6 mins

Friday Feature: Houck's Newsletter

How Houck's Newsletter is rapidly approaching $1M revenue with 70k subscribers.

Dylan Redekop

How Houck's Newsletter is quickly approaching $1M in revenue with 70k subscribers.

We're diving into a newsletter with wild momentum this week: Houck's Newsletter, a newsletter for startup founders.

It’s written by Michael Houck. Michael's worked for well-known startups like Uber and Airbnb, and cofounded a venture-backed startup, Launch House, in 2020.

Michael left Launch House in early 2023 and switched focus to a new startup: his newsletter.

Here's where it gets spicy 🌶️

Since focusing on it full-time in March, Houck’s Newsletter has blown up, growing from 18,000 subscribers to over 70,000 (!) — and is now approaching $1 million in total revenue, including $250k in ARR. 🤑

Stick around because we're diving into how Michael’s done it—and what you can learn from his approach to running his newsletter like a startup.

You’ll learn…

  • How to Monetize Free Subscribers of a Paid Newsletter
  • The Newsletter ‘Trojan Horse’ Strategy
  • Re-investing in paid growth

Time to level up your newsletter game—let's get into it.

#1 - Monetizing Free Subscribers to a Paid Newsletter

Michael’s approach to newsletter monetization is an important lesson in maximizing revenue.

Paid newsletter operators often focus monetization efforts solely on paid subscriptions.

While Michael is intent on growing paid subscriptions, he wisely leverages both paid and free versions of his newsletter to generate income.

🧐 Why it’s awesome

Making recurring revenue from paid subscriptions is the dream. But if it’s your only focus, you’re most likely leaving money on the table.

There’s an opportunity to monetize 100% of your readers, not just the ones paying a subscription.

Why should you consider it? Because you’re…

→ Increased revenue potential: Multiple streams provide the opportunity to compound earnings.

→ Diversifying revenue streams: Not only are you making money from your dedicated paid subscribers, but you're also pulling in funds from ads and sponsorships.

→ Mitigating risk: If one revenue stream declines, the other can help cushion the fall.

→ Increasing overall reach: Having a free edition allows you to tap into a broader audience who may later convert to paid subscribers. And in the short term, you’re increasing list size, which will increase the value of your ad spots.

🙋 How Houck's Newsletter does it

Michael runs two weekly editions of his newsletter: one free, one paid.

Tuesday edition (free): Curated send with trends & opportunities (like this one →)

Saturday edition (paid): Advice column with a paywalled section: (like this one →)

(Houck's Newsletter Saturday edition with paywalled section & Upgrade CTA)

Tuesday’s edition is monetized with sponsorships, where Houck’s Newsletter features a “Tool of the Week” sponsored section.

Lastly, Michael ensures his free subscribers know there’s more value if they “upgrade” their account.

(The end & footer of Houck's Newsletter)

✏️Steal this for your newsletter

Smart newsletter operators (like you!) should be risk-averse. One of the easiest ways to reduce revenue risk is by increasing revenue streams.

If you’re operating a paid newsletter, capitalize on the free content by offering sponsorships or ad spots.

Not running a paid newsletter? Learn & apply the Rule of 10s →

To unlock even more newsletter revenue, launch Upscribe paid recommendations with the SparkLoop Partner Network →

🧮 Bonus: how much can YOU earn when you activate Upscribe? Find out with our earnings calculator →

#2 - The Newsletter 'Trojan Horse' Strategy

The idea of using a newsletter as a "Trojan Horse" into a broader media company is simply genius.

How does it work?

The newsletter serves as a valuable, top-of-funnel entry point to a larger ecosystem of products, services, and media entities.

Here’s how Michael thinks about it:

“I’m keeping [Houck’s Newsletter] as an asset that's branded around myself for now—but as a wedge into a larger media company around entrepreneurship and startup founders, along with other products they might be interested in. So some of those might be other media products, either newsletters or podcasts,” Michael told us.

“It’s still early days, but to me, Houck's newsletter is this Trojan Horse into the ‘Houck Media’ enterprise.”

🧐 Why it’s awesome

Michael’s idea is smart, the Trojan Horse metaphor is poignant. Using a newsletter as a Trojan Horse into your business’s ecosystem can be beneficial because it allows for…

  1. Greater Scale: Allows for expansion into other forms of content, services, or products.
  2. Audience Retention: Provides various touchpoints for your audience to engage with your brand & business.
  3. Cross-Promotion & Upsell Opportunities: Easily market new products to an already engaged newsletter audience; and more touchpoints equal increased opportunity to sell other products & services.
  4. Deeper Engagement: Subscribers are not just on a mailing list—they can become part of a community.

🙋 How Houck's Newsletter does it

Michael doesn't see Houck’s Newsletter as just a standalone product but as an entry point into his entire brand & business ecosystem.

Once subscribed, readers are immediately plugged in.

Free subscribers are regularly reminded of the community, deep dives, software tools, events, and other perks they’re missing out on (for only $15/month or $150/year).

✏️ Steal this for your newsletter

Your newsletter can be the key to a much larger kingdom.

Transforming subscribers from passive readers to active members in your business ecosystem is one of the best ways to cap the downside, increase value, and provide “something for everyone”. Readers become part of a beneficial & valuable ecosystem.

Some newsletter operators are satisfied operating a traditional media business—and that’s great!

But for those looking to build a larger enterprise like Michael, consider using your newsletter as a Trojan Horse to your media or business enterprise.

Similarly, business owners and founders can build newsletters that naturally funnel subscribers into their own business ecosystem.

#3 - Re-investing in paid growth

Houck’s Newsletter has exploded in growth in the past 9 months.

It’s been a testament to Michael’s commitment to and focus on growing strategically.

“Newsletter operators need to think more like startup founders,” Michael told us during our recent chat.

And part of that “startup founder thinking” has to do with re-investing newsletter revenue right back into paid growth…for the newsletter!

Michael leveraged this strategy to get his newsletter from 18k subscribers in March 2023 to currently over 70,000—only 6 months later.

🧐 Why it’s awesome

It’s pretty simple:

→ Re-investing in paid growth has a powerful flywheel effect: The more subscribers you gain, the greater your newsletter’s earning potential, and the more you can re-invest in acquiring more subscribers.

🙋 How Houck's Newsletter does it

Michael admits he’s in the rare and fortunate position where he can re-invest nearly all of his newsletter's revenue back into paid growth.

“Obviously not everyone has that opportunity. But it's definitely beneficial to keep the money you're taking out as low as possible in the early days so you can get that growth flywheel started sooner.” - Michael Houck

Houck’s Newsletter reinvests earnings into four main sources of paid growth:

→ Facebook Ads
→ Twitter Ads

Megaphone (a platform he’s founded)

SparkLoop Partner Program

Michael is bullish on spending for growth with SparkLoop:

“We spend a good amount through the SparkLoop Partner Network,” Michael told us. “Our budget is around $20,000 per month which we've recently raised from $10,000 because we've been seeing really good quality of subscribers come through.”

✏️ Steal this for your newsletter

What can you afford to spend on newsletter growth?

Consider your revenue & expenses, your subscriber LTV, and payback period to help you determine a paid growth budget.

Scaling from 10,000 to 100,000 subscribers quickly is more possible than ever—with the right budget and focus. Especially when you run a SparkLoop Partner Program, just like Houck’s Newsletter is doing to acquire high-quality, engaged subscribers.

Adding it up…

Houck's Newsletter strategy goes beyond the basic newsletter principles.

He’s running his newsletter like a startup: maximizing monetization to maximize growth in order to build a media enterprise. He's created a business model that's robust, versatile, and primed for scaling growth.

And that begs the question: are you ready to start thinking about your newsletter like a startup?

Here are 3 things to do next:

  1. Check out Houck's Newsletter if you haven’t already →
  2. Listen to our whole chat with Michael Houck on our podcast →
  3. Give us your take: what newsletter is doing something different and innovative we should feature next? Maybe it's yours... EMAIL US and let me know!

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