Bootstrapping from zero to $1m+ in ARR with Justin Jackson, mega maker of Transistor.fm

The below is a full (unedited) transcript of a Youtube session / podcasting episode I recorded with Justin Jackson, founder of Transistor.fm in Q2 2021. You can view the video/listen to the podcast on YoutubeApple PodcastStitcheror wherever you get your podcasts.

Justin Jackson 0:06 
Here’s like, you know, I realized the internet isn’t real. Like what what happens on the internet is like, it’s weird that we spend, you know, all day looking into this portal and living our life on the internet. And I can understand where he’s coming from. But for me, the internet has been such an amazing point of connection. Ever since I was a kid dialing into BBs and bulletin boards then getting access to the internet when I was 13 and 93. Growing up in a little small farm town in Alberta, like being able to connect with other people all over the world that has never lost its novelty. For me, it’s I still love it. I think it’s incredible that we can

Erasmus Elsner 0:54 
I feel you man,

Justin Jackson 0:54 
I feel hang out and get to know people from all over. It’s it’s a real gift.

Erasmus Elsner 0:59 
For those people who’ve just tuned in. I want to really welcome you to this episode and announced my very special guest today, Justin Jackson here on this podcast that’s called Sand Hill Road. But he’s actually the first indie hacker or bootstrapper on the show. One word is not enough to describe Justin Jackson, founder of Transistor.fm. He’s a blogger, podcaster, educator, a community builder and bootstrapper. He’s been an inspiration to me for a while. I wake up every Saturday morning to an email from Justin because Justin writes a great newsletter. I’m always fascinated: how do you come up with this stuff? You know, sometimes it’s about how to sleep better, sometimes it’s about how to build Saas, how to find mental stability, you share so much random wisdom.

Justin Jackson 1:41 
That’s really kind, but thanks, I appreciate that. I’m glad you chose all my positive descriptors because I have I have not some positive things about me too. But that was really kind.

Erasmus Elsner 1:54 
But enough about me being a fanboy here. I would say why don’t we dive into your background and what you’ve been up to over the last couple of decades or so?

Justin Jackson 2:03 
Oh, a couple decades, I’ve been kind of a citizen of the internet. From the very beginning. I was lucky enough to get a Vic 20 Commodore VIC 20 when I was five years old or something 1985 I really have loved computers my whole life but didn’t get involved in startups or the tech industry until I was 28. So fairly late in life. And I got this job at the startup called mailout Interactive. I’ve always been interested in computers always been interested in the web, always been interested in business. And my first week on the job, my boss gave me a copy of getting real by Jason Frieden DHH. And it just brought everything together. For me. It was like I had built some other businesses before I owned a couple snowboard shops. In my hometown. In college, I had a web design and wedding video business. In high school, I was throwing raves in my hometown. But getting to see how 37 signals had built, their business had bootstrapped their business and the amount of leverage that building software gave you. You know, I was used to like building websites for clients but creating something once and then being able to duplicate it 1000s or millions of times for very low marginal cost. The bits are basically free. That was just really intriguing to me. Yeah, getting to work for that first sass company kind of opened my eyes opened my perspective to what was possible. I’ve been basically pursuing building a bootstrap business online ever since. And in 2018, I teamed up with my friend john Buddha to build Transistor which is a podcast hosting and analytics platform, compared to anything else I’ve done. It has been it’s been the most gratifying. It’s also given me the most, the most margin, the most enjoyment, the most financial benefit all that stuff. So yeah, it’s been it’s been a great journey. Even sometimes it feels like it came later in life for me. I’m 40 now so sometimes I pull my Twitter followers and and I’m like when I’m older than like 80% of you. So yeah, sometimes I feel like a little bit of an old guy.

Erasmus Elsner 4:31 
Age is just a number man. And I love your mindset, you have this surfer mindset. You have to blog post “businesses like surfing” and in that post you write about surfing being really frustrating for beginners, because you get out and the wave hits you in the face. But all that matters really is that you get back out there in the surf and in the water and keep paddling. Because surfing is 90% paddling and 10% surfing and the best surfers are always the best paddlers consistently. Then it looks like an overnight success. But it’s an overnight success 10 years in the making. That’s, that’s what I really love about you.

Justin Jackson 5:06 
Yeah. So if you look at someone like Kelly Slater, who’s a professional surfer, one of the best in the world, he is really the combination of 1000s of events in his past, his ability, the fact that he is so good at surfing, relies on this whole stack of events from the beginning of his life till now. And entrepreneurship is really like that. And even more specifically, any entrepreneurial success, like a contextualized actual success relies on all these things in the past, I like using surfing as a metaphor, because it’s really difficult to do. And it requires just a lot of investment. You know, people will work on the fundamentals of surfing for years and years and years, before they’re able to catch a really good wave. And part of those fundamentals mean, learning to paddle developing, you know, the right muscles, developing the right technique, and learning to observe the size and shape of good waves. And I think entrepreneurship really follows that pattern. We need to learn to observe and recognize the size and shape of good waves. And really, the only way to do that is to be in the water. And I think being in the water means pursuing your interests, pursuing different communities getting to know different people being in motion working on different projects. And in the midst of that, you’re developing all these fundamentals, you’re learning to watch waves as they come in and watch people try to catch those waves and how well they do or how well they don’t do. And maybe try to catch a few waves yourself, and be like, Whoa, that one was just too small to small to to really ride and get out of it what I wanted to get out of it. Or you might try something really big like, okay, I raised a bunch of money. And I really went after this big opportunity. And the wave just crushed me.

Erasmus Elsner 7:20 
I haven’t been surfing for a while. And two weeks ago, I was in Lisbon and Caparica, “Capifornia” they call it and was surfing my first wave after 10 years of you know, taking a break from it. And I really felt this force of nature under me. And I think this is a good segue to this to this question that you have spent a lot of time thinking about, of picking the right market, or catching the biggest wave if you like, because it’s a common thread in a lot of your posts. One post of yours about selling ice cream on a busy beach. And essentially, it’s about trying not to be too clever, but closely observing where there’s market pull, and then really going for it. And it reminds me of this great quote from from Don Valentine from Sequoia, who said, the founder shouldn’t look for the problem, but the market should be pulling the company out of the founder. I think you went through this phase before Transistor.fm where you tried to push a barrel up a mountain. And suddenly you had these tailwinds with Transistor, and it was a completely different feeling. Talk a little bit about that, and how this has changed you.

Justin Jackson 8:22 
Yeah. So I mean, really starting from high school, you know, my grade 12 year, we put on this rave in my hometown. So we, I live in this little farming town, seven or 8000 people. And my friends and I wait, my friends were older than me, they would drive me to these raves in the big city. And, you know, there would be 1000s of people there and these massive warehouses. And I thought, Oh, I would love to bring this to my little town. And so we put on an event, we pre sold tickets. And it was clear. Once we started selling pre selling tickets that there was pent up demand, like a lot of kids in the 90s wanted to go to raves, but they their parents wouldn’t let them drive to the big city and go to these like overnight parties in the big city. And so this was like an opportunity for them to experience that. And we sold out of the tickets before we even launched the event. The following year, my friend and I got really into breakdancing and kind of early hip hop culture. And we thought Oh, let’s do the same thing. Let’s put on another event but this is going to be like a hip hop block party. We’re going to we’re going to invite a bunch of B boy crews we’re going to you know have some MCs and like we’re going to do this up similar to the rave but with hip hop. And we learned that the demand in Stony Plain Alberta was not there for a hip hop block party. We we sold like I don’t know, maybe a quarter of our tickets ended up just breaking even, you could see it was the same people involved. It was the same passion, the same excitement, if anything we have learned from the previous year. But what we couldn’t manipulate or what we couldn’t kind of force was the underlying pole of the market. It’s the market that really dictates most of your success. The momentum in the market is what carries you. And you as the entrepreneur, or the marketer, or the developer, or the product person, are really just bringing your skills to bear on that wave. Right. So yeah, it helps if you’re trying to write a big wave, it helps to be Kelly Slater and have all that experience, have all those skills. But even Kelly Slater can’t ride a wave in a pond in Nebraska, right? Like you have to have the underlying energy in the market. And this has been illustrated over and over again, in my life. And especially now that I’ve been involved with so many other entrepreneurs and indie hackers and bootstrappers, who are trying to build something they want a better life for themselves. They want this new American dream of being able to run a profitable internet business and quit their job and all that. But without that underlying energy in the market, that underlying pole. It doesn’t matter how good you are.

Erasmus Elsner 11:33 
And I think closely related to this is your understanding around the business idea. And John Doerr from Kleiner Perkins has been credited with this mantra, that the idea is easy and execution is everything. And you disagree with this, saying that the market you choose and the idea that you focus on are really the most critical business decisions you’ll make.

Justin Jackson 11:54 
There’s this, like truism that ideas don’t matter that much. It’s execution that matters. And I, I think that’s become that’s become too much of a too much of a cartoon idea. Because, of course, execution matters. But the underlying idea, this observation you’ve made and your hunch about that observation, your hunch that, Oh, you know what, I think there’s momentum here. I think people want this, I think there’s untapped demand, or even like demonstrated demand, that just isn’t being satisfied. That’s important. That observation. So if that’s the idea, that observation paired with your hunch is actually really important. A good idea can carry you a long way. And there’s people who are incredible at executing, I mean, look at Katzenberg with quibi, like, he’s an absolute operator, he is an absolute in Hollywood, he, there’s no one better at executing, quote unquote, than him. So why did quibi fail? Well, there was no demand for that he miss read the market. That idea he had the underlying idea was just not that strong. You can’t just execute your way into success, there has to be something that the markets going to provide the actual momentum. And we as entrepreneurs, especially indie hackers, and bootstrappers, we just don’t have that much influence over the market. Like I don’t know what it’s like to be Microsoft scale or, or Google scale, maybe they can, but even they can’t like there’s so many examples of Google launching products. And even with all of their power, and influence, and, you know, distribution, they can’t make Google Plus work or Google Wave work or whatever else. So the idea matters a lot. And the momentum in the market, how the market is pulling you matters a lot.

Erasmus Elsner 13:58 
I absolutely agree. And I remember this post of yours, “the idea matters” I think was even the title. But maybe let’s take a step back for the audience. Because most of the founders I have on this podcast are actually VC-backed founders. So the idea of being an indie hacker, to bootstrap a business might be a bit foreign to many. And you are what I would describe as an OG of the indie hacker movement. Having started a while ago, I think it was even before Courtland Allen started Indiehackers with the Mega Maker Movement. It said there “ mega makers is for geeks, who love the internet and who want to build for the internet”. And I’ve personally been a part of the indie hacker movement since I would say the mid 2017. I’ve built a fully bootstrap marketplace that had its moment in the limelight of the internet, I would say, I really feel that. Maybe for the audience describe a little bit what what it actually means to be a bootstrapped business.

Justin Jackson 14:53 
Yeah, I mean, I think 37 signals were really the OGs. For me. So 37 signals, folks like Rob Walling who had a podcast called “Startups for the rest of us” that I listened to while I was driving one hour into work every day and just hating my commute. David Heinemeier Hansson Jason freed, Jason Cohen at WP Engine, patio 11. These were the people I looked up to, you know, four years later, when I started the product people podcast, those were the folks I wanted to talk to at the time, we call ourselves bootstrappers or solopreneurs. That term is eventually evolved into, you know, indie hackers, indie makers. And now, I think we have this idea of the Creator economy, which is really kind of encompassing all of these things. The idea of bootstrapping was being able to build a company on your own terms, to gain the freedom and margin you wanted in your life, not being beholden to investors, and aboard, not being pressured by shareholders to grow really fast. But to be able to create a company at a scale that gave you what you wanted out of life allowed you to serve great customers, but didn’t carry all the pressure, and craft and struggle, potential downsides of being a unicorn, you know, trying to be the next unicorn. For Transistor that meant, you know, in 2018, john, and I signed a partnership agreement, each got 50% of the company, we interviewed invested $5,000 of our own money to pay for a few things. And from February 2018, till, like I said, August 2019, we really, were working on it without being paying ourselves very much, and funding it all ourselves. And it was difficult. there’s pros and cons. I think, now I’ve revised my my take a little bit, there’s some new funds, like tiny seed and earnest capital that will invest 100 to 300k. And take, you know, not a huge part of your company, eventually, it can net out to them owning 4% of the company or something like that. And they give you breathing room, to quit your job and work full time on your project. But at an appropriate scale, you’re not going to quit your job and hire 20 engineers, you’re going to quit your job and work on it with by yourself or with a co founder. So yeah, it was it was difficult for us. If you listen to our podcast, build your SAS from the beginning. There’s definitely a time, you know, about six months after we launched, where I’m starting to thrash a little bit as a dad with four kids, you know, waiting for the money to come. But now that we’re past that difficult stage, I’m so glad we bootstrapped because we have tons of optionality. I’ve spoken with a lot of people who started companies around the same time as us, even in the podcast industry at the time. In the beginning, were all like, Okay, I guess we’ll see how this works out, you know, you guys are raising money, we’re not. And in retrospect, they’ve said, You know, I wish I wish we’d done what you did. Because it turns out the podcast category is just not that big. It’s going to be really difficult for those folks to get kind of venture scale exits. And so they’re feeling the pressure now. And john, and I feel like gentlemen, co founder, we feel like we have lots of margin. We’re basically still a two person company, we’re, we’re just hiring our first full time person now. So it’s gonna be a three person company and then one part time contractor in love it. It’s, it’s just very lean. And that leanness that the fact that we don’t have very many people, we don’t have a lot of pressure from shareholders or investors. It just gives us so much breathing room, and the calm that’s come from that. So sure, while we were bootstrapping, it was there were stressful times. And there’s times where I felt like I was being stretched so thin. I didn’t know how I was going to make it. But once we kind of made it through that ring of fire. Now it just feels like we can relax, we can breathe, we can take things slow. So, you know, this pandemic year, john, my partner was my co founder was going through a bunch of hard stuff. And I said, you know, let’s just take it easy. We’re in no hurry, we can be mindful about what we build, how we work and how much pressure we put on ourselves.

Erasmus Elsner 19:48 
So for me, that’s been the real advantage of bootstrapping is the ability to “grow slow, grow real”, that’s really enabling you to try things and that’s so much more natural, I think, than in many VC backed hyperscale situations where you have you know, investors piling on pre-empting, the Series B then pre-empting, the Series C and so forth, and you know, at some point maybe without underlying real product-market fit and everything just being like paid growth. And you know the story, you know how it plays out with the preference stack. You know it can be quite tricky.

Justin Jackson 20:17 
Just because I know a lot of a lot of VCs and people who are interested in venture capital might be listening. Let me just give two critiques. And don’t, yeah, you can DM me if you want. So, the first critique, I would say to founders is to really identify what do you want? Like, why are you doing this? So when I started Transistor, again, I’m in my late 30s. I’ve got four kids. I’ve got, you know, a mortgage, I’m not moving anywhere. What do I want? Well, I wanted financial freedom. I wanted more time to go snowboarding and mountain biking, I wanted the ability to say I’m taking a john, I’m taking the afternoon off. And for that to be okay. I wanted to do work that I enjoyed with people that I liked. And I didn’t want a full calendar. I didn’t like tons of meetings and tons of expectations and tons of pressure. The only pressure I wanted was, how can I best serve customers? That’s it. And, and by the way, I wanted to get paid well, it’s not like I’m opposed to being wealthy, as much wealth as I can get through reasonable means I’m fine with that. And I would question founders, go talk to 10 people who’ve accepted venture capital, and then go talk to 10 people who have had success bootstrapping, and talk about compensation. Because, again, it’s gonna depend on your sample, and your sample. But if we’re talking about folks who have taken money, and then folks who apply the right principles to bootstrapping, the financial rewards for bootstrapping can be much better than what you get the venture capital route. My friends who accepted VC, they feel guilty about giving themselves raises, they’ve purposefully deflated their salary so that they don’t look bad to the board or investors. They are many of them continue to get less and less ownership of their company over time. And so and, and because it’s, it’s often like you either have to hit a home run, or go home, anything less than a home run, even if you have a decent business means you sometimes have to shut it down. Like having a decent business that’s making decent profits isn’t enough. And so as a founder, I would really look really do your research and say, Do I want to take investment, because it might not actually give you what you want? If what you want is freedom, and optionality and actual wealth for you and your family. I would say again, there’s no way to like actually get the statistics of this. Because there’s a built in survivorship bias with business Anyway, you almost want to look at have a survivorship bias because you only want to look at the people who succeeded. Because there’s millions of people who start a business every year. And they’re at all sorts of stages of life and all sorts of abilities. And they’ve chosen all sorts of ideas, good and bad. So if you look at those that survive in both categories, who are they? What’s the chance of success? Like what’s the chance of actually getting what you want? And the Go big or go home mentality of a lot of venture capital, I think is can be very damaging to founders, especially. And it’s not always it doesn’t always give you what you want.

Erasmus Elsner 23:56 
I absolutely agree. I think there’s a place there’s a place for venture capital for some business models, but one has to be very thoughtful before entering the venture route. And I often think about startups as a as a way of experimentation. And if we think of a VC-funded startup as the CERN Large Hadron Collider, kind of experiment, like a huge experiment that requires lots of manpower, lots of facilities, then we can compare this to the indie hacker solopreneur startup as like the high school physics experiment that can be run in a small setting with small tests, but it also requires a founder that sort of, is able to play many roles and wear many hats. And as a solopreneur, as an indie hacker, you have to fill so many roles, you have to start out in customer success. You have to you know, you have to do all the roles and it requires a lot of patience. And you once wrote me one on one Saturday morning, most “successes is gradual and then sudden”. Creating experimenting and building relationships and then suddenly, you’ll have a breakthrough. You started your, your blog 11 years ago, it took years of writing, and not a lot of attention before you really hit it big. And the same with podcasting. And then, after crossing this desert, you got to this magic product market fit 2018 when you revealed Transistor to the public, and you grew much faster than expected. I remember, this episode a year afterwards, when you talked to Courtland Allen, where you were surprised by how fast it is grown and to the scale that it had grown by that time. And yeah, you’ve stopped sharing revenue numbers, but just for the audience. By that time, I think in one year, you had grown it to $30k in month recurring revenue (MRR), you could pay yourself and your co-founder a decent salary, just out of the operations. But it took you a while and and not everyone is carved out for that.

Justin Jackson 26:02 
I would still argue that your chances of success are higher, because that there’s a limiting function with venture capital, like a 5x return isn’t enough for a lot of those funds. They want 100x return. There’s like ridiculous examples of like, like gumroad convincing their their investors to just to just downgrade the investment and, and basically give the money away. Like, that’s insane to me, you Fab. I don’t know if you remember them that I do, I do, like hundreds of millions of dollars just up in smoke. To me venture capital is incredibly inefficient. Now, for them, it’s worth it because all they need is the unicorn to make the fund work. But there’s a lot of externalities with that process. There’s a lot of crushed founders, crushed employees, crushed customers, that get hurt along the way. And, again, I agree with you some companies require venture capital, and not all venture capital capitalists are evil. But Transistor is doing well over a million dollars in revenue every year now. And that’s a great business for net soon to be three people working there full time, that would not be a great business for for venture capitalists. And I want more people, more founders, more entrepreneurs, and honestly more employees to experience these, these businesses that have real profits, real revenue, and are just able to just kind of march along and have a great life for the founder great life for the employees, great service for the customers. And, you know, fingers crossed, the market always determines kind of what you’re doing. But if I could do this for another five years, I would if I could do this, if I could sign a deal with the devil and do this for another 20? I would. Because it’s sustainable, it feels good. You know, there’s lots of margin there. I think some people that are thinking about venture capital and thinking it’s gonna solve all their problems, don’t realize how many other problems, it’s gonna, it’s gonna cause you know, think it through, someone’s giving you 2 million, 5 million 20 million, they’re going to expect that you higher up. So now all of a sudden, you’re responsible for 20 human beings and their lives. And if it doesn’t work out, which is what the venture capitalists are betting on statistically, right, they’re betting that whatever it is eight out of 10 aren’t going to succeed. Well, that means all your employees are statistically going to be out of work if this doesn’t work out. And I don’t know, there’s just part of that, that seems shitty to me. And again, not all venture capitalists and not all venture capital, but it’s worth considering that there’s a different way of doing it. And I’ll round out my criticisms of capitalism, which is, I think, on the venture capital side, I think there’s a risk of over capitalizing in certain categories. And I think we’ve seen this in, in podcasting. podcasting is a tiny, tiny category. It’s in the entire advertising revenue for podcasting. Last year was a billion dollars. That’s nothing. It’s nothing. It’s a that’s a tiny fraction of radio advertising budgets. It’s a tiny fraction of Facebook advertising budgets, Google advertising, it’s tiny. And for Spotify to have invested 500 million pumping $500 million of cash into this tiny, tiny category, hoping that they can grow it, you know, like to get returns on that even get 5x returns or 10x returns. podcasting is gonna have to grow enormously, and maybe it pans out. But if this moonshot doesn’t work, all that money that’s been going to creators, all that money that’s been going to podcast networks, to content producers to all these real human beings 1000s and 1000s of people who are dedicating their lives to this category. If if that if the bet doesn’t pay off, and all of that capital dries up, those real human beings are going to be affected. And again, I could be wrong. I’m just a jackass on the internet, I am probably dumber than most venture capitalist. So I don’t know, maybe they’re right. But to me, over capitalization is a huge risk, and can really impact a sector in negative ways if the moonshots don’t work out. And I wish more VCs would take that into account before they start investing these big dollars. Because again, if they if they’re okay, with writing them off, eight out of 10 times, there’s just real collateral damage that can be done afterwards. It’s not like there’s no effects of that, right? No, I’m

Erasmus Elsner 31:09 
Absolutely with you. And actually reminds me of the first email when I replied to your newsletter, which was I think, in the week when Andreessen Horowitz published this podcasting state of podcasting deck where they really went into the nitty gritty details of how it works from the RSS feed, and then looked at Anchor and Gimlet being like the first exits in the space. And I think at that time, you were at $20k MRR, I think I wrote you in this email, you must be getting, you know, term sheets left and right. And you were like, I’m gonna stay humble, I’m gonna do it my own way. And I really loved that answer.

Justin Jackson 31:45 
By the way, those offers have dried up. I don’t want to pick on them too much. But you know, that the founder of anchor, who I actually like, I was one of the first anchor users ever when it was a social network for audio. But he just published this piece about how, how RSS isn’t good for creators and how Spotify is, is now going to, is now wants to do away with RSS and, and trying to sell it as good for creators. And honestly, it’s bullshit. We’ve seen this already, we’ve seen that four creators, open is better than closed. Now in the short term, closed is better. In the short term, you can get a big audience on a closed platform like YouTube, or clubhouse or whatever, especially in the beginning, when there’s lots of hype, especially in the beginning, when the platforms are enticing creators with big payouts and, and you know, big grants like, hey, we’ll get you and YouTube. This is YouTube’s playbook. Now, Spotify is playbook, right? We’re gonna, we’re gonna pay big money, get people on the platform. But when one centralized platform owns the distribution, they have all of the leverage. They own your relationship with your audience, and audience portability. Josh Constantine has been talking about this a lot, is a huge issue. The reason we’re seeing people go back to email newsletters, go back to RSS go back to the web, is because creators, especially older creators, are realizing that your relationship with the audience is all that matters, and an open protocol or an open system like email, RSS, the web, these give you options. These, you can take your email list, and you can go to another email provider, you can take your RSS feed and forward it to a different podcasting host. You can take your blog, RSS feed, and forward it somewhere else or post it somewhere else. That gives creators control and giving up distribution and control for short term gains, I think is a real mistake for creators. And I hope we’re learning the lesson now. That Yeah, you can do arbitrage on YouTube do arbitrage on Google and SEO and arbitrage on Twitter, like use all of those platforms to build your audience. But don’t think that they have your best interests at heart. They own the leverage and they own the leverage for one reason only. And that’s to get returns for them for their shareholders. That’s it really care about creators, and there’s so much rhetoric out there right now, from Facebook from from Zuckerberg saying he cares about creators, come on people like we can’t have that we can’t have amnesia, remembering what they did with Facebook pages reach and you know, now you got a boost to reach your audience. They don’t care about creators, and I don’t try Any of these big multinational corporations, they don’t have best interest at heart. And the open platforms are what’s going to save us. We need to keep investing in them. We need to keep sustaining them. And it’s another reason i’m, i’m i’m cynical about venture capitalists, because venture capitalists from the beginning have been saying, we need to fix podcasting RSS problem and the discoverability problem. Fix it for whom? Like, yes, it’s messy. RSS is messy. podcasting is messy. Open protocols, in general, are messy. Email is messy. But I would way rather take the beautiful mess, then giving all of that control to Google, or Facebook, or Apple or Amazon. Like we can’t we can’t trade, a little bit of mess for giving up everything. Right.

Erasmus Elsner 36:05 
I agree. And I think your message is quite timely. In light of the announcement of Apple this week, the gist of it was that they are going to move away in part from RSS, if I understood it correctly, and that they’re going to move to the Spotify model. People say it’s an antiquated technology, RSS, but it is, it is a very pure and stable and open technology. And I always like this about podcasting so far.

Justin Jackson 36:32 
Yeah, I mean, Apple needs to clarify a lot of things, because the way I understand it right now is they are still recommending that all free shows, be hosted elsewhere, and be submitted via RSS, the only thing that’s changed is they’ve added a premium option, where podcasters can sell a exclusive access show, and or sell bonus content. So with the bonus content, you would still have your free RSS feed posted on Transistor or somewhere else. And then you would upload additional bonus content that’s paid directly to Apple, or you can have a show that’s completely premium hosted on Apple.

Erasmus Elsner 37:17 
They are moving in on Patreon with this model, right?

Justin Jackson 37:20 
They need to clarify some of this stuff. I mean, I’m not naive. I know, Spotify wants to own the whole thing. And I have friends that work at Spotify, there’s really good people working there. Spotify has actually done a lot of good for podcasting. But I’m not naive. They want to own the whole thing, if they could, from creation, to hosting, to analytics to ad insertion, distribution, the whole thing. That’s why, you know, this latest blog post about our from them about RSS being something that needs to be done away with is so ironic, or whatever,

Erasmus Elsner 37:56 
Maybe let’s talk a little bit about Transistor, which I think is really fascinating. Because a lot of people don’t understand the background mechanics of podcasting, you’re in the podcast hosting and analytics space, which a lot of people have thought when you entered that it was a fully commoditized space a little bit like, let’s say the cloud hosting being dominated by AWS, GCP and Microsoft Azure. But you moved in there with the elephant in the room, which is a company called Libsyn and publicly listed company, $130 million in market cap, what was the thinking behind that? And I know this underlying philosophy that you have of really looking at what works, instead of trying to reinvent the wheel, and maybe for the audience, what went into this process?

Justin Jackson 38:39 
Yeah, I mean, there’s, again, there’s a big stack there, that includes everything from me being loving audio for a long time, wanting to be on the radio, and starting a podcast in 2012. Meeting john in 2014, he built the initial version of simplecast, another podcast hosting platform, and then us kind of continuing to hang out me getting more and more involved with the podcast community on forums and Reddit groups, and, you know, and then in, you know, cereal hits. And I just noticed for the first time, this kind of bigger wave coming. So there was a bunch of evidence of demand. First, I already knew a bunch of my friends who were podcasters that was helpful. I knew a bunch more people who wanted to start podcasts. I knew a bunch of companies that were starting podcasts for the first time. So Basecamp started a new podcast called rework, and hired two full time people for it and built a studio. It’s like, Wow, that’s a big investment and code pen did the same. And, you know, there’s just a bunch of companies doing this. And then there’s just so much media attention, like the New York Times had an op ed on podcasting almost every week. And so all of these factors Just kind of stacked up to being like, wow, there’s something in motion here. This wave looks like it’s kind of building. Maybe now’s a good time to paddle out and try to. Yeah, it was an existing space. But I could see demand. It’s kind of like my friend Andrew started a coffee shop here in Vernon in this town I live in. And there’s hundreds of coffee shops here. But one thing that coffee has, is demand. Right? Like every day, you look at the Starbucks lineup, and the Starbucks drive thru. And it’s, there’s a huge lineup, right? There’s all of this demand. And Starbucks, maybe in even in my small town, like they probably serve 1000s of customers here every day. There is enough volume there, that my friend, Andrew, all he has to do is come in and just carve off a little piece of it, he just needs, I don’t know, 10% or 15% of the local coffee market. And what’s great about coffee is every single day, people wake up and want a cup of coffee. And that’s going to happen today, it’s going to happen tomorrow, it’s gonna happen the next day, there’s momentum in the category. Now, certainly, he had to have a new take on it a new idea, a better way of executing on it that differentiated him from the other players. And there’s a bunch of ways to do that. You can do it with brand you can do with customer service you can do with product quality. There’s, you know, some levers that indie hackers and bootstrappers have. And I just felt like, we’ve got john, who’s incredible product person, developer designer, he’s built this before. So he knows how to do the bones of this. And I’ve been using podcast hosting since 2012. I know the ins and the outs, I know what I want from that product standpoint, like what do customers want? And we just felt like, wow, we could do this. And here’s the demand. And we also had an answer to how are we going to get our first 100 customers. It was people we knew it was people in my audience. It was people who read my newsletter, people who were following us on Twitter, our friends that had podcasts elsewhere. And so we just felt like well, we can carve off a piece of this market. I think Lipson has 13% of the market or something like that, of the paid podcasting market. We have like 1.25% or something. So there is potential there, right for us to grow, for people to switch to us. And also every single day 1000s of people wake up and go, how do you start a podcast and they Google how to start a podcast, there’s a great channel there because there is intent on the behalf of potential customers. They they want to do it already. I don’t have to convince them to even now like my daughter is in college, she’s 18. And, you know, she’s just starting to think like, oh, how do you start a podcast? Like she’s thinking about it now Gen Z. So we’re gonna have this whole new generation of people who are thinking about it, in addition to millennials who might be thinking about it, in addition to Gen X, in addition to baby boomers who might be thinking about it, right? So that that all all these people already in motion has really helped us. And again, waves sometimes don’t last a long time, my fingers are crossed that this keeps kind of sustaining itself that, you know, today 1000s of people will be searching for how to start a podcast and tomorrow 1000s of people will. Yeah, it had some, it had some really good characteristics that we were able to take advantage of very similar to the web hosting market, which was helpful.

Erasmus Elsner 43:52 
But what I love about your description there is that you really walked us through, you know how you thoughts about the different pieces of you know, having the skill set, this first stack of your founder, and I remember this Hackernoon post of yous, from I think it was 2018, where you talked about the MVP. What was required for the Transistor.fm MVP. Tthat’s so important for every indie hacker to think about, you know, what’s required for the first version of the product and be really concrete about it. And you wrote there it needed a way to upload mp3 files, to generate an RSS feed, to add show notes and additional information and to have a website for the podcast. And you build it in rails as you’re obviously a big disciple of DHH, Postgres and hosted on AWS. It had a semantic UI and I think you were really quite specific on how you built this. And that’s another point that is super important for indie hackers and bootstrappers. They are often building it in public and they’re they’re giving back to other people. We are super specific about what our thought processes and how we take the first couple of steps?

Justin Jackson 45:04 
Yeah, I mean, and and to be clear, John is really mostly on the technical side, right. So I, we overlap a little bit in the middle. But what he brings is, again, he’s a great Rails developer, and I think a pretty good designer as well. And then on my side, I’ve done product, and I’ve done marketing for most of my career. And our partnership, was one of the first times in my life where I felt like, Whoa, these two halves that make a hole, we are way more together than we are apart. And so being able to build a solid product that was simple, that did things well, that was well thought out, we were able to do that as a two person, team. And we’ve really done that this whole time as a two person team. I’ve had a lot of people again, my friends who have venture backed companies, and like, how are you guys able to move so fast? Having more people doesn’t always make you faster, sometimes it slows you down. You know, even like right now, Apple just released this new version of podcast Connect. And there’s tons of bugs, there’s like tons of problems. It’s like, this is a trillion dollar company. And it takes them forever to fix things. It’s like, it just takes more time when you’re a bigger company. And your codebase is bigger, and you’ve been around for long. Like it’s all that’s harder. And so, yeah, we’ve been, we’ve been able to, I think build something a really great product using now what’s old technology like rails that’s been around forever, hosted on AWS, because that’s what john knows, using the stack that we know, I built the marketing site myself using Laravel and a Laravel. CMS called statamic. I’m friends with Adam wabun, who’s one of the creators of tailwind. So I convinced john to switch to tailwind as our CSS framework. So there’s some new stuff in there too. But that the every decision we make is, is this going to be sustainable? Is this going to make our lives harder, more complicated, less enjoyable. And we realize that everything we commit ourselves to now is something we’re committing to for many years in the future, right? It’s like, you don’t just say yes to something and it’s done. It’s like you say yes to this thing. And then you’ve got to maintain it for a long time. And so we’ve made some product decisions. For example, we don’t have dynamic ad insertion, because that would significantly make the product more complex, more sophisticated. We probably have to hire people. And john doesn’t want to build it. It’s just not interesting to him. It’s it would be a slog. And we’ve been able to say well, that there’s enough market outside of dynamic ad insertion, that we can just ignore that part of the market. And, and it’s still really enjoy working on the product. I love it. I love it.

Erasmus Elsner 48:10 
The most impressive founder I ever met in person was Craig Newmark, the founder of Craigslist. He’s the absolutely first generation of the internet indie hacker and just the freedom he has on you know, keeping also the freedom of keeping the product basic, is is a is a great and underestimated freedom of indie hackers. Free from feature overload. That’s what I mean.

Justin Jackson 48:48 
Yeah, having to build like 1000 fatures. And I think the point is now, a lot of these frameworks have matured to the point where you can be a really small team, and produce a product that has a lot of quality. And again, it’s going to matter how much time you spent in the water, how many? How much skills and expertise do you bring, one of the beautiful things about being small, is, again, we can afford to move slower. Now, when you move fast and break things, you just, you just end up adding a lot of things to the product. That’s like, you know, Instagram can’t just be about photos. It’s got to also be about long video. It’s also gonna be about stories. It’s also got to be about, you know, the tick tock scrolly things you can never be satisfied with just like okay, but let’s just do a few things really well. And, yeah, I think it’s one of the great benefits of if you can market or find a market where there’s enough momentum, you don’t always have to make the product super complex. And again, there’s gonna be some products that need to be a need more investment. But if you don’t want to build that kind of company, there are other options, and two, or three or four person company and build a really high quality product these days, that that really competes. I mean, we’re competing with again, Libsyn as a public company. And, you know, I think we’re doing okay.

Erasmus Elsner 50:30 
You’re crushing it, man, you’re crushing it. And maybe as a last question, as we’re running against the clock here, most startup narratives, you know, they typically go like, I had problem X, and there wasn’t any solution Y. And that’s why I built products that, but what I find so refreshing about the notes that you put out on the internet is that you’re also quite honest and transparent about your mental state. And you had this note on how you felt personally, when you started Transistor FM: “Last year, I got depressed. And for the first time in my life, I was dealing with intense mental health issues, then weeks where I was only able to work five hours in total.” And that was really the huge downside of being a solopreneur. And that’s when you decided to partner up with John. And for the first time in your life, you had a co-founder.

Justin Jackson 51:18 
You know, I initially reached out to him as a friend, just saying, Man, I’m going through some hard stuff right now in 2016 — 2017. And, you know, we were sharing life together, I felt, you know, like, I had hit rock bottom. Personally, just like going through some really tough shit. And as I was coming out of that, yeah, that’s the other piece is, yeah, the market opportunity was there, you know, all that other stuff was there. But then john was like, Hey, I’m thinking of building this new podcast hosting thing. And I was like, Man, that could be an opportunity that could work for my stage of life like this. This might be the time, you know, to do that. I mean, in some ways, I’m so lucky and thankful, grateful that this opportunity came around my dad, because it really did save me in some ways. You know, like, I, that year, those years went on, I was depressed, I’d had some good years as indie hacker as an indie hacker. But when I was depressed, I am solo. I spent all my savings, you know, just like cuz I wasn’t earning as much because I wasn’t working as much being able to come out of that. And as a stronger person, like went to therapy, really figured out a bunch of stuff. Personally, in my emotional inside life, and then I was able to look outward and go, Okay, what are some opportunities, that would be a good fit for me, where it’s not all reliant on me. And for john to be there as a friend. And then for him to say, Well, I’m thinking about doing this. And then it’s like, oh, well, maybe we should do that together. And then he thought about it, and then came back and said, Yeah, let’s do this together. Yeah, I was just feel, I feel so fortunate to have had that. In some ways, it’s fun. so passionate about thinking about all of these, the stack of things that needs to happen. Personally, you need to be at this place, the market opportunity needs to be at this place, if you’re going to have a co founder, then there needs to be alignment there. There just needs to be alignment in multiple vectors. But when it happens, and when you’re kind of purposeful and mindful about it, it really, it really can make things better. And I think your chances for a better life increase. Even though there’s tons of luck, and tons of privilege in my personal stack, your chances for success increase when all of these things are aligned, founder market fit, co founder fit, product market fit, you know, there’s all these vectors. And being mindful about those things before you start the company, I think increases your chance of success. And for me, it’s just meant the world financially. It’s been a huge for me, you know, it paid off debt. I have a really comfortable living now, I’m able to pay for my daughter’s college and save up for my other kids. It’s just been, it’s just been incredibly gratifying. And I think it’s a result of that alignment. I was talking about being mindful and purposeful about what I was doing. And, and that all kind of led me to the place that we’re at now. And you know, I’m just going to enjoy it. I say every day like, I’m just going to wake up every day. Enjoy the day be thankful for the day with zero expectation of what might happen tomorrow because of course it could all fall apart tomorrow. But like today, April 23. I’m just enjoying the place. I’m at enjoying working with john in serving our customers enjoying this life that we’ve built for ourselves. And, yeah, it’s just been, it’s just been a great ride.

Erasmus Elsner 55:08 
And let me tell you, you know, it’s been absolutely beautiful to watch your transition over the last couple of years. I know you’ve been hustling for so long. You once wrote me on another Saturday morning, that you’ve grown jaded, because you felt like excitement of your 20s had passed you by and you were like, Huh, among these young tech bros, and you felt sort of out of place. And now you really went back into the water and started paddling and hit the wave again. I’ve been so inspiring for me to see your room blossom over the last couple of years. It’s crazy because you don’t know me and I don’t really know you but but as we said at the top of the show, that’s that’s the beauty of the internet. Right? Maybe to wrap things up, Justin, where can people find out more about you?

Justin Jackson 55:51 
Yeah, if you if they want to read the newsletter, they can sign up at justinjackson.ca on Twitter, I’m mijustin. The letter M the letter I Justin. And the podcast is called “Build your Saas” and Transistor is transistor.fm.

Erasmus Elsner 56:10 
Perfect. Thank you so much, Justin for taking the time. This was fun.

Justin Jackson 56:15 
Yeah, thanks for doing this. I enjoyed it a lot.