Dan Runcie is the founder of Trapital, the newsletter that breaks down the business of hip hop. We learn all about his favorite hip hop artists, of course, but he also shares what indie creators can learn from the world of hip hop and so much more.
Having switched from a lucrative paid newsletter to a consulting business, Dan explains the thinking that went into his new business model, and what it means for anyone trying to monetize their newsletter.
Dan shares his opinion on Substack—the out-of-the-box newsletter service that seems to be everywhere these days. You’ll find out why Dan started Trapital on Substack, and why he later switched to ConvertKit.
You’ll also learn unexpected insights from the world of hip hop, including lessons indie creators can take from Beyoncé’s sales funnel, and why Master P’s cutting-edge albums in the ‘90s show that consistency might just matter more to creators than quality!
Links & Resources
- ConvertKit – Email Marketing for Online Creators
- Ghost: Turn your audience into a business
- Blog Tool, Publishing Platform, and CMS — WordPress.org
Dan Runcie’s Links
If they’re using Gmail or using any other service, they see my face in the icon come up, they see my name there. And it’s a familiar thing where it is coming from a person. I want to make sure this reads like an email you would get from someone, not just like a marketing email. So I try to make sure that even though I am sending the email, it’s not just the straight copy from the essay, they are getting something that reads like a note that they would get from a friend.
In this episode, I talked to Dan Runcie who runs Trapital, which is the newsletter that breaks down the business of hip hop. He’s really fun to talk to. We learn all about his favorite hip hop artists, right. Specifically what indie creators can learn from the world of hip hop and so much more. So let’s dive in.
Dan. Welcome to the show.
Nathan, thanks for having me.
Yeah. Well, I want to dive right in. You have a love for specifically the business of hip hop and I would love to hear from you where, where that started.
Why. You know why you care so much about the business side and, what brought you to this point?
yeah, for me, the love for the business of hip hop really started with loving hip hop. I was pretty early on with gravitating towards this culture and. It was deeper than music. I mean, I remember elementary school. I was really getting into different artists who were the people that are making moves, but it’s also the people that were making movies behind the scenes.
Right. I was very interested in the persona of someone like a show ignite or someone like a Puff Daddy and the people that were both being very deeply involved with what was happening. But. Pulling the strings and making things happen and all of the criticism and successes that both of those people achieved.
And I think as I continued to grow up, seeing what that was like at the time, I never truly saw that as a career path for myself, but I was intrigued with it. So it was almost like a hobby and something I pursued and kept up and would always talk about with friends pretty much all through life, but it wasn’t until.
Let’s see, six, seven years ago. And this was when I was in business school. We were doing case studies on all different type of topics. And one of them that stuck out, we did this case study on Beyonce. He had just released this surprise albno one had done albums, surprise albums like that at that particular timeframe.
And it was this huge marketing case study on how these things happened. And it was a case study that was done by Harvard business school. It spread across to other schools. And that stuck out to me almost like a reminder, like, Oh, Hey, you know, this is something that is huge. And. It stuck out for a few reasons.
One, the topic, the subject matter, I’ve been a Beyonce fan since the Destiny’s child days, but second, it stuck out to me just how big of a deal that case study was, how it was from a business perspective. And there weren’t that many articles or breakdowns that were talking about hip hop artists or.
Artists in entertainment that we’re doing and making the same type of strategic moves that other industries were making in the type of jobs that I was working in and was playing into working thereafter. So for me, it was really an opportunity to look at that. And that was how I had started doing some freelance writing on the side.
Started a blog. It was a personal endeavor just to explore hobbies, my own interest topics that snowballed into publications, reaching out where I started writing for them. But then that snowballed again into writing for more and more reputable spots. And then eventually I saw where media was going. I saw hip-hop’s continued rise and said, you know, I have an interest for this.
I clearly have some skills that ability to convey these thoughts. Well, let’s merge these two together and started diff publication focused on the business of hip hop and that CellTrak capital was born.
Yeah, that’s awesome. So I’m just imagining, you know, you in elementary school with the love of music, but then you’re actually diving in like, You know, when, when something happens or when someone makes a move, you’re diving into the story behind that. Are there any early ones that really stand out to you that you know of an artist making some move where you’re like, wait, Whoa, what was the deal there?
Or that you were fascinated to hear every little detail about.
fascinating. One to me when I was that age was Master P So I remember this was around the time where I was really starting to buy CDs and I bought a single. Of make Em Say Uhh so not even just the alblike the single, I just had like one side and then maybe like a B side album with it. And I played that single.
I don’t even know how many times. And That stuck out because master P wasn’t just an artist that had this record label behind him, his whole business model. And how he went about just running and being so popular for that stretch in hip hop was so monumental for people across the entire country. He was putting out an album from him and his group every other week.
And. They did not go on tour at all. During this stretch, they just monetized their ability to market extremely well, made sure people knew there was a style and a cover of what that No limit album looked like. There was a distinctive sound. And to be honest, even if the music itself wasn’t always the best they mastered the art of branding.
So when I think about that fast forwarding that 20 years now, when you hear all people in content, talk about how. You know, it’s better to be consistent. And sometimes that consistency may be more important than the quality master P is always one of the first people I think of with that. that isn’t necessarily a knock to him.
It’s just seeing how so many of those lessons from hip hop can translate to how media and content and so many things in the current world of the landscape operate
Yeah, that’s fascinating. And I think we’ve seen that, you know, all across the creator ecosystem of people who show up consistently, or really do it in a novel way, you know, like that’s crazy to think of. I mean, that’s almost the level of an author releasing a book every couple of weeks or, you know, every month of, so people they go away for a long time and like, you know, two years later they come back, like, this is my album.
And he’s like, no, like this is the creative process. Like let’s go and we’re as much marketers as, as anything else. what about on that side? Like, I think so many creators. Are stuck in this world of like, I am a creator. Like I make great art or over here, they’re like, no, I’m a marketer. You know, I, I do business and I feel like in hip hop, they just merge that so well, right.
Of saying no, the business and the art, they go hand in hand. Do you have any favorite examples of, artists who have just done that really well?
Yeah, I think with the best example, I always go back to it’s an easy example, but Daisy is still one of the best I’ve seen that has done this so well, he’s not only. Many people consider the greatest rapper of all time, but also the most successful businessperson. He was the first true billionaire to come from hip hop.
So much of just how he learned from how the game worked for him. Things didn’t always go his way, whether it was how his early partnerships with Rockefeller or the people that he was working with at the time, there are plenty of things that went well, but plenty of things that he learned from, and then.
By how he was able to build future businesses like rock nation and the joint partnerships and the ventures he’s able to make since then truly show the evolution of someone that has learned the craft evolved, but has also incorporated so much of that into his lyrics. You hear different Jay Z albums.
There are snapshots in time for where his mindset was at that particular timeframe. And that’s always been the most interesting, I think a lot of this. Rubs off or not necessarily rubs off because I think it probably rubbed off the other way, but a lot of this, you could see with Beyonce as well. I think in a lot of ways, she was a bit.
Earlier, in some regard, in terms of how he was focusing on certain things, whether it was the visual content of her work and having that incorporated, having the messaging come in there. But yeah, I really think of the two of them as people who both incorporated how they were changing their business strategy.
Over time, how that shifted, how they went about creating their music and the actual content of their music. So it’s a bit of this, flywheel type connection where people see what they want. Right? So when you see them having a performance somewhere in or filming a music video, somewhere like the loop that they did a couple of years ago, it all stems from that same type of place that how they generally perceive themselves and how they want to operate in business, which has always been intriguing to me.
Yeah, that makes sense. So you have, like, I always think of you as having a foot in two worlds. Right. One of the business of hip hop and then the other in this like indie creator space of, you know, you building an audience, figuring out how to monetize it. everything else before we dive into more of your story, I’d love to hear just some, some of your thoughts or observations on what indie creators, you know, anyone growing their newsletter can learn from the world of hip hop.
This is one of the things I really enjoy about the work I do, because there’s so many things I’m reading or things. I seeâ€”whether it’s things that happened decades ago or things that are happening right nowâ€”that are so relevant to this indie creator space. So right now I’m in this space where I am running a newsletter, running a podcast, and it’s my job to help grow these things, but not just to grow them in any particular type of way.
How do I attract the right. Audience. So who’s the persona, who’s the type of person that would be interested in triple a content. How is this going to help them? What problem is it solving? And I think that a lot of artists think of themselves in that same way. They understand that there’s a particular niche that they’re trying to hit.
And there are so many tools that they could use. In some ways they’re using a lot of the same tools that. indie creators are using in order to help grow. Right? So many artists have their email lists. They have their community of super phone numbers that they’re texting people. They have their social media, so they have their own funnels in terms of how they are attracting customers, attracting fans.
And they funnel down to that type of perspective, artists, or indie creators rather need to do the same. One of the more popular visuals I had drawn in a recent. Case study I’d written for Trapital was this funnel for BeyoncÃ© I’ve just mentioned her a few times in this interview, but it’s, what’s relevant is funnel of Beyonce of just how her.
Big media appearances, whether it is a Superbowl performance an interview her being in a big movie that makes a billion dollars, like the lion King, those are her top of funnel. Right. And then how that helps spread awareness to where she can then sell products that are a bit more on the expensive side, like Ivy park, and then at the furthest end down how she can sell VIP concert tickets and other expensive experiences.
I think that most indie creators also have their funnel where they’re like, okay, how do I attract people to find out about me in the first place? And then after that, how do I have, or how can I get people to subscribe to my podcast, subscribe to my email list somewhere I have more of a direct connection.
And then how can I go about selling them certain. Products or services that can help my bottom line, but then can also help serve them. So, So many of those parallels run true, and I think that’s how that’s been reinforcing. And I think so much of that is applicable, especially in hip hop because the artists themselves are multihyphenate, they are expanding in a bunch of different areas.
And I think in hip hop specifically, there’s a bit more of that hustle mentality that you see that makes them a bit likely to expand into different areas.
yeah. When I think that funnel makes a lot of sense. And just for an example, From what my funnel is. And I’d love to hear, you know, some of you like, even this podcast, the clips that we’re doing on social media, you know, the really short things to get out there that is our top of funnel. It may not be the same level of appearing in lion King, but that is the same.
Like I’m just going for awareness at that point. It’s not even about trying to get the subscriber. It’s people seeing like, you know, the clip pop up and then have a little bit of detail about, art of newsletters or the things that I’m interested in. And then from there, after they see them a few times, then it’s like, okay, well, I guess I should listen to the full episode, you know, and diving in getting someone to a listener of the podcast.
And then the next step would be the, the newsletter list. And then in a previous life, that would be, you know, books and courses that would follow up next for me, it, you know, in the current life, it’s for them to start their own newsletter and, and build and grow that on ConvertKit. so you’re absolutely right.
You have to think about, okay, what’s the thing. Where I’m trying to get them from, you know, having heard of Beyonce or having not heard of, to having heard of Beyonce, having never heard of Nathan Berry to having heard of it, heard of him. And so I’d love to hear for you, you know, what’s the, what’s that top of the funnel and where does it break down from?
I’ve no idea. Never heard of trap. It’ll never heard of Dan Runcie into like all the way through the business to, you know, you earning a living as a creator.
right. So the top of the funnel, that’s the awareness piece. How can I get the people that are not aware of Trapital right now to realize that so. Think about where are the type of places people who would be interested in Trapital are probably spending the most time. So if you are interested in hip hop, whether you are someone that works directly in this music industry, you work tangentially connected to it in some way, or you’re a general fan of it.
You are probably going to be spending your time consuming. a Fair amount of media, whether that is through Twitter, through Instagram, through LinkedIn. And now there’s enough of the core audience in those particular fields that are truly interested in hip hop that are that target core customer for Trapital that are reading tweets on Twitter, seeing people that they follow.
So I use social media as my primary top of funnel. if I am posting tweets on a regular basis, I know there’s certain things I want to Cover in terms of topics. So I want to at least have something to say or a topic about some timely events that are happening right now in hip hop, or I will also share some evergreen thoughts.
I may have about a topic that may just keep coming up in the business of hip hop. So that is my top of the funnel. I probably focus most on Twitter, but I try to follow that 80/20 Rule where I have 80% of the focus in one particular social media app, just to put my primary focus there. So I’m not spread too thin, but also have a little bit of focus into other areas so that if something takes off, I’m not completely left out of it.
Well, let’s say a top of the funnel for a second, because you mentioned having things, you know, on social media that are really relevant. So I see you like w when there’s a breaking story developing, you know, I, for example, one that you’ve been talking about a decent amount lately, cause it is just happened in, you know, his little way in selling, young monies, masters, you know, and that being such a w what was the number on that?
A hundred million dollars, So, yeah, like dive into that for a second of taking something that’s just happened, you know, and how you’re, you know, writing content, having your perspective on it to go out on Twitter.
So when something like that time, we happens in the news. There’s normally a few things that’ll happen. One, a bunch of people will start reaching out to me being like, Hey, what’s your thoughts on this? What’s your thoughts on this? And it’s almost like a thing where okay. If I have. A ton of people reaching out.
Then this is something that many more people are probably going to be interested in what my opinion is on this. So I normally try to make sure that I’m not just reporting facts, I’m providing some other deep type of insight where it’s thinking about something else that happened historically, or thinking about how this impacts or broader trend.
So that relates in two ways. One. young money was a imprint at a time of cash money, which was a record label that Birdman who was a close friend and has had an on-off relationship with little Wayne at the time had started back in the nineties almost 30 years ago. And they had done a pretty landmark deal where they had able, they were able to maintain ownership of their masters.
They were able to get a very lucrative distribution deal. So I knew all of those things happening. And I said, there is a narrative here about how this story connects to what just happened, because it’s almost a reversal of what we’ve seen, where. A really good deal happened from the hip hop record label, partnering with the, one of the biggest music companies in the world.
And then we just saw the opposite thing happened where Lil Wayne sold one of the valuable assets he had for a very cheap price relative to what we’ve seen in the marketplace. So there’s that. But there’s also this broader trend around ownership that we’ve seen and heard more about, especially in hip hop, more artists are being much more vocal about wanting to maintain their assets that they have, whether that’s their sound recordings, which in most cases, their masters or their publishing, so on and so forth and not necessarily making a partnership with a record label.
So being able to bring these thoughts together in a clear and concise way and. Posting and sharing insightful tweets helps offer some of that context that isn’t necessarily there because this is where also one of the reasons why I started travel, there was so much focus on the, what that was happening, what happened, what is the biggest news that happened, but there was so much less talk about, okay, what does this mean?
Is this a good deal? What are the other considerations? How does this fit into the broader landscape? What is the nuance? So being able to have clear and concise thoughts about that, whether that is a tweet, whether that is a Twitter thread or some other type of post that then can get awareness with the people that are already following that can be shared retweeted.
And so on and so forth. So because of the way that Twitter’s algorithm works, it’s also likely to find other people that would be interested in that type of story. And because of that, that then helps grow that overall funnel. That doesn’t mean all the people that liked or retweeted are necessarily going to subscribe and become an Email subscriber to Trapital but similar to how you kind of shared with your newsletter. If they see that they then see, okay, who is this person? Dan Runcie sounds like he has some strong opinions on this. They scroll through my feed. Oh, okay. He had something interesting to say about, this deal that happened a couple of weeks ago.
He had something interesting to say, about all of these livestream music festivals. Okay. Maybe a week later, you see another tweet of mine coming to your timeline. And it’s like, okay, now I’ve seen a couple of these. Let me go subscribe. And then maybe, you know, a week or so later, you see me say, Hey, I’m going to send out a newsletter.
I’m going to cover these topics. Sign up here. If you want to get it, I’m going to send it out later today. There You sign up and then you start to see the email funnel. You could read a few of my past essays and that’s normally how it works for a lot of the people that end up subscribing. But I also know that there are people that are off of Twitter I also need to be able to reach as well.
So it’s trying to use that similar type of mentality in other platforms. And I think that has served me pretty well.
Yeah, that makes a lot of sense. There’s two things that I heard in there that I want to really highlight. One is the deep industry knowledge, because so many people are saying like, Oh, this happened. And then this other thing happened. And so as a creator, being able to tie that back and say, this happened, and it’s interesting because here’s the whole backstory, here’s the trend, you know, or here’s how it’s opposite of what happened in the past or here, the continuation of the trend.
There’s a lot of news, you know, news headlines. We can have all of that. And what you’re offering is insights and that’s, you know, what other people don’t have the deep knowledge or the time or something like that. And so I think we’re seeing that with newsletters all across the board, where at first glance glance, we’re saying like, okay, newsletter, you know, there are people are highly in the news part of it and saying, Hey, that’s covered already.
You know, the headlines are written, you just follow the right people on Twitter, you know, read CNN or whatever industry publication. And like, you know, you know, what’s going on and what all these newsletter creators are finding like you is that there’s a whole group of people who say like, no, no, no, I want, I want the narrative behind it.
I want to know. The deep insights and there’s quite a market for that. The other thing that you said that you’re doing is. In addition to, you know, as we’re bridging that from top of the funnel into now subscribed to the newsletter, you’re not just saying, you know, every, every week or every month, a tweet of like, Hey, make sure to subscribe.
You’re saying this story that you’d be interested in my take on this thing that just happened is going to be published, you know, three hours from now later today. Subscribe, if you want to get that now. In most cases, they could go to your site and it’ll be published there publicly by having that specific call to action, you know, where you’re like, Oh yeah, I want this thing that I know is coming soon, is way stronger than just subscribe to my newsletter or some generic giveaway, because then not only am I subscribing, which is goal number one, but two now I’m waiting for an email from you.
I’m like yearly, like Dan said he was going to get it out today. Like, is, is that, is that coming? You know, and that’s such a great place to be.
Yeah, I agree. And I think that it’s so easy to just say, Hey. Subscribe, Hey, just subscribe or please subscribe to my newsletter. I really wanted to be able to make sure that I was offering some type of value. And even though that is value that they could get outside of subscribing to the email newsletter, it still provides that connection to be able to provide some type of lead, provide some type of incentive that they are like, Hey.
This is just the tip of the spear. That in many ways is how I treat that top of the funnel or how I’m communicating information in social media. This is the tip of the spear. It’s enough for me to be able to use this format, but in order to really get the depth of it, that you can. Subscribed to the email list, you’re able to get a bit more insights and then it’s a bit more of a relationship, right?
If they’re using Gmail or using any other service, they see my face in the icon come up, they see my name there. And it’s a familiar thing
it’s like, I’m intentionally using the name, Dan Runcie that they’re getting from and not coming from travel. Because even though I am a. No solo person, plus a few freelancers running this.
It is coming from a person. I want to make sure this reads like an email you would get from someone, not just like a marketing email. So I try to make sure that even though I am sending the email, it’s not just the straight. Yeah. Copy from the essay, they are getting something that reads like a note that they would get from a friend.
It’s a quite detailed note that has a lot of insights and comparisons, but it sounds very familiar and that’s intentional with the language and the texts that I use with trappable.
Yeah, that makes sense. I have this friend, Levi Allen. Who’s a filmmaker in British Columbia. And in his videos, he often said like, he’ll just start his videos and be like, Hey friends, you know? And he has just has this like, charming way of, you know, where you’re immediately just feel it like, you know, Oh, we are friends, you know, like you’re immediately in there instead of having this feeling of like, let me broadcast to all of my subscribers on YouTube or, you know, like dear masses out there, this is my proclamation, you know, it’s just instead this like personal feeling.
And so I love that about your work of like, yeah. Yeah. I just have this friend named Dan who happens to know all the insights about the music industry and he just drops them in my
Okay. Right. And I think with that too, one of the things I try to intentionally do is make sure that the tone of Trapital comes across relatable. There is a way where this can be written with much less. I don’t necessarily want to say flavor, but there’s a way this can be written where it doesn’t have as much relatability to how hip hop actually is running, where you’re just trying to come at it from this pure business perspective.
So I want people to know this is coming from a place where. It understands the business, but it also understands the culture and the analogies and all those things, which make it a much more enjoyable and approachable read. Because I think a lot of us that are indie creators putting out content realize we’re just not in the business of trying to educate if we are trying to hold attention.
And there is an opportunity for the content we’re creating to be able to. Entertain or offer that value it’s in our interest to be able to do that. I felt like there was enough about my tone and the comparisons and the way I’m writing it, that that can come across in an effective way. And that’s been one of the things I often get complimented on with the newsletter and the essays specifically.
So that has also been an intentional part of Trapital’s tone.
well, I think part of what I imagined it being is like that first HBR case study that you read, you know, when going to business school, being like, Oh, wait, people care about the music business. Like I could, you know, I could write about that. It’s almost like as if you were hanging out with the people who wrote that case study afterwards, and they’re like, they wrote the official thing and like, this is all of it.
And then. It’s that plus, you know, they’re taken like this didn’t make it in to the, the full thing or we had to stay very, you know, I don’t know, proper official, that sort of thing. And so now when you’re hanging out afterwards, they’re like, Oh, but this was super interesting, you know? And so you’re getting more of their opinions rather than just the straight facts.
right. And I think a lot of that came from those conversations I had with people and like how we would naturally talk about things, thinking about how let’s say I’m talking with a friend and we’re talking about door dashes or air B and BS, IPO. We would, we wouldn’t necessarily be talking as if we are wall street journal, wall street, journal journalists that are breaking this down.
We would probably be a bit more relatable than that. And that speaks a lot to how we communicate. And I think so much of that translates as well. Whether we’re talking about little Wayne, sell a young money’s masters or Beyonce, partnering with Adidas or Rianna doing a Fenty deal. So on and so forth.
Yeah, that makes sense. Okay. Let’s go further down the funnel. so we we’ve covered awareness and we have people in the newsletter list. One thing that you’ve done is you start with the free newsletter and then you launched a paid newsletter back before pay newsletters were cool, you know, and, and then you’ve actually later you shut it down and, and change business models.
And so I’d love to hear first, what, what, let’s just start with, what was attractive about a paid newsletter and, and why you started down that path.
so I started and focused on the paid newsletter path originally because I was pretty focused that that was the best model for travel because it was what I had seen From other people doing this, that was the most successful. So I was trying to, in many ways, replicate that I saw what Ben Thompson had done with Stratec Curry and had actually talked to Ben Thompson, getting his take on how he had built this.
And I said, okay, some of that I think relates some of that. It doesn’t relate, but I said, There are enough people that are interested in this culture and rising that even if I’m able to skim off, let’s say 10% or however many of those people that end up subscribing to the email list to become paid subscribers, then that would serve me well.
And then that would continue to help the business grow. So I think I was almost thinking about it from a wide net perspective where. That paid product. this was something I was charging at the time $10 a month, $100 a year. And it was essentially for freemium content. I had the one deep-dive essay that was going out to everyone weekly.
It was a free essay I had written, but then if you wanted, the more timely updates on the most recent things that were happening in the business of hip hop from the past 24–36 hours. That was what I was sending in those, updates later on in the week. And this week product had attracted a fair amount of people in the music industry, outside of the music industry as well.
It also attracted people that had just wanted to support B and CBB successful. And it’s the type of model that could have worked. I. Didn’t necessarily get that 10% of email subscribers. I thought I was going to get, I ended up getting around 6%, so I was a little disappointed from the yield, but then I thought more broadly, there were a few challenges that I had with it.
One, I was still in the early days of travel and I really should have spent more time. Building the overall funnel. So really growing my overall top of funnel, as opposed to spending more time shot at events that people that were already in that interest stage to committing to the product that I had, that was at least the product that was at the bottom of my funnel, which was this paid membership to travel and.
It was difficult because one, it required a tremendous amount of time to be able to offer what I had already committed to the people that were in the paid membership. And it wasn’t necessarily monetizing Trapital itself to the best of its abilities. I realized that beyond just having people who have an interest in hip hop, there was a super-specific group and niche that could be super served well, by what I was offering, there are the people that are working and making the decisions that are truly taking the business of hip hop to the next level. I’m writing about the types of deals Drake has done and whether or not he should have considered other options.
I’m talking about the type of partnerships record labels have made with other, livestream companies or other organizations. Over time, if you write enough and you do well, you’re going to attract the people that are making those types of decisions to your newsletter. So there’s a better way to serve that audience than offering just this general product that was reaching the wide net.
And that’s a product that can work. It clearly worked for a number of people. I think it could’ve worked even at a 6% yield with a much bigger net, but. There are better ways to offer products that aren’t necessarily annual commitments or subscriptions that can serve them, whether that is a consulting offering, whether that is a specific type of service or advisory or some other type of practice that you can.
What I’ve done specifically with Trapital since pivoting is working more on a consulting and, Unique project basis where I’m helping different companies in different types of ways help bring hip hop to the work they’re doing, whether that is helping with podcast, helping a podcast network and thinking through some development for some projects or helping different, Companies outside of hip hop, but in the electronics or the entertainment space, think about how best they can integrate and partner with hip hop artists.
You’re seeing so many people just seeing the type of deals that are happening. So by me using my newsletter as, or using my newsletter as a funnel to help reach those people, it then can attract the people that are working in these industries. And then It can easily start a conversation where we can explore other different types of business opportunities.
So that’s been the main way that I’ve done it. And I think there’s plenty of ways to expand on this as well. I think there’s an opportunity for courses. I think there’s an opportunity for one offer digital products that I can offer to help serve the true executives and the Bogles and the people that are making those decisions at Trapital or that are reading travel.
And for me, That is a better way, both to monetize trap metal from a time perspective, which in many ways is my most valuable asset, but also from a value add perspective as well. So it was a lot of learning and building the plane as you’re flying it. But I I’ve definitely been humbled and appreciative of how much I’ve continued to grow and learn through this part of that comes from.
How much, I’ve just tried to better understand the landscape, but also just came from doing it, realizing what doesn’t work and quickly being able to iterate.
Yeah, that makes sense. And the most important thing is that once you have someone’s attention, There’s a bunch of different ways that you can earn money from that I’ve with pay newsletters early on. I’ve been pretty vocal about, Hey, I don’t think that they’re necessarily the best. not that there’s anything wrong with them.
I just think that for a new creator or someone gaining traction, they may not be the best way to monetize the audience. So for example, David Pearl, who was on the first episode of the show, he’s got an email list of 40,000 people. I think he could do a very successful paid newsletter. He’s quite prolific.
And instead he said, Nope, I’m going to do what he calls the Rite of passage, which is his, you know, very expensive premium course. It’s, cohort-based, he’s heavily invested in these people. I think the course is 2,500 or $3,000, something like that. And it’s generating millions of dollars, per launch of the course, you know, and.
And that’s not to say that he couldn’t also do a paid newsletter. He’s just found that this is his monetization method that he wants to do and what works best for him. so yeah, there’s a bunch of different options there. And so it’s interesting to me that I guess two things in, in what you said, one that you chose consulting as the, the way that you most want to monetize right now.
So I’m going to dive into that. Yeah. But before we do, what was the reason that you chose to shut down the paid newsletter? And do consulting rather than keep the paid newsletter and add consulting. why have, why go to one instead of two monetization methods?
time. Tea time was the biggest thing for me, the way that I had structured the paid newsletter, the product that I was offering was something that required 20 plus hours a week in order to be able to create on a regular basis. And sure. The. Unit economics of it can work out. If you have a large number of people, it’s a zero marginal cost product, but it was still a large time for me to be able to do that where you just, I would have needed to have a very large number of people, not just to justify the cost, but also more to justify the opportunity cost of what else I could do.
With that time. So it was a tough bullet to bite, right? There was some traction and there was some recurring revenue that would have been there. And, having paid subscribers consistently is a nice thing to have. Even the people that I know that are successful with paid products. It is nice to be able to have that.
There is a reason that I, so many companies have been trying to figure out how best to create subscription models. But that said, one of the things that I think does make it a bit easier as a. Nimble and indie creators that you can pivot and see when these things make the most sense. So for me, offering the consulting was a way to be able to do a few things.
One. If I look at that 20 hours of the week that I can now buy back, I can do better for myself. If I am very selective with the type of projects I’m taking on with the type of companies I’m taking that I’m working directly with and thinking about it, not just in a way where you are. Renting out your time for money, which I do think can be the reality for a lot of consulting projects, but what does that deeper layer?
How can the insights or connections or work that I’m doing further help? Either my context, so trapped little, that it can be used in other, stories in other, Work that I’m doing or could somehow help what, what, what I’m doing in the future in some other type of way. So I always try to think about that when I’m partnering with a company or when I’m working directly with, with the client, whether it is on an advisory basis or it is on a specific project basis.
So those are the things that. Have interested me and I think I will continue to do it. The thing that I’m most interested in in the future is what does that course, what does that digital product look like? Cause I think there’s a huge opportunity there with trappable and I think over time there’s a reality where I may pivot to doing more of that.
Then I will have the than I will have the consulting. I think the thing that may make it a bit. Tricky though, is that because of the type of work I’m doing, there are a pretty selective group of clients that would truly benefit from being able to, partner with trappable or partner with me specifically to work on a consulting project.
There’s so many of the insights from the weekly memos that I’m sending out. That’s like, Hey. Loved your thought on this. Can we talk sometime it would be great to get your thoughts and that’s how these relationships start, but there are only so many CEOs of these companies that can work in this particular type of way.
So if you’re building a product and you have a very specific type of customer base, Consulting in a lot of ways does become quite attractive or having some other type of service where you know, that there are a very few number of stakeholders that are in this sweet spot, but these are deep corporations that have deep pockets in many ways, the best way to be able to partner and work with them.
Would be to have some type of consulting agreement, whether that is purely for cash, whether involves equity or some other type of revenue share for whatever the deal may be. But that said, just given how many people in this space are thinking about their own personal growth, their own personal brands and how they can continue to grow.
I think there’s a great opportunity for that digital product and the course in a company where travel is heading. And that excites me too.
Yeah, that makes sense. Okay. I want to get into some specific numbers. and so feel free to answer or not answer any part of it. I’m going to ask three together so you can choose whether to answer all three of them or, you know, dive in on, on just one. I the first is I’d love to hear numbers of, you know, how big you were able to grow the capital audience too.
So, you know, on just the free subscriber side, you mentioned the 6% free to paid conversion rate. And so just getting into the, what the MRR was when you shut it down. And then the third one is I’d love to just hear how your structure consulting deals are. These $10,000 consulting projects. Are these a hundred thousand dollars consulting projects?
You know, how you go from there?
Yeah, so the newsletter itself right now, over 7,000 people subscribed to the email list. And when I had shut down the page, The newsletter itself, there were. To be honest, I forget the exact number, but I want to say maybe it was around like 220 230 people, or so that were paying either a $10 a month or a hundred dollars a year.
So it was somewhere between like 22 to $25,000 in monthly recurring revenue. So, I mean, that was me doing the math of that to be like, okay, this is what I’m, you know, at least at this current stage, putting 20 hours a week into to be able to. You know, continue to, ultimately get that type of revenue. Of course it can grow, but it can’t grow until I have more time to be able to help grow that overall base.
So that was a big, piece of the, decision there in
Yeah. So about, so 2200 to 2,500 a month in recurring revenue from the, from the newsletter. Yeah. So, I mean, that’s a solid baseline for, you know, like as an indie creator, having that coming in consistently. You know is really nice. That’s all of rent in some cities, you know, two thirds of renting in other cities, you know?
It doesn’t cut it in San Francisco, which is where I lived down. So, I mean, luckily I was able to, you know, I I’d saved up some money before I had started trap it’ll or not. Before I started charitable before I started working on it full time, because I said, you know, there’s probably going to be some, trial and error and I need to have a bit of comfort there.
So it wasn’t all the money that I was living on. Thankfully. But I realized that, you know, there’s a timeline for everything I needed to make some changes and make some pivots there. So in terms of the type of projects that I have right now, it that I take on for consulting, it truly depends. I mean, I think for the most part, that main.
Way that I’ve got about it. So the main standard is let’s do a three and a half month engagement where I am giving an overall assessment on what the best path of strategy should be. So this is me working much more on the strategy side, more than the implementation side of things. So if you think about how a trap metal article or how a trap capital newsletter is typically written, there is.
My take my insights on what’s happening with a particular company. So if someone reads that, they’re like, Hey, we would love something like this, and even more in depth for what you think we should do. Moving forward that 3.5 months of work would include the. analysis, it would include the interviews, the research to understand what makes most sense for this company and then being able to provide overall recommendations, next steps, moving forward and so on.
So it really depends on the company because in some cases, Is straight cash and other cases it’s, you know, revenue share or derivative rights, or if there is something, if there’s a partnership related to the future content that we’re creating in other aspects, I’ve become an advisor for companies and getting equity in exchange for that.
So it’s definitely varied based on the deal. So I think for them, People that are listening to this. It’s probably best, helpful to think. Okay. Where are the places that you want to be able to serve? And for me, there was interest in being able to do. All of those things, whether it was working for the big fortune 500 companies or working for the startups and just knowing that the type of deal or the type of structure you have in place for a startup may not necessarily make sense for a big firms working for a big firm that three and a half months strategic.
Advice works much for, you know, for some five figure amount of money makes much more sense than a startup where equity makes more sense for several reasons. One, they probably don’t have the cash to pay that. And secondly, Where they are from a company isn’t necessarily someone coming in with some big strategy deck or some analysis to be able to suggest things.
They want someone that they can reach out to you. And hopefully if you become more of a trusted and supportive advisor, that’s always a running joke. Not every, you know, not every advisor is necessarily worthwhile. As they are, but if you become one of the worthwhile ones then great, great for you awfully that can work out well, if there’s an exit for the company in the future.
So the flexibility has worked out well, and I think that’s what I’ll continue to do. Moving forward.
yeah, that makes sense. And then you’re just able to tailor it to each, each business in each conversation. Let’s talk about the rise of newsletters, you know, we’ve seen, obviously you’ve been doing it for, for quite a while. you’ve run your newsletter on ConvertKit. There’s all kinds of things.
Email’s been around for a long time, but over the last three years, but even the last, like 12 to 18 months, we’ve just seen newsletters take off like crazy. I was joking with Barrett, our COO at ConvertKit that like, it seems like half the people that follow us on Twitter, you don’t have a sub stack in their, in their Twitter bio and that sort of thing.
And it’s just a level, whereas 12 months ago, 18 months ago, if you were like, Oh, you know, I’m a newsletter creator. People would be like, Where’s your startup, you know, whereas, you know, but now if you say that they’re like, yeah, me too, you know, and everybody is. And so I’d love to just hear your take both on, on platforms.
And then maybe before that, get into the, you know, just the, the most recent wave of an excitement around newsletters.
right. I think I came in just before this wave truly kicked off because I had started, I at least I had the idea for travel and knowing that I wanted this to be delivered through email towards the end of 2017, because I started a trap battle, in spring of 2018. And then I started working on it full-time a year later, but yeah, so that, as you mentioned, yeah, 18 months, 12 months ago was when things really took off.
So I think I kind of came in just before that, but I think that for me, the. The platforms tell a big story, because I do think that where people have chose to start their newsletters have said a lot about the brand and the identity of what the newsletter wave is, what it means and where things are necessarily going.
I think what’s worked out well. I think Substack has been one of the main companies. Involved with the wave. I had trap it’ll on the sub stack for the first year that it, that that had existed. And funny enough, I found out about sub stack by typing into Google. Is there a platform out there where I can have my blog posts combined with my email list?
Because. At the time I was looking for something that was very easy at the time, I knew that this was a pilot that I wanted to test out with Trapital. I wanted to see what this was like, and I wanted the tech to be as low and as easy as possible and ended up talking to the founders that work at sub stack, both great guys, Hamish and Chris, and was able to at least help me get ramped up and really think through how the delivery deliverability and audience for something like trappable.
Could work. What I think later on happen though, is just given the ease of Substack and how it was built. It worked in a way that, because it was very easy and out-of-the-box to use it attracted a lot of the people that were like, Oh, well I have the content I have. You know, tens of thousands of Twitter followers.
Let me find a way to monetize this content, because if I can follow the best case scenarios of a Ben Thompson or a, or some of the other people that are doing quite well, then I can. Monetize 10% of that audience by that I could hopefully come on and subscribe to my newsletter. So I think it performed and got caught on quite well with tech audiences that were seeing what was happening and just because of how popular tech, Twitter and VC Twitter is, it was able to help the spread of a lot of those things quite well.
What I think differs though. And this is, these are conversations I’ve had with people conversations I’ve had with, Hammerson Chris at sub stack and also other creators is that what sub stack offers is great in that it’s a very quick out of the box tool that lets you as the creator focus primarily on the content you’re doing.
What I think is a little different though, is that one, they are very much focused on having people start paid newsletters, and I think it can work out great. As I mentioned, it wasn’t the path I want it to go, but I think it can work out well from that perspective. So it’s very easy to turn on. And in many ways, it’s almost like how Amazon could work.
If you’re a seller from a marketplace, it is very easy to sell your products. Right. However, if you want something, that’s a bit more bespoke, something that is a bit more customized for your audience, and you want to be able to be a bit more flexible almost in the way that Shopify or some of these other platforms are for sellers that want to have something you may want to move your newsletter off of that.
And just have something where you can customize the website. You can offer products or services that aren’t directly tied to. Having a paid newsletter or freemium content. And more importantly, you can segment and see those audiences, see that audience in different areas. I knew that that valuable information and having that customization was going to be important for me.
So it was worth the switching costs. I’ll call it in order to switch. And as you know, I’m now on convert kit, I’ve been on convert kit now for say a year and a half. And yeah, I mean, I think like anything, it took a bit of. Getting used to this would have been a mess, but it would have been a much tougher switch for me.
If I had made the switch to cook, or if I had made the switch to ConvertKit earlier, if I’d started, I converted because I didn’t feel like I had it tested out. I was very new to this. I didn’t even know how to create a website already. The things that I would have needed to know how to do before this.
But I do think that. You’re seeing a lot of people that will also kind of do what I did, where they’ll start on Substack get an initial following base there, and then they may move off of it. Or you see people that have stayed on sub stack and, you know, continue to do quite well for themselves. And I know there’s a bunch of other platforms like ghost is coming up and getting more popular MailChimp of course has been around for, decades plus now and doing.
I’m still, you know, one of the top players in the space. So I think that the wave is probably going to continue for some time. I think, just to bring it all back. This is something we’ve seen outside of writing and this type of content as well with some of these paid podcast platforms that have come up or.
Products like OnlyFans which is essentially like a paywall for Instagram. These types of things are coming up that are allowing creators to monetize their work in more individual ways in, I think that’s probably the overall way that interests me. So the optionality of this is great, but it’s important for creators to think, okay, where am I in the process?
How do I think about this from that MVP perspective to be able to grow the product. And if I’m thinking about that, What makes the most sense And for me, my journey did work out pretty well with it so far.
Yeah. I’d like to imagine that in your ConvertKit account, you have a segment for like, just music executives, you know, and it’s like just this group of people and you’re like, those, those are the people here’s the whole audience, you know, and you can break it down in so many different ways that you, right.
You can’t do on, you know, a Ghost or a Substack or something that’s more built for broader publishing. But then at the same time from the difficulty or the setup side, right. You have to have WordPress, you know, and, and do your publishing, you know, and then the email through ConvertKit. So. There’s a lot of trade-offs, but I think it makes sense that, this trend that we’re seeing, if people starting on sub stack and then getting that level of traction and either seeing the payment cost or wanting an API or wanting flexibility or segmentation and reporting, and then say, okay, it’s time to graduate from sub stack to, kind of the next level.
right. Yeah. And I mean, I think that let’s say that if you are, if your goal is to, you have a large following and you want to monetize that following on the side from everything else that you’re doing. Something like sub stack could work out quite well. Obviously other platforms can do a lot of those same things too, but the quick plug and play aspects of it can work out quite well.
But I knew for me, I wanted to do something a little different. I truly wanted to build a company that in many ways, stood for things beyond just monetizing the audience I had. I didn’t have an audience before I started trapping, so I didn’t come into it from that perspective. It’s something that I’m still okay.
Building now. So being able to have that as a home base was a reminder of where I wanted to take things, but also a, a I guess, a stake in the road in terms of where I wanted to make sure that the company was heading and being willing to make certain trade offs when the time was right.
Yep. That makes sense. Well, thanks for joining me today. It’s been really fun to dive into your newsletter in the world of hip hop. where should people go to subscribe?
so people want to learn more about this. Go to Trapital.co that’s the website. So that’s T R A P I T a l.co. Sign up and subscribe. I send a newsletter out every Monday, I call it the Weekly Memo and this is the weekly breakdown of the business of hip hop. So you want to get all of the latest insights, whether it is what’s happening with the latest artists, partnering with the company, a masters deal that’s happening, or just a wave of partnerships or deals that are happening that are even tangentially outside of hip hop, but are still related to the people that are operating in this space. It’s most likely going to get covered there so you can check it out.
Sounds good. And also, I would just say everyone should follow you on Twitter. Just @RuncieDan on Twitter. yeah, you’re one of my favorite Twitter followers. So
Thank you. I appreciate that.