James:
Hello, and welcome back to Indie Bites, the podcast where I bring you stories from fellow indie hackers in 15 minutes or less.

James:
In today's episode, I've got Justin Jackson, who's the co-founder of Transistor.fm, a successful bootstrap podcast hosting company. The journey building Transistor is documented on the Build your SaaS podcast, which is a must listen. Justin is also the founder of the MegaMaker community, which he started back in 2013. So if you're part of the Maker sphere, you'll probably have heard of him.

James:
In this conversation, we talk about the steps Justin and John took to grow Transistor, why it's so important to pick a growing market and whether or not you should just go and get a job. There is also a 35-minute extended version of this recording on the Indie [Feast 00:01:04] Membership, which is just four pound a month, where Justin expands on some of his thoughts from this episode, along with why you should take time off the opportunity cost of bootstrapping and what happened to the Build your SaaS podcast.

James:
Now Justin has almost 30,000 Twitter followers, which is an incredible useful tool for his business. And he's growing that using a handy analytics tool called ilo, which is the sponsor of today's episode. Indie hacker, Dan Rowden, has created one of the most useful analytics tools for Twitter, giving you the metrics that actually help you understand your tweet performance and grow your audience. Ilo easily helps you see which kind of tweets get the most impressions, likes, profile clips and so much more so you can grow your Twitter audience. Head to ilo.so and use the code indiebites27 to get 25% off your ilo subscription for life. Let's get into this episode.

James:
Justin, welcome to the podcast. How are you?

Justin:
I'm doing well. It's good to be here.

James:
Thank you for joining me. Now, let's quickly talk a little bit about what Transistor is and why you built it.

Justin:
It's podcast hosting and analytics. Every time you push play in Apple Podcast, that file is hosted somewhere. That's what we do and we've been doing this since 2018. I was a podcaster since 2012 so it made sense. And John, my business partner, had previously built Simplecast so he was already a veteran in that sense, and we teamed up and it's the best decision I've ever made.

James:
Why podcasting was it? Was it not already a solved problem?

Justin:
So for us, it was just we could see building momentum in that category. Again, John had built the first version of Simplecast, but then since then, he'd been able see how Simplecast had grown, how other providers were growing as well. He was working for Cards Against Humanity. They wanted a podcast. So the poll of the market was visible to him. And on my side for years, I'd said podcasting is just hobbyists and DIYers. It's not a very good market. And then that tide started to turn once Serial, the podcast, came out.

Justin:
All of a sudden, you've got every week, The New York Times was doing an op-ed on podcasting. I could see the rising tide of interest and as that wave was building, I was able to go, okay, I think I'm going to jump on this now, and understanding that the ceiling isn't super high, but it was high enough. Our biggest competitor in paid podcast hosting is Buzzsprout and I think they have like 80,000 podcasts. And so we have 13,000 podcasts on Transistor.

Justin:
So the scale is the biggest we could ever be is probably eight times what we are right now. So we already kind of know where our ceiling is and we're okay with that, right? But it has to be big enough, there has to be enough fish in the sea. If you want to go fishing and catch something, there has to be enough fish there to get to whatever you want to catch that day. If it's five fish, 10 fish, whatever, your upside is all going to be how many fish are already swimming in these waters and how many of them can I catch?

James:
How do you start getting a few of those first customers? I know this is casting your mind back quite a few years. What did you do when you launched it? And did you do anything different with Transistor to set yourselves apart from the other hosts out there?

Justin:
As soon as John and I started talking about partnering, I already knew that Cards Against Humanity wanted to be a customer. And so for me as a kind of sales and marketing person, I was like, I can sell that. It's already social proof that this established brand that people know is a customer. I'd built up a big enough audience by that point that would help kickstart this. People were already invested in my story and were curious about what I was going to do next.

Justin:
And many of those folks, like I said, were starting podcasts or were wanting to, would be willing to switch so I had a feeling and I was talking to people. As soon as John and I started negotiating our partnership, I was, on the side, I was like messaging all the people I knew who had a podcast saying, "Hey, John and I are thinking about doing this. If we do it and I give you a little discount while we're building it, will you switch?" And he had the bare bones already built by the time we signed our partnership agreement. So we could onboard people almost as soon as I came on as a partner.

James:
And how is Transistor going? It seems to be every bootstrapper, indie person that has a podcast I see now is on Transistor.

Justin:
Yeah. Transistor's going great. The pandemic has been kind to podcasting. So lots of folks signing up to create podcasts during the pandemic. And our two biggest growth months were in April and May. And it's slowed down a little bit now, but it's still growing. We crossed seven figures a year quite a while ago and yeah, we're still growing so ... And that's really a two-person company.

James:
Wow. That surprises me 'cause I thought you might have maybe got an engineer or two on. Where are you going with Transistor now? You've made it, right?

Justin:
Mm-hmm (affirmative).

James:
Success as a boostrapper, what's the end goal? Do you want to sell Transistor or are you just enjoying, having fun in the moment as it is?

Justin:
I mean if I could make a deal with the devil and the devil said, Hey, in exchange for your soul, I'll let you run Transistor with John until you die, I would probably take that deal. If I could keep doing what we're doing, making basically the same amount of revenue and growing a little bit every year and it was guaranteed until I turn 101 and leave this earth, I would do that in a second. The end goal was always to give ourselves a better life. John's the first person I've partnered up with who's felt like he just, everything he's good at is stuff I'm not really great at, and the same vice versa. And so just enjoying being a part of this company and having all of this margin, right? Transistor's changed my life financially.

James:
You're living the dream. This is where founders want to be with their businesses. But what isn't so enjoyable> what are the biggest challenges for you at the moment?

Justin:
You're getting me at a pretty good time. Right now, the podcast industry has been growing steadily at the same pace for the past decade, no hockey stick growth. It's just year after year, it grows 10, 15%. Sometimes people say, "Oh, once you get there, it's just not as good as you think it'll be. Once you get there, you're just hungry for more." And I don't know, maybe it's my age or the fact that I have kids or, I don't know, but I love being here. It's way better. It's way better than where I was, where every month, I was needing to fire up a bunch more revenue and go out and search for more work, and the margin and the lifestyle, the freedom, I don't have nearly as much stress as I used to. I was able to pay off a bunch of debt. We moved into a bigger house. It's been great for the kids. Everything really is good.

James:
Well, I think that's a good answer as any to ... Is having a successful bootstrap SaaS as good as it sounds? Yes, it does. And back in the early days, how were you deciding how to pay yourselves and at what point? Because it would've been a struggle at the start with the small [crosstalk 00:08:33] numbers.

Justin:
Yeah.

James:
A lot of people were there at the [moment 00:08:35]. And what numbers should founders be trying to aim for? Because I'm sure a lot of talented technical indie hackers and founders could go and get themselves a job at Shopify or [Fang 00:08:46] for 2, 3, 4, $500,000 even without any of the stress.

Justin:
Yeah. In a lot of cases, I think they should just take the higher paycheck, especially now. The downside to Fang before was you had to move to San Francisco or New York, but now in this new world where Shopify's gone fully distributed. So if you can make 200, 300 grand a year at Shopify and live wherever, pretty good deal. Again, the thing about entrepreneurship is it's not guaranteed. There's no surefire way that you're going to gradually build this thing up and then have a payout at the end.

Justin:
So in some cases, I think you need to write down what do I want? And for some folks, it's no, I can't work for Bezos. I just don't want to work for him, and I don't want that schedule. I don't want those expectations. I don't want those meetings. Okay, well, maybe you need to look at building your own thing. But if all you want is the stability and the paycheck and you can get one of those jobs, maybe you should, and maybe you should just go try it out first to see if you like it. And if you do, then yeah, just stick with it.

Justin:
The biggest risk for bootstrappers is you're going to go broke or get broken. So if you can go and work at a high salary job and work on something on the side and build up some runway so that when you do want to quit your job, you have a bunch of money in the bank, more money in the bank is the best way to increase your odds. This doesn't get talked about enough in bootstrapping.

Justin:
There's this idea in bootstrapping that everyone starts with a zero-dollar bank balance, and everyone starts on the same starting line. That's not true. If you are a person of privilege, if you are a person with a better bank balance, if you are a person with a bunch of network connections, if you are a person who's got a bunch of skills that other people don't have, you have an advantage. And really as a bootstrapper, you want to stack as many of those advantages as you can because the failure rate is high. You'll either end up broke or broken. Those are the risks.

James:
Well, what do you think about people eating through their savings to bootstrap a business? And it's not working on the side of their full-time job and they go, you know what, I'm going full time on my side projects. I think that's the only way I'm going to be able to grow it. Then they just burn through their savings.

Justin:
It's okay to do that way. I would set a time limit. So Jason Cohen has given us ... He's the founder of WP Engine. He has this loose rubric that I think is pretty good, which is if it takes you longer than two years to get up to $10,000 per founder, the fundamentals of that market are probably not good enough to sustain you. And people get upset when I talk about this, but this is the risk. Your risk is that if it takes too long for you to get to a certain scale, you're just more likely to run into financial stress, financial hardship to not have enough to sustain you to get to that point where you're at scale.

Justin:
And to be honest with Transistor, it was difficult 'cause I didn't have a lot of money in the bank. And if you go back and listen to those episodes of our podcast, the times where I am thrash, and it's clear that I'm thrashing, it's financial stress. That will cause you to make all sorts of bad decisions. So the sooner you can get up to scale ... Really, people are always long slow SaaS ramp of death, we've got to remove that from our lexicon 'cause people are expecting it to be long and slow. What you want is for it to be fast. You want it to be as fast as it can be to get up to scale. And if that takes a year, that's great. If that takes two years, that's okay. If it takes three years, I would be cautious. If it takes four or five or six years, I think that's a sign that it's not a great market or that there's something wrong, and you should be either quitting it to go after something else or figuring out what's wrong pretty quick.

Justin:
How many people are already searching for that thing that you're thinking about building? It's not about trying to reverse engineer what you think people want or what's a good idea or ... It's what are people already actively searching for? What are the problems that people are already exerting time and energy and money to solve? And then going after those things.

James:
Yeah. And I want to touch on something you said there about stress, at the start it was stressful, and how we should manage our mental health as founders. I've had my own struggles with this, especially these last few months where we've been locked down here in the UK, finding how to motivate myself, stay consistent. Sometimes I just don't really want to do anything. I know you've faced some similar challenges yourself and I don't think we really speak about it enough really. What can founders do to look after themselves more, avoid burnout and dealing with that self-doubt and comparing ourselves to others that might be making a lot more?

Justin:
It's the same principle. So you want to have a bunch of money in your bank account before you go indie. You want to have a big balance in your emotional and mental health bank account before you go indie. And so that includes things like getting a therapist even when you feel healthy and just getting in the habit of seeing that person occasionally at least, especially so you don't ... If you do get yourself into trouble, the worst thing is to be depressed and then not have anybody to call. So having somebody you can call that you've already met, you already trust them, you've had a few sessions where you're just like, I don't know what to talk about. I feel pretty good, but then to have that number when the shit hits the fan, that is so crucial.

Justin:
Therapy changed my life. So I think you want to have a big emotional and mental health balance before you start something as stressful as indie hacking. If you're already indie hacking, then you can still do it. You just Google therapists near me and book a few sessions with a few different people and build a rapport with somebody.

James:
Certainly getting a therapist, having someone to talk to is one thing I need to do.

Justin:
And the issue, and this actually seems to be a UK problem as well, but the issue is that people like to keep things inside. You have to let it out. And one reason talk therapy is helpful is instead of having all these thoughts rattling around in your head really sending you into a tailspin, and the tailspin is the dangerous part, that's when start to think dark thoughts, that's where you start to be destructive to yourself or to other people, that's where you start to self-medicate with booze and drugs and other things, you just talk to a person and it is medicine. It's just like letting out all that stuff that you can't really talk about with anybody else.

James:
Well, I think getting a therapist, great recommendation. Justin, you've been extremely generous with your time. I finish each episode on three recommendations, a book, a podcast, or an indie hacker, an entrepreneur people should follow or you've been inspired by.

Justin:
Sure. Life Profitability by Adii Pienaar is what I'm reading right now. It's really good, highly recommend it. Yeah, so podcast ... Man, this is so dangerous for me. I am really enjoying Software Social. I think they have a perspective on bootstrapping that you don't hear about a lot. They're just very thoughtful and they're at different stages, which makes it fun to listen to so Software Social, yeah.

James:
And finally an indie hacker, entrepreneur, someone that inspires you?

Justin:
Oh, so many people. I'll go with Derek Sivers because a lot of people don't know him now. He's part of the old scene. And I think he just has so many gems that people need to check out.

James:
Justin, thank you so much for joining. Really appreciate you being here.

Justin:
Yeah. Thanks so much. This is great.