Million-dollar newsletter business

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Read time: 12 mins

Requirement: Your focus

I had the opportunity to interview Aaksh #2 guy in the product management space on Substack and the newsletter space.

Today, let me share what he told me in the podcast on growing a newsletter business.

I’ll do it in a conversation format, so you can have fun.

Me: What led you into newsletter building? Like, what were your thoughts behind starting a newsletter in the product management space?

Aakash Gupta:

So I actually started with LinkedIn, and that was because I was writing a lot when I was working at Epic Games on Fortnite, the biggest game in the world, in my own internal Slack channels. And then COVID hit. And with COVID, I realised, I was commuting to work almost an hour and a half every day, if you count both directions. I was spending hours a day at the office just networking.

Now I have all this free time. I used some of that free time to start posting on LinkedIn. I started reading from other creators about how these algorithms give, but they also take. And you need to secure your own destiny by creating your own platform. And that really resonated with me, which is, you know, sometimes I'd post something on LinkedIn, it hit 60,000 people. Another time, it might hit 5,000 people, even if I have 60,000 followers. So these algorithms don't always distribute to your followers.

So are they even followers? It's hard to say they're true followers. I wanted to create some true followers. And so that's what really motivated me to capture people's interest. And I know it's a little bit annoying. Like, if you visit my website, after you scroll for like 30 seconds, I'll give you an email pop-up. As a user, before I became a writer, I used to kind of be like, Why are they doing this? This is so silly.

But now, on the other side, I completely understand because now I have followers who I might have acquired three years ago, and they're still on my email list. And I ask them sometimes, they say, Have you ever seen my LinkedIn post? They say, No, LinkedIn is totally buried here for me. But email is the one way I can still reach out to them. So that's the kernel of insight that helped drive the newsletter to begin with.

Me: So you are saying that you have 260k followers on LinkedIn and LinkedIn is your number one channel for growing your subscribers.

Aakash Gupta:

So LinkedIn is a pretty important channel. I would say, actually, my most important channel these days is a Substack recommendation. So I get probably the most newsletter subscribers from that feature, which I think there is today as of today, like over 1100 newsletters recommending my newsletter. And so those are people who also write newsletters who felt like my content is worth recommending to their audience. And after people sign up to their newsletter, Substack says, would you be interested in subscribing to these other newsletters that this author recommends, including my newsletter, Product Growth? And that has been the really important flywheel for growth.

Anirban Das:

So why did you choose Substack over Kit and Beehiiv?

Aakash Gupta:

So if I were to do it again today, I might actually choose Beehiiv. I think Kit is a little bit expensive. It's pretty good for people who wanna create like email sequences or personalise the content they send to folks into certain segments and then have segmented list strategies.

So I do really like the functionality of Kit. To be honest, I was hoping Substack would have released that functionality by now. I'm very frustrated, honestly, with Substack. There's a couple of things that are wrong with substack number one is They actually they're trying to be like the social media platforms where they own your audience instead of you owning your audience So if you click a link to my website these days They put an app pop up like follow Akash in the sub stack app, which is quite annoying But back in the day it used to be an email address pop up.

So I really liked the functionality in the beginning days of Substack. When I started, Beehiiv wasn't really a thing. Maybe like it had just gotten founded, but it didn't have the great functionality it has now. Now, Beehiiv is far and away better than Substack and Kit in my personal opinion, because they're shipping so many features so frequently. They're good at deliverability. They're good at customizability.

They're good at allowing you to incorporate ads into your business model. And so all those things I think make Beehiiv probably the best place if I were to start again today, but the lock-in that I have from Substack, you know, from those recommendations, this 1,100 newsletters recommending me, is pretty hard to walk away from.

Anirban Das:

So I have talked to the account executive of Beehiiv as well, Tom Brady. And Beehiiv is actually building a newsletter ecosystem. I mean, the founders used to work in Morning Brew. So they know how it works, how the overall newsletter content ecosystem works. But when it comes to Substack, Substack is trying to be a social media or creator-first platform. So that's why they are inventing the Substack nodes. I mean, maybe they will start bringing some new features as well. So that's why, like Beehiiv built only for newsletter purposes. So if you are starting today, I mean, if it were your first day in the newsletter space, it would be Beehiiv, right?

Anirban Das:

Awesome. So, do you think that Substack helps you, as you have mentioned that Substack helps you with this recommendation part? But apart from that, when it comes to your content flywheel, do you think Substack has an importance in that? Or do you think that it's your social media game?

Aakash Gupta:

Substack does a couple things that are pretty interesting. So, three other benefits outside of recommendations that I do like about Substack. Number one, they have a lot of saved credit cards, and I have a paid newsletter. That's actually my main business model. And people, what I've noticed, a lot of the people who are paying from a newsletter have already had a saved credit card with Substack. So that's one really important thing. That's reducing the friction to become a paid subscriber. Number two is that Substack's main business model is paid subscriptions, whereas Beehiiv is very much invested in its advertising network.

And a kit is very much invested in getting people to pay based on the size of their email list. So they all have different monetisation models. And what your monetisation model is, what your incentives are, really drives the structure of how you build things. So Substack is constantly releasing features to improve paid subscriptions. One of those features that they recently released, I think a couple of years back, guess now, so not recently, but released, that I thought was effective was that they created some programs around referrals that were very easy to use for users.

Users could, free users could refer people to my newsletter. And if they referred enough friends, they'd get free months of the paid newsletter. And if they referred more friends, they'd get paid more for newsletter months. And they could also rise on my leaderboard, which is public.

So that's one example of how, because of their business model, they're shipping features for that. Another thing that they've released is Substack Notes, which is basically a Twitter competitor or a threads competitor. So I do post some content on there and receive some subscribers on there. To be honest, it's not that good. You know, it's not as good as Twitter or LinkedIn. It is better than threads for me. So I do like that component of Substack Notes. And then probably the last thing that's interesting about Substack is that they are actually doing a really good job, or they're spending a lot of money, a lot of the money they're earning from people like me, to acquire more creators.

So they keep acquiring more and more, and you might have recently heard the news that they just raised, I believe, it's like a hundred million dollars at like a billion-dollar valuation. So they are continuing to get money, putting it into investing in the business at a fast pace. And so that's the other thing that I like.

Anirban Das:

So I have come to know about you from the Growth in Reverse newsletter. I guess mostly those people who are watching this podcast, they came to know about you from GIR and only because Chenell is doing a pretty amazing job there. She also invited you to her podcast. So, like you have mentioned that don't be everywhere in the podcast when it comes to the paid newsletter business. So what do you mean? Do you mean that we should focus only on one platform when it comes to the paid newsletter or do you think that we should distribute the content in such a way that we can attract more people and we can become the people magnet?

Aakash Gupta:

I don't remember the context of what I was saying in terms of don't be everywhere, but the larger sort of insight here, right? Or at least how I try to structure my content is I have a paid newsletter at the centre of the business, right? So I want to make sure that my paid newsletter subscribers get access to the best, most content first, right? Best, most first. And so what I'll do is I'll create, or my entire life really, is organise around creating a really, really good paid newsletter. Then once I create that paid newsletter, I'll take a look, and I'll say, what portion of this am I gonna distribute on social media? What portion of this am I gonna make available for free subscribers? And so, taking that basically hub and then creating spokes off of that. Maybe if there are five, really good infographics in this paid newsletter, maybe two of them will be available for free newsletter subscribers and the ones that are available for free newsletter subscribers, I can post on different social media. But I'm not gonna necessarily reveal all five because then there's no reason to be subscribed to my paid newsletter. So that's how I try to think about it.

Anirban Das:

So you also have a podcast, which is free. So how do you use your podcast to grow your subscriber base?

Aakash Gupta:

I think my podcast actually doesn't grow my subscriber base at all. It most likely shrinks my subscriber base because I send emails of my podcast to my newsletter. And every time you send an email, as you know, you get a bunch of unsubscribes, and I'll get like right now, like these days with a list of 170,000, 7,000, I'll get something like 150 unsubscribes when I send a podcast email to the list. And then when I distribute my podcast on social media and different platforms, I'll only get like maybe like 10 free subscribers back from promoting the podcast. So the podcast, at least as of now, and it might be due to my own failures as a podcaster distributing the podcast or something like that, but at least right as of now, the math is that the podcast is decreasing the size of my email list.

Anirban Das:

So let's assume someone wants to start a newsletter today or let's assume someone wants to start a paid newsletter business today. What are the five steps they should follow?

Aakash Gupta:

Okay, so if you wanna start a paid newsletter, it's very different from a regular newsletter. So there's a lot of content out there about newsletters. So let's talk about paid newsletters, right? Step one: What is your market of one? Because when we're talking about a paid newsletter, we want people like Tom or Bundan or Pavel to really consider you the world's leading expert in that thing. And that's why I say a market of one. I took this concept from David Perell, and when you think about it, everybody does have a market of one. It's about figuring out what those things are that people want that you have expertise in that very few other people have expertise in.

And at the centre of those three circles, at the centre of that Venn diagram, lies the place that your newsletter should be about. And so if you look at other paid newsletters out there in my niche, you know, there are some newsletters that are pretty good about B2B growth. There are some newsletters that are pretty good about consumer growth. There's very little that's really good at B2B and B2C consumer growth and careers. And so that little intersection there of, OK, B2B growth, consumer growth and career. Is there any other news that they are talking about? Not really.

That's because there's nobody else who's really had that level of expertise in that area, as we talked about from the very beginning, through a 16-year career rising from PM to VP of product across those areas. So that became my market of one. So that's step one. Step two to building a paid newsletter is actually to grow your distribution first. So, before you just immediately switch on to paid, I would recommend you get good at one social media channel. I know that people might look at me and say, Hey, you're posting on different social media channels, that's hypocritical, you're telling me to only focus on one. But actually, at the beginning, as we talked about, I just focused on LinkedIn. So at the beginning, you just want to focus on one social media platform. And that's because it takes a lot of time, investment to get really good at one social media. And even now that I focus on multiple social media, I think it hurts my LinkedIn because I don't have my brain 24 seven, just marinating on how do I get better at LinkedIn? Just opening up the LinkedIn app and looking at other people's posts. There are so many little intricacies on any platform that allow you to succeed. One of the most important things is literally using their new features when they're new. So about a year ago, LinkedIn released the video tab on LinkedIn. The video was getting insane distribution compared to its quality of the video. So I started using a lot of video.

Now that distribution has really normalised, where if your video is really good, you do get to distribution, but if you just have a normal video, you're not gonna get insane distribution. So, understanding the nuances of the new features and being able to use them and learning the nuances of what is a good one-line hook? What is a good second-line re-hook? These skills only come if you're really focused. And so establish your distribution on a single Channel. That's step two. Step three is to start building out your free newsletter list. So, as I did, I think I probably had around 60,000 free newsletter subscribers before I ever went paid.

And so you're creating this nice base where you're learning all about newsletter writing, how to write an email newsletter subject line that people are going to open, how to write a good first three paragraphs so people read the rest of the article, how to make sure that you're not sending out so many newsletters that your unsubscribes grow faster than your growth rate. There are so many little nuances on newsletters that you want to learn. Step four is to finally go paid. And when you go paid, what you should do is you should think about what is my unique offering for this paid newsletter? And so many people have different, unique offerings. And so what I would say is try not to use a copycat strategy or a copycat formula.

The key to strategy is looking at, okay, what are other people doing that no one else is doing? What are they doing? What am I gonna learn from them? But how do I create a sort of differentiated value proposition? So I really like this guy, Nate B. Jones, for instance, who's recently grown on his technology substack. So he realised, okay, people are not doing a daily AI newsletter that's paid. There are some daily AI newsletters, but few of them are paid. So I'll create one of those. And a lot of people are doing AI news newsletters, but very few people are kind of being like the same voice of reason.

That's like, instead of just hyping up ChatGPT agent mode, I'm saying here's what's wrong with ChatGPT agent mode. So he created a unique differentiated strategy, and now he's growing incredibly fast on Substack. So that's an example of creating a differentiated strategy for your paid newsletter. And then step five is to analyse your data rigorously. I look at every single email newsletter, the number one metric for me is how many new paid subscribers did I get minus how many paid subscribers did I lose? And sometimes, I'll be honest, I'll send an email, and I'll get more paid unsubscribes than subscribes.

And that for me is, I need to extract what the learnings are here? Was it the hook? Was it the subject line? Was it the quality of the deep dive? Was it the infographics? Was it the amount of research I put in? And slowly learn, as we did in steps three for distribution and steps four for free newsletter, for step five, or steps two and three, yeah, I think, what is going on for a paid newsletter? And really just analyse and live in your analytics. Take a look at your retention curves. Go talk to users who have unsubscribed. Go talk to users who are still subscribed and build both your database and user insights-based understanding of what drives success. And that's going to be the key to creating your growth.

Anirban Das:

So the UVP is really the most important thing when it comes to, because right now there are so many people who are creating their own newsletter. They are on Substack, are on Beehiiv, or they are on Kit, but the problem is it looks like the, I mean it looks like copy-pasting someone else's content or maybe just so-so content, right? So AI changed the game. AI changed the content game overall. So, how do you use AI to grow your newsletter?

Aakash Gupta:

Yeah, look, what AI has done, at least for where we are right now, is that it has allowed people who were below-average writers to create average content. If you think of one hundred newsletters, fifty used to be the average. The people who were between zero and fifty are now able to produce content at the level of fifty.

Now, if you want to grow your newsletter, you need to be in the above-average section.

For me personally, two years ago, I used ChatGPT and Claude quite a lot. But what I have found is that these days, everyone is trying to sniff out AI. They read something and think, Is there any AI smell here? Oh, is there an em dash? He must have used ChatGPT. Are there too many emojis? Then he used AI. Did he write the phrase it is not X but it is Y? Then he used ChatGPT.

People hate the feeling of reading AI-generated content.

So, for me, I do not really use AI much at all for my newsletter anymore. I used to have a workflow that relied heavily on it. Now the main thing I do is this. After I write my entire piece, I do two things.

First, I have a project file in ChatGPT and Claude that contains all my best-performing articles. It also includes my user interview notes, where people tell me what they liked and did not like. It has a bunch of public reviews of my posts. It has context about what makes a good piece for me and data on which posts have done well and which have not, along with how many paid subscribers each post has driven, because that is my North Star metric.

Once I have a ninety per cent complete draft, I drop the newsletter into that project file along with a meta prompt from my prompt library. That prompt asks the model to be extremely critical, to act like a high-level analyst, and to give specific suggestions to improve performance against my key metric.

That is the last ten per cent of refinement for my newsletter.

Anirban Das:

So, as you know, there are some top people in the newsread space. Sahil Bloom, Lenny. So they have over 900k subscribers. So, are you planning something different in order to reach that certain level?

Aakash Gupta:

I, you know, to be totally honest, I'm not the type of person who really compares myself or cares about the success that other people have. I think it's awesome that they are like have 900,000 plus subscribers, and you know, I'm very proud of the, I've been calling both of them kind of my friends and have known both of them for three plus years. So I'm just cheering those two guys on.

They're amazing. I think that Lenny lives in San Francisco, and Sahil has a very expensive home outside New York City and so they need to earn a lot of money because they're in two of the highest cost-of-living places in the world. I personally look at my own budget. Say, hey, what amount of money do I need to earn in order to cover my budget and in order to save? Try to have a low cost of living base and just do that much.

And that's the beautiful thing about being a creator. is your control how much time you put in, how much money you earn. For me, I could probably be earning five times as much as I'm earning if I were working harder, if I released a course, if I had a group coaching cohort, all these different things. If I had tripled down on an AI in 2023, I would have been the biggest AI influencer in the world. But I never did any of those things. I pursue my passion. just so that I earn just enough so that I can save and cover my budget, and I can live life. I have two young kids and, wonderful wife. Those are my real priorities. So good, great for them for having 900,000 plus. But personally, for me, I'm the happiest guy in the world because I have more than enough money to cover my needs.

Anirban Das:

So the newsletter is your tent pole, right? So you have shared how much money you have made from your newsletter. So would you mind sharing with the audience how much money you have made in the years 2023 to 2024 and 2024 to 2025?

Aakash Gupta:

Yeah, in basically what is like the growth, right, of my revenue. If you think about it, like my first year as a creator, I probably made like 200K or so. My second year as a creator, probably made around like 475K. And this latest year as a creator, I'm gonna be crossing a million dollars. So I'm trying to do more than a hundred, a little bit more than a hundred per cent growth per year.

Anirban Das:

So in June itself, you have made over $34,000.

Aakash Gupta:

on the paid newsletter. Yep.

Anirban Das:

So what is your number one advice to people who are starting their newsletter business?

Aakash Gupta:

Find something that you're passionate about and can write about for a long time. You would be surprised how many newsletters I've seen come and go in the years that I've been doing this. I've seen a lot of people who they really, I think, amazing. What they're doing is amazing, but they burn themselves out, and six months later, they don't have a newsletter or one year later, they just move on to the next thing. The people who succeed, you mentioned Sahil and Lenny. They've been doing it for years and years. And I think sometimes just that longevity is the most important.

Anirban Das:

So, 2025 is the year of local newsletters, right? So, are you planning to start your local newsletter?

Aakash Gupta:

I don't want to start any more businesses. I want to stay focused on the core because I feel like focus is what really drives success.

Thanks for checking today’s newsletter conversation. Hope it will help you.

Anirban ‘helping you scale your newsletter’ Das. 💠

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