June 5, 2020
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Audience Growth Compounds, But Takes Time to Get Started

I have been thinking a lot about how so many people—including me—are trying to build newsletter businesses. For many, these are the first 6-12 months of building a new media business.

Large and small, we all start from square one. We all start with an idea, create some content and then hope that we might build something exciting and important. But the difference between those that truly succeed and those that flounder is the successful understand their job. What’s difficult for many is that the difference is tiny.

Our job as a media company is not to produce content. Instead, it’s to serve an audience. It’s to provide what that audience is seeking out.

It’s a subtle distinction, but an important one. Our job is to serve the needs of the specific audience. For example, I may enjoy rambling on about Facebook vs. Twitter. However, my audience wants strategic insights on building media companies. Who am I serving here? My interests or the needs of my audience? Only one will be successful.

The way in which we serve the audience is by delivering information and connecting communities. We produce content so that we may build an audience.

This brings me to another point. People have misconceptions about audience growth. I touched on this last week, but in many conversations I’ve had with newer newsletter writers, there’s this thought that we need to create more content and better content. The focus is always on the content.

There’s not a lot of focus on how we get people to consume that content. This is where the subtle distinction I described above comes into play again.

Writers spend too much time thinking about their product. It’s true. And don’t get me wrong… that’s obviously incredibly important. If you are failing to deliver the right content to your reader, they are going to go elsewhere. But it’s even more important to make sure that readers know the content exists. You can have the best piece of content out there, but if you’re not doing the work to get people to read it, you’re not going to succeed.

On Wednesday, I hosted the first of two A Media Operator Zoom calls. It was a great conversation and what was only scheduled to be 60 minutes turned into a 90 minute discussion.

One thing we discussed was how a few of the represented media companies found their early audiences. For example, one guy said he interviewed hundreds of people in the first year and used their networks to help build a following. Another team hopped into forums, LinkedIn groups and any other communities where the particular professional he was looking to target existed. A third gentleman worked out an insane licensing deal with a larger magazine that gave him carte blanche access to their Facebook group.

And it made me realize…

When you’re first starting out, you have to do whatever you can to get an audience. There are no elegant referral systems, LTV-driven ad buying or elaborate partnership agreements. When you’re first starting out, audience building is a grind. Sometimes it’s 1:1. It’s not glamorous, the work doesn’t scale but it has to be done. Every user you bring in today could be a user in five years.

Audience growth compounds. But compounding takes time. It can take a long time for you to see the benefits of that early grind. It’s what can be most frustrating about building media business.

That early work, though, results in a flywheel that begins to get faster and more pronounced as you do start building audience. It looks like this:


As you create content, you have something to build an audience with, which then allows you to generate revenue, which then circles back and lets you invest more in your content creation.

A point worth making: none of those three tasks are passive. Creating content, building audience and selling ads/subs are all active tasks. The outcome of each of those are all proofs of work. And those proofs of work compound.

The building audience component of the flywheel has two components.

The first is retained audience. How good are you at keeping a user you’ve acquired on your platform? I was looking at the metrics for a media company a few weeks ago and one number really jumped out to me. The vast majority of its audience only visited the site once a month.

Trying to build a compounding audience business where you lose the majority of your audience every month is really hard. It means you need to put that much more work into audience development.

That’s a big reason why many of these newsletter-first companies are gaining notoriety. By design, they have user retention baked into the product. Rather than needing the user to seek me out, the newsletter can seek out the user. I have not hidden the fact that I think every media company needs a newsletter. It’s integral to that retention.

The second part is new audience growth. Once you’ve got your retention figured out, you can seek out the audience where they exist and work to bring them to your platform.

In the content marketing community, there is an adage that people should spend 20% of their time creating content and 80% promoting it. It just so happens that these numbers line up with the Pareto principle—80% of your success comes from 20% of your effort.

If there is an audience size in the six figures and you’re only getting a few thousand reader, creating more content won’t help you get those hundreds of thousands. Instead, you should be spending more time finding where they are.

That’s why I enjoyed Wednesday’s conversation so much. Each operator talked about going where their audience was. For the B2B operator, he went to LinkedIn where his audience spent their time. For the B2C operator, he went to Facebook for the same reason.

Many of you seasoned operators might already know this, but like I said at the beginning of this essay, there are a large number of solo newsletter writers who are still in their first year of building their media business. They are focusing all their efforts on the content creation when, in reality, they should be spending a lot more time on the active task of building audience.

One more thing before I wrap this up…

Why this relates to COVID-19

When you view your business as that flywheel above, you develop specific muscle memory. As you grow larger, you may not be in the mode of constant grind. You can take bigger chances. You can spend three months building a robust system to help you scale faster. Audience development goes from 1:1 to 1:many.

But when your DNA is grounded in the understanding that the flywheel is an active task, you’re able to withstand a lot of problems that happen.

COVID-19 is the perfect example.

There are many media companies that are announcing furloughs and layoffs. The ones that are dealing with this the most are those that raised too much capital too quickly. Why might that be?

They never developed that muscle memory and DNA. Rather than learning how to build an audience 1:1, they used boat loads of cash to try and build 1:many immediately. In good times, that might work. But when the going gets tough and you have to rely on that flywheel; the operators that know how to build 1:1 are better prepared.

That doesn’t mean taking cash is off limits, of course. Once you’ve developed the business culture of actively creating content, acquiring audience and monetizing it, you can begin to make strategic decisions to grow your business more quickly.

We see this a lot with the companies The Chernin Group buys. The companies will spend years building with the flywheel. They’ll be at the point where the 1:1 becomes the 1:many and then Chernin can come in, acquire/invest strategically and give the company resources to begin scaling.

The reason many fail at media is because they’re impatient. They see the speed in which tech platforms and marketplaces grow and think that the same can exist in media. That’s simply not the case. The early years really are spent grinding.

But the outcome of all that work is a business that has a very strong foundation, a flywheel that is compounding and the opportunity to build something that lasts.

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