How 3 Guys Killed a $650M Competitor With $0 Marketing Budget

Everyone says you need millions in funding to compete with tech giants.

But three guys working nights and weekends built a newsletter platform that went from zero users to challenging a $650 million competitor... while charging exactly zero dollars for their core product.

And they did it by breaking every rule in the SaaS playbook.

I tweeted about this story yesterday: "Can 3 guys kill a $650m competitor?"

Tyler Denk, Beehiiv's CEO, replied: "I think so."

He's not wrong. Here's exactly how they did it.

Today, we’re breaking down:

This is the story of Beehiiv. And before you think this is another "overnight success" fairy tale, let me show you the receipts.

Tyler Denk wasn't some random developer. He built the entire tech stack that powered Morning Brew, a newsletter that scaled to millions of readers and sold for $75 million.

But here's what's insane: In 2020, when he looked at the newsletter tools available to creators, he saw a massive gap. The custom tools they built at Morning Brew were not readily available.

Substack was simple but limited. It had no APIs, no customization, and they took 10% of everything.

Mailchimp was built for SMB campaigns, not publishers.

And the giants? Facebook and Twitter were literally throwing hundreds of millions at the space.

So Tyler and his co-founders Jake Hurd and Benjamin Hargett did something absolutely unhinged. They started building Beehiiv while working full-time jobs, ruining vacations, and coding until 3 AM.

I'm talking about what Tyler calls the "Sprint Period", and this is where most side projects die.

Here's the playbook they used that you can steal today.

Phase 1: Brute Force the Start

Instead of launching with a "Sign Up" button like everyone else, they launched with a waitlist. And this wasn't just a scarcity tactic, it was technical survival.

Email platforms live and die by sender reputation. If you send millions of emails from cold IP addresses, Gmail marks you as spam and you're dead.

So they manually onboarded publishers with 10,000 to 50,000 subscribers. The Goldilocks zone. Big enough to establish credibility, small enough to not trigger spam filters if something went wrong.

By October 2021, they had 400 people on the waitlist but could only onboard them one by one.

This "constraint" became their superpower, because Tyler personally migrated every single user, he knew every bug, every friction point, every feature request.

When a user said "I'm leaving because you don't have X," they built X that week.

When a prospect said "I'll join when you add Y," they built Y immediately.

This is what Tyler calls "Ship or Die" culture. And it created something competitors couldn't match: speed.

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Now here's where it gets spicy.

While Substack was taking 10% of every creator's revenue, Beehiiv charged... zero.

"Wait, how do they make money?"

Patience. This is the genius part.

They counter-positioned against Substack on every feature Substack ideologically refused to build:

Beehiiv wasn’t going for just writers. They were competing for OPERATORS, the people who saw newsletters as businesses (not blogs).

And then Tyler did something absolutely brilliant.

He started his own newsletter on the platform: Big Desk Energy.

This newsletter became a 24/7 product demo. Every time Tyler used a new feature, 80,000 subscribers saw it work in real-time.

He made the growth playbook itself the content.

He published his actual investor decks. His monthly revenue numbers. His hiring failures.

Other startups guard this information like nuclear codes. Tyler made it public.

Why?

Because his target audience, newsletter operators and founders, are OBSESSED with business mechanics. They don't want another productivity blog. They want to see the actual machinery.

Once they had product-market fit, they deployed the nuclear option: turning every user into a distribution channel.

The Partner Program:

They offered 50% commission (sometimes 60%) on all referred revenue for 12 months.

Most SaaS companies offer 20-30%. This seemed insane. It was. And it worked perfectly.

Suddenly, agencies, influencers, and educators had a massive financial incentive to recommend Beehiiv.

But they didn't stop there, they built virality directly into the product.

The "Recommendations" feature meant when someone subscribed to your newsletter, they'd get prompted to subscribe to three other newsletters you recommended.

This turned newsletters into a network. A small creator could get recommended by a large one and instantly access thousands of readers.

And every email sent through Beehiiv had a "Powered by Beehiiv" footer link.

With millions of emails going out daily, this became a passive lead generation machine that cost them exactly zero dollars.

By 2023, they were growing 20% month-over-month but starting to hit chaos.

So Tyler implemented something called the Entrepreneurial Operating System (EOS), from the book "Traction."

Here's the framework:

The North Star: $250 million in revenue by 2028. Not a vague goal, but a specific target.

The Rocks: Every quarter, they set 3-7 critical objectives. Everything else is noise.

The Weekly Meeting: Every week, 90 minutes, non-negotiable.

This meant they could never go more than 7 days without catching a problem.

Their engineering team ran 3-week sprints plus 1-week "cooldown" (dedicated entirely to bugs and tech debt).

This is how they maintained "startup speed" while scaling to millions in revenue.

In June 2024, Beehiiv pulled off their biggest strategic move: they acquired Typedream, a Y Combinator-backed website builder.

Why?

Because they realized something critical: it's easy to switch email providers. It's HARD to migrate an entire website.

By owning both the newsletter AND the website, they lock users into the ecosystem.

They also built an ad network that sources high-paying advertisers and distributes them across newsletters.

A "Boosts" marketplace where newsletters pay each other for subscribers.

And tools to sell digital products directly.

They were taking a cut of the ENTIRE revenue pie their users generated.

Companies like Blockworks run 7 daily newsletters on Beehiiv.

"There's An AI For That" serves 1.7 million subscribers.

Agencies like Emerald Digital are migrating our clients.

They went from three guys working weekends to a platform targeting $250 million in revenue by 2028.

And they did it by breaking three fundamental rules.

Here's the playbook distilled into an actionable framework.

Call it The Beehiiv Blueprint:

1. Brute Force the Start (Months 0-6)

2. Counter-Position Against the Leader (Months 6-12)

3. Build in Public (Ongoing)

4. Engineer Network Effects (Months 12-24)

5. Systematize Before Chaos (Months 18-36)

6. Expand the Ecosystem (Months 24+)

Rule #1: Don't compete with well-funded giants

They went head-to-head with Substack's $650M war chest and Facebook's billions.

Rule #2: Charge for your product

They gave away the core product for free and monetized the ecosystem instead.

Rule #3: Keep your metrics secret

They published everything—revenue, bugs, failures—and turned transparency into trust.

The result? They didn't just build a product. They built a movement.

This playbook works for ANY vertical SaaS.

Find a wedge in an established market.

Brute force the first 100 users with manual onboarding.

Build in public to attract your tribe.

Let your loudest users dictate the roadmap.

Systematize before chaos breaks you.

And engineer network effects directly into your product.

— Matthew Berman

P.S. Want 3 moves you can make this week? 👇

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