293 - Best of 2025! Building Beehiiv Into a Million Dollar Business with Tyler Denk

0:00We're generating a little bit over$2 million a month right now. And then the money that we pay out to creators is not a part of that revenue. I pinch myself every now and then and we built a platform where several thousand people that have built an entire business that supports themselves and their family on the backs of like this platform that we created four years ago. A big part of my job is being able to effectively convey we're not just sending emails, people depend on us to pay the bills to send their kids to college that added a bit of responsibility adds a lot more purpose behind what we're building.

0:29We're in the top 0.1 % of fastest growing companies. We are on pace to do over 30 million in revenue in our fourth year in business. We've been very fortunate and I don't do it enough to take a step back and really appreciate where we are.

0:43All right, Tyler, instead of asking you the same question that you're always asked on every podcast, I'm going to summarize your journey and then we'll jump into it. Tell me if there's anything I missed. So you are the co-founder and CEO of Beehive, and that is a newsletter platform or was. you're kind of becoming more broad than that. But you currently process over 2.5 billion newsletter impressions a month. And you have an ecosystem of about 350 million unique readers. You founded this company in 2020. You've raised about$50 million. And you're currently paying more than like a million dollars a month to creators on your ad network.

1:20Did I get that all right? The last part, caveat, we are close to a million on the ad network. But if you include the paid subscriptions and boosts and everything else, we're paying multiple million per month to our publishers. How old are you? 31. Okay. So here's my question. What's taking so long? You're already 30. So why aren't you more successful? Well, if you heard me start off by answering that question, I almost said 29. I forgot how old I was. It's funny. So let me ask you this question. So I did read you're about a million dollars paying out to creators and you're currently generating about$1.5 million a month as of 2024 December, that's what I read.

2:01Let's say that those numbers are true. A million to creators, 1.5 million in revenue. Is that 1.5 inclusive of that 1 million you're paying out or are those two separate numbers? Two separate numbers. And today we're actually closer to two, two and a half million a month in revenue. So the numbers are a bit dated, but yeah, Yeah, we're generating a little bit over$2 million a month right now. And then the money that we pay out to creators is not a part of that revenue. So what's it like building a business where your customers are making almost as much money as you are from the business? In aggregate, yes.

2:34And that's like the name of the game, right? That's where I get a lot of passion out of what we do because it digs both ways, right? If something goes wrong or if we ship a bug, people are very passionate about why something isn't working because it's not just a hobby for a lot of these people. It's like their full income and living. And so the fact that we, like I pinch myself every now and then and talk to my co-founders where I'm like, we built a platform where there's non-negligible, like several thousand people that have built an entire business that supports themselves and their family on the backs of like this platform that we created four years ago.

3:09And so I think that's really cool. And I think a big part of my job is being able to effectively convey that story to the broader team of we're not just sending emails. We're not just adding like a new shiny feature that people use. Like people depend on us to pay the bills, to send their kids to college, whatever it may be. And I think that added a bit of responsibility adds a lot more purpose behind what we're building. I think it's really cool because anytime you build a business, I build multiple businesses and you have people that are working for you and you see, you know, I have 130 employees, but then you start thinking about, man, that person's the breadwinner for their family.

3:44Like not only do they depend on this job, like they depend on me to do good things, anxiety inducing, but there's the flip side, which is also really cool that you've created something of value. I don't know. Do you think about that? You're kind of heads down building. Does it do you ever have so heads down and stressed all the time? Like I do try to remind myself. There's something that I've read before that I like to think of, of like Tyler from five years ago would have done anything to be in the situation that Tyler is in today. Me speaking about myself in third person, very oddly. but like yes it's like very stressful the day-to-day like putting out fires waking up super early working super late you kind of get lost in the sauce a lot during the the business building experience and and it and i don't do it enough to take a step back and really think about like what it took to get to this point the fact that we are on pace to do over 30 million in revenue in our fourth year in business like a lot we've been very fortunate and very lucky we have a lot of great people around us but it is cool and i don't do it enough to take a step back and really appreciate where we are so you were at morning brew you started at morning brew 2017 morning brew sells in 2020 and you were a huge part of that process and i want to talk about some of that stuff but they sell for 75 million dollars and then you go from that and you start beehive 2020 and now you just said you're doing you're going to do 30 million dollars this year in revenue yeah we should all right so tell me if i'm close 30 million dollars let's just say 10x ARR?

5:09Are you a$300 million company? $500 million? I'd like to think it'd be more than a 10X, but it depends on the markets, right? The markets the past few days might not give us a 10X, so who knows? Let's say$200 million. Sure. You know that's not normal, right? You went from Morning Brew 2017 to 2020,$75 million, 2020 to 2025, and you've built something of really significant value in these short sprints. Like, do you know that that's not normal? Or are you like, well, it's kind of just my reality. So yes and no. I don't think, again, I don't think I think about it a ton until there was a point to the past, I don't know, six to eight weeks, we've been adding between 25 and 30 ,000 MRR per week.

5:49So like net of everything. So we're adding like over a million in revenue per month. And so I've read an email to the team every Sunday to kind of like get all of our priorities aligned. Like this is what we're focusing on this week. Here's a milestone. Here's what we accomplished last week. these are the top things we're going to accomplish this week. It became so repetitive for me just to say, hey, last week, record week, we grew by 25 ,000 MRR or 26 or whatever it is. And so I went to the chat GPT and Claw and I was like, where does this put us in terms of growth to make it a little bit more impactful for the team to understand what they're a part of?

6:22Because again, my job is storytelling to get everyone swimming in the same direction and motivated and aligned. And it's like something like the top 0.1 % of companies grow at this pace. And obviously you see on Twitter, there's a lot of the ai native companies that go from zero to 20 million in like three months right and you're like okay we are not that so it makes you think like oh we're not achieving this like rocket ship growth but there are so many companies that struggle to get the traction and revenue that we have experienced and like i'm aware of that and like we are very fortunate but yeah i had to like do a little bit of research to like position to the team of like just understand like yes it is very stressful we all like are drinking from the fire hose we're solving problems like it's a very high fast paced, high stress environment.

7:04But like, let's not take for granted that we're in like the top 0.1 % of like fastest growing companies. And like, you should be learning a lot and stretching yourself and gaining a lot of experience from this journey that we're on and positioning that to the team. I think it is super important. So let me ask you just about Beehive in general. So you are, you're doing call it$30 million this year in top line revenue. What are the margins look like on newsletter or on this business? Cause it's not just a newsletter business right now, right? Like you have the way that you've talked about it is you're helping people with distribution, which is the newsletter part.

7:40You've got website builder, which is actually helping people get up and running and then have an integrated platform. And then you've got the third pillar, which is escaping me at the moment. The ad network. Yeah. The ad network of the 30 million, like where is your revenue coming from? Of those kind of that pie. It's a good question. I think for this year, the projection would be like 22 to 23 will be SaaS, which is just like pure platform, which that's like the email and the newsletter part combined. Essentially, the ad network will probably make up seven or eight million, ideally more of revenue this year.

8:13I think we're pacing above our projections. I'm just basing this off of what we did to start the year. But yeah, I'd say we're about 70 % SaaS business, 30 % ads. What does the margin look like on the SaaS and ads business? Are they effectively the same or does one have better margins than the other? Yeah, the SaaS business is like typical SaaS somewhere between like 60 and 70%, I would say. Ads, we take between like a 10 and 20 % cut of revenue. It's like our profit margin and that's like supply and demand based. So when we have advertisers like Nike who are like very high in demand, like we can charge more.

8:46I think we take a bit of a larger spread there and then vice versa. So that's all like supply side, demand side, like real-time bidding and understanding like we cap out at 20%. So we'll never take more than 20 % of a cut from any ad placement that we place with our publishers. For context, the way that many people make money on these newsletters is by selling ads or sponsors within their newsletters. I'm on Beehive. And from what I've seen, there's kind of two ways you can do it. I could sell sort of a private ad. I could just put it in my newsletter natively, or there's an ad network on Beehive where I could sell a space or I could actually say, Hey, I'm buying space in somebody else's newsletter.

9:28And then they would choose me. Have you found either one of those like more or less effective is buying an ad through Beehive? Does it have the same conversion, same CAC, same LTV as one of those natively placed ads in a newsletter that's not on the ad network? Yeah. I'm happy to take a step back just for the audience, even like explain what is like this whole ad or deal with an email situation? Like how did we get here? I think that might be helpful context. So going back to when newsletters became very popular, whether it's the skim, Axios, Morning Brew, the hustle, almost all of them monetize almost exclusively using advertisements.

10:03So rather than banner ads within emails, they had full sales teams that sold ad placements that went directly into the email. So using Morning Brew, which is the example I know best. They have a story, they have another story, and then they have a big ad unit of MasterCard, Visa, Apple, who will pay$60 ,000 to$70 ,000 to get 150 words of creative in the newsletter. And then they have other, they call them secondary, tertiary ads, like below the fold. But it's primarily that one sponsorship that does the majority of the revenue per newsletter. And it depends on who your audience is and the size of the audience.

10:40So for Morning Brew, we were less specific. We were pretty broad, general business, but we are very large. We were 2, 3, 4 million subscribers when I was there. And so that warranted Apple paying$60 ,000 to have their logo at the top of Morning Brew's newsletter. because Apple knew that they were getting in front of 3 million, mostly affluent, upward trajectory, 18 to 34-year-olds that live in New York, Miami, Austin, LA. And so when you think about what it took to do that, we had 10 to 15 people on this brand partnership team, aka sellers, who are constantly talking to different brands, different advertising agencies, trying to convince them to move their ad budget to Morning Grill.

11:22And that took a huge effort. We had copywriters at Morning brew that took the messaging points and turned into good copy. And then we had a full ad operations team that's running the ads, pulling the data, reporting it back to advertisers. So I give all that context because that was really the impetus for building Beehive. I saw what this well-oiled machine of content creation and email, an amazing CMS, an amazing ad team, the operations are smooth. Say what CMS is. Content management systems, like what the writers use to actually create the newsletter. So we had this well-oiled machine and it turned into a$75 million acquisition.

11:59And meanwhile, while I was there, all of these other writers, hobbyists, journalists, and people who work at these other publications were like, how are you doing this? Like, how are you building the newsletters in this template? How are you monetizing efficiently? What data are you looking at? And that really was the impetus for us building Beehive, which is the all-in-one solution to do all of that. So to fast forward to your actual question, which was, what does Beehive do? we help people create content and send email newsletters and we also host their website as well but if you want to monetize you can do what morning brew does you can hire an ad seller they can be in market they can talk to nike they can talk to the ad agencies they can close deals and you can put that ad in your newsletter and a lot of our large newsletters do that and like that's totally fine we don't take a cut of that that's like your revenue the thing is 90 percent of publishers, journalists don't have ad sellers on their team or their team of one.

12:52And so the value that the Beehive Ad Network brings is we talk to all of those brands. We have HubSpot, Nike, Netflix, Roku, like tons of massive brands in our ad network. And with one click, you can get an opportunity from Nike, accept it, put into your newsletter. And it's as if you have a direct contact with Nike. We never have to talk to anyone at Nike and you still get paid for running a Nike advertisement in your newsletter. So we play in both. We want to support people who can sell direct and we have launched features that help them sell direct and manage their inventory. We don't make nearly as much money on that, but we're not in the game of just making money for bottom line revenue.

13:28We want to support the people who use the platform or you could use our ad network. Yeah. I mean, you want to enable the people who are doing real things. You're just trying to help them have a better experience monetizing the content that they're creating. I know it started out as creators, but I see more and more small businesses using platforms like Beehive in particular to monetize their email distribution lists. whereas in the past it was like oh i just have a list and maybe it's in google sheets or maybe it's in clavio or some other platform like that but there really wasn't a way to monetize it unless they actively were selling something and launching a new campaign whereas now there's this sort of second unlock in the ability to generate revenue because they have this ad network that they're able to leverage so it's been interesting it's worth doubling down and like we really i mean yes we need to make money as a business but my philosophy from day one has been we want to build whatever tools and platform allows our users to succeed.

14:24And we will extract revenue in their success without directly pulling revenue from them. So a lot of people compare us to Substack, who takes a 10 % fee of every dollar that their creators earn through the platform. We offer the same features of like, you can have a paid subscription product where your readers pay you directly, and we don't take a cut of revenue. And then same with us facilitating all of the direct sponsorships on the platform as well. We do a$10 transaction fee if you use our tools. But if you sell direct, that's totally fine. There's no penalties. So I think that's just more of an ethos and philosophy thing that we want you to take home as much revenue as you possibly can and succeed because our user success in the long term ends up being our success as well.

15:07There's these really interesting trends that are happening right now. You have companies. SMB is like my experience, right? Healthcare, e-commerce, those types of businesses. And for a long time, their strategy was like, all right, get the intern and let's do a TikTok dance. And this is our social media strategy. But they would start to realize like, oh, I can drive business from this, especially if they're local small businesses. But there's this huge risk, which is called platform risk. Instagram, TikTok almost got banned. Twitter, they can change their algorithm at any time. And so the ability that you might've had in the past to reach the people who were following you changes pretty dramatically if you don't keep up with the trends, et cetera.

15:46And so there has been a big movement I've seen from business owners to take their followers off platform, one-to-one communication. Some of them do texting, but the majority is emails, right? Like sending them emails so that they have direct access to them. When you were leaving Morning Brew, was that even in your mind or was it just like, hey, creators are having a bad experience? we should create a better experience for them that is now kind of morphed into, oh yeah, small businesses are actually using us or was this always part of the master plan? One of the first things I realized when I got to Morning Brew was that I wish that I had been collecting emails for the past decade.

16:23The fact that Morning Brew, the input is the same, right? We had a team of writers who spent six hours writing the newsletter. The writing was incredible. And whether they were sending to 200 people or 2 million people, the input is the same. the output in dollars and influence is drastically different, right? And so if you can like hone your craft and get really good at creating content, whatever it is, whether you're serving content for farmers, small businesses, crypto, like whatever your niche is, like owning your audience and being able to say when I press send, like I sent my personal newsletter this morning, I press send, it goes to 95 ,000 people, whether or not they open it, like I hope that I built the trust and reputation that they do look forward to my emails.

17:04But like there wasn't some product manager at TikTok or Facebook determining whether Tyler Dank's content today is going to be shown in the feed or it will get buried and get less distribution based on whatever the content is. So I'm a huge, obviously a huge believer in email. And I think once you see the light, it's not mutually exclusive, right? You can have an amazing YouTube, TikTok, Instagram presence and boost your newsletter, collect emails down funnel and vice versa. You can use email as a way to drive more subscribers on YouTube, TikTok impressions. Hey, I don't know if you remember this, but when we started this podcast, we entered into a social contract.

17:42I would spend time, energy and money producing this podcast, interviewing these individuals and giving you insights into how to build, buy, start, grow your business. And you would like subscribe and leave me five-star review. Now, out of that, we both get to talk to really cool people and hear really cool insights. we both get a ton of value but i just want to help you keep your word so would you do me a favor will you go leave a five-star review for me on apple or spotify it would really help and if you want even share this with a friend and i think that's where i've seen it done the best colin samir like an excellent example started off as massive youtubers that cover the creator economy they've done interviews with zuckerberg mr beast like they're kind of like more or less the face to the creator economy in a lot of ways for the content that they cover.

18:29They have a newsletter in addition to their YouTube channel. That's Monday, Wednesday, Friday, goes to 150 ,000 people. It's not regurgitating the same content, but it's complimentary. And they drive people from the newsletter to the YouTube and they drive people from YouTube to their newsletter. And it's like the symbiotic relationship and it works extremely well. So there's definitely ways to do both. It's not even massive creators. I have a friend of mine who's on Twitter, not a huge following he has a podcast i don't want to out him i mean he does talk about this but let's call it 50 000 followers across platforms he's making five million dollars a year from his content and why it's what he's like built really good trust he's taking people off platform and then he's partnered with businesses that sell to his audience and so he's just like turned this into a machine but he's really learned like oh i've got to capture not only attention but i've I've got to be able to interact with these people one-on-one without some intermediary that is a platform deciding based on their algorithm, like whether or not my stuff gets reached.

19:28That's what's been interesting for me to see change over the last few years. Content creators like Nick Huber, Cody Sanchez, I'm trying to think of some other ones, but where they're using media to accelerate their business as opposed to just media is the business because they're making money from AdSense from Google. What was it like in 2017 when you were launching? Was that even a thing? Or am I like way late to the game? Am I stupid? Because this has been going on for a long time. What's your observation of the way this stuff works? I mean, Morning Brew definitely benefited from a different time and place with the competitiveness of acquisition, whether it was Facebook, Twitter, Google.

20:04We were getting subscribers for sometimes 50 cents, sometimes$1,$1.50. But we knew and we solved the equation of we know that advertisers are willing to pay this much in the CPM. We know if we can grow fast enough and if we can acquire subscribers for$0.50,$1.50, we break even on that subscriber if they stay subscribed for X period of time. And so it very quickly becomes an equation of you know that if you can grow fast enough, you know advertisers want to get in front of your audience or willing to pay a premium rate to get in front of that audience. They pay you up front. You put that money into growth, you grow faster.

20:42And that is the flywheel. It required Morning Brew raising, I think, $600 ,000, which isn't a ton. But early days, I did a friends and family round to get that flywheel off the ground. But once we saw that equation, you just do the math and it scales up. And you've seen 1440, I think now has 5 million subscribers. It's like another newsletter. Same thing, same equation. That being said, I think you caught out something important is we've been talking about morning brew and the millions of subscribers my personal newsletter has almost 100 like whatever all of that is but i know plenty of writers on beehive that have five six thousand subscribers who are making six figures as a side hobby and that's just because they've like really doubled down on like a very specific niche so they understand whether it's advertising execs or rental cars or whatever niche that they want to stay in.

21:36And they are just like the best at covering that content. And they know that they can either charge advertisers$100,$200 CPM to advertise, or they can charge some fraction of their audience will convert to a paid subscriber and pay$100 a month because they need it for work. There's a lot of really interesting niche, small newsletters doing ridiculous amounts of money. And some of them only put a few hours a week into it. So I think that's a huge opportunity. And that's also one of the other benefits of newsletters, similar to, I guess, social as well. You don't need a ton of capital to get started.

22:09We have a free tier. You can start bringing money in risk-free using email and having a website as a testing bed to try new things. And you're not raising capital. You don't need to hire 10 people. So I think there's very low barriers to entry to the medium as well. What would you say to somebody who's listening to this and is like, well, easy for you to say, you work in this space, you know what to write. You've got a hundred thousand followers. Like, what do I even write about? How does a business owner get started even thinking about the concept of writing a newsletter? The, what do I write about is the thing that I can't necessarily solve, right?

22:43I think there's plenty of other people who can, can help give you inspiration. I think the easy thing is if you're a business owner, whatever you do or sell as a business, how, if you think through the lens of like, who are my customers? Why do they come to us to buy whatever product and service? And is there any other tangential information that they would benefit from receiving that would eventually lead? And you don't have, I think the mistake that a lot of people make is they too quickly try to get to the dollars, right? They're like, I'm not going to spin up this weekly email unless it has a direct call to action for them to purchase something for me.

23:19And every time I send this email, I'm making money. I think way too many people look for shortcuts rather than thinking of their customer as someone or a group of people that they can nurture and have their brand awareness and trust build over time. And so, for example, Brex is a big startup credit card company who finances and does banking for tons of popular startups. They have a newsletter on Beehive for their community. And it has nothing to do with starting a new Brex account. Obviously, somewhere down funnel, that is the purpose of any distributed content that they're working on. It's to eventually have people know who Brex is, to identify and like the content and brand that they're creating, to eventually open a business account with Brex.

24:06But that's the long-term thinking. They have a newsletter that covers all of their local community events in SF and LA, New York, things that some they do like business owner spotlights but they're creating content that their ideal customer would benefit from and enjoy and they're nurturing this funnel of leads through content knowing that one day that person who does launch a business and does need a business credit card they've been on this brex list for a year they love all the content they already look favorably on brex and now it's the no-brainer decision to create an account so Well, I want to throw my framework out at you and see what your opinion is.

24:47Because when I first started writing, I was always like, man, this is stupid. People don't want to hear what I have to say. You're like, what do I write about? This is dumb. When I sort of reframed the way that I look at it, it changed how I do things. And it changed my ability to stay consistent. I look at it in this order for me as a small business owner writing a newsletter. Number one, clarity. Number two, trust. And then number three, sales. and what I mean by that is it helps me create clarity around what I'm doing there's just something about writing and getting your thoughts out and like being able to understand like what is my goal here what is my ethos what is my strategy and then trust building like this long-form content that people are reading all of a sudden people who don't even know you are like oh I trust Tyler if Tyler recommends something I'm going to trust him because I've seen him over a long period of time and it's not necessarily that they buy from you but maybe you need to raise money maybe you're looking for a rockstar hire.

25:43Maybe you're looking for an intro to somebody that could change your business and somebody knows that person who you're looking for. You get a warm introduction from them because they like you, they trust you, and they can now put you in touch. The third and last thing is like sales. Okay, maybe I get a sale from it for my business, but those other two things for me have been the most valuable things and that have helped me stay consistent. What do you think of that framework? Totally aligned. That's a much better phrase and thought out framework than what I just rambled on for, but it's getting to the same thing.

26:12right? I think like another example, and it doesn't work for everyone, but my personal newsletter that I send is just about entrepreneurship and business building. And so, yes, I cover Beehive tangentially because that is the business that I'm building. But I am more often than not just sharing our hiring tactics, our strategies, the different things that we're doing as we build the company. And people then see that and it kind of personifies the business in the sense that Beehive as just a brand is some new brand that I've never seen before. I don't know anyone who works there, whatever. But if I follow Tyler's newsletter and I hear about his struggles as a person, his travels, how he's building the business, how his philosophy on hiring and running the company and the milestones, now I can tie a person and a figure behind the business.