264 - Best of 2025! The Zero-Dollar Blueprint for Newsletter Domination with Derek Kolstad

0:00But you've gained over 600 ,000 subscribers without spending a dollar. I've never, I was in this mindset of I have to be this GI Joe and parachute in and do everything guerrilla marketing and get as far as I can before I have to spend any money. Once I tapped into a few pipelines that were actually working, I realized it's much better to have a consistent flywheel that'll keep the whole process in motion. Right now, what do your newsletters generate a month? This month, already over$30 ,000. I've booked out the whole month. I'm confident I'll hit the$400 ,000 dollar mark, maybe hit half a million this year.

0:30Over the next 60 days, I need to gain 10 ,000 subscribers. Am I crazy?

0:37All right, Derek, I'm freaking, I'm so excited to talk to you because I'm in the middle of this newsletter goal that I have, which is over the next 60 days, I need to gain 10 ,000 subscribers, which is a very lofty goal. If anybody who knows anything about newsletters knows like a personal newsletter, getting 10 ,000 subscribers from scratch in 60 days is a lofty goal. Let me ask you a question. Am I crazy? No, you could do 10 grand, 10, 10 ,000 in 60 days. That's not too crazy. It's all about having they're just the right distribution system. And if you can nail that now, nail your message and create kind of this Trojan horse to attack something from a top down strategy, you can't brute force bottom up trying to do small tactics.

1:23So if you want to scale fast like that, I think you're going to have to go top down. I got to go big. Yeah. And you could, I think you can do it. Okay. I can't, I can't wait to get into tactics. We were planning on doing this podcast anyways, because we, we spoke what, six months ago, probably. And, uh, my team screwed up, but we lost the audio. So I wanted to get you back on. Cause I'm like, it was such a good conversation. You have a newsletter though. Like this is this we're speaking your book right now. Give the people some red meat. Like you're legit. How many subscribers do you have? I have a few newsletters and combine.

2:00I have over 600 ,000 subscribers now. Oh my gosh, dude. Add 10 or 15 ,000 a month, but the main newsletter is called daily UI. And that's a newsletter for designers. Basically. So that one's at like a little over four 50. And then I've got one that's a little over 120 for a job board remote jobs.com plug that nice then i have a tiny digital product that's got a few thousand subscribers and a uh like a coming soon wait list called pixel kit pixel kit.com is going to be a new little pet project and so that's got a pretty decent wait list first of all you're legit like 600 plus thousand subscribers even if even whatever it's across a couple.

2:47That's incredible. You have guys like Sahil Bloom, who's one of the most well-known newsletter guys. He has about a million subscribers. So you're well on your way. Yeah. Those guys actually put a lot of spend behind it. So you see a ton, you know, the cost per acquisition and it's a lot of monthly push for that. I've never spent a dollar. I haven't done a paid ad before. Wait, you've gained over 600 ,000 subscribers without spending a dollar? sir that's amazing i think i kind of you know i was in this mindset of like i have to be this gi joe and parachute in and do everything guerrilla marketing and get as far as i can before i have to spend any money and then once i kind of tapped into a few pipelines that were actually working i just kind of realized you know what it's much better to have a consistent flywheel that'll keep the whole process in motion than it is to do kind of transactional ads and stuff.

3:45So, you know, Chris, my business partner, Chris Kerner. Yeah, yeah. He's grown 100 ,000 subscriber newsletter in the last 12 months. Hasn't spent a dollar on ads. That's pretty good. It's all organic driven from his socials and he's adding like 20 ,000 subscribers a month, which is great. I mean, you're adding 15 across your platforms, right? But once you got the flywheel going, it's a lot easier to keep that momentum up. You know, running a business or something, any type of product, it is like a steam train. It's easier to stay in motion than it is to get in motion. And it takes a lot of steam to get that thing out of the gates.

4:22But once you have it rolling. I agree. I've also said momentum is hard to build, but it's also hard to stop. Yeah, yeah. Sometimes you stop doing the things that got you the momentum in the first place. And you don't really see that show up until months or years later, because you've already got all this momentum behind you. So I want to give a quick context. So I've interviewed over 120 entrepreneurs since last year. It's been nuts. I've been at least three episodes a week for not even a year. I officially started this in April of 2024. I did it because I wanted to find out about different businesses.

4:55And I've kind of gotten tired of the theory. I mean, I still love it. I'm still super curious. But I see all these people like you who have built things and like you're making real money. and I've wanted to start testing the ideas that I've had on my podcast. Nice. And the one that I keep coming back to is newsletters. That's the one that people are like, anybody can do this. And I want to put it to the test. Can anybody do it? I don't know. Let's try it. I'll put some money behind it and let's see if I can actually grow a newsletter. But the way that I'm thinking about it and the way I want to go to 10 ,000 subscribers is because in order to monetize it, in order for it to become a business, you've got a couple of different channels.

5:33I'm going to name them and you tell me where I missed. You can monetize your newsletters through ads. So you can have sponsors who pay you money to market their product. And you can do it on things like Sparkloop or Beehive or some of those types of platforms. Or you can have private engagements who pay you money to market in their newsletters. So that's one avenue. Another avenue is similar but different. It's affiliates. So you don't necessarily get money up front. But you put a link or a product in your newsletter. and then people click on it and they go to that. And if they purchase, because you have the affiliate link, it's trackable, it's attributable, you get money for that.

6:11That's so that's way number two. Way number three is you have a digital product that you sell. So you've got this newsletter, you've got people who are subscribing to you. And it's like, Oh, by the way, I'm the business guy, take my course on how to buy a business. This is a digital project product that I sell. And the last way it's similar, but different, um, a business that you advertise through the newsletter. So I talked about ads. That was the first one. Well, instead of taking money in, in ad spend from other people, you just put your own product into the newsletter and think of it as a distribution channel to grow your business.

6:44Those are kind of the four ways that I think about monetizing newsletters. Did I miss one? No, that seems pretty legit. You could just sell the newsletter as a whole. So that could be like the exit strategy monetize. Yeah. Yeah. As As an exit. I'm just saying like ongoing cash flows. That's kind of how they're generated. That's pretty much the way to do it under the hood. You know, you'll see a lot of people sell secondary things that aren't necessarily a product, that it could be a service. So you could be selling your accounting services or things like that if you're a CPA. So you could leverage it to sell products or services.

7:18But you either sell someone else's or you sell your own. That's pretty much it. And the way that I've seen it, like, let's say I'm taking ad money is it's decided on this thing called cost per milli CPM. So they take your total number of newsletter subscribers. They look at your open rate and they say on a monthly basis, how many of them are opening your newsletters? And then they pay you on a cost per milli. So I'll just do an example. If I have a hundred thousand newsletter subscribers, my open rate is 50%. That means I send four newsletters a week or excuse me, four newsletters a month. so i've got 400 000 50 open rate i'm now at 200 000 people who have actually looked at that the cost per milli is actually cost per thousand so i'm going to divide 200 000 by a thousand now i've got 200 and then they'll pay me a certain metric so let's just say 50 per milli i've now got what is that uh ten thousand dollars a month in ad revenue based on the number of buttons is Is that correct?

8:19Yeah, you can totally do it that way. But you don't do it that way, right? I kind of do and kind of don't. There's a lot of nuances to it. One is that sometimes they're just not apples to apples where depending on your industry, one is going to be more valuable than the other. So that CPM could fluctuate. And then depending on the geography too, like I have primarily US audience. So English speaking, usually higher budget, things like that, that's more attractive for a sponsor. Are you going into a localized one or is this yours is just going to be a personal? No, this is a personal newsletter, which I think is harder to be honest.

8:59And maybe I'm wrong. What do you think? The reason it's harder to do the personal newsletter is well, next month, it'll be a year since I started this podcast. I've had over a hundred interviews. It's been a ton of fun, but I promised my wife at some point I would decide whether or not this was going to be a business or we would just continue to pay for it out of our pocket and I'm exploring monetization, to be honest with you. There's not a ton of costs, but I do want to figure out a way to cover the editing and the packaging and the promotion costs of putting this podcast together. So I am looking for sponsors.

9:28I don't know what that looks like. If you've enjoyed this podcast and you've ever found some value and you want to sponsor, reach out to me, nickatcofounders.com and let's get back into it. There's a level of friction around that where you tell me, Hey, I have a personal newsletter. I have to know who Nick is. And I have to know the context of why that would be valuable to me. Yeah. So that extra layer creates extra friction, makes it harder to sell the idea. So harder to spread. If it's easy to tell, it's easy to sell. That's the way it is. Oh, that's a good framework. If it's easy to tell, it's easy to sell.

10:04I kind of think about newsletters in sort of three buckets. There's a geographic bucket. So you have these like local newsletters, right? Jas, who's building in public, He has a Winnipeg newsletter that's just Winnipeg. Ryan Sneedon has a newsletter that's just Annapolis. There are topic-based newsletters, which are like, hey, this is the particular subject, which I would say kind of what I'm focusing on is, hey, how to buy, start, and scale your first business. And then I think there can be demographic-based newsletters, which are – these are for moms, millennial moms who have a kid at home. These are for seniors from AARP.

10:43and then you can you can mix and match those right like you can have a demographic-based newsletter in a geography or a topic-based newsletter sure in a in a geography so that's kind of how i think about it but to your point i think that the topic-based newsletters are harder especially if you're building it around a personality or a brand because you've got to build brand awareness and then figure out where you're going to get those potential customers from whereas geographic it's like cool everybody in winnipeg all right i'm going to dial up some Facebook ads and target them. Is that right? That's right.

11:13But then again, if you actually wanted to dominate one of those industry verticals and own that market on something, you can be an expert that someone else just can't compete with because they don't have that edge. If you're saying you're spinning up one in Toronto or Austin or something, pretty much I can compete with you or anyone can compete with you from wherever. You don't have to in Austin. You could be sitting in Rome. It doesn't matter. So I don't know what the competitive moat is other than you're a local and you can meet people. It's so much broader if you go for an industry one that you want to try to...

11:48Give me an idea. You have 600 ,000 subscribers. Can you give me some metrics? What are your open rates? What's your top line revenue? And to your point, different types of newsletters have different types of performance. For example, daily UI is this. I don't pitch it as a newsletter. I pitch it as a design challenge. And that one little tweak makes it kind of more unique. It makes it stand out. Success can ultimately be kind of determined by either minimizing or maximizing certain variables. So you can either be really specific on one thing, lower your costs, compete better, or you can be better at marketing and grow and maximize on one end.

12:31So for the design newsletter, that has a lifetime average open rate of 42 % across over like 450 ,000 subscribers. Wow. Basically, as your list grows, it's kind of common for the open rate to actually decline. So of that 450, there's probably at least seven or so 100 ,000 that have actually passed through it over the lifetime of it. You have churn, people churn out, but the unsubscribe rate on that is crazy, crazy low. It's probably under 1 % on that newsletter. And so when you say 1%, is that like 1 % per issue? Is that 1 % per month per year? I think I just had that as a, like an annual 1%. Wow.

13:10Under 1 % annually. Yeah. Per, per month or something. It's just a fraction of that. It's very tiny. And I think that's a function of just maintaining your lane. You know, there's of these newsletters that become very generic. And that one, I just maintain my lane. Another example, for example, the for my newsletter for remote jobs.com is just like a roundup of jobs. Job boards have terrible newsletter performance. And they do. I know that across many job boards, because I've looked at buying, you know, other job boards and career sites from other people as well. I thought, Oh, is that an easy strategy to grow is just acquire others, right?

13:49It's not a good strategy for that particular niche. The reason for that is churn is built into the product with a job board. You know, they don't, they don't stick around for very long. You might see someone two, three, four months, but then it's pretty much over because the whole purpose was to find a job, you know, so churn is built into it. And another thing is you'll have really low click rates on those because nothing compelling. You send them these jobs and they're not interesting. They're time. Got to click them. Give me an idea right now. Like what are your newsletters generate a month?

14:22Okay. So this month it's the 7th of March combine them already over$30 ,000. That is not just for a week though. That's pretty much just means I booked out the whole month. So I'm pretty confident the year, like I would like to peg it as basically trying to make a dollar per subscriber per year. So I'm pretty confident I'll hit the$400 or$400 ,000 mark, maybe hit half a million this year. I don't really monetize the job board newsletter. It's a programmatic newsletter, so it's kind of different, but daily UI, I sell big sponsored, dedicated campaigns and ads in this automation sequence. The main thing that makes daily UI kind of a unique style.

15:12Is daily UI literally daily? It's literally daily and it's fully automated. I haven't actually written an issue in years. Full suite. I just set up a workflow, predefined all of those sins. And once you subscribe, you're into this workflow and you're supposed to create different designs. The idea is you'll build a design portfolio. It'll challenge your skills, you'll learn more. So if you subscribe and you create a neat piece of design work and you share it on Dribbble or Behance or Twitter, I'll share those. So a way to feature subscribers. Let me ask you this. The job board, is that weekly, monthly, daily?

15:54I'm doing that one weekly now. It could even go down to every two weeks. I just want to do some quick math. All right. So you said you want to do$600 ,000 in revenue, right? I think I'll do four to six. I'm pretty confident I'll do four and that would be less than a dollar per subscriber. But because I'm not monetizing a lot of those subscribers, you know, I'm probably 20%. I'm not monetizing. And that's okay because one easy way, possibly the easiest way to grow a newsletter is to cross promote it. Here's my question. All right. I'm just doing back at the end. I was just doing some back of the envelope math.

16:30You've got 600 ,000 subscribers. One of them's a daily newsletter. One of them's a weekly newsletter. If I just did the math that I've been doing. All right. number of sends, 42 % open rate. That's how many eyeballs are going to be seen on these newsletters. And then you say the CPM is$50. I'll even say CPM$20. I'm getting like$1.4 million in like potential top line revenue, but you're not getting$1.4 million. Is that a conscious choice? Are you like, I don't really want to? It's really hard to actually achieve. You can't book all your slots. no one can sell out all their slots basically it's very very hard to do and of that like i'm not monetizing those the smaller list 100 000 and 70 000 on this other list when we spoke the last time i got the sense from you that you had you were like i know i could get more but it's a conscious choice yeah yeah i think i could you could try to juice it if you really did didn't leverage it.

17:31What I have is like all pre-sell things too. So I'm sold out for the rest of this month and next month. So what'll end up happening is if I add 30 or 50 ,000 subscribers in the next couple of months, those rates aren't going to change for that sponsor. They've already pre-booked. So in theory, what you should be doing is yeah, as your subscriber base increases, you should be increasing your price because you say it's proportional if you're using the cpm basis it's easier to pre-sell things lock in a rate now and get them on the books that's i also think there's i also think there's nuance to it like sometimes there are people who push too far and they're like oh i want to get as much revenue as i can every single time and maybe you could get yeah a 50 cpm or 100 cpm but from talking to you you were like well the enjoyment of the newsletters it's almost completely automated.

18:25And I don't have to do that much stuff. I feel like if I start investing more, then I have to build a bigger team. And it's kind of like the Mexican fishermen. Have you ever heard that story? Yeah, yeah, I have. Yeah, no, I totally get that. The other thing though, is let's say, so my job board is about two years old. The way that I got it off the ground, growing subscribers and growing the traffic was promoting it through my other newsletter. And if you're cross promoting one of your own products, that means you have less space for ads. If I'm hitting you with a daily email already, and I send one per week as a sponsored one, you have to pick and choose, you know, are you going to promote your own product or are you going to promote someone else's?

19:07When did you start doing that? When was that? Maybe two years ago. We launched in like December, 2022. Because if I was looking at it, I would say, oh, um, what, what's a good customer acquisition cost for a newsletter subscriber? Yeah, that's a good question too, because I've never paid for one. It's hard to say. I see people do that all the time. What I've heard is between one and$2 is like normal. It depends on how you monetize it. Sure. Some people have gotten way less. They paid way less for a subscriber. Some people have paid more. But if I was just doing back of the envelope, I'd be like, okay, you got 150 subscribers from cross-promoting to your other newsletter.

19:45That was potentially between 150 and 300 ,000 of value that you created for yourself, right? So yes, there was missed revenue because you were filling the ad slot. However, there was a lot of value created. Yeah. You have to weigh those opportunity costs. If you have something else that you want to own and really grow and scale and add value to another thing is I I've always done this since day one offered a 15 % rebooking discount. So if you book a second campaign, you get a 15 % discount. those will sneak up on you too. I've had some sponsors book like over a dozen times. And that means you're giving that discount continuously.

20:28I basically grandfathered that in on a lot of people. And you kind of have to do that to get the ball rolling so that you can have a portfolio of clients that you've worked with. You're more attractive to new sponsors. The bottom line is, you know everything gets easier every time you do it so for me let's workshop chris i want to gain 10 000 subscribers in the next 60 days you're the consultant derrick you're the guru help me understand what i need to do here's what i would do i would first define the benefit of this newsletter there's so many it's so vague uh people don't buy products they buy improvement what what's the improvement that we're making in someone's life you know okay entertain someone or you can improve them that's it let me tell you what it is and then you can tell me too broad that sucks or all right you're playing in the same ballpark that you should be my newsletter is geared towards first-time entrepreneurs and wantrepreneurs who want to buy scale or start their first business and have not yet made their first million dollars that's my ideal customer so that so my newsletter is helping them buy start or scale their first business is it too broad no all right now's the part of the show where i feel the most uncomfortable but my therapist says i need to face my fears so here we are i've started a newsletter and i want you to subscribe and what you're going to get every single week are the aggregated conversations from that week that i have on this podcast with an overview of what their business actually looks like i'm also going to throw in a review of one or two businesses that are listed for sale i'll give you my opinion on whether or not the EBITDA multiple is good, or there's customer concentration, or there's red flags or green flags.

22:06And then lastly, I'm going to give you one piece of actionable advice every single week on how to buy your first business. So click the link below, subscribe to my newsletter, and let's get back into the show. You need a really snappy, short slogan. There needs to be something, or it needs to be built into the name as to what it is. So what if I was like, I want to help you make your first million dollars. Is that too snappy? That's kind of too broad now because a million dollars doing what? Like you're going to teach me to write a book and I'm going to be bestselling author. What, what, I want to help.

22:36I want to help is basically. Yeah. First time entrepreneurs and entrepreneurs make their first million dollars. You're in that mindset. You're still, you're like an early stage founder kind of where you are first time founder style. So then you're appealing to two sets of people, one who are already running a business and two people who want to, so you could work any normal job. You could be anywhere in the workforce and you want to go buy one, what types of businesses are you going to focus on? That's the question now. The businesses I would focus on are, it's not tech. These aren't SaaS companies.

23:10Local businesses. Yeah. These would be services, businesses, mom and pop businesses, agencies that you want to launch and then exploring the ways to scale them, buy them, or start them. The businesses I've ever operated have been up to$30 million in revenue. That's good size, but I feel like my sweet spot is a$10 million or less business. I mean, so those are small businesses. Those are typically going to be first time entrepreneurs or entrepreneurs who are buying into those businesses. So that's why I picked that range. Yeah, that totally makes sense. Yeah. Once again, if it's simple to tell, it's simple to sell.

23:47We need a really, really snappy short slogan of how you say that. This is people, are you, are we buying a business or am I starting one. I've done all of that. So it's like, which is the focus here. What I want is the focus to be, I can help you buy, I can help you start, or I can help you scale your business. You're saying that's too broad. It feels like it for me. I would just kind of get paralyzed on the landing page. Cause the people that I have on my podcast have done all of those, right? They're, they're buyers, they're starters, they're scalers. Right. And so I'm drawing insights from those conversations to then apply to this newsletter.

24:20Yeah. I'll have to workshop on this idea. Okay. Let's say I workshop the idea. You were saying I've got to go big in order to get to 10 ,000 subscribers. What, like, what should my plan be? Well, the plan is we define that improvement, you know, how you're going to person's life. So that's the idea is like, I'll show you how to buy a business and, uh, or I'll show you how to make a million dollars with a local business. We need your playbook. And now your playbook is kind of the lead magnet and you can promote that lead magnet. And if they all follow the same flow and it's consistent, it makes sense.

24:56So I'll kind of stay in your funnel. So we define that product and then you build a little flywheel for how you're going to promote it. Social media, lead magnets, also promoting others. It has to be a good enough little cookie that it's worth subscribing to. Oh, interesting. Okay. So step one is what's the problem we're solving for the customer? That's essentially the product. So that's where I need to refine. I can't be everything to everybody. I got to kind of refine that piece. The second piece is then, okay, what's your playbook that becomes your lead. So Chris grew to a hundred thousand subscribers.

25:36His kind of thing is I had these entrepreneurs on my podcast. This is a really cool idea. Click on the link in the bio to get the business plan. And so that's what's driven then the majority of his growth is like, they're going to get the business plan and then they sign up for the newsletter and they they're staying for that. Is that kind of what you're describing? Yeah. Yeah. And for years, we'll have to think of it specifically, like I've never run a local business. I don't know what that's like. I've worked in them before. So there could be context there, but yeah, you would have to share some case case studies because you're also building trust too.

26:10It's not some random guy, someone who's done it before. You want to know that you're getting advice from an operator. Okay. So let's say that I've figured out the problem I'm solving, which is the product, the playbook, which is the lead magnet. What's next for me, 10 ,060 days, what would you do? Am I just like posting videos on every platform I can and driving them to the lead magnet? Am I going to other newsletters, maybe that I have relationships with that I've made on my podcast? I mean, I have a couple of people who've come on that have large, you know, do I go to Derek and like, Hey man, would you mind recommend?