Episode #164: Jake Shapiro, RadioPublic, “It’s This Incredibly Engaging, Highly Effective Medium For Really Valuable Listening”
Guest: Jake Shapiro is the CEO and co-founder of RadioPublic, Podfund, co-founder of VC firm, Matter, and former CEO and co-founder of PRX.
Date Recorded: 6/7/19
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Summary: In episode 164, we welcome our guest, Jake Shapiro. Jake begins by talking about his background, as well as his early days in public radio with NPR.
Meb asks Jake to expand on major moments for podcasts. Jake discusses the three waves of podcast growth from the 2003-2005 era where podcasts were first introduced, to when Apple incorporated podcasts on its platform and the introduction of the iPhone, to 2014 when both a confluence of trends and Apple breaking out podcasts from iTunes as a standalone app created an important inflection point for growth.
Meb asks Jake to get into the point when he started branching out into some new ideas. Jake explains the spinout of Matter Ventures which launched as an accelerator for early stage mission driven media companies.
Next, Jake walks through the frustration with monetization and the solution that ultimately spurred RadioPublic. As it was spun out to run as a startup, Jake left with it. He discusses the backing it had, and RadioPublic’s current focus.
As the conversation winds down, Jake talks about podcasts being under monetized. This was the inspiration for Podfund, a fund that set out to help podcasters with tools, expertise, as well as startup and growth capital.
Hear all this and more in episode 164.
Links from the Episode:
- 0:50 – Welcome the guest and Jake’s origin story in music
- 1:18 – Investing in the Podcast Ecosystem in 2019
- 6:46 – Jake’s career in radio starting at NPR
- 9:48 – The start of PRX
- 12:03 – PRX expansion
- 13:06 – The Long Tail: Why the Future of Business is Selling Less of More (Anderson)
- 15:13 – The three waves of podcast growth
- 20:48 – The formation of Matter Ventures
- 24:12 – Beginning of RadioPublic
- 26:17 – Deep dive into RadioPublic
- 29:24 – Handling the ratings situation within podcasting
- 29:55 – The Idea Farm
- 34:55 – Features to look forward to using RadioPublic
- 39:10 – Insight into the future of podcasting based on their analytics
- 44:51 – Effectiveness of podcast ads
- 46:52 – Inspiration for Podfund
- 49:56 – Podcast Revolution
- 53:06 – Capital Allocators – Michael Schwimer – Moneyball as an Investment Strategy (EP.72)
- 55:01 – Criteria to getting considered by Podfund
- 57:54 – Other exciting trends in podcasting
- 1:00:20 – Most memorable investment
- 1:01:44 – How to connect with Jake: radiopublic.com, Podfund, @jakeshapiro on twitter.
Transcript of Episode 164:
Welcome Message: Welcome to “The Meb Faber Show,” where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.
Disclaimer: Meb Faber is the co-founder and Chief Investment Officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.
Meb: Happy summertime, podcast listeners. We have an awesome show for you today. It might even get a little bit meta, talking all things podcasting. Our guest is the co-founder, CEO of RadioPublic. You’ve heard me mentioned that at numerous times on the podcast before. Co-founder of Podfund, PRX, MatterVC. Welcome to the show, Jake Shapiro.
Jake: Thanks so much, Meb. Psyched to be on with you.
Meb: I’m excited to go down the rabbit hole of all things podcasting. There was a really awesome deck that we sent around this week from a16z that was like 70 pages of podcasting goodness. But I want to rewind and start with a little bit of your origin story. My producer said you started out as a South Korean rock star, is that true?
Jake: Kind of, yeah. That was sort of my beginning in all things digital was a musician, so played in a long series of rock and rock bands throughout my career, I think starting with sixth grade when we played “Beat It” with a cameo guitar solo by Eddie Van Halen. So I was trying to learn how to play that back in the early days. But the band that I started in around 1996 was called Two Ton Shoe, T-W-O T-O-N S-H-O-E, like a big, heavy shoe. It was kind of a funk, soul-rock band.
And we had a fan and a friend who worked at the MIT Media Lab, and this was 1996. And so he and I set up our first website and server, and we started distributing our own direct MP3s and building like email lists and fan clubs and starting our own digital record label. This was like super early. And not only that, but like as they were developing standards for like MPEG layer three and layer four, they ended up using one of the Two Ton Shoe songs in the white paper for the standard.
I, of course, not only was the guitarist and like a partner in the band, but I ended up, by default, becoming like the manager and label guy. So we were an early guinea pig in a lot of the digital music startups of that era. So one of the stories I like telling is that when mp3.com got started in, like ’98, ’99, we were one of the first bands to really like get on it. And it was, you know, it had to be this new discovery platform for unsigned artists and different kinds of bands. And we shot up to the top and like won their best band in the internet contest at some point.
But when they did their IPO, which was like the height of the dot-com heyday in like the summer of ’99, like July of ’99, the founder Michael Robertson, who I have since occasionally thanked for this, did this like unusual thing. And he said, “Any rock band who had an account on mp3.com prior to the IPO, if they opened up a Charles Schwab account in like 48 hours, they could buy-in at the banker at the private offering price, the insider price.” And this was a moment when all these things are going through the roof.
So I got the band, it’s like friends and family that cobbled together a couple thousand dollars, and we bought all the shares. You know, opened up the Charles Schwab account and bought all the shares we could at 26 bucks, the offering price. And they warned us that you couldn’t flip it or you’d, like, never have a Charles Schwab account again or something. And, of course, we flipped it, like, as soon as we could because it went to like 150, like, the next day.
I think we managed to sell it at 90, and that paid for the band van, it paid for a new guitar, we recorded our next album, but it was a hugely important moment in the meta version because it was one of the few places where the entrepreneur brought in the artists in the value creation of the platform, which was based on the artists. I wish more of that happened, but it was a very instructive moment for me, both in the sort of, like, the early internet music days and also what it means to build some of these businesses that are helping artists as entrepreneurs.
Meb: Man, you brought back a lot of fond memories during that description. First of all, I think a lot of people don’t know that that was Eddie Van Halen’s solo in the Michael Jackson song. That’s a great trivia piece. Second…
Jake: It is. I usually try to turn it into a trivia question. I was like, “We picked that one song because of the cameo, who did it?” It’s an amazing solo. I still can’t play it today. Never mind when I was in sixth grade.
Meb: That bubble, I was in college during that bubble, and it brings back a lot of fond memories of, I mean, we had professors that were checking stock prices during class and it’s hard to really convey that to other generations of younger investors. Maybe you can talk a little bit about a crypto to them, but of what a real mania felt like, and it was a lot of fun. But also, it reminds me, as you were talking about mp3 because I was a early adopter in the opposite direction. I went mini disc. Mini disc, for the young listeners, was basically like a small CD in a case. They were amazing because they didn’t scratch, they didn’t skip, but they were not adopted.
Jake: I’ve got boxes of them still sitting here. I mean, we recorded a lot of band practices on mini discs. I’ve got some kind of that stuff. And it turned out that, to get to the South Korea bit, that one of those songs, a decade later, became a viral hit in South Korea, a song called “Medicine” by Two Ton Shoe, and we got a call out of the blue. This was like way past the heyday of the band. That was like 2007, 2008, when I was already off into my whole, like, podcast and radio career. And this label called us, said, “You have a song that’s blown up over here, but, you know, there are no, like, sales because this is all an internet economy. So we want to fly you over to do some touring and release your back catalogue.” And so we actually flew over and ended up playing sold-out shows, including Olympic Stadium and sold out clubs and the fans know all the words to the songs. We sort of had like this strange trip of being like rock stars for two weeks in South Korea. And to this day, you can find cover bands playing “Medicine” in South Korea. And I’ve been teaching, occasionally, how to play that solo from that song to Korean guitarists.
Meb: That’s like a Harvard case study. I feel like that’s one of the most beautiful random benefits of the internet is things like that.
Jake: It’s one of those, like, long-tail success stories where, you know, the moral of the story is there’s a South Korea out there for every great artist, you just have to find it. It’s like the thousand true fans Kevin Kelly thing. And so it was definitely a lesson learned and fun to be at the epicentre of it.
Meb: You know, put that on your tombstone. There’s a South Korea for everyone. All right, so take me through the past, so after your fame in South Korea, did you start out at NPR? What was the radio bit? Walk me through it.
Jake: So I was playing in the band but I needed the actual day job, which is not an infrequent experience. I got hired as a producer for an NPR call-in talk show called “The Connection” produced out of WBUR in Boston 2000, 2001, which was amazing. I’d already been a fan and a listener, but I fell in love with the medium, fell in love with sort of high-quality journalism and just like daily adrenaline of like a talk show on every conceivable topic. So we would one day be talking about like philosophy and jazz piano and, then the next day we would be covering the hanging chads Florida recount, you know, supreme court hearings. And that show ended up blowing up.
There was a fight between the producers and the station management. It was sort of like classic sort of talent versus management, question of control and IP. And this was also sort of the backdrop of the dot-com thing. And we set up an independent production company. I ended up leaving to start essentially a pre-podcast, digital audio company because podcasting hadn’t yet been invented, but we were distributing our own direct MP3s of this talk show, you know, sticking them up on a PHP nuke, you know, website that was like community home for the fans of the show. And webcasting was the phrase at the time. We were webcasting it out to other radio stations.
And we got an invitation to set up shop at this academic think tank called the Berkman Centre for Internet and Society, which is at Harvard Law School. And they invited us in to sort of incubate this thing we were building, and I ended up getting hired there as the associate director around 2001. And that place, really then, back then and is still today, this amazing confluence of a lot of interesting thinking in the kind of academic intellectual and policy side of the internet.
And later around that time was when Larry Lessig was there, and they started Creative Commons in 2002, and this whole licensing scheme to try to make it smoother, to have shareable intellectual property on the internet. And then a year later, Dave Winer, who was the blogging pioneer that really invented RSS, showed up as a fellow at the center, and he teamed up with my former radio boss, Chris Liebing. We got him as the host of the show, and they ended up almost accidentally inventing the first podcast in the summer of 2003.
Dave was an advocate for RSS and blogging, and that was just emerging as a phenomenon. Chris was recording audio interviews. In fact, he was going up to New Hampshire and trying to cover the primaries. And he was like looking at the Dean campaign and was recording interviews. And I remember this because I was sitting at the conference table when it happened, and Dave Winer was like, “Why do I have to keep going to your web page to see if there’s new audio interview? Why can’t we just stick it into the RSS feed like my blogs and it shows up automatically?”
And there you go, that was actually the invention of podcasting. I’m not claiming any credit to have done it but I was at the table where it was invented. And it was all really sort of an interesting confluence of trends happening at that time, but it was sort of at the moment it seemed like a trivial hack. It was like just an add-on audio blogging, essentially, but it quickly became apparent, this was an incredible new avenue for distribution and expression and, you know, hopefully, some business models eventually.
Around that same time, I left the Berkman Centre to co-found this brand new startup that was just an idea on a piece of paper, but luckily had some really great mentors and stakeholders called PRX, the Public Radio Exchange. That was the fall of 2003 where the idea was, this was a nonprofit because all the risk capital going into internet startups had dried up, especially media journalism. And so luckily, the forward-thinking foundations and philanthropies like Ford and MacArthur, and National Endowment for the Arts, in cooperation for the broadcasting, recognized that this was an important medium that somebody needed to build, experiment, do all the R&D for what would happen in digital audio.
So we made the case that PRX would create an online marketplace to help independent producers of stories and documentaries, this is still, again, podcasting wasn’t yet a phrase anybody knew, but anybody who’s creating these radio shows, we would create an open marketplace where you could directly upload them and then we would make them directly available to local broadcast affiliates of NPR all over the country.
So the idea, and this is still true today, you can go to prx.org to the exchange, and if you wanted to upload an episode of this podcast, you can make it available for broadcast on local NPR shows all over the country. And the stations, if it’s a B2B marketplace, they would go license the show, download it, put it on their, you know, local broadcast automation systems and send it out to the terrestrial listening audience on radio.
And Dave Winer at the Berkman Centre was like, “That’s pretty cool but you should be making those all available as podcasts, too.” So even at the beginning PRX was straddling these two worlds of trying to change the broadcast system to a new marketplace and then cultivating this early idea of what podcasting could be, which, back in 2003, 2004, there was like a rush of interest but also a really slow to pick up audience because you had to plug your iPod into your Apple laptop and connect it to your iTunes desktop application.
It was a little hard to make it all work, and so we built our first podcast desktop app called Pubcatcher in 2005. It was like a PRX product. So it was like, that was just the first phase of this whole journey, but it’s interesting to think back that those were some of the building blocks that got me started.
Meb: Well, all right, P to iTunes, I think they just recently announced that’s going the way of the dodo. It’s funny because I mean, man, it seems like you were a full…I mean, that’s like a full decade ahead of what seemed to be mainstream adoption. So in the post ’05, ’06 period, was it kind of focusing on that business? And then at what point did the genesis of the rest of your ideas come to fruition?
Jake: You seem familiar with those phrases. I mean, this was sort of dawn of Web 2.0 and like the dawn of social, and it was still pre-mobile, pre-smartphone. Digital audio was still stuck in the sort of like RealPlayer and Winamp days. You know, part of the real friction was that audio, until the smartphone ,was a terrible fit for the internet. You know, you’re trying to jam audio files into web pages, and that is really just not a good distribution model. So it was always this kind of like awkward evolution, even for music, but particularly for spoken word and podcasting.
The way we handled it at PRX is we began building that marketplace and climbing up the long tail. So, you know, Chris Anderson wrote that “Long Tail” book right around that time, and we were in the book. PRX was included as a reference, you know, early example of a long tail marketplace because we built this open aggregation. We had tens of thousands of these stories available for licensing but we recognized that we needed to start to develop talent and shows as well, both the technology and have a stake in the content side.
So around 2007 that led to us helping create something called, “The Moth Radio Hour.” So it was like this phenomenon of a live local storytelling event in New York, and they dabbled in thinking about taking it into radio or audio, and we helped them develop it into a radio show that then became a very successful podcast. That was really our first, PRX’s first stake in more of a franchise that was a weekly national show that led us to eventually bring on “This American Life” for distribution and eventually start the whole Radiotopia Podcast Network.
But in those intervening years, you know, looking back on it, in a lot of ways we were an R&D. We didn’t have a business model that was yet functioning to power the whole organization. We were growing one because it was a licensing business, but we were essentially on behalf of the industry with subsidy from philanthropic, visionary philanthropic sources, experimenting with stuff. We started building those desktop apps. And then in 2008, when the App Store on iOS launched, we built the first aggregation app for podcasts and live radio streams called the Public Radio player. It was literally like within the first month of the App Store launching, we turned our developers into iOS developers and began building native apps because it was immediately clear that this was the section point where audio could make sense in a digital world outside of the metaphor of a web page.
Meb: I’ve been to a Moth before in Los Angeles at a bar called Zanzibar, which doesn’t exist anymore. Sad. It was a great salsa club too. I can’t salsa dance but it’s good music.
Jake: Did you tell a story? Did you tell a Moth story? Did you get up on stage?
Meb: You know I would’ve, I think, probably, but I was a voyeur. I was an audience member. I loved it. I had a great time. You remember you’re in LA, so everyone telling a story is like a professional storyteller because they’re all wannabe actors doing monologues essentially but it was good. So you’re still years ahead of your time. It’s bringing back a lot of fond memories, I mean, because you’re talking about the early days of this and that. We had started a blog in the early, mid-2000s. And so thinking back to Blogspot and Blogger, and our blog role, and the way that you interacted with people, pre-Twitter and everything else is taking me back.
Okay, so financial crisis happens. I feel like, was that sort of the time…I mean, I think the iPhone is probably the accelerant for the whole podcasting world, maybe you have a different opinion, I don’t know, but it seems like post-financial crisis, was that really when podcasts started to find their footing and was there kind of a main moment there?
Jake: When I look back, I feel like there’s three waves with this third one, you know, as the one that really hit the inflection point, but that first one was, of course, the kind of founding moment, the 2003 to 2005 era of the introduction of podcasting as an open standard, and then Apple incorporating it in 2005 was really where it simultaneously like sort of got elevated into, you know, this major platform but also kind of got calcified, because they didn’t build a business model on top of it, they didn’t really innovate. So it sort of sat there for a while, but at least got sort of fixed into the firmament of like Apple’s own devices.
And then you’re right, the introduction of the iPhone began this second wave, and that suddenly made it clear that these phones were actually also radios, and two-way radios at that, but it just changed the dynamic incredibly, where all of a sudden, the distribution of audio instead of being stuck in desktops and web pages could be freed and opened up and transported along with you, which, ironically, I mean, it is like the transistor radio or the Walkman. Like, suddenly we had those back, but they’re everywhere.
That took a little while, of course, and then the phone was introduced and the App Store was launched but it took a while for consumers to gravitate towards that new habit. So over the coming years, 2008, 2009 that was around when Stitcher launched their like a first standalone podcast player. We launched the Public Radio Player. We began building standalone apps for “This American Life.” We built an app, and then stations like KCRW in LA and WNYT in New York, we began building apps on their behalf. We started to see a lot more growth.
I would say that it was the confluence of the propagation of smartphones and consumers getting habituated into expecting on-demand media of any kind. So whether it’s, you know, YouTube, Netflix, or Spotify, but they just got used to the idea that there was, at their fingertips on their phone, on-demand media, and then podcasts, of course, we’re not just high-quality media but they’re free and they’re still really confusing. You know, everybody sort of had just…like, still today, there are people you’ll meet when you say, “Do you listen to podcasts?” And they’re like, “I don’t know how.”
There’s still this, like, friction just around the concept of it, but it did mean that that second wave started to lift the visibility and participation both of audiences and podcasters. And then, really, the third wave, you know I can fill in the gaps about what we were doing during all that, but 2014, you can mark it on a calendar, like that is the birth of the modern podcast industry that we’re now just shy of five years into today. The inflection point there was, one, it was all of those trends that I had described finally reaching kind of scale.
Two was Apple broke out the podcast app from iTunes that made the little purple icon. Suddenly on millions of phones, by default, there was this new thing that you could touch, and suddenly podcasts were listenable. That same year was the year that “This American Life” launched “Serial.” That was the year that Gimlet launched “StartUp.” It was the year that PRX launched “Radiotopia.” That was the year that Slate launched Panoply. 2014 was the breakthrough year. That was when Nick Quah began “Hot Pod” to start chronicling the industry.
So you can see a trend that had been lagging finally breaking through, which was advertisers recognizing that this was a really valuable engaged medium, that there’s an audience there that was listening with extraordinary attention. And they began shuffling parts of their budgets into podcast advertising, including, of course, the direct response advertisers, who found that to be a perfect fit for how they want to reach consumers.
Meb: I’ll tell you the aha moment we had. And so we’re not the first adopters, but we launched, what, 2015, 2016, I can’t remember at this point, 150 episodes. I don’t know. Anyway, but we had resisted doing it, and then the investment world had always really struggled with the concept that they don’t teach personal finance and investing in high school or college so we always say there’s a great business opportunity for someone to really develop some basic education courses. So I had always thought that the correct delivery mechanism was online videos for that.
There still is an opportunity to do that, but we had resisted doing a podcast for quite a while at that time because of thinking the video was what everyone wanted. And eventually on just like a board whim, had tweeted out to our audience and said, “Hey, would you rather prefer, all things given equal, a really high-quality production video series or a podcast, audio-only?” And it was like 80% or 90% said podcast, and that just floored me. I was like, “That’s so weird because I voted for the video,” but it’s obvious in retrospect, right? People were like, “Oh, I can listen to it on the train, while I’m at the gym, while I’m walking my dog,” all that sort of things, which we’d started a lot earlier. It’s been a lot of fun. So enough about me, but it was right around that same time. Okay, so you’re cruising along with PRX, what’s kind of the development there? And then at what point did you start to branch out some of these other ideas?
Jake: In 2012 we spun out a separate company called Matter Ventures, matter.vc, and it was partly based on our experience of being an innovator in technology and media and recognizing that there needed to be some seed capital for other similar mission-driven media inventions. Then rather than… You know, when we first started to do it we got grants of two and a half million dollars from the Knight Foundation. We were gonna do it within the four walls of PRX and decided that that would be a little off-strategy for us to be incubating more things.
I already had a little bit of trouble leading the organization being the kinda person who gets distracted by too many new initiatives. So I’ve been trying to have more discipline, and the answer there was to actually spin it out, turn it into a for-profit fund, and then found an extraordinary person to run it, a guy named Corey Ford, who had been at the time, after having led some of the design thinking work at the d.school at Stanford, he had been working for Eric Schmidt running an early-stage accelerator program for innovation endeavours for Eric but had been missing his journalism and media roots. And so I recruited him to take over as managing director of Matter Ventures.
And we got some matching limited partner investors into a fund and launched it as an accelerator for early-stage, mission-driven media companies based in terms of scale and then we had eventually opened up a New York branch. PRX is one of the founders, so we owned a little piece of the fund, but we really made it a separate company because it was a different beast entirely. But it taught us a ton, both about some interesting structural governance ideas about nonprofits and for-profits and hybrid enterprises, but also the accelerator model and early-stage entrepreneurship and really the sort of Venn diagram of entrepreneurship, digital media, and design thinking, which was really Corey’s strength and discipline.
So Matter began its first cohort five-month-program. It ended up doing seven of those over the course of two funds. It’s currently deciding whether it wants to raise a third fund or a 10, but it was a really great window into that entire phenomenon that really was taking shape too about vertical accelerators and the other kinds of things that we were trying to develop. Some of those ingredients, the reason I spent a minute on it is because they are some of the DNA that got recombined into what we’re doing today with Podfund, which we’ll definitely get back to.
PRX continued at that point to start to see a real business model forming around podcast distribution. We’ve made a hard decision to stop building, have like this apps business that was almost a white label business for building mobile audio apps for partners, and patients, and producers. We wound that down, we launched Radiotopia as one of the first podcast labels. It’s like, you know, a podcast network in partnership with Roman Mars who’s the host of “99% Invisible,” really successful independent podcast.
And it was really one of the first to sort of strike this model where almost like, you know, for those familiar with the YouTube universe, it’s like a multi-channel network, but saying we wanna represent this group of really excellent producers who own their own shows, but PRX will provide the ad sale, distribution, marketing, technology for publishing, and as a collective could actually have some real slow weight with the platforms. Radiotopia launched that same summer of 2014 and is today one of the strongest podcast networks.
And we did a Kickstarter campaign that fall, which was really successful as well, raised like half a million dollars to get the network started. But one of the things that was a source of frustration, like we just knew this was friction and a problem, is here you are with millions of listeners, and you’re running a campaign on Kickstarter. And the only way to get them from here to there is to ask them to do it in audio and be like, “Hey, we know you love listening to us, although we don’t know who you are and we don’t know how much you listen. Unfortunately, you can’t click a button on the app where you’re listening. You have to go over to Kickstarter and then sign up anew to support us.”
I had been lobbying Apple for a long time to build in some of the hooks that would allow for direct donation or payment or at least, you know, some sort of funnel for engagement. Those kinds were not happening back then, but we knew it needed to be done. So, you know, took us a while, but about a year and a half later, we decided to build a platform that could do all those things, really help with marketing engagement, monetization for publishers and podcasting, and we decided to spin it out again. So that instead of being inside of the nonprofit, we decided to create a separate for-profit, make it a startup, and that became RadioPublic. And this time, in order to give it a shot of success and also to separate out the two different entities, I left with it.
So I came and became the founding CEO of RadioPublic. We were in a really good place with PRX because it became a strong network, and my Chief Operating Officer, Kerri Hoffman, who had been there from the beginning with me, was more than ready to take the reins and really run PRX as my successor as CEO. And then we set it up as a hybrid where PRX was on the cap table for RadioPublic. It’s a founding partner but it’s a separate entity. And we raised a seed round for RadioPublic with a mix of institutional strategic investors like Homebrew, the NSF, but also the New York Times and Project 11, a fantastic fund here, obviously from Boston, but also American Public Media, Bose Corporation, you know, sort of a really great mix of investors who are backing the RadioPublic platform, which we really launched, I think, it was the spring of 2016 was when we announced it, and we launched the product in the beginning of 2017.
Meb: So you’re a couple years in, talk to us a little bit about what RadioPublic’s focus is, how you guys are different, what you’re up to. All that good stuff.
Jake: I mean, it’s been fascinating, of course, because like this last two and a half years has had so much rapid evolution in the industry. And as an early-stage startup, you’re constantly iterating and solving and figuring out and doing all these pivots around product-market fit. I took two of my engineers who had worked with me at PRX for a long time. We had enough head start in having built many things within the industry that we were very deliberate about the kinds of things we thought were missing and what we needed to build.
So the first focus was more on the user experience and discovery side with a view toward saying, the ultimate customer is a creator. Like we want to build a B2B2C platform where, you know, the way to gain traction and market share is not necessarily by trying to compete with Apple at its own game because they’re gonna beat you at that. But by solving the problems that podcast publishers have, that are still remaining, and they’re growing, because they need all of the tools to do marketing engagement and monetization that don’t exist anywhere else.
Some of those things, for example, are a couple of innovations. One is, the whole way to issue call to action. With New York Times, for example, we were lucky enough that they launched “The Daily” right around the time we were launching RadioPublic and they had, as an investor and a partner, they linked to our Android app as the exclusive first link for “The Daily.” But the goal of “The Daily” isn’t just listening and advertising, they wanna convert listeners to New York Times subscribers, or at least have them take the next step to join the email newsletter. How do you turn that funnel from listening into taking action?
We built this thing called Affinity Promotions, and what it is, it’s a score, it’s an algorithm, where on device each listener, per user, per feed, per device basis gets a score that is an expression of their affinity for the show. If you listen all the way through to “Meb Faber Show,” you know, you get a high score. If you skip one, your score goes down a little bit. If you share it, your score goes up. If you listen within, you know, four hours of the new episode dropping, your score goes up even more.
So that score then we can unlock a promotion from the publisher to that individual user based on the score with a call to action. So an example would be, “Hey, we notice you love listening to the show, do you want to join the email newsletter? Click here.” The click here just goes to your email, you know, your MailChimp, web-friendly funnel, but the conversion rates are crazy through the roof. They are 20%, 30%, 40% because it’s only unlocking for someone who’s exhibited high affinity through their listening.
So that kind of connection, which I think was part of the missing value of podcasting across the board, is the kind that RadioPublic began solving for, but definitely I don’t think at this stage we’ve like cracked it for the whole industry. It’s still a small audience all told that’s using these tools, but it really has started to demonstrate what we know to be the bigger picture resulting to that podcast, they need that kind of an engaged marketplace that isn’t just driven by the thin layer of CPM advertising monetization but as the much deeper value of these highly engaged listeners who will jump through walls, if you invite them the right way, to support what you’re doing.
Meb: I know I’m probably the only person on the planet that believes this, but I love harassing all my podcast app friends about the rating situation as something as a podcast host but also a consumer, I probably listen to, I don’t know, 30 to 40 podcasts that I subscribe to. I don’t listen to all them, of course, but I am up to about two to three times speed on most of them. But it grew to be such a frustration on my side. My producer here, Justin, part of his detail was to listen to all the podcasts each week and rank them, and we send it out to our Institutional Research List, the Idea Firm, as somewhat of a benefit.
Because if you think about it, if you value your time at, I don’t know, $100, $500, $1,000 an hour or whatever it is, you know, listening to a few crappy podcasts can add up quickly. And my kind of whole point was, if you have something rated 95, chances are it’s probably good, if it’s rated 10, it’s probably an Adam Sandler movie and chances are, it’s probably terrible. Pre-“Water Boy,” they’re all amazing. But anyway, the podcast industry will eventually figure out the curation and signal problem. And it’s something you guys have started to think about, at least I’ve seen, there was some partnership and ideas?
Jake: I’ll tell you in a minute about that because part of our attack on that front has been through really focused curation. So we early on created the first position in the industry of a podcast librarian. She’s our content strategist and librarian, Ma’ayan Plaut. And we started doing hand curation, like really bespoke initial stuff, where she…and as a classic kind of startup move, something that’s designed not to scale but teaches you a lot. In the first six months of the app, there was a button you could push on the search screen that says, “If you don’t know what you’re looking for, fill out this form and we’ll send you recommendations.”
That form would go to Ma’ayan, and the form would say like, “Here are the movies and books I like watching. I like, you know, consuming. What podcasts I listen to,” and then she’d write them back one at a time. And we had, you know, 1,000 of those that became like the corpus that we started to build more recommendations off of. What she’s done since, which I think is actually at least one piece of the puzzle, is to create a framework for curated collections that she does, but mostly we do it through partnerships.
We find people who are experts in their field or have particular influence or know-how, and they then work with us to create a list of, it could be 10 or 12 episodes or it could be 20 podcasts around a tightly defined vertical collection. Then that becomes simultaneously a building block for discovery inside the app and on the landing pages but also becomes content marketing for them, because they put it on their webpage and they say, you know…
For example, we did one with the Financial Times, FT Alphachat, Brendan Greeley, who used to work with me at PRX who is an amazing host in his own right of the FT Alpha podcast, “Alphachat,” which is awesome. He created a list of slightly wonky economics podcasts, and he animated it, you know, a little of why he thinks each one is good. Then, of course, they put their own in there so it gets some promotion. But that list, which, you know, exists as an OPML file, it could be imported into other apps. It lives out on the web and isn’t tied to native apps, you know, is a really good way to do what you’re saying, which is to sort of shortcut to something great but through like a trusted recommendation, you know, not just through either like obscure ratings or, like, you know, luck of the draw in a search index.
Meb: I think you’re gonna see a lot more of that, whether it’s AI-assisted or pure human creation, whatever point .0 we’re at, at this point with the internet and everything else, 3.0, 4.0, where there’s so much information and the ability to curate it to where it’s useful. I mean, like the 1.0 in my mind was like search and discovery. And so the 1.0 in my mind of podcasts was like, “Hey, do you like cereal? Here’s three other podcasts you might like,” because people wouldn’t listen to one podcast. Now, the problem is, I literally have 30 or 40 and I just wanna hear the 5 best episodes each week or at least be able to order them.
Jake: It’s an interesting problem to solve. I was on the advisory board for a Boston-based startup called The Echo Nest. It was eventually acquired by Spotify. They were these two [inaudible 00:33:28] guys, another friend of mine was the CEO, and they built this amazing software engine that could make intelligent connections between songs, essentially, and the two halves of it. One was like scanning the social web for all the things that listeners were saying, the fans were saying on music blogs. The other one was actually like, scanning the MP3 itself and distilling it down to like 17 attributes of tempo and danceability and tone. And together they could just apply that to a huge music catalogue and start to make recommendations that were actually innately interesting but then, when they were owned by Spotify they ended up powering Discover Weekly because they could add in all of the cloud filtering of listening data.
The podcast version of that is not as simple as it might seem to sort of get that right for the wildly diverse interests that listeners are bringing to the table, where you might be a fan of a few popular shows but then you have this niche… You know, you listen to like the “Whitewater Rafting” podcast and have your friend’s talk show about minute by minute listening to like “Star Wars” movies.
So it’s a really interesting problem that I think will get solved to your point because there’s so much investment in the semantic understanding of words and, you know, the ability to do automatic transcripts and the kind of work that I’ve seen at companies that we get pitched on or understand, I think, will end up being a really good solution to more of that, but it’s not here yet.
Meb: Good. Well, I hope you guys build it. I’m cheering for you because we love it and we’ll produce it. For the listeners here who haven’t used RadioPublic or the podcast’s actual host, talk to me a little bit about anything else that you think is important that you guys think is different and/or maybe what’s on the horizon as you guys continue to innovate and build out this app.
Jake: On the listener front, there’s a couple things to call out. For one, we are really privacy-forward so you do not have to social sign-on or even create an account to listen or download or make use of RadioPublic. I mean that’s purposeful. It turns out to have been on trend from what we’ve seen in the internet in the last couple years but this was a commitment, both as a practical strategy and as a mission from early on. That means that you are able to also immediately open the app from any link.
We have universal link, so if you share a link on Twitter or a post on Facebook, or use one of our universal embed players, you can seamlessly go from an episode straight into continuing to listen to that episode without having to go through some signup or onboarding process. So we see that as a real advantage for how RadioPublic functions, as well as, of course, all the things I was subscribing in terms of recommendations in radio mode for continuous listening and stuff like that on the listener front.
We do have this layer of additional promotions that podcasters are starting to really use. So you can get some bonus fan invitations, and it could be an invite to a live show or a chance to learn something more about your favourite podcast that’s ancillary, additional to the listening experience. And a lot of our, you know, attitude towards that is like, “Don’t interrupt listening because people are usually not even looking at their phones.” So some of those promotions are just like notifications that come later in the day, like, “Hey, thanks for listening. Here’s something you might want to follow up on.” So that’s a unique attribute on the listener side.
But a lot of our work in the last 18 months we’ve done on the creator side, on the publisher side. So when you go to podcasters.radiopublic.com, which is really the home for publishers of podcasts, there’s now an entire set of tools, free tools, the embed player, something called podsites, which I’ll explain, and a program called Paid Listens, which if you don’t yet monetize through advertising, you can opt into it and you get paid for every listen on RadioPublic, you get a $20 CPM. So this is something where we get to put like a short pre-roll on top form, and then we pay a fixed fee guarantee for every listen on the platform. So there’s a couple thousand podcasters who’ve signed up, but we’re in the long tail to start monetizing even if they haven’t been able to sell their own ads. We see that as a unique benefit as well.
The product that we’re just now starting to really promote more, and we believe in it deeply as a strategy for any podcaster, is something called podsites, which is essentially the podcast website, but it’s designed as optimized podcasting where it automatically updates every time you have a new episode. It’s designed for SEO so that when listeners are landing through web search, they can really quickly convert to being a subscriber or a native listener, not just in Radiopublic, but in any popular app, including Apple and Spotify. It is essentially like, imagine Squarespace to WordPress, but actually designed for podcasting, with all the native tools built-in for analytics and conversion.
So podsites, we also sell your own domain, so we encourage you to own your domain, make sure their feeds are associated with that domain, so that even if you switch podcast hosts or aggregate it into different apps, you’re never gonna be pulled away from your ownership or your end users and your listeners. So there’s a lot of best practices that we’ve learned the hard way over the years that are baked into the free product and the free tier, and then there’s a paid product of $15 a month to have a professional podsite that is sort of an instantly really great-looking, marketing, landing page, and home for your podcast.
Meb: Very cool. I love a lot of those ideas. They seem fairly podcaster-friendly. Reading through that A16 report, we’ll add it to the show in our links, there’s almost a million podcast hosts now. And you hear so many people in the media being like, “Oh, it’s peak podcast,” but in my mind, it’s like, “When has there ever been a better time to be a consumer and producer? You wanna talk about craft beer that are porters in the Northwest, like that you can find that audience.” I love it. It’s a great situation so I’m usually bushed.
Talk to us a little bit about, you built this app, you can kind of… It’s like a playground of analytics in my mind. You have kind of some serious insight into what’s going on in the world. And you had some news recently where Tim Ferriss is moving from sponsor to donation-supported project, you have a situation where, in China where it’s like 5X the revenue of the U.S, but it’s mostly paid subscriptions, etc. Talk to us a little bit about the kind of future of how this evolves in your mind, and feel free to use this as a jumping-off point to starting to talk about the Podfund as well.
Jake: All of those are healthy trends. I mean, some of them deserve a nuance because like the whole Chinese market is so sort of radically different than the consumer experience or sort of expectations, but it’s also a signal, I think, of opportunity for how it could evolve here as well.
The good news is that podcasting as a whole has been under-monetized and sort of undervalued given that what we’ve known, and I’ve certainly been feeling this since it started in 2003, is that it’s this incredibly engaging, highly effective medium for really valuable listening and information and entertainment, but the monetization has lagged for a long time, in part because there’s never been a significant platform monetization in the middle. There’s never been a YouTube of the space. Apple definitely hasn’t done that yet. So all the advertising dollars kind of have to flow around like being pushed through a straw, like directly into each of the shows in a different, less efficient way. So that’s also protected it from some of the ills of like, you know, overly optimized, and also gameable digital advertising.
But the thing that’s always been clear is that podcasting should include evolved multiple revenue channels, and that increasingly podcasters of every stripe are waking up to that and starting to, you know, develop a diversified business model, which, of course, is a good strategy overall. And I’m highly encouraged by the trend because it’s already had pre-existed with crowdfunding and Patreon and Kickstarter of podcasters seeking direct support, whether you call it donation, membership, or subscriptions, I think there’s a lot more to come on that front.
And you’re going to see it happen both at the platform level so, obviously, at the most significant swing, taking that this has been luminary in building a payroll subscription product of their own. But you also see it through like third parties where you have, like, supporting casts and A cast access and startups providing sort of the infrastructure through direct payment and billing. And then you’ve got apps that are going to continue to try to do that where they are the gatekeepers for those kinds of solutions.
At one end of the spectrum, there’s Spotify, which, of course, has its own freemium model that could play into a significant source of revenue for podcasting, and then Apple which, you know, remains to be seen how they turn on or if they turn on monetization at some level. So what I think is a great advantage for podcasters, and I’m glad to see Tim take a swing at this too, Tim Ferriss, is to say, “Hey, amongst the thousands of listeners out there, there’s a core audience who really values this, and we’re part of their lives and we should give them a means of supporting it directly.”
It doesn’t mean necessarily the zero-sum that you have to go ad-free to have direct support. I think there’s a lot of gradations in between. There’s still all of these building blocks that are not in place such that the friction is still inhibitor. So, if you back somebody on Patreon, or Patreon of a podcast that you love, and they give you a private feed, you know, you still have the public feed and the private feed and you have to copy and paste the private feed into your favourite app and then you can listen, and all of that should be fixed.
We’ve got a proposal for how to fix it with an open protocol that we’re calling Podpass. If you can imagine what it’s like when you turn on your Apple TV and you authenticate to Hulu, you can imagine authenticating to a premium feed or a private feed from any publisher on any app, and so Podpass is a protocol that we’re beginning to advocate for right now behind the scenes and eventually publicly in the industry to solve that problem.
But I think the overall trend, like you’re describing the future as I see it, is, you know, more of a diverse economy, where you certainly have some fully advertising-supported, openly distributed podcasts, and you’ve got an archipelago of like, you know, paywall solutions that are likely to be more vertically focused than a broad aggregator. Then I think you’re gonna see startups and others trying to carve out these other forms that are more like the China market, where it might be in a very bespoke kind of focused paid products for segments of professional learning or lifelong learning or, you know, particular kind of experiences that don’t necessarily make sense in an open podcast distribution, but could be supported by the same ecosystem that’s grown podcasts.
So far, I really do hope that there remains like the lion’s share of the pulse of the industry remains on the open protocol that is still sufficiently decentralized, that it’s not a winner take all platform game, and it’s not just a better thing for creators but a sort of a better thing for the industry to be healthier that way. I think there’s a good chance that we’ll make it through without having that happen.
What led to eventually the creation process of Podfund is seeing this rising class, an influx of podcast creators of all stripes, building more effective, profitable, small media companies with podcasts as the core product, not necessarily as the only one, but a diversified business model where it’s advertising and crowdfunding your membership and live events, and merchandise, and licensing to paywall platforms and in some cases, increasingly, you know, IP that gets turned into a film, television, books, or other media, then you start to see patterns of that that actually could be at scale, you know, the ground floor of an entire new media category that, I think, is really exciting to think of as a market.
Meb: It’s endlessly fascinating, you know. There’s so many different models and ideas. Tim’s is interesting because he had mentioned at some point on Twitter a while back and had kind of teased this or asked his audience. It was funny because it might have been a poll. And like the vast, vast, vast majority said, people said they wouldn’t pay. But what was funny is if you read the comments, almost all of them were like, actually, “Hey, we actually like your ads, because they’re more…” They’re not just like ads for, I don’t know, American Express or something. But they were ads for products that he liked. So they’re almost not full endorsements but like, “Hey, I use this,” and so people, instead of skipping them, like, they would probably a normal ad, they actually like them, which is a different relationship that people have with ads than really almost any other platform where there’s like, “Oh, my God, skip through this.” These are ads.
Jake: All the data sort of continue to show that podcast ads, particularly the host-read ones, perform extremely well. They aren’t skipped as much as people would think they are. They are effective when they’re being measured in terms of their recall, retention, brand lift, their call through. It’s a really effective medium. I could imagine getting worse, the way that it could get much worse, but for the moment, that actually is still quite viable. And that’s what I meant when it doesn’t necessarily have to be either/or.
Meb: We also just eliminated the possibility of American Express ever advertising on this podcast. It’s really interesting. And it’s to the point where, at one point, a year or two ago, I was trying to convince a friend who’d written a book, I said, “Why don’t you just publish it as a podcast serial?” And you’re starting to see more kind of those, the stories coming out. We had some friends who were talking about doing educational courses as just, “Hey, you know, I’ll do this for free, but it’ll be ad-supported and we’ll probably make more money if this ends up getting 10 or 100,000 or a million views or whatever.” Anyway, there’s a lot. I’m very bullish on the space. Talk to me, what was the inspiration for this concept of the Podfund?
Jake: A lot of insights that we’ve been gaining from building these tools for podcast creators and equipping them particularly around marketing and monetization started to become really obvious that there was both a deep need for these tools, but also the need for expertise and strategic advice and how to navigate the whole evolving industry, which has been changing every three months with new practices and new players. But also the entire class, this influx of these creator-led media companies, these like mini podcast studios, but even single podcasters who started to franchise or started to think about a second show, and they needed the tools, they need the expertise, but they also needed access to some startup and growth capital. And there really is no source of it.
You’re not as lucky to be sort of Gimlet where you kind of built this beautiful destiny for yourself by managing that first seed round and telling the story of it and actually raising like a startup round of capital. It’s very hard to raise that kind of money as a content creator, or you’re facing, you know, the ultimate battle of getting to the gatekeepers of joining a network, or maybe doing a deal with a platform where they might advance something against ad sales. So there’s a very tiny sliver of creators who sort of can make their way up to there. And if not, then you’re facing bootstrapping, which, of course, is the best way to go if you can do it. But it’s hard again, because monetization is lagging, to kind of bridge the gap between something that’s starting to work, but still below the threshold where you can reliably either sell your own advertising or turn to an ad sales team. And a wider thesis, as we were talking about before, if you take a step back is, like, here we are in a moment where there’s literally tens of thousands of incoming new publishers of every stripe.
Podcasting has become a strategy from every media company down to every author and creator and thinker and influencer, could we be, with Podfund, a place that isn’t just supporting them on the platform side, but is writing their first check, and helping them, supporting them on an independent path to creating a valuable company without the trade-offs that you face in raising sort of VC round or doing a deal with the platform?
So that was the inspiration, and we went out to the market and we decided that rather than make it a part of RadioPublic where it’s somehow like a platform resource where, you know, we only fund shows that we’re distributing, which we didn’t wanna do. We’ve had to make a separate company again. We seemed to have a habit of creating separate companies around different loosely coupled strategies. So Podfund is a separate company. We raised the seed round from a bunch of investors around the thesis of investing in this emerging content creator class in podcasting. RadioPublic is, of course, one of the partners, and provides some tools and resources, but we also have assembled a group of mentors from different fields of expertise, whether it’s legal and IP, or marketing and sales, or, you know, ad tech or licensing IP to Hollywood. And all the things the creators are asking these days, we have somebody to match them with on a mentorship level.
And then we created these instruments, the science instruments. And the first one that we really have taken out publicly is called PodREV. And it’s part of another trend that I’m excited about, which has been true in the startup technology world a bit around revenue-based financing. That’s important for creators who, I think, are feeling this even more so in this industry, to own their IP, to own their business. So revenue-based financing gives them an opportunity to level up with some access to growth capital, but retain full ownership of their IP in their business. But essentially, it’s a revenue share model over a period of time. And we took the unusual step of publishing the term. So you have the term sheet that’s out there as a Google Doc. And it ended up being really important because this particular community is on the early stage of a learning curve. Most of them, there’s often exceptions, early stage of learning curve about what it means to build a business and take on financing.
And there’s a lot of like misperception or confusion about how that all works. And so it’s important to us that even just the creation of Podfund and on the offering of the terms itself, you know, helps create a conversation and some education around what it means to build a business and what a strategy should be in podcasting. We opened up an application process. So anybody can apply for the funding, the typical check size is between $25,000 to $50,000. And the typical deal is 3 to 5 years and a revenue share of total gross revenue between 7% to 15%. And when we do that, we’re investing at the creator level, not the show level. So the idea is, if you’re starting a podcast studio, and you’re doing your show, and then your second show, and you’ve got your live tours, and you’re doing your merchandise, you know, we’re investing in you growing the capacity for that business to succeed when it’s attached…the financing is attached to that, which I think helps align us with their independent success over time.
We do have the ability, we have, you know, something we call a Podface, we have the ability to join on an equity basis. And so there is a smaller but important subset of podcast studios and agencies and creators who are out raising enterprise level rounds or raising a seed round and building a bigger business. And in that case, we can either join that round or help lead round or syndicate around on an equity basis when it makes sense. But I think we’re part of helping creators decide when it makes sense and give them the options to choose from as they’re building it. This seed round of Podfund, because it’s a seed stage, we raise 2.3 million. Now, the goal is to rapidly demonstrate that we can both identify the market for that, come up with a unique process for diligence and streamlining and actually bringing on board these creators, build a brand around Podfund as the go-to resource for the whole field, and then take that out, because we probably need a lot more capital because we think there’s a way bigger demand than just this first foray that we’re doing into it. On day one, we had over 100 applications. In week one, there was already like $6 million of funding requests. And, you know, we know there’s a much bigger opportunity, and Podfund is just really in its early days of cracking that wide open.
Meb: Listeners, obviously, I love it. I’m actually an investor in the fund. So full disclosure, because I think it’s such a cool…
Jake: Thank you for that.
Meb: Yeah, I think it’s such a cool idea. I mean, not only is it like a quasi, totally different asset class, but it reminds me a lot of this podcast Ted, our buddy, at Capital Allocators, did with this baseball player who not invented a new asset class, but essentially, it’s a similar thing where he would invest in minor league players and do a sort of income sharing agreement, essentially, on their career, but give them some upfront money. It’s a different model, because they’re kind of reducing the risk for the baseball players, but participate in the upside. But it’s similar, and it’s a similar idea where you have, in my opinion, superior analytics, but also it’s a massive tailwind of growth of this industry. Where do you guys stand with deployment for the fund? Are you 10% allocated, 50%, or 100%.
Jake: We’re probably closer to like 10% to 20% right now. I mean, we’ve launched publicly only about a month ago. And we’re just making our way through a backlog of the first wave of applications. And part of what, of course, we believe to be true, but it’s really become apparent in the actual data is that there really are some remarkable, diverse, talented, entrepreneurial, scrappy podcasters building unique businesses out there that are in the sweet spot of what we think we can support. We had already, you know, made four investments prior to launch as a way to kick the tires on the model. And we purposely chose a wide range. So we, at the higher end, we are an investor in Pushkin industries, which is Malcolm Gladwell and Jacob Weisberg’s Podcast Network, that obviously has like some really high visibility shows out of the cave, or a much later stage. But also an example like Erica Mandy, who’s a solo printer podcaster based in LA, who has a daily newscast that she does called “The Newsworthy.” It’s like 10 minutes long. It’s kind of a light treatment of a roundup of the news that’s sort of fast, fun, and fair, as she describes it, and she’s incredibly industrious, and like has carved out her own niche and is selling her own ads and building a business. And so we were really happy to invest in her. And we’ve got dozens that are in the pipeline right now. And the goal is to just do it on a rolling basis. So we’ll be making investment decisions each month.
Meb: For the podcasters out there, what’s the main criteria? Like if they say, “Oh, man, this sounds like a cool partnership.” What are you guys looking for?
Jake: We did a post on this, this week and last week on the pod.fund website and on our medium page, post about the specific criteria and how the application process has been going. But the sort of broad stroke notion is we’re looking for, first of all, we’re looking for shows that exist. The podcasters have already have something in the market. So we’re not taking pitches, even if there’s someone who has, you know, huge standing somewhere. But if it’s a brand new idea, at least at this stage of Podfund’s evolution, we’re not doing development deals or funding ideas. So it has to exist and has to exhibit some traction. So that would mean, we’re gonna ask you like, “Give us the numbers of downloads of your last three episodes.” And we’re hoping to see some month over month or episode of episode growth. And ideally, some early evidence of revenue. It doesn’t have to be that you’ve like, you know, crack the advertising thing and it’s sold out your show. You know, it could be that you’ve managed to scrape together one live event or sponsorship, but just some evidence that you’ve got some ability wherewithal and also like line of sight to how you make some money, because we’re at a place where we can help you grow that, but we need to know what we’re building from.
So it can be very early. We’re not looking for some magical threshold of 50,000 downloads and above. Like, it can be in the low thousands, it’s usually not low hundreds, but it can be low. And, you know, mileage varies. Sometimes we’ve seen creaters with lots of downloads, but very little sort of business savvy and doesn’t look like a good fit. And vice versa, we’ve seen some who are, you know, really smart about how they wanna build a brand and build a business, podcasters just emerging, but we’re ready to back them. So it’s not like a single size, but that kind of growth and early revenue is important to see. But obviously, if you’re, like, wildly successful, you’re probably not gonna need a check from us because you’re already profitable. And if you don’t exist at all, you’re probably too early for us. So we’re trying to mitigate the usual risk filter for this first stage of Podfund.
Meb: That’s really exciting. It’s gonna be fun to watch. You guys can almost be like the OkCupid of the podcasting space, and talk about all these analytics and put out, I think, it’d be a lot of fun to read. I would certainly be a consumer.
Jake: The thing that we’ve also realized, yeah, definitely there’s inspiration from like the Y Combinators of the world. But part of what’s super valuable addition to the mentorship is the peer network that’s already starting to take shape. Because podcasters so often are working in isolation, and because the industry is changing so fast, and because we’re investing in like a diverse set of creators who have different strategies, one of the things that’s super valuable about the Podfund portfolio is the horizontal learning that’s happening. Somebody’s doing a deal with this platform, somebody has figured out how to do their IP licensing, somebody’s cracked, you know, social media marketing spend on conversion to downloads, then that becomes a totally unique resource that we can bring to bear.
Meb: It’s interesting. As we start to wind down here, you got your hands in a lot of stuff. As you look out the horizon, what else keeps you up at night or anything else on your brain you’re thinking about? Any other things we didn’t talk about today?
Jake: My origins and the RadioPublic side of things always makes me feel about like, how can we create a healthy industry, I think, at the ecosystem level, and part of what I think I’ve been able to with a lot of help and creative partners is create a bunch of different pieces of that puzzle. So PRX and Radiotopia, RadioPublic, and now Podfund, Matter Ventures, like each one of these is like helping build out a broader community around creating impactful, profitable, meaningful businesses. And I think podcasting for all the reasons that we’ve been talking about this whole hour, you know, actually really could lead the way, not just as a new successful industry, but something that I think is really good for consumers, good for listeners, good for brands and advertisers, but particularly, good for creators and publishers. So I’m super excited about that. I’m wary or worried. You know, what keeps me up at night is the fear that it’ll come crumbling down, not because of some bubble tops, but more because once the big value is understood, and the money comes in the major platforms take over, there are ways that you could screw it up by, you know, a winner take all, paywalled model, or, you know, black box of data, things like that, that we’ve seen those movies before and other parallel industries.
And, you know, I’m hopeful that that sort of pulse and kind of heart and soul of podcasting can actually grow it, scale it, make it wildly more successful and viable for everybody without screwing it up. I think we have a shot at that in this industry. But that’s certainly what I had my sight set on, and without starting a new thread, like part of what we did when we set up RadioPublic as a for-profit, raising, you know, venture capital, institutional strategic, is we made it a public benefit corporation, which is a flavour of a C Corp. Instead of a Delaware C Corp, it’s a Delaware PBC, Public Benefit Corporation, doesn’t have any different tax status, but it is a mission-driven startup, where our mission is embedded in the founding documents in a Delaware charter, described that as a signal and a safeguard. You know, there’s certainly a lot of skepticism out there about whether that, you know, matters in the world of capitalism.
But I actually think that in a moment where trust becomes a really critical advantage for how you work with consumers and creators, embedding that into the company, that its route, I think, actually is a major advantage for us, and it’s just the right thing to do.
Meb: I love it. Two more questions. We ask this one to all the podcast guests. Granted, this is an investment focused podcast, but hey, you’ve started a gazillion companies and been a VC. And I imagine investing on your own too. So you qualify. We always say over the course of your career, what has been the most memorable investment you’ve been involved with. It can be good, bad, terrible, silly, wonderful, awful. But the first one you can think about, what’s the most memorable?
Jake: Oh, man. I would consider some investment. We did at PRX something called the TalentQuest back in like 2007, 2008, where we did an open call for anybody to apply to be a host. And it was right around the heyday of “American Idol.” I wanted to call the contest “This American Idol.” They wouldn’t let me do that. But the two winners are two guys named Glynn Washington and another guy named Al Letson. And we invested in their shows. They, you know, they came through truly off the grid. One of them was just like searching for “American Idol” and they’d bought the keywords for it on Google and they found the contest and entered it. And today, Al Letson is the host of an amazingly successful show called “Reveal,” which an investigative documentary radio and podcast show. And Glynn Washington is the host of a show called “Snap Judgment.” So a decade later, these two guys who are now like core to the new generation of voices of programming and podcasts, like, were an early bet that we made, and it seemed like totally crazy and risky at the time, and has proven to be more valuable. I think I could have anticipated.
Meb: That’s great. Jake, it’s been a lot of fun. Where do people go if they wanna read more what you’re up to, they wanna follow on, they want to subscribe to “The Meb Faber Show” on RadioPublic, where do they go? What’s the best place?
Jake: For sure, go to radiopublic.com. And that’s where both as a listener, you can search, find anything, and download the apps, and get the curated collections and the rest of our recommendations. I definitely recommend that, is to try as your app of choice for podcast listening. And of course, if you’re a podcast creator, go right there as well, because we’ve got all these free tools that really help you with growth and marketing and engagement, monetization. And then for funding, Podfund is the domain, open applications right now to get into the queue to be reviewed for potential investment by Podfund. And you can follow me, twitter.com/jakeshapiro, for, you know, a lot of the things that we are learning and advocating appear there from time to time.
Meb: Jake, it’s been so much fun. Thanks for taking the time to join us today.
Jake: Yeah, that was great. So much appreciate it.
Meb: Listeners, we’ll add the show notes, links to all the stuff Jake and I talked about, PowerPoint decks, etc, etc., links to how to apply to the Podfund, all that fun stuff at mebfaber.com/podcast. You can always leave us reviews, subscribe to the show on RadioPublic, and send us feedback, firstname.lastname@example.org. Thanks for listening, friends, and good investing.