From Newsletter to Startup Goldmine

Introduction:

Michael Houck is the founder behind Houck’s Newsletter, a weekly startup advice column with 70,000 dedicated readers, and Megaphone, a managed marketplace designed to boost Twitter or LinkedIn accounts. Houck's previous startup raised approximately $15 million, including a Series A led by a16z, and he has co-founded over 50 startups.

Houck organizes weekly fireside chats with experts, records these sessions, and hosts in-person meetups. He also plans to launch courses and playbooks to support his users' startup growth. His team of 450 members has collectively raised over $200 million.

If you're looking to attract leads or build your personal brand on social media, Megaphone could be a great tool. You might even find creators you already follow.

Origin:

Houck explained that Megaphone began by accident. He texted a few friends to gauge interest in a marketplace where prominent creators would amplify content to help others grow. All five friends were willing to pay immediately, which indicated he was onto something.

The initial version of Megaphone was quite basic. Houck set up a Typeform linked to Slack and Airtable. When someone submitted a URL through the Typeform, a message was sent to a Slack channel where VAs chose a few opted-in creators from a list and sent it to them on Telegram or WhatsApp.

Houck did not need to invest any capital, as he already had subscriptions to these tools and VAs for his newsletter.

Houck's newsletter began as a side project to enhance his personal brand and draw more customers to his previous startup.

Despite some peers advising him that a newsletter for startup founders was too broad, Houck pressed on. He identified a notable gap in the market. Most advice was very specific to various aspects of running a startup, but there was a lack of modern guidance, particularly from someone who had recently built a venture-backed company, despite the evolution of Silicon Valley since the early Y Combinator days.

Realizing the newsletter could turn into a business, Houck invested $10,000 but used only $1,500 for Beehiiv and other SaaS tools to get started.

Initial Marketing:

For Megaphone, Houck kept his newsletter strategy simple, expanding in concentric circles:

He began by texting a few friends for their feedback.

He then contacted larger, more diverse groups with a crafted sales pitch to find out which messaging was most effective.

He shared it with his paid founders community (about 450 members) to see how a trusted audience would react.

He ran a lead magnet campaign on Twitter and LinkedIn, gathering over 600 emails.

He added the sales pitch to his newsletter’s welcome sequence, mentioning it two to three times.

Megaphone started generating revenue immediately due to its clear value proposition, and Houck's friends and audience had seen his growth over the years, giving him credibility.

For the newsletter, Houck used swaps with other newsletter writers in his niche who were at a similar scale and engaged in content marketing through viral threads on X. He had a small initial email list from a previous newsletter with over 1,500 emails, so he didn't need to start from scratch.

Marketing Strategies:

Houck has not yet expanded Megaphone's growth channels beyond his own newsletter, but he is considering a few options. He has some ideas from his time at Uber, though he’s not ready to disclose them yet.

For the newsletter, paid channels are the primary source of new subscribers, a common trend among most newsletters, even large ones.

Houck runs ads on Facebook, Instagram, and Twitter and uses SparkLoop for paid recommendations. He has also explored acquiring other newsletters and using lead magnets on social media.

Output:

Megaphone offers tiered subscription pricing at $49 or $89 per month. The $49 per month option delays subscribers' posts from being sent to creators by one hour.

Houck takes a 20% commission from the creator’s earnings but does not charge anything on their spending.

The newsletter earns through ads, subscriptions, and upsells to Megaphone and Houck's consulting services. Additionally, his team makes money through SparkLoop by referring other newsletters and various other channels.

Currently, these revenue streams are growing sufficiently, so Houck is not looking to expand into more channels. The team recently hit their first $100,000 month, a milestone that, while unlikely to be consistent until Q1, serves as a motivating achievement.

More reliably, they are earning between $70,000 and $80,000 per month, with $20,000 of that being MRR (up from zero at the start of the year).

Expenses vary with growth investment, but Houck aims to keep margins very low (under 10%) to focus on growth.

Get in Touch:

Here are some links to learn more:

Houck's Newsletter: https://join.houck.news

Megaphone: https://megaphone.network

Twitter: https://twitter.com/callmehouck