Apple’s App Store Loss, AI Persuasion, and an Interview with Tyler Denk of Beehiiv | E2120

Key Concepts

• Power Law: Uneven distribution where a small percentage of inputs drives a large percentage of outputs (e.g., 99% of venture returns from top 2% of investments).
• Automate, Delegate, Deprecate (ADD): A philosophy for startups to optimize operations by automating tasks with AI, delegating non-core functions, and deprecating unnecessary processes.
• Customer Acquisition Cost (CAC): The cost associated with acquiring a new customer.
• Lifetime Value (LTV): The predicted revenue a customer will generate during their relationship with a company.
• Reverse ETL: Extracting, transforming, and loading data from data lakes into software applications.
• ARR (Annual Recurring Revenue): A measure of recurring revenue normalized to a one-year period.
• MRR (Monthly Recurring Revenue): A measure of recurring revenue normalized to a one-month period.
• Boosts: A two-sided marketplace within Beehive where users can pay to grow their newsletter subscriber base, and others can earn money by recommending newsletters.
• Building in Public: A strategy where founders openly share their company's progress, challenges, and learnings.

Economic Data and Macro Trends

• Jobs Data: The US added 177,000 jobs in April 2025, exceeding expectations.
• Impact on Interest Rates: Stronger labor market may deter the Federal Reserve from cutting interest rates.
• Unemployment Rate: Around 4%, considered low.
• Labor Participation Rate: 62.6% in April 2025, lower than the peak of 69% under Clinton.
• AI Impact on Jobs: Potential for AI to impact labor participation, but not yet acutely visible in data.

Dub's Funding and Autopilot

• Dub's Series A: Dub, a company mimicking trades, raised a $30 million Series A led by Notable Capital and Neo.
• Business Model: Dub charges a subscription fee (around $10/month) and potentially earns revenue from payment for order flow.
• Autopilot: Another platform that mimics people's trades.
• Concerns: Concerns about the responsibility and potential anger associated with people copying trades.

Apple App Store Ruling and its Impact

• Epic Games Lawsuit: Epic Games sued Apple over App Store policies.
• Court Ruling: The court ruled against Apple's attempt to circumvent the original ruling by imposing a 27% tax on external subscriptions.
• Impact on Startups: Startups can now direct users to their websites for subscriptions, avoiding the 30% App Store fee, increasing their profit margins and valuation.
• Customer Acquisition Cost (CAC): Increased room for CAC spending due to higher margins.
• Preferred Partner Program: Suggestion for Apple to offer a preferred partner program with marketing and distribution benefits for a 30% cut, and a standard 10% cut for others.
• Duopoly Concerns: Concerns about the duopoly of Apple and Google Play, with identical fee structures.
• Tim Sweeney: Praised for taking on Apple and offering no revenue share on the Epic Games store until developers hit $1 million in revenue.

Atlassian for Startups

• Tools: Includes Jira, Confluence, and Loom.
• Loom Example: Investment team using Loom to communicate investment ideas asynchronously.
• Offer: Eligible startups get up to 50 seats for free for one year.

Fiverr Acquires Census

• Fiverr: A large company valued at $5-6 billion in 2021.
• Census: A reverse ETL company valued at $630 million in 2022.
• Reverse ETL: Census specializes in moving data from data lakes into software applications.
• Possible Motives: A marriage of convenience facilitated by the shared investor, Andreessen Horowitz.
• End-of-Life Funds: Venture funds at the end of their lifespan (10-12 years) may encourage portfolio companies to sell or be acquired.
• Zombie Corns: Companies making a billion dollars but not growing fast enough to go public.
• Single and Double M&A: Smaller acquisitions that provide liquidity and hope to LPs.

Starbucks and Customer Experience

• Uber Rating System: Proposal to implement an Uber-like rating system for Starbucks orders and beverages.
• Equity for Top Performers: Offer equity in Starbucks to top-performing employees.
• Focus on Consistency: Emphasis on delivering consistent, accurate orders rather than prioritizing barista self-expression.
• Two Lines: Suggestion to have two lines, one for complex orders and one for simple orders.

AI and Persuasion

• University of Zurich Experiment: Researchers used AI-generated comments on Reddit's r/changemyview to study persuasion.
• AI Effectiveness: AI bots were six times more effective than human responders in changing people's minds.
• Concerns: Concerns about the potential for AI to manipulate opinions and spread misinformation.

Beehive Interview with Tyler Denk

• Beehive's Focus: Helps people create, distribute, grow, and monetize their audience primarily through email.
• Customers: Range from large publishers like Time to individual creators like Arnold Schwarzenegger.
• Multi-Part Revenue Strategy: SAS revenue (70%), ad network (30%), and boosts (2-4%).
• Boosts: A marketplace where users can pay to grow their newsletter subscriber base, and others can earn money by recommending newsletters.
• Shipping Velocity: Beehive ships features quickly, often at 80-90% completion, and relies on user feedback for further refinement.
• Website Builder: Acquired Pipe Dream, an AI-native website builder, to offer an all-in-one solution.
• Building in Public: Tyler Denk actively shares his company's progress and learnings.
• Staying Focused: Emphasizes getting 10% better every week, listening to users, and having an opinionated roadmap.
• Ad Seller: Actively hiring an ad seller to legitimize and grow the ad network.
• Competitors: Ghost and Substack are the main competitors.

Conclusion

The episode covers a wide range of topics relevant to startups, from economic trends and funding news to app store policies and marketing strategies. Key takeaways include the importance of automation and delegation, the impact of the Apple App Store ruling on startup profitability, the potential of AI for persuasion, and the value of building in public. The interview with Tyler Denk provides valuable insights into Beehive's multi-part revenue strategy, rapid shipping velocity, and commitment to user feedback.