# VC Funding vs. Bootstrapping for Subscription Apps — Martín Siniawski, Podcast App

Channel: Sub Club by RevenueCat
Video: https://www.youtube.com/watch?v=e8GJ1XnIKOc
Duration: 40 min
Language: English
Words: 8884
Transcript page: https://viewrankai.com/tools/youtube-transcript/e8GJ1XnIKOc

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[0:00] hello I'm your host David Barnard and with me today Revenue cat CEO Jacob biting Our Guest today is Martine sinowski co-founder and CEO of podcast app after bootstrapping streama into one of the largest radio streaming services in the world our team founded podcast app to help enhance the joy and personal growth provided by podcasts on this podcast we talk with Martine about spinning off a new product from secondary product Market fit the Journey of getting into YC and to give and take of raising venture capital hey Martin thanks so much for joining us on the podcast today really excited to be here thanks for having me on and

[0:42] Jacob always nice to have you on an episode I'm here for the folks on the video pod this is the first time in the enhanced studio with the neon backdrop and all that stuff you'll have to check out the YouTube yeah check it out on YouTube Jacob has a really nice neon Revenue cat logo in the background this is a trick it's not actually neon do you know that they don't do neon seriously it's just yeah I mean LEDs we're living in the world you know it's the air of solid state so everything's just you know it looks like neon it looks much more exactly it looks like we have much

[1:12] more affordable anyway we're here to talk about subscriptions all right so Martine I want to talk about your app podcast app but before we get there you started your career in apps with an app called streama and combined between streama and podcast app you're not 100 million downloads which just blew my mind when you told me that so tell me about bootstrapping streamoff first and kind of know what the app is and what led you to build it and then we'll get into the podcast app and everything else today sounds great yeah it still blows my mind too to think of like 100 million downloads numbers in

[1:47] the thousands or hundreds of thousands it's already quite impressive when you come to think of like 100 100 million is beyond human yeah yeah it's pretty crazy to grasp yeah yeah so the story with streamer so it's a am and FM radio streaming service right so if you want to listen to our radio station from any country in the world any city in the world you can do it through our service and before it was an app it was actually a website the website is still pretty big and we started that in 2007 and so it was a long arduous experience I thought I was gonna get a Lamborghini

[2:19] after a couple of years it ended up being like four years of complete no Revenue no payments no users no nothing and then slowly very slowly things started to happen and we only launched the app which is called Simple radio which is the one that has lots of installs as we're talking many years after that probably like 2013 so we kind of I came late into the game of mobile but it's been a company it's been around like 15 16 years it's profitable I haven't been personally involved writing it in the past six years since I've started building podcast app but it was where I learned and made most of my

[2:51] mistakes and uh it's always good to have a starter company you know yes yes ideally you know it's even better if it's not yours that's what I did but this is a good tactic and it's kind of a recurring theme of folks who we've had on who bootstrapped is that there's this kind of idealism of I'll start my side project and it's going to instantly become this hit but yeah it sounds like you wandered in the desert for years before it actually made a meaningful Revenue we did wander in the desert for years and we had some false starts it almost looked like it's gonna happen and

[3:27] it didn't quite I'm kind of dating myself but at this point we were like using the Facebook platform you know and they were like oh yeah yeah like it was 708 yeah yeah yeah totally yeah so we first started like a social network for radio listeners 2007 Facebook for everything right so we started doing that nothing can happen then they announced the apps and their platform and we started hearing these Wild West stories so yeah oh it was a lot less you could do it wasn't really anything yeah it was really wild west not super proud of the things that happened in there just to give people like concrete like

[3:59] you could crawl the Facebook API you could just jump from person to person Cambridge analytica is nothing compared to what you could do in like 2007. for us it was like there were like notification apis you could use to like send notifications it's amazing right you come to think of it it's kind of crazy like you could actually send notifications on behalf of Facebook for your app right these were important notifications because they weren't in the phone but they were still in that desktop app right there was a small window before you know when Farmville and all those people exploited it until Facebook shut it down it was only like

[4:29] totally exactly exactly so we I think we caught for months of that and we did have some dazing which we had like 130 000 daily actives new users through this kind of crazy viral Loops but we have quotas and they will close the quotas and they will like reset back after 20 days or 30 days you had to wait for the next big boost of users the problem was they ended up shutting it down and also the users were coming from countries that were monetizing great so it wasn't like U.S users or some of those really well monetizing countries so I think that at the peak we made hundred dollars

[5:02] in ad Revenue not the most encouraging so that was one of the false starting which we thought we were seeing the light and we didn't quite see it but slowly and surely we started figuring it out that was the first experience and as I was saying like it's been profitable for the past five six years and operated by an amazing team independently and it's been really good I did want to transition to the podcast app so you built streamer it's doing really well you finally get the momentum going what made you decide to jump from that to build the podcast app masochism because otherwise I Cry

[5:39] this whole thing is really a mind game right you really need to I think laugh at it and also this whole journey of understanding oneself better and what were the things we do I mean at the time and it's still our motivation so we had this amazing 10-year run with srima after 10 years I co-founders and folks on the team you start becoming a different person wanting different things maybe thinking about what's your next stage what's your next phase and how you want to do it and we all have different ideas for me and also for whom we ended up being my co-founder in Pakistan who was our CTO at streama his

[6:07] name is Juan College mate of mine we kind of had this desire of building like a bill to last company we had read this book actually by Jim Collins right the bill to last and they talk about long-lasting enduring companies and companies with a purpose and with strong core values and that idea kind of resonated with us I think we were doing a little bit of soul searching with srima and many other things happened we personally got into podcasts because they were the future of radio from live to On Demand analog to digital that sort of thing and we were enamored by podcasts just this idea of learning from

[6:36] the world's greatest Minds being able to obtain knowledge while you're doing something else that maybe it's not particularly fun or meaningful like washing the dishes or just driving somewhere we started talking with the idea of putting all these things together and also felt like there was going to be a big migration from radio and other media idioms onto podcasts and that was 2016 and there had already been a few like let's say boom and busts around podcasts but I'm trying to remember when when was cereal what year was that serial I'm guessing like 2014 okay there's like false yeah right because podcasting's been around like I

[7:11] remember downloading podcasts in like 2006. yeah right but it was like before super nerdy you had to do it in iTunes right or an RSS feed and there were very few people that was the technology I just felt like we were in the flats for a very long time but then this period you're talking about there were just convergence of big money came in like cereal New York Times like those started to come into it I guess also it was just like a consumer Behavior thing right like normies for lack of a better word had to understand downloading digital and it had to change from being RSS

[7:43] feeds of MP3s to being like a click button get audio content model right but that would have been right around that time so yeah yeah I think there were like many different pillars and that were being built or assembled from like content to user interface even like more penetration maybe not a devices like Android cultural moments like serial which is ties back into content but there was for example Stitcher Stitcher was a big one right big app that they actually raised like 30 million I think it was like around 2012 2013 they had already raised a significant amount of money and funny enough I ended up

[8:16] meeting the founder of Stitcher we ended up becoming friends and he was like the first advisor to podcast up and I randomly made an event here in San Francisco but yeah I think it was these conversions of things you know opportunity and trends that we were identifying a personal passion and a desire of thinking hey can we build another company make it larger bigger maybe more purposeful and having more of an impact in the world and hoping something that can be our last company and maybe the last thing I want to say is I was living in Argentina at the time that's where I'm from originally and I

[8:43] also kind of had this desire I don't know of playing in the big leagues and doing it from Silicon Valley and doing that sort of experience we had also felt some pain with strima even though we built it to like pretty large company and it's the second largest platform for that AM FM radio world the first company was built from here and we were doing it from Argentina bootstrapping it for the US right so I was gonna ask like I didn't know if you guys use Latin America as like a wedge or if it was fully based U.S or so definitely Brazil is a big country for the product but U.S

[9:13] is the main one in terms of Revenue and the most important metrics so when you founded podcast app did you initially bootstrapper or you go straight to raising a little bit of funding we tried to race and we failed quite a bit turns out that moving to a different country and here right to this ecosystem and maybe having us one of your accolades that you bootstrap something even if the scale is pretty interesting it's not that meaningful or important it's not one of the classic I think pattern matching that people use you know it's almost an anti-signal to them right they're like yeah oh great you

[9:49] built a cash flowing business that's not dependent on Capital like what do I get yeah yeah exactly exactly like you're looking for money to do this again so that was tricky we did try to raise money at the beginning we did a few different things you know like we applied to YC that was part of the dream YC that'd be awesome we were reading all the program essays for the past 10 years so we applied at the end of 2016 rude awakening we got to the interview stage but we got obliterated in the interview stage with some like really where did they hit you guys like what weren't you I'm sitting

[10:23] down in my chair and they start like another podcast player we have iTunes we have apple it works great like why do I care about this what is this you know like I have really bad copying it big time did you not know that that's what the style of the interview is going to be or I think I knew some extent but I just hadn't fully internalized like kind of I think penetrated my defenses more than it should have and it's starting us on the wrong foot I think we were still fresh in many respects had you built anything at that point was the app live

[10:52] on yeah when you first applied so over 2016 we built like a first prototype within streamer you know we were already exploring podcasts within srima and we were wondering like are we gonna do it within srima is it going to be a separate company and we ended up speeding it off funny enough we started with Android so it was only like an Android I'm saying funny enough because in the US most monetization at least what we've seen is happens through iOS right so we started with Android we had early Revenue we had some decent level of traction and we had the streamer background and we got to the interview

[11:20] stage close enough right I think it's 500 folks or companies getting invited to that so pretty close but yeah we just got obliterated there and we just hadn't had that much exposure pitching investors you know we just not something that we were used to because we were more in our own bubble and ecosystem building our own bootstrap thing for 10 years and immediate exposure I guess to investors so we raised some money from stream our co-founders we put in some money ourselves we started doing that we didn't have a lot of Runway but also we didn't have a lot of costs it was stressful my wife and I had moved here

[11:50] cost of living expenses you know coming from Argentina like 5x 10x I don't know what what happens you know and all of a sudden time is taking and I think we had a mixture of scale and luck honestly in the sense that somewhat fast we were able to get traction many of the things we were doing that we learned from the stimulates cannot translate it well you know when it comes to user acquisition and distribution and monetization so very fast we were able to start generating building an audience and growing eventually we got into YC it was another year had the second interview go you come in much better much better

[12:23] I felt like I'm a big Rocky Balboa fan and I just felt like it was the rematch you know oh yeah classic Arc right yeah yes if I feel like it was the rematch we were pumped we were in a different mindset we tend to be very chill people you know very thoughtful and we hear people loud you know here we were ready more for a fight yeah it's interesting the interview is I don't know what their exact philosophy of it but it's 50 Constitution and intelligence tests right they want to just see how fast you are on your feet maybe only half of it's Pro being the idea and your preparation

[12:54] if they can defeat your idea in 30 seconds or 10 minutes then like you're not ready right you need to be ahead and you made some point there about building stream uh like kind of on your own and sort of your own bubble and when folks are considering this like bootstrap not whatever I do think that outside capital or outside pressure can be really helpful for a company I found it really helpful for me when I'm not sure what to do next or like not sure how fast I go or how slow to go whatever having a little bit of that constraint or interactions with those investor types

[13:26] or whatever I found can be really clarifying it forces a little bit of discipline right it forced you to go back and clarify your thinking and really be able to defend your idea did you have the same interviewer both times they probably don't remember different interviewers but the second one was tough it was Michael siebel wow I'm sure they're all tough I don't think I've never heard anybody say like I Breeze through it so I don't have to do too much YC inside baseball but yeah it's an intense experience I've never been in a more loaded atmosphere than like sitting outside the interview rooms like I've

[13:54] never seen so many nervous overachieving kids in my life outside of the YC and you'll get all sorts of Dynamics and Vibes the first time I remember like some folks started interviewing me or like reading me on my phone I was out in the hallway because I was so nervous it's so silly now but like I brought my mother-in-law so they give me some like peppermint smelling oils that were like supposed to be calming you're just supposed to put a little bit on like your body and then you smell and it's just but no I just brought the whole bottle with me and the whole time

[14:25] I was just like you were drinking it just like it like a crazy person one thing you talked about in the first interview was them pressing you on well apple has a podcast app Google has a podcast app Spotify I don't know if they were big in podcasts at the time you applied but this is a huge deal for apps like how big can your app really be there may be a huge tan but it's also super competitive going into that second interview did you prep for that question or how did that go and how do you think about it even to this day like how big

[14:53] can the podcast app be that's a really good question so there's you say yeah bootstrap versus bench you're back and I think this idea of deciding how to do it or what to go goes beyond like the market size I think it's also like a matter of what you're signing up for you know when what kind of entrepreneurial Adventure you want to go through we're coming right off at coming off this bootstrap so let's have that conversation right so like okay did you guys know because I think that was the thing I didn't know honestly even when we did YC it clarified to me during YC

[15:21] what you're signing up for you go from building cash flow business first to building an equities business first you're engaging in business with some people who you know essentially invest in equities for a living right just like any other customer they're going to like spend some money and expect some kind of return did you know that or I mean I'll say for me I think I was stuck in the lights a little bit right I was like this is what you do this is what all these Founders I look up to do like where were you at in that mental game I think it was mixed feelings I definitely

[15:49] was thinking a lot about it because we were very jaded or skewed I guess by a 10-year bootstrapping experience and so we were constantly thinking should we have done it differently is this a better path so I definitely was thinking a lot about it and to this day I still think a lot about it because we've raised some money we raised like a million and a half so we didn't raise a lot of money and that option is still on the table for us it's not that we said hey we're never going to raise money again but I just wonder will that be the best path so at the time yes we were

[16:16] thinking about it I think one of the main worries for us was is this something that's going to compromise our desire to build something for the future that can last is it going to limit our options too much is it going to compromise our lifestyle the heroes these horror stories I love working hard and I do think that work is my hobby to some extent so I'm sure it's kind of sad no no it makes sense I'm happy but I don't feel like there's some kind of craftsmanship around being an entrepreneur and Building Things but at the same time I want to have my family I

[16:41] want to do certain things that are important to me and so I guess I was afraid and after hearing all these stories of folks getting burned out things that sounded terrible but here's what I would say for sure the more you bring outside folks right involving other people in the business I think there's higher Stakes there's more responsibility there's more accountability I think what you're saying earlier Jacob right you need to know if you're in the mood for that right and if that's what you want to sign up for or if you want to do something that's more your terms you your freedom optionality always again I

[17:11] don't want to get too like into the psychology but I do think there's the issue of commitment how comfortable do we all feel in commitment versus freedom I think there's lots of parallels there I've never really had a bootstrapped business I think everybody grasses Greener right they're always thinking that the other one is oh that'll solve all my problems in reality it's somewhere messy middle I think the easiest thought process I'll give to most folks is that you know with raising Venture it unequivocally accelerates your business right like you can make the higher today you would have had to wait a year right you can build the

[17:40] thing today that you would have had to wait and that can make the whole thing go a lot faster assuming you can find product Market fit and you're actually building into a market that cares The Venture Capital can be really really awesome and you don't have to build a wholly unhealthy business too right like you can just be you know like Revenue cat we operate maybe a year ahead of what we can afford right at any given time or so plus or minus depending on the quarter yeah we burn Venture but also like the business is sound in a lot of ways I think the thing that I always

[18:07] think about is that once you bring that money in you're limiting your options the number of all mutually agreed upon successes for the company is limited right doesn't mean you're screwed doesn't mean you can't do certain things right like there are stories of venture-backed companies that have returned to like a free cash flow and bootstrapping model there are stories of companies that have I don't know I think Kyle's been pretty public about this but like gumroad is a good example like he raised a bunch from I think the Sequoia and never really got the right product Market fit and he just kind of went to him he's like hey I'm just not gonna

[18:40] keep building this like you guys want and they kind of just cashed out they were like yeah okay that's fine right they wrote it off and then he's gone and built it his own way right so there are options but those can be rare my advice would be it's a bit reductive but I think it's true it's like when you take money from people just figure out how you're gonna pay them back 5 10 20x like that's what they're going to want that's their success criteria is a 5 10 20x payday and if you're not comfortable thinking about that math then probably don't take the money right

[19:10] and I saw this and it was helpful for me it's like I was very timid about it initially I was like I don't know like it's so scary and I think seed and early stage investors are very good at kind of being like nah you know pushing a little bit like yeah yeah you just take this deal it's not a big deal but as you get further along like it gets a little bit they're like I do want to return at some point right like especially if you start to look like a winner and that goes back to that accountability it can be good I think for me it's been good it's not

[19:35] just the advice that I get from this folks it's the betting and them saying folks I know have other winners and being like I think you have the makings of a winner in our portfolio so like I want you to keep pushing I find that helpful but I also for Revenue cat I couldn't be like 180 actually we're going to be a bootstrap totally now like that's been viable anymore which is fine it's okay in life to close doors sometimes I just I think the advice that I would hope anybody in this situation that's the thing you need to think about is like okay what doors am I closing and

[20:04] am I okay closing those doors I don't think there's like a right answer I mean we covered this on the podcast before but it's rare to talk to somebody who's played both sides I think that's a great summary man I also do Wonder again this might be an example of classic screener on the other side but I do wonder if there's like a b2c versus B2B difference also oh absolutely yeah like I look at the feeling of course b2e companies they pivot they struggle with prior Market fit all of these classic surprises I think that all companies have but I do feel like b2c I don't know that's all my

[20:33] experience right that's all I've done and it's like I don't know you're trying to kind of read the culture a little bit you know what's going to happen in the world broadly I mean we all do that as entrepreneurs but I do think that there's something here that it's less predictable more artistic maybe like yeah it's a hits business right if you look at other hits businesses like the movies they run a portfolio like having lots and lots of movies and they lose a lot of money on a lot of movies and then they have a couple that make a ton and I think what that does is it creates this

[21:00] really dangerous and difficult early phase where you haven't had your first hit yet and you know with B2B if you can make one customer happy like truly happy you have a foothold and then you can make that too and you can make that for and like that's how we met like I met you during YC when I was looking for those first couple of customers to make happy I emailed you because you're when I see I was like can I just come put my stupid SDK in your app please and you were gracious enough to be like sure and we hung out in a blue bottle for a

[21:30] few hours you send some pull requests for us like including the SDK but I think it was obviously a couple of bucks you know sometimes your car fixed they ever put some like candy on the dash or a little bit of like appreciation gift that was my little appreciation gift I fixed some UI things I saw while I was in there and it was really cool man by the way because subscription wasn't big for us at the time right now it's most of our revenue and the company 3x or 4X because we properly took the time to like focus on subscription and at the time it was mostly ads and subscription

[21:58] was something that we had but just for the handful of people that wanted to remove the ads and so we gave them a subscription that was pretty hidden and it was already working and I think you added the SDK so we would do it through you but it ended up like planting the seeds for what would be truly the future of our business model and our Revenue so I won't take any credit at all for that I will take credit for fixing the little launch UI bug though like the image being missized that definitely I take credit for but that era you know go back to the B2B b2c as a B2B founder you can

[22:26] show up to a coffee shop and Implement and learn and iterate and like there's just much easier toe holds and then like the flywheels are present much sooner in a B2B business also because of retention our retention tends to be over 100 it's just an easier game and so going into that question I would say is actually an easier game but in some ways more predictable game and so going back to the raising question I've definitely changed my attack here a lot and I think for Consumer Founders I think it's even a bigger gamble with B2B it's been pretty well shown how Venture Capital can be turned into like Enterprise

[23:00] Equity value and then eventually like a public company for b2c they certainly exist I mean there's duolingos of the world there's lots of b2c and they're massively valuable I mean compared to even like your average B to B company in a lot of ways but there's an order of magnitude or several orders magnitude fewer of them there are so and even Duolingo right I feel like it's so much more clearly at like a educational tool to learn a very concrete skill which is amazing and I think it's an amazing company right but I'm just compare that to maybe like a clubhouse the race I think I don't know was it a billion like

[23:32] 100 billion yeah they raised more money than four billion and killed the company essentially right it put them in a really weird place at the time they were really booming the metrics were insane we were following it because we are in the audio space plate and we were like whoa and it looked like it could be the next big thing right and then maybe I don't know lockdowns is covered change defensive things and I don't know the exact metrics but from public analytics you can see that they have come way down and as you're saying like raising so much money limits your optionality where do you go from there when you raise so

[24:02] much money you need to do like a 10x 15x20x out of that it's really tough even for a company that was all already with huge amount of traction and things can change rapidly that's kind of how I see a little bit difference between b2c and B2B taking back the entire conversation we've been having this last piece think through the implications of like either path there's no right or wrong paths it's more about thinking through the implications or doing it either way and maybe try to see which one's the best for you and I don't think raising money necessarily means that it's not like such a binary decision I

[24:31] guess the raising money peace because I think it's the more you raised and the further yeah exactly before it comes up every incremental dollar like the floor of possibilities gets cut off and there's some categories of exits that kind of get smaller with time so circling all the way back I am really curious in that second interview because again I think so many consumer apps like we've talked through now all the reasons you would or wouldn't raise money and opportunity and everything else like that but for those who are thinking they might want to raise money you do have to when talking to somebody who's going to

[25:03] invest convince them at some level that there's enough opportunity to be Venture scale that they will be able to get a 5 10 20x return on that investment so going into that second interview and then especially kind of knowing the first interview part of why that went South was that Apple has a podcast app Google has a podcast app how did that second interview go as far as convincing them that you were potentially a venture scale outcome I think the interview specifically they weren't necessarily about size of Market the first interview I'm going to write off just because I do feel like we kind of froze you know I'm

[25:37] gonna Broke Down Under Pressure the second one so the other person was Gustav who used to be the head of growth at RBM who's our group partner as well yeah yeah we work with him and with Michael and I think they were both Believers around streaming and around the audio itself and by the way when we didn't get in for the first batch of YC three months after that Tech Ranch article announcing all the startups there was another podcast company with a very similar pitch to ours I think that what that means is that they were Believers in podcast to the point that they were already backing a company

[26:07] talking about market for a moment some ways of thinking about it at least in the case of podcasts one way was looking at Radio the broadcast radio world hobby of an industry in ad Revenue that is and that will stand 13 billion something like that and what was the time spent listening on talk radio which is like comparable to podcasts I think that was 25 so with that you could already see like hey there's multiple billions right a year that are spent on ad Revenue just locked up in a legacy yeah exactly without targeting without any type of intelligence and the content also is not personalized right like the audio

[26:38] content that folks are listening to so podcasts will be much more compelling so that was already like one way of thinking about it but I think what YC was more interested at the time and I can see that was the subscription angle and there was a lot of talk at the time of building the Netflix or podcasts so in that case it was more like a Bottoms Up approach kind of saying okay how many subscribers would we need for this to be like 100 million dollars a year type of business and the math added up just in the sense that it was maybe like millions of subscribers yeah it's not

[27:04] huge yeah yeah it's not huge right when you see like Spotify or Netflix the scale they're at I think now there's been more attempts at that from luminary like it's a company that started with that page they raise 100 million out of the day they had like 50 premium shows and they never quite were able to do that or scale it and Spotify itself right that's it so far they've been like big winners in the world podcast but they invested more than a billion dollars into doing that there was only one moment in history when you could invest a billion dollars in like exactly podcast content and they did it when

[27:36] they could right yeah yeah well for them it was content but it was also like platform you know like hosting Services ad targeting services and then the content and Deals and networks I guess there's different approaches how to do that estimation of the market right now we're doing something actually in the world of sleep and we recently had to do that too same exercise you mean just yeah same exercise of like yeah I think the more and more you grow as an entrepreneur or maybe you get older the more you realize that hey the size of the market matters it's really hard to build something that wins anywhere might

[28:06] as well maybe do it in a large Market where there's lots of money flowing and so we did that recently for sleep and yeah let's talk about that so yeah you've run the podcast app and then I'll cut the story short you initially were more focused on ads and then really double down in subscriptions and have been very successful growing it as a subscription business also I just want to point out the all-time greatest name of a company ever which is to name it the SEO perfect name right it's like A1 podcast app that you put in the phone book right by the way I would love to

[28:40] give you like a really inspirational like we did this workshopping session this Retreat you know off the grid for five days and we came up with that but it was actually in the Stream uh like within streamer we had to launch the Prototype I think for Android and we have to put a name on Google Play and I don't know someone on our team came up with said the podcast app it's so good it's so good I mean it's something forward it's probably gonna help with SEO or something if you'd gone to the stupid Retreat you would have come up with some name that wasn't even in where

[29:07] words and like nobody's gonna remember right the podcast app so good it does create sometimes have you downloaded the podcast app it's like well which box yeah yeah but then you get a really nice moment where you like the podcast app right it's like the titular anyway yeah yeah yeah so the podcast app is doing really well but recently you did decide to become a multi-product company talk us through that exercise in both thinking through becoming a multi-product company and then with the Sleep product that kind of Market Discovery yeah so Pakistan we got it to like 130 000 page subscribers so that's number we're pretty proud of but yeah

[29:43] talking about multi-product company I think my first rule of multiply companies is trying not to become a multiplier company the masochism yes yes now because there is this issue of focus I think for us it came from a place of hey we've been at this for like six years now with the podcast app we got it to meaningful scale but what's the next PATH forward for us and we had a team of 20 folks highly capable people how do we use our time in the best possible way and continuing with this idea of building large businesses but also in a way that has positive impact which Stills

[30:14] continues to be a through line for us since those days at Tremont starting into a Pakistan right so we came up on this opportunity on sleep it wasn't like a systematic approach for like some folks can be very regimented in exploring opportunities and really opening up the aperture and lens there's a backstory of lots of experiments that we did within podcast app that didn't necessarily pan out in terms of like where can we meaningfully differentiate Beyond like the essence of podcasts and we trade like experiments around education from creating our own content to like creating thematic playlists with editors and curators to creating like a social podcasting learning Club kind of

[30:50] like a book club you know over WhatsApp like I mean we did all sorts of crazy things in this past few years with the goal of exploring what's the next big leaping growth while doing all of this we came up across the use case of sleep podcast for sleep we were seeing lots of people using our app at night for sleep and it turns out podcasts can have a hypnotic effect hopefully not hours because ours is very engaging but but other podcasts can have a bit of a hypnotic effect and so people like forget what about their concerns what happened during the day you know and

[31:19] they're able to like fall asleep similar to maybe reading a book but without light in your face for some people it works better we started looking into sleep we also went through our own personal Journeys with sleep you know being stressed as entrepreneurs I also had a my first daughter two years ago and so different experiences with sleep and we learned a lot we did all sort of weird experiments from like cooling down or my mattress to like looking like at work at night with the blue light Blossom classes you know or wearing the ordering for many years so kind of similar thing to podcasts we saw some

[31:48] like adjacent type of opportunity we have personal experience and again we started looking into a space and it does look like there's a huge amount of people with sleep problems it's only getting worse and the money that's being spent is really big like it's huge in the US it looks like 30 billion a year multiple categories of course from the sleep medication to like the mattresses we started doing interviews with people who had improved their sleep and it turns out that usually people they buy lots of products in many different sub categories of the market because they're trying to for them it's about improving their sleep and getting it solved you

[32:20] know they don't care they don't think oh I'm only gonna buy a mattress I'm a mattress purchaser you know stick here you know big mattress person you know yeah exactly so because there's some controversy sometimes you know in terms of like okay what's really the market that you can you're not building a mattress yeah you're building a mobile app are you going to take loaders away from mattresses are you going to capture any of that value or not and I think there is an opportunity of doing that because it just help people sleep better baby have less of a need for buying other products or maybe you can be the

[32:47] person who directs them to buy the right product for them that's going to help them America capture some of the value there that's kind of how we came to this new opportunity in sleep that we're pursuing started with audio we started as we learned more getting into using Ai and specifically like llms to give people like a personalized sleep coaching experience because a lot of that has to do with changing your habits and changing your routines and changing your thinking around sleep and it's not easy to do like some people go to doctors but they're expensive or hard to find or other folks they just do it

[33:16] themselves by listening to podcasts and watching videos and being on Tick Tock and learning where and then trying an error so yeah we're trying to create something that solves it better and faster for people sounds like with the podcasts app you were looking for that second level product Market fit like we were talking about with competing with Google and Spotify and apple and everyone else like how much money is there in podcasts app and what are the opportunities so it's really cool that through trying to find that second level of product Market fit with the podcast app that you actually came upon the Sleep opportunity and then also just

[33:51] even looking at how much more willingness there is to pay and all of those kind of opportunities but now you're a two Product Company how has it gone and the sleep app has already launched how did you get those early users for the sleep app yeah I wish we had another three hours to talk through all the distribution and the things that you did with both srima and the podcast app and now the third app like you've kind of run the gamut but yeah give us a speed run of what it was like bootstrapping inside an already successful company this new app this secondary product I don't think we'll

[34:25] share like this Vision that distribution is extremely important you've always been really good at acquiring users I think you've been one of the founders I think's always been just very comfortable doing that yeah I think the most important piece is to have folks realize first and foremost that it's a skill set that you need to build that you need to continuously hone in because channels change tactics change we're seeing that right now right the things that were working for us maybe for a certain type of business works and maybe doesn't translate as well for a different one maybe the maturity of the channel is different from what it was

[34:56] earlier on in which there's more low-hanging fruit I mean back to a Facebook example at the time right that we were sharing at the beginning while West but I think the most important piece is first realizing this is important and then just spending a lot of time and energy to try to learn it and ways of learning it I think this podcast is a great one actually I've learned a lot from listening to you guys interview other practitioners who are like really deep into trade or ASO I think this is the most important piece you know the mindset I'm taking the time I'm making it a priority because I think

[35:22] it's easy to get obsessed over product and product is important of course but in this day and age like product alone won't do it and many times a worse product wins over a better product just because they have better distribution right and this whole idea about the teams versus slack example and the growth charts are like amazing back to your question David how do we get this thing going inside of like so this sleep product is live it's called rest and if you want to check it out it's get rest dot app app and it's live and it has a mixture of like this audio content I was

[35:54] telling you it's the largest audio catalog for falling asleep and going back to sleep really really fast and we're building these aips which we're really excited about and it's in like Early Access right now and so how do we get the initial users for that it's a mixture of cross promotion cross promotion helps with our existing app because we already have an audience and the use case translates so we were able to target folks at night for example that's something you don't have the first time around right we did that at Elevate coming from mind snacks we've sent out like a blast or my size list

[36:22] like hey if you're interested and when you're in that like zero to one those little boosts are a big deal totally for the streamer which we had absolutely nothing you know going for us no money no nothing and SEO ended up being the thing for us long tail SEO was huge so it just takes time right that takes time you need to be able to like survive as that thing kicks in and starts working and I also do wonder how it's gonna be now in this world of generative Ai and search will change SEO will change or not I don't know but I think it's a

[36:52] really interesting discussion but yeah so cross promotion is something we do we also have money so we have money from the business so we're able to like buy users get that going and not to an insane amount but to a good enough amount for us to like be able to understand if your products working get some metrics right do you consider like your CAC LTV to be like a product Market fit indicator I guess I mean if you wanted to be a viable business it probably needs a but do you use it I mean because like you can just purely use like retention metrics but you also

[37:18] look at revenue and scalability metrics I don't know if I look at it like actual TV like we look at it quite closely just because we would love to be able to scale paid acquisition even further and that's being a constraining factor because we're not there yet maybe it's product Market feed and it's the right term like I just see this needs to work for this to be viable right do we have a bio business here or not I don't think it's totally unindicative of product Market fit right because business with product Market fit tend to be good businesses that's the market part and so I think it's interesting to look at

[37:47] earlier though I do see some Founders like over rotate on it too soon right well they'll be like trying to balance that equation right at the beginning you've been in this long enough you know like you don't need to necessarily have a dollar ten for every dollar spent what matters is learning what matters is it right yeah and and in my experience like actual TV thing it's surprisingly hard like yeah yeah it's not easy and my conclusion at least so far I guess consumer world with this type of products you know you need a big organic piece to make everything work the core product has to be good

[38:16] or virality or whatever it is there needs to be a really core organic piece to make the system work at least that's how it's been in like all of our cases I think it's a great place to wrap up it was so fun having you on the podcast and I I can't wish you had another three hours to go maybe maybe we should just do something in the Rogan style four hours just I mean you have the logo at the back the the yeah I've already got it so we're going here I'm telling you I'm telling you somehow they keep it going I don't understand how these long

[38:45] Pockets do it but like we have a lot in our brains we could talk for hours we do we could anything you wanted to share as we wrapped up Martina you're hiring anything you want to share about your apps and business as we wrap up just check out our products and send us feedback and so it's podcast.app and get rest that app really curious to see what you think and we keep on working on both of them making improvements and trying to like really finesse them so yeah we'd love to hear from the audience and get feedback and also I'm also curious to learn about New Growth playbooks so if

[39:16] you have like a growth secret you know that you send it on one of the Martins yeah one to three notes and we can trade my growth secrets for your growth secrets I'm always interested in learning I really consider myself a student of this discipline and I think this audience is quite a special one awesome thank you so much it was great talking to you today thank you for having me on thanks so much for listening if you have a minute please leave a review in your favorite podcast player you can also stop by chat.subclub.com to join our private community [Music]

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