Full Transcript for 164 - Building Beehiiv into a $300 Million Dollar Business with Tyler Denk

We're generating a little bit over $2 million a month right now and then the money that we pay out to creators is not a part of that revenue. I pinch myself every now and then and we built a platform where several thousand people that have built an entire business that supports themselves and their family on the backs of like this platform that we created four years ago.

A big part of my job is being able to effectively convey. We're not just sending emails. People depend on us to pay the bills, to send their kids to college. That added a bit of responsibility adds a lot more purpose behind what we're building. We're in the top 0 .1% of fastest growing companies. We are on pace to do over 30 million in revenue in our fourth year in business.

We've been very fortunate and I don't do it enough to take a step back and really appreciate where we are.

Alright, Tyler, instead of asking you the same question that you're always asked on every podcast, I'm going to summarize your journey and then we'll jump into it. Tell me if there's anything I missed. So you are the co -founder and CEO of Beehive and that is a newsletter platform or was. You're kind of becoming more broad than that. But you currently process over 2 .5 billion newsletter impressions a month.

And you have an ecosystem of about 350 million unique readers. You founded this company in 2020. You've raised about $50 million. And you're currently paying more than like a million dollars a month to creators on your ad network. Did I get that all right? The last part, caveat, we are close to a million on the ad network. But if you include the paid subscriptions and boosts and everything else, we're paying multiple million per month to our publishers.

How old are you? 31. Okay, so here's my question. Like what's taken so long? You're already 30. So like, why aren't you more successful? Well, if you heard me start off by answering that question, I almost said 29. I forgot how old I was.

Dude, it's funny. So let me ask you this question. So I did read you're about a million dollars paying out to creators and you're currently generating about $1 .5 million a month. As of 2024, December, that's what I read. Let's say that those numbers are true. A million to creators, $1 .5 million in revenue. Is that $1 .5 inclusive of that $1 million you're paying out or are those two separate numbers? Two separate numbers.

And today we're actually closer to $2, $2 .5 million a month in revenue. So the numbers are a bit dated. But yeah, we're generating a little bit over $2 million a month right now. And then the money that we pay out to creators is not a part of that revenue. So what's it like building a business where your customers are making almost as much money as you are from the business? Yeah, it's crazy.

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

And so I think that's really cool. And I think a big part of my job is being able to effectively convey that story to the broader team of we're not just sending emails. We're not just adding like a new shiny feature that people use. Like people depend on us to pay the bills, to send their kids to college, whatever it may be. And I think that added a bit of responsibility adds a lot more purpose behind what we're building.

I think it's really cool because anytime you build a business, I build multiple businesses and you have people that are working for you and you see, you know, I have 130 employees. But then you start thinking about, man, that person's the breadwinner for their family. Like not only do they depend on this job, like they depend on me to do good things.

Anxiety inducing. But there's the flip side, which is also really cool that you've created something of value. I don't know. Do you think about that? You're kind of heads down building. Do you ever have so heads down and stressed all the time? Like I do try to remind myself there's something that I've read before that I like to think of of like Tyler from five years ago would have done anything to be in the situation that Tyler is in today.

Me speaking about myself in third person, very oddly. But like, yes, it's like very stressful the day to day, like putting out fires, waking up super early, working super late. You kind of get lost in the sauce a lot during the business building experience. And I don't do it enough to take a step back and really think about like what it took to get to this point.

The fact that we are on pace to do over 30 million in revenue in our fourth year in business, like a lot. We've been very fortunate and very lucky. We have a lot of great people around us, but it is cool. And I don't do it enough to take a step back and really appreciate where we are. So you were at Morning Brew. You started at Morning Brew 2017.

Morning Brew sells in 2020. And you were a huge part of that process. And I want to talk about some of that stuff. But they sell for $75 million. And then you go from that and you start Beehive 2020.

And now you just said you're doing you're going to do $30 million this year in revenue. Yeah, we should. All right. So tell me if I'm close. $30 million. Let's just say 10x ARR. Are you a $300 million company? $500 million? I'd like to think it's more than a 10x. But it depends on the markets, right? The markets the past few days might not give us a 10x.

So who knows? Let's say $200 million. Sure. You know that's not normal, right? You went from Morning Brew 2017 to 2020, $75 million. 2020 to 2025, and you've built something of really significant value in these short sprints. Do you know that that's not normal? Or are you like, well, it's kind of just my reality? So yes and no. Again, I don't think I think about it a ton until there was a point to the past, I don't know, six to eight weeks, we've been adding between 25 ,000 and 30 ,000 MRR per week.

So net of everything. So we're adding over a million in revenue per month. And so I write an email to the team every Sunday to kind of get all of our priorities aligned. This is what we're focusing on this week. Here's a milestone. Here's what we accomplished last week. These are the top things we're going to accomplish this week. It became so repetitive for me just to say, hey, last week, record week, we grew by 25 ,000 MRR or 26 or whatever it is.

And so I went to the chat GPT and Claw and I was like, where does this put us in terms of growth to make it a little bit more impactful for the team to understand what they're a part of? Because, again, my job is storytelling to get everyone swimming in the same direction and motivated and aligned. And it's like something like the top 0 .1% of companies grow at this pace.

And obviously, you see on Twitter, there's a lot of the AI native companies that go from zero to 20 million in like three months. Right. And you're like, OK, we are not that. So it makes you think like, oh, we're not achieving this like rocket ship growth. But there are so many companies that struggle to get the traction and revenue that we have experienced.

And I'm aware of that. And we are very fortunate. But, yeah, I had to do a little bit of research to position to the team of just understand, yes, it is very stressful. We all are drinking from the fire hose. We're solving problems. It's a very high, fast -paced, high -stress environment. But let's not take for granted that we're in the top 0 .1% of fastest -growing companies.

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

You've got website builder, which is actually helping people get up and running and then have an integrated platform. And then you've got the third pillar, which is escaping me at the moment. The ad network. Yeah, the ad network. Of the $30 million, where is your revenue coming from of that pie? That's a good question. I think for this year, the projection would be like to 23 will be SaaS, which is just like pure platform.

That's like the email and the newsletter part combined, essentially. The ad network will probably make up 7 or 8 million, ideally more, of revenue this year. I think we're pacing above our projections. I'm just basing this off of what we did to start the year. But yeah, I'd say we're about 70% SaaS business, 30% ads. What does the margin look like on the SaaS and ads business? Are they effectively the same or does one have better margins than the other? Yeah, the SaaS business is like typical SaaS somewhere between like 60 and 70%, I would say.

We take between like a 10 and 20% cut of revenue. It's like our profit margin and that's like supply and demand based. So when we have advertisers like Nike who are very high in demand, we can charge more. I think we take a bit of a larger spread there and then vice versa. So that's all like supply side, demand side, like real time bidding and understanding like we cap out at 20%.

So we'll never take more than 20% of a cut from any ad placement that we place with our publishers. For context, the way that many people make money on these newsletters is by selling ads or sponsors within their newsletters. I'm on Beehive. And from what I've seen, there's kind of two ways you can do it. I could sell sort of a private ad.

I could just put it in my newsletter natively or there's an ad network on Beehive where I could sell a space or I could actually say, hey, I'm buying space in somebody else's newsletter. And then they would choose me. Have you found either one of those like more or less effective is buying an ad through Beehive? Does it have the same conversion, same CAC, same LTV as one of those natively placed ads in a newsletter that's not on the ad network? Yeah, I'm happy to take a step back just for the audience even like explain what is like this whole ad or deal with an email situation.

Like how did we get here? I think that might be helpful context. So going back to when newsletters became very popular, whether it's the skim, Axios, Morning Brew, the hustle, almost all of them monetize almost exclusively using advertisements. So rather than banner ads within emails, they had full sales teams that sold ad placements that went directly into the email.

So using Morning Brew, which is the example I know best, they have a story, they have another story, and then they have a big ad unit of MasterCard, Visa, Apple, who will pay 60 to $70 ,000 to get 150 words of creative in the newsletter. And then they have other, they call them secondary tertiary ads like below the fold, but it's primarily that one sponsorship that does the majority of the revenue per newsletter.

And it depends on who your audience is and the size of the audience. So for Morning Brew, we were less specific. We were pretty broad, general business, but we are very large. We were 2, 3, 4 million subscribers when I was there. And so that warranted Apple paying $60 ,000 to have their logo at the top of Morning Brew's newsletter because we, Apple knew that they were getting in front of 3 million, mostly affluent, upward trajectory, 18 to 34 year olds that live in like New York, Miami, Austin, LA.

And so when you think about what it took to do that, we had 10 to 15 people on this brand partnership team, aka sellers, who are constantly talking to different brands, different advertising agencies, trying to convince them to move their ad budget to Morning Brew. And that took a huge effort. We had copywriters at Morning Brew that took the messaging points and turned into good copy.

And then we had a full ad operations team that's running the ads, pulling the data, reporting it back to advertisers. So I give all that context because that was really the impetus for building Beehive. Like I saw what this well -oiled machine of like content creation and email, an amazing CMS, an amazing ad team. The operations are smooth.

Say what CMS is. Content management systems, like what the writers use to actually create the newsletter. So we had this well -oiled machine and it turned into a $75 million acquisition. And meanwhile, while I was there, all of these other writers, hobbyists, journalists, and people who work at these other publications were like, how are you doing this? Like, how are you building the newsletters in this template? How are you monetizing efficiently? What data are you looking at? And that really was the impetus for us building Beehive, which is the all -in -one solution to do all of that.

So to fast forward to your actual question, which was, what does Beehive do? We help people create content and send email newsletters and we also host their website as well. But if you want to monetize, you can do what Morning Brew does. You can hire an ad seller. They can be in market. They can talk to Nike. They can talk to the ad agencies.

They can close deals. And you can put that ad in your newsletter. And a lot of our large newsletters do that. And like, that's totally fine. We don't take a cut of that. That's like your revenue. The thing is, 90% of publishers, journalists don't have ad sellers on their team or their team of one. And so the value that the Beehive ad network brings is we talk to all of those brands.

We have HubSpot, Nike, Netflix, Roku, like tons of massive brands in our ad network. And with one click, you can get an opportunity from Nike, accept it, put it into your newsletter. And it's as if you have a direct contact with Nike. But you never have to talk to anyone at Nike. And you still get paid for running a Nike advertisement in your newsletter.

So we play in both. We want to support people who can sell direct. And we have launched features that help them sell direct and manage their inventory. We don't make nearly as much money on that. But we're not in the game of just making money for bottom line revenue. We want to support the people who use the platform. Or you could use our ad network.

Yeah. I mean, you want to enable the people who are doing real things. You're just trying to help them have a better experience monetizing the content that they're creating. I know it started out as creators. But I see more and more small businesses using platforms like Beehive in particular to monetize their email distribution lists. Whereas in the past, it was like, oh, I just have a list.

And maybe it's in Google Sheets or maybe it's in Klaviyo or some other platform like that. But there really wasn't a way to monetize it unless they actively were selling something and launching a new campaign. Whereas now there's this sort of second unlock in the ability to generate revenue because they have the ad network that they're able to leverage.

So it's been interesting. It's worth doubling down. And like we really I mean, yes, we need to make money as a business. But my philosophy from day one has been we want to build whatever tools and platform allows our users to succeed. And like we will extract revenue in their success without directly pulling revenue from them. So a lot of people compare us to Substack who takes a 10% fee of every dollar that their creators earn through the platform.

We offer the same features of like you can have a paid subscription product where your readers pay you directly and we don't take a cut of revenue. And then same with like us facilitating all of the direct sponsorships on the platform as well. Like we do a $10 transaction fee if you use our tools. But like if you sell direct like that's totally fine.

There's no penalties. So I think that's just like more of an ethos and philosophy thing that we want you to take home as much revenue as you possibly can and succeed. Because our user success in the long term ends up being our success as well. Like there's these really interesting trends that are happening right now as you have companies.

SMB is like my experience, right? Healthcare, e -commerce, those types of businesses. And for a long time, their strategy was like, all right, get the intern and let's do a TikTok dance. And this is our social media strategy. But they would start to realize like, oh, I can drive business from this, especially if they're local small businesses.

But there's this huge risk, which is called platform risk. Instagram, TikTok almost got banned. Twitter, they can change their algorithm at any time. And so the ability that you might have had in the past to reach the people who are following you changes pretty dramatically if you don't keep up with the trends, et cetera. And so there has been a big movement I've seen from business owners to take their followers off platform.

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

The fact that Morning Brew, the input is the same, right? We had a team of writers who spent six hours writing the newsletter, the writing was incredible. And whether they were sending to 200 people or 2 million people, the input is the same. The output in dollars and influence is drastically different, right? And so if you can like hone your craft and get really good at creating content, whatever it is, whether you're serving content for farmers, small businesses, crypto, like whatever your niche is, like owning your audience and being able to say when I press send, like I sent my personal newsletter this morning, I press send, it goes to 95 ,000 people.

Whether or not they open it, like I hope that I built the trust and reputation that they do look forward to my emails. But like there wasn't some product manager at TikTok or Facebook determining whether Tyler Dank's content today, is going to be shown in the feed or it will get buried and get less distribution based on whatever the content is.

So I'm a huge, obviously a huge believer in email. And I think once you see the light and like, it's not mutually exclusive, right? You can have an amazing YouTube, TikTok, Instagram presence and boost your newsletter, collect emails down funnel and vice versa. You can use email as a way to drive more subscribers on YouTube, TikTok impressions.

Hey, I don't know if you remember this, but when we started this podcast, we entered into a social contract. I would spend time, energy and money producing this podcast, interviewing these individuals and giving you insights into how to build, buy, start, grow your business. And you would like subscribe and leave me five star review. Now, out of that, we both get to talk to really cool people and hear really cool insights.

We both get a ton of value, but I just want to help you keep your word. So would you do me a favor? Will you go leave a five star review for me on Apple or Spotify? It would really help. And if you want, even share this with a friend. And I think that's where I've seen it done the best. Colin Samir, like an excellent example, started off as massive YouTubers that cover the creator economy.

They've done interviews with Zuckerberg, Mr. Beast. Like they're kind of like more or less the face of the creator economy in a lot of ways for the content that they cover. They have a newsletter in addition to their YouTube channel. That's Monday, Wednesday, Friday goes to 150 ,000 people. It's not regurgitating the same content, but it's complimentary.

And they drive people from the newsletter to the YouTube and they drive people from YouTube to their newsletter. And it's like the symbiotic relationship and it works extremely well. So there's definitely ways to do both. It's not even massive creators. I have a friend of mine who's on Twitter, not a huge following. He has a podcast. I don't want to out him.

I mean, he does talk about this, but let's call it 50 ,000 followers across platforms. He's making $5 million a year from his content and why it's what he's like built really good trust. He's taken people off platform and then he's partnered with businesses that sell to his audience. And so he's just like turn this into a machine, but he's really learned like, Oh, I've got to capture not only attention, but I've got to be able to interact with these people one -on -one without some intermediary that is a platform deciding based on their algorithm, like whether or not my stuff gets reached.

That's what's been interesting for me to see change over the last few years. Content creators like Nick Huber, Cody Sanchez. I'm trying to think of some other ones, but where they're using media to accelerate their business as opposed to just media is the business. Cause they're making money from AdSense from Google. What was it like in 2017 when you were launching? Was that even a thing or am I like, am I like way late to the game? Am I stupid? Cause this has like been going on for a long time.

Like what's your observation of the way this stuff works? I mean, morning brew definitely benefited from a different time in place with the competitiveness of acquisition, whether it was Facebook, Twitter, Google, we are getting subscribers for sometimes 50 cents, sometimes a dollar, dollar 50, but we were, we knew, and we solved the equation of, we know that advertisers are willing to pay this much in the CPM.

We know if we can grow fast enough. And if we can acquire subscribers for 50 cents, dollar, dollar 50, we break even on that subscriber. If they stay subscribed for X period of time. And so there's like, it very quickly becomes like an equation of, you know, that if you can grow fast enough, you know, advertisers want to get in front of your audience or willing to pay a premium rate to get in front of that audience.

They pay you up front. You put that money into growth. You grow faster. And like, that is like the flywheel. It required morning brew raising, I think $600 ,000, which isn't a ton, but like early days, I did a friends and family round to get that flywheel off the ground. But once we saw that equation, you just do the math and it, it, it scales up and like you've seen 1440, I think now has 5 million subscribers.

It's like another newsletter, same thing, same equation. That being said, I think you caught out something important is we've been talking about morning brew and the millions of subscribers. My personal newsletter has almost a hundred, like whatever all of that is. But I know plenty of writers on Beehive that have five, 6 ,000 subscribers who are making six figures as a side hobby.

And that's just because they've like really doubled down on like a very specific niche. So they understand whether it's advertising execs or rental cars or whatever niche that they want to stay in. And they are just like the best at covering that content. And they know that they can either charge advertisers, a hundred, $200 CPM to advertise.

Or they can charge some fraction of their audience will convert to a paid subscriber and pay a hundred dollars a month because they need it for work. There's a lot of really interesting niche, small newsletters doing ridiculous amounts of money. And some of them only put a few hours a week into it. So I think that's a huge opportunity. And that's also one of the other benefits of newsletters, similar to, I guess, social as well.

You don't need a ton of capital to get started. Like we start, we have a free tier. You can like start bringing money in risk -free using email and having a website as like a testing bed to try new things. And you're not like raising capital. You don't need to hire 10 people. So I think that there's very low barriers to entry to the medium as well.

What would you say to somebody who's listening to this and is like, well, easy for you to say, you work in this space, you know what to write. You've got a hundred thousand followers. Like, what do I even write about? How does a business owner get started even thinking about the concept of writing a newsletter? The, what do I write about is the thing that I can't necessarily solve, right? I think there's plenty of other people who can, can help give you inspiration.

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

And every time I send this email, I'm making money. I think way too many people look for shortcuts rather than thinking of like thinking of their customer as some one or a group of people that they can nurture and have like their brand awareness and trust build over time. And so, for example, Brex is a big like startup credit card company who finances and does banking for tons of popular startups.

They have a newsletter on Beehive for their community and has nothing to do with like starting a new Brex account. Obviously, somewhere down funnel, like that is kind of the purpose of like any distributed content that they're working on. It's to eventually have people know who Brex to identify and like the content and brand that they're creating, to eventually open a business account with Brex.

That's the long -term thinking. They have a newsletter that covers all of their local community events in SF, LA, New York, things that they do like business owner spotlights. But they're creating content that their ideal customer would benefit from and enjoy. And they're nurturing this funnel of leads through content, knowing that one day that person who does launch a business and does need a business credit card, they've been on this Brex list for a year.

They love all the content. They already look favorably on Brex. And now it's the no -brainer decision to create an account. So I want to throw my framework out at you and see what your opinion is. Because when I first started writing, I was always like, man, this is stupid. People don't want to hear what I have to say. You're like, what do I write about? This is dumb.

When I sort of reframed the way that I look at it, it changed how I do things and it changed my ability to stay consistent. I look at it in this order. For me, as a small business owner writing a newsletter, number one, clarity, number two, trust, and then number three, sales. And what I mean by that is it helps me create clarity around what I'm doing.

There's just something about writing and getting your thoughts out and being able to understand what is my goal here? What is my ethos? What is my strategy? And then trust building, like this long -form content that people are reading. All of a sudden, people who don't even know you are like, oh, I trust Tyler. If Tyler recommends something, I'm going to trust him because I've seen him over a long period of time.

And it's not necessarily that they buy from you, but maybe you need to raise money. Maybe you're looking for a rock star hire. Maybe you're looking for an intro to somebody that could change your business. And somebody knows that person who you're looking for. You get a warm introduction from them because they like you, they trust you, and they cannot put you in touch.

The third and last thing is like sales. Okay, maybe I get a sale for my business, but those other two things for me have been the most valuable things and that have helped me stay consistent. What do you think of that framework? Totally aligned. That's a much better phrase and thought out framework than what I just rambled on for, but it's getting to the same thing, right? I think like another example, and it doesn't work for everyone, but my personal newsletter that I send is just about entrepreneurship and business building.

And so, yes, I cover Beehive tangentially because that is the business that I'm building. But I am more often than not just sharing our hiring tactics, our strategies, the different things that we're doing as we build the company. And people then see that and it kind of personifies the business in the sense that Beehive as just a brand is some new brand that I've never seen before.

I don't know anyone who works there, whatever. But if I follow Tyler's newsletter and I hear about his struggles as a person, his travel, how he's building the business, how his philosophy on hiring and running the company and the milestones, like now I can tie a person and a figure behind the business. And when I have to make a vendor decision between Beehive and seven other faceless brands, at least I feel like I kind of know the person behind this one and I enjoy the content and I've benefited from it.

We're like that has actually been the edge in us winning business, which was never like really the intention somewhere in the back of my mind. And maybe I think if I send this newsletter, everything I just said would become true. But that's almost been like revisionist history of like we've seen people come in from my personal newsletter and become a user or we've made a mistake.

And they've been like, hey, like you shipped a bug and it kind of screwed me for like a week. But like I trust I trust you and like your vision for the business. And I know how passionate you are about this. And like it's not worth me churning off the platform to go to another like unknown platform. When I know that your head's in the right spot, I know you're determined to make this work.

And I know that that was an honest mistake. And so like it gets a lot of like goodwill as well. Again, assuming you are authentic and assuming that like your authentic self is what people want. It's like I'm just me all the time and it either resonates or it doesn't. I can't remember exactly what you said earlier, but it let me know. It's like you're very mature for your age.

I didn't get to this point until my mid -30s. The main job of a CEO is I'll throw another framework out to you. In my experience, I've had organizations. I've managed several thousand employees. So I understand kind of what it takes to lead leaders and lead employees. And from what I've seen in my experience, lots of failures. A CEO has three jobs internally.

Recruit, retain, and inspire. You've got to be able to bring on really good people. And then you've got to create an environment where they stay. What you sold them isn't just a lie, but they're like, oh, cool. This matches what I thought it was going to be. And then you've got to inspire them to achieve results that they probably couldn't achieve by themselves.

That's your job as a CEO. Now, it's not your job when you're starting a company and you're like sub $500 ,000 in revenue. Your job is just like fulfillment. I'm just doing the work. I'm creating the product. I'm providing the service, whatever. But there comes to a certain level where it's like, all right, I got to kind of extract myself from the business and become the communicator.

And that's a hard transition for people who are so used to building because it doesn't feel as productive. It doesn't feel like I'm actually doing anything. Was that transition hard for you? Because I can hear you're at the spot now where you got 90 employees. Like you've got to be a CEO. But you started this thing from scratch. So you know what it's like to get in there and build and want to just be building the product.

Talk about the transition from those two. What's funny about this, it's very timely, is I have not transitioned. Like why I have the gray hairs that I have is like where I think I have differentiated as a CEO is not following that accepted track, which I think is true for 9 out of 10 people and leaders. It is like for that same reason, right? At the early days, you were just doing like someone needs to send that email.

Someone needs to build this feature. Someone needs to answer customer support. There's no one else to do it. The CEO does it. The co -founder does it. And then you hire people. Then you get managers. And I think there's a common acceptance that at some point it does become what you just described, right? Like your job is to communicate, to hire, to retain, to inspire.

But I get more enjoyment out of actually doing, as I think most founders do. But I think they blindly follow the feedback that at some point you can't do. Like at some point you have to do everything else. And I have been as hard as I possibly can pushing back on that, being like after this, I'm going to write. I'm going to QA the new features that we're launching this week.

And I'm going to personally write the product update, which will then go to all of our users, educating them on all the new features that we're launching this week. That allows me to understand what our users want, to test the actual work of the engineers, and to communicate it and build a narrative that I want. You can argue at some point that I could hire someone else to do that.

And I'm sure I can. We already have people on the team that are super talented and could. But that's actually where I get a lot of my enjoyment. I think that is like the fourth stool or whatever, fourth leg of the stool would essentially be like the doing part. And maybe it's not for every founder and CEO. And at some point, if we had a thousand employees, maybe I'm not doing that.

But I actually think it inspires a lot of the people on the team and makes me a better CEO because I know what our users want because I'm actually in the work, like in the weeds doing the work. And I think that's a competitive advantage. And what I would say is like that's part of the way that you inspire people. That's part of the way that people who come on are like, oh, yeah, what I thought I was getting, I'm getting the ethos that Tyler had in those interviews or that I'm hearing about it.

I'm actually seeing it at the office or in the company because I think you guys are co -located. What I would say in response to what you just brought up is I think many young founders think, oh, I got to hire a team and delegate. And what they do is they they like build their company to this place where it's it's growing, Nikolas the flywheels going, they're going like crazy.

And then they do something really stupid because they think they're supposed to. They

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and Nikolas Hulewsky and Nikolas You bring people in who are doing those things. Right. I'd go one step further though and there's something that I think gets lost in all of this, which is like beyond just like our competitive advantage, like what makes me happy and like what makes me enjoy work the most, which is like more of like almost like a meta thing, right? And I, my assumption is the company is better off when I am fully energized, happy, excited, contributing to what I am good and best at and like leaning into all the different teams, like fully enjoying the company building experience.

And that is what I'm sure that's why I said it was an interesting question when you brought up of like the transition, because at 90 employees, like some of the things that worked at five and 10 employees no longer works at 90. In fact, most of them. But like me as like a startup founder, like the zero to one, the first five, 10 employees, when you get like one conversion a day, like you get $100 at the bank account a day and you're like going crazy and you're just tinkering and building like the early company building, I personally find the most fulfilling and exciting.

And as you go from 30, 50, 70 employees and my, my calendar now is recurring meetings, one -on -ones performance reviews, like those things suck energy out of me, right? That is not actually what I enjoy doing. And so I was like, I listened to a lot of like different founder content. I listened to the, the founder podcast on the CEO of Nvidia who has 60 direct reports and has zero one -on -ones.

And he's like, I've been at this company for 30 years. One -on -ones do not excite me. And if I want to continue to wake up and go to work and enjoy what I do, I need to build a schedule around like what I get fulfillment out of. And it's not meetings. And he's built one of the most successful, arguably the most successful and like largest company in the world based off of that philosophy.

So I think it breaks down what a lot of companies are just pattern matching of when we raise a series B, we have to bring in three HR people. We're doing performance reviews. We're now like breaking alpha into teams and the CEO is going to run like recurring meetings five times a week. And I try to push back on all of those assumptions and just do what I think we should be doing, which is how are we solving problems for the customer? Like number one is I want every, I want myself and I want all of our key employees to be as close to the customer as possible always.

And recurring meetings sometimes are like a necessary, like, Oh, we have to do them to get aligned. But if it's not solving customer problems, don't want it on the calendar. And so that's kind of like the company building, pushing back transition that I'm going through is like, how long can I keep this going? Because I don't have ambitions to hire 5 ,000 people.

I don't think that sounds super fun, but how do we keep the fun and like the it that we have as long as we can and still compete in this market? I think we've done a pretty good job so far. It's that whole, I never know how to say it, ECOG where it's like the concentric circles, what you're really good at, what you're passionate about, what the world values and what you can get paid for.

Once you have overlap there, it's like, I don't go to work every day. I go to fun every day. It's, it's an amazing experience. I don't think enough people focus on, okay, what, what are you passionate about? And you're good at, and you can get paid for. Most people are just like, well, just focus on your passion. Nah, that doesn't necessarily translate.

Oh, just focus on what you get paid for. Well, you're going to kill yourself because it's like, you're just going to be so depressed doing something that you hate. What's interesting though, is it sounds like you you've prioritized creating an environment that you enjoy that gets you excited, but you raised venture money, which to me is always like I raised venture money.

Now I've got, I have to hit these targets. I've got 10 bosses. It's 50% year over year growth every single year. Otherwise there are big problems. Why did you raise venture money? If you, if you could have bootstrapped, sounds like your margins are fantastic, right? Like what, walk me through that process. Yeah. I mean, going all the way back to the beginning, it was me and my two co -founders.

I was 27. They were 24. We didn't have a ton of capital. Like I made a little bit of money from the morning brew acquisition, but big difference between founder money and early employee money and getting this business off the ground required like, oh, it's a very ambitious roadmap that we need to build. Like we aren't going to build this ourselves.

We need very talented engineers. So now you're in the recruiting decision of how do we attract top talent? You can sell them on the dream and the vision and the equity. But at the end of the day, a lot of like the top talent is already getting paid $200 ,000. I get another established company. It's like a huge risk for them to come to us.

Then we have vendors that we have to pay to stand up the infrastructure, to send the emails that we're sending. And most of the vendors kind of operate on like an annual upfront contract. Plus you need like the support tiers. So when we add it up very quickly, like we just needed capital to get off the ground to pay ourselves, right? Like we, we didn't go full ramen diet, like living under the bridge, like sleeping in like a random friend's office and like building this company.

We thought the company would be better if we like paid ourselves a normal salary, can pay ourselves to like put food on the table. Both of my co -founders are married and be able to like provide for ourselves and just focus exclusively on the company rather than trying to worry and focus on where's the money coming from to pay the bills. So I think the whole ramen diet is like a total, like, so you weren't like so equity hungry that you're like, nah, man, I got to hang on to every single piece of equity.

You kind of went deliberately from the beginning. Like, Hey, look, we have a track record. We know we can raise money. Let's go raise some money. Yes, we dilute. We'll still stay in control. We want to have some type of quality of life and let's run. Is that like a fair characterization? Yeah. One is like, just like the starting cost. Like there was just like a fork in the road of like, we weren't going to be able to pay the $60 ,000 annual contract to a vendor out of our pockets.

Like we didn't have that type of money. And then like when we need our first engineering hire, even if we pay them conservatively, 120K, where's that money? Like, is that coming from my bank account? Because I don't have that. And my co -founders who are 24 don't have that. So I think by like a forcing function of getting off the ground, I'm like hugely envious of bootstrap business.

I think if you, if you have the funds or the means to go about owning as much of the company as possible and not getting on the VC flywheel, like power to you, that's amazing. We just weren't in a circumstance as 24 and 27 year olds to be able to spin up this business and attract the talent that we needed from our own bank accounts, which weren't anything at the time.

With AI the way that it is now, do you think you could do this business without, could you have started this business without venture money? Maybe like a small friends and family? Yeah, definitely more competitive now and easier now I'd say with like the tools that are available. It doesn't necessarily solve the, how are we bringing in like our first senior engineer who can help us stand up this infrastructure.

You can argue like, can you use AI? And I think in like the current state to build the, like the AI that you see that goes viral on Twitter, that's like super flashy and marketable or like fairly simple crud apps that do like basic things and they look shiny and they work. But like the amount of infrastructure, data engineering security, that's like built into this platform.

Like, and maybe this changes over the next year or so with AI advancements, but we definitely needed some of the hires that we, that we made to get off the ground. But then I'd say like, how did we get to where we are now? And I continue to raise capital. Like once you get on the flywheel, there's not even like the pressure of like, oh, we need to deliver, especially the seed round.

I think most seed investors know, like they're losing money nine out of 10 times there. Like there aren't these like super lofty, you have to be a hundred percent growth. They just hope that you make it to the next round to like an A, right? And then once you get to like a series A, we raise $12 and a half million dollars. We, you kind of get on this, like, it's not even like bloat, but you start to accelerate and you're growing 20, 30% month over month.

And then you are burning more capital than you're making in most circumstances. So we, we've had a few profitable months, but like have almost intentionally been unprofitable to put money into growth to continue to gather market share. Because I think going, it sounds like to like small business owners may be totally illogical to build a business that way.

You have to like assume that the anxiety you're living with on a day -to -day basis, that there are dozens of other companies in this space who are going after the exact same customers that we are, that are sending cold outreach emails to our current customers to win them over. And we're all like going head to head on features, functionality, competitive advantages.

Like once you're on this, like, Hey, we want to compete in the big leagues, there's not like, hey, how about we slow off growth? We maybe launch a few less features next month. We lay off this one team, so we cut off that initiative. And then we get to break even. So I think the hardest thing to find in any company, and especially a startup, is true momentum.

And once you find that momentum saying like, oh, let's just take our foot off the gas, let's get to break even, let's get to profitability. And then we'll try to find that momentum again. I think it's the hardest thing to do. And it's something I've debated many times, right? I've come to two fork in the road moments, our series A and our series B, where I was like, we don't need to raise money here.

We can pull back spend. We can slow growth a little bit. We can maybe not hire those five people that would help us get to this next level of growth. But it's like the unknown unknown of like, if we do that, are we just shooting ourselves in the foot and not taking advantage of the opportunity that we have in front of us? Or do we raise the round, make those five hires, accelerate growth and gain more market share in a super competitive market? And I'd rather lose by going for it than looking back in five years and being like, we had such a great opportunity in front of us, but we took our foot off the gas to get the profitability when we didn't need to, to save what,

five, 10% dilution. And that's kind of the decision that I've landed on twice. What's interesting is whenever I talk to entrepreneurs who are either new to the, I guess, content space or don't know it very well at all. And they're like, why would you be doing that? I always ask them this question. I'm like, Hey, you know, Uber, right? Yeah.

Yeah. Do you know how, you know, they raised billions of dollars, right? Yeah. Yeah. Yeah. And they raised billions of dollars. Do you know where like half of those dollars went? Uh, no, they went to Google and meta. Like, what, what do you mean? Like customer acquisition. They were trying to grow their market share. They're trying to attract customers.

Like, Oh yeah, I guess. Yeah. That makes sense. I didn't really realize that. Like, okay. So if you could build your own brand and have a newsletter or have an audience, how valuable do you think that distribution channel is? And like, that's the moment that it sort of reframes in their mind where they're like, Oh, I guess that makes sense.

Like, yeah, why wouldn't I try to grow an audience? So then I have another distribution channel and exactly what you're explaining is like, once the flywheel is going, you don't want to pull your foot off the gas. Cause you finally have figured out product market fit. Now is the time to throw gas onto the fire in the form of whatever paid ads or marketing or customer acquisition, because you know what works.

I'm in agreement with you on like, once you get to a place, it's like, yeah, sure. Let's dilute and bring venture money. Just interesting seeing that you raised it from the beginning. Cause it would seem like this was profitable enough from the outside. But yeah, I mean, it makes sense. I was going to hit on it earlier. Like the ambition you were, I think one of your first questions was like, do you ever take a step back and like, think about like where you are, like, you know, 30 million plus in revenue this year.

Maybe you get like a 10, 20 X multiple, like big, big, large business, right. And like three and a half years time. And what I was going to say to that question was like your ambition really grows a lot over time. Right? Like I think, I think a year and a half in we had, who knows how real of an offer it was, but a competitor wanted to buy us for $30 million.

I think we were 18 months into the business. If you would have told me 18 months prior, Hey, you're going to go heads down, build this thing and, and really grind for 18 months. And there's a $30 million offer on the other side of that. And you walk away with like eight, 9 million. I'd be like, that's an amazing bargain. I would take that 10 times over 10.

But once you start to see the product market fit, you understand how you're actually solving real user problems. Like you're gaining momentum. You start to see the roadmap develop and like, Oh, you see the potential of what this can be. When that $30 million offer came across my desk, didn't even, didn't even flinch. Didn't, didn't consider it for a second.

Cause I was like, I think this can be a multi -billion dollar business. I'd be shooting my, and I'm also having a lot of fun. So that's like the other thing too. There's always the trade off of like, there's a dollar amount that could be offered today where I'm like, yes, I do think this can be bigger, but like, it's also my life. I've stressed beyond belief for four years.

Yes. We could grind this out for another four, 10 years, but there's an opportunity cost there to the enjoyment I could get out of like, maybe having a little bit of savings and money and like paying whatever. Versus the gray hairs and stress and struggle that will come for the next like eight years. And there's a price. But what balances that is the fun that I have doing what I do.

And I guess I said that there's a price, but like, we're not for sale. Like that is not like the immediate 12, 24, 36 month roadmap. I'm having a lot of fun building what we're building. I think the opportunity in front of us is absolutely massive. And then to answer one of your most recent questions in terms of having 10 bosses, me and my two co -founders actually control the board.

And so like we are in control of the business and we are very fortunate that we've never had a down month in the three and a half years we've been doing this. So maybe we haven't felt the VC pressure of like, what are you guys doing? Get your shit together. Like we need to return this capital, but our VCs have been incredibly supportive. And so I don't feel the pressure of having 10 bosses.

All right. Here's my last question for you. If you were an entrepreneur or if you're somebody who's like, hey, I want to start a newsletter. I freaking love newsletters. Like I really do. I think they're awesome. Potential businesses. You have like insider information. All right. You're like Wall Street, but you know exactly when the earnings reports are coming out.

What niche are you seeing that's like underserved or like what would you start? What kind of newsletter would you start? And what are you seeing that's like, hey, I think in the next 12 months, you're going to be seeing a lot of X in this space. It's hard to say what is being underserved because I feel like all I see are the ones that are actually existing.

Right. So it's kind of like for someone else to determine like, here's something that I'm really good at and really passionate. And there's not enough content. I mean, that is like, again, the Morning Brew initial story. It's like I'm very passionate about business news and finance. And no one seems to be serving my other classmates at the University of Michigan.

This is the co -founder speaking in this hypothetical. So like I see a void and a gap to fill of like, so something between Bloomberg and like what students are reading who are interested in business and going into like their entry level investment banking jobs. And like that was the gap that they found. I think there's plenty of niches. I think that's like the best part of the Internet.

The Internet, the quote Ben Thompson is so much larger than everyone even gives you credit for. Like you can find probably 10 ,000 people that love the most obscure thing that you thought you were the only person in the world that even knew existed. So I think there's plenty of niches out there. All right. One last thing. Can I make a recommendation? Sure.

I think you should launch a podcast ad network because the newsletter space was already disparate and messy, right? If there was a place for podcasters to go and easily transact ads, that would like change the dynamic and the experience. You would get so many podcasters who would then sign up and sort of utilize their podcast network into a newsletter, but then also sell ads that way.

I don't know if you've looked into it, but like the current existing podcast ad networks just stink. Not even networks, just platforms to buy and sell ad space. Yeah. My response to that is way to our feature launch later this week. My visual response is no comment. All right. Hopefully you liked that episode. And if you've made it this far, you're either really committed or you're stuck doing yard work and you can't actually skip on your phone.

So while I have you, the show is growing, but I have a favor to ask of you. Will you please help me grow the show? I want to reach more people. There's a couple of things that you can do. Like, and subscribe is the simplest thing. Obviously you want to get notifications for when the next episode is coming out, but if you go the next step, will you leave me a review five star on Spotify or Apple? What that does is it tells the algorithm that, Oh, Hey, this is a high value podcast because more people are leaving reviews for it.

And it then pushes it out to more people. So that's why when people are like, well, you like and subscribe and put the five star rating. It's not just to make themselves feel better. It's actually to get more exposure for the show. So if you do that for me, I would greatly appreciate it. And I'll see you next time.