Sam breaks down the staggering numbers behind Beacon Hill, Agora Financial’s paid newsletter subsidiary — $550M in revenue, $200M in profit, and 160 products across 12 brands. The hosts dig into the front-end/back-end pricing model that drives the business, debate the ethics of financial newsletters, and riff on how Sam would have built The Hustle if he were trying to replicate this model today. The conversation ends with Sam sharing how he found and developed top editorial talent like Trung Pham and Steph Smith.
Speakers: Sam Parr (host), Shaan Puri (host)
Beacon Hill’s $550M Paid Newsletter Empire [00:00:00]
Sam: You want to talk about paid newsletters really quick? A topic that we’ve discussed a lot.
Shaan: Yeah, let’s do it.
Sam: This one is particularly interesting. The reason why is we’ve talked about this company a lot — Agora Financial. I’ve brought it up to you a ton. They spun off a couple of their brands, and they tried to do a SPAC. When they tried to do the SPAC, the company that they were SPACing with kind of went down significantly. So there was already a publicly traded company that was going to buy a few Agora brands, the stock went down big time — but that’s not that important.
What’s important is the numbers behind this paid newsletter business. There’s this company — it’s a subsidiary of Agora, I think they call it Beacon Hill — and it owns 12 different newsletter brands. Collectively, those newsletter brands do — where did I put the number — $550 million dollars in revenue and $200 million dollars in profit. And by the way, growing. Some grew 77% over last year. Is that crazy?
Now I’m going to tell you some more numbers. They have 10 million free subscribers — kind of like The Hustle, they’ve got 10 million of that. This is even wilder: they have 550,000 people paying them between $1 and $600 for subscriptions. Then they have a quarter million people paying them $600 to $5,000. And finally, they have a hundred thousand people paying them more than $5,000 for a product — for a paid newsletter.
Shaan: And what is in this paid newsletter?
The Pricing Ladder and Business Model [00:02:30]
Sam: Here’s where things get way crazier. They have some paid newsletters that cost $35,000. And they have 160 products across 12 brands. So each brand has about 12 or 13 products.
I don’t fully understand every product, but I understand the business model. The model is: they get you to buy a $49 thing, then they get you to buy a $2,000 thing. That $49 thing is like a monthly paid newsletter — it’s not significant. And a large percentage of those $49 people buy the $2,000 thing.
Shaan: Okay, so these must be B2B newsletters, right?
Sam: No, they’re not. Yeah, that’s an important part I left out. Nearly all of this — and we’ll link to their deck, they have a whole deck — it’s kind of scammy. It’s a financial and wellness company, which is kind of weird. They talk about health, they talk about wellness. If you click Agora up there under my name, you’ll see the deck. They say their target demographic is “self-directed investors.”
What does that mean? Well, I’m going to tell you. If you’re looking at the website, it’s just a bunch of older, kind of wealthy people who are probably Republican. Because they have ads that say things like “Nancy Pelosi is coming for your guns — you better invest in these eight stocks.” Like crazy stuff, you know?
It’s basically Motley Fool on steroids.
Shaan: Right.
Sam: But I think Motley Fool is ethical. These guys aren’t. They also sold a book on how to cure diabetes.
Shaan: I was going to ask you why you think they’re unethical, and then you answered my question.
Sam: So it’s all financial news, financial news related stock picks. It’s just a crazy story. I’ve brought this up tons of times. We don’t need to spend too much time on it, but it’s pretty wild to actually see these numbers. I actually guessed this is how big they were — now we have proof.
Shaan: Yeah, you’ve been talking about Agora as doing hundreds of millions of dollars, and some people know about them — but I would say most people don’t know about this empire. And this blows away most people’s expectations of what a paid newsletter can do. Like, I just had a paid newsletter as an individual. I made a few hundred thousand dollars total and I thought I was crushing it. And these guys are making hundreds of millions of dollars.
Why Didn’t The Hustle Do This? [00:05:00]
Shaan: So when you look at this — my honest reaction is: dude, why couldn’t you have done this with The Hustle? What did they do, or why was the hill too hard to climb? Why couldn’t you scale like this?
Sam: I don’t think it was too hard to scale. I think I could have done it. I would say this business has been around since the ’70s. It’s kicking ass now, but it didn’t always kick ass. If you’re willing to be patient, you can do it.
Second, if you’re willing to put your ethics aside a little bit, it’s actually quite easy to do.
Shaan: It helps. So exactly how would you do this? Let’s say you want to be these guys or beat these guys. You’re Sam — you’re probably one of the most well-equipped people in the world to do this. How would you have gone about it?
Sam: What you have to do is create multiple brands under one roof. It’s really hard to have one brand and only a couple products make all this money.
For us, we were going to do this — but then we got bought. The reason I got bought was a whole different thing. Basically I wanted a payday. I was pretty clear about that before. But if I wanted to be patient and do it for 50 years — which I kind of do want to do, honestly — I would have created versions of Trends for sub-categories.
You make the first newsletter the one that people pay for, like $49 or $50 bucks, and we send you just a couple things a month. Then the second thing is you go to sub-categories and you charge thousands of dollars. For example, if there was a newsletter that dissected media companies — I work in the media industry — and you told me it was $4,000 and I also got access to a community, I ain’t gonna complain about it. I’m gonna do it.
If there’s something for digital streaming that five smart analysts are writing, Twitch is going to buy that. It’s not that challenging.
The Front End / Back End Model [00:07:30]
Sam: That’s what I would do across multiple industries. And the thing a lot of newsletter writers do — which I’ve talked about plenty of times — is they do one of two things. One: they charge too little. Two: if they charge too little, they don’t have a higher-end back-end product.
You need a front end and a back end. You need your cheap thing that gets a lot of people, and then you need your paid thing that only gets a few people but charges a lot and makes a lot of money.
So you guys at Trends — it’s like, I don’t know, $300-something a year. It could have been $49 and then $5,000. That would have been a better mix of value if you were optimizing for how do we get this thing as profitable as we can.
Shaan: Lucrative as you can. Yeah.
Sam: Had we not gotten bought, I would have done that. We were actually about to make that change.
Shaan: And what happens to Trends now — do people still pay for it or is it free now?
Sam: They pay for it. We might lower the price. We’re either going to make that the back end or the front end. We were copying this model — a $99 thing and then a $2,000 thing.
Shaan: Dude, when I see companies like this it just makes me want to do it so badly. Because it seems so doable.
Simple vs. Easy: The Framework [00:09:30]
Sam: Now I know that in practice — and by the way, we get heat for this sometimes because we’re like “dude, it’s so easy, it’s so simple.” We’re talking relatively. Building a successful business is hard, okay. We’re not saying things are easy.
Sometimes we actually do say that word “easy” — what we really mean is “simple.” Benching 500 pounds is simple: here’s how you get strong on the bench press, you lift a lot and you eat a ton. That is quite hard to do for five years. But those are the steps. So it’s simple, but not easy.
Shaan: Actually I think weight loss is a better example, because 500 pounds is genuinely hard to bench. Weight loss is literally simple: avoid carbs, avoid sugars, eat a little bit less than you’re burning, work out regularly — try to get an hour a day, break a sweat. If you actually just did those two things and gave it four to six months, you’d be in great shape. Everybody knows that formula. It is simple. Executing it, having the discipline, actually sticking to it — that’s hard. But it’s relatively way easier than becoming a CrossFit champion.
So when we’re talking about business, the scale is: it’s hard to create the next Facebook — that’s really freaking hard. Is it hard to create a paid community? I don’t think most people who try it will succeed, but it’s relatively way easier than creating the next Facebook.
So for people out there who get sensitive when we call something easy — we’re not trying to mislead you. Yeah, it’s going to take work. Most likely it won’t work. It’ll take some time. But on a scale of one to SpaceX, this is more like a one. That’s a useful scale for people to think about.
Sam: I completely agree. And now let’s talk about what makes this hard.
What Makes This Hard: Ethics and Commitment [00:12:00]
Sam: The first thing is that you have to sell your soul a little bit. Many people will not be comfortable with this stuff. Shaan is pretty comfortable with it. I think I’m comfortable with it, but a little bit less so.
You have to be a face. Sometimes you have to say, “I’m an expert at X — pay me money for me to tell you my thoughts.”
Guys like James Altucher — who we’ve had on this podcast — he was ridiculed for doing this with Bitcoin. Everyone made fun of him. He made $60 million dollars doing it, and he still got mocked constantly. Shockingly, most people would actually prefer not to make the money and not get made fun of, rather than make the money and get made fun of.
Shaan: The way I think about it is: most people are afraid they’re going to get mocked and not get the money. So they’re like, forget it, I won’t do it. If you really had a guarantee, I think people would happily trade reputation points for bank points.
Sam: Perhaps. But that’s kind of a moot point, because the fact is most people don’t even want to — because as you said, they may not get the money at all. That’s also true. And that’s why they’re not going to do it.
So you have to cross that psychological barrier. Second: it’s a treadmill. You can’t stop. This is a lifetime job. If you’re a content creator — I hired people to do it for me, you 100% can do that — but you actually have to do the work for a while first anyway. You’re going to have to work.
How Sam Found His Editorial Team [00:14:30]
Shaan: Quick question on hiring, because people ask me this and I have no idea. You’re the one who did it — why are they asking me?
They’ll be like, “Dude, The Hustle has had amazing talent.” They talk about Trung, they talk about Steph Smith, some of the people you guys had. So the question is: where did you find these people? Can you give me the 10 seconds on each? Where’d you find Trung? Where’d you find Steph? Where’d you find Colby?
Sam: Colby worked at a PR firm doing copywriting. Trung came from Eamon Troy — a mutual friend and investor of The Hustle. And Steph — I found on Twitter because I read her blog.
Shaan: And then when you found these people, did you cycle through 30 people who sort of fit before finding the gems?
Sam: When we actually sold to HubSpot, they were like, “Wow, you guys have a lot of churn.” I said, “Yeah, but this is actually quite normal in the editorial industry.” You hire a bunch of people and either fire them or there’s a mutual “all right, we tried it, it didn’t fit.” That happens a lot.
Shaan: And you understood the tone, because you were writing it originally. So you could spot the right people. You were the one actually doing it every day — posting in that Trends community.
Sam: Yeah, and that sets the culture and attracts like-minded people.
The “Made Man” Principle [00:16:30]
Sam: I also think: once you find the winners, you go all in on them. Trung is what I call a made man. Steph — a made woman. Whatever Steph wants to do something cool, sounds good. What do you need?
When other people come to me with an idea, I negotiate. Trung brings something? Yes sir.
Shaan: Right. Like, you’re a proven hitmaker.
Sam: Exactly. And then the last thing is when we interview people, I always ask about the bottom fourth of the resume — the college classes and other stuff — because I want them to entertain me during the interview. In the same way that you’re really good at storytelling, you have to find other people who are good at storytelling.
Shaan: Right.