AdQuick Madvertising Podcast Episode #5: Tyler Denk & Daniel Berk of beehiiv
In episode 5, AdQuick VP, Marketing Adam Singer (your co-host) interviews Tyler Denk 🐝 and Daniel Berk 🐝 from the beehiiv team about the newsletter business and key takeaways for both publishers + advertisers.
Watch on YouTube here, (also embedded below) listen on Spotify here or Apple Podcasts here.
Transcription follows (auto-generated) below if you prefer text, for accessibility or if you'd like to grab any quotes for re-use via blogging or social.
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Adam Singer (00:00:03):
Awesome. Hey everyone. Today is episode number five of the AdQuick Advertising Podcast. My co-host, Chris Gadek, is not here today. He is not feeling super well, but that's okay. Today we happen to have two guests, not just one. So we're going to sort of flip the seating of the tables here where we usually have Chris and myself and various guests from the marketing and advertising industry. Today we have Tyler Denk and Daniel Berk, who are part of the team over at beehiiv. beehiiv is one of the fastest, if not the fastest growing email products for individuals and for businesses. We can get into more of it in their words, but I am personally a big fan of beehiiv and of Substack.
(00:00:52):
Those are my two favorite email platforms. They're probably going to kill me for even saying Substack, but I think there's a huge bull market in email and a big resurgence of owning your audiences, of owning your channels. I think these guys have the experience and the product, and today I wanted to bring them on to talk about not just email, but also marketing and audience building more broadly, which is something that all of us that are listening to this do. So I'd love to intro both of our guests if they can give us a super quick in their own words of their history and also what they do at beehiiv. It would be probably a cool intro if we want to start with Daniel, and then we can go to Tyler.
Daniel Berk (00:01:39):
For sure. Thanks, Adam. I am Daniel. I'm the business development lead at beehiiv. I've been an entrepreneur and sales and marketing kind of lead builder for about 10 years. I started my own marketing agency back in 2014/15. I went kind of solo, solopreneur as it were. That led me to Spain. I lived in Madrid for a while, I lived in China for a while, just doing client work all remote before remote was cool. I came back to the States because Uncle Sam was knocking at my door and said, "Hey, you have some student debt." So I had to put my big boy pants on and start my career.
(00:02:17):
So I was sales and marketing director and medical devices manufacturing, so super random with an e-commerce side of that. So that kind of background led me ultimately to using social media where I actually met Tyler on LinkedIn. So I'm a big fan of LinkedIn. I know it gets a lot of bad rep, but Tyler and I stayed connected for the last year or so while they were building at beehiiv, and I officially joined the team in November of last year. So super excited. I think what we're building at beehiiv is phenomenal, and we'll get into that a little bit more as we go on in the episode.
Tyler Denk (00:02:54):
Yeah, I'd say Dan is like a premier case study of how to leverage social media to get in front of different people and eventually open up doors and have new opportunities. But my background, I joined Morning Brew back in 2017 as the second employee. There I did everything from product engineering and growth, so I was the only engineer for about the first 16 months there. I built the website, the email newsletter template, the referral program, content management system, an ad management platform to manage all of the different placements of advertisements in the newsletters. Also ran growth for a while there, so managed $600,000 a month on different spend, building different funnels and pipelines, re-engagement campaigns, using data to leverage our audience to grow quicker.
(00:03:45):
And then product, it was kind of just tying it all together in some capacity, so understanding the growth components, understanding the tech components, what sales needed, what the content needed. At the end of my time there, we just had a very well robust, well-oiled machine that all worked between growth and engineering and product and sales and monetization. I left Morning Brew in 2020, just a few weeks coincidentally before their acquisition by Business Insider. Joined Google briefly for about 10 months and built beehiiv kind of on the side as a moonlight type project. Launched beehiiv as a co-founder, one of three co-founders in November of 2021, and I am currently the CEO of beehiiv.
Adam Singer (00:04:32):
Awesome. And so I know beehiiv super well. For our listeners, they know what things like MailChimp and Marketo are, but how do you differentiate yourself or if I am a marketer who hasn't heard of beehiiv?
Tyler Denk (00:04:52):
Yeah, and so I know the space fairly well. From early days of Morning Brew, there wasn't an all-in-one type platform, so we were like every other publisher where I'd say traditionally there is the email sender, the ESP, which is a MailChimp, a SendGrid, a Campaign Monitor or sale through giving free advertisement to all these companies. But those are like your traditional, that is where you go to send emails. They range from e-commerce and marketing, so drag and drop components where you can create like a different sales and promotions for your email newsletters or emails. There's email newsletters which are more content heavy and you can do custom HTML, but ESPs in general are typically just for sending the email. If you want to host your content online, it's an entirely different platform in most cases, so that would be a WordPress or a Webflow.
(00:05:43):
And then if you want data and growth and everything else, those are kind of third party tools and plugins that fit somewhere into the ecosystem. And so what you ultimately had and like us at Morning Brew, we had a custom-built Ruby On Rails website for the content hosted online. We would then copy and paste that content into like a MailChimp and eventually other platforms, but it was two separate systems, one for hosting, one for email sending. And so that's what most companies typically use historically would be some sort of platform and you can integrate it with APIs and everything else. But that's kind of a way of thinking of the ecosystem. A lot of these traditional more incumbent players are just straight up sending emails from the content you put in, to your distribution list.
Adam Singer (00:06:30):
Yeah. I think it's so smart what you guys are doing in particular because for so long, these two things were divorced. I imagine the internet would actually look a lot different too if WordPress had thought to do what you do from early days. Because I think you're doing the things that are sort of realization of what blogging should have always been because RSS never caught on. It was always going to be email as the sort of distribution channel that weathers the storms of the changing tides of social media and changing tides of user preference. It always cracks me up when people are like, "Oh, you know?" Back in the day there was this narrative, "Oh, social media is killing email." And I'm like, "Wait, every social channel sends me five emails a day to try to get me to go back into their platform." So this is hypocritical, right?
(00:07:24):
So that's always been super interesting to me because I've been a blogger since the early days, and for a hot minute, FeedBurner let you also send emails and I saw more people were subscribing to FeedBurner email then RSS. It's surprising to me that it took so long for you guys to come around and innovate this sort of thing and let people realize, well, if going to put the time together to... Especially from an independent creator perspective, it doesn't have to be a blog or an email list, it's like this beautiful fusion of the two. So your ideas can live forever and so you can build upon this narrative and not just, I think, it different than if you're just using a MailChimp to send out offers, right?
Tyler Denk (00:08:11):
Yeah. And when I was at Morning Brew, there was always people reaching out with questions of how do we build our ecosystem? How does everything work? I would say of all of the different companies and content organizations that I either consulted with or offered advice, it was always a process problem where they're like, "We have someone at 10 o'clock at night copy and pasting between the WordPress site, deleting all of these different components that don't work in email, trying to fit them into the email, and then the email shows up in Outlook and Yahoo totally messed up or whatever it was." And so process is a big thing that I think is fairly underrated in the entire content creation ecosystem where, I mean, we did the same thing at Morning Brew. I'd say the first year that I was there, I had a custom HTML template that the writers would copy and paste for an hour and a half every afternoon. The title into the content and into the tags.
(00:09:02):
And it was a full hour and a half thing that the writers just had to do if the email was going to go out properly. We realized pretty quickly when we were moving up into like a more legitimate media organization that you can't hire top-notch writers if you're going to tell them they're going to copy and paste for two hours a day. And so that was a necessary build to create a content management system. But yeah, I think just streamlining processes and knowing that a lot of these content teams run pretty lean, and so time is such a valuable factor. If you can make things easier for the writers to have the output that they want, see the results that they want, whether it's growth monetization or just traction, that's kind of like the sweet spot that I think there's a lot of room to innovate.
Daniel Berk (00:09:43):
I think to add to that, Tyler's background and mine are interesting to compare because as he was building Morning Brew, I was watching Morning Brew closely. I was an early subscriber, huge fan and referred a bunch of people, and I talked about it fairly vocally across socials. So a FinTech startup actually hired me in 2020 to build in their ecosystem a Morning Brew type of newsletter, so it was my full-time job. So I remember reaching out to Neal Freyman and saying, "Hey, what tech stack are you using to build your newsletter, your blog, your referral program?" I was effectively researching and building a case study for what Morning Brew had been doing for the last few years and why it was successful. And he is like, "Oh, that's all totally custom-built and proprietary." And I was like, "God dang it."
(00:10:30):
So I had to go build with like six different pieces of technology what Morning Brew had effectively built in-house. So then come 2021, November, I see beehiiv, and it was like in its early stages of actually going public. I reached out to Tyler on LinkedIn and I was like, "Dude, just so you know, what you're building right now for users, for organizations, creators to actually tap into is something that a lot of people have been waiting for since 2017 when we started seeing Morning Brew popularize this ecosystem." So it's pretty exciting. It's very exciting.
Tyler Denk (00:11:07):
I'd also say we're only here, and that only happened probably due to my naivety of being 23 years old running a tech team or product team at Morning Brew. And by running a team, I mean it was just me. And so the classic build verse buy dilemma, I was too naive and maybe stubborn to go the buy route. I think Morning Brew raised $750,000 from friends and family, so not necessarily venture backed with deep pockets. And so when we had a problem, for example, the writers copy and pasting into this static document for two hours a night, I wasn't like, "What expensive software exists that we could then have our writers use?" I was like, "I'm a self-taught developer, fairly scrappy. How can I spend two months building something that does exactly what Neal needs it to do?" And that was like the real... I mean, it could have gone terribly wrong, but it also worked.
(00:12:02):
It made more sense to me to say, "I sit next to the content team all day. I hear every one of Neal's complaints and I know exactly how it should work. So I'd rather just have full control over going to a company and complaining to them, having them tell me it's on their Q4 roadmap of next year to maybe do that." And then we're kind of beholding to their product releases, and so that was the real selling point to building this our own content management system. The same could be said for our ad platform. There's plenty of like HubSpot, Salesforce type ad management platforms that we could have plugged into but I sat next to the copywriting team too, and I knew exactly what intake they needed, what the output was in Google Docs and how it needed to sync with our newsletter and everything else.
(00:12:48):
I just love the advantage of having your own tech team to sit next to the people using the product and build exactly what they need without being dependent on a third party. So I'd say I think more experienced product managers or engineers would've probably leveraged existing tools better. I was too young, dumb and naive to even consider that, and so I just thought I could build everything, and that is what led to that ecosystem that was custom-built and ultimately beehiiv.
Adam Singer (00:13:15):
Awesome. So switching gears a little bit, I'd love to talk and get your perspective on... I don't love this word because it's so broad, but the creator economy. And I guess what I mean by that is individuals having newsletters and so folk like Jack Raines who we're all fans of. He's got his Young Money newsletter he has on beehiiv, obviously successful, building his entrepreneurial business. Where do you see that market at? Is that a bubble? Is it early days? Is it as many people as can stick it out and actually make a living? Because it's so interesting because there are lots of successful people like Jack and then there's a lot of probably people that don't break through and that are probably trying it because they saw a YouTuber telling them how to make money online through ads or through whatever selling whatever things that they're going to sell. But I'm curious your perspective on the platform side, how you see that market going larger, smaller, doesn't matter if I'm an indie creator because I know you have thoughts on this.
Tyler Denk (00:14:32):
Yeah, I'd say in general, while we support a ton of independent creators, Jack Raines being one of them, we also have large organizations like the Boston Globe, large newsletters like Milk Road, TheFutureParty, Cult of Mac, larger media publications that use our software. And I don't think they're going anywhere. I think the market is actually massive that for them, both like them being on the more traditional incumbent tech where we offer an entirely new perspective and suite of tools. So while we are fueling and supporting what you would call the creator economy and independent content creators, that's not the big bet of the company by any means, but there's a considerable long tail of them.
(00:15:14):
As far as how big that market is and what the angle is, I believe it depends on what their objective is. And so there's definitely independent content creators that are trying to build a business, whether it's the next Morning Brew or their version of it, or they can eventually offer courses, they can do premium subscriptions, they can do ads and actually support themselves as a full-time job. I think that's one angle. I don't think most people start off with that ambition. I think most people just want an outlet to create content and to write because they enjoy writing or they have unique takes or they have a particular interest, whether it's crypto or AI or business or politics. And I think most people kind of start it as I have interesting thoughts, let me write about it. Now I have my friends and now they're friend's reading it. Now I have 5,000, 10,000 people.
(00:16:03):
... now their friends reading it. Now I have 5,000, 10,000 people. Now there's an actual asset here that I think I can monetize, and let me try premium subscriptions or ads or affiliates. I think very few people start with the, "I'm going to go out day one and build a massive media organization of one and branch out from there." So I do think it kind of starts with your, and you being the independent content creator, what your actual goal is.
(00:16:29):
And then I'd also say one of my favorite quotes is Ben Thompson's, "The internet is so much bigger than you think it is." In the sense that there are so many ridiculous newsletters on topics that I thought zero people would care about that have 5,000, 10,000, 15,000 20,000 rabidly engaged subscribers that are opening almost every newsletter, and the polls and the comments and everything are off the charts.
(00:16:51):
And so I think that's a case for, if you are passionate about something and whether you're an aggregator, you have unique analysis or takes, if you want to write about something, odds there are tens if not hundreds of thousands of people that would also find that content interesting. And I know that we all kind of live in this one Twitter bubble where we follow a lot of the same people. And whether it's crypto or JPEGs or AI, there's always that hot topic and you're like, "How much content of this can I possibly get in my inbox?" But I think that's such a small sliver of what the internet actually is, and there's so much content and available audiences out there.
PART 1 OF 4 ENDS [00:16:04]
Adam Singer (00:17:30):
The only JPEGs that I save are memes, so I don't really know what you guys are talking about with JPEGs.
Tyler Denk (00:17:36):
Same.
Daniel Berk (00:17:39):
Yeah, me too.
Adam Singer (00:17:39):
I just had to mess with you, Tyler, I'm sorry. I know what you're talking about.
Daniel Berk (00:17:42):
I think to add to that, if you compare current media verticals with the traditional library and the amount of authors that write the amount of content on exactly the same topic that fill rooms and buildings for hundreds of miles across the world over the last literally thousands of years, there can be 100 people writing about exactly the same thing that all have an audience.
(00:18:07):
And that's what I think we're seeing right now in AI. Tyler mentioned kind of the hot topic is, we have some of the largest AI newsletters in the world on beehiiv, and in one sense you could look at it as like, "Oh wow, they're all trying to compete for this space." But the creators themselves aren't necessarily looking at it that way. They're all just taking one piece of the same pie and their audience are all, many of them subscribing to all of their newsletters because they have their own kind of flavor and take.
(00:18:34):
And so I think the creator economy is evolving. I think 10 years ago everyone thought email was going to die by now, but it just keeps getting better and more sophisticated and monetizing attention, as of course Adam you're familiar with in advertising, it's expensive. Attention, it's harder and harder to get as TikTok and similar platforms continue to take over the space. And so I think having, even if it's 100 people, but 90% of them are engaged, that's worth to an advertiser some amount of money. So I think that's where it gets interesting.
Tyler Denk (00:19:10):
I'd also say real quick, there's definitely a maturation curve of the newsletter space. And speaking specifically in the American market, we're used to the Morning Brew, theSkimm, The Hustle, Axios, all these big newsletters that a lot of us have been reading and following for the past five, 10 years. But some of our largest markets on the platform are actually Brazil and India, who don't have their version of the Morning Brew yet.
(00:19:35):
And so there's just different maturation and adoption levels in different countries that are far bigger than the United States as well. And again, I think just putting things into perspective of our small Twitter bubble, that I think all of us probably put a little bit too much emphasis on in thinking that that is what everyone is thinking whatever the topic of the day is. There are so many different slivers of people and markets and countries that haven't had that maturation of being inundated by a bunch of different newsletters yet. And that's why we launched an international where we support Portuguese and a bunch of other languages as well.
Adam Singer (00:20:08):
Tyler, I loved what you said about, a lot of folk who end up having a newsletter business didn't start with the intent of it being a business, they just started with the intent of sharing cool ideas. And I think there's really something to that, because their initial spark was from sort of a different place than just this raw capitalist perspective. And while obviously capitalism is good for sharing ideas, that can't be the nut of why you're there, because there's already too many other people doing that, right? You can't also be the Wall Street Journal. You can't also be like CNN. And why would you want to anyway when you could be yourself, that's not this edited down, watered down version of something as opposed to the raw passionate human behind it?
(00:21:06):
But with that said, you guys are kind of unique because you do have these larger publishing operations using you, and you also have indie creators that are trying to grow an audience whether to have their ideas heard or monetized. What are maybe some of the learnings from the larger publications, like you were at Morning Brew, that a smaller publisher that was just looking to grow and increase, not even necessarily monetize, what should they take away from the really big success stories and organizations that have done well?
Tyler Denk (00:21:43):
Yeah. And I'd say it's also very intentional that we are going after these larger tent pole organizations, but also catering to the long tail of independent content creators. Going back to, I think email is a very follow the leader space. And whoever's having success, whoever's newsletter looks great and is growing quickly, because it's such a low cost medium, the ability to copy and imitate and take best practices from others is very attainable.
(00:22:10):
And so going back to the Morning Brew days, when we were evaluating our ESP at the time, I think we were initially on Mailchimp, then we moved to Campaign Monitor. And when we were trying to figure out where to go next, we just looked at theSkimm and Axios because they were doing things that we wanted to do, whether it was advanced referral program, the ads, the format, dynamic content. And we kind of followed the leader as, "Oh, they're so much bigger than us, they have more money, they're more experienced, they probably have already vetted it. They're using Sailthru, let's just use Sailthru."
(00:22:42):
And so there was kind of this herd mentality of follow what those who are a little bit bigger and more established are doing. And so that's the same approach we take to who we're catering to. We're catering to the Boston Globes, Milk Road, Exec Sum, FutureParty, very large newsletters. Knowing the long tail of an independent content creator writing about politics or sports probably wants a lot of the same features and capabilities that the Boston Globe has or FutureParty.
(00:23:08):
And so we see that all the time. Some of the top requests we get in the support channel is, "I want my newsletter to look like Morning Brew." So being able to create stories, grouping them together, adding a little border around them, it's an aesthetic that they kind of innovated a bit. And there are so many people trying to copy it, which is why we're releasing a feature next week depending on when this launches, that will allow you to do that.
(00:23:31):
So style is a good one. The referral program is probably the quintessential example of that where, when we built the referral program at Morning Brew it led to over a million subscribers by the time that I was there, so for those three and a half years. Everyone saw that as an opportunity of, "How can I supercharge the growth of my newsletter in a way that I already know people are engaging with my content. They reply all the time that they love it, they read it every day, that they shared it with their family. What if I added stickers or a community or more content or a t-shirt to accelerate the rate at which they are willing to share the newsletter with other people?"
(00:24:08):
And that was a real insight at Morning Brew, and something that, entire third party companies were formed to copy what we did at Morning Brew. And so that's a pretty quintessential example of following something that's working for a larger, more successful newsletter and trying to put your own spin and variation on it to your own benefit. So style and growth of the big ones. And I don't know if you have anything to add, Daniel?
Daniel Berk (00:24:37):
I think just from the creator side, while he was building those things it was so obvious to me as it still is that it is complex to replicate what Morning Brew did successfully. So just reiterating, beehiiv is closing that gap. Not only is it complex and not only are the systems where replicating it with different tech stacks become fragile, but it's just, it's expensive. To have six different pieces of software to do one thing where beehiiv can replicate all of those and more is honestly just easier.
(00:25:11):
Especially when you think about onboarding teams, I see writers and editors who hire new people and onboarding them to five different pieces of technology can take weeks. It can be really expensive, you don't always know if they're the right fit until they fully comprehend all the different nuances of those processes. Whereas at beehiiv, it's all under one umbrella and you can onboard someone in a single day. And so even with the kind of work from home remote world that we live in now with contractors being normal and freelancers being part of the team, you can onboard someone in a trial in a single day, and if they don't work out you can hire and replace them and it's all under one tech stack. So it's just easier to figure out who should be on the team without wasting a bunch of money for these [inaudible 00:25:56].
Tyler Denk (00:25:55):
Daniel, as someone who spun up both LinksDAO, and then you said at a previous job you were trying to emulate Morning Brew in some capacity for a FinTech company, and you have your own newsletter as well, I think the question that Adam asked may even be better suited for you of, what do you look for in other newsletters that are larger, more successful, that you try to emulate in your own either solo projects or with those other companies in attempts to build a newsletter business?
Daniel Berk (00:26:23):
Yeah. So in my own newsletter right now, my next issue is going to start experimenting with, it's a hypothesis I have, so we'll see if this is successful, but I think more and more people are trying to imitate the once a week long form newsletter content. But if you're anything like me, you subscribe to a thousand of those, and so the actual reality of reading through all of them every week is like 0%. So my newsletter, I'm actually going to start experimenting with being able to read in 30 to 60 seconds. So it goes back almost to the way emails started, which is real quick, bite, actionable, open and be done.
(00:27:02):
And so when I look at what do I want to emulate, I look at above the full design, you open it, immediate brand recognition, whether it's logo, product placement, ad, brought to you by whatever it is. And then, can I read this? Can I scroll it really fast and comprehend the main nuggets without spending my whole morning extrapolating some of that different pieces of content?
(00:27:27):
And I think that's a hypothesis of mine, but you look at the ways that beehiiv makes it easy, obviously referral program, but referral programs don't work if you don't have people who love your content. And then you look at recommendations, recommendations don't work if people don't love your content. Advertising doesn't work if people aren't paying attention to your content. So it's all about the content. So my hypothesis moving forward is that people will have to actually slim down their pieces of content to be more easy, to catch more attention in a shorter amount of time. And I think that'll make advertisers a lot happier as well.
Adam Singer (00:28:02):
Sure. You're actually leading into my next question, because you guys definitely sit on both sides of the table in terms of reader and media product and sponsor, actually all three sides of the table. Since we have a lot of advertisers listening, do you want to share... I was going to ask both sides, if you're an advertiser, what are some of the things that you would want to look for when finding new newsletters to sponsor? And then if you also want to answer, if I'm a newsletter, whether I'm a professional one or an individual, what do you think I should do to pitch brands better? I'm asking you both sides of the table question because we have both sides listening, and I'd love for you to talk through that. Daniel, you probably have good opinions here.
Daniel Berk (00:28:56):
I do have opinions about everything. I think Tyler probably has more accurate opinions on this. I'll give my two cents and then I'll let Tyler answer probably more fully. But I think what beehiiv is building right now in the ad space is probably more than anything what Morning Brew popularized in their entire content model, which is that advertising in a content vertical doesn't need to feel to the reader like an advertisement. Of course we're all familiar with this, you open Morning Brew, it says, "Presented by Fidelity," or something like that. And then somewhere, sometimes even unrecognizably in the newsletter, you're being sold to by one to five different partners or sponsors.
(00:29:37):
And obviously Neil and the team of writers at Morning Brew have kind of unlocked this secret key of, how do we sell to readers who love our content without making them feel like they're not still reading our content? And so beehiiv is currently building what I believe will be the most robust automated way to do this across newsletter platforms in the world. And we're already in kind of a beta session with a lot of our different users that I believe is already showing a lot of data that advertisers and users really love. So Tyler can speak a bit more to that specifically.
Tyler Denk (00:30:12):
Yeah, I think to piggyback on what Dan said, I think we've already paid out about $250,000 to newsletters in the past three months, and this is kind of like our beta trial period as we build out the tech. But I can paint the full picture of both sides fairly quickly.
(00:30:26):
Starting with the newsletter side, don't quote me on this, but I believe probably one of the largest teams at Morning Brew is the sales team. And so just being able to attract top advertisers and convince them of your audience, your demographic, your engagement and have them place ads into the newsletter is quite the operation. And then scaling that down to an independent content creator who's writing about politics or sports and suddenly has 10,000, 15,000, 20,000 rabid fans reading their content, they've got those 20,000 fans because they're amazing at writing about sports, not because they know how to sell brand deals to advertisers.
(00:31:01):
And so now there's this dilemma from a business model perspective of, they've actually, through incredible content, amassed a large and sizable audience that's engaged, and I'd consider that an asset to have that many people's attention. And so do they go premium subscription, which we also offer and don't take a 10% cut. And if they think that their content is differentiated and niche enough to charge a premium subscription, they can offer that through strike through our platform no problem. What I think a lot of writers realize is, you have to be very differentiated, very consistent and very unique to be able to warrant a $10, $15, $20 a month premium subscription to a newsletter. And so the more attainable approach for a lot of these newsletters is going the business model of advertising, which is, you have 10,000, 15,000 plus subscribers who are actively engaging, and you have a core demographic of people who are probably smart, interested in whether it's sports, politics, business, AI, it's targeted. And there are plenty of brands in that space that would love to get in front...
(00:32:03):
... targeted, and there are plenty of brands in that space that would love to get in front of those readers who are highly engaged. So, from the newsletter perspective, rather than diluting your time and attracting brand deals, creating a sales deck, doing surveys, doing the reporting and the invoicing, think again. That is the team that is probably largest at Morning Brew, just to do those operations. What if you were to be able to focus on just creating more content, and we could bring you top-quality ad deals from the top advertisers in the world, because they want to get in front of your audience, and it legitimizes your newsletter, because you now have brands like BMW, Funrise, Apple at the top of your newsletter, paying you to be there. That is like the pitch for newsletters, whether it's a media company or independent operator.
(00:32:47):
The pitch for advertisers is... And I know this because when running growth at Morning Brew, one of our largest acquisition channels was purchasing ads in other newsletters, so one, there's a research and discovery phase of, "What newsletters do I think would align with my audience?" So first, you have to define your audience, which would be for us at Morning Brew, 18-to-34-year-olds interested in business and finance, looking to advance their career, stay in the know, and so we have to do our own research to find who is writing to those types of people? What are the other newsletters that are out there? A lot of them are also competing, right? So do they want to even advertise with us? And let's say we do find a newsletter. They say, "We're booked until next month," but it's $20,000 up front payment for one newsletter run. We then front the money. They run a newsletter. Hypothetically, maybe there's an incredibly engaging story right above your ad. It does really poorly, and you just front-loaded $20,000 onto a single send, and now you're looking for the next newsletter. Or let's say the send actually goes really well. Now you need to find the next available slot another month and a half later, to be slotted into that newsletter.
(00:33:58):
That's a really long way of saying it's a grind, to both find the newsletter, to get the advertising copy, get it placed, and have success, where the alternative traditionally has been just go to Google or Facebook or Instagram, where there's ad marketplaces, and you put in your demographic, you say, "I'm willing to spend 5, $10,000 a month," and it will find that audience and spend for you, and optimize over time. So, what we are building at beehiiv is the closest thing to a Facebook ad manager, but for newsletters, where you can say, "I am Brooklinen. I'm looking for women in their 30s who are interested in home goods and comfort whatever," and we go, "Okay, within our network of 5,000+ active newsletters, we actually have 750 newsletters that fit that criteria." No one on Brooklinen's marketing team wants to go to 750 individual newsletters, and the truth is, a lot of those newsletters might be 3,000 subscribers big. It's not even worth their time to speak to those newsletters, but us as the marketplace can diversify their spend, whatever it is, across a diversified set of newsletters, many of which, again, are smaller, and they would never go after individually. But those also might be the most engaged readers, that they never knew was even there to purchase their product.
(00:35:12):
So that kind of is the sale of the ad network, where we are a marketplace where we have a ton of first-party data, where we can deliver ads and test different audiences that hypothetically, Brooklinen doesn't even know would convert, but we will determine that through the data that we get back, and the performance of the campaigns continue to optimize over time. Meanwhile, on the flip side, newsletters are getting brands in front of their audience and getting paid, without doing the sales, copywriting, reporting, or invoicing. So it really is like a win-win for both sides of the table.
PART 2 OF 4 ENDS [00:32:04]
Adam Singer (00:35:45):
Yeah, that's super cool, and I think the value prop for a brand is definitely there. You know, I've done... I think I've only seen like one small, and I can't even remember the name of them, company that does programmatic for newsletters, and I found the reporting was pretty lacking, and I never even... Like, if I can't remember them, and I do a lot of advertising for startups, that's not good, so no, this has been really useful to hear about. I think all of our advertisers should certainly kick the tires on your ad market. Is it as simple as if I'm an advertiser, I just sign up on beehiiv? Because I've played with the actual user flow as a newsletter writer, which is really straightforward. Is it as simple for an advertiser to come on the site?
Tyler Denk (00:36:30):
Yeah. We have a few different intake forms on our marketing site, so you don't even need to sign up yet. We will eventually have a advertiser-facing platform, similar to like a Facebook Ad Marketplace, where you can actually purchase your own buys and manage it that way. I'd say within a quarter or two, we should have like a live tracking campaign page as well, where you can say, "I committed $25,000 for Q2." Here's how many impressions, clicks, unique, everything, conversions that have happened on the platform, and you can kind of track your campaign in real time. We're probably a quarter away from that, but in the meantime, we have a few intake forms. We have a full team dedicated to working with advertisers and then a full team dedicated to working with our data and tech to find the top newsletters that would resonate and convert for these different advertisers. And again, it's not a one-time buy. It's a commit a certain amount of money and we will diversify that. We are going to test a bunch of different audiences.
(00:37:26):
The thing about like the email ad copy is also you can test the header, the images, the copy, the call to action, the buttons, like everything else as well, so there's a lot of variables within the ad placement itself, which differs from, I think, the banner copy that you typically see on like old-school banner ads, or the company that you were thinking of that does banner ads in newsletters. So we can optimize the copy and ad placement itself, in addition to the different types of audiences that we're trying to target.
Adam Singer (00:37:53):
Yeah. I like that a lot better than just running banner ads, which we all have banner ad blindness anyway. I like the idea of a sponsor having their ad written in the style and prose of that newsletter article, because when I'm opening a newsletter, I'll keep reading if it's still in that voice, and if it's clearly in an advertiser voice, it's a little bit more awkward. So I actually like, just to mention Jack again, we sponsored his newsletter, his beehiiv newsletter, and he rewrote about us, in his words, and with our permission of course, but I thought that was really cool, because a newsletter is at heart, whether you're an indie creator or a brand, you're a writer, so I think if you're an advertiser, you're aligning with that newsletter, and you sort of... You don't have the same thing as having like an audio sponsorship, where you have Joe Rogan selling your product, but it is cool to have them talk about you, if you're a brand willing to let them have a little bit of leeway and not micromanage them, right? Because you wouldn't want to do that either on the brand side. You wouldn't want to have them change their voice, right?
Tyler Denk (00:38:59):
And that was one of the big selling points of advertising with Morning Brew. They built their own like creative studio, is what they called it, so you weren't just giving them a few assets and telling them, "This is the copy to run." You would give them a few marketing points, assets, directions to play with, and they had an entire copywriting team that was the funniest team in the entire company, dedicated to making ads more... just as engaging if not more engaging than the content itself. And so you had your own basically in-house copywriting team, which is the premium that you paid to advertise on Morning Brew, because they made sure that the ads, through all the data, and trials, and tribulations of running previous ads, just making them super engaging and perform really well, and that's definitely what we're trying to emulate as well.
Daniel Berk (00:39:43):
Yeah. I mean, I think when you look at traditional like video media, a movie for example, it's the difference between product placement like, "Oh, he's driving a Mercedes. That's a sick car," in the movie, and a commercial, where you are taken away from that actual experience to see an advertisement, so we're trying to produce that product placement where it feels like, Adam, what you shared with Jack, like it feels like Jack is actually selling your product, not you selling your product, so a totally different experience for the reader.
Adam Singer (00:40:12):
Yeah, and I think the only way you get that alignment as well, is if your newsletter actually does make sense for the brand. You wouldn't have like... Like, if I had a newsletter about environmentalism, it would look bad if I had like Shell sponsoring me, versus like Tesla, right? If Tesla did sponsorships. So I think those things sort of work themselves out. You know, you guys are kind of cool, because you're doing both the large media brands and the independent creators, and I think a lot of the things you said about learnings of growth can definitely go in both directions, but I'm curious. How important are individuals as well, to media brands? Especially in the case of a newsletter, right? We have people like Matt Levine at Bloomberg, who's a super important iconoclast voice in finance, but then I have other newsletters I subscribe to, for example from MediaPost, where I can't really name the people behind them, so is that a best practice? Do you want a mix of both? Are those totally different styles of newsletters? I'm curious how you see that playing out. Because in social, people really matter a lot, but in email, is that always true?
Tyler Denk (00:41:41):
Yeah, that's a great question, and I don't even know if I'm the best person to answer it. Like, I have my own opinions. I can see it going either way, depending on the brand and the person, so I think it's like a big "it depends." Early days of Morning Brew, you never knew who was writing the newsletter. It was all behind the brand of Morning Brew. So, we could have rotated writers in, which we did. We could have hired writers, fired writers, whatever it was, and the goal was to keep Morning Brew, the brand itself and the content as consistent as possible, and that's something I think we probably copied early days from theSkimm.
(00:42:14):
Like, I don't think theSkimm... I don't follow them now, but at the time, they never broadcasted who the actual writers were. The Hustle did something different, where they started introducing the writers and the editors at the bottom of every newsletter, and I think that's something that, one, it's just kind of understanding your employee base and talent as well, so I think a lot of people just naturally want to be recognized for their work, and so there was a point at some time probably 2019, where we ended up actually calling out who wrote each story in the newsletter, initially at the bottom, then at the top, and now somewhere in-between I believe. But that helps elevate the brands and build the brands of these writers, which ideally, if they're active on social media, they can drive eyeballs back to the newsletter as well, because as they build their brands, they're amassing their own personal following, and then they can kind of cross-promote with what their actual work is at Morning Brew.
(00:43:05):
The flip side of that, which you can see with a ton of different examples, Barstool's another great example, where they really build brands, but then you're kind of in the talent management business, so people end up growing a massive brand, and then you're managing talent and renegotiating contracts so they don't leave and start their own thing. That's kind of what you've seen with a lot of these other newsletter organizations, where they're kind of attracting personalities, or people that have already established some sort of online presence or media asset. I'm kind of talking in circles. I don't know if there's like a correct answer. They're like two different problems, or two different ways of approaching a media business. I think there's benefits to both.
(00:43:43):
Axios took very established writers who either had a media property of 10, 20, 50,000 subscribers already, and an active blog, and an active social media presence, brought them onto the Axios platform, and they benefited immediately, because they brought that individual person's audience to the Axios brand, and that's really powerful, but I think it also works the other way when that person actually experiences a ton of success and realizes that they could actually probably make more money and have more freedom by going independent and doing it without the parent brand, and that's kind of the push and pull of that problem.
Adam Singer (00:44:18):
Yeah. It's interesting, because as we all know, monetizing online is really hard, and if you just wanted to focus on writing, it is probably appealing to go to an Axios, or even a Bloomberg, or a Wall Street Journal, or something. I think it definitely takes a certain type of writer, maybe more entrepreneurial or also maybe pushed too far by whatever media conglomerate, where they're like, "All right, guys. I want to cover this, or I want to have this voice," and I guess you guys, being a platform, you're sort of agnostic, because if I were really successful within a media company, I could come to you and be like, "Well, I'm just going to use beehiiv's tools and monetize."
(00:44:55):
So yeah, I appreciate you sharing thoughts, because to me, it's interesting, just from a like what news and information do we get from the world, and what are those voices influenced by? I think it gets to be really interesting when they have more choice as like writers, and they can sort of decide to be independent or decide to work for others, and like when I see a brand, I think more and more lately, I do question who is behind it, if that brand is sharing stories with a clear agenda versus just like purely informational news, where it's just like aggregating links, and I kind of don't care so much if they're just saying, "Here's what's happening in the sector," sort of like a tech meme does, but an email, which a few people still do.
(00:45:45):
But I think like as they're getting more of their point of view in things, like the brand matters, but then the people matter even more, because now I care about this person, and what their experiences are, and why they have this perspective.
Tyler Denk (00:45:59):
Yeah.
Daniel Berk (00:46:00):
Well, and to add to that, I would even go as so far as to say that the people who also care about those pieces of content matter, and so really, the community aspect of what you're reading and how you're engaging starts to even go a bit further, where if you're reading and you're wondering, "Who's writing this? Are they credible? Are they noteworthy? Should I listen? Is this their area of expertise?" Some of those fears or concerns are answered in part by, "Well, what experts or people that I follow are also listening to this person as they write?" So I think... You know, I'm experimenting right now with a community of writers, and I just launched it last night on Twitter, and there's already over 100 people, just overnight, that joined this Telegram community.
(00:46:44):
I have no idea what my plans are for it, but what I've realized in the last several months, speaking with newsletter creators small and large alike, is that people want to bounce ideas off of other people, not brands, not people behind a curtain, but other people. And I think regardless of which direction you start to view a media vertical, the human behind the curtain always matters, I think on both sides of the coin, to the advertiser, "Well, who is this person? Are they noteworthy? Is our money worth spending toward this content vertical?" But also to the readers, like exactly what you shared, is, "Should I listen to this person as they produce content toward me?"
Adam Singer (00:47:23):
I-
Tyler Denk (00:47:24):
I think there's a large secular shift in general, towards individuals and personalities, on many levels. Back to what we were just saying, but the fact that the barrier to entry to start a personal newsletter is $0, and you can spin up a website newsletter for free, podcasting pretty much the same, the explosion of different social media channels, Instagram, TikTok, even like OnlyFans, even Substack and us, right? Like, the ability that you can monetize your audience directly as an individual, I don't even think was an option 10 years ago for most people. And so I think the proliferation of all of these different platforms, that I can like Daniel Berk and-
(00:48:03):
All of these different platforms that I can like Daniel Berk, and I can follow him on Twitter to get his thoughts there, I can follow him on Instagram to see what he is up to in like his day-to-day life. He can be on TikTok, can be on OnlyFans, he can have a newsletter, he can have his own podcast, like there's just so many different low barrier to entry platforms where you see different angles and sides of these personalities that you like them for either career purposes or entertainment purposes. And I do think that's becoming much more powerful than any individual brand in itself.
PART 3 OF 4 ENDS [00:48:04]
Adam Singer (00:48:32):
I couldn't agree more. And, I'm actually kind of... I'm a little sad it's taken us this long to wean off being purely an ad-supported internet, and start to support each other financially with subscription recurring revenue. All of us have chosen to build products and work on the tech side, but I also have empathy for the people who... They want build a recurring subscription business, right? They want to have a niche media product for this topic that isn't big enough to get covered by traditional meaning. That's sort of the beauty of what the internet has enabled people to do from a passion perspective, but I feel like only now we're getting closer to where that could be viable for your income, right? And have that move from just from passion to actual profession of what you do during the day. And, that's like a very freeing thing for a lot of creative individuals.
(00:49:28):
I only have one more question, and I have to ask it to be really annoying. What are your thoughts on GPT and AI from a product perspective and also from just your user's perspective? Like, is every newsletter going to be AI and edited? Are you guys going to have AI suggestions in the product? Have you not thought about this? Anything you want to offer as relates to newsletters?
Daniel Berk (00:49:55):
I'll speak a little bit to it. I think AI is unlocking a lot of really exciting things in technology, and just across the world as people start to innovate or continue to innovate. A lot of, I think world changing different tools. But, I definitely think there's a really good argument on both sides where people can say, well, yeah, AI's going to replace jobs, this is the end of the world, everyone freak out, set your building on fire type stuff. And I'm like, I mean, there's probably some jobs it's going to replace. I mean, that's just likely to me. I mean, there's no way around it. But, I think it will further incentivize in the creator economy, people who are unique and have that skillset to differentiate what they're saying and why they're saying it. I think AI and the creator economy is going to come into play in part as like an executive assistant in some ways.
(00:50:47):
I mean, we saw Microsoft just released their, I can't remember the name of it right now, but their whole suite of tools alongside like Word and Excel and all this cool stuff, where it's basically like Clippy 2.0, dating myself there. But, it's this executive assistant as you create. And, if you saw the video that Microsoft released, I mean there are some aspects where it's creating for you, but it's still using you as a guide, it's using what you are doing, the meetings you're having, your voice and the interactions you're sharing with your colleagues and in an actual setting of business to create. I think we're still probably a bit away from it creating so completely without prompts, that creators are fully replaced. I'm not saying it won't ever happen because a hundred years ago planes weren't flying in the sky, but now they are. So a lot happens, right? But, yeah, I think those are my thoughts, in short.
Tyler Denk (00:51:47):
Yeah. I think to start, it'll be more of like an assistant type thing where it aids and does things and organizes content in a way that humans just don't feel like doing. There's a lot of laborious work that's done by everyone on a day-to-day basis. And I think as these tools develop, finding ways to leverage AI to make your life more efficient, whether it's a workflow or process or data aggregation or whatever it is, I think those are like the immediate short-term effects of it. I don't think anyone has a perfect sense of what the long-term effects of this are, as far as like a product perspective as well. We have a bunch of active conversations about how to leverage it. What I don't want to do is take advantage of the hype and build some very useless but flashy headline type feature, that leverages some sort of like GPT model, for the sake of saying, hey, we are AI-powered.
(00:52:41):
I am very much in the business in camp of thought where we are trying to provide values to content creators to better help them create content, grow their audience, monetize, for advertisers to be able to better reach their audience and convert an audience to purchase their products. And if the tech and products that we're rolling out don't aid either of those, it's not like of much interest to me, regardless of the hype that we could generate from just saying we have an AI-powered feature. So I think we're being pretty deliberate and careful about how we want to deploy AI, and when the use cases rise, we'll definitely take advantage of it, but it's definitely exploratory for now.
Adam Singer (00:53:24):
Awesome. You guys have an obvious product that could integrate GPT-3 or 4 in a way that would help people with writing. So I have to ask that question. I'm sure every-
Tyler Denk (00:53:36):
What would you as a user wish that GPT would do or AI more broadly to help you in your day-to-day with the newsletter?
Adam Singer (00:53:45):
Actually, the one thing I think that would make sense is sometimes I write thousand word newsletters. If it could write like a three bullet point description at the top that I could click and insert, that could be cool. I think Axios does a good job of that in there. Some others like CNN used to do that, put just the bullet points at the story. So if someone's busy, they can just read it. Because I'm not doing news stories, I write longer thought pieces on philosophy, on marketing. If the AI could summarize it for someone in a sentence to just get it, that would be cool. I try and do that with subheads, and I try and write three or four tweets to share what the newsletter is. So, if the AI could take my thoughts and condense it and not make it sound like a robot, or we can infer, like the sort of padded phrases that it says, that would be a cool thing.
(00:54:40):
Because now it's, I finished my job, and it's making the promotion of it easier. I'm not, as a writer, like, I have ego or I wouldn't write, right? So, now I'm not bothered by it, because it's just adding an efficiency. So it's not trying to step in front of me and tell me how to use the language. Right?
Tyler Denk (00:54:59):
Yeah, I think that kind of coincides what Dan was talking about in general about his newsletter maybe being too long and not everyone having time. I would actually push back on that and say some of my favorite newsletters, time permitting are the deeper analysis where, again, I read them because I appreciate their perspective and point of view, Ben Thompson being the primary example, where it's very deep tech analysis and it takes like a good seven to eight minutes read. Right? But that is why I pay for his newsletter, because he's very smart, has tons of experience, and I want to learn and understand how he thinks about things. And so if he were to summarize it in three to four bullets, I don't think that I would get and extract the same amount of value that I do. But again, everyone has their own schedule and routine, and not everyone that Friday that the newsletter hits, has enough time to read a 10-minute thought piece.
(00:55:44):
So being able to do the best of both, where Dan or Ben Thompson does the full 10-minute-long read and analysis. But the TLDR at the top is summarized by some sort of AI, and it's like a two paragraph summary or four bullet points or whatever it is. I think it would be an additional value add.
Adam Singer (00:56:02):
Yeah. Or even AI gives me like the teaser content, that hundred words for LinkedIn, right? Where it's not going to redraft what I said, but it's going to help me market it on social in a really interesting way.
Tyler Denk (00:56:15):
Yeah. That is the most annoying, not the most annoying, but well, the thing that I write, the product update emails every week, which are more time-consuming than you think, it takes like probably two to three hours depending on the different features we're highlighting. And then I'm finally done that, and I go, shit, I need to think of how I need to hype this up and summarize it for Twitter and for LinkedIn. And it's like I've already exhausted all my creativity in writing the posts where that extra step of how do I get other people net new that aren't directly on this list excited as they're scrolling through LinkedIn and Twitter. And that's always like the smallest and quickest part, but the most exhausting, because I do it last. So yeah, I think a pretty good application there.
Adam Singer (00:56:52):
Yeah. Or just have Daniel do it as he does mark-
Tyler Denk (00:56:56):
He's my proofreader, so he [inaudible 00:56:58].
Daniel Berk (00:56:57):
That's right, that's right. Yeah. No, I think there's a lot of really exciting use cases. I mean, I think the earliest versions of this is like, you've seen this in newsletters where it says it's going to take you this amount of time to read the newsletter. I mean, that's all, like the very earliest signs of AI adaptation to newsletters. So I think we'll continue to see bits and pieces of that rolled out in this creator economy. But of course in beehiiv land, I think we'll just continue to kick the can until we come up with a good strategy for what makes sense for our ecosystem.
Adam Singer (00:57:29):
Yeah. Or the AI could come up with, you could do something else in this amount of time or read the newsletter like... When they do like, there's an asteroid that's like the size of 22 crocodiles. You've seen people do headlines that you could-
Tyler Denk (00:57:45):
Yeah.
Daniel Berk (00:57:45):
Yeah.
Tyler Denk (00:57:45):
Yeah.
Adam Singer (00:57:46):
In only the time it takes you to walk to your mailbox, you could read this newsletter, it could come up with fun things. I don't know.
Tyler Denk (00:57:52):
We could just ask the AI to come up with what it would prefer to do for our platform and see what it-
Daniel Berk (00:57:56):
Oh, there's a... I can't remember who did this, but there's a Twitter thread right now, like ongoing mega-thread of a guy that asked ChatGPT with GPT-4. He said, I have a hundred dollars and I need you to tell me exactly what to do with it to make, I don't know, some absurd amount of money, like a monetizable revenue-driven business. And he's like following the instructions of GPT-4, and actually making money. It's really funny. I don't know how he's doing it, but-
Adam Singer (00:58:25):
It came up with build a site that you monetize. And the reason it did that is because every make money online bro, says to build a site that you monetize. So, it's not wrong to do that, because there's so many other people that have done that and it's meta to the internet. It's not going to assume that you're like, it's not going to come up with start a electric car company or something like that. The electric car company's going to make more, by the way. So-
Daniel Berk (00:58:51):
Exactly. Yeah.
Adam Singer (00:58:53):
Well, this has been awesome guys. I will put links to follow Daniel and Tyler on social media as well as check out the beehiiv website, whether you are a newsletter writer or media brand or you're an advertiser. Sounds like there's options for advertisers now too, which I think is most interesting for everyone listening. So, anything else you guys want to add on the way out?
Tyler Denk (00:59:15):
No, I think you've covered it. We're only 14 months old, so we're hustling. We're a team of 17 now. We are launching features weekly. We are way too in the weeds of product feedback. And so, if you are a publisher or an independent content creator who is looking for something that we don't yet have, if you were to DM me and let me know what you're looking for, odds are that we can get it live pretty quickly. So that's my promise to potential new users and publishers. And then, for advertisers, we really are trying to compete with Google and Facebook. That's like our big broad ambitious goal. And we're 14, I think 15 months in now. But being an early advertiser on a new platform typically has a ton of different advantages, and we are seeing a lot of success in our early campaign. So, definitely reach out.
Adam Singer (01:00:06):
Awesome. Tyler, we'll have to beta you for some AdQuick ads and give you feedback.
Tyler Denk (01:00:12):
I'm down.
Adam Singer (01:00:13):
And maybe we can give you guys a billboard in Times Square. You guys can share something feisty on a billboard. We'll get a picture of it for you two.
Tyler Denk (01:00:20):
Be Dan with OnlyFans.
Adam Singer (01:00:23):
Oh God, we're not promoting that.
Daniel Berk (01:00:25):
I have size 15 feet.
Adam Singer (01:00:27):
This is all safe for work, guys. All right, thank you so much. And don't forget to subscribe, follow, and like the Madvertising podcast, so you don't miss future episodes. We will see you next week.
PART 4 OF 4 ENDS [01:00:43]