How much MRR is enough?
Hey folks. If you like this podcast, you'll also enjoy FounderQuest. Each week, the 3 founders of Honey Badger share what it's really like to run a bootstrapped software company. These guys are definitely further ahead than John and I. And I really enjoy listening to the show and just kinda hearing, okay, how would an experienced founder approach these struggles?
Justin:Go to founderquestpodcast.com to subscribe or just search for Founder Quest in your podcast player. Thanks to honeybadger.io for sponsoring this program.
Jon:Hey, everyone. Welcome to build your SaaS. This is the behind the scenes story of building a web app in 2019. I'm John Buda, a software engineer.
Justin:And I'm Justin Jackson, and I was distracted. Follow along as we build transistor dotfm. Is that a new bit for us?
Jon:What what did you have? Like, YouTube open or something?
Justin:I was I was texting while I I finished the ad read and then my brain was like, okay, you've got time. And then I started doing something else. And then, I realized that you had stopped speaking.
Jon:Just sucked into your phone.
Justin:Yeah. Yeah. I'm, I'm meeting with one of our customers today, Mike Vardy. He's in he's in town. So
Jon:Cool.
Justin:He was just telling me he's at ratio coffee, which is just down the street. So I was replying to that.
Jon:Nice.
Justin:Sorry about that, everybody. How are you doing today, man? Friday?
Jon:It's Friday.
Justin:September 6th?
Jon:Yeah. 6. Having a little xoxofomo. A little xoxofom0. Yeah.
Jon:Xoxo is going on in Portland right now, which is where you and I met years ago. Mhmm. Yeah. It's the first one I haven't been to in a long time. Yeah.
Jon:And, they shrunk it back down. So we'll see we'll see what it's like. But
Justin:Back to the smaller group.
Jon:If anyone's there or whoever's there, have fun. Enjoy meeting meeting people. And
Justin:Yeah. I know, our friend, Jason, is there. He's been he's been, saying that it's good. Yeah. You know, you can't go to everything.
Justin:I think that's the that's the thing. You gotta choose what you go to. So, talking about a different Jason, we got a message from Jason Zuk, who's a friend of mine. And he's been listening to the show. And he has a pretty long email, but I'll I'll try to synthesize it for us.
Justin:He says one question that keeps coming to my brain, but doesn't seem to be something that's on you here on John's radar is how much MRR is enough for transistor?
Jon:That's a good question. I he's probably right in that. I I don't think I've really thought about that because no. I mean, we're nowhere near that. I mean, whatever that number is, we're nowhere near it.
Jon:We also haven't hired anyone.
Justin:Yeah.
Jon:So it's like, I have no idea.
Justin:Yeah. Well, and plus, all we care about is money, so there's nothing that's gonna be enough to fill this hole.
Jon:Because that solves all that solves all problems.
Justin:Listen. We got a hole in our soul, and the only thing that is gonna solve it is green dollar bills.
Jon:Canada has better dollar bills, though.
Justin:Yeah. We got multicolored. Yeah.
Jon:And they're like they're like waterproof. Yeah. Way, way better.
Justin:Multicolored. They got holograms on them.
Jon:Oh, man.
Justin:Just feels cleaner, you know. You wash our money.
Jon:Yeah.
Justin:I mean, I think this is a good question, Jason, in all seriousness. He says, the reason I think this question is so important is that if you don't have any sort of financial finish line, you stay on the he the hedonic treadmill of growth forever. Is that right? Hedonic? Hedonic?
Jon:Sure. I don't know if I've heard that word.
Justin:Okay. What what is I mean, I I thought I knew it, because I'm guessing it has to do with, with, Hidoism. How come I can't. Is it hedonism? He how come I am not pronouncing this right?
Jon:Hedonism? Isn't that totally different?
Justin:Hedonism. So hedonism is a school of thought that argues that the pursuit of pleasure and intrinsic goods are the primary or most important goals of human life. The hedonic treadmill is the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events of life change. Okay. So people win the lottery, and they're happy for a week, but then that becomes their new baseline.
Jon:Or they return to their previous baseline despite the fact that they won a bunch of money.
Justin:Yeah. Yeah. That's probably a good way to put it.
Jon:And they're miserable, but they're rich.
Justin:That's right. That's right. And so Jason thinks this relates to our conversation about, you know, enterprise clients because he feels like if we had, an enough number, then we would be able to go through these scenarios more easily. Like, if our enough number is a 100 k MRR and every enterprise client brings us in, you know, another 10 k, it's like, oh, man. We only need 10 of those enterprise clients to get to our enough number.
Jon:Right.
Justin:But if it's if it's like we you know, it doesn't maybe our number is a 100k, but, I don't know. Maybe it's harder to get those enterprise clients, and so it doesn't really bring us towards our goal. Or maybe our goal is only 30k, and we don't really need a bunch more big clients for that. We can just
Jon:Yeah.
Justin:Keep going on the track. Yeah.
Jon:It's hard to say. I mean, it it's certainly higher than it is, but I don't know what this I don't know what the limit is. I mean, we're I think both of us are still sort of working towards that number that provides, like, the comp the lifestyle that we want with some padding. Right? But
Justin:Mhmm.
Jon:But Yeah. But that's not to say that, like, we're not gonna hire anyone, which would obviously increase the need for more m r MRR quite a bit.
Justin:Yeah. I mean, the number that's always been in my head as kind of a good, milestone is 50,000 MRR. And the reason is if we continue with the way we're budgeting right now, which is 50% of MRR goes to salaries, that's 25,000. And then that split between the 2 of us is 12,500 a month. And so you multiply that by 12, and we get roughly you get roughly to an okay salary for a tech worker in North America.
Jon:Right. Can we get to that point, though, with 2 people?
Justin:Well and that's the thing. And so and so then the next question becomes, you know, if we hire somebody, does that how does that affect things? I mean, of of course, like, when you're starting out, your first goal is 10 k. And then, you know, Jason Cohen's benchmark for, like, a reasonably good bootstrap SaaS business is getting to about 20 k, which is 10 k per founder. And meaning, like, if you've gotten to 20 k MRR in a reasonable time time frame, you're doing reasonably well.
Jon:Mhmm.
Justin:But, of course, after that, if you're going to pay a $100,000 salary, the employer related costs related to that is another 25 to 30%.
Jon:Yep.
Justin:So you'd have a 100 and you need to be, you know, a 130,000 just to pay the the employee costs. And I think we discussed this before, but there's a lot more costs than people maybe do in their mental accounting. Hey?
Jon:Yeah. There's a lot of costs that are the burden of the company to pay for when you have an employee. So, like, you know, part of the taxes, unemployment unemployment tax, health insurance costs, which we don't we don't really deal with yet. But
Justin:Yeah. Office costs.
Jon:Office office costs.
Justin:Equipment costs. Yeah. Vacation pay.
Jon:Yep.
Justin:There's yeah. There's there's all these things. And, of course, when you're bootstrapping and you're lean, initially, you're just, like, kind of ratcheting up to okay. I just we're just looking at top line revenue of 10 k per month. And then you get there and you're, like, this is incredible.
Justin:Like, very few people even make it to 10 k. Mhmm.
Jon:And then,
Justin:like, okay. The next one is 20 k, because that would be roughly 10 k each. And then you get there and you're like, okay. This is great. But then you start to crunch the numbers and go, okay.
Justin:If we're gonna be a real business what's going to last for a long time in North America. Again, we can only speak for our area. It it's gonna have to be at least 50 k of monthly revenue for 2 people. And if we wanna hire somebody else so let's just say off the top of our head that we hired someone, and we're not planning on doing this, but we hired someone at $75,000 a year salary. Well, we add another 30% to that.
Justin:That's already almost 98,000. Mhmm. And so just to pay for that, we'd need another, over $8,000 in new MRR just to pay for that.
Jon:Right.
Justin:And, that would be hard.
Jon:It would be.
Justin:Like, just to hire a a full time person, we would need to be at 33,000 MRR. Like, that yeah. That that feels that feels substantial. And so and we're and and and that's without us paying ourselves kind of a market salary that's even close to comparable to what we were making before. There there's a great blog post from the founders of More Aware, where they talk about you know, they say, we started this company, and we didn't pay ourselves for a long time.
Justin:And so then they he calculated their yearly profit based on whether he and his partner would have paid themselves, market salary. And, you know, it just changed the picture completely. And he said, you know, it was hard getting through those years. But now that we're here, we've had to, if we wanna last for a long time, we need to pay ourselves a market salary. Like, you can't just keep sacrificing and sacrificing in perpetuity.
Justin:Right?
Jon:Right. Yeah. They can't that that can't last. It seems like if you don't get to that point within a reasonable amount of time, like, maybe the business isn't gonna work out, or it's just gonna end up it's just gonna stay like a side a side thing, and you're gonna have to sort of figure out something else.
Justin:Yeah. Yeah. Yeah. So I again, I think if it if it's just you and I, and maybe a, you know, a part time support person, 50 k in MRR seems reasonable. And, if we wanted to hire more than that, I think, like, if we wanted to hire a full time person who's going to be making a reasonable salary, we'd probably need to be at 60 k MRR.
Justin:Yep. And if we're going you know, and then you can just keep adding, you know, 8,08500 a month in additional revenue per employee kind of.
Jon:Right.
Justin:And that I mean, that's that's assuming that if, for example, if we wanna hire a full time developer in North America, you know, that's going to even be more money.
Jon:Yeah. Probably double that.
Justin:I'll say this. Right now, we're at 25 k. By the way, have we celebrated that yet? 25 k.
Jon:Not on not on the Internet.
Justin:Well, here we go. We we were there, and feels it feels good. Virtual. That's why we're here.
Jon:Yeah. Virtual high five.
Justin:Virtual high five. I think the the next goal in my mind is 50 k.
Jon:Mhmm.
Justin:And then, like, just like Jason Fried says, like, they try not to plan too far in the future. I think, that one problem with saying what's my enough number is it assumes that all of my context and all of my, you know, all of the factors that are our play at play right now are going to continue to be true. Right. Like, maybe when we hit 50 k, a lot has changed. Like, maybe our infrastructure costs doubled.
Jon:It's yeah. Totally possible. I mean, who know? Like, things things happen in the podcast industry so fast that it might we might have to just do a U-turn or, like, a left turn or something. Maybe not a U-turn.
Jon:That'd be going backwards, but a left maybe a left turn. It's yeah. It's hard to say. And I'll and, also, like, I think to, who is it? Jason?
Justin:Jason. Yeah.
Jon:Do you call him Zuke?
Justin:Zuke. He should just go by Zuke more. Zuke is actually, I I believe he made up that last name.
Jon:Oh.
Justin:Like, he he decided he was going to, for a bunch of reasons, going to create a new last name, and I think Zeke is the one he made up.
Jon:Yeah. But I will say, I I think I don't think either of us is really in this to, like, just make unlimited money. Like, I don't think either of us is really chasing material stuff
Gavin:Mhmm.
Jon:Or, like, I wanna buy a bigger car or, like, a faster or, like, a 100 inch TV or I just like that. I don't think that's our motive. That's not our motivation, but it's there is certainly a level of, I so would say, like, financial comfort that we're not quite at
Justin:yet. Yeah. Exactly. And so there is a a personal question there that's probably worth exploring. Like, just honestly answering, like, John, Justin, how much money do you want to make?
Justin:And being honest about that number, I think is helpful. Because then, we can say, okay. Well, we know where each other kinda stands. We know what we're shooting for. What's it gonna take to get there?
Justin:Can we get there?
Jon:Is
Justin:it even realistic? And also, I think as someone who's been bootstrapping for a long time and made sacrifices along the way, I think it also means being honest about, you know, what's coming up. Because when you're building the thing initially, like, you're just willing to sacrifice so much. But my daughter's graduating high school this year.
Jon:Mhmm. And
Justin:so I have to be honest about what's coming up there. That college, you know, I that's gonna be a a bunch more money. And, so I think that plays into it. And probably the other thing that anyone who's experienced in running a company is going to be screaming at their iPhones right now as they're listening. Is, you know, in this stage, of course, we're just trying to get to okay.
Justin:Let's get to again, like, maybe, this level of salary for both you and I. And once we get there and the hedonic treadmill kicks in and we return to base, well, of course, then you're going to pursue something else. Like, maybe we get really fired up about building a big team at that point and, helping put bread on the table for a bunch of families all over the world. That might really fire us up. Right now, we're not interested in that at all.
Jon:Mhmm. Yeah. And, like, yeah, who knows what's gonna I mean, that's that's the question I have too is so you set a number and you reach it, and then do you just, like, turn off sign ups? And you're like, we're done. Mhmm.
Jon:We're just gonna we're just gonna coast it out.
Justin:Yeah. We're just gonna coast it out. Which of course, like No. We're not
Jon:gonna do that. But yeah.
Justin:Churn would kill all that. Right? So, yeah. There's so many variables here. I think it is a good discussion though, Jason.
Justin:I think there's, I think there is something about I think there's also something about trying to push a business past its its kind of default growth rate. So eventually, a product category is just growing at x percent. And you can try to juice it really hard. Like, we could just be going crazy on marketing automation, going crazy with salespeople, going crazy with enterprise, you know, whatever. And we're just trying to push the product category to its absolute limit in terms of what kind of growth is possible.
Justin:Mhmm. I don't think that's healthy. And, and so I think there is something about, you know, maybe trying to do that and being unhealthy that isn't helpful. And it might be good to say, okay. Well, maybe this is just a 50 k a month business, and maybe that should just be okay.
Jon:I think the default mode is to always wanna grow, to keep growing. I mean, if you keep growing, obviously, your revenue is gonna grow, and then you're gonna wanna do something with it. The whether that's hire more people, but that now that means you have these other responsibilities. But, I mean, there's other things you can do with leftover money. You could use it to fund, you know, scholarships or, like, grants for people to do something or Mhmm.
Jon:It doesn't the money doesn't have to go towards necessarily employees. But
Justin:Yeah. Yeah. Good question. Good question, Jason. I've got another hot topic.
Justin:But first, I wanna say thanks to ActiveCampaign. I was actually just reading on their site. They have this blog and they have this one post. I'll put it in the show notes, where they gave a bunch of examples of how you can use a welcome sequence. And this one was interesting because the person, the case study was on this person who was using it for client onboarding.
Justin:So here's an example. Email number 1, this automated email. You welcome your new clients to your business. You say, hey, here's a little bit about the business. Thanks for being a client.
Justin:And then automated email number 2 is describe how you work. Hey. This is how we work at this studio. This is how we typically approach projects. Thanks for being here.
Justin:Email number 3, and this might be, you know, day 1, day 2, day 3. Tell them what they can expect from you. Right? This is how our agency works. This is how we interact with clients in, you know, our project management software.
Justin:This is how we follow-up on calls. These are our office hours. And then email number 4, communicate what you need from them. Hey. We're just about ready to get started on your project.
Justin:If you haven't already, log in to the project management software and, sign off on the initial, statement of work. And I just thought that was a really cool example of how you can use, email automation. So if you're in a business like that and you wanna build a sequence like that for your business, you can try ActiveCampaign for free by going to activecampaign.com / build your sass. That's all one word. You'll get 2 months of service for the price of 1.
Justin:2 free one on ones. This is where they'll, like, meet with you and talk about what you were trying to achieve and then actually give you solutions. And then you'll also get a free migration with that. Activecampaign.com/buildyoursass.
Jon:Cool. What's what's the hot what's the hot topic?
Justin:You're ready for hot topic number 2? And, I'm not sure how much you've dug into this, which is fine. Actually, it'd be great to get your just gut reaction, but there's a new podcasting app called supercast.com that launched this past week. It was launched by Andrew Wilkinson, who's the founder of MetaLab. They helped design Slack.
Justin:And I just had multiple people e email me and DM me. Yaz in particular said, hey, I'd love for you to talk about this on the show. So what Supercast does, if you go to the website there, is it does private paid podcast feeds. Their head their headline is enough with the MeUndies ads. Mhmm.
Justin:And so you can make subscriber only content and build, they say, sweet sweet recurring revenue.
Jon:So it's like a it's like a subscription model on top of?
Justin:On top of podcasts. Yes. And this isn't the first thing like this we've seen. Of course, there is, Patreon. Right?
Justin:You can subscribe to a monthly membership on Patreon, and you can give your subscribers a private podcast feed. There's also glow.fm that launched, I believe, last year. And pod.fan, which also, recently launched. So it's not a new thing, but I think because of Andrew's audience, this one made a big splash. And he also posted this manifesto called Howard Stern is getting ripped off.
Jon:Mhmm.
Justin:I'll I'll, put this in the show notes as well. And he kind of does some some math here saying, you know, Howard Stern switched to he switched to SiriusXM, and he figures Howard gets 90,000,000 of that.
Jon:That's a good deal. No. It's a good deal.
Justin:But he figures that if Howard Stern used supercast, Howard would get 228,000,000.
Jon:I mean, if all the listeners paid directly. Right?
Justin:Yeah.
Jon:Yeah. I mean, you know, I think a lot of this is clickbait because he launched a new app. My gut my gut reaction to this. But, I mean, yeah, it but your car radio is still far more accessible than adding a pod and a feed to your phone.
Justin:Mhmm.
Jon:So I
Justin:don't know why.
Jon:I'm sure there is a segment of people who purchase SiriusXM mostly to listen to Howard Stern.
Justin:Mhmm.
Jon:Are all those people gonna switch would all those people switch to a paid private feed and then cancel their Sirius account?
Justin:Mhmm.
Jon:Probably not. I mean, some of them might. Yeah.
Justin:Yeah. I mean, to see, this is already this is a hot topic. I like this. I I like the I like where you're going here. Do you pay for any like, what what sub what content subscriptions do you pay for?
Jon:I pay for Apple Music. I pay for HBO now and Netflix.
Justin:Okay.
Jon:And that's it.
Justin:And that's it. Have you ever tried did you ever try medium, paid subscription or
Jon:No. I didn't.
Justin:Audible?
Jon:No. I I tried Audible. Got it. I think I'd meditate for a month of Audible, but, god, you know, you get, like, a couple free books when you sign up. But Mhmm.
Jon:I just I don't I I don't know. Audiobooks for me don't really work.
Justin:Yeah. So this conversation that you are and I are having where I'm asking you, hey, what have you what are you doing right now, and what have you done in the past? This is the the kind of line of questioning that, an author named Rob Fitzpatrick, who wrote the mom test book, advocates people ask because it shows what people are already doing. And his theory is that the only way to accurately predict what people will do in the future is to ask what they're currently doing right now, or what they've tried in the past. And one of my thoughts about this, is that I don't see a lot of evidence for both podcast creators using these kind of membership apps and for podcast listeners paying for these kind of membership apps.
Justin:And I think that is the challenge, is if there's not a groundswell of folks who are actually doing this, if this is just a cool idea that, you know, people think should exist, it's not that's not going to be enough. And when I do ask peep like, podcast creators, hey. What are you doing to fund your show? Almost all of them are doing what we're doing, which is use Patreon. I mean, what do you think why do you think why do you think people choose Patreon?
Gavin:Well, I
Jon:mean, I know Patreon has a feature for private they they you can make your own private feeds through Patreon.
Justin:Yeah.
Jon:I mean, from my perspective, people use Patreon because that's what they're using for other shows. Mhmm. It's one platform for multiple memberships. Yep. And it's really, like, I wanna say accessible, but I don't know if that's it's, like, it's not really related to the I mean, it's related to the podcast, but it's not it doesn't put up a wall in front of the podcast.
Jon:Like, it's very unobtrusive. It's like you pay it's a separate thing. You pay for it. You still get the feed, and then you're still supporting the show, but it's not it's not locked down to a private feed. And some certainly, some people want an entirely private feed.
Jon:Mhmm. For certain reasons. But
Justin:It also it also benefits from the people like us do things like this kind of, movement, which is you often hear podcasters saying, hey. Anne, remember to support us on Patreon. Hey, don't forget to support us on Patreon. And so people are, they they start to understand that the place I go to support podcasts is on blank. Well, it's on Patreon.
Justin:That's where I go. That's where people like us go to support podcasts, and that's where people like podcasters go to get support. That's where it happens. And so you're fighting this all you're fighting this cultural narrative, which is like it's like anything else. Like, hey.
Justin:If I wanted to run an an auction online, where what would I use? EBay. EBay. Right? Yeah.
Justin:If hey. If I wanted to do a search of all the world's web pages
Jon:What would
Justin:I use?
Jon:Bing, obviously. Right?
Justin:And these things matter because the the slots that people have in their minds for that thing, like, hey. If I wanna support my favorite creator, where do I go? Those matter.
Jon:I think it's a good idea. I don't we'll see how it works out. Like, I Patreon Patreon is Patreon to me feels different because you can you can mostly choose how much you wanna pay, and it it doesn't it doesn't mean you don't get access to the show if you don't pay necessarily. Mhmm. So if someone like Howard Stern was like, my show is completely private.
Jon:Everyone has to pay for it. 5 or 10 $10 a month to listen to my show. Like, I think you see this now with with streaming television where, you know, 5, 10 years ago or whatever when the stuff started, it was like, oh, these you can you you can cut the cord. You can get rid of your cable subscription that that's costing you $70 a month. Mhmm.
Jon:And you can you can just stream stuff online, and it's gonna be way cheaper. Well, now you have, like, all these networks that are making their own streaming services, so now you're paying $15 a month for Netflix, $15 a month for HBO, $10 a month for CBS. Disney's gonna be, like, $8 a month. And, like Yeah. Now you're back to spending exactly what you spent for, let's say, I don't know, less content.
Jon:And so I Mhmm. If you're if there are multiple shows like this that you wanna listen to, you're quickly just gonna have this new expensive monthly bill Yeah. For more content.
Justin:Yeah.
Jon:I I don't know. I mean, it's it's tricky.
Justin:Seth Godin had a great episode on podcasting in general on the akimbo, podcast. It's called meta. That's the name of the episode. And I think he addresses a lot of this, which I think and is worth listening to, because there there's a again, I think what's instructive about this and again, we could be wrong. I could be wrong.
Justin:But what's instructive about this is I think for any entrepreneur that's looking to start a new business, you want to see evidence of existing momentum before you jump in. And then you have to be able to figure out, can I compete with that exist that existing momentum? And so one thing that worries me here is exactly what I said. If you go and talk to a 100 podcast listeners and ask them, hey, have you ever thought about supporting your favorite podcaster financially? If 99% of them say yes, and then you say, what have you done about it?
Justin:And 99% of them say, well, nothing. That's a bad sign.
Jon:Right.
Justin:Right? And, likewise, if you go and talk to a 100 podcasters and say, have you ever considered, you know, a charging for content? And they all say, yes. Okay. That's a good sign.
Justin:But then ask them what they've done about it. If they've done nothing, that's a bad sign. If they did something, but they felt like it really wasn't working for them, that's a bad sign. Mhmm. Or if they have something that's already working for them, like, oh, yeah.
Justin:I use Patreon. And they say, oh, that's interesting. Why is that? And they talk about it, and they say, have you ever considered an alternative? And they'll say, well, no.
Justin:Because I run 5 shows, and this allows me to have all of my shows on one platform. And then plus, like, when I click through on the people supporting me, I can see that they're supporting multiple shows all on one platform. And so fighting that fighting that existing momentum is what you're up against.
Jon:Right. Yeah. It's gonna be tough.
Justin:And you're gonna have to figure yeah. You're gonna have to figure out a way to do it. So I I I'm not opposed to these platforms. Another big one that Relay FM has been using forever is Memberful. Right.
Justin:Which Patreon just bought. And so now Patreon has kind of shored up, a lot of this puzzle. Again, not saying that you can't compete against them. Sometimes you wanna look for a big successful incumbent that you can go in and slice a piece of their business off of. But you wanna make sure that if you're if you're offering an alternative to Patreon, you wanna be absolutely sure that people have considered looking for alternatives and have actually done something about it.
Justin:What I see here and this is a question for listeners too. Like, how many podcasts do you support? And of those if you do support podcasts, how many what percentage is outside of Patreon?
Jon:Yeah. And how do you support them? I mean, guess there's a lot of different ways. I mean, there's there are membership platforms. There's affiliate links.
Jon:You can if people recommend things, there's, like Mhmm. Some some people have their own books or or other materials they sell online. That's one way to do it, but it's, yeah, it's hard to.
Justin:Yeah. And we might offer it, like, from the beginning. You and I had this idea, and we're thinking about building this into Transistor. It's in our ideas folder with mock ups and everything.
Jon:Yeah.
Justin:Dating back to January 2018, I believe. But this is also how we consider new ideas of, okay, who would actually benefit from this of all of our listeners? Well, it's gonna have to be folks that are their audience is so big or their audience is so crazy enthused about the topic that they like, Taylor Jackson has a big audience of professional photographers. Right? That's perfect.
Justin:It's like, okay. We should build this for Taylor. But when you talk to Taylor, he goes, oh, but all of my I've already got all that going on Patreon. Oh, well, would you would you switch? He's like, well, no.
Justin:Because it it's working perfectly for me. And it also allows me to do video, which I'm already doing. And it's like, okay. I maybe this isn't a good fit for, you know, most folks.
Jon:Yeah. I don't know. I mean, that said, it looks like a nice platform. Like, it's it looks nice.
Justin:It looks nice. It's true. And and this isn't to like, I like Andrew a lot. I think and, in part of me wishes them all the best because, you know, the folks who are on Transistor could use this. They could if if they're podcasting and they want to, you know, build some recurring revenue, then they could make this their, you know, the the home for their private podcast feed.
Justin:I I'm just saying I'm not saying I'm not seeing there's a lot of evidence that supports us as a business. Like, it it's just, and I'm happy to be wrong. But folks ask us for our opinion, and that's that's kinda what I think. Now that said, like, you know, we have lots of our customers that use platforms like Patreon or use platforms like, you know, Podia to create a online course. Or are you know, there's all sorts of ways you can earn revenue as a podcaster.
Justin:Mhmm. And, there's I'm all for new new ideas coming out of the woodwork. I'm just telling folks, here's what I've seen work. Here's what I see actually happening in practice. Hopefully, that's instructive.
Justin:I I I don't know if that's helpful or what.
Jon:I guess I will see what happens. I mean, it's yeah. There's like like I think I said earlier, like, there's certainly a lot of changes happening or, like, being talked about.
Justin:Yeah. Okay. One more thing. Because this this brings it up. You and I have a channel in Slack called podcast news.
Justin:Yeah. And the what here's what happens is I will I'm subscribed to these podcast industry newsletters. I get the new thing every day. I go look through it, and then something will jump out at me as, like, oh, wow. Look at this.
Justin:And I will feel compelled to go and paste it into Slack so that John can see it. That's a it's dumb. It's just dumb. Just because it's being written about or being talked about or there's a lot of, you know, a lot of movement around a certain topic in the media does not mean you should pay attention to it.
Jon:No. Because someone probably paid a PR person to do it.
Justin:Yeah. And, also, people will talk about people will talk excitedly about all sorts of topics, but never take action on those topics.
Jon:Right.
Justin:So so the idea that I'm kind of persistently bothering you with these news articles.
Jon:Yeah. And I I only respond, like, 20% of the time. I mean, I see them, but I don't I don't really I'm, like, I don't I don't know. I don't know what to say to this.
Justin:You you you know what? Our our our spiritual grandfather, Jason Fried, would say about this. He'd say, Justin, why are you distracting John with information that doesn't matter? Like, why waste your brain cells on on news?
Jon:Now I'm distressing out that we're not doing this. And
Justin:Exactly. Like, we we could be stressed out about whatever the new hot topic that comes across our desk is.
Jon:Yeah.
Justin:You know, I hear from all sorts of folks that, you know, have questions about the podcast industry or, you know, I have ideas for the podcast industry. And I I see a lot of assumptions. And the only reason, especially now, that I feel like I can I have a clearer view? And again, it's just I'm only seeing our data and our friends' data that, you know, like, we've got, you know, David Chartable, and there's other people we talk to. But we can see what genuine action people are taking in their lives.
Justin:We know. We know when people switch to us and why they switch. We know why people switch away from us. We know, you know, we know kind of how their how their podcast is doing. We we we have all of this data.
Justin:That's kinda what matters. What matters is what you can prove with what people are already doing. What matters less is these guesses or these new ideas or these new hot topics that come up in a particular industry. You know? Yeah.
Jon:Yeah. I mean yeah. That's not to say that, like, that stuff shouldn't be worked on or talked about. But I don't know if I don't know if it has to be, like, this huge announcement type of situation.
Justin:That's probably enough on that. I I just kinda maybe wanna bring this back to what I feel is the topic, which is it's easy to make decisions on mistaken assumptions. And even in Andrew's article and others I've seen, there's they often quote this, it's not Himalaya. It's Ex Himalaya, the the Chinese parent of Himalaya. And there's this idea that, you know, the Chinese podcast listeners are paying 1,000,000,000 of dollars a year in subscriptions.
Justin:That's incorrect. There was a big takedown of that that story. Yeah. See, there was headlines like the podcast business in China is 20 3 times more valuable valuable than the US. But the the when they actually investigated it, it turns out that that story is not correct at all.
Justin:Mhmm. It's actually more equivalent to online courses that these people are paying for. They're not podcasts. And that the the kind of the way that they're marketed and consumed is very, unpodcast like. And so people keep referencing this, this article, but it's not true.
Justin:It's just, oh, yeah. Here's an article by Nick Qua. The Chinese podcast industry isn't really podcasting as Americans think of it. There's nuance to all of this. And, I think that the mistaken assumptions are what people wanna pay attention to.
Justin:The blind spots, including us. There's probably stuff that we're missing too that we need to think about.
Jon:For sure.
Justin:Alright. I think we probably used all of our time. Anything else you really wanted to talk about?
Jon:Not yet. I mean, you know, there's been a few updates to transistor itself as as we sort of, like, do a little bit of housecleaning before our first 6 weeks cycle of work coming up next week or this week by the time this publishes. But yeah. Yeah. We'll probably send a newsletter out about that.
Jon:Okay. Hopefully, with some updates.
Justin:Yeah. Sweet. Well, talking about monthly supporters, why don't you give a shout out to our Patreon supporters?
Jon:Yeah. Thanks as always, to our supporters on Patreon. We have Matt from Nice Things.
Justin:Brand new.
Jon:What is Nice Things?
Justin:I think actually, that's a good question. It just says that in his title.
Jon:Okay.
Justin:I think that's his company. Yeah. I'll we'll find out, and we'll let you know next time.
Jon:Russell Brown, Evandro SaaS. Wait. He emailed us.
Justin:Yeah. He emailed us. What did he say?
Jon:I forget. I probably just butchered it again.
Justin:Yeah. He says, just heard the last couple episodes, and you're a bit confused by my name. It's really hard. You can just go by my surname, Sassy, as most of my friends do. You were very close to it on episode 73.
Justin:Actually, he's got a small audio player on his website. Maybe I'll get Chris to just cut it in right there.
Jon:Okay. Well, thanks for supporting us. Pradyumna, Schembecker was PD for short, Noah Praill, David Colgan, Robert Simplicio, Colin Gray atld2.com, Josh Smith, Ivan Kerkovic, Brian Ray, Miguel Pedraffita, Shane Smith, Austin Loveless, Simon Bennett, Corey Hanes, Michael Sitver, Paul Jarvis, and Jack Ellis, my brother Dan Buddha. Danbudda.com? Friend Darby Frey, Samori Augusto, Dave Young, Brad from Canada, Sammy Schuichert, Mike Walker, Adam Devander, Dave Junta.
Justin:Junta?
Jon:Kyle Fox from get rewardful dot com, and our sponsors this week, ActiveCampaign and Honey Badger.
Justin:Yeah. Thanks, everyone, and we will see you next week.
