Matt Paulson started making money online in middle school with a GeoCities website that earned him $25-50 a month.
Almost two decades later, MarketBeat brings in mid-8 figures annually with 20 employees and 17 million email addresses in their database.
The wildest part? A third of their revenue comes from SMS. Not email, not their website, but text messages.
We got the chance to have him on the podcast recently, and it was an interesting conversation to say the least 🙂
You can watch the full episode on YouTube, or listen to the podcast on your favorite podcast platform.
Phone Numbers Are Worth 5-10x More Than Emails?
While most newsletter creators obsess over growing their email list, MarketBeat is building something they say is even more valuable: a database of phone numbers.
“A phone number is probably worth five to ten times more than an email address,” Matt said.
Their monthly Twilio bill runs $300,000-400,000, but it’s seems like it’s 100% worth it.
One text message to their list can generate $5,000-10,000 or more in revenue. I signed up and got some of these to show you:
But you can’t just send out your free content. “You probably have to be at least 50% ads, otherwise it’s just not going to pay for itself,” Matt said.
When he sends a text to his full list, it costs at least a few thousand dollars. So every text needs to at least break even on that send cost.
They’ve built 3 separate SMS lists, and they’re strategic about collecting numbers.
The 4-Channel Strategy That Changed Everything
Most newsletter operators celebrate getting one email address. MarketBeat collects four different touchpoints from a single visitor:
- Email subscription to MarketBeat
- Email subscription to their Beehiiv list (American Market News)
- SMS subscription
- Web push notifications
“If I can communicate four or five different ways with people, it’s a lot easier to break even than if I just have one email subscription,” Matt says.
This multi-channel approach makes their paid acquisition work. They spent $11 million on ads last year and are targeting $20 million this year. That’s only possible because their funnel is so profitable.
I don’t hear a ton of people talking about push notifications these days, but Matt still seems excited about them. Here is a screengrab of what that signup looks like:
This kind of notification would make sense for someone interested in timely stock news.
The Post-Signup Money Machine
After someone signs up for their newsletter, they go through 4 to 5 offer screens. Each page is dynamically optimized based on what’s performing best across their various co-registration networks and their own ad inventory.
“We’ll make $2-3 from them typically if they come through a paid channel,” Matt says. That immediately pays back about half the acquisition cost. By day 30-45, they typically break even.
After 12 months, they’re targeting a 3:1 return on ad spend.
They track everything by monthly cohorts, so everyone who signed up from Google Ads in November would be one cohort. Then they watch how each cohort performs over time.
I would never feel comfortable putting people through this flow, but they’ve clearly hit on something profitable, so I can see why they do it.
The Biggest Mistake Newsletter Operators Make
Here’s where he says most people screw up: they optimize for cheap leads.
“I think that’s the biggest mistake newsletter operators make these days—you’re optimizing for cheap leads, but then you end up getting very low quality leads,” Matt says. “Cost per lead is not a metric at all. It’s really what did I spend on that cohort versus what did I make?”
MarketBeat recently rebuilt their entire Google Ads strategy after realizing they were getting subscribers for $3-4 each, but those subscribers weren’t buying anything from their advertisers. They figured out they were running ads on lower-quality websites.
Now they advertise on Yahoo, Fox News, and CNN—more legit sites. They’re paying about twice as much per subscriber, but they’re getting way more buyers from fewer people. And it’s more profitable.
“I have leads I’m paying 15 bucks a lead for and it’s profitable,” Matt says.
How They Got Their First 100,000 Subscribers (With Automation)
While they have millions of subscribers now, I had to know how they got to their first 100k subscribers. What Matt told us was pretty interesting.
Back in the day, MarketBeat was called Analyst Ratings Network. They realized that there was an arbitrage with the bigger news networks and Google News.
People loved reading about earnings reports and current stock news. So they would publish automated news stories about stocks using a simple template. It was almost like Mad Libs but for earnings reports.
Here’s how it worked:
- Company announces earnings
- Their automation would plug in the numbers
- It would be published to the website
- Google News picks it up
- Free traffic flows in
- A % of those join the newsletter
Then they’d show a popup specifically geared toward whatever company the person was reading about. If you came to read about Apple, the popup asked: “Do you want to be notified whenever there’s news about Apple stock?” with Apple’s logo on it.
I couldn’t find the pop-up, but they also had a static form on the earnings pages that were super relevant to that specific stock or company:
This drove a ton of subscribers. “That’s probably where our first 100k people came from,” Matt says.
It was just a JavaScript lightbox popup. It wasn’t super fancy, but it was super contextual, and it worked…really well.
The Email List Size Problem Nobody Talks About
Matt discovered something interesting: email lists start to “melt” after about a million subscribers.
Deliverability gets harder. Unsubscribe rates go up. Your biggest list might be 2 million subscribers, but it’s really hard to maintain that size and quality.
(I know, I know, mega-newsletter problems, but I don’t hear a ton of people talking about this)
His solution? Just make another list.
MarketBeat now runs multiple different email lists, including 4 main ones and 2 on Beehiiv. Some are completely different brands, like Early Bird Publishing with their newsletter called The Early Bird.
“If you’re in the investing space, you likely get 50 to 100 emails a day,” Matt explains. “Do you want to be one of those or do you want to be five of those or ten of those? Because people sign up for all sorts of different brands. If you want mind share and market share, you need more than one brand.”
They also cross-promote strategically. If someone on MarketBeat keeps clicking the insider trades page, they’ll get signed up for the insider trades list because they’re clearly interested.
Why They Changed Their Strategy
Matt credits Beehiiv with being a huge growth lever in the last year.
“Their deliverability is so good,” he says. “Since you’re sending from mail.beehiiv.com, you don’t really have to warm up a new list. They think their product is being an email service provider. No, the product is actually your great deliverability.”
But they didn’t kill their main list to move to Beehiiv. As he says, that would be killing the goose that lays golden eggs. Instead, they created a new list on Beehiiv and started promoting that to people as well.
When you sign up for MarketBeat, you also get signed up for American Market News on Beehiiv. Two lists, one signup.
Note: I’m not a legal professional, but make sure people are aware you’re doing this and actually want that content.
The 2 Numbers That Actually Matter
While we were chatting, I noticed Matt kept looking at a different screen to get numbers. So I asked if he had a custom dashboard with all of this information readily available.
And he confirmed that. He has a custom dashboard on his phone that tracks everything from subscriber data, revenue, open rates, all of it.
But when it comes down to it, he watches 2 numbers:
- How much money did we make today?
- What was our email open rate?
“Deliverability is so much of a challenge these days, especially when you’re emailing millions of people,” he says. “I just want to keep my global open rate above about 40%. If I’m doing that, I know I’m getting pretty good deliverability.”
The Sponsorship Model That Lets Them Fire Advertisers
MarketBeat does zero outbound sales. No one’s reaching out to potential sponsors. Advertisers come to them through word of mouth among media buyers.
In any given month, they have 45 different companies advertising. The smallest might spend $5,000, the largest $270,000. They typically do $4.5-5 million per month in ad revenue. 🤯
And here’s the kicker: if an advertiser’s offer doesn’t perform well, MarketBeat won’t run it.
“People don’t realize coming to us with a checkbook is not necessarily enough to get placement,” Matt says. “We ask, okay, what do you want to advertise? What’s the price point? It’s got to be on par with the other stuff we promote.”
Most of their deals are performance-based (cost per sale), so advertisers don’t care which channel the customer comes from. Some do cost-per-click deals with benchmarks around $0.45 per click, but the performance deals are their bread and butter because there’s no cap because advertisers will take as many customers as you can give them.
You Need to Be More Than Just an Email List
“I do think companies have to be multi-channel these days,” Matt says. “It’s going to be tough to just be an email list.”
His advice? Think of yourself as a media company with a network where every channel points to every other channel. Your email points to your Instagram which points to your YouTube which points to your SMS.
People find you anywhere there’s discoverability, then you point them to all your other stuff. Someone might unsubscribe from your email but stay subscribed on YouTube.
“It’s okay if your email list and your SMS list are not connected to each other. It’s really not that big of a deal,” Matt says. “All the tools are out there now. You don’t need to go build anything.”
The YouTube Channel That’s Becoming a Million-Dollar Business
MarketBeat’s YouTube channel has 590,000 subscribers and publishes content almost every weekday. They hired a local news anchor named Bridget to run it.
“Turns out when you tell a mom who’s got a couple kids, hey, do you want to not work at 10 p.m. at night? Pretty easy sell,” Matt laughs.
The channel is profitable. It’s not huge compared to MarketBeat’s main business, but it’s about a million dollars a year and growing. Revenue comes from:
- YouTube AdSense
- Promoting advertiser offers directly in videos
- Driving leads back into their main funnel (these tend to be high-value leads)
- Sponsored videos where small public companies pay $7,500 to be featured
It sounds like Matt is excited about this channel, and he says that some of their most profitable subscribers come from YouTube.
Play the Long Game
Matt opened his Google AdSense account on December 26, 2006. The company incorporated in 2008. They started doing investing content in 2010, got the MarketBeat name in 2015, and didn’t become a “real company” with employees and an office until 2019.
For anyone in year 1 feeling like growth is hard: “Persist,” Matt says. “This is a business that’s simple to understand but very hard to do at scale.”
I had to ask him: how do you stay focused on one thing for so long?
His answer? Side projects.
He started the startup ecosystem organization in his town. He had a business helping animal shelters raise money. He has a venture capital fund now.
And recently, he accidentally became a consultant after a tweet led to almost $100K in consulting bookings.
“If you try to over-optimize things… if you do a test, you need to give it room to breathe and time to get data,” he says. “You need something to do in the meantime.”
The Lifestyle Business That Prints Money
Matt runs this entire operation from Sioux Falls, South Dakota. His current office is 2,000 feet from his original 12×12 office. He works 8-5 and maybe Saturday mornings before his kids wake up.
“I’ve got small children at home that want dad to be home in the evenings. My kid doesn’t want me to work on Saturdays. She wants me to go to Target and go to the science museum,” he says.
He’s had one serious acquisition offer from one of their largest advertisers. He thought about it, then said no.
“I don’t want a boss. I don’t want to be part of some bigger company where I’ve got to fly out to the coast every month for meetings. No interest in that.”
Will he ever sell? “I will run this business until the day that I’m dead. I don’t want to do anything else. I love this business. I love the people that work there. It makes great money. I’m not bored of it at all.”
Are You Willing To Do Stuff That Other People Aren’t Willing To Do?
Matt left us with this question: “Are you willing to do stuff that other people aren’t willing to do?”
For MarketBeat, that’s SMS when everyone else focuses on email. It’s running 11 different email lists when everyone else has one. It’s spending $20 million on ads when most people spend $20,000. It’s building relationships with advertisers over five years instead of taking quick money from anyone with a checkbook.
The tactics are simple. But the execution at scale is hard. And that’s probably why their aren’t many people who are willing and able to get there.
