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Ep 37 - Tom Alder
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Dylan Redekop: [00:00:00] One quick note before we dive in. We had a little bit of trouble with Tom's audio in this episode. I 100% recommend listening, sticking with it anyway, as Tom drops a wealth of knowledge. And we also have a transcript to go along with this episode if any bits are unclear. Thank you so much. And really sorry in advance
Tom Alder: all the posts that are posted that are, that have gotten to say one, 1000 or 2000, like what I consider to be a viral post at least, at least in my books.
They have all had like 200, 200 plus in in the first hour. Okay? And so what that means is there are a number of things that you can do to try and optimize the success of a post. Once you understand that, that mechanic. So the first one is,
Dylan Redekop: welcome to the Send and Grow podcast. I'm your host, Dylan Redekop. In my day job at Spark Loop, I spent all my time analyzing how the best newsletter operators and media brands in the world grow and monetize their audiences.
I get a behind the scenes look at how they're growing their newsletters and driving revenue, and there is so much to learn from their success and from their mistakes. With this [00:01:00] podcast, you get that access too. Every week I sit down with a different guest from industry experts to successful operators, and we go deep on the stuff that you need to know so you can become really effective at growing and monetizing your newsletter.
In today's episode, I'm joined by Tom Alder. Tom writes the rapidly growing strategy Breakdowns newsletter. And I hope you have your notes app handy because this conversation is a playbook on mastering organic growth. Specifically on LinkedIn, a few weeks back we interviewed Bill Kerr from Open Source CEO, and Bill mentioned how Tom had grown his newsletter to 5,000 subscribers before even publishing one edition.
It was at that moment I knew we needed to get Tom on the pod, and boy am I glad we did. In this episode, Tom spills his LinkedIn Secrets for growth on that platform. And how he's used LinkedIn to grow his newsletter to thirty-five thousand subscribers in a mere seven months. Not only that, but Tom recently quit his job at Atlassian to go all in on strategy breakdowns.
I [00:02:00] could keep going on and on with teasers forever, but let's just get right into the episode. I'm so pumped to have you on the podcast, Tom. So what is Strategy Breakdowns and how is it different than the typical teardown newsletter?
Tom Alder: It's a absolute pleasure to be here. Thanks for having me Dylan. So, strategy Breakdowns is a three-minute weekly email breaking down the strategy playbooks of, of the world's greatest companies.
So each week we, we look at a. Legendary. Primarily software companies like Spotify, Canva, Snapchat, and we dissect an aspect of their strategies. We'll also sometimes look at some of the more interesting, like less well-known strategies of companies like Unsplash or, or Minecraft. There's a lot of awesome, awesome content in the space and, and incredible creators, and I subscribe to all them.
I'm obsessed with this space. And so one of the ways that I thought about differentiating what, what I wanted to do was, um, rather than knocking out like a, a thirty-minute read on the, the grand unifying theory of, [00:03:00] of Uber's business model, um, which is a amazing thing to put together and, and the payoff is huge for the reader, but I went the other way.
I wanted to focus very specifically on like just one aspect of how they can build these logo generator, business card generator. T-shirt maker to, to rank and, and convert organic SEO traffic. Mm. Or how Loom creates these like product-led growth loops, uh, that actually have the effect of making it go viral within different organizations.
Like one person has a Loom license and then all of a sudden everyone has a license.
Strategy. Um.
Founders and leaked emails and things like that to really try to illuminate how the, the founder was, was thinking about, uh, the, the strategy at the time.
Dylan Redekop: Right. And so what kind of person would read [00:04:00] your, would read your newsletter?
Tom Alder: Yeah. So in terms of who reads it, the data very much supports exactly what you'd expect if you try to kind of reverse engineer who you think would read a, a publication like this, so.
Right. We have a very, very high concentration of, uh, readers in, in tech companies as well. VC, PE, investment banking, IT services, things like that. When you think about specific personas, the number one role title that that you see in our audience is founder. Number two, most common is Co-founder. Number three is CEO four is product manager, and then five is software engineers.
So kind of exactly what you'd expect. Yeah. Considering the concentration in, in, in software companies.
Dylan Redekop: Yeah. Uh, and that's a pretty impressive, uh, I guess roster or, uh, demographic that you're, that you're catering to. I wanna get into that a little bit more, um, later on when we talk maybe about, uh, monetization and revenue.
Sure. And I also wanna get into how you structure your content, um, because I really, I like the way you've got it. Templated and, and formatted with, uh, you [00:05:00] know, the chess move and, and all that sort of stuff. So, we'll talk about that in a minute. But before we do that, I don't wanna bury the lead. You started strategy breakdowns, correct me if I'm wrong, in June of 20 twenty-three, correct?
Yeah. Yes. Okay. Yay. My, my research LinkedIn served me well. Okay. Well done. Um. And you have currently 35, give or take thirty-five thousand subscribers. That's right. Yep. And it's currently February of 2024, so we're less far under a year. Um, that you've launched. You also launched to just shy, I believe, of 5,000 subscribers.
So like you hadn't even published an edition and you published your first one to 5,000. Most people publish their first edition to like, you know, grandma, grandpa, mom, dad, and, uh, a few co-workers. If.
I guess as you're building up strategy breakdowns, um, you, you obviously had the idea to launch it, you had a landing page. How were you, how are you driving, um, all of these subscribers without an a live newsletter?
Tom Alder: Great question. [00:06:00] So this is a, this is a classic case of like. An overnight rocket ship by no means the fastest rocket ship, but it's, it's, it kind of followed that pattern.
So I, I launched a newsletter like seven months ago, but I started writing on LinkedIn like two and a half years ago. And when I started, I, I wasn't really growing that fast, but I was posting, uh, every single day. I, I, I started off with kind of a challenge. I.
I continued and, and ended up doing it for, for nine months. Straight posting every single day, including weekends and, and got to 10,000 followers. And along the way I was kind of figuring out like, right, when am I gonna stop this? Like days, whatever it might be. Ended up stopping at 10,000 and then took quite long break.
Actually about a year with, without really posting too much, um, did a few other things, was kind of trying to, uh, launch a website. I got a new job, joined the strategy team at Atlassian, and then once I started to get, uh, my, my footing and my new job again, I started posting [00:07:00] again at, at the start of last year, the start of 2023.
Okay. And this time I had a of. Sharing random stuff. I was much more like growth oriented, I would say. Okay. Um, and I had a definite plan to figure out a way to spin out a business from the audience that I was growing. So I started posting again at maybe like 12 or 13,000 followers on, on LinkedIn, thereabouts.
And. You know, when, when I launched the newsletter seven months ago, I was probably sitting in around maybe 20,000 followers for Park. So that's, that's the first bit. So I, I wasn't launching to a totally empty state and kind of also starting on LinkedIn and Twitter at the time. So I did have a bit, bit of a base to build off.
Mm-Hmm. What I actually started doing was I was already posting this content every day and I decided to a. Basically said, Hey, if you like this, I'm launching a newsletter soon. Like, go check it out here, go subscribe. And that just [00:08:00] pointed to like pretty much a blank landing page. Like the first iteration was basically Tom's mailing list coming soon.
Like something of that nature. And you know, maybe a week later I added a, a welcome email that said like, Hey, thanks for being here, you know, gonna appreciate. As I was forming the idea of exactly what I wanted to be, you know, you, you iteratively improve and, and refine their, their experience for new subscribers, even though I still didn't have any content.
So at some point I changed the name to strategy breakdowns. I kind of included the pitch of, you know, breakdowns to strategy, playbooks, etc. But yeah, I, I think the point was I was already creating all of these impressions and, and, and clicks and traffic and, and activity and just wanted to kind of throw up something that would start to form the base of what I, what I knew was, was going to be a, a newsletter I was gonna end up launching.
Right. And yeah, I guess that was probably, maybe a two month period, something [00:09:00] like that. Okay. A couple of posts, which, which kind of blew up, which, which helps like the, the viral post mechanic is, um, certainly what, what drives a lot of value in terms of followers and, and subscribers. So I might had one which generated, you know, 400 subs, hundred subs here, 300 subs there.
And yeah, it was, it was kind of like launch before you're ready kind of situation. Right. But that, that's basically the story of, um, by the time my first email went out, I was yeah. Ballparked 5,000, maybe four and half thousand subscribers.
Dylan Redekop: Right. It's uh, one of those, uh, build the rocket ship as it's already kind of hurling into space.
Right? That's right. Yeah. Yeah. And I think, you know, reading through, you posted something a little out of the ordinary in December for one of your posts. I think you a six. Strategy breakdowns and how you've been growing it, which was really interesting. It's kinda like a build, build a public post you, or you shared a lot of details.
And one thing you mentioned in there was you had a post, one of your, you know, viral posts that you just mentioned about, I'm gonna [00:10:00] say, uh right, Nikita beer selling or with the gas app. Yeah. And it got, I think, 2200 subscribers to your newsletter. For just this, this one post. Yeah. Which is, which is remarkable.
And I mean, if you go through it, it's, it's nicely formatted. You know, you've got step one, step two, step three, step four, and so on. You included a photo of Nikita with a cake, which is quite, uh, or very interesting, uh, a picture, which is, which is a fun piece of, um, content there. But yeah, it's, it's really interesting to see success.
With posting these kind of almost mini breakdowns right? On LinkedIn, like this one has over 11 and a half thousand, um, engagements, which is, which is remarkable. The other thing I think is really interesting is you said in July you launched to, was it around 20 or 25,000 followers when you actually launched?
Tom Alder: That's right. Yeah. Ballpark. Yeah. And, and
Dylan Redekop: now you're, now you're around 75,000. So not only have you been growing this newsletter, you. Online persona, your online audience has grown as well. How have [00:11:00] you seen that? How have you seen that correlate with, uh, newsletter growth?
Tom Alder: Yeah. Pre pretty well, perfectly correlated.
I mean, yeah, about, I think it's about 75 or or 80% of my newsletter subscribers have, have come from LinkedIn. Okay. Uh, or organically. And so I. The, one of the benefits of doing this, you know, there's trade-off pros and cons to every growth mechanism, but one of the benefits of of doing it this way is you, you grow a subscriber base, but you also grow a following on LinkedIn, which is kind of flexible and, and useful in other ways.
Yep. But yeah, I would say for the most part, as I cranked up the volume and frequency and, and intensity of, of posting on LinkedIn. The newsletter subscriber rate of growth followed pretty, pretty much. Exactly.
Dylan Redekop: And you always followed those posts with, uh, I would imagine a link to your newsletter. Was it pretty much every time that you would include that?
Tom Alder: Yeah. Yeah, that's right. I, I would include it in every post. Mm-Hmm. There, there are quite a few like strategies and tactics to, to optimizing. That's CTA and, and funnel and, and subscriber [00:12:00] flow, which I, I mean, I'm, I'm happy to just share a few kind of specific tactics for other people who are, who are interested in Yeah.
In growing on LinkedIn, so that'd be great. Yeah. Where, where do I start? I think the, the first thing that I point out to anyone who, who's looking at to grow on LinkedIn is the, the first hour. Right after you post is, is by far the most important time period in determining the success of the Post. So I can roughly predict how, how many reactions a, a post will get based on how many it has in the first hour.
Wow. So if it has about a hundred in the first hour, you can roughly predict after the kind of 48 to to 72 hour lifespan of. That post, it'll have like 500 or so reactions, you know, plus or minus one 50, but it'll be in that kind of ballpark. Okay. All the posts that I've, that I've posted that are, that have gotten to say, one, 1000 or 2000, like what I consider to be a viral post at, at least in my books, they have all had like 200, 200 plus in, in the first hour.
Okay. So what that means is. There are a number of things that you can do to try and optimize the success of a [00:13:00] post. Once you understand that, that mechanic, so the first one is don't set and forget. Don't just don't just post and bail you. You've gotta be there re responding to, um, all the comments that you get Replying in, in interesting ways, creating conversation.
You're try and try and reply in a way that actually creates more conversation, either from the.
Absolutely critical to, to be there posting and engaging, and really giving the post the, the best chance it has to, to succeed in that first hour. Another thing that I, that I recommend to everyone is not just focusing on your content, but doing outbound engagement as well. So for roughly half an hour before I post, I would highly recommend.
Posting comments on, on other people's, uh, posts, particularly larger creators in your niche. Right. To, I'd say kinda like warm up the algorithm is, is like a, a crude way of putting it. But you want to get your profile in, in different people's feeds, you know, different people on the network that get notifications and some of them [00:14:00] include you.
The other benefit of doing it this way is especially when you're just getting started, it's even more valuable. So if you have, let's say, like 1000 followers, you know, early on in the. And every time you post, it gets, let's say between 500 and and a thousand impressions. Um, if you are also sending out 15, 20 outbound comments a day on large creators and they have 500,000 followers and, and they're getting a million impressions, a post, let's say a conservative 25% of people who see a big post will scroll down and read the first comment.
If you post an early high value comment. Create more conversation, get, get some engagement. You have a pretty good chance of getting bumped up to kinda like the top comment, like the de facto highest place comment on in, in that little thread. And if you're doing 20 of these a day, you have a pretty good chance of getting one of these a day or one, one every few days.
And so that's, you know, 250,000 people that have at least seen your comment and it's
click. [00:15:00] 30% of those people who hit your profile end up following you. Mm-Hmm. If you think, if you think about the math, it's just a, it's a much more efficient way of growing, especially at an early stage than kind of just posting to the void and hoping people will, will come and find you. I think out outbound comment is a, a super, super valuable strategy.
Wow. Another tactic that comes to mind. Uh, so if I'm kind of rambling on a little bit here. No, this, this is gold. Keep going. Another one that comes to mind is how you actually place the CTA. So like I mentioned, the first hour is the most important, and LinkedIn, I think the same as Twitter. But I'm, I'm just starting on Twitter and quickly realizing I've got absolutely no Twitter game.
So ignore my Twitter commentary, but at least on LinkedIn, if you include a link, it, it massively creates the reach of the percent would've been 70. If you can avoid it, you don't wanna include a link in a post, right? Mm-Hmm. But then the question becomes, okay, how do you get people to your subscribe page?
[00:16:00] And so what you need to do is, or at least what, what I believe the current kind of playbook metagame is that, that most creators actually doing is, is two things. One is you want to edit the post after one hour. So you leave the post without, um, any link for the first hour, optimize for, you know, engagement, activity, conversation.
And then after one hour you edit the post and include the CTA at the bottom and say, Hey, by the, by the way, if you like this, you know, you'll, you'll love my newsletter. Go check it out here. And if you edit the post and include a link, it certainly does have an impact on reach. But that is absolutely outweighed by the.
The value that is created by having an optimal first hour. Hmm. Like, I truly believe that is like the most important driver of the success of a post. So you kind of get the best, best of both worlds there. You get a CTA in after that first hour, and then, um, you, you also optimize for the first hour.
Dylan Redekop: One question on that.
So how does that compare to what you often see people doing, leaving even making a note, saying, you know, see the first comment for. You know, the [00:17:00] link to whatever, um, and putting the link in a comment right after how, how, like how do those two strategies compare?
Tom Alder: Yeah, absolutely. So I, I would actually recommend you do both.
Mm-Hmm. So the, the thing with comments is LinkedIn also penalizes the reach if you are the first to comment on your post. And if you are in the first, like even 10 minutes or so, even if you had a few other comments, ah, they, they figured us out.
After 10 minutes, assuming you're not the first. So those are the kind of the, the two rules that you have to go by. But assuming there's comments in there, after 10 minutes, you add a comment, you can, you can plug the newsletter for sure. Another part of the meta game again that, that I'm seeing a lot of large creators doing and, and I'm, I'm trying to adopt it myself as well, is you don't just leave one comment, you leave like five awesome comments on your own post.
And so this is again, under the umbrella of like, don't just set and forget. You want to, let's say you're doing a. Listicle, right? Like top 10 tips to XYZ or [00:18:00] something. Mm-Hmm. At the bottom in, in the comments, you leave a comment, which is like bonus tip, and you, you make it stand out and you go like, start it with an emoji, a little brain emoji or a rocket emoji or what, whatever your style is.
And I like to do. Like bonus tip, all in caps, and it's like Unicode bold, you know, you can't do like the, the, the native bold, but you can use Unicode characters. So you got bonus tip all caps with emoji. It stands out and then you drop a bonus tip and then at the end of that you have another little CTA, which could be the same.
It could be, you know, by the way, if you like this, go subscribe, right? Or it could be, Hey, if you like this, like, you know, repost it with your network, it means a, to me, something like that bunch, you can drop a little. Steve Jobs quote about marketing in the bottom or, or something like that that's like related to the post, but kind of just adds a bit more value.
Mm-Hmm. Um, and then say, Hey, by the way, like, you know, follow me or what, what, whatever the CTA you choose is. Yeah. Yeah. That's a really interesting strategy that I would, I would recommend. Recommend everyone do as well.
Dylan Redekop: Wow. Okay. So, I mean, my head's [00:19:00] exploding a little bit here. I'm gonna have to try to rein us back in because I have so many more questions to ask you.
Uh, but this was like, I mean, um, you know, LinkedIn organic growth, uh, you know, goal. So I really appreciate you sharing all that. So you, you clearly know what you're doing. I mean, obviously with the growth you're doing. One last question maybe on this. How do you manage all of that? Like, that seems like a lot.
Like you have to, you fire up the algorithm first, you know, for the first, you know, 20 minutes or so by commenting, uh, or the first hour or so or so commenting. Then you need to post and then you need to, you know, kind of set a timer and, you know, within an hour edit, you know, the post and then. Like, how do you, how do you go about managing all that?
Tom Alder: Yeah. I think for, for this, it all comes down to like systems and processes. You, you certainly won't nail all of the optimal steps on the first go. Mm-Hmm. But I would recommend everyone create a, a bit of a, a playbook or, or like a run book. Yourself of all the steps that you think need to happen in, [00:20:00] in order.
So if it starts half an hour before with the outbound engagement, you know, that's step one. But then in the playbook you also have the list of all the creators that you want to go and engage with, and you have linked all their profiles. So you just bang, bang, bang, bang, right? Go knock 'em all out. There's certain tools that you can use to, to rapid-fire engagement as well, so.
And then goes
out commend. You post, you go do something else for 10 minutes, probably outbound engagement, and then you come back, drop in the extra comments and respond to the replies that have come in so far, and then go do something else for 20 minutes, come back 30 minutes after you've posted, reply to comments, and then come back one hour after you posted, reply to the comments, and then do the edit with the CTA.
And that way you kind of tick off all of the, the key actions. And there's, there's a bunch of little, little steps in between there. But that's, that's the general run book that I.
Dylan Redekop: I think I'm gonna start the Tom Alder LinkedIn Growth Challenge, and it's gonna be like [00:21:00] follow Tom's playbook. I'm just kidding.
I'm totally kidding. But like, really that's, that's, uh, that's really good. Thanks again for sharing that. Totally. After a short message from our sponsor, Spark Loop, Tom shares his top tips to convert LinkedIn followers to newsletter subscribers. Trust me, you do not want to miss this.
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beach. Now back to the show, you mentioned, I mean, you really, you, you are obviously very skilled at growing an OR or an organic audience and growing your newsletter organically.
Have you tried any paid growth at all?
Tom Alder: Yeah, so my experience with paid growth has been through newsletter referral platforms. Right, okay. Such as Spark Loot, but others as well. Mm-Hmm. Like Behi boots and, and Refined. Yeah. They all have their own unique, you know, characteristics. They're super easy to set up.
Mm-Hmm. Less than 30 minutes. And, and you're done. And the other thing is, if you have budget and if you have a publication that people read and open, I think you, you can absolutely scale with these paid referral platforms. And I think it is important that you have something that people read, right?
Otherwise you're scaling something that, that no one reads. And it's also important that you have the, the mechanisms and the business model to. To monetize on the back end in order to fund the growth. But I think for the most part it's just a, an amazing growth channel. And I think that the speed at which we've seen you can, you can [00:23:00] spin up these incredible digital media properties with really immense mm-Hmm.
Reach, it's just phenomenal. And it, it, it kind of makes me think of, it's a bit before my time, but I've read a lot about it. Like back when Facebook ads were like really, really cheap and, and people were realizing like, wait, you mean I can just send. People a day to my landing page, to my e-comm site or SaaS product or something.
And then 5%, yeah, 5% of people will convert and I get like a TenX ROAS and I can just keep on kind of, I think that's what a lot of these more mature and like super successful, uh, newsletter publications. I've realized is it's just super powerful channel for growth. So as you can tell, very bullish on this channel, I'm interested as well in like mm-Hmm.
Twitter ads, meta ads. That's kind of a four different ball game. I don't really have the skills yet to work in that space. But yeah, certainly these referral programs have been amazing in my experience, and I think it's, it's very clear why they're a huge part of the growth strategy for, for most newsletters.
Dylan Redekop: Talk to me a little bit about quitting your job, and you just recently did [00:24:00] it. Again, you shared, you shared a bit about that in your, um, your build-in public six-month post on strategy breakdowns. But talk to us about your decision to do that. Did you ever think it would be possible to quit your job and, and go all in into a newsletter?
And why did you do it?
Tom Alder: Yeah, I, I, let's break down here. I. I certainly hoped it would be possible, and I was, I was very pleased that, um, we got there. But yeah, no, that, that, there's a, there, there are a few, uh, mental models that I think stuck with me that, that helped me make the decision, rationalize the decision.
And by the way, this is like super fresh for me at, at, at, at the time, a recording. So I was a, I was a full-time employee like Mm-Hmm. Five weeks ago, right? Just, just over a month ago. So this is, um, very fresh, helpful for. One of the ways of, of thinking about this problem was I think typically when, when we are making a decision or we are weighing up the risks and, and pros and cons of a decision, we think what is the upside of making the decision versus what is the downside of [00:25:00] making the decision?
Right? And so in, in this case, if it's quitting your jobs, go full-time on your thing. Mm-Hmm. The upside is, you know. To do what you, what you want every day, like freedom, flexibility, creativity, making something you're proud of, and you know, financial aspects as, as well. And then what's the downside of making that decision?
Well, in my case, there was maybe a bit of, bit of fear of failure. It's a very public thing. An audience-first business model. Mm-Hmm. No one wants to get pie in the face publicly and, and see that fail. So like those, those kind of trade-offs. Yeah. Maybe leave like a, a more stable, secure job, etc. What I realized is, uh, that that's not the whole equation, and I didn't make this, I read it somewhere, but the other side of the equation is what's the downside of not making?
If you stick out, you know, spend, spend more time in your job, or maybe don't ever go, go full time on, on that thing that you're building, would you be kind of disappointed? Regretful, resentful, like those types of things. Those are actually additional fodder for reasons why you should make the decision.
Right? It's, it's not just upside [00:26:00] and downside of making it right. It's also considering if you don't. Upsides to not making the decision, right. The stability, uh, the stability aspect, but that yeah.
Aspect. The opportunity cost, right? I you see a lot of these frameworks of like, well, maybe you should, maybe you should get your, your side business to, to 50% of your, your salaried income before you go for it. And people who are inherently more risk-averse or financially conservative will say, yeah, that, that's like the minimum you should get to before you even consider it.
And then other people who are more. Risk-taking or kind of more aligned with like the high-growth startup kind of world will say, well, you, you kind of left it too late. Like the opportunity costs, you should have gone it earlier and then you would've got to 50% way faster. Mm. Um, so that, that's another equation.
Not only do you grow faster if you have more time to spend on it, but you also get to reclaim your like evenings and weekends, right? Because you are, [00:27:00] you're working your full-time job, you're building this thing on the side. Should be. You time, social time, and, and mm-hmm. Time to enjoy yourself. So it's kind of a double whammy.
You, you grow faster and you get all this extra time back in your week and you, you, you just don't have the challenges that you are also facing and, and solving your day job. You just have the mental clarity to focus on, on the one thing. The last thing I'll, I'll, I'll say on this point is I think a people.
I say this from experience because I, I certainly did this. So it's easy to fall into the trap of thinking that you should de-risk everything that you possibly can before you are comfortable enough to make the decision. And you can't possibly predict all of the challenges that you'll face and, and opportunities that will come your way and people that you'll meet once you go for it.
And so I would encourage people to kind of. Avoid thinking that you can consume enough information and do enough research and enough planning that you'll actually be able to kind of uncover and pre-solve for [00:28:00] every single thing that could possibly happen or go wrong. Right. Um, the only way that you'll actually be comfortable enough to, to make this kind of decision is if you just accept that you back yourself to figure out a way to solve challenges as they come up.
Yeah. Yeah. Right. Like, you can't possibly anticipate everything. You just think that, you know, as they come up, you'll, you'll find a new way to do it, you know? Google and Yahoo bring in new email privacy, uh, compliance requirements. You can't possibly anticipate that. Like it's new for everyone who doesn't really know the, the inner workings of email, but you figure out a way to do it.
Or, you know, you run a whole bunch of ads and then for the first time you have an underperforming ad, like worst nightmare for a newsletter operator. Everyone faces it. At some point, what do you do? You weigh up.
That, that, that's also kind of a, a, a useful way of thinking about it. Like just try and get to the point where you, you have belief that you can figure out things on the fly. Yeah. And so you don't have to pre-solve everything. De-risk everything before you make the call.
Dylan Redekop: It kind of goes [00:29:00] back to that building the rocket ship, uh, after you've launched.
Right. Um, finish finishing, putting the pieces together to some degree is you can't possibly, um, you know, plan for every. Everything that will and could happen. So it leads us into, we'll probably end kind of on this topic here. It leads us into monetization because, you know, to quit a job that you're getting a, you know, reliable study income from, you obviously have to have some, at least I would anticipate you'd have some, uh, monetization plans or you're already monetizing strategy breakdowns.
So what does. A, I guess, are you, I, I shouldn't assume that you are, but I, I've seen ads in your newsletter, so my assumption is you are, what is your current revenue stream pie chart, so to speak, look like?
Tom Alder: That's a great question. The pie chart. I'm, I'm gonna steal that. So if you wanna see the pie chart, by the way, actually it's, it's on my, uh, six months building a public article.
So if you. Google search six months into strategy breakdowns. You can see it. Yes. Um, but the gist of it is, this is kind of from memory, but about 75 to 80% is, is sponsorships [00:30:00] currently. Mm-Hmm. So that is flat fixed fee sponsors who run a little ad insert, you know, today's article was brought to you by brand name, so that's the, the primary revenue driver.
Dan, the next segment is maybe 20%, maybe? Yeah, about 15, 20%. And that is through paid referrals. So that's platforms like sparkly, so recommending other newsletters and uh, generating a commission for successful referrals. Right. And then I think the last very thin slice is maybe two or 3% is affiliate income.
So that is recommending. At least in, in my case, primarily recommending SAP tools. Uh, one of the benefits of that is you typically generate a recurring revenue source. Mm-Hmm. So if you refer two people in the first month and then three people in the second month, you're not on three, you're on five referrals, right.
That are paying each month. And so it kind of stacks up and then six months in, all of a sudden you're getting a slight of the income for 20.
It's quite a small, [00:31:00] small size is the smallest size for the pie right now.
Dylan Redekop: And so that leads me to the next question is, do you see the pie chart revenue stream changing in the next one to two years? And if so, how do you see that changing?
Tom Alder: Yeah, I, I certainly see it changing, uh, though it, it will change in a few ways.
I think the first one is. Diversification away from ads, and that's not to say we'll stop running ads. Certainly, certainly still keep, keep running ads. The more scalable and and efficient way to, to run a business like this, especially is more of like a solo-preneur type operation, is to, to launch some kind of paid product or, or subscription offer.
Right. Mm-Hmm. Infinitely scalable in that they're kind of digital, like very little incremental effort to deliver each, each additional sale. The umbrella term for like paid product is course 'cause everyone kind of understands what, what, what a course is. Um, but there's, there's various ways that you can, you can deliver a product like that.
Subscription offer is just a kind of strategy to breakdowns premium, right? Like you get the additional right resources, tools, like [00:32:00] maybe an extra newsletter, something like that. Uh, there I'm tossing up a few things on which direction to go to go here. To be honest, I think there's a a lot more reader validation I that I know I need to do before I commit to a direction here.
Lots of options, but I come from a product strategy background, so I know it's like too early for me to build something. 'cause I want to build something that, uh. Certain people will actually buy, ask them, and then, and then kind of build exactly that. So that's the first thing. I would hope that as a result, the, the, the percentage of ad revenue would, would scale down even if the absolute number maybe stays the same or even goes up, if that makes sense.
So the percentage of the overall pie would, would go down. I would expect something pretty similar for the. Paid referrals. I would imagine that the monthly absolute value would stay roughly the same, maybe go up slightly. 'cause it's pretty well correlated with my social media content. Mm-Hmm. And, and impressions on, on that side.
And then affiliate revenue, what I'd [00:33:00] like to see is it actually slightly increases as a percentage because of that compounding benefit of the recurring revenue.
Dylan Redekop: Yeah, that makes alluding there. Potential product, quote unquote course that you're gonna make is gonna hopefully be maybe one of the larger pieces of the pie with the other ones, um, being smaller, yet their revenues remaining stable in terms of sheer, you know, numbers.
That's right. So I, I, I'd like to ask a lot of, you know, people on the show this question because. Usually if you're on, if you're on the Senegal podcast, you're doing something right with your newsletter. And so I'm curious what you see, um, kind of, I could frame this question in two ways, either. What's one thing you see most newsletter operators doing wrong, or what do you think is the most obvious low-hanging fruit that newsletter operators just aren't, you know, plucking from the tree and snacking on.
Tom Alder: Good question. I think, I think for this one, I'll, I'll focus on like early stage operators. So say I kind of my stage, my stage or earlier, let's say Mm-Hmm. I think the, [00:34:00] the number one thing would be having a plan for sustainable growth, which is very different to kind of one hits of growth. And I'll, I'll explain what I.
There is a, there's a perception that if you write an awesome free newsletter, it'll just get shared around like wildfire, right? You write an article, send it to a thousand people, and then the next day you wake up and you've got 1500 subscribers. That can happen in, in certain cases, but I think the reality is for 99% of, uh, newsletters, if 5% of your subscribers are forwarding your emails each time, that's like best-in-class.
That's like an exceptional rate. Mm-Hmm. I think ha, having more of a plan for how you are planning to, to grow the size of the email list on a sustainable basis is, is absolutely critical. Like if you don't have an audience on social media, say you might think you write a great article, you kind of share it to no one, and it just gets picked up and everyone starts sharing it.
Very unlikely. Mm-Hmm. What I would actually, and I, I don't say this to be discouraging. Hopefully this is [00:35:00] like. Illuminating. Mm-Hmm. There are specific growth channels which are more sustainable to consistently chip away at and generate a few hundred thousand subscribers every single month on an ongoing basis.
Um, and there are a few options to consider here. I'll split it into organic and, and paid. So on the organic side, you pretty much have like social media, which requires either having an audience or growing an audience. Right? And that's totally cool. It's a, it's a whole game in itself. And so you, you can go down that path and it certainly works and you can just keep doing it and, and keep on growing the size of your audience and the size of your subscriber list.
The other organic method that is sustainable is a a bit more old school, but it is interesting is like SEO, right? Organic search traffic. To do that, you need to learn and become a master of SEO. How to rank, how to do keywords and how to write SEO-optimized content. Totally viable path. I think people might hear this and think, oh, what about like newsletter swaps and forwards and.
Lead [00:36:00] magnets and giveaways and stuff. I think just based on experience and, and based on what I've seen across.
You can't leave magnet your way to like a thousand subscribers a month every single month, just consistently. It just is. Yeah, it doesn't work. It kind of taps out after a while. It has implications on, um, on your brand, etc. So I think those are the sustainable organic methods. And then on the paid side, like I said, there's paid referrals.
Amazing. There's meta ads. That's a whole, uh, industry in Mm-hmm. In itself. And people become absolutely amazing at, at running efficient meta ads. You need our budget and. You, you need to come into this knowing that your, your plan to monetize, sorry, your plan to grow rather is, is $2,000 a month of paid ad spend.
And that's, that's how we're gonna grow. So I think that that would be probably the biggest realization that, that I've had, at least in my experience, like coming into this, doing this for a little bit of time, is. Certain methods are sustainable and, and longer term and, and ongoing, and they work. Others are just [00:37:00] simply less sustainable to really do something over the long term and, and do something at scale.
Dylan Redekop: And do you optimize for scalability?
Tom Alder: I think absolutely. Yeah. One, one of the benefits of of growing a social media audience to to grow a newsletter is. You kind of kill two birds of one stone. You, you get that LinkedIn audience or that Twitter audience as well. Right. And, and you can use that in other ways.
And that's valuable for attracting sponsors and yeah, launching products and finding partners and doing whatever you want to do. I think I would, I would much rather have a plan, even if it's like a little bit slower, but doing something which is sustainable, scalable, certainly of. A preferable approach.
Dylan Redekop: Tom, it's been awesome having you on. There's a few things I wanted to ask you. We just, we're running short on time here, so maybe we'll have to do round two in six months or so once you're totally six months into the, uh, once you've quit your job and been doing the newsletter for six months, is what I mean.
So yeah, that'd be, that'd be fun. Why don't you share with us, uh, where people can find you, uh, where you're most active, and, um, how do you get in touch?
Tom Alder: Yeah, absolutely. So the newsletter [00:38:00] is Strategybreakdowns.com. You can find me on LinkedIn, Tom AlAlder think it's just "/tom-alder" is the, the little handle on the, on the end of the URL there.
And then on Twitter, I'm @TomAlderTweets
Dylan Redekop: Awesome. And, um. We wish you the best in 2024. Like I said, we might have to have you come back on and see, see what you're up to in six months time. Maybe you'll have a product course launched. You never know. But thanks Tom for coming on. It's been a pleasure and all the best.
Thank you.
Tom Alder: Cheers. Say hi to the SparkLoop team for me. Love your work. I'll, thanks.
Dylan Redekop: Thanks. Thanks for listening to this episode of the Send and Grow podcast. If you like what you heard, there are three quick ways that you can show your support. Number one, leave us a five-star rating and review in the podcast app of your choice.
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I am really grateful for your support. Thanks, and see you next week.