It’s weird, but in some ways, side projects require better strategy than regular businesses.
They’re so easy to quit. Even if you love it, your hours are constrained, so you have to be absolutely ruthless in choosing what not to do. (A critical skill in creating any strategy.)
Plus, there’s pressure to build the right thing from the outset. If the project doesn’t find an audience quickly, it usually dies on the vine. I mean, who wants to pay the emotional toll of pivoting a project that’s supposed to be a fun thing?
But even if you beat the odds, and manage to make something people want, the challenges just get tougher. You have to decide how to spend your limited time and money to make it grow. It’s a process that forces you to get extremely clear on what your goals are.
There are few people more suited to explore these questions than Ben Gilbert.
Ben studied CS at Ohio State. When he was in college, he built an early todo list app for iPhone that got over a million downloads. After graduation, he joined Microsoft as a Program Manager and worked on Office for iPad, before going on to run The Garage. Now, he’s a co-founder at Pioneer Square Labs, a startup studio and VC firm in Seattle.
(And, as a bonus, we’ll see how their journey helped lead to the creation of Glow, a spin-out company of Pioneer Square Labs that helps podcasters offer paywalled content!)
Here’s the interview:
On Acquired’s goals
Every year I get together with my co-host David, and we have a little summit to reaffirm our values and reflect. We’ll have dinner and talk about how we’re doing with our goals, which are, in order:
Learn about the stuff we want to learn about
Build relationships with guests on the show, listeners who participate in the community, and each other
Build our own reputations within the startup/tech community
There’s one obvious thing missing from this list: monetization.
For Acquired, revenue is not a KPI and we’re committed to never having a specific goal for it. But that doesn’t mean we don’t view money as important — actually quite the opposite. We realized along the way that monetization is actually an enabler that turbocharges the first 3 goals, by giving us the resources to make higher and higher quality content.
This all became crystal clear when we made the decision to launch a second, paywalled podcast.
The origin of the idea to go paid
Almost two years ago, David called me and said “I listen to this podcast that just launched a Patreon, and it’s great. It got me thinking—we should do a Patreon!”
I hated the idea at first. I couldn’t articulate it at a time, but to me, Patreon means I'm holding out a tip jar. It's the complete opposite of the branded experience we've created with Acquired. I also didn’t love that we had to ask people to go and sign up for a new platform, with our branding totally minimized.
But I know David is smart, and coming from a good place, so I said “let me think about that.”
Coming around to the idea
As we talked more about the idea, we came to realize a couple things:
First, I started to acknowledge that I'm a fidgeter. I could spend all day tweaking the Acquired website, or editing the audio myself. I’d get great joy out of it, but it was low leverage. There’s a trade-off: it's making me happy to do these things myself, but it's also costing us in quality, because I'm not researching for the next episode. I had this realization that I was making the wrong trade offs, and having money would help us make better tradeoffs in pursuit of our actual goals.
Second, we realized that what was interesting about the podcast David listened to wasn’t that they were now holding out a tip jar — it was what you got for putting money in that jar. They had essentially launched a whole second, paid show, which gave them a new canvas to paint on and a new way for their audience to interact. We decided that was something we wanted for Acquired too, and could serve all three of our main goals extremely well.
At first we thought launching a paid podcast would be relatively easy, because we have a lot of conversations we don't release. It seemed like an easy win to just publish those conversations, some of which were already recorded. Like, when we are just catching up and talking about “the state of Series A investing,” why don’t we just release that? It’d be helpful to our listeners and little extra work on our end.
(Turns out, it wasn’t quite so easy, but we’ll get back to that later.)
Could this be an app?
So we wanted to do a paid podcast, but there was still this problem of not wanting to use Patreon, because of the tip jar association, and because their branding is too heavy.
That led David to ask, “Well, is there room for a new platform for people like us to be able to do direct monetization?” And that was part of the impetus of Glow. [A company recently spun out of Ben’s startup studio, Pioneer Square Labs.]
We thought, “we should build a podcast app that provides great listening functionality, like Overcast, but with a way to support podcasters.” And because hosts will be driving people to download the app, then their audience will switch over because they have an affinity to the hosts.
We actually spent two months thinking this through. We thought it was the key to displacing Apple Podcasts.
Actually, it shouldn’t be an app
Then somewhere in that same time, the founders of another podcast app pitched us basically that same idea, which forced us to ask ourselves the question… would we actually tell our audience to listen in another app than they’re used to?
Quickly we realized the answer to that was “No.” The best thing about podcasts is you can listen anywhere. It took someone else pitching us the same idea to realize we wouldn’t actually want that as creators.
[Editor’s note: strategy drunk, anyone??]
So what should it be?
Around that time I met Amira [now, Co-Founder and CEO of Glow], who was also thinking about how to enable the direct monetization of podcasts.
She was experimenting with an SMS-based product, and we were going to do it as an app. We were both able to look at the problem with fresh eyes, and saw that neither of these approaches were right.
We were a sanity-check for each other, and realized that it needed to be a web-based platform that listeners could access from the podcast app of their choice.
This is another example of a strategy trade-off. By being web-based, Glow sacrificed control over the user experience of listening to a podcast, but it didn’t require people to change their listening behavior (which would likely have steep drop off!), so it creates a much wider top-of-funnel for podcasters in their membership program.
Launching the Acquired LP show
We launched the paid podcast using a beta version of Glow in October of 2018. It honestly didn’t go well at first. We realized our pitch wasn’t very good, so we had to hone it.
The original pitch was “listen to stuff that we talk about anyway, maybe deeper than the standard show, and it might contain guests.” Turns out, you can't just release the stuff that's on the cutting room floor. That's not actually interesting to people.
What we realized, though, was that having the second show provided this incredible testing ground for new kinds of content outside the constraints of the main show. By this point Acquired had started to become fairly popular, and while that was wonderful, it had a side effect of making us more conservative. Our content was working, so we didn’t have the same natural incentive to try new things as in the early days— if anything we were becoming afraid to rock the boat. The LP show changed all that and gave us room to experiment again.
For instance, we invited founders of still-private companies on the show for candid conversations about the realities of building and scaling, a format that’s proved so popular we’ve now brought it into the main show rotation.
The positioning we’ve gotten to today is “the main show is about telling the flashy stories behind the biggest companies you’ve all heard of (whether public or private), and the LP show is about the nitty gritty journey that founders, employees and their investors go on in hopes of one day reaching that mountaintop.”
The formats work incredibly well together because many people who listen to the big, flashy stories on the main show themselves also are somewhere in the trenches on that journey (or aspire to be).
Messaging matters. And so do the “features” of your content offering. Glow thinks about this as finding “content-market fit”.
Once we figured that out, the LP show started to grow significantly on its own. From a just trickle in beginning we now have about 1,000 Acquired LPs who pay us anywhere from $5 to $100 per month.
How money fuels Acquired’s goals
As we expected, that money has had a turbocharging effect on Acquired’s goals. Even with just a two person, part-time operation (we both have pretty busy day jobs!) it’s been easy to find ways to reinvest that money for growth.
Should we fly in-person to every single guest to make the quality of the show better and deepen our relationship with them versus recording on Skype? Absolutely.
Should we be able to buy any amount of advertising with profitable ROI as opportunities present themselves? Absolutely.
Should we be able to foot the bill ourselves for meetups and live shows so that we're not charging our audience a bunch of money to meet and interact with us? Absolutely.
In the year since launching the LP show, growth for our main show has accelerated significantly, and more importantly the content feels creative and dynamic again.
All in all, I’d say it worked out pretty good!
Nathan here—thanks for reading! Before we go, a few quick observations:
Creative projects need R&D release valves. It’s fascinating to me that the paid LP show wasn’t just valuable for the revenue generated. It also gave them a space to experiment with their content. I think this is incredibly important. And it’s not just about bringing successful experiments into the main show. I would bet this practice has refreshed Ben and David’s creative juices, and that it pays off in a myriad of subtle ways. It reminds me of a time during Hardbound when I was feeling burnt out, and instead of skipping a week, decided to do a story that I thought would be fascinating but probably not perform well. (It was called “What is Fire?”) It ended up being one of our most popular stories ever.
“Strategy drunk” happens to the best of us. Ben and David are incredibly smart, and even still, it took someone else pitching their own idea back to them to realize it wouldn’t work. (And they were building something to solve their own problem!) Just goes to show how cautious you should be.
Goal clarity enables everything else. It might seem like a “nice to have” that Ben and David explicitly list their goals in order of priority. Or that they have a yearly “summit” to renew and adjust their values. But I think this is critical. If you don’t know exactly why you’re doing a project, it’s really hard to make all the little decisions that crop up along the way. Too often, we assume our goals are somewhat obvious, so we skip the step of formalizing them. But we’re usually just deluding ourselves. If you’re not clear on your goals, it’s impossible to make any other decisions.
Ok, that’s it!
If you have any questions for Ben or me, and you’re a subscriber, leave a comment below! We’ll be hanging out the comments.
See you next week! (Or on Twitter!)