Capital Daily

How Capital Daily started: a MailChimp account and a stay-at-home mom

Frustrated that his local Victoria paper had laid off its journalists, Wilkinson started a local news newsletter, Capital Daily, with a stay-at-home-mom writer and a MailChimp account, then discovered ads for local-news subscribers were dirt cheap because no one was competing.

“I went to a friend who is a stay-at-home mom who had some experience doing a bunch of writing. And I said, hey, why don't we just start a MailChimp account and we'll come up with a brand. We called it Capital Daily. And we'll send out a daily newsletter and we'll just summarize like, hey, here's like 3 or 4 stories of things that are happening in town. So we start doing this and, uh, I have a friend who runs a PPC agency and I get him to just go buy ads. And I realized I can buy ads for like nothing. No one's advertising for local news.”

Local news is winner-take-all — so buy your way to scale fast

Wilkinson's local-news thesis: historically there's one dominant paper per city, so he spent $100–200K on ads to race to ~25,000 subscribers fast, then hired a CEO (Farhan) who had scaled Vancouver's biggest local news site to monetize it.

“I realized that in local news, usually there's one winner, right? So historically there's usually been one big newspaper. And so I was like, how do I get this as big as possible, as fast as possible? And I was also just impatient. I was like, I have money. I can afford to do it. I'm just going to spend like $200 grand on ads. And so we spent, I don't know, $100,000, $200,000. And very quickly we got to like 25,000 subscribers.”

Steal thisIn winner-take-all local markets, spend aggressively on ads to grab the dominant audience position before competitors wake up.

$2M spent to build a city's biggest news business that can net $1M/yr

Wilkinson spent just over $2M building Capital Daily — but only ~$250K on ads, with ~$700K from late monetization and ~$500K wasted on wrong hires. He believes the city-level business can do $500K–$1M in annual profit at scale.

“I think at this point I've probably spent just over $2 million, but you have to remember that probably the first $700K was just me, me not monetizing it soon enough and just focusing on building the audience first. So I think we probably spent $200K, $250K in ads. And then we probably burned an unnecessary $500K, like hiring the wrong people and kind of like experimenting. So really, like, at this point, we have the biggest news business in my city for probably $750K to $1 million.”

He built a local newsletter to 40,000 subscribers in a city of 200,000

Frustrated by his dying local paper, Andrew asked a stay-at-home-mom friend to write a daily summary of Victoria news, modeled on The Hustle. Capital Daily grew to 40,000 subscribers in a city of 200,000.

“And so I went to a friend of mine who is a stay-at-home mom. And I said, hey, let's make a newsletter. And we're just going to summarize everything that's happening in Victoria every single day. And, you know, kind of inspired by The Hustle, just super simple. Here's like, you know, kind of a cleverly written summary of what's up. And before we knew it, We just, we just had like crazy numbers of subscribers. Uh, we're at the point. So, well, I mean, it's not hustle level, but we're now at about 40,000 subscribers in a city of 200,000.”

Why a lean local newsletter beats the legacy newspaper it replaces

Andrew's thesis on local news: newspapers fail because of legacy baggage - real estate, printing presses, unions - not because the model is dead. Strip all that out and a two-person virtual newsroom can cover a city profitably while selling ads far cheaper.

“The reason newspapers don't work is because they have legacy. They're cruise ships. It's hard to turn them and change them, and they have these huge real estate portfolios, they have printing presses, all this stuff. When you cut all that crap out, you can actually afford to sell ads for way less, you don't need that much revenue, and you can really just have a virtual newsroom with a couple people and cover a city.”

Steal thisRe-enter a 'dead' industry by stripping out the legacy cost structure the incumbents can't escape.