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Brian Sanders pitches his upcoming podcast app Nexcast to Shaan Puri of Blab. Hear the behind-the-scenes story of a startup as they document their own journey on the podcast, Building Nexcast.

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Episode transcript

You’re listening to The Pitch. I’m Josh Muccio. On this show, we highlight people right at the beginning of their company. They’ve started something good, but they’re right on precipice of creating something great. But they need funding to make it great. Today, I’d like to share a story from someone who has decided to record their own journey. An autobiography in podcast form, you could say.

BRIAN SANDERS: We should have our own podcast. We could tell the story of building Nexcast.

This is Brian Sanders. He’s building a company called Nexcast. His goal? To dethrone the podcast app that comes on every iPhone and create a better podcast experience. Something that’s 10x better, in fact. More on that later.

SANDERS: I had a good gig as a head of product management and user experience at a tech company in Santa Monica. I saved as much as I could while working there, living like I was making minimum wage. But last year, I quit to go off on my own with the classic entrepreneurial dream.

I continued living the minimum lifestyle for the next 9 months, jumping into projects and making mistakes, and learning all the while. I learned a lot about Costco shopping for one. I could eat for a couple dollars a day. I even put my social life on hold. No wasting time texting girls all day, no dating, no going out on Friday nights. It was all business.

Then finally, last November, all that work materialized into something. I revived my old podcast app idea, built a team, and we became a real, poor, bootstrapped startup.

We were many months in on development when I pitched the podcast idea to Troy. He’s been my partner on this from day 1 and we have known each other since 7th grade, by the way. Soon after we decided to actually go through with it, I was lucky enough to be invited to a pitch night in San Francisco. I was due for a trip up to the Bay anyway, so I grabbed my new mic and I booked a flight up north.

SANDERS: I’m here at LAX. My flight was delayed. There’s some bad weather up in San Francisco. It’s raining. I’m just sitting here kind of going over some things in my head. It’s a little intimidating, I think, going out to Silicon Valley. I’ve always sort of been on the periphery of things, seeing the tech world from my home office.

SANDERS: Wow. I was already doubting myself. Over the years, I’ve designed over 20 products from start to finish for other entrepreneurs, and some for myself. I’m not immersed in the tech scene, but I’m not some bozo rookie either.

I made it to the city and it was pouring. The rain easily got past my flimsy umbrella as I fumbled around a mailbox trying to reach the keys my friend had left me to get into his place. It wasn’t a stretch to compare this weather to how I was feeling.

SANDERS: Did it just turn rainy like this or? I just flew in, so I don’t know.

DRIVER: Oh, yeah. Okay. No. it’s not always like this.

SANDERS: Comments on the weather are always an easy intro to a stranger.

SANDERS: Is it okay if I record this and use some clips of this on our podcast?

SANDERS: I was headed over to the startup called Blab which holds a pitch night every Thursday to help out founders. They are a platform with live video rooms where you can hang out with friends or broadcast to the world. I was catching an uberPOOL there.

PASSENGER: Oh, cool. What’s the startup?

SANDERS: Well, do you listen to podcast?

PASSENGER: Yes.

SANDERS: What kind of podcast do you listen to?

PASSENGER: Well, a lot of things, some French -a lot of French podcasts.

SANDERS: He is a senior manager of finance and operations at a startup in Sunnyvale. And it turned out, he was a big podcast fan and had a lot to say on the subject. Talking to him definitely helped to ease my nerves on the way over.

PASSENGER: It’s really hard to find a new podcast. You need to–so you have the Top 10 out of 50 podcasts, and that’s it. So maybe you’ll ask me what I like, like I can say I like yoga, I don’t know, football, and startups. And maybe it will give you some recommendations regarding podcasts.

SANDERS: He makes some decent points. And yes, we want to do all of these things. Sometimes, I think, podcasting is this tiny thing that only a few people care about. But then I have conversations like these, random people from all walks of life will talk my ear off about their favorite shows, how it’s improved their life, or how to make the medium better. I really love these little interactions.

Soma was deserted on this Thursday night. The building where I was dropped off looked empty, and I thought I might be in the wrong place. Luckily, I was quickly buzzed in and made it out of the colds into warm lights and rich décor. Polish brushed steel met with dark stained woods. Custom furniture, interesting antiques. Every inch of floor, wall, and ceiling was finely crafted.

I made my way upstairs and found Shaan leaning over one of the last remaining developers, still working at this hour. Shaan told me to wait at the bar. I pulled up to the high table made from a giant reclaimed steel factory part, and a couple friendly fellows poured me a draft from the tap. This exactly how I pictured the startup world. Gregarious guys in t-shirts, tilting some brews after work in a sleek, high-ceiling workspace.

Next thing I knew, I was in a conference room with Shaan, setting up my mic and trying not to spill my beer.

SHAAN PURI: The idea is, can I help you get where you’re trying to go in less than 20 minutes? And that’s what we try to do. Start to explain your business and I’ll be writing notes and try to figure out. So what is it? What’s the name of the company?

SANDERS: Nexcast.

PURI: Nexcast. What does Nexcast do?

SANDERS: It provides better podcasting technology.

PURI: Huh. Okay.

SANDERS: No, why did I say that? After all that planning, I spit that out?

PURI: Listeners don’t want podcasting technology. What do they really want?

SANDERS: They want a better experience.

PURI: Okay, what is a better experience? cross-out podcasting technology a better podcasting experience, and what is a better podcasting experience?

SANDERS: Well, right now, there’s sort of disconnect between listening to audio and connecting or interacting with anything they’re saying so right now they have websites, podcasts like Serial, or Tim Ferris have their own website. They have content, shownotes.

SANDERS: I’ll take over here. So, you’re listening to season 1 of Serial and you could see a picture of Adnan and see the crime scene as it is brought up. Or if you’re listening to Tim Ferris talking to Edward Norton. You could click through a button right in the app to support the Wilderness Conservation cause he mentions, or buy a book he recommends.

PURI: Cool, so what’s the motivation for me to do that?

SANDERS: A lot of these podcasts, they have their own products. And so they can put their own products in there, you can just click on it, and they can make more money, higher conversion rates, free access to our analytics.

PURI: I already have that.

SANDERS: They don’t have that though.

PURI: Libsyn-

SANDERS: Yeah, but those only give dowloads. I’ve talked to a lot of podcasters about this and they–

SANDERS: I really have talked to a lot of people in the industry about this. Nobody is getting reliable numbers on who’s actually listening to podcast. Companies like Libsyn only can provide how many people downloaded, which is nowhere near the amount of people who actually listened. It’s well-known the podcast world is not up-to-date. There’s New York Times articles detailing these problems and basically laying out the great opportunity if someone could solve them.

I tell him there’s a lot of benefits hosts and advertises are getting from our third piece. This analytics dashboard.

PURI: So what are they gonna pay you?

SANDERS: Well, I don’t know exactly. I have a call with…

SANDERS: We’re referring to the advertisers now. But yeah, I should have known that one.

PURI: Yeah, so what is the total amount of money that flows through podcasting? from advertisers?

SANDERS: Yeah, we’re trying to find that.

PURI: You have to.

SANDERS: I know, I have to find that.

PURI: You can’t get into this business without knowing that.

SANDERS: Yeah, I know.

PURI: So what would you need to make it work? What do you need to charge. You can figure out how much your business needs.

SANDERS: Oh, yeah.

SANDERS: I didn’t do this Math, either, but yes, it should have been done. We do have bigger plans than just making money off analytics.

PURI: You might do the math and decide this is literally not possible. Or I need to charge thousands not hundreds. So let me validate that before I even go to the problem and figure out what are the ten strategy I could use to get 15% to all podcast to be listened to on Nexcast? And if you can do that, then you might have a chance.

SANDERS: Luckily, I did have a plan for how we’re going to build our audience. And I brought up this very podcast.

We’re going to tell our story. The audience is coming along. You want me to pick people’s podcast app that can help us build this–what features do you want, have a podcast–get those first-time users that way.

PURI: Have you recorded any episodes yet?

SANDERS: Yeah, I’m recording this now, if that’s okay.

PURI: You should probably tell someone.

SANDERS: Oh, I actually told you that.

SANDERS: Mistake number 1. Remind the guy you’re recording that you’re in fact, recording. I feel like crawling under the table and withering away to a pile of dust at this point.

MUCCIO: Coming up.

PURI: We’re gonna do two minutes each trying to see excited how you can get an investor about your product.

[ADVERTISMENTS]

MUCCIO: Okay. Back to the pitch session happening at the Blab headquarters in San Francisco where Shaan just asked Brian to give his best 2-minute pitch for his upcoming podcast app, Nexcast.

SANDERS: So should I use numbers, you think?

PURI: Whatever you want to do?

SANDERS: The problem is, I don’t know. I don’t know if I should just stop–podcast is the whole world is all disconnected.

SANDERS: Good Lord. Your face is probably hurting by now from cringing so hard. We need to skip ahead to where Shaan takes over.

PURI: So I’ve been obsessed with podcasting for the past 5 years. And I’ve seen it grow from where it was in 2010 to where it is now in 2016. Where last year more people want Serial than watched the season finale of Breaking Bad and Game of Thrones combined. There were 6 Billion downloads in podcasts last year. So what used to be niche is now going mainstream.

But the problem is the podcasting market is still the sophistication of the farmers’ market not what you see at the mall. It’s like the black market in Thailand. You’ve got advertisers who are paying $50,000 per episode of the Tim Ferris Podcast and they have no idea how many people even listen to it.

SANDERS: Perfect. He’s pitching my company back to me better than I did.

PURI: So there’s a three-sided marketplace: the listeners, the podcasters, and the advertisers. And it’s broken for all three. What we do is we don’t try to solve the whole problem at once. What we do is something pretty clever.

So first we make the best app to listen to a podcast. And we’ve been out for three months, we only have 50,000 users, 4 ½ star reviews. Once you start listening on our thing, you never leave. 60% of our users use us again.

SANDERS: His pitch was good, but he moves on to criticism very quickly.

PURI: So right now, you’ve got, what? You’ve got no business model, it’s an unvalidated model that potentially could be too small to support a business.

Team. A guy from Australia and one guy here and you’re over there and whereever. So that’s not so good.

Defensibility. Is this just a feature that Overcast could add? Who knows, maybe not.

Product. You have to see it, that sounds cool. And market size. This is a big challenge in podcasting which you’re going to have to work out which is your market size, potentially, is very small.

SANDERS: Well, yeah.

Little old podcasting. Yeah, you can say it’s a small market now, but it has huge potential, and it’s growing quickly. But yes, I am exquisitely aware of all these things we’re going to have to overcome. They really add up for when you hear someone spit them back to you all in a row.

PURI: I’m excited for you. I think this will be an interesting process. It’s tough. If you’re pitching me, I wouldn’t do it because I don’t think this is a good business, but I think it’s a cool product so I think you’re in a tough spot because it’s a cool product, but maybe not a good business.

SANDERS:So you’re saying I haven’t sold you on the business aspect. But if I can prove that that that business side is doable, then–

PURI: I’m not convinced you can get listeners. That’s the part that’s hard for me but that’s the opportunity. If you could do it then you have a much  different position than you are today.

SANDERS: Yes, there is an opportunity here. This is where I’ve quit my job to pursue. Now it’s our time to execute and make it happen.

SANDERS: Cool. All right man, thank you.

PURI: Yeah–

SANDERS: That was great.


TROY: Hey, man. How did it go?

SANDERS: Not the best, but not the worst.

TROY: Yeah, I’m sure it wasn’t that bad. I mean, it’s your first time pitching for real. I’ll listen to the recording when you get back.

SANDERS: Yeah. Yeah, let’s do it.

MUCCIO: After a brief visit to Apple and Facebook headquarters, Brian headed back to LA to regroup, do a little soul searching, and figure out what’s next. Shortly after returning home, Brian called up his cofounder Troy again.

SANDERS: Hey.

TROY: Hey, man. How was the trip?

SANDERS: Dude, super good. Yeah. It was intimidating, though, being there, seeing all that.

TROY: Wait. What do you mean?

SANDERS: I feel like Apple could just move into our space and copy what we’re doing in 2 weeks.

TROY: I don’t even think Apple is really interested in competing in this business. They don’t make any money off of podcast, and I say we don’t worry about them and just focus on ourselves.

SANDERS: We really are worried about going against Apple. They have 82% of all podcast listens through their app.

TROY: I mean, half. At least half of the podcast listeners that I talk to are not satisfied with the app at all. And then you have other people who are out there, trying to make apps, but none of them really improve the experience that much at all.

SANDERS: The Apple podcast app comes with the phone, and unfortunately, most people just use whatever software comes with the device. It’s super hard to change people’s habits. People say a product needs to be 10x better for a user to switch.

SANDERS: Yeah. His main criticism was he doesn’t think we could get users but that’s everyone’s problem. That’s every business ever, so.

TROY: Yeah, exactly. So now that you’ve had a chance to digest this whole thing, what are your thoughts on it now?

SANDERS: Definitely rough. Honestly, now that I saw these companies, I get more of a sense that we’re tech nobodies. I was kind of thinking that before and then I was there and it’s just–it feels like everyone has connections. Silicon Valley, everyone knows someone, especially–that’s how you’re successful, so.

We’re like this ragtag crew of of people all over the place. We’re going against Apple. And even if Apple doesn’t do it, some of their podcast app could just add in our features. Like, we’re just up against so much, man. It’s so big, and can we do this? I talked to people, they’re like, “What are you thinking?” I just–I don’t know. I feel–

TROY: Brian, Brian. Dude, dude, dude. You’re getting way too deep into this, going way down the rabbit hole, man. You’re like the guy that goes to the Jimmy Hendrix concert and doesn’t ever want to play the guitar ever again.

SANDERS: Yeah, yeah. I’m getting too far of myself.

SANDERS: Tech companies are an insane amount of work. If you make it to the big leagues, it’s exponentially harder as I saw. After some contemplation, soul searching, and candle lit aromatic baths, I definitely know in my heart, we just want to build something people use. We don’t need a billion dollars, we don’t care to be publicly known, we definitely don’t want to be responsible for tens of thousands of employees. But that’s pointless to think about. What are the chances Nexcast would get to that level, anyway? Most startups fail, right?

MUCCIO: That was Brian Sanders again with Nexcast. You can follow along with future episodes by subscribing to the podcast, Building Nexcast. It’s live in iTunes now or at buildingnexcast.com. Or if you’d like to tryout the private beta version of their upcoming podcast app, go to nexcast.co and enter your e-mail address to get access.

You can subscribe to this show in iTunes, Google Play, or on Spotify. And you can also subscribe by email at thepitch.fm. The Pitch is Sheel Mohnot and me, Josh Muccio, Lisa Muccio, Jacob Bendicksen, Sophie Masure, and Jake Cohn. The music on this episode is by Tours, Ketsa, Spiedkicks, Dexter Britain, and Glass Lux. And our ad music is by Podington Bear.

We’d love to hear from you. So if you have any comments for us or any of the startups featured, e-mail us: hello [at] thepitch.fm. Or if you could do us a huge favor by taking a moment to review the show on iTunes. You can get there quickly by going to thepitch.fm/review. Or you can reach me, @joshmuccio on Twitter, and Sheel is @pitdesi. Or the show handle is @thepitchfm. We’ll see you next week.