Reaching $1M in ARR, Rising Above the Competition, and Knowing Your Purpose — ft. Tyler Denk of Beehiiv

We’re finishing off our three part series on the future of entrepreneurship. In the episode we share today, we feature a First Time Founders episode, in which our co-host Ed chats with Tyler Denk, the cofounder and CEO of Beehiiv, a newsletter publishing and monetization platform. They discuss Tyler’s background at Morning Brew, his thoughts on selling secondary shares, and dealing with the death of one of their early employees. Music: https://www.davidcuttermusic.com / @dcuttermusic Subscribe to No Mercy / No Malice Buy "The Algebra of Wealth," out now. Follow the podcast across socials @profgpod: Instagram Threads X Reddit Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Scott Galloway?

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• 0:57Scott Galloway?

  Welcome to another episode of the Prof G Pod. In today's episode, we finish our special three-part series covering the future of entrepreneurship. In last week's episode, we answered your questions about life after a startup exit and whether to pursue an MBA.

• 1:12Scott Galloway?

  I remember taking a long walk on the beach when I sold my company. I'm like, okay, that's it. There's no, I'm done. And I remember thinking, does it feel different? And it wasn't that it was like a sensation or a high, it was just a bit of a feeling of like an absence of anxiety and a feeling, quite frankly, of pride. I felt really good about the people I'd worked with and I felt good about myself.

• 1:37Scott Galloway?

  Will an MBA make you a great entrepreneur? No. So just divorce your kind of aspirations about being an entrepreneur and say, do I want the skills and the experience that an MBA offers? And then if you decide to be an entrepreneur, great.

• 1:54Scott Galloway?

  Today, we will be featuring an episode from one of our newer shows, First Time Founders with Ed Elson, every first Sunday of the month at interviews, you guessed it, First Time Founders. In the episode we share today, Ed speaks with Tyler Denk, the co-founder and CEO of Beehiiv, a newsletter publishing and monetization platform. They discuss Tyler's background at Morning Brew, his thoughts on selling secondary shares and dealing with the death of one of their early employees. So just disclosure, I don't think my producers know this. I'm an investor in Beehiiv. Small investor, not a big deal. I don't think I've influenced the editorial programming here based on my own financial interests. But guess what? I would absolutely do that. The dog needs to eat, and he likes that expensive shit. You know, that food that costs more than what most families spend

• 2:38Scott Galloway?

  on a dinner out at Red Lobster? Or what's the other one? The onion one? Wait, the green olive. That's right, the green olive. I used to go to Sizzler. I used to go to Sizzler. I don't have a lot of-- remember those commercials in Sizzler's in the 90s, if you're old like me? I don't have a lot of money. I don't have a lot of time. Sizzler. Me and my friends would be like, I don't have a lot of class. I don't have a lot of taste. Sizzler. True story. During the summer, one year at UCLA, I gamified saving money. And I got to the point where I only spent $77 a week on everything, including rent. And my big treat was every Sunday night, I would take a coupon from the Daily Brew, and I would head down to Sizzler. And for $3.99, me and the rest of the crew team could, for $4 each,

• 3:22Scott Galloway?

  do all you can eat. And we would show up at 5:00 when it opened, and we would stay till 9:00 and try and have two or three enormous meals and basically eat for the week. Anyways, good times. Good times. Anyways, enjoy Ed's conversation with Tyler Denk.

• 3:37Scott Galloway?

  Scott, you invested in our next founder. What do you look for when you're investing in a startup? Someone who's been able to attract really talented people. I tried to interview the whole management team. So it's more really looking for a team of talented people who clearly get along. I went on the board and was an angel investor in a company called Olapic, which was-- It was like a visual image curation software platform and it was three guys from Columbia and they just could finish each other's sentences. One was a tech person, one was the marketer, one was the CEO. They're all very, very smart, very hardworking, got along and I thought I just want to back this team. So it's really when you're early stage investor, you're really not investing in a company, you're investing in people.

• 4:27Ed Elson?

  Welcome to First Time Founders. I'm Matt Elson. Online newsletters have exploded in recent years. During the pandemic, we saw the rise of Substack, which became the home for writers and creators who wanted to monetize their work independently. Newsletters are also essential to our business. Scott considers our newsletter, No Mercy, No Malice, to be our flagship product. We've invested significantly in this asset and we now have nearly half a million subscribers interacting with our content every week. That's why I'm excited to introduce our next guest, Tyler Denk, who's an expert in all things newsletters. After leading growth and product at Morning Brew, Tyler started a newsletter distribution platform called Beehiiv. In less than two years, Beehiiv amassed a network of nearly 15,000

• 5:12Ed Elson?

  active newsletters, 50 million readers and 500 million monthly impressions. And unlike so many software platforms these days, he achieved profitability. Now he's looking to take on the incumbents with Substack at the top of the hit list. Tyler, thanks for joining us.

• 5:29Speaker 03

  Thanks for having me. Happy to be here.

• 5:31Ed Elson?

  The story of Beehiiv really begins at Morning Brew. Could you give us the rundown of first what Morning Brew actually is and then also what you did there and how that led to the creation of this newsletter platform, Beehiiv?

• 5:44Speaker 03

  Yeah, for sure. So I joined Morning Brew back in 2017 as the second employee in a very fun role, ranging from growth and engineering and product, just doing anything we could possibly do to scale the newsletter size. It sounds like you're pretty familiar with the whole game of being able to scale your audience, expand the newsletter. My first project was creating the Morning Brew referral program where by incentivizing different readers- You could earn T-shirt, coffee mug, crew neck, whatever that looks like. We realized that we, our existing audience was already natively sharing with classmates, friends, family. So being able to help further incentivize them with rewards. One thing led to another. I built that on contract. Austin Reeve asked me to come on full time.

• 6:28Speaker 03

  And I came on and just built anything that would help us grow. I guess to take a step back and answer your question like, what is Morning Brew? Morning Brew is a, or at the time was a daily newsletter, Monday through Friday, that covered business news and finance, kind of like Bloomberg, but more for younger demographic, millennial, told in a conversational voice and tone. I joined it, went to about 50,000 people every day, Monday through Friday. When I left, it was seven days a week, going to three and a half million subscribers. And then, so the team grew from, obviously, me as the second employee to about 35, 40 people when I left in 2020.

• 7:04Ed Elson?

  Why, why did you decide to join a daily newsletter with 50,000 subscribers? What led you there?

• 7:11Speaker 03

  Yeah, it sounds crazy now, right?

• 7:12Ed Elson?

  Yeah.

• 7:13Speaker 03

  Yeah. Looking back, everyone's like, oh, you are early on Morning Brew. That's amazing. At the time, it was the furthest thing from like a sure opportunity. We, there was the two co-founders and a writer in a closet-sized office in the NYU campus dorm. When Austin, who is a friend from Baltimore, reached out to me, I had $4 in my bank account. And when he asked if I would be able to build a referral program, I lied and said that I could because I needed money and I built it. And after building that, in the two to three weeks that that took, it was the first time that they had a engineer, quote unquote, I'm self-taught, but an engineer to help build something. And of course, it's like a team that's growing. They had a laundry list of things that they wanted to be built. And I provided an opportunity. So I spent that summer

• 7:58Speaker 03

  building a little bit of everything from the website, the referral program, social share icons, where you could share the individual stories on Facebook, Twitter, LinkedIn. And during that process, I had full access, like you do in a startup, to everything from the inbox, from user feedback to other people talking about the product and seeing how the team works from the inside out. And during that experience, I saw the rabid fan base that they had of people emailing in daily, being like, I can't start my day without reading Morning Brew. I've shared it to my entire class. My entire, all of my coworkers are reading it. They're raving about it. And it was kind of like that, like aha moment of. They've clearly struck a chord in an opportunity in a market that I think there's

• 8:39Speaker 03

  already a huge market for business news from looking at Bloomberg and all of the other larger established publications. They were doing it in a very fun, novel way, and it clearly resonated. And then seeing how passionate the team was, was kind of like my two-month-on-trial experience of being like, I actually think they're on to something massive here.

• 8:59Ed Elson?

  Yeah.

• 8:59Speaker 03

  And whether they go into education, or just being one of the largest publications for millennials to get business news, I thought both were a pretty promising opportunity.

• 9:08Ed Elson?

  So then, in around late 2021, you decide you're gonna start your own newsletter platform, when things, I presume, were going super well at Morning Brew. Why did you do that?

• 9:20Speaker 03

  Yeah, so there was a slight gap. I left Morning Brew in 2020, right before they got acquired by Business Insider. I didn't know that that acquisition was happening, but

• 9:29Ed Elson?

  Okay.

• 9:30Speaker 03

  Through that experience of three and a half years at Morning Brew, I, fortunately, Morning Brew was like a huge success. We were making a lot of money. We had 40 people on the team. We were like the go-to email newsletter.

• 9:41Ed Elson?

  Yeah.

• 9:41Speaker 03

  And I had built everything from the referral program, to the website, to our content management system, to an ad management platform that our sales and copywriting team would use to handle all of the different brand advertisements. So, more or less, kind of built a platform within the company that was internal for our employees to use, and it worked really well. It was kind of what made us a well-oiled machine to be able to operate at the scale that we did.

• 10:06Ed Elson?

  Uh huh.

• 10:07Speaker 03

  And at that same time, the good thing about email is you can always receive replies from your readers and get feedback. And there was always feedback coming in daily of, what referral program do you use? It works really well. How does your newsletter look so good in all of these different mail clients? How are you able to share your stories to different social platforms and trying to work with a developer and build something similar? So there was both an appetite for email newsletters at large, and there was an appetite for software that kind of did what Morning Brew did well, which is make the emails look great, make it easy on the team, be able to integrate advertisements, being able to integrate different growth tools and analytics to understand who your audience is. Historically, those were five or six different platforms.

• 10:50Speaker 03

  And building something very robust that worked well through trial and error for three and a half years gave me the opportunity of seeing what worked, what didn't, and how can we make this applicable to anyone with the newsletter? So that was kind of like the real moment of the more feedback and input we got from readers, and our readers weren't even necessarily newsletter operators, and there was an appetite with them. I figured there was some value in what I had built internally with my team at Morning Brew.

• 11:15Ed Elson?

  Yeah.

• 11:16Speaker 03

  And then around the same time, as you alluded to in the intro, other companies like a Substack were raising money at $650 million valuation plus and using their software, using what I had built at Morning Brew. I thought that what I had built and the tactical, like boots on the ground experience at Morning Brew was a pretty core competitive advantage. And that's what really led to wanting to launch a company to white label a lot of that.

• 11:40Ed Elson?

  So you basically went to work at a startup, no experience, built a product for a startup that took them to growth and success. And then you were like, okay, I'm gonna just take this product that I built and start selling it to other people. Is that a fair characterization?

• 11:55Speaker 03

  If you were to take a few steps back, yeah, you could probably summarize it like that, yeah.

• 11:59Ed Elson?

  So was Morning Brew, would Morning Brew be upset in any way that you took a sort of your core differentiated product that you'd built in-house and then started selling it to other companies?

• 12:12Speaker 03

  Very loaded question. I would say a few things. There was a point in Morning Brew where I had pitched this idea, actually, to build this and white label it to other software vendors. And at the time, they were already going through acquisition talks with Business Insider and others. So it was kind of a curve ball to also pivot into SaaS, like in the ninth inning of acquisition talks.

• 12:34Ed Elson?

  Yeah.

• 12:35Speaker 03

  There's also a lot of traditional media companies who have attempted to get into software and failed. I think Washington Post just shut down their media or their tech division relatively recently, or their software platform. And so there's a lot of nightmare stories as to why you don't want to divert away from something that's working really well, which is their core competency, I don't think necessarily was the software and the product. That's a lot of the operational things that made things move the way that they did.

• 13:01Ed Elson?

  Yeah.

• 13:01Speaker 03

  But I would argue Morning Brew's core value prop was understanding their audience and creating the best content for that audience. The tech was kind of like behind the scenes, the underlying thing that facilitated a lot of that to happen at scale.

• 13:13Ed Elson?

  Yeah, definitely. And you've also mentioned Substack. What was the key differentiator in your mind when you decided, okay, I'm going to go start my own competitor?

• 13:21Speaker 03

  Very directly, I thought I could compete because at the time when signing up for their product, I wasn't overly impressed. And knowing what I had built at Morning Brew, I actually thought our internal tech had a lot more flexibility and customization for our writers. I'd say the other big difference is, I think fundamentally, they have a principle around wanting to enable writers to earn a living, kind of like the Patreon and OnlyFans model of monetize your audience directly.

• 13:47Ed Elson?

  Right.

• 13:47Speaker 03

  And charge a subscription, which I subscribe to several paid newsletters. I think they're great. And I, but I do think it's very difficult to charge a premium subscription for newsletters in a competitive media landscape where there's HBO Max, Netflix, all of these other paid products. Like, it's really hard to deliver reliably a newsletter product that warrants paying for. And I actually think that's a very small market where my initial thought was, in seeing what made Morning Brew successful and seeing the Hustle, Axios all get acquired, they were all ad-based newsletters.

• 14:23Ed Elson?

  Yeah.

• 14:24Speaker 03

  And I think actually the most difficult thing that we did at Morning Brew was scale a sales team that could really take the data and understand who the audience is and be able to sell that to premium advertisers. And so that is what we are building at Beehiiv is one, just facilitate, make it so easy to create good-looking content where you can engage with your readers and understand who they are. But if you want to monetize, rather than you having to sell all of these D to C brands or premium advertisers on why they should monetize and advertise in your newsletter, we can actually help facilitate that transaction and place premium ads in these newsletters. So you have the upside of monetizing without having the sales team to do so.

• 15:01Ed Elson?

  So where is the majority of your revenue coming from?

• 15:04Speaker 03

  Our primary business model is more of a traditional SaaS. So we have the free plan to get started. We have a $49 plan, a $99 plan, which is a fraction of a lot of the competitors in the space. But that is like a traditional, if you were sending emails, I'm sure you're familiar with No Mercy, No Malice.

• 15:22Ed Elson?

  Yeah.

• 15:22Speaker 03

  There is a monthly fee associated with paying the software vendor used to send those emails. That is the majority of our revenue. I alluded to the ad network as well. We take a transactional cut on ads placed. So in place of you having to source your own advertisements and pay commissions to a sales team and do all of that work, we facilitate premium ad deals for you and we take a cut of that, which varies. So that's a second revenue stream. And then we also have like some transactional like growth tactics built into the product where you can recommend another newsletter in the BI of ecosystem. We take a 20% cut off of like co-registration is essentially what it is. So those are the three primary revenue streams. We facilitate premium subscriptions like Substack, but

• 16:06Speaker 03

  we don't take a transaction fee. So that's 100% revenue to the content creator.

• 16:10Ed Elson?

  I feel like the big milestone that people like that founders like to talk about is one million ARR. So when did you hit that? And how long did it take for you to hit that? And then finally, what decisions did you make that you think led to that milestone being achieved?

• 16:28Speaker 03

  There's a lot there. I feel like I can kind of do like a masterclass of like everything going on in my head in terms of how I was, I mean, any, I feel like any company that starts and can go from zero to one million ARR in a very competitive space has dozens of growth tactics and things that they did very intentionally to help reach that milestone, because the zero to one is by far the hardest part, especially in a hyper competitive industry like email in general. So it took us 14 months to go from zero to a million ARR. And there's probably dozens of things I could attribute that to, but a few that jump out is one, our very first seed round, which actually Scott is an investor in, we strategically had a long tail of strategic investors who

• 17:11Speaker 03

  have newsletters, who have media experience in the hopes that being our early adopters kind of incentivizing them to move their newsletter over. Again, when you launch like your product is the worst it will ever be day one. And when there's much more mature platforms in market, you kind of need like an extra incentive to win over those early adopters. And so leaning on early relationships and investors is like one kind of like growth hack to get that initial cohort in the door. So that helped. Two is, I would say, Building in public has been very powerful for us. I know it's cliche and a lot of people do it. Some people are like totally against sharing numbers and metrics. I'm the opposite. Everything is an open book. I share cost, I share revenue, I share growth, I share the upsides, the downsides.

• 17:56Speaker 03

  Because one, I think people can align with a person and a story more than like a business and a brand.

• 18:01Ed Elson?

  Yeah.

• 18:02Speaker 03

  And so I never intended to really be the face of the brand. But in being able to share and promote other newsletters who are having success on the platform. And also being very quick to respond to user feedback and how we can make it better. I've kind of become the face of the brand and in doing that, I have been very vocal in how we're building the business. Because I actually think it, one, it's hard as shit. And I think that people actually resonate and are intrigued to learn about how you go from zero to one. And even how you hit scale, how we're prioritizing engineering versus support versus product versus growth. What's working and what's not. And so I've kind of done it through content and just being able to share the journey of how we've been able to do that.

• 18:43Speaker 03

  And then I'd say the last one is we've developed a reputation for shipping features very quickly. I think a lot of that's actually born out of the insecurity of being a young company. And when we're in this space where our top 10 competitors are so much further, they've been around for five, 10 plus years. They have a much more robust feature set. What I wanted to prove to the market was, one, we can ship really good product very quickly. And what that tells them is maybe we don't have feature XYZ. But if you've paid attention to our pace and velocity of shipping, odds are we will get to XYZ very quickly. And so it kind of buys you a little bit of time of winning people over with whatever features we do have.

• 19:24Speaker 03

  And if they grow frustrated that we don't have something, kind of earning their trust that we hear them, we know what's important and that we can prioritize that.

• 19:30Ed Elson?

  Yeah, the building in public thing is so interesting. We've had a lot of founders on who've discussed, we've discussed this topic. Why exactly is building in public good for generating revenue versus just getting followers?

• 19:44Speaker 03

  I actually think if you were deciding between a different software vendor and you're kind of like up in the air between two or three. Being able to bet on trajectory and a person that you think actually has your best interests in heart. And is trying much harder to make this work and succeed and that you have. Their ear directly to provide feedback, I actually think is a pretty key selling point.

• 20:06Ed Elson?

  Yeah.

• 20:06Speaker 03

  Whether it's the most scalable selling point is TBD, but I'm sure that there's plenty of people that I've DM with over the days that view it as a competitive advantage to be able to say, here's three things I think you can do better. And I have the track record of listening to them and delivering on those three things pretty quickly.

• 20:21Ed Elson?

  Yeah.

• 20:22Speaker 03

  And then like lastly, when you hit milestones, it opens up a lot of doors, right? Like, I don't have to share on Twitter and LinkedIn that we hit three million ARR, four million ARR, five million ARR. But when I do, I get dozens of warm leads from people who are like, hey, I've been following the journey. I think I'm moving off platform X to jump over to you. Or, hey, can I make an introduction to this investor, this advertiser, this newsletter? Because I think they'd be a perfect fit. And I think it's just like maximizing your luck surface area. The more you can share, the more hype that you can build around the narrative that you're building on, the more opportunities and doors that open of people who either align with you and want to help you succeed, or at least just with like the

• 21:04Speaker 03

  algorithms and everything else, being able to surface your success as a broader opportunity to whether it's investment is what you're going for or new customers. It helps just expand the opportunities there.

• 21:14Ed Elson?

  If you're willing to disclose it, how much of the company do you own? And have you taken any off of the table?

• 21:21Speaker 03

  I won't share how much I own, but I have not taken any off the table.

• 21:26Ed Elson?

  Okay. And what is your opinion on selling secondary shares? Do you approve, disapprove? Would you ever do it yourself?

• 21:34Speaker 03

  Yeah, I think everything is like a big, like, it depends on the person and the situation, right? So if you had a family, if you needed a larger house because you just had a kid, whatever it is, like there's circumstances in life, I think, I think there's like a classic saying or thing within startup culture of like paying yourself very little as a founder because you need to focus all your time on the business and like you need to kind of earn that salary. And like completely disagree with that. Like, I'd rather, I'm able to pour 14, 16 hours a day into the startup because I pay myself well enough that I'm not stressed financially to have to worry about bills and other miscellaneous things that distract you in life.

• 22:14Speaker 03

  And so by giving myself a livable salary that I'm okay with, I can focus 110% on the business.

• 22:20Ed Elson?

  Yeah.

• 22:21Speaker 03

  And so I think that can be extended to secondaries as well, right? Like if you are in a place in life where your significant other and you have a kid and you need a larger space and you don't have the available liquidity to do that, to be able to sell secondary and be able to take care of your family. So you can focus on the business, I think is totally acceptable. I mean, I have two co, for to give an idea of equity stake, I have two co-founders. We didn't split equally, but roughly. And then we've done a seed round and extension and then our series A. So fairly diluted and I'm also someone who doesn't love the traditional like raise an A, raise a B, raise a C. Like that's why you alluded to in the intro, like we were profitable for two months earlier this year.

• 23:03Speaker 03

  Since raising our A, we've hired a shit ton and are not profitable on a month to month basis, but I think we should get pretty close to profitability again in 2024 and the goal is to not raise again. For a lot of the reasons we kind of just mentioned, right? Like I am diluted a good bit from having two co-founders and having two rounds of funding. And I think we've been able to run the company extremely lean. We have people who are really good at what they do and the business itself has pretty high margins. So I don't see a reason to continue to burn cash just so we can go to the series B. I'd rather build like a sustainable business that can eventually flip the switch and optimize for profits.

• 23:41Ed Elson?

  To what extent is money motivating you as you build this business? And do you consider Beehiiv to be the thing that will set you up financially for the rest of your life?

• 23:51Speaker 03

  The goal is for that answer to be yes, right? So 5 million ARR right now in like month 20 and that doesn't include the other revenue streams. So at about a $7 million run rate in under two years. I feel really good about our team. We're extremely talented, extremely hungry. Run really lean and the space I think is pretty ripe to be disrupted. And so I don't see any reason where if MailChimp can get acquired for $12 billion, I think our goal, our ambition is much broader than the software that they Built when they got acquired for 12 billion. Right. And so I do think this can be a massive multi-billion dollar business, which I think by most measures of success would be financially set if that were to happen.

• 24:35Speaker 03

  So that's like for sure the goal and the vision of what we're looking to build. As far as like money as a motivator, like I, I remember in a younger stage in my life, thinking people always like what after an entrepreneur sold the company, talking about like their users and how like the new acquire like didn't set up their users for success long-term and like, there's always like kind of headaches after an acquisition or that there can be. And I always viewed that as like, who cares? You kind of just walked away with a hundred million dollars. You really give a shit? And I, I've changed a lot on that. And like, the answer is like, yes, because there's a lot of users and people who really stuck their neck out and helped us get to the point that we are. Yeah.

• 25:16Speaker 03

  There's a lot of users who put up with months of our product being like a clear number 10 in the space, but trusting that we would figure it out and build and actually proactively provide a lot of feedback. And so there is like a, a very unique perspective in like, I want to do what's best for our users. And I've also in building this, you kind of forget a lot of these businesses are newsletter first businesses that are trusting us as a 20-month company to run their business, to monetize, to be able to push conversions downstream. And there's a lot of responsibility in making sure that we do that really well. I'm not going to bullshit you and say that money isn't anything that I care about.

• 25:57Speaker 03

  Like I for sure have aspirations, would love to be financially free to be able to support my family and those that I care about. But there's a lot of like mission and vision built into that, that was always there from the beginning, but it actually becomes a bit more amplified throughout the journey, I'd say, to really look after your users and make sure that their best interests are in heart.

• 26:20Ed Elson?

  We'll be right back after a quick break.

• 26:34Scott Galloway?

  Support for the show comes from Superhuman. The pace of modern work can be relentless. You're getting a constant influx of messages from a ton of different apps. You haven't closed all your browser tabs in a year. Everything seems urgent and staying on top of it all feels like an impossible task. Superhuman Go is an AI chat that's always there when you need it, already aware of what you're doing and doesn't ask you to start from zero. Superhuman Go, from the makers of Grammarly, help you be the best version of yourself at work. It handles the repetitive stuff so you can focus on the work that only you can do. Whether you need to summarize an endless email thread or prep for a meeting that's happening in five minutes, Superhuman Go works inside the tools and sites you already use, your browser, inbox, docs, and your project tools.

• 27:15Scott Galloway?

  And its AI chat is available on the side of your browser and it's always ready. No new tabs, no switching apps, no losing your place. This is AI that works with you, not on top of you, so that you have the time and brain space to solve the problems that matter. Check it out, find out more at superhuman.com.

• 27:41Ed Elson?

  We're back with first-time founders. What are the biggest challenges you faced starting this company and as a founder?

• 27:48Speaker 03

  Yeah, I mean, a lot. I remember when everyone always gives, like, the ups are really high and the lows are really low. And they say like, any week can be the highest highs and lowest low. And I always like to think like, any hour can be the highest high and lowest low. And I've had someone who I was super optimistic on joining the company turn us down in an offer. And then the next hour, have a massive user say that they're churning from their platform and moving over to us. And the swings are wild. And when you care as much as I do, like, it's very much amplified. And something I'm trying to work on is trying to be a little bit less, you know, a little bit more steady along the journey because there's a lot of swings. We, one of our not yet co-founders, but first I'd say employee, our CTO,

• 28:32Speaker 03

  Andrew Plackin, was a good friend and he ended up passing away about eight months into the journey. And so he worked with us before we went full-time for like that summer in 2021 and built the company, had our initial seed round. He joined full-time along with my two co-founders and unexpectedly passed away in May of 2022. And so as a company of, I think, six people at the time, he was kind of like our X factor. He was like a 10x engineer. I don't think 10x actually does it justice. He was like incredible. And just about the time that we were really hitting product market fit, we had a lot of

• 29:14Speaker 03

  big time users with high expectations moving over. And he was kind of like the de facto guy to fix things, solve things, push features out. So it's like a small six person company losing arguably the most important person in the company, both on like a personal and emotional level, but also the technical competence and everything in between.

• 29:34Ed Elson?

  Yeah.

• 29:34Speaker 03

  I mean, it's hard to compare anything as being like a more difficult experience in the journey than losing probably the most important person in the company. Also at a time really when startups are so difficult and you know, like all of the metrics of nine and 10 startups fail. And it was right around that time in like March, April, where we really hit struck a chord in the market. We were really starting to compound and scale. And it was like that, oh shit, like I think we broke through the, is this even going to work and get off the ground? Like this is off the ground and working. Now we just need to execute and scale. And everything we were pouring, you know, 16 plus hours a day into to have someone in your core team, your CTO pass away. One emotionally and personally like devastating

• 30:18Speaker 03

  from everyone that looked up to him on the team, myself included.

• 30:21Ed Elson?

  Yeah.

• 30:22Speaker 03

  And then just from like, uh, it's hard to not conflate the business and the personal. But it's like, everything we've worked so hard could completely fall apart unexpectedly because of this. And so that was an extremely challenging, I'd say, several months of shuffling CTOs, trying to hire a CTO, try to regroup the team when we were so small and fragile. And in a way, like not that there's any positives out of that, but to go through that experience and be able to rebound the team and really align and execute and everyone kind of stepped up to get done what they needed to get done, has put a lot of the other challenges into perspective. Cause I hope that nothing is, is ever as terrible as that was. And that

• 31:05Speaker 03

  makes the other like day to day challenges a little bit more manageable.

• 31:09Ed Elson?

  What did you do personally to move?

• 31:14Ed Elson?

  I mean, not past, but how did you motivate yourself personally in the midst of, I'm sure, extreme grief? And then how did you, as a company, move past that? Like, what kind of tone do you even strike with your employees when something like that happens?

• 31:34Speaker 03

  Yeah, I feel like it's the classic like fight or flight or like wartime, peacetime CEO, where, not that I wasn't already giving it a hundred, ten percent and cared way too much about this business and was like, giving it everything I could, but my way of dealing with it, probably not the most healthy in retrospect, but like, I need to work twice as hard to make sure that we can get through this. And also, kind of toeing the line between vulnerability and going through that while also being like, everything's going to be okay. It really was a time in the company where you're so young, you don't have like dependencies and everyone's context sharing, like, he was owning mission critical things to the business. And outside of the personal tragedy that it was, it's like, oh shit, who knows how

• 32:19Speaker 03

  to do anything? And like, the business is still going, like, people are sending emails that next day, expecting XYZ to work perfectly, and no one knows how XYZ actually works in the company. And so it's like a very tactical, like, anything, everything and anything had to be done. My co-founders are incredible, so both of them are engineers as well. They were teaching themselves new languages that he was owning just to get caught up. Everyone was like, working extremely hard.

• 32:47Ed Elson?

  I feel like when you're a founder or CEO, you have to have this almost delusional level of excitement and enthusiasm for your business. You have to turn it into the be all, end all of your entire existence. And I can imagine when something like that happens. It might trigger feelings like, it might trigger feelings such as what, what is this all for? Did you feel that you had to sort of take a step back and kind of reevaluate the things that that were important to you as a, as a CEO?

• 33:23Speaker 03

  I think that probably would have been the healthier way to do it. I half browned out and it's like, that's why it's difficult to talk about because it was such like a very high stress, chaotic situation.

• 33:33Ed Elson?

  Yeah.

• 33:34Speaker 03

  It was also like my way of dealing with it was the delusional, like that is terrible, but I'm going to put my head down and work harder than I possibly can to push forward, to DM every single person on LinkedIn who could be a CTO to help us, to reach out to our contacts, to email every single user who's having issues explaining the situation that we're working on it. But my way was the unhealthy, like just grind it out and get it done. And like, we will see the other side of this. And then after, like I went to the funeral and like hearing everything from his friends and family of how much he, like, I didn't know a lot of this at the time, but how much he had attempted to build other startups in the past and kind of failed, but how entrepreneurial he was

• 34:19Speaker 03

  and how passionate he was about Beehiiv actually ignited a lot of passion and like motivation in me and giving it a broader purpose beyond just like, yes, there's building a successful business and I'm extremely competitive. I want to build a market defining business and like the money and fame and everything else, like all of the other extraneous things that you would build a company for. But his mom owns part of the company and having that as like a motivating factor to kind of do it for him in a way is also something that is very top of mind.

• 34:55Ed Elson?

  What's one piece of advice that you would give to other young entrepreneurs that you think is worth knowing before deciding to start a company?

• 35:04Speaker 03

  Yeah, it's a difficult one, right? I guess know why you're doing it.

• 35:09Ed Elson?

  Yeah.

• 35:10Speaker 03

  If there's not a purpose, like there's a lot of terrible things that happen in a day to day, week to week basis that you really need to have the drive and like an end goal of like, what is your why of why you want to build something? And without that, I think it's really easy to get caught up in the negatives of building a business, the stress, the lack of work-life balance, the expectations from now I have forty people that look to me for answers, look for me for providing for their family. And there's a lot of expectation to continue to build a successful business that can pay them and provide for their family. And so without having like a real vision and drive and why for what you're doing,

• 35:51Speaker 03

  it becomes a lot easier to lose sight and lose focus, I believe. And also just like what it takes to build a successful business, like one of my more controversial, but I don't think that controversial takes is that it's a huge competitive advantage to be a single founder. And like it, I, and you can take that however you like, but like I have other friends who are building businesses and they can't work on Thursday nights because they have to go out to dinner or they're taking their kid to the park on Saturdays and like I don't have that. I, for better or worse, I, like my top ten priorities are how do I make this business better and stronger and how can we position ourselves to dominate in this market?

• 36:33Speaker 03

  And for the short term and in the medium term and maybe long term, like that's the only thing I really care about. And I do think that's like a huge competitive advantage relative to other people who have other extraneous situations and circumstances.

• 36:46Ed Elson?

  Do you think that you had your, your why, that you find your why, have you found it?

• 36:54Speaker 03

  Yeah, I mean, I also think there's a level of like it's, I complain all the time about how stressed I am and how there's so much to do and not enough time in the day, but at the end of the day, it's really fun. Like I'm solving problems, I'm working with really talented, smart people that I like to work with. And we are the underdogs in a very competitive industry and we're doing really well. And it is like a fun thing to do. And I think just fundamentally, taking a step back and like you work for what? Fifty, sixty, seventy percent of like your waking hours, you might as well do something you care about and that's fun and enjoyable and challenging. And every day is a challenge. So on a personal level, the why is like continuing to learn, continuing to build, and do something that I care about. I am also extremely competitive and so

• 37:39Speaker 03

  I take notes of everyone who said no to us on the investing side, all the competitors who think that they can run over us, like the list goes on of like different small things that motivate me, but being extremely competitive and wanting to build something that I think can be as synonymous as like a a MailChimp or a Google at one point is like something that I'm trying to build. And it's a big, audacious goal and that's what makes it fun is kind of putting your head down and trying to build it.

• 38:06Ed Elson?

  Well, and with this, which is what is what's been the best moment in this journey, your highest high?

• 38:12Speaker 03

  Yeah, it might not seem like much, but there was a time when I think one of our second or third engineers joined and we were making $2,000 a month. And I think maybe, I don't know, 10 months ago, he put in Slack, he's like, yeah, we're making $20,000 this month. It's like 10x since I've been here. But like that level of ownership of I've been here and I helped build that. And like seeing that from someone that you hired and has worked really hard was like really cool. It was like a parent moment of like someone who you trusted to do a lot and he's built it and crushed it. But the fact that he can like really resonate with, hey, I've been working my ass off and building something and like here's what I can show for it. Like we've 10x revenue since I've been here and I feel like I'm happy to be a part of that.

• 38:58Speaker 03

  Is like all I could ask for as a founder and providing opportunities for people to do meaningful work that they care about. And so that was a moment where that hit me and like reading that was like really awesome. Being able to do that for other employees as we scale and really making sure that everyone feels like they're a part of something special and they're actually contributing is like my top priority as a founder.

• 39:20Ed Elson?

  Well, thank you so much for coming on Tyler. This was this was awesome.

• 39:23Speaker 03

  Yeah, I appreciate you having me.

• 39:28Ed Elson?

  This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our executive producers are Jason Stavers and Catherine Dillon, and Drew Burrows is our technical director. Thank you for listening to First Time Founders from the Vox Media Podcast Network. Join us on Wednesday for office hours and Monday for Prof G Markets.

• 40:05Speaker 04

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