Episode 158
The Daily Upside's niche strategy
Inn this episode, The Daily Upside's Patrick Trousdale explains how niche products like Advisor Upside and ETF Upside are helping the company move up the value chain. We also talk about paid growth, building a newsroom, and why journalism—not just distribution—is the long-term differentiator.
Transcript
Welcome to The Rebooting show.
Brian:I am Brian Morrissey.
Brian:If you haven't already, please check out the other podcast I do.
Brian:It's called People Versus Algorithms.
Brian:that podcast is a little bit bigger picture about connecting the dots of how media, tech and culture are all changing.
Brian:I do it with Troy Young, who is a media investor, and also the former.
Brian:president of Hearst Magazines as well as Alex Schleifer, who builds video games and used to be the head of design at Airbnb.
Brian:it's a bit of a conversational show, but sometimes we have guests.
Brian:And last week we actually had a guest host because Alex had a hard to stop, and that was Nick Denton, the founder of Gawker Media.
Brian:It was a fascinating conversation about Nick's recent reemergence and how he's now.
Brian:As I like to jokingly say head of macro.
Brian:he's swapped muckraking media for trading and I think there's a lot to learn there with the direction of this industry.
Brian:As media grows both more important than ever, I.
Brian:While the business models of Legacy media continue to shrink, it's a strange situation.
Brian:So check out PVA wherever you get your podcast.
Brian:It's also on YouTube.
Brian:If you wanna see us in person, just search for it there and you'll find it.
Brian:So this week I spoke, with, Patrick Trusdale, who is the CEO of Daily Upside.
Brian:I had Patrick on like a couple years ago.
Brian:He's a former.
Brian:Investment banker at Guggenheim who got into the newsletter game back in 2019 with the Daily Upside.
Brian:And this was, he was actually early to the newsletter boom.
Brian:And I think the evolution of Daily Upside is instructive of my view of how newsletter businesses I.
Brian:Really need to evolve beyond just buying email subscribers and aring them with ads.
Brian:it's just a different landscape now.
Brian:the cost of, acquiring customers is higher and there's so many people running very similar playbooks, that that business has a ceiling that's lower than it used to be.
Brian:And, it also has very little leverage.
Brian:I mean, in short, like most things at digital publishing, it becomes a race to the bottom.
Brian:I've seen this so many times.
Brian:Patrick.
Brian:Has not stood still.
Brian:He has shifted daily upside, to becoming a portfolio of B2B vertical newsletters.
Brian:I mean, he's niched down as they like to say, in order to cater to financial professionals.
Brian:We get into why the daily upside has invested in original journalism.
Brian:Go figure, what they've learned from launching, new products like Advisor Up.
Brian:Upside and ETF upside and how a focus on B2B financial audiences, is creating, new commercial leverage for the company.
Brian:And we also talk about paid acquisition, the real cost of newsletters, and the playbook.
Brian:Patrick's team is now running as they continue to expand, its portfolio of these, vertical newsletters.
Brian:Hope you enjoy the conversation.
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Brian:So here's my conversation with Patrick.
Brian:Patrick, thanks for coming back on to the podcast.
Brian:Appreciate it.
Patrick:Brian, thanks for having me.
Patrick:It's been a couple years, so I'm,
Brian:I know.
Brian:So I want to check in.
Brian:I mean, there's a few reasons.
Brian:One, I like to check in, you know, every now and again, two, my sister, Jean, you are the favorite.
Brian:You are the favorite podcast guest that I've had.
Brian:So you resonated with her.
Patrick:I don't know how that could have been, but I'm, I'm,
Brian:So no pressure, but you know, I know Jean is gonna be excited that you're on this.
Patrick:Yeah, we'll try to do whatever I did the first time.
Brian:But I think it's also, I, I, I kind of get it 'cause I think you're like plain spoken, about the, the, the business and the ups and downs of it.
Brian:I feel like every, anytime we've spoken, I find that refreshing.
Brian:There's a lot of people are peddling bullshit out there.
Brian:I don't know if you ever noticed that.
Patrick:Yeah, no, I mean, I also didn't come from the business so.
Patrick:You know, having started at the media company with really no idea what it was going to be like, it's definitely probably a, a different
Brian:Yeah.
Brian:So now, so you're in, like, for those who who do not know, Patrick founded the, the daily upside, I guess in 2019.
Brian:It's been like six years now.
Brian:You, you were at Guggenheim, investment banking.
Brian:I don't know about this.
Brian:I said this last time.
Brian:I'm not sure about this pivot from investment banking to, to media of all places.
Brian:I think, you know, from a financial, I think you should maybe run the numbers another time.
Brian:I mean, this.
Brian:There are examples of that.
Brian:I mean, I guess Henry Blot, but he also had the SEC involvement too.
Brian:So that helped.
Brian:Helped the decision.
Brian:I assume he did not have any of anything like that.
Patrick:I didn't have that, that type of overhead, but I, maybe I said this last time around, but I, I married into an entrepreneurial family and, you know, you, you've written about this a lot.
Patrick:I mean, doing what I did at the beginning, starting a newsletter, it didn't require.
Patrick:A ton of CapEx.
Patrick:It was a, it was a pretty easy foray into entrepreneurship, and I just happened to have been at it for almost six years now.
Brian:Yeah, so it's funny 'cause when you started in 2019, you know, I guess it was a little bit early, but you know, it was, it was the newsletter.
Brian:Boom was starting, right?
Brian:I mean, you were early to it, but the newsletter boom, like sort of t took off particularly during the pandemic.
Brian:I talked about it I think on this podcast, a few weeks ago I was at this like newsletter conference.
Brian:It's, it's a, it's like a massive sub-sector that I am, I'm always fascinated by and you build a big.
Brian:Newsletter with the Daily Upside.
Brian:Right?
Brian:And, and mostly it was like a lot of people have built, I wouldn't say a lot of people, but there are people who have, who built these, these kinds of properties.
Brian:Like I've had Tim Holc camp from, from 1440 on there.
Brian:There are others who have built these kind of properties.
Brian:But I think what's really interesting is, is the direction that you're taking, the distribution that you built up.
Brian:Right?
Brian:So walk us through that sort of journey.
Brian:'cause I want to get into.
Brian:And really go deep into the the B2B verticals that you're building.
Patrick:Yeah, I mean, I think to start off, I, I very much agree that it was pretty, it was still pretty early days in, in 2019.
Patrick:There were some newsletter centric companies, but very much still the early innings of the newsletter, boom.
Patrick:Right When I started, I had to go into MailChimp and figure out how to build a template and if I wanted custom design features that was.
Patrick:You know, back and forth with a, a developer probably overseas or it was a, it was a really, cumbersome process to get, get, a new product off the ground.
Patrick:It took weeks, not minutes, like you can launch now with some of these, these platforms.
Patrick:So the barrier to entry while low, you know, was a lot of actual effort.
Patrick:and I'd say now, as you know, I wasn't at that conference, but that conference did not exist.
Patrick:Six years ago, and, and I'm sure 80% of the people at that conference are net new to newsletters in that period of time.
Patrick:so it's gotten significantly more crowded and I think that is very much, guiding where I'm trying to take the daily upside and kind of where we're evolving the business.
Brian:Yeah.
Brian:So let's talk about the, the evolution of the business, right?
Brian:Because I'm kind of like in, like, I'm.
Brian:I wouldn't say bearish, but like, I think like a lot like newsletters are, like you had mentioned it, they're a great minimally viable product.
Brian:You, you can get up and running.
Brian:I mean, it took you a little bit 'cause you had to like monkey around with MailChimp or whatever.
Brian:but pun was atten intended there, by the way.
Brian:but you know, nowadays you just set up on Substack, set up on Beehive and you're off and running like that day.
Brian:Right.
Brian:And I feel like newsletters though themselves as just a business, like I think you have to.
Brian:Like, I think 1440 is doing some interesting things there, but they're even branching in more into being like a knowledge company with, with their new products.
Brian:But, you know, you need to generally, I think, you know, build a, a more well-rounded media company.
Brian:Like do you consider where the daily upside is now?
Brian:Do you consider yourselves like a newsletter company or something more?
Patrick:I don't know if we consider ourselves a newsletter company.
Patrick:We definitely are trying to evolve beyond our, newsletter distribution because as, as I. Read about in the last couple days.
Patrick:I mean, newsletters as a, a way to deliver information to a reader probably are going to be subject to some of the same technological and ai, threats that SEO and, and other types of distribution are facing.
Patrick:But I don't know if there's a, a magic, oh, I've got a website now and I'm suddenly a, a real media company or I've got a podcast.
Patrick:I think for us.
Patrick:The evolution has been more around just the authority of the journalism, and really investing in the best journalistic talent we can find.
Patrick:So we've built out the newsroom in, in a really major way.
Patrick:Since we've last talked, we've hired headers and chiefs of other, larger organizations and senior reporters from publications have been around for, for, for decades, for, for centuries even.
Patrick:and for us that's really been the investment, is what is our, what is our right to engage with an audience?
Patrick:And for me that's, really high quality journalism.
Patrick:and that I think is o oftentimes missing from the conversation probably at some of these newsletter events is just what is our fundamental right to engage with this audience?
Patrick:What are we providing and, and in what way is that differentiated?
Brian:Well, yeah.
Brian:'cause I mean, a lot of the, the newsletter world is so big.
Brian:Like I've written about this, like it's, there's a lot of arbitrage that goes on, and.
Brian:A lot of parts of it are more like direct marketing than they are like media.
Brian:In my, in my view, obviously getting distribution is incredibly important.
Brian:and particularly these days, but the core of their businesses are not, is not really content like they win on, on, on distribution alone.
Brian:I think what you've done is, you know, you're looking to, to build out like.
Brian:A well-rounded product.
Brian:Right.
Brian:But also you're going deeper in a lot of areas.
Brian:So when, when I think when we did the last podcast, you, you had just, I think you had just done like a pat and drop, you acquired them and then you, you launched Power Carter, which was, I guess was between Wall Street and Washington.
Brian:And, and then you've, you've, you've built out other.
Brian:B2B focused, outlets, right?
Brian:So talk to me about that.
Brian:'cause I mean, I had Robert Dipple on, a couple weeks ago from Morning Brew, and you know, they've done something kind of similar and you know, you have like a large mothership property, right?
Brian:And you can filter that down into higher value verticals.
Patrick:Yeah.
Patrick:For us, and I'm not gonna try to compare us to any other publication, but, but for us, the, the difference has, has always been trying to develop real expertise in financial markets, investing in finance.
Patrick:So we have thousands of people sign up for the newsletter organically who work in financial services.
Patrick:And as we studied the data, as we kind of got smarter about who the audience was over time, these were by far our most loyal subscribers, people who work in the industry.
Patrick:so we definitely, took some swings in 2023.
Patrick:We still have patent drop and a form and power corridor.
Patrick:We send in a more special edition type format.
Patrick:But for us, we, we really learned that our core audience are financial service professionals.
Patrick:So in, in 2024 in June, we launched Advisor Upside.
Patrick:Advisor Upside.
Patrick:We hired the, a guy named Sean, who's he's, has a great name and, and a great brand in that wealth management arena where we were gonna be looking to do, reporting.
Patrick:And, you know, the product is, is nine months old.
Patrick:We started with 5,000 financial advisors here who were reading our flagship.
Patrick:We've quickly scaled to 75,000 financial advisors, which doesn't sound like a lot and relative to our flagship property is, is pretty small, but it also happens to be around one out of every four financial advisors in the country.
Patrick:and it's been really interesting to see how that is translated into, into commercial success for us because.
Patrick:We had a lot of those same people reading our flagship newsletter, so we could go to large asset managers and say, Hey, we know we have 50,000 financial advisors reading the Daily Upside.
Patrick:But because it was in this umbrella, this, this broader, you know, general markets newsletter, we were irrelevant to 90% of
Patrick:people who, you know, the the Blue Chip financial service advertisers, because the marketing they do is extremely targeted.
Patrick:Okay.
Patrick:So yeah, that's what Advisor Upside's been all, all about.
Patrick:And we just made another major hire, last week.
Patrick:We, we hired out of investment news, who's the managing editor there.
Patrick:So we're, we're doubling and, and tripling down in this space.
Patrick:And then two weeks we're gonna be launching ETF, upside covering, obviously ETFs.
Brian:Right.
Brian:Okay.
Brian:So you find just by like that, I guess people like to say niching down, right?
Brian:I mean, sometimes it's just, it's just repackaging the same audience in a different context actually can give you a lot of leverage in, in the marketplace.
Brian:I always saw this like when, you know, we would create verticalized newsletters.
Brian:the same audience you could reach, like in the sort of main newsletter.
Brian:but for a lot of, you know, when you're, when you're selling advertising, you know, they want to feel like it is extremely targeted and, and that is, a good way of doing that.
Brian:Exactly.
Brian:Are they, are they bringing people in?
Brian:Or is it mostly just is, is the sort of flywheel that you're having?
Brian:It's like you get a lot of people to come into the daily upside and then you sort of, you end up segmenting them out into these different verticals.
Patrick:It is definitely a little bit of both, but way more powerful in combination.
Patrick:So again, every, every week we have thousands of people sign up for the daily upside.
Patrick:A couple hundred of those people are going to be wealth managers.
Patrick:People work in this industry and you know, over 50% of those people are telling us, this is me.
Patrick:I work at X-Y-Z-R-I-A CHOP in Kansas City.
Patrick:They tell us that, and then immediately we say, wow, how convenient.
Patrick:We have the perfect newsletter for you.
Patrick:Yeah, it really helps that we have someone like Sean who has a brand people have heard of, and people are maybe more inclined to sign up.
Patrick:So there's that top down.
Patrick:And then Sean's and other journalist editors we have on staff are, are actively pulling people in and they following some working in the space for decades.
Patrick:That's of course multiplier.
Patrick:I think for us going out to conferences has been.
Patrick:Extremely important to get the word out, not necessarily for new subscription.
Patrick:but if someone saw Sean speak at future Proof like you did a couple days ago, then if they see an ad for ad for the product on LinkedIn or on Meta, wherever they could serve an ad,
Patrick:ad, they might, you know, there are gonna be some percentage, hopefully greater than zero, more likely to sign up for that newsletter because they have some affinity, some.
Patrick:inclination towards it.
Patrick:and then, you know, the, the same muscles that we've built to grow the flagship audience also work to build these more specialist audience as well.
Patrick:So we go out and we can target people on LinkedIn and meta, and it's way more expensive, right?
Patrick:You're if, if you're trying to acquire a subscriber for your, a mass market newsletter for a couple dollars, we'll go out and pay.
Patrick:You know, 10 times that for a wealth manager to read the newsletter.
Patrick:so yeah, we're, we're doing, a bunch of different things to grow the
Brian:So how important is paid growth to, to the model?
Brian:I mean, I was like, Tim was like talking about spending $300,000 a month on, On acquisition.
Brian:I was like, whoa.
Brian:I was like, do you put that on your credit card?
Brian:You must have incredible points.
Brian:It turns out no, they, they, they graduate you out of that.
Patrick:Yeah.
Patrick:it's important, but it's nowhere near as large a percentage of our budget as it was in 2022.
Patrick:So in, in 2022 there were four people working at the Daily Upside, and we were, you know, a multiple seven figure a year business.
Patrick:So we, we had more excess budget than we knew what to do with, and we.
Patrick:Rep like Tim deployed a lot of that into himself, user acquisition growth.
Patrick:And our total subscriber number was, the number we looked at at the end of the day is, oh, this is really great that this is going up.
Patrick:now I'd say, because we have,
Patrick:different types of ambitions and different, different types of audiences.
Patrick:Our percentage spend on, on marketing and paid acquisition is much smaller.
Patrick:We're spending a much higher percentage on, on journalists, on events, on conferences, on other ways to get, get the name out there.
Patrick:so it's probably come down by 50% as a on total budget.
Brian:Okay.
Brian:And what, what led you is that, was that sort of part of the natural evolution?
Brian:Because I think a lot, I think what's really interesting about the newsletter space is, you know, you can, you can, you can acquire distribution, right?
Brian:And getting distribution is.
Brian:Critical in media, right?
Brian:Like, and, I feel like a lot of people who come, like, there's, there's nothing wrong with spending money on marketing.
Brian:This is like how products like get made.
Brian:Like some people think it's like, oh, it, it should all be organic or something, and like, it doesn't really matter.
Brian:you paying for ads for your product is just a normal thing in any, in any, industry.
Brian:But at the same time, like, you know, it can crowd out other investments.
Brian:is it, was that like sort of a pivot that you felt like you had to make in the model?
Brian:Because I always wonder that, you know, I said this to, to Tim with 1440, like, okay, great, but you're, you're like reinvesting like three.
Brian:Like what happens if you turn that off?
Brian:This is the whole business collapse.
Brian:Like.
Patrick:Yeah.
Patrick:I'd say for us it, it was an evolution.
Patrick:to be clear, I think if we had done the same exact thing as we were doing in 2022, not hired four or five journalists.
Patrick:in the span of six months and just continued to spend money on u user acquisition.
Patrick:There's no question our flagship audience would be larger.
Patrick:There would be a whole ecosystem of performance marketers who would be willing to pay us more to run than the newsletter because we had a larger list.
Patrick:We could drive more clicks for their ads to buy jeans or, or, or whatever.
Patrick:that ecosystem thrives on.
Patrick:But for us, we've always wanted to build a really durable brand.
Patrick:And for me, that's always come down to journalism.
Patrick:It's come down to, breaking news to the extent we can, but also just pro providing expertise and analysis in a differentiated fashion.
Patrick:So the investment naturally went towards more journalists, more editors, and I definitely think that has put us on a different trajectory.
Patrick:So.
Patrick:In an, an advisor upside, for instance, the folks that are gonna be sponsoring and will be sponsoring the newsletter over this year are, it's a completely different tier of
Patrick:advertiser that we could have had a list of 10 million people reading the flagship newsletter, 20 million people, everyone in America.
Patrick:It really wouldn't have mattered.
Patrick:We, we wouldn't have tapped some of these sponsors.
Patrick:and also made investments in things like brand, which.
Patrick:Four years ago, I would've had no idea how much design mattered, right?
Patrick:When you have marketers at these big holding companies, you shoot them an email saying, Hey, we'd love to talk to you about X, Y, Z client.
Patrick:First thing they do is go to your website.
Patrick:What type of presence do you have?
Patrick:How many reporters do you have on staff?
Patrick:What does the overall experience look like?
Patrick:So I'd say that's something that's generally speaking, been neglected in B2B.
Patrick:Over the course of, over the course of time.
Patrick:So we're, I think just from a product, a UX experience, trying to innovate and just put us on a different type of trajectory, I think for some of these clients,
Brian:So is the, is the, the business model is primarily advertising based now.
Patrick:100% our cousins.
Brian:Okay.
Brian:How do you, how do you view that?
Brian:I mean, advertising is, is, I love advertising.
Brian:It's high margin.
Brian:At the same time it can be fickle.
Brian:how do you think of that?
Brian:Because I mean B2B typically you have a different, I mean, one of the great things about B2B, you know Yes.
Brian:The ad rates are higher.
Brian:Right.
Brian:but you also have, you know, you were, you were just at like a conference like down here in Florida, right?
Brian:So like, you know, like there's lots of different ways to make money in B2B that are quote unquote easier than, than consumer publishing.
Patrick:We found the B2B space to be way more forgiving than the consumer side of things.
Patrick:As you've said before, right, in B2B, you show up with receipts where you're delivering customers or your sponsors, and you can do so.
Patrick:We believe you can do so in a, in a, in a way that's scaled and consistent.
Patrick:So people aren't, aren't thinking about you as advertising.
Patrick:They're thinking about you as demand gen and really an extension of their, marketing services operation.
Patrick:So in terms of renewal rates, in terms of.
Patrick:How far people are willing to look into the future and plan with you.
Patrick:It's a completely different ecosystem for us on, on the B2B set of things versus consumer where you really are in such a competitive space that you're living and dying by the performance of your last ad that you ran.
Patrick:And the same may be true for B2B, but we've just found it to be more forgiving and a more easier to.
Patrick:Easier to succeed relative to some of the, competition.
Brian:Yeah, but I mean the events are usually a big part of these models.
Brian:you know, I think lead gen. It pretty much bleeds into to advertising, depends.
Brian:subscriptions, memberships, like how, how are you thinking about evolving?
Brian:Were you not thinking about evolving the business model?
Brian:Because, I mean, I think there's, there's two ways you can go about it.
Brian:Like, I had Sean Griffey on here.
Brian:I've had had him on the podcast a couple times, but you know, I think one of the interesting.
Brian:Interesting things about industry dive is they stuck in their lane like they did, they did marketing services, right?
Brian:Like they did not go into events or any of the other things that are typical in B2B.
Brian:And they just developed a really great competency in, in what they did.
Brian:you know, typically.
Brian:A lot of these, like I'm used to like typical trade models, right?
Brian:That where you've got awards, you've got, you've got events, you have a content studio.
Brian:I mean, you have all these different, you have memberships, you have all these different, I think I counted it like at digit day we had like 11 or 12 different, you know, revenue lines.
Brian:how do you think about that?
Brian:Because there's, there's upsides and downsides to both.
Patrick:Yeah, I think I, I'd probably end up more in, in, Sean's camp on that in terms of how quickly we, we evolve.
Patrick:I mean, for us, you'll see webinars from us in Q2 for the first time, so, live online event.
Patrick:as far as events, I think we're at least a, a year away from trying to do that.
Patrick:and I think I.
Patrick:For, for us, the bar is trying to do anything we do really, really well and I, I don't think we're in a position to do events well and
Patrick:I just went to an amazing event at teacher proof in Miami and said, I don't know if we'll ever be able to do something like that.
Patrick:Right.
Patrick:This is a
Brian:Was like a massive event or.
Patrick:tru, truly massive event.
Patrick:Thousands of people on the beach.
Patrick:you know, it's an entirely different muscle team skillset and.
Patrick:You know, I, I love attending to the event.
Patrick:We'll, we'll go to any that they host and, but I don't, if we did an event ever in, in that space, it would not, you know, we would not attempt to try to compete with that.
Patrick:We would try to do something different.
Patrick:so for us it's, it's just about finding the white space in our particular verticals and, and, and what do we see the competition on behind on?
Patrick:Where can we capture, share?
Patrick:And for us it's definitely not events.
Patrick:but webinars, definitely we also perhaps view them as, as a high margin product that, that is attractive financially.
Patrick:yeah, awards, again, something not having grown up in the traditional media ecosystem.
Patrick:I know you can make money on them.
Patrick:They strike, they strike me as a little bit pay to play and we've, you know, not gone that way in the past.
Brian:Yeah, they can be kind of gruesome for sure.
Brian:I stay away from for a reason.
Brian:I mean, no, no offense to those who are running award schemes.
Brian:there are many of them out there.
Brian:you just can't do too much.
Brian:I, I would call, I would, I usually put those into the.
Brian:You know, going to the brand ATM bucket, you know, you can, you can go to the brand a TMA few times, but like, you can't keep going, getting up from the, craps table to go to the brand ATM.
Brian:You're gonna, you're gonna be in a bad place.
Brian:and a lot of, there's a, there's a lot of these kinds of, of things that are.
Brian:I think, you know, are little old fashioned in, in B2B and that's why I think it's good to have, you know, new energy coming
Brian:into, into the sector because you can, you solve for very similar, you know, when you talk with B2B marketers like they have.
Brian:You know, pretty basic, you know, marketing challenges.
Brian:They may use different terminology, whether it's m qls, SQLs and all that stuff.
Brian:But, you know, they're very performance focused in their own ways.
Brian:You know, I think, and I think they've long been very performance focused.
Brian:I think a lot of their performance is, you know, it's directly tied to sales.
Brian:that's one leverage that, you know, events have is, is, at least in my experience, every B2B marketer loves.
Brian:Loves events, because they lead to sales.
Brian:They know that.
Patrick:Yeah, you should definitely.
Patrick:You know, check out.
Patrick:It'll be next year at the same time.
Patrick:the events of Miami, it's, it's unlike any other event I've been to,
Brian:Yeah.
Brian:how are you finding the dynamics in B2B different?
Brian:I.
Patrick:so we chose wealth management as kind of our, the, the first area where we're, we are really gonna go deep and we find it to be just such a small.
Patrick:Corina, and it's surprising because it's, it's a large, it's a large industry.
Patrick:There's 300,000 people that work in it and, you know, many multiples of value work and, and the supporting industries.
Patrick:but what what we found is when we hire a journalist, it really matters who we hire, right?
Patrick:And, and marketers follow the bylines of journalists as a proxy for.
Patrick:Quality, basically a, a proxy for where audiences are, are headed.
Patrick:So when, this is not to say anything, you know, disparaging to, to any consumer oriented product, but it's just a much smaller ecosystem.
Patrick:So hiring brands as journalists really matters.
Patrick:we found, and the same thing for on, on, on the partnership side, but in the past.
Patrick:It would've been a kiss of death to hire a salesperson for their Rolodex, for our flagship newsletter.
Patrick:They could have come in and said, I am best friends with the CMO of 10 out of the top 20 companies in in the country that spend on newsletters and our ability, even with
Patrick:this person having been to that person's wedding or bachelor party, our ability to go win and get the client could be zero.
Patrick:You know, they could be at it for 10 years and, and it not happen.
Patrick:It's not because they're bad salespeople, but it's simply if, if there's not a fit in a, you know, a B2B to a consumer setting, you're never gonna be able to make it a fit.
Patrick:So we would never hire for, a Rolodex
Brian:You mean in B2B?
Patrick:in, in B2C and then, we did in B2B for the first time, hire not for a Rolodex.
Patrick:There were.
Patrick:A lovely tar chips person, but they'd been operating in this space for 20 years.
Patrick:So when they go to a conference, they can't walk five feet without seeing a marketer that's also a friend it's just you're operating in a much small, smaller pool.
Patrick:So we've also found it it way more important to, you know, we're really not looking to get quick win sales.
Patrick:We're looking for sales people to build relationships that can last.
Patrick:You know, years, decades, hopefully.
Patrick:but we, we have found that having, partnerships, people with relationships actually really does make a difference in B2B.
Brian:Yeah, that's a good point.
Brian:So do you have like a playbook now that you're able to like, run with these?
Brian:I mean, you've, you've, acquired, but you've also, you've, you've, built a bunch of different like, you know, vertical properties.
Brian:Like what, is there a playbook in, like what, what is the playbook?
Patrick:Yeah, I, I think we do have a playbook.
Patrick:So again, we're two weeks away from launching ETF Upside.
Patrick:we're really excited about that property.
Patrick:We think there's obviously some coverage, but generally.
Patrick:The dearth of coverage relative to how much ETFs are exploding as a product.
Patrick:So I think, I think there's a ton of white space there, but the playbook is really just looking into ourselves.
Patrick:Who are the audiences that we already have in our flagship product that we, that we can tap, that are a really engaged B,
Patrick:where there's a large commercial lane, and C, where we have, you know, a, a right to win or, or ability to build a product.
Patrick:so that's the way it works for us.
Patrick:And then relative to where we were a year ago, all the musculature, which will sound silly, but for a small company is pretty important around recruiting, around culture and onboarding and process, all that stuff.
Patrick:A year and a half ago was, was more or less a chocolate mess.
Patrick:And now if we decided we want to launch X, Y, Z vertical and.
Patrick:In, September, we would have the exact, technological, but also just hiring, and commercial roadmap to, to build a process that can be profitable on day one versus the years past.
Patrick:We, we would acquire a product and, you know, we'd say, we can figure this out on the fly.
Patrick:And guess what?
Patrick:It's actually pretty difficult.
Brian:Yeah.
Brian:And, and so on the, on the editorial side, you like to have like, kind of like a face, I guess you would like, someone is like well known, like, I mean, how do you end up figuring out the staffing?
Brian:Because you want these things to be profitable, right?
Brian:I mean, you're, you're not swimming in venture capital money as far as I know.
Brian:Patrick, are you.
Patrick:You needed to be profitable, but you know, the, the game has not scaled content.
Patrick:So we're, we're sending a couple newsletters.
Patrick:A week so you can really launch a new vertical with one or two editorial hires.
Patrick:And then we have six full-time salespeople now.
Patrick:So, if we launch a new vertical, oftentimes someone will have, at least the early kernels of relationships in a new vertical that we're looking to, to get into.
Patrick:So sometimes we will, to test 'em all, maybe hire the journalist first, get the product going, and hire the the salesperson after we get our current sales team.
Patrick:Selling into it.
Patrick:but it, it's really not a large capital outlay.
Patrick:And we think that now we have this kind of base fundamental infrastructure, right?
Patrick:We, we have a CTO, we're never gonna need another CTO.
Patrick:We have A-A-C-O-O, same thing.
Patrick:We have
Brian:well then you get efficient, right?
Brian:I mean, like a lot of the biggest problem is like a lot of businesses can be like really inefficient because you still have to do all the business stuff.
Brian:Doesn't like.
Brian:And so you, if you don't spread those costs across like a bunch of different areas, you are in an inefficient business, you know?
Patrick:Yeah, so we're, we're very quickly looking to, to scale.
Patrick:I'd be pretty surprised if you didn't see, after ETF another financial services vertical launched from us in 2025.
Brian:Yeah.
Brian:so basically it sounds like it's, it's one or two editorial people, and then it's one dedicated sales person.
Brian:It's not like the sales.
Brian:Or, or does sales like go up and down the portfolio or do you do, like, how do you handle, how do you organize the sales side?
Patrick:So our, our sales folks are verticalized across, what do you call 'em?
Patrick:Pods or, or verticals.
Patrick:But just a, as it happens, we've hired a lot of people with financial services selling expertise.
Patrick:So they did, they do allow them to sell into the financial advisor product, and that translates pretty well to our flagship product.
Patrick:in the future though, I think we, we will be much more specific about hiring in a verticalized fashion.
Brian:Okay, so right now they can sell like across the portfolio, right?
Brian:Like, I mean, I, there has to be enough to sell too, you know.
Patrick:Yeah, they can.
Patrick:And they do, and they're encouraged to.
Patrick:I mean, we find that, you know, especially relative to our flagship newsletter, it's great cross selling, cross-selling opportunity.
Patrick:So if you sell a B two P sponsorship on one side, but that same company has, a large reason and desire to reach consumers, we're now winning business on the consumer side that we never would've won without the advisor product.
Patrick:so we find they all tie together pretty newly and we definitely encourage Crosson.
Brian:Yeah.
Brian:How do you end up, how do you think about, you know, using the sort of upside brand?
Brian:Versus, and this is something that Sean and I talked about, versus having like unique brands that space, because like I, I always think that there's a balance there and I probably overthink it.
Brian:I think Sean basically told me that, in so many words is, Like, you kind of want something, at least I think about it from my editorial point of view that's like unique to the space and to the audience.
Brian:Right?
Brian:but from a corporate standpoint, like, you know, you, you wanna spread these things, you wanna be efficient, right?
Brian:And it's hard enough to build one brand.
Brian:You want to, you wanna be able to confer legitimacy on it through.
Brian:Do you think of these things all as like verticals of one brand?
Brian:Which is the Upside brand?
Brian:Or do you think of these like does everyone in there like know that like this is an offshoot of the Daily Upside?
Patrick:That's a good question.
Patrick:I mean, we're still relatively early days, but the way we think about it as, as a company is the daily upside is the, the master brand and all of the verticals will sit underneath of it.
Patrick:but I think there's absolutely people who signed up for advisor upside in new, maybe the new Sean.
Patrick:That would've no idea that the daily upside exists.
Patrick:I think the thing that's different about us versus maybe your conversation with Sean is our master brand content is pretty tightly bound or tightly wound with our advisor content.
Patrick:So if you're an advisor, you're reading B2B news about what's happening with the wirehouse you work at you.
Patrick:You also are probably gonna be consuming content
Brian:the circles touch.
Brian:That's what I used to always say.
Brian:The circles, you know, sometimes you know, waist dive versus I know marketing dive that they have nothing to do with each other.
Patrick:Yeah, exactly.
Patrick:So I, we we're definitely looking for them to build off each other and that ultimately to be accretive to, to us as a company.
Brian:Okay, cool.
Brian:what, what about like paid, I mean, do you, I, I assume at some point you want to, a lot of these things are all like sequencing.
Brian:I mean, how do you think of the sequencing of, or do you or do you think it's better just to stick with the, you know, lead gen ads business?
Patrick:I'd say I'd never say no to anything, but we built the.
Patrick:The musculature of the company from audience development to the partnerships and client success team, all of that is framed around selling ads and, and hopefully getting a lot better at it over time.
Patrick:So I think we're ending like one of nine of, of that business of the a ad selling business.
Patrick:And I mean, I have the.
Patrick:Thought all the time.
Patrick:You know what, it would be great if we could convert 3% of our flagship audience to some type of paying product, but to me that would just be a, a massive distraction.
Patrick:And if we tried to do that, the advertising revenue would probably cut in half and suddenly we're at the same place revenue wise with, you know, a whole subscription team.
Patrick:So.
Patrick:To answer your question, I think we just, we need more scale on the advertising side.
Patrick:I think we're, we're still in the, the early days.
Patrick:We think the business can more than double this year, in size.
Patrick:But until we get to a much larger organization, I think it would be pretty foolish to try to suddenly flip on subscriptions, something we've never done.
Brian:So how solid are you on like the unit economics of the business?
Brian:Because like that's something I always, you know, this is something I've, I've talked with with Tim about a lot 'cause he really zeroes in on
Brian:the unit economics of, you know, they, they know exactly how much like a subscriber is, is worth and, and then they can sort of dial in the cac.
Brian:And, I, I, I mean, how much of that is, is, are you following that kind of playbook?
Patrick:I think my interest and intention on that type of math, and this is, you know, I've got a, I think a, a pretty similar background to Tim, right?
Patrick:In the early days I was very interested in that type of math.
Patrick:I think still obviously very important, but I think I'm spending.
Patrick:Most of my time on, on figuring out ways to increase, you know, the, the LTB part of the equation.
Patrick:And for us, that's the B2B side of things versus dialing in.
Patrick:How low can we get customer acquisition.
Brian:Right.
Patrick:both our both are important, but as our marketing spend is as a percent of total budget has come down, I'm definitely thinking a lot less about tact.
Patrick:LTV.
Patrick:And we're thinking, okay, we have someone in, we brought into the daily upside ecosystem.
Patrick:What can we do, from a B2B perspective to bring that, you know, $3 subscriber on a flagship to suddenly a $50 LTV person, getting them to opt into advisor upside.
Patrick:And, and for me, just how I spend my time at, that's been, what type of journalist can I recruit to the organization to make advisor upside a must read product?
Patrick:What type of.
Patrick:Presence can we have there?
Patrick:versus the more arithmetic side
Brian:So be honest on this question.
Brian:Did you think that you, you like that original journalism part would, would be a major part of the model when you started it?
Patrick:I started, the newsletter myself.
Patrick:I wrote every newsletter for, you know, over a year.
Patrick:You know, I was working.
Patrick:18 hours a a day getting up at 4:00 AM to read the news and try to make the best newsletter.
Patrick:And so I, I, I've really, I really have cared about the, the product since day one, but I definitely did not appreciate the, the art of journalism day one.
Patrick:Right.
Patrick:I, I came from investment banking and I knew relatively small amount about media and, and journalism.
Patrick:And I, I've come to develop a, a ton of respect for what journalists do.
Patrick:I'm not trying to paint some holier than now operation, right.
Patrick:We're covering financial news and markets.
Patrick:But I, I do think, especially with ai, that it's, it's going to be just table stakes to have original and, Original content that your audience loves.
Patrick:I think there's just no way around that.
Patrick:maybe newsletters can get around it for another couple months, a couple years, but the days of just repackaging and curating content,
Patrick:putting it in a newsletter, sending it out, and hoping, you know, to grow the audience setting, those, those days are long gone.
Brian:So talk to me more about that.
Brian:Why do you, because I mean, there is, I think that was point, like there's a lot of newsletters that have been built off of.
Brian:Of some kind of form of aggregation at the end of the day.
Brian:and there's, there's always look, we call it curation, call it aggregation.
Brian:And, and there there's shifting definitions of both, right?
Brian:But, some choose to, to stay in that lane.
Brian:I mean, in some, you know, the old thing was you make the leap into original, you know, reporting if you will.
Brian:Like, I mean, business Insider really started as aggregation for the most part.
Brian:Blogging slash aggregation and then they moved into original reporting.
Brian:but why do you think that, that, that is gonna have another pun, but like a lot of upside going forward?
Patrick:Yeah.
Patrick:And to be perfectly clear, I'm not trying to say we, we have, you know, you know, we're, we're, we're a small newsroom, so for us.
Patrick:Original reporting means something very different than, you know, what a newsroom with a thousand people might
Brian:Sure.
Patrick:I think for, for me though, it just comes down to authority and your mastery of the subject that you're, that you're talking about.
Brian:Yeah, maybe reporting is not right.
Brian:I should just like clarify.
Brian:I, I don't do reporting.
Brian:and I think a lot of times people in journalism, I don't say overrated reporting, but they, they sort of think that the only form that matters is, is beat reporting.
Brian:it's not, not necess, I mean, it's, it's serving an audience.
Brian:Like, and there's a whole bunch of different ways that you can serve an audience.
Brian:Right.
Brian:And I think it's, it's a fine line.
Brian:'cause you can say like, and, and, and definitely forms of aggregation and curation are in there.
Brian:I just think that a lot of times, much like a newsletter is not the end state, like a lot of times people will start in the aggregation, but then they'll sort of move up the stack, if you will.
Patrick:Yeah, and that's where we are.
Patrick:We're, we're actively looking to move up the stack right when I started writing the newsletter.
Patrick:I didn't have a single source.
Patrick:I, I did not have any inclination as to how to get a source.
Patrick:Didn't really know that sources were important.
Patrick:That thinking and knowledge has, has evolved significantly over time.
Patrick:and why do I think it's important?
Patrick:I think any commoditized work, I think, is going to be increasingly cannibalized by ai and whether it happens in the inbox, whether it happens.
Patrick:On a Google search.
Patrick:I think if readers don't fundamentally trust and understand that they're reading someone who has domain expertise that goes far beyond what, what they have, why would they care if they're reading an AI bot versus a human journalist?
Patrick:So I think for me, it's, it's an existential question of what are we doing?
Patrick:What value are, are we bringing to, to the audience?
Patrick:And if it's not enough.
Patrick:What's our right to exist and, and, and kind of survive as a company?
Brian:Yeah, I think that's like a great point.
Brian:because you know, the, when you use these tools, I mean the summarization, eh, they're, they're good.
Brian:Like they can summarize a lot of data.
Brian:It doesn't matter what the data is.
Brian:And I think, you know, what it's doing to programming is, is a, a sign, right?
Brian:I don't think it's gonna replace all, you know, original content.
Brian:I think people will seek out like original insights.
Brian:that are born of, particularly of experience, at least I hope they will.
Brian:I'm betting on that.
Brian:but a lot, it's like anything like it compresses.
Brian:It's a great compressor and commoditized stuff is, you know, it's, that's gonna be the things that it comes for first.
Patrick:Yeah, there used, there used to be a website, I'm sure maybe it still exists.
Patrick:Celebrity net worth, I think it was one of the earliest cases of, of, of Google just, you know, people with Google beyonce's net worth.
Patrick:And I didn't wanna read the story about Beyonce and.
Patrick:They just wanted to know what our net worth is relative to, to theirs.
Patrick:And Google said, okay, great.
Patrick:Let me just grab that little, little piece of information and put it on the site.
Patrick:And the traffic probably went down 90, 95% overnight.
Patrick:And I, I think I visit, you know, some massively smaller number of, of websites than I did when I'm doing these informational ferries on Google.
Patrick:And, but if I'm looking for, for something deep, something where I know it's technical, like some.
Patrick:You know, some small business tax concept, right?
Patrick:I'm not gonna trust the Google summary, right?
Patrick:I'm gonna go to some lawyer's website where I know they, they've got someone, you know, deep in the dungeons thinking about tax law, writing a long blog piece.
Patrick:So I, I think you'll see that play out as you are right now on, on search.
Patrick:And I think there's really no reason the same won't happen over time in the inbox.
Brian:Okay, so you said you're, you're hoping to double this year.
Brian:Are you?
Brian:You're profitable, right?
Patrick:We're, we're profitable though.
Patrick:We're, we're investing a lot.
Patrick:we are looking to, to double, hopefully more than double.
Patrick:I think there's a lot of new product launches and we're still learning the art of the possible here in, in advisor upside and, and ETF upside still on the, we've got.
Patrick:I've got a big, big plan for the year so I can keep you updated.
Brian:Okay.
Brian:Awesome.
Brian:Patrick, thank you so much.
Brian:I really appreciate you, taking the time.
Patrick:Thanks, Brian.
Patrick:Appreciate it.
