How The Hustle grew to over 2 million subscribers through paid ads.

Pay to play:

A lot of people who start newsletters use ads as an early growth channel. And it makes sense: faster growth, repeatable, and predictable.

But there’s a problem. It’s often a false signal of profitable growth.

You’re trying to brute force your content to people without finding PMF/CMF (Content-Market FIt). Typically this means higher acquisition costs and lower future revenues.

So The Hustle flipped this. Getting to >100k subscribers before investing in paid marketing.

They had found their CMF and could easily calculate the LTV of a customer having monetized for a while by this point.

From here there was no looking back. Going all in on finding channels they could pay to acquire a reader for less than their LTV.

🔬 How this looks practically:

3 actionable insights from the tactic.

💸 1. Figure out your unit economics

Facebook and other digital ads completely changed the way marketing was done.

It was a digital tap that you could turn on and keep increasing the pressure.

But underlying all of this was the principle of unit economics. I.e. per unit of what you do, how much profit do you make (if any)? In The Hustle’s case, their unit is subscribers.

Another way to think about it is what it costs to acquire a customer (CAC) vs the money that customer will earn you in their lifetime (LTV).

The great thing about digital ads is that they are extremely measurable. And as long as your LTV is greater than your CAC. You should continue to use that channel to grow.

Because it means that you are acquiring customers profitably (even if you don’t see the revenue immediately).

It’s how newsletters can scale to millions of subscribers in short amounts of time.

And The Hustle was one of the pioneers of this.

Two quick sidenotes:

One: If you’re looking for the exact way to calculate LTV for a newsletter, beehiiv does a great job of breaking it down here.

Two: You might be thinking that what I’m saying doesn’t apply to all businesses, particularly VC-backed startups trying to blitzscale/ winner-take-all markets.

And while you’d be right in that they don’t earn an instant return on their ad spend, the principle of unit economics remains. It just gets pushed down the road. And in some cases, the very act of doing this increases your unit economics as you acquire more users.

📣 2. Scale with ads

Given you’re reading this newsletter, I’d be willing to bet that you’ve seen this ad before (or at least a variation of it):

And you’ve probably seen it a lot.

Firstly, because it crushed it for The Hustle.

Secondly, repetition is often indistinguishable from the truth.

If you see the same message enough, you will start to accept it as given.

This repetition gave this ad cult-hero status.

It worked so well that The Hustle spent over $10m on it alone.

Assuming a $10 CPM (cost per 1,000 views) that would mean this ad was seen over 1 billion total times.

And that’s not including all the different copies of it you’ve probably seen from other newsletters that crushed it for them as well:

Besides repetition. Why did this ad do so well?

Well from a high-level point of view two things stick out:

• Helps you be seen as smarter at your job (different and, for most people, more important than actually being smarter)

• It’s as easy to do as read The Hustle. No long and complex processes. Anyone can do it. People feel like they’ve found a loophole.

Facebook wasn’t the only channel The Hustle used for paid growth. They also experimented with LinkedIn ads and sponsoring other newsletters (a tactic the Morning Brew helped pioneer)

The key lesson here is to find messaging and a platform that works and then double down on it. It might not be Facebook (or Meta now) for you. But make small bets until you find a hint of gold. Then keep digging until all of it is gone.

🫂 3. Incentivize community

It’s often said that word of mouth is the best form of advertising.

But how the hell do you control this?

Well, sadly you’ll never have 100% control over this.

The best, and first, thing you can do is create a product/service so great that people want to share it.

Once you have something so great people want to share it, that’s when you can step in and give them a little nudge.

The Hustle did this by creating an ambassador program where they rewarded people for sharing The Hustle.

The rewards have changed over time, but the principles behind them have not.

Create rewards that are specific and appealing to your audience. And where the unit economics of them are profitable.

For the Hustle that included:

• Discounts for HustleCon tickets

• Free HustleCon tickets

• Speakers dinner post HustleCon

• Hustle swag

• Flights to SF to hang with them

All things a reader of The Hustle would want.

And because they knew the LTV of a customer, they knew how much they could spend for each referral to make sure it was still profitable. This led to some pretty awesome rewards.

A win-win-win. The Hustle, its ambassadors, and their referees.

On top of this, the team made sure to make every ambassador feel extra special with a handwritten note for anything they had mailed to them.

By the time The Hustle had hit 1.5m subscribers, their ambassadors had accounted for around ~300k of them.

Tools of the week 🔨

Today is quite a special day for me. Notion - probably my favorite tool in my tech stack - is the sponsor of today’s newsletter.

I’ve been using Notion for years now and it powers my life, my business, and all the backend for this newsletter you’re reading.

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My picks to take your business to the moon 📽️

• Andrew Chen on what doesn't work when pivoting (link)

• Takeaways from Jensen Huang (Nvidia CEO) & Patrick Collison’s (Stripe CEO) talk at Stripe Sessions (link)

• Why investors backed Perplexity (Google’s biggest competitor?) (link)