Zero to Unicorn: beehiiv Founder Fireside

Yeah. Does anyone read Big Desk Energy here?

Nice. So the new again power of newsletters, right? Newsletter to IRL events. Great. One of the things that I've done not intentionally to start is building in public is something that I think is like played out a ton, but I think it works extremely well. And so I didn't even know at the time when I it was 2020 and I was building this as a side project. I was genuinely just so excited about building and like the potential that I was just sharing updates publicly on my Twitter feed. I had like three or four thousand followers on Twitter. And from that, I've come to learn and there's like a strategy behind it as well where if I only posted on LinkedIn and Twitter about email newsletters, I think there's tens of thousands of people who really care about that. But if I were to post about revenue milestones, hiring tactics, how we're scaling the company, how we run meetings, how we're a remote company, now the like TAM of people who are interested in that content is anyone who's interested in business, startups, and entrepreneurship. And so just from like a pure strategic standpoint, this whole building in public persona I think is really interesting. I also think that most startup founders think that they have like some secret that they don't want to get out into the world and so they don't share what's actually working and what's not working. I've projected exactly what our roadmap is and like what we're prioritizing from day one. I think our team can out-execute any of the other teams in the competition. And so like I've been very transparent of like this is what we're building. This is our vision and I share all of our revenue milestones as well. Not from like a douchey standpoint of like look at how much revenue because I used to share it when we were making $1,000 a month. But it's more of just like being very transparent of the journey, the ups and the downs. And also when you hit these different revenue milestones, it's great for obviously raising capital. It's great for users at the beginning. Like now we have 50,000 active users. There was a time when we had 50 active users. And when there's already well-established players like a Mailchimp or a Substack in the space, you have to convince users that this is a legit platform with real staying power. And seeing the up and to the right trajectory gives people a lot of confidence to trust in me as a leader, the platform as a platform that they would choose to use, and then investors obviously like to pass around the different milestones and metrics. Again, didn't answer your question. The most recent revenue milestone, we're at $22 million ARR today. And then we make an additional $10 million every year in the ad network and that's growing. So total revenue run rate is about $32 million today in about three and a half years.

Business model, so that's where we separate from a few companies. So if you put us in like the creator space and like Substack, Substack takes a 10% take rate on all revenue generated from subscriptions, a lot of the different creator companies, whether it's Gumroad, Kajabi, etc., they're in the take rate business, as in they take 5, 10, 12% of all the revenue you make on the platform. I think that's like not creator friendly. It also doesn't scale at a certain point. The same when you have one paying subscriber and you're losing $10 a month to Substack, that's fine. When they're providing the exact same service for you and you're paying $100,000, $200,000 a year, I think that's where it starts to break down and creators kind of grow out of the problem. I heard the term graduation problem is like something that people were talking about recently. And so these take rate models have a graduation problem where when you're large enough the take rate is just so large it's just better to either build your own solution or find a competitor. So our business model is very straightforward SaaS pricing. It's free up until 2,500 subscribers. You can pay $49 a month, $79.99 depending on how large your list is. We don't take a cut of your subscription revenue. So, what you charge readers is what you take home. And then we have an ad network that helps people monetize as well. We do take a cut from the ad network, but that's not like we are taking it's basically net new revenue coming in for the publishers and creators. We're like an intermediary there that we take about 20%.

Yeah. So, a few things I think entering the space and knowing our place that it is a very competitive industry. It's like our game isn't convincing people who don't have a newsletter to start a newsletter. It is there's already hundreds of millions of revenue out there using different platforms that we think were a better fit than sending your newsletter on Substack or Mailchimp or whoever. And so the first thing we did is basically grease the wheels where anyone can basically port over their subscriber list, their content, their paid subscriptions in minutes. So that's one. We have a lot of product-led growth. So getting users who are having success on the platform and being able to showcase that. So that's kind of like the secret in the creator space. Like our users have hundreds of thousands of readers and followers. So when they're having success on the platform, they're already broadcasting that they're using our product because we have powered by beehiiv in the footer of emails and websites, which you can pay to remove. But we didn't let people pay to remove it initially cuz I saw the data and I knew how quick how well it was working. And so the one in 20 people who would complain that they couldn't remove it, I'd rather them churn and be upset because the other 19 are driving so much growth for us. So it's like another like data-driven decision that I would just fight people on Twitter all day that we weren't removing that. But yeah, that's how we've typically grown. It's been a lot of like boots on the ground. There's a lot of I mean, we've done paid spend, a lot of product-led growth. Weirdly, my newsletter and like this founder like building in public has led to a lot of people. One of the largest deals we've ever done is Time magazine. They pay us a few hundred thousand a year. Their CTO actually just read my personal newsletter and like me and the persona and the brand we were building and recommended that they should be using us and they moved all of their newsletters over. So that's kind of like I guess the power of building in public and like the founder persona.

It varies per industry a lot. I'd say like for anyone who has a newsletter and curious like above 35, 40% open rate, great. Click-through rate 2, 3%. Those are like kind of like the rough numbers, but it like varies a ton. We have newsletters that are doing 70, 80% open rate. I think the other thing that's interesting is Morning Brew kind of normalized this like grow at all cost like mass scale. Like anyone could read the Morning Brew newsletter. You could be in any industry. It's like very broad. And the way that they make money is like obviously advertising. And so that used to be the playbook of grow as fast as you can and sell advertising to a broad-based audience. I know newsletters on the platform that have 2,000 readers that are doing north of 100k in revenue because they're very niche like B2B. They can sell events, they can sell courses, they can just charge very premium CPMs on ads. And so that kind of like I think that has opened a lot of doors for people realizing that I don't have to be Morning Brew or The Hustle or The Skimm and try to grow to millions of readers. If I have a niche in a certain content that I own that space, I can get a thousand like a thousand true fans, get them in and monetize them really well and that's like part of our roadmap and our vision of what we're building.

So I mean if you follow Whoops. If you follow the newsletter, we have a winter release event coming up in three weeks or four weeks I believe. We are announcing, not gonna blow it here, but like the biggest like TAM expansion that we've ever done as a company. I can I'll hint at it a bit and you can guess around, but we started with email newsletters a year ago. We acquired a website builder called Typedream. And so the thinking was I I'll even take a step back where I think email used to be is Mailchimp helps you send emails. And typically people would host their content on WordPress as their blog. And if they had an email newsletter, they would copy and paste their WordPress blog into Mailchimp or Campaign Monitor. And so now there's two different systems. If you wanted paid subscriptions, you'd have to integrate Stripe or Memberful. If you wanted ads, there's like third-party providers like LiveIntent. If you wanted a referral program, there's third-party software for that. And like very that was like the problem set and the pitch that I pitched back in our seed round. Typically, if you wanted to stand up a scaled high-growth email newsletter, you were piecing together five to six different pieces of software and most of these people were either not technical writers, journalists or part of media rooms that don't have like a deep bench of technical talent. And so, where Substack actually came in and innovated was they bundled website, newsletter, and paid subscriptions. So, in one product, you can basically publish through the same like CMS flow. It publishes to your website. It'll also go to all of your email subscribers and you can do paid subscriptions on top without having to like bundle and build your own Stripe and user authentication. So that became kind of like the standard in North Star for us. So we launched with the same thing website, newsletter, and then paid subscriptions with like the ad network and growth tools that we've also built in-house. Our website builder used to suck. It wasn't like very good. It was like a default thing and we kind of assume people would use their own website builder whether it's WordPress or Webflow. A year ago, we launched or we acquired a company called Typedream, which was an AI-native website builder. And the thinking is, and this is just from user feedback. We would field dozens and dozens of tickets every week of people wanting to do more with their website. So it became very clear to me like that is people's digital home. That's where they're sending traffic. That's like the first perception that people get of your brand and your content. So we acquired that company and like we launched that in July of this year. Proud to say we have like tens of thousands of active sites on the new website builder. I think it's amazing. I think it's as good as I think who we're trying to compete with. So starting to project like where we're going with the roadmap. I think we compete with Wix, Squarespace, WordPress, Framer, Lovable as like the AI website like vibe coding. I think that's like well within the realm of the type of companies we're trying to compete with. We're forever tied to Substack because we launched at a similar time and they became this like tech darling newsletter platform and we kind of followed. I think Substack is trying to build a social platform. They're trying to compete with Twitter, X, Threads, Bluesky. I see Framer raising at a $2 billion valuation. I see Lovable. I see and these companies that offer digital products. Our mission is to help anyone basically be able to build a business online, a content-based business. And so whether they want to sell products, book time, have an incredible website, monetize with ads, monetize with paid subscriptions, we want to be the all-in-one. And I think the common thing with the all-in-one solutions is if you try to do everything, you actually do everything kind of poorly. And so most people try to do all-in-one, but they are five out of 10 on everything. I actually think our specialty is our product philosophy and our engineers. I think our product's best in class. And so my bet is that we can build nine out of 10 features for everything and actually do the all-in-one well, which simplifies all of the work and whatever is needed to build a successful business.

So I did mention Lovable as one of the companies that I'm interested in competing with. So maybe projecting what we're launching in a few weeks, but that's one potential way. What's interesting to me is we were initially kind of like walking on eggshells where a lot of our core users are writers and like AI is like intimidating to basically write to replace writers and like the creative workflow and so we were kind of like a little bit nervous about rolling out AI tools for the editor but we've also done a lot of user interviews where like because of the proliferation of AI tools we're almost like training this generation where they almost feel like they can't write without like AI assistance. And I even think about it like less than like helplessness. It's more of like what does AI unlock? And I think anyone who's ever had an editor, which is like not that many people, once you do have an editor, the end product is so much better when you have someone actually editing your work. The thing is, unless you work in a news organization, very few people actually have access to an editor. And so like what does AI potentially unlock is like can you have an always available editor that's like fine-tuned to like your voice and your tone that can not write entire posts for you. So you're like hey write a newsletter about like sports but it's like as you're writing it's giving recommendations it's giving you tweaks and edits. And so that's something I think we're looking a lot into is like how do we build the greatest writing experience in the industry that it's AI assistant that you can like swipe away if you don't want it. But if you want like a world-class editor who's trained on all of your content and also trained on the content and like corpus of knowledge of what content works well on the platform for other writers, I think that's a really interesting way to use AI. But those are like a few examples.