Inside the beehiiv Playbook with Tyler Denk, Co-founder and CEO

You were raising money for Beehive. What happened?

Not just once, but twice. I got a no from Turner Novak.

So the reason I didn't invest was. Welcome to the Peel. I'm your host, Turner Novak, founder of Banana Capital. Today's episode is with Tyler Dank, co founder and CEO of Beehive, the newsletter platform built for growth.

And every time we press send we would get 500 replies. I absolutely love this newsletter. I can't start my day without reading it. That reader feedback gave me the buy in that there's something here.

We break down Beehive's business model, how it got to a nearly $20 million revenue run rate in three years. How Beehive moves so fast and go inside its strategy of building in public.

We ship as quickly as we possibly can. That comes from the insecurities of we are missing 20 of the largest features that every other competitor has in this market.

When his co founder Andrew passed away less than one year into building the.

Company, by far the worst thing that's ever happened, both my life and for the company.

And the time GoDaddy took the entire Beehive platform off, it was a real.

Oh shit moment of we are much more fragile than I think we are.

If this is your first time listening, I publish new episodes exploring the world's greatest startup stories every week across all your favorite platforms. If you enjoy this, like comment, follow, share and subscribe to my newsletter in the show notes to get future episodes in your inbox every week. Let's talk to Tyler. Tyler, welcome to the show.

What up? Thanks for having me.

So the first question, the juiciest question, I think that I could possibly. Or we could. The topic we could possibly talk about. You were raising money for Beehive and you talked to me. What happened?

Yeah, well, not just once, but twice. I got a no from Turner, no back. So I think for the seed round which granted, no hard feelings, seed rounds are tough. We are pre product, pre revenue. So I think the expectation is like most conversations will lead to a no. So there's like no real hard feelings. But I think the seed plus or extension actually hurt more because that was 8 months later. I think we had 20k MRR like definitely product market fit. And it's like, oh, this company can get off the ground and have paying customers and you are using it.

Yeah.

And the no there I think actually hurt a lot more.

Yeah, well, so the reason I didn't invest was and I think it's a good lesson. It's a good in retrospect for me, but then also for the audience is usually what I do is I just. If I know your prior employer, boss, coworkers or, or sometimes I'll just kind of reach out and just ask like, what do you think of Tyler? Are you investing? So your old boss at Morning Brew, he gave me a hard no, absolutely not. Do not do it. And I did not know the full story behind what was going on, but that's why I didn't invest. It was like, all right. I mean I was pretty good friends with Austin and he's like, don't invest. And I was like, all right, won't do it.

Yeah, I was gonna say. And then he went on to invest. Not in that round, but. But a few rounds later.

Yeah, no. And I was like, I remember thinking, I think I literally said what the hell, like what? So you're one of the first employees at Morning Brew. You kind of built their whole engineering side of the business. I'm not really sure what that all entails. It's a newsletter, it's a media company. But can you just kind of talk about that journey, how you initially joined Morning Brewing?

Yeah, and Austin's obviously a pretty key part of that. And by the way, for the audience, me and Austin are totally boys now. He's, he was our first advisor. He's also an investor. I'm also texting him yesterday, so. But I guess I can get you caught up to like that point where he told Turner to not invest essentially in college, self taught, a software developer, taught myself how to code with me and two other students built this company. It's kind of a two sided marketplace for startups and software developers. And the first lesson in like entrepreneurship one, two sided marketplaces are incredibly difficult. We were also targeting college students which is usually a terrible idea because they have no money, but it taught me a ton of incredible things. 1 like how to build something from scratch. So we were three students, self taught coders and got upwards of like 10,000 users literally from word of mouth, blogging, any we had no budget so it was like a very scrappy which I think you can actually see a lot of that correlate to how we build Beehive today. Like very lean team, very scrappy, not spending a ton of money, not doing anything flashy, just kind of like putting our heads down and getting it done. So fast Forward graduated with a bunch of student debt and that company didn't take off. So living in parents basement with, you know, literally $2 to $3. I have a screenshot of my phone, of like my bank account, like $2.50 in it.

I've definitely had that before. You've got like nothing. You don't know what you're going to do. Any money is money. Basically.

I had literally all of my eggs and like this company is going to be a multibillion dollar company because you kind of have to be delusional as a founder and when it was not a multi billion dollar company. And actually I just forewent having an internship for the past three summers in favor of paying myself nothing. I was left with like nothing unfortunately like in my parents house building and so I started building Shopify stores and like random like freelance gigs as a self taught developer. And I got into a conversation with Austin who's also from Baltimore. And at the time Morning Brew was him, his co founder Alex and a writer. And they had clear momentum. I think they probably had 50, 60,000 subscribers, mostly college students.

This was 2017 or 2016?

2016. 2017, yeah.

So that was like pretty big for a newsletter. Like newsletter wasn't really like a business that people knew about back then.

It was the Skim was kind of like the trailblazer in the space. They've been around for a few years prior. They were like a few million subscribers. And then there was Morning Brew trying to be the Skim. I mean a lot of our early days were just looking at the Skim. What were they doing? Their Skimbassador program, their referral program, the style of their newsletter. Axios was just coming in to launch right around that time as well, like 2016, 2017. And I was on a phone call with Austin driving home from D.C. and we were just like brainstorming. He's like one, he was fascinated with barstool and how a lot of their revenue came from merch. And so that's where we were talking about should we launch like a Shopify merch store for Morning Brew. You have like an avid fan base and I was doing Shopify freelance gigs at the time. So like that was like an in. And then at the time it's, it's common now but at the bottom of every story there's like a share on Facebook, Twitter, LinkedIn and Axios had that. The Skim had that. Morning Brew did it and he was like could you potentially build this? And like straight face. I was like yeah, absolutely. No problem. I've never touched WordPress before. I had no idea how to do it. But I had literally $2 and 50 cents in my bank account. And he offered I think three grand to do this.

Wow. Just to build a share button at the bottom of a email.

It sounds crazy now but like I had never used their ecosystem like their tech. I haven't like got into the code. So there was like a few week ramp up of like what the hell is going on in this website? And like how does it work in email? Like how does it tie it all together? So there's a decent amount of ramp. And I think you're just at the point like I just want this built. So for two weeks I stayed up like 3am every night trying to figure this out. And like the funny thing is I almost quit like four or five times. WordPress is terrible. I like, I just hated everything email as anyone who's coded an email knows nothing that you build looks the way it does in like Yahoo, aol, Outlook, Gmail. Like there's just so many variations. So I almost quit a ton. Fortunately didn't. And long story short, after building that he's like, so the skim has this referral program, could you build that too? And now I'm like kind of familiar with the code base. I'm like, sure, I'll play around with that. And we basically for that summer I just freelanced and built things for 3, 40, 50, 60 hours a week until eventually he's like, you just want to join us full time up in New York. Which was actually never my intention. I didn't look at at the time there were three people sending an email newsletter and I just like did a mechanical engineering degree, self taught developer, had like my hand in entrepreneurship. I was like looking for. I applied to SpaceX, I flew out to California for like a final round at SpaceX. Like I was like into like tech. And this was like a cute newsletter thing that I was just doing for money and had like no real ambition. What I think changed is you kind of have to. As a small startup they gave me full control to like the inbox and like everything that was going on. And every time we press send we would get 500 replies of people being like, I absolutely love this newsletter. I can't start my day without reading it. And it was like that reader feedback that gave me the buy in that there's something here in terms of like what you can do with a valuable audience, which I was very new to. You can sell education, you can do advertising, you can do events. Like there's so much opportunity if you have the attention of these people. And so one thing led to another. I moved up to New York and joined them back in 2017.

And then what was the general business model at the time? It was just couple, maybe a couple hundred thousand subs by then. It was basically sending people kind of the daily news. So that's kind of what Morning Brew was. It was almost like CNBC in an email, like a five minute email. And then you were sticking ads in the counter.

I mean it was all ad based. And at the time it was Monday through Friday, a single newsletter to about 100,000, 150,000 people. He sold me because again, like very small. They didn't raise a ton of money. It was all friends and family. I think there is five, six hundred thousand dollars friends and family. And I had a job offer which granted a whole nother story, but I had a job offer at Deloitte as like a technical consultant, which, you know, whatever, but like very sure thing. I have like $120,000 of student debt. I'm just out of college, $2 in my bank account. And like a very sure thing retirement account can pay off debt. Or joining a two person newsletter in New York that's obviously super expensive to live there. I'm getting paid like an out of college, you know, post grad, whatever. And the business model is like very unsure. He was like, hey, Discover just gave us $100,000 check to advertise for the quarter. And like for me, like see $100,000 come in from Discover, like that was their first big win. But that was the ad model. It was. We're sending emails to 100, 150,000 upwardly mobile people that live in like New York, Miami, Louisiana, disposable income, just recent post grad. And we show an advertisement at the time, just a single advertisement every day and they pay us a few thousand dollars.

And so did you guys, I, I think Austin said, or maybe you told me that you guys. That morning Brew used Sail Through, I think it was called. Is that the product?

So we use a few different things. When I, when I first started, we used Mailchimp because that, I mean for Melchim's credit, the 0 the $0 free plan up until like 5,000 subscribers, which I think they've scaled back since, is brilliant, right? Because Alex and Alston, as a broke college student building a newsletter that's not even a business yet, it's $0 is the cost. It's, it's Alex's time to write the newsletter and there's no additional cost up until 5,000 subscribers. And then at 5,000 subscribers you have Some value. Like you can generate revenue if you wanted harder in those days. But still there is value there. So mailchimp put in tons and tons of newsletters. Early days still does, scaled that up. Then we moved to Campaign Monitor which is just kind of like a more enterprise one. And then we eventually moved to Sail through and I kind of led the migration of all three. So very tough times. Like the biggest pain in the ass process you could possibly imagine. Moving 100,000 and then like 1.5 million emails from one service to another. But also a huge competitive advantage for what I do now and like actually living the process and moving emails over.

Yeah, because I think I've, I've signed up for Beehive before. I've migrated my list over. Pretty seamless. And this is a couple of years ago, this is three years ago, two years ago, I forget. But I mean, pretty seamless process. You guys definitely nailed it down. I, and I still do. When people ask what is the best newsletter product? It, you know, I usually give the nuance of like it depends what you're looking for. But I think broadly the answer is Beehive. You guys have built a really, really good product. I really, really liked using it. So then I guess just generally speaking, like what is the business model of a newsletter today? Like, how do people usually make money on them?

Yeah, I can even complete the story in terms of like what Morning Brew was like what I had built there. And it goes right into like Beehive and everything else. But the value propper at the time, there's like the website component. So everything from the New York Times to CNN.com to every blogger from the early 2000s typically on WordPress and like now there's, you know, Wix and Webflow. But content lives online and so you post your content like a blog. That's where it lives. Then with like the Skim and Morning Brew and these newsletters basically they would then convert different types of content and put it into an email and they would send that usually with like a mailchimp. So now you have two different platforms, maybe integrated if you have engineers. Otherwise you're copy and pasting and then there's like a bunch of additional layers. Right. So the referral program, they're eventually. Once the Skim and Morning Bird did it, a few other companies kind of like white labeled and built their own like third party referral program tools for ads. You can use different ad servers and drop in pixels if you wanted to like pay wall your content, which a lot of, you know, Large media companies do you usually have to build them yourself. You integrate with Stripe, then you have user authentication. Like very quickly you get into the game of if I just want to write because I love writing about sports or politics or tech. Now I have to like hire an engineering team and like piece together a WordPress site with Mailchimp and then put on like some paywall and then drop ads in. It gets very complicated very quickly. At Morning Brew when I say like, I kind of like led the development of a lot of those things. The classic build versus buy decision that a lot of different teams make. I've always been partially because I guess like self taught and like really scrappy. I just love the build side of things. One, it's more enjoyable. But I've been in the buy situation where it's like, hey, you really need this. And you're talking to an account manager who doesn't really give a shit and they're like, okay, we can like flag it to the product team and like maybe Q2 of next year we'll be able to build this. I'm like, well we kind of need it now. We have like a business that has like real needs and like we have a huge friction point and it's actually entirely out of our hands. It's on your product that we're paying you for. And there's just this breakdown of what we need as a business and what they are willing to give us at the time because they have a ton of other customers and either incorrectly or correctly they are not prioritizing what we need to. So after running into that a few times, we built our own website. So like Ruby on Rails backend, like totally custom. So not like a WordPress website. We, we didn't build our own email sender but the referral program built in house the content management system. So what the writers were actually writing.

In, it's kind of like it's like Google Docs with superpowers basically. Like it's just pretty simple interface, multiple people can use it, stuff like that.

Right. And like at Morning Brew we looked at a bunch of other platforms and CMSs to use. But at the time again there was kind of newsletters that existed before but it was kind of like stratachery the scam and Axios and us is like the large like and the hustle kind of. It was like these large newsletter first businesses. So every vendor we looked at was web first. It was here's the SEO features and this is how you publish it to your website. And we were like, no, we don't publish it to our website. We need it to look great in Outlook and Gmail and Apple Mail. And so it was like the product kind of didn't exist in the market. And I was like, we can just build this ourselves. So the content management system we built in house, our writers created the newsletter. We've made it, you know, exactly custom fit to what Morning Brew is. You can drag and drop the stories around. There's the what is brewing story, there's the referral program, press send in one place. It goes to the website, it goes to the email. And that was just like a novel thing. So we could have pieced together and paid tens of thousands of dollars for off the shelf software. But I kind of took a risk on myself at the time and was like, I think I can just build this ourselves. And it ended up working out great.

And then why is email so important? Like, why is it so important to just have someone's email and send and show up in their inbox versus put it online?

Yeah. So it actually kind of goes to what I was just talking about of the blogger days of like are going to CNN.com or New York Times. Like there was a time in college where part of my routine, I'd go to techcrunch.com and just read like five or 10 stories. So it's what we would call at Morning Brew like the push first pool where the it used to be. You, you have your ebolms world, tech fronts, whatever. You go to these different websites, ebombs world.

That is a throwback, that's like middle school, right.

You just go. But that's a kind of like the contrast, right. It's like there's a web destination that you go to and then you realize that everyone in the world is so busy. They have their jobs, they have their responsibilities, they have other things going on, but everyone kind of checks email. So rather than me having to remember to go to techcrunch.com I could sign up for their email newsletter. And in the normal routine of my day, I check my inbox and there's the TechCrunch, you know, newsletter that they're sending me the top stories. So it gets pushed to me. It's effortless for me as the consumer. Why it's valuable as a writer or a publisher is the exact inverse. Right. You're meeting people exactly where they are anyway, which is in their inbox, checking flight receipts or responding to friends and family or whatever else. And like once you get that top of Funnel there is what you initially ask, which is like the newsletter business, which is primarily still ad based, but you can do subscriptions as well, where you charge. It's kind of like the Patreon only fans model. Just charge your readers directly and they have this relationship with you. They pay you $10 a month and you get more content or community or whatever else. But it also just unlocks that top of funnel for whatever else you want to sell them. It's like my personal newsletter. I did a Mastermind in Costa Rica. So like events essentially. And I have the attention of 40,000 founders and startup people. And I sold them seven spots to like a, a mastermind in Costa Rica. And like that's how I generated revenue off my newsletter because I'm in their inbox and they built this relationship with them. So long way of saying there's a lot of ways to make money with email, but it's really just owning the relationship with the reader.

Yeah, it's kind of like the, it's like a daily touch point or however often you send it and whatever the percentage open rate is, like sometimes people don't open it every day, but just, you know, it's something you, you get in front of them consistently. Any kind of online business now is battling the algorithms and email. It's like there's, there's no algorithm, at least not yet. It's like it'll show up. Well, actually, I guess the algorithm is like spam versus, you know, subfolder.

That is kind of the thing no one talks about. Like it's a total own your audience. And it's not like the classic example that people love to give is Facebook sold all these brands and publishers and like getting fans or likes on their pages because as a business that sold umbrellas, if you get thousands of people to like your page and then you post like this new umbrella, maybe it was showing up like 70% of your fans like on their feed. And then all it took was a few product managers to realize they could make more money pushing native posts or community or something else. They changed the algorithm and now when you're getting 70% of your audience, you might be getting 7% of your audience. And that's like the helpless, like you don't really own the algorithm or the distribution. And so email really is like when I press send to like the 45,000 people in my list, 45,000 people, more or less get the email directly from me, irregardless of what some feed does with the caveat that you hit on that, like, there is spam and that's like a whole nother thing and kind of that does live in the hands of like a few black box players, which is like the shitty part of email. But it's a lot different of an algorithm. Like, if you do the right things and follow best practices, you're usually pretty good there.

Yeah. And so I guess wrapping up the Morning Brew story, you had hired a couple people that were on the engineering team. Like, you guys had gotten fairly, you know, decent size, packing a lot of pretty big punch, doing a lot at Morning Brew. What was kind of the, I guess the state of the business when you left or today? Morning Brew and then the insight to then go start Beehive?

Yeah, I mean, I think it's a huge plus one for anyone who's debating large company workforce or like small startup hustle, like learning a lot on the job. I owe Austin and Alex so much for like one is like, they don't have the bandwidth to like be able to micromanage me and tell me what to do. So they gave me all of the trust and faith of like, we trust you. We hired you. Just figure out how to grow this newsletter and build this ecosystem. And So I was 22, building like the core infrastructure of like, how we're sending emails, how our writers are using the platform, how our readers are interacting with our content, and like a total, like, I don't have a boss, I don't have a mentor. It's just like a figure it out situation, which is amazing. So I did that when I was 22, 23 for three and a half years. I joined when we had about a hundred thousand subscribers left. The team was probably about 40 people. We were at three and a half million subscribers on the main list. And then we had like a few other verticals from emerging tech and retail and hr. So more like an established media business. But we were about 40 people doing probably 20 million in revenue in the year that I left.

And it was like 2020. Okay, 2020. Yeah. And then about six or something months later, I think it was acquired by Business Insider.

Even funnier, I. I left kind of like on. So at least like what we led with. So like Austin kind of recommending you not to invest in Beehive. I wouldn't. It was not bad terms because, like, again, like there was three of us in like a closet sized office for years, just kind of building this business, but in anything with like startups and like that type of culture, so a lot of egos and emotion and there's, like, a lot going on, and there's, like, a lot of money on the line as well. Right? Like, they're entrepreneurs. They own most of this business. There's, like, a potential acquisition on the line, and at the time, not many people had left the business. It was a great place to work, I'm sure. Still, it's a great place to work. And I just kind of hit my limit of, like, I came in with pure white space. Like, there was so much to build. And three and a half years later, I kind of, like, scratched that itch. And we were, like, optimizing the website, which is a little bit less exciting for me. And of course, I have these broad ambitions and, like, an ego as well, of, like, hey, I built all of this. I want to be paid a lot more. I want more equity. And Austin's, like, very pragmatic, and he's like, no. Like, you're in New York, you're four years out of college. This is, like, what the going rate is. So there was, like, typical compensation friction, and also, like, where's value being created? And I was there for three and a half years, so I kind of, like, left. Maybe not in the most, like, mature terms. I didn't just, like, pick up and leave, but I was like, yo, I got a job at YouTube Music, and I'm out in two weeks. And I was like, the first person, especially, like, the core, like, early team, to kind of just, like, peace out. So I think there was, like, ego and also, like, you're kind of, like, not putting us in an amazing situation. And then to make matters worse, I had no idea that they were in talks with Business Insider to get acquired. So I joined Google four weeks later. And, like, literally, I think the second week on the job, I wake up one morning and get a notification from, like, 20 of my friends being like, yo, congrats. I can't believe Morning Brew just got bought. I had no idea about any of this. So I think that also leads to kind of, like, the drama and the emotion tied up. Like, Austin, little do I know, is, like, in hardcore negotiations to make millions and millions of dollars. And, like, now a core person on his team is just kind of, like, piecing out, like, weeks before and we're friends, like, a whole weird thing. But that's kind of like what you get into with, like, startups and friends and relationships.

Yeah, that makes sense. And then you're at YouTube for a little bit.

YouTube is cool because, well, one, I joined YouTube in 2020 when they just went remote. And you, you still see the headlines now of like, you know, the bloat of like a massive business for me and like my career trajectory it was. I did like my own startup in college, like amazing experience. I did Morning Brew where I wasn't a co founder but I was a second employee, kind of got that co founder experience. I saw it from three people to 40 people. And then I was like, kind of the thing that I'm missing is like this big tech company and like Google is obviously a behemoth, one of the most influential companies. And there's so much you can learn from being at like a large company of like, how is like the sausage actually made at a company like at Google? And I also love music and so I was actually on the YouTube music team. So for me personally it was I've seen small, like let's do big. I knew I wasn't gonna love big for all the reasons that you can like I love startups. It's a total contrast. But I thought there was some value to learn. Just as like I, I fell into the product role without even knowing what product was. And Google was kind of like the gold standard of product management. So I went to Google. They had just gone remote for the first time from the pandemic and definitely a clash of know they've been in person their entire lives and now there's a bunch of, bunch of middle managers, 30s, 40s, 50s, working remote. It's a summer, they're like by the pool, they're hanging out with their kids. There's like no real processes in terms of like how do you get things done in a remote culture so abruptly for Beehive, we've been remote day one. So like everything we've ever done in our processes are async and remote. A company like Google at 150,000 people being in person every day that of their entire career most likely, and then going remote all of a sudden. I definitely felt like a lot of gaps of I'd finished work at 11am and be like, what do we do now? Cause I was on the startup culture of just Hustle. And I would say generally at Google they're not at the same pace. Which one of their, what was it Sergey just said in an interview, then walked it back.

Yeah, I think Eric Schmidt, also the old CEO, he got, I think they deleted the video. He said he definitely called them out.

He just told the truth in that there are startups that move very quickly and someone could probably go into Google and cut 40 50% of the workforce, and they would crush it with earnings and bottom line and probably have the same output. But that's kind of like what below and middle management does. And, I mean, Google's not the only one guilty of that.

Yeah, I think another example is, I don't know necessarily about boosting the bottom line, but Twitter, I mean, they cut like, 80% of the staff and the company didn't die. Like, everyone's like, oh, it's gonna. The servers are gonna blow up or whatever. And it's still. Still there. I mean, different case on the business side for sure.

And they. They also decided to cut off revenue as well. But yes, they had the cost idea down pat. It. It was the revenue part that they didn't really think through. But no, I mean it. And I see it now, too. We're 75 employees at Beehive, and a lot of people come from larger companies or like, they hit a threshold of, like, this is all I can do. I think the natural thing, partially ego, is like, hey, I want to have a larger team. Partially, is like, I'm maxed out on bandwidth. And I think it's really easy just to say, yes, let's just hire more people, let's add more processes. But, like, I've seen the flip side of, like, how much that slows things down. I think it takes a lot of maturity to realize, like, yes, in your current role, you can't do everything on your plate. But, like, sometimes that's okay. Sometimes maybe we just do it 7 out of 10. And that's totally fine if it means we're saving a whole nother person's salary, benefits, processes, cross functional meetings. Or like, maybe that one thing that you can't do now is fine being done in a month. But I think when you're in the startup hustle and culture, it's really easy, like, oh, we want to do everything right now. And if we're blocked, the answer is just hire more people. I, like, hate that answer. I push against it every. Every week.

Yeah, I think you. One of the things that I think is always interesting is you said you just like, hey, meetings. You just don't like meetings. I don't know if those are the exact words, but why is that?

A lot of it. It kind of goes to, like, the DNA of what Beehive is me. My two co founders are all engineers, and we, like, identified a need in a very crowded market and we had zero. So, like, the only thing to do at the time was to put our heads down. And build new features. And then when we launched, we were the shittiest product in the market because all of the competitors have been around for a decade plus and we like pieced together something over 10 months. So like, then you have users who are used to very polished products telling you like, hey, this is cool, but you're missing 10 features that I absolutely need. So like, in that situation, there's like, there's not a need for like financial projections and modeling and meetings. It's like the users are telling us directly what we're missing and we just need to put our heads down and build it. And so I think four of our first five employees were all engineers. I think it kind of comes from that culture. And I still feel that hustle. Like our competitors are still 5, 10, 15 years ahead of us or have been around longer. And there's just so much to do and meetings are just sometimes necessary. Right. But we're remote first. We do a lot of things Async. I feel most productive personally. And I kind of projected on the rest of the team when I can put in my headphones and like, here's the 10 things I need to do. And at the end of the day, those 10 things are done. Meetings are talking about doing things, a lot of cases without actually doing that.

Yeah, that's cool. I. I know you guys have a really interesting structure with remote. Well, maybe we'll get into it a little bit later. Cause I want to make sure we. We get on. You had this insight to start Beehive. You spent almost four years building Morning Brew. How did it all come together, starting the company?

Yeah, probably two things. One was just seeing the response in the inbox. It's like a very tangible response of how people think about one, mostly the content is like 80% of the replies, like kind of political. Hated that stance. But I'd say that we always got a few hundred responses each day being like, these emails are beautiful. They look amazing in outlook. This referral program is so functional. Like, I've referred it to 10 people, like, what software are you using? And a lot of the people responding either had their own newsletter or. Or worked at a business or company that had like a company newsletter. But Morning Brew kind of became that north star of like a very well run, polished newsletter in the newsletter ecosystem and in being the person who led the development and made a lot of the decisions of how it worked and functioned in that way. When people are like, hey, I really want to use this referral program, is there like a software you could recommend us off the shelf. The answer was no. Like, we built it in house, so it's like, didn't solve their problem. And it was also like, I also built that, like, I know exactly how it works. And so it was like pure demand validation. And people were asking for the referral program, the cms, and kind of like the total package of what we had built. And then at the same time, substack just raised 65 million. So this is like dating it to like 2020, 2021. They just raised 65 million at 650. And at the time, Twitter was just a bunch of angry substack users being like, hey, I can't do these 10 things that are so obvious and available in every other email platform. So there wasn't huge user love, at least visibly from what you would see in the narratives. And I know what we built at Morning Brew was super powerful. We even had the case study that took us from 100k to 3 1/2 million. Arguably one of the most successful newsletters. And here's a competitor who is raised money at nearly a billion dollar valuation. And from the outside looking in, looks like everyone kind of doesn't like it. And so that was kind of the push I needed to say. I think there's something here. When I see more people adopting newsletters, one, I feel like I'm in the 1% of people who really understand how to build the text and the data and the. And everything that it takes to build a successful newsletter. And kind of the stars just aligned to kind of push me over the edge there.

Yeah. And so the. Did you rate? You kind of started building it and you raised money kind of as you were working on it. I can't remember what, what happened first, if you officially launched or if you just did a small round first, what was the order?

Yeah, the whole timeline is super funny. It's. I left Morning Brew. I had my one week before, in between Morning Brewing, Google and I was going to go to San Diego and I got Covid. So I'm just like trapped in my Brooklyn apartment with nothing to do, no plans because my plans got canceled. And I can't sit still. So I'm like sitting there and I think it took three days for me to call Ben, my now co founder, and he was the first engineer that I hired at Morning Brew. I was like, dude, what if we just built like kind of like a Morning Brew in a box, like kind of like a substack, but like much more ambitious in terms of like, what the functionality is kind of like enterprise software meets substack meets Morning Brew. And he's like, dude, that's a lot of work. We've been doing this for three and a half years and we're still not even there. Yeah, I just couldn't sit still on it. So like I literally left Morning Brew and like within a week I kind of like planted the seed of. I think we could do this. It was kind of convincing. Ben and then Jake, the other co founder. So it was us three and Jake was also a software engineer at Morning Brewing. And then we just like after a little bit more buy in like November of that year. So probably two months after I left Morning Brew, we just started building. We built up until the summer, which is when we started talking. I think I got in contact with you probably around July. So July of 2021 is when we kind of had a functional prototype. We could kind of show people no one was using it. I don't even think you could send emails at the time, but it kind of existed. And that's when we raised money, closed our seed round somewhere around like August, September, so about three years ago, and then went full time in November.

Okay. I think a pretty common reason to not invest at the time was probably just like super crowded market. You didn't have like barely any features anyone else had. And then also the market kind of seemed small probably too to some people, like, how do you actually make money here? Is that a common. Was that like a good summary of like the reasons people didn't invest in.

Yeah, I'd say it was like a bloodbath of competition. Right. So you have the incumbents of Mailchimp just got bought for 13 billion or whatever by Intuit a few years earlier.

That was around then too. Okay.

I think this was probably two or three years earlier, but it kind of showed. Well, it was both a good and bad thing.

Yeah. 13 billion. I forgot it was that big. Yeah, that's a massive number.

Might be 11 billion, but yeah, it was definitely a like, oh, you could build a successful email first platform and there are no shortage of people who want to send emails in this world to the, to the extent of $13 billion. But then you also had like ActiveCampaign AWeber Campaign Monitor sales. Like I could rattle off two dozen email providers that are like legacy tech. So those have existed. They're all like very successful multi million dollar businesses. Then you kind of had this new wave of substack which just raised at nearly a billion dollar valuation. And then Facebook Announced bulletin which was like a really half assed effort to like. But I think it was like Malcolm Gladwell, like they had a bunch of like huge names to like launch a newsletter product. So they kind of got the newsletter bug and then Twitter had just bought Review which was like one of the competitors. But like it made it super easy to have like sign up to my newsletter in the bio of your Twitter profile. This was back when Twitter was still like really crushing it at least like from outward looking in. So bloodbath of competition. A lot of established players, a lot of flashy players, big tech's getting into it and then I think people hear newsletter and they think of the skim, the hustle, Morning Brew Axios and they're like, how are you going to build a business? I can name five newsletters. It's like how are you going to build a business that's like has a large exit opportunity with a handful of newsletters? It did feel like a very small space. I think it's still underrated for how many people could launch an email newsletter. One newsletter, just email as a medium and the channel in itself. But yeah, those are definitely the big pushback.

Yeah. Because I think if you talk to, if you talk to any, any vc, they're like, oh, media businesses suck. Like they're not good businesses. That's kind of a little bit of a loaded opinion though because VCs probably shouldn't be investing in media businesses most of the time. Like the traditional model or at least like they've, there's like a graveyard of all these venture backed media companies, but they're actually pretty good businesses. They have really good margins if you grow them in the right way.

And we're not a media business. Right. Like we're, we're a SaaS platform for sure. But we serve media businesses. I think you also in those days too, again we are pre product launching, pre revenue for users. There's definitely a balance when raising money for the first time of selling the vision of what you think this can be. But then you also get the syndrome of like trying to be everything to everyone because like at that point you really can. Right. You haven't proven any concept, you don't have any traction. And so being on the other side of the table as an investor, I think you're kind of looking for like some very narrow focus. And our narrow focus at the time was we can do email newsletters better than anyone else. We just built Morning Brew subset has proven there's a market here. But like the Long term vision is much bigger than just email newsletters. Right? Like we have an ad network, we have other monetization channels. I'd love to be able to sell into publishers and businesses. We sell into VC companies that send their customers and like portfolio company comms all through our channel and platform. So like the market's just anyone who sends email. But if you say that pre product, pre. Pre user, like, you sound like very scatterbrained. So there's a. There's definitely a fine line of focus and go to market with like a clear path to expanding and it's definitely difficult to do as a founder. Yeah.

And I remember too, the thing I thought was really interesting, which I wasn't sure if it would work or not, but I thought it was an interesting pitch, was you wanted to build this kind of newsletter, ad marketplace, kind of like programmatic because you had all the data on the back end. I remember thinking it was like, I think that was the reason I was like really considering it because I was like, man, that's huge. If you can figure that out. Faraz at Lightspeed, who led your Series A. Maybe we'll talk about that later. But he's like, you gotta get him to talk about this thing. So what is that? How exactly is that or. Or will that work?

Yeah, I'd say two things just jumped out. One is I think why I keep. One, I'm super competitive. And one reason why I keep track of everyone who said no in the early days is because it actually is. You're so early. It's not like I don't believe the numbers don't make sense to me. As in, like, you're not showing the right traction or roas. It's kind of like I don't believe in you. Which like I always find is like, that is kind of what seed investing is. Right? Because you kind of are betting on the team. Which is why I have all of our seed investors getting included on our monthly investor updates. Because, like, it is like a person of like a personal.

Yeah, they're good updates.

We were just talking about seed rounds. But yeah, to answer your actual question, around the ad network, I saw firsthand. So again, going back to Morning Brewing, the largest team at the time, when I was there at Morning Brew, was the ad sales team, which in our brand partnerships, which is basically building relationships with different brands and advertisers, a copywriting team, which would then, you know, discover signs a big deal with Morning Brew. They give us $500,000 to run five ads in the Newsletter, we take their talking points, we convert it into bite size. At native ad placements with their copywriting team, we put into the newsletter. And then after the placements go after like a bunch of testing and sign offs, we then report the results of how many people saw the ad, how many people clicked on the ad, they tell us their conversion and like, again, we're just like an advertising channel or like a medium. Us being Morgan grew in this use case. But there's a lot of steps to that process. There's one, you pick the brand relationships, there's networking, there's sales, there's understanding who your audience is. There's being able to tell an advertiser that can spend money on Facebook or Google or Instagram that their money is better spent to get in front of their target audience. Because you have a very niche, engaged audience that trusts your recommendations and they should give you money to put an ad in your newsletter. And so the business model works really well. It's how the Hustle sold, how access sold, how Morning Brew sold. But those were massive teams and massive processes. So in seeing that from the inside out, my bet was one, these brands are having tremendous sec success in email newsletter advertising. But like, outside of like the big few that you go to, there's a huge long tail of newsletters. And if I'm a growth marketer at Brooklinen, does it make sense for me to reach out to a newsletter that has 5000 subscribers? Because at a 50% open rate, that's 2500 impressions. And I can get that by putting like $20 into Facebook. So like, it's just like the juice isn't worth the squeeze for these brand marketers to get in front of this long tail of newsletters. But that long tailed newsletter has like a very trusted audience of people who like their recommendations, very highly engaged audiences. You just like kind of can't get there and like vice versa. Those people can't get in front of these brands. So their thesis was, can we build an ad network that takes the top brands who want to advertise? So right now we have Netflix, we have HubSpot, we have Betterment, we have Better health, we have Monday.com, like very large advertisers who are diversifying away from all their money being in Facebook and Google and getting in front of these very niche audiences ranging from a few hundred thousand subscribers down to like a thousand. And on the flip side, as a publisher, I'm writing my newsletter that I was going to write anyway, and I'm Getting an opportunity from Netflix to pay me a $2, $3 cost per click. I get the brand validation of having Netflix logo at the top of my newsletter. I did no selling, no testing, no copywriting, no reporting and money is deposited into my account just from accepting the ad. So it really is like a win win situation. And once you start using a ton of first party data, we have machine learning engineers building all of these different models, it actually becomes extremely performant and basically tapping into untapped inventory that would have went unsold previously.

Yeah. And to your point, it's you, you just continue to run your newsletter however you might have done it. And it's just free money as long as you are hitting all the thresholds and delivering on providing a good product. So it's kind of a win win and a triple win win, win win. Because Beehive makes money too. So.

And really for us, what makes us different is there have been decades of like email service providers where you like, it's a cost of doing business. You pay Mailchimp $700 a month to send emails. Where I think we have a very interesting opportunity is you might pay us 2, $300 a month, but we may be paying you 2 to $3,000 in earnings from our ad network and our other features. So when you go to like just pure, pure like SaaS business and stickiness and churn, if not only is all of your data and processes built on our platform that's extremely robust, but by turning off of our platform and having to migrate to another one, you're also leaving your primary revenue stream behind. Becomes extremely sticky to turn off that product. And we're starting to see a lot of signs of that as well.

Yeah, and you do something else. I think that you guys also make money from. It's kind of boost is what you call it. I think that's the current name. Can you describe how that works and then how, how do you and the, the publications make money?

Yeah. So it's basically a paid recommendation network. And a lot of again, a lot of our roadmap comes back to experiences that we had at Morning Brew. At Morning Brew we saw like yes, we put a ton of money into Facebook and Instagram and Google and Snapchat. But one of the highest quality readers, again for us, our North Star was we want to convert new readers to the newsletter that have a high likelihood of opening reading and clicking on different content or ads. So we're looking for quality readers who are engaged. And it makes perfect sense that the most Quality readers who would be interested in our newsletter are probably opening their email and reading other email newsletters. So one of our largest acquisition strategies became can we find other newsletters that are not competing with us but tangential, that are our target audience and advertising them. So we would do co registrations, we'd swap like recommendations, we give them a free shout out, they gave us a free shout out. But that was a home run in terms of acquisition. So that was like a known fact going into the Beehive experience that enabling newsletters to find other non competing newsletters and promote their product in there was a winning strategy to grow. And then we'd also have a ton of large newsletters like the Milk Road or other larger media businesses that were on like the blitz scale. Like we need to grow as quickly as possible path to scaling a email newsletter. And they would come to me and say we're spending $15,000 a month on Facebook ads and like we're starting to see diminishing returns. Is there anywhere else you recommend where we could spend money? So there's like a clear use case for these newsletters to want to grow quicker. They were already doing Google and Facebook but they wanted to tap into new channels. And I already knew that newsletters were a very high quality, high conversion channel. So that makes perfect sense as another way to grow faster. And then where it's smart is on the flip side of that newsletters are making 2, 3, $4 per lead simply by recommending other newsletters. So you have one side of the two sided marketplace growing faster, which they wanted to do anyway and paying competitive rates. You name your own price and you have the other side just simply using our product and being a part of the ecosystem, making money also something they previously weren't, making money passively. And then we take it 20%. To answer your question as far as like the business model.

Interesting. Yeah. So you make money from people just, you know the, the core SAS fee. I think you have different packages, I forget what the pricing is, but it's below a hundred and then a hundred or a couple hundred a month for different packages. You also make money from the ad network, which it seems like that's. I haven't, I don't think I remember your latest investor update, but it's decent size, like it's starting to work and then boost also you make money from that, from the recommendations.

I'm extremely transparent on all of our numbers both on Twitter and updates everywhere. So we're, by the time this is released, we'll probably be at a million dollars. Mrr. And that's like the pure SaaS business. The ad network is probably about a half a million a month right now in terms of revenue, ad sales around, you know, 600, $800,000 a month. So that is dollars coming in from a Netflix, from a HubSpot, from whatever.

Else, and that's your cut. Or that's like the total transaction volume.

Technically from like the accounting basis. Revenue is. There's the revenue, which is dollars moving from brand to us and the publisher, and then we take a cut of that cut. So the profit would vary between 10 and 20% is typically what we're taking, depending on kind of supply and demand. Right. So like Netflix, everyone wants Netflix ads. So like, there's higher demand there. We can take a slightly larger cut for other advertisers that are less known, we take a smaller cut, but totally fluid marketplace, essentially. And then boost is a million dollars business per year right now. And that's purely archive. That's not like top line.

Got it. Okay. So if people are paying you about a million a month for software, it sounds like maybe on ad share, you're paying out about 500k roughly. Maybe I'm missing this. And then on the boost, also maybe a little bit smaller, but it sounds like you're almost basically like paying out what your customer, what you're charging your customers for.

The software really is our North Star. There is how many people are paying us, which is like the classic, like SaaS North Star. And for us, where I think it's interesting is how many people are actually making more revenue through our tools than they are paying us. Because once you. That only gives you a ton of pricing power to increase prices. Right. As long as there's a delta. But not even increasing prices just as far as like reducing churn tons of, you know, stickiness in terms of, like, being able to pay out more than what you're paying us.

Yeah, interesting. Okay, so I don't know if we ever actually finished it. So you, you close up the seed round. How did that go? Because I know it. It sounds like it took a while, just based on the times, like, took a couple months.

How.

How did the seed round go?

It's funny because it was time box. I lived in LA for the summer. I was living in New York at the time. And me and some friends got like seven Hamptons house. We got like a menace house in Los Angeles. And so it was like six of us living in this house for like the month of July, 2021. So like very easy for me. I came in with the goal of I need to raise money this month. Like my top focus is, is raising money. And we left the month with the, the term sheet from social leverage. So it was about a month process. So like I guess all things being considered fairly fast but feels like hell in the moment as like anyone can relate that's raising money of just repeating yourself. Also just like a funny time place in my life where I'm living with like my six best friends in this house. I like have a job, full time job at Google. Every waking free moment that I have, I'm just repeating myself in this living room for like all my friends.

They're like shut up, quit. I don't want to hear this anymore.

But it's just funny how it works out that like it was a month lease that we had and like the goal for me was like let's, let's raise money in this month and we hit it. So that was like the timeline we got. We the money hit our bank sometime in August. We went full time. I went full time immediately and then my two co founders joined probably a month later. This was like back in the Walking on Eggshells with Alex and Alston Time where I was like, hey, kind of raise money. They're my co founders. We kind of need to start building this thing and kind of like get a little bit. Get a little bit. We gave them like an extra six weeks to work at Morning Brew to make the transition smoother.

Yeah, yeah. And I definitely remember, like I said, it was just awesome. It was like don't invest. And I mean I'm not going to pretend like I was going to invest 100% anyways, but it was just like that was the hard. It was like, all right, he, I mean he knows he's still a boss. Like he's saying don't do it. So. And it's like I think we mentioned earlier, it's just like the, I think the power of checking references. Like it is super important to get the feedback on the people who worked with them previously for three and a half years. But I didn't know the full story around everything that was going on. Maybe if I would have known the full story I would have maybe poked a little harder. But I don't know. Big mistake.

I literally just wrote a newsletter on the pre launch days because the amount of anxiety I lived with day to day one. I just have. You have your full time job which takes up a decent amount of your time and Then I have this vision of hey, I actually think I love startups. I've always wanted to build my own company. I'm obsessed with this and I see an opportunity of hey, I think there's a real shot, put our heads down, build something, compete and build a successful business. But those opportunities don't last forever and it's a shifting market. Right. So what we went to market with as counter positioning was we have a referral program built into your newsletter program.

So that was the big, that was like the initial sticky thing.

Yeah, it was a very competitive space and for us like, like Substack didn't offer it all. Like the traditional ESP is like don't even think about growth, they just allow you to send emails. Everything outside of like sending an email is like outside of their wheelhouse. So for us it was we can kind of do what Substack does out of the box. You have a website, you have a newsletter. But like our kicker is like we're going to ride the momentum of Morning Brew success and you are going to have a referral program built into it again. Now it's a bit more commoditized but that was our counter positioning. But if you can imagine the stress of 10 months of building this at like glacier speed because it's like nights and weekends for me and my co founders and then their substack who just raised $65 million to like sees the success of Morning Brew and the Hustle and these other growth driven newsletter companies and like in the back of my mind I'm thinking they're going to launch a referral program and that goes our entire go to market like you know, counter positioning. So the amount of anxiety of building something very slowly against a fully funded like full time team and I'm like kind of battling egos with like Alex and Austin who are my good friends and like former bosses at Morning Brew. But I'm also kind of taking two of their for engineers to co found this company with me and there's like legal implications. Like I don't know if I'm like waking up with like a non compete or non solicit and like there's just a lot going on while having a full time job, while falling behind in this market, while also having like this like dream vision of I think we could do this and pull it off and build a business but each day that we're not full time heads down on this is like we're getting further and further away from being able to compete and it's Just a ball of 10 months of anxiety.

And then you did launch. What happened with the launch? How'd it go?

Good. So one of the things when we raised our seed round, so like for anyone listening who kind of raises money pre product, I kind of tipped our hand on Twitter and was like, hey, I was previously built this at Morning Brew. We're building a product that does kind of Morning Brew in a box. If you have any interest in this. And this is like people kind of shitting on substack at the time on Twitter where I was like, just put your email in, collect a little bit of information. So I kind of had like a wait list and we got 450 people on the wait list from that tweet. So that's kind of like what I went to investors with. I was like, it's not the biggest thing, like it's not like a trillion dollar market in my hand, but I had 450 people that have showed some level of interest in wanting to use this product. And I had like 2000 followers at the time. So like decent conversion there. So when we launched we contacted all 450 of them. Obviously like conversion super low. Like they were interested at the time but like picking up and moving their email list. The other, the other cheat code that we did for growth, which I'm surprised more people don't do more of, is our one of the reasons why we had the conversation too. Our seed investors and angels all had newsletters or most of them did. So for example, Liquidity, the meme account on Instagram and Twitter had his own exec newsletter that was using like a, a random email provider and he raised money. And like the first ask is like, look like we just started like we need like a little bit of momentum here. Plus we're like a very like consumer facing product. We have the logo and the footer of like built on Beehive both in like the email and website. So there is network effects of getting large users. It's like the other growth hack is when we, when we convert someone to move over to our platform and they're sending to 100,000 readers, that's 100,000 people that see our logo at the bottom of their footer. So there's like natural network effects in the business in itself which works in our favor. And then we had probably two dozen angel investors that had a newsletter of some sort. Some put up a little bit of a fight and like we're like righteously kind of like, you know, like I have like a full business that like works on this platform and you just launched a week ago. I'm not sure if I'm going to move my entire business that's generating revenue for me into your platform. So I like, I always give a huge shout out to liquidity, no hesitations. Asked, like, our product is so janky at this point. Like, we just launched, he picks up 100,000 emails and just drops it right in. We had no idea what we were doing with like deliverability, scalability. We never even set that many emails and he just starts sending 100k out every day.

So he was the big first customer.

He was definitely our biggest first customer. So I always like love to give shout outs like, because like, looking back now, there's like so many people that like stuck their neck out and took a chance. So like it's something that like from a business sense, from where they sat, did not make sense whatsoever when you're accounting for the risk. But they did it and they put their money where their mouth is and moved over. I also say that because some investors actually didn't. And it pisses me off that like we're like fighting tooth and nail for market share. I say now, now. Like, there's a little bit more competition around allocation. At the time I would have taken any dollars, like, whatever, but like they had a spot on the cap table and they kind of didn't help support us when we needed it the most. So that's always like, tough. But anyway, what I'm trying to get at is for anyone listening, the whole like finding who your target user is and having them invest so they have like an actual financial incentive to use your product and promote it and you're getting beta users who can then give you feedback and make the product better. Some combination of that with the referral program was kind of like our go to market strategy.

Yeah, I think you another thing you've done a really good job at is kind of building in public. And you've, you've done a really good job of building like brand affinity, employee and customer affinity around the product. What do you think you did right there?

A lot of it comes from the insecurities of being a very new product and needing to build whatever narrative that you can that people are actually using this product. So going back to liquidity example, right, he says, like, hey, I just moved over to Beehive. It's going great. It's like the cheapest retweet you could possibly get from me. I'm like, dude, obviously like do that. And then People start seeing, like, okay, I move. I'm not like, super happy with mailchimp or whatever I'm using. I'll try Beehive then. We are very design forward and, like, user focused. They have a good experience. They tweet about it, hey, I just moved over to Beehive. It's so much better than what I was using previously. The easiest retweet of all time for me. Right. And so you start doing that and it kind of like reinforces itself of people moving over, having a good experience, sharing it, knowing they're gonna get a retweet from me, my co founders, our house account. And then it kind of builds this narrative on social media that, like, as an innocent bystander scrolling through your feed, you see seven people just moved over to Beehive. And it kind of sets in like, oh, it looks like everyone's moving. It just creates a narrative. The successful product we're doing.

Yeah, even if it was only seven people, but if all seven of those are elevated, people are gonna be like, holy shit. Beehive must be amazing. Everyone's talking about it.

And especially at the times, like, I. I have noticed, like, Twitter's definitely changed a bit in probably the past year in terms of, like, engagement and like, whatever. But, like, early days, it was hot and we just very easily created this narrative of everyone. And your mother was moving their newsletter over to be. I've been having, like, tremendous success and we would fuel that. So that's part of it. Part of it is like, we. We ship a lot of new features and that comes from, like, the insecurities of. Yes, like, we launched, but we are missing 20 of, like, the largest features that every other competitor has in this market. So the only way to be able to communicate that we are working on it is we ship as quickly as we possibly can. We send an email to all of our users that says, like, hey, we just launched this feature. But it's like custom fields or automation. So it sends a signal to users who probably were aware that you were missing that, like, hey, you don't need to churn. Like, we now offer this. Like, that's no longer a reason you need to churn. So it kind of reassures the existing users. But then we promote it on social, have a bunch of people share it, and it becomes like, now people who are looking at our product, but they're like, oh, they don't have automation yet. So, like, I can't possibly move my email program over. That's very dependent on automation now. That we've projected into like the broader ecosystem that we do offer that now it's legit of people being like, oh, they're like, they just launched something that was the blocker for me, so now I can move over. So it's like churn reduction and then also just like top of funnel awareness. But then when you start shipping features, two to three new features every single week, and you keep doing that, then the narrative shifts from like, yes, they're still missing 10 things, but they ship so many features that by the time I migrate over, they'll probably have already addressed those 10 things. And like, they're very aware that they are missing things and they're addressing them as quickly as possible. So a lot of it's like psychology and narrative and just building that type of momentum. A lot of it is trying to convince people not to churn because we are listening to them and building things and then trying to convince more people who were blocked, that were here, that were totally aware and prioritizing things that they were previously blocked on. And then I guess the last element of building in public of everything from sharing different milestones and hiring strategies and our philosophy uses. If I only tweeted about email newsletters all day, that is like a very small segment of the world who actually gives a shit about like how to grow your newsletter as quickly as possible or like the best growth strategies. But if I expand to like, this is how we hire, this is like our, our onboarding philosophy. Here's like the milestones, here's like the difficult decisions we've made of how we've structured our team, like that now appeals to a very large base of people who are just generally interested in entrepreneurship, startups, business, and that's a much, much bigger market. And so if I can win the ear of someone who's just interested in startups and entrepreneurship because they don't give a shit about emails, but they're very interested in how we run this remote first company. Then I have a fan in them. And when they're at a dinner and someone talks about their email newsletter, they can easily be like, hey, I follow this guy Tyler, he runs this company Beehive. It seems like they have this whole product roadmap development thing down. I think you should give them a shot. It's really just kind of spreading and expanding. Like the luck surface area of people who could potentially follow you to potentially be a future user.

Well, yeah, that's another thing I remember seeing in the, the updates you send out. So you have your Investor updates that you send, which I think is a private list. But then you have kind of your public, public email. Big desk Energy I think is what you call it. It's kind of its own media company. One of the things I think you've said in there is like you don't do meetings on, I think it's Tuesday and Thursday. How, how do you guys structure your weeks and just like product development process and all that stuff with these like hardcore. No, no meeting days.

I've definitely taken bits and pieces from my time at Google and like applied lessons from morning brewing Google into what we do today. In the peak of COVID at Google, I think Sundar, one day I did like, hey, mental health. Well so did like a wellness day which was like one random Friday, like three day weekend. And everyone thought that was the coolest thing ever to have, like be appreciated for working hard and having an extra day off. So we adopted, we do that every single month at Beehive. We have the third Friday of every month, like wellness day. So guaranteed three day weekend every single month. And then there was another thing of like no meetings, where a lot of it comes from the early DNA of the company of just being engineers who needed to build. We didn't need meetings, but eventually we hired someone on support and community and growth. Like there needed to be a little bit of meetings and you like very quickly realize how context switching totally kills all productivity within a small business. So we did no meetings on Wednesday and we would always leave Wednesdays and people would look around and be like, dude, I just got so much done, like everything that was building up from Monday and Tuesday now that we didn't have six meetings to jump into and discuss all these things like entirely cleared my plate on Wednesday. And one day someone's like, dude, I wish I had Wednesday. But like twice a week and like, no question, no hesitation. I like this. At this point we're at 50 people, so it's like kind of hard to like change it.

Wow.

Yeah, I, I listen to that and I go, dude, say no more. Tuesday, Thursdays, focus days. And I made sure everyone moved all of their meetings around so there was absolutely zero meetings on Tuesday and Thursday. And it's still not enough. If I could do, if I could do five days a week, no meetings, we would be so productive. But then you start to like really play with like we're entirely remote. We have meetings where like we have a very light, fun culture. Like people get to know each other and like, it's very limited in the ways that you can get to connect with your coworkers when you are entirely remote across 10, 12 different countries. So when you pull all of that fabric away, it's like what's left? You're just on your computer coding. Like maybe you're the most productive person in the world but you have no idea about anyone else in the team. So I'd say that's a delicate balance. But yeah, right now, Tuesday, Thursdays, no meetings.

So this is just broadly a question from a mutual friend. He's an investor in Beehive. Sasha Kolletsky at Creator Ventures on just the threat of remote work. You have made it work and I think it's your opinion is remote teams will. A well run remote team will beat an in person team 10 out of 10 times. Why do you think that that's kind of a hot take now. We've kind of shifted back and then how do you do it? What's, what's the secret of just like a well run remote team?

I don't know If I'd say 10 out of 10. There was definitely something amazing about being with other people. And like we do our annual off site, like it's incredible to chat with other people. I think when I say would win 10 out of 10 times it's not like maybe the best performing. But if you're going to consider the broader scale of like retention and like employee happiness and morale, there's. If you were to say that I had to show up in an office 9 to 5 and commute 30 minutes both ways, like that sounds so horrible than like building my own schedule. We have an engineer right now that has been in Switzerland for the past two weeks and now he's surfing in like the north shore of Spain, shows up to meetings, gets everything done perfectly fine like it's an outcome based business. But he has the freedom and flexibility to travel, to spend time where he wants, with who he wants without being tied down to a location. So I think that's one element of like just lifestyle. Like we attract people who want to work autonomously and care a lot about their work and don't need someone over their shoulder to make sure that work is getting done. And I think that's like the type of people you kind of want to build a business with. But there's also just like the talent pool aspect. Like if I were to hire our entire team within a 30 mile radius of Los Angeles, this company would have failed three years ago. Like there's just like we, there's like so hard to Find like talent density, right? But the total opposite of that is we open up a product designer role and we hired someone in India who's remarkable. She was like the best person for the job. And thinking through where do they live is such a distant and like archaic way of thinking about like, how do we get the best person on our team contributing to what we want to do? So I think it's some combination of like lifestyle, happiness, retention and then also just like finding the best available talent irregardless of where they live. How we do it is like there's a lot of like subtle psychological things and like ways to like format the company. Again, going back to like the fact that one third of our team is engineers. Like, engineering is so output driven. It is. Here's the four features that we're launching next Thursday. Here's the six engineers in charge of that and either gets done or it doesn't. But there's like nowhere to hide, right? Like you, you like, I don't care if you watch movies all day, if you can get your work done like it's an output based business, can say the same with support, right? Both quantitatively and qualitatively, we have how many tickets are you responding to? And then like your CSAT score, like, are they quality responses? And then for growth and marketing, there's like, we need to grow faster. Here are our sales objectives and output and like, are you delivering or are you not? So without micromanaging, it's just like shit either gets done where it doesn't and if you aren't going to get it done well, like we will find someone who can get it done well. And I think that is just like this shared attitude. But then on the flip side it is everyone at the company has equity in the company. Everyone's like a shareholder. I've run the business incredibly transparently. Everyone knows how much money we're making. Everyone knows how much money we're burning. Everyone knows the bank account, Everyone knows I don't hide, like when there's things that aren't working. It's not like, oh, this might hurt morale. I send a weekly email to the team and there's probably more complaints in there than there is like positivity. But I want everyone to know exactly, like what is not working at the business. Because we hired really smart people and I, we hire them and trust them to help solve these problems, not to like hide and shield them from them. So kind of a long winded rant of like one like very outcome driven one, one Everyone is extremely bought in and, and those are the people we're looking for. Everyone's a shareholder in the business. And so like part of the storytelling is I think we can build a multi billion dollar business and you own, you know, 1% of that business. So like even selfishly for yourself, like what does that mean for you financially? And it's kind of a lot of being a founder is like just storytelling. And I've been saying that this is a multibillion dollar business back when there was five of us. And I don't think anyone outside of myself believe that now as of like April May, we're a quarter of the way to $1 billion valuation. So it's a bit more believable, but some combination of all of those things.

So it sounds like just hiring the best people for the job is just a key part of that. Just so you know you can shift from like a, as in seat model, like a 9 to 5 model to an outcome based. How, how do you hire people? Like what do you, what are you looking for and what's the process?

I think anyone who listened to like my like rant there of like the type of work culture we're looking for, like it either repels you as in I want to do 9 to 5. I don't want to be held accountable for like the outcomes of like the quality of my work. Not in a bad way, but some people just want to plug in like work is not the most important thing. But some people hear that and say, wait, I can. Like we hired someone out of College who was 20 years old and he was shipping production code that was like touching tens of thousands of paying users and making a huge difference like within weeks. And like if you want that type of autonomy and impact, like that is kind of what we're selling. Another example, we have an engineer who like spent three weeks building like a PWA feature. So basically turning your newsletter and website into a mobile app. And we launched it. And one, probably 500 people on Twitter are like boasting about how awesome it is. And the CEO and founder of Vercel is like, this is an excellent example of PWA being used smartly. And here's this engineer who just spent three weeks building this feature and is being praised and recognized by CEOs of other multi billion dollar tech companies. And so it attracts the type of person who wants to take control over what they're building, wants to make an impact and wants to be praised for the work that they do. And some people love that and Thrive and there's enough of them. Some people don't want the accountability and they're probably just not a great fit for the business, but that's totally fine.

So one thing I think that you, you obviously care a lot about the team. You super passionate about making sure everybody is successful that joins Beehive. You're incentivizing people. Give them equity in the, giving them equity in the business. I think a really just crucial, compelling part of the story of Beehive is your co founder, Andrew. Can you tell us what happened there?

Yeah, I can add a bit more context to like who Andrew was because I mentioned two co founders. So Ben and Jake were two engineers I hired at Morning Brew. Software engineers. Incredible. They were like the OG US3. And then somewhere in like that weird period of stress and anxiety of 10 months of building, there's like, oh, there's so much to build. And like, you know, Ben and Jake are married, they're going on vacations. Like I have my own like full time job and you like don't want to lose the magic of we need momentum and like to build things. And so I reached out to this guy, Andrew Blacken who was my advisor at Morning Brew. I guess even to take a step back when I was saying I'm 22 years old at Morning Brew just making all of these decisions. One awesome. But also Austin is smart enough to recognize maybe we should get like a technical advisor where Tyler can ask questions and like figure out that this 22 year old is making engineering decisions as like a self taught developer. Doesn't destroy like our 20 million dollar business. So Austin reached out to his investors, introduced us to Andrew who was like basically my unofficial technical advisor. He like didn't get paid, but he was kind of like a person I could reach out to and be like, I have no idea if like decision A or decision B is the right decision. I'm 23, building this on the fly. And he'd be like, yo, this is how you do it. He also was like exceptional at having zero context. And like on a Tuesday afternoon I'd be like, yo, I think I just broke everything. And he would like drop what he's doing at his full time job in Chicago and fix pretty much like everything that I messed up probably a handful of times. So I had like already proven to me like 10 out of 10 engineer, like unbelievably smart, talented, ambitious. And so in the 10 months as we were building Beehive as a side project, just kind of reached out to him. With like a would you be interested in building this company with us? And he at the time had an opportunity to work as a CTO that fell through. And it was like, very interesting because Ben and Jake again, both married. I basically like both selling them the vision of we're about to be our own boss and like you guys are co ctos. And then all of a sudden I kind of introduced this Andrew guy and I'm like, but this guy Andrew is so smart. And like, I think it was like kind of a somewhat fucked up move on my point, but I kind of pulled him over. But Benedict, we worked together throughout that summer. Andrew's like, I don't want to take any salary. Like you don't have any money to pay me, but like, let's see if it's a good fit. And immediately Ben and Jake started messaging me like, this Andrew guy is the smartest person I've ever worked with. Like a 10x unicorn engineer. So he ended up being the CTO and we launched November of 2021, built the product, raised our seed round in that summer. And so Andrew in May, beginning of May, ends up passing away. So May of 2022, at the time I think we were six employees. So to put like a time and a place and like a feeling into it, it was one. It's so hard to build a startup and here we just raised two and a half million dollars. We have product market fit, we have like 20k mrr. Like there's like a path forward of like momentum. And like, granted, selfishly, my entire livelihood and wealth is tied into this business and we are like, we have something here that's like magical and working. And then Andrew passed away in the beginning of May of 2022. And that was like a huge gut check. One like, you know, like the bus factor, quite literally. Like he was owning shit that no one else knew how to build. We also just had hit our first scaling issues ever as a company when that happened. And then we were also just like, we're riding such momentum, but everyone knows how fragile the company is. At almost $2 million a month. I still feel like the company is incredibly fragile. I think you kind of feel that way up until acquisition or like you're so like 10 years into the business.

Yeah, you're the chairman inside of the CEO or something.

Like there's. There's always like tons of anxiety around just building a business and the fragility of it and losing someone. Like, Andrew was like one again, like a 12 out of 10 engineer. But I think there's a lot of what we do really well that kind of shines through from that experience. One, like going through something as absolutely terrible as that, like nothing else in comparison, feels like a huge problem I'd say two, like to have for engineers quickly like teach themselves like new coding languages in all of the contexts while like we're having scaling issues while like all of our users are completely just complaining about lack of functionality or whatever else is going on. Huge gut check in the business. And so you can, you can tell that it's harder for me to talk about it. Like whenever I bring up Andrew it's like still very, very top of mind and a difficult thing to chat about because. And I think what, what he wanted to get to as well after he passed away, we gave him, he had like a sizable chunk of the business. But because he typical like founding vesting schedule, like the one year cliff, four year vesting, he like actually wasn't with us for a full year just from when he signed on full time. And so we actually ended up accelerating his vesting and then giving it to his mother. So that's like a part of the company. She's like a shareholder in the business which is great and like super motivating but obviously by far like the worst thing that's ever happened both my life and for the company.

So yeah, that is, I mean it's good thing to reflect on getting into maybe a little bit of a different topic. So I know that you, you never really wanted to raise more money. Like you were just kind of like we're break even business in a good spot, don't need to rely on VCs. But then you ended up raising a series A like pretty quickly. What's the story there?

Yeah, so a lot of things there. One, I, I respect the hell out of businesses that are bootstrapped. I think again I kind of goes in line with like the no meeting, like kind of no bullshit, just like get things done. Not that investors cause a lot of bullshit, but there's more processes, there's more expectation, there's more seats at the table. And so if we could have built the business bootstrapped, we, we would have. But day one, we're you know, 26 years old and we have to pay vendors 50, 60 thousand dollars a year up front. So raising the C round kind of had to happen. We had to hire other people. Fast forward, we do like an extension round in 2022. And then for the series A, we had a million and a half in the bank, we were spending about $300,000 a month, but we were also making around $300,000 a month. So like we're kind of break even. And then I think our first time we've ever shot ourselves in the foot, like we did something with like deliverability or like IP whatever, and basically it hurt deliverability for a subset of our users very noticeably for like two weeks. And like they were obviously super pissed off. And it wasn't like a just like band Aid fix. It it was like you just kind of have to let it play out for two weeks. It was just two weeks of people just bitching at you every single day and they happen to be your most valuable users. I think it was at that moment, it was like a real wake up call. It was like, we have 1.5 million in the bank and we're spending what, 20% of that every single month. Granted, we're also making the same amount, but that's making the assumption that you're going to continue to make $300,000 a month. Right. If you stop. If you saw like a huge wave of churn, which is. Didn't happen in this situation, but very well could have, it kind of showed the fragility of the business. I was like, my job of CEO is to ensure we have enough money to keep building. And if worst case scenario like this fails, we have enough money to keep pivoting and trying different things because we have smart people. And it was a real oh shit moment of like, we are much more fragile than I think we are. And then at the same time, some other competitors in the space were reaching out to our top users and offering like $10,000 advances to move to their platform. And it was at that moment where I was like, oh shit, we're like, we're under capitalized. Like, we could have the better team and the better product, but we can just get run over by the competition who's been around for 10 plus years or has like tens of millions of dollars in their back pocket and just pluck off our top users and like have us die a slow death. And it was at that realization I was like, we're way too vulnerable from where we are. So that's what led to us raising 12 and a half million in 2023, I believe.

Yeah, so it was really a function of like, it was, it was good for the business. Like, it was a net good. Obviously you have to sell some of the company away. You own a little bit less to your point of you maybe have to Do a little bit more structure around. You have to do board meetings and know the less fun stuff. But hopefully increases the chances of success and what the outcome looks like at the end of the day.

In retrospect, it was a no brainer the way that it. And because I do send this monthly investor update and we have about 250 people on this, including investors who pass, including our current investors, friends, colleagues. I'm constantly projecting our milestones, our revenue, our growth, these big users who are signing on, which obviously leads to a lot of people reaching out, being like, hey, we'd love to, to lead your Series A. Or like, we love to like invest in the business. So I had been like fighting off months of investor. It sounds like it's a good problem to have, right? But investors would come in now and be like, hey, we'd love to lead a Series A. And for me it's like, I don't want more dilution, I don't want more seats at the table. I don't want this. Like, I think we're, we're break even now and I can see a path forward where slow and steady, we continue to hire one person, scale revenue. Hire a person, scale revenue and build this business sustainably. And then you kind of get like punch in the gut and you're like, you know what, it's honestly just not. We have such a good thing going with like very smart people and an amazing product. I'd hate for a bad month or like a black swan event of like some AI feature just like totally changes like the Gmail algorithm and now we're like shit out of luck finding a new product and pivoting with, you know, two months of Runway.

Well. So you talk about the importance of the investor updates, but I know you also think it's kind of not a good use of time to build all these investor relationships. How do those go? Hand in hand?

Yeah, I guess to clarify, I do the investor updates. For me, the first investor update ever was kind of like, oh, we just got two and a half million dollars. I almost felt like I owed them something as like an acknowledgment. Like you, I've invested in like a few small companies and like when they take the money, I just never hear from them in six months. I'm always like a little confused, like, well, is it working? There's like a seed round, right? So like, or you have users yet? And so after raising around, I was like, I think I owe them like an update of here's the roadmap. Here's the game. Basically, like they're on our team now and here's like the plan of how we're going to figure it the fuck out and grow this business. And so that was like the impetus for it. And I sat down and wrote it. I realized my brain is firing in so many different directions at all times. Like, it's really hard to keep track of, like, what are our priorities? How are we being held accountable? What are we, what did we build last month? What are we building this month? So I found the exercise of writing the investor update to be very helpful in formulating my thoughts. But then I also send it to the entire team again, going to the transparency thing. Like right now all 75 employees know everything about our business. They get the investor update as well. So one it like just aligns priorities from everyone at the business. Like, this is what we're focusing on. This is how we did. This is how we're going to do it next month. And then also keeping the investors because it also, to your point, allows me to brush off investors very easily as well. If I get introduced to someone, they're like, hey, like, would love to raise your or lead your serious c. I'm like, honestly, we're not raising you. Seriously not really interested. Like, I'm not going to keep you updated. One off, I'll just add you. It's like, honestly, a cheat code of saving my time. I just add them to the investor update and now at the end of every month they have full transparency and understanding of exactly how our business is doing. So I don't need to do a one off call fee chat with them. So it's kind of like a cheat code. I think I learned it even at Morning Brew. At Morning Brew, when we would get dozens of people reaching out being like, hey, how'd you build this referral program? For the first, like 15 times, I would schedule an hour call and just walk them through how we built this because I thought it was cool to share that type of thing. And then I was like, dude, I've wasted 15 hours talking to these random people about how to build this. So I spent 10 hours, I wrote a blog post of exactly how we did it. I published it. Anytime someone came to me, send them to the blog post. So kind of the same philosophy. Anytime someone wants to like build the relationship or learn about the business, like you can learn about the business through the investor update. I'm just going to keep building the business.

Is there a link to sign up for the investor update anywhere we'll throw it in the show notes if we have it.

Yes and no. So I now open the live investor updates that I send to, like, our list of 250. That's private, but I have open source, the old one. So you can sign up and receive like, the. I think it's as like a startup nerd. I think it's the coolest thing ever. You put in your email and you get like month one, September 2021 of like, what we did, revenue, what our focus is, and then every single month after that, you get October, November, December, January. So you actually do get a monthly update. It's just two years delayed, so it kind of protects, like, we're not sharing the secrets in real time, but you. It's almost as if you invested in our seed round and are kind of following journey.

Interesting. Okay, cool. Well, yeah, we'll throw a link in the show notes for people to sign up. And that is, I'm assuming, built on some of the automation on Beehive.

Entirely on Beehive. I think that kind of gets into, like, build the whole, like, building in public on my product. Right. So it's like the most meta thing ever. I'm not just like, building in public and sharing, like, oh, this is how we're building this business and how we're hiring and everything. It's like, I'm doing that on Beehive. So I'm sending a weekly newsletter out. I'm open, sourcing and sharing our investor updates. Literally, I copy and paste it from, like, I love it. I copy and paste the exact thing that I sent at that month into this automation that you get each month. And so, for example, I just moved over October of 2020 or August of 2022 the other day. So two years ago, basically to the day I sent this email, it was three months after Andrew passed away. The company was in flux. And in the update, it takes you back into the moment. It's like, very nostalgic. We just hired a new cto, we hired our chief of staff, Both are with us today. We launched five product updates in a single month, which we've never done before. We had four engineers and we launched five huge updates in a single month. So I think it kind of, one, it's super nostalgic. Two, it shows a lot of resiliency, like, three months after Andrew passing away, that we were able to have that output. It's really cool to see, like, that was like a huge inflection point of the business. There's also a gut check now we probably launched two big product updates per month. It's still a lot, but it's like we have 75 people now.

You're slowing down. Yeah, exactly.

Just like more process. And like when we launch something, it impacts 20,000, 30,000 active users. So you have to be very considerate of how does it impact the 40 other things that we built previously and those days, the wild west. But it is a gut check to be like, hey, people complain now that like, oh, we're moving too fast or whatever. Like internally back then we moved ten times as fast. I was answering support tickets and we still figured it out.

So yeah, so what is the secret to moving fast? Like how do you stay nimble even? I mean some people might say beehive small, some people might say it's big, you know, depending on what perspective you have. But how do you stay moving fast?

Yeah, so there's like a lot of, I've written a bit about it. There's like a lot of different things that we do. One is that again, the core team was me and two engineers. So three engineers to start. So when you say moving fast, I think ultimately what you're saying is like we launch products and features very quickly, we listen to customer feedback, we run like a very tight agile process. And that's because one third of the team is engineers. It's always been that way. The DNA is like ship and the DNA is always. The urgency that I felt in the 10 months leading up to launch is we're putting in 10 hours a week and there's companies that have $65 million in their bank account full time. Like we are so behind and we have so much to do. So there's a sense of urgency that I think percolates through me of like we, until we own a lot more of this market share, there is so much more to build. There is like cheat codes. Like we only typically hire full stack engineers. So I think depending where you come from, if you come from a large company, like when I was at Google, there was a front end engineer, was like a back end team. There's like a designer somewhere. There's like a QA person. And so now like the back end team's waiting on mock ups from the front end team and front end team's waiting on mockups from and wireframes from the designer. And then we're not launching because the QA team guys on like PTO and like there's just like so many handoffs and meetings and like the meetings add up so quickly. So I'm very fortunate that, like, both my co founders and all of our early engineers both had like an amazing product sense. So I didn't need to like break down, like, this is how the user would use it. It's like they get it. They, they see the feedback from our users. They, they have intuition about how to build it. And they did front end and they did backend and they wrote test and they qa. So if you can find, I guess what you would call like a unicorn engineer, but someone who's like front end, back end and like, somewhat design and product focused, which is like, again, difficult to find, we were very lucky that two of my co founders are that exact thing that saves you so much meetings and hiring and process and back and forth. And when you, when you have a very high bar for hiring in the early days, again, I have the anxiety that we are so far behind and have so much to build. So I just want to hire more engineers. And maintaining a high bar of like, the quality of engineer that you're extending that offer to was also probably one of the most difficult but, like, biggest G codes. So there were times where I was like, hey, this person seems great. Like, we have so much to build. We can't, we're not getting. We can't get feedback fast enough. Like, everyone's just responding with everything that they want built into this product. And we have four engineers. This person seems pretty smart. They come from a good startup. And the amount of times that either Andrew or like our most recent CTO Noah, would be honestly just like, not a perfect fit for what we're doing, it's really hard to hear that. But as I've seen it play out, when you do find that 10x engineer, that you finally extend the offer to such a level up and worth waiting to find the right person. So those are a few of the cheat codes, I'd say. But lack of process also. I think there's also a philosophy of I don't. Perfect kills all momentum. And like the classic I just put in my newsletter, like the Reid Hoffman quote of like, if it's perfect, you shipped it way too late. We, unless it's touching money or something that's like very fragile, I. We knowingly ship things probably 80, 85% done. Not like blatantly missing something, but not entirely polished because the last 10% can take so much time with guessing of how would a user use this? Or like, what. What do you think they want to do where you can actually just short circuit all that by Getting it in their hands and they'll tell you right away. We launched our product Today, we did four days of QA. I think it's like pretty polished. And immediately 10 people say like, the thing that we weren't even thinking about is actually what we're missing. And so like, now we're addressing it today and tomorrow and it'll be there, but we could have spent another three weeks trying to guess that and not got to the same conclusion. So I think there's an acceptance with good enough and getting in the user's hands where a lot of founders are scared of negative criticism. I send these product Updates, I get 40 people telling me what's wrong with the feature. And rather than that, like hurting my ego, I just synthesize it, put it into a doc and send it to the engineers and they fix it. And like a week later I respond to them being like, hey, we addressed all those things. It actually adds a lot more user loyalty and like, openness to listen to their feedback and it got us to a better product in a quicker amount of time.

Yeah, that makes sense. So one thing I think you're known for is never taking days off. But there's one time you did take a day off. What happened that day?

I actually don't never one thing I do, I mean, I'm super into my work and love what I do, but I also, you know, get my eight hours of sleep, I surf, do yoga, take care of myself. So like, I definitely try to. It could be misconstrued that we are so output driven, we ship so much, we're looking for this certain type of person and the founder never takes days off that it like seems like a little hole in the place to work, which is not. Which is not the case. But yeah, I went to a bachelor party. This is like the classic, the infamous GoDaddy story, which is also, I think, an amazing lesson and understanding where your weaknesses or vulnerabilities are as a business. Like, you should know any day that you wake up, if stripe goes down, you're not accepting payments as unless you have a fallback. Right? But I think every founder should know their blind spots and what if goes wrong or like a certainty that you thought was certain suddenly becomes uncertain that the business would run into a shit ton of problems. And for us, which we learned the hard way, was we per. We previously purchased Beehive through like the DNS of GoDaddy and we had them hosting our DNS services and whatnot. I go to a bachelor party in Cabo don't check my emails for like eight hours. Apparently like some one of our users was like a malicious user and sent like a phishing link that got rerouted to our server which got rerouted to like our web hosting which was godaddy and like their security team flagged it and they gave me like a heads up, like a 24 hour heads up which I missed traveling and then they just shut down our DNS or like our like beehive.com like working as an email or like not even as an email as like a website.

Yeah. So like the entire product just did not work.

So like slowly like again I'm like playing beer pong. I'm like I'm like drunk in Cabo with my friends. I'm like kind of checking on Slack. I can never like totally detach. And the engineers are kind of like hey, like we got 10 reports of users website just coming down. So it was actually happening. Not even just our platform which has been easier to identify but like because a lot of people host their website in like the beehive subdomain. Our users websites with their users and readers were unreachable. They're like slowly like shutting down and so but the way that I guess like the web propagates it's not like all at once. It would be like a random subset of people and like I don't know, Washington state. And so we're like trying to debug it but like we haven't pushed any code in like 24 hours so we couldn't figure it out. And like slowly everyone's website started to fall down including our app and here I am, it's like a Thursday night at maybe 11pm and GoDaddy obviously if we had like an account manager this would have never happened but like trying to get in contact with their support and escalated through their overseas chat support in Indonesia to like speed the business essentially. And I went like full nuclear. I'm tweeting out, I said like a code red to all investors and like our investor update. I'm like tweeting like the whole story of them taking over our account or like shutting it down. I'm pleading with this like person on like chat support in Indonesia like if you don't fix this, this entire business is go, it's going to go under. I was like we have 10 employees and like they will be unemployed next week if we cannot get our users websites up in our website up and through pleading and finding the emails and phone numbers of every exec person at GoDaddy finally got the account back in good standing and then moved off GoDaddy the next day. And now I'm very vocal. Absolutely hate GoDaddy. Wow.

Okay. Yeah. Because I remember what happened. I either got the email or saw the tweets and I remember I was like, oh, this isn't good. But I remember. I think you figured it out within eight hours or something like that. Like it took a while but like.

8 hours for like the worst 8 hours. I'm also like a bachelor party. I'm like drunk. I like try to be your friends and you all go out to dinner, like go out to the club. And I'm like, I'm like stressed, like shirtless, sweating, confusing this house, trying to get in contact with like the overseas like chat team. Honestly terrible. But, but like an amazing, amazing reminder of like now I know like we use cloudflare. I know all of our vendors, we have an account manager with all of them. I know if stripe goes down that causes these problems. We're aware of them. We can make the trade off of having backups. But very tough lesson to learn but very important one.

Yeah. Geez. One thing that was from, I think it was Dan Atia 1, one of the Beehive investors who was like, you gotta, you gotta remember to, to ask Tyler about that story. So one other thing I, I wanted to hit on. You've got this. You've kind of talked about your newsletter that you have. Big Desk Energy is the name of it. Why, why are you writing a newsletter if you have the startup?

Yeah. So it's definitely not like my next venture business whatsoever from day one. Well, I think as soon as I made the decision that I'm going to build in public and share the story. I've kind of done that through LinkedIn and Twitter and like through different mediums like the investor update and I always wanted to. We, we literally have the publications called Building Beehive. From like day one, I was going to send a newsletter weekly. Like kind of the behind the scenes. It's just like building public on steroids. It basically is what big ass energy is. But then you realize there's like a three person company who's like fighting for market share and has a million dollars. Like there's so much more important things than to write a weekly newsletter about everything that's not working at the business. So I basically punted it for two years. And then last November I think I got tricked by the holidays. Like it kind of slows down a little bit. Or like, I don't know, it seemed less stressful and I was like, I have like a few extra hours. I'll, like, start this newsletter. So that was the ubiquitous for now. I, like, love doing it. Saturday mornings I write like two to three hours, but for me, it's one dog suiting, right? So it's all built on beehive and I have direct access to the product team and the engineering team, and they typically take my recommendations pretty seriously. So when I run into. Also makes it so much real, right? Like, I'll hear on Twitter somebody, hey, this feature doesn't work super well. Like, we take all of our feedback super seriously. We put it into a doc, we like, synthesize it. But when I'm trying to do something and it's not working well, I'm like, super pissed off. So I go, I hit up the engineers. I was like, yo, this feature is build. Is this. It's supposed to work like this. And it's so janky right now. So I think there's a huge difference. And a lot of our employees do actually send like a team end of week update and end of month update. A lot of our employees actually have their own personal newsletters as live projects. I think it's such a cheat code to have your employees actually be users of the product because they can relate to it so much more. Our onboarding experience is actually every new hire goes through the process of building their newsletter on the platform with like all of the bells and whistles. Some actually continue it, some just, like, do it as like the onboarding and that's it. But for me, I get the dog food, the product, I get to do building in public. It's also like another success story, right? So, like, we're almost at 50,000 subscribers in nine months. It's been super fun to use boost, to use the ad network, to use like these lead gen, the lead magnets, like everything else. And also just like stress. Like, I'm super opinionated when something doesn't work. I like to let people know about it. So it's been, it's been great.

And you have a. You have a pretty popular Spotify playlist. I think you started this back in the morning brew days.

That's the G code that no one knows. Everyone's like, how do you have, like. I think it's like 20,000 likes in this playlist. I created this playlist. I listen to music all day long when I work. So I created this playlist of songs I want to listen to while I Work back in the Morning Brew days and Neil, the managing editor is like, dude, I'll throw it in the newsletter. So that was like the real cheat code from going from like 0 to 6000 likes on the Spotify playlist is Morning Brew. Being sent to a million people helps that a lot. And then from there it's just kind of grown into its own where people recommend it. And now I have the newsletter kind of driving it. I'm probably the only person dumb enough to have a newsletter built on a Spotify playlist. Very unique for sure.

Any, any new bangers that you've added in the past, you know, couple days, couple weeks, always.

People always ask me, how often do you listen to the playlist? And the answer is never. I'm always listening to new music to find. I'm always doing like R and D for the playlist.

Okay, so you don't listen to the playlist but you add stuff all the time.

I, I'm like deep in like finding new music and then Spotify, I mean 95% of the credit goes to Spotify. Their algorithms are amazing. So you go down like a rabbit hole of good similar sounding music. You use their like radio feature and I'll just find like banger after bang and I just add it to the playlist. So the only time I really listen to the playlist is on flights because I have it downloaded and so it's like easy to listen to. But outside of that, I'm recruiting for new music out there.

Okay, cool. We'll throw a link to that in the show notes too if people want to, want to check it out. What kind of stuff is it? Is it like edm, rap, country? What's the, what's the vibe?

Not rapper country. Probably skews more edm. I call it like chill DM on but basically it's like it should be lively enough to keep you focused, awake, attentive, but not super word heavy or aggressive where it's like very distracting. So it's like kind of a fine line between. That is how I describe it.

But interesting. So then just generally speaking, going back early days of Beehive or your pre, like recent, anything you wish you did differently, you probably hit on some stuff. Maybe, maybe we can just pull some prior examples. But what, what if you could go back to day one, what would you do different?

It's such like a shitty answer and reflection. I'm sure I've made dozens and dozens of mistakes, but in talking to other people in the startup ecosystem of how many times They've pivoted or made an assumption and had to backtrack. Maybe it's because we came from the Morning Brew days where we've already made those mistakes at Morning Brew. And I've had a very clear roadmap of like, this is what it takes to build a successful newsletter. These are the features, these are the data. This is how users are using it, because this is how we used it. I've kind of had a pretty clear vision for what the product would be. I'm sure I've made, like, personnel decision. The classic example I think everyone gives is not hiring soon enough. And obviously everyone repeats that. There's definitely been a few people where they're like, there's a little bit of friction in the early days and you just hope magically they're going to be a 180 different person, start contributing and caring more and, like, working harder. And that never happens. And it's always a morale drainer in the sense of, like, having someone when you are so good at bringing on A players, you actually discredit, like, how annoying it is for them to have to put up with someone who's putting in like a C plus B minus effort because they care about their work, they're pushing forward 100 miles per hour and there's always like someone who's doing a little bit less. And it's like, very insidious, but it really kills the momentum and drive like your other A players on the team. I love the book no Rules Rules. It's like the Netflix book. Very rarely do I recommend. Like, I try not to read, like, so many business books and some of them are like, a little cliche. I think the no Rules Rules book, my team makes fun of me because I always quote it. But, like, I read every chapter and I go like, this is the way. But it just is, like, if you do hire the right people and you give them the autonomy and trust and space to do what they do best, those types of people get really annoyed when they're surrounded by people who are not trying as hard as they are. And so you're doing yourself such a disservice by keeping them around. And I'm like a people person. Like, it sucks firing people. It sucks. Like admitting that you were wrong and then also, like, ruining someone else's week, month, career trajectory. It's like a really shitty thing to do. And, like, definitely the downside of being in this position. But every time I've done it, the amount of DMs I'd get immediately after being like, thank God. Like, it's. It's quiet and insidious, but it's best for everyone and probably for them, too.

Interesting. Okay, So, I mean, it comes back to the talent thing. You got to have the right team in place, people that all have the same priorities and ambition, and everyone's. Everyone's aligned.

I mean, that's kind of the realization with, like, raising the Series A as well. It's like, what if AI totally wipes out newsletters? And, like, if something happens with Gmail, we have such a talented group of people that with $10 million in the bank, we could figure out something else to do. But it always comes down to, like, do you have people who are smart, talented, bought in, and take pride in their work and that they're enjoyable to work with? I think if you have that as a nucleus, that it's hard to do anything without that.

Wait, so there's people that think AI is going to, like, eliminate email or what?

I have no idea. I'm just using, like, the Black Swan. I mean, like, no one knows what the Black Swan is before it's the Black Swan. Right. But I at least want to be in a situation where, like, it is. So I'm getting. We're across 12 different countries, right? So the fact that we've created this group of talented people who are so amazing to work with and so smart and driven, like, shouldn't be taken for granted. And to have that go to waste because I mismanaged capital or, like, didn't foresee something that's, like, unforeseeable, which is, like, really what led myself to raising.

The Series A. Yeah, that makes sense. And you raised a Series B also a couple months ago, I think you mentioned.

Yeah, the decision with that was actually more difficult. We had $10 million in the bank still, and we were burning about 3, 400,000, maybe 500,000amonth. And it became this classic fork in the road where, again, my gut is like, I love the bootstrap. Just, like, slow and steady. But then you start to realize, like, oh, we could actually ramp. The paid spend is working. We could ramp this up and get more market share. We've actually ignited a lot of competitors in the space to pick up their pace and work harder. And it's getting actually harder. And there's a very path forward of, like, yes, we could inch it out and burn four or five hundred thousand a month. We'll close those margins, we'll work towards break even. Or it could really step on the Gas and really try to win and dominate in this market. And I think that's like the classic tale of VC in general. But it was like a very real. I saw both pass and I thought either one could have been the best path forward. But ultimately I think we're just like super competitive. We have like a ton of conviction in what we're building and I wanted to be empowered to accelerate market share. Not the slow and steady and kind of like a more heated and contested space.

Yeah, I was going to say, knowing you, you're pretty competitive. So if like one of the options is like go harder and win faster, that maybe sounds like what you pick.

There's also like a quality of life element too, right? Like at the end of the day, everyone on the team is a human that has like emotions and other hobbies and things to do and there's like friction and like, yes. I love the fact that we're very lean, we work really hard, everyone puts a ton of time and effort into it. But if there's a way where like I could have a little bit more confidence because we have more capital to hire like three people that would then remove something off of like either my plate or someone else's plate that makes my life better, makes their life better. And we're probably actually doing that thing better at the end of the day. Like that's like the benefit of like, you know, being able to spread bandwidth. And if everyone's just working 60, 80 hour weeks and burnt out, like that's also not a recipe for success. So there's definitely trade offs.

Yeah, that's fair.

I actually.

And I have one more question. Do you have a favorite founder or CEO or just business example from history? You can go back like prehistoric times through today. Anyone that you usually like kind of draw to is like, man, it's just my. I've learned so much from that.

Probably two who jump out immediately and one is like more controversial now, which would be Elon. So like, I don't know if there's like a before, like a recent like before Twitter Elon and after Twitter Elon. But like what he was able to accomplish and like his sense of building these businesses. Like anyone who's read the books character, aside from like a pure business acumen, it's like hard to refute that what Elon has been able to accomplish is absolutely crazy. Like totally redefining industries, making it normal to go up the space, making it normal that like people drive electric cars and that's been tried so many times before. The other one, like, I think Brian Chesky from Airbnb is like a total role model CEO, like stand up person, very thoughtful. Going back to like the COVID days when he had to do the mass layoff and then created a page on his website on Airbnb of everyone they laid off with their resume and like a recommendation of why they should work somewhere else. I think as far as I love traveling, Airbnb is like a beautifully polished product. So I'm a huge fan of the product in itself. But the way that he has built the business and conducts himself, I think is like a total class act. And so I think to balance the Elon answer in terms of like new Elon Musk, like Brian Chesky I think is like an absolute stud of CEO and like a really product design driven person. That's like another thing that's pretty unique about Airbnb.

Yeah. I think you and you, I think you have an interesting way you like to do where you go in the winter. Do you take advantage of Airbnb when you go down there?

Yeah. So I've spent the past two winters in Medellin, Colombia. It's funny because I have such little balance in my life. The way of like where I find balance isn't like, oh, maybe I like and work at like 6pm on a Thursday and go out to dinner. It's let me pick up and move to an entirely different continent and like kind of immerse myself there. And like that is like how I've been able to find a bit of balance. And I'm also learning Spanish. But yeah, I've done Airbnbs down in Colombia. It's just like a nice, I hate the cold and sounds funny living in la, but it gets a little chilly in the winter and like a total different like culture ordeal to be down in Colombia, learn a different language, meet different people. People.

So yeah, I mean you, you realize you're talking to a Canadian and I also live in Michigan, so I'm like, you know, I'm pretty cold most of the time for me. La's. LA is pretty good.

That's why I moved out in New York. I just absolutely hate the cold. But it's also, in a way, I was actually thinking about this this morning. Like when I go to Columbia, it's focused to the max in a way of I get all of these invites of, hey, do you want to come to this dinner? Do you want to do this coffee chat? Do you want to talk to this conference? And for like the four months that I'm in Columbia, it's like default. No. I'm like in a totally different continent. Don't. It's not worth the 18 hours of travel to go off to Boston and like go to this conference. Like, I'm just not doing it. I'm like trying to formulate a post now and like, just like the power of saying no, obviously, like, it's like a known thing of like focus. But it's been, it's one of the hardest things to do, especially as someone who likes people and wants to build relationships. Like, I understand the value relationships and I understand when people ask me to do shit and I say no immediately all the time. Like, I'm definitely not the most fun person to invite this shit. And I'm always going to say no. But as far as like prioritizing what I'm prioritizing, like building this business is by far the most important thing for me. And me going to a dinner or networking event or thinking that meeting this one person is going to be like that silver bullet unlocked to get us over the hump is like unrealistic. And what I think a lot of founders kind of hang their hat up on is if I can get it in at this one company and then they promote us on their landing page or do this like, partnership, like, that'll be the inflection point. I think there's like a 1 in 100 chance that like every time, every now and then there's like a perfect partnership that works for both businesses. But what I've seen that works best is take control of the business and kind of like do what you can do and not leave it up to third party integration, partnerships, networking events, and just do the work. And that's worked pretty well for us so far.

Yeah, just do the work. It kind of the, the Columbia, it's almost like you're in monk mode. Like you're just, you go to a different spot. You, you know, hold down, remove yourself from the world. No distractions.

It's also just great of like, it's me embodying, like why I think it's so amazing to have a remote first company. It's like, I what now? I'm not single, but was single 29, 30 years old, and I can just pick up and live in Colombia for four months, still work the same amount of hours and work on the same projects, but have like such a different life experience. I think I know like, that's not going to last forever, like five, six years. I have family, kids, responsibilities, whatever. It is like I can't just pick up and live in a remote country. So really just taking advantage of that.

Yeah, you hit this point. I mean, I have, my kids are almost four and eight. I think next summer we're going to try to do some kind of spending a little bit of time somewhere else in the summer when they don't have school. But I mean, there's so much like you've got dance classes, you've got sports, school schedules after school. Like you're really, your schedule gets really constricted and you, you can't move like your kids are in school. You're like, I'm going to move from this city to this city. It's a big deal. You kind of got to pick your, pick your shot.

I think it's just very realistic that this doesn't last forever. Right. Like, I have a bit of disposable income, I work at a remote company and I can pick up and live without kids, family, whatever, wherever, as long as the time zone's easy.

So, yeah, makes sense. Well, this has been a lot of fun. I know we kind of went way over on time, but hopefully people liked it. And thanks for coming on the show.

Yeah, thanks for having me. This is great.

And thank you for listening. Make sure to check out the show notes if you want to go deeper on some of the topics mentioned throughout the company conversation. If you like this episode, it mean the world. If you liked, subscribed, commented, followed and shared it with a friend, you can learn from it. And if you don't want to miss future episodes, subscribe to my newsletter the split in the show notes and you'll get links plus a transcript for every new episode emailed directly to your inbox. Thanks again for listening. See you next episode.

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