If you subscribe to a multitude of newsletters like I do, you may have noticed a little button that has started to pop up at the bottom of many of them (including this one).
In the last two years, Tyler Denk has led beehiiv (stylized with a lower-case b) on a torrid pace of growth, passing $4m of run rate revenue this spring, on pace to triple that by the end of the year. beehiiv has more than 35 million monthly unique readers and 7,500 active newsletters on the platform. Perhaps the most impressive piece of this, though, is that beehiiv did this having only raised $4m and having reached profitability before raising their $12.5m Series A led by Lightspeed Venture Partners.
Read on, as I’ll take you through Tyler’s journey from the suburbs of Baltimore to leading one of the buzziest startups in Los Angeles. 🐝
If you only have a minute to read, check out our key takeaways for founders and aspiring entrepreneurs.
- 🤔 Solve your own problems - beehiiv was born out of Tyler’s experience at Morning Brew, where he was the founding engineer. Morning Brew readers constantly asked how they could make their own newsletters more like Morning Brew, and Tyler decided he could make that happen by building a standalone tech product.
- 💸 Venture capital is a means not an end - Tyler has approached venture capital cautiously, raising only what he needs to build and accelerate growth. With this approach, beehiiv reached profitability raising less than $5m in venture capital and recently raised a Series A to accelerate growth.
- 🤝 Strategic investors matter - beehiiv’s early investors included a number of newsletter writers and creators, like finance meme page Litquidity, who moved his 100k+ subscriber newsletter to beehiiv after investing and has promoted the platform to his followers and fellow creators.
🧒 Early Years
Growing up in Baltimore, Tyler Denk was a self described “normal suburban kid, not the smartest or anything,” but when I asked him how he started his entrepreneurial journey, his answer was immediate: physics class. As I think anyone who has gone through a high school physics class knows, physics is hard. For Tyler, though, that’s where he found his passion. He tore through the physics and engineering classes at his high school, and moved on to the University of Maryland, where he was a mechanical engineering major.
❝I loved everything about physics and equations and math and all that s*** - that's where I nerded out.
While nerding out in mechanical engineering, Tyler also joined all the entrepreneurial clubs, classes, and programs he could find. He met multitudes of people like him - aspiring software founders who might have had an idea but didn’t have the software engineering skills to build it. Unlike most of us (myself included), Tyler didn’t just talk about his ideas ad nauseum, but rather, he taught himself to code and built his first company himself (this is the first of many examples of Tyler solving his own problems).
The company was called Venture Storm, and the goal was to solve the “lack of coding skills” problem for everyone else by building a marketplace for founders with ideas and no technical skills with college-aged software engineers who have skills but no experience. Basically a cofounder dating app. Cool idea, but very hard to execute. Tyler worked on Venture Storm through college and after graduation, growth hacking, hustling, and pushing forward, but eventually wound the company down after realizing that he had a “terrible business model because we had the brokest customers possible, [new founders], who had zero willingness to pay us.”
🌎️ The Real World
After winding down Venture Storm in 2017, Tyler was a college grad with no job and a bunch of student loans to pay off, so he started freelancing for his grandfather’s shoe store, building the store its first online presence.
Tyler freelanced for a few months, building Shopify stores for small businesses in his network before sitting down with fellow Baltimorean Austin Rief, co-founder of the pioneering newsletter Morning Brew. Austin and the Morning Brew team were just getting started, and they needed an engineer to help them turn what was just a content company into something with a little more tech behind it. Tyler spent the next three years building the tech behind Morning Brew’s massively popular family of newsletters. Throughout those three years, Morning Brew readers who ran newsletters themselves would consistently contact the company asking about the Morning Brew’s tech stack as they looked to improve the appearance and functionality of their own newsletters. With this clear untapped demand, Tyler pitched the Morning Brew leadership team on licensing the company’s software to other newsletters, but pivoting a newsletter business to a SaaS business was judged a bridge too far.
Eventually, Tyler left Morning Brew in October 2020 to join Google just months before Insider acquired a majority stake in Morning Brew for $75m.
After leaving Morning Brew, Tyler couldn’t get the idea for a newsletter software company out of his head. Substack was flying high, but Tyler kept hearing about unsatisfied customers.
❝I kept seeing on Twitter and hearing from friends that people were complaining about the lack of features on Substack, and I knew I could build a better product because I had already built all of that at Morning Brew
Substack’s approach was to focus on simple newsletters written by individual authors, with a focus on monetizing via premium subscriptions. Mailchimp, the legacy leader, has always been a product built for email marketing rather than email newsletters. Neither platform was custom built for the aspiring newsletter company, and neither one was built for ad supported monetization, the bread and butter of Morning Brew’s business.
In the week between leaving Morning Brew and joining Google, Tyler and his Morning Brew colleague Ben Hargett scoped out what building a newsletter software company would look like. They thought it would take about 10 months to build while holding down real jobs at the same time. Ben brought along another friend and colleague Jake Hurd to help build out the product, and the three of them went to work (on nights and weekends).
🐝 beehiiv
In August 2021, Tyler, Ben and Jake were ready to go with their MVP and went to market for some initial funding to get the company off the ground, eventually raising a $2.6m seed round led by Social Leverage. Smartly, Tyler and team took not only money from institutional VCs, but also relevant creators, influencers, and newsletter writers like finance meme page Litquidity, who moved his 100k+ subscriber newsletter to beehiiv after investing and has promoted the platform to his followers and fellow creators.
Concurrent with the raise, the three co-founders left their day jobs and started working on beehiiv full time.
beehiiv has been in growth mode ever since. The company has grown ~40%+ month over month since its early days, with 90% of growth coming organically. One example of the clear product/market fit of the business is that in year one, the company didn’t spend a penny on paid customer acquisition. Since then, the company has grown to over $4m in run rate revenue, and is on pace to triple by the end of the year.
So why has beehiiv been such a hit with newsletter writers? 🤔
Substack has been around longer, Mailchimp and Constant Contact even longer than that. All have bigger warchests, bigger engineering teams, and bigger marketing budgets.
What beehiiv has is an extremely clear understanding of the customer. In Tyler’s opinion, Mailchimp, Constant Contact, and the other legacy players are purpose built for email marketers not newsletter writers. The platforms are massively full featured but are clunky and confusing for first time users. They don’t offer easy, simple website tooling and are more expensive than beehiiv and Substack. Substack, on the other hand, is free but offers extremely limited customizability both on the newsletter and on websites. If you see a Substack newsletter, you immediately know it’s from Substack. It’s hard to stand out, and for enterprises, it can look unprofessional. They also have limited growth-focused features, like referral programs.
Additionally, Substack has focused on paid subscription-based monetization rather than sponsor-based monetization, dramatically reducing its appeal to free, ad-supported newsletters. Clearly Tyler and beehiiv onto something, given the rapid growth of the business thus far.
Today, beehiiv makes money primarily by charging a SaaS fee to writers, with tiers ranging from free to $99 a month for the premium package, but the company’s grand ambitions lie elsewhere, in advertising.
Today, if you’re an internet marketer, there are two primary mega-channels that exist - Google for search and display ads and Meta for social media. Tyler wants to build a third mega-channel - newsletters. Right now, if you want to market your product or service through a newsletter, you have to find a newsletter, manually work with them to create a custom contract, and then go from there. Similarly, if you’re a newsletter writer, a large portion of your time is probably spent trying to sell ads on your product. beehiiv hopes to create the first true marketplace for newsletter advertising, unlocking supply and demand for both sides of the equation.
Obviously, that’s a big vision, which would take years to accomplish, but it’s a goal that has gotten top-tier investors, like Series A lead Lightspeed Venture Partners, as well as others excited about the opportunity.
We here at dot.LA are excited to see what Tyler and the beehiiv team can accomplish, and we’re happy that they picked sunny Los Angeles as their home base.
P.S. If you write your own newsletter, you can sign up for beehiiv here
Image Source: Blackbird