Apple’s App Store Loss, AI Persuasion, and an Interview with Tyler Denk of Beehiiv | E2120

26:17Because if I want to go to Whole Foods, I can also go to Trader Joe's or any place by car will take me. But on Apple's iOS platform, I only really have one option. You have no choice. The other option would be to force Apple to allow other app stores. I think that might have happened in Europe. That might have been part of one of the European settlements that they are going to have to have. I think on Android, you can load an alternative app store and some people do. And I think this is also where cooperatives, I know this sounds silly, but I think cooperatives where, you know, everybody says, I'll give 1 % of my revenue to this nonprofit organization to run an app store across all the platforms that is, you know, governed by vote, you know, by, you know, this board that represents small, medium and large size app developers, something like that consortium could be a great counterpoint here.

27:11But yeah, this is all impacting startups on brass tacks and on their profit margin. So if you can get people to sign up on your website, you should certainly do that. And that's what a lot of people wind up doing is they do all their marketing, all their advertising, come to our website, sign up at our website, you know, and they just really kind of bury the app store subscription. We mentioned Lena Khan earlier, and I was going to troll Jason with a Studio Ghibli style Lena Khan hero portrait with a halo. It took several iterations to get this done, Jason, but just because I've been doing it in the background, I present to you our lord and savior.

27:48It's Lena Khan. Oh, there she is. Oh, there she is. There she is. I mean, I don't have any personal, uh... I know. What's the word? Personal animosity? I know. Animus or animosity? Animus is what I would use. Animus. Okay, I'll go animosity, animus, any of those. towards her as an individual other than she cost me a lot of money so other than effing with my paycheck i think she's great i think she seems like a wonderful person but she killed mna in the country and she's really screwing up the ecosystem i'd say she's the number one reason that venture capital in our country um she she was the number one challenge to venture capital in the world well first they came for the billionaires and now they're coming for the sent to millionaires.

28:31Who's next long producer? It'll be us. Well, you know, I was just gonna say and the employees of every company who can't get bought and shuts down. I'm tweaking you. I will say, I think that image looks, that's a little bit more like fist of the north star Lena con than studio Ghibli, but that five people in the audience, anime reference, but what do we got next? Let's get through this. All right. So I want to talk about a startup acquisition, Jason, a company called five Tran bought a company called census. Now, if you're not familiar with these two companies, that's because they work deep in the backgrounds of the enterprise data movement game.

29:06Now, Fivetran, you may have heard of and mentioned everyone listening, because they were valued at five or six billion dollars back in 2021, when they raised a nearly $600 million Series D. So an absolutely huge company. Now, Census does something very specific, which is called reverse ETL. ETL stands for extract, transform, load. They do the reverse of that, taking data out of, I believe, data lakes and putting it into software applications. Turns out that's a whole business, and now they've sold. We don't know the actual dollar amount of the transaction, but the company, since this was last valued at$630 million as a post-money valuation in 2022.

29:43My thesis, Jason, is that because Andreessen Horowitz backed both of them, this is probably a marriage of convenience, but I wanted to ask you if I'm being too cynical about this schmushing. Hey, founders. I want to share with you an experience I love. It's when I get an ad that is relevant and not some nonsense. Like the other day, I got an ad for a fund management platform, and it was like a new one I'd never heard of. I clicked on the ad because, well, I manage four venture capital firms. We scheduled a call with them, and it was amazing. How did this happen? Well, I was on LinkedIn because I like to share links from the podcast, The Speaking Startups, right on LinkedIn.

30:23In fact, we live stream to LinkedIn three days a week, and we get a great audience over there. And I happened to be presented with this fund management platform, and it was a direct hit. Like, I mean, talk about hitting the bullseye. If you're in business and you're making a product or service, it's really hard to find customers in the business-to-business space. And doing B2B advertising is hard, but LinkedIn makes it so easy because, you know, their tools let you target people by job title, industry, company size, and more. So this fund management platform obviously was looking for people in venture capital who had a fund size and a number of people, maybe 10 people, maybe 50 people.

30:57And they found me. They got me. They split the arrow, boom, right on target. And there's two things you really need to know about LinkedIn going into 2025. First, they broke a billion members and 130 million of those billion are decision makers and 10 million of the billion are C-level executives like myself. Where can you get to those people? It's really hard. And the second thing you need to know, LinkedIn makes an impact. B2B markers report two to five times higher return on ad spend or ROAS, return on the ad spend. You should know that acronym. Compared to other social platforms, 79 % of B2B markers say LinkedIn is the best platform for paid media.

31:31LinkedIn is going to let you build the right relationships. It's going to drive results and you're going to reach your customers in a super respectful business environment. It's not a place where people are dancing around, saying inappropriate things or debating politics. Nope. LinkedIn equals business, business equals LinkedIn. Start converting your B2B audience into high quality leads today. We'll even give you a hundy,$100 credit on your next campaign. Go to linkedin.com slash thisweekinstartups to claim your credit. That's linkedin.com slash thisweekinstartups. Terms and conditions do apply.

32:01If you have two partners at a firm and they both are having coffee and it's like this company is thriving, doesn't have this other company's feature set, that company is less than thriving. Or let's say it lost its founder, went on to do another company, or has competitors that are nipping at its heels because everybody discovered it's a really great market, or maybe it reached its natural audience size. The venture capitalist has to come up with a result for that company. What are the possible results when you hit year 15 in a venture fund. The venture funds are typically 10 to 12 years in lifespan.

32:41When they hit 15, you kind of want to wrap it up, folks, and shut that fund down. And what that means is there might be five stragglers, companies that still exist, they're making a million dollars a year. What happens in those situations? The investors encourage the founder to sell the company or buy back their shares for a dollar, or a third party might come along and say, we'll buy the 17 names in this fund for$1. Then if that fund was a 5X fund, then those 17 investments, if they were 1 million each and were 17 million, you get the tax benefit of that loss against the gains. And in order to realize that though, of course, you have to sell it.

33:21So you sold those 17 million in investments for$1. Now you got 16 million, in 999 in losses that you can take as LPs, as you're supposed to do. That's the name of the game in America, right? Losses offset the wins. And then that person who's buying all those shares is going to hope maybe in that 17 million somewhere, there's a million dollars that will pop out of it, or they could even get a pay to fee. So they're going to buy it for a dollar and you're going to pay them a fee for a year to wind them down or something to facilitate that transaction in some way. So that's typically what happens at end of life.

33:54In these cases, It could also be Andreessen Horowitz hosted a retreat for their founders. The two CEOs were hanging out at the bar at night. They vibed and they came to this conclusion on their own. So all of those are possibilities. And with the larger the firm, the greater the chance that they have their fingers into multiple pots. So the idea of non-investing in competing companies seems to be going away for the Andreessen Horowitz's, the Lightspeed's. they seem to have so many different funds that they may have angel invested or seed invested in something and then the growth team invested in the competitor or one of their old investments bought a company and then suddenly started competing with a company that they never invested in or they launched the same product.

34:40So the industry is changing and these large funds are now so big that they're kind of becoming private equity-esque. They're even doing this move where they're looking to buy companies. So if they see an undervalued company, a number of them, I'm not sure who's on this list. I know Andreessen has been talking about it. Thrive Capital just announced it, Josh Kushner. He announced he's going to start buying companies and then they try to run them. So kind of Berkshire Hathaway, kind of ownership levels or a private equity firm levels. Venture capital exits do not generate enough total liquidity to make a$7 or$8 billion venture capital fund make economic sense unless you accrete to yourself like 80 % of the exits for the next 10 years.

35:22So I think it makes a lot of sense to see probably lower IRR expectations for larger checks and also some private equity things rolling over deals between funds and also, yes, buying stuff and being more experimentative. In this case, Fivetran is doing very well. They announced, Jason, last September that they surpassed 300 million ARR. Essentially, the gist there is that AI, lots of data. If you move corporate data in the era of AI, you have a lot of business. So I'm actually kind of, my hypothesis here is that 5Champ is doing great, Census was doing fine, better together, full spectrum package, and TechCrunch did right.

35:54They had sums of the same customers. So probably pretty easy just to tie up those relationships in one bucket and move on. But I'd love to see M &A. Yeah, it's great. And this is what I'll call single and double M &A. This is not even past, I don't think this is past the billion dollar mark. It's a company that raised, what, 100 million or something? Yeah, I lost valuation 6 to 650 back a couple of years ago, but that was bubble valuation era. Yeah, so I mean, there's a lot of cleanup work that's going to happen in the next couple of years of companies making hundreds of millions, tens of millions, hundreds of millions, maybe even a billion that aren't growing fast enough to go public.

36:35So you're making a billion, but maybe next year you're making 1.1 million. Maybe nobody really wants that stock. You can't really tell any story. You've had 15 years to figure out how to, or 20 years, how to get this thing to grow faster. All of that, all of those zombie corns, you know, companies going sideways, but they're still billion dollar companies. They have to be dispatched in some way. So there's going to be a lot of this M &A, I predict, or selling of assets in the coming years. and um you know singles and doubles like i've always talked about kind of make the uh industry work because they give lps like little bits of hope you know dribs and drabs of uh you know little distributions that build confidence that oh there's really an industry here as opposed to a four-year you know winter has arrived and you're everything's frozen what else do we got did you see my uber starbucks tweet i sent you yes i saw the starbucks let's get into this one because i you know i i'm i'm in a uh i'll find it hang on okay i'm leaning into my uh villainous uh capitalist era and this one i thought was going to tweak people in fact when i wrote it i was like this is going to get a large amount of hate because people are going to think it's too orwellian or it's too heavy-handed but i watched these people on uh if you look at the i was quote retweeting myself, which is the true sign of a narcissist, but if you look at this union video, if you just play it for a second, it's kind of interesting.

38:08What Starbucks loves to do is allow partners to be themselves or whatever that PR that they want to push. I don't understand how that's in good faith of letting us express ourselves. I don't understand how that's supposed to embody craft and culture and bring us back to that cocky house Okay. Okay. And you said. So your most annoying niece or nephew or they've been is really upset that they cannot wear what they want to Starbucks. And I said to this, like, it's enough already. Like, we're not going to Starbucks for your creative outlet as a barista. We want coffee that's delicious, served correctly and fast.

38:49And Starbucks can't get orders correct. 50, 60 % of Starbucks orders are wrong. Now, it's kind of their fault, too, because there's too many options. But I'm just infuriated by Starbucks because I have to go to it because my daughters love it. Oh, yeah. And I just want them to get the order right. I don't care about your flair. You know, some places, like in office space, they want you to do flair. Tchotchkes. The restaurant's called Tchotchkes in office space. They want you to have Tchotchkes that want you to have personality. I'm not going to Starbucks for the personality of the barista. if i'm in spain or i'm here in miami and i want to get a cortado or a cafe con leche and you know like i guess i do want a little bit of flavor there i'm looking for consistency at starbucks anywhere in the world make it right is this kind of starbucks own fault but like i'm not disagreeing with you when i go to starbucks i just want coffee get me in get me out i don't want to worry about it yeah but i do feel like starbucks themselves kind of created this yes We're the neighborhood funky coffee shop.

39:50They leveraged that. They leveraged it as a place for cool people to be. It used to be, don't forget, 15 years ago, a place to hang out. Right. And I think this barista is correct. Like, that was the vibe. Starbucks changed. The barista didn't change. There's a new sheriff in town. I am officially the CEO of Starbucks. I am the shadow CEO. I'm Darth Calacanis, the shadow CEO of Starbucks. We're getting back to basics. okay not bring your personality i always like yes put a uniform on yes sir no sir yes ma 'am no ma 'am is that acceptable and here's my idea i can break this union i can break oh these individuals and get this back on track darth this is my sith lord era and i thought this would tweak people but look at my follow-up tweet this is my plan you order because i love the starbucks app i use the Starbucks app.

40:48It's great because you can skip the line. You guys use the Starbucks app? Absolutely. Absolutely. It's great because the promise of the Starbucks app is faster, better, cheaper. I'm going to get my drink faster. It's going to be better because you're not going to make a mistake and it's going to be cheaper because you're giving me some rewards. Correct. I'm putting an Uber rating on not only every order, but every beverage, just like DoorDash and uber eats and lyft and everybody else does and that feedback will go back to the entire team at that starbucks in aggregate because you don't want like they know your drink lawn so if they're like oh this cherry macchiato with three extra egg yolks in it they're gonna oh that's lawn's drink whatever nonsense you're ordering i don't 1200 calories you've seen me order coffee i just like an americano black americano that's what that's what this is black americanos are the absolute way to live it is a legit order i'm going to tell you guys that if i'm not getting cafe con leche yeah i'll get a i'll get a flat white i'll get a cortado i'll get an americano sometimes i'm all in on keeping it simple but now imagine so you get the aggregate okay as a team today we got rated this yesterday we got written last week we got rated this you can measure it you can manage it great here's where it gets really interesting i want you to rate every drink How is every drink?

42:06Then we're going to fire the people who get poor ratings, obviously. But I'm going to encourage people. Hey, you gave it five stars. You said it was great service. Would you like to give a tip or an additional tip? You gave a dollar. Want to say something nice to the barista? Pick one of these choices. Want to add an extra dollar? Go right ahead. and then put a picture of that person i didn't put this in the tweet but put a picture of that person if they opt into it or you know if that's the standard you know whatever um and just a sentence about the person so again like bringing your whole person to work oh yeah meet lon he's a screenplay writer and his favorite drink is americana just a little something to kind of guilt you into giving that and then if you're amongst the top 20 you get equity in starbucks You get RSUs, you get stock.

42:54And take this from an entitled group of lunatics who have been over generations distancing themselves for the purpose of Starbucks. Better, cheaper, faster, quality, no mistakes, hot, not cold. Cold when I want a cold, not lukewarm. Make it right, keep it tight, and then give them equity. Carrots and sticks, folks, you have to bring this to starbucks i feel like they you know like ever since the the founder left charles schultz like howard schultz howard schultz yeah charles schultz is the peanuts guy peanuts guy yeah similar similar things they tried to make people happy with basic stuff and ever since he left they just have been involved in so much shenanigans not focused on what matters yeah i feel To me, and this is me personally, but the viral secret menu, millions of ingredients and all these drinks.

43:48Enough. That was the beginning of the end. It's enough already. Guys, guys, guys. We're starting this out a little bit like Old Man Yells at Cloud. Yes. Because Jason says something very important earlier in this segment that undercuts our entire point here. Oh, and I, look. I drink more coffee than I should. I drink a lot of fancy coffee. Five, you have to five cups a day? I mean, I would say no less than five. Ooh, that's a lot. I started early and I've got small children. That's too much. That's too much. I mean, I have a coffee and a Red Bull on my desk right now. Get those numbers up. Those are rookie numbers.

44:18Those are rookie numbers. But here's the thing. We are talking about what we would like to see from Starbucks. Yes. Jason said something earlier. I wouldn't go, but my daughters love it. That's why the secret menu. That's why the flair and the tchotchkes. That's why they want you to have a multi-frap whip, cold foam, whatever. I like Mark Merin's old suggestion. You need two lines. You need like the people are there for fun and then the hardcore users. Like that's all I'm trying to say. I think that's like a window or a little side where if you're just getting like a black coffee, a drip coffee, a cold brew, just go right there.

44:54You get your fix and you're out. And if you, yeah, you want dragon fruit, boba with aramel whip or whatever, you go to the other side. All right. We got anything fun in, you know, Reddit or blue skies falling, any of these great bits and reoccurring segments we have? There was one Reddit thing that we had flagged the other day that we have not talked about. OK. In a post to r slash change my view. This is the subreddit where you can go debate things, convince people to come around to your point of view. moderators this week informed the community that researchers from the university of zurich have been conducting a scientific experiment on them without telling the moderators without telling the community researchers from the university of zurich were posting ai generated comments on cmv change my view threads in an effort to study how ai could theoretically be used to change people's minds let me guess the results i'll tell you the experiment 13 bots posted close to 1500 ai comments to the subreddit 1500 over the course of just a few months that's a lot they're looking at how you know because when when if you're a redditor and somebody's post on change my view changed your mind you give them what's called a delta you give them like a thumbs up this post actually changed my mind okay they're evaluating the rate of deltas awarded to ai posts versus human generated posts like how did ai do it changing people's mind versus human responders you know what i can i have an ai in my life his name is david sacks and he is actually an ai in some ways on like the ukraine right uh the war in ukraine putin just fed in all of his data feeding in but you know there is something to not giving any room for disagreement and just pounding the same points over and over it's a debate tactic so the bots were stalking the post histories of the redditors to whom they were responding learning about them and thus crafting arguments specifically designed to appeal to those people correct okay so jason also the bots were hallucinating so sometimes they would make up arguments that were not true all right it's obvious to me i don't know the results of the study i do know i got the study occurred i gotta think this might be i wouldn't say a hundred times but i could see it being three four five times more effective wow than a human yeah magnitude so out of 1500 ai comments overall over 100 redditors awarded deltas to the bot suggesting the ai had changed their mind that's about six times the rate of a human responder so you almost nailed it you got very close six times better than a human would in terms of changing people's minds.

47:47And by the way, this is what's happening across all systems. This is the argument, Alex, for getting rid of TikTok, because the Chinese government is doing this right now. Words out of my mouth. I'm terrified about what this means just for the broader internet, because I don't think we have the bot problems sorted out. I don't think we have any way as scale to filter out AI generated content. And I think that the average person is such a low information voter to borrow a term from elections that they don't have defense mechanisms. Should we go to Beehive? We got Tyler from Beehive. This is a pretty great company.

48:17I love their product, and it's a super competitive space they're in. Tell us who you're interviewing on today's show. I'm interviewing the indefatigable Tyler Dank from Beehive, which is a Substack competitor, a little bit different. We talked earlier in this show about a cut of revenue that an app store might take or substack. Substack 10 % Beehive, just a SaaS company. Built-in advertising stack, interesting boosts features. Lots to dig in. Dig in. Lots to dig in. Let's go.

48:48Social networks, they come and they go. Internal work tooling seems to come out every couple of years and replace what we used before. But no matter how far we get from the birth of the internet, one service has shown essentially unstoppable staying power, and that's email. Yes, everybody's favorite communication tool to love and hate really does appear to be unkillable today. But that means that we all use it, and therefore startups have a really big prize to go after. And a couple of them have shown recently that email is still so powerful today, it's possible to build a big business on top of the venerable technology.

49:22One of them is Beehive, a super impressive company that we use every day here at Twist. This is now our Twist 500 email. Now, I added Beehive to the Twist 500 not only because I use its product every single day, but also because it's growing incredibly quickly and appears to have a very unique shipping culture. So to better understand how Beehive has grown so quickly and manages to drop new features so very, very often, please welcome to the show. It's Tyler Denk, Beehive's co-founder and CEO. Tyler, how are you, man? This guy's a pro. Honored to be here. It's been a minute since we've talked.

49:55Beehive is shipping like mad. We'll talk about that in a second. But before I get into my questions, I want to pause and let you tell the people exactly what Beehive is in your mind. Yeah. Very simply, we help people send email newsletters. A more official stance would be we help people create, distribute, grow, and monetize their audience, primarily through email. And so we have large publishers like Time. We have talent like Arnold Schwarzenegger. We have journalists like Oliver Darcy. It's like a very wide range of people who leverage email to distribute content and grow their audience. Do you have one particular customer profile that you think is the best one?

50:30Like when I think of like Substack, for example, a competitor of yours, I think about independent media. Is there like a leading group of customers that we have that I should think of? Twist. Twist is our ideal customer. Well, we do send out five to six emails a week with you guys, and it's very, very smooth. One thing I do get in response from Beehive Corporate is a lot of notes about boosts and potential ad deals. And that brings up the fact that Beehive has a multi-part revenue strategy and has that for a long time. Can you tell me just a little bit about when you guys branched out from just being a SaaS company and what led to that choice?

51:02Yeah, I'd even go a step further back in saying previously to Beehive, I was at Morning Brew, and Morning Brew eventually got acquired by Business Insider for$75 million. dollars. Morning Brew primarily made revenue via advertisements. And so what you see at the top of every Morning Brew email is Apple Visa sponsors the newsletter. They get 150 words of copy. There's a few other advertisements down below as well. What they don't see is that there's probably 20 people in that brand partnerships team that's talking to ad agencies and advertisers. There's a team of copywriters. There's an ad operations process to put the ads into the newsletter to get all the data, to package it up, to send it back to the advertisers, and then to renew the advertising process again, right?

51:44And so in seeing that and building the infrastructure and tools while I was at Morning Brew, like that really was the impetus and the opportunity of a lot of these writers are just like a one-person team. They're amazing at writing about sports, politics, tech, whatever it may be. Just because they're amazing at writing about sports doesn't mean you know how to sell an advertising package to Nike or Adidas to monetize your content. I am that person with my own little newsletter. And if you asked me to sell to Nike, What would I show up with? Like a clipboard? I have no idea. Yeah. Feetal position, right?

52:12No idea where to go from there. And so that is like the value prop that we initially started with, right? We didn't launch the ad network day one, because as you know, building an ad network, you need scale, you need impressions. We can't go to Nike and say, we have seven email newsletters on our platform that send up 30 ,000 people. Like they won't pay attention. Now we do two and a half billion impressions a month. And so it's enough where you can go to Nike, Netflix, HubSpot, Roku, which are a lot of the advertisers on the platform and say, we can identify your target audience and get in front of them in a medium that's less switchy than TikTok or Instagram and like a proven platform and medium that works, which is email.

52:48And like inversely, as the content creator or publisher, you don't have to talk to the brand representative at Nike or Netflix, but you still monetize and get the reputation of having these big time brands in your newsletter. So it really is a win, win, win. in the sense of advertisers get this long tail of audience. Publishers get premium advertisements without doing the work. And then we obviously take between a 10 and 20 % cut as being kind of like the facilitator in the ad network. And just for the other founders out there, has that 10 or 20 % cut, is that grown into a material chunk of Beehive's revenue?

53:20Or is it more of a sweetener to the greater pot? We're about 70 % on SaaS revenue, 30 % on ad network. So it's a growing part of the pot. Obviously, we started 100 % SaaS. A third is not small. That's a real chunk. 5 % would be a sweetener. 10 % is real. 30 % is chunky. Now, Tyler, where do boosts fit into this? You guys have another way of driving revenue at Beehive, not just SaaS, not just advertisements, but also, we'll explain boosts probably better from you than me. Yeah. Boost also was born kind of from the Morning Brew experience. I ran growth at Morning Brew, and one of the best channels for us finding other email subscribers was Go Figure, people who read emails.

53:56And so we would sponsor other email newsletters or do what is like a classic acquisition strategy on the internet, which is like co-registration. We sign up for something and like towards the end of the signup, one click, I also want this other thing. And by sending that person to that other thing, that other thing sends you money, right? So it's like basic co-registration on the internet. That was always a huge growth strategy for us at Morning Brew. And I wanted to systemize that and make it available to like a wider network of people within Beehive. So quite simply, Boost is... It's a two-sided marketplace.

54:28So maybe not as simple to explain. But if I want to grow faster, I can say I am willing to pay$2 per lead. Everyone in the Beehive ecosystem sees that offer. They can apply to boost my newsletter. And if I accept them, every subscriber they send me, I pay them$2. So it's like a growth channel for me as someone who wants to grow faster. Inversely, if I want to make money on the platform, I can go through the marketplace and be like, oh, this person is sending$3 per lead. They're doing$4 per lead. So I can aggregate these other publishers that I want to recommend. And for every subscriber I send them, I get$3 or$4 back.

55:03And so it ends up being a very easy, passive revenue stream. And it's like, again, another win-win. People on the platform want to grow faster. They already have a paid budget. They're willing to put money to grow their audience. Other people are growing quickly and they want to monetize this new growth and then they can earn revenue from that. and then we take a 20 % flat rate on that. And then to answer your initial question of where does that fit in, boost is smaller. It's probably between 2 % and 4 % of our monthly revenue. So according to your scale, I think it's a sweetener. To be clear, that's the scale I made up during this chat.

55:34That's not my absolute hardcore mental model, but 30 % definitely was big and 2 % to 4%, I would say like nascent growth business perhaps. Yeah. I mean, it serves both sides of the marketplace really well and it's non-negotiable revenue for us. So I think that's actually more important that it serves a function than like bottom line revenue for us. Yeah, it's probably more contra-churn than it is plus revenue. Like for my personal newsletter, Big Desk Energy, like I have - Which I read, by the way. 5 ,000 a month growth budget. I hope you read this morning. This morning's was good, I thought. I have not read this morning's.

56:08I am slightly under the weather, so I'm behind on, I think, 65 ,000 emails, but keep going. Yeah, it's all good. You could have lied and said yes, and we would have kept on rolling, but I appreciate the honesty. I, yeah, once a Boy Scout, always a Boy Scout, I think is the way that works out. Yeah, but like for me, right, like I actually depend on the Booth's network to grow it. I think it gives me between two and 3000 additional readers per month. So like, yes, it's not like driving tons of revenue for Beehive Bottom Line, but it serves a function for our users, and it's net good. And ultimately, we just want our users to succeed.

56:36Also, it's kind of cool that you're putting up your money to use a paid service on Beehive, because it actually works for you. You wouldn't be putting up 5k a month on that if it wasn't, if it wasn't a good use of your money, frankly. So that's an endorsement. And maybe something we get to later. But yes, me being a user of the platform, I do think is one of the key competitive advantage that I'm in the weeds building this newsletter as if I am just an ordinary user. And people like to say like, oh, but you're the CEO. You know how everything works. I publicize everything that I do so anyone could do it.

57:03But yeah, I do think that helps build a company. So definitely cool. You guys have a multi-part revenue strategy. Has helped grow the business very, very quickly. I was going back through your ARR milestones. you said you came within a couple million of 20 million ARR last year, shooting for 30 million this year. So a company at scale, but was there any loss of focus by having a multi-part revenue strategy early? One thing we hear a lot from folks out there is that founders need to be laser focused on their ICP and their revenue plan. So talk to me about the balance between adding revenue lines and staying focused.

57:35Yeah. So going back to us, like needing to hit some level of scale before we even like started building the ad network, I think we didn't start building it until like 18 months into the business. Okay. Day one, day zero, the plan was always like, we are going to build like a SaaS business. We are going to layer an ad network on top of it and go multi-revenue stream. But like we didn't start building or doing anything behind that vision for 18 months. So focus for the first 18 months. I'd say it's hard then splitting like what I like to describe to the team is like, it's hard enough to build one successful business.

58:05What excites me the most about Beehive is I actually think we're taking two massive home run swings and a successful SaaS platform that can serve being a website builder, a newsletter builder, automations, like everything that we do as like an ESP, in addition to building a globally scaled network, which is an entirely different set of problems. And they're both so interconnected that one not doing well also impacts the other. So we're kind of taking two big swings here. Well, it seems that when we talk about this, the SaaS revenue is pretty easy to understand, But the other stuff makes it better to be on the platform.

58:40So to me, it probably drives customer loyalty. Also, it's probably a good selling point to bring people over. So it doesn't actually feel that distracting per se. It feels actually more complimentary to helping people grow, stay on the platform and also get bigger. So they buy more of Beehive services. So I guess in retrospect, it looks very well threaded. I presume it was tricky to build, but it looks great from the rear view mirror, Tyler. I would say I need to like coin this phrase. is I don't know what this framework is, but there's something that I have observed where we have launched so many features that are totally unique to us that other platforms that we compete with just don't have.

59:14But if we launch this feature and let's say it's four out of 10, like maybe there's some bugs, it's like not as smooth. People ding us and be like, oh, I don't like this platform because this one obscure feature isn't that good. Although it's not offered by any other platform. I don't know how to like better phrase that. I got this. Do you know DJ Khaled? Of course. Yeah, of course. Okay, so he has that album like suffering from success when he like does the thing. That's what you're doing. You're building so much stuff that you're going so far ahead of competitors that if you stumble a little bit, people think you're tripping even though they're not in the picture.

59:45It is just something as like a founder, I think, to be aware of those. Like once you build this reputation of like the value that you provide, there's some certain bar and threshold of an expectation of what every additional feature will offer to users. And when a user churns like, hey, this one feature that just wasn't good. That's why I'm leaving to this other platform. Like that platform doesn't have that feature. And they also don't have half the other things we do. But like we got dinged for not having a 10 out of 10 experience for this net new thing that's totally unique. So that's something that I've learned over time as we've launched more and more features.

1:00:16Does that slow you down in terms of, you know, releasing things like, you know, not in terms of building more stuff, but in terms of actually hitting go on a new feature? Have you slowed down and boosted QA to ensure that you don't have that problem? So we have boosted QA. I was QA for the first maybe two and a half years. And I'm also, I'm QA on one side. And on the other side, I'm getting DMed by dozens of users being like, if you don't launch this feature, I'm churning next week. So I'm typically the engine that is pushing things forward against the will of the engineering team product team, because I'm the one that's dealing with all the customers who are saying that they need these features to continue to grow.

1:00:52That being said, we've come a long way with QA and have definitely gotten a lot better. I also have a philosophy of, if you leave it up to engineers to choose the perfect time to launch something, nothing ever launches. Because in software, there's always the ability to make something 10 % better. And you know the four features that you punted on, but it could come back into the future. And so I think we'll get to the shipping velocity. A lot of it is just totally arbitrary deadlines where I'm like, hey, we are launching this next Wednesday. And whatever state it's in, that is how it's going out.

1:01:24typically engineering product UA falls in line. And I'm also okay with not perfection, right? So if we launched something at 80%, we actually get to 100 % much quicker because the users will relentlessly DM me and tweet at us like, hey, this doesn't work as I expected, or this is cool, but it's missing these five things. And then those five things immediately become top of the list things to do. And a lot of times those five things weren't even on our roadmap before we launched it, right? So I actually think we get to a better product, albeit a much more stressful process by shipping things at like 80, 90%.

1:01:58But that's kind of been our philosophy from day one. All right, I want to bring up a tweet from you that talks about the number of things you guys launched from Beehive in Q1. New website builder, direct sponsorships, at marketplace, multiple sending domains, newsletter builder 2.0, blah, blah, blah. It goes on and on and on and on. But the new website builder you guys discussed, I think was on LinkedIn, how quickly you were iterating that product, shipping new updates to it and so forth. So I'm curious, has your QA and dev team decided to throw you out of a window yet? Or is everyone holding it together as you ship this quickly and also iterate to improve what you have released?

1:02:33It's a huge competitive advantage to be remote because they haven't been able to physically throw me out the window. But if we were all in the same location, I do think that they would want that. Yes. The website builder is extremely exciting to me, right? I think my philosophy and thesis on like the broader creator economy is that we're going to see a conversion or a lot of companies acquiring others and converting it to be like this all-in-one solution, right? So you've seen Circle and Kajabi who started off primarily as courses and community. They launched a newsletter feature last week. They're kind of doing some website and link in bio things.

1:03:08You've seen link in bio platforms also launch email or website functionality. And so we started off primarily... We always had a website component and an email newsletter where like our bread and butter. We acquired Type Dream last summer, which was a AI native website builder. It's like a website builder that competes with Webflow, WordPress, etc. And that was June of 2024. So about 10, 9 months ago? Yeah, 9, 10 months ago. And so that was like our move to say, like our users are already using our extremely mediocre website builder. And all I do is get complaints from our users saying like, hey, I want to launch this custom page.

1:03:44I want a lead magnet. I need a splash page. And it became very obvious that our out-of-the-box website builder was... We were going upmarket and getting more sophisticated users who expected more out of their website. And again, our value prop is the all-in-one. And so, yes, you could build a WordPress website and integrate it to your Beehive newsletter, set up some API calls, you could set up an embed. But now you're managing multiple accounts and plugins and data not syncing properly. And so there really is an advantage to have it all under one roof. Especially if you're selling to writers, man.

1:04:16Like, I mean, no offense to us and the writing team, but it's not like I get excited about setting up a new API call. In fact, it makes me want to die inside. I just want to mess around with my commas and em dashes. Now, the release of the website builder seemed to help contribute to a pretty banger Q1 for the company. You said that you added around 260 ,000 MRR or a little bit more than$3 million of annual recurring revenue. Talking about like, you know, February being better than January. Seems to be like things are going pretty quickly here. Is there one particular feature you guys dropped lately that has been the key driver or is it more the aggregate impact of all the stuff you dropped in the first quarter?

1:04:52Yeah, depending on who's listening, they either think this is extremely cool or extremely lame, depending on how large the company is. Last week, we just had our best week ever and added 30K of MRR, which maybe it's because it happened so quickly. Like just three and a half years ago, we did 2K MRR in the entire month, right? And so like being at a stage where we're adding$30 ,000 of recurring revenue a week, to me is like crazy. Like I'm super hyped up on that. But to answer your actual question regarding like, was there any individual feature? What I've always said, and like some companies have some inflection point where it just goes pure vertical.

1:05:24For us, we've gotten 10 % better every single week and consistently listen to users ship new features. And it's just like an incremental at our size. We probably go grow MRR 5 to 10 % a month. But there's not like, hey, we launched this. Things went money printer turned on. We went full vertical. Things are absolutely crushing. The website builder is probably the closest thing to that, but it's still like in a private beta now. And actually your MRR growth in January was about 6.6%, something that I know because you share more information about your company than pretty much anyone else. There's always been a handful of startups out there kind of building in public.

1:06:01And this makes me as a reporter on the space so happy and thankful. So one, thanks Tyler. On the strategy of emailing people, listening to DMs, posting on LinkedIn, your Twitter account's super active. you are ubiquitous, Tyler. And I'm curious if you think that approach to talking to the market, talking to potential users, current users, is a model that other founders should emulate because it's effective? Or is it more of a Beehive-specific approach that works better because of the business you're in, the types of users and customers you have, and so forth? I don't think it's necessarily Beehive-specific.

1:06:33I do think there's a layer that our users are content creators and are the ones that are sandwiched beside me in the Twitter feed or whatever, because they're also creating content themselves. And I don't think there's ever a should. This is just something that... There's a level of I get enjoyment out of it. I love startups. I love tech. I love this entire journey of building this company. And I have made countless and countless mistakes along the way and think that there's plenty of things that I wish that I had known that most founders either feel more secretive because if they're onto something, they don't want other founders, even in other industries, to know that they have found some secret to success.

1:07:11Or because out of fear of like on the venture capital flywheel, they can't ever show a sign of weakness because they might not be able to raise that next big round. So they keep things very close to the chest. And what that does is it hurts other founders from benefiting from the mistakes and learnings of those founders who have been through those experiences. So part of it is slightly altruistic of like, I do want to help other startups and founders. I think more startups and companies being built and having success is like net goods for the world. And if people can benefit from my shitty mistakes that I've made, and I can summarize that, package it up, send it, and people will not make that mistake in the future.

1:07:47And that increases the odds of their success. Like that's net good for everyone, unless it's our competitors. And that's great. It's a form of brand marketing, I think, which actually, we don't really have time to get into this, but you guys just talked about dropping, I think it was like a half million dollars on Subway ads and that sort of thing, which was overall pretty effective for the company. So the first time we've ever done brand marketing, when you get around to reading my email newsletter today, that's what it was about. Oh, well then I read it on the web then. Good, I actually did read it.

1:08:13Ah, look at that. Full circle moment here. So first year of business, we've never spent a dollar on acquisition, right? I think a lot of startups, they very quickly fall into, we raise money. Let's put money into the Facebook and Meta machine and the Google machine. And that's how we're going to scale users and revenue. We didn't have a ton of money. And I just thought that it would be healthier as a business to figure out how do we grow organically from word of mouth, from product-led growth, build our funnels. And after three and a half years of relentlessly building features, and with the roadmapping Q1 that you displayed earlier, I feel like we finally reached the point of Beehive stands alone as an incredible product that has feature parity with all the incumbents in the space.

1:08:54With the newsletter builder and the website builder that now expanded the market of who we can serve, I felt like it was the perfect time to kind of reintroduce ourselves as the campaign is the one place to build. And it's encapsulating whether it is a newsletter, a website, a landing page, a community. Beehive can do that. And so that is like the lead up to doing this brand marketing campaign, which was a Subway ad as well. One last question before I let you go. It is a particularly busy news cycle out there. And I mean, right before we jumped on this interview, I was just thinking about what does 104 % tariffs mean on China-US trade relations?

1:09:35And there's also, as you mentioned earlier, some AI startups that are going from zero to a kajillion dollars in revenue seemingly overnight. So for founders out there who are working on something and building it, possibly in obscurity, what can you tell them about staying focused, staying motivated, and keeping around the prize while the world tries to emulate around us? I did write something about this recently. I think it's one of the most difficult things, right when you see a company go from zero to 20 million in revenue in three months and i'm like dude i've been doing this for three years i have so many gray hairs from dealing doing this and they don't i don't see a single gray hair on that head they're on the side they're on the side okay all right the fact that they went from they they're doing more revenue than we have done we've been building this for three and a half years and i've had so many lessons like it's very humbling and it's also i think the earlier you are in your journey the less you have to lose so the easier it is to get wide-eyed and see that next shiny thing and try to jump on and latch to it and like jump onto this AI hype cycle, try to pivot to something else.

1:10:29And again, some pivots are good. But I think the thing that in every journey is very different. For us, it really has been just like, how do we get 10 % better every single week? We have a very opinionated roadmap. We listen to users and we do have an opinionated roadmap that I think takes up 80 % of the roadmap in every given quarter. The remaining 20 % is the users ultimately know best and they will let us know when we're messing up and when they want something that we don't offer. And so we have 20 % of flexibility to lean into user demand. And so that's how we remain focused. But it is hard.

1:11:06The news cycle works for you and against you, right? For you, if you ever make a mistake, and it feels like the world is crashing down around you and every employee is like, holy shit, this is the biggest mistake ever. It's very humbling to remember all the crazy shit that's happened in the past few years, people will forget about this in 48 hours and everything is going to be okay. But it does mean frequency and consistency with creating content and making yourself relevant is just as important. Well, Tyler, I appreciate it so much. I want to have you back on in six months to see how you are tracking towards your 30 million AR goal for 2025.

1:11:36But in the meantime, it's B-E-E-H-I-I-V.com. And what is one role you're trying to hire for that's currently a bit tough? Ad seller. So we talked a lot about the ad network. We're doing about$2 million in ad sales per quarter without an ad seller. So that's like the demand from advertisers, like they want to advertise. We're looking to hire a first ad seller to like more legitimize this. And if you do ad sales and you heard$2 million without a seller, that's the opportunity, right? So I think it's a great position and hoping we find someone great. All right. Someone's going to call in and take that from two to 4 million.

1:12:11But in the meantime, Tyler, thank you so much. We'll have you back on. And in the meantime, this is Twist. Appreciate it. Thanks.

1:12:20what would you say uh beehive sub stack is there a number three i know there's that company ghost um that is like the open source project with a hosted one are there any other people in that space because there was this thought that maybe the space of it's not content managed more like email management system yeah i was gonna say extra features yeah wouldn't mail chimp be another big one not anymore i know mailchimp was for marketers really more than uh a subscriber list but i mean i'm sure they fancy them uh but is there anybody medium patreon no those are those are the other names that come to mind but they're a little bit different i think really it's ghost beehive substack are the three that are pursuing the newsletter slash blog with a clear focus on monetization and i think three horses is a good number for that race because i think we get different approaches and different products and i think they're keeping one another sharp okay so beehive flat rate sass they don't take a percentage of revenue substack they take a percentage of revenue ghost open source you're going to need to be a little technical and work on that three great choices for folks uh and a great interview from our guy alex wilhelm we'll see you all and if you want to see the other companies in the twist 500 go to twist500.com we built it it's not brought to you by exactly but we built it using coda and coda has been a sponsor of this program in the past coda.io slash twist twist uh is the code they gave us and they'll give you some free stuff there and they also bought grammarly which is one of my other favorite products so those two companies are together but i don't know grammarly might have sponsored the program at some point anyway i love both those products and it's been a great way for us to try to find the top 500 private companies where are we at what's the number what's the uh there's 318 in the list right now and i have the next, I'm just pulling my spreadsheet.

1:14:07I have the next 16 picked out and I have another eight on the short list. So hopefully Long and I can get the next 20, 25 locked in today if we finish up on time. I really think we got to look at also valuation tables from some of the other parties and maybe what's trading actively on some of the secondary markets to fill in if we missed anybody. If it's trading on a secondary market, then it's kind of, that's a small set of 100 companies. Let's just make sure we cross-reference the secondary market companies, make sure we don't miss any of those because buyers of secondary shares is like one of the great indicators that they're one of the top private companies and we'll see you on Monday.

1:14:40Bye.