TMBA 286: An Audio Response to Alex Blumberg and Gimlet Media’s “Startup” Podcast

TMBA286: An Audio Response to Alex Blumberg and Gimlet Media’s “Startup” Podcast post image

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Ian, Taylor Pearson and myself can’t stop listening to Alex Blumberg‘s new podcast called Startup. If you haven’t heard it yet, go check it out! If you listen to a lot of podcasts or radio at all, you’ve probably heard Alex’s work on shows like This American Life and Planet Money. We decided we wanted to create an episode that would serve as a companion piece to this fantastic series. The three of us are talking about how the show inspired us, what we see as the ironies in the venture capital world, the distinctions between being and artist and an entrepreneur, and what this series represents in the podcasting world.

Listen to this week’s show and learn:

  • Why so many people are starting their businesses by telling their stories.
  • What you can learn by being transparent about your business to the outside world.
  • Why it pays to be disagreeable as an entrepreneur.
  • What we have learned from listening to the series and what we would have done differently.
  • Why seeking venture capital is not the answer for everybody who wants to start a business.
  • The benefits of hiring a location independent staff.

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Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST.


Dan & Ian

Published on 03.19.15
  • I really enjoyed listening to Startup, specifically the storytelling and production value. I thought this week’s TMBA episode offered an outstanding summary of the show, particularly around the discussion of VC vs Lifestyle businesses. From the very early episodes when Alex is pitching Sacca, I could never understand why he was pitching a VC! What was the need? Why did he think he needed VC money?It became clear to me Alex probably thought every new company was just supposed to get VC funding. I agree with Taylor’s assessment as to why this was probably the case (social influences). Had Alex knew what a lifestyle business was (which he admitted to not knowing), I’m fairly certain he wouldn’t have pursued VC investment.

    The big takeaway from listening to Startup and your recap is that Alex should have been listening to TMBA (and LBP) over the years. :)

  • Jonathan Fils-aime

    This is very insightful, I never looked at the entrepreneurial Silicon Valley ecosystem from that point of view. VC are looking for extremely hard working and talented entrepreneur in order to sustain their lifestyle business. I don’t mean to generalize I’m sure there are hard working VC who can help entrepreneurs built amazing business.

    But you guys are right there are many more routes to wealth and quality of life. I don’t think Alex considered the possibilities before jumping in.

  • Looking fwd to listening to this one, gents. But I’m only on Ep #3 of Startup. Are there spoilers in this TMBA episode / should I come back and listen when I finish Startup?

  • There are definitely spoilers and considering I binged pretty hard on Startup, I’m guessing you’ll be through it by the end of the weekend.

  • yeah i’d wait!

  • hey Jonathan thanks for listening! It’s possible he did and went a more ‘traditional’ (what!?) route in order to build a more resonant story, ya know it’s sorta the thing that the minute after you have a business idea the ‘next step’ is how to get money for it… either way, at least from what i’ve heard on the show, and minus the great drama of VCs and raising money, GIMLET makes a lot more sense as an artisan lifestyle business, a hugely profitable one too.

  • at least from what i heard on the show that would be my guess as well, these scripts are very powerful and there aren’t a lot of strong ‘how to grow a business’ voices from people who’ve made millions with their lifestyle businesses, and theres good reason for that– they don’t benefit from telling that story (generally) whereas VCs benefit hugely from it. Thanks for your comment Greg really glad you enjoyed it!

  • Ricardo P Aquino

    Been a Startup listener from day 1 and thoroughly enjoyed it. Having the TMBA do an episode about it makes it even better! Agreed, Alex would be much happier if he hadn’t taken any VC money.

    Perhaps tying to a few episodes ago, I just finished reading a book called Bootstrapping Your Business by Greg Gianforte, who founded RightNow Technologies in the mid 90’s, which was bought in 2011 by Oracle for $1.5 billion. In his book, he writes about how he bootstrapped RightNow from the get go and how he pre-sold the software without it even existing yet. A great read for anyone interested in the art of bootstrapping.

    I agree that Alex would have been better off bootstrapping his business by exploiting his know-how on creating awesome content that can be turned into podcasts, as well as further leveraging the relationships he had built during This American Life and Planet Money.

    As proven by this episode, you guys are spot on about your assessment of virtually any business.

  • Stacey

    Great one guys! But man is there a hole in the market for a high end production shop for podcasts to emulate the quality that he’s pumping out. Thoughts on that?

  • i think there’s room for that for sure, also agile podcast networks (low cost structures) that know how to monetize (and create shows that serve monetizable niches)…. if you have this skillset could also leverage it for a high quality business partnership.

  • hey Ricardo glad to hear you enjoyed the episode. thank you for the book reco as well, it probably would have made sense for us to outline more clearly what a bootstrapping scenario could have looked like here.

    thanks for the compliment !

  • Great episode chaps!

    I blame the tech/start up press for fanning the flames on the VC fueled fire. You can’t read an article about a start up company without the proud mention of the number of millions it has raised, as if that’s some kind of meaningful business metric. People are dazzled by the word million, as if somehow all you need is to be able to use the word “million” to describe your business and it’s a success.

    Totally agree with you Dan, for many (most?) start ups, it should be get to the “living” first, that first 50K. Then you can make your next sober and steady steps towards bigger goals, without the giddy high of millions disillusioning you.

  • thanks Chris. it’s true. there are so so so many lifestyle business owners making millions annually, having fun doing it, and doing interesting and impactful work as well, but so few of them benefit from press attention like “so and so is making wheel barrels full of money doing something they love!” and it seems unfortunately for a lot of aspiring and developing entrepreneurs, that most people in such a position actively try to deflect attention. there’s nothing wrong with going out and hyping up the fact that you got what amounts to an expensive loan from a smart person, but I hope this show can at least shed some light on a different path.

    and glad you liked the 50K thing, that’s the first time i mentioned that. i’m not sure where it came from but it resonates with me.

  • Would the show have gotten as much traction if the VC/tech world wasn’t involved?

    In some ways I doubt it. Lot of folks in that space identify heavily with Alex on pitching, handling investors, and everything that comes along with it. If it was just another lifestyle business podcast (lol) it probably wouldn’t be on their radars.

  • yeah it was super compelling from a narrative point of view, they would have had to be pretty clever to come up with something equally compelling… although if anybody could do it! :)

  • Yeah definitely he would be the guy to do it with all dem chops. Hope they check out this episode!

  • TJ

    I think Dan alluded to it on the show, but it’s important to be aware of who’s game you’re playing and how it is won. VCs are playing a long-shot game. They seed a bunch of companies and then push them to scale as quickly as they can. The result is that most of them (~60%) will run out of cash and implode. A smaller number (~35%) will plateau and fizzle out, never really finding their niche. However, a handful (~5%) will become superstars that more than cover for all the losses. If you are in that group or one of their VCs, everyone thinks you are an entrepreneurial guru, but the VCs only need to be a little bit accurate to win. (As an aside, I think there are strong parallels between the strategies of VC firms and major record labels.) Their portfolio founders need to be 100% right or they walk away with nothing, sometimes losing ownership of everything to the investors. In some cases, the companies that didn’t make it might have been better off taking less or even no money and ended up with a sustainable but smaller scale of success. The VCs don’t make money playing that game, which is why lifestyle businesses are sneered at in Silicon Valley. So you have to ask yourself what level of success you are aiming for and whether you need that kind of outside investment. I think if you need to build out major infrastructure (Tesla) or you are in a land grab situation (Facebook) then you need to play their game. However, I don’t think Gimlet falls into that category and they got swept up in the hype thinking they needed that seal of approval. Their business sounds more like “art” to me and is not something that will scale well.

  • Petru Gaspar

    This is the first time that I binged listen to a podcast, 7 episodes flew by in an instant so there is definitely a great production value in the show and Alex is an amazing storyteller. Where I felt it falls a little bit short is by focusing way to much on the glamorous parts like big names VCs, 100K , oh wait we now have a million dollars in the bank like overnight, and while this things obviously sell a lot as everybody likes to dream big and hope for instant success I think that it could have been so much more by offering even deeper inside details about what’s like running the business and the daily grind that’s required or as you guys like to say “just keeping it real man!” . I had a blast and thoroughly enjoyed the segments where he is like wtf am I doing, finding a business partner or having conversations with his wife about how this business is affecting his life. I don’t know, maybe this could be the beginning of the reality-tv-podcast shows.

  • What is a startup? I’ve always thought of it as a brand new, high growth company, which requires heavy funding (usually from VCs).

    I’ve seen the term used a lot more to describe any new or small business in the past few years, which may explain some of the script confusion between a lifestyle business and a VC business.

    Maybe it was VCs that stole the term in the first place, in order to control the narrative around creating new businesses?

    Maybe the sexyness of the “doing a Startup” and “being a Founder” has caused most entrepreneurs to identify with that VC script, even if they really want time and mobility over growth and big paydays.

  • Paul Cochrane

    Now im gonna have to listen to this on the way to bed every night!
    I think the best point in the entire podcast was the importance on not focusing on SO MUCH. That if they go into 10 different podcasts, they will likely have 10 average shows. But if they focus on 1-3 – they will probably end up with 1-3 amazing shows that are much more profitable (and enjoyable).

  • On the subject of who the podcast listeners are and where they came from, Gimlet ran a survey for startup with some interesting results!

  • Jen Anderson

    Great episode! Your podcast is getting better & better. As someone who moved out to Silicon Valley and worked at a VC for a while, I can say that you guys are 100% spot on. There is so much hype out here that people actually think the only way you can start a business is by raising VC money. I literally pitched my business to an old boss and he told me: “too niche”. My response: “So what?” Everyone out here is just trained (probably by the VCs) to go big or go home. And there is so much money chasing deals right now that it’s so easy perpetuate the hype. I was having drinks w/ a VC friend the other day who told me he looks “off the beaten path” for companies because once a prominent VC like NEA or Sequioa has gotten to them, the valuation will get so ridiculous that it’s too late.

  • thanks for the heads up Jonathan!

  • hey TJ I appreciate the run down here! This sounds like an accurate description of the venture world to me, when I think back then to the discussion contrasting the founder personalities, the Uber gentleman was just crazy at wanting to win, even the story of him ‘playing games’, whereas Alex’s motives seemed to revolve around his family, his art, his audience… so yeah, clearly a terrible candidate for VC style money… but i’m sure the VCs are loving being involved anyway :)

  • i really enjoyed those episodes too… i was really brought in by the parts where people were recorded asynchronous sharing their perceptions of others and how they turned out to be twisted… it’s a very common experience but it’s so rare to see it represented … i think that might have been my favorite part of it.

  • it’s a great point it seems the term is sorta still up for grabs as i’ve seen writers try to make cases for why lifestyle type businesses should be called startups too… i’m not sure that’s all that useful. i think VCs / SV have defined it for the culture, and it looks something like: any business that is in… wait… why am i even bothering… i’ll differ:

  • agree the track record out there doesn’t seem to rosey

  • thanks Jen I’m really glad you enjoyed it! this was a really fun one for me to do. would have loved to have been a fly on the wall for that conversation

  • Thats the article that shaped my definition of the word!

    So using that definition, “a company designed to grow fast,” can a lifestyle business also be a startup?

  • Marco Zamboni

    I think the bottom line is: I became an entrepreneur, among other things, to be FREE.

    If you run a company and you have to work for years 12 hours a day, you’re not free, you’re a slave, you’re a slave who choose to be a slave, you’re a slave to yourself.

  • The production quality and storytelling is truly impressive and there’s so many moments where you can relate.

    Would love to have some way to fork the Universe and have him produce the same podcast about starting a small business instead of a startup.

  • I thought about that after we recorded. At one point Ian says something along the lines of “It’s not clear what the value of these VC guys is beyond offering money,” but I think the connection/credibility value is substantial.

    I was at a tradeshow at the end of last year and there two companies with relatively similar software platforms, one bootstrapped that had been around for 10+ years and the other funded in the last 12 months.

    It was fascinating to listen people talk about how the funded company would definitely win. Warped logic about how clean their design was –> superior company.

  • Also notice how all the VCs on Twitter basically hawk their own investments since they have a vested interest? A16Z always promotes Lyft, Sacca is tweeting 24/7 about Periscope now, etc. Almost like a lesser version of the self-fulfilling prophecy

  • I also think it’s sad that taking investor money is now more respectable than actually making it. Totally understand its a different nature, but drinking that kool-aid as a one-size fits all solution to entrepreneurship is just silly.

  • Absolutely. The situation they’ve gotten themselves into sounds like a complete nightmare.

  • Your comments in the episode echoed a lot of the things I was banging my head against the wall about while listening to the first season of StartUp. I really fail to see why they made a lot of the decisions they did. They’ve basically eschewed all of the positive parts about “new media” in an attempt to conform to their “old media” roots. It is ridiculous, particularly the fact that they are not working as a distributed team. Why they’re spending so much capital for an office (that isn’t even nice!) just boggles my mind.

    You mentioned them potentially fundraising through their listeners with equity or something. I don’t believe that this is cost-effective or makes much sense for a small company. However, there is NO REASON why they couldn’t have launched this as a Kickstarter and had insane success. Blumberg has a built-in audience, along with the creators of Reply All. There are plenty of podcasts who have run Kickstarters to fund themselves – it’s not unheard of. It’s actually quite smart, more akin to the pledge drive on public radio, but with the cache of current crowdfunding. There’s no securities law issues, so that saves a ton of money.

    I think that getting a “business” type of guy involved was a mistake. I can’t imagine the amount of fat that could be trimmed from his business plan. Maybe it’s just that listening to your podcast for years has completely shifted my mindset!

    Also, you mentioned copyright in the beginning of the show: you’re probably fine, since you’re doing criticism and commentary on the original work and the sections you took were rather small compared to the whole work. Of course, not legal advice ;)

  • thanks for the heads up on copyright Zach agree there… yeah i defo wouldn’t share equity with listeners but perhaps give them perks for being “investors” in fact exactly as kickstarter works.. you’re totally right it probably would have gotten tons of buzz and success as a kickstarter with much less effort and time (but still a lot!)…

  • But again, they probably wouldn’t have had much of a show (or it would have been less sexy). It’s like a snake eating its own tail!

  • ha or as my friend Tommy Schultz has said “a self licking ice cream cone.” :)

  • Hah! I prefer that (deathly afraid of snakes, but love ice cream cones)

  • TJ

    Tim Ferriss interviewed Chris Sacca on his recent podcast. It is a wide-ranging, interesting discussion. Early on, he readily admits that VC is a rigged game. Check it out:

  • thanks for the heads up TJ!

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