How the Daily Upside grew to over 1 million subscribers

Patrick Trousdale explains why he partnered with a traditional news brand and how he works with finance influencers.

One of the best insights Patrick Trousdale had when growing his finance newsletter The Daily Upside was that he didn’t need to go it alone. With his deep background in the finance industry, he knew he could create a high quality editorial product, and he also knew he’d have a much easier time growing it if he teamed up with an outlet that had an already-existing audience.

That’s how he ended up partnering with The Motley Fool, a venerable media brand that was looking to diversify its portfolio. After the Motley Fool started promoting The Daily Upside to its email list, the latter was able to quickly scale up its operations and revenue. Today, it has over 1 million email subscribers and employs an entire editorial team.

In a recent interview, Patrick walked through all his growth strategies, including how he convinced The Motley Fool to partner with him, how he works with finance influencers to drive signups, where he invests in paid acquisition, and how he collects first party data to measure the value of his audience.

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Transcript

Hey Patrick, thanks for joining us.

Hey, Simon. Thanks so much for having me today.

So we're here to talk about how you grew your newsletter called The Daily Upside. When did you launch the Daily Upside? What year?

I launched the Daily Upside in September of 2019. So right on the precipice of the pandemic. 

And what platform do you use to distribute it?

It's changed over the years. At the outset we were on MailChimp. Now we use Campaign Monitor.

Wow, interesting. And what's the basic format? When you're at a party or meeting someone new,  how do you describe it to them?

I describe The Daily Upside as a newsletter that covers business, financial, and economic news. And really what sets us apart as a publication is, yes, we're looking to break news and tell really interesting stories about economics. But what sets us apart is the notion that we're grounding the news in longer term trends. So yes, we want our readers to understand what happened yesterday, but we also want them to understand why that matters in 3, 5, 10 year trends. So they get a really broader context when they read our newsletter.

And correct me if I'm wrong, but unlike maybe a business newsletter like Morning Brew or something, like you're going for a slightly more sophisticated investor audience.

Yeah, I'm not gonna necessarily juxtapose this against any particular newsletter, but we are definitely looking to talk to director-and-above type folks across corporate America. And we also do come to the newsletter every day with insights that help investors and business people generally. So we find that our average reader actually skews north of 35 years old – 35 to 45 is our core sweet spot.

And as the name indicates, it's daily, is it five times a week?

Six days a week. So we publish Monday through Friday our daily flagship. And then Sunday we have what we call our Sunday Deep Dive, which is a really interesting long form investigative piece about something topical that our journalists can sink their teeth into in a completely different way. So all original reporting, all original narratives, and frankly, we often find that a lot of larger publications are fast following our Sunday deep dives, which is cool to see.

And how is it staffed today?

Across the whole company, I think there are 15 of us producing the flagship newsletter. We have three journalists who all come from strong pedigree journalism backgrounds and an executive editor. Then we also have a halftime editor who top edits the newsletter every day. So it really is a production change starting. We've got a journalist in London who gets an early read on international news, we’ve got a journalist in New York who's, you know, hitting stories right as they're breaking New York time. And then the rest of the editorial team, by and large, sits on the West Coast. So from a newsletter perspective, that really allows us to see the longevity of an entire day's news cycle. And we view that as a competitive advantage.

So I know when you launched, prior to you forming a major partnership that we'll talk about soon, it was a very kind of uphill battle to get those first few thousand subscribers. What was kind of your main growth strategy in those very early days?

I think probably like a lot of newsletters in the early days without raising capital, with the team being really small, in my case, just one person, you had to get really scrappy and the newsletter ecosystem is, as you all know, was much younger back then. So yeah, Substack was coming into its own, but the number of newsletters was significantly fewer. So the game was really trying to find audiences that existed and, you know, doing swaps, barters in their early days to  grow the audience, even if perhaps the newsletter wasn't a hundred percent topically related to yours. 

So you were emailing other newsletter writers and being like, Hey, I'll recommend your newsletter if you recommend mine.

Yeah, and to be clear, we still do that. We still find that to be a really high quality tactic. But in the early days when money is tight, that's something all newsletter operators have done. 

Okay. So how big did it get in those first few months? How many thousands of subscribers did you have?

Not many. I'm not gonna know the exact numbers off the top of my head, but definitely not more than 10,000 by January, February of 2020. So I spent the first three months just trying to figure out what I was doing with the newsletter, how the editorial process was going to work, how it was gonna be different than what was already out there. And that took three months. And at the end of those three months, I was starting to think about growth and okay, how do we build an audience in a real way? That's what led me to the Motley Fool conversation.

So if I remember correctly, you actually maybe sat down with or reached out to several different publishers. Ultimately, the Motley Fool was the one that showed the most interest. What was kind of the pitch to the Motley Fool?

It definitely came down to me. I was a company of one. I was a person who just left investment banking who was trying to do something entrepreneurial. I think that resonated with the person I spoke to who also sits on Motley Fool's Venture Capital team. So it just had some familiarity with perhaps my background and skillset, and the pitch to them was really about the product. So the product existed then, it was not a concept, and the exercise really was convincing them of the merits of what I was writing, how I was writing it, and how that could potentially appeal to their audience as well. And yeah, the Motley Fool is by far the most entrepreneurial about newsletters. They had become familiar with this space as a result of doing a lot of newsletter buys and marketing to grow their product. So they were quickly becoming familiar with the space, were a believer in the power of the channel, and that's how that conversation went.

And the value to you was that Motley Fool not only had a really well regarded brand, but it had an already existing huge email list that you, in partnering with them, could tap into.

Motley Fool has been around for decades, a massive web presence, massive email presence, massive marketing funnels. So yeah, for me at the time, it was a way to get from zero to one without raising outside capital. And I didn't even really know this at the outset, but half of the value was that the Motley Fool readership was a little bit older than people who were reading these new media newsletters that were coming up. So it ended up being a white space of subscribers that maybe had not found their newsletter or business newsletter of choice yet.

So the way that it worked was that you entered into, it seems like at first, it was kind of like an informal agreement that Motley Fool would start sending dedicated emails to a subset of their newsletter list to see if they could entice that list to signing up for your newsletter. Is that basically how it worked?

Yeah, there was some formality around the agreement, but that was definitely a piece of it. We also syndicated content on their website, which, you know, if we posted something on our website, it would get, at that time, not a lot of traffic. If that same article went up on Motley Fool, that article would get traffic. So we had people acclimatizing to our content on their website, and there were offers to sign up for the Daily Upside on that content, which worked well. But also, yeah, Motley Fool would email a subset of their engaged audience an offer to join the Daily Upside.

And if I remember correctly, that partnership, like within a few weeks or months, it resulted in a huge boost in subscribers, 30 to 40,000 subscribers. And that was kind of proof of concept to Motley Fool that this investment was worth it. And at that point, they entered in a more formal business relationship with you where they took some equity and then they also started helping you with like the ad sales and stuff like that.

So the trial portion of the agreement lasted probably seven or eight months, the majority of 2020. And these were the early days of the pandemic where first the market absolutely cratered when people didn't know what was going to happen with the economy, big rescue packages from the Fed. No one really knew what was going to happen, and everyone wanted to read more about markets than the economy. So it was explosive growth in 2020, really hard to replicate. With the Motley Fool, they looked at open rates, engagement, click through rates, and all the traditional newsletter metrics to figure out if there was something there with the product. And it was clear that there was, and yep, it, it was around September that we memorialized with some more formality around the economics of our arrangement with Motley Fool.

Yeah. So at that point you had tens of thousands subscribers, you had a proof of concept, you had a devoted audience. I think the last time I remember you announcing what the audience size was, you were north of 500,000 subscribers. I don't know if you've done any updates since then, but obviously there's a wide gap between tens of thousands and hundreds of thousands. So I'd love to just now spend the rest of this episode talking about what were your growth strategies since then? Like when you look in terms of continuing to grow your audience, what are you doing? So you did mention that you are still continuing to partner with other newsletters. In what form are those partnerships taking place?

Yeah, so with certain other scaled newsletters, we definitely find really high quality subscribers who fit our target demographic, which has evolved significantly over time and become more precise. I'd say in the early days, the Motley Fool was, you know, the elephant in the room. For us, it was how we grew our audience from, you know, 10,000 to 80,000 subscribers. And then we parlayed that audience into revenue, right? We had an investing focus, higher net worth readership, these are more senior business decision maker types. And it was fairly easy back in 2020 and 2021 to sell newsletter ads. And we quickly parlayed that revenue into marketing to grow the audience further. I'd say in the beginning, we stuck to the channels that we were familiar with. So influencers who were talking about business and finance and economics on YouTube, on Instagram, and other newsletters.

So you would go to a YouTuber and what would you say?

We would say we're the Daily Upside, this is what we're up to, this is what our newsletter is. Oftentimes people had heard of us, which really helped, and we would tell them something like, we really like what you're doing too. Your content's amazing. We think it would really resonate. We think our content would also resonate based on what you are either writing about or making videos about. And yeah, we would oftentimes pay to have a creator talk about the Daily Upside at the beginning of a video or at the beginning of their newsletter.

And you found that to be pretty effective in terms of driving signups?

Yeah, still do. I mean, with the right creator, it can definitely work. It requires a lot of manual work to reach out to creators and have the conversation, get the creative assets in place for the newsletter for the ad to actually work well. So not everyone's willing to do it, but for those who are, and you can find the channels that have scaled pretty nicely, then that can drive very powerful growth. We have around a million subscribers. You also need to find really scalable channels. It means doing the acquisition math and figuring out what network works where you can acquire a subscriber for a certain amount of money and have the payback period. 

So I think you use some of these referral programs like Spark Loop, or others where you basically say that I'm willing to pay X amount for qualified signups for the newsletter, and then other newsletter creators can come and create and grab like a custom URL that leads to a tagged signup page. And so then you pay them based on how many legitimate subscribers they send you.

We've definitely experimented with all different types of platforms, including that one. We'll test anything, we'll apply budget to any channel. And then for us it becomes how do we get smart on who these subscribers are? As an example, if you signed up for our newsletter three years ago, we would collect your email, send you a welcome message, and then we would monitor how engaged you were in the newsletter. Now you sign up for the newsletter, you're quickly greeted with five or six questions about who you are, where you work, how senior are you, what industry are you in, what job function do you have? So we're getting a lot smarter about customer acquisition because our belief about who we want to talk to and what’s valued by a sponsor, it's become much more precise over time.

Now, when we're testing a channel, it's not, okay, how many opens are we getting from this person? It's okay, are these the right opens? So is this the right subscriber? Because scale is dead, and that narrative I think also applies to newsletters and the value of it. Just having a large audience who perhaps can click on one of your newsletter ads, it's really tough for that to compete with Meta, right? You're not gonna compete with Meta or Google on scale. So we now view the world as, okay, yes, we want more subscribers, but we want the right subscribers.

When you're doing a Facebook ad or something like that, are you just using a signup message? Like you're not promoting a particular piece of content, you're promoting the Daily Upside , trying to very succinctly explain the value proposition of why someone should sign up and then either they click on a link to sign up or – I don't know if Facebook has an ad product that allows you to sign up for a newsletter without leaving Facebook.

They do have that ad product, but we always like to send people to our website to buy into the branding and mission of who we are and to collect the first party data just mentioned. Sometimes we also do lead with content – you know, here's an article we just published about x, y, z, if this article would be of interest to you, come read it. And they're met with a gate to sign up for the newsletter if they want to finish reading the article. I find that's a really good way to drive high quality traffic.

Have you found any channels that have surprisingly low acquisition costs? Like I've heard that Reddit is one that you can do pretty good targeting, get pretty high quality traffic, but because there's still a little bit of a stigma attached to it and like mainstream advertisers still don't know it very well, you can get pretty competitive rates in terms of acquisition and stuff like that. Are there any channels like that for you?

Reddit's not one of them for us. I think we'll have a team meeting later today about whether or not it should be. But that would make sense based on their prospectus, which I just read the other day., that their annual value of a user is a very small fraction of what a Meta use is worth. So there probably is value to be found on Reddit for the right type of newsletter. For us, I don't know if there's one particular channel on a creator level, there are individual creators where we find a ton of value where we're getting a disproportionate number of Wall Street leaders on a given channel that we feel like we can find deep value in.

Would you rather work with a creator that has a million followers or a bunch of creators that have 10,000 followers?

It's just gonna depend on the conversion math, it's obviously a lot more work to work with, you know, the creators with 10,000 followers. But you can find really deep and loyal audiences, as you all know, with more niche products. So if it's a channel talking about Japanese economics,  on YouTube and a very small portion of FX traders are are gonna care about that, it could be a really great channel for the Daily Upside to advertise on.

Well, I would just think like the 10,000 followers, like those would be a loyal audience and the YouTuber would probably be too small to have like an agent or something who's going to, you know, vastly jack up the price and stuff like that. So from an arbitrage perspective, you might be able to get a better rate for those smaller YouTubers.

Definitely, that's absolutely the case, but then it's just more cost and salary to go out and actually execute on the ads. .

Do you have a social media strategy?

It's really interesting that you ask, because we've been debating about this a lot internally. I think in the past it's not something we focused on at all, and with the changes to the algorithms that these platforms are making to deemphasize off platform traffic really doesn't make a ton of sense for a publisher to invest a ton of capital or budget into social when you're not gonna be rewarded for it. So unless you have a really specific strategy that the algorithms are gonna reward and you think it is authentic to your audience, it's not something we're really actively focused on and I don't think that's going to change. I think, for us, the value if another hundred thousand dollars of budget were to free up, it would be how can we create more editorial content for our readers? Not how can we scale on X? Right? You don't own that audience. You don't, it's not providing the same type of value to your readers. 

I was looking at the website, it seems like you've optimized the website, so the newsletters now exist on well-designed article pages. Is that for SEO reasons or to make it easier to share the content? Like what's the kind of thinking there?

So since the last time we talked, we completely redesigned the website, rebuilt the website, and at least half of that process was focused on brand and building a stronger brand, which we're really happy and proud of. The other part of the website rebuilding process was creating operational efficiencies. So whereas in the olden days, our process from writing in Google Docs to getting our content into Campaign Monitor was a pretty arduous and delicate process. Now we have everything built on our backend where these things happen with much more click-of-a-button type transfers of content, which frees up time for the editorial team, frees up time for more enterprise journalism essentially. So, I mean, to answer your specific question about the newsletter archive, that's just part of the building of a stronger brand and having a real proper home for our content.

But you don't think it makes your content a little bit more shareable since people can discover it on the open web and it's easier for them to simply because a lot of newsletters, they just look really bad on the web because they're really only meant to be read in the inbox, whereas now yours are more optimized for like the open web?

Definitely. And as far as editorial strategy is concerned, we're gonna be looking to do more web only content, right? We view newsletters as a really important pillar of our property, but not the only pillar. So having grown into an actual website I think is, for us, an important part of our journey.

Do you have any sort of SEO strategy? Like do you rewrite headlines just for SEO or do you create like evergreen content that's mainly SEO focused?  

We're not rewriting headlines. We view our content as our content. We're not really overly focused on SEO, we're trying to provide value to the audience, wherever they meet us, but we are doing things like adding tags, adding keywords, so our content does become more discoverable on the web. But as far as content with longer shelf life and longer tail value, it's on the roadmap. Not necessarily for the flagship newsletter, but for more B2B focused newsletters.

I seem to remember from our last interview that you experimented with referral programs, but found that since you had like an older skewing audience that they weren't really interested in those kinds of prizes that you would give out, like a coffee mug or a t-shirt or something like that. Do you do anything to kind of encourage your audience to share or provide any kind of incentives or anything like that? 

It’s something we definitely put on the back burner, probably even since we last talked. I'm not sure how many times we've experimented with it. We occasionally do more content-led referral initiatives where ask people to share the newsletter, and really there's no system behind it. There's no way to log onto your portal and figure out how many referrals you have on your way to your stickers. We just don't really find that's the type of audience we have, but we have said things like refera friend and, get access to this piece of content, but there's no actual technological gate. But we also just frequently ask people to share it at the top of the newsletter and we find that that actually does drive traffic and conversions. 

Are there any kind of growth strategies we haven't talked on here that you use?

I think for us the web is going to be the biggest lever we're gonna look to pull over the next 12 months that we did not have the last time we talked. So we had a story the other day get picked up in Google Discover. It was an original type piece. Got hundreds of thousands of views on Google Discover. So over the last six months, we built the technology to recognize when that happens and convert some portion of those subscribers to newsletter readers. So trying to get smarter about how real journalism can grow the audience versus simple arbitrage.

Oh, there was one other question I had that I forgot to ask. Do you do anything to optimize your landing pages? Like have you tweaked the language, have you found anything that has been more particularly effective at converting someone once they're landing on some kind of signup page or anything like that?

I think that the key with landing pages is just keep them simple. We definitely a/b test and figure out what sequence of words or logos for social proof drives outcomes and helps increase conversion rates. But I'd say keep it simple. Help allow people to understand what you're offering and why you're different.