After graduating from NYU, I wrote a business plan for an email newsletter company that I bootstrapped.

Some of my predictions were naive:

• I expected to be profitable in the first year. Instead, the early days were a painful slog.

• For some reason, I expected to pay $400 per month in insurance. Obviously, bootstrapped newsletter startups don’t need insurance. Etc.

But there’s one thing I nailed:

• Understanding my unit economics.

We did over $38,572,258 million in revenue and $6,748,650 million in profits within 3 years.

How unit economics work for email newsletter companies like the one I built:

1. You pay to acquire a subscriber ONCE.

2. After they’re subscribed, you earn ad revenue from EVERY email.

From my business plan:

• Pay $1,000 to acquire 1,000 subscribers.

• Earn $6 per day per 1,000 subscribers from ads.

• Break even on new subscribers within 167 days.

In the end, I found ways to acquire users for much less. And, because I launched multiple newsletters, people subscribed to multiple publications. That meant revenue per subscriber was much higher than I expected.

The amazing thing about bootstrapped companies

Building a bootstrapped company with solid unit economics isn’t as cool as starting a venture-backed flying car company, but the model stands the test of time.

I launched this company in 1998!

After I sold it, I created the Mixergy podcast, where I interviewed founders of similar newsletter companies, including:

Thrillist - Founded 2004

Vital Juice - Founded 2008

Help a Reporter Out - Founded 2008

Sam Parr told me he watched many of my interviews with newsletter companies and launched his own:

The Hustle - Founded 2015

I read that The Hustle did over $10 million a year in sales.

A few days ago, on the Bootstrapped Giants Podcast, I interviewed Tim Huelskamp, who was inspired by Sam and created his own newsletter company:

1440 - Founded 2017

He’s doing over $20 million a year in revenue. And it’s growing fast.

Bootstrapped companies stand the test of time.

Tim broke down the numbers behind his business and how to think about unit economics in my interview with him.

Go here to see my business plan + audited financials + interview with Tim

~ andrew