Is Due Diligence the Hell Is the Frat?

Sam Parr founded The Hustle, a top-flight newsletter that he grew to almost 2,000,000 subscribers… and just sold to HubSpot! Tune in to hear the whole story of how Sam grew a successful newsletter to seven figures per month in revenue, and the roller coaster ride of selling his small business.

Despite his success with a paid newsletter, Sam has lots to share about what people are doing wrong when they launch a Substack. Plus, he gives Nathan ideas and tactics for growing a new, local newsletter that focuses on Boise.

In this wide-ranging conversation, you’ll also hear about the art of writing quickly, whether writing your newsletter is something you can (or should) delegate, and whether running a solo newsletter is even the right business for you in the first place.

Links & Resources

• HubSpot - Inbound Marketing, Sales, and Service Software
• Product Hunt – The best new products in tech.
• DailyCandy - Sweet Sorrow
• Thrillist - Find the Best and Most Under-Appreciated Places to Eat, Drink and Travel
• Fool.com: Stock Investing Advice - Stock Research
• James Clear
• Gumroad
• Glossier - Skincare & Beauty Products Inspired by Real Life

Sam Parr’s Links

• Subscribe to The Hustle Daily
• Trends by the Hustle - Your next business idea, delivered weekly
• Twitter: @theSamParr

Episode Transcript

Sam: [00:00:00]
I think they’re making the wrong mistakes. The first example is pricing. Most people charge way too little, but if you actually want to make a living at this and provide value, you’ve got to charge more money. How are you gonna make a living if you’re charging $4 a month? That’s really, really hard.

So charge way more. People tend to like that stuff more. If they paid money for it, they usually appreciate it. 

Nathan: [00:00:25]
In today’s episode, I talked to Sam Parr from The Hustle. Now Sam and I have been friends for a long time. And he’s got some pretty wild news in that, HubSpot just acquired The Hustle. There’s a lot of crazy things that went on with that, but, we dive into the story there. How long due diligence took everything else.

It’s a long ranging free-form conversation. But we hit another things like, my new local newsletter that I’m starting. He has some growth ideas and tactics that he shares there. We get into what he thinks people are doing wrong when they’re launching Substacks, which is pretty wild since he has crazy revenue.

I think, you know, there are over a million dollars a month in sponsor revenue and getting pretty close to that in paid memberships revenue for The Hustle. And we get into growing the newsletter to almost 2 million subscribers. There’s so much good stuff. I’ll warn you. It’s a very rambling conversation, but we have a great time.

So I hope you enjoy it.

Sam, thanks for joining me.

Sam: [00:01:18]
What’s up, man?

Nathan: [00:01:19]
So you would have been friends for a long time. It was hung out in a lot of different circles. You’re wildly popular on the internet today, not today, over the last couple of months, a couple of weeks. 

Sam: [00:01:30]
Not as popular, popular as you.

Nathan: [00:01:32]
Exactly. I don’t know, but you just sold The Hustle and we were talking right before we hit record and you’re like, dude, just hit record so that we can have the whole conversation for everybody. On the first question I was asking is how long did it take from when, when HubSpot reached out to the deal actually closing,

Sam: [00:01:53]
About 90 days. Well also, had you ever sold this business before?

Nathan: [00:01:57]
I have not, I can’t say what business I acquired, but this week I acquired a company. it just closed. 

Sam: [00:02:06]
Was it a big deal?

Nathan: [00:02:07]
It was a medium deal.

Sam: [00:02:09]
Okay. That’s great. Well, we,

Nathan: [00:02:11]
If you bucket deals into small, medium and large, it was a medium deal. So.

Sam: [00:02:15]
Well we, We, like, I didn’t know. I mean, I had been part of a company selling before as a shareholder and like a investor, an advisor, a very, very close advisor, but I still didn’t know. I didn’t know like what closing meant. I didn’t know what signing meant. I didn’t know. I didn’t know anything. And so I didn’t, I didn’t know what a LOI was.

I didn’t know. I mean, I had heard the words, but I didn’t really know like what that implied. And they reached out to me around September or October. They cold emailed me and we had been recruited or, you know, buyers have talked to us for a long time. And like the first couple of times I took them really seriously.

And I was like, Oh my God, like, I’m going to dress up nice and fly out to their office. And I’m going to show them all this school stuff. And then after awhile I was like, I just didn’t take it seriously. And I just said, I would send them like, I would like write up like a one pager and I would like tell them all the reasons basically why they shouldn’t bias where, I mean, I was like, look, we’re really good at this.

We are horrible at this. the reason why you should buy us as this, the reason why you should not bias as this, if you are, the, the, the expectations for pricing is around this. If you want to talk, call me and like, it was a pretty straightforward thing. And, they liked that. And most people don’t, most people don’t like that.

And so they emailed me and then we, we, the deal was announced, like the last day of January and they emailed me in October.

Nathan: [00:03:47]
So I feel like that’s pretty quick.

Sam: [00:03:49]
Is it? It certainly doesn’t feel quick.

Nathan: [00:03:51]
You mentioned on, on your podcast, that due diligence was. I think hell was the phrase.

Sam: [00:03:59]
It is so bad. It’s so bad for a bunch of reasons. But first of all, I sold to a public company.

Nathan: [00:04:06]
Yeah. 

Sam: [00:04:06]
I’ve never sold a company for $300 million, but I have a feeling selling for 300 or 500 or actually have been the same amount of work as for what we sold, which was less than 300 million. it’s a ton of work.

And the difference between my small company, it was that I didn’t have a team of like, I don’t ha I had like one woman named ed who works on accounting and finance. And then I had outsourced a lawyer, you know, like an outside law firm. I had an outside tax firm. And then I had me and I had to do a lot of this in private.

You can’t really tell employees. And it was very, very hard. They basically, I ha...