How a former Guggenheim banker pivoted to newsletter publishing and built The Daily Upside to profitability in 4 years (2024)

As an investment banker at Guggenheim Partners in the last decade, Patrick Trousdale had the chance to observe the media industry up close. While he was at the company, investment arm Guggenheim Securities did some work on Vice Media, the brash digital-media darling that was once worth billions.

But when Trousdale left to start his own media venture for investors in 2019, The Daily Upside, he tilted more toward Morning Brew (which now shares an owner with Insider) and The Hustle, conversational email newsletters that had success with modest outside funding.

"You have sizzle before the steak at times with digital media," Trousdale, 33, told Insider in August. "I'd seen that play out a lot of times. So I definitely wanted from the outset not to raise a lot of money."

"It was going to take longer" to build the business that way, he added. "But it was important to find the right model."

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How a former Guggenheim banker pivoted to newsletter publishing and built The Daily Upside to profitability in 4 years (1)

The Daily Upside has grown to 1 million subscribers since its 2019 launch, with a 45% open rate, about double the average open rates of media and finance newsletters, per MailChimp, and profitably (helped by Trousdale forgoing a salary for three years). In 2022, it made $2.3 million in revenue, which it expects to grow by at least 50% this year.

While the heyday of venture-backed digital media companies has faded, The Daily Upside is among a growing class of newsletter-based startups like Puck and Graydon Carter's Air Mail that are modest in size but designed to last — by growing slowly, with multiple revenue streams and content readers can't get elsewhere. While Trousdale knows people can get the news from lots of places, his aim is to provide the context that can be lacking from other news reports, and as the name suggests, with "grounded optimism."

The Daily Upside is expanding and adding original content

Now with a staff of 18, The Daily Upside has been ramping up its original content to complement its aggregated pieces, with articles like "The Largest Wealth Transfer in History Has Begun" and "Airbnb is Letting the Air Out. This year, it acquired Patent Drop, a media company that crawls registries for company patent filings, written by former Protocol writer Nat Rubio-Licht; and launched Power Corridor, a newsletter written by longtime investigative journalist Leah McGrath Goodman.

Goodman said she was looking around for her next move when she met Trousdale, and his desire to build something from scratch and fill a niche resonated with her. She described the debate going in about what editorial tone to strike.

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"I think he felt there was a lot of cynicism built into the financial news," she said. "Maybe a little too much glee announcing layoffs, too much politics, horse-race coverage. We're going to give you the news but pull back on the cynicism. It's about appealing to an audience that doesn't want to be righteously indignant all day."

There was some trial and error with The Daily Upside. Trousdale initially wrote the newsletter himself, focusing on one company each day, then realized readers needed some connection to the daily news cycle to open it.

After growing slowly by word of mouth for a couple years, he struck swap partnerships with other news outlets, starting with The Motley Fool; others, including Financial Times, followed. Those deals have helped grow The Daily Upside's subscriber base and attract sponsorships from the likes of Apple, financial services company Plaid, and Axios. The Motley Fool also made a small investment in the business.

John Keeling, SVP Business Development and venture partner at The Motley Fool, said he admired The Daily Upside's ability to write about complex topics in plain English, with analysis and wit — and Trousdale's entrepreneurial thrift.

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"He was living on ramen noodles for a long time," Keeling said.

Trousdale also used paid partnerships with creators. While The Daily Upside dabbled with using TikTokers to promote the newsletter, it found more success reaching investment-minded types with YouTube personalities like finance guru Patrick Boyle, whose videos have yielded The Daily Upside thousands of new subscribers.

"I'd be lying if I said I thought I had the complete bible for what works," Trousdale said. "But for us, staying in our lane with our original product, original idea, original voice is what has allowed us to stay profitable in a tough market."

How a former Guggenheim banker pivoted to newsletter publishing and built The Daily Upside to profitability in 4 years (2)

The Daily Upside

A paid model is in the plans, along with podcasts and video

Trousdale finds inspiration in Puck and Air Mail, which both have a freemium model and have raised outside funds, even as recent high-profile newsletter swings by Substack and Facebook have had setbacks. He also sees his approach as a way to avoid dependence on the tech giants' shifting support of journalism and survive the rise of generative AI.

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"AI isn't going to be able to call someone, get an original opinion, get a scoop," he said.

"When you look at media broadly, there's a signal-to-noise problem, with clickbait and media companies writing for SEO and growing at all costs," Keeling said. "Not all businesses are meant to be at Google and Amazon's scale. So for ones that really build on voice, maintain that quality of audience, there's a wonderful business model there."

Next on Trousdale's agenda: Figuring out a version of The Daily Upside's newsletters that people will pay for, adding more newsletters, and getting into podcasts and short-form video. Meanwhile, he sees newsletter subscriptions reaching 2 or 3 million over the long term.

"There are huge pockets of people who have still not heard of us; we still feel like we're scratching the surface," he said.

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This article was originally published August 8 and has been updated.

How a former Guggenheim banker pivoted to newsletter publishing and built The Daily Upside to profitability in 4 years (2024)
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