Substack Wants To Become A Social Network; Beehiiv Wants To Stay Invisible

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2:04Peter Kafka:From the Vox Media Podcast Network, this is Channels with Peter Kafka. That is me. I'm also chief correspondent at Business Insider. And today we are talking about how to make money writing newsletters and also why making money writing newsletters doesn't necessarily mean Substack. My guest is Tyler Denk. He is the CEO of Beehive and he would very much like me not to call Beehive a Substack rival. But that is how lots of people in my world think about Beehive. And that's why we saw a bunch of stories in recent months about prominent Substack writers leaving that company and heading to Beehive.

2:42Peter Kafka:And if you think the world isn't big enough for multiple news platforms, well, I would have thought so too. In fact, I didn't think the world was really big enough for Substack way back in 2017. But turns out there are lots of companies that will help you send emails out. And when it comes to Substack versus Beehive, there's one truly meaningful difference, I think. That is that Substack now sees itself as a platform like Twitter or Facebook. It wants you to engage with its content in its own walled garden. Beehive, Dank says, just wants to be your service provider. He doesn't really care if you never realize your favorite newsletter was created using Beehive.

3:19Peter Kafka:There's a lot more in here. Dank talks about the work he did building newsletters at Morning Brew, and how that helped him build his new company, why he thinks we're nowhere near peak newsletter, and why he's a startup CEO who is over the moon about what he thinks AI can do for his company. So let's get straight to it. Here is me talking to Beehive CEO, Tyler Denk. I'm here with Tyler Denk. He is the co-founder and CEO of Beehive. Welcome, Tyler. Thanks for having me on. Because you're on channels, I think a larger percentage than normal of any given audience knows what Beehive is or has heard of Beehive.

4:00Peter Kafka:I still think the majority of my audience and most people in the world don't know what Beehive is. What is a one-sentence summary of Beehive? Can you do one sentence? Yeah, it's hard. This actually might be the hardest question of the entire interview, to be honest. We are building the operating system for content creators. Okay. I'm going to try translating. Yeah, try to poke at that because I did that right off the cuff. I described the ad differently. It was good. I would say you're in the newsletter business. And if I had two sentences, like Substack, you're trying to provide creators with a way to send emails and monetize them.

4:38Is that fair? If you were to ask me that question three or two years ago, I would typically answer with, we are a newsletter platform. My background, I was the second employee at Morning Brew. My co-founders were early employees at Morning Brew. Our initial product was to be able to create, distribute, and monetize newsletters. And I still think we do that better than anyone. We have since, though, launched podcasts. We launched community. We launched digital products. And so we are evolving beyond just the newsletter. I'd say newsletters still are bread and butter and the core of everything that we do.

5:12But that's why I think we have matured to more of a operating system for content creators is what I threw out there off the cuff.

5:19Peter Kafka:Yeah. And that part makes sense because just like I'm not going to compare you to Substack for the entirety of this interview, but just like they started with newsletters and they've expanded and they want to do more stuff. That makes sense. It also makes sense. I think you guys have raised like 50 million bucks in venture capital, which on the one hand is nothing these days in the AI days of 2026. But it's still money. And presumably the people who gave you that money are expecting you to do more than just build a newsletter platform. You started to get to a question I didn't ask you, which is to explain how you got here.

5:50Peter Kafka:So let's go there now. You founded this company in 2021. What were you doing prior to that? Yeah. So, yeah, I alluded to this a little bit earlier. I joined Morning Brew in 2017 as the second employee, and that was everything from a daily email newsletter typically covering business news, but they now have different verticals. And I think they would actually be upset for me calling them a newsletter business now as well. They've also expanded into a bunch of different media. Yeah, they are owned by Axel Springer, which owns Business Insider, which I work for. And if you want to get an Axel Springer executive excited, ask them about Morning Brew.

6:27Peter Kafka:They love this business. That's so - Or maybe a tip for other budding, for other media reporters. Look into the Morning Brew business. People are very excited about it here. But back to your story. Yeah. So back then I joined as the only engineer and I ran growth and basically built the internal infrastructure. So what that means is the writers were before me copy and pasting the emails into an HTML template. That's not very scalable. We built our own content management system that the writers use to create the newsletter. We monetize with ads. And rather than dealing with the 40 or 50 different ad placements that go live on any given week, we built our own proprietary ad management platform that would interface with advertisers, integrate with the newsletter, kind of made that one well-oiled machine.

7:14And then I built all of the different funnels. I ran Facebook ads for us. I helped scale us to 4 million readers. Long story short, I was there for three and a half years, and we took the newsletter from 100 ,000 subscribers to over 4 million.

7:24Peter Kafka:And so you left that company and you said, a lot of people do this, right? They work on one thing, one place, and they go, I want to do a better, bigger version of this for my next thing, which kind of makes sense. But in this case, I would think that it's one thing to build a successful email product for a company. And other than to say, I think there's a business building email products for lots of people. And just to put my cards on the table, I said I wouldn't do all Substack references here. But I wrote either the first or one of the first articles about Substack when they launched back in 2017.

7:59Peter Kafka:And my thought was, oh, it seems cool that they built this service that allows you to build your own newsletter service like Ben Thompson does. But there can't be that many people who want to use a service like that. And there can't be that many people who want to subscribe to newsletters. And I was clearly wrong on both counts. But what was your thinking going into this? Yeah, you and all of our seed investors, our would-be seed investors who turned us down, had the same hypothesis. So, yeah, I think that was probably pretty commonly held opinion at the time and still maybe to this day. I think from our POV as engineers, me, my two co-founders, like it's cool to build internal tech for the 40 employees that we had.

8:38I think most engineers want people, millions of people to touch the software that we're building. So I think that there was a drive to want to take what we've built and apply it in a much larger scale. The thing about email is we were sending to four million people every day. we'd probably receive a few hundred responses every week, specifically about the referral program, the email template, the design, the growth strategy, basically people that were either journalists at other orgs, newsletter operators at another company, or had a newsletter company of some sort. And they wanted to know how was Morning Brew achieving the style, the growth, the success, the revenue.

9:17And a lot of those emails got forwarded to me and anything tech related. The answer is like, I knew exactly how to build it. I'm the one who built it, but I can't explain everything. But there's a, there's a large enough of a volume of those requests coming in where that really was the impetus for what we had built at Morning Brew is clearly special. It solves a problem.

9:37Peter Kafka:Our market research is showing up in our inbox, people saying, I want to use your product. Totally. And so I actually pitched it to Alex and Austin. I didn't know that they were talking to Business Insider about an acquisition. And I I was like, I think what we, we already have the distribution of this 4 million person email list to say you can use the same software that we are using. So I kind of pitched Beehive back within the morning brew days and they, to their credit, said no, because I think it would have been a distraction from what they were doing or maybe not to their credit. We already have a successful business.

10:05Peter Kafka:We don't need to build a tools business. Totally. And so that was really the impetus before for me to see that this was a need in the market. And then, yeah, I mean, that's really kind of what set the stage for continuing to build this on our own. So you launched in 2021? Yeah, I did a quick like 10 month stint at YouTube in between leaving Morning Brew and launching Beehive full time. Good platform experience. So when you launched in 2021, who did you think your customers were going to be? And in 2026, how has that changed from your original conception? Yeah, it's a great question. At that time, it was newsletter native media companies.

10:44is there was Morning Brew for X, Morning Brew for crypto, Morning Brew for AI, Morning Brew for politics. Morning Brew really had the brand reputation. In the early days when we didn't have that sophisticated of a product, it was the credibility that this was the early Morning Brew team. That was on all of our marketing webpages. So it was anyone who tried to emulate the Morning Brew success and build a newsletter, whether it was an internal newsletter at a company or a hyperscale newsletter that wanted to be like The Hustle, The Skim, Axios, Morning Brew. That's where we started.

11:16Peter Kafka:Were you thinking, oh, there are going to be some people who want to build a morning brew for X, a media company built around a newsletter. I think you just said this. And there will also be people who want to create newsletters who aren't trying to create a business out of that. They just need to have a newsletter provider because they need to distribute newsletters for other reasons than making money. How did you think that pie chart would split up between professional email creators versus people who did it as part of something else? I think we actually approached it from the lens of, from my experience of building on MailChimp and Campaign Monitor and Sailthrough, it was very clear to me that all of these ESPs were built for marketing and commerce, primarily.

12:01Like when Sailthrough would send their updated features of tracking volume of purchase order, I go, that's awesome. that has nothing to do with our business at all. And you aren't building for media or journalism or content creators at large. You're building primarily for e-commerce. And when you go down the line from Klaviyo, Constant Contact, et cetera, I actually viewed the competitive set as there's already billions of dollars in revenue sitting in these ESP platforms that are building software for the right customer for them. But a lot of these media companies, newsletter operators, journalists were using the wrong tool for them.

12:40And so that was really the opportunity. We've obviously had plenty of people who are starting as hobbyists who have grown and built a business or a good side project. But we aren't really in the business of convincing someone to go from zero to one. We want people who are already sending on these large platforms that were misclassified that we know we can do media tech better.

13:00Peter Kafka:So this was always built as what we now call the creator economy. This was for people who want to do this for a living or something close to a living. you'll be that tool set for them. And over time with maturation, we've always built enterprise level functionality, right? Like we take a lot of our customers from the campaign monitors and sail throughs of the world. And in doing that and bringing in like quote unquote democratizing like enterprise level software for this cohort, we've been able to attract a lot of Newsweek, Time, TechCrunch, like larger media companies that I do think fit that bucket of they were using a Klaviyo to send content-based newsletters from that doesn't give you any of the audience insights or flexibility that you would expect as a publisher.

13:41So yeah, to answer your question, yes, I think we started primarily on like the long tail of content creators. Everyone from hobbyists to starting a side project to wanting to build Morning Brew for X and have matured to a place where large publishers actually thrive with our software because we offer enterprise level features at a fraction of the cost with the product velocity and everything else that we're doing. We're really trying to push the boundaries of what's possible with this.

14:08Peter Kafka:And today, to explain what your business is today, you told me if these stats are still right. I saw 40 ,000 users, meaning people who are using your tools to create newsletters. 15 ,000 of them are paying you for help doing that. And you did, those people made$19 million in revenue last year. You think that's going to double this year? Did I get all that right? I think directionally right. We're about like 55 ,000 to 60 ,000 active users on the platform. So these are people who are actively sending about 15 to 20 ,000 paying customers right now. I think we just surpassed$60 million paid out all time.

14:43And so that is from the ad. Basically, you can make money one of three, actually more than that now. The ad network primarily. So we have an ad network with premium sponsors, Nike, Netflix, Roku, HubSpot, etc. The thesis there, that was actually our strongest thesis when we started the company, was I saw firsthand how Morning Brew monetized. We had a 20-person brand partnership team that's in market talking to agencies, talking to different businesses to get them to sponsor the newsletter. I knew that a lot of these content creators and journalists who are going independent, they might be the best in the world at writing about sports or politics.

15:16But they have no business or interest building brand partnerships with Nike and HubSpot to monetize their newsletter. I think that's where Substack was very opinionated in saying the proper way to monetize your content on the internet is paid subscription. For years. That way they were insistent on that. And I think directionally that is a stance to take. But for the past several decades, there's been, you know, the true, the tried and true way of generating revenue on the internet has been ads. And Morning Brew is a success story. Axios was a success story. There's a lot of these businesses who built very large newsletter first businesses that were ads based.

15:51But the gap in the market was most of those content creators didn't have the processes or connections to, to do brand partnerships. So we have a Beehive ad network. We pay out over a million dollars every single month. That's one of the primary ways that our publishers and content creators get paid. Essentially what YouTube did for video, we want to do for newsletters now and eventually for podcasts.

16:13Peter Kafka:And the Substack guys have now come around and said, actually, maybe ads aren't a bad thing after all. And they're basically in the process of building up an ad business. You've had one from the start. One other distinction I think is important. I mean, there have been a bunch of stories about people leaving Substack to go to Beehive. I think those numbers are probably smaller than those headlines suggest. But there are real differences in your company. I think the biggest one is it seems to me that Substack has this notion that they are going to become a platform themselves, that you will come to the Substack app or the equivalent to engage with Substack content, to read articles, to listen to stuff.

16:52Peter Kafka:And then they have their own sort of like Twitter-like service where you're supposed to comment about that stuff. I understand why they want to build one of those. I understand why some of their creators would want that. I don't understand why a regular person would use it. But you guys do not seem interested in that. You're not trying to build a hub at the moment. Yeah, I think we're going two totally different directions there. I think you are correct in that they want to be the destination. They want to be the aggregator. They want to be the social platform. Like we usually liken it to Amazon versus Shopify.

17:23Like I very much see them as the Amazon of the industry where Amazon has millions of third-party sellers, but you go to the amazon.com app or website, it shows up in an Amazon box. Like they are intermediating between the sellers and the customers. We've positioned ourselves very much as the Shopify. We want to be tools and infrastructure that sits in the background, mostly invisible. You land on these different content creators or publishers, website or newsletter and have no idea that Beehive is actually the ones powering it, the same way that you would land on different merchant websites and have no idea that Shopify is actually powering them.

17:57Yes, exactly.

17:57Peter Kafka:You want most people who consume Beehive content to not know Beehive exists. Because we don't even call it Beehive content, right? Like it is Oliver Darcy at status. Like we want status to be status. We don't want Oliver to be a Beehiver or sub-stacker. Like it's his brand that he's building. And I think that's a really important distinction in terms of philosophically the types of content creators that we want to have on the platform. And the success stories are them building their own brand that stands alone, not us being their distribution or reason for their success outside of providing the tools and infrastructure.

18:31Peter Kafka:We'll be right back with Tyler Denk, but first a work from a sponsor.

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19:12Peter Kafka:and if there's one place that that's playing out most clearly, it's in Michigan. A crucial Senate primary battle in Michigan that could determine control of Congress in November. Congresswoman Haley Stevens and Abdul El-Sayed. A progressive Democrat and a moderate Democrat. In the end, it all comes down to the dreaded E-word, electability. But in Michigan, one candidate is trying to turn the electability concept on its head. If we think that voters walk around asking, where do I sit on some theoretical left-right spectrum? Then in theory, the bulk of the voters are somewhere in the middle. The problem, though, is that that model hasn't really accurately predicted our politics for a very long time.

19:51If Michiganders wanted moderate, why would they have elected Donald Trump twice? Dr. Abdul El-Sayed is making the progressive case for America first, and he's trying to settle the Democrats' ideological battle in the process. This is about the many versus the money. I'm Estet Herndon, and this is America Actually. Catch us every Saturday on YouTube or wherever you get your podcasts.

20:17Peter Kafka:and we're back you guys do seem to have made a concerted effort to get the oliver darcy's and lachlan cartwrights i'm sure i can find other guests from this podcast who are using your platform that people who are starting starting relatively high profile newsletter businesses these days to come work with you from the get-go how do you how do you source those people how do you figure out that that's someone who might want to create a newsletter how do you get in front of them and how do you incent them to use i can't believe i just use incentive as a verb how do you how do you persuade them to use your service instead of substack or anybody else yeah so we have something called the beehive media collective where it's an application process there's probably about 30 to 35 journalists in it now and we do everything from provide health insurance to legal overview to giving them credits to get the images basically a lot of the luxuries that they had while at a larger institution like a New York Times or CNN.