Build Your SaaS

Money: how to get it (and how we spend it).

Show Notes

Recent news

Main topic: money

  • Should your startup get funding?
  • Quotes:
    • Joel Gascoigne, founder of Buffer: “Easy to sell away your ownership and control without realizing what it will mean. The industry seems to normalize and make people feel like it's a given that they can't grow with their company.”
    • John O’Nolan, founder of Ghost: “This is so important. I had the exact same experience in a startup accelerator. All these wealthy smart people telling me that there was no way to succeed without taking capital. They are VERY good at convincing people of that”
    • “Growing fast and health are nearly mutually exclusive”
  • Pros to funding: it’d be nice to move faster.
  • Cons to funding: you lose control, your forced to move faster than you might like (or need to).

Show notes:

★ Please review us in iTunes ★
Thanks to our monthly supporters
  • Pascal from sharpen.page
  • Rewardful.com
  • Greg Park
  • Mitchell Davis from RecruitKit.com.au
  • Marcel Fahle, wearebold.af
  • Bill Condo (@mavrck)
  • Ward from MemberSpace.com
  • Evandro Sasse
  • Austin Loveless
  • Michael Sitver
  • Dan Buda
  • Colin Gray
  • Dave Giunta

Want to start a podcast on Transistor? Justin has a special coupon for you: get 15% off your first year of hosting: transistor.fm/justin
★ Support this podcast on Patreon ★

Creators & Guests

Host
Jon Buda
Co-founder of Transistor.fm
Host
Justin Jackson
Co-founder of Transistor.fm
Editor
Chris Enns
Owner of Lemon Productions

What is Build Your SaaS?

Interested in building your own SaaS company? Follow the journey of Transistor.fm as they bootstrap a podcast hosting startup.

Helen:

2,960,666 years of transistor. Frankly, I think that's a better deal than getting, $20 off a lip wax.

Jon:

Hey, everyone. Welcome to Build Your SaaS. This is the behind the scenes story of building a web app in 2018. I'm John Buda, a web developer.

Helen:

And I'm Justin Jackson. I'm a product and marketing guy. Follow along as we launch transistor dotfm. That's our startup. That's what we're doing.

Jon:

Yeah. We're doing it.

Helen:

And the the fun thing, especially, I think, right now is that we keep making progress. Like, you were I I guess we're gonna get right into this. I I I'm already screwing with our order, John. But, you were just sharing with me these new, shareable pages. Can you can you explain a little bit about what you just built?

Jon:

Yeah. So it's sort of related to being able to share it on social media and Twitter and things like that. So you can share an episode in which Transistor will actually embed a playable audio file into the Twitter timeline. Yeah. It's like an embeddable player.

Jon:

But in order to do that, you sort of need a link to share, which then Twitter will, like, find the appropriate tags in the document and and like build your player. So for every episode in Transistor, there's gonna be this like shareable landing page that's like an, you know, a nicely designed, single episode page that will link to some of your other accounts and have the full episode description and have a player on it.

Helen:

Yeah.

Jon:

So those will be going those will be going live pretty soon. You'll be able to grab that URL and also the embeddable player URL from your dashboard.

Helen:

Yeah. It looks real it looks really good. Like, I'm gonna put it in the show notes. You can get to those at saas.transistor.fm. Just look for this episode.

Helen:

I think we're gonna call it it's gonna be something about money as a little teaser. We're gonna talk about money today. So look for the title with money and yeah go to to the links at the end and I'll have an example of this, but looks really good. And, yeah, excited to it it's especially exciting when you have users.

Jon:

Yeah. It is.

Helen:

Because now I can put faces to people. I'm like, oh, you know, Joe's gonna be able to use this. And, you know, you start to think like, oh, this is really fun that folks are gonna you know, everything we release now gets used by

Jon:

Yeah.

Helen:

At this stage, you know, 2020. Yeah. Probably 20 some people.

Jon:

Yeah. The downside to that, though, is every new feature we release, it's not a 100% finished, so there's always feedback and bugs and, like, things we're thinking about doing that people bring up. So it's just this stream of Yeah. You know, support requests. But Yeah.

Jon:

It's fun. It's always good to hear from people.

Helen:

Yeah. It's part of the game. We've talked a little bit about this before, but it's way better to release something, when you can and then get people using it and giving you feedback than to stay in your creative cave forever and just be crafting and crafting and crafting.

Jon:

Yeah.

Helen:

Only to release something too late or to release something that could have benefited from some user feedback right away. So

Jon:

Yep.

Helen:

Yeah. I So yeah. I dig this. This is awesome.

Jon:

Yeah. So as as, you know, along with progress on the actual application, there's obviously progress with getting the word out, which you've done a a really good job on.

Helen:

Oh, yeah. We we had a big day on Product Hunt. We should say hello to all of our new Product Hunt listeners. If you came here via product hunt, thank you. I can't remember when I posted that.

Helen:

It's it was a little while ago. For those of you that don't know, product hunt is a website where you're supposed to share cool new apps, cool new software products, and I broke the rules a little bit because I submitted this show, a show about building a product. But I figured the audience was right, and they would probably let it through. And, I think we were number 1 that day, which is something a lot of people try to get to.

Jon:

That's cool.

Helen:

Yeah. Yeah. And it it absolutely so it's always interesting to see what actually gives us traction. So that's the number one question people ask is how do I get more listeners for my show? And in this case, having a show about building a web app in a community of people who are building web apps really translated into listens.

Helen:

So our previous record was 443 downloads in a day. And Product Hunt launch day was 1,773. So that's like a 4 x improvement.

Jon:

Yeah.

Helen:

And then the next day, we did 1,483. So so, again, like, normally, it would be 431, then we'd go down to 156 the next day, and then 60 We'll

Jon:

see what the long tail is for that Yeah. If actually if people actually subscribe to the show or if it was, like, a one off listen. Mhmm. It's always interesting.

Helen:

Exactly. Yeah. But that really worked for us, and, yeah, really fun. Thanks to everyone that kind of listened and upvoted.

Jon:

That'll that that'll give me a nice incentive to build out our analytics so we can actually see which episodes they were listening to.

Helen:

Yeah. Exactly. And, you know, a lot of these things, for example, tracking episode listens, especially in the web player by referrer, is an interesting idea. You can do it a lot of people track it by, like, what client people are listening in, like Right. Apple Podcasts, whatever.

Jon:

Yeah.

Helen:

But in the case of this show, you know, we would have got a lot of web traffic, and we can see that in Google Analytics, but it'd be cool to see that actually in your transistor dashboard too. Like Yeah. You know what? You got a bunch of new listeners from Product Hunt or Google Search or whatever.

Jon:

I'm not sure how helpful it is to know how these people listen.

Helen:

Yeah.

Jon:

Do do you have an opinion on that?

Helen:

Well It's Oh, yeah. So oh, man. That would be a good topic for another show too. Yeah.

Jon:

Maybe that's another show. Well Analytics.

Helen:

Well, one thing is it is good to know if, a lot of people are listening in iTunes because then you can really start to double down on some strategies in iTunes, you know? Getting into what's what's, like, new and noteworthy is really important. The other thing, for for example, overcast. If overcast is a big, part of your stats, then maybe you might want to purchase one of those ads in Overcast. Yeah.

Helen:

So I can see them sometimes being actionable. And because some of these players double as directories, so iTunes and overcast both have their own directories. If you can see, you know, you're getting a lot more listens, you know, kind of organically through one of those directories. That's interesting too. But the stats are not very actionable right now in general in podcasting.

Jon:

Yeah. That's a that's definitely, I think, another episode topic.

Helen:

Yeah. One thing

Jon:

It's a big topic.

Helen:

One stat I saw today is that Spotify, I think, is becoming about 5% on average of people's, podcast listens. And, I we got some news. Right? We signed the docs.

Jon:

And Yeah. We are officially a, I guess, a Spotify aggregation partner

Helen:

Yeah.

Jon:

I believe is the title.

Helen:

It's weird that they chose the word aggregation.

Jon:

Right. I wonder if, yeah, I wonder if that's, like, a holdover from the music industry.

Helen:

Yes.

Jon:

I was I was involved in a music start up. Was it, like, 2,007, I wanna say? Okay. And we would deal with these distributors who were basically just sending us, like, hard drives full of music every week.

Helen:

Really?

Jon:

I guess they were just aggregating different labels together. Maybe it's something like that.

Helen:

We should send Spotify a hard drive.

Jon:

Yeah. Yeah. It was really funny because it was it was that was so antiquated. Yeah. That was 2007.

Jon:

Right? And it's like that was the easiest way to send terabytes of information.

Helen:

Yeah. We should send them a a hard drive of just you and I trying to figure out how to play Dungeons and Dragons. Yeah. It's just a recording of us going, okay, and reading the manuals and figuring out character sheets and all that

Jon:

stuff. Coming up with voices.

Helen:

And then people could search for it. Justin and John, D and D on Spotify. So that's really exciting. We're gonna have that, integrated into our app right away. We were able to send some of our first shows to Spotify, and they're going to be searchable in the app, fairly soon.

Helen:

So, that's really exciting. I wanted to talk about this thing because I I I'm getting a lot of people messaging me, about Casey Neistat. Now we were talking before. Do you do you know who Casey Neistat is, or do you follow him?

Jon:

Hearing this I keep hearing this name, and I know he's somewhat famous. I never really knew what he did. I always felt like maybe he was one of those YouTube vloggers that had, like, some sort of scandal going on,

Helen:

but I don't think it did. I Interesting. Interesting.

Jon:

I don't really know. I I just I don't I guess I just don't pay attention to that.

Helen:

So Casey Neistat market. Is kind of, I'm not sure if he he was one of the first vloggers ever on YouTube. And before that, he was a filmmaker. He was just making short films and kind of traditional filmmaking, discovered YouTube, and did this daily vlog where he would always have a really well, really, yeah, well made story arc. So it's about his life in New York City, and he's very like, people who watch him, watch him aspirationally because his life just seems so interesting.

Helen:

And he's starting this new project called 368, and it's going to be kind of like a creative hub in New York where him and his friends are gonna be able to make videos, films, and, notably, podcasts. He's mentioned this now on a bunch of and so it's funny. You can kinda see, like, how much of an impact he has culturally because every video he's mentioned podcast in, I get these DMs and emails and messages in Slack going, hey. Casey's getting into podcasting. You should reach out to him.

Helen:

And, I think that's interesting on its own. But I wanted to talk about because, you know, I've had a number of these messages, and part of me is like, you know, should I try to reach out to him? And, Jack Conte, who is the, I hope I'm not getting all these names wrong. He's the CEO of Patreon, Jack Conte. Yeah.

Helen:

He just made this really crazy video for Casey to get his attention. And, you know, he basically wanted a meeting with Casey yesterday, and Casey said yes because of this crazy video. And part of me goes, man, like, Jack Conte is, like, the founder of Patreon. You'd think that would be enough, but he had to make this crazy video and get his attention. And so, you know, I've been kind of wrestling in my mind with, is it even worth trying to get Casey Neistat's attention?

Helen:

Like, what would that do for us as a business? Does that even matter?

Jon:

Right. I guess to a certain extent, having people who are well known, big names on your platform could be beneficial if, I guess, if they talk about you, but I don't know what what's in it. Why would they do that? What's in it for them?

Helen:

Yeah. I I think I mean, the one thing is it can be a nice bit of social proof. So as people are Yeah.

Jon:

You

Helen:

know, we're brand new and people are like, well, why should I host my podcast with you? And my answer is always, well, Cards Against Humanity host their podcast, and they have almost 3,000,000 downloads on our platform. And it's a way of legitimizing what you're doing. It helps to have a ringer that you can bring up. And, anyway, so I was just, like, debating this in my head, and I thought, you know what?

Helen:

I'm just going to tweet about it. So I tweeted something like, you know, people keep messaging me about Casey in podcasting. I'm wondering if, you know, I'm I I have no idea how I would even introduce myself to Casey. Well, I sent that tweet, and then I got a DM from Kaylee. And she said, I used to do video titles for him.

Helen:

Here's his email address. Now I'm sure, like, this is not like, it's not like a sure thing, but it because he probably gets tons of people emailing him. But I just thought that was interesting that putting it out into the open, got that kind of response. And then I I just went and got a coffee right before we started chatting, and I was telling the story to my barista, Andrew McWilliam, and he was saying, you know, my friend also worked with Casey. Let me know, and maybe I can get my friend to mention you as well.

Helen:

And I think what's interesting about it is part of me thought, you know what? I'm not gonna say anything. Part of me thought, well, if I do pursue this, I shouldn't put it in the open because we've got other competitors that are trying to get Casey's attention. And and I think more often than not, it's actually better to put it out in the open, get it out in public, because I wouldn't have made either of those connections if I had not

Jon:

done Yeah. You don't know where that's gonna lead. I mean, it might not lead to Casey using us, but it might lead to someone else or

Helen:

Yeah.

Jon:

Someone else referring us to someone else who's doing a podcast. Yeah. I guess you kinda never know.

Helen:

And this actually led me to another thought, which I just wanted to bring up quickly, especially since I know we've got so many incredible listeners that are really kinda cheering us on. Like, some listeners are our friends. Some listeners are just people that have been following our work online. And I think, you know, when you're trying to think about how, people can help each other with, you know, their projects and things like that. The best thing I think anybody can do is say, hey.

Helen:

My friend John has a podcasting startup called Transistor. You should check them out, or you should try them out. That line is so helpful to anyone starting something new. You know, someone's a brand new artist and, you know, you're at a you know, someone's looking for art and you go, hey. You know what?

Helen:

My friend, Rachel, just started painting, and, you know, I really dig her stuff. You should check her out. And giving the website, that is so helpful. And I just wanted to shout out Joe Workman, who is one of our first paying customers over atweaverradio.com. He just referred someone to us the other day, and I'm sure it was just in conversation.

Helen:

He just said, hey. If you wanna start a podcast oh, you wanna start a podcast? Oh, just talk to my friend Justin at Transistor and

Jon:

Yeah. It's yeah. I mean, that's that's totally invaluable. Like, it's in a marketplace that I guess I wouldn't say it's saturated, but there are a lot of other we have competition. There's other players.

Jon:

There's a handful of other places they could go and to have someone have someone give their approval is is a huge, huge win for us.

Helen:

Yeah. And I think it also goes back to something we keep hitting on, which is relationships are important. And, there's a lot of folks that will only buy things or try things relationally. So if you want a good coffee in Vernon, you've got to go to ratio coffee that my buddy, Andrew, owns. Like, that's what I'll say every single time.

Helen:

And I always say when you go, tell them that Justin sent you because that relationship, I think, is important. And, you know, for someone to think, oh, you know what? I, you know, I saw I was a big follower of John's work when he was working on this project, and, I kinda know him. I'm gonna I'm gonna start my podcast with him because I kind of know him. There's something powerful about that.

Jon:

Yeah. I mean, that happened, the other day in

Helen:

the office, yesterday

Gavin:

in the office.

Jon:

So in the who have podcasts. And one of those people came up to me. She was like, I'm thinking of moving our entire network over to Transistor because you're a local Chicago company. And I was like, that's awesome. Mhmm.

Jason:

Let me know

Jon:

what I can do to help.

Helen:

Yeah. It makes a difference when you especially if you've had a bad experience with customer support in the past. Sometimes you just wanna feel like I know someone on the inside could really help me out. Yeah. And Definitely.

Helen:

To be honest, in the beginning, that's kind of you you need to rely on that. That's one of your strengths is at this point, you know, if Joe Workman messages me in Slack and says, hey. This thing is not working for me. I'm gonna do whatever I can to help him because Mhmm. We're young.

Helen:

We're hungry. You know, we have just a handful of customers, and we wanna make sure people have a great experience. And so, anyway, I I just thought that that whole Casey Neistat thing kind of sent off this stream of, you know, thoughts with me. And, that kind of stream of consciousness, I think, is what people like about the show, so that's what I wanted to talk about.

Jon:

Hope so.

Helen:

But let's Yeah. Let's get into the main topic. What are we talking about this week, John?

Jon:

We are talking about money as in dollars and cents and how we get it, how we make it, how we spend it, how we decide to spend it, how we decide not to spend it. All all those things.

Helen:

All that stuff. So let's talk about how just as a background, how has most of the money, in the transistor bank account come in so far?

Jon:

Let's see. So initially, it was, me putting some money in for my own personal account

Helen:

Yep.

Jon:

To get things rolling, to pay, you know, to pay the Stripe Atlas sign up fee, to pay a designer, to design, you know, the logo and some branding and a little bit of that. That was it really. It was it didn't need to be a whole lot of money at first because of Stripe Atlas and how they gave us, you know, credits for AWS, and we can rely on those, the free credit to do our web hosting.

Helen:

Yeah.

Jon:

Other than that, it was you putting in some money once you were officially on. Yep. And then we had an episode sponsorship for this show.

Helen:

Yep. Shout out to Bulleit train. Thanks for doing that.

Jon:

We had, that's it. Right? And then we have, obviously, money from subscriptions in transistor from our customers

Helen:

That's right.

Jon:

Through Stripe, which is, you know, not a lot yet, but it's slowly growing.

Helen:

Yeah. Yeah. So and, so, basically, the way the initially, we were just like, okay. John, you put in some money. I'm gonna put in an equal amount of money.

Helen:

I'm not there yet, but we're getting up there. And then, our next big thing was, you know, our first customer paid their annual fee. Then our next big thing was our was our, sponsorship from from Andrew Culver. And then we've opened up early access to everybody else. And now we've got, you know, these small monthly amounts coming in.

Helen:

So there's not a lot of money in the Transistor account. There's not. No. I think that's one thing I realized. You know, when I look at it, I I just like I've I'm used to spending my own company's money.

Helen:

Like, it's just me solopreneur. This is what I was talking to, Francois in the office here, in this co work office I'm in. I was like, man, the biggest difference is now is John and I. We're partners. Got this new company.

Helen:

But I'm used to, like, just like, oh, I need this. I just spend the money. And Yeah. Part of that is because I built up a business that has cash flow and money coming in all the time. And now it's like, oh, we we should get this.

Helen:

Oh, wait a second. We we don't have the money. There's not enough money to do that. Right. And it's it's a a real different mindset.

Helen:

Part of it, I think, is healthy because I'm realizing, especially with you, because you're kinda like the sober second thought, because I'm like, oh, we should just spend this money. And you're like, well, do we really need to do that? Do we and I haven't had anyone questioning my purchasing decisions until now.

Jon:

Yeah. I guess I think of it I think of it a little bit differently in, like, can this what what is this money we're getting paid for for the company, like, in in monthly costs? Right? Like, one sponsorship might pay for, like, 2 months of our our media hosting or a month of I don't know. What are some other service we're using, right, that we're paying for monthly and,

Helen:

Web hosting. We pay for podcast editing for this podcast. Yeah. We pay for domains. We've already had to pay, like, taxes and corporate fees.

Jon:

Yep. We had paid a lawyer for some business work for you and I to get legal.

Helen:

Yeah. It It almost seems ridiculous in some ways because in some ways, these are small amounts compared to any other business.

Jon:

Oh, yeah.

Helen:

But when you've got just a little cheddar in the in the Yeah. In the account, it's like, ah, like, we really can't go crazy right now.

Jon:

Yeah. It really it really sort of makes you prioritize what what you wanna spend money on. And then it also makes it makes every notification we get in our Slack channel of a payment being made to us, like like, high five. Like Yeah. High five through the Internet.

Helen:

That much more exciting for sure.

Jon:

Yeah. Let me Yeah.

Helen:

I'm just looking at our bank account right now and just seeing if there's anything we missed, but I I think that pretty much covers it.

Jon:

Yeah.

Helen:

Now this brings up a good question, which I've definitely thought about, and it was with the first question our lawyer asked us, which was, are you going to get funding? And, you know, that's something a lot of folks consider, right, when they're starting, especially a software company. Are we gonna get funding? Early on, something you and I discussed was we really wanna bootstrap this thing as as, you you know, long as we can. We're not, like, opposed to funding.

Helen:

We don't think funding is evil, but we definitely felt like, you know, let's see how far we can get just you and I putting sweat, blood, and tears, and a bit of our own green in and see what happens.

Jon:

Yeah. I think funding I think funding would change the nature of how the company is run quite a bit.

Helen:

What do you mean by that? Like, what do you think it would change?

Jon:

I think we probably would not get funding for just the 2 of us. I think it would probably be we'd have to approach, you know, some investment firm or venture capital or even a even a individual and show them what we're trying to build and how we wanna grow the team. Mhmm. I don't think they're just gonna give, like, 2 people a 2 person team a bunch of money without them having a plan for growth because, obviously, they wanna get their money back.

Helen:

Yeah. You're right. And and even thinking about how we would have to hire fast and all the decisions you would have to make quickly Yep. I think it goes against some of our belief, which is, like, we believe in growing things kinda organically, in a linear way, making it manageable, not, having too much chaos, trying to balance the chaos in order a little bit. So that those are the reasons, I think, not to get funding.

Helen:

What are some of the reasons to get funding? Like, what how would it help

Jon:

us? Well, obviously, we will we'd be able to grow a lot faster. We'd be able to put that money into building out, you know, a more, I don't know, a better infrastructure for like ton we could, you know, pay a bunch more money for better infrastructure.

Helen:

Mhmm.

Jon:

We would be able to, you know, hire a dedicated, let's say, marketer or another dedicated programmer to move the product faster, a designer. I mean, it's Yep. But then all of those all of those add in other complexities because now you're managing people and you're worrying about doing payroll instead of actually building a thing, and you're worried about yeah. It just adds in an inherent amount of complexity, which I don't I we might get there at some point. You know, it'd be great if Transistor was big enough to to do that and hire someone else or whatever.

Jon:

I'd love it if we got there without funding. What what are your thoughts on that? What do you what do you

Helen:

think would It kinda goes back to why figuring out what you want first is so important. Because, you know, for me, I wanted to build something significant and something that I felt reflected my values. I wanted to build something that would give me more freedom, not less.

Jon:

Yep.

Helen:

And I'm not opposed to hiring people. I mean, I think that part would be amazing, but I there there's a lot of running a bigger company, especially a company that's growing really fast, that just doesn't feel like it's what I want, at least not in at this stage. Maybe I'll change my mind. But Yep. It just feels like right now, I just want something that, you know, if it could support you and I and then maybe a few other people and, you know, we're making an impact with customers and helping their lives get better.

Helen:

We're helping, to improve this medium of audio, learning and entertainment and, you know, like, that to me is worthwhile, and I I don't want to get distracted from that.

Jon:

Yeah. Yeah. Definitely. I mean, your your point to, like, how did it affect your values and what the type of company you would wanna build and the freedom you can have to do that, I think is huge.

Helen:

Mhmm.

Jon:

Emphasis on freedom to do that and freedom to sort of build it when you want and how you want and sort of build build your life around it as opposed to it building your life for you almost. Yeah.

Helen:

Yeah. Yeah. Now on the other hand, I have felt one of the something I have experienced since we've started that I didn't anticipate is that, you know, a couple weeks in, I was already like, man, it'd be nice to move faster. You know? Yeah.

Helen:

Oh, yeah. You're working full time. I'm working full time on other things. And, you know, we spend a lot of time on Transistor. Like, during a day, you and I are both investing considerable amounts of time and then weekends and evenings and all that stuff.

Helen:

But, you know, I've definitely had that thought of, like, it it'd be great to get John some help. If John had help, you know, here

Jon:

Yeah. We

Helen:

could move twice as fast. I I mean, that's probably not true. But, you know, you we could move a little bit faster. And then, if we had this person here, we could move even faster. And, you know, I I'm not naive.

Helen:

We are in a race. This is a competition. This is we're we're we're trying to be nice capitalists, but we're still in a capitalist system, and it's very competitive. So if someone doesn't sign up with us, they're going to sign up with 1 of our competitors. And so every day that we keep our waiting page, you know, our, you know, sign up to hear when we launch page, every day we keep that up, we're potentially losing market, losing customers.

Helen:

And so

Jon:

Yeah. I

Helen:

think that part is you know, if you were going to if you were going to entice me over to the dark side and go, you know, here's some money, I'd be like, you know, it would be nice to move faster.

Jon:

Yeah. It's it's a trade off. I was chatting with a a friend of mine who, used to live in Chicago, who's been in San Francisco for a number of years now, and he I haven't really talked to him in a while. I just started texting back and forth, and he he's at a pretty large company in San Francisco, a startup. And he's sort of seeing a bunch of problems there from them trying to grow really fast still.

Jon:

And what he said to me was, I'm beginning to suspect that fast growth and healthiness are nearly mutually exclusive. You can have one or the other, but not both. And I think it's, you know, healthiness as as a company and as, you know, the individuals working there, I think just trying to move fast and

Helen:

Yeah.

Jon:

That said, I've never I've personally never really been part of a company that had a lot of funding like that. Like, I've been in companies where there was some, like, seed rounds or, like, friends and family rounds, and there's certainly pressure to, you know, build something within a certain time frame

Helen:

Mhmm.

Jason:

For those people

Jon:

to get their money back, but I've never really been part of a startup that had, you know, VC funding and 1,000,000 and 1,000,000 of dollars and tried to go really fast. Yeah. So I I, you know, I I'm speaking on it up on the subject, but can't really speak for it directly. Mhmm.

Helen:

And and me as well. I've I've only worked for oh, no. Actually, I I have worked for 1 funded startup. And and part of this does get down to it's kind of a religion which camp you're in. You know, the the bootstrappers are are gods are DHH and Jason Fried and the venture funded people.

Helen:

Their gods are Marc Andreessen and, you know, whoever I don't know. There's other people on that side too.

Jon:

Yeah.

Helen:

Paul Graham, probably. I think there's other models that are interesting. For example, Bryce at NDVC.

Jon:

Oh, yeah.

Helen:

I think that's kind of a cool model. Basically, they they wanna invest in businesses that are trying to make something and sell them for a profit. And so, you know, I think there's something to that. I I also kinda one thing about funding I always thought, as as soon as Kickstarter came out, I was kinda like, that's so brilliant. You basically say, hey.

Helen:

If is there any customers out there that want this? Well, give us your money now, and we'll make the thing, and then we don't need to get investors. Right. And so, you know, like, part of me, if if, you know, I I'm just gonna put this out there right now. Like, if you have a $1,000,000 and you wanna pay us for a 1000 years of transistor, we will take your money.

Helen:

I I can't guarantee we'll be up in a 1000 years, but, you know, if you if you have a $1,000,000 and you're like, you know what? I just wanna give these young whippersnappers something, then, yeah, give us your money, and we will we'll give you a lifetime membership to Transistor.

Jon:

Yeah.

Helen:

What would that be?

Jon:

It's funny, though.

Helen:

I I gotta figure I gotta figure out how many years that would be.

Jon:

That's like years.

Helen:

29. That's about, yeah, that's about at our we're thinking we're gonna be about $40 a month when we launch. That's 12 times 40 divided by a million. That's 2000 years, I think. That's pretty good.

Helen:

You can get 2,000 years of transistor for a $1,000,000. That's a good deal.

Jon:

We'll be around that long, but we'll see. It's funny, though. You mentioned a few minutes ago with indie Inde VC where they wanna invest in businesses that sell something for money, which is funny that, like, that's that's not every company. Right? Yeah.

Jon:

I mean, business is usually you sell something for more money than it costs you and you make money. Yeah. But that's not really how businesses operate these days.

Helen:

Yeah. Well, especially funded companies. Like, they're

Jon:

Yeah.

Helen:

They're it's all about growth. And so Right. You know, Anchor has $14,000,000 in funding and 14.4. Now just remember, I just said for if someone paid us a $1,000,000 at our price, $40 per month, which is higher than most podcast hosts, they would get 2,000 years of, transistor. Anchor has 14,400,000.

Helen:

So they have 14 of those. And they basically, they need to grow that sucker so fast in terms of user base so that they can eventually give you know, those investors probably want at least 5 x, I'm guessing. What's 5 x? So 5 times Right. 72,000,000 they need to make in revenue somehow.

Jon:

Right. Or sell it.

Helen:

Or sell it. I mean and that could be the game too. That is another game we haven't talked about is that, you know, maybe audio and podcasting is super hot and maybe down the road Amazon gets hungry for audio startups, and they're, like, looking at everybody going, oh, okay. I could buy Transistor for you know, they said if I give if if we give them a $1,000,000, they'll take it. So, you know, and then Anchor and maybe $72 sorry.

Helen:

70.72,000,000 for Amazon to buy Anchor is a pretty good deal. I don't know.

Jon:

Yeah. Yeah. I don't know. I'm thinking back on my time in Chicago, and there was a really big period in 2,008, 2009, I wanna say, where Groupon was like

Helen:

yeah.

Jon:

Just starting up in Chicago, and it was like the fastest growing, hottest company in the world. Right?

Helen:

And they

Jon:

were buying up all these competitors and got a bunch of funding and hire I have a lot of friends who worked at Groupon as developers and designers, and I still work with one of my coworkers worked at Groupon for 5 years and I never got sucked into that bubble, but like it was it was tempting. But I also would go over there once in a while for like a meetup or something and just see this room of developers and people and be like, what are all these people doing? Yeah. Like, what? What are they?

Jon:

They got like Aqua hired and they hired they had like 500 developers or something. Like, what are these people working on? Yeah. And my friends that I know, they're like, not much. Like things move slow because it's big, so you don't really do much.

Jon:

But there's a lot of us and it's like, that sounds awful. And it just all it all just imploded. Right? They went public and they made some money, but, like Yeah. I mean, their market is not great.

Helen:

Yeah. They they got $1,400,000,000

Jon:

Yeah.

Helen:

In funding. Yeah. Guess how many years of transistor that would get to? 2,000,000 960,666 years of transistor. I, frankly, I think that's a better deal than getting, $20 off a lip wax.

Jon:

Yeah. I think that's the title for the show.

Helen:

The numbers are so big. I just

Jon:

Yeah. I know. It's

Helen:

It it especially when you're on our side and, like I mean, I don't wanna reveal too much, but we're under in terms of MRR, we're under $500 a month right now. We've just started. So 500 times 12, that's $6,000 revenue a year right now. And these folks are talking about, you know Yeah. Like, 1,000,000 and billions.

Helen:

It just is insane. Now, I know there's a lot of money out there, and some folks are yelling at their podcast player right now. Actually, if you're yelling, I that's I always find that interesting. If you have, like, yelled something out loud during this episode, could you tweet that to us at transistorfm? Because I find myself doing that all the time, and I just wanna hear your guys' angry rants.

Helen:

Like, if you're like, no. You guys are stupid. There's so much money in the world. Like, you just don't understand. Tweet us, transistor FM.

Helen:

But, yeah. It's it I don't know. Again, it comes down to your values. How do you wanna grow? What kind of life do you want?

Helen:

And, you know, my first kind of goal for this company is that we would get to probably $200,000 in revenue a year. That would that's like a nice kind of first step. And then after that, I would like to get to a1000000. I haven't thought much about what comes after that.

Jon:

I don't think you need to. I mean, it's I've never been in that situation. I think we'd have to, you know, figure that out as we go. Yeah. 1st step is 200,000.

Helen:

Yes. Start there. Exactly.

Jon:

We're not not anti funding, but I think at this point, we're we're holding off. Reevaluate later.

Helen:

I've got some great tweets by Joel Gascoigne, founder of Buffer, and John O'Nolan, founder of Ghost. I'll put those in the show notes as well. Maybe just to close off, why don't we talk about we've already touched on this a little bit. But Yeah. How we spend our money, how we decide, how to spend it.

Helen:

You you'd mentioned, like, part of what you were asking is, can we get away? You know, like, some of some of the questions you ask when you don't have much money in the account.

Jon:

Yeah.

Helen:

You wanna go into that?

Jon:

Yeah. Well, I think the first the first, time I noticed that with Transistor was so with with Stripe Atlas, you get set up with a bank account Mhmm. With this bank in San Francisco, which is cool because of whatever it's in San Francisco, but it's just a business account. And they have a $25 monthly fee unless you have a a certain balance, which is like $25. And like, if you're a startup, if you don't have funding, you're not gonna have that.

Jon:

No. So after spending, you know, for 4 months of spending $25 a month on for what? Yeah. I was like, this is dumb. Got it.

Jon:

Sign up for a different business account with no fees, close that one out, and now we're saving $25 a month, which, you know, not much, but, like, it's it's something.

Helen:

Yeah. It's actually made me rethink actually how some companies acquire customers. Because in the beginning, if you don't have either a free tier or a tier that's quite, you know, like, good for startups, basically. Right? So Yeah.

Helen:

You know, like, give us x number of visits, and then once we pass that, you can charge us more. Or, you know, Mailchimp gives us x number of subscribers and then charge us more. There there is something about that that's super helpful when you're just getting started. And I used to be a big fan of I'm still a big fan. I I I really like the product.

Helen:

It's not Mixpanel. Mixpanel actually is a good example of a company that does this well. They have a really generous kinda I think they call it indie developer tier.

Jon:

Yeah.

Helen:

And just to be able to, like, have give us some room to grow. But then, Segment is the other company I was thinking of.

Jon:

Okay.

Helen:

They're just they're a great product, but they're just really expensive for someone who's starting out. And, you know, we could probably grow with them if, you know, if their intro tier is a little bit more generous, but we can't even get in the door. And that's fine. Like, they probably make their money off other folks. But yeah.

Helen:

So we've been thinking about, like, ways to do things for free. We switch bank accounts. Right?

Jon:

Switch bank accounts. We our customer support chat widget, sort of like help desk product that we use is Kayako. I think I'm saying that correctly. Yep. They actually have a free plan that works well for us for now

Helen:

Yeah.

Jon:

As opposed to something like Intercom, which probably is a lot better. Yeah. But is really expensive. Yeah. At least in our stage.

Jon:

Right. Like down the road. Sure. It might make sense. But right now.

Helen:

Mhmm.

Jon:

It just wasn't it the the trade off wasn't really worth it for the amount of money we'd be spending a month.

Helen:

Yeah. What else? We're using we're using a personal plan for GitHub, I think.

Jon:

Yeah. It's a personal plan. We could form an organization, but, again, it's 2 of us, and we'd be paying per seat for that, I think. And we only really have, like, 1 or 2 repositories that we need.

Helen:

So, I mean, we are spending some money. We we just got Flywheel. That was another

Jon:

Yep.

Helen:

For for hosting. And we used some of the money we got from, from our sponsorship for that, actually. So when when bullet train sponsored us, I used some of that money to pay for a year of flywheel. And I think it was like a $160 or something like that. But and I I know there's some people laughing at us right now going, a $160?

Helen:

Like, that's nothing.

Jon:

And that's for a year. Not a month.

Helen:

Yeah. That's that's for a year. I it just kinda goes to show, like, the mindset that John and I are in at at this point. Like, we're we we don't want to blow a bunch of money, when we're still growing revenue. We want revenue to grow, and we basically eventually want revenue to grow much greater than what we're spending money on.

Jon:

Yeah.

Helen:

And and then after after that, we wanna have enough left over that we could eventually pay ourselves. And so there's a balance here, obviously. Like, we talked last episode. I think it was last episode about how we decided to hire, Adam Clark to build our website, our marketing site. That's going to be our biggest purchase so far, I think.

Helen:

Right?

Jon:

In this year, yeah, I mean, design design, work was a little bit more than that. That was last year. Yeah. That was the biggest one. The other the other one that just came to mind for services we use.

Jon:

So obviously with with a company, you want email addresses that are under your domain. Gmail for business is no longer free.

Helen:

Oh, yeah.

Jon:

Used to be. Yep. So, I found an alternative, which is Zoho mail. Yep. And Zoho is a big company.

Jon:

They're like a productivity suite, but they offer a free tier of email with your domain name for like 5 email addresses for free. Mhmm. And you know, admittedly, Gmail might be better for interface and maybe, like, spam detection, but it works it works really well. And it's Yeah. You know, at some point, probably will switch to Gmail.

Jon:

Yeah. Or Google Apps or, you know, whatever it's called. But, like, for now, it's works fine. It's free.

Helen:

Yeah. It it actually, all these decisions have made me think about how I spend money in my other company because I have 5 accounts under my, my Google Apps account. So it cost me $55 a month. Yeah. And, really, the company is just me.

Helen:

But when it was free, I created all these email addresses. And now Right. And I just haven't, like, you know, consolidated. Yeah.

Jon:

I mean, it adds up. Right? It's like even for personal expenses, you have these monthly fees and services you sign up for, and you're like, can I get a better deal? Can I call and renegotiate? Can I do I need this?

Helen:

Well, one thing to consider, and maybe we'll close with this, is right now, John, you and I are practicing for what it's going to be like when it's bigger. And if we can't manage these things now when everything is smaller and simpler, So our revenue's smaller, our costs are lower. You know, if we can't develop good habits now, how are we going to, you know, are we just magically going to know how to budget once we get to $2,000,000 in sales? I don't think so. And so I for me, I think, and for all you out there that are bootstrapping or starting small, what you're learning now, what you're putting into practice now is super valuable.

Helen:

It's not like I don't feel like, you know, we're sacrificing or we're doing it just because, you know, we're super cheap. It feels like we're learning valuable skills that we're going to need to continue to use Yeah. And not take dollars for granted. Like, you know, maybe, you know, if Zoho is a better deal, maybe we should keep going with Zoho. Yeah.

Helen:

It hasn't been as painful as I thought it would be.

Jon:

No. It's not bad. Speaking of budgeting, though, it reminds me that we need to sign up for accounting software.

Helen:

Yes.

Jon:

So right now, we have a spreadsheet that I think is out of date. We've had some expenditures and some some money coming in that we maybe haven't recorded. Yeah. Probably should do that before it gets out of hand.

Helen:

Yes. Yeah. So we'll probably We'll probably have to pay for that. We'll probably have to pay for that. We'll probably use 0 or something like that, I think.

Helen:

Hopefully, this is interesting and helpful for you out there. Let us know again if you were you know, you have thoughts. I'm actually getting a few emails in our inbox, shows at transistor.fm. If you're a listener and you wanna send us an email, do it right there. Like I said, we're on Twitter at transistorfm.

Helen:

Instagram, transistor dot f m. John Buda, where can folks find you again?

Jon:

Twitter at John Buda, j0nbuda. I'll get on there at some point in the future.

Helen:

And Johnbuda don't Johnbuda dot com?

Jon:

Yes. Jonbudda.com.

Helen:

Don't forget about that. On Twitter, I'm the letter m, the letter I, Justin, m I Justin. And I've got a personal blog at justinjackson dotca. Folks, if you're still with us right till the end, thank you so much. Scroll down in your Apple podcast player or go there on your computer into iTunes.

Helen:

Search for build your SaaS. Click that 5 star, rating thing. It really does help us get the show out and even better to say, hey. You should listen to the show I'm listening to. It's 2 guys.

Helen:

They're building a startup. In 2018, so much has changed since, you know, all the big guys like Salesforce launched back in 2003 and 2002. So, yeah. If you if you wanna share the show, we appreciate it. Yeah.

Helen:

That's it for this week. We'll see you next week.