Tyler Denk
Episodes
Notes
Nikonomics - The Economics of Small Business · 164 - Building Beehiiv into a $300 Million Dollar Business with…
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Why Did Beehiiv Turn Down a $30 Million Offer?
Tyler Denk turned down a $30 million offer for Beehiiv about 18 months in because he thinks Beehiiv can be a multi-billion dollar business, and he was having a lot of fun. He is not sure how real the competitor's offer was, and he did not flinch or consider it for a second.
Eighteen months earlier, grinding for 18 months and walking away with eight or nine million would have sounded like an amazing bargain. He would have taken that deal 10 times out of 10. Product market fit, real user problems, growing momentum, and a roadmap that was starting to develop changed the view.
He has been stressed beyond belief for four years. Grinding another four or 10 years carries an opportunity cost in th
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Does Beehiiv Take a Cut of Subscriptions?
Tyler Denk takes no cut when readers pay a writer directly for a paid subscription on Beehiiv. Writers are meant to take home as much of that revenue as they can.
People compare Beehiiv with Substack, which takes a 10% fee of every dollar creators earn on Substack. Beehiiv offers the same kind of paid subscription and takes no cut of the revenue. Facilitating direct sponsorships with Beehiiv tools costs a $10 transaction fee. Selling a sponsorship directly brings no penalty.
Beehiiv still needs to make money as a business. The philosophy from day one is to build the tools that let users succeed, then earn from their success without pulling revenue from them. User success over the long term
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How Does Beehiiv Split Its Revenue?
Tyler Denk is working from a year of about $30 million in top-line revenue at Beehiiv, split about 70 percent SaaS and 30 percent ads.
The projection he is using puts the SaaS side, the email product and the newsletter product together, at $23 million. The ad network is the other $7 or $8 million, ideally more, and Beehiiv is pacing above the projections set from the start of the year. SaaS margins sit in a typical SaaS range, somewhere between 60 and 70 percent. On ads, Beehiiv keeps a 10 to 20 percent cut of the revenue, and the spread moves with supply and demand. An advertiser such as Nike, where demand is high, means a larger spread, and weaker demand means a smaller one.
The ceiling