Season 3 Episode 9
Bradley Davis, CEO and Co-founder of Podchaser

Imagine creating something from scratch that transforms an entire industry. As the founder and CEO of Podchaser, Bradley Davis did just that. Sometimes called “the IMDb of podcasting,” Podchaser was a concept that didn’t exist until Bradley brought his idea to life through persistence, pursuing the right acquaintances and a bit of luck.

Tune in to hear how Bradley raised $4 million in just 40 days with zero startup experience and no connections in the industry.

Chris Allen: I would like to welcome Bradley Davis to the Entrepreneur Studio hot seat.

Bradley Davis: Thanks for having me on.

Chris: Yeah. Does it feel hot yet?

Bradley: It’s actually a little bit hot.

Chris: A little hot. Okay. Fair enough. It’s spring.

Bradley: It’s good.

Chris: It’s going to happen. Yeah. Super excited to have you on. Like I was saying earlier, it was like to have somebody that has done what you’ve done, but in a local area that we’re familiar with, Oklahoma City, it’s pretty cool. It’s exciting. I mean, you founded a company that’s kind of like, I call it the IMDB of podcasting, right?

Bradley: Yes.

Chris: It was a platform that really didn’t exist until you brought it to life. But there was a time when you didn’t even know what a podcast was.

Bradley: True.

Finding a gap, visualizing a solution

Chris: Tell us how you went from being a podcast listener to this, I’m going to say technology innovator that built some software in such a short period of time.

Bradley: It’s a loaded question. I think that the impetus for me starting to listen to podcasts was one of my co-founders. His name’s Cole. He’s my best friend. We knew each other since we were 10, and I had a sales job selling a lot of really cool things. So cardboard boxes, rags, like rags and light bulbs. So I was driving around multiple hours a day and Cole was like, “Hey, what are you doing filling your time? Nothing."

Chris: You’re like, “I’m selling cool things.”

Bradley: I’m just driving in silence because I didn’t really listen to music much, somewhat, but I would just drove up in silence. He’s like, “You should listen to podcasts. You’ll learn a lot and you’ll develop as a person.” I was like, “Nah, I don’t know if I care about that too much.” But then I —

Chris: You’re like, “No, I prefer my own thoughts.”

Bradley: I prefer my own thoughts, yeah. Why would I need somebody else? But I actually started listening to Tim Ferriss, classic, and just became more or less obsessed, and I would listen for multiple hours a day as part of my job from plant to plant, doing these cold calls. And I just felt as if I was getting this impartial information right in my ear. And that was cool to me. It was unique. It was special. And then I also started listening to narrative podcasts. Serial was obviously huge, and then S-Town, which was closer to this time period, which was like 2016 to 2018. And I listened to S-Town, which is the best podcast ever made in my opinion.

So then I felt like I had listened to every podcast in existence in this little nucleus of entrepreneur podcasts, narrative podcasts. And then I went on the internet to find more. And I was looking for an IMDB or a Letterbox or something similar in that vein. And just really wasn’t anything. It was still this very wild, wild world. It still is to a degree, but it wasn’t very organized. It was before Spotify’s involvement, before Amazon, before the big technology companies started putting their tendrils into the industry. So I just felt like that was, I mean, I really don’t know why, but I thought maybe I should build this for some reason because I’m qualified, which I wasn’t at all, still not. So I went on Reddit on the podcast subreddit, hoping to find this resource. So I basically said, “Hey, is there an IMDB for podcasts? Is there a database product? Is there something that I’m looking for to help me find more podcasts, follow people, read ratings and reviews, things like that?”

And then I also added a line that was like, “If not, would anybody want to build it with me?” And everybody, it kind of blew up. And a lot of people were like, “Oh, this really should exist. And there’s been some attempts, but it hasn’t worked out for whatever reason.” And then one guy named Ben commented and was like, “Yeah, I’m a podcaster and I think this is a big problem and it’d be fun to solve and we should put our heads together.” So we got on, what was it, Google Hangouts at the time on a video call, and he was in Australia. So finding time to get with him was difficult, but we ended up building Podchaser. So he became one of the co-founders, the CTO, and we met on Reddit. And if I hadn’t had that really random urge to post about something on Reddit, there’d be no company. It’s weird. I wouldn’t even say it’s good advice to post stuff on the internet because it was kind of dumb. It just worked out.

Chris: It’s amazing. There’s a couple of things that I was really sort of like, man, I want to talk with Bradley about this, because there’s really two pieces of this is one of the things you’ve stumbled on is companies, or let’s say either accelerators or other funding entities are really interested way more now, almost exclusively interested in people who have a kind of visionary integrator or a CEO, CTO, right? It’s almost like you can’t even do that. And that’s sort of happened to you organically, right?

Bradley: Yeah. I mean, I have to be clear, no technical skills, never written a lot of code and just had an idea. And I knew enough, my dad’s in technology, I’ve been around. I’m a big technology person. I just never knew how to code. So I knew I needed a developer to bring it to life. And so yeah, that describes us completely where I needed the CTO figure for sure, from day one.

Chris: And then it’s like there’s a lot to software. And I think the thing that I’m really interested to unpack with you is you went from IMDB, which is kind of a source of truth for finding or discovering other podcasts to actually building a software that would enable podcasters to do other things. So tell us a little bit about the software and we’ll get into how you built it in just a little bit, but what does it actually do?

Bradley: Yeah, it’s a great question. So it’s complex. Similar to IMDB, there’s a consumer facing version of the product, which is, I want to find a podcast. I want to find podcasts similar to this one. I want to follow you as a creator and see what you’re on. So the credits aspect of why people usually use IMDB, like, “Oh, this guy, I can’t recognize his face. Who is that?” So that’s one thing we do, ratings and reviews, discovering podcasts as a consumer. But then we realized, I think a couple years in we’re like, well, a lot of people needed to discover podcasts for different reasons. And there’s a lot of people that need to discover podcasts that have money, like a PR firm who’s looking to place their CEO client or a media agency that’s wanting to plan their media campaign. They need to find podcasts with a specific criteria and have a search function and a database. So we turned sort of from this consumer aspect of discovery to really a data-driven product. So a database that can be accessed through a front end, which is our Podchaser.com, Pod Chaser Pro. And then we serve that same data through the back end through an API, which I didn’t even know what API meant at the time, but that’s our current business.

Chris: Okay. Well, it’s a pretty robust build out in my mind. And so talk to us about how you find your CTO.

Bradley: Yep.

Funding the vision

Chris: What are the early days of Podchaser where you’re like, “Okay, I have a dream”?

Bradley: It’s so hard to describe. I think it’s just this weird mix of irrationality and interest and stubbornness where it was just weekends for years, for a long time. I had a full-time job. I raised two rounds of funding, still had a full-time job. I was still selling rags and doing whatever, because I felt like in the back of my head, this is never going to work. It’s never going to come to fruition. And I do remember we got that first, the first big obstacle is money. This is not going to make money anytime soon. So we need to figure out a way to get Ben working on the code base more often. We need to hire a front end developer. We need to hire a designer. We need people to come in and build this. So I was like, well, I guess my job is I need to go raise money. I was in Louisville Kentucky at the time, so I moved to OKC in around 2020. Great year, great vintage year for the world.

Chris: Great year.

Bradley: So in Louisville, I went to the small business chamber development entrepreneur person, and I was like, “Hey, how do I raise money?” And she’s like, “Oh, honey, have you heard of Kickstarter? Maybe try that.” And I was like, “No, I need VCs. I need software money.” And she referred me to a couple people, but I just kind of bothered all the rich people in town until they would have coffee with me and I’d pitch Podchaser and they’d be like, “I’m sorry, what’s a podcast exactly?” And I’m like, oh my god, this is going to be so hard.

Chris: I have an uphill battle ahead of me.

Bradley: Absolutely. So that was, I think the biggest unlock was we raised half a million dollars on a safe note in 2018, and that let Ben go full-time or almost full-time with a project to let us hire a couple contract developers and then let us sort of prove out the model and the idea so that we could go to institutional funding and actually go big.

Chris: So that was a friends and family round.

Bradley: Yes, it was, I think like 20 angels.

Chris: Wow.

Bradley: And by the way, to be clear, no friends and family. We need to change that term.

Chris: Yeah, I know.

Bradley: I don’t have any friends, I don’t have any family that are going to write me a $25,000 check, not even close. So this was weird rich dudes.

Chris: Yeah. It’s your angel round.

Bradley: Yes, yes.

Chris: I mean, your seed fund, your angel round. And so one of the things that I think would be really helpful to unpack for people is there’s a lot of different avenues to go raise money. You can bootstrap if you’ve got your own cash, you got family members or these other sort of, let’s say, call them informal angels that you can sort of bootstrap and use the funds that you start with with a little bit of seed. And then you start creating revenue, and then you can live off of some of that revenue to a degree, and that’s bootstrapping. But then there’s sort of what you called kind of the institutional funding, and I’m saying there’s loans and lending, and then there’s sort of investment, institutional investors. So talk to us a little bit about your discoveries of this sort of...because not everybody goes, “I need angel investment.”

Bradley: It’s a wild concept.

Chris: It is.

Bradley: I’d say my first advice would be to not ever raise money if you can help it.

Chris: That’s not the first time I’ve heard that.

Bradley: Because you’re then beholden to somebody. If you’re able to bootstrap successfully, you’re beholden to your own business, your own self, your own P and L and your team, and that’s it. But I’d say if you do want to raise money, you are signing up for a roller coaster and an exit. That’s how success is defined is some sort of exit event. And 99.9% of people will not reach that. It’s a miracle that we reached that. And so I think that whenever I meet with founders, I’m always like, “Oh, you’re raising money. Why? Do you have to? Do you have to a job? Keep your job.” I did Podchaser on the side for three years before I went full time after raising the money. So yeah, I think for us, we knew that our software and what we wanted to build was so big that it would be silly for us to monetize that and impossible for us to monetize that because we had to build this huge data mode and data set before it had enough value for anybody to pay for and commercialize. So in our scenario, it was uniquely, I don’t know, it was unique in that we had to get a bunch of money to pay developers to build it before it could monetize it.

Chris: I’d say when you’re building a company, especially building software, you’ve got these, I’m going to say multiple teams that you’ve got to build out. Obviously you’ve got to build out the software. So that takes time from people who have expertise, and that’s where you’re spending, it sounds like a lot of your first round of money. What where are the stages after that that you’re like, "Oh, I need to let people know that we have this?”

Bradley: So honestly, most of our marketing was Reddit until Reddit picked up on what we were doing. So I’d say finding where your people live, going to them, whether that’s on Facebook groups, Craigslist, wherever it is. Twitter. Reddit generally is a really good place to sort of boost a business and to get awareness. I think before we raised any money, we had I think 20 or 30,000 signups to a very generic sort of wait list for whatever Podchaser was going to be while we were building it. So for us, the dev work was a big chunk of that first bit of money. And then the second round of money it was, we did start thinking, we need to commercialize this. And we really are huge believers in outbound SaaS sales. So inbound requires a massive budget. It requires kind of an element of throwing money out there and seeing if it works.

Chris: And a lot of experimentation.

Bradley: A lot of experimentation. For us, we got very lucky. We hired some killer SDRs from the very beginning, and then we built such a good product that they started telling their peers. And so we do get a lot of inbound, but it is organic inbound, which is the whole point of business. Organic inbound is awesome. And then for us, too, by nature of a big database with a bunch of SEO juicy sort of pages, we have millions of pages. We had a ton of SEO traffic as well. So that was another thing we knew there was going to be —

Chris: And people write a lot of links to those pages.

Bradley: We have a ton of back links, and so we knew that there was going to be this huge ramp period for SEO that was going to take years. SEO takes a long, long time. And so we were kind of betting on that, and that was part of the pitch was like, “Hey, it’s going to take a while, but once we have enough SEO juice, business will come to us.” And it did pan out. But yeah, so we didn’t ever go do some sort of big marketing blitz, but we did have to hire a sales team. We’ve had to do HR, which was me for a very long time, or my co-founder did that for a very long time and started to build out an actual company.

Chris: So you went from building sort of product and development into what I would call sort of sales marketing. It was like SDRs, you needed SDRs to sort of do the outbound that can give to a salesperson.

Bradley: And of course, like me and Cole, the two American co-founders, we were the SDRs and the AEs and the CS team for a long time. It was just us. We talked to hundreds of potential clients, perfected the pitch, and then we felt comfortable of like, okay, I can go hire somebody and teach them this because it’s a process, it’s repeatable. But for the first part it was definitely just us.

Data-driven success — pitch by pitch

Chris: Well, talk to us a little bit about, well, there are two things I want to talk about. I want to talk about product market fit and dilution. Okay. We’ll get there. So at what point were you like, “Hey, we’ve got product market fit,” where there’s enough traction where you’ve got sort of a commercial viability and product market fit?

Bradley: So we really didn’t know what we’re going to do from a monetization angle for a while. And I forget the aha moment, but Cole and I were on the phone and we talked pretty much every day on the phone, which is I think important to just be like, “Hey, life sucks. Hey, this is hard. Hey, what do you think?,” and constantly bouncing that really tight feedback loop, otherwise I would’ve gone crazy. So we kind of had this idea of, I think it came from a potential client, but nobody knows how popular a podcast is. Period. There’s no indication, no metric, nothing. On YouTube, there’s YouTube views. On podcasts, there’s nothing. So we’re like, huh, that’s interesting. And that seems to be really valuable. And so we kind of had this harebrained idea that if we approach podcast apps and we’re like, “Hey, if you give us access to anonymous aggregated stats on who’s hitting the play button, we’ll give you a slice of equity of Podchaser.”

And we thought this is not going to work. But it did work and we were able to get a big chunk, a few million devices, and then we were able to sample out the popularity of a podcast, that would be very valuable. That’s like Nielsen’s model. It’s a data model. So we went out, Cole and I, and just started cold emailing podcast apps. There’s a lot of them. And this is before there was a huge concentration and we’re like, “Hey, will you give us your download stats for equity?” They’re like, “Sure.” We’re like, “oh my god.” So then we had started building essentially this pro product of pay us and you’ll be able to see the popularity and about how many people listen to a podcast for any podcast in the world. We’re the only product that does this in the world, and we didn’t really know who would buy it. It turns out PR firms are the bread and butter of the program.

Chris: Yeah, they’re trying to figure out, hey, where am I going to get the most reach for an audience that my CEO —

Bradley: And then they get inbound, they’re like, “Hey, we want you.” And before Podchaser, you just kind of went on podcasts and then kind of asked for verification of reach, but there was nobody checking the math. So we signed Edelman and the biggest, the top 10 PR firms in the world and we’re like, “Oh, I guess this works. I guess this has value.” And so then of course we veered not away from, but we started hitting other markets like marketing agencies and media buyers. But I think we realized this is working when I think Edelman was one of our first customers, the biggest PR firm in the world, the only billion dollar PR firm.

Chris: Totally.

Bradley: So we’re like, oh, if they find value in this and they have 30 users, then I think that every other PR firm of which there are tens of thousands would also sign up for this. And then we were like, I guess we need to go raise money and hire salespeople.

Chris: Okay, well that is really important because I think when you are selling to a customer, that’s one thing. But when you’re selling to investors, that’s all they do is hear pitches all day long. So talk to us a little bit about that kind of critical round of funding that needed, that I would consider as beyond product market fit, that gets you into sort of...of course you’re still a startup, but you’re in a, “Oh, we’re going to hit another phase and we need to fund into the next phase.”

Bradley: So we raised a $1.65 million, important five, round in 2019, and it was from institutional. So Hi Alpha, Hyde Park, Poplar Ventures, these are all Indiana and Kentucky. They’re the big VCs of that region. And this was when we started getting that early traction from our pro product and we could kind of model out like, “Hey, if we keep doing this, we will make a lot of money and this business will work.” And so these are VCs that we had a relationship with from the seed round. The ones that were like, “Hey, call me when you get to this and that.” Okay, well we have all these users, we have all this data. This data pipeline that we built is exclusive and very valuable. And then we were able to productize it and we had early traction and we had, I don’t know, a few dozen customers at that point.

And also we have no money, so we need to raise more money so that we can keep paying people and keep building this. So that round was very dramatic. We had one of the VCs basically require a million dollar minimum before a close. And so I asked all my employees to not take paychecks and I said, “I’ll pay you back.” And my accountant-slash-friend, his name’s Rhodes and he lives in Louisville, hopefully he listens to this. I was like, “Hey, Rhodes, could you give me $25,000 to cover payroll for the devs?” So the founders were not taking any money, but the devs, we still need to pay them. They’re employees. They would quit otherwise. They’re very talented. So he’s like, “Okay, will you be able to pay me back?” I’m like, “Oh, totally. A hundred percent. The round’s going to close any day.”

And so he floated us $25,000, which got us I think a couple months of runway. And I had breakfast with a guy named John Wilmoth, and it was in Louisville. There were two locations. I went to the wrong location. And so I showed up 30 minutes late and I was like, “Hey John —”

Chris: “Can I have money?”

Bradley: “If you don’t write me this check, the other VCs won’t write the check and the business will die next week.” And I’m just completely transparent, “I think we’re onto something here. I know you don’t really know me, but I think this is going to work.” And I kind of listed off the data moat that we had and he took a bet. And there’s so many moments that if not for John, if not for Hyde Park. So Hyde Park is out of Chicago. Jackie emailed me, and this was right during this whole we were running out of money thing.

It was like, “Hey, you wanted meet and talk about raising money?” Not for her, because she got High Alpha excited, and then High Alpha got Poplar excited. If not for an inbound email from a VC in Chicago, we would not have raised any money. We went to New York and met people, which we thought we’d seen that in a movie. We’re like, we’ll just go to VC’s offices and we would meet with their lowest-level associate who was texting the whole time and being like, “Get out of here you idiots from Indiana.” So it was like miracle after miracle that put that round together for sure.

Chris: That’s amazing. So how many pitches did you end up doing?

Bradley: I’d say all in all 200 to 300, probably something like that. A lot. A whole lot.

Chris: That is something that I love talking with founders who have raised money because there are people who get their pitch, they try it four times, three times, and they’re like, “We don’t have anything here.”

Bradley: I relate pretty much everything back to sales. You got to keep adjusting your pitch and sales is a number game. So I thought, okay, if I have a 10% hit rate and I go to 300 or get 30 and then 20 of them will actually follow through, I think I can put around together. If I pitch 20 and get two, it’s not going to put a round together. So it was outbound sales approach. I will say that the amount of outbound hits I think were quite low. What really hit was warm leads. So that angel round, going back to them saying, “Hey, do you know an institutional, do you have a buddy? Do you have a partner somewhere? Could you introduce me and say that I’m not a crook?” Those were the probably over 50% close rate. The outbound is low, but again, though, it’s a numbers thing. If you put enough out there, then you’ll close some.

Discovering your hook

Chris: Well, what was the biggest maybe shift in the pitch that you did that started getting you more raised eyebrows? Was it a hook, was it a certain number? What was your sort of —

Bradley: IMDB of podcasts was the hook. For the most part, people understood what IMDB was. And then very early on I reached out to one of the first employees at IMDB and put them on the cap table as an advisor and got some details about their business model, how big it is, how sort of high margin it is. And then I was able to relay that information to say, “Hey, if we can do this for podcasting, which is having this huge growth period, then I think we can build this compelling business.” So I think that, any sort of social proof I think helps a lot. And the guy who built this business, John from IMDB, he believes in us so much so that he’s on our cap table and you want to talk to him, here’s his phone number. And they would talk to him. And he was our closer a lot of times to saying that, yes-

Chris: That’s freaking great.

Bradley: “This database makes sense. I know that Bradley is just like a redneck from Indiana, but the way he’s approaching this is smart,” and that helped get a lot of investors over the line.

Chris: Of the 300, what was the estimated pitch count that you came into the IMDB of podcasts?

Bradley: Probably fairly early. So I’d say definitely after that first angel round, that was my go-to, and that also became our branding on the internet, which was super helpful. And any sort of mental shortcuts you can make for people to remember what you even do. Podchaser is just like a nebulous word. It doesn’t help, but putting that together and putting it at the front of the pitch deck I think helped us a lot. Other than that, I don’t know. A lot of it was like, I think it helped that I was so naive and young and I think people felt bad for me, so they would at least take a meeting, but you certainly have to have some sort of, this is real money, and so you definitely have to have some sort of hook to get them over the line.

Chris: Yeah, I think the resilience required to do that level of selling and how committed to your vision you’ve got to be, it’s a huge one. You had what I’d consider, you were talking about selling fun things, but there was a resiliency that you developed selling-

Bradley: Yes. Cold calling.

Chris: I’m going to say things south of commodity.

Bradley: Yeah, a hundred percent. A hundred percent. I always say the number one skill in all of this is just sales. And if you can do cold call outbound sales, you can do anything. It’s the exact, so selling your company, fundraising for your company, getting customers obviously for your company, it’s all an outbound sales cycle.

Being the CEO your company needs

Chris: I love it. What would you say, there’s something that you said that I’d like for you to maybe expound on. It was it was an aha moment. You’re like, “Okay, well if you’re going to write code, maybe I should raise money.” What do you think the job of a CEO is, especially a startup CEO?

Bradley: Yeah, so John, the IMDB guy, I kind of asked him that question and he’s like, “Your job is to have enough money in the bank for the business to survive, period.” And I thought that was really simple and something that could mean closing a big customer, fundraising, whatever it meant. I didn’t want my co-founders or really anybody in the staff to worry about their next paycheck or the next big customer or who’s going to write a check into the next fundraising round. So for me, that was my job. And before we had revenue, that meant I had to fundraise. And so that was really all I did. And obviously I was very involved in the product creation, but for the most part, I tried to have Ben be over that and Cole and have the team work on this. I’m like, “Okay, how many months do we need? Two years? Ok, I think I’ll go raise $500,000.” And these things are not set in stone. And I’d say they’re pretty much made up. The amounts money, it’s all kind of completely made up.

Chris: How much are we selling these units for?

Bradley: Exactly. Pricing was just throw it at the wall and, “Oh, you said yes? That’s our pricing.”

Chris: Yeah, somebody’s willing to pay it.

Bradley: A hundred percent.

Chris: Yeah, I’ve heard it said that, it’s very similar. I love that enough money in the bank for the business to survive. I’ve also heard a CEO’s job is to make sure that the business has the resources to bring the vision to life. And that is really huge. You got to get the people, you got to get people excited, and then you got to have money in the bank as well. And I don’t know if people, entrepreneurs that are deciding to go raise money realize that their job of running a particular part of the shop, when you go into like “Hey, I’m going to expand,” your job changes and raising money, it is a job.

Bradley: Oh, yeah. Is a full-time job. And yeah, a big part of it too was recruiting and convincing a developer to take half of their market value in exchange for a sliver of equity in a company that most likely won’t exit. So that’s crazy.

Chris: That does sound crazy.

Bradley: You’re pitching the investor and you’re pitching your first software developer to be like, “Hey, this is going to be big and here’s why.” And you really go through the almost exact same pitch you would go to a VC for savvy remote software engineers to join the team. And founders. Even my best friend said no at first, Cole. He’s like, yeah, “I have a gig. It’s going pretty well.” I’m like, “oh, that’s fair.” It all worked out, though.

Chris: That’s awesome. Well, I definitely want to cover on the dilution and how that really feels. Because when you go to a vision, think about you’re sitting in your shoes, you’re writing models, you are trying to sell on this vision that you really, really believe in, believe in to the degree that you’ve had taken 300 meetings and said no, it got no said 280 times or whatever, and you have seen the math. Right? And then what happens is there’s this sort of commitment to the vision, the calculations that you believe in so much. And then what ends up happening is, oh man, my position of bringing this thing to life, the value of what I believed, there’s a continued...talk about the emotional impact, the actual what was sort of dilutive or dilution as it relates to the value of maybe you and your co-founders stake in the business, how that diluted and then the sort of emotional impact that had.

Bradley: So I think the first thing is it was important for me that the only people that would suffer would be me and Cole. So the sales American guys, not the developers, not the CTO. So I wanted to not have that burden on their heads at all. And so it is a burden because to your point, the responsibility of fundraising is essentially on me, but also the notion that all these people that work for me could go without jobs very soon is a very guilt-ridden concept. So for me, I think what was huge was, like I said earlier, I don’t know how solopreneurs do it. I could call Cole and be like, “Hey man, this isn’t going to work. How is this going to work? This doesn’t make any sense.” And pounding just the same talking points with him over and over. And I think that you have to keep finding these proof points, and whether that’s a round of funding or whether that’s a milestone from customers to brainwash yourself into believing that this can still go.

And I think it is a tough question because I see a lot of founders and I can see in five minutes you should not be doing this. But at the same time, I would’ve said that to myself at the beginning of this journey. And so if you’re signing up for this kind of horrible job of a founder, especially a VC-backed founder, you just have to get yourself there with milestones and proof points. But then there’s still a gap. And that gap I think is a scary thing that you just have to be blind in faith and just keep going. And I don’t know how you get that in any sort of rational framework other than you just have to be a little bit insane.

Getting to the exit stage

Chris: So maybe you’re not your own dilution, but what would you say would be a typical through the multiple rounds? Did you guys do —

Bradley: We did three rounds.

Chris: Three rounds.

Bradley: So we did $500,000, then we did $1.6 million, and then we did a Series A in 2021.

Chris: Got it. And then exit.

Bradley: Yep.

Chris: And so a typical through a Series A, somebody that owns, you got a CTO and you’re like, “Okay, 50/50,” and then you raise your round. And so what would a typical entrepreneur at post-Series A exit, what do you think that is? Sort of a fair range of a percentage of value?

Bradley: Dilution, 20% each round.

Chris: 20%. Exactly.

Bradley: So if you start with a hundred percent, you’ll end up with 40 percent-ish.

Chris: Got it.

Bradley: That’s what I was told. And doing it back, if I did it again, I probably would’ve tried closer to 15%, 10% if you can.

Chris: Per round.

Bradley: But it’s like the investor kind of has an expectation. And especially if you’re pre-revenue like I was, it was kind of like a, “Yeah, 20%, right?” Yeah, sure. That’s what you should do. So, yeah.

Chris: Fair enough. Yeah, I’ve been around a couple of founders who have gone in a really not so great direction because they believed so much, and they end up at the end, they’re like, “What did I just do?”

Bradley: Yeah. So you have to factor in your crazy exit dreams with the fact that you tend to own 10 to 20% maybe of the company if you’re lucky. That again is another layer of insanity to the whole puzzle.

Chris: It really is.

Bradley: Your investors end up doing great.

Chris: I think one of the things that it really is hard because when you have, I like how you said it, your exit dreams. I mean, when people think billion-dollar exit, it’s like that doesn’t...unicorns don’t happen often.

Bradley: No. You’d be more likely to, I don’t know, win blackjack a hundred times in a row.

Chris: Exactly.

Bradley: It doesn’t happen.

Chris: Exactly. Well, I think you covered the sort of emotional kind of roller coaster.

Bradley: I was on Indeed, probably two months before our exit looking for jobs. And also, I don’t have any skills. I’m not a developer. And so I was literally looking at Thornton’s regional manager, like a gas station, which is probably a great job. Nothing wrong with Thornton’s.

Chris: That is an emotional low. That’s got to go in your book, for sure.

Bradley: That was my go-to, I can’t do this. It was job boards and thinking about what company would hire me to manage maybe 10 people because I do not have any skills.

Chris: Oh, man. You’d be a great VP of sales.

Bradley: Yeah, well, there you go.

Chris: That’s a real skill. Well, one of the things that I think would be really good is I love talking about the mechanics of building a software company and software multiples and dilution and fundraising and all that kind of stuff, but podcasting.

Bradley: Wild.

What makes podcasting so special?

Chris: This industry has really, it’s a sleeper, I think, but at the same time, it’s really evolved. There’s a lot of attention on it right now. Where do you see it going?

Bradley: Great question. So I think the big initial push in the 2015 to 2020 era was mobile data, the ability to have unlimited data plans on your phone, and then being able to listen to podcasts on your walks, in your car. So I think that was a big moment. And that happened to coincide roughly with Serial, which was the killer content that started pushing podcasting everywhere. And then you had this period which I participated in, which was this Renaissance period. You had Gimlet, you had Rogan to Spotify, you had Spotify spending a lot of money on content, on tech. And I think that everybody has sort of seen the path of podcasting overtaking radio, which is still a larger business, which is kind of wild.

Chris: It is wild.

Bradley: But it’s a large established business. Podcasting has struggled with efficiently monetizing to the degree of pretty much all other media verticals because of its sort of fragmented nature. And that’s why we exist, is to try to help bring all the data together so that a brand is comfortable spending a ton of money and is able to spend a ton of money to get the word out about whatever product there is. So I think there’s still sort of an opportunity for sophistication behind data so that media buyers who are very comfortable in linear radio or wherever else can be as comfortable in podcasting with the same attribution and faith that their dollars are getting to ears. So that’s a big piece of it.

And I think that the beauty of podcasting is the intimacy, obviously. It’s like the beauty of a host-read ad is incredible. And so it’s however, generally not as scalable as Papa John’s, “It’s $5 off today.” That is not as effective as you’re host saying, “I love Papa John’s. Let me tell you why. They have a new product. Here’s what it is. Go here, go to this link.” So trying to figure out how to scale the native host-read read to every podcast is hard. It’s a hard problem that is being solved, and I know a lot of great efforts behind it to be solved, but there’s still, I guess room to drastically improve the monetization of podcasts. But I’m obviously a huge believer in it. I think we’re still at the very early stages of the size of this industry.

Chris: I mean, you think about radio, you’ve got larger than life. You’ve got larger than life musicians, bands, right? Different genres of music. But it’s on autoplay. You turn it on, it just goes. And that’s really, really hard to compete with because guess what? I’d say Tim Ferriss, Joe Rogan, they’re probably the most kind of well-known. There’s not a host of really, really, really well-known podcast host.

Bradley: You don’t have a Howard Stern.

Chris: Yeah, you don’t. And I think that there’s some really interesting things about podcasting. I mean, there’s a reason that I’m excited about it. I like the word intimacy where you really can get to know an idea, a person. It stimulates curiosity, all of these different kinds of things. And self-improvement and education. I mean, that’s the reason your boy was like, “Dude, you can better yourself.” Right? There’s a lot you can do there. But think publisher, advertiser, marketer. Talk about your point of view of podcasting as a marketing play.

Bradley: I think it is a great way to market. I think my opinion, not to say anything bad about this podcast, it’s much more efficient to get your people on other podcasts than it is to start your own podcast. As you all know, starting your own podcasts, and you guys have done a great job, it requires an investment and it has to be really good and professional. And then you do all that and it’s like, “Who’s going to listen to it? How many people are going to listen? How am I going to have an impact?” But even if you don’t —

Chris: It is a really great question.

Bradley: Even if you don’t have thousands or hundreds of thousands of listeners, you guys and you know this, you’re able to chop up the content, put it on socials. It can be an email drip, it can be autoplay. It can use the content in a billion different ways. It can be a blog post. It’s great for SEO, blah, blah, blah. So I think marketing, doing your own podcast is great. It just requires a significant investment, more so than people realize. And then also just leveraging other people’s audiences to be a thought leader in whatever it is, payroll, whatever it may be, to say, “Hey, this is a world expert on this. And a very niche audience who’s really interested in payroll,” which exists, which is crazy.

Chris: It is crazy.

Bradley: That’s the advantage of podcasts. You can get a thought leader on a podcast with 800 listeners who are all your most perfect buyers in the world, whether that’s, I don’t know, people who run foundations or we have wildly niche, we have a rhino foundation to save the rhinos, and they get on podcasts specifically for the people that whoever they need to reach. Rhino people? I don’t know. But it works.

Chris: I mean, there’s ones on crochet and all these wild things that you would never think anybody —

Bradley: Yeah. So the earned media podcasting, which I’m very familiar with, is awesome. For very low amount of money. You can get thought leadership in the exact audience and you can hang out with them for an hour. That does not exist anywhere else. And then on the paid side, similar. If you have the right host, the right content, you’ve seen the explosion of direct-to-consumer brands, Better Help, Manscapes, all those brands have built an entire business off of this sort of targeting. So it’s an incredible marketing vehicle.

The future of podcasting and AI

Chris: Yeah, it’s good. What would you say would be kind of the next innovation in podcasting?

Bradley: Well, video is the hot thing to talk specifically. So getting clips and hooks on TikTok are driving a huge amount of downloads, especially to, I’m sure you guys have seen the stand-up comedians like the Theo Vons of the world. You get these hooks and you start thinking about that creator. And then you go to their podcast feed, which that’s new. So this is a huge driver of downloads for podcasting is this YouTube shorts, Instagram reels, TikTok clip, getting you into the marketing cycle essentially to get you to download the podcast. So that’s fairly new. And I think that every podcaster is trying to figure out, “Do I need to have a video element?” Marc Maron does not do video. Some people just do not do video. And I think that you’re seeing a ton of pressure. Is that the right thing? I don’t know. But it’s the thing right now.

Chris: I wish people could, we’ve had big names that have giant podcasts come sit in that seat and they’re like taking pictures. You know what I mean? Of what this team’s got going on. It’s pretty amazing. I don’t get to brag on them too much, but it’s pretty rockstar level of what they do.

Bradley: Oh, yeah. Very impressive.

Chris: I just get to sit here and ask questions.

Bradley: It’s great.

Chris: Talk to us about where Podchaser is today and where it’s headed.

Bradley: So today, I think our parent company, Acast, which is a Swedish company, which has been very interesting to learn about, Swedes. Acast is a leading global hosting provider and they monetize podcasts very efficiently. So I think Podchaser has been in this earned media position and sort of listener-adjacent position for a while. And because of the acquisition, because of the synergies between us and our parent company, we’ve been able to learn a lot about the buying process for podcasts, how to deeply understand an audience of a podcast, their demographic makeup, how to measure that, how to model it. So one of the big releases we just did is predictive demographics.

So using AI and machine learning to look at the show notes and the transcripts of a podcast and predict spot on what type of people listen to the podcast without any need for first party data. That’s been our cool little trick we came up with a few months ago. So building out more of these tech layers for a world in which first-party data may not exist at all, which is a complete, cookies are kind of going away and trying to be prepared for that world and to move podcasting along. So I guess to answer your question, continuing to do what we’re doing with our pro products, our API products, but then building another layer for another set of clients, for media buyers.

Chris: Yeah, it’s amazing. It’s amazing.

Bradley: I guess AI is a big thing we should probably touch on.

Chris: Yeah, I mean, the thing about it, I like that you called it a trick because it’s a real thing. I mean, there’s a lot of AI. There’s this pretend voice out there that is mine that reads stuff from time to time, and everybody’s like, “I can tell the real Chris from the AI Chris.”

Bradley: Open AI just, I think it was like three days ago released, I don’t know if it’s in beta or whatever, but you could sample like 10 seconds of a voice and it pretty much perfectly recreates. That’s going to be huge for ad reads in a way that consumers probably care about, but probably won’t notice, because the more unique, the more tailored an ad read is, the more effective it is. But that’s just not, you cannot possibly do, a human cannot do perfect variations of ad reads for every single consumer in the United States. AI can. So I think that will improve ad tech significantly. And then like you’ve already seen, I’m sure the New York Times and a lot of these publishers have podcasts that are just robots reading, taking an article and creating a narrative, adding in the music. And so that’s going to become a thing, a big thing.

Chris: I mean, the synthesis that can happen from an AI to take something that’s a TLDR down to a little, “Hey, this is what it was.”

Bradley: Totally.

Chris: It’s pretty huge.

Bradley: It is huge. It’s going to be really weird.

“Hedge your bets as much as possible.”

Chris: It’s amazing. Well, you gave a piece of advice earlier about people considering raising money. So let’s just say for a second, so as we wrap it up, what piece of advice would you give to somebody that’s kind of starting on the road of like, “Hey, you know what, venture capital is the way that I want to go”? What would you consider them or maybe have them consider along the way or encourage them to do?

Bradley: I’d say hedge your bet as much as possible. And for my situation, somebody who doesn’t have the friends and family and doesn’t come from any money, I just kept my job and I was transparent about it and I had a very flexible sort of job, but nights and weekends for as long as possible so that you can keep your family fed and keep yourself sane. I think that’s totally appropriate. I think the notion of go with reckless abandon into your venture with full passion, full focus is not necessary. You can at least prove a few things out and you can, in my experience, raise a couple rounds, small rounds of funding while still having a job. And then eventually, yes, you do have to jump off the ledge and prove it out. But I think hedge your bet as much as possible because in my experience, I had quite a few startups before Podchaser that were duds, clearly duds. And if I had gone full on to those before and quit my job, I would be in a horrible position. So that’s my advice. I think that’s pretty opposite of what you hear in the startup podcasts.

Chris: It’s huge advice. And it’s also really good to hear that you had other startups, startup ideas, startup things that you gave a shot. Having something like this hit on the first go is pretty amazing and unlikely.

Bradley: Very unlikely.

Chris: Well, I have to say, it was super great to have you have the conversation about all of the things around software startup and what it means to raise money and all of those sort of real-world impacts. So Bradley, I just appreciate you coming on the podcast.

Bradley: Thanks for having me. It’s a blast.

Chris: Absolutely.


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