Substack takes a 10% take rate of everything you earn. I don't believe in that predatory business model. I think that if you can convert free readers to paid readers, you are entitled to take all of those earnings.
Are you scared at all about how people can start using AI when it comes to actually generating newsletters themselves and content?
I'm not really concerned. I think subscribers will vote with their feet and with their dollars if it's good content.
Welcome to another episode of Lunch with Jamie. On today's episode, I'm joined by Tyler Denk, the CEO of beehiiv. Now, this is a little out of the box for me, but as a proud member of beehiiv, when I got the opportunity to talk to Tyler on the day of a bunch of new releases for beehiiv, I just got really excited and wanted to invite him on the show. We covered so many topics. You know, this guy started at Morning Brew, then ultimately launched beehiiv with a couple of partners. They've now built it into an amazing business. I'm really excited to be a part of the network. beehiiv ultimately is more of an operating system for the content economy as opposed to a newsletter platform. They have thousands of newsletters ranging from Oliver Darcy to Arnold Schwarzenegger to Scott Galloway to Time magazine and of course Jaime's List. Tyler has his own newsletter called Big Desk Energy, which talks about being a founder. And it was an awesome conversation. We talked about AI, we talked about the creator economy, we talked about his lack of knowledge of LA food, which I'm hoping to change for him. And I think you'll enjoy the conversation. So here's my conversation with Tyler Denk.
Well, thank you for joining. Really appreciate it. I am, as you know, I think you know, this is called Lunch with Jamie, which is, although we're not eating lunch, food is really important to me. It's a core tenet of my newsletter, Jaime's List. And I always start off with the same question for my guests, which is, if I was meeting you for lunch in your new home of Los Angeles, although you could pick another city if you want, where would we be going for lunch?
It's a great question. It's honestly something I always struggle with in general when people ask for recommendations. So I would selfishly choose a place that I want to try that I haven't been to yet. It's a little risky. I can't take credit for whether it be good or bad, but Steak 48 has been pretty high on my list.
All right, there you go. I'll always take a steak. So good call. Good call. I like that. I actually have not been to Steak 48 yet, which is surprising, as it's been here for a while. I'm sort of just mourning the loss of Wolfgang's in Los Angeles still, and I refuse to kind of go back to any of the other steak places.
I live right down the street from Baller, which is also pretty great. That's usually my go-to when people are in town.
When did you move out from New York?
Four and a half years ago. It's actually like one-to-one with when we launched the company. So we launched beehiiv November of 2021 publicly, and that's the first day that my lease started. So easy to remember.
That's really easy to remember. So, you and I, you may not know this, but you and I just got back from some place not that long ago, which was Cannes, in Cannes Lions. Which to me, I was there last year, but for some reason this was like a real light bulb moment for me, being back at Cannes. You know, all anybody wants to talk about obviously is the creator economy. I think, you know, I'm someone who's been in Hollywood for over two decades now. I think I've sort of in some ways pushed away from the creator economy. But I think to the average Hollywood person, they still don't really think about the quote-unquote creator economy as something they're a part of on a day-to-day basis. But as you see the numbers, and I talked about this in my newsletter, with the creator economy reaching a half a trillion dollars almost in the next couple of years, in some ways we're all a part of it if you're creating anything. And so I guess my question to you is sort of what was your biggest takeaway from this year's Cannes Lions?
Yeah, I hate to repeat kind of the same thing, but it was overwhelming, right? It was so in your face everywhere I looked, whether it was in person at the different events and who were on the different panels, to who I followed on Instagram that were also there promoting their panels and the parties and the events that they were going to. So it's not much of a hot take because I think everyone's kind of in consensus with this one. But it did feel, as someone who went to my first Cannes last year, so this was my second year, and the contrast in the number of content creators there, the panels, the events, the parties all centered around the creator economy was pretty large position, I would say.
What's interesting, and again something I talked about in my newsletter, is that Hollywood really has its birth in sort of branded content, sponsored content. You know, I think a lot of what the creator economy is, is obviously branded and sponsored content. I think the Lumière brothers in the late 1800s created a 40-second short film that was financed by a soap company. You know, if Paul Thomas Anderson created a 40-second branded short film branded by a soap company, that'd be called a commercial. It wouldn't be called a short film. So I think in some extent it's like semantics slash just sort of this feeling that I even had of sort of once you've put a brand on it, once you've sponsored something, traditional Hollywood kind of has this aversion to it. Whereas, you know, in many ways, to me, it seems like that's the obvious place for where the funding for so many things are going to be coming from, whether it's traditional film or TV, or it's newsletters, or it's a podcast, or it's micro-dramas, or whatever it may be. So, you know, I think to me, I'm actually really excited for how Hollywood kind of folds into this kind of new creator universe. I'm not sure some of my friends will be as excited, but I am.
Well, I mean, you've seen like in the box office some of the recent films, right? Led by and directed by those creators on a sub-million dollar budget and the commercial success that they had. And then I also remember reading an article not too long ago of how many studios are actually casting creators to be either extras or like not the main character, but characters in these different films, knowing that they'll get the added distribution of those content creators promoting on Instagram and the different channels. So yeah, I tweeted last week, I said that I think the creator economy is the future of media. Whether you're seeing these journalists go independent and leave these large legacy media companies, whether you're seeing these YouTubers and TikTokers building their own scripts and going to Hollywood directly, whether there's some combination of how you're consuming content today, whether it's YouTube, newsletter, podcast, like and all of the news, the reports of like where people and Americans are getting their news primarily through social media, which has been like that stat that's been circulating for the past few years. And a lot of that news isn't coming from the New York Times posts or their pages on social. It's content creators covering right-wing, left-wing politics or on-the-ground reporting local news. So yeah, I'm very bullish on the creator economy. I think we're actually like really much in the first inning and think that there's going to be a lot more developments and just content being created from not these institutions.
No, I think you're totally right. And to be honest, that's I think for me what excited me and has been exciting me most about beehiiv is, you know, I was someone who formerly was on Substack. I moved over to beehiiv primarily because I felt like I wanted something that had more customization, something that could create this whole community for me that ultimately had, you know, not only a podcast but a community-sized section and something with flexibility on what you're building and can personalize it. And again, it felt like it was mine because ultimately for myself and for, you know, if you're a content creator, again, whether you're an amateur filmmaker or you're Mr. Beast, or you're Arnold Schwarzenegger, you know, you have your voice and only you can really be the one to express that voice. And so if you're limited by and confined by sort of parameters set by, you know, a tool that you're using, it makes it hard to really express, you know, your vision and your voice. So I think that's one of the things that makes beehiiv special for a lot of people who don't really know beehiiv, which in many ways is sort of, I've heard you talk now on podcasts, is actually not, you're not mad at people not knowing beehiiv in some ways because you know that you sort of want to power everybody as opposed to be the front brand. Can you talk a little bit about, you know, what beehiiv is and how it began?
Yeah, for sure. And we definitely do want people to know what beehiiv is, but at a different angle, right? I think the point that you're hitting on is if people visit your website, they might not necessarily know that you are using beehiiv. And that's intentional. We don't want to intermediate between our content creators and the end audience. We want to be the tools and infrastructure in the background to empower these content creators to create that content, to engage with their audience, to extract revenue, whatever it may be. The backstory on beehiiv, I think, really starts with my previous job. I was at Morning Brew. I joined as the second employee back in 2017. And if Morning Brew is a daily, now a daily newsletter, goes out Monday through Sunday covering business news. The Skimm was kind of like the first big newsletter at scale. Morning Brew came slightly after, and the thinking was just creating more relevant business news outside of the Bloombergs and Wall Street Journals of the world. Morning Brew ended up being a massive success. We scaled it to 4 million readers and eventually got acquired by Business Insider. But along that way in that journey, I built all of this internal infrastructure. I built the content management system that the writers use to create content. We built an ad management platform, which is how we monetize the newsletters through sponsorships, and all these dashboards and analytics that we created to make Morning Brew a success. During that journey, we would get hundreds of replies every single week of people asking, 'How did you build the newsletter? How did you style it that way? How are you scaling so quickly?' And the answer was, I knew the answer to all of that because I had built that myself. So that was kind of the impetus for beehiiv. It was, can we build a Morning Brew in a box back in the 2020-2021 time when everyone wanted to be Morning Brew for X? There was Morning Brew for crypto, Morning Brew for AI, Morning Brew for politics. And having that experience, me and my two co-founders, who were two engineers early in the Morning Brew days as well, we kind of knew the tools and infrastructure it took to make that possible. So that's where beehiiv started. It was primarily a newsletter platform. We had the same referral program that we built at Morning Brew available out of the box. We wanted to build an ad network. We saw at Morning Brew that we had 30 people in the ad sales team. You know, you, Jamie, you might want to sell sponsorships, but like you're probably better creating content. Like you don't want to do ad sales. We have a lot of writers who are amazing at writing about sports and politics, but that doesn't mean that they want to sell ad sales to Nike and whoever wants to sponsor these other newsletters. And so being able to solve the monetization problem, similar to what YouTube did for video, was always a core tenet of what we wanted to do. And then of course, Substack entered the market like three to four years before us. They believe that paid subscriptions were the only way to monetize. They take a 10% cut of any paid subscription. We don't believe in like the predatory take rate model. We have 0% take rates across the business on subscription and digital products. So to kind of sum up where we are today, we're kind of like this all-in-one creator platform. We started with newsletters. We have a website builder. You can build a beautiful custom website. You can use AI to do that. We allow you to sell digital products. So you can sell courses, webinars, templates, coaching, etc. We recently launched podcast hosting three months ago, and so you can actually host and distribute your podcast directly on the platform. And then depending on when this airs, Thursday, July 16th at our summer release event, we're announcing community as well. So you can actually go deeper and build a space for your audience to engage with other members of the community, kind of as like this final missing piece of what we think it takes to be a total creator platform.
So yeah, so this is coming out. We're talking, it's Thursday. You have a lot of new features that are coming out. I think I want to stay, let's stay high level, but what are the couple of things that you're most excited about?
Yeah. So I already hinted at community. Community is like the big bet, I think. And selfishly, like, you know, I have my personal newsletter. It goes to 130,000 founders. I've done a good job of curating an audience and a network of founders who are like-minded and interested in startups and tech. For me to launch a community to bring all of them together and learn from each other, I think is like a massive opportunity, one for them and also for me as like an additional revenue stream. So it's like an example of why I think community can be so powerful, both like what it actually is and what it unlocks for the creator for like monetization. We're also launching something called a copilot. So we launched like three, four months ago an MCP. It allows you to interact with beehiiv essentially through Claude or ChatGPT. People who are using like AI in their workflows have been raving about it. Copilot basically brings that directly into the platform. We are launching programmatic ads. Right now with the ad network, you can choose from like a library of available offers, and with programmatic ads, you just add the block and we will automatically fill the newsletter with the most relevant ad at the highest price. And then the visual editor is like kind of the last thing I'll hit on. The editor is kind of at the core of the entire platform, what our writers use to actually create content. We basically rebuilt the entire editor from the ground up. It's what you see is what you get. It's collaborative. It's more powerful. There's more customization. It's just like a better writing experience. It's really hard to describe a better editor over text. It's like one of those things you just like, you use it and it just feels so much better. So those things I'm all like very excited to share.
As a user, they all sound really exciting to me. Now, I want to take a step back. As I told you, I was on Substack for a while. While I was on, you know, it's interesting as I've prepared for this and listened to you. I started off with an email to friends that I sent out of my inbox, you know, just because I wanted to get some things off my chest and talk about restaurants. Then I put it over to Mailchimp and fumbled my way through that, and then I made it over to Substack and got a little more serious about it, although still kind of a side project. Then finally came over to you guys because, truthfully, because of customization. That was really the number one for me. And I also didn't like the fact that Substack was kind of going, you know, they ultimately, I was just a part of this Substack network. It wasn't Jaime's List. It wasn't my own thing. I was just part of Substack. But the irony, and we talked a little about this in branding, is that Substack now has become Kleenex or Band-Aid, right? People come up to me all the time, 'I love your Substack.' And I used to be someone who would say, 'Well, it's not on Substack, it's on beehiiv.' And then finally I was just like, this is not worth the energy to try and explain to people what the difference is. But I guess the question is, if I was, you know, there are a lot of people who are considering starting a newsletter. Why, if I'm listening to this right now and I'm thinking of starting a newsletter, why would I start it on beehiiv?
Yeah, there's quite a few different reasons. One, I think, is like we have a very different business model. Substack is trying to build a social platform. And going back to your point, you were complimented on your Substack, like not Jaime's List, not your media company, not your newsletter, not your website. We use the Amazon-Shopify analogy a lot. There are millions of third-party sellers on Amazon. Most people don't know them because they just type in whatever they want to buy and that's their interaction with that merchant. But really you're going through the Amazon website, the Amazon app, it shows up in an Amazon box. Everyone associates you with Amazon in that case. Shopify is the complete opposite. Whether you're shopping for shoes or whatever. I used to use Allbirds as an example, but it's no longer a good example because I don't know that they exist in the exact way anymore. But when you go to Allbirds, you don't know that they were actually built on Shopify. It's Allbirds' brand. It's their website. It's their customer support. And so I think it's important to understand like whether you want to be a part of this network and associated as a Substack, or if you want to be like Arnold Schwarzenegger and build Arnold's Pump Club, like that is a standalone media property that is associated with him. So that's like one big differentiation, and I think that's a philosophical differentiation all the way down to the features and capabilities. Substack is very limited in customization and design. We want every brand to be unique and bespoke to themselves. There's business model considerations. So Substack takes a 10% take rate of everything you earn. I don't believe in that predatory business model. I think that if you can convert free readers to paid readers, you are entitled to take all of those earnings. We also have digital products. So you can sell, like I said, templates, guides, coaching, webinars, all of that. It's a 0% take rate on our end. So I think as far as like capabilities and breadth of what you can do on a platform, it's far more expansive. Philosophically very different in terms of like are you building a Substack or are you building your own brand? And then as far as like revenue opportunities, like I said, we have digital products, we have paid subscriptions. We also have an ad network. So in two to three clicks, anytime you're creating content, you can add premium sponsors like Ramp, Kozi, AG1, Nike directly to your newsletter and get paid out accordingly. So we offer a very large breadth of one, features and functionality, and two, ways to monetize. And so when you kind of sum it all up, I think they're two totally different philosophies. I think they're going for a walled garden, closed platform that you're building on their turf and your subscribers kind of find you through Substack. We are building an open platform that can integrate with any third-party platform that you can customize and make your own and monetize however you'd like. And we are not confining you to just our platform. And so I think there's a lot of philosophical and technical differences there.
Yeah, and that makes total sense. And as a user, that tracks. For the, it feels like in some ways, right, everybody has a newsletter now, but you know, it's barely scratched the surface, as I think you said. You have a lot of casual people who are starting newsletters. I know I heard you quote sort of something along the lines of, you know, one of the most important things is growth, and the next thing is kind of monetization. I think that, however, there are a lot of people who are just passionate about something. And that's sort of where I started from, is that I just felt like there's a lot of stuff I loved and wanted to talk about, and it was just a way to get sort of a creative aspect out of me that excited me, and that was food, culture, politics, and sports really, and music as well. And truthfully, growth and monetization actually really were really low on the totem pole. And at the same time, I was really, although I'm tech-savvy, I definitely did not understand a lot of the technical aspects of things you're kind of talking through. So if you're someone who's just an amateur or someone who's a hobbyist, is beehiiv the right place for you? And what do you say to kind of encourage people to kind of take that first step of starting a newsletter?
Yeah, I mean, even my newsletter, like growth and revenue wasn't really my main objective either, outside of I wanted to be a case study of what could be possible in the platform. I wrote because I wanted an outlet to share the behind-the-scenes stories of how we're building the company, both as like a journal and an archive of everything that we've built and the experiences that we've been through. As far as like getting started, like there's a reason why we have one of the more generous free plans. Like you can go up to 2,500 subscribers without ever spending a dollar on the platform. So we want to encourage people who are just kind of kicking the tires and experimenting that this is a platform that should be beginner-friendly without having to put up cash and like have a subscription towards the platform. We have invested a ton in templates from websites to newsletters to like quick-start your journey and make sure that you can get started as quickly as possible without going through the nuances of styling every last detail. Transparently, on like the product side, which is what I run, it's the hardest part to think through. Like we have power users who are spending hours a day on the website builder and the newsletter building all these custom integrations and designs, and we want to encourage that, but we also don't want it to be intimidating for brand new users to come in. And so finding the right balance of someone who just wants to write and have a beautiful template and website that they spent 10 minutes putting together, like that should be very possible, and we have made that possible. And then for those who pick up momentum, and there's been so many stories of people like you who started with, they didn't care about revenue, they didn't care about growth, but they found a niche and people who really cared about that content, all the way up to them like quitting their jobs and going full-time a year or two later because they did find an audience and they were able to monetize eventually. That's kind of like the beauty of the platform. I think we've made it very beginner-friendly. But when you're ready to take the plunge and you want to start monetizing, you really want to focus on growth. We have the largest public publishers from Time, TechCrunch, Newsweek, Sinclair, like running their content business through us. And so it is meant for enterprise all the way down to beginners, and that's kind of the fun of it.
Talk me through some of the stats on newsletters. Obviously, you know this business intimately. How many newsletters are there today?
We have like an active metric, which is they've been sending frequently. It's about 55,000 actively sending on the platform today.
Sorry, not on beehiiv, in the universe. Do you have, do you sort of just the big size scale of the market and the size of the market?
Yeah, yeah. I have no idea what our market penetration is. So like multiples of that, I mean at least, how can I make an educated guess here? I'd say at least like a million.
It's hard because so many companies are also launching newsletters, right? Like there are small, medium-sized businesses that have a bulletin to reach their customers in their community. There's churches that have newsletters for the people who attend their church. Like so, newsletter is such a broad category. I say a million just like shotgunning, that's like way undershooting it, which is why I think the market opportunity is so big. So I think one, like the bull case on beehiiv is that we're at like...
a tiny tiny fraction of a percentage of market penetration of like people who are consuming emails and then two we know that emails aren't the end all be all which is why we've also expanded into podcast and websites and community. Um, so we're kind of just going after the creator economy pie. But to answer your question, I have no idea of how many...
