The Newsletter That Comes With An Equity Portfolio

This might look as the stock market chart of a very profitable investment. In fact, the graph shows the growth of subscribers of a paid newsletter about stock markets, shares and personal finance. Snowball is published via Substack.

Snowball (up to now, see later!) is a publication in French language. So it doesn’t face as much competition as an English newsletter would. Nonetheless, it is impressive, what Yoann Lopez has achieved in his first year. Snowball.xyz went live March 2020. It’s paid newsletter tier started only end of April 2020. Nonetheless today, it counts more than 1,300 subscribers who pay €6 per month. That adds up to above US$100K a year. And Yoann strives for the US$250k-a-year mark till end of 2021.

There is another reason which makes Snowball so remarkable. Yoann puts 20% of his subscriber revenue aside and invests this money into a portfolio of shares. After 12 months, he will pay back the yields of this portfolio to his subscribers.

A shared equity portfolio as a means to increase the loyalty of a finance newsletter. What a brilliant idea!

But not only this. The earlier someone has subscribed to Yoann’s newsletter, the bigger will be his share in the portfolio. Therefore, subscribers get points, called Snowflakes, which represent their quota. The first 200 subscribers had collected 600 Snowflakes when they signed up. The next 300 got half of that. Subscribers 501 till 1,000 each collected 150 Snowflakes. Current new subscribers (till #10,000; you don’t have to hurry too much) get 100 Snowflakes.

I really was interested in getting to know more about this inventive creator. So I reached out and connected with Yoann. We had a long video call. I think, the following is a good, slightly edited, extract of the most interesting parts of our conversation.

Yoann Lopez

Interview with Yoann Lopez, publisher of Snowball

Where did you get the financial expertise from to give this kind of advice to your readers?

“First of all, it’s from my education because I studied economics in France, in Germany, in the Netherlands and in the US. And then it was mainly just investing myself. I mean, it was a learning— because my education didn’t really teach me how to invest my money. It teaches you the basics, the foundations of economy, how it works and everything. But I guess, unless you’re working in a hedge fund or as a venture capitalist, the only way to learn is just to invest your money, and to read stuff, and to read books, and to read the blogs, and to talk to people, too. So that’s how I learned, by just doing it myself.”

You say the idea behind Snowball is to be a service made for humans to manage and grow their wealth. When I read your newsletters, I find that you tackle a lot of very abstract or theoretical topics, like what is money? What about capitalism? What does it mean to be rich? And I wonder how you weigh such basic or maybe educational topics against more tangible investment advice, which I would expect.

 “Actually, when I started Snowball, about 10 months ago, I wanted it to be more practical than theoretical. But as time went by, I was like, “Yeah, maybe people need to understand more foundations and to better understand what it means to be rich, or what it means to raise money for a company or whatever.” Because if you don’t understand the foundations, you have a hard time investing your money. So that’s the reason why I decided to blend practical and theoretical.”

Do you have a percentage in your head, how much practical investment advice you want to give and how much more of this educational, abstract topics?

“I guess it’s 80% really practical, educational, use cases, and maybe 20% of theory. Maybe in the free version, it’s more theoretical than in the paid one, which is more practical and more news, and so they are quite different”.

Let’s talk about the Snowball system. Maybe as a starter, have you been a good investor? What’s the value development of your Snowball portfolio over the last year?

“I guess it’s not the right time to judge because all the stocks went up basically. It went up more than 50% since I started, or even more than that. I don’t have the exact number. It’s something in between 50 and 80. So yeah, that’s a lot. I mean, even if I tried to be safe, it went up quite a lot. That’s a crazy year. I guess it’s not how you should expect it to grow in the future.”

Then, in December, it was the first time you had to pay out to your subscribers their share of the profit, right?

“Actually, it wasn’t December because in the beginning, I thought about December, but then I delayed it to March because March is going to be one year – it’s going to be the first year of Snowball.”

How exactly will you do it? Will subscribers get money from you or will they get prolonged subscriptions or free months of subscription?

“Well, I guess it’s easier for me to reimburse. Because I’m using Stripe, the company to pay the subscriptions. It’s very easy to reimburse someone on the credit card used, so that’s what I’m going to do. But in the future, I would like to give more options. Maybe one option could be, I just keep the money on my account, like with loyalty cards. You can keep the money and wait and get the money whenever you want. I would also to make it possible to get free months. Or maybe to give some free months to friends. To add these options in the future, it’s going to need more development and to be on my own system [selfP: not on Substack].”

Isn’t that a hell of a lot of work to select those people, to look at how much each person has to get paid back, and then to initiate all those reimbursements? Do you have any kind of automation for this process at hand? Does Substack provide any tools to do this?

“In the beginning, I hoped to find some kind of automation. At least I have the spreadsheet with all the names and how much they’ve earned and everything. That’s already done. So it’s pretty easy to calculate. The one that’s going to take a lot of time is to reimburse people because you can’t upload the CSV or something into Stripe. You have to do it manually.

It means that I’m going to have to do maybe 50 or 40 reimbursements per day, and it’s going to take about half an hour to do it. It’s manageable today. But in the future, I’m going to have to find a better system. Substack is of no help here at all.”

You promise an app, where subscribers can look up how many Snowflakes they have and how their worth develops. But I cannot find this app in the appstores?

“It is subscribers only. And it is not on the App Store. Because it’s not like a native iOS or Android app. It’s made with Glide. It’s a no code product. You can actually build a web app based on Google Spreadsheets. It’s very easy and it’s very useful, because you can build quite a complex app in one or two days. And you don’t need a developer and everything.”

Snowball subscribers have access to an app with a dashboard showing Snowflakes data

“When I noticed your Snowball system. I thought, ‘yeah, that’s brilliant. That’s so great to prove your competence and, hopefully, your success as well. It will increase subscriber loyalty. And it is an innovation. I haven’t ever heard of any investment magazine doing something like this. But then, finance products are heavily regulated. I wonder if this kind of cashing in money, doing a portfolio, promising to pay out something, wouldn’t need some form of license from national or even EU authorities? Did you ever check this? Or is it that you just said, ‘Oh, I’m so small at the moment, that’s okay without a license’?

“In the beginning, it was like, yeah…I checked, but since it was really small, I was like, yeah, I’ll see to it later. I don’t know if it is perfectly OK or some kind of gray area or maybe even formally illegal. I mean, people actually pay the subscription. I’m investing the money and then doing a cashback. I’ve never seen that before either except for credit cards or with Revolut, you get some cash back but it’s quite different.

If I were in your shoes, I would be a bit afraid that someday somebody comes up and says, ‘You can’t do what you’re doing here’.

“Well, I’ll just stop [laughs]. Actually, today I’m trying to set up another system with a company in the US. Instead of giving cashback to people, you could basically give shares to these people and the share of the company would grow if it’s successful. This would be completely legal, because it’s regulated in the US. It would be a bit different. But the same spirit, which is to give some kind of incentive to the readers, and to give them also some kind of alignment between the incentives of the company and of the readers. So that’s what I’m trying to do at the moment. But first, I have to do this AMF stuff [selfP: a French license for financial advisors]. And then I can have a corporate company in the US and then create a subsidiary in France.

I mean, it’s quite easy today to open a company in the US. With Stripe Atlas, in a few clicks, you can open a company in three hours. It’s totally legal. I did it in the past. And it was quite easy, so I guess that’s going to be the plan and maybe, with shares, you can then give dividends – I mean, real dividends – to your shareholders. So that would be more in line with regulations, even today. Instead of being a bank, I guess that would be the best system at the moment. Maybe in a few years. I’ll have a bank license. Who knows?”

“It’s a no code product. You can actually build a web app based on Google Spreadsheets”

Okay. I’ll have a look, then. You do publish a newsletter, ‘Behind The Curtain’, where you tell people about how Snowball is coming forward. Snowball comes in French, ‘Behind The Curtain’ in English. What’s the idea behind these two newsletters in two different languages?

“Before starting Snowball, I was wondering if I would write it in French or English. In the beginning, I thought in English, because you get a broader audience, it’s easier to grow and the market is much larger. But then … in France, there’s not a lot of content around personal finance. Of course, there’s some content but maybe not the kind of content I wanted to create. Also the market is different. You’ve got some different products to invest in France, so it’s very nation-specific when you invest your money. I thought, maybe it’s better in French if I want to focus on the French market.

The reason why Behind the Curtain is in English, is because the topic is different. The topic is about building a company or a product. It doesn’t have to be in French because of some specific jargon or stuff that is only in France. And also because I hope that in the future Snowball will also be in different countries. So it could be a way to start growing some kind of email list and also, when I launch in a new language, maybe people will be interested to subscribe to Snowball as well. That’s another thought I have.”

You already had this Behind the Curtain newsletter before you started Snowball?

“Yeah, but before that, my idea was basically to interview entrepreneurs or managers and see what methods, tools, steps they’re using to grow their company. And when I started Snowball, I didn’t have any more time to go to people, so I was like, ‘maybe it’s better to focus on Snowball’.”

Currently, I’d say you are what people call a creator, a person who is publishing digital content, trying to make a living by it. But speaking of shares, speaking of editions in different languages, you definitely have in mind to leave the step of being a creator. That’s more the path of a proper startup entrepreneur, maybe someday having employees and a real company. Is that what you have in mind? Is the creator stage just something you want to step over to become bigger? Or do you think you could combine both modes of existing, being a creator and at the same time being an entrepreneur?

“That’s a good question. Actually, when I started Snowball, I didn’t think about all these things. It was really a side project. So I was not planning anything at all. And as Snowball grew, I was like, ‘Yeah, What should I do? Should I live in this passion economy/creator thing, which could be a good idea? Or do I want to turn Snowball into something bigger?’ And the second option was what I wanted. So I was like, ‘At the moment, I’m at the creator, passion economy stage. But at one point, I’m going to get out of this, because if I want to be able to be a real company, hiring people, maybe raising money, I won’t be in the creator space any more’. Of course, I will still be a creator, but not in this passion solo founder sense we have today. So I didn’t plan that at the beginning, but that’s the plan now.

When did you start to think so big? And why did you dare to think so big?

“That’s really hard to pinpoint. When I think about it, I can find different times, but I guess it was before the summer, around May or June 2020, when I reached quite a high level of revenue. I can’t remember exactly, but it’s written in Behind The Curtain. I think it was something around 40K dollars per year or something like that. And at this point, I thought, ‘Okay, it’s getting bigger. I mean, it’s almost my salary today.’ It was less, but I wasn’t quite far from my salary at this time.

 “Substack is an amazing tool to really start quickly, test and just focus on the idea”

You didn’t plan that. Probably that is the reason, why you chose Substack as a platform. Because, I think, with all your IT knowledge, you would have been able to create something on your own. Now you’re on Substack and you will have to leave Substack, if you want to realize those IPO plans, because Substack doesn’t have the functionalities you’re thinking about. Is the reason why you are on Substack today that at the beginning, you didn’t think as big as you’re thinking now?

Up to now, Snowball ist published via Substack

“I’m not sure if I wouldn’t have chosen Substack, even if I had the plan to go bigger. Because Substack is an amazing tool to really start quickly, test and just focus on the idea instead of the pipes and the foundations and all the stuff that can take quite a lot of time. So, I think I would have started with Substack as well, even if my idea was bigger from the beginning. It’s an amazing tool to really test quickly. I think it’s going to be a pain in the ass to move out of Substack, but it was worth this future migration.”

Just to get the timing right. You said around May or June, you started to think about being bigger, but it was only in April that you launched the paid version of the newsletters, right? Really fast then. When did you start Snowball as a free newsletter?

“That was in March.”

Only four months before starting to think even bigger as a paid newsletter. That’s so fast!

“Yeah, it went really fast. That was quite a surprise for me. I remember the day I launched the paid version. In a few hours, I went from zero to $10,000. I was like, ‘yeah, wow, that is kind of crazy’.

In, I think it was your last newsletter, at least the last one I have in mind, you said for 2021, you have a revenue goal, “I’d like to reach the 250K dollars milestone.” Is this a goal after having transformed Snowball into a public company? Or is this a goal you think you might achieve in your current setup as a one-person publishing company?

“It was a goal as the current setup. But yeah, I don’t know, maybe in six months, things are going to accelerate, and maybe it’s going to be even bigger than that. But for now, that’s the goal, me as a solo founder and Snowball as a newsletter and not as a bigger company.”

” I’ve always wanted to build things that could have, first of all, a positive impact on people around me”

20% Of Revenues Into a Foundation

Okay. And maybe my last question. There is a second thing you are doing, which is quite unusual. You not only set aside 20% to invest in the Snowflakes portfolio, but also 20% for a Foundation which aims to educate kids. How come you are so interested in this story, the education and in being a nonprofit benevolent donor?

“Well actually, I’ve always wanted to build things that could have, first of all, a positive impact on people around me. It could be the society. It could be smaller than that. It doesn’t really matter. But that’s one thing, and that’s why my previous company, Comet, was a company that could have an impact on the society at large.

For me, finance is a part of the equation because it’s very important, without money you can’t do anything. Education is quite the same. It’s not exactly at the same level, but for me, it’s just as important as, or even more important than money because without education, it’s hard to find the right place in the society. And education doesn’t mean you have to be an engineer or whatever. It’s more about doing what you want and people hiring you for doing what you want to do. So I guess I wanted to help at least younger children to not only find what they want, but also to find something they could be hired for, which is not exactly tackled by the educational system in France today. For me, it has to be tackled quite early, because after you’re 15 years old, you have already kind of chosen your path.”

Is there a personal connection to this topic of educating young people, because there are several goals you could follow with the money. I mean, you could support environmentalists, you could give it to the poor, whatever, but you decided to support an educational project, your own educational project. Why that and not any other of those possible benevolent goals you could follow?

“I guess it’s also personal taste. Well, maybe it’s because I strongly believe that this educational system is not perfect at this very specific point in time for kids. And maybe it’s also because it could have been something I could have wanted as a kid because I didn’t know what to do, or, I did know what to do, but it wasn’t the right choice at the moment. And I didn’t have the right person to talk to at school. My parents, they weren’t aware of the options in the future. So what I want to build today, it’s for the kid, but it’s also for the parents of the kid, so parents could be also more aware of what their kids want to do. Because today in France, you have to be an engineer, or you have to work to go to business school, people have this very narrow-minded view of what should be the education of a kid.

Myself, as a kid, first of all, I wanted to be a pilot, but I wasn’t good at math. So it was out of the question. After, I wanted to be an engineer and wasn’t good at math, same issue. I was kind of lost, I didn’t know what to do. So I went for economics, because it was general knowledge. And you can do a lot of stuff by studying economics. So that’s why I picked this, but without really knowing where I was going. And I wasn’t aware of this entrepreneurial world, or this startup world, or this creator world. I mean, it was smaller at this time, of course, but it was existing. Maybe if somebody had told me at that time ‘You can work for a small company, and you don’t need to have an engineering degree or whatever’, I guess it could have been less stressful for me.

There is a second reason. I think it has to be really narrow if I want to start somewhere. This stuff is very narrow so it’s easier to start. From there, you grow. And maybe in the future, it’s going to be education at large, not only this very specific part. Maybe it’s even not the best point to enhance the education system. But I have to start somewhere. And I believe that’s the right point.”

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