Build Your SaaS

A chat with Nathan Baschez (Substack, Gimlet, Product Hunt)

Show Notes

Justin is interviewed by Nathan Baschez to talk about business strategy:

"Every strategy is really just a theory: “We bet if we do x, then y will happen. In business, the 'y' that people are usually aiming for is some sort of sustainable competitive advantage." – Nathan Baschez

This is a long episode, but it's a good one!
  • What made Jon and Justin feel like they had an advantage in podcasting?
  • Original hypothesis: "Maybe we could be to podcasting, what WPengine was to WordPress hosting. Or what Wistia was to video hosting." How did that work out?
  • Nathan's take on the podcast industry from his experience working for Gimlet.
  • When should you focus on a niche?

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Creators & Guests

Host
Justin Jackson
Co-founder of Transistor.fm
Editor
Chris Enns
Owner of Lemon Productions
Guest
Nathan Baschez
Co-founder of Every

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.

Justin:

Hello, and welcome to build your SaaS. This is the behind the scenes story of building a web app in 2020. I'm Justin Jackson. John is still away. We're hoping to have him back next week.

Justin:

But this week, I have an interview that Nathan does he say Bashaw or Bashaw? I think it's Nathan Bashaw, that he did with me for his Divinations newsletter. If you haven't checked out Nathan's newsletter yet, you really need to go check it out. It's divinations.substack.com. It's a paid newsletter.

Justin:

It's actually the first paid newsletter I think I've ever subscribed to. And he's talking about business strategy for early stage startups. And, you know, with Transistor, I think we've reached a point where I needed to start thinking about strategy more. And he takes, like, these really deep dives, into business theory and, you know, doing all this research on on strategy, and then basically puts it into this nice package that you can read, you know, in your email client or on the web. I'm really enjoying it.

Justin:

I highly recommend it. And, yeah, he interviewed me for an upcoming feature, And so here it is.

Speaker 2:

So I'm I I've read all about transistor, and I listen to a lot of the episodes, build your sass. And as far as I can tell, the original inspiration for the idea is this observation that, you know, podcasts are becoming this thing that not just sort of like hobbyists do or people that, like, work at NPR or something like that, but also that businesses may wanna create as, like, a form of content marketing. Is that am I getting that right as, like, kind of the original inspiration?

Justin:

Yeah. That was part of it. I mean, like, anything, the the reason you start anything is multifaceted. Right? And so I think, you know, I was at a time in my life where it made sense to start something new.

Justin:

I was pretty hungry to start something new. And when John came to me, John Buda, he's the cofounder, I mean, there's there's just so many layers to this. But the the market observation that I made that was interesting to me is I've been podcasting since 2012, and it was mostly people like me. People who are just doing it for fun on the side, maybe for a little bit of ad money, but nothing. There there was no real professional market for podcasting.

Justin:

And I started noticing Basecamp has a podcast, Cards Against Humanity has a podcast. That was one of the major motivators for us to build Transistor is that John worked there. And so we knew we would have a paying customer right away, And CodePen has a podcast, and all of the and Mastercard has a podcast. So there's all of these branded shows. And, you know, when I did the math in my head, like, Basecamp is a pretty small company, but they're employing 2 people to work on the on the podcast.

Justin:

And, you know, back of napkin math, you'd assume that would be at least $200,000 a year, maybe more. Yeah. And, of course, all of these shows are going to need tools. And so the original hypothesis is maybe we could be to podcasting what WP Engine was to WordPress hosting. So we'll be or Wistia was to video hosting.

Justin:

We'll be the the option for businesses. And I don't think it didn't the hypothesis didn't exactly turn out that way, but, it was at least I noticed that something was different than what it had been before. Like, increasingly, companies were saying, we're gonna have a blog. We're gonna be on social media. We're going to have a YouTube channel, and, oh, we should also have a podcast.

Justin:

It was another item on their checklist. And so I felt like, okay. Well, maybe there there's now something here, whereas before it was a lot of DIYers and hobbyists and and folks that didn't wanna spend a lot of money.

Speaker 2:

Right. Right. Right. Well, did you have specific theories of, like, better, like, marketing channels or sales process or pricing or, like, product functionality functionality that you thought would help you kind of go after this market? I'm talking about the inspiration too.

Speaker 2:

I I definitely wanna get to, like, how it's evolved and what you've learned and all that stuff, but, like, the initial inspiration.

Justin:

Yeah. There's a few things. First of all, John had built a podcast hosting platform before, so we had some experience. We knew from his experience, on the programming side and the design side what would the initial version look like? We also had a paying customer at Cards Against Humanity.

Justin:

And not only that, John was interacting with all of these other podcasters that were using the Cards Against Humanity studio for as their home base. So, like, Friend Shipping is out of there. I think there's, like, 6 podcasts that get recorded out of there regularly.

Speaker 2:

So So was this, like, right around the time when they opened that up? Because I remember hearing that they were opening a podcast studio in Chicago. Is this all kinda happening around the same time?

Justin:

I mean, they have multiple podcast studios in that office. It's crazy.

Speaker 2:

Oh, wow.

Justin:

They have, like, a big kind of, like, radio style place where the sound booth is over here, and it's all glassed off. And then they have 2 other kind of smaller recording studios. And so, yeah, there's he was interacting with folks all the time that were, you know, creating shows or a

Speaker 2:

part of

Justin:

shows. And he had a sense of what they wanted. So I think that was that was helpful. I mean, I built up a pretty big audience by this point. And so I knew people that had podcasts.

Justin:

And so I could ask them, what would make you switch? Like, if if you, you know, if you were going to switch, what would make you switch? Or why did you even choose the host you're with right now? And what's keeping you there? And so I was able to get a lot of insight from that.

Justin:

And, I mean, there's so many things. There's also, I was friends with Nathan Barry, and I'd seen him launch ConvertKit. And I'd also seen how a substantial amount of his revenue came from affiliates. And so I knew that that was probably going to be one of the channels we were gonna try. And, I'd seen, you know, he does 30% of revenue recurring for affiliates.

Justin:

And that was very motivating for a bunch of folks in his audience. And knowing that he serves this group of people that kind of call themselves creators or creatives, and that's kind of a generic term now. But, you know, this group of people that are creating stuff now and maybe aspirationally wanting to do it for a living, or it's just part of their identity. I knew that that was gonna be part of our audience probably. And so that was another insight.

Justin:

I had formed a relationship through with, Jason Cohen from WP Engine. And so I was able to see how he had built that business and which is in many ways different than ConvertKit. So I had all of these kind of inputs, and John had all of these inputs. And, our initial version was kind of based on that of okay. Well, we're gonna need something for aspirational kind of creative folks to be able to get in.

Justin:

And so $19 a month is probably a good starting point. And then we'll probably go 49.99, and that will be where we start. And, actually, the one thing I will say, one of the key insights we had during this time was we talked to a lot of people, but how did they do pricing? Like, how do you do that? Like, what what and so we talked to Nathan Barry.

Justin:

We talked to Rob Walling. I talked to Jason Cohen, talked to Ben Orenstein. Just a bunch of folks. The oh, and, Patrick Campbell from, Price Intelligently. What's his other thing?

Justin:

Anyway and so they were talking about pricing around the kind of the value metric. Like, what do people want more of? And in podcasting, we're like, well, what they want more of is more downloads, more listens. And that's also what ends up costing you more as a podcasting host is the bandwidth. And so we're, like, okay.

Justin:

Well, that's probably a good metric to base our pricing around. And then I had this other thought of, you know, something like oh, 80% of podcasts get less than a 1000 downloads in their 1st 30 days. And so most shows actually have very low download numbers. And I thought, you know, if you're just getting started out or even if you are just into podcasting, you probably wanna have multiple podcasts. Like, for myself, by the time by that time, I probably had, you know, I don't know, 5 shows.

Justin:

And some of them were in active production and others weren't. And I thought, you know what? I think if we offered unlimited podcasts for 1 monthly price, but the pricing was based on the number of downloads you got per month, I think that would kill because then you're incentivizing folks to start more shows. And if you're really again, whether you're inside of a company or outside of a company or, you know, a prosumer or an enterprise customer, the idea of starting more shows is probably attractive and not penalizing people for starting more podcasts. And so

Speaker 2:

Especially when you're experimenting and you don't really know you don't have, like, sort of, like, product market fit yet, so to speak, like, with your content.

Justin:

Yeah.

Speaker 2:

And once you get it, you may, like, really hone in on one show, but you might try out a bunch of different concepts before one really sticks.

Justin:

Yeah. That was exactly it. It was like because I I'd launched multiple shows, so I could see while this one really kinda resonated, but this one didn't. Or and I was also doing experiments. Like, I wrote a book, and then I did the audiobook as a private podcast feed.

Justin:

And so I had that in my account. And for most folks, if you're on Libsyn or any of those other ones, you're paying for every additional show you add. And so, that that, insight turned out to be, kind of a game changer for us early on because nobody else was doing multiple podcasts for one price a month. Everyone was charging per additional show.

Speaker 2:

Oh, interesting.

Justin:

And so we a lot of folks that was one way we were able to get people to switch initially is they said, well, I've got 4 shows on Libsyn. Why don't I just switch to you? And, it's kind of it's not super difficult to import a podcast and then to forward your old RSS feed. So yeah. Early on that played that that helped us for sure.

Speaker 2:

Was the idea that they would save money by switching?

Justin:

Yeah. That was definitely, that was part of it is that they would save money and also just the idea of being empowered. They were like, oh, yeah. Like, if I had no limits on the number of podcasts I could start, I could do all of these experiments. And so, that was attractive.

Justin:

And for new customers, you know, we had a, like, a VC firm came to us, and all of the partners want their own show. And so when you're looking around, it's like, okay, who are we gonna choose? It's like, well and businesses pricing is so funny because it's it's like, okay. This might char cost you an additional $15 a month or $10 a month for for another podcast. But when people bump into limits like that, they really don't like it.

Justin:

And they want the future to kind of be wide and open. Like, we could start as many podcasts as we want on this platform. And so with with firms like that, it was also attractive or agencies. It was attractive. The idea that they could have a bunch of podcasts all under one roof and, not have to pay more for each one they added.

Speaker 2:

Yeah. What kind of initial users did you get that were so it sounds like most of them are attracted by that as, like, kind of main value proposition. Who is that most valuable for? Well, so this is

Justin:

the weird thing. So I've been building this audience forever in the Bootstrapper community. You know, I had a mailing list of about 10,000 people, and I had, probably about 20,000 people following me on Twitter. And, initially, I thought, okay. Most of our audience is going to kinda come from this group.

Justin:

Right? Like, we'll get the startups through here. We'll get the all the venture funded people through here. We'll get the VC firms through here. We'll get the solopreneurs and the aspirational folks that wanna do content.

Justin:

We'll get programmers that wanna start programming shows. And that was true in the beginning. So our first you know, out of our first 100 customers, I think 75 of them came from my audience. And, you know, maybe another 15% came from John's network. And then other people just kind of randomly found us.

Justin:

But now we have 2,000 customers. And Yeah. This is this is kind of why I've been, interested in this idea of disagreeing with Kevin Kelly's 1,000 true fans, essay a little bit is sometimes you niche down. Like, you focus on a niche, and there's so much momentum in that niche. It just works.

Justin:

Or what for you. You give it to that niche and they love it so much and they share it and everything about the dynamics of that market work. But in our case, we said, this is podcast hosting for brands, and we put it out there. And we just had thousands of people who are not did not identify as brands signing up. And in fact, we're kinda turned off by it.

Justin:

And so I I had one But

Speaker 2:

they signed up anyway.

Justin:

They signed up anyway, but they they messaged me privately. A lot of these folks were in my audience, and I was able to get some insight. You know, one one fellow was a YouTuber and had a big audience on YouTube and said, you know, just so you know, I I signed up, but I was really hesitant to because you are kinda going for this niche. And I thought, well, I don't really fit into that group, so maybe I won't sign up. That might actually be 2 separate things.

Justin:

1, I thought maybe most of our customers would come from my audience, and that was true initially. But later on that became less true. And second, that this idea of niching, which is very popular, this idea of building something in the beginning just for a specific group. For us, anyway, we put it out into the world, and it turns out just lots of people have a job that they're hiring for, which is I just want podcast hosting. And I don't care Right.

Justin:

Yeah. If it's for brands, or if it's for ballet dancers, or if it's for I just want podcast hosting. And if you can do that for me, that would be great. And maybe maybe we will end up niching down again in the future. But for right now, it seems like it's almost like you always have to work with whatever momentum is already in the market.

Justin:

And so, you know, we we launched this thing, and we're paddling down this river, and the river just wants to take us this way. And we might really wanna paddle upstream, but, the river is kinda taking us this way, and we just decided to go with it. And so I think now we say we're podcast toasting for creatives, brands, and professionals.

Speaker 2:

How when did you sort of realize that your initial, brand focus was or is there, like, a specific moment that that you realized that, oh, man, this may not actually be the thing?

Justin:

Yeah. It was it was mostly getting that message from from from that YouTuber. And and, also, once you have people signing up and you're getting you're in customer support every day, you're realizing, oh, wow. There's a lot of folks. And in fact, maybe we need to adjust our our our tagline again because we have a lot of hobbyists that sign up.

Justin:

And for whatever reason, they're coming to us even though there's free options available. And it could be that, you know, there's so many reasons. They could be a fan of my writing, and so they sign up. They could they might just want really good customer support. They might like the fact that they can start multiple podcasts all in one account and manage it all from one dashboard.

Justin:

It might be they really like our podcast player. There's so many reasons that, you know, kind of nudge people over to Transistor. And but in terms of, like, a demographic or a specific, you know, market avatar or something, it's a a huge variety of folks are signing up.

Speaker 2:

Yeah.

Justin:

And it it made me revise some of my thinking around again, this is this is podcast hosting for blank, where I think some markets just don't might not lend themselves to that as much. And maybe I'm wrong. Maybe maybe we're actually missing an opportunity. But when I think about it, it's like podcast hosting and podcasting is still really small. There's, like, maybe 800,000 or 900,000 shows, from what we can tell.

Justin:

You know, a lot of that growth is coming from Anchor, and but a lot of those shows are no longer in production. Like, they they pod fade really quickly. And so it's possible that there's only, like, a 125,000 or 200,000 active podcasts in production right now. And when you compare that to any other medium, like YouTube, there's 36,000,000 YouTube channels with 10 or more subscribers. Right.

Justin:

Blogging, there's 550,000,000 blogs. And I don't think audio will actually ever get there. I don't think we're gonna be as big as either writing or video. And so that makes me think, okay. Our our market has a cap.

Justin:

Like, it's it's going to or it has a ceiling. Sorry. And it's gonna be lower than blogging. It's gonna be lower than video. And, also, in terms of, like, our closest competitors, Libsyn.

Justin:

And from what I can tell, they have 66,000 podcasts hosted on Libsyn that show up in Apple, podcasts. And I go, man, 66,000. That's the market leader. They're, like, the only public company that's doing podcast hosting, besides Spotify now with the anchor acquisition. It's like, man, that's that's so small.

Speaker 2:

Right.

Justin:

And so if our ceiling is that low, does it make sense to then niche down within this group of a 125,000 or 200,000 active podcasts and say, well, no. No. No. We're just for these people. It just feels like the overall market isn't big enough.

Justin:

And so I I think for us, at least, it makes sense to say no. If you wanna start a podcast and you want this kind of service and this kind of support and this kind of setup, Transistor's perfect for you. And so far, that's working out pretty good.

Speaker 2:

Yeah. Totally. Well, I mean, the main the main reason usually I feel like to, like, focus on a niche is because there's a set of people who are, like, totally served in the wrong way, underserved, overserved, whatever. Something just doesn't fit their needs. And and the guess is, hey.

Speaker 2:

It's a big enough set that'll support the business. Right? All the fixed costs and what like, time, whatever that go into it. Yeah. And, it sounds like there's kinda 2 things you're saying.

Speaker 2:

1 is that maybe that is too small. But 2 is that, actually, people are signing up for Transistor even without having to focus on some segment, you know, in the market. Yeah. It's like you're getting growth anyway.

Justin:

Yeah. That's a that's actually a good way to put it. I think because it's so easy to, reverse those. So what you said is if I noticed a group that's super hungry for something and they're not being served and everything every characteristic characteristic about this group tells me that they just do not like the incumbents. Well and if there's enough of those folks in motion, then, yeah, you should go after it.

Justin:

But at the beginning, especially before you've launched anything, and you're just kind of like you're just guessing, like, no. We should be the podcast hosting for businesses. That's what we should be. But you don't you're not basing that on anything. That's just what you feel like.

Justin:

Right? That's just that you're you're you're feeling. My wife experiences this all the time because in our house, she's the one that does all the fixing. She buys all the power tools, everything. And she often has this feeling in Home Depot, like, nothing like, she doesn't want anything just for women.

Justin:

She doesn't want anything for just for moms. She just wants to go and buy a drill. Now in the midst of that, she wants to be treated with respect. But there's she doesn't wanna be pandered to in any sort of like, there's there's Right. There's she doesn't need a unique product.

Justin:

She doesn't need

Speaker 2:

It's not like let's paint the skill saw paint.

Justin:

Yeah. We don't she she doesn't want a pink, a pink skill saw. Right? Now if there was a group of women that did want that, that that could be interesting. But I'm just saying, sometimes it's easier in your marketing boardroom to say, you know what?

Justin:

If we wanna reach that demographic, we gotta paint all the tools pink. It's like, no. You just imagined that. You're you're just making that up. If there's no evidence for it, don't do that.

Justin:

If but if there's if you wake up the next morning and there's a 100 women lined up at Home Depot with signs that are saying, you know, give us these kind of tools, then sure, you should listen. But often, we're just we're just making these decisions outside of any sort of visible demand. And visible demand is something I'm thinking about a lot. Visible demand to me is every morning I wake up, and I go to this coffee shop, and there's people lined up waiting for coffee Every single morning, I'm gonna wake up tomorrow, and that's also going to be true. And so far in podcast toasting, every day, I wake up and I open Transistors Business Stores, and I see a lineup of people who wanna sign up for podcast hosting.

Justin:

And so that to be oh, okay. There's demand for this. Right? There's a lot of businesses and a lot of ideas and a lot of segments where they say, you know, they're they're they're trying to open a business for which there is no visible demand. There's nobody lining up here here in Vernon.

Justin:

I live in this small little town, the small little ski town. There's a noticeable difference between the lineup at the bubble tea place and the lineup at the coffee place. It's just Yeah. The the bubble tea place opens up its store every day, and nobody's waiting in line for bubble tea.

Speaker 2:

Right.

Justin:

And there's just something about that distinction that resonates with me, especially when I think about people starting new businesses. And even actually now that I think about, you know, how we're gonna grow transistor going forward is eventually we're gonna open up the door and maybe there won't be as many people online. And there's all sorts of reasons for that, and we gotta figure out what those reasons are and kind of act accordingly.

Speaker 2:

Yeah. Totally. I'm curious. Like, when you talk to, you know, your customers that are signing up these days, like, what what do they say about, why they chose you? Like, what's the thing Transistor is better at than anyone?

Justin:

I mean, it really depends. We still get a lot of folks signing up because we offer multiple podcasts for one price. Word-of-mouth is is very big. A lot of our traffic does come through search and through these kind of these authoritative sites that do, like, articles and then comparisons between the different hosting platforms. In those cases, people are it's very much based on feeling, it seems.

Justin:

There's some rationale of, like, we need these features and we don't need these features. But when 2 companies come up and they're very similar, there's what nudges them one way or the other seems to be emotional. And I'm still trying to figure that out a little bit.

Speaker 2:

Yeah. Kind of like design quality, marketing, communications quality, that kind of stuff. You're just like evidence of thoughtfulness and that they are like me. They understand people like me. Because if the packaging is really sick, then, like, it's probably good inside too.

Speaker 2:

A little bit of that maybe.

Justin:

Some of it's packaging. A lot of it is real is customer support. I I think that I can't remember who said this. I think it was Adi Pinar from, originally from WuThemes, and, he just what did he just sell? He just sold, his latest one to, Campaign Monitor.

Justin:

But in an old, old talk, he said, you know, software as a service, most of what people are signing up for is the service, not the software. And so we've had this, you know, live chat widget on our site from the day 1, even as a small company of only 2 people. We just hired someone to help us in the UK part time. But up till now, it's just been us. Just offering amazing service when you're one one of the proprietors and you really care about each customer.

Justin:

I mean, I've jumped on so many calls. I've I've done so many videos. I was I was like manually recording videos and uploading them to YouTube as unlisted videos. And I finally just started using Loom. Yeah.

Justin:

Because, like, 3 or 4 times a day, I'm I'm recording videos for folks. Podcasting is confusing as heck. I mean, just just to even I have to under explain, like, okay. At some point, you have to tell them what an RSS feed is, but people don't care about the RSS feed. They say, how do I get my audio onto Spotify?

Justin:

That's what I care about. And and helping them bridge that gap, especially at, you know, various levels of, expertise. You know, some folks have all the recording equipment, and some folks have an iPhone. And, yeah, that's been interesting jumping on those calls. The other day, as an example, I did this call with a gal that works for an agency.

Justin:

And she was probably I mean, probably later in her career. She wasn't, like, just fresh out of college. And she's seemed to be quite accomplished, but she's just, like Right.

Jon:

Yeah. Yeah.

Justin:

Being honest and saying, I have no idea how this works. Like, she said, I did a little bit of googling, and this just makes no sense. And I just took 40 minutes and just walked her through everything. Here's how it works. And to be able to do those calls and help folks out, and it it scales in the sense that I think she'll probably become a customer and probably tell a bunch of people about us.

Justin:

And it also scales in the sense that right after I recorded a video that I uploaded to YouTube that, you know, can then get shared. It is tricky to figure out what nudged people over to us versus what nudged them away from us. And I ask that question all the time. I ask people why they switch all the time. You know?

Justin:

We have this opportunity when they're importing an RSS feed to say, so what what why why isn't it working out at Libsyn? Like, what's going on there? And and, you know, there's a bunch of reasons that people get frustrated or fed up or just ready for a change. And sometimes they're emotional. Like, oh, I listen to your podcast, and I just resonate with the journey that you and John are are on.

Justin:

And I talked to my boss, and he says, okay, if we switch. Okay. Other folks are like, oh, I'm just ticked off with their interface and Right. The way they organize things really bugs me. That's another reason.

Justin:

You know, there's all these reasons. And which is why I wonder if just staying focused on the job, which is ultimately people just want their audio to be on Apple Podcasts and Spotify. They want that emotional satisfaction of recording something, uploading it, and then seeing it on Spotify. And I'm I'm almost certain that when that happens, like, when they submit to Spotify, they're opening up their phone and they're showing their friends and their spouse like, look at look at my podcast is right here on Spotify. Right next to Justin Bieber and Taylor Swift is my show.

Justin:

Right? And there's that that excitement, which by the way, I would love if you ever get anyone from Apple Podcasts on here, I would love to be the 3rd party in that conversation because I think they are missing out on so many opportunities. Number 1 is right now because Spotify has this is a total aside. Sorry. Because Spotify has a great submission API, What we've noticed is what people will do is they will upload their first episode, and then they'll notice that Apple Podcasts seems kind of complicated to submit to.

Justin:

So they just click submit to Spotify. It's on Spotify, usually within 5, 10 minutes, and then they're sharing that with everybody on Twitter and everything else. Apple's process is just a hellscape. It's so I in fact, most of the most of the support we do and maybe I should be careful what I wish for because, you know, a lot of the people a lot of our support is just supporting Apple Podcasts. And it's such so difficult to get your show on there.

Justin:

Oh, it's so you need an Apple ID. And I recommend to folks to not use their personal Apple ID to because if you wanna transfer the show to someone else or if it's for work, like, set up a new Apple ID. The Apple ID needs to be verified in Itunes, the Itunes store, either on your desktop or on your phone. So if you're a PC user and you don't have an iPhone and you don't have iTunes installed, you have really no way of doing this. It's so silly.

Justin:

It's like it's like okay. And then you have to submit your RSS feed to them. It's very you, like, copy and paste, you know, put it in. And then you have to wait 5 days for them to manually approve it. It's, like, this makes no sense.

Justin:

So I love Apple because they've kept podcasting open. I love Apple because, you know, so many people are using their directory. And, you know, if you submit to Spotify and Apple, you've basically got everything covered. There's so much they could improve, on their side. Anyway, sidebar over.

Speaker 2:

To kinda go back to, like, why people use Transistor, it seems like one of the big things is just accessibility, whether that's through customer service or, like, you know, content you create with, like, YouTube videos of how to do stuff or whatever. It's just kind of like feels like you're going for something that's maybe more approachable and friendly and, like, committed to making it easy for you. Does that sound

Justin:

Yeah. As simple as we can. And there's still some drop up drop off spots that we're we're working on. But Right. You know, because John had built a podcast hosting platform before, he had learned from that.

Justin:

Right? Okay. Here's some things that I'm gonna architect differently. We have tried to keep it as simple as as possible. So the the interface is very simple.

Justin:

It feels mostly like posting something on Tumblr or WordPress. Or if if folks have done that, they can probably create a podcast and post it on Transistor.

Speaker 2:

Yeah.

Justin:

It's not as simple as Anchor because Anchor does all the recording and editing in the app. But in some ways, we don't want those customers. Like, I actually, recommend Anchor and SoundCloud to folks that are clearly, like, just getting started. But if you like, our sweet spot is if you've already purchased a microphone, that then you're probably a good transistor customer. And we we will do everything we can both with product and with service to help you do something great.

Justin:

And so, the other big thing is, like, hosting a basic website for your podcast. We do that. I we have really nice embeds that, you know, John has learned from previous iterations and and made better analytics as well. Like, everything is simple enough, but powerful enough that if you're a business and you want CSV exports for every one of your, your shows, people can just do that and and get those. So I I feel like even though we're serving kind of a wide breadth of customers all the way up to, like, seriously, like, enterprise companies that are huge, and should we should probably be charging more money to.

Justin:

You know, we're serving this big breadth of customers, but we're helping them all all along the way. And then the the new thing that we just released as kind of a hedge because it is competitive, podcast hosting. And like you and I have talked about before, there is part of it that is just a commodity in the same way that website hosting is kind of a commodity. So as a hedge, we built this private podcast feature that allows you to create a a show and then add subscribers to it. So you add email addresses or you have an invite link as a part of your onboarding.

Justin:

And then every person you add gets this individual email that links to an individual landing page that allows them to open their individual feed in whatever app they want.

Speaker 2:

Right. Right.

Justin:

And we have folks using that for employee training, for employee onboarding, for, you know, some folks have membership sites, and they're doing that as a part of, like, people pay them for something. And then in the welcome email, they'll say, oh, here's a link to your your private podcast.

Speaker 2:

Right. Totally.

Justin:

So that is interesting because it allows us to price higher. We end up pricing per private subscriber.

Speaker 2:

Yeah.

Justin:

And, there's actually some expansion revenue there that, you know, we wouldn't have normally had. And it gives us something else. Like, if the podcast hosting space gets really, really competitive, we at least have something that differentiates us that, you know, we could try to grow while we're getting attacked from this other side.

Speaker 2:

Right? Yeah. Totally. I'm curious how it's evolved, like, the podcast hosting market since you first, you know, started working on it.

Justin:

I've said this kinda off from the beginning. Like, so when we came onto the scene, notably with all the leverage we had, right, we had all this leverage that we could use to kind of propel us, I think, maybe higher than some other folks that had just started podcast hosting companies. So in the new group, we kind of became one of the top picks right away. And we got the benefit of that for a long time. And then people kind of partly probably because of our our openness.

Justin:

Like, we were sharing all of our revenue numbers, and we're sharing all of our decisions and journey on our podcast. Folks have started copying the business model, copying the pricing, copying, you know, a lot of the things that we offer. And that's been tricky. It's one of the things that actually in terms of, like, the job that I hire your newsletter to do, it just like, when you wrote that intro post, where you're saying, you know, a lot of you're basically saying, I'm really geeking out about strategy. And I was like, you know what?

Justin:

I could probably use a dose of strategy now because I've got to think about this now in a more sophisticated way. And so if we're gonna go back to this metaphor, because I actually like this metaphor of the rushing river, I think most new companies should try to find a rushing river as opposed to a little niche stream somewhere, just because it's way easier to put your cup out and just capture some of that energy. Or if you're in the canoe, like, you're the river just takes you as opposed to, like, just kind of floating slowly down a stream. I think it's better to be at a a market that's moving really fast. But now we're kind of past the easy parts.

Justin:

Like, the river moved really fast. We we got taken up with it. We grew really fast. I mean, 20 to 30% month over month, some months. And now we're hitting the rough water.

Justin:

And now things aren't as easy as they were before. Yeah. I think that's one reason I wanted to join your newsletter. That's one reason I've started to think, okay, this now we actually need to figure out, you know, how to steer this canoe or steer yeah. Some technical things to get over this next little bit of, of difficulty.

Justin:

Because we we've definitely seen wow. Okay. We don't have the advantage of being the new kid on the block anymore. Now there's new new kids on the block that we're getting compared to. That's a very different place to be.

Justin:

Like, when you're new, you just have all of this part of the part of what attracts people to you is just the fact that you're new. Like like, if you're starting something a brand new podcast, it's like, oh, well, I'll go with the brand new people because all their stuff is fresh. And if you're thinking about switching off your current providers, like, oh, wow. I'm gonna switch them because it's fresh. But then, you know, now we're we're 2 years old, and we're not so fresh anymore.

Justin:

And so we've lost that advantage. Now there's new people that are fresh. And I there's this Rodney Mullen quote that I think about all the time. He's a pro skateboarder, one of the originals. And he has a saying where he says, like, you only win once.

Justin:

And after that, you're just defending. And I think about that all the time because it's like, he said, you know, it was super fun when he was just, like, climbing the ranks and, like, beating all these other pros. And then he got to the top. I mean, we're not at the top yet, so we still got room. But we got to the top.

Justin:

Sorry. He got to the top. And then it was really not fun because now all he's trying to do is maintain his position. Right? Now he's just trying to ward off all these attacks from these other people.

Justin:

And In

Speaker 2:

order to go down.

Justin:

Yeah.

Speaker 2:

Yeah.

Justin:

And so, I feel a little bit of that. It's like, once you've reached a certain spot, then all of a sudden, there's all these hungry folks that come up behind you. And now you're trying to maintain your spot. You're also trying to gain ground, but you're also trying to ward off these attacks from these other folks. And, yeah, I'm not sure how to deal with that.

Justin:

I mean

Speaker 2:

Yeah. Totally. Are they, like, competing on price? What's the kind of what's the kind of axis of competition?

Justin:

One is they just took our business model exactly. Like, $19, $49, $99, exact same amount of monthly downloads included, and, unlimited podcasts for one price. And then they just do some other things a little bit different. And so enough to attract people. And then using the leverage of, because we're not really from the podcast.

Justin:

I've been trying to codify this. I don't know if I wanna I can do it live, but you you know some of this. But podcasting, like, the podcasters, if you had a Venn diagram, there's like, let's just call it, like, thoughtful narrative podcast. That's like the New York scene. It's like Right.

Justin:

It's very

Speaker 2:

Public radio diaspora.

Justin:

Yeah. Oh, okay. That's perfect. That's perfect. Like, NPR, Gimlets, they're all in that tradition.

Speaker 2:

Yeah. A 100%. Yeah. Yeah.

Justin:

But then there's this other huge group, which is, like, the make money online podcasters. Very kind of, like, aspirational, like, start your own business, type. And a lot of podcast movement, the the main conference is that group. I mean, we certainly serve both groups. And then there's there's probably a few other groups I'm missing.

Justin:

Well, I think branded podcasts is probably another one. And so there's a Venn diagram of who we serve. But, some of our competitors are definitely have more sway in the make money online crowd.

Speaker 2:

Oh, gotcha.

Justin:

And so, and that's been a constant tension actually, because part of me likes that group. Like, there's there's a part of that group I really don't like. But, you know, I'm an entrepreneur, and I like I like shows, like, some of my favorite podcasts are bootstrappers sharing their journey. And so I like that group. But, you know, I I dislike it the more further you get over to the really kind of hardcore, like, make money online.

Speaker 2:

Get rich quick.

Justin:

Yeah. Get rich quick. Totally. And meanwhile, John is really steeped in the Chicago scene, which is more kind of like the NPR, and actually, maybe even a different, you know, like, shows like, Dubai Friday and Friendshipping. And, you know, like, a lot of these shows that are have a different sensibility.

Justin:

And we we we've debated about should we just target, you know, one kind of podcaster? And again, I think it's too small to do that completely. But anyway, that was a big thinking me thinking out loud. But I would say that some of our competitors definitely have a stronger foothold in make money online. Maybe that's okay.

Justin:

Maybe it's not okay. It's really hard to tell at this point.

Speaker 2:

Yeah. It's interesting because it feels like it maybe this is what, like, a fragmenting market kind of feels like. Or if it's like the main thing that people want, the main thing that matters is I can upload a file, and it gives me an RSS feed. And the RSS feed can go into, like, Spotify and Apple Podcasts. And everything else you try and do is, like doesn't matter that much to most people.

Justin:

And what

Speaker 2:

ends up being the deciding factor can be weird stuff like, well, this person has a podcast that's really popular with this group of people, and so we hired some, like, freelance developer to make, you know, podcast host, and then, like, that got a lot of those people because they just know him and trust him.

Justin:

Yeah. Yeah. Yeah.

Speaker 2:

End up compete competing on kind of, like, noncore almost. Like, it's more of, like, competing on, like, market access, like, access to certain groups of people who we trust and that kind of stuff.

Justin:

Yeah. And actually, hearing you talk about it like that is a little bit of a a little bit of a rude awakening. Because the way you articulated it is is is actually probably close to the truth. This is what's hard about being an entrepreneur. I just, in my feelings, I want things to be different in so many ways.

Justin:

But the the reality is, I think you're right, is that I do think that a big part and it's the reason that podcast movement, for example, continues to be kind of the podcast conference. And everybody goes, regardless of your sensibility, even though the primary focus ends up being, like, how to make money from your podcast. Because a lot of the growth in podcasting are folks starting those shows. And, again, part of me loves that. Like, that there's a big group of that customer that I really love serving.

Justin:

And some of them have made it. Like, some of them have are using our tools and have a bunch of people supporting them on Patreon. And everything's going really well. Similar to maybe medium, similar to maybe ConvertKit, similar to substack, there's going to be a big group of folks that try and it doesn't work. And so there's going to be built in churn there.

Justin:

And there's just, there's just some things you have to accept with that, that particular kind of aspirational market that eventually wants to make money from the thing. Whereas branded podcasts, it's a smaller target market. But some of these folks like the Basecamp podcast, I think it's just they just have a point of view, and they just wanna be able to get it out in the world. There's no return on investment. Right?

Justin:

And there's a lot of shows like that where these, you know, for better or for better and for worse, VCs and tech CEOs have margin in their life that allows them to be thinking about things and want they wanna share those thoughts with other people.

Speaker 2:

Yeah. Yeah.

Justin:

So branded podcasts are interesting to me.

Jon:

By the

Speaker 2:

way, I did love that post of yours recently about creating margins and the importance of that. I've been lacking that lately.

Justin:

Yeah. And I mean, I it was great. I think this has to go into strategy. I like the vector of strategy that you have been attacking lately, which is competition. There's this whole other vector of strategy that is so difficult.

Justin:

Because once you start applying these filters, it's like, why would anyone become an entrepreneur? But Right. Product founder fit, founder market fit, both of those things often determine how much margin you end up having. Like, if you're a WordPress freelancer, it's likely that your life's just not great because WordPress breaks all the time. The clients you're that you're going to attract aren't fantastic.

Justin:

There's just all sorts of kinda inherent problems with that market that are gonna make it difficult for a lot of folks to have enough margin. But then you add this other these other things like well, yeah. But what's your competition like? And what's, you know, what's the ceiling on your growth? How fast can this thing grow?

Justin:

Is there gonna be enough? You know, and they're all complicated. How much supply and demand is there in this market? Because that's gonna determine, you know, mostly how much margin you have. If there's there's a lot of demand but not a ton of good supply, well, you can you can get a lot more margin.

Justin:

So yeah. It's tricky. This the it the the things that pull you kind of from side to side are sometimes overwhelming, but other times are every day I wake up and I think that everything is gonna go away. Like, everything we've built is just gonna evaporate. But on the other hand, of everything I've done, this definitely feels like I have the most margin.

Justin:

I'm I'm what I'm banking on in terms of strategy is now I have the time and the margin to consider, for example, like viewpoints like yours, where you're bringing all these things to the table and all this research to the table that I actually have time to digest and think about as opposed to just rushing out in a reactive way and googling something and then try to implement a bunch of stuff because I'm under pressure. My my hypothesis is that more margin and taking longer to make decisions is actually better in the long run. And I guess we'll see if that plays out, strategically. But that that's kind of my feeling is, what's worked for John and I so far has been this strategy we call wait and see. Yeah.

Justin:

Just like, let's wait 6 months and see what happens. And so much of the stuff that we were, like, stressed out about and we thought the sky was falling. And we're like, okay. We gotta we gotta react right now. If we don't add this right now, everything's gonna break.

Justin:

We just waited because at the time, John was working full time, and we didn't have an option. And then, like, 3 months later, it didn't matter. Or 3 months later, we saw everyone that jumped on that ship, and it turns out it was the wrong boat to jump on. Right? And we're still, like, kind of considering our next moves carefully.

Justin:

So

Speaker 2:

we'll see

Justin:

we'll see if that works out.

Speaker 2:

Totally. Well and it's also it's also to me fascinating that some markets that seem totally commoditized, there end up being these really sticky, like, really good products that that sustain really good businesses for long periods of time and, like, I don't know, like, Fantastical. Right? It's just like calendar software. Like, that's a thing that people have been building for a long time.

Speaker 2:

And sometimes things obviously come and go. Maybe they get, like, acquired fast because they raise too much money, and it's, like, whatever. But it's like, if if you have the kind of business model that can support, like, you know, enduring, then then that's obvi that's a huge advantage. Another one that sticks out to me is, like, cultured code with, things, the to do list app. It's like what's like the hello world app of pretty much every, like, like, app development framework?

Speaker 2:

It's like a to do list, but, like, somehow, things is, like, this beautiful piece of software that people pay for even though you can so easily get a free alternative elsewhere. And there's, like I think you can always find, like, an edge. It may not always support, like, a, like, a Google or whatever. Obviously, it's, like, extremely rare to find something that ends up becoming that. But, like, to find something that becomes a, you know, 20, 40, 50, a $100,000,000 a year business is like I mean, I have no clue what fantastical and what things actually do every year in revenue.

Jason:

But

Justin:

Yeah. I'm so I'm glad you mentioned that. There's I I've had this other thought that I could be wrong about. All of this is within a context. Like, what we're talking about right now is within a context.

Justin:

And maybe it was was it you that was talking about this? It was. Everything we're talking about is within a context of there being these massive companies, Google, Apple, Amazon. And then, you know, even if you go down a level, Spotify, etcetera, that are sucking the oxygen out of the market. Like, they just they their fire is burning so hot.

Justin:

It's just taking all the oxygen out of what, you know, maybe in the old days, a small little 2 person company might have been able to attack. And that's interesting to me from a competitive standpoint. Just that we know that less businesses are getting started. And for every transistor story, there's, like, all these other folks that are trying. And there's so many things where it's like, well, why even bother?

Justin:

Because the gorillas are just so big.

Speaker 2:

Yeah.

Justin:

That being said, my other thought, kinda underneath that, in that context, is that for most startups, especially I I don't know about venture funded startups as much, but I'm just talking about companies that wanna be profitable. People that wanna start a business and be able to make profit and have a good life. For most of those businesses, even if you're small, the key is to keep the main thing the main thing. Meaning, I see a lot of folks that are starting businesses that are ancillary to the main thing, like, oh, I'm gonna add I'm gonna build a a add on for this thing. And there's just not enough I mean, add ons in in podcasting are a great example.

Justin:

Like, there's not enough market to just have a podcast review service, like a podcast a service that aggregates all your podcast reviews. Or there's not enough market to have, you know, I've heard every idea like, oh, I'm gonna do just commenting for podcasts. I'm gonna do just voice mail for podcasts. The every time you're building something that's ancillary to the main thing, I think it's way harder. And when I look at the bootstrap companies, especially that made it.

Justin:

But even in the startup world, they're almost all people who kept the main thing, the main thing. Like, superhuman. They're going after email. Email is the main thing, especially in b two b. Like, what do you need?

Justin:

I need email. Yeah. Yeah. MailChimp is the main thing. What do I need if I'm a business?

Justin:

Almost every business needs a way to send email marketing. That's the main thing. Now you could create an add on for Mailchimp. Like, maybe you just have really beautiful subscription forms, and they're better than Mailchimp's. But as soon as your ancillary is that the right word?

Justin:

Ancillary? Yeah. Okay.

Speaker 2:

Yeah. Yeah.

Justin:

As soon as your ancillary, you're you're no longer the main thing, and you just go way down people's priorities. Most people wake up in the morning, and they're just looking for the main thing. I need website hosting. Oh, so now you've got card and you've got, Squarespace, obviously. But even, like, Webflow and all of these companies that are making it, they're always in the same category.

Justin:

It's like project management software, Basecamp, you know, and Trello. The there's very few kind of, like, ancillary products that end up going crazy unless the market is so the market for that thing is so nuts like Clearbit for g Gmail. Well, the market for that is so big and so crazy that creating an add on makes business sense. But Yeah. The the main thing there has to be so big that you can kinda, like, you know, hit your your, cart to it, and it actually works.

Justin:

But, there a lot of markets just aren't big enough for that. And so

Speaker 2:

Yeah. Totally.

Justin:

Yeah. I I think about that a lot.

Speaker 2:

Yeah. There's kind of, like, a main flow in podcasting that's, like, you know, people have to have, like, a time and a place to talk. There has to be sound coming out of their mouths that goes into something that catches that sound. That has to go into a computer, and then it has to, like, get created as an m p 3 at some point with, like, mixed in with a bunch of stuff or maybe mostly just like the raw m p 3. And then that has to go in, like, a server somewhere on a CDN, and, like, there's just, like, this main flow of, like, value that's like if you're some little add on to the side or whatever, it's like it's so hard to get anyone's attention, and it's even, like, just in general.

Speaker 2:

And then it's even harder when you're, like, not in the main flow of stuff that people need.

Justin:

Yeah. Yeah. And, actually, even thinking about that, because you have that great map of the podcast industry. If you think about the recording apps, think about already how much more fragmented that is in the sense that, you know, my preference might be to record on Skype and then edit in GarageBand. Oh, but my preference is to record and edit in Anchor.

Justin:

Oh, but my preference is to record in Zencastr. And then and so already, the the demand is fragmented. Whereas everybody gets to podcast hosting, and everybody needs some form of podcast hosting. It's like it is more the main thing than all of the other things. And I was thinking about this.

Justin:

I really love my friend, Jack. He has this CMS called statomic, and I love it. It's just, like, amazing. And I think for a personal license for it, it's 299 or something. But I was thinking about it.

Justin:

I'm like, oh, Jack. Like, so much of your value chain is getting sucked up by digital ocean. Because people because people host it themselves, and people eventually, you know, you could choose whatever CMS you want, but eventually, you need a wear a way to host it. And so that's kind of, like, the main thing in that value chain. Does that make sense?

Justin:

You probably have a better way of articulating it, but that's that's interesting to me that oh, wow. Like, he's built this amazing software that in a different dimension should be worth way more than the hosting. It's just like his thing is the main thing. Like, he's done it so well. But he ends up his his the value of his product ends up getting subverted by the hosting problem, which is I need a place to host it.

Justin:

Now maybe in a different dimension, hosting is like like I don't know. Like, hosting is is powered by what's that thing that everyone's into now? It's like physics computers, quantum computing. So in the future

Speaker 2:

Oh, quantum computing.

Justin:

Yeah. In another dimension, hosting is, like, so cheap and plentiful because of quantum computing. Nobody cares, and nobody pays for it. But in that dimension, people really care about the CMS. And so they pay, like, tons of money for it because it's so valuable.

Justin:

But Right.

Speaker 2:

Yeah.

Justin:

In our dimension, it's like this is how things are. And it's so hard to swim against that current to say, like, even for him to charge a one time fee so people can use this CMS, it's it's just hard. And so my advice to him is, like, you should offer hosting just like Ghost offers hosting because some people just wanna pay for the thing like that. What do they ultimately want? It's a website hosted somewhere.

Justin:

And, yes, the software is, like, part of it, but in our dimension, it that part's almost been downplayed in a weird way. And it it's the hosting that's actually worth it.

Speaker 2:

Right. Well, there's something interesting about it, which is, like, you interact with the CMS more. It shapes more of your actual user experience of, like, the person who's running the website. But, that's code that he wrote once, and then, you know, he'll continue to add to or whatever. But, like, there's no ongoing cost for him.

Speaker 2:

If you go if it's, like, an essentially open source or, like, licensed source where you, like, buy the source code and then you run it on your own servers, it's like the the server that's actually hosting your website has to be, like, hooked up to the Internet and, like, with electricity and, like, do operating system upgrades, all that kind of crap. So there's, like, this, like, baseline level of, like, ongoingness to it that makes it, I guess, impossible to be free. And so therefore, it's not kind of a thing.

Justin:

The other interesting thing about that. So when Derek Thompson in his book, Hit Makers, talks about, you know basically, people want things that are familiar to them, but just a little bit different.

Speaker 2:

Oh, totally. Yeah.

Justin:

That is so and then the his second thing is that distribution almost always wins. It's like viral is, like, not nearly as much of a thing as just finding a good channel that just kills it. Right? But if you think about, like, human beings are used to doing things. And so in our dimension, like I said, we're just used to paying for website hosting.

Justin:

It's like we know that we have to pay for Squarespace. Like, we just know that. And so we're we're accustomed to that. And if someone came, you know, and and goes about it from the other way, it's difficult. Like, he like going back to the CMS thing, one of his options is to say, yeah.

Justin:

Just, like, pay for the CMS and you download it as a client on your machine, and then you post for free to Netlify or GitHub pages. But it's still just because you're subverting the way it is, that doesn't necessarily mean that people will automatically then give you all of that value.

Speaker 2:

Right. Yeah. Because it's something that, that people have to learn, and and expectations are hard to, think, hard to change. Like, there's a lot of path dependence, I think, to, like, the way that the economy and different stacks of, like, oh, this layer captures all the value or whatever. Like Yeah.

Speaker 2:

Some of it's a little arbitrary, but it's just, like, expectations are a thing. Like, kind of it's one thing that's fascinating is, like, what's the difference between, like, YouTube videos and Netflix videos? I feel like, in a lot of cases, equally entertained, if not more, by some stuff I see on YouTube Yeah. Stuff I see on Netflix. But Netflix, I just it feels like movies, and so I have to pay for it.

Justin:

Yep. Yes. And and you think and this is why, I don't know if you've done a that that would be fascinating for you to do, kind of in-depth strategy look at Disney plus. Because Disney plus falls perfectly into this, which is I want something that's familiar, but just a little bit different. And so we already have Netflix.

Justin:

We already have, you know, all of these, Amazon Video, Prime, or whatever. They take that idea and then they just twist it a little bit. And I don't know how well it's doing. But my sense is that it's doing well because they were able to capitalize on yeah. You you know what streaming video is.

Justin:

Right? Well, here's that, but just a little bit different. And we're going to subvert some things that, because they did change some stuff. Like, remember they used to lock down every like, they would only release, like, The Lady and the Tramp only every once in a while on VHS.

Speaker 2:

Right. Right. Right.

Justin:

Do you remember that?

Speaker 2:

Yeah. It's, like, we're it's from the vault.

Justin:

Yes. From the vault. But now it's like you get everything. We're not holding it back anymore, and there's something attractive about that too. Anyway, sorry.

Justin:

We we got off off topic, but I find that stuff fascinating.

Speaker 2:

Yeah. No. This has been awesome, though. I know I know you gotta run really soon. Before we go, is there any other stuff that, you wanna make sure we get in?

Speaker 2:

Like, you know, I'm especially interested in anything around, like, you know, new stuff you're thinking about. Like, what may be next? Like, what's on the horizon? All that kind of stuff.

Justin:

Something you said earlier does stick with me, which is you said something about, like, a lot of this is just about how long you can last. That is kind of the whole thing of of business. Like, the longer you last, the more you win. And every year that you last is another year that your and your chances of, like, lasting longer kind of go up Every year you last longer. Right?

Justin:

Like, it's just Yeah. And so I do think about that a lot of, you know, there's some pressure on John and I to hire more. There's some pressure on John and I to add a bunch more features and stuff. And or complicate our business even, like, like, eventually, I need to go to podcast movement. But I just I don't really wanna go.

Justin:

And so and it it feels like a complicating thing in my life, and so I just haven't yet. And I think this constant kind of simplification, arranging our lives so that we can go the distance is an interesting strategy. You keep our burn rate really low, you know, keep serving customers the best that we can, but not try to hang on too tightly to customers that wanna leave and optimize for the long term as opposed to even quarter by quarter. I mean, I I'm still new, so I don't know exactly how we're gonna do that. But this business feels so different than the other things I've been a part of.

Justin:

Even other startups I've been a part of. Like that line in my blog post where I say, you know, in a business that doesn't have margin, your boss kind of downloads all their anxiety onto you. Mhmm. I don't want to be in that position if I can, if I can help it. And so I've been very careful, like, let's keep as much margin as we can here.

Justin:

So and sometimes you can't like sometimes things just, you know, whatever things happen. But the healthier that John and I are, I think that's an advantage. The lower our costs are, I think that's an advantage. The simpler our app is, I think that's an advantage. And Yeah.

Justin:

We we are kind of always, being careful about what, yeah, what we kind of engage in. And then I think the other big question for us eventually will be like, once we hit 1,000,000 annual recurring revenue, then some of I don't think we want to get acquired. But there's always that fear of how long is this gonna last? And how long can we compete?

Speaker 2:

Right?

Justin:

And so once we hit 1,000,000 in annual recurring revenue, then the acquisition multiples start to make a be a little bit more interesting. And so we're thinking about that long term too. Like, I don't think we wanna sell, but it would be nice to get up to at least $1,000,000 a year so that we're attractive enough to an acquiring company. And yeah. So, again, we'll probably try to get there slowly.

Justin:

Like, we're not in a huge rush, but I do think about that because maybe, you know, this podcasting thing, maybe it is just here for a little bit. And so I I don't wanna delude myself to thinking, like, this is gonna be here forever. I hope it's here forever.

Speaker 2:

Right.

Justin:

Yeah. But I don't know. And

Speaker 2:

Yeah. Especially in technology. I mean, the Internet, like, it's, things things, are volatile. Yes. You know?

Justin:

Yeah. Even even, like, the main things are volatile. Right? It seems I mean, yeah. It seems like we're onto something.

Justin:

And there's all sorts of bets that we're making. Like, we're betting. We're kind of betting against ever every venture capital firm that's, investing in podcasting right now. Because they are all betting that it's all gonna become YouTubeified. It's all gonna go under one platform that is not open.

Justin:

We're betting that it stays open, that RSS continues to be the standard or a a something like RSS, and that it will continue to be have this advantage of being open and distributed, but also have all of these downsides, which are, you know, whatever. That's the future we're betting on and hoping for. And so it'll be interesting to see how that plays out. Like, you know, may there could there is a future where Spotify, for example, just gobbles up so much of that. And they own the whole creation and consummation consuming.

Justin:

End of it. Consumption. Consumption. That's a wrong word. Although I do kinda like the idea

Speaker 2:

of people finally listening to a podcast episode that's been created as sort of the consummation of the active podcast.

Justin:

Yeah. So So there's a future where that's true, but we're betting on the opposite future. And Yeah. I yeah. It'll be interesting to see how that plays out too.

Speaker 2:

Well, this has been awesome.

Justin:

Yeah, man.

Speaker 2:

Thank you so much for taking the time.

Justin:

Alright. Thanks again to Nathan for that. Yeah. Definitely go check out Divinations, d I v I n a t I o n s, dotsubstack.com. The link is in the show notes as well.

Justin:

And to close off the show, I wanna thank our Patreon supporters. We have Ward from memberspace.com, Eric Lima, James Sours with user input dot I o, Travis Fisher, Matt Buckley from nice things dot I o, Russell Brown, Evander Sassy, Pradyuma Schembecker@clearsstack.io, Noah Pral, Robert Simplicio at Simplicio dotcom, Colin Gray atalit2.com, Josh Smith at hellosift.com, Ivan Kerkovic, Brian Ray, Shane Smith, Austin Loveless, Simon Bennett, Michael Sittver at letterjoy.co, Paul Jarvis and Jack Ellis, Dan Buddha, danbudda.com, Darby Frey, Samori Augusto, Dave Young, Brad from Canada, Sammy Schubert, Mike Walker, Adam Devander, Dave Junta Junta, Junta, and kylefox@getrewardful.com. Thanks for listening, and I'll see you next week.