The Bootstrapped Founder

Arvid: 00:00

It's been a month since I started my latest business adventure. And, today, I will share with you what happened in this month, how I approach talking about it, what that gets me, and where I will go from here. Welcome to the PodScan. Fm recap on the Bootstrap Founder podcast sponsored by acquire.com. That's a lot of brands right here.

Arvid: 00:18

Let's start with the numbers. Within this 1st month and it's been 4 weeks almost to the day, PodScan has attracted over 400 users on the platform of which 10 have become paying subscription customers. Revenue wise, this translates into roughly $300 of monthly recurring revenue or MRR for short. There are a few 100 users who are on the 10 day trial right now with around 50% of them actively using the platform. So those are the numbers on the platform right now.

Arvid: 00:48

Is PodScan profitable? Definitely not. At least not yet. From the start, it was pretty clear to me that trying to transcribe every single podcast out there was not going to be cheap. I'm currently running 4 cloud servers that each have a GPU attached, so I can use machine learning and AI systems to work with my data, and each of these servers costs between $200 $400 per month, depending on the kind of graphics processor that it runs.

Arvid: 01:16

This cost me a total of $1200 just to be able to keep up with the stream of podcast episodes that are being released every day and maybe throwing a few older episodes in every now and then. The basic idea behind PodScan is to allow people to get mention alerts right now. Right? Real time alerts when new episodes come out. So the focus of PodScan really is new episodes and getting them in as quickly as possible.

Arvid: 01:40

But I also wanna build a large backlog of all the older episodes. I kinda wanna crawl back in time till like 2012 or 2013 when podcasting kinda started being a thing, and go through every single episode along the way and transcribe them as well. That's the long term dream, but right now the focus is on what's happening right now. And there is also the database in terms of costs, right? I run a managed database on Amazon Web Services or rather on their RDS offering, where I have a really small cluster of just a regular MySQL server and the read replica.

Arvid: 02:13

These cost me around $500 a month to run, and they are managed so somebody else is taking care of those servers for me. I don't run my own database. I just connect to it, and I can administrate it if I like, but there's a team of engineers dealing with this, which is why I'm paying that much money. My previous business feedback panda, we paid at the end, I think, called IBM Compose, and it was called Compose before IBM bought it and before that it was called MongoHQ, which you would think is a MongoDB database provider, that's how they started, but they also had PostgreSQL and MySQL and all these kind of things. So we ran a database on their managed servers, and I think just for founders in general, having a managed database is just makes it so much easier to sleep, because you know that if it just breaks down, if the servers go up in flames for some reason, or the data center gets flooded, somebody will try to restart it and we like just reboot it or put your data somewhere else and and have it go again.

Arvid: 03:15

That's that's the idea, you can sleep more easily if you have this, but that is $500 a month because you pay for that kind of service. The read replica in this is a new edition. And a read replica really really basically is it's a a database mirror, a mirror of your original database that can only be read from. You cannot write data to it. And for that reason it's particularly fast in accessing data, right?

Arvid: 03:39

If I wanna run a query on like how many podcasts are on the platform, I don't have to wait for some process in the background to write the currently transcribed podcast that I just finished transcribing into the database, I could just run the query quickly and over time it will keep up with the original read write server that I have. So it's kind of it's it makes it faster and it makes it possible for me to offer a performant interface on the browser and an API that doesn't have to deal with all the data inflow that my main server has to handle. So with those $500 and the $1200 for the back end system, you just add a few cloud servers in for the main server, which is not too complicated, it's just a PHP server, the full text search, which is also not that complicated, it's a mighty search server, cost me like $30 a month, some file hosting, and we're roughly at $2,000 a month in expenses. So $300 in revenue, $2,000 in expenses. That means I have to have at least 7 times the customers that I have now, which seems absolutely doable because, you know, I had 0 a month ago and I have seen strong payment intent from users with a budget to go for my mid or enterprise tier plans.

Arvid: 04:46

And I have a story to share here. 2 weeks ago, I decided that my $99 enterprise plan was laughably underpriced. And looking back at it now, I could just shake my head here really because $99. What kind of enterprise plan is that? Back then, I just checked on that day when I did this.

Arvid: 05:03

A few competing social listening tools and I saw that their price for the high tiers, the enterprise tiers, or just even the higher tiers are often in the 100 if not 1,000 of dollars. So thinking I had all the time in the world to make changes and experiment, I just 5 x that price to $499 a month, and I adjusted the price inside of Paddle. I went into my dashboard and then flipped the numbers on my landing page as well and minutes after doing that, after pushing my landing page to production, I got an email from a user who had just signed up a few hours prior to the platform to begin with. And they had been checking out the pricing page right in the middle of me updating it. And they had their eye actually on the enterprise plan.

Arvid: 05:42

They were confused why the price had just jumped and 5x'd. They even assumed that they might have been in some sort of AB test which they weren't. I was just changing the price and then they asked if they could buy at the old price. Let me just share my train of thought with you that I had at this point. But I just increased my price.

Arvid: 06:01

I want them to pay the full price. How will it look if I give them a discount? What are people gonna think? That my prices aren't valid or that I'm just kinda trying to fake it so people get the lower price. I had all kinds of weird thoughts about it, which after some reflection was the completely wrong approach.

Arvid: 06:16

What I did instead was embracing their willingness to pay. Anything at all really. Right? I extended them this 80% discount back from 500 down to a100, created a coupon code for them, one time use coupon, and they bought a few days after. And right then, at that point, I talked about it on Twitter.

Arvid: 06:33

I shared this particular story in a tweet. And as a consequence, I got another email from someone who expressed interest in the enterprise plan. I created the same discount for them, and I sent it over. And I'm now just waiting for them to purchase because the other person also took life till the end of that trial to make sure that it was worth it, which is perfectly fine. That's why we have a trial.

Arvid: 06:53

Right? So these are 2 customers who are willing to pay a $100 a month, every month for my product. This is the kind of selling that will get me to break even. This is what I need, like, 20 times and then I'm at, you know, my expenses. And I've chosen to be very liberal with sales at this point.

Arvid: 07:10

This is something that I had to learn. Because in the in the past, I was really in a low price segment that wasn't really So going a bit lower for these early customers and extending them this kind of grace and extending them the liberty of negotiating that price is perfectly fine. Something that I'm personally learning from my own experience, which is really cool. And you might notice that all of these are perpetual sales. They're all subscriptions, which is another thing that I wanted to build.

Arvid: 07:44

I wanted to build a software as a service project which, you know, tends to be subscription based. But I did toy with the idea of a lifetime plan. And I kind of want to just explore this with you here today. This is kind of an ongoing thought, right? So you know take it for what it is.

Arvid: 08:00

It turns out that PodScan's expenses lie almost completely in the podcast ingestion into getting audio files and transcribing them into, you know, a transcript, with timestamps and all that kind of stuff. The marginal cost of checking those newly transcribed podcasts for keywords or even running it through a local LMM for semantic checking, they're quite minimal. I can run 100 if not thousands of scans on a piece of text. It's not gonna cost me anything. It's marginally zero really.

Arvid: 08:30

A new customer doesn't really increase my cost significantly. The cost for the business will likely grow at 10% of the rate of customer growth. Right? If I get a 100 new customers, the just the cost will maybe increase by 10%, maybe less. Which makes this early cash injection via a few dozen or 100 lifetime deals a very interesting prospect.

Arvid: 08:53

If I can build a monthly expense run rate for like half a year, I can push this into profitability. Knowing that even if someone were to use the product for a decade, they would incur manageable costs. And, you know, that this kind of injection initially, I would probably charge like 10 x or 15 x the monthly value of the plan, which would go anywhere from 200, 300 to $5,000. That could really help significantly offset the time when I needed to be profitable. So, you know, it's something that I'm still debating, and I'm not sure where to go from here, but I'm certainly sure that I will share this journey as I go through it.

Arvid: 09:32

And that's another important part of this recap here today. I've been building PodScan in public from day 1 and my relentless sharing of the product, the whole development process around it has caused a few very beneficial things. First off, my rather influential peers have amplified my efforts. My founder friends that I love and admire have given their feedback, they retweet it and then praise the efforts that I have put into PodScan. And I think that peer validation has been extremely motivating.

Arvid: 10:02

Very motivating presence in my life. And besides that, many of them have been trying out my product and shared their honest feedback with me which was often positive and often constructive, you know. Several have even purchased it. Although they are in the minority which is important to me because I don't wanna operate under the illusion of having customers when it's just my well intentioned friends and giving me financial support. So don't want that.

Arvid: 10:25

I wanna make sure that my business is actually useful to people outside of my friend group, but it is it's been really nice to have them support me. And beyond that, I've gotten extremely valuable product, design, and technical feedback on PodScan and its components. Both the business, the product, and everything around it. Because whenever I talk about transcription and, AIs and LLMs, AI experts come out of the woodwork and offer an opinion. When I share a screenshot, designers do the same.

Arvid: 10:51

They talk about the interface, they talk about the experience. I even have somebody working on a logo for the product which is so nice. Like, people are using the leverage that I have, which is a large audience to help me with their expertise and get some of the attention that I usually get kinda pointed at them. It's extremely beneficial for me to do this in public, and I'm aware that not everybody has a large audience, but I've been building this audience by building in public. So, you know, it's a consequence just as much as it is prerequisite.

Arvid: 11:20

Yeah. And when I when I talk about marketing, marketers chime in because I have a widespread audience and a lot of people from different backgrounds. And so far around probably 80% of these comments have been very kind, very useful, and thoughtful, and actionable, which is just really showing how great my personal audience is. And I think in responding only to those kind of comments, I'm setting an example for what I wanna see and then people kinda act accordingly. Building PodScan in public has also created a sizable idea backlog for me.

Arvid: 11:50

Not only do I get people's expertise in the moment regarding like actual issues that I have, I also get to tap into their dreams and into their ingenuity. Dozens of dm's have arrived where people just tell me how they see themselves use a future version of this tool slightly different one an improved one or what they envision it being used for by their peers that they know, what they could see them do, and what might be possible with all the data that I accumulate in PodScan. And this brings me to the value of the business, the actual asset. Because you could probably do some calculation around how much the business is worth right now with $300. That's $4,000 a year, you 4 x this or whatever, and then it's worth like $16,000 or something if you were to sell it.

Arvid: 12:31

Obviously, not gonna sell it anywhere under, like, what, 5, $6,000,000 wouldn't be just some time to get there. But, yeah, you know, that that is not the real value of the asset because I think there's way more. I realized that I'm building something extremely unique here. I'm transcribing podcasts that nobody ever transcribed before or likely ever will. Niche pods with just a few 100 listeners, they get the same attention as those with millions of listeners.

Arvid: 12:56

Small shows, well, they are just as searchable as the big ones or alertable, which is a massive treasure trove for data analysts and marketers and everybody who needs insight into audio. And I do know that Apple has announced that they're going to generate transcripts for all the podcasts listed on their platform, but they likely won't make them available for public use for anyone else, but just for the user of Apple Music or Apple Podcasts. I have this feeling that these will not be exposed to the wide world. You're just gonna see them in your Apple apps and that's it. Can't really do much with that.

Arvid: 13:29

What PodScan is building over time is a massive database of otherwise undiscoverable content. At this point, I have over 700,000 transcripts in my archive. 100 of 1000 of these exist nowhere else. And while it's not impossible to transcribe all of that yourself, all you have to do is download 700,000 audio files and run it 700,000 times through a transcription engine. It's a lot of work.

Arvid: 13:56

Right? It's much easier to just use an API like PodScan to have direct access, which is exactly why people buy the enterprise plan to have full API access to build their own tools on top. So who is my target customer here really? I've I think I've found 2 distinct segments. One are founders and businesses who themselves need access to podcast metadata and the full transcripts that podcast provides.

Arvid: 14:20

They care about reliable access and a well documented interface to the data, the API. The great part here is that the ecosystem of podcasts is built on open standards and doesn't change much or at least not very fast. New standards slowly evolve and allow me to resiliently implement them into the system, which makes it stable for everybody who wants to use it. So that's one half of my prospective customers. People who wanna build on top of data.

Arvid: 14:44

Right? You will actually find that a lot of the podcasting tools out there, look at Podchaser or listen notes or all these these other things where people can find information about podcasts have a side API business. Like they offer some kind of tooling among podcasts, like, you you can use it as a user. You can track what you listen to. You can find cool new things, but there's also always a data side that gives people access, programmatic access to all the data accumulated on the platform.

Arvid: 15:12

And they tend to be quite expensive because they know how valuable this information is. So, you know, this is half of my business at this point, unexpectedly. I'll get to that. The second segment though, and that's the one I started out with, that was my initial assumption here, are marketers and agencies who need introspection into spoken content. From podcast guest booking agencies to the p r departments of large organizations.

Arvid: 15:35

I think anyone who has a vested interest in knowing every single mention of a keyword, or their name or brand is a prospective customer. The more urgent that need, the better because my real time alerting features end up providing fast access to new mentions. Right? Podcast comes out. I get a notification.

Arvid: 15:52

I download it, transcribe it. 2 minutes later, I run my check, and they get the notification, hey your brand was mentioned on this podcast that came out 2 minutes ago. I'm still 0ing in on my perfect customer profile, but I know that it's someone who has a lot to gain from quickly reacting after an episode with that trigger keyword was released. Either they spread the good news, they share it on social media, or they do something with the data, they analyze it. Maybe it's a legal department trying to figure out who's kinda bad mouthing their, you know, their brand or whatever, or it's a PR department trying to deal with like disaster recovery something, you know, like somebody, post something and they had their businesses in a lot of trouble, how quickly can we react?

Arvid: 16:30

Or it's it could be anybody really that needs some kind of fast reaction. Maybe you wanna sponsor a podcast, so you want to immediately reach out to them once they mention some something that you care about. There are many good reasons to quickly react to it, and I still have to figure out who is the perfect customer for this. I have started marketing this product to podcast production agencies, and I will keep doing this for at least another month. That's one of my marketing plans for the next month.

Arvid: 16:54

Being able to find mentions of your clients and then placing them on these shows, I think it's a pretty clear value proposition, and I'm in the middle of creating a whole landing page for that particular purpose. Make it very easy for people to understand, yeah, this is how we can get value out of PodScan. And fortunately, a lot of these podcast booking agencies have been emailing me because they're trying to place one of their clients on my show. This show. Right?

Arvid: 17:18

My Wednesday segment where I interview people. So I'll just go through my backlog of podcast agency emails and just email them back with my own offers. I I've done this already, so far this approach has created a few trials, I'm gonna see where it goes, but I think at least I already have a connection, so it's not necessarily a cold email. So a couple final thoughts here on my 1st month running the SaaS business, I mentioned it already, I didn't expect the API to be such a big success. Half of my paying customers pay to have that access.

Arvid: 17:50

It kinda makes me think that this business could already just be a podcast data API that would already allow it to be profitable. But I also want to actually fulfill some useful use case with this, which is the dimension alerting. Mention alerting, by the way, has an API integration as well. Like you could just have a webhook where these alerts go. Right?

Arvid: 18:13

You don't have to read the emails and react to them. You could just stay programmatically take them in with like a Zapier webhook and then put them in a file or dispatch your own email or put it in a Slack or whatever. Like this already works with PodScan. Anything that is mentioned that you care about can already be programmatically put into your own tools. That was from the start integratability was an important part for me, but seeing how many people actually care about this enough to pay has been very interesting.

Arvid: 18:39

The thing I learned now from the the founder business building perspective is that setting up email automation from day 1 via ConvertKit was absolutely worth it. Like, when somebody signs up, I push their email and their name onto ConvertKit as a subscriber. And then it triggers an onboarding sequence where they get an email, right, the first day. And then I think, like, 3 or 4 days later, they get, like, a follow-up email that says, hey, how's it going? Anything I can help you with?

Arvid: 19:04

Then a day or 2 before their trial ends, they get an email with, hey, your trial is gonna end. Everything alright? What do you think? Like, is there anything I can do to make this better? And then if that trial actually ends and they're not a subscriber, I send them a follow-up with, hey, what could I have done to make you stay as a subscriber?

Arvid: 19:21

It's a really simple automation, but it gets them at at 3 or 4 different points of their journey. And I've gotten a lot of good feedback from these. Sometimes just a quick email with, no, it wasn't what I was looking for or here's what I tried, didn't work, didn't pay. Right? That those are extremely valuable.

Arvid: 19:36

But I also put, a link to a 15 minute Zoom chat in there and every single email so that people can just contact me, and people have been taking me up on this a lot. And from those conversations, which I tend to do, like, 30 minutes off because I really get into this, I learned so much about what people need, what people want, what people thought it might be, what they thought they wanted, but then try it and it didn't work. Like I get a lot of insight into motivation, into the job to be done, and how I can or cannot currently facilitate this. Super useful to have these touch points with my customers from day 1, and then day 3, and day 7, and day 10. It's extremely useful.

Arvid: 20:15

I've also gotten several partnerships, our partnership and funding offers I guess, that have already arrived in my diverse range of inboxes. I'm trying to be careful right now, because my commitments are quite risky. I believe that PodScan benefits from having figured itself out before it joins forces with another business or another person, and I don't wanna risk that right now before I really have understood completely what this is for, what it can do. It's kind of the product market fit. I wanna get there first before I partner up with anybody, either as a cofounder or as a business collaborator or as somebody that I have, like, a kind of a written agreement with.

Arvid: 20:50

I'm careful with this. I'm interested in it, but I'm careful with it. I really look for alignment here. Yeah. And and finally I guess Twitter being the place that I talk about this has been a great initial marketing platform, because it really allows me to find people who know who my next customer should be.

Arvid: 21:08

Like people who don't necessarily need the tool but understand it from a technical or a marketing or business perspective, and then they kinda multiplex it out to their audiences, the people they know, their peers that can actually use it. It's been a good kind of accelerator for my own marketing to talk to the people who know me and understand what I'm doing. My internal blockage at this point is reaching out to those people outside of my own audience. That there's a mix of impostor syndrome that every founder has and a dislike of cold outreach that is really something that I need to work on for this. But I will get to it.

Arvid: 21:42

I'm absolutely sure that I do. The goal for my 2nd month is to get this from 300 to a $1,000 in MRR, just a goal that I'm setting. So let's do it, and you my dear listener can help me with this. I think if you have any ideas around this or a crushing piece of criticism or helpful piece of advice, just as you listen to this, please share it with me as a DM on Twitter, an email to arvid@potscan.fm, or a voice message at podline.fm/arvid. I appreciate every single piece of feedback that you can give.

Arvid: 22:13

Should I run lifetime deals? Do more cold outreach? Star customer? I haven't even thought about yet. You tell me.

Arvid: 22:20

And that's it for today. I wanna briefly thank my sponsor acquire.com, who I hope to use to eventually sell this business. Imagine this. You're a founder who's built a solid SaaS product. You've acquired customers and you're generating consistent recurring revenue.

Arvid: 22:34

You're living the SaaS stream. The problem is you're kinda not growing and you don't know why. Lack of focus, lack of skill, lack of interest doesn't really you don't really understand it. You just feel stuck in your business and with your business. What should you do?

Arvid: 22:47

Well, the story that I would like to hear is that you buckle down, reignite the fire, and do all the sales marketing stuff that 6 months down the road leads to making a lot more money. You tripled your revenue and you have this hyper successful business. But reality, unfortunately, not as simple as this. Right? The situation that you're in always is a little bit different for every founder facing this crossroads.

Arvid: 23:08

But too many times the story here ends up being one of inaction or stagnation until your business becomes less and less valuable over time or worse completely worthless. So if you find yourself here or you think your story is likely headed down this road, consider the 3rd option of selling your business on acquire.com. Capitalizing on the value of your time today is a smart move, and acquire.com is free to list, so you have nothing to do with really. They have helped hundreds of founders already. Go to try.

Arvid: 23:35

Acquire.com/arbit and see for yourself if this is the right option for you. Thank you for listening to the show today. You can find me on Twitter at avitkahl, a r v a d k a h l, and you'll find my books and my Twitter course there too. If you wanna support me in this show, please subscribe to my YouTube channel, get the podcast in your play of choice, and leave a rating and a review by going to rate this podcast.com/founder. Makes a massive difference if you show up there because then the podcast will show up in other people's feeds.

Arvid: 24:01

And, hey, any of this helps the show, go to podscan.fm and check it out. That really helps me too. Your feedback is extremely valuable. Thank you so much for listening. Have a wonderful day and bye