Welcome to The Newsletter Operator!

In today’s email:

• The AI newsletter war. ⚔️ A deep dive into how they grow (how multiple AI newsletters have reached 100k+ subscribers 4 months!), how they make money, and who the winners and losers could be

• What AI newsletters can learn from the Milk Road

• The playbook for acquiring a newsletter

• And more…

Deep Dive

The AI Newsletter War

If you’ve been on Twitter or LinkedIn in the past few months, you’ve probably seen a massive spike in content and newsletters on artificial intelligence.

The spike in AI content isn’t surprising. It’s an exploding trend. Tools like ChatGPT, Midjourney, and Bard are revolutionary.

What is surprising is the massive rise of newsletters covering AI news and tools.

I’ve organically discovered 25+ “AI newsletters” that have been started in the past 3-6 months.

And I find more and more popping up every week.

Why is everyone starting an AI newsletter?

Many see a newsletter as the best way to capitalize on the trend.

If you’re not a programmer and can’t create AI software, the next best way to ride the AI wave is to create media (newsletters, blog posts, courses, videos, podcasts, tweets, etc).

Another way to capitalize on this is through services and consulting to help people and businesses use AI. Some AI newsletters are doing this too.

Inspiration from Milk Road, The Hustle, and MorningBrew

Almost every recent AI newsletter has been inspired by (or straight-up copied) the Milk Road.

Milk Road is a crypto newsletter, started in Jan 2022 that grew to 250k subscribers and was acquired for 7 figures in 10 months.

The Milk Road also jumped on an exploding trend (crypto, NFTs, and Web3) and quickly grew to the largest crypto newsletter.

They were self-funded, profitable, and sold for millions in just 10 months.

So when ChatGPT launched and took the world by storm in Nov 2022 (just one month before the Milk Road acquisition was announced), aspiring newsletter operators saw a huge opportunity.

Savvy newsletter operators also saw The Hustle, Industry Dive, and MorningBrew acquisitions as a signal of how successful newsletter businesses can be.

Lessons learned from Milk Road

I worked with Milk Road from Jan 2022 to Dec 2022. Here are some insights from their growth that will apply to AI newsletters (and newsletters in general):

1/ Content is king. Milk Road was genuinely funny, informative, and useful

There’s no formula for great content. It takes talent, work, and obsession. It also takes a unique perspective.

The writers Shaan, Ben, and Diego didn’t have any background in journalism or professional writing. However they were funny, great copywriters, storytellers, and obsessed with crypto.

The newsletter wouldn’t have worked if content was outsourced or if they hired journalists from the start. The unique “smart and funny friend” tone was key to standing out and growing faster than established crypto publications like Blockworks, Coindesk, and Cointelegraph.

2/ Focus on what matters most

Many people know of Milk Road for their design and funny brand character “The Milk Man”

But what most don’t know is that there was no brand, no color pallet, no website, and no character until Milk Road reached 100k subscribers.

Before then all the focus was on content, growth, and monetization.

Before 100k they just used a simple logo made with Canva and Beehiiv’s default website and email template.

3/ Marketing stunts and building in public

Milk Road put $1M into a crypto wallet with the plan to trade it publicly as a stunt to grow the list.

It worked ok was a growth hack but better as a way to keep subscribers engaged. Every day in the newsletter readers would see the balance and gains/losses in the wallet.

It quickly went down by 70% as crypto crashed.

Frankly, this could have been executed much better. The wallet just held Bitcoin and ETH and there was only one public trade announced. If there was true transparency into the portfolio and trades this stunt could have been viral.

4/ Using paid ads profitability was the key to fast subscriber growth

My agency drove 180,000+ subscribers for Milk Road with Facebook and TikTok ads. And many more subscribers from affiliate marketing.

Over 85% of their subscriber growth came from paid acquisition.

Early on CPA (cost per subscriber acquisition) was incredibly low at ~$1.00 or less. Later in 2022 as the crypto market crashed CPA increased to ~$1.70-$2.00.

That’s still a low CPA for a newsletter, but it’s a drastic increase from the cost in early/mid-2022.

Through sponsorships, Milk Road earned ~$0.50 per subscriber, per month. Making subscriber payback period just 2-3 months. This made it possible for Milk Road to be self-funded and profitable quickly after starting.

5/ The Crypto Hype Helped and Hurt

Milk Road would not have succeeded without the crypto bull market of 2021 and 2022.

If they started just 2-3 months later, the newsletter would have been a fraction of the size and it may have never become profitable and sold. It also would have been a bigger success if it was started 3-6 months earlier.

(Milk Road started in Jan 2022. Crypto started crashing around June 2022).

The crypto hype helped us acquire engaged subscribers at a very low cost. But when the hype diminished cost per subscriber went up and those subscribers' open rates (and overall list open rate) went down a ton.

The crypto advertising market also slowed. It was hard to find sponsors for the newsletter, and sponsors were willing to pay less.

Will AI newsletters suffer from a similar boom and bust model?

Probably not to the same degree.

The AI trend seems more sustainable and less based on financial markets and greed. But there will be slowdowns and AI news and developments that could hurt AI newsletters.

How are AI newsletters growing? And how are they growing so fast?

• Zain Kahn grew his AI newsletter Superhuman to 200,000 subscribers in less than 4 months

• Rowan Cheung grew The Rundown to 150,000 subscribers in 4 months

• Ben Tossel grew Ben’s Bites to 90,000 subscribers in 7 months.

And dozens more AI newsletters have hit 10k-30k+ subscribers just weeks after starting.

How?

I’ve found these newsletters use 3 primary growth channels:

1/ Twitter

AI newsletter operators are masters at Twitter growth and converting views and followers on Twitter into newsletter subscribers.

Here are 3 Twitter growth tactics I’ve seen them use:

A. Rowan Cheung publishes 2 threads a day with a CTA for his newsletter at the end.

B. Zain Kahn consistently goes viral with image Tweets of AI tools. Below these tweets he adds a call to action to join his newsletter.

C. Ben Tossell uses Twitter replies to grow. This reply to the CEO of Google got 25k views and likely drove hundreds of subscribers.

D. Aadit Sheth used email-gated content in his threads to get subscribers.

E. Nathan Lands shared his Twitter growth tips in this thread.

2/ LinkedIn

AI newsletter operators also have amassed huge followings on LinkedIn.

Zain Kahn has 500,000+ LinkedIn followers and posts similar content to LinkedIn and Twitter.

Pete Huang, Alex Banks, Aadit Sheth, Azeem Azhar, and many more are also using LinkedIn content to drive newsletter subscribers.

3/ Paid Social

AI newsletters are using Facebook, Twitter, and TikTok ads to grow.

Paid Social is a tried and true growth channel for newsletters. Subscribers can be acquired for <$1-3 and this channel can drive tens of thousands of subscribers per month.

AI newsletters have also learned how to leverage it.

4/ Sparkloop Partner Network

The Sparkloop partner network is an affiliate network for newsletters. You can recommend newsletters to your audience and get paid per subscriber you send. Or pay for other partners to recommend your newsletter and only pay for a qualified subscriber.

AI newsletters like Superhuman, Synthetic Mind, The Intelligence Age, and more pay ~$2.00-$2.50 per qualified subscriber, and spend up to $15,000 per month on the network.

The interesting thing about Sparkloop is newsletters only pay per “qualified subscriber”, and newsletters determine what a qualified subscriber is.

For example, Synthetic Mind only pays for subscribers in the United States who open at least 2 emails in the first 14 days on their email list.

It’s likely that ~50% of subscribers that partners send to Synthetic Mind don’t meet those criteria.

Which could mean newsletters that set qualification rules like Synthetic Mind have a ~50% lower CPA. Meaning that their listed payout per subscriber is $2.50 but they actually could pay $1.25 per subscriber.

Who are the biggest AI newsletters?

• TLDR AI - 225,000 subscribers

• Superhuman AI - 200,000 subscribers

• TheSequence - 160,000 subscribers

• The Rundown - 150,000 subscribers

• Big Brain - 100,000 subscribers

• Ben’s Bites - 90,000 subscribers

• Exponential View - 84,000 subscribers

• The Neuron - 60,000 subscribers

• The AI Valley - 60,000 subscribers

• Alpha Signal - 50,000 subscribers

• Future Tools - 50,000 subscribers

• Not A Bot - 50,000 subscribers

• The Intelligence Age - 50,000 subscribers

• Through The Noise - 30,000 subscribers

• You Probably Need a Robot - 20,000 subscribers

• AI Supremacy - 20,000 subscribers

• Lore - 7,000 subscribers

These are the biggest AI newsletters I could find based on publicly available subscriber numbers.

It’s important to note 3 things:

1. Subscriber numbers don’t tell the full story. Some newsletters with fewer subscribers have higher open rates (newsletter readers) and/or higher revenue.

2. Some AI newsletters choose not to share subscriber numbers so they aren’t on this list

3. I sourced most of these subscriber numbers from the newsletters themselves. I assume their reporting is accurate but it’s possible some exaggerate their numbers.

If you know of more successful AI newsletters that should be on this list, reply to this email to let me know or comment on this post.

How do AI newsletters make money?

There are 6 primary ways AI newsletters make money:

1. Sponsors

2. Services and consulting

3. Courses

4. SaaS

5. Paid newsletters

6. Affiliate marketing

Sponsors

Newsletters charge brands a flat fee for ad placements in their newsletter.

Superhuman AI charges $1749 for a “main ad” according to their sponsorship page. Assuming they sell all ads at this rate in their 5-day-per-week newsletter, Superhuman makes $34,980 per month in sponsorship revenue.

This of course is an estimate. The real number could be less or more depending on their ad fill rate and how many secondary sponsorships they sell.

Services and consulting

Newsletters like You Probably Need a Robot and Lore offer agency and consulting services to help companies use AI and automation.

Courses

Prompt Engineering Daily sells a course on how to write prompts for ChatGPT.

SaaS

Through the Noise founder Alex Banks created Tribescaler, an AI SaaS product that helps creators write viral Tweets.

Paid newsletters

The Sequence offers a premium subscription that unlocks additional content, comments, and discussions.

If 5% of their 160,000 free subscribers convert to paid at $6 per month, they would bring in $48,000 per month in recurring revenue.

Affiliate marketing

Many AI newsletters use Sparkloop Upscribe and Beehiiv Boosts to share paid recommendations for other newsletters after users sign up.

This could generate ~$1-$3 in earnings per subscriber. So an AI newsletter that adds 10,000 subscribers per month could earn ~$20,000 from Sparkloop Upscribe.

Winners and losers

Many AI newsletters struggle with differentiation.

There are dozens of AI newsletters covering the same content in similar ways. Many straight-up copy other newsletter content and Twitter threads.

Sure, there are many that stand out. Their content is better because of their style, tone, newsletter design/format, ability to summarize, or their witt.

But news content about AI is quickly becoming commoditized.

Not only are AI newsletter startups competing with each other, but they’re also competing against established media companies.

There are 2 ways AI newsletters can stand out and win:

1/ Different content

Different is better than better. People are quickly becoming fatigued of constant AI news updates.

But people still want to learn how to use AI to work smarter, work less, learn faster, make more money, and better their life at work and home.

AI newsletters should help them do that with great evergreen content. Rather than recycling the same AI news every day.

Helping people become better marketers, designers, investors, writers, managers, etc, with AI will be a winning formula.

But the real winners will create truly unique content and awesome communities around AI and how to use AI that I can’t imagine.

2/ Better monetization

There’s a huge focus on who can be the “biggest” AI newsletter, but very little focus on revenue.

At this stage, that’s ok. Many of the biggest and fastest-growing AI newsletters were started less than 6 months ago. Growing revenue takes time.

But what will separate the winners and losers is monetization – who can grow revenue the fastest and have the highest subscriber LTV.

Subscriber LTV and how much you earn per subscriber per month determines how much you can pay to acquire more subscribers. How fast you can grow.

I believe over the next 3-6 months organic social growth will slow down dramatically for AI newsletters and they’ll have to rely more on paid acquisition.

At that stage, the newsletter with the highest LTV and shortest payback period will grow the fastest and outpace others who may have been previously ahead.

How do AI newsletters increase LTV?

By being great at the 3 ways newsletters make money. Which are:

1. Affiliate Marketing - Promote someone else's product, get paid when someone buys

2. Sponsorships - Promote someone else's product and get paid for that promotion

3. Owned Products - Promote and sell your own content, product, or service

The winning AI newsletters could be great at all three of these methods or amazing at one.

Here’s how:

Affiliate marketing - AI newsletters could partner with AI SaaS products to get favorable commission-based deals. Then write reviews and tutorials on those products.

Sponsorships - AI newsletters could sell more sponsorships, at higher rates. Right now, most AI newsletters don’t have sponsorship sales teams and charge low CPMs.

Owned Products - AI newsletters could create courses, paid communities, job boards, events, agencies, or SaaS products to sell to their free subscribers.