The Bootstrapped Founder

Justin Jackson has been successfully bootstrapping with a small team throughout the ups and downs of a shifting economy. He even rejected massive clients to be able to keep running a calm and self-funded business. Find out just how important it is to stay independent, resilient, and nimble, and what building on open standards has to do with that.

00:00:00 Justin Jackson
00:01:24 The world of ideas
00:10:32 Understanding the context of advice.
00:15:58 The importance of attribution
00:20:49 What’s the most important metric?
00:25:29 What’s your company for?
00:29:56 Having a team that can execute at the highest level
00:35:34 The repercussions of decisions
00:40:41 Simple things are more resilient than complicated things
00:45:26 Platform risk
00:51:22 The problem with centralized discoverability
01:00:53 The importance of open standards

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Creators & Guests

Arvid Kahl
Empowering founders with kindness. Building in Public. Sold my SaaS FeedbackPanda for life-changing $ in 2019, now sharing my journey & what I learned.
Justin Jackson
⚡ Interested in bootstrapping, podcasting, calm companies, business ethics 🎙️ Co-founder of @transistorfm (podcast hosting) 🐘

What is The Bootstrapped Founder?

Arvid Kahl talks about starting and bootstrapping businesses, how to build an audience, and how to build in public.

Arvid Kahl 0:00
Hello everyone and welcome to The Bootstrapped Founder. Today, I'm talking to Justin Jackson, the co founder of Transistor FM. We talk about the problems with common entrepreneurial advice, bootstrapping, a value driven software business, and how open standards benefit indie founders in particular. Here's Justin.

One thing that frustrates me a lot is how unreflected many things are in the community. Entrepreneurs, indie hackers and founders, there are all these best practices that people rarely reflect on. And really just jump onto and try to out execute the competition, whatever that might mean, in that context. And it's super frustrating, too. I was actually gonna ask you this as a particular question because I wanted to see, what do you think about advice? And I feel there's a lot of advice out there. And most of it is bad in the sense that it's not applicable, it's not pragmatic and it's kind of has ulterior motives somewhere.

Justin Jackson 1:10
Yeah, yeah

Arvid Kahl 1:12
And I was wondering what your perspective is on this, like, do we as people who have some experience in the field, do we have to like, see the ideas space out there to combat misinformation that is quite prevalent?

Justin Jackson 1:24
Yeah, I think so. I mean, the human world is a world of ideas. And the way we share ideas is by talking about them, discussing them, writing them, podcasting about them, making videos about them. And I think ideas should be put forth. And then I think those ideas have to stand up to scrutiny. I think ideas need to be debated. I think ideas need to be tested, evaluated, all of those things. So I'm pro idea. What concerns me sometimes is that some of these ideas are just so thin, in that the way that they get me modified and generalized, are devoid of any context, any nuance, any sort of exploration. And if you challenge them, you're seen as a pessimist. If you question people who are trumpeting them, you're seen as you know, a negative Nancy. That's the part that I think is unhealthy, even ideas, like charge more. Charge more is a good idea in a certain context, but you have to get deeper than just the meme version of that, that just gets spread around the world. You know, it's like, there's people making stickers that say charge more and nothing wrong with that. But as soon as it becomes a slogan and there's like, okay, well, let's dive into let's actually get into the weeds on that, like, what does that mean to charge more? Even, you know, all these people are raising prices right now. There's this like, general idea that in a recession, you wanna raise prices. Sorry, when there's inflation, you wanna raise prices because everybody else is raising prices, because theoretically, your costs are going up. And I mean, I'm as big of a dummy as the next person. But I wanna at least investigate that or have more of the smart people investigating these things and going okay, but is this always true? And when would it maybe not be true, how do you test this out? And it has to go beyond, you know, like, these blog posts, which are three months ago, we raised our prices and we increased MRR by 300%. Okay, well, report back in 6 months, 9 months, 12 months, 36 months, 48 months. I wanna see the whole trend. And we have a very short news cycle even in the bootstrap, indie hacker, startup space. People publish a blog post. And I can understand why it happens. These blog posts will often resonate and then they'll get kind of embedded in people's understanding. And but very few people are going well, let's go back to that post where they wrote that they increased prices. Let's see what happened since then. Because you can increase prices and sure you might increase your monthly recurring revenue short term. But then if we go back in 12 months and overall revenue is down, well, you can see there was a trade off there and maybe that trade off is worth it. And maybe it's not worth it.

Arvid Kahl 4:54
It's probably something that people don't even report, right? They don't report that because

Justin Jackson 4:58
Oh, yeah

Arvid Kahl 4:59
You only share the Interesting stuff, which is one of the biggest problems that I have with people attempting to build in public.

Justin Jackson 5:04

Arvid Kahl 5:05
They go for the interesting blog posts

Justin Jackson 5:07

Arvid Kahl 5:07
That are great and that are motivational.

Justin Jackson 5:09

Arvid Kahl 5:10
The long term consequences, the damages that these kinds of things actually might do they kind of pulled like, they just put it under the rug like, that is a big problem.

Justin Jackson 5:18
Yeah, and again, because to me, I'm just interested in I have this idea that knowledge and our discovery of things that are true is generally ascendant. Meaning, the more we investigate, the more we test, the more we rigorously evaluate ideas and concepts, the more knowledge we have. And this knowledge is ascendant, meaning we keep climbing up the stairs towards a greater understanding of truth. And we can't get there unless we can apply that rigor to everything to go okay, well, is this really true? And when is it true? In what context is it true? Was it just true for this person? Could it also be true for me? How would I evaluate that? How would I evaluate the trade offs? How would I evaluate the risks? And it becomes more complicated quite quickly. And yeah, I think that there is a potential even for I mean, we even saw this a little bit back in the early kind of SaaS days when you had Salesforce come out and then fairly soon after, you had Basecamp and then Ruby on Rails and then there's this explosion of interest in building SaaS and Ruby on Rails in particular. And if you look at that first, a lot of people don't even remember this or know about this. But if you were around for it, there was this kind of gigantic movement of people launching Rails based SaaS apps. And maybe at the time, some of the dissemination of information was lost on some of those folks. And you know, many of them did not succeed. Many of them lost a lot of money. Many of them struggled for years and years and years and then had to throw in the towel. And that's always gonna be a part of business. But my hope is that we could, if anyone's thinking about starting a business, we can at least help them see the landscape as clearly as possible. And what helps with that is just the rigor, it helps to rigorously kind of process and evaluate ideas as a community. So yeah, advice? Sure. I mean, I think, if you've been around for a while and you've had some success and you've had some failures, there are certain situations, which are kind of clear to anybody with experience, where it's like, okay, this idea you have just does not seem to have enough traction. And maybe you could maybe point to people where it could be maybe it's there's not enough demand in this market. Maybe it has to do with your product. It's not good enough or not stable enough or not polished enough, maybe it's just the competition is that much better. So I think we can give advice. But what I don't really like is this kind of slogan, one word, two words, one sentence advice, that then just gets trumpeted around like a cult or religion or something. And you know, move fast and break things and all these other things, just like these are just silly statements that don't actually have any reasonable meaning. Meaning, if you apply them, you could have like, move fast and break things. You can apply in a million different ways with a million different results. It's not repeatable in the sense that you go, okay, well, I'm just gonna move fast and break things, whatever that means. And then I'm going to get a Facebook style result like

Arvid Kahl 9:31
Yeah, obviously

Justin Jackson 9:33
Of course, it doesn't work that way. And but oddly, I see people acting and believing in that way and yeah, so advice is fine. I think building and public is fine. But every founder at the end of the day, it probably just comes down to founders. They have to ask those hard questions and struggle and research, contemplate, ask for help. Most of the good advice is being given in backchannels unfortunately, just because real good advice requires context and you know, there's a lot of context. I just don't wanna give publicly about my business and my life. And I only share that with people I trust in the kind of back channel, the telegram groups and the Slack DMS and the Twitter DMS and all those things. So

Arvid Kahl 10:32
That's the key. I think that is 100% the key like advice cannot be applicable without the context for A, in which it is given, by whom it is given and to whom it is given and for what, right? Like, do you have these both kinds of sides. And on the side of the person giving it, it's always anecdotal, obviously, because that's kind of where it comes from. So you know, you have to translate it into something meaningful anyway. And that's where you start, like evaluating it and try to figure out, is the person doing this because they wanna help me or are they doing it for another reason? There are so many things, just even from the transmission standpoint between sender of the message and recipient of the message when it comes to advice. I very much agree that trust is at the core of advice to begin with. And what I love what you just brought out here is like the kind of Twitterfication, codification of advice and I think, like, move fast and break things is a great example. Because to me, that's not a description of anything you could ever do because it's so general and it's so unspecific, but it's a rallying cry for a kind of person that wants to, you know, do something in a specific way.

Justin Jackson 11:43

Arvid Kahl 11:44
That's all it is, right?

Justin Jackson 11:45

Arvid Kahl 11:45
And can't be more specific than that.

Justin Jackson 11:47
And the same thing applies to charge more. Charge more than what? Charge more than when? Charge today and tomorrow? Repeatable forever, like next week? There's no foundation. There's no like, for a culture that, you know, seemingly loves, like mathematics and logic and programming and all these things. Like I suck at math, but let's at least get what are the variables here, charge more? When? How? What are the starting variables? What are the ending variables? How did these things increase? When does it stop? Like, give me some context here.

Arvid Kahl 11:50
And it reminds me of another thing you recently talked about, like when you talk about starting and ending variables. And that's the kind of like visitor to trial version thing, right? Which is also something people hyper optimized for, like with all kinds of cheap tricks and growth hacks, things that I detest because they're short term gains over long term perspective, right? And that's really, really bad if you choose to short term stuff. But what do you think about that? Like, I know that you put less emphasis on that now than you used to, which is interesting because I would like to know why

Justin Jackson 13:07

Arvid Kahl 13:07
That happened and how that happened?

Justin Jackson 13:09
Well, there's always been these general rules of thumb that have been shared in the community. And I think they're generally pretty good. So trial the paid conversion, credit card upfront visitor to trial, people say around 1% trial to paid with credit card upfront between 40 and 60%. And then there's a different like, no credit card upfront, people say generally 5% plus visitor to trial, trial to paid 8% to 20%, depending on you know what you're doing. Now, here's the problem. It's pretty easy to quantify with reasonable accuracy, your trials and how many people converted to paid. Those numbers are almost always accurate. Because, you know, in Stripe these days, we get okay, well, this is a trial. And then we could see them convert. That's a conversion, right? Those numbers pretty solid. What's not solid and what is incredibly muddy is visitor because this became most acute for me when I was working for a startup in Portland. And I had to report on KPIs all the time. And one of the KPIs was visitor number of visitors. I put that in, number of trials and then it would auto calculate visitor trial. And, you know, based on whatever I was typing into those boxes in Excel, you know, my boss was either happy or not happy. And then one day, I was like digging through Mixpanel or Google Analytics or something. And I'm like, look at all these visits like these just look not real. And then I'm looking at it and I just found all these garbage visits that were being treated by Google Analytic and Mixpanel as legitimate visits but words. And then sure enough, a month later Google finally get comes around to tagging those as bots or spam or whatever. And so all those numbers I'd spent months inputting have zero meaning. Now, if month to month or week to week or day to day, you can put a number in your spreadsheet one day, and then wake up the next morning. And Google says, ah, you know what? You had, we said you had 10,000 unique visitors. But it turns out that 3000 of those were not legitimate visitors. Well, that changes your numbers substantially. So all of a sudden, my conversion rates look way better. How am I to know and there's no reasonable baseline because I might have months with very little spam visits. But then the next month, I might have lots but at the same time, the next month, I might have legitimate visitors increase. It's just very, very muddy. And people treat this kind of attribution, like it's like rock solid. And I've been doing product marketing now in SaaS since 2008. And those attribution numbers, I've never seen attribution numbers, like visitor numbers, especially that I was like, those are rock solid. I can trust those 100%. Because you just don't know. Your Samsung refrigerator could be pinging your website for all you know, like, it's completely possible. So, and we deal with this in podcast hosting all the time. And you know, there's tons of smart people and in podcasting, it's even more you think it would be elevated in the sense that a download is what is monetizable for people who are selling ads, but it's a moving target. It's like, everybody, no matter who they are, whether it's Spotify, whether it's Us, whether it's the biggest publishing places, the biggest trackers, they're all modifying their filters and their numbers all the time. So for me, it's like, the only numbers I really look at for Transistor these days are number of trials and number of conversions. And we have a Slack bot now that Jason built that just shows us number of daily paid signups. And these days, you know, if we're in the double digits for paid signup, daily paid signups we're pretty happy. And if it's a slow day, we're like, you know, we keep an eye on it. But you know, and even those numbers have seasonal variations and COVID variations and you know, economic variations, depending on recessions and things like that. So I don't know. You can have somewhat of a baseline and the more you've done it, you get this kind of third sense for, okay, this is kind of what feels like, oh, yeah, every year in December, things kind of slow down. And then for us, January people kind of wake up two weeks into January, I wanna start a podcast. So you get kind of a sense of when you might be in trouble. But yeah, I think visitor to trial is just, I haven't seen it being super helpful. Maybe as an overall trend, you can kind of see like, okay, this looks good. And but even then, like I don't know. I guess if you saw a bunch of traffic converting from Reddit and you're like, okay, well, that was an interesting, you know, refer. But for me, it's like trials. And then I just asked every trial, when they sign up, how'd you hear about us? So they're self reporting right when they sign up how they heard about us. And I find that more helpful than trying to get a computer to accurately attribute a visitor and where they're coming from and all that stuff.

Arvid Kahl 19:08
It does remind me a lot of what people are currently trying to do with chat GPT here with these kind of AI systems, where they're trying to fake things in a way that aren't even detectable. And I'm always thinking about like any system that is monetized on a certain particular metric, either pageviews or even listens on a podcast where sponsors pay per amount of downloads or something like that. People will try to game that. People will always try to out fake the system in a way that gives them bigger numbers and anything that you then try to track or analyze will have these things in there, right?

Justin Jackson 19:43

Arvid Kahl 19:44
It's just unavoidable. People are trying to circumvent any kind of system in their favor.

Justin Jackson 19:48
Yeah, exactly. The old trick in podcasting used to be you would, if you posted a direct link to the mp3 on Twitter, it would get 1000s of downloads. And it would help bump up your numbers for when you talk to sponsors. And there are tons of people doing this thing. And you know and the most recent one was people were putting in video games, you know, that my kids have to play and they have these horrid ads you got to watch through and they were putting podcast listens in there. So you gotta listen to 30 seconds of this podcast in order to keep playing the game. And these were IAB certified downloads for a podcast. IAB is the Advertising Bureau that is supposed to track all these things. So these are legitimate downloads, which is but it's just some 10 year old going, I just wanna get back to this game. Okay, I'll listen to this thing and downloading. For me, always the simpler, the better. And I mean, I've tried all sorts of complex, like marketing, tracking and everything. And about a year into Transistor, I just ripped it all out. And now we use Fathom for like, basic page views on our website. Okay, what's, you know, what's our most popular page? It's our pricing page. Okay, good to know that. Is traffic basically pretty steady? Okay, that's great to know, where are people finding us? So here's the referrers, good to know. And then I just track in Stripe, how many trials we have? What's our trial to paid conversion and how many paid customers we have and what MRR is. And for podcasting, I always like looking at the response rate, which is just a completely made up metric that you can't really report on in a graph. But when I release an episode, how many people do I hear from? How many people reached out try to find me some way, you know? And this is after they, you know, they're driving to work, listen to the podcast, like a lot of people are listening to your show right now. And if we've said anything that like, kind of hits them and they're like, oh, I got an email Arvid about that when I get home. And then they just think about it and then they actually get home. They say hi to their wife and kids and then they actually go to their laptop and type you an email. That response rate matters. That's the most important metric. Did you move people enough that they were willing to go okay, as soon as I get hey, Siri, remind me to, you know, I did put on Siri, remind me to talk to Arvid when I get home about that episode because it made me mad or made me think that he's totally right. And this is why and, you know, those are the responses that I love are people, you know, responding. And the other thing is, those responses sometimes come. They don't all come all at once. Like we still have people signing up for Transistor who say, hey, I listened to like this one episode of build your SaaS right when you were starting. And it just had such a profound impact on me. I filed it away. Yesterday, my boss asked if, you know, we should sign up for a podcast hosting platform. And I said, oh, we got to use Transistor. But it's been two years since he listened to the episode, right? So these responses don't come all at once. either. It's like almost antithetical to the way marketers like, evaluating campaign just like, well, if it's not within this 30 day window doesn't matter. It's like, well, but humans don't operate on a 30 day window. Humans operate on a, you know, a much different time line. And if we're trying to fit everything into these rigid, you know, whatever attribution windows or whatever, you're missing out on how most humans make decisions by things get moved, are influenced. That's not how we work, you know, and it's easier to just simplify it, ask customers why they signed up and keep it simple. You don't need all that extra machinery to and if anything, it's just not gonna give you the right information. You're just gonna be you know, driving this bus based on maps or GPS that's not actually taking you anywhere interesting. Just simple stuff, just simple touchstones along the way. We don't need, you know, to make it too complicated.

Arvid Kahl 24:40
Yeah. And I think that your business that you've built, at least from the outside, doesn't look too complicated either. And it's solving a very specific problem for a very specific kind of people. I think you've done a really good job with this. Great job, even if I may say so myself being a customer of your fine establishment. Yeah, it's like you've been doing this for five years now, right? Seems like it's been a while almost over five years. I think it's been a while.

Justin Jackson 25:04
Yeah, you're right. Yeah, we signed our partnership docs in. Well, we decided to work together January 2018. And I think we'd signed everything by February 2018. So and it's 2023 now, right? Yeah

Arvid Kahl 25:21
That's right. Yeah.

Justin Jackson 25:23
So, you know, it's been an incredible journey. And especially, to reflect back on that time, where, you know, we wanted to build something together. And we had some hunches about the podcast market. We had a pretty good idea that we would be good partners. But you never know. And we just feel so much gratitude that, you know, folks like you have come along and decided to become customers and use the product and enjoy the product. And, yeah, it's been incredible. I think, the things we did in those few first few months, were interesting because we kind of talked a lot about our values. And what we wanted out of the company, what is this company for? Now a product is for customers to use and enjoy and get value out of. A company is for the founders and the employees and the employees' families, and the community that in which they exist. And we thought a lot about the product we wanted to make. We wanna build the best podcast hosting and analytics on the planet, offer the best customer support, have really insightful features, really intuitive UIs, all those things. But what's the company for? Well, the company is to give us the stakeholders, a good life, founders, employees, employees' families, and then the community. And I think you can do that work and still not have a successful company because so much of it depends on these other variables, having a market that is hungry for a particular product and then building a product that can outshine the competition and attract, you know, customers. So it's not a guaranteed way to build a company. But if those other things fall into place, it really is a great way to build a company that serves the stakeholders that gives the stakeholders a better life. And having built many different kinds of companies from retail shops, like we had to snowboard shops in my early 20s to you know, I've sold ebooks. I've been in consulting. I've worked for startups. Often, businesses kind of own the founder, they are running the founder and running the founder ragged, like they're just founders. Too many founders, I think and too many business owners are just on this treadmill that's not very fun and really grinds them down and burns them out eventually and being able to put these pillars in place these values and these questions we ask before we build anything really helped ground us in like, okay, this company is going to build us a better life. So when things came along, like we had one story is, it was just John and I at the time. We were the only two people in the company and we got a call from a must be a fortune 10 company. It's one of the biggest companies in the world. And he is interested in our private podcasting feature. Already folks in his organization are using Transistor. He noticed he's in the, you know, the C level suite at that company. And now he wants to negotiate a bigger deal. So he asked us to book a call. He books a call with me. And we're talking and he's like, wow, like you've got, you know, 15 of our accounts already using you. I wanna bring you 5000, all of our divisions, we're gonna bring them all here. I love your product. He said I spent all day reviewing reviews of Transistor online. You're consistently recommended in the top three. I logged into the product. I looked at it, it's amazing. Your team has executed that highest level, this is great. And he says, you know what? After this call, let's get your legal team to talk to my legal team. And then we'll get your trust and safety folks to talk to my trust and safety folks. And then and I was like, whoa, whoa, whoa, whoa. I said, this company is just two people. And he literally paused for 30 seconds. He was like, it was like he lost his breath. He's like, what? I said, yeah, it's just John and I running this. And I can tell you, if you need all of that I know because we have these values. Like, I don't want that. I don't wanna hire a sales team. I don't wanna have, like I said, in order for me to do business with you, I'm gonna have to hire three lawyers full time. I'm gonna have to hire like an accounting department, we have none of that. We're two people. And we just love the life we have. It's calm. It's not like, even though it was just two of us, we could run things in this manageable way. The pace of life was good. I said, before I got on this call, I was snowboarding an hour ago. And he was just like reeling from all of this. It was just like, he could not believe it. And so he's like, so you don't want these 5000 extra customers? I said, no, not if it's gonna take all that. So paused again. And he said, well, what if we bought you? And I said again, I said, man, no, we don't wanna work for you. We just don't wanna work for you. We built ourselves a great business and a great life. And we're good. And he just couldn't believe it. He was just like, okay, I guess the call is done, you know, but it was those values, those questions, those pillars we put in place about what was important to us. And instead of like responding to oh, of course, like if somebody comes to you with 5000 accounts, of course, like just ratchet up your whole company to be able to serve that enterprise customer because that's gonna be you know, tons of more revenue. And of course, if a bigger company says they wanna buy you, you should take it seriously, like that's what you're supposed to do. And we're just like, maybe it's because we were older when we started Transistor, but it's like, well, if I go work for this company. And I mean, John really felt it because this was his first kind of independent, you know, company on his own. And he's like, why would I give this up? Like, I have all this flexibility and all this freedom. I'm having more fun than I've ever had in my life. We're serving great customers. We're not going to be billionaires. But we're going to, we're doing well here. Like, let's, we would rather enjoy this for as long as it lasts than you know, trade it for something we actually don't want, which is the freedom, the life, the good life, you know? So

Arvid Kahl 33:18
That's the kind of choice you can make as a bootstrapper, though, right? Like, that's

Justin Jackson 33:21

Arvid Kahl 33:22
If there's no other interest in how big your company should grow and how much money you should make

Justin Jackson 33:29

Arvid Kahl 33:29
Right? Then you can make those choices.

Justin Jackson 33:31
And again, this is why I have changed my opinion on funding a bit because it was hard that first year. And I think getting someone else to risk their money so that you can try out an idea can be a good idea, especially, you know, some of these other like Tiny Seed and Calm Fund, I think seemed like reasonable approaches to funding. But you really see, especially in a recession, you see all of the not unintended consequences, but the consequences of funding. And in the podcast industry, especially we're seeing lots of companies publish reports that they've run out of runway and they're firing people, you know, all the major podcast companies, Spotify and Art19. And they're either freezing hires or they're laying people off. And runway is such a it's a foreign concept for John and I because we

Arvid Kahl 34:46
That's infinite

Justin Jackson 34:46
We each invested 5000 which was mostly just for the contract. And then our runway was well, John's gonna keep working his day job. I'm gonna keep doing all the other business stuff I was doing. And we're going to just keep growing this until we can go full time. And it's when we could go full time. The runway was it's infinite as long as churn doesn't exceed revenue, right? And so it's interesting. I think this is why sometimes advice is difficult because advice is given in a moment, it only takes a minute to tell somebody what to do. But the repercussions of decisions and values take a lot longer to play out. And I think we're seeing some of that play out right now, folks that we're hiring up with runway, which is we've got some money in the bank and now we're going to spend that hiring people that if we don't get revenue high enough, we're going to have to let go. And that idea, I get maybe one day, we'll have to do work like that. But I just, I don't want to. I just wanna run a small company, hire when we absolutely need to or want to and hire out of revenue, meaning we've got enough money to pay this person. Even if revenue went down by 20%, we'd still be okay.

Arvid Kahl 35:32
Do you find the Transistor being a bootstrapped company with those values in place is more resilient to the recession we're currently facing?

Justin Jackson 36:37
I think so because we also, we, I mean, again, this is the thing. I can say all this stuff and then everybody can check in on me in two years and see what's happening.

Arvid Kahl 36:49
We will

Justin Jackson 36:50
It's true. I could and I'm not, I wanna be clear. I could be wrong, I could be making the wrong decisions. But first of all, we're trying to live within these values we set up. And we have these values that, for example, one of them is our physical, emotional and mental health is more important than anything that's going on in the business. So if a contract is going to require me to take three red eyes in a month to sign things and meet with people, already, I'm just gonna say no, because I just know that's gonna destroy me. So living within your values, even if the decisions you make end up not working out, at least you lived within your values, you know. I do think it makes us more resilient though. Because again, we never had this idea of runway, we never had this idea of spending money we didn't have. And our margins are always we always try to have some leftover. And at the end of the year, if we do have some leftover, we do profit sharing with our employees. So and I think we've been able to do that every single year. And every single year since we've hired people, we've decided not to raise prices right now. Because in our mind, it doesn't make sense for our customers. It's like, if we're in a recession and everything else is getting more costly and we're serving creatives and we're serving a lot of prosumers, so people who are trying to build a brand or an audience or build their profile or build a little side hustle, if we raise prices on them, you know, as a former kind of prosumer, myself, I would just quit, like I would just cancel. You know, as soon as Adobe, you know, raise their prices on Photoshop and all that stuff. I was like, like, oh sketches cheaper, I'll just use that. And so it doesn't make sense for our customers. We're deciding to add more value and keep our prices the same because I feel like our prices are fair and we're still growing. So why would we mess with any of that? It's just and the other thing is our costs. Because we're small, our costs have not gone up that much. Sure. We have costs, our biggest costs are people but and server costs have gone up a little bit and you know, our email costs have gone up a little bit, but it's just it's fractional compared to it's not like I'm running a coffee shop. And you know, the main thing I sell is coffee beans and like those have gone through the roof. We're doing fine. And so to punish customers by raising prices when, you know, where people are losing their jobs and prices are going up, it just didn't feel right. And we can run this for a long time and our financial math is pretty simple. It's not like our books are super complicated. Or there's not a bunch of variables we're having to check all the time like, oh, no, what are the investors think? No, no, what's the board think? And oh, boy, what about this? And it's like, it's just simple. It's like, okay, how much money did we have coming in? How much money is going out? And John and I meet a couple times a month and just go through our every transaction. Like literally every transaction in our business, we just like, not every customer transaction, but you know, every Stripe deposit and then every expense, it's not that complicated. And again, anything could happen, we could lose this all tomorrow. But overall, I think it's making us more resilient. The reason I'm trumping this a bit is generally, simple things are more resilient. If you have a well built simple chair with less joints and all those kinds of things, it's going to last longer. If you know, everybody knows, like in the 80s and 90s growing up, you know, every once a while you get a friend who'd get a real fancy car, you know, like big dashboard, like all these buttons and power windows and stuff. The fancier the car, the more stuff that can go wrong. Simple is more resilient, like you get, you know, my parents always bought manual transmissions because it was just like, it's just simple, no power windows, you know, nothing extra, it was just like simple. And they just break down less. So I think these principles also kind of work themselves out in other spheres. The less complicated things are the less variables, the less contingencies, the less, you know. It's actually the problem with web development is there's so many dependencies in web development and there's so many things that can break. It's HTML. HTML on the web is pretty simple. That's why I love the web. But simple things are resilient, you know?

Arvid Kahl 42:04
Yeah, I guess that's a whole other layer too like, the whole podcasting space is effectively built on open standards, which themselves are fairly simple protocols, right?

Justin Jackson 42:13

Arvid Kahl 42:13
RSS feeds, where tools can pull episodes and meta information. HTML for the website that you create and JavaScript for the widget that you use to embed every podcast episode into something else. Essentially, the industry you're in and the tool you're building and all of this is built on open standards on something that is simple by design, supposedly, but at least simple because it's so well distributed and ubiquitous.

Justin Jackson 42:39
Yeah, I mean, I think the open standards are certainly bring more, from a conceptual standpoint, they are a little bit more complicated to understand. Because people's frame of reference is the centralized standard. I really experienced this with my daughter because she's 20 now. But when she was 18, she was writing this report for me the Gen Z kind of report, kinda thing.

Arvid Kahl 43:09
That was a great one.

Justin Jackson 43:10
And she's like, we had a phone call and she's like, dad, I don't get it. Like, why are you so down on, like, all these central players? Like, you seem to have a negative kind of feeling towards YouTube and Spotify. And what's wrong with Spotify? Spotify is cool. Spotify is great. If I go to Spotify, it recommends podcasts like, isn't that a good thing? And I said, well, you're gonna need some centralization, for sure. But here's what's great about the distributed nature of podcasting is we're still pretty early in Spotify cycle, but we've already seen how it affected artists. So Jack Conte of Pomplamoose, tells this great case study of he was selling MP3s on iTunes and his band, it's a two person band and they're making about $150,000 a year on the band. And this is enough money for them to make music, to produce it, to put it on the world for their fans to buy it. And they're full time on the band. They're making a combined 150 grand and you know, life is good. And then streaming comes along. And it literally destroyed, like 95% of that. And he's still selling the same thing. He's still selling music but it was the centralization that ended up hurting him because everyone decided I'm gonna get my music through, the majority of people decided I'm gonna get my music through Spotify. And they just didn't have any other channels to reach their fans. There was no, there's no and he went on to create Patreon to kind of create an alternative funding model. What open standards like RSS give creators is optionality. So for sure, I think a lot of creators should be on YouTube because YouTube is a giant platform. It's a giant search engine. There's so many people watching and consuming video there. It's a great way to get your message out. But for sure, I don't wanna rely on it. I don't wanna have all my eggs in the YouTube basket because the story is always the same. Facebook convinces all these local businesses to build Facebook pages, get everybody to like their Facebook page, you know. You go to a shop and they've got a little sticker that says, like us on Facebook. They're giving up their email lists to go all on Facebook and just have Facebook likes. And then a couple years later, Facebook goes, oh, now to reach your audience, you've got to pay for boosts. This is the same cycle. The entire structure of their economic model depends on it. You're eventually gonna get taken advantage of, guaranteed, by the way. So right now there's some YouTubers that are killing it, that love YouTube. Eventually, YouTube's gonna do something that they don't like or they're gonna get demonetised or they're gonna get kicked off or they're gonna have an ad that they don't agree with or whatever it is. Or YouTube's gonna change the algorithm. YouTube's gonna say, you know what? We're gonna move away from creator based algorithms. We're just gonna go to algorithms like TikTok and TikTok doesn't care who the videos from. TikTok is just gonna show the most viral content of that moment, which makes it harder for creators to build an audience. This is where it's going for sure. Open Standards, RSS, email, the web, these standards, they're messier, but because they're distributed, for sure, like Spotify and Apple would love to own podcasting, but they can't. They're in this battle where there's tension between them, you know. Apple's got 30%, Spotify has got 30%, YouTube's probably got another 20% or 30% or 40%. But they're all in this locked battle of, well, no one's gonna own it. And as long as nobody owns it, creators own it. We have our RSS feeds, we can host them ourselves, we can forward them to a different hosting platform, if we want, we can lock them down, but keep all of our subscribers, we can remove it from Spotify, if we don't agree with their business practices. It gives us optionality, we can put ads in there, we can use bad language on there if we want. It gives us the freedom to do what we want and what we need and allows us to keep our audience as long as people are subscribed to that RSS feed, no matter where you go, they can go with you.

Arvid Kahl 47:52
The only thing we pay with is discoverability.

Justin Jackson 47:55

Arvid Kahl 47:55
That's always been one of the biggest issues in podcasting to begin with, but also that people are self hosting their video. Nobody's gonna watch it if they don't know where to find it. And the same goes for podcast.

Justin Jackson 48:03
Yeah. And this is what's strange to me is that we had this whole decentralization. It was almost like a cartoon decentralization movement with Blockchain. It was like all of these people were discovering decentralization for the first time. The web has been decentralized before there was a web, like Usenet groups, FidoNet on BBSes all decentralized. DNS decentralized so the thing that runs all of the domain names in the world is decentralized. It's just a bunch of, every service has a list of you know, all the domains and then where they point to. And it's distributed around the world. It's amazing. It even works, right? And somehow in that system and again, here's the surprising part to me, is whenever I point to these older systems like DNS for discoverability, DNS I'm blanking, torrent trackers, you know, there was Usenet for sure, FidoNet, for sure. These were old systems. Some of them were built three or four or five decades ago. And we never, it's like, we just stopped that discovery and that curiosity. And then blockchain came along and then it just owned the conversation about decentralization. And even they weren't really focused on discoverability. And that's why you got all these centralized exchanges and centralized NFT marketplaces. It's like, if you're going to have an imagination of about decentralization, if you're going to put the smartest people in tech on a problem, why are we not doing any work on decentralized discoverability? And you know, a lot of people say, well, it's impossible and I'm like, well, it feels like we have not been curious enough about it. And to me, it's not impossible because we had these rudimentary systems working. And even like, even if someone just decided to help improve DNS, right? So right now DNS takes, you know, a couple hours to update, usually sometimes longer 24 hours. Well, why have we not gotten curious as a tech community about how we can improve that, you know? And then the same kind of tack could be used for discoverability. And in some ways, you know, this whole movement to Mastodon is interesting to me because you have this decentralized model. And again, limited discoverability. But it's there. Like, I can search for your username, even if you're on a different server and it finds it pretty quick. So we just need to augment some of these existing models. And to me, that's a way more interesting question than saying, let's continue to build up, you know, let's just find the next YouTube and the next Google and the next Spotify. I know, venture capitalists love that. And maybe that's why we haven't gotten decentralized discoverability because venture capitalists will not fund it.

Arvid Kahl 48:43
Well, they want to fund it, but they want to fund one thing. And the problem with decentralized discoverability is that it has to be federated. And if something is federated, there has to be a connection between different entities that is willingly maintained, right? It's like, what would you say with Macedon, you have all these servers and they have to federate with each other. That means that each server has to accept all these other servers as like agents of truth.

Justin Jackson 51:21

Arvid Kahl 51:21
And if you wanna do that, if you wanna fund that, well, now you have to find 1000 people with 1000 different servers. This is probably an incentive alignment problem because

Justin Jackson 51:45

Arvid Kahl 51:46
That's probably the same thing, like the companies or the nonprofits that run the servers, they have very little incentive to make it any better. Because, you know, like, what's in it for them? It's, being used as it is. I think you're absolutely right. There's a problem there. But the problem might just as well be that trust again, like, kind of harkens back to what we said earlier. Everything is built on trust.

Justin Jackson 52:18
Yeah, and the curiosity of just independent geeks.

Arvid Kahl 52:27
Yeah, I guess

Justin Jackson 52:27
If you think about

Arvid Kahl 52:29
They've been snatched away by the Facebook's of the world, right? That's a bit of a problem. They're pulled into these decentralized companies as well.

Justin Jackson 52:35

Arvid Kahl 52:36
Again, very little incentive to do any thinking about decentralized systems, if the system they work for is a centralized one.

Justin Jackson 52:43
Yes. And I think I hope, this is why I've always held on to these ideals from the early web. You know, I grew up and I turned 10 in 1990 and grew up visiting BBSes. And that whole system, you know, it was this beautiful system of people building some open source stuff, but that also stuff that you share were that you would pay for. And each enabled the other in this nice, I mean, it wasn't perfect. I've got a little bit of rose colored memory here. But there was something nice about it and if you look at the bootstrapped companies that have succeeded, MailChimp, ConvertKit, lot of email companies, a lot of podcasts hosting companies that the top you know, Buzzsprout, Transistor, Captivate, Castos we're all independent companies. We're not big public companies. A lot of the even look at Basecamp built on open source and the open web, right? HTML, CSS, TCP/IP, all of the protocols. These open old, crusty, open protocols have enabled so much commerce, independent commerce. It's like the bootstrap companies. Why do the bootstrap companies gravitate to these kind of open? Even like Tailwind. Tailwind is open source software, open source framework. And it's an incredible independent business, maybe one of the most profitable independent businesses ever created. You know, it's incredible. Taylor's done the same thing with Laravel. Open Source open protocols, they generate opportunities for indie hackers, for bootstrappers, for solopreneurs. And this is why I think that the geek community or you know the tech community, this is why we need to be rallying for improvements and innovation in open standards. And we're doing this in podcasting right now. We formed a Podcast Standards Project, similar to what Zeldman did with the Web Standards Project back in the was probably in the 90s or whatever. Like they were petitioning these big companies, Microsoft, convincing Microsoft to adopt open web standards. We all benefited from that. And you know, who else benefited from that? Base Camp and Microsoft, yeah, yeah. But Basecamp benefited from the fact that you could visit and sign up and use it in Internet Explorer, Firefox, whatever. So I hope that we haven't had some of these movements in a while, you know and we got really distracted by crypto and NFT's. It was like, it had all of the energy of like, building the open web again. But it was just not useful in a way that has shown itself. And I hope now that you know, crypto is kind of down right now. I hope that we can take some of that energy and bring it back to these things that actually give us value now. It's very likely, your next business is gonna be a boring web app built on boring old open protocols, TCP/IP, DNS, HTML, CSS, it's all old and boring. And we should be innovating on top of it.

Arvid Kahl 56:41
Wow, I could not agree more like honestly, the idea of open protocols to me has always said nobody can take the market away from me because the protocol will always be there, right? That's the kind of anti Peter Thiel sentiment here you cannot become a monopoly in this market, like Tailwind couldn't become a monopoly because somebody else could build something different for different people and exist just as well. Nobody can buy the IP rights for TCP/IP.

Justin Jackson 57:08

Arvid Kahl 57:08
Does not exist, that cannot happen. And great advice.

Justin Jackson 57:12
And today, I'm sure there's I mean, if Microsoft could have owned any of that they would have, they would love to. This is what's funny to me. Sorry, I did one more tangent is I often get called on people say, Justin, you're too cynical and pessimistic about whatever, Elon Musk, crypto, venture capital, all these things. I wanna critique, I wanna critique people in power, I wanna critique powerful companies, I wanna do all that stuff. So if we're going to be cynical, here's what I don't like us being cynical about. So I'll bring up this idea of like, oh, email. Email is this beautiful, open standard that we all benefit from. And people say, wow, but really, who owns email? Gmail, right? And sure, Gmail is a big part of the market. But you know what you can't do? Is you can't create a Spotify profile, not on Spotify. You can create a email address. And there's probably 1000s, maybe even more than maybe 10,000 independent email service providers in the world that will give you a unique email that is not Gmail, you can host it yourself. You can put a machine under your desk and host your own email server if you want to, I recommend that. So sure, you can be cynical about that. But it's still an open standard. Gmail is not charging you a stamp fee for every email you send and I guarantee you if they started charging me a stamp fee, I would move somewhere else. These protocols are remarkably resilient to monopolies. So sure, Gmail has most of the market. There's still a lot of Hotmail addresses out there. There's still a lot of Yahoo addresses out there. There's tons of Outlook addresses out there, Microsoft, you see the same tension of these big Goliaths and they all wanna own the market. But even with Gmail's success, they're still Microsoft. They're pulling and holding the balance of power and independent nerds and smaller companies saying, you know what? I don't like the way Gmail does email and I got to start my own email company. And you can do that, like those exist. And some of those independent email companies are doing quite well, you know. So, the cynicism I hear about, you know, those kinds of standards I'm like, and people will say why you don't even like email. I'm like, emails amazing for all of its faults and all of the mess, it's actually beautiful. And the same criticisms you apply to email and spam email. I can apply it to YouTube comments. Like, I get so much bullshit YouTube comments, I could apply to Google Analytics results, you look through like your referrers. And you're like, there's like 10 like spammy referrers here that they haven't filtered out yet. It's everywhere, whether it's centralized or non centralized. So I don't think open standards deserve the kind of cynicism they sometimes get. It's like, no, this is beautiful. Emails are amazing. Arvid can have a list of all of his, you know, customers and fans. And he can download it as a CSV and have it on his hard drive. Even if, you know, even if MailChimp decides to go take it away or ConvertKit or whatever, you get to hold on to

Arvid Kahl 1:00:54
That's exactly what I did. Like I hit my list on MailChimp, they wanted to charge me a lot of money. And I said, nope, took my list, went to ConvertKit. Exactly the route I took. And there was no friction because it was impossible for that friction to exist because the standard is there, right? It was. Yeah, that's, it's a really good point. I think what you said earlier, these systems, they generate opportunities for founders.

Justin Jackson 1:01:17

Arvid Kahl 1:01:17
That's the big, big point here.

Justin Jackson 1:01:19

Arvid Kahl 1:01:20
With all the complexity of Federation. And I guess email is a great example of that, too, like with the spam filters and like, the trustworthy domains like the big players are trying to push the smaller ones aside, right? Because they don't want to federate with them.

Justin Jackson 1:01:34

Arvid Kahl 1:01:35
But in the end, you know, if you build a solid system based on solid protocols, you could still operate your own email server and communicate with people and Gmail.

Justin Jackson 1:01:45

Arvid Kahl 1:01:46
Not a problem, you just have to

Justin Jackson 1:01:47

Arvid Kahl 1:01:47
Understand how to technology work.

Justin Jackson 1:01:48
Yeah. And the nerds at Gmail, by the way, the nerds who are running those email servers, fundamentally, there's still these intrinsic values baked into these protocols. So even if Gmail is like, ah, we're not super stoked that a lot of people are switching to The nerds at Gmail are still going to receive emails from because the values are built in, you know and that's probably enough on open standards. But I'm a big proponent of them. And I think we've missed again, crypto was a distraction, especially for indie hackers, on where most of the value on the web has come from. And it's been the open web open standards, we've all benefited from it, every bootstrap company has benefited from it. And we should be investing more in it as independents.

Arvid Kahl 1:02:45
Yep. As you said, the values are built in and they're built into the protocols, the open web, and also built into Transistor FM, which is kind of cool to know that this is a business that started from values and then just attached them later but came out of it. Thank you so much for being on the show today. That was a lot of insight into a very interesting industry. As a podcaster myself, I'm excited to understand it better because it's the world that I'm in and I wanna be in. I wanna make better too. And I'm so glad that you are on the forefront of making it better. That committee, super interesting idea like establishing and kind of being a proponent for change for the better. That's awesome. Thank you so much for doing this. And thank you for talking to me about it. It's almost yeah, it just makes me very happy to see the journey that you've been on, both with Transistor and before and building in public that you're doing, the communication that you're doing in your newsletter on Twitter. Where do you want people to find you if they wanna learn many more very interesting things from you?

Justin Jackson 1:03:58
I mean, I would love for people to sign up on my newsletter, I'm still on Twitter. The letter N letter I Justin, I'm spending a lot more time on Mastodon. If you search Am I Justin on there, you'll see me on But yeah, come hang out. And we have a podcast that we haven't published an episode on in a while. But if you haven't listened to our story, Build Your SaaS chronicles our whole journey from nothing to where we are today.

Arvid Kahl 1:04:31
I'm a big fan of that podcast. And I hope there will be more episodes in the future but no pressure. Same goes for your newsletter. It's sporadic. But whenever it appears in my inbox, it's always good.

Justin Jackson 1:04:43

Arvid Kahl 1:04:44
Same goes for the podcast. Thank you so much for being on today.

Justin Jackson 1:04:46
Thanks so much for having me.

Arvid Kahl 1:04:48
And that's it for today. Thank you for listening to The Bootstrapped Founder. You can find me on Twitter @arvidkahl. You'll find my books and my Twitter course there as well. If you wanna support me and this show, please subscribe to my YouTube channel, get the podcast in your podcast player of choice and leave a rating and review by going to ( Any of this, will help the show. Thank you very much for listening and have a wonderful day. Bye bye