A Hosty Retreat
Basecamp has taken a clear stance against tracking on the web, so when we learned that our podcast hosting provider had introduced listener-targeted advertising, we decided to decamp to a different company. On today’s episode, Wailin talks to Lex Friedman, chief revenue officer of Rework’s old podcast host, about what they’re doing with targeted ads. Then she talks to Justin Jackson, co-founder of our new podcast host, about how he’s approached building his startup.
- Art19 - 1:02
- The Distance - 1:09
- Tweet from Kevin Finn to DHH / "Heal the Internet" - 1:15
- Buzzsprout - 1:21
- Video about Art19's new ad technology - 1:28
- DHH's tweet about leaving Art19 ASAP - 3:23
- Transistor - 3:52
- Lex Friedman - 4:16
- "Breaking: Two Top Stitcher Executives leave for Art19" (Hot Pod) - 10:58
- California Consumer Privacy Act (Wikipedia) - 23:20
- Justin Jackson - 40:24
- Jon Buda - 40:34
- The Good News Podcast, a show by Cards Against Humanity - 40:45
- "Crafting Radio's Driveway Moments" (NPR) - 42:26
- Sleep With Me podcast - 56:38
- Justin Jackson's post on getting to $30K - 58:21
- DHH's personal website - 1:02:27
The Full Transcript:
Shaun: [00:00:00] Rework is brought to you by Basecamp. Basecamp is a software tool for project teams. It centralizes everything the team needs to know: tasks, files, and discussions in one easy to use place so nothing gets lost and nothing slips through the cracks. You can find out more and sign up at basecamp.com.
[00:00:16] Broken By Design by Clip Art plays.
Wailin: [00:00:17] Welcome to Rework, a podcast by Basecamp about the better way to work and run your business. I’m Wailin Wong.
Shaun: [00:00:22] And I’m Shaun Hildner. We have a supersized episode for you today and it’s kind of meta. We’re talking about why we very recently and fairly abruptly left the company that was hosting this podcast.
Wailin: [00:00:33] This is the company that hosts our MP3 files and generates an RSS feed, which is what podcatcher apps like Apple podcast and Overcast use to download episodes of your favorite shows. There are lots of podcast hosting platforms out there and many of them offer additional services like analytics or show websites.
Shaun: [00:00:52] Unsurprisingly, some of these companies are also starting to compete on how they can help podcast publishers make money and that’s what brings us to today’s episode. We’d been using a podcast host called Art19 and we’d been using them since 2017. This is even before we launched Rework. Back then we had a different show called The Distance, which you can still find.
Shaun: [00:01:11] Fast forward to a few weeks ago, Basecamp cofounder David Heinemeier Hansson got a tweet from a guy named Kevin Finn, who is the cofounder of a podcast hosting provider called Buzzsprout. Kevin shared a video of an executive from our podcast host Art19 talking about the company’s plans to introduce targeted advertising.
David: [00:01:32] So, I’d probably been ranting about some big tech bullshit earlier that day and that would be any day, really. Mostly, that I’m on Twitter, but that day in particular, some a person responded on Twitter saying, yeah, I hear you that this is all bad, but why are you guys essentially adding to this problem?
[00:01:52] And the person who sent me this tweet linked to a video where one of the guys from Art19 was explaining how they were going to innovate in advertisement in podcasts by making it all personalized. And as I was listening through that video explainer, I was like these are all the things that I hate. Why are you trying to push them into a thing that I like? I like podcasts, in large part, and I listen to a fair number of podcasts, because they don’t include personalized advertisement. Because I’m not haunted by whatever the last thing I clicked on Amazon was and then I get some stupid ad for that inside my podcast. I just get these generic ads for, I don’t know, whatever it is, Basecamp or Casper or Wick Vicks or whoever it is that it advertises on all the podcasts and I think like that’s a better experience. It feels like it’s not invasive. It feels like I can download a podcast, no one knows who I am in personalized details. No one is scraping that data off. No one is selling that data off podcast feels like a safe haven.
[00:03:01] So when I’m essentially hearing this plan for how to turn podcasts into the same media sludge that is everything else on the internet, I’m just like, this sounds absolutely horrible! Why would we want to be part of that? And immediately after that tweet, the guy was something like, well you guys should maybe look into using another platform. I’m like, I barely finished the video. I’m like, we’re fucking off Art19 by the end of the day!
Shaun: [00:03:26] As regular listeners of Rework, know, we don’t have outside ads on this show. Wailin and I work full-time for Basecamp, which funds this whole operation. So we run house ads for Basecamp, but we don’t look for additional sponsors.
Wailin: [00:03:37] Even though we’re not affected by Art19’s move toward listener-targeted advertising, we didn’t want to spend our money with a company engaged in that kind of practice. So a few weeks ago we canceled our contract with Art19 and moved our business to a company called Transistor.
Shaun: [00:03:53] On today’s episode, Wailin sits down with Lex Friedman of Art19 to do kind of an exit interview. He was the executive that was on the video that David watched. You’ll hear Lex explain Art19’s thinking behind targeted advertising and how it’ll work.
[00:04:07] And then you’ll hear from Justin Jackson, the co-founder of our new hosting provider. He’ll talk about their philosophy on building a business and being part of the podcast industry.
Lex: [00:04:16] I’m Lex Friedman. I’m the chief revenue officer at Art19, a podcasting company headquartered in Oakland, although I work out of our New York City office.
Wailin: [00:04:24] Just to give some context for what we’re going to be talking about because we’re talking about kind of a new phase in podcast advertising. Can we talk about the more dominant form of advertising we currently see, which is host read ads, right? Can you explain kind of how we got to the point where host read ads were the standard, the current standard?
Lex: [00:04:46] My introduction to podcasting was truly, all tech podcasts and initially you were just distributing these things for the fun of it. And when it became time for some folks to look at, how could they monetize these things? Frankly, the easiest way, and the only sane way at the time was with those host-voiced ads. I think some of the first ones I was introduced to were on John Gruber’s The Talk Show. So you had hosts who started reading ads, and you know, the listeners feel such a relationship with the host and if you get that host to lend their voice to your thing, it can be really authentic and genuine and less likely that listeners are going to skip it, etc. etc.
Wailin: [00:05:23] In those early days, what kind of data were the advertisers looking for and what were you able to give them?
Lex: [00:05:31] Well, advertisers want to know as much as they can. What advertisers really want to know is how many people are there are hearing their ads? How many people are exposed to their ads? The only thing you could ever report on in podcasting back then was the number of times the episode containing their ad was downloaded. When I first started selling, I wasn’t even selling on a CPM basis. And I can explain more about what that means. But you know, initially I was just saying flat rate. If you want to be on this show, it’s $500 an episode. If you want to be on this show it’s $1000 an episode.
Wailin: [00:05:58] Almost like buying a display ad, then, like in a newspaper.
Lex: [00:06:02] Right. Oh, exactly. A print ad. Yeah. And so then eventually, you know, fairly quickly evolve to a CPM where you’re saying, you’re going to pay me this price per thousand, in this case, downloads of a podcast. And so some folks in the space early on were calling them listens. But that was a misnomer because you didn’t know if people were listening, we could just say, hey, it’s gonna be this many. This episode is going to be downloaded 10,000 times and it’s $100 CPM. So it’s a $1,000 spot.
[00:06:29] And initially advertisers are balking because they’re like, well if you can’t promise me that it’s going to be listened. But you kind of had to have that education conversation of when you buy ads on TV, you can’t be sure that I’m not going to leave the room or have a DVR that skips the ad break automatically. And if you buy a print ad, you can’t be sure I’m going to look at it, etc. It’s the same. It’s a very similar trade off, at least with podcasts. You could say, we know this is how many times the episode will be downloaded. But that was—what advertisers wanted was everything, right? They wanted to know who heard the ad, what were the demographics of those people, how far into the ad did they get, etc. And what we could report on was here’s how many times the episode containing that ad was downloaded.
Wailin: [00:07:02] And yet the industry is still developed. I mean, I’m sure that advertisers then paid for what they thought they were getting, which maybe perhaps in comparison to other forms of digital media was not as much. So that was probably reflected in the rates. But they were intrigued enough to keep buying, right?
Lex: [00:07:21] Oh, absolutely. And I think that the rates were actually pretty great. Direct response advertisers, they’re the advertisers that every new podcast listener quickly gets familiar with that give out offer codes and vanity URLs. They really proved out the medium. There’s a reason that, you know, it’s been nine years or so of LegalZoom and Squarespace buying podcast ads and then ZipRecruiter and Blue Apron and Stamps. There’s a reason you hear so many brands over and over again. In fact, a tip that I give to both consumers and people in the industry is if you’re listening to a podcast and you hear the same advertisers week after week or month after month, that’s a show that really works well for advertisers. But yes, I mean, direct response proved to this out, the only way we ever got brands to start buying podcast ads was after years of direct response advertisers showing success.
Wailin: [00:08:03] So if the rates are so good and advertisers are so happy, then what’s the problem with the host read ads?
Lex: [00:08:11] So I want to be clear, first and foremost, I love host read ads. I don’t think they’re going anywhere. And I think that some podcasts we’ll only ever use them. I think that many podcasts will continue to use a mix of host read ads and then other kinds of ads in podcasting too. But there are numerous challenges with host read ads. A lot of them relate to scaling. It makes less sense for a podcast ad buyer to go to an individual show and say, hey, let me buy ads and more sense to go to one of these, call it a rep firm, for lack of a better term, but these companies that sell ads for many, many podcasts because they want to find scale and reach and all that.
[00:08:43] But managing host read ads, you want to get the host’s approval, you need the host to read the ad correctly. You need the host not to say anything that they shouldn’t say. The episode has to be released on time. Managing that over one or two shows is pretty painless. Managing it over a couple of hundred shows can get really, really hairy quickly. And that’s just one of the scaling issues.
[00:09:00] There’s also, you know, the challenge of, there’s some brands that are never going to be comfortable lending their brand’s voice to somebody else. My go-to example is always Geico. Geico wants the gecko involved in their ads. Geico’s ads in podcasts have always been prerecorded ads. And there’s another piece here, I guess two other pieces that come to mind for me with host read, which is one, you know, when you have Conan O’Brien or Dr. Phil or Joe Rogan talking about Blue Apron, they can do a great ad read, but I’m hard pressed to believe that Dr. Phil is actually using Blue Apron. So there’s a disingenuousness that can come with some of those ad reads.
[00:09:36] And then, frankly, sometimes the economics don’t pencil one way or the other. There’s so many podcasters who want to monetize. But if they don’t have wide reach, if you don’t have, call it 30 or 50,000 downloads an episode, it’s gonna get harder and harder for you to find advertisers who want to buy ads on your show, specifically. Because ad buyers are all about scale and what’s the most efficient way they can do their buy to reach the most customers as possible or the most potential consumers as possible, with the fewest conversations and insertion orders and that sort of thing.
Wailin: [00:10:04] Yeah. So then with all those things in mind, that brings us to what Art19 is doing. Can you explain this next phase in advertising and ad tech?
Lex: [00:10:14] Art19 started life as a hosting platform. So it was just enterprise hosting for podcasts. Very early on, they added in support for dynamic ad insertion, dynamic ad insertion being a fancy word for the technology that lets you swap out ads in podcasts. Historically, ads in podcasts were effectively baked in. Marc Maron records, his ads are right there in that episode. Everybody who downloads the episode hears the same ads. With dynamic ad insertion, you could start saying, hey, after X days, 60 days or a million impressions or whatever it is, let’s swap out those ads so that, older episodes didn’t have ads for stuff that didn’t exist anymore.
[00:10:50] And it wasn’t until this year, as we’re recording, 2019, when Art19 hired me and my friend and colleague Korri Kolesa. We added in an in-house sales force so that we can look at a podcast network that’s hosting with us and if they have open spots, if they have a show that they say, you know, this show can have one pre-roll and three mid-rolls but they’ve sold one pre-roll and two mid-rolls, we can insert targeted ads into that podcast based on who’s downloading it.
[00:11:17] And so this targeted ad approach is instead of being show specific, we can target in all kinds of ways. The one that I think we’re most specifically gonna be talking about is listener-based targeting, where we can look at what do we know about the person doing the downloading so that if you and I download the same episode of the same podcast, we might get different ads in the same episode based on who we are.
Wailin: [00:11:41] So what do you know about the individual listener and how do you get that information?
Lex: [00:11:46] I don’t know anything about it, but the way it works is this: we’re not targeting individuals because we don’t have that level of data. We’re using a variety third-party companies and building an internal graph as well to use a combination of deterministic and probabilistic targeting data. So we’re looking at companies like Claritas and Neustar and Experian, which can look at anonymized data about what a given IP address is linked to.
[00:12:11] And I want to actually emphasize that point for a minute. When we do this deterministic targeting in podcasting, the only thing we get is IP address because of how the medium works, or the technology works. We don’t get device ID or anything that’s more identifiable than that. And, as you know, IP addresses can change quite a bit over time. But so what we get is anonymized data that’s linked to IP address and there’s, right now, in our world, around 10,000 targetable segments.
[00:12:39] And these can be things like age, gender, income, education level, but also things like job type or beer preference. Do you like Bud Light or Miller Lite? And all this data is coming from these companies that are looking at a point of sale transaction history and web data and all that sort of thing. The one misconception I think is, that we’re saying, hey, let’s specifically target an ad to Wailin. We know that she’s going to download this podcast. Let’s insert this when she’s doing it. It’s not that. It’s an advertiser says, Hey, I want to reach, let me use an example that can hit me. I want to reach millennial dads with bachelor’s degrees. And so when we have that ad running, basically what happens is a download request comes in for an episode of a show that we host that’s part of our targeted ad platform. If we see that there’s an open ad spot in that episode, then we look and see what do we know about this listener? It’s oh, this is a millennial dad with a bachelor’s degree. We have an active campaign with targeting of that exact person. Let’s stitch this ad into the episode. And then serve the download. And the total lapsed time is 20 to 30 milliseconds.
Wailin: [00:13:42] I have to say, I struggle with this because what I hear all the time is we’re not targeting you specifically Wailin, but then if you’re able to target, I’ll use like myself as an example, a older millennial suburban mom who recently bought a bottle of rosé from Aldi. Like you could do that. And I’m not being facetious, because you have now partnered with all of these ad companies that have been tracking my purchase and my browsing history for years. So it’s still highly targeted to me.
Lex: [00:14:19] You’re not wrong. The ads are targeted, and it’s like you said, it’s targeted based on what these companies know about the stuff that you do. That said, when we’re selling, it probably doesn’t make sense. In fact, I know it doesn’t make sense for us to say, recent rosé purchases because it’s too niche of a market, right? It’s too small a download pool. So it’s typically, people who buy wine might be a targetable segment. And it’s like, you bought wine in the past six months. And, I get what you’re saying. And to me, there’s wo different approaches or two different feels to how this can work. If you’ve been talking to a friend about, Hey, I’m thinking about taking a vacation to Greece and you haven’t searched for it at all yet, but then your Facebook newsfeed has an ad for a trip to Greece that feels creepy and invasive.
[00:15:05] But if I’m on Facebook-owned Instagram and there’s an ad for a device, that can charge my Apple watch and my phone and my AirPods at the same time, that doesn’t feel creepy. It feels like I’m seen, right? It feels like, hey, they know that this is a thing that would be interesting to me. I’ve bought multiple sweaters off Instagram. It’s not the kind of thing where it’s, hey, you just made this purchase on Amazon, so now we’re going to show you these ads for it over and over again. And it’s not the, hey, we’ve seen even surfing the web for this thing, so let’s target with that.
[00:15:32] I think the podcast ads frankly just aren’t realtime enough for it to feel that level of creepy. Instead it’s hey, we know that you’re a person who likes tech. Or, we know that you’re a person who is a parent. And that’s as deep as our targeting really goes in actual practice with advertisers because that’s what makes sense in this kind of a medium.
[00:15:54] Any advertiser is always trying to target. If they’re buying ads—all my examples are old-fashioned cause I’m old. But if I was buying ads during The West Wing, it was because I wanted to reach a certain level of affluent consumer. And if I was historically buying ads on Marc Maron’s podcast, it’s cause I wanted to reach men in their thirties and forties who liked comedy and music. This is a different version of that same kind of targeting, but to me it’s better than the tradeoff of meaning shows don’t exist because they can’t monetize or ads that are totally irrelevant to me that feel, frankly more offensive.
Wailin: [00:16:25] Right. I mean, you said that the level of targeting is limited by kind of the current, technology we have that it does not get more niche than these are people interested in tech or these are people who are parents or potentially interested in parenting topics. But you can already get that level of specificity or generality, depending how you look at it, without doing any kind of targeting. Right? Because if you want to reach parents then you can buy an ad on Longest Shortest Time.
Lex: [00:16:59] Yeah.
Wailin: [00:16:58] Or if you like tech, there’s eleventy billion tech podcasts out there, so you could get even more specific than just tech. You could say, I want to buy ads on an Android podcast or a Mac obsessive podcast or an SEO podcast or something. So, I guess I’m not seeing how you can say that, oh, well we don’t get more niche than that, when at the same time you’re saying you’re really thrilled to be offering, what was it, 10,000 categories or something?
Lex: [00:17:30] Yeah. So we can get niche, for sure. And I think the delta is, or the difference here to me is yes, I could run ads on a video gaming show for a new video game. The problem is, sometimes—well there’s multiple challenges there. One is, if that video game show is sold out, now I can’t reach those listeners. But if I have the video game to promote and I know, Hey, this person who listens to this show about true crime also happens to be a video gamer. Now I have another way to reach that kind of consumer. I can target tech listeners on tech shows, but when, I can say, you know, for an online backup company, online backup companies love to target new parents because they take a lot of pictures that they want to protect. They love to target photographers for the same reason and they love to target gadget lovers.
[00:18:12] And I’m using a real example. Typically in podcasting, you would just say, okay, I’m going to buy on, shows like The Talk Show. I’m gonna buy on very tech shows, so I can reach those listeners. Maybe I’ll buy on photography shows or maybe like you said, Longer Shortest Time and reach new parents. But it’s really hard to test anything there. And advertisers, as you can imagine, love testing. With targeting, with actually that online backup company. We made, I think, two different versions of the ad that we could then A/B test and then three different buckets of listeners. So it wasn’t just one segment of new parents. It was a couple different ways to get at new parents. Are they new parents, do they subscribe to new parents magazines, they visit websites about new parenting, that kind of thing. Do they buy diapers?
[00:18:55] And then you could do your photographers, like what cameras do they own or how many pictures do they take or do they use photo printing services? And then you could, for the gadget lover podcasts or gadget lover audience, you could look at those segments. So then, now we effectively have three different audience buckets, two different versions of the creative. So we make a total of six different permutations of the ad. And in that case they’re tracking just with offer codes, right? So they can track which of these ads is resonating best. And as it turned out, when we started running that campaign, the one that was targeting gadget lovers performed way better than the other two buckets. The other two buckets did okay, and the ne targeting gadget lovers was blowing it out of the water. Like 17% of the people who heard the ad were going through and using one of these vanity URLs or offer codes.
[00:19:31] So the buyer says, hey, can we optimize this? Can I push more of my remaining downloads to the gadget lovers thing using copy variant two and ignore, most of the other ones cause they’re not performing as well? And that was not something that had ever been done in podcasting. When I talked to digital ad buyers, they’re like, okay so you optimize the campaign mid-flight, this is a very common thing that happens in display ads or other online ads. But you couldn’t do it in podcasting. If the ad’s in the Rework podcast, it’s in every episode of the Rework podcast, right? Everybody’s going to hear it if it’s just a host read ad there. But when you’re doing it with this technique, you can start optimizing ads in real time.
[00:20:07] And, the thing that, I never intended to be in ad sales, but the way that I could sleep at night, because I know that ad sellers all have reputations and there’s ways that we look at them. But the way that I could sleep at night was that it was a win, win, win scenario. The ads worked for the advertisers, which meant that they were happy because they were getting a response. And because the advertisers worked, the ads worked for the advertisers. They were willing to spend money. So the shows, the hosts could make the art they wanted to make. They can make the podcast they wanted to make. The listeners could hear the show that they wanted to make because the hosts were getting paid. So the fact that everybody was winning in that transaction, the host, the listener and the advertiser was very rewarding to me. Because if the ads don’t work, then you feel like a garbage person.
[00:20:50] And I think that targeting has tradeoffs, right? Targeting, one big tradeoff is that you don’t get to have the host read, and the host read has that incredible quality that I think is not reproducible without a host reading the ad. But the tradeoff there is, in part, it’s not targeted. So if an ad buyer comes in and says, I need to reach new parents, and 55% of a show’s audience are new parents, 45% of that spend is in some way wasted.
[00:21:12] So if we can say, here’s a targeted campaign where 100% of your ad will go to new parents, but you have to trade out having the host read it, that’s another approach to do it, which helps all—it helps advertisers. It helps smaller shows, and it helps any show that’s under-monetized because most shows don’t have 100% fill rate on their ads.
Wailin: [00:21:28] I mean, don’t you think that an important tradeoff is the listener privacy tradeoff? I mean, what about listeners who are new parents and don’t need fifty third-party data companies knowing that they’re new parents?
Lex: [00:21:42] It’s a fair question. I don’t control, obviously, what the data companies do. Now, I pay a couple of them and we could choose not to do that. But again, what we’re trying to do is look at aggregated, anonymized data about whom we’re targeting. And historically the way we did this in podcasting was with listener surveys, right? So you put out a survey and you say, tell us about yourself and answer these questions and what kind of car do you drive and what do you make and all these things. What we’re doing here instead is looking at data that says, okay, based on what we know about this IP address, you have a new baby at home because of the purchases you’re making. Some listeners don’t want to be tracked at all. It’s tricky, right? Suddenly, if you don’t want to have any kind of targeted ad, it means that you really can’t be on Facebook. You can’t be on Twitter, you can’t even use Spotify.
[00:22:26] Like, the Rework podcast, for example. You have buttons on the website that say, you know, listen on Apple, listen on Google, listen on Spotify. Spotify sells targeted ads. They don’t go inside your show. They go in between shows and they go in between songs. And part of the transaction of using Spotify for free is that they’re going to give you ads and they’re going to make ads, again, that are targeted based on what they know about you.
[00:22:48] I get consumers who would rather not be targeted in any way, but the truth is every ad in some way is targeting you. Even when you’re on the freeway and the sign’s like, Hey, being in traffic stinks, buy this thing or go on vacation. It’s targeted at you’re a person who’s stuck on a freeway with lousy traffic. But I will say this, GDPR means that targeting in Europe is done differently, right? And we think that that similar kind of privacy legislation is going to come to the States, and we welcome it.
Wailin: [00:23:15] Because of what happened in California?
Lex: [00:23:16] I think California will likely lead the way as it often does with that sort of thing. But because we’re not using first party data and we’re just using anonymized data that’s based on IP, you can absolutely make the argument that IP addresses are personally identifiable information, but I don’t have emails, addresses or names. From my perspective it’s anonymized, and what we’re working to do is enable things like opt-out, which we have to by law with GDPR, if we’re going to do any targeting in Europe. The mechanics in podcasting are tricky, right? I can’t convince every single podcast client app to include an opt-out technology that could then report back to different companies like mine, A, I would like to not be target . ed like this. Since that would have to happen [crosstalk]—
Wailin: [00:23:53] Is that what would need to happen? Because that was going to be my next question is how would a listener opt out of this system if they wanted to opt out?
Lex: [00:23:58] So what we’re working to do, which I think we will, in fact I’m fairly confident to say we’ll be live before the end of the year, is that we can automatically inject into show notes. If there’s a targeted ad running in the version of the download that you get saying, Hey, this podcast episode contains ads that you use targeting, to opt out, click here. And then if you see that in the show notes, you can click through and then we can tell our data vendors don’t track this user anymore. Don’t provide us targeting data on this user. We’re going to include those links in episode or show notes.
[00:24:27] That’s more than I think a whole lot of people in the space are doing. But I want to be clear and I get the objections and I get the hesitations. But I do think it’s unfair when folks in podcasting who have, you know, tremendous success in podcasting because they have big reach and host read has worked for them, for them to say, well this is bad for podcasting. Because I can clearly demonstrate that it’s good for podcasting in the sense that there are shows that can make money now that couldn’t make money before and these are shows with lots and lots of listeners. And being able to monetize those shows so they can continue to exist and continue to grow the space and get more listeners and more creators, that is good for podcasting.
[00:25:06] I think that what we have to figure out is what can we do to get people the maximum comfort possible. For me, I don’t like when I’m listening to a show that I really enjoy and hear ads for a bra that I’m just not in the market for it. But when I see an ad on Instagram that’s like, Oh, that’s actually cool, I don’t mind that. The fact that those ads are at least relevant to me makes them way less offensive than if I’m seeing ads for stuff that I’m never going to buy.
Wailin: [00:25:28] Right. I always wonder though, because what I always hear is listeners want relevant ads. It makes for a poor experience for them as they move through the world when they get random ads like you getting an ad for bras. Like, that’s not interesting to you where, you know.
Lex: [00:25:42] Right.
Wailin: [00:25:42] But I wonder that if you presented someone, a listener, a consumer with a list of all the things that third party data providers know about them and you said to that person, well you say you like relevant ads, this is what you’re giving up. This is the information you have consented to provide and in exchange you get really relevant ads. Because we’re not actually presented with that choice, right? I feel like as a consumer and a pretty well informed one, I am moving through the world. I’m getting targeted constantly. And if I could go back in time to a point where I was like presented with like a form to sign and a checklist of information that I’ve given up while surfing the web, etc, I would, I would give it up. You know, I would give it up.
Lex: [00:26:32] I get that.
Wailin: [00:26:33] It doesn’t seem worth it to me.
Lex: [00:26:36] And I think that Facebook and Google, today, and I’m not an expert on either, but I think that they both at least now have places where you can to see what do they know about you? Like when you’re getting targeted ads, why are you getting that targeted ad and what do they believe about you that they think that they should be showing you that ad?
[00:26:51] And I hear what you’re saying and the reality is if every single person opted out across the internet for ads with that kind of targeting, it would be bad for the internet in the sense that there would be less money for the internet, which I think wouldn’t be great, right? If companies can’t find ways to make things available for free, that’s the trade off, right? You see ads on television. You see ads before you watch a show on Hulu. You hear ads when you’re listening to Spotify, until we get to a point where every consumer is willing to pay for all the stuff that they enjoy, there’s a tricky trade off there. If the ads don’t work, they stop spending money on them. Nobody knows that more than people who sell ads. When the ads don’t work, people stop buying and there are literally podcasts that no longer exist because they couldn’t make enough money.
[00:27:38] And I hear you and I take privacy really seriously. It was really important to me that we have good privacy policies at Art19 when I was taking the job and I had to understand how the targeting worked. I think most people, not everybody, but most people are generally okay with the idea of saying it is okay if you use my IP address to get a sense of my geo. So that I don’t hear it when I’m living here in, you know, New Jersey. I don’t hear ads for Southern California cable companies that are no use to me. Most people are typically okay with that. I don’t want people to have to say, I’m not going to listen to podcasts anymore because I think that podcasting is an incredible medium. But I will say, I think every enterprise hosting company in podcasting is either already doing what we’re doing or getting ready to do what we’re doing.
[00:28:20] Exactly to your point earlier Wailin, we could target like I was saying, on just Bud Light drinkers, but the number of people we can target on Bud Light drinkers isn’t interesting. Rather, it might make sense if we have a spirits advertiser and shows that have approved spirits advertisers to say, let me target you across these 200 drinks that we know that people buy. And if they have some new alcohol drink that they want to spread the word, on targeting those drinkers, whether they’re listening to a show about bar mixing or a show about sports or a show about true crime, targeting those listeners in a way that’s functional, effective for the advertiser and not invasive to the listener is just a way for these shows to keep on making more money and thus keep existing. It’s, you know, if you use your loyalty card at the supermarket, it’s the same reason that CVS gives you that giant receipt because they know all the stuff you buy at CVS and they can say, here’s other stuff.
Wailin: [00:29:05] Yeah, that’s why I deeply resent loyalty programs, too, because they’re saying, well, in order to save money you now have to give us this transactional data. And writ large, that’s what’s happening all over the internet, which is not a problem you and I can fix in this interview, but it remains something I’m deeply, deeply resentful of. That we created an entire economy where in order to consume any piece of interesting information on the internet or whatever, I have to be subjected to ads. That we have figured out no other way to make any of this stuff work than to say, well you got to put up with some ads. And I’ll put up with some ads, but it’s like this example we keep coming back to about targeting Bud Light drinkers. That’s to niche, right? Targeting one specific brand of alcohol. So you say, okay, we want to target maybe across 200 brands that we’ve been getting from the advertiser. Don’t advertisers always want more specificity? Next year when the advertiser says, you know what, now I want to shrink that list down to 50 drinks and I want you to help me get there and we have this fire hose of data we can apply. I mean it’s like when does it stop?
Lex: [00:30:20] Yeah, well I mean, from the advertiser’s perspective, it only is beneficial or relevant if there’s enough pull there, right? If there’s enough, if there’s enough inventory there. And so when I was saying that we typically broaden up is because I think even in a year or five years’ time, if you’re just targeting Bud Light drinkers, you’re not going to have a big pool of listeners to be targeting.
[00:30:38] And I think your point is fair, Wailin, and I know you’re not alone. There’s people who just are frustrated that the tradeoff you have to make to use certain things or shop at certain places or have rewarding credit cards or whatever it is, is that you’re going to get targeted in these ways. But you said, we haven’t come up with another way. I think we have come up with another way and the market has spoken and meaning like there are a couple different competing services out there where you can get an ad free podcast experience.
[00:31:06] And the number of people using those services is a drop in the bucket compared to the podcast listening ecosystem. It probably doesn’t make sense for most people to say I’m going to sign up for eight different five dollar a month Patreon patronages to listen to these podcasts that I love. For some people that’ll make sense and some people are willing to make that transaction but the truth is many hundreds of thousands or millions of listeners don’t want to do that and they would rather get this content for free and I don’t begrudge them that. I get it.
[00:31:30] What you’re saying is basically it is unfair that to enjoy these things or to experience these things, I’ve got to be willing to get targeted. Now, the truth is we are going to be working to let people opt out of that kind of targeting, through those show notes links like I mentioned. And many websites and web browsers have the options to say, hey, turn off ad tracking. As more and more people use those things, advertisers are going to have to try, frankly, to find other ways they can target listeners.
[00:32:00] And so we’ve worked on that too, right? There’s context targeting. Like here’s what this episode is about. Sometimes if an advertiser comes to us and says, I want to be adjacent to any cooking content and we can even now say, hey, here’s an episode of a sports show that’s talking about what snacks to prepare for the Super Bowl. And since that’s cooking content, if they want their ad to be adjacent there, we can do that. So you can target by that. You can target by show category to your point of, hey, these are shows that reach—that are about parenting. Obviously, we can target by geo.
[00:32:31] But just coming up with ways to make ads relevant. The only reason to do it is because it’s beneficial to advertisers. And when I say that, the only reason that is because it’s beneficial to advertisers because that’s the tide that lifts everything else. If advertisers spend money then you can keep shows that hosts want to make and listeners want to hear.
Wailin: [00:32:42] I mean, I think that you and I probably will also have a fundamental disagreement over scale, because the baseline assumption in this entire conversation is that of course podcasts need to scale. And what if they don’t? We’re chasing big numbers. We’re chasing hockey stick growth. We want to see growth in advertising. We want to see like a huge number of podcasts creators able to monetize and support themselves full time. And I would love to see people be able to make a full-time living from podcasting if that’s what they love doing. I’m able to, I consider myself an extreme edge case there. But, what if the reality is that if we just adjusted our expectations of growth and what kind of growth was expected out of podcasting, then we wouldn’t have to kind of tie our fortune so closely to what advertisers want.
Lex: [00:33:43] So when I think about the scale, certainly there is the argument for companies that want a IPO or get acquired or just make more and more money and be truly purely capitalistic. Yes, they want to have more listeners so they can have more advertising dollars and they want all those things to grow. But I also think about it as a person who started by being a podcaster, and still has a couple of small podcasts that I host today, including What About Parenting, actually. I also think about people who aren’t going to be big enough to have a mid-roll or a Cadence or a Wondery take on their show, who should, in my mind have the same right or opportunity to try to make a living like you do out of podcasting.
[00:34:24] What I think about with this kind of targeted ads isn’t how can we achieve scale so that we can have bajillions more dollars. I mean that’s certainly, that’s a piece of it, but it’s also how can we make it so that somebody with a show that has, put it in quotes, merely 5,000 or 10,000 downloads an episode, how can they also be monetizable? Even if it’s, you know, you’re making enough dollars to pay you for your time each week and it’s not like retirement money and it’s gonna replace your full-time job income, but it’s extra income. That feels fair to me. That feels right to me.
[00:34:53] I know that big ad buyers aren’t going to buy host read ads on those shows and you can say, well, they should sell them individually. They should do it more bespoke and reach out to their friends who have businesses. And that’s all options. And that’s how I started was like calling up or emailing app developers and being, hey, do you wanna promote your app on the show? But there are, that’s where I talk about scaling right? It doesn’t make sense for a 10,000 different small podcasters to have 10,000 different conversations with every advertiser.
Wailin: [00:35:19] One last question for you is, you know, as we are constantly negotiating the line between what is considered okay and what verges into creepy from the listener perspective. When it comes to targeted ads, do you ever worry that if a listener is put off by a targeted ad, if, let’s say they’re listening to a and then for the first time they get an ad that they notice as being more targeted to them, than the ads they usually get. If they don’t like what they’re hearing, do you ever worry that the blame falls first on the show and that the show itself will be punished by a decrease in listeners?
Lex: [00:35:55] That’s something I take very seriously. We only want shows to grow and we only want audiences to be happy and we don’t want any publisher to suffer. So I want to be crystal clear. First that Art19’s ad program is entirely opt in. We weren’t putting any targeted ads in your podcast, right? It’s only for podcasts that—frankly, it’s invitation only today. We talk to publishers who are hosting with us or who aren’t yet hosting with us and say, hey, do you want to host here? And we can offset some of your hosting costs if we can run targeted ads. We can potentially pay you if we run some targeted ads in there. But nobody has to say yes, plenty way more customers use our Art19 and don’t run targeted ads, than do In fact right now we’re saying no to some publishers who want us to turn on targeted ads cause we’re trying to be really careful and picky about what shows and networks and publishers are part of that platform right now.
[00:36:39] Any time an ad is poorly received, the host will about it and if we see that that’s a challenge we can adjust in real time very quickly. Meaning every show approves every advertiser. So if we have 50 advertisers running targeted campaigns, it could be that, you know, networkX says, you know what, we don’t want to do any of the ones that are for alcohol or anything that involves home security. And that’s fine. Here in this case, we’re running targeted ads, and I think that part of it, just because of where the scale is and because of how limited the targeting we can do is, since we don’t have Facebook or Google or Amazon level data, We have a different, multiple layers back version of the data. I think the targeting feels way less creepy than some of the stuff can feel on Facebook.
[00:37:24] In fact, I don’t think it feels creepy at all. I think that most people… When I’m traveling for work and I’m in California and I get ads for California cable companies, it’s funny to me that that’s a limitation right now. It doesn’t realize that I’m only downloading this episode because I’m traveling there, but I’m not normally there. But when you hear ads that are just like a little bit more relevant to you because they’re targeting new parents or because they’re targeting photographers or they’re targeting men over certain age or whatever it is, I don’t think most people in that case feel like it’s any quote-unquote “creepier” than if you’re listening to a true crime show, you’re mostly gonna hear ads targeting women because women make up the vast majority of true crime podcasts.
[00:38:00] So it’s a different approach to the targeting. It’s instead of saying, hey, based on what this show is about, it’s saying based on what there is known about this particular listener. But I don’t think it’s being mishandled. I don’t think… because it can’t get super specific. It can’t be like, hey Wailin, we know you like rosé. It’s not that niche. Even though, listen, if it could be, you’re exactly right, advertisers, would love for it to be, but I think that we are so far away from being able to go to that level just based on ad demand and listener inventory and all those things, that most listeners today, if they even recognize that an ad is being targeted to them based on something wouldn’t be put off.
[00:38:37] That said, if listeners are put off, we have to evolve. It’s why we’re not just doing one kind of targeting. It’s why we’re also looking at geo and contextual and all those sorts of things, because we want to figure out what works best for advertisers and listeners alike.
[00:38:47] I came out of the tech world and I was never on the ad side. I was always on the product side and I was always the person, you know, yelling at the salespeople, why are you selling stuff that we can’t serve? Why are you selling these giant homepage takeovers, that’s gonna ruin the experience, whatever. I was that person and I still, I have a DVR that I can press one button and it skips the entire ad break and I use that button. So I get people who don’t want to be targeted or who don’t want to feel like ads are taking over. I really think podcasting is getting this right.
[00:39:13] Broken By Design by Clip Art plays.
Shaun: [00:39:15] After the break Wailin sits down with Justin Jackson of Transistor, the hosting company we switched to. But first, here’s a non-dynamically inserted advertisement from Basecamp. I’m going to turn it over now to Lexi on the Basecamp support team.
Lexi: [00:39:28] We have a huge variety of different customers and kinds of companies or endeavors that use Basecamp. That’s one of my favorite things about the job is to see how different people use it and what they use it for. Everything from a major league baseball team, lots of like architecture firms and artists and people who have their own small businesses like that. Lots of schools and churches, event planners, especially wedding planners and I’ve seen a lot of couples just using it themselves to plan their own weddings. Lots of snack companies and in particular a lot of coffee companies, which I feel like really resonates with us here at Basecamp. And I like the idea of like a lot of really over-caffeinated people using Basecamp to streamline their thought process and work because I relate to that a lot.
Shaun: [00:40:13] Basecamp combines everything you need to manage projects and people in one organized place. Check it out at Basecamp dot com
Justin: [00:40:20] I’m Justin Jackson and I’m the cofounder of a podcast platform called Transistor.fm. It was the result of a friendship I had with my co-founder Jon Buda. We were both into podcasting. He had built some podcasting tools before this and he mentioned that he was building something for Cards Against Humanity to use and I said, hey, I’d like to partner up with you on that. We decided to become partners early 2018.
Wailin: [00:40:20] And what did you want to be the differentiator of your product as opposed to other podcast hosting providers out there?
Justin: [00:41:00] When Jon and I were talking about this, we’re both in our late thirties, and we’ve been involved in software companies and the technology industry for a long time. And one of the things we talked about a lot was this idea of mindful companies or mindful technology, meaning technology that isn’t designed to be addictive technology that doesn’t grab your eyeballs and want you to stay focused on something. Technology that doesn’t want you to keep scrolling. Technology that doesn’t want you to stay engaged for hours and hours and hours with no chance of, of getting away.
[00:41:40] When the idea for Transistor came up, one of the things we’ve always liked about podcasting is it just felt like more mindful technology. We don’t require people to become super, super engaged. We don’t need them to click on a bunch of ads. That’s not the way it works. It’s built on this open platform called RSS. And most of my podcast listening happens when I’m doing something else. So I’m going for a walk or I’m driving in my car and then when my drive is done or my walk is done, my podcast is done. There’s no… I suppose you could get addicted to podcasts but it just doesn’t seem to happen as much.
Wailin: [00:42:24] Yeah, aside from the rare driveway moment perhaps.
Justin: [00:42:25] Yeah, maybe you sit in the driveway and listen a little bit longer. But when I was evaluating my own technology use, I just felt like, you know what? This just feels more calm. It feels like something I want to invest in as opposed to some sort of technology that makes people more, you know, tracks people all over the web and harvests their data and shows them more ads or whatever. It just didn’t, all that other stuff I was getting a bit burnt out on. And podcasting still felt like a refuge for people that wanted more calm, more slow, less addictive technology.
[00:43:09] There’s something also about not having to look at the screen that felt really unique. Like all of these other apps really kind of optimize for you staring at the screen and they want to, they say it like we want to keep your eyeballs. They want your eyeballs and it just felt so yucky to me. Well, why don’t we just leave their eyeballs alone, you know?
Wailin: [00:43:33] How did you build this mindfulness then, into the product as you’re developing it?
Justin: [00:43:38] Well, a lot of it is based on the constraint that it’s just two of us. It’s just myself and Jon Buda. We want to build it for customers that we like because we’re going to be serving them every day. We’re going to be answering their emails and their support requests. Every once in a while I get on the phone with them. I’m recording tons and tons of tutorial videos for customers all week. So these have to be people that we enjoy serving.
[00:44:07] We wanted it to be a product that matched up with our values. I just talked about that. And we want all of this to contribute to a good life for Jon and I as people, as human beings. So we didn’t want to build something so sophisticated and complex that it would require, you know, lots and lots of people, a really crazy technology stack.
[00:44:32] The more complex you build something, the more places it can break down. And you know, if we’ve taken a day off to go snowboarding, which we do from time to time, we didn’t want things to break while we were away.
[00:44:49] It’s been interesting to see why people switch to us and why people switch away. When I ask them, oh, you know, why, why are you switching to a competitor? Often it’s because they think they need these kind of more sophisticated tools like dynamic ad insertion, being able to target listeners in different ways. And at first when people switched away, it really bugged me because I felt like, Oh, maybe we need to be building some of these things to compete. But now that we’ve been going since—we launched in beta in March of 2018 and now that we have all of these months under our belt, I’ve been able to see some people come back that thought they needed this more sophisticated tool but actually realized that they really liked the simplicity.
[00:45:44] So, you know, there are podcasts networks that have to have ad inventory and they need to manage that ad inventory and be able to have people buy it dynamically and then have those ads, um, you know, inserted dynamically and be able to count impressions and all of those things. And so I think there’s probably a place for that in the market. We just knew that we didn’t want to build that. We just want to focus on doing the basics and doing them well.
Wailin: [00:46:17] This simplicity that we keep coming back to, that plays itself out in the design of your product, and your product roadmap and stuff like that. Can you talk about how that affects the customers that you’re looking for and the business model that you’ve set up?
Justin: [00:46:32] Well, it definitely means we say no to a lot of customers. So on one hand, if you’re trying podcasting for the first time and you really want to record the show on your phone and you just want to share it with a few friends, Transistor’s probably not the best place for you. One, you’re going to have to pay a monthly fee and it’s very likely that, especially for your first podcast, that show’s not going to last. On the flip side, if you are an enterprise company that needs us to answer a hundred security questions and can only pay by check, we’re probably not a good fit either. We’re not set up for that. We don’t have salespeople that can, you know, help go through all that due diligence. We don’t have lawyers that can go through all the due… It’s just the two of us.
[00:47:29] In the middle are all sorts of folks. A lot of our customers have a podcast for their organization, for their company. A lot of our customers have multiple podcasts. So that’s one of kind of the big features of Transistor. You can start multiple shows, but you can be on our smallest tier. We don’t charge you for additional shows. So people who are already in motion that aren’t enterprise level, that’s kind of our best fit for in terms of customers.
Wailin: [00:48:02] Did it feel like a big deal to say we’re not going to do dynamic ad insertion? I guess I’m trying to get a sense of how much demand is there from the podcasting world for kind of more whizzbang ad technology. And since at Basecamp we don’t take outside ads, I’ve never had to think about it except as an intellectual exercise as I try to pay attention to what’s going on in the bigger industry. But I don’t feel like I have any firsthand experience in what that demand might look like. And you know, what it would look like if I were shopping for a provider and I really needed assurance that I could do fancy things with ads.
Justin: [00:48:40] Yeah. Well I think a few distinctions are probably helpful. One thing I am very interested in is this idea of dynamic content. So you can have a podcast that is the regular show, but giving people the ability to say, oh, you know what, we have a workshop coming up in January. Let’s put a pre-roll before our show and say, hey folks, just before the show gets started here, we wanted to let you know we have a workshop coming up.
[00:49:13] The ability to do that is quite interesting. I think what doesn’t align with our values and doesn’t align with how sophisticated of an app we want to build is these more complex ad targeting tools where you’re trying to replicate what we have on the web. Which is, we’re going to track people and we’re going to collect a bunch of data and we’re going to then try to figure out who you are based on not only what shows you listen to, but maybe what you’ve browsed on the web. We to be able to retarget you. We want to be able to, oh, see that you were visiting here and then have you hear an ad for that later on when you’re listening to podcasts.
[00:49:55] That just doesn’t align with our values, number one. Because we’re trying to build calm, mindful technology. And second of all, we just don’t want to build something that’s that complex. Having to track and collect all of that data, all of that listener data, is, that’s a huge undertaking.
[00:50:17] I’m actually still not convinced that it’s good for podcasters themselves. So something like 80% of podcasts don’t get more than like a thousand downloads in the first 30 days. So for most podcasters this doesn’t apply anyway because to even get an advertiser to look at you, you’re probably have to be, I mean, it changes all the time. It used to be 30,000 downloads an episode in the first 30 days, and now maybe it’s 50,000 whatever it is. So, you’re probably in the top 5% or the top 1% of all podcasters.
[00:50:57] But even them, if we look at what happened in advertising on the web, where in the old days, you know, maybe your blog had a little Carbon Ads banner on the top right. And that was based on not user tracking. It was just based on, oh, well, if I want to reach this audience, if I want to reach the Daring Fireball audience, I can sponsor Daring Fireball. It just seemed that simple.
[00:51:29] When this new ad tracking tech came into web and blogs and everything, it wasn’t like it helped the web publishing industry. Ad rates plummeted. It became harder and harder to make money from ads. You had to create clickbait headlines. You had to compete with the Buzzfeeds, and then even Buzzfeed now, I think, is having financial trouble.
[00:51:57] So the idea that we would try to replicate that in podcasting seems funny to me. And inevitable, if you bring that kind of tech that you think is going to help advertisers or attract more advertisers, I think we’ve already seen that narrative play out and the end of the story wasn’t great.
Wailin: [00:52:17] Yeah. So do you get a sense of why then there is a push, even if it’s not necessarily really big yet, why there’s a push to replicate the same dynamics in podcasting? Is it that like we don’t have any other ideas about how we could possibly monetize audio content?
Justin: [00:52:37] Well, I’m just guessing, but there’s probably a few things at play. You know, I think for podcast producers, they’re thinking we have to—the advertisers are going to demand this. They want demographics, they want to be able to target listeners the way they target them on Facebook. But what they’re missing is what makes those ads so effective right now. Most of our shows are only using host read ads, so we don’t have any shows that are using dynamic ad insertion. So, I don’t really know, like maybe I’m missing out on all sorts of data that shows this is really what… And maybe it is what advertisers want, but maybe the answer is still to say, well no. If that’s what you want, we’re just not going to serve you. We’re going to have to figure out another way because you might give them what they want in the short term, and this is kind of my fear, is you give these big advertisers what they want in the short term, which is more data, more tracking, more targeting. But in the long term it just plays out exactly the way it did with online publishing.
[00:53:52] To me, that’s a big risk and you will have lost this advantage you had, which was these host read ads that were working already. You didn’t have to mess with the model and it might also mean that podcasting just has to grow slower than we’d like it to. If we’re trying to bring in all this new ad tech just to make podcasting grow faster. I don’t think it’s worth doing that. Podcasting has been growing pretty steadily since it started. It’s been, there’s been no hockey stick. It’s just, you know, 10-15% a year, or something like that. And to me that’s fine. Why do we need to make it grow any faster? I mean, we’ve been, Jon and I’ve been running this business for not even two years. And already the time that’s elapsed has given us insight that we didn’t have when we got it started.
[00:54:54] And I wonder if we just need to slow things down again and go, let’s just wait and see. Instead of jumping into… instead of saying we, must have new ad targeting technology for podcasters, we must! The industry depends on it. Well, maybe not. Maybe we need to consider other things and maybe we haven’t considered those enough. Maybe we’re getting bullied too much by advertisers who say that we have to do things this way. Well, maybe we don’t have to do things this way.
[00:55:28] There’s some Transistor customers that are podcasting for their employer, and that’s.
Wailin: [00:55:37] Like me!
Justin: [00:55:37] Yeah, like you and that’s, that’s great. We need those kinds of podcasts. There are some Transistor customers that make enough on Patreon to, pay a few bills and they’re having fun doing it. Well, that’s great too. Like, if you can do something that brings you joy and it pays some of your bills, that’s great. Keep doing it.
[00:56:05] One thing that hasn’t been considered a lot but is just starting to gain traction is this idea of having maybe a podcast that’s public and then maybe a podcast that’s private, only for members.
Wailin: [00:56:20] Mm-hmm.
Justin: [00:56:20] And I think podcasting, even more than the web, you know, we’re all used to hitting that New York Times paywall. Podcasting, actually, I think it works better for podcasting. And I’ll give you an example. I listen to this show called Sleep With Me. Have you heard of it?
Wailin: [00:56:38] Oh, I have. Yeah.
Justin: [00:56:40] So for anyone who doesn’t know about it, it’s this fellow Drew who lives in San Francisco and he talks really quiet and slow and the whole idea is that he tells you really boring stories at bedtime so that you fall asleep. And his podcast is ad supported. But if you want a non-ad version of his podcast that also has all these bonuses, then you can support him on Patreon and then you can get the private RSS feed that you just add to your podcast player the way you normally would. And now, instead of getting the public version, you’re just getting this private version, this private podcast version. And I happily pay for this because he’s giving me something of value, which is, he helps me fall asleep. Well I think that model still has… there’s some unexplored territory there and it fits perfectly with the way the technology already is. We don’t have to do much to the RSS a spec to make that work, right?
Wailin: [00:57:50] And I wanted to kind of wrap up on a really positive note and I actually think this is trending in kind of like a less dark direction than we were in the middle because now we’re kind of like talking about what could be some interesting ideas, right? Which is always more interesting than like, God ads. Ads are all terrible. I wonder if all of this thinking you’ve done around sustainability, around thinking for the long term and readjusting expectations. I was wondering if you could talk about that in relation to this big milestone you just announced today, which is hitting $30,000 in recurring monthly revenue, right. Which you said enables you and Jon to do this full time.
[00:58:28] I was really taken with what you said on your blog post about how when you look at that amount of money in Silicon Valley, people would not be impressed with that figure and it wouldn’t go very far. But you and John are not in Silicon Valley and you have different expectations of the kind of life you want and the kind of business you want to build. So can you talk a little bit about that?
Justin: [00:58:48] Yeah. I’ll couch all of this to say we are still really early. And so, I think also in the post I say, you know, even if this all blows up tomorrow, which could happen. The market can move all sorts of different ways. I don’t know what’s going to happen tomorrow, but I am really enjoying this place where we’re at right now. And in some ways I’m thinking of it as maybe this is just a really great place to be. And the idea of working with someone, I like, serving customers that we enjoy serving, building a product we believe in and being able to have a good life. I’m just so grateful for that. You know, for Jon and I, that means yeah, we’re not making as much money as we were previously. And definitely if we went to San Francisco, we could make a bunch more. $30,000, I don’t think that even pays for a single developer in San Francisco once you add all the costs, right?
Wailin: [00:59:55] Yeah.
Justin: [00:59:56] But for us, you know, Jon’s in Chicago and I’m here in British Columbia. That’s enough money to live on and my life is just so good. It’s calm. You know, I wake up in the morning, I jump on my bike, I go down and get a coffee. I’m in the office at around 9:30, and I leave around five o’clock. I enjoy my time at work and then at the end of the day I can go, okay, I’m done. Yeah, there’s just nothing like it. It really feels special and that, we’re grateful for. We’re grateful for this moment and if we wake up tomorrow and we get to keep doing it, we’re going to be grateful for that. And if that continues for years, we’ll be grateful for that too.
[01:00:39] And I think that’s also why we’re being so careful about what we decide to embark on next. What we decide to build next. Are we going to hire people? If we hire people, how would that effect what we’ve built already? And why are we doing this, at the end of the day? What is this for? You know, definitely it’s to empower a podcasters so that they can get their audio to the world. We love podcasters. But this is also for us to have a good life and it feels like building something that’s sustainable and has the ability to maybe last a long time just because it’s sustainable. That feels really good.
David: [01:01:23] I’d rather support a smaller startup that was making great product rather than some big company. So this was sort of like the cherry on top, which is like, hey, we also got to just get some better software made by people we had more in common with. That feels pretty good.
[01:01:38] And what was the cost? Okay. We scrambled for a few days and we changed some links over and we migrated a bunch of things. You can hear that I clearly did not do any of this work, so it’s very easy for me to summarize it in a glib way. But even if it was a lot of work and I mean clearly it was a fair amount of work. That’s the kind of work that’s good to do. That’s the kind of work we should be doing. I mean if we get on the air and talk about high-minded ideals of things and principles that we believe in and we then don’t live that, that’s just shitty.
[01:02:10] So I was really happy actually to get called out on that and I had another incident of this happen Friday around the same time where someone emailed me saying, oh, I hear you’re, you’re all this about tracking on the internet and so on and so forth. Like that’s all good, but have you checked your own website? And it’s like, Jesus, I thought my own website was clean DHH.dk. And he was like, there’s trackers on there.
[01:02:30] I’m like how the… what the F, I thought I’d removed Google analytics and I checked, yep, no Google analytics. Then I found out I fucking embedded a YouTube video and having just that player in there loaded up all sorts of shit. In many ways, like I enjoyed the call out because it’s literally information, which is sometimes a little bit of a funny comeback because people will put it to you in bad faith, right? They’re basically just trying to point out that you’re a hypocrite when we most of the time just go like thank you for the information, let’s get right on it and then we get right on it.
[01:03:01] I literally stopped everything I was doing to clean my own website. We pretty much stopped what we were doing to immediately jump to a different podcast provider and like I think like one episode later we were publishing under the new podcast provider. So thank you for both of these call outs, whether they were in good faith or bad faith. I don’t give a shit. This was good. We got better. Hallelujah.
[01:03:21] Broken By Design by Clip Art plays.
Shaun: [01:03:25] Rework is produced by Wailin Wong and me, Shaun Hildner. Our theme music is Broken By Design by Clip Art.
Wailin: [01:03:31] Thanks again to Justin Jackson and Lex Friedman for coming on the show this week. And Art19 gave us our money back for the time we had left on our 2019 contract, which I’m not even sure we were entitled to. So that was very nice, thank you.
[01:03:43] Also thanks to Kevin Finn of Buzzsprout. They’re another pro privacy podcast hosting provider, and Kevin was the one who really helped get this ball rolling by tweeting at DHH.
Shaun: [01:03:53] You can find show notes for this episode at Rework.fm and we’re also on Twitter @reworkpodcast.
[01:04:00] If you see something, say something. Like David said, whether you want to point out something to us in good faith or in bad faith, we don’t give a shit.
Wailin: [01:04:07] Hallelujah.
[01:04:09] Rework is a podcast by Basecamp, the all in one app for organizing your work and communicating company-wide. Find out more and sign up at Basecamp.com