E1: “How to Build a Media Business in 2023”| Austin Rief, Morning Brew

Transcript

AR (Introduction)

You know, the internet is bigger than you can imagine, even when you think about how big the internet can possibly be. And so you think, oh, I had this niche I'm gonna do, you know, Substack for Rolex collectors, and you're like, oh, what's the TAM there? A thousand? It's no, it's 50,000. Right? And I think everything is like 10 or 50x more than you think, which leads to so much opportunity.

I think we're in the first inning of, let's call it maybe a CMO, multiple CMOs thinking, oh wow, I can build hundred million dollar businesses off the backs of my brand. I think they're too focused on, you know, building businesses. So we're in the first inning there of people leaving their jobs and going full-time on content.

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Austin Reef is the CEO of Morning Brew, a media company that covers business news with unique blend of wit and insight. Morning Brew is a 70 million growing business that encompasses newsletters, podcasts, brands, and products. During our conversation, Austin shares his perspective on the future of the media business, the critical elements that determine success, including talent and monetization, and where he sees the single biggest opportunity to build a media empire.

Austin, thanks for coming on Media Empire's podcast. Excited to chat with you.

Yeah. Happy to chat. Awesome.

Austin, your Morning Brew story has been told lots of different podcasts. So I wanna start in the middle a little bit or tell some stories that perhaps haven't been as as widely told.

I'm curious, as you think about the evolution of Morning Brew. What were the different forks in the road? Or different like phases where you made a decision to expand it this way, you know, different verticals, for example or you know, evolve in this way, you know, courses and other business lines where you could have perhaps made a different decision.

I'm curious what were the kind of those evolutions or forks in the road?

Yeah. So I think there were a bunch of inflection points, right? A bunch of decisions. So you can start at the beginning or towards the beginning when we decided to go more general. I think it's a theme of Morning Brew is at the time 2018 or so, when we hit a million subscribers, we had this idea ‘do we go down funnel and bill a verticalized media company that stands for finance?’

Or do we stand for more general business news? And we opted to stand for more general business news. Now we do create content in retail, marketing, HR, all these verticals. But we didn't build a business that has, you know, seven or eight different revenue streams all targeting, let's call it people work on on Wall Street.

I think that was a, that was one big one. And then, you know, along the way, every time we'd decide to continue to grow, decide to launch something new is another inflection point. And do we aim for growth or profitability? Whether it's expanding into multimedia or trying to build direct to consumer revenue.

These are all inflection points in the business. And trying to, you know, grow a little bit more, take it up a notch, diversify revenue a bit.

What are things you decided not to do of hey, that's just either too hard or outside of our competent area, or we just don't think it makes business sense, even though other people are suggesting, Hey, maybe we should explore it.

Yeah. The early days, the big re 2017, the recommendation we got was, you know, pivot to video. Launch video was all about video on Facebook. Right. And at the time we started a newsletter, cuz we didn't know a single thing about video. I, we couldn't have made videos. Right? Even the idea that you know, you just pop up your camera and do this.

This wasn't nearly as accessible in 2017. And and that was a big thing. We're like, you know, we're just gonna focus in the newsletter business. That's something we know we're not exactly sure, you know, we're not gonna go raise $10 million, try to compete with Buzzfeed or Vice or anyone like that.

One thing you've talked about is being really excited about just. Just niches and just you know, owning a niche especially, you know, B2B niche or a high consumer you know, a consumer niche with hi high consumer spend, know, serving rich people effectively. That said, you picked a psychographic profile.

I'm curious, do you think other companies should also consider picking psychographic profiles? Or are they all picked over? Let’'s talk about, we're starting a media company in 2023, Morning Brew already exists, et cetera. Like how would you think about that trade off?

Yeah, I think it's interesting cause I think a lot of what I say now is very counte- intuitive or counteracts or, you know, is not what we did for Morning Brew.

And I think that's always the challenge with startups in general trying to copy that companies are successful, right? Starting in 2017, I thought we, you know, we showed that you can go general, right? The skim showed that you could target women. We showed that you could target business interested people.But those large swaths had been taken up by the Morning Brews and the skims of the world, but then also the number of people, the long tail of people who are creating content for specific niches has increased so much that now I think that to, to try to compete with a Morning Brew at scale is really hard. And what the internet has shown and what these platforms have shown more than anything is that you know, the internet is bigger than you can imagine, even when you think about how big the internet can possibly be. And so you think, oh, I had this niche I'm gonna do you know, a substack for Rolex collectors, and you're like, oh, what's the TAM there? A thousand? It's no, it's 50,000, right? And I think everything is like 10 or 50x more than you think, which leads to so much opportunity.

Totally. So if we're talking to, you know, ambitious media exec, you know, media entrepreneurs who wanna start a media company in 2023 is are your options either go super deep on a niche, crush that niche across multiple platforms and, you know, you'd be surprised at how big that, you know, opportunity could be like the, you know, Kevin Rose's luxury watch, you know, company, I think that's doing a hundred million revenue or something.

Or is it, and, or an option is to like, Try to aggregate niches, like what Industry Dive did, what, you know, Workweek is trying to do. Does it feel like those are the two options or how do you think about that?

Yeah. To me, those, both those companies are quite successful. I know, industry, I've sold for half a billion dollars.

To me the first is really where the opportunity is because, you know, starting a business today and it really depends. Do you want this to be a lifestyle business where you can make a couple hundred thousand dollars a year or do you want it to be a 50-million revenue business? But if you want the former, you're really gonna have to diversify. Not away from ads, or not away from subscription, but in addition to, right? A watch marketplace, for example. And if that's the case, you have to pick a niche and become known as the go-to expert in that niche. And I think in that respect, we are in the first inning because there are so many CFOs, CROs, CEOs, who I think they think the opportunity in content or content-led business, not only content, but content-led business is quantified in the hundreds of thousands or millions of dollars, and I actually get done. Right. You know, it can lead to, you know, 9 - 10 figure outcomes. Again not the newsletter itself but what it can lead to.

And so I think we're in the first inning of, you know, let's call it maybe a CMO, multiple CMOs thinking, oh wow, I can build hundred million dollar businesses off the backs of my brand. I think they're too focused on, you know, building businesses. So we're in the first inning there of people leaving their jobs and going full-time on content.

Give more examples that you give the watch marketplace as one, but what are more, you know, let's further paint the picture of what this could look like such that, you know, like in terms of filling the gaps of what people are missing on how big these businesses could be.

Yeah there's obviously the big examples, right? There's Mr. Beast and Feast Balls, Logan Paul, and Prime, right? These are billion dollar companies already in my guess, right? I don't know. I haven't seen the numbers. Those are big scale plays, right? But then there's so many niches, right?

Right. There's people doing it in fitness, you know, there's cosmetics, there's I met a guy who has a YouTube channel. For woodworking and he has like a, an eight figure business for woodworking. And so there are so many opportunities in all these niches and I think the important thing is you have to pick, as you mentioned, you have to pick a niche that either you're putting company cards down.

So it’s you know, real estate or finance or investing or marketing, or it's something that people have high disposable income or they spend a high percent of their disposable income on it. So hunting, fishing, right? These people are spending so much money on this, you know, race, car driving. People spend so much money on these.

And there's so many opportunities there. One other is there's someone… I’m a blank on his name. They started Flying Mag. And it's a magazine all about flying. And then I'm pretty sure the way he monetizes is he owns and then sells homes by landing strips. Like I, I think he bought like a community, I think, and he's selling, he, he's in a real estate play where he is selling real estate.

You can watch, you know, planes land and see different planes and stuff like that. Like really unique ways to monetize things. I think they’re really cool. And I think you're gonna see so much more of this.

Totally. That, that, that's really exciting to see. You went on Greg Eisenberg's podcast recently and you said that you are, you're so excited about this you niche opportunity that you're interested in potentially, you know, funding or even co-founding kind of opportunities in this space. Like what types of things you'd be potentially interested in getting involved in or that you just wanna see happen?

What I wanna see over the next five, 10 years is any true expert, right? Whether you're an expert because you've worked in the industry for 10 years, whether because you've been a watch collector, a pilot - come in and build a brand on Twitter, on LinkedIn, in a newsletter, and really have propensity for call to action.

I think there are a lot of people out there who, you know, hack their way to 100k subscribers via Twitter threads. But I don't think they're really gonna, you know, sell you anything. Their audience doesn't really love the content they create. But I'm talking about true experts, and I think the opportunity over time is to build a really lean, high margin business and just build a brand, be the go-to person for flying or for hunting?

You know, it's the same idea of really owning a space. It, the reason why it's so hard is because for most startups, you can hack your way there, right? You can say ‘Hey, I'm gonna learn about the ride-sharing business and I'm gonna, build Uber’ and obviously that wasn't easy, right?

But you don't have to, you didn't, you know, Travis didn't have to be a taxi driver, right?. And in fact it was probably a benefit, right, of him to not be, you know, or own a taxi cab company, right? Airbnb guys, famously, obviously they had people stay on their couches, but they didn't work at Marriott.

But for this idea, you actually have had to put in the 5, 10, 15, 20 years to become an expert. And that's what's so hard is that people who want to do it don't have the expertise, don't have the experience, and haven't spent the time. And that's the interesting part here is it kinda breaks some of the the narratives of Silicon Valley and VC investing.

Yeah breaks it, how so?

In the sense of, again you… in Silicon Valley, you know it, it's often said that you don't want a disrupt an industry from within, right? You don't wanna have worked at Marriott and then disrupted. You wanna have an outsider's perspective because you can view things differently and you don't view these artificial or potentially artificial walls, these barriers.

You're just like, oh, well why? You ask, why? Like, why is that the case? Right? But let's say for example, someone was gonna start. You're gonna build a brand all around copywriting, right? You want someone who's really good at copywriting has spent years doing that. And so in that regard you know, they don't have to be a, an industry expert, but they have to be really good at copywriting.

Yeah. Make expertise great again.

Exactly.

So thought experiment. Let's say, you know, Morning Brew was flourishing, but you were no longer there for and you still have the same expertise and resources that you have now. And let's say you are ambitious to build another media company. Why not create… would you create like an agency or like a private equity model? Or what is the business where you take all these experts and you get the benefits from scale? Like how do you think about that?

Yeah, so I, I think it's an interesting idea. I haven't exactly come across, yeah what it would look like, but I think totally, right, I have an idea, you know? If I wasn't at Morning Brew, would I do this for building media companies, right?

Would I create a media company about building media companies? Right. Like it's a little yeah, meta. It's a little like meta. Yeah, exactly. And would I consult and help all these people start their companies? And again, the question is how would I monetize, right? Cause I wouldn't wanna monetize a consultancy fee.

You want, you'd probably take some upside, right? You'd co-founded with them effectively.

Exactly. Exactly. Or, you know, what's interesting is and I'll give him a shout out. There's a guy named Tyler Dank who worked at Morning Brew. Was our first, like everything besides writer, our first product manager, first growth marketer, and he started a company called Beehive, right? It's a competitor to the Substack, the reviews. But what's interesting is, a, at the time we couldn't launch that within Morning Brew. What was interesting is, and I would never do this because Tyler's built a great company, but if I went out and did that right, that's exactly in this model of me building this verticalized media company.

And the question is, how do you aggregate across many? How do you partner with them or you buying or you building? I think it can be done in a number of different ways. I just think you need the right people and you need to most importantly, be able to add enough value to a creator to get them to work with you.

Yes. And that is a high bar. And so sticking in the aggregation theme, l let's talk about Industry Dive. If Industry Dive started in 2023 w what would it look like and would it be successful? Is there an opportunity to build you know, aggregator of trade you know, content niches or how do you think about that?

Well, I don't know if you get started from scratch. I guess you technically could, right? But it's really hard. I think what Industry Dive did is they took these trade publications that were written and brought them online and made them look much better and made the content more internet-friendly, internet-native.

But I, I think now it would be tough to replicate that model, like there's just so many more companies. But I do think there's a big, and this has been spoken about a ton in the media industry, but there's probably a B2B roll up of sorts, right? Where there are all these niche publications that are doing 2, 3, 4, 10 million dollars of revenue.

They have a conference business, they have a subscription, they have an ad business. And can you buy all of these, the real estate pubs and the marketing pubs and scale technology across all of them? Scale ad sales across all of them, you know, what are the synergies and build something really big.

And I think the kicker there would be, if you can build a data product on top of all of that and sell data into these companies, that's where it becomes really interesting, right? That's where you can build something where it truly is venture backable, right? You know, in the tens of billions, and it's what like Freight Waves is trying to do in the freight industry. If you can do that across 10 or 15, it gets really interesting. Yeah,

…It's and say more about what the data business would look like and how you'd get economies of scale across these categories. Like what's really important there?

Yeah, so I'm not an expert on the data business, right?

But what a media company does is it gives you access to a lot of people in a frequent basis, right? And so you can either collect data from them, right? Interview these people or you can give them data and do like a data-sharing service, for example. Oh, you can get, you can, you know, you're in the, I don't know, the watch business, right?

You know, you can plug into like your business for example. And I can see, anonymously of course, almost a similar web, right? I can see what. What you guys are selling and for what price. And you can, and in exchange of that, you get data from other people and you're selling into that.

And I'm not a data product expert, but there's something there around owning the audience to the entire…the entire industry. You have access to everyone. They trust you more than any other, you know, publication.

Makes sense. Lot, lot of opportunity there. Let's look at Work Workweek as a, as another example.

And, you know, there's a specific company, but I'm also just curious that the broader model that, that they're doing? What do you think is exciting about that model and what do you think is, like, a risk of that model? And of course you guys are, you know, have your own flavor on it.

Yeah. I, look I think B2B is always interesting. I, that, that's like my thing is I think consumers are hard. Consumer brands are hard. They're here today, gone tomorrow, so I really do what WorkWeek's doing in the sense that they're going B2B and they're using talent, right? And I think talent first is the way to go.

And so they have a flavor of what I'm talking about. I think it's a really interesting business model. I think they saw what Industry Dive did, and they said, ‘Okay, how do we make the Industry Dive for 2022 or 2023? And this is the business they came up with. And I think it is a good idea. It's a really interesting concept.

And so I like that. You know, look, the challenge is always working with individuals is hard, right? They, you know, they, well, what's the expression? Mickey Mouse doesn't get a DUI, right? When you work with, you know, when you're Disney…Why is this just a great business? Mickey Mouse doesn't die and Mickey Mouse can't go to jail. Or, you know what, whatever it may be. So that that, that's pretty nice, right? So that's always the challenge is dealing with people. How do you deal with people? How do you retain them? How do you keep them motivated? How do you add enough value to them where they stay excited and like you, these are all the things that we deal with on a day-to-day basis.

And they're gonna deal with too and, you know, if they can execute well, it's an execution game. There's no technology risk. It's all execution risk.

Yeah, it is. It is interesting, you know, the Industry Dive takes this kind of you know, everyone, you know, I don't mean I say this in a positive way or I don't mean to say it in a negative way, but everyone's replaceable and some it's all about the brand, and less about the, you know, the individual creator.

Whereas WorkWeek, I think it's, I don't say exact opposite, but they're much more creator, you know, -focused. And WorkWeek is the, you know, white label and the back brand, in the back, empowering it. You guys, I think, explore both models or do some hybrid in some ways. How do you think about the pros and cons of those models or what do you think makes most sense?

You're saying between creator and the brand?

Yeah, like unified brand.

So I think every business is different, right? But for us, we think the balance is to do both, to build a really great brand. And leverage the brand you don't want to hide the brand, right? You want the brand to, especially in an ad-based business where you're trying to work with big, you know, financial institutions or big consumer brands, they wanna trust your brand. So you need to have the Morning Brew brand, or we believe when need to put that front and center.

But we also believe that people follow people. People follow individuals, and it's the classic, you know, individual over institution mindset. And so we think the correct thing to do is to bring them together. There are a ton of companies who are successful not doing that. Industry Dive, of course, is one.

The the Economist is another, is really succeeded with that. So it's not impossible to succeed either way, but I think knowing why you're doing what you're doing is what's important.

Yeah. I I'm gonna tell you a little bit about what I'm up to in a way that helps put some of these questions in context and also you know, it's a bit of a…I'm gonna ask for a live advice session.

Alright, ba basically I'm incubating a media company in the tech space, but my vision is basically podcast and newsletters for every category. Some of it's going to be partnered with VCs who are just like too busy to do this on their own, but hey, they just show up or founders and, but they have good distribution and they make good content and then I'll take care of everything else.

And some of it is going to be actually finding the next, the Lenny, when is an Airbnb and has an inkling that he wants to write a newsletter. What advice or even follow-up questions to better understand you know, might you have or reactions?

Yeah. My question would be why is why would someone partner with you, right? What are you providing for them such that they should partner with you? That's always the biggest thing - is like everyone's to build a network and they're valuable if you can build them. But why is someone gonna work with you? And then why when they become successful, are they gonna stay? And why are they not gonna just leave?

As long as you have the right infrastructure, the right contract length, the right setup. If you bring in a Joe Rogan or a what's his - Lex Freeman, right? Or any of these people, right? It’s your ecosystem. And yes, it's gonna suck when they leave, but if they have an act as a rising tide that lifts all boats for what you've built, then you really don't have the right infrastructure in place, right? And so your goal should be to retain them as long as possible. They may leave or maybe renegotiate where they get the vast majority of the upside, but that's also gonna be very dependent on what are the shared services you provide for them?

Are you selling their ads? Are you helping them grow? Are you editing their content? Are you sourcing guests? All of that stuff will go into their calculus and if they leave or if they stay.

Fascinating. How do you think about different formats? Like I, I know Industry Dive is just You know, newsletters slash like publications. Are podcast networks on their own that valuable or how should I think about the, like the business value of podcasts, versus newsletters versus like newsletters plus new or whatever Industry Dive does, like a combination of.

Yeah. So one insight that I think is really important for anyone starting thinking about a network is that, like mediums grow like mediums, right? So podcasts grow, other podcasts; newsletters, grow newsletters, you know, YouTube grows YouTube, but growing across is very hard. It is. You'll see growing from Twitter to podcast like you might think, or newsletter to podcast even, right?

We expected our conversion rate on listeners to podcast downloads, even to give it one try would be super high. And it wasn't that high, right? Because it's a different - it might be the same psychographic of person, but they have different consumption habits. And oftentimes the person wants to read a seven-times-a-week-newsletter, doesn't wanna listen to a once-a-week, 45-minute interview podcast.

And so having the network of one medium and dominating a medium and then expanding is super powerful.

Let’s say say you dominated the podcast, like how should I think about monetization…Or just how you guys think about monetization on podcast networks?

For us, it's, it's host-read ads, right? So it's an ad-based model.

And then we've built or we've been working towards a direct-to-consumer business as well. So for example, we've a really successful creator in our platform. Her name's Katie Gaddy. Her podcast is The Money With Katie Show. You know, 40 to 50,000 downloads per episode.

Her Instagram's 150, some thousand. Her newsletter's a hundred some thousand. Every year she launches a wealth planner, which is updated every year and you put your income in and everything and it spits out all this information about your wealth, helps you track your net worth. It's six-figure product, right? And it's very high margin. And so we look to monetize in two different ways. I think ads are, you know, some people are very dismissive of ads. I think that's a mistake. I think ads are important piece, but just a single piece of a puzzle. It's not the full puzzle.

Talk about the trade-off between subscription and ads, or how modern media companies, like is it ‘Yes and’ just ‘Oh’, like often are always do both. Or how should, how? How do you recommend I think about it?

Yeah. So it's ‘Yes and’ right?. I think ads are really helpful to get things off the ground and so you don't burn money, right? It's a good way to, for most businesses to really fuel growth.

It's not a great business if you're trying to build, you know, again, a multi-billion dollar business in terms of you know, having true equity value ads are a very tough business there. It's very fickle.

Yeah. If you were dead-set on building like a media company in the tech space, There hasn't been a ton of innovation outside of the Lenny's and the Packys that, that we talked about. There was the information a few years ago, but that's like a, you know, more of a Wall Street Journal, like news, you know, scoops proper business. How would you think about what is the opportunity or what is the white space in tech media?

I guess the que do you consider Lenny Tech media?

I don't know if I would, right. Like I, I think it's all about definitions, right? And it gets a little tough, but if you think the idea is operators helping people who work in tech not become more informed about the industry, but to become better at their jobs, the opportunity is endless, right? The opportunity to help people get better at their job is endless.

There's endless niches, endless opportunity. The opportunity to tell better tech stories - to me that's not nearly as exciting if you're trying to build a big business.

Yeah. No, I'm focused on the get better of their job. It's the working name for the company is called Turpentine.

After the quote by Picasso - When art critics get together, they talk about form and meaning, and when artists get together, they talk about where to buy cheap turpentine. So it's meant to be like practitioners talking to each other, you know, kind of insider like, on just how to get better.

That's a great quote. I love that aim.

Yeah Thank you. And so when you say as endless opportunity, you, what you mean is just say, go by, like position by position and, you know, everyone's in some like career path. If they have a sense for how to get better in that career path, there's a big opportunity there.

Totally! I think, yes. I think the question though is how big are those opportunities, right? And I think that's gonna be your biggest challenge is if there are $3 million opportunities…to sell ads in these niches is not easy, right? And it's tough to sell across, right? How many companies wanna buy ads for project managers and for marketers, and for people who work in healthcare and people who working on IT.

And that's always what's tough about going har you know, going into horizontally, across verticals, scaling an ads team is gonna be tough.

Yeah. And is the reason why you guys pick the categories you pick ‘cause there is some adjacency to each other or because you already have a edge there?

Yeah, so we, it's a variety of factors, right? We look at everything, we look at (1) Is there enough news to tell, right? We're in the news business - Is there enough stories to tell, right? That's really important. Cause we wanna send three to five newsletters a week per vertical.

The second Is there enough overlap between the people, you know, that like the marketing industry and our reader base, that's our big advantage over someone like an Industry Dive is we start day one and have 50 or a hundred thousand subscribers. It's very unfair when your verticals are profitable day one, because. You have a list.

Yeah. It's really interesting. And so you, when you think about how to work with creators, let's say you're advising me on, you know, I identify these future Lennys and I, you know, first I focus on what the value prop is, et cetera.

Do you have a sense for what are the economic arrangements that best set up for long-term success? Should I be trying to hire, should I be trying to fund? I know some of it is case by case or a lot of it, and depends what they care about too. But do you have an instinct on what like, You know, even medium term win-win relationships, you know, could look like?

Yeah, the funding thing is interesting to me right now. Coming to terms on evaluation is gonna be really tough. I think a lot of the way these networks work is you try to partner with big names as almost like marketing and to expedite distribution. And then you try to bring in people who you think you've found ahead of the curve.

People who you think can build a big brand, who can become somebody, but they're not right now, and you pay them a salary and then you know, you kinda… that's where you can really make your arbitrage right? It's finding, you know, hidden gems, right? If you brought Lenny onto your platform, how, how much arbitrage are you gonna find there?

Right? He's, he knows what he's worth and he's not gonna, know, sell or whatever for less than that. So you're not gonna find much arbitrage there versus if you found the next Lenny, right? Maybe something's more talented than Lenny, a better writer, but no one knows who they are, and they actually haven't even started yet, right? They're still working at Airbnb. That's where the arbitrage opportunity is in my mind.

Yeah, totally. And so l let's say, you know, I found the Lenny for, you know, 5 or 10 different categories where off the races there's, you know, there's a podcast, there's a newsletter. Then there's like additional business, there's like recruiting or there's events, or there's other products that you mentioned, you know, the planner was one example. Or what have you learned about the different, you know, courses, like different business opportunities and which ones make more sense to go into relative to each other?

Yeah, so I think the number one thing we've learned is it's really hard to do a bunch of things at the same time, and so I don't think any are better than others, right? Necessarily, right? It's all about who the audience is, what the product is, what your level of investment is, but doing multiple things, having multiple sources of revenue and working on those simultaneously, that's really hard.

And so I would recommend. You maybe start with ads and then do events and then do courses, but over a course of years. So 2024 is our year of events. 2025 is our year of courses. And what that thinking makes you do is it makes you ruthlessly prioritize if you only do one new thing each year. That's very different. They say, Hey, we're gonna test everything and testing everything is really hard. And you need to have an a plus team to say, Hey, we're gonna go out there and we're going to try seven monetization you know, revenue streams Day One. It's really challenging.

Hard to do all, all at once, for sure. Let’s give more advice to the creator. Let's say, you know, someone is listening to this. They have, you know, the 15 to 20 years of experience doing something, you know, owning some niche. Maybe you know, they're an accountant or they're in real estate, or they, you know, been in the InsureTech space and they wanna be creator. And they're wondering what platform makes the most they could write newsletters, they could start a podcast, they could, you know, be a YouTuber they could do other things - Instagram, et cetera. How should they… TikTok, how should they evaluate which format might make most sense?

Yeah I think it depends what they're good at, right? If they're good on camera I think YouTube's a great platform. Great platform!

If they're a good writer or if they can take a copywriting course and become a good writer. I think the written mediums are great, too. I think they're a great place to start, right? Twitter's a great place to build a brand. You can take that content. Port it over to LinkedIn, pretty easily. Push all that to a newsletter the starting off on Twitter, LinkedIn pushing to a newsletter, and then go to a podcast. That's a really great path. So is the YouTube path. And I think those will not mutually exclusive.

Again, you wanna get really good at what you're doing. I think the number one recommendation I give any creator who wants to work on a written platform is go take a copywriting course, cuz most, most of these creators, they're just not good at writing like it. It's very hard to be a good writer. And it takes a lot of practice and practicing your craft, but if you can combine being a CRO at a SaaS company and you go and you're an amazing copywriter, that's really compelling. You can build a business off of that.

Totally. Yeah. You know, highly recommend that course you know, you guys are the best in the business when it comes to, when it comes to copy.

Just on that idea, I feel like there are two interesting opportunities here. Just like even for broader agency plays, one is like COO-in-a-box for creators. I, you know, identify talented creator and say, Hey, here are the other platforms or businesses you should be doing, you know, and I was, I even had Jack Butcher on the other day and we were brainstorming all the other things he could be doing and he's doing a lot already and he's pretty entrepreneurial.

He's yeah, I could be doing it. But I'm not, and I don't even, I don't want to. But if someone else was out there who's really capable and wants to do it with me, like I'd give them a big chunk of it. So kinda COO-in-a-box for creators who recognize that's what they need.

But then also there's the kind of the opposite, where it's people who are good at operators but don't know how to build like an audience. But they have really interesting thoughts and experience. And they would like if they were good at it, they would build a big audience. And so it's almost like Creator- or, you know, Audience-builder-in-a-box in terms of Hey, here, you know, Here's how to write, here's how to do the frameworks, or here we'll do it for you.

Yeah. So let's start with the second, right? I think that's more commoditized is the operator, the COO. So the second one I think's tough because you know, to say, hey, just write great content on accounting. That's, you know, if that was the case and if you could find people to do that this, I don't think we'd have an opportunity here, right? This is a very. You know, maybe over the last 10 years was when the platforms had all the power, right? It was all ever content was commoditized. And I think now we're seeing the rise of, let's call it super creators, where the creators are getting power backing then, Mr. Beast is more powerful than YouTube in a lot of respects, right?

He became the fast growing person on TikTok, and so he can pour his audience over and he's so good, he can really control the platforms in some way. Joe Rogan's worth a hundred million or maybe 200 million, right? I don't know if that works. The first one works, but I don't think you have to figure out the right way to do it because…

You have to fight the find the right value exchange, right? What is the right value exchange such that a creator's gonna gimme a percent of their business? Or is the new business and what's the business and how much of your time are you spending and are you doing across 10 creators or one? And so I think a lot, I've seen a lot of people try to do this like operations in a box and it will work.

And it does work, right? There's, there are people out there who create. Alcohol brands for celebrities, right? But you have to be really focused. You have to be really, you have to be the best in the world of what you do and partner with great creators or otherwise, the value exchange isn't there.

You're not gonna get paid enough such that you're happy and you're not gonna provide enough value such that the creator's happy.

Just follow up once more of the first idea, to see if there's anything there. You could imagine someone like. Dave Perrell, you know, like a couple years ago when he was newer and he was, you know, starting up his course and he was the guy on that you could have imagined he would go to the Nick Cougars of the world before.

Like basically all these you know, all the, you people selling these commodities and say, Hey, I'm gonna make you the real estate guy. I'm gonna make you this guy. And I, because I have this course, I can find people to just like you know, train you on how to do that or do it for you. And you're gonna you're gonna become like the default, you know, known person for this very niche space.

And I'm gonna get some upside or you're gonna pay me handsomely for that. Do you see that or not really?

Maybe I'm skeptical, right? I think the point of view, right? Like I think you discount how much you've learned about either company-building or VC over the last 10 years, such that you just think it's obvious, right?

Maybe. Hopefully I'm the same way about media. Someone else, Dave Perrell. Same way about writing and so to just have someone write for you. Yes cop ghost writing's a thing, but to scale it to something meaningful, I think is hard. It's possible. I just think it's hard.

Yeah. I think you'd have to believe that it was like, You know, you take podcasts or something and turn like you, you find some way of translating the thinking in a way that's honest to it. And maybe it's audio but yeah it's not easy. A lot of things get lost there.

How would you advise growing the media properties once there's one thing that's working or is that the wrong framework to bring about?

The first thing is I think people too all too quickly expand to another medium, right? I would just keep on, you know, running until the wheels fall off and just keep on going and make it. You know, the biggest newsletter, the biggest podcast that can be. And then I think you have to really have a reason. So many people have newsletters, launch podcasts for the sake of launching a podcast. Oh, it's just the next medium. But it's not differentiated. It's not very good. And so I think that's always the question. It's like, why you, why a podcast? What topic, what content? That's, I think an important thing.

Yeah. Yeah. No, don't, yeah. Don't take it for granted that it'll work.

I'm curious about your education business and the courses business. Because, you some things I like my experience in the courses business is that some of it was inflated by just Covid. Like a lot of people had a lot of time on their hands and money. And then also just that teachers wouldn't want to give classes again, you know, like if they were really good. And I'm curious how you're thinking about the course business has evolved and what that means for you guys.

Yeah I totally agree that cohort-based courses were definitely a not a flash in the pan, but they had their moment and it's much harder now. And so we've taken our education business from one cohort-based course to three cohort-based courses to now cohort-based courses are like the middle of the funnel for us, right?

We have downloadable things. We have, you know, $249 one day to one week sprints. Our core-based courses are our six to eight week products, and also we have a B2B offering and we're selling into businesses, and I think that is a big opportunity. I think, especially with remote work, companies are looking for ways to incentivize their employees when they can't buy them lunch every day, or they're not buying them ping pong tables and they culture, and I think we can provide this experience. I do think we… I mean if you look at NPS scores and everything else, like the experience we provide is amazing. And I think the challenge is people, some people aren't earn willing to spend $2,000 in that experience, but a company might be willing to spend, you know, $1,500 for a hundred people or 200 people. So we think B2B is a, an interesting path there, and we'll see if it works out. But we're excited and we have a couple clients lined up to, to beta test it.

That's awesome. When you think about the future of Morning Brew and your vision for it, and obviously you've done a ton to date over the past number of years, but what do you, how would you pie chart like what you expect the business or the revenues is going to come from and how is it different from what it looks like today?

Right now it's vast majority ads and it's vast majority of newsletter ads, and our goal has always been to continue to grow the absolute dollar of ad and newsletter ads, but decrease that as a percent of total revenue. And so our goal is to grow our podcast advertising revenue and our video advertising revenue, and then grow our education revenue.

And so I hope that advertising is always the biggest part of our business. Otherwise advertising will have collapsed. Or, may, maybe other businesses will have grown a ton. Our goal is to continue to increase the pie and slowly, over time, make education 3%, 5%, 7, 10, 12, but make it challenging for that to grow because of how big the ads business is getting.

Yeah. That, that, that's really inspiring. When you look at, when you talk about your vision, like what's the closest thing like that has existed or exists today.

So I think there are businesses doing both, but not doing it together. Right. I think Industry Dive reflects what was something like what we wanna do on the B2B side.

If you look at what we're doing on the multimedia side of things. There's flavors of complex, there's flavors of even like what HubSpot has been doing with their network, right? There's flavors of Spotify or a Wondery, right? So there, there are all these other orgs out there who are doing bits and pieces, but they're not putting it together the way I think that it can be done. And it's really hard. But I think we're gonna take the best of Industry Dive and the best of here, the best of their, and bring it all together. And just, know, build, essentially what are we doing? We're trying to build next Wall Street Journal. Just doing it in a different way.

The HubSpot podcast network is really interesting. What do you think is the business case for it for them and do you think more companies should do that?

When I first got in the media, to me, this verticalized media thing was so obvious, right? Why wouldn't Robinhood buy Morning Brew? Or Coinbase buy Morning Brew? Why wouldn't a HubSpot buy The Hustle?

And they did. And so I guess my answer will be contradictory. Yes, they should, but it's so hard, it's so hard to buy a media company, let it run independently, not disrupt it, right? We've seen time and time again, this model that looks so, it's like it's perfect for an MA a pitch deck, right?

Like it's a banker's dream, right? I can draw off the deck in 30 seconds. In practice, doing it and keeping the soul of the company and keeping the team, that's what's so hard. And so should more companies do it? Yes, but it's not quite as beautiful as, know, an upside down triangle that you can kinda just briefly draw in an MA deck.

Totally. And what's exciting about it is you're buying an audience and a brand at kind of an arbitrage, basically.

Yeah. I mean if you think about it, rght? What do you, I'll ask you, what do you think the average customer value is? The LTV of a HubSpot customer?

Let's say maybe it's measured in the thousands, and so it's you know, if you if you buy, if HubSpot goes and buys a meaty company for 10 or $20 million, They only need, you know, a couple hundred customers to, to break even. And that's the, and that's the player, right, is saying you're a high LTV SaaS business, and you're gonna buy a media company who not only has an audience, but they sell ads.

And that business is a volatile business. And so to take a check today as a media company, it's super attractive. And so yeah, I get totally, Hubspot, it seems and I don't know too much about it, but in addition to buying the hustle, they've been partnering with other creators. They're doing this right? And the beauty from a creator standpoint is I don't have to work with a thousand advertisers.

I get to promote one. And I think there's something really like nice and beautiful about that.

Totally. Gearing towards closing here. The Morning Brew alumni is a bit of a mafia. You know, you mentioned Tyler earlier, Beehive. We're talking to the the team that's running smooth and a number of people there, you know, are doing interesting things post their Morning Brew experience.

Talk a little bit about how you thought about it or what, how you react to you know, what's happened at Morning Brew for people who've gone and do really interesting stuff afterwards.

Yeah, I think it's really cool. I think it's really cool that people have learned enough here to be able to go on and start their own thing or be a part of something bigger.

I think it's awesome. And you know, I like to cheer on everyone who goes and does something. And I think it's a testament just to the culture the company had and the first seven or 10 people, we were seven, you know, we were, I don't know, the first 10 people, let's say. The only reason they joined Morning Brew is cuz they were entrepreneurial, right?

And so we basically had 10 entreprenuers, two.. 10 CEOs, 10 entrepreneurs, 10 CEOs, and everyone saw the company in a different light. Everyone saw a different opportunity and everyone you know, is now attacking the opportunity they saw. And I think it's really cool to build this ecosystem around newsletters, media, whether it's the software version like Tyler's doing, or whether it's a consultancy or whether it's you know, going on and building the next generation of Morning Brews.

And I think that's really cool. And I think it shows that you've, you know, you as a company, you've created a lot of value. There's the Peter Thiel thing where it's like you create X value and you capture, how can you capture y percent of x? And I used to think for a while that what we did as a company is we did a really good job of making y and x very similar numbers but seeing people go off and build other companies makes me feel really good that x is actually much bigger than I originally once thought. And I think that's a really cool thing.

Yeah, That's a, that's an inspiring note and it's a great note to, to end on. Austin, thanks so much for sharing your wisdom here with the podcast and with me.

For any upcoming plugs, obviously people should follow you on Twitter and be subscribing to Morning Brew and look out for your courses. What else can people you wanna share with people in leaving?

Yeah, Just gimme a follow on Twitter. Reach out if you have any questions.

I'd love to just chat with people. I checked my dms at least once a week I'll try to get back to everyone. And Erik, we gotta talk about this media company. I didn't know you're doing this. We should chat more.

Yeah, exactly. I eager look forward to it. Thanks so much, Austin. Awesome.

Thank you

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E1: “How to Build a Media Business in 2023”| Austin Rief, Morning Brew

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