6AM City by Ryan Johnston and Ryan Heafy

"We have an established model that allows us to launch in a new market within two months and be profitable within 18 months."

March 05, 2023

Newsletter Circle is the newsletter for newsletter creators.

👉 Every Sunday, you will read the unique journey of a different newsletter creator and learn more about how to start, grow and monetize your own newsletter.

👉 Every Wednesday, you will read articles and the list of curated resources to level up your newsletter business.

CREATOR INTERVIEW

6AM City is redefining the future of local media as the fastest-growing newsletter-first local media company in the United States.

The company operates newsletters in 25 cities across the United States, reaching 1.2 million+ subscribers and generating $10 million+ annual revenue.

The Co-Founders Ryan Johnston (CEO) and Ryan Heafy (COO) master the science of growth so that their model lets them launch in a new market within two months and be profitable within 18 months.

Today, I invite you to learn 6AM City’s story, which is super inspiring in terms of both seeing the power of activating communities by driving conversations with high-quality local content and reading the future of newsletter-led media businesses.

🏷 NEWSLETTER IDENTITY CARD

🛠 Tool Stack

👋 MEET THE CREATORS / FOUNDERS

Welcome Ryan's. Let's start with getting to know you.

Ryan Johnston and Ryan Heafy have strong complementary backgrounds. Ryan Johnston has experience in entrepreneurship, commercial real estate and publishing - specifically skilled in product design and sales. Ryan Heafy has experience in entrepreneurship, aerospace manufacturing, and nonprofits - specifically skilled in operations, systems and processes, and fundraising.

The skills that each brings to the digital media landscape have allowed for the successful development of a highly scalable local media product that is sustainably designed with the audience in mind (both readers and advertisers).

Today, Ryan Johnston is the co-founder and CEO of 6AM City, focused on product and sales. Ryan Heafy is the co-founder and COO, focused on business operations, marketing, expansion, and fundraising. They are supported by a strong leadership and management team.

🥁 START

What is “6AM City”?

6AM City is a hyper-local media company focused on activating communities through daily email newsletters that aggregate the most positive, impactful local news + events.

The business currently operates newsletters across 25 U.S. markets, with over 1.2 million subscribers.

How and why did you decide to start “6AM City”?

6AM City was a product innovation of a local print media company, Community Journals.

At the time, Ryan Johnston was the SVP of Community Journals and recognized the need to expand their digital footprint. He was evaluating business models similar to the Skimm and the Charlotte Agenda.

Around the same time, he and Ryan Heafy developed a business relationship through various leadership organizations in Greenville, SC. Following some conversations, Ryan Heafy came on board at Community Journals to help develop and launch the digital media business.

We had the first publication ready to launch within four months of development and pre-sales.

What is the role of “6AM City” in the local media space and its contribution to activating local communities?

6AM City believes great cities should be celebrated.

The more a city’s stories are told and its residents are engaged, the deeper the pride in place becomes. Pride in place is rocket fuel for growth, both cultural and economic.

At 6AM City, we’re local everywhere, making it easy to celebrate the city our readers call home. Whether you’re showing up early or closing down the house, we point you in the right direction to get the absolute most out of your city from the moment you walk out the door.

Just like our readers, we are locals. We’re listening to and reporting on what our neighbors want to see, know, and do — telling stories with our community. We’re inside chefs’ kitchens and construction zones. We’re sampling street food and uncovering coffee shop secrets. We’re highlighting makers and small business owners. We’re interviewing massive employers and hiking the great outdoors.

Why? Because a city isn’t just a line, your mailing address, it’s the lens through which you experience your everyday life. That might mean exploring spaces, visiting or (re)visiting iconic places, discovering hidden gems or filling seats in stadiums, restaurants, board rooms and volunteer booths.

We believe in providing the positive information our audience needs to get involved and stay inspired, all while fueling local growth.

Can you tell us about the first issue that you sent?

Our very first issue was sent in Greenville, SC, our hometown, in July 2016.

We were both hands-on in the daily writing and editing of the newsletter, along with 1-2 writers who were just starting their careers. While we were just figuring it out in 2016, the core product remains consistent today.

How did you acquire your first 1000 subscribers?

As part of a legacy media company, we had pre-existing subscribers that we could leverage when we launched, so the first 10,000 were essentially built-in.

🚀 GROWTH

Can you summarize how “6AM City” has expanded since its launch in 2016?

We became an independent entity, spinning out of the parent company in early 2018, when we started expanding across the southeastern U.S. in geographically adjacent markets where we were most familiar. It was a low-risk opportunity to test our thesis on scalability.

We also began fundraising around this time to fuel expansion efforts and have raised all capital to date from angel investors in the cities we serve, so we are not beholden to a large venture capital or private equity like most scalable media companies.

Over the next several years, we expanded to 1+ cities per year, proving our business model and developing the playbook that would allow us the opportunity to scale.

Coming out of COVID, we leveraged our relationships to inject additional capital into the business and between Q4 2021 and Q1 2022 we tripled the size of the business growing from 8 to 25 markets, from 300K subscribers to 1.2 million, from 40 to 100+ team members. 

We knew it was critical to achieving 1 million subscribers to expand our revenue potential and prove our unit economics.

Which growth channels do you mainly use?

We use them all, but the lowest CAC still remains with Facebook Lead Ads.

What are the most effective growth strategy & channels in your case?

In addition to paid growth channels, because we focus so heavily on community and pride in place, we often work closely with leading local brands that align with our audience, working through co-promotion, co-registration, referral, contests and more.

If it’s a growth opportunity, we’ve probably tried it.

“6AM City” acquired Nooga.com in 2018 and Austonia in Dec’22. What was the strategic role of these two acquisitions? Do you have any plans to acquire more platforms?

Many great local creators have developed brands but at some point, they decided to change course for a number of reasons (cash flow, life circumstances, etc).

In the event that a brand aligns well with 6AM City, and we can help to carry forward the legacy that someone else spent a lot of time building, we will do our best to support it in that manner. We anticipate that we will continue to acquire other brands as appropriate over the coming years.

What are the minimum requirements to enter a new city? What is your system for launching a new city newsletter?

We have identified over 100 cities in the United States where we can achieve our unit economics of about 100,000 subscribers and $1M in annual revenue.

We identify these cities through a formula that overlays our demographic profile with census data and tracking things like inflows and outflows of people, charitable giving per capita, retail spending, and more.

When we identify a city, we have an established model that allows us to launch in a new market within two months and be profitable within 18 months.

When subscriber growth slows as the population is finite in a given city, how do you continue growing the bottom line?

We have several complimentary products supporting long-term health and bottom-line growth in our markets, including City Guides, integrating local merchandise, membership, and more. Many of our revenue diversification models are in development and all are designed to support the local community.

Regarding the growth efforts, what would you do differently if you had a chance to start over?

There’s not much we would change regarding our growth efforts. Our timing on expansion was in line with and supported by the enhanced focus on local communities as we all emerged from COVID.

The only thing we might consider would be expediting financial investment in audience development. Still, we’re quite happy with what we have achieved thus far and will be focused on expediting audience development this year.

💸 MONETIZATION

How do you keep “6AM City” as a sustainable business and keep it free to readers?

6AM City was designed from the beginning to be an ad-supported product so that we can send the newsletter for free to all members of the community.

Through direct advertising and revenue diversification, we are able to maintain a profitable and sustainable local media model.

Can you shortly explain how you generate revenue?

Revenue is primarily from direct advertising (local, regional, and national) and some incremental revenue from membership, merchandise, digital listings, and ad networks.

👉 You can check out the “Advertise” page of 6AM City here.

📩 E-MAIL SERVICE PROVIDER

Did you change your ESP over time and why?

We started with MailChimp, which was great initially but isn’t designed to scale with growing media companies.

Before our expansion, we pivoted to Sailthru, which allowed us to automate and integrate many processes with our CMS, enhance data capture, and seamlessly integrate commerce, referral, etc.

🧩 SYSTEM & TEAM

What is your system to ensure sending a daily newsletter with high-quality content, curated and created originally?

We leverage social listening tools and content-sourcing strategies that allow us to pay attention to and monitor a broad diversity of content within a market.

In this sense, we are the opposite of social platforms and the algorithms which filter content so you only see the things you have expressed interest in. 

On social media, this means that if you like food festivals but don’t follow cultural groups in your community, you may never see the local cultural food festivals. Our approach surfaces top-performing content for our team regardless of the content vertical or demographic segment of the community. It allows us to share relevant content, inspiring readers to participate in parts of the community that they wouldn’t otherwise be aware of.

To ensure quality and consistency at this scale, we leverage a training platform called Trainual that helps us to coach content approach, tone, voice, etc. This means we can hire editorial staff and get them up to speed in just weeks.

How is the team structure?

6AM City has an established hub and spoke management structure allowing the company the ability to staff each market with 2 Newsletter Editors, while supporting roles (Sales, Revenue Fulfillment, Marketing, Graphic Design, Operations, etc) can be located anywhere (many times in the same or nearby cities).

The supporting roles work together to ensure each market can focus on editorial content without worrying about business operations.

What are the must-have requirements that you look for in any teammate?

Pride in place, team player, personal drive, willingness to learn, ready to hustle, fun, and acts like an owner.

Which metrics do you follow closely as a sign of healthy & sustainable business?

Unit Economics is the most important, focusing on audience and revenue growth – consistently increasing Annual Revenue Per User (ARPU).

Audience metrics focus on Daily Active Users (DAU’s), Click-to-Open Rate (CTOR), and Churn.

🎯 FUTURE

What is your ultimate dream for “6AM City”?

We strive for 6AM City to be the leader in local at the intersection of content, commerce and community.

Can you share high-priority short-term and long-term goals? What is your strategy to reach these goals?

In the short-term, we focus on profitability – developing strong and consistent unit economics for all our markets. 

We’ll be making big strides in audience development, launching a few new markets, and diversifying revenue streams. 

Over the coming years, we will further our relationships in our existing markets and expand our footprint.

Considering the new type of media companies like “6AM City”, how do you see the future of media and the creative world?

Legacy models (specifically print and broadcast) will not be sustainable as they have operated historically.

Innovation will be required to support a growing and diverse creator economy.

6AM City is excited to be at the forefront of the evolution of local media. 

We are not independently planning to be the complete solution, but we intend to be a significant part of the equation.

📌RECOMMENDATIONS

What do you advise newsletter creators who want to turn their solo business into a newsletter-first media company?

If you don’t have an operational business background, seek a cofounder that can help you figure out how to monetize your brand and create a scalable and sustainable business model with proven unit economics.

What are your favorite newsletters that you can’t wait for the next issue?

We’ve been reading a bunch of newsletters on newsletters lately - Including this one, Andy Griffiths Champion Newsletters and Charlotte Henry’s and many more.

We’re enjoying seeing more folks cover the rapidly evolving newsletter space.

Thank you so much to 6AM City!

I look forward to watching you expand your footprint across the United States and continue setting the rules of innovation in the newsletter space.

🔗 Where to find 6AM City and the Co-Founders Ryan Johnston (CEO) & Ryan Heafy (COO)

👉 Do you want to reach over 2,000 newsletter creators & enthusiasts?

That’s all for today. Thanks for reading.

See you next Sunday.

Ciler

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