Why beehiiv's Funding is Big for the Newsletter Economy

Let's not accuse our competitors of cloning us, when they are as innovative as we are.

Hey Everyone,

beehiiv got major funding last week, in their long-awaited Series A, and can now scale into being a legit competitor to Substack, among others, like ghost and ConverKit.

I’m always watching PR, news and things like Twitter. I didn’t really like how Substack was accusing competitors of cloning their features, in fact, in some ways beehiiv is actually way more innovative and has a culture of growth-hacking. beehiiv had more advanced referral features for months before Substack finally launched their own, and as I’m platform agnostic, I believe in a creator-centric philosophy. We should always be giving Creators and writers advice that benefits them, not our own platform.

You shoudln’t have a platform incentive to be giving writers bad advice that’s not truthful, factual or accurate. Being creator-centric has to be basic to helping them monetize their Newsletters, first and foremost, irrespective of platform.

Substack’s insistence that pure play subscriptions are the best (even the only thing that matters), really doesn’t give Creators very good advice.

Thankfully there are companies who give a more balanced perspective on monetization. I’ve been burnt before by this “Ads are toxic” narrative from Medium, and in fact I’d wager Substack’s philosophy around Ads feels like a clone of Medium, so with all this being said, beehiiv’s Series A funding last week really is a big deal.

That beehiiv are Ads friendly means they are really their own beast. Now that SparkLoop has been acquired by ConverKit, it’s a three horse race. So let’s go! The Newsletter platforms are like kids, each growing and asserting itself in their own peculiar way with their wildly different personalities.

But hold on, hold on a for darn minute! It’s way too soon to say pure-play subscription model is the best for Newsletter creators.

Why the Hybrid Business Model Matters

I think for most Creators, a 65/35 or 80/20 split between subscriptions and Sponsorships really is the best balance, since for the majority of creators subscriptions are a slow gaining mechanism in the Newsletter Economy.

As a Creator you never want to be relying too much on just one income stream, you need to be diversified, and sadly this means being diversified by platforms as well. Since nobody gave me good advice when I started Substack, I had to “eat bread” while I figured it out myself in stark poverty. I wonder if any of these people have had to deal with the stark poverty of trying to be a creator?

Now if Creators are smart and if it’s possible in their niche, they are going to do paid video courses, paid seminars and other more lucrative higher tier monetization streams as well. For many of us that won’t be possible. I can charge $400 for a single Native Ad, but there are many days I’m not getting new paid subscriptions, and that’s concerning if I’m trying to build a sustainable profitable business. Even a one-person gig with a minimum viable product that’s on the cusp of somewhere between brand new and with momentum.

To rely solely on either Sponsorships or Subscriptions, I just don’t feel is sustainable to push on our Creators. Especially in 2023 and sure as heck not in 2022 or before.

It’s usually somewhere at the intersection of those two things that Solo entrepreneurs and amateur media startups are going to shine, especially in the first couple of years. It’s at the beginning when a hybrid approach to revenue diversification makes the most sense.

Newsletter saturation like an Ads slowdown is likely upon us in the Summer of 2023. It’s only normal right, if my Subs are slowing down, I need to double down on Sponsorships. This before I even have a living wage. I’m still bootstrapping here, living a bare minimum existence. Do you know what that’s like?

There will soon be more Creators in our topics than there are plentiful new readers and early stage platforms like Substack and beehiiv don’t do a great job of attracting audiences and users without relying on their influencers. Even our in-house media analysts are sugar-coating it. We are still basically doing this on our own.

The fact is, the beehiiv Series A says a lot about what’s really happening in the Newsletter Economy.

I’m now testing out testimonials.te since we should also own our case studies of our Email list, and Substack’s testimonial capabilities are subpar and if I can’t bring them with me, I don’t own them do I?

I’m an advocate of being analytical about Newsletter platforms, and as a creator-centric advocate of the Creator Middle Class, competition now from beehiiv, ConvertKit and Twitter is ultimately good for Substack becoming a more mature product.

We should be praising Newsletter Platforms, not thinking they are inferior to us. We should be openly debating all of these things, if being creator-centric mattered to us. If people doing what they love was important to all of us.