One year in, here's how Extra Points is doing
Good morning, and thanks for spending part of your day with Extra Points.
I’ve got a very cool sponsor message and some editorial announcements at the bottom of this newsletter, so stick around until the end.
But first, I want to give everybody an update.
Every quarter or so, I’ve been sharing financial data on how Extra Points is doing. I think that sort of transparency is useful for my readers, potential freelancers, business partners, and an industry that is badly trying to figure out how to get away from display ad-driven publishing platforms. Newsletters are in, but we’re all still mostly trying to figure out how to make this all work.
In a few weeks, Extra Points will hit one year as a paid product, and two years as a newsletter. In that spirit, I wanted to take a few minutes to share a status report about this whole operation, and talk a bit about what I’d like to do next.
So how is Extra Points doing financially?
As of March 28, Extra Points has 4,621 free subscribers and 714 paid subscribers.
According to Substack, that comes out to a little over $50,000 a year in annualized revenue from subscriptions. When you add in revenue from merch, book sales and sponsorships, my annualized revenue is slightly over $53,000. My goal is to hit $60,000 by the end of 2021, and while that might be a stretch, I think it’s at least possible.
As far as other key metrics, a typical open rate for a free newsletter varies from 38-43% and 44-56% for a paid newsletter. CTR varies from 6-15% per email. Churn is typically under 3.5%.
When I look at these figures and charts, I see good news and bad news.
What’s the good news?
Extra Points is profitable! That’s pretty good, right?
I’m intellectually aware that it’s a real accomplishment to build a profitable small media business in a year. That it happened while I was stuck in my basement, working in the middle of a global pandemic, and while in-person elementary school wasn’t really offered, feels like a big deal.
What’s the bad news?
I’m not sure that topline financial data tells the whole story.
For one, that $50K isn’t all profit. Big picture, the margins on a newsletter are still pretty good, but there are non-trivial expenses. I’ve had to pay for expensive internet upgrades to accommodate Zoom First Grade, Extra Points and my wife working from home, all at the same time. I just had to replace my laptop, and I imagine I’ll need to make other technical updates this year. I read a lot to make Extra Points, and subscriptions to various newspapers, trade journals and archival systems add up. Substack takes 10% of my revenue, and Stripe takes another 2-3%.
I also spent a fair amount of money trying to grow my audience. Newsletters can be highly profitable if you’re already famous, but I’m not famous. I’m not even in the top five most famous Matt Browns. So I’ve had to spend money on advertising, sales support, growing my professional network, and on really understanding my analytics data. While I anticipate those costs will go down in 2021, they won’t drop to zero.
There’s also cashflow concerns. I wish that subscription growth followed a linear or at least a predictable pattern, but it doesn’t. I made roughly 20% of my revenue last year within three weeks of launch, so renewal season in a few weeks is going to be a big deal for me. I might go three weeks with virtually no growth, then add $1,000 in revenue over a weekend. The site has grown every month, and growth is still outstripping churn, but this pattern can make budgeting a challenge.
Still, that’s more good news than bad, in my humble opinion.
What are the short-term goals for Extra Points over the next few months?
Last quarter, I wanted to focus on diversifying revenue streams, starting a podcast, and improving the infrastructure of this business. That mostly worked! I am optimistic about my ability to sell more ads over the next few months, Going For Two has published ten episodes and is growing, and I have more potential sources and a deeper sales pipeline.
For the next few months, here’s what I want to focus on.
I have to be honest with you: I’m absolutely exhausted.
Under conventional circumstances, I think I’ve written quite a bit. I’ve written over 150 newsletters over the last 11 or so months, which would be over 300,000 words. I suspect that I’ve written more than most other single-author newsletters.
I’ve also been working as a sales director. And an audience engagement editor. And I’ve been speaking to classrooms. Helping other reporters with their FOIA requests. Doing consulting. All while being interrupted every 40 minutes to solve a school problem or chase a two-year-old from my Twitter account or to force my brain to work when I want a nap and eat Popeye’s.
I’m burning out!
That’s not good for you, since burned out Matt doesn’t produce interesting content. And it’s not good for me, for obvious reasons.
I’m taking next week off, and moving forward, I’m really going to focus on ways to make running Good Spot Publishing LLC more streamlined. I’m going to really focus on figuring out what business tasks I can outsource, and how I can tweak this product to make it more sustainable. I love doing it, but I can’t sustain exactly what I’ve been doing under these circumstances.
A new website
Extra Points is a newsletter, but it’s also more than a newsletter. It’s a Discord chat room. It’s a podcast. It’s merch sales. And in 2021, it might become even more things, from video to consulting to computer games.
I plan on creating an honest-to-goodness website this quarter so everything in the Extra Points universe can live in one place. I want to make it easier for you to search the Extra Points archives, talk to each other, buy discount subscriptions, chat on the phone, and anything else. I hope to have this ready this summer.
I also plan on tweaking the core functionality of this newsletter. I want to have a referral program that wasn’t as clunky as the last system. I want to tweak the design a little bit. That may very well mean that I leave Substack. I haven’t completely decided yet, but hey, if you run a different newsletter service, I’d be happy to talk to you.
I don’t want to bite off more than I can chew. Other than those two goals, this quarter is also about operational excellence, and building the best newsletter experience possible. None of this other stuff matters if I’m not giving you something you want to read.
What about long-term goals?
Now that we’re a year into this experiment, I think there are three possible ways this can all go.
One ending? I sell Extra Points. I didn’t start this newsletter looking to cash out, and that’s not why I continue to work on it. But I am also very aware of exactly what I am good at, and what I am not good at, and if I could sell off my ownership so somebody else can take over the stuff I’m not good at, then I think it would create a better product for everybody. I’ve had several conversations about selling Extra Points, and I’m happy to have others.
Another ending? I grow my revenue enough for me to hire somebody to help me with the stuff I’m not good at. I only want to do this if I can offer enough to pay to pay grown-up wages, help with health insurance, and do this properly. Right now, I’m not at that point. But if I grew large enough for me to either hire somebody to help write the dang thing or help grow it, I’d love to do that too.
The third possibility is that this is just as good as it gets, and Extra Points can’t grow any larger or add additional functionality. I plan to do everything I possibly can to avoid that outcome, but if that’s the truth, I’ll pivot accordingly.
I really like Extra Points. Is there anything else I can do to help support it?
I’m glad you like it! I love making it!
The best way to support Extra Points is to subscribe. Paid subscriptions pay almost all the bills around here. A paid subscription gives you access to our Discord, plus four newsletters a week. Subscriptions are $7/mo, or $70 for an entire year.
I completely understand times are tough, and not everybody can afford to pay for a subscription. The other thing folks can do, besides introduce me to your eccentric rich uncles who might want to buy content companies, is just to spread the word about Extra Points. Tell your colleagues about it. Share it with your message board buddies. Tweet a few stories and @ me. Link to it in your reporting. Help spread the word.
I don’t have a massive media company amplifying my stuff. I’m not on TV or national radio. I don’t have a six-figure ad budget. I cannot overstate how helpful word of mouth and earned media is to the growth and sustainability of Extra Points.
Thank you again for everything. I’ve learned a lot this year. I hope you’ve enjoyed it!
I’m going to finish up this week, take a few days to go hiking and fiddle around in the ol’ workshop, and come back to give you more interesting stories that I think you’ll like reading.
Quick reminder, our Community Interview guest this week will be John Ashaolu, the athletic director at Point Park University. Point Park is an NAIA school in Pittsburgh that competes in the River States Conference.
John has worked as a director of basketball operations at ECU, and in athletics administration at the high school and community college level. He’s a graduate of one of the most unique colleges in the US, Xavier University in New Orleans, the only Catholic HBCU in the country. He’s happy to answer questions about Point Park, working in NAIA, basketball operations, athletic administration, and anything else on your mind.
Please submit questions via email, comments, Twitter DMs or Discord. If you’re interested in participating in a future Extra Points Community Interview, please fill out this quick form.
This newsletter is sponsored by the Playing the Long Game conference, presented by The University of Texas Sport Management Program.
Join sports industry professionals, academics, and students worldwide as they discuss current trends and the future of the sports industry at the inaugural Playing the Long Game conference presented by The University of Texas Sport Management Program.
YOU are invited to join panel discussions on the immediate and long-term impact of COVID-19, innovation, and the long-term future of the industry, diversity, and culture and ethics in the workplace.The event kicks off on Monday April 12th, with a keynote conversation featuring former NFL Commissioner Paul Tagliabue, and will continue on the 13th and 15th.For a complete list of panelists and sessions, as well as free registration, please see our website: https://longgameconference.com/
If you’re interested in sponsoring future newsletters or podcasts, or want to lock down a 50% institutional discount code, drop me a line at [email protected]. For story ideas, feedback, FOIA requests, media inquiries, generous offers to buy Extra Points and more, I can be reached at [email protected], @MattBrownEP on Twitter, or at:
Good Spot Publishing LLC
C/O Matt Brown
PO Box 411023
Chicago, IL, 60641