Lessons from building the largest business newsletter in Canada
🗞️ business philosophies with 'The Peak' CEO Brett Chang
The Come Up is a newsletter that highlights successful business owners’ & operators ‘come-up’ stories in an easy-to-read, written interview format.
All content is transcribed from live interviews (this one - October 2022) and edited to be more concise and easy to read.
The goal is to discuss what worked, what didn’t, upcoming challenges and insights learned along the way.
For the first edition - an interview with The Peak Co-Founder & CEO Brett Chang.
The Peak Quick Stats:
Co-Founders: 3
Revenue Model: Advertising
Average Deal Size: $8-10k
Team Size: 9 employees
Time Since Launch: <24 Months
Subscribers: 100k+
53% open rate
Outside Capital: ~$400k
Approx. Revenue: $1.6M+
Launch to Raise: 5 Months
Best Growth Channels:
LinkedIn
Referral Program
Contests
Paid Social
# of Businesses Started Prior To The Peak = 5+
How Many Times He Almost Quit: None
Read the full interview below 👇
Business Prior to The Peak - What Worked, What Didn’t?
Yeah, that’s a good question…
The first thing we did was my co-founder, Taylor, and I started an agency right out of school. We did different jobs and came together with another guy, Michael, and built this agency that worked. We sold deals and work came in, but it felt like there was a cap. We kept running into walls and had a big disagreement with our business partner, so ultimately had to shut it down.
So that obviously didn't work.
And that didn't work for personal reasons, not necessarily because the business was bad.
Also didn't know what I was doing then - I was very young, so I really had no idea what I was doing and that was a big issue.
The next thing was called Line Six - it was this bus we ran from Liberty Village to Union Station and we wanted to build a crowd-funded transit platform but the economics didn't make sense. We started running it and couldn't figure out a way to get ticket prices to a point where we'd actually be able to make money off it since the cost of running the bus was so high.
We shut that down because we couldn't find a way to make that work.
Again, we were still young so we didn't even know how to raise money…
Then we did Leaf Forward - our cannabis accelerator fund and we were able to raise a million-dollar venture fund for that. But again, there weren't a lot of prospects for the companies that were investing because the industry had changed and many of the assumptions we made were wrong. So that clearly didn't work either and we shut it down.
Then it was all these little things I was doing on the side and some things worked better than others, but eventually, The Peak began to have money coming in and it was enough.
Were You Working When You Launched The Peak?
(Side Hustle or All-In?)
Yeah, I was unemployed at the time…I had no job…It was the pandemic. I had made a Notion course and some templates I was selling, but nothing was actually making me enough money to pay my rent.
On Validating The Business Idea
(Reinventing the Wheel vs. Pursuing Something That Is Proven?)
The most important thing with The Peak was simply that we saw that other people were doing it which gave us a real guide. Knowing that there are people doing the exact same thing in America and making a pretty good revenue, we thought we could do the same.
Previously, we spent a lot of our time trying to invent new stuff, but I think, really seeing something that works and being able to copy that model, is a very powerful mental model, which probably should be applied more.
The Process Before Raising Money…(and hiring)
It wasn't that bad - it was just annoying. Like you had to find a few hours to sit there and write it all out. Originally, each of us would write one edition at a time. Eventually, we came up with a new system where we each write a story and there'd be one person, usually Taylor, that would act as the editor and put it all together.
That worked fine for a while, but it was all-consuming.
So to be able to hire people and then transfer that on to them was an exponential shift in productivity.
How Long From Launch To Raising Money…
(and why raise money at all?)
Probably about five months of writing every day before we then decided to raise some money - we ended up raising about $400,000. We wanted to raise so we could invest in growth and pay ourselves.
Sure, you could bootstrap it, but there are three of us, and it's tough to see how if we bootstrapped it, we could get the revenue quick enough where one of us wouldn't have left and gotten a job elsewhere because someone would have to bail - or all of us would bail…
It would take too long for us to get to a place where we could pay ourselves that it was unstable.
Unless you have a built-in audience that you can convert into subscribers of your product or readers of your work, you have to pay to acquire new readers…
That's just how the internet works - I don't think there's a shortcut around that. If you can find organic, cheap growth channels to get you those subscribers without paying, that's great…
But again, the point is - you raise the money, you hire people, and you can then turn your attention to other things that are more pressing or higher leverage for the business.
Assumptions You Got Wrong…
(and what you wish you knew when you started…)
I think the one thing we underestimated was just how much the audience is worth, and how much advertisers would be willing to spend. The amount of value per placement is much higher and the number of subscribers that we need to charge per placement was much lower.
I thought by this point, actually by the end of this year, I projected we would have 250,000 subscribers and each newsletter would generate an amount that would lead to $1.6 million in revenue.
The top-line revenue number wasn't wrong - the subscriber number was wrong, and the amount of value per placement was wrong. So it's kind of interesting to look back, it's all a guessing game…
You have no idea how this whole thing is going to unfold.
The margin is also higher than we ever thought it would be as well.
I wish at the very beginning I understood better who the advertisers would be and how much they're willing to spend - that would have changed at least a bit of our approach early on. Maybe we would have raised a lot less money had we known that we would be able to get to this amount of revenue this quickly with this size audience.
I underestimated how much each ad, and the value of each placement would be in the newsletter because my first impression of our target advertiser was DTC brands, but they want scale. So that makes the economics of the newsletter look a lot worse than they actually turned out to be.
Because we're going after these B2B SaaS companies that have high LTV on their customers and high cost per acquisition to acquire new customers. So if I had known that, I would have raised less, and that would have been better for our own personal economics in the business.
What You’ve Learned Building The Process
And What You’d Do Differently Now…
The thing I learned was how important processes and systems are when I run these businesses. Now seeing what I've seen, if I was to start again, I would have those processes built in on day one, and I would scale those processes as we grow the business.
At the time we just didn't operate that way - we were just scattered.
We noticed that we made more mistakes if we didn't have a robust and durable process, so we really put a lot of time and effort into building that out. I tried to get as much insight into what Morning Brew does as possible, but really we had to invent the business development piece because they just don't share that. The management side, I think it's all new to us - I don't think any of us have ever managed people at all.
But the principles of good management, I think, are fairly straightforward - be kind to people and create a good work environment.
Why The Peak Is Excelling While Traditional Media is Struggling…
Yeah, I don't know - we're not special… It's the model, right?
There are a lot of businesses out there that are low margin, require lots of work, and are highly operational. An example would be a coffee shop or a DTC brand or a ride-sharing company.
Whatever it is, they are commoditized low margin, high operations businesses.
On the flip side, there are software businesses which are low operations, and high margin.
I would say that the majority of traditional media is probably closer to the other end of the spectrum, and we found somewhere closer to software, which is high margin, low ops.
What do I mean by that?
We picked a model that doesn't require us to do a ton of independent reporting, which means our overhead is generally lower. We're also targeting a business audience where advertisers have a greater appetite to spend, which means that we get higher margins on our advertising products.
Those two factors make us give us a better overall business model than traditional media.
All we had to do was execute that model and do it well. There was nothing stopping anyone else from doing that - we're not special. If you were The Globe and Mail, you could easily hire people to do this as well - I think we're just the only people to try it.
They used to have a great model - high margin, mid-tier ops, with a huge moat.
They lost that with the internet.
Thoughts On Growth
Audience growth is fairly straightforward.
There's a toolbox of initiatives you can run to generate incremental growth of audience…
A combination of paid social contests, referral drives, and some other creative things you can do. We've got a pretty good playbook for that that we can apply to grow any of our email products at least.
On the advertiser side, I think the key for sales is that you need to be able to have a consistent repeatable process where you can generate some type of predictable revenue.
I think we've got a pretty good formula there - we've got Chris, our BDR in Calgary going out and doing a bunch of work on the B2B SaaS side.
Future Challenges (and unlocking new growth)
I think the future for us is how we get plugged into the 98% of media buying budgets held by agencies. How do I get plugged into those agencies and get them to slot me in on those campaigns?
Those are big-budget campaigns with big brands.
I need to get on those campaigns because it’s a really good fit with our audience.
It's a matter of getting on their radar and building those relationships up.
That is a longer sales cycle, but if we can accomplish it is a total game changer for the business.
It would mean we're consistently getting $50k, $100k, $150k, RFPs coming through - we'll win some, we'll lose some, but we'll net out in a different position than we are today, where our average deal size is in the $8 to $10k range.
If I can get in on these media agencies, we get a way higher average deal size.
Biggest challenge or setback so far?
Again, I think the media buying agencies are one for sure.
It's a really tough cookie to crack because I don't have a product that fits into their traditional offering, so I need to convince them that we've got something really cool going on that’s worth their attention.
The vast majority of people that I reach out to - I just don't get a response so it's really tough to even get on their radar.
I keep pushing and I hope that someday I can break through. But it's challenging - it's a bit of a bet on our part for sure.
A secondary issue and challenge are hiring writers.
Really strong writers who want to come in at the compensation levels we offer and who can produce strong content and onboard quickly. This is a tough role to hire for and we spend a lot of time looking for writers because it's an ongoing challenge for us.
On Future Product Lines
(and maximizing a captive audience)
I think what we're trying to do is look at the core audience that we've built and try to maximize that audience… How do we find new opportunities to monetize that audience with a high return on invested capital and low incremental cost on the business?
I think events make sense, they’re extremely high margin.
We'll do an event - a full-day event for $30k in sponsorships, $3k ticket sales, and maybe $3k in costs. So on ticket sales, we break even alone, and then everything else is margin for us.
So super high margin on events.
We're hoping to hire an event GM who's going to manage that line of business.
Ideally, it would do some selling of sponsorships plus the actual coordination and planning of the events themselves. I treat those initiatives as net new business lines and we're trying to make sure they get the attention they deserve.
We have The Peak Money, our new personal finance newsletter - again, taking our loyal readers and double monetizing them on a new product at no additional cost.
I think what we'll do next is a content studio - we've built-in such good processes around the production of the newsletter and the podcast…
We have the additional capacity that we can allocate to helping other brands develop content as well - I think that could be a really high margin and it could be a really great new revenue stream for the business.
How You Knew To Raise Prices
Sometimes people would say, “wow, that's such a great deal! - that was a really good indicator.
Responses like, “yeah, that's pretty affordable - we can definitely do that.”
It was so quick that it made me wonder…
The other thing too is that you would see people buying big packages, right?
It was just an indicator that they just had a budget in mind and they were going to pay that budget. They didn't really think about how many placements were involved in that budget, they were just going to spend that budget.
This one B2B SaaS advertiser is when I probably first realized this, but they said, “okay, we're going to buy seven grand worth of ads.”
And at the time, that was probably like eight or nine or ten ads, some type of placement combination. But then I was like, well, we can probably just charge them three placements for that seven grand.
They probably still would have spent the seven grand because that's just the budget they had in mind for a channel like this.
And that was kind of a real takeaway as well.
Where You Go For Answers When You're Stuck
(Besides Co-Founders)
Yeah, I get stuck on things… The most recent example was, like, sales.
How do I create a good sales process?
I think my way of solving it is I try to listen to as many podcasts and read as many articles about people who talk on that subject matter. They were experts on that subject matter as possible, and that informs a lot of my views. It gives me ideas of things I can test out, try and see if they work. And then that in concert with just trying stuff out, is really how we learn.
And I think that's how we all kind of approach it - we try to find resources of subject matter experts who can speak to the challenge that we're dealing with.
I use my own network if possible.
If there's somebody who has experience with that, I'll ask them. And all of that kind of feeds into these experiments that we run, which ultimately give us clarity on the correct approach.
Tech Stack
Vimcal - which is what I use for my calendar
Xero… I think Xero is good
HubSpot for sales.
Campaign Monitor for the email
Google for the docs
ClickUp for project management, which is the one that I'm probably the least excited about
And Slack - that's kind of our stack
Best Book On Business
Traction is the most practical and best business book I've read. As somebody who is running a business, it just really gives a lot of clarity as to what you should be doing.
Prior to that, it was very easy to just kind of run around and try to do a bunch of things and get distracted and not be focused and disciplined. But if you just follow their formula, which we try to do as closely as possible, it really does bring a lot of clarity to the business.
And everyone in the business is what they should be working on at all times. I think that's something that I was missing and every other thing that I've ever done, I think it was missing from every other business that I've ever tried to work on.
Even companies that I've worked at didn't have that.
And so I think that's a really good book and it's a really good system.
That’s it for issue no. 1!
If you’re not already subscribed to The Peak, you can subscribe here!
Thanks to Brett & the whole team for their hard work!