What it takes to launch a SaaS
Justin was a guest on the Framework podcast
All right, folks. I have a great bonus episode for you this week, Tom and Robert had me on the framework podcast. I think you're really going to enjoy this.
While you're listening to it: Framework is where we dig into the research planning and building that goes into bringing products to market.
I'm Rob Hayes
And I'm Tom Creighton.
And today we're talking with Justin Jackson, who is the co-founder of the podcasting hosting and analytics platform, transistor and host of the Build your SaaS podcast.
We'll discuss building tools for creator communities like podcasters and doing it as an independent non-venture backed SaaS business.
We wanted to talk with Justin for a couple of reasons. Justin is one of the most recognizable faces in the independent creator community on Twitter. And he manages to do more than just register domain for every project idea he has (like some of the hosts of this podcast). He actually builds them and helps other indie creators do the same.
And as podcasters ourselves, we're excited by the idea of focusing on this community of creators to provide tools, to create better content and lower the barrier to entry. Justin, can you give us a short intro to yourself and what transistors all about for those people who aren't familiar with it?
Yeah, I mean, that was a really nice intro you just did. I don't know if I can live up to that!
I've been doing business stuff my whole life, but went independent from consulting in 2016 and then early 2018. Jon Buda. And I teamed up to work on Transistor.fm, which is podcast hosting and analytics.
So every podcast you've ever pushed play on in Apple Podcasts or Overcast or Spotify is hosted somewhere. And that's the part that we do.
And so when you guys got going on this in 2018, can you give us a sense of what the software landscape looked like for podcasting back then? I imagine it's evolved a ton in the last two years, but how much tooling was in that space when you got going and, and where was it focused in the workflow of a podcast?
Yeah, so I've been podcasting since 2012, and I met Jon at this festival in Portland called XOXO in 2014.
And at the time Jon was working on another platform called Simplecast. I was self-hosting my show at the time (using WordPress and a bunch of plugins and hosted my media files on Amazon's AWS). I thought self-hosting my podcast would save me money and it ended up just actually costing me more money. [laughs]
And so Jon said, "Hey, why don't you come over to Simplecast?" So I did.
Fast forward a bunch of years. We stayed in touch. Jon stopped working on Simplecast and got a job working at Cards Against Humanity. After he'd been with them for 3-4 years, they wanted to launch a new podcast.
And so they said: "Hey, well, you know, we're thinking about using one of the exiting platforms (Libsyn, Simplecast, Buzzsprout).
Jon said, "you know, I think I could build something better then what's out there."
At the time, Libsyn was the leader Well, Anchor technically has the most users, but in the paid hosting category, Libsyn was the leader.
And, I mean, Libsyn is fine; they've been around for a long time. They've done a lot of good things for podcasting, but it's pretty old and crusty. At the time, their UI is hadn't been updated in a while.
Jon and I were both product people, and we just felt like we could build something better.
We wanted to create a tool that was super simple that didn't have a lot of extra bells and whistles. And we also recognized (at the time) that there was this growing wave of interest in podcasting.
For years, I'd have people approach me saying, "oh, I'm thinking about building a tool for podcasters."
And I would always say: "ah, I don't know if that's a good idea, because a lot of podcasters are pretty DIY." For a long time, podcasting was like having a ham radio station: people in their basement putting together their own equipment and their own workflows. And so the timing [to start a podcast company] didn't seem right.
But around 2017, I noticed there was kind of a shift in the tide. Not only did I personally know a lot of people who had podcasts, but, every week, the New York Times had a new piece on podcasting. There was Serial, there was Gimlet. And then also VCs and bigger companies (like Spotify) were investing in the medium for the first time.
Companies were also building little podcast studios and starting shows. And so I could see this kind of swell of demand that was increasing. And as I was looking at that, I felt like, okay, this would be a good time to team up with Jon and maybe actually turn this into a business as opposed to just an internal tool for Cards Against Humanity.
So when you were chatting with Jon, either at XOXO, or shortly thereafter, how far along was, was sort of this core idea of Transistor.fm?
In terms of timeline, you'll probably get two different stories, depending on whether you're talking to Jon or myself.
The way I remember it is we were in this Slack together from a previous project (that never took off).
And, we just stayed in touch and we were sharing what we were working on. And sometime in 2017, he was saying, you know, I'm thinking about building a new podcast hosting platform for Cards Against Humanity.
Personally, I was looking for a new project to work on. And I had been thinking a lot about the market and how the market you're in really determines most of your growth.
I'd also become friends with Adam Wathan who is the co-creator of Tailwind CSS. And I watched him launch a series of products for the developer community, and was impressed by the huge momentum in that market. There was a pre-existing hunger for the different things he was launching.
It really showed me that, "wow, if you have a market where there's demonstrated demand for something, folks will line up for it!" That's a lot different than launching something for a market that is maybe too small, or where demand isn't strong.
And so there were all these checkboxes I was looking for. Is this market sufficiently large? Is there a growing tide of demand for something? How is that demand demonstrated in real life? Is there evidence that more people are getting into podcasting and that there is an opportunity to get into the market?
And as I was thinking and reflecting on all these things, Jon's like, "Hey, you know, I'm thinking about doing another podcasting thing."
I was just, I was like, "oh my god, that really aligns for me personally. It aligns in so many ways. I could see the market demand. I'd been tracking podcasting since 2012: I was in every podcasters forum, I was paying for paid private newsletters for podcasters. I was in it and I could see that the tide was shifting.
And for me personally, the opportunity had a lot of founder/market fit. I could just see in my mind that I had something to offer in a partnership.
And so, I pitched him on the idea of us working together and launching it together; doing it together as a business.
Jon wasn't like super enthusiastic right away, partly because he'd been burned in the past with partnerships, and he had a pretty good gig where he was, you know, he's comfortable.
But, he's a thinker and he went away for a couple of weeks and thought about it and then came back and said, "yeah, let's do it." And so we signed our partnership agreement and modified all of those Incorporation documents and everything probably around February of 2018.
And he's still here three years later. So he doesn't yet regret the decision.
I mean, there are definitely days where he regrets for sure. [laughs]
But, in the big picture. Yeah. I mean, we feel, oh, it's, it's honestly every single day him and I are just like, "I can't believe where we're at."
Even in a good market things feel like they start slow. And so we were, you know, in the beginning, I mean, there were definitely some growing pains and now it just, uh, it's definitely surpassed. Kind of minimum viable dream, you know, like we had a minimum viable kind of benchmark we wanted to hit.
And I think we said, you know, $20,000 a month in recurring revenue would be kind of default alive. And then at 50,000 monthly recurring revenue, um, that would be a pretty good business. And we've, we've passed both of those benchmarks. And so now. Yeah, it's just, it's a trip, uh, to be here.
It's, it's funny because you've got, you've got the Build your SaaS podcast, that's kind of evolved or running in parallel with the business itself.
And I went, spent the weekend just going through kind of episodes from start to finish just cherry picking along the way. And it's like, it's like watching the business and fast forward. Cause every, every episode there's a mention of like where you're at MRR, what the problems you're focused on and the problems get kind of higher level, big picture.
Every podcast you move further into the future, the MRR accelerates it's, uh, it's, it's pretty fun to watch that, that business development on, on fast forward there.
Yeah. And to have that, to have that archive is pretty. It's pretty dope. I mean, really, to be able to look back and again, if, if my story evolves too much, uh, from the truth, we have this, uh, this Canon of truth, we can go back to,
um, touch on the, what, what you said around you felt that, that groundswell of, of interest, the audience growth, the, the creator growth on around podcasting when you were batting around the idea in 2018.
So what gave you an indication of where the market was? How did you kind of settle in on the problem space of, of hosting and analytics as your kind of entry points into building software for that, that community?
I think the answer would be different for Jon. I think Jon, you know, he had built it before and he had some, some product intuition that he wanted to, you know, like he wanted to improve things that he'd done before.
Um, and. In his case, there was demonstrated demand because his employer was looking for a solution, uh, on my side, um, I was just seeing like the, there's some things that are kind of the main course of a meal that everybody gets, you know, like if you're starting a business, everybody needs to get podcasts.
I mean, a website hosting and most people's, you know, you'll sign up for a Twitter account. You'll probably get some accounting software. You're probably get some sort of project management side software. And, you know, as you go further and further from the main dash, some things are more like side dishes and some things are more like dessert, you know, and side dishes kind of compliment the main thing.
So maybe you'll get website hosting and then you'll. Uh, website analytics, uh, on the side and then maybe, you know, for fun, you might buy a few WordPress plugins that are more like dessert. I don't know, I'm trying to stretch the metaphor here, but that, I just noticed that there was this dynamic and in the category of podcasting, the main thing that everybody needs is hosting and analytics.
You need somewhere to put those MP3s and kind of, uh, included in that layer is, you know, other things too, like maybe a little website, maybe a little social media landing page and an embeddable player you can put on your. And, uh, in a way, of course, a way to generate the RSS feed that you're going to then submit to apple podcasts and Spotify.
And then even there there's like, oh, well there, in terms of the job to be done, like why are people even looking for podcast hosting it's because they want to get their podcast on Spotify and apple podcasts, and they don't know how to do that. So the, the easier you can make that whether through the UX or just through good customer support, you know, there's an opportunity there.
So I think that, that was part of what I was looking at was what's the main thing that everybody needs. And, um, and you know, I, I'd seen, I'd interviewed folks, uh, on my podcast, like Zen caster, um, and I'd seen that they had a lot of success doing what they were doing. And the people that were, you know, buying their service were mostly businesses that had a podcast.
And, uh, so that was kind of interesting to me, but I also saw the technical side of, of doing like web recording in a browser is quite complicated. And so if we're going to bootstrap this, it was like, this is probably a good fit in all of those vectors.
So you, you mentioned as, as you were looking at this space and particularly around the time that that transistor was starting to come together, you're noticing that it wasn't just individual creators anymore, but like brands, publishers, and so on, we're starting to get into the space.
Were you trying to serve any one of those segments or really just as, as you said, like satisfy that, that basic need for, for the main dish?
Yeah. So I think I initially, I, I believed this, this startup, um, mantra that, that, you know, you need to choose a niche. And so. I had developed a relationship with Jason Cohen, the founder of WPengine.
And I was like, oh, this is perfect. Because Jason Cohen offered this kind of premium WordPress hosting service to businesses. That was his whole, that was his niche. You know, he's not going to be for hobbyists. She's not going to be for bloggers. This is going to be, if you're a business and you need a WordPress site, we're going to offer it to you.
And so our initial positioning was podcast hosting for brands and businesses. And we quickly, we discovered that that was hurting us more than it was helping. Um, because partly because podcasting is just a lot smaller, but also because the, the, the people we're starting to podcast, uh, you know, some, a lot of them.
See themselves as brands or businesses. One of the most popular ones show's on transistor is, um, is, um, not overthinking, which was started by these two brothers. And they had a pretty big following on YouTube and Twitter beforehand. And, uh, at, I think it was Ali me and said, Hey, just so you know, I ended up signing up, but, uh, your messaging almost turned me off.
Like I'm a YouTuber and you said brands or businesses. And then I got into the product and it's like, there's no, there's nothing about this product. It's completely agnostic. So I've, I've changed my thinking on that quite a bit. I, the most interesting thing to me now about a category is not like, what niche is this for it, but rather what.
Search for when they type, when they look, go to Google to find a solution, what are they searching for? And in our case, it's just podcast hosting. That's what, or how do I get my podcast on apple podcasts? They, these are, these are people that don't kind of, it'd be difficult to categorize them as an audience or a niche.
They're just people who want a podcast. And some of them work for businesses. Some of them are just, you know, DIY wires in their basement. There's a whole spectrum of people and what's more interesting, um, or important in our case is what are they trying to do? What are they looking for? Podcast hosting, hosting for my podcast, get my podcast on iTunes.
That's all they care about it. Doesn't w they're you know, whatever characteristics we would assign to that group aren't as important. So. Within our customer base. We definitely have a, you know, some niches like w uh, I have a lot of, uh, programmers and, uh, you know, startup people starting podcasts. We have a lot of bootstrappers starting podcasts, but those groups, you know, when you compare it to our overall customer base, which is, you know, thousands and thousands of people, maybe they account for hundreds of accounts, but not thousands.
Um, so yeah, there was an evolution there of how many people are looking for podcast hosting and how can we reach them? And those were the more important questions then who is this specifically for, you know? Yeah. Yeah.
And so with that, that diversity, I guess, in, in the potential kind of podcast or audience, were you able to kind of validate your assumptions or did you actively validate your assumptions or did you just kind of build something to do the validation, you know, build something and release it to do to validation?
I mean, I had some, like, we both had kind of fertile ground in our brains, I think, because we we'd been, you know, uh, building the tools. Yeah. We'd been in podcasting for a long time. And so we'd seen and heard and felt things. Uh, along the way, both personally and also, you know, um, I've, I've seen dozens and hundreds of podcast threads on Facebook and on Twitter and in conversations at conferences.
So there's all of this kind of fertile ground inside of us that we were kind of, I think, drawing on, which is the hard part of like trying to deconstruct any sort of, um, success or even, how did you get here is I have to somehow communicate like all of the context that Jon and I brought to the table, uh, which is our, our experiences, our network, the skills we've had, the things we've tried, the experiments we've run.
There's like decades of this experience that we were, you know, coming to the table with. Um, which is maybe the advantage that a couple of, uh, you know, at the time late thirties folks had, uh, is that we had all this experience that we could bring to the table that maybe we wouldn't have had. Well, I definitely wouldn't have had it, you know, 20 or 25.
Yeah. So I think bringing all that to the table and then mining that as we went along and then yeah. Testing some assumptions, some of our assumptions were right. Uh, many of our assumptions I feel were right. And some of them, you know, once we kind of went down that path of, for example, we, we explored the idea of doing dynamic ad insertion or dynamic content insertion, which is still something we might do.
But we developed this, uh, this process, uh, this discovery process called "wait and see," which was basically just, you know, it was just two of them, us, and at the beginning we were working on it on the side. And so you could have an idea which was, oh, we should do dynamic ad insertion. That's the big thing.
And in podcasting and some of our customers are requesting it, like, what more proof do you need? And we, we even went to Portland and met up and like hashed everything out and, you know, drew out all these plans. And then we got home and I said, you know, it's just like Jon was stressed out. And I, I was like, well, let's just wait and see.
And we waited and see, wait and see. And then we had some customers that had left because. You know, absolutely needed dynamic insertion. And then a couple months later, they came back and were like, whoa, what's going on here? And I'm like, ah, it turns out like our problem wasn't dynamic ad insertion. The problem is there's just not that many.
There's, there's a lot of demand for advertisers, but there's not as much supply and maybe that's not the solution for, you know, the way I want to monetize my podcast. So, uh, that approach I think, has actually served us well of wait and see. And Jon definitely has way more of that inclination than I do.
Like I have a new idea every day. And, um, you know, he's pretty grumpy about new ideas and that, that grumpiness serves us well
on that exact topic. I mean, you've, you've mentioned like you've been in podcasting for, for almost a decade and you know, very much a podcast, power user or power creator leaning on that experience.
Did you make decisions about the product that you were building that you thought would be representative of your, of your customer base, but it turned out, you know, you were acting on, on a faulty assumption or it has that wait and see approach sort of served you well in that department.
Yeah. I mean, um, I think a lot of our inclinations are correct.
Um, the. I mean, I don't know that there's certainly a lot of things I want to change about the product, um, because I'm using it every day and there's, yeah. There's just certain things that we, we put in there. And sometimes didn't put a lot of thought into that. We could definitely revise and make better.
I, I mean, the danger I get into is when my experience doesn't match up with a big section of our users experience and. It's it's. I sometimes have to remember the pain and frustration I had. And even the questions I was asking early in podcasting, that now as kind of, um, weathered veteran, I'm like, ah, that doesn't matter.
Why does that even, you know, why do people even care? And I remember, oh, wait a second. That, for example, like the, one of the quintessential problems in podcasting is distribution, uh, to get on all of the apps and the directories and the platforms like apple podcasts and Spotify and Google is a giant mess.
It really is. Um, and you know, now that I understand it and it's, I understand like this is just the way it is. Um, It's not as big of a pain for me, but I remember when I was starting, I was like super confused, like, okay, w what is, how does all this work, you know, like how, how does a podcast get on apple podcasts and what I need an apple ID to like, create an apple podcasts account.
And then I submit it, do I have to do that with all of these platforms? And you know, now Google podcasts, for example, magically indexes your show, and you don't have to submit anything. And Spotify requires a submission, and then they rehost your audio, but they still need the RSS feed. It's like all of this mess.
And I like the mess because I really want podcasting to stay open. And I want, you know, for us to continue to use some sort of open platform like RSS, um, But I also can, I'm not naive in the sense that I, I see the threat from Spotify in particular. Uh, you know, like if, if Spotify is becomes the place to listen to podcasts, then it's, it's, you know, it's immaterial for them to create a platform that allows you to, you know, edit and record your show and immediately upload it to Spotify and get all these great consumption analytics and have dynamic ad insertion built in, you know, like if I was just getting started out, I don't care about the open podcast ecosystem.
I just want my audio to get to as many people as I can, and to get that immediate feedback of oh wow. I'm live. In the Spotify directory and people are listening and I can see their stats. And, wow, this is really cool. Um, that is a giant threat for Transistor.fm, but also for the open, uh, podcasting ecosystem.
Are you seeing any material effect of that on your product or on the customer base or is that just kind of like something looming in the distance?
Yeah, it's looming in the distance. Uh, it, I mean, if anyone is listening at apple podcasts, I would love to talk to you. Uh, um, you know, like the, the behavior we see right now is people sign up, they upload their first episode.
And then the first thing they do is submit to Spotify because we have a built-in integration with them. It's automatic, it's a one-click submission, whereas apple podcast, you have to go sign up for an Apple ID if you're a PC user and you've never had an Apple ID, you it's, it is a giant. Well, like just it's the worst.
Um, you have to have a payment method attached to your Apple ID. You have to get it verified. And then it takes Apple five days to manually review these podcast submissions. Those 5 - 8 days used to be 48 hours. It just keeps getting stretched out.
In podcasting, the magical moment happens when people upload that first show and then submit it to Spotify and see it in the Spotify I app on their phone.
But because Apple is still such a big channel for distribution and people want as many people as possible to hear their show. It's, you know, we're still, that's kind of holding the balance. It's, it's holding the tension, right? Yeah. Now, um, and, uh, you know, I. We'll we'll see what happens. Um, I I'm hopeful that it'll stay open.
What would really help the open podcast ecosystem is if Apple just improves its submission process.
And Google, maybe we'll see what they, what happens with them. If they gain more prominence than, um, their auto-indexing, you know, might become, uh, a standard as well. And there's, they're also using, uh, uh, uh, some tech called pubsub, which is super smart.
RSS is pretty dumb, right? Like all the clients just sniff RSS feeds all day, multiple times a day, seeing if there are new episodes. But with pubsub, you actually send a push event to Google podcasts and it says, oh, there's a new episode. So instead of just hitting your RSS feed all day, it just waits for the actual push event.
To build on that point, it sounds like what you're saying is the risk is maybe, Apple is a great distribution channel right now, but the friction for creators to get their content there could just kind of see the volume of content on Aple atrophy over time.
And then that would in turn, I guess, reduce its importance as a distribution channel. And that's when you kind of, when industry consolidation around Spotify could happen.
Yeah. I mean, Apple has a pretty good hedge because the podcast app comes pre-installed on every iPhone.
And really, I think so much of the way products and things get distributed is via word of mouth. And so someone might hear about podcasting and you may have even done this yourself. Like someone wants to listen to a show and you say, well, do you have an iPhone?
And they go, "yeah." And you go, "okay, well just search for podcasts in your apps. Then search for the show you want, okay, now you're listening to podcasts." So there's some, a lot of built-in strength there, uh, for sure. But on the other side, there's this threat of, you know, the easier Spotify makes it and the more kind of strategic acquisitions they make, um, like right now, uh, you know, listen on apple podcasts is a cultural meme, right?
It is something that gets repeated. And there's this strength there, but the more that, you know, if, if Spotify buys all of the big shows and people just hear, listen on Spotify over and over again, that will become a cultural meme. And there'll be, you know, some competition there. Uh, And yeah, I'm, I'm really hoping it doesn't turn out the same way, YouTube dead, uh, because I think ultimately that was bad for creators.
Um, as soon as there's a single distribution channel, the owner of that distribution channel can use that leverage to crush creators. The creators will increasingly compete with each other to get the crumbs off the table. And we've already seen that with YouTube, they've reduced their ad, their ad share with creators.
And, um, in some ways what saved them is live streaming on Twitch and other things, because then they had a different distribution channel, but you can see the effect of this. And, uh, I think open is better than closed. We saw it with blogging. We've seen it with email. Uh, even though it's more messy and it's not quite as user-friendly, uh, ultimately for creators and consumers, I think open is better
Just changing gears a little bit.
I'd love to dive into the tactics of, of building the product and the fact that, that you and Jon have a weekly podcast focused on, on basically your business and planning processes is really interesting. You know, it seems like you're often talking through decision-making or introducing new ideas.
How much of that intentionally or otherwise contributes to, to how Transistor.fm evolves?
Yeah. The nice thing about having a weekly show with your co-founder is. It's an opportunity to talk about hairy issues, uh, with, and still be polite. So the forced civility. Yeah. Because we know it's being recorded. And I mean, we always know we can scrub something, uh, with editing, but generally we're, we're in just, it, someone said that like being on a microphone just makes you a better version of yourself.
And I do think that's true. It's like, it just heightens you a little bit because there's an element of performance in it and that's really helped us. Uh, and that was a, you know, we, we saw, uh, Alex Bloomberg do that with start-up and talk openly about how. You know, doing the show was, um, a form of therapy and planning and it, there's some sort of magic that happens when you're doing that in public.
So yeah, there's definitely some things that we talk about for the first time on the podcast. And I think it, it does really help. And then you have this feedback mechanism where listeners can respond and many of our listeners are our customers as well. And so they can say, oh, you know, that thing you were talking about, it's not quite right.
You're missing, you know, this piece here. Interesting. And so we have a feedback loop there that's quite helpful. Uh, and sometimes the podcast is the only time we talk in person every week. And it, it, it's almost like built in. If, you know, it it'd be easy for us to just stay in our little slack, Hobbit holes and just, you know, send each other messages back and forth.
Um, and I think that can be bad for just interpersonal dynamics. Um, but also in terms of planning, uh, you know, if we have three episodes where it's like, wow, we haven't talked about any product development stuff, probably cause we're just kind of coasting, just kind of floating and maybe we need to, you know, do some planning.
So, um, yeah, the, the podcast definitely helps and, uh, we've adopted kind of a loose, loosely adopted base camps, shape up process. And what I like about it. Is first of all, it's just way more calm for us instead of feeling this pressure to have like a full backlog, you know, like it felt like I was a product manager for so many years and it felt like a lot of my job is just to make sure there's a big backlog, so that developers had something to do.
Do you know what I mean? And uh, now it's like, no, if, if we don't have something good to work on, let's just not work on it. You know, like we can do other things. And when something reveals itself as sufficiently important, then let's put it in a Google doc and just kind of chew on it for awhile. Like, okay, here's the thing that we're seeing, you know, let's, let's explore the content tours of this idea, but we still haven't committed to anything.
You know, it's just still kind of just sitting there and it's like, eh, okay. Oh yeah, it's something new. I had a new insight about this. I'll add that to the Google doc, but it's not in the backlog. It hasn't become an, an item of work. And it's only once we've said, you know what, like this thing that we've been thinking about and shaping, and, you know, kind of just tracing the contours of it feels like there's enough here that we should commit to doing the work.
That's when it goes into, you know, we're, we're using clubhouse. Um, but you know, that's when we translate this document into tasks that we're going to get done. Um, and yeah, that, that process has worked pretty good for us so far.
You mentioned recently on the Product Journey podcast, that out of the gates, you saw a lot of use cases for the product come up, that you didn't necessarily expect.
How do you go about evaluating who's a fit as a customer or which case which use cases kind of need to be accounted for in the product?
So we have the luxury of asking, like the first question we ask is, is this a good fit for us? So, I mean, part of the reason we didn't want to get into ads is it would add a bunch more complexity to the product.
And we started this company to serve us. It's it's not, uh, And definitely to empower and serve customers, but I don't want to be in a position where I have this company and I just don't like working on it and it's not giving me the things out of life that, you know, we kind of wanted it in the first place.
And so any, you know, there's definitely a bunch of requests that we get that just don't fit what we want to build, because it's not a good fit for the kind of life we want to live. Um, and I think, yeah, ads is good. We, we, I, at one point I had this idea for us to build, uh, another product called Spots.fm, and that was going to be an ad marketplace.
And the more we explored that, the more, it was like, ah, like that is going to require so much more human hours to just keep that machine running. Whereas right now, um, you know, there's, there's little things to fix here and there, but if Jon and I want to take some time off, it's, it's pretty easy, easy for us to do that.
We have a few folks that help us with customer support. And, um, so anything that kind of infringes on the margin that we have, not just financial margin, but margin for our time for our mental health. Um, if it doesn't fit that, then we don't want to be involved in it. Then there's a second filter, which is, is this something we want to contribute to the world?
Uh, is this a mindful use of technology? Is it going to be good for society and. Uh, yeah, so we have, for example, we haven't spent a lot of time on building any sort of integration with Facebook. Uh, cause we don't like Facebook. Uh, and we just think it's like not, I don't know, it's, it's just a crummy ecosystem and platform.
And so we can make those decisions and it probably harms us a little bit, but overall we just think it's contributing to a better society. It's contributing to more mindfulness for our customers and their listeners and it's better for us. And then other than that, it's like, if it feels like something keeps coming up and we can see both sides of it.
So it's something the customer wants. And then on our side we can see it will actually get them what they want. Like there's that perspective. You know, people again, the dynamic ads, uh, feature is such a good example cause people were like, so sure they needed that. And we're on the other side going okay.
But we've been in podcasting a long time and we just know like most podcasts are not going to be best served by having advertisers. Uh there's other ways that they, that folks can make some money with their podcast if they want to, that are probably better fits. And so we're, we were kind of tow the line on that, you know, like it's like, okay, well, uh, sometimes it's just, we'll just recommend our competition.
If we think that's a better fit for people. Um, sometimes we'll try to communicate our rationale and. Uh, and we're also just very careful about what we introduced to the product, because we know anything we start, we're going to have to support. And it's very difficult to take things out. Like we have this YouTube integration that like, we really wish we'd never put into the product, but now so many people are using it and it's just, it's hard to take it away once it's there.
And I think it's, that's actually a great example of just that, that feature, which allows it automatically posts your episode to YouTube as a video, but there's no visual. It's just, you know, the audio it's just, uh, from what I've seen like 90, I don't know, like 99% of the time these videos get very few listens.
It's a bad experience for a YouTube subscriber because they want to see video. And so when they see these audio clips in your stream, it like turns them off. Um, it's just not a great fit. If you're going to post video, you should record the hosts, recording the podcast and post actual dynamic video. It's, there's a better way of doing it.
Uh, rather, you know, that's not that much more work, but you know, people want it. And yeah, so there's a, uh, it's, I think that's the hardest part about building products is that people often buy and use products for emotional reasons. And, um, even if there's a rational side, Say, well, you know, this isn't the best use of your time.
It's sometimes hard to argue with that. So there's probably a little bit of tension between those two things that we're always just kind of dealing with and, um, Yeah. Uh, there's not a perfect way to deal with it. Our, I guess our way of dealing with it is we just wait as long as we can. And we resist new ideas as much as we can, uh, and try to only build things that we feel are a good fit in a variety of ways.
So maybe it's sort of an alongside that topic is that obviously, you know, a Transistor is a business and, you know, a whole lot of SAS businesses make money, but not necessarily enough to be a sustainable job or to make a living at it. How, how slippery is that slope in terms of feeling like you're, you're just on the cusp and I, you know, I, I saw that recently or relatively recently on the indie hackers podcast you were mentioning like in, in the early days, certainly it was a little touch and go.
Was it always your intention to self-fund or did you think about funding or how did you approach sort of what your, your magic number was?
That's why the podcast is so interesting as an archive because in the early days, so, you know, we launched, uh, we had, we did an early access in February and then of 2018 and then launched August 2nd, 2018.
Um, so just, you know what, uh, that was, uh, six, seven months later. And you know, when we launched, I was thinking, okay, if we double our early access, we'll be at $1500 monthly revenue and you just realize, wow, this is going to take some time. And I remember punching it into like a forecasting calculator. And I was like, wow, this might take five years.
And that was a challenging, um, for me in a financial sense and for Jon in a time sense. So. I came to transistor without a lot of savings, without a lot of financial margin, you know, I've got four kids and a lot of bills. And, um, and that, you know, that was tough. Um, on me personally, and by, you can hear this in the podcast, like around August, September of that year, I'm starting to flail a little bit, you know, that it, the feeling of like, oh, I'm working on an exciting, new project has subsided.
And the reality of wow, that mortgage still needs to get paid every month. Right. Um, and so that's when I was like, starting to like really flail, like, oh, maybe we should get investment and maybe we should launch another product. And maybe, you know, we should just, all of these things, like. When you're desperate for money, it, the pattern is always the same.
You just like start grasping for any sort of way to make money. Right. And it's, it, it all has the smell of desperation on it. Uh, and so I was definitely doing that, which is one reason. Like, uh, it sucks because the more margin you have when you start a business, like, honestly, if you're going to fund it sure helps to have a lot of money in your bank account.
Right. It just does. And uh, some reason a lot of people end up raising money because they don't want to take that risk themselves. There's a huge opportunity cost as well. Uh, Des from Intercom reached out to me and he's like, you know, you've got the financial piece, but there's also. Your opportunity costs of your investing, some of your most kind of, uh, your best productive years to this thing.
And you're hoping that it turns out. So that was challenging. I think what helps is at the time our numbers were public. And so we had all of these mentors and connections we'd made with, you know, really great people, um, that could look at our numbers and say, okay, well, you know what, you're actually on the right track.
Um, in my worst moments, I was like, I was emailing all these people's like, I'd made connections with like DHH from Basecamp and Jason Cohen. And, and the joke was like, when I get stressed out, I just email a bunch of millionaires and just see what kind of wine to them. And it was, you know, a lot of them were, it's difficult to give advice in those situations because nobody really knows, but they were able to look at our fundamentals and say, you know what?
This looks, the fundamentals here, look good. Like you're growing. And this is definitely, you should, if you can, hold on, you should hold on. Um, as opposed to, you know, if they looked at our numbers and said, oh, this is, you know, uh, it was nice having some people that could look at our numbers and I knew would give me some really honest, brutal feedback.
And I think all of them would have had no problems telling me it was a mistake to keep going. So that helped in those times. But it is hard in the beginning. Now, looking back on it, We're so glad we didn't raise money. I was like, just so glad we're beholden to nobody. We have no debt. We have no investors.
We own a hundred percent of the company. Um, and if you can make it over that threshold, it's always better to bootstrap always. Uh, unless I guess you're building something that's really capital intensive, but if the product and the market and everything align with bootstrapping and you can do it and you can get over that at that difficult stage, it's always better to bootstrap.
Always. It gives you all the time control. It gives you way more optionality. Um, like if someone came to us and said, Hey, I want to invest a million dollars in your company. We would have no idea of how to spend it. It's like we, we can't spend it. The money we have right now, like in terms of like investing it back into the product, there's not like anything we really need to spend money on.
And if we do need to spend money on it, we, we spend it. There's, there's so much margin built into the business. So yeah, it's, it's not a, it's not a perfect answer in the sense that I can't be, you know, I can't. Tell you to just subscribe to the bootstrapping religion. And that you'll definitely benefit positively from it because there's a lot of pain for a lot of founders, but for us, once we crossed that threshold, it was the right decision.
Yeah. It seems like there's a lot more gray area built into the health of a SAS business because you know, you've done consulting before as Tom and I have done. And, you know, it's pretty clear if you don't get another customer, you know, for, for July, you're not going to be making any revenue, but with SaaS, you know, there, there is that baseline of revenue that always kind of, I guess, could, could leave you holding out hope that you're on the right track.
Yeah. Yeah. I think if that's not growing, that's the thing, like if you're looking at that number and it's, it's staying flat or it's not growing fast enough, um, like Jason Cohen said, you know, in, in two years, if you're not at 20 K MRR, so 10,000 per founder, uh, you might want to look at it, you know, like it's just that it needs to get you to some sort of baseline fairly quick.
And I think, you know, there's this really popular talk called the long slow SAS ramp of death, which has kind of been, um, it's a great talk it's by Gail Goodman of constant contact. But the, as a mantra it's like, ah, it, it, it leads people or D deludes people into thinking that, oh, well this is just going to take a long time.
It's going to be painful. And I think. If you're bootstrapping, you want it to happen pretty quick, like relatively quick, in the sense of within a few years, this should be showing some signs of health. And because again, the opportunity cost of your time and your energy is so valuable.
And if you spend too much time on a bad idea, then you've wasted that energy.
There are so many examples like Taylor Ottwell the creator of the Laravel framework. You know, he spends years kind of cultivating this open-source framework and building up an audience and, um, you know, doing these conferences. And by the time he launched his SaaS, he has all this fertile ground to plant the seeds in.
And, you know, he announced, uh, Laravel Forge on stage. And there's about a thousand people in the, in the audience. Well, he got a thousand customers that month that was not slow. It was fast in the sense that it was gradual. And then sudden, like he, he had all of this experience and all of that, you know, all of the groundwork had been laid, but you do that before you start building the product, you know what I mean?
Like that's the, that's the. That's the culmination of all of your life experience. That's, that's the ground that you're planting the seed in and the market, right? It's like what's happening in the market. What's happened with my own experience. That's where you're planting the seed. And if, if that seed, you know, come harvest time, hasn't produced well, your, the ground isn't fertile, right?
You're missing something either your own experience or the market you've chosen or whatever. And so, uh, you know, you wouldn't tell a farmer to like plant some seeds and if they don't grow in a season, be like, well, I'll just wait. And you know, maybe that something will happen. It's like, no, if they haven't like, if they haven't sprouted in a season, you're in the wrong place, like go find different grants.
And so we've touched on MRR as, the major quantitative measure of the business on the qualitative side. Was there anything that you were really focused in on to assess your success?
I mean, for me, everything is qualitative. Uh, so really the only metric we look at on, on, you know, like metrics is, is like MRR and active customers.
That's really kind of it. Um, I look at how many podcasts we have on the platform, but the only one I'm really looking at every month is, is MRR going up? Is it going down? Is it growing? Is it, how fast is it growing? That's all I really look at on the qualitative side. It's just everything else, you know, how am I seeing a lot of Transistor links out in the wild. You know, when I talk to people, what did they say about Transistor? Have they heard of it? How many emails do I get from folks? When we get customer support messages, do we hear from folks that are like, "oh yeah, I heard about it from this. Or I've switched to you because of this."
Those are the things I'm paying attention to every day. Um, I get worried when our customer ser like customer support is our, one of our biggest challenges. We get quite a few requests every day. And if I, but if it goes, you know, if it slows to a trickle, I get worried because I want to see what's in there.
Like, what are people exploring? What are people having a tough time with? What do they want? Like, why, why are they here? What brought them to Transistor today? And what, what underlying motivation was there, you know, to start a podcast. Um, yeah. And then just qualitatively what's happening in the industry.
Uh, I'm a member of like, I don't know, like there's at least at least five or six different Slacks that I check fairly regularly, just cause I want to see like what's bubbling in the, you know, in the ecosystem, what are people recommending without even being prompted to? Um, what are the honest challenges folks are having all that stuff is kind of out there and that's yeah, that's me every day.
Just looking at it and, and kind of mentally recording it or maybe jotting a note in my apple notes app or whatever. Uh, oh, here's what I'm seeing. And, oh, when I shared, like, I I've noticed, for example, like podcasters just want to be noticed. So if you, if you put their show in your monthly newsletter, they're over the moon, like they just, and for anyone to notice their show and recommend it is massive for them.
And so we try to do that quite a bit. Um, the same applies for listeners actually, uh, we, you know, we have a Patreon for build your SaaS. And initially we just did it to test that we have a little integration with Patreon and I'm surprised when people started signing up and I thought, oh, we're going to need to create all this extra content for them.
And, and the truth was what, what they wanted. And that I noticed kind of through qualitative, like just measure is they just want us to mention them at the end of the show. And that became a part of the, the, just kind of a part of the, the culture of the show is that we do these shout outs at the end of the show.
And people hear the same names every week. And sometimes these people get recognized at conferences and stuff. Like that's the kind of stuff you kind of stumble on, uh, through observation that you might not get from a survey or like by looking at your analytics.
Yes. That need for, for distribution means that there's very little, that happens in the podcast community, in the shadows, you know, you can kind of see, see all the activity in the industry.
Yeah, yeah, exactly. Yeah. Folks are always asking questions publicly and it's helpful in that sense, for sure. I think people can still get there though in other product categories, just by. Becoming a member of, you know, private slack channels. Um, you know, this is like when I'm at conferences, I sometimes like ask, like to ask people like what, like secret slack and telegram groups, are you a part of, because increasingly that's where, you know, people kind of converse in these back channels of the internet.
And, um, there, it's surprising, you know, how many of those are out there and, you know, sometimes to get invited, you just say, Hey, can I become a part of that? And then you're in there and you can observe, you know, what people are talking about and what they're recommending and the struggles.
Just to round things out. I guess thinking a bit more on, on the business side of things, obviously as, as a software, as a service business, you know, you've got your sort of, day-to-day focus on growth and so on, but. How do you ensure you're thinking about or planning for the next more strategic phase of your business? How do you avoid staying too heads down?
Part of it is that we just, we do move pretty slow. We're pretty chill now. Um, we, we're not in a rush to fill our calendar. We're not in a rush to fill our backlog.
We, you know, time and space really does give you perspective. Uh there's there's like so many people over the years that I was so jealous of. Uh, and then you just let time elapsed and you go, oh wow. I really should not have been jealous of that person. You know? Like it, it just, it gives you perspective.
And so I think by slowing down, that's helped us quite a bit. On the other hand, in some ways, this is something I'm struggling with is, uh, I have this feeling now that we've had some success, but I want to, um, to have some sort of hedge, you know, against the possibility that things could go bad. And so in this time where we do have margin and we do have space, I'm thinking through like, okay, what should we like, should Jon and I be investing in other companies, should we start something else?
Should we be, you know, you know, it should like, should we be trying to figure out ways to take money off the table? Um, there's all sorts of things. I th I think we're wrestling with right now that, uh, Yeah, I don't really have an answer for yet. And, and strategic for transistor is itself. I mean, podcasting has the advantage of, it's never been a rocket ship sector.
It's been going pretty steady since, you know, for like two decades or something. Um, it, it's just, there's not going to be anything super, even the things that people think are going to be super revolutionary, like, oh, we're going to have dynamic Lee inserted ads. It's like, okay. You know, it probably isn't going to be a big deal.
Ah, we thought Anchor was going to be a big deal and, you know, offering free podcast hosting and it didn't end up being a big deal. So. I shouldn't say that I'm, I'm not concerned. Like I said, there's definitely things on the horizon I'm concerned about. And strategically in terms of like what we want to add to the product, there's things where we're kind of letting simmer, but we're also trying to be slow with how we implement those things.
I think if I have any sort of like anxiety about a strategic anxiety, it's thinking we're on a wave right now, but every wave eventually subsides or at least becomes less of a stress. Well, and what are we going to do then? Um, and in my mind, it's not, I don't think, I think podcasting has that much more room, meaning like there's not going to be something that comes along that route.
In changes the trajectory, the growth trajectory, you know, how much interest there is in the category. I think we're pretty much seeing that right now. Like this is kind of where it is, and maybe it'll be like blogging and blogging just keeps trucking along forever and people just keep starting blogs. Um, and you know, that would be, that would be great.
Um, maybe it's more like, uh, I mean, definitely if it, if it becomes centralized, then that will, I think, killed the category as far as we're concerned. So, yeah, I, I'm more thinking like what is there outside of podcasting, uh, or maybe adjacent to podcasting. We should be looking at. And the most recent example of that for us was private podcasting.
So we we've created, uh, private podcasts that really automate a lot of the onboarding you would do with a private subscriber. And then the next phase of that is paid PR private podcasting. That's definitely a wave that we're seeing with sub stack and Patrion and everyone else. And so, yeah, we're like, okay, well, that's an interesting, you know, kind of adjacent thing that we should be looking at your TG CLI uh, again, we're not in a huge rush to, to, you know, build something super quick.
Um, it's like, okay, let's just kind of ease into this. Get a feel for the water. If the water's good, we'll keep going. But long-term. I'm just thinking about, okay, what should we do with the resources we have now to ensure that, you know, we're not, we're not wasting what we have. Is there something else we should be getting into now that's gonna, you know, plant some seeds now and have them grow up next season that we can take advantage of.
That's great. I think that's a, that's a really great sentiment to end it on there. I appreciate you both kind of giving us the history of, uh, of that product and how you've gotten to this state and then ending it off with a little look into the future. So thanks so much for joining us today to talk through it.
Yeah, no, this was great. This is a, just every interview is a little bit like therapy. So I, it was really nice being able to hang out with you too.
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