The Bootstrapped Founder

Arvid: 00:00

Ever since I started building PodScan in public, I have received a lot of attention. And it's been spectacular. I've found early users, prospects, customers, and lots of cheerleaders. Apparently, when people see something get traction, they wanna be part of it. And besides the much welcome support on social media this has also resulted in the few offers that go beyond monthly subscription revenue.

Arvid: 00:23

Today, I want to share with you how I think about collaborating with people. Taking investment and growing the team. This episode is sponsored by acquire.com. More on that later. Now, you know that I'm usually very transparent with the goings on inside PodScan.

Arvid: 00:38

After all, I'm just building this whole thing in public, and I wanna encourage people to do the same with their own entrepreneurial experiments. That's why I will not hold back with my opinions and sentiments today. Take them with a grain of salt though. They're my personal and extremely subjective observations and reasons. They're what I'm thinking about right now in this moment in the trenches, right?

Arvid: 00:59

It might be interesting to look at it, but it's not necessarily instructional for your own thing. This topic is uniquely complicated for every founder and circumstances are really always extremely different. So please understand that this is not advice. It's not meant to be advice. It's food for thought.

Arvid: 01:15

And it has been food for thought for me. It's definitely been occupying my mind over the last couple weeks. I've gotten offers for co founders and angel investments and elaborate business partnerships and and some. A lot of stuff has come my way because PodScan is taking off and people are interested in that. And if I had taken them all, PodScan would now have a sizable cap table and with a dozen people, a handful cofounders, and we'd be working on integrations with a dozen or so established services out there.

Arvid: 01:43

So far I've been extremely careful saying yes to anything. In fact, I said no to most of them for now. I think there's something magical about being a solopreneur. That's why I chose this journey. It lends itself so wonderfully to the software business life.

Arvid: 01:59

I build what I think needs to be built. I put systems in place for things to work all by themselves, and then I get people interested in paying for the thing. And wasn't Sam Altman just saying yesterday that AI makes the first single operator $1,000,000,000 business possible? I guess, we're in that stage of building businesses. And it's certainly an alluring dream to be the sole decider in a business.

Arvid: 02:23

Yet, realistically, you're also the only person responsible for the endurance and the success of the business. Right? With great power comes great responsibility. And I won't be kidding myself here. I think PodScan will need to outgrow the solopreneur stage.

Arvid: 02:37

It will need to grow beyond it. And eventually, I'll need to hire and I'll need to partner up with collaborators that will benefit from my work just as much as I will benefit from theirs. So the question is really not if I will collaborate, if I will have other people in the business, but when. So let me take a look at how I look at this whole idea of working with others for 3 distinct offers that I got. One of the first kinds of message that I got from a variety of my peers on Twitter in particular was that of becoming an after the fact cofounder.

Arvid: 03:09

A lot of people saw my journey in public building this whole thing and they noticed that I was lacking a few things and I certainly am lacking a few things. And and they felt that they'd be able to contribute meaningfully to the success of the business with their own skills. And let me tell you something, every single offer that I got was absolutely right about that. Their talents eclipsed mine in every single area they would suggest. For me, like, I'm a I'm an engineer.

Arvid: 03:32

I'm good at coding and good at setting up systems. I'm not a good designer. I'm not a good product manager per se. I'm not a good marketer. I'm not a good salesman.

Arvid: 03:40

Obviously, I'm good enough to do all of these by myself, but I'm not the expert in those fields. That's what I'm trying to say. And those experts have come to me and asked me if they could join, but is it worth giving up ownership for that expertise? And that's a tough one. Right?

Arvid: 03:57

That is, generally one of the hardest questions to answer when starting a business right after what should I be doing, what business should I be building, and who is my customer. I don't think I wanna give ownership for that just yet. I have some history with that kind of stuff. My last company, FeedbackPanda, was effectively a family business. I cofounded it 5050 with my life partner, Danielle.

Arvid: 04:19

We ran and grew it without ever really hiring anyone or let let alone another founder, And we paid for services and contract work when we needed it. So when it came to selling the business, our complexity was effectively 0. Right? We didn't even have fights amongst the cofounders because we were very aligned being life partners too. There were no additional decision makers, no hesitation, no delays.

Arvid: 04:40

And, honestly, if I look at my PodScan journey right now, at this point, that's what I wanna retain for as long as I can. Control over the internal challenges of the business. I have no control over the external challenges. Right? I can't control the competitors.

Arvid: 04:54

I can't control the regulatory system around there, around the whole podcasting space. I can't control what new movements, new technologies happen, but I can't control who tells me what to do or not. So no cofounders for me, at least for now. There's always an opportunity. Like, all of these these things I'm talking about today are optionalities.

Arvid: 05:15

Right? It's possible that somebody comes up with an amazing offer and I'm saying, okay, let's throw everything I said until now out of the window and go with this because the opportunity is just so useful, so smart, and so, yeah, opportunistic that my personal belief has changed just through being offered that. That's always an option. I'm extremely flexible when it comes to this because that's what entrepreneurship is about. It's like seeing opportunities as they present themselves and not expecting to know where they are.

Arvid: 05:48

Right? You know that they exist, you just don't know where they are and you have an open mind and you look at everything that comes your way through this kind of scanner of is this an opportunity or not. So no cofounders, but how about investors? Because that's a different kind of opportunity. And I think that's an interesting question.

Arvid: 06:05

Particularly as I've shared that PodScan incurs a few $1,000 a month in expenses at this point. A cash injection wouldn't hurt here. Right? And you will have heard me talk a lot about bootstrapping. Obviously, that's one of the things that I really enjoy.

Arvid: 06:18

And that's what I've done so far with PodScan. And that's what I would suggest for people to start a lifestyle business and indie business is to bootstrap it. But if you have a lot of expenses, naturally, you think about, well, where can I get the money to fuel this before revenue catches up with the expenses? Right? So would a cash injection hurt?

Arvid: 06:39

Obviously not. Maybe. It really depends on what it's going to cost me in the long term. Right? Money has a cost, and my options here are quite limited.

Arvid: 06:49

No bank will give me a loan for this not yet profitable business with the goal to transcribe all podcasts everywhere. If you go to a bank and tell them that, they're just gonna look at you like, why and how? And where's your factory? That that actually happened to me. Back in Berlin, must have been like almost 10 years ago at this point.

Arvid: 07:07

We tried to build, a local food marketplace business And we went to a bank and asked them if there was a chance for for us to get a loan or, you know, some kind of credit at least. And they were like, no. Not for an online business. That doesn't make sense to us. We don't understand this, and we're not gonna give you money.

Arvid: 07:24

Now if you had wanted to build a factory, we would we would probably be signing the papers right now. So, you know, I think in many ways banks still operate like this, most banks. Obviously, there might be some that understand startups or online businesses better, but chances are pretty low that they're gonna give me money, and chances are quite low that they're gonna give you money. So a bank has another problem, but they're they're not gonna give me money without collateral. Right?

Arvid: 07:47

And what would that be for me? Right? Is it my Mac studio? My AWS credits? It's not gonna happen.

Arvid: 07:52

But alternatives. And I mentioned that I've gotten a few emails with flat out angel check offers already. People see the value of what I've already built and what it will grow into in the future, which is an archive of content that exists nowhere else. The more I transcribe, the harder it will be to replicate, so they come knocking early with offers. What will I do?

Arvid: 08:14

Honestly, I'm at a stage where I have no idea. I'm still very much a bootstrapper. I'm still very much trying to build a calm business, but it is interesting to build up runway. Right? I I have the funds myself, but if I can facilitate external funds and grow them into something bigger, that is not the worst idea.

Arvid: 08:37

I will go through each of these offers 1 by 1 just to see how much it would add. And I don't just mean legal challenges when I talk about complexity here. I mean people. Can I see myself working with and kind of for these people? Do I trust their sense of entrepreneurial direction?

Arvid: 08:53

Do they want me to keep running a calm business like I intend to? Or do they seek this liquidity event in the next year? I certainly don't want to add someone else's expectations as pressure on my own path. In this relationship, I am looking for guidance and the freedom to follow my entrepreneurial instinct. I'm not looking for somebody else trying to control what I'm doing.

Arvid: 09:16

So let's see if I can find it within the offers that I've received or will surely be receiving in the future. I don't think this is gonna die down anytime soon. But let's maybe talk about something that I am currently taking some action towards, and that's collaborative partnerships with other software businesses. I can't name anything here just yet because all of these things are behind the scenes, but a number of agencies and software businesses are actively building features for their products or for their clients on the PodScan APIs. Some contact me almost daily and we chat back and forth, build something together.

Arvid: 09:49

Some of them have been building just from the API documentation alone, but there's something magical here in seeing people using PodScan to increase the value that they can deliver to their customers. And this is something that I'm leaning into quite heavily. First off, it validates that PodScan could survive as just a standalone API data business, which is something that I didn't ever expect it to be. Even partially, it was never an idea in the first place. But, yeah, turns out that if you catalog all podcasts everywhere, people want access to that data.

Arvid: 10:20

And that is not a big surprise in retrospect, though, I guess. But, you know, it's it's interesting to see that this was not the initial idea for the business. This is a micro pivot inside the business. Right? I'm still doing the monitoring and dimension alerting and all that stuff, but I see that the base of podcast transcript that I'm generating, like, there's probably at this point roughly 20, 30,000 of them that I create every single day adds to the value of the business massively.

Arvid: 10:49

The asset value of of these transcripts, they don't exist anywhere else. And with 30 of them a day, which is like, what, a a 1,000,000 a month, like, that is value that just gets more and more absorbed into the business itself. So that is very interesting, and it cements the necessity for me to build a stable system to have people on the APIs. Right? That's external pressure that I quite enjoy at this point because in the last 2 weeks, I've learned a lot about database performance, API management, security, and unsurprisingly, I guess, the complexity of working with dates because all of a sudden people from all over the world want to access this data.

Arvid: 11:27

Dates and time and that kind of stuff, not fun but necessary work. It's challenging work and often requires the, I guess, figurative open heart surgery on the running production system because people need changes made that immediately only can kind of be tested on the production API. But every single day the system becomes better, stronger, and more resilient. And that is a moat or at least partially a moat. And I've been thinking a lot about moats with PodScan because if you start talking to investors, that's one of the first things that they actually care about.

Arvid: 11:59

Not just investors, cofounders. Anybody who wants to have a stake in this business wants to see, well, how stable is it? How easily is it copied? Right? That kind of stuff.

Arvid: 12:07

And as PodScan is built on publicly available data, well, it's definitely possible for somebody to build a clone of this business. I I wouldn't recommend it because if you wanna deal with 100 of thousands of webhooks hitting your servers every day from random places or reaching lip curl's error code range of 63. Like, I had 63 different errors just trying to download audio files from all over the world. Or if you wanna waste, like, figuring out just how to correctly store massive amounts of vector embeddings in a database that is not meant to store this, go ahead. Enjoy.

Arvid: 12:40

I'm fortunate to have cash reserves and time set aside for exactly this kind of project, but it certainly is not your easily bootstrapable bot project as well. But it certainly is not too easily bootstrapable project. That's for sure. I did some math on this. If I didn't run my transcription and inference on local AI as I'm doing right now, but, I would actually use external APIs for this, I would be spending roughly $30,000 a month on API calls.

Arvid: 13:10

That is not bootstrappable. At least not for people who are not millionaires. So, you know, that is a mode. It feels like a mode to keep at least the less ambitious at bay and the people who go for the easier potential copycat businesses. So which is why I'll keep building this in public, really.

Arvid: 13:27

I know that I will find more partners and collaborators and potential investors that way and a whole lot of supporters for me and the business and everybody using it on the PodScan journey. So I guess it's time to get back to work. These podcasts won't transcribe themselves. Well, you know what I mean. That's it for today.

Arvid: 13:46

I wanna briefly thank my sponsor acquire.com. Imagine this. You're a founder who's built a really, really cool SaaS product. You acquired 100, thousands maybe of customers, and you're generating solid MRR. You're living the SaaS stream.

Arvid: 14:00

Right? You're a solo founder, solopreneur doing all of this yourself. Nobody tells you what to do, and you kept keep building. You're doing your thing, but you notice you're not growing as much as you used to. And you don't really know what it is.

Arvid: 14:11

Maybe you just lack the skill or you you reached the skill ceiling or you're not that interested anymore. Other things have come up or you're kinda stuck in a business. What should you do? Well, people will tell you just to go at it, reignite the fire, work on the business not in the business, and triple your revenue over the next couple months but come on. Reality is unfortunately not as simple as this.

Arvid: 14:32

And this situation you're gonna be in is different for every founder facing this cross for us. So like I said earlier, right, we are all in these unique situations. That's what entrepreneurship is. It's like going and doing something that has never done before this exact way. So your circumstances will always be unique.

Arvid: 14:49

But what happens too many times at this point is that the story from there on is one of inaction and stagnation. So circumstances are unique, but the consequence is always the same. People don't do what they should be doing, and the business becomes less and less valuable over time or worse completely worthless. So if you find yourself here already or you think your story is likely headed down a similar road, just consider that there's a third option, which is selling your business on acquire.com. Capitalizing on the value of your time today, that's a smart move.

Arvid: 15:19

Right? Get rid of the business, sell it to somebody who is capable, is willing to keep it keep it going, and then do something else with the money, the cash influx that you received. Acquire.com is free to list. They've helped hundreds of founders already. So go to try.

Arvid: 15:35

Acquire.com/arvid and see for yourself if this is the right option for you. Thank you for listening to the roots of founder today. You can find me on Twitter at avidkar, a r v I d k a h l, and you find my books on my Twitter, of course, that too. If you wanna support me in this show, please subscribe to my YouTube channel, get the podcast in your podcast player 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: 16:02

And any of this will really help the show. So thank you so much for listening. Have a wonderful day, and bye bye.