David C. Baker Built a Million-Dollar Consulting Business Through His Newsletter

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David C. Baker has the kind of consulting business I’d love to have one day.

Baker’s an author, speaker, and advisor. He runs Punctuation, a two-person consulting business. Baker runs the advisory side of the business; his son, Jonathan, runs the M&A side.

Baker is unusually prolific. He co-hosts, with Blair Ennis, a podcast on creative entrepreneurship called 2Bobs. He’s written six books, most recently “Secret Tradecraft of Elite Advisors.” He has his own publishing imprint, called RockBench. He leads big-ticket workshops, gives talks around the world, and runs a conference, called Mind Your Own Business.

He does all of this not out of some global hub — not New York or London or Singapore — but from 61 acres of farmland in Murfreesboro, Tennessee.

And I should mention: His business billed $1.7 million last year.

At the heart of his work, he told me, is his weekly newsletter. He started running it in 1996, back before any of today’s email service providers existed. When it first started, he had to install servers in his living room so he could send out emails to readers.

“My email strategy is absolutely at the core of what we do,” he told me via email last fall. “If there were a fire, the first thing I would metaphorically grab would be my subscriber list.”

But what’s remarkable is that Baker has built this big, successful business, and one where email is central to his strategy, and yet he seems to ignore every common rule of email marketing.

Sign up for his newsletter, and you won’t receive a welcome series of any kind. You’ll see hardly any marketing around his actual consulting business, save for a tweet-length note in his footer. (“We position, benchmark, review, value, and buy/sell/merge in the marketing, creative, and digital space. Hit reply if you’d like to connect.”) There’s nothing behind a paywall, and no upsell for a digital course. He doesn’t put any content behind a paywall. When he does send out a pitch around a new workshop, he sounds almost apologetic for having to bother readers with a brief marketing pitch. (“So, here we are,” started one recent email about a handful of 2024 events.)

Baker doesn’t even have a particularly big list — he reaches 13,000 subscribers through his newsletter. “If you look at the growth of my email list, it seems somewhat like a failure,” he said.

So how does a consultant who never seems to pitch his own services, who doesn’t have a massive email list, and who gives so much away for free end up building a business that brings in seven figures a year? I wanted to know more.

Baker and I connected in late December to talk about the business he’s built, why he gives away so much to his audience for free, and what he’s learned over the past three decades of writing newsletters.

(This conversation has been lightly edited and condensed for clarity.)

You said something to me over email that was fascinating. You said, “If there was a fire, the first thing I would metaphorically grab would be my email subscriber list.” Why is that?

Well, because I feel like I could rebuild anything I wanted if I had that. I guess that’s because I have this relationship with these, at the moment, it’s 13,000 people that get a weekly email from me. Whatever I wanted to do, I could do it as long as I could tell those people what I’m doing. Nothing else is all that important to me. I mean, that’s probably an overstatement. But it’s also the one thing that I’ve been doing for almost 30 years, even before there were email service providers, is doing that weekly email. And so all of the business adventures and the new service offerings, all of those have been possible because there have been people who have trusted me and are interested in knowing what I’m doing next. The common thread is that email list.

When you think about your email list, it’s changed, I’m sure, in incredible ways over the course of 30 years. That predates Mailchimp, that predates Substack, that predates AWeber, that predates Google — forget about Gmail, it predates Google as a company! How did you decide at the start that email would be a valuable channel for you?

Oh, I wish I could claim some brilliance. But at the time, of course, there weren’t that many options. Because I wasn’t going to go into some sort of broadcast mode [like TV or radio], I knew that my target was very limited. I also knew that I could reach enough of them at the beginning, and that it would slowly build. So I didn’t have many options at the time. 

I was subscribing to a few newsletters back then, and I knew what that connection was like. It felt like it was worth all the effort. But I’ll tell you, the effort was really substantial back then, because I had to get a T1 line to my home, which may have been the only one in all of Tennessee. It was, like, $1,150. I had to have a server rack in the living room, which my wife was not all that excited about. It had an email server, a DNS server, and a web server. That’s how I served the initial people that signed up for it. The honest truth is that I sort of stumbled on it. 

About 10 years after I started it, I came across the PESO Model. It was developed by Gini Dietrich out of Chicago. And the PESO Model stands for “paid, earned, shared, owned.” And her point is that if you are establishing a relationship with your prospective clients, you ought to spread your efforts across those four channels, but the owned one is the most important. And over time, it’s been really obvious because, you know, you could be a contributor on Forbes or on something else, or maybe your primary vehicle was having a newsletter on LinkedIn and then they changed the algorithm. The email thing is the one that I own. And so whatever happens in the future, I feel like I have a secure relationship with my clients.

I don’t know whether it was brilliance or luck. It was probably more luck than anything. But I wanted something that I could control, and there weren’t that many options back then.

How much has the newsletter that you send now evolved over the past 30 years?

So it’s been rebranded three times in terms of the domain, and there’s always a few bumps when that happens. And then the way it looks, the visual branding, has changed a little bit. But the main difference is that I’m sending full articles in the email, and have been for the last four years or so. That’s been the biggest change. So in the early days, I would write something, post it on the website, send a preview in an email, and then link so that if somebody wanted to read it, they could go to the website. The idea was to keep the email short, and also to prompt somebody to go to the website, and then track all of that activity and then do something with it. I realized that, gosh, that’s really not in the user’s best interest, because people are automatically a little bit suspicious of links, because they know it’s sort of being tracked. And it’s also not convenient. 

I realized, you know what, I’m not doing all that much with this data, so why create the friction with the reader? Why not just relieve them of that? My vibe is to give away really useful information, enough people will send me money for stuff they see as valuable, and I don’t have to advertise much to them. I’m not saying that advertising is wrong at all. I’m just saying it’s not my vibe.

If you’re not driving people somewhere else, if they’re staying in the inbox, if the main data point that you have is open rate, how are you measuring success with a newsletter like this? How do you know that it’s working?

I think it’s actually harder to measure that now after Apple changed their algorithm so that you don’t really know how many people are opening it. So I am measuring open rates, although I don’t know how accurate they are. I’m measuring click rates, but I don’t ever dive down into it. 

Mainly, what I’m looking at is two things. The first is the relative size of the list. I don’t ever want more than .25% to unsubscribe from any mailing. If it’s higher than that, then I’ve done something wrong. I’m assuming that the new signups are going to exceed the ones that I’ve lost. The net size of the list should always be rising.

The second thing I’m looking at is spam complaints. Right now, there’s 13,000 people that get it weekly. I get one spam complaint about every six months. So I don’t know what that math is, but it’s a ridiculously low amount, and I think some of those were actually accidental. 

So those are the two things that I’m looking at. Those are proxies for the health of the list. You know, there’s other things, like, does my business still thrive? But it’s hard to tie that directly to the list, because there’s lots of other ways that people find me.

I just signed up with a new email address for your newsletter to see what kind of welcome series or pitches I would get. And you don’t send anything like that — all I got was the weekly newsletter. How do you convert readers to clients without those automations or hard sells?

Yeah, you sound exactly like a lot of people that are in my life who are constantly telling me I could sell more without annoying people. And all of you might be right! But my approach is informed by my own personality. Let’s say I go to a website, and something intrigues me, and I kind of want to read this .pdf they’re promising me. But I know that nine times out of 10, I’m gonna be disappointed, and that I’m going to be dropped into some stream, or they’ll try to convert me to something else. It just annoys me! So I just don’t do that to people. There’s two of us. It’s a $1.7 million business, hardly any overhead at all. And so it’s very successful using that methodology. I don’t think that setting up a response stream or whatever, like you were looking for, I don’t think that’s wrong at all. And I think I could probably do more of it without turning people off. But even though I advise marketing firms, I am really annoyed at what marketing firms do. And so I just don’t do it. 

If you get my emails regularly, you’ll see that if we have an event coming up, I will say something about that. Every once in a while, I’ll say, “Hey, will you tell other people about this?” But other than that, I’m just going to assume that people are going to figure out what it is they want from me. They know that you’re in business for a certain reason. If they want to hire you, they’ll figure it out. I know I’m really weird about this stuff, but that’s where it comes from.

When I look at your practice, you’ve never seemed to be in a huge rush to scale the newsletter operation, never seemed to be in a rush to roll out new features or offers. It seems to be a very slow build — you’re building on this idea of, “How can we provide value week in and week out to these readers and let the relationship build from there?” Is that fair to say?

Yeah, it is fair to say. In fact, I feel so strongly about what you just said that I’d rather just go out of business if I have to change my outward approach too much. You know, the business has been up and down over 30 years. You would expect there’d be lower and higher years. But I’m always thinking more about the future. I don’t want to do something right now that sounds desperate or angry or needy. For one thing, you don’t want to hire somebody that isn’t confident in what they do. So the subtle message I want to send is, “Listen, I know what I’m doing. I’ve been doing it for many years. I love helping people. I’m going to keep giving away what I hope is useful content. And if you need to talk with me next week, or 10 years from now, that’s totally fine. I want to wait until you really need me. And I’ll be here when that time comes.”

For anyone who has real expertise, as you do, and who provides consulting, coaching, or services, there’s often a disconnect between list size and revenue. Yours is an extreme example of that: 13,000 readers, but the business brings in $1.7 million a year. How is it possible that a list of that size could bring in that much money?

I don’t know if I have the answer to that. But philosophically, I feel like the answer is to always have more opportunity than capacity. You and I both live in the U.S., which is called the land of opportunity, and we worship growth at all costs. In fact, if you look at the growth of my email list, it seems somewhat like a failure, as it’s been around for two and a half, three decades, and it’s only 13,000. But it’s more about the quality of the list than it is the quantity. And so when people ask me, “How big should our company be? What’s the ideal size?”, in a smart-ass sort of way, I always say, “Well, the ideal size is a little bit smaller than however much opportunity you have so that you can keep prices high.” 

I think sending an email every week with an original article of 1,200 words, — and I’ve got, like, 90 of them already, sort of set aside with some research and the graphics already done — writing that sends a signal that the business is making enough money that I have enough time to write that thing every week. That’s a signal that I’m not running around like a hamster on a wheel, with no time to market myself. No, I believe in this. I believe in giving away useful insight and spending about 20% of my time doing that, because the other 80% of my time is compensated highly enough that I can afford to spend that 20% doing that. So it’s all just this virtuous circle of knowing what you’re worth, having lots of opportunity, viewing each client relationship very, very carefully, and not being consumed with growing.

How did you come to the realization that giving away a lot in your newsletter was, 1.) The right strategy for you, and 2.) Wouldn’t hurt your business?

If you’re going to charge a lot of money for what you do, then I think your potential clients have a right to know how you think, especially if 100% of what you do is charged upfront. Everything I do is prepaid. So that’s either very confident or very obnoxious, right? I believe that if I’m going to charge that much money, then my clients have a right to know how I think. That’s part of it. 

I also want sales to be a very efficient process. When I get on the phone with a prospect, I want them to already know how I think and how I might approach things, and it’s just a 30-minute call to see if this is a fit. If you’re going to charge a lot of money, and if you want to have a big impact in people’s business lives, then you’re going to have to get really deep into their situation. So if they’re going to trust you ahead of time, then I think the best way to do that is just peel off some subject — and there’s a thousand subjects — you just peel off one subject, and go really, really deep in it to demonstrate the level of expertise that you have. And so they’re going to say, “Oh, wow, so he must be able to go that deep on these other topics, too.” 

The selfish part is really that I write mainly for myself. I write because I need to figure out what I think about something. When you send out your email, you’re realizing, “Oh my God, there’s tens of thousands of people reading this thing. I better know what I’m talking about.” Writing forces me to keep thinking and to be curious, and even if nobody reads my stuff, I love the fact that it forces me to keep learning.

Is there anything you wish you’d known at the start to improve your newsletter?

I definitely would have ungated everything and included everything in the email from the very beginning, if I were doing it over. It’s pretty painful to switch domains — and so I would pick a decent domain at the very beginning and never change it. We’ve been on three different domains. It was ReCourses, which was a really stupid name, because I could have picked anything back then. Then we went to David C. Baker, and then to Punctuation. And those transitions have been pretty seamless — they’ve just taken a whole lot of work.

Tell me a little more about the 2Bobs podcast. Whenever I listen to it, I find myself nodding along and going, “David gets this. David knows this stuff way better than I do.”

The podcast serves a pretty narrow niche, but we still get about 26,000 downloads an episode. It’s a popular podcast, given how small our audience is. But I do lament the fact that I don’t have that close relationship with my listeners. I could announce something in the podcast, and a lot of people would hear it, but it’s not the same as email. And it is in that owned category. But it’s not as direct or immediate. I wonder if that’ll change someday. I’m hoping that the podcast medium does. It’s still a fantastic thing that I love doing. But it’s not quite like email.

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