Alex Blumberg set out to do a podcast about the real trials of creating a company. His unfair advantages made Startup Podcast just another startup myth.
I’m a podcast fan. I’ve been a listener since I got my first iPod in 2005. Much of what I have listened to has been Alex Blumberg’s work including hundreds of hours of his previous shows—This American Life, Planet Money and now the first season of his new podcast, StartUp. I’m going to listen to the whole StartUp Podcast series, and I recommend you do too. But after the first season I feel as though we should pause and reflect upon his goal and whether or not he achieved it. Because I feel that while the podcast maintains humility, admits flubs and has a great narrative voice, we’re led astray from the very first episode. Blumberg has huge advantages over the majority startup founders. Investors call these “Unfair Advantages”— and they are an entrepreneur’s super powers.
Because Blumberg is unaware of his super powers the story he tells perpetuates existing startup myths and limits the lessons budding entrepreneurs can and must learn.
The problem with StartUp’s problems.
When you have as many super powers as Blumberg, almost all the problems you face are “First World” startup problems. And that’s great StartUp Podcast listeners and for lovers of his work because you are more likely to hear more narrative journalism to enjoy. But these problems are very different from those you are likely to face, especially early on. Here are a few illustrative examples:
- The first episode is called “How Not to Pitch a Billionaire” where he does a terrible job pitching to billionaire investor Chris Sacca. When’s the last time you met a billionaire? Right now, there are only 615 billionaires in the US— they are the 0.00019%ers. One percenters dream of meeting them. Having a billionaire dedicate more than an hour of his time to you is an amazing opportunity, even if you screw it up. Even better when they give you several more chances.
- His two person media company raises 1.5 million dollars in only 6 months with very little media created, no media released, and no functioning business model. Funding comes from Silicon Valley top investors. Other investors, including the founder of Tumblr, are crawling out of the woodwork to hand them checks. Episode 7 is called “How Listeners Become Investors” a very Planet-Money-type show about the ins and outs of crowd investing. Unfortunately for listeners, theirs was so successful that the funding was already complete when the podcast aired. This is not how fundraising works for most founders.
- Other good startup problems mentioned: The podcast network audience grew too fast! There is too much money coming in from advertisers! We have to throw our business plan out because we’re so successful! Should they hire another editor or pay themselves more? Our investor is mad because we talked about breaking even early!
If your startup has these problems, congratulations! You’re hiring right? Here’s my resume. But for most of us, this is not what starting a company looks like. How Blumberg got to only deal with these first world problems boil down to what investors call “Unfair advantages”.
Understanding Alex’s unfair advantages.
To really get a hold on why Alex Blumberg’s story is exceptional, you first need to understand a little about a media company’s business model. In one word: Advertising. Media companies, including social media companies like Instagram, make money selling the attention they generate. They sell your eyeballs and earballs to advertisers who want access to you. Because of that, the simplest way to create a successful media company is:
- Create content that is compelling to an audience.
- Get your audiences attention. The larger, faster growing and more valuable the audience the better.
- Get money from selling your audience to advertisers. Optionally fundraise to pay for production before you have enough advertising dollars coming through the door.
- Make enough money to put food in your mouth, keep the lights turned on, and give yourself room to grow.
Get the first two going and it’s much easier to get advertising dollars. Blumberg’s experience makes him a super hero when it comes to starting a media company.
Creating compelling content – He’s a pro.
StartUp Podcast is predicated on the first unfair advantage. Blumberg realizes that he is in a unique position to create the podcast network based on narrative journalism. He has 15 years working at This American Life, a hugely successful radio show with 2.2 million listeners. He also created Planet Money, which is “consistently ranked among the top 20 podcasts on iTunes”. This is in large part due to his editorial work and storytelling style. The man knows what he’s doing.
However, creating great art isn’t enough. Episode 10 perpetuates the myth that making great art means you’ll get money somehow. Vincent van Gogh would disagree. He famously failed to find an audience for his art in his lifetime and he died penniless. Luckily for Blumberg, his time at NPR also gave him another unfair advantage for finding his audience.
Getting attention – Borrow other people’s pipeline while creating your own.
Chris Sacca himself points out this unfair advantage in an episode of StartUp. He knows that Blumberg will be able to leverage the large audiences of This American Life and Planet Money to gain attention for his new podcast and company. Blumberg launched StartUp Podcast on This American Life as part of the September 5, 2014 episode, “It’s not the product, it’s the person“. A couple weeks later on September 17 the Planet Money podcast ran a version of this episode on “How to Split an Imaginary Pie“. Even after leaving NPR, Blumberg was able to utilize the NPR machinery to focus attention on his new work.
How well did borrowing that pipeline work? From the sounds of Episode 10, pretty damn well. As of that show, there were more than 200,000 listeners to StartUp Podcast. But where did they come from? When did they subscribe to StartUp Podcast? Blumberg mentions some coverage in episode 11 “Know Your Customer”, but he focuses on how confusing figuring out who your audience is can be. The simple truth is that while Blumberg may not have a good handle on the personas of his listeners, he has numbers that could help tell the story and inform entrepreneurs about how to grow an audience of their own. That story would be extremely valuable when it comes to gauging what impact appearing on popular podcast or radio media. This is a story that Blumberg could have told to increase the podcast listener’s understand of what it really takes to build a company.
Also, being the media coverage that covers your own startup is evil genius. Major hat tip to Blumberg. In general, startups are dying for media attention. It’s more than just being a “meta” podcast, it creates a positive feedback loop of interest. After he borrows other people’s pipeline for his podcast, he also keeps his audience aware of and interested in how his venture performing. The past podcasts may become less relevant as time goes on, but they don’t disappear. I’m listening to StartUp Podcast months after it was created, talking about it at length and that may drive more people listen to it. This type of feedback loop is simply great, and it will definitely pay dividends for the startups he covers in later seasons.
Chris Sacca is probably smiling because his bet on the Blumberg’s unfair advantage was right, and speaking of Chris…
Show me the money – Investors and Advertisers
What about bringing on investors? Taking other people’s money in the form of bank loans or investment money is a way to fund your growth before you make enough from advertising. But good investors also bring connections to synergistic businesses, other media sources, advice and much more. I’m sure that some of Blumberg’s non-NPR appearances were arranged by his investors. It would be nice to know about those and other ways his investors are helping him beyond just the checks with a lot of zeros.
Speaking startup capital, indulge me for a quick aside about a featured pizza artist founder in episode 10 “Mixing Art and Business”. The narrative presented was that he was just a starving artist who knew how to make pizza. He opened a pizza joint and now he makes his art with the money his business makes. But wait! How exactly did he start his business? Knowing how to make pizza is a great prerequisite, but where did the money for rent, dough, cheese and sauce come from? Was it a bank loan? Parents? Saving for a decade? Aspiring entrepreneurs want to know! And since research has shown that having money is the major prerequisite for being an entrepreneur, it would be nice for some of that nitty gritty to get into a podcast like StartUp. It’s an important part of the story.
Since the long-term success of a media company is based on advertising, it would be nice to know more of the story there too. Does Blumberg have any advantages there? I don’t expect them to open their books, but maybe give us a peak behind the curtain. Did Blumberg have connections to advertisers before leaving NPR? #Mailkimp? Maybe not. So how many advertisers did he get before the podcast launched, how many did he reach out to? When did it stop being outbound and start being inbound? Or has it never made that switch?
What should entrepreneurs learn from StartUp Podcast?
Ok, so Blumberg is new to doing startups. I don’t think he’s actively trying to keep valuable information from his audience. I’ve had four different startup experiences in the last five years, and there is A LOT going on. I know I’ve personally screwed up in many ways–that’s how you learn. Sometimes you lose information along the way. But realize that the mistakes and worries Blumberg shares with us are mostly the good ones. Maybe he left out the questions I have asked because he thought they weren’t part of a “good narrative”. That’s his prerogative. Gimlet media is primarily an entertainment company. The problem is that by not covering these issues StartUp Podcast serves to inflate the startup bubble instead of informing other entrepreneurs of what it really takes to become successful.
Despite the many open questions I still have, I still think there are lessons to be learned. It comes from reading between the lines.
Find your unfair advantages.
Sometimes the things you take for granted are actually those that are hard earned. I suspect that part of why StartUp Podcast doesn’t cover some of these issues is because Blumberg may not realize how many advantages he really has. But what are yours? What are the things that you are really good at that other people find really difficult? What skills have you been building over the years? Look for threads that run through your past employment, family life and your hobbies.
If you can’t find a laundry list of unfair advantages, maybe you can’t build a venture scale company. And that’s probably great! Small businesses create between 33% and 50% of all the jobs in the US. There’s no shame in creating a business that’s profitable at a smaller scale.
When you find unfair advantages, double down. Focus on what you know you are good at and you’ll increase your chances of being successful. And test your unfair advantages by pitching investors. Those guys are always looking for a good story about huge returns. Their best-case scenario is that you create a highly profitable, near-monopoly as quickly as possible. They will be honest with you about whether your advantage is unfair or just average.
Finding advantages that aren’t unfair? Keep working on those skills, abilities and projects you’ve created until your advantages are unfair. And pay attention to the people that may make help you take your run-of-the-mill advantages to unfair advantages.
It really is who you know.
Blumberg had access to incredibly powerful and helpful people because of his job network. You may have those too when it comes to your family, school, church or other social group. If you haven’t joined one of the million startup meet-ups in the world, do it. Go to conferences, have interesting conversations about the amazing things you are making. Find out what people are excited about and share your passions with them. Keep in touch with the people who share a lot of the same passions as you, but have complementary skill sets. Look for people who are where you want to be, and people who are along the path to where you want to be. Think about how the people you interact with every day could be beneficial for the next steps you need to take.
And for god sakes, if you have the chance to talk to a billionaire or another extremely influential person, take it. Seriously. You couldn’t stick your foot in your mouth any worse than Blumberg did.
How did I do?
What information would you like to have heard from StartUp podcast? How did you find your unfair advantage? Let me know in the comments.
All artwork is original, though shamelessly parodying StartUp Podcast’s first season episode art.