#7 - How To Build Two $75m+ Newsletter Empires w/ Beehiiv Founder Tyler Denk

Man, do I have an epic episode for you guys today. In this interview or episode, I interviewed Tyler Dank, who's the CEO and founder of Beehive, which is one of the fastest growing software businesses on the planet today. It's the tool that I personally use to grow my newsletter empire. I'm also an investor in Beehive. Quick disclaimer on that, but he was also one of the very first employees of Morning Brew, which currently does more than $100 million in Newsletter Ad sales every single year. You're probably familiar with the space if you follow me in any way, shape or form, but if you've ever been interested in the early ongoings and secrets behind Morning Brew, if you're curious what the future of the newsletter business, both from a software perspective but also from a advertiser perspective, looks like, this episode is for you. You're going to want to stick around. And as always, if you like what you are hearing, if you're getting any sort of value from this podcast, please hit that Follow subscribe button on YouTube or Apple Podcasts or Spotify and I will see you on Twitter or in my email. Hope you enjoy the episode.

Marketing is about values.

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This in a catalog.

I bought this swoosh because it's ingrained in my soul.

When you have a product that really resonates with customers, the word of mouth grows like wildfire.

Welcome to the Marketing Max show. Now let's dive in. I'm super, super excited to have you on. As we were just chatting about pre hitting record. We have so many things in common. Some friends in common. Maybe we visit the same bars and restaurants here on the west side where we live. But today we have the one and only Tyler Dank. If I'm saying your last name properly, Founder and CEO of Beehive. I am a huge fan. I am an enterprise customer paying a lot of money to not too much. Three different newsletters. Not too much, not too much, but certainly not your your number one customers.

Yeah, let's not scare. We're actually one of the least expensive options.

Oh, Beehive in general is one of the least expensive options. In fact, I moved from Convertkit where I had my two newsletters over to Beehive because I could have three newsletters on Beehive and I would say $4,000 a year with my current size newsletter by switching over to Beehive. So you guys are very inexpensive. I just met. I recently crossed the threshold where I had to upgrade to enterprise so gotcha.

So relative to where you were before, it's more expensive, but it's still correct or.

Yeah, correct. You have your founder, CEO hat on for sure. Making sure that everyone knows it's very affordable. Customer service is great. I've been connecting with, I think, your chief of staff, who has kind of taken over as my, like, designated customer service person. I apologize to her for that, but she's amazing. Everyone on your team is fantastic and I'm just really excited to dive into your experience. Morning Brew before Beehive and Beehive. But do you want to give a little quick background on who you are and what you're up to today?

Sure. I mean, I don't want to steal too much because I have no idea what you're about to ask. Right. So I don't want to steal some of your thunder. But yeah, I. The quick spiel is I joined Morning brew back in 2017 as the second employee, kind of in a role spanning product engineering and growth. So small team, there's just the founders and a writer before me built the website. A referral program that worked very well at Morning Brew, led to over a million subscribers. I built a content management system because I was young and naive and thought that we could build something instead of use existing tech, which ended up being a great move, but in a great experience. But built the CMS that the writers used and then we built an ad management platform that facilitated all of the ads, integrated with the copywriting team, integrated with the sales team, and then integrated with the cms. So long way of saying kind of like a end to end custom built solution at Morning Brew. Morning Brew went on to scale pretty successfully. Got acquired by Business Insider, and then I did a quick stint at YouTube and then started Beehive shortly thereafter. So quick tldr on my background.

Well, I did a ton of research on you, which doesn't sound stocky at all, but I did a ton of research for this podcast because the last few podcasts I did like 10 minutes of research and those ended up being the best questions, the most insightful. So I said, let me. Let me dig a little bit deeper for Tyler. Let's start from what I consider to be the beginning, which is certainly not the beginning for you, but college. It was fascinating to me that you were, I think, an engineering major in college in some way, shape or form. Most of the entrepreneurs that I meet these days are marketers by trade or just business people from day one, and then they go on to hire the engineer, hire the product Developer or hire the person that's going to be servicing the revenue if it's a service business. Where did you first find interest in engineering and how did you know you wanted to be an engineering major?

Yeah, I mean it even probably starts back in high school. I signed up for like a physics class because everyone else said it was like very difficult and challenging. And I've like enjoyed math all my life, so I'm really just a huge nerd. Got into physics and like loved it. I thought it was so interesting. Had a legendary professor in high school. I didn't know what engineering was in middle school or high school, but it was the ap. Physics was like the feeder into engineering at the University of Maryland. And our high school teacher is just a huge advocate of the engineering program. So that's the first time I figured out like, okay, I like physics. I like solving hard problems. There's like constraints and formulas and you just have to figure out kind of what the fuck to do. And there's a lot. And it was always like really interesting to me to work through those types of problems. So that's what led me to engineering. I did electrical engineering for a semester my freshman year. I was also pledging a fraternity. I didn't have the work ethic. I just like showed up to college and like definitely partied a lot. Didn't have like the studying as like a primary motivator at the time. So got bumped down from electrical engineering to mechanical engineering, which was a great experience. Did that for four and a half years. Self taught software developer, somewhere in the mix as well. But that's kind of like what led me to engineering.

I know we alluded to it a little bit before, but you know, were one of the first few hires at Morning Brew. For anyone that doesn't know Morning Brew, I considered them to be, tell me if this is wrong, but I consider them to be one of the first two major newsletter businesses of what we consider to be right, a newsletter. Business. Morning Brew and the Hustle kind of invented this concept, at least for millennials, of sharing interesting business, tech, finance, Wall street news in a fun format in your inbox every single morning. Morning Brew went on to be sold for I think 70 + million dollars. They're doing now well over $100 million a year in revenue. How did you land that job? What was the first interaction that you had with the Morning Brew team and how did you decide to give them a go?

I mean, funny enough that you went to the Hustle as like the first two, we actually Looked at the scam. The Scam was like the first email newsletter that millennial women primarily were like, advocating and love. Like being up to date with like their trendy news and stories and ambassador program. So early days of Morning Brew, we actually copied a lot of what the skim did. So the referral program, the ambassador program, everything was inspired by the scam. The hustle came along pretty simultaneously, but they were kind of our role model at Morning Brew. But Austin Reef, who is currently the CEO of Morning Brew, is actually from Baltimore, where I'm from. So we grew up together, played basketball growing up. We actually went to Israel for a summer while we were in college. I believe we both had internships. It's when he was at Michigan and starting Morning Brew. I started a separate company in college that was more of like a tech platform, like two sided Marketplace, Venture Storm.

Yeah.

And funny enough, he would be like on the. We'd be on the beach. Everyone else is like, kind of like partying, drinking. And me and Austin were just such nerds, like talking about business and business models and return on ad spend. Just like weird that everyone else was not spending time talking about. And he was talking about this email newsletter, how it was growing pretty quickly and that there was some sort of business opportunity and sponsors interested in getting in front of students. And I was like, that sounds kind of simple. I'm building a tech platform. It's so much cooler. And fast forward a little bit, we end up shutting down the tech platform. It was a very difficult two sided marketplace to scale. Austin calls me, I'm at this time just graduated college, have a ton of student debt. He is talking to me about wanting to get into merch. And a lot of people want Morning Brew mugs and T shirts and how barstool actually makes a ton of money from merch. And that was like the initial. He was like, hey, do you want to help us build like a Shopify store to sell T shirts, tank tops, mugs? And I had like no money, was living at home, kind of looking for my next move after college. So volunteered to do that. And then it turned into, hey, we don't have an engineer. Do you want to build this referral program? The skim does it. They're blowing up. Would you be interested in building a referral program for us? And I almost quit three times, but he offered $3,000 and I had like legit less than $5 in my bank account. So figured out how to do the referral program. And he was like, now that you've Kind of proved your worth and can build something. We have a list of 20 things that we've been wanting to do on the engineering side. We just don't have an engineer. So you just want to start working through this list. And one thing led to another. I ended up working on contract for them for about three, four months. And that eventually led to him being like, you just want to come up to New York and work for us. And the rest is kind of history.

So. Eduardo Savin was one of the co founders of Facebook, basically because he lived on the same floor as Mark Zuckerberg. Steve Ballmer was one of the co founders of Microsoft, basically because he lived on the same floor in college as Bill Gates. You and Austin were high school friends and you helped turn Morning Brew into what it is, and now you're off doing your own amazing, epic thing. Is that all fair to say? You're just like them? Yeah.

I love the Mark Zuckerberg, Steve Jobs, Bill Gates comparison to Austin and I. So hopefully that becomes true in some capacity one day.

And I, I know that Austin is. I think if I publicly, I say this, I think he's one of the investors in Beehive. Right? You guys are still pretty good friends to this day. You guys talk all the time and he kind of gave you his blessing to go build Beehive, or was that kind of contentious when you basically took a lot of the insights and lessons and. And learnings from your Morning Brew days and went off to do your own thing?

Very contentious. I'd say less so, I think, from like the insights and experience. I think that's kind of expected. Like, a lot of people start companies from experiences that they have had at, like a previous job or role or life experience. So the amount of coworkers or colleagues who solved a particular problem at one point in their career, realized there was another market to tackle, that their business either wasn't prioritizing, and then they go off and start their own thing. I think that's kind of the story of Silicon Valley and most startups. So I think that's kind of to be expected. That's not where there was contention. I think more so it was. We were like a small team at Morning Brew, and my professional network of people who really knew the space was kind of limited to the people I worked with there. So my two co founders, Ben and Jake, are two engineers that I had previously hired at Morning Brew. So I'd say that's where most of the contention came from. So it's kind of like Hey, I think we're going to launch this new business. It's like tangentially related. We're going to build software for newsletters and I think I might do it with like two of your three remaining engineers. Was like a pretty tough pill to swallow. And like, I'd say there's like a slight rocky time, but we're all good friends now. Alex is an investor in the business. Austin is an advisor and also an investor along with you in this most recent round that we're working on. So full circle. Like, I mean, Morning Brew is crushing it. We gave them an extra few weeks with Ben and Jake. They offloaded their work. They went on to be extremely successful and are crushing it there. We're obviously doing pretty well ourselves and now they're investors and advisors. So full circle, everything's great. But definitely, I'd say in like the trenches of like, in between before really launching, there was a bit of hostility.

There's always a rocky start to those kind of conversations. And from my personal experience when I bought out my business partner and many other conversations I've had with many other entrepreneurs, I'd say 9 out of 10 times it ends up coming full circle and everyone's invited to each other's weddings and everything is shared amongst friends. Plenty, plenty of dinners to be shared and. And good times to be had after the. The time heal heals all wounds things. So glad to hear that. That worked out really well. If you could walk us through a typical day, like in the morning Brew offices in New York. I think there's a lot of secrecy or not intentional secrecy, but I've tried to study Morning brews early days as much as possible. I went back to podcast with Austin and Sampar from the Hustle and the guy who founded Business Insider from like 2014, 2015 when I was building my newsletter. But if you could just walk us through like a typical day, you know, was it crazy and chaotic like a lot of SF startups, even though you guys were in New York? A lot of just tech startups and kind of hostile energy and lots of partying going on. Was it just kind of business and matter of fact, what was the vibe like? And maybe walk us through a typical day.

Typical day is probably harder now to recall, but I'd say like, general vibe was amazing. It was a very young group of mostly post grad. It was a lot of very hungry, talented people, people who kind of had a chip on their shoulder or something to prove. I think there's always something fun and like we're doing it now kind of with Beehive of the sense of there's incumbents, whether it was New York Times, Bloomberg, like you know, traditional media and business news. And then there was a bunch of people who don't have a journalism background who were just sending emails in like a medium that wasn't as not trusted but like used as much as like the main way of consuming news at the time. And we were just like kind of working really hard to grow and compete and get respect in a very competitive business news type environment. And so the vibes were light in the sense that we had a lot of fun happy hours after work networking. Like it was a lot of people who were in New York in their young 20s, but it was also a lot of people very young in their career who were very driven and had a lot to prove. And some combination of like, we have fun but we work really hard and we're really good at what we do. Is like what I found to be so fun about the experience. Something I've tried to replicate at Beehive as well.

Yeah, I remember the early days of my agency, which was in midtown New York. We were probably running around the city the same time, but I remember the oldest person in our office when we got up to even like eight or nine people, the oldest person in the office was 28, you know, and we're doing seven figures a year in revenue and it's just like the most fun thing ever. People are bringing in the person that they're dating that day and we're just hanging out at 5, 30, 6 o', clock, drinking beers in the, in the common space and going out together and all just hanging out. It's just such a, such a vibe. Like being young 20s in New York City, being a part of a startup, nothing beats it.

We were also there for like peak. We work as well. So we had the ping pong tables, we had the unlimited beer tap. We had like 4 or 5pm on like a Thursday day. We're like playing ping pong, drinking beer, about to go to happy hour, going to like some networking event that leads to going out that night, which leads to we were all pretty close and like so close to this day. So going out together, getting super fucked up and then rolling into the office and getting bagels at Leo's down the street. Friday morning is like pretty like recurring thing. But the thing is like it wasn't like that happened, but we would also work super late Friday to make up for it and like shit got done. So that was like, kind of like the most cliche. Work hard, play hard, but we had a lot of fun. We were all between the age of, like, 22 and 26, I'd say, for like, the first year and a half. But we were also on a mission to make a difference, to do something in a new medium, to go against a bunch of incumbent players. And we were, like, the full underdog and. And really played the part.

I think, from everyone's perspective in the newsletter community, which Beehive has really played a huge catalyst role in building and growing and driving, especially in the last six to nine months, which we'll get into. I think from that whole community's perspective. Morning Brew is one of the darlings of the industry. One of the huge success stories that got profitable, was acquired for big money. And Sam Par from the Hustle says that Austin is one of the entrepreneurs that he fears the most. He says every time he meets him, every time he talks to him, he's overwhelmingly impressed with the decisions he's making, how he thinks about the business and growth and team and motivation and all that fun stuff. Interesting kind of maybe. Weird question. If you were in Austin's shoes today and you've been the CEO from Morning Brew since day one, what is maybe one or two things that you would have done differently if you were the CEO in the last, whatever, six, seven years? Is there anything that really stands out operationally wise or advertising wise, tech wise, that you were like, you know what? I definitely would have done that differently or I definitely would have done that differently.

I'd say, if you will, one, like, Austin's an unbelievable operator, so I would double down and second everything that Sam Parr says about him. Like, sitting in the room with Austin and whiteboarding for hours and just seeing how he thinks and operates. Just honestly get shit done and doesn't take shit. He is, like, a very, very impressive operator and leader to, like, have learned a ton from Austin, and that was an awesome experience. We would also butt heads all the time. I think we're both fairly stubborn and both kind of have a similar leadership mentality. And so we both think we're right a lot, and we argue about it, and we usually. But that was also, like, part of the vibe, too. Going back to morning, we were like. We'd be in a room and we work whiteboarding and, like, kind of arguing with each other for a full two hours, and then we'd leave and grab a beer and, like, hang out after, and, like, all was good. If anything, he would Respect the fact that I cared so much as an employee. Like the same way I would care if someone's like really fighting me on something. Like there takes a certain level of giving a shit and being smart and having a passion about what you're doing on a day to day that I think is respectful even if you disagree with the person. So it's kind of like the vibe going to your question more directly. Like what I would have done different one is like I did pitch Austin and Alex on Beehive as an employee and seeing the opportunity that people were reaching out to us at Morning Brew asking about our tech stack or referral program, the software we used. And so I was very much in like interested in white labeling our software, which ended up being bi. And they obviously I didn't know at the time they were already talking about the acquisition with Business Insider and whoever else. So it's kind of hard to like mid acquisition talks pivot into like a SaaS model as well in a software provider. So I totally get why they didn't. So that's like the obvious one that jumps out. The other one that I was always really passionate about was I thought there was a huge opportunity. Like we could see all of the clicks and what types of links and content got the most engagement and above and beyond. It was always like investing in finance and like credit card and personal finance related content. And at the same time, the Motley fool is absolutely crushing it with a subscription business, making tons of money and they were one of our biggest advertisers. So they were taking our audience, which they viewed as very valuable, and paying us millions of dollars to advertise in Morning Brew to then push them into the subscription of what the Motley fool did. And to me, I was like, why are we giving them our valuable audience? And then they were coming to us asking about how to send better emails and more engaging content. I was like, this is our bread and butter and we already have the audience. And like we're stuck on this advertising flywheel. Why would we not offer a premium subscription where you charge 69 $79 a month? Basically do the Motley Fool. You would have emails going out two, three times a week only to paying subscribers. We had an amazing network, so we could do like weekly webinars with. If the theme of the week was the airline industry, we we'd have a weekly webinar with like the XCO of Boeing. And you just had like access. We had access to really interesting people. So that was one plug, the other was Just like it was more of what we were already doing. Software is a stretch for a media company, but to create, like, to read S1s and break them down in like, a fun, digestible way, like how Morning Brew breaks down content. I've never read an S1. I'm interested, but I don't feel like reading through it. But if Morning Brew were to break that down in a way that was like in the Morning Brew tone of voice and make me pay for it, in addition to just analysis of different industries, I thought this was like a home run. And given that we had a base of two and a half, three million people, I thought we could have built, like a very profitable subscription business almost like within a few months with a few hires, not like an entire team, but, like, get a writer, a researcher, someone to focus on the tech and subscription side of things that. I mean, clearly you can tell how I'm talking about it. It was like something I was just for a while and I was. I still think they could do it. I think there's a huge opportunity there.

What was the pushback that you got at the time for them saying no? Was it during the acquisition talks also when you were talking about white labeling.

Or a little bit before the acquisition talks? I think there were some concerns about how stock picking is perceived in the market of, like, being a trust. Like Morning Brew is kind of like a Switzerland of just kind of presenting business stories. To say, like, this seems like an interesting opportunity to invest in. You don't want to steer your readers to put their personal cash into investments that they could not work out, and then you're kind of to blame. I think there's a pretty fine line of being able to present information in a way that doesn't say buy or sell, but here's just information you may be missing or signals that we're seeing. So I felt there was a way to do what we wanted to do without crossing the line, but I think there were some concerns about that.

The Motley Four, to some people, is just trash. It's like, you know, they're always recommending stocks that are bad and they only promote the three or four amazing wins that they've had, you know, in the last 10 years. So definitely a risky foray. But I think that's a good topic that I definitely wanted to get into. On this pod. I noticed on your LinkedIn from your time at Morning Brew, it said that you helped launch the Finance Fest, I think it's called, or Finance Festival. Talk to me a little bit about what that was or maybe I'm totally making that up.

But no, you're not totally.

Because you're looking crazy and I'm like, no.

Well because one I one I need to recall what it was because we didn't actually do a finance fest. It was an April Fool's joke, which is why I'm confused why I was on my LinkedIn. But it was at the same time as the Fyre Fest ordeal, where on April Fools we launched a finance fest. Kind of spelled like Fyre Fest, where we created a website, drove a ton of traffic, had people sign up and did something else semi funny around that. But now I'm just curious about your level of research in terms of like where you found that and how that was visible in my LinkedIn and if it is still visible. But that was like an April Fool's thing that we did one year.

That's very cool. On that note though, I am curious why Morning Brew hasn't tried more monetization things. Maybe they've tried it and I just haven't seen it, or they do little small tests. But I'm shocked that they don't do subscription businesses, which we just talked about. I'm shocked that they don't do more events. That seems like the absolute next step, hosting even small intimate events. But Hustle started with Hustlecon, right? $500, eventually a couple thousand dollars to go. Is there anything that you tried while you were there that was something similar but maybe tangentially different or things that you always thought outside of the subscription business would make sense? One of the questions that I get a lot and that I also see in a lot of these newsletter group chats that I'm in is how else can we monetize outside of advertisers and subscriptions? And Morning Brew has one of the biggest audiences in the space. There's so many ways to monetize. I'm always surprised they're not like a private equity fund and going out and buying their best advertisers and just continually promoting them the newsletter and owning it from an equity standpoint. So is there any other things that you think they tried or that you think they they missed the boat on? Besides the subscription revenue like events, I'd.

Say everything of like one to set the stage. I've been removed for three years. So like I never experienced Morning Brew under the ownership of Business Insider and so I don't know how much that changed. Also hard to like I can hypothesize on things, but being away from the business for three years. Like, I only know up until like 2020. I know. One thing that I give them tremendous credit for is almost like the opposite of what the case you're making of how focused they were. Because we were pitched constantly about going into video, going into events, going into podcasting. And one thing that Alex and Austin were relentless about is let's just nail down writing the best newsletter, selling very quality ads that perform for advertisers in the newsletter and growing as quickly as we possibly can to just reinforce this entire cycle. So like, right sell grow is something Alex were like right on the whiteboard and like always talk about. And there were so many big name people who wanted to come in and say, you guys should get into video. That's the trendy thing to do. You get more impressions. You can ride the wave of Instagram and TikTok. There's people who wanted to go deep into audio subscription too. And so I'm sure there's a case from like sitting on the outside, you could say you have such a large audience, you can get into so many different monetization streams. I think they're in that position of power because they said no to so many things up until this point and got really good to the point where they're at like four and a half, five million subscribers now. And they also built a really good playbook. So once you understand how to spin up a vertical, to do it in retail, to do it in emerging tech, to do it in HR, there's a lot of like B2B enterprise value I think that they're trying to explore. And I think for the B2B, I don't know if they're doing webinars and events and like different products and guides there, but my guess is they are. And then they experimented with education as well, which I'm not sure where that is. That was kind of on my way out. It's kind of like the grass is always greener. It's easy to say with that large of an audience. There are so many creative things to do. One, you could be correct. I just don't know what it looks like from like a leadership and like Business Insider standpoint of like what they're willing to tolerate and test. But two, like, I think the point that I am very meticulous about now and learn from Alex and Austin is there's always opportunities that on the surface level, you look at them and you say that does kind of make sense and we could do that. But is it the best use of time. And, like, what are the trade offs that we're giving up to do those things? I get pitched on, like, a potential partnership five times a week where it's like, in theory, the partnership could probably work. And, like, maybe we drive signups to your app and you drive new users to us. But, like, what's the trade off? How confusing is it? What clutter are we adding to our app and our marketing and our messaging? And saying no is something that we were kind of talking about before we started recording. But I've gotten really good at saying no. And I do think a lot of it is from Alex and Austin.

There is 100% a extremely undervalued, underappreciated aspect of business in terms of saying no and sticking to your discipline of I have a great thing, I don't want to break it, I don't want to try new things. It's going to take me months, if not years, to really perfect it, to really figure it out. If we can just become the best at this one thing and stick in it for decades to come, not years to come, but decades to come, we can build something truly amazing that's. That's going to outlast us. So I definitely love that. And it's something that I see as a theme in, you know, the four or five episodes I've recorded on this podcast so far. And as. As well as my career and my life. Something else that came up in my research was the Great Wall of Opens. What is the Great Wall of Opens?

Not an April Fool's joke. So we're getting warmer. For anyone who has an email newsletter, the open rate's kind of like the North Star, despite Apple and everything else. It's kind of how you measure engagement. And we got so obsessed with ABCD testing subject lines four different ways. And obviously, the more opens, the more impressions, the more buzz you're creating on social. The more people that are seeing the copy, the more people that are clicking on the ads. So, like, the open rate really was like our North Star metric. And towards the end of every day, we would always do like a subject line competition of everyone would kind of suggest a few different subject lines. So it became somewhat competitive to come up with which subject line is going to perform the best. And then the Great Wall of Opens was just, I think at 11am because we sent the newsletter at the same time every day. So you can kind of see where it's pacing, whether above or below, like average or like the day before. So at 11am every morning, we would write like 33.5% and like that. Then we knew like that day it ended up at like 48%. So if the next day it was 36%, you're probably going to get 3% higher. So you can kind of project where it was going to land and just like kind of benchmark the. It was just something to get excited about, honestly. But we would like literally have a massive wall on this whiteboard and just every day write what the open rate was at like 10 or 11am just for competitive and tracking purposes.

Yeah, it's kind of like the social network where they have that big TV that updates in real time with how many users Facebook had. And every time it got whatever it was like a million and then 10 million. Every extra 10 million users would have like a big confetti and make a big noise. And even if you were on a call it would just stop and everyone be like, whoa. Maybe for you guys that was like record open rate or a record open number.

10 million users sounds a lot more cool than what we were doing. But still, I don't know, like at a startup it's like early days, you just find different ways to like add entertainment and fun and competitiveness into your work. We're all just super competitive, looking for data points. Email is like not the most data intensive thing in the world. So you look at the open rate, you make it kind of competitive. It's something, it's like a little pick me up at 11am and at the end of the day like you just. We were so obsessed with growing the newsletter and like the more opens meant more referrals meant every, like it's just a flywheel. And so looking up at 11am being able to say like, yo, this yesterday was an amazing day and today looks even better. It's like a nice little morning. Pick me up.

I need to do that. I have a big whiteboard next to my desk and I'm thinking I care more about click through rate because my open rate more or less stays the same. And so I just know that the higher my click through rate, the more money I can charge from advertisers. Was there anything in particular from your time staring at this wall of opens that stuck out to you in terms of things you could put in it, or structures or templates that you can use in the subject line that would lead to a higher open rate? Is there any insight, any patterns that you saw where it's like, oh, if we lead with an emoji, if we have an Exclamation point. If it's three words, if it's seven words. Were there any patterns after all that data?

So we always tried to uncover patterns. We'd have interns like look at all of like the ABCD tests that we were running and seeing if there were any comparisons in like days where here's a sample set of every four way test we've ran in the past six months. Here's the winner. Each day. Does anything jump out to you as like a commonality? There's not like a silver bullet. We typically found like rules of thumb. Like shorter was usually better. So like a super long sentence or question or like anything that was just like too long to read in like a crowded inbox ended up performing worse. So shorter was better than longer was like a general pattern. And none of these are like always true. You could have like an amazingly creative and intriguing long subject line that I'm sure would outperform, but on the whole we saw that shorter would perform better. And then like obviously like attention grabbing but like ambiguous. Like Amazon fires Jeff or something was like one that's like so intriguing. But it wasn't like Jeff Bezos. It was like a different Jeff. Right. Like that where like you would see it and you'd be like, wait, that doesn't make sense. I get the natural like clickbait reaction of like, what the hell are they talking about? So shorter and like slightly more ambiguous where it could mean so many different things that you're like kind of intrigued to click on it. But that's just like clickbait 101. It's. We also found like, yes, you could do like a very annoying clickbait subject line. People get pissed off at it, so use it very sparingly. We do it like try to be clever with it every now and then. But no, like massive themes beyond those.

Yeah. Everyone is always trying to find the silver bullet or the hack for increasing open rates, getting ad sponsors, and there just is none. Like there are definitely little tiny things you can do to increase it a little bit or to move the needle a little bit, but once you kind of get to your 50 plus percent open rate, once you kind of figure out how to get sponsors, what makes it interesting from their perspective, it's just a matter of continually optimizing and tweaking it. Would you agree?

Yeah, I mean everyone looks for the silver bullet. Even like platforms like ours where we have a bunch of different tools, everyone's like, oh, this will make growth and monetization so much easier. And like, relative to what it was, it is easier and there's more tools available at your disposal. But it's so like, at the end of the day, you have to put the work in. Like, the content has to be good, otherwise people aren't going to open it. You have to get in front of your target audience, you have to deliver value and you have to be pretty consistent. And like, those are things you can't really cheat. So it really is like, to grow. Like, Morning Brew is not an overnight success story. It took like three to four years to get to like over a million or whatever it was we're seeing now. A lot of newsletters take advantage of either having an existing large channel podcast, YouTube, TikTok, Instagram, use boost, use recommendations, use a referral program. Like, there's a lot of tools at your disposal where if you use them correctly, you can create a flywheel and definitely accelerate growth in a way that we're seeing people go from 0 to 100,000 and like maintaining a really strong open rate and engagement, which is like unheard of, I think like three, four years ago. But that's also not a silver bullet. They're also either supplementing that with paid spend or being very strategic or partnering with different people who can help promote them. And at the end of the day, if the content sucks, people are going to unsubscribe. So, like, you still have to put in the effort and make sure you're providing value.

To close the chapter on the Morning Brew section of this podcast, talk to us about Beehive. If you could set the stage for or of what Beehive is, how big of a market opportunity is this? Who the competitors in the space are and how you think you differentiate yourself from them, and also who the target customer is. I know I asked you like 17 questions, but set the stage. If someone is new to newsletters, doesn't know the space very well, what is the business of Beehive?

So kind of set the stage already with like the Morning Brew background and kind of what I did there. So the website, the email templates, the newsletter, the referral program, the ad management platform, those are all things that we built custom. Within Morning Brew, we also used an esp. We had to connect everything via API. We had to export data out of our esp, which is like an email service provider, and dump it into like a BI tool and then do create like cohort analysis. And point of the story is like, there's a lot of moving pieces to have a full ecosystem of understanding One who your readers are being able to create content and send it via email, being able to create content stored online. And then like the insights and monetization and growth. So those are a few of like the different pieces. What Beehive is is kind of like morning brew in a box in a way. It's an all in one platform that we both. You can create content and host it on a website that we host. You can send a newsletter. The newsletter can have growth tools like a referral program to incentivize your readers to refer other readers. We have a recommendation network, so you leverage from the thousands of active newsletters. In our platform we have a Boost Network which is kind of like recommendations but paid and then monetization. There's obviously a wave substack started it. Only fans Patreon. But paying directly for your. Your audience, paying you directly for your work. So we have premium subscriptions. You can sync it up to Stripe. They're your users. We don't take a cut of subscription revenue. So 100% yours. If you want to charge $10 a month, you make $10 a month minus the stripe fees. We have the Boost Network, which I mentioned on the grow side. But you can get paid to promote other newsletters, whatever they're willing to pay per new subscriber. And then the ad network is like our big bet as well, where advertising is kind of the tried and true way of monetizing and content. It's a ton of work. It's a lot of outbound. It's identifying who your target advertiser is, who your target reader is, being able to sell your audience, do the copywriting, do the reporting, and it's like a full team's job. And a lot of content creators are just that. They're a content creator focusing on creating a newsletter about sports or finance or business or whatever it is. And so now that we're doing about 500 million monthly impressions, that's a large enough number where advertisers want to come in and work with us. They don't want to go individually to 15 different newsletters. They can come to us and we can target and help them get in front of their target audience. So that's a little bit of a rant because we actually do a lot and it's getting very overwhelming to kind of quickly run through it. But at its simplest, we are a newsletter platform that helps people create content and send it via email and we also do the website and then we help them grow and monetize.

I switched from ConvertKit, which I talked about earlier, ConvertKit was charging me, I think six or seven hundred dollars a month for the size of my list. And I joined with them I think before you guys even existed and you guys came in and said hey, for the same list size and for a bunch of other features like 3D analytics and a bunch of other amazing things, it's, it's $100 a month. Can you talk a little bit about how you one about pricing and your feature set when you first launched, knowing that ConvertKit was in the space and maybe mention a few of the other competitors that you might not view as competitors, but at least from a consumer perspective, you know, we think about, we could potentially host our newsletter on ConvertKit on Campaign Monitor. I know a guy that has 150,000 subscriber newsletter makes seven figures a year and he sends it from mail or light. So there's, there's a lot of players in the space that aren't necessarily a newsletter tool. How do you think about differentiating yourself and in terms of pricing and features and everything else?

One, it's a very, very competitive space. Like Mailchimp got acquired for $12 billion. I think they're still doing 2 to 3 billion in revenue. Like the market is massive. The difference is a lot of these email tools are centered around e commerce, sales and marketing. So every mom and pop store, rag and bone, mad, happy, whatever, like they all send emails for sales and promotions and clothing and drops. So like almost every business sends emails. I think with like the popularity of Morning Brew, the Skim Axios, the hustle Politico, there's been a real interest in creating a newsletter as a monetizable asset and business. And so obviously my background, we just talked about it for 30 minutes is morning brew. There's a huge, I know the opportunity there and how much money can be made. And so we kind of built our platform with content as the primary driver and like we're building the entire feature set and ecosystem with the Morning Brew model and content top of mind, which is very different from these other email players. I'd also say traditionally the other email players are a cost. Like most SaaS platforms we are looking, yes, we have a subscription cost. It's $99 a month as you mentioned, for everything, more or less. But we are looking to help our content creators and users monetize via like one of three or four different monetization channels. So our goal is you pay us $99 a month. Ideally we're paying you three, four thousand dollars a month in revenue from our partners and everything else. So we should actually be value additive to our users, which I think is a completely different way of viewing who we are as a partner in a platform. And that's our goal and we're finally kind of living up to that now.

That's awesome. I have personally made probably close to five figures. I'd have to tally it up, but from your ad network for sure. I get emails from you guys saying, hey, would you like to run at this cpc? At this CPC we have this advertiser and you guys are a huge value add in that front. And then, yeah, the Boost, I know you launched maybe a month or two ago. I was one of the first people to get on at day one. You guys had that 2x bonus. When I saw earlier this week, you guys also had a 2x bonus. And someone internally said you guys had a way higher success rate than you expected on Tuesday that that cost you guys a pretty penny. Talk to me a little bit about your thought process building out Boosts and how you plan to grow that product. I know today you just announced that you have an algorithm now that optimizes how much money you could potentially make showing different newsletters once someone signs up for yours. Seems like that's going to be a huge catalyst for growth for your customers, but also maybe for you guys because it's a huge value add. Is that something you guys are hanging your hat on and really looking forward to doing and growing over the next few months and years or something else more exciting?

I'm a huge fan of Boost. We came up with the idea, I think, back in like October, November, and like, it was kind of my baby of like sitting on it, mapping out, wireframing, everything. And it took a while to build. It really came from. We had our recommendation network, which is almost like altruistic. I recommend these five people. Hopefully they recommend me. We create a pod. Everyone grows by a few thousand. Like the rising tide lifts all boats. Like, that's amazing. And it works really well. And we still have that. Then we saw like our heavy hitter newsletters being like, hey, I'm paying $4 a subscriber on these channels. They're pretty low quality. I'd rather just pay to have my recommendations, like, boosted throughout your network and have like trusted newsletters promoting us kind of like recommendations. So they took the existing framework of our recommendations that we already had built and be like, can I just pay people to promote our newsletter? And I was like, wait, that's brilliant. Like, why Would we not allow you to do that? We have all the first party data of we know which newsletters are quality, which know the topic and types of content they're creating, we know the subscriber overlap and who you should be targeting. And so Boost really is just paid recommendations. The reason why I'm such a big fan of it is one, it is built on first party data. And we see like when you boost a subscriber and they convert, we can tell if they're opening, if they're clicking, if they're coming from like some sketchy location or IP address or device type. So like quality and spam, because we own the network, we can control that and make sure that anyone who's sending bad quality, we can get them off the platform. And so the promise with Boost is on the gross side, you only ever pay for quality and engaged subscribers if they don't meet a criteria, which is a bit of a black box intentionally so people can't game the system. But if they don't meet the criteria, then you don't pay for those subscribers and they're removed from your list. So it's literally as if you were using Facebook ads and acquiring users for $10, but you only ever paid for users that signed up for your platform and paid you. So like all of the bad signups that fall through the funnel or the clicks that don't convert, like you wouldn't actually pay for them. So it's all upside on the growth side. And then on the monetization side, all of these newsletters are trying to find other ways, as you mentioned earlier. Like they have these audiences, they want to know how to monetize outside of subscriptions and ads to be able to passively just promote other newsletters that you've already vetted and trust and they're paying you 2, $3 per subscriber that converts with your already evergreen traffic coming in. It really is like free money at the easiest level. And then it's just again like value additive. It's hard in the sense that it's a two sided marketplace. And two sided marketplace are very difficult to build as a standalone product, let alone one of like 15 features and products that we have within our ecosystem. So that's like, I'd say the main challenge is like it really does deserve an entire team of engineers, product managers, designers, growth people. And it's like one small subset of what we're doing. But in a perfect world, once it gets ramped up, which we're seeing now, it has people growing Very quickly it has the other side of the marketplace making tons of money. And if we're the platform that does everything else well, it's a great ui, it's a great ux, you can send emails, you have data, and we're paying you hundreds or thousands of dollars a month. It's a really compelling pitch to not leave our platform and I think it's very value additive.

Like I said, I've. I've used Boost before and it's absolutely awesome. Before I switched to Beehive, I was using a similar tool called Sparkloop, which integrated with ConvertKit the last ESP that I worked with. They definitely give you the ability to choose how many opens qualifies a good sender, how many, or I guess a good subscriber, how many clicks in a certain timeframe describes, you know, what is a good sender in your own mind. You said you're intentionally kind of keeping that a black box. Do you guys ever anticipate opening that up and letting people choose? Or you really think people can game the system that much and you guys want to keep it a black box?

I think it's the case in most scenarios where we know better than most, seeing all of the data and where we sit. So I'd actually rather make those decisions and not make it easy to game the system. Like if you know that, oh, you just need to open two emails and then you're considered qualified, then you're paying for it. Like the Internet's big enough and people want money when there's real money involved. I do think you have to be pretty careful of people not trying to scam other people out of money. So we definitely side on the side of caution in most areas where if we can keep it obscure and we, I mean, we see everything, right? So if we see abuse, we can reverse charges, we can fix it retroactively. But I'd rather be on the side of the. Who we care the most about are those who are putting money in and trusting us to help them grow. Making sure they see a positive ROI and aren't scammed out of their money is pretty important for us. And then we have all the data from the IP addresses and locations and opens and clicks. So I think that's like a pretty core advantage to the Boost network over some of the other competitors who are kind of leveraging APIs and pulling data and building segments and trusting other third parties rather than first party data.

Yeah, I was pretty anti Boost or Sparkloop up until you guys introduced Boost or just the concept, I should say I wasn't anti boost, but I was anti the concept of it because I gave Sparkloop a try. I think I spent like five or ten grand on it. And the quality was so low, even though I set the bar at must have this open rate, must have this click through rate, the quality was still really low. When I would email them, they weren't really high quality subscribers in terms of clicking on our ads and signing up for our advertisers tools and everything else. And I actually sent out a tweet that said I really don't believe in this concept. More so outside of the quality. My concern was if someone's signing up for my newsletter and I'm recommending you to sign up to four other newsletters, I'm basically encouraging you to sign up for my competitors every single day. And they're not competitors in the sense of the actual business metric of driving revenue for advertisers, but they're competitors in terms of your time and attention. Inside of the inbox right now with Beehive, it's so easy to stand up a newsletter. It was easy before, but now it's even easier to start a newsletter. Like you said, it's morning brew in a box, right? And so my concern was if I'm encouraging you to sign up for four other newsletters and it's going to be a marketing newsletter because I know that you're coming to mind to sign up for mine because you're interested in marketing. So if I'm recommending you to four other marketing newsletters, I now have to compete with those four other marketing newsletters for your time and attention in the inbox. Every single morning. I have to slave over those open rates like we were talking about earlier, right? And so it just becomes this weird thing where I don't want to have to compete for attention. Everyone wakes up to 30, 40, 50 emails every single morning. It's just more and more and more content and eyeballs to compete with. Leading me to my, my question for you, which is something that a lot of people have been asking on Twitter and in these private Facebook groups. Do you think there is a newsletter bubble or do you think we're on the. The beginnings of a newsletter bubble? Because there are so many newsletters, it's become so easy to create a newsletter, right? We're all competing for the same attention, almost all, you know, newsletters competing for the millions of people who decide to sign up for newsletters every single day. So do you think we're in A newsletter bubble. What do you think of the concept that something like Boost, where we're all just promoting each other and clapping each other up, contributes to the concept of everyone competing for the same eyeballs and the same attention?

Yeah, I'd say a lot of your criticisms of this network and marketplace is why we built it the way that we did and are very careful. So where some competitors are very quick to tout, this person made $200,000 this month through this program. Or like this person's growing so quickly. One, because we actually own the data, because they are building it on top of our software. We know the quality, we know the unsubscribe rate, the open rate, the click through rate, and we can see the quality of what they are promoting. So I think we are intentionally building it almost to our own, not demise, but like, it's been less flashy in the sense that we really are prioritizing quality. What I think we need to do a better job of, and what we're focusing on this week is being able to surface that quality really easily. In order to see the quality, you actually have to go in and create a segment and make sure you're only looking at active people that you are paying for. And then what's the open rate, click through rate, unsubscribe rate, and then compare that to the other channels. I think we can do a better job of making that easier. And if you are using multiple of our competitors to do something similar, I think it would stand out pretty quickly of what you're paying for. And the quality of the subscriber is far superior on Boost than our platform. So to that point, I agree with a lot of your criticisms and that is why we built it our way. We're making less money because of the way we built it, but it's to the benefit of everyone in the ecosystem. As far as, like, promoting others, I think people have been talking about a newsletter bubble since, like, even when we were at Morning Brew and other newsletters started popping up, people were saying, like, Morning Brew and the Hustle, like two newsletters that cover business and tech. Like, that's a lot. One of my favorite quotes that I always reference is Ben Thompson saying that the Internet's so much bigger than you give it credit for. There are so many really niche newsletters on Beehive that I would never think there's an audience for. And there's like 70,000 people opening at like a 60% open rate. And it feels so niche and small and like, multiply that times Thousands. And I think there's just so many different interest groups.

What's an example of one or two that stands out to you?

Different video games. There's types of video games, there are sports, there's like geographic newsletters. So there's a lot of newsletters that focus in like a random city in Canada and they have like 25,000 really active people that are in the community engaging with like restaurants and events that are showing up. So like community is one that I think the local news and Axios Local has like their whole initiative there. But I think local is interesting. But there's like just a lot of random content categories that I just wouldn't expect to have the audience and following that they do, but they exist and they're engaging with emails pretty consistently. So I'm less worried about the bubble. I think we personally live in a bubble on Twitter where there's a small niche of newsletter people who are interested in tech, who live in SF, LA, NY, Austin, and promote a lot of the same content, talk about the same newsletters, talk about the same trends. I think that's why it feels like it could be a bubble. But I would also argue that I don't know, 70% of people don't get news through newsletters or information or entertainment. And so I actually think the market is like very nascent altogether. Another thing, another reason we invested in Portuguese, Spanish, German, Italian, French. I think that there's a lot of morning brew of Country X that are growing and like there's a lot of international markets and growth there as well. So I'm personally not concerned about market saturation or a bubble when it comes to email newsletters.

As you look ahead in the next like three to five years, what are you most excited about in the newsletter space or what are you most excited about on your own product roadmap? You guys ship faster than any other tech product I've ever seen, whether it's a bootstrapped solopreneur or whether it's a big venture backed VC raised startup. Like you guys, like, what are you really excited about? What are you really looking forward to in the next three to five years?

It's crazy that we're considered big venture backed startup in the sense that we've been around for 20 months and I've been pretty vocally anti VC. Like I, if it was up to me, I'd rather not to choose venture money opportunities presented itself and I think we're in much better footing and much more competitive in the market because we did but we're definitely not trying to be on some venture flywheel where we're going for a Series B, Series C. We raised our Series A. We were profitable for two months earlier this year. Obviously post raising, we've hired a good bit and so we're kind of teetering more in the unprofitable in the month to month. But the goal is to get back to profitability as early as early Q1 of next year and get off this venture path and just build a strong, sustainable business. But as far as what excites me the most, like the ad network, by far, I think my vision is to compete with Facebook and Google. They always say like start with like the big hairy ambitious goal. I really do think that there's an opportunity with how many billions of emails are being sent per day to be the go to platform that can help newsletters, content businesses, publishers monetize their content better than any other platform. And obviously Facebook and Google are incredible at what they do and they've built tremendous businesses and that's like what we aspire to build. But there's a lot of really talented solopreneurs, content creators, businesses that could benefit from better monetization opportunities through the content they're creating. And I think that we are in a pretty prime position to build the tools to do that for sure.

100%. Could you see a world where someone could go in and buy an ad in a newsletter or in a group of newsletters in a particular niche? Just like you can go into the Facebook Ads manager and buy Facebook ads without ever speaking to the newsletter? Like is that kind of the path and your big hairy goal?

Not only can I see a world, but depending on when this podcast launches, you might see that world too. But it's coming pretty soon.

Amazing. Wow. So competing with the live intents of the world and the post apex is of the world and all that fun stuff.

Yeah, I mean when you look at Live Intent Power Inbox and those players like one, I think it's pretty low quality ads of what they're serving. And they are a billion dollar plus company serving ads to people, they and subscribers who they don't really know who they are and they don't perform well. They're the shittiest banner ads you can possibly imagine. And it's the same allbirds ad in every single newsletter and issue of the New York Times dealbook. And so if that can be a billion dollar business, I think one it shows you like the upside of what's possible in email as a medium. We are far more competitively placed and under. We are the place where content creators and publishers create their content, where all the data flows into from opens and clicks and locations and interests. We are building like data models on top of all of this and we are the ones that are actually doing the sending and can validate all the first party data and engagement in addition to building tools for our publishers and content creators to collect more data on their readers. So whether it's a sports newsletter and they want to know what is their favorite sports team or league or if they're political, if it's a political content, like what party they lean or whatever else, there's a lot of first party data that we're able to collect. So we're really uniquely positioned in the ecosystem. I'd say how nascent advertising is in email and how low the bar is for how valuable some of these companies have grown is kind of the bull case for what I think we can do. And that's again just one of many revenue streams that we have that kind.

Of just blew my mind. I'm really excited to tweet. I just had a call with Tyler from Beehive and if you're not on Beehive, they're about to drop some news soon that's going to really make it compelling. Almost like you're an idiot for not being on Beehive because you guys are doing it the right way, providing so much value to your customers. And just like you said, it's kind of a no brainer if you use boosts. If you tap into your ad network, it's not even an expense. The hundred dollars is more more than covered from the amount of money you guys are bringing to all of these newsletters. And you're not even taking a cut, which is absolutely amazing.

You kind of nailed it. But I think that is like our vision, right? It's whatever the quote is where a platform is valuable when the value is extracted more than what the platform extracts. I completely butchered that quote, but hopefully the listeners understand what I'm talking about. That is very much what we're trying to do. Like you may pay US$99 a month to get access to all of our tools and we've invested heavily in building really great software. You should see many, many multiples of that cost in revenue for yourself. Where we really are value additive to your stack of whether you're a solopreneur or a business or a publisher, we want to help you grow and monetize however we can and that is finally where we are after 20 months of building in a place where we can confidently say that for most of our users.

I'm happy to say that I'm one of those users. I just got a black card that says I'm a VIP power user of Beehive and I'm an investor and I'm an affiliate. I drive some customers for you guys as well. A lot of other questions we didn't get to I know. Before we hit record, we talked about doing an in person episode already planning round two. If you would grace us with your time again, thank you so much for coming on. Where can people find you? Is there anything else you want to promote besides beehive.com?

It'S the only thing I know how to promote, so beehive.com check it out. It's spelled B E E H I-I V.com. you can find me on Twitter. Dank underscore tweets. That's probably where I'm most active. So either one of those.

You're the man. We'll talk to you soon, man.

Thanks for having me.

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