The Economics Behind the 1440 Newsletter

“Huelskamp says: “We do over a million [dollars] in revenue per employee.” The company has 15 employees — which implies a run-rate in excess of $15m annually.

There’s a certain brutality to the email business, however.

It’s heavily dependent on having high open rates and high subscriber retention. For every 100 new readers who sign up, Huelskamp says 20 readers can typically be written off immediately — maybe there was a typo in their address or the 1440 message went to their spam folder.

The remaining 80 will stick with the brand for four months or so, but with some attrition, either because they unsubscribe or because 1440 scrubs the list of inactive readers. The remaining 50 readers tend to stay with 1440 for years, he says.

The headwinds don’t end there.

Advertisers only pay 1440 if the email is actually read — so the open rate has to be high to ensure the ad revenue is greater than the cost of acquiring the reader. Huelskamp says 1440 aims for an open rate of 60% daily, or better.

“When someone opens an email, we make about a nickel. So, you know, we send 25 emails a month-ish. We have the highest open-rate in the space, 60%. So they’re opening 15 emails a month. At five cents, [that adds up to] 70-ish cents per user per month.””

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