Alex Blumberg: Your Best Selling Points Are the Mistakes You’ve Made

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blumberg_big.jpg

About this presentation

Startups often have “creation myths” about their early days. But real life is much messier than that. To prove this, former This American Life producer Alex Blumberg recorded nearly every painstaking moment in creating his new podcasting company, Gimlet Media. With plenty of audio examples, Blumberg highlights the ups and downs of turning your creative art into a business, culminating in a cringe-worthy pitch to a venture capitalist.

“The story that you tell, it’s like you’re killing it all the time,” says Blumberg. “But deep inside every single person who has ever tried to start a business, I’m sure, has had a pitch like that—if not worse.”

About Alex Blumberg

The uncomfortable details of starting a company are often glossed over after the fact. So what happens when an alum of “This American Life” records every part of the process?

Alex Blumberg is an entrepreneur, radio journalist, and CEO of the podcast company Gimlet Media. He currently hosts the Startup podcast, and is a former producer atThis American Life and the co-founder of the podcast Planet Money.

Blumberg has won every major award in broadcast journalism, including the Polk, the duPont-Columbia, the Peabody, and several Emmys. Blumberg’s award-winning documentary on the housing crisis, The Giant Pool of Money, which he co-reported and produced with Adam Davidson, was named one of the last decade’s top ten works of journalism by New York University. ??He lives with his wife and two children in Brooklyn, NY.

Links

Startup
Planet Money
Twitter

Full Transcript

Note: Press the “CC” button on the embedded video player to view this transcript as closed captioning.

I’m going to be talking about my, uh, my journey from nonprofit journalist to CEO. And what I learned along the way about the crazy world of capital and enterprise formation and running a company. And it was a pretty improbable journey. Just how improbable? Well, I don’t have an MBA, obviously. Not only that, I don’t have any business experience at all. And in fact, before I was the CEO of my own company, the last time I had worked as a– the last time I had worked in a for-profit entity, uh, was when I was a bagger at the supermarket in high school. And yet, I did it. I am now the CEO of my own company, which is why I’m standing on the stage. Spoiler alert.

Uh, so, um, and so I want to talk a little bit about where I came from and sort of like– because partly what I’m talking about is also sort of turning, you know, your craft or your art into a business. And so I want to start with what that craft and art is. I worked for a long time at “This American Life,” which is a show on public radio and a podcast. And I, uh– while I was there, I learned a lot. I– I developed a deep love for audio as a medium and the power it has to do a lot of very special things that I think other forms of media can’t do. And one of the greatest powers it has– I’m going to play you some examples. I’m going to be playing little clips of sound throughout this talk. But one of– I think one of the great powers of audio is the power of narrative. And I just want to give you a little example of what I’m talking about here. And this is a story that was on “This American Life” a while ago and it involves an actor, maybe some people have heard of, named Tate Donovan. Tate Donovan was sort of a character actor, not very well known. He’s not the kind of actor you recognize in the street, although for a brief window in the ’90s he had a sort of a recurring role on “Friends.” and so he all of a sudden was getting recognized. And this was really exciting for him. He was a working actor. He was doing pretty good. But, like, it was exciting to be recognized because finally he could be the kind of actor he’d always dreamed of being, magnanimous, sort of, I’m going to shake your hand. Yes, I’ll sign the autograph, absolutely. And then there was this moment where he got to be that guy, that actor. And it all came to head one– one night he was at a Broadway show. And all these people were coming up and recognizing him.

[AUDIO PLAYBACK] I was– I was exactly how I wanted to be. I was doing it. I was doing great. And then, the kid with the camera came along. This nervous kid. I don’t– he must have been 16 years old. He’s in a rented tuxedo, unbelievably, like, shy and awkward. And he’s got acne. And he’s got a camera in his hand. And underneath the marquee is his date, who is literally, like, in a prom dress. And she’s got a corsage. And she’s really, you know, nervous and sort of clutching her hands. And he sort of comes up to me and he sort of mumbles, you know, something like, you know, something about a picture. And I’m like, I just feel for him. So I’m like, ah, absolutely, my gosh, sure, hey, no problem, my God, you poor thing. And and I go up to his– to his girlfriend, and I wrap my arms around her. And I’m like, Hey! Where are you from? Fantastic. Uh, going to see the play. It’s great. And the guy is sort of not taking the photograph very quickly. He’s just sort of staring at me, and he’s got his camera in his hands, and it’s down by, like, his chin, you know. And, uh, she’s very stiff and awkward. And I don’t know what to do, so I just lean across and I kissed her on the cheek. And I’m like, all right! Come on, take the picture. Hurry up! And finally, he sort of, like, snaps it. And I’m like, OK, it was really wonderful to meet you. And he just, like, st– stammered over to me and was like, Um, c– could you take a picture of us? Oh! And the whole time, he just wanted me to take a picture of him and his girlfriend underneath the awning of the play. Eh! He didn’t want a picture of me. He had no idea who I was. Ha ha ha! Ha ha ha! [END PLAYBACK]

So that’s one thing, the power of narrative. Uh, but the other– another great power of audio– there was a study done where they did– It was a study about, like, the abil– how– how– easy it is to lie through the media. And they– researchers made up a fake story. And they had– and they put it on the TV news. They– they wrote a fake article about. They did a fake news report about it. And they did a fake radio story about it. And they asked people how– who, um– and then they asked people to determine whether it was a lie or not. And the people listening on the radio had the easiest time determining the lie. In other words, radio is the– audio is the hardest medium to lie through. And I think that’s because all you have is– it’s, uh– you formed– When you’re listening to audio, you sort of create a connection with the voice. You don’t have a picture. You don’t have any of these implicit biases they we’re talking about. You just connect with the voice. And you create the picture around that voice. And often the pictures that we create look more like us. And so we feel more empathy with the voice that we’re hearing. And there’s a lot more authentic connection, so it’s harder to lie through. So authenticity is this amazing power of audio.

So this is a piece of tape we were– that I had at “This American Life.” It was a story that we did on “This American Life.” It’s a guy named Dave Ramsey. And Dave Ramsey has a radio show– do anybody know who Dave Ramsey is? So Dave Ramsey is like– he’s like this sort of money guy. He does this call-in show. People talk to him, and they come up with their money problems. But it also sort of– And so he talks about getting out of debt and all that sort of stuff. But it’s also sort of, like, a little bit of a community. And he ends up giving, sort of, more than financial advice and that’s what this clip is.

[AUDIO PLAYBACK] We’re going to start this segment off with Carrie in Kankakee, Illinois – WKAN 1320. Hi, Carrie. How are you? Hi. How are you? Good. How can I help? [END PLAYBACK]

All right, so Carrie is calling into “The Dave Ramsey Show.” And this is a clip of “The Dave Ramsey Show” that appeared on the radio show, “This American Life.” And, uh, her problem is that she is living with this– Her problem is her boyfriend. She’s living with the boyfriend. She has a very, very low-paying job. He has a higher-paying job. And things aren’t good.

[AUDIO PLAYBACK] The thing is, um, he’s like very– to a point– controlling. We share expenses. I have to give up half of my paycheck to pay for the bills– Mm-hmm. –to help pay for the bills. When I’m done doing that, then I have hardly any money left to do for my kids or for myself or to try and put money back. Mm-hmm. OK, he says that I can’t leave because I would never be able to make it on my own. Mm-hmm. I will admit, I’m not very good at handling money. I don’t know how. Well, let me ask you something. If you were sitting down with a cup of coffee– How old are you? I’m 41. OK. If you were to sit down over a cup of coffee with a 27-year-old single, young lady that was living with a guy, and she told you what you just told me, what would you tell her? To get out. You can make it on your own. Mm-hmm. Good advice. OK, but where did I– how do I start on my income. I mean– Well, I’m not positive– You don’t make a lot of money. I agree with that. Right. But let me tell you what, you’re in a really unhealthy relationship. You’re dealing with a guy who– he’s not hitting you is he? No. You sure? Yeah. I’m not sure I believe you. Yeah. It’s fine. I’m sorry. It’s OK. He– I just, I mean to– You got to get out of there, girl. You get to get out of there now. OK. You think– He says, you know, that it’s me. It’s because– No. It’s not you, darling. This guy is sick. OK. You got to get away from him. OK. OK. You think I can survive– Well, I can tell you this. If nothing else, you could start by going to domestic violence shelter right now. Mm-hmm. And checking in with your kids. And they will help you. And– and– you know, you may have to take a part-time job. Um, you may have to move into subsidized housing– Mm-hmm. –of some kind. I don’t know exactly what the short term, the next six months is going to look like, but I can tell you this– Carrie, you were not designed by God for this man. OK. [END PLAYBACK]

That clip, obviously, is very– you feel something very real happening in that exchange. And you feel it. Dave Ramsey felt it. You can hear the honesty when she finally– you can hear that she’s not being entirely forthcoming. And then when she finally admits it, you hear the change in her voice. You hear all these things that I don’t know if you would have detected necessarily if it were video and certainly not in print. It’s just harder to render those things and because we are creating our own picture of– I’m sure if I went around the room and asked what does that caller look like. Every single person would have a different description of her. And because we’re creating that picture in our minds, we– she’s ours in a certain way. And we connect with her. And that is, I think, one of the greatest powers of audio, the ability to sort of help people empathize.

So you have this power of narrative. You have this power of empathy. And that can sort of combine in this wonderful way to help increase understanding in a way that, like– where you feel something on an emotional level. And that’s this last clip I’m going to play. This was a, um– This was– back in the housing crisis, we decided to do a show about, like, what was going on with the economy. And it was a show called “The Giant Pool of Money,” and it ended up– We found a guy who had been, sort of, affected by the housing crisis. He had taken out a very large– he’d had a couple part-time jobs. And yet he had– the bank had given him a very, very large home loan.

[AUDIO PLAYBACK] for round figures. You basically borrowed and they didn’t check your income. Right. It’s a no income verification loan. They don’t call me up and say, you know, how much money– They don’t do that. I mean it’s almost like you pass a guy in the street He say, Well, what do you do? Hey, I got a job. OK. It– it– it seems as if it’s that casual even though there are a lot of papers that get filled out and stuff flies all over with the faxes and emails and all like that. Essentially, um, that’s the process. Would– would you have loaned you the money? I wouldn’t have loaned me the money. And nobody that I know would have loaned the money. I mean, I know guys who are criminals who wouldn’t lend me that money. And they’d break your knee-caps. So– Ha ha ha! You know, yeah, I mean– I don’t know why the bank did it. Ha! I’m serious. person with bad credit. [END PLAYBACK]

So that– that began that show that we did on the mortgage– on the mortgage crisis, which was essentially asking– asking and answering Clarence’s (question) why did the bank lend him and many, many, many hundreds of thousands, if not millions, of people like him large sums of money that they probably wouldn’t pay back. And that– so that and that became sort of a hit. And that led to the show that we did called, “Planet Money.” And so we realized like, oh you can take these tools that we’ve learned, that I’ve used, that I thought you could just– I thought you could just use on a show like “This American Life,” sort of a storytelling show. But you can actually apply them to really tough financial concepts. So we did “Planet Money” for five years. And during “Planet Money,” I realize like, OK so “This American Life” worked. “Planet Money” started developing this large audience. And then I was like, wait. I think there’s a business here. And we did a, uh– we did this project at “Planet Money” where we went around the world. And we talked to all the people who are involved in making a t-shirt. And we actually made that t-shirt. And then we told our listeners that we were going– you could buy the t-shirt that we are going to be documenting the making-of. And we thought, like, a couple, maybe, I don’t know, a couple thousand people would maybe buy the t-shirt. And we ended up selling I was like, that is some really interesting audience engagement. It feels like there’s something here. So after mulling it over for a long time, I decided, OK I think there’s a business here. And I set out on my own to launch it. And I put together this deck. And I was, sort of, talking to people about like, look. I’ve done this show, and this show, and they’re at the top of iTunes. So give me money and I’m going to make more shows. I was telling people like, look. Podcasts are coming to the dashboard. And I thought I had a pretty sweet– sweet deck. And then– But once I actually started going out and pounding the pavement, trying to raise money, it was much more difficult than I thought. And that made me realize, like, wait a minute. In the creating of the business, I’m going to go backwards. There’s an actual story. So I started recording my conversations with investors that I was trying to raise money from. And I put it into a podcast called, “StartUp.” And it also went very well. But I’m going to play a couple of clips from that. So– so– and the very first episode featured my disastrous attempt to pitch Chris Sacca, a venture capitalist in California. Anybody familiar with Chris Sacca? Um, yeah, so this is me. I get together and I’m, like, making my pitch. And I had put it– and basically we met in a sushi restaurant. He got me out. I thought that we’re going to be in some boardroom. And he was like, Nah, let’s go out on the street, make your pitch there. I didn’t have my laptop with me. And so I’m sort of stammering through everything. And this is just a sample section from the pitch.

[AUDIO PLAYBACK] You got to tighten up your story. So this– Well, start again. Yeah. So you’ve now kind of– All right– Really tight this time. How are you going to make money doing this? So, you make money a combination– so there’s three major– there’s three major revenues– streams. I start again. I meander my way through the ad rates, “Planet Money.” At a certain point, I find myself deep into an explanation of my friend’s successful Kickstarter project. Chris interrupted. So, [INAUDIBLE] your own outline. I did. What you haven’t given me is the outline of your story. Right? If I were calling in Uber right now, and it said, it’s going to be here in two minutes and that was all the time you had– Uh-huh. –what are you doing? So I’m making a network of digital podcasts that we will– that is going to meet– [CLEARS THROAT] Sorry. [END PLAYBACK]

At a certain point, then in the pitch, he just stopped me. And he was like, here’s how you give your pitch. And he gave me my pitch back to me. [AUDIENCE LAUGHS] But that– I put out that podcast and actually that was like– it became, like, oh this is a really interesting world. Nobody’s gone inside this, and so we continue to do these podcasts. We did, you know, two episodes, three episodes. I thought I’d maybe do four to six episodes. But they kept on going. And we started doing a podcast about all different phases of building this business. And it was like me– sort of me bumbling my way through this thing. But in baring these sort of like– What I realized as I was putting this out there, I got all these emails from people and tweets and stuff. And it was like, Oh my God. I had the exact same thing happen to me. And I realize that the story that you tell, it’s like you’re killing it all the time. But deep inside every single person who has ever tried to start a business, I’m sure, has had a pitch like that– if not worse. And has gone through these things, so then we started– and so we did a whole episode on naming, for example. We couldn’t come up with the name of our company. And I had the American Podcasting Corporation which I really liked, APC. But my co-founder hated it. And then, we kept on getting these things like destroyed by trademark law. And then finally one night, we were at my co-founder’s house. And we went on this foreign language kick. And that sort of led us into the Esperanto dictionary. And we were like, that’s it! We’ll name our company an Esperanto word. And so I have I recorded us having that conversation. And then I came home and I told my wife that we’d come up with the name.

[AUDIO PLAYBACK] Orelo. Orelo? Orelo. What is that? What is that supposed to mean? Well, it’s “ear” in Esperanto. [GUFFAWS] The most odd idea. [SNORTS WITH LAUGHTER] It’s so dumb! That’s so dumb. Ha ha! [CLAPS] God. Ha ha. You said that one’s good, though, right? Ha ha! What? Who’s idea was that? It came up organically. How does that come up organically? I was like– You guys were speaking Esperanto? [END PLAYBACK]

All right, so you get the idea. Thank you. [APPLAUSE] So– I’m just going to speed ahead here. I’ve badly miscalculated how long this would take. So, uh, so, anyway it worked. The weird thing that happened is that telling a story about your own futility at fundraising actually makes people want to invest in your company. We ended up raising $1.5 million. And we have now two shows that are up and running. We just launched the trailer for our third show that comes up. And where we are now– we have two shows on, a third on-the-way. We have a total audience And we’re actually making money. There is actually– you get money. The ads are doing pretty well in podcasting. We have 15 employees.

But we’ve continued to sort of do the “StartUp” podcast. We continue to do it about our company, and then we just launched a Season 2 about another company. I think we’re going to try to make this into a franchise of, sort of like, documenting startups in the process of going through the thing. But the piece of– the last piece of tape I wanted to play for you is from a more recent episode of “StartUp,” which was actually after our company was launched. And we’ve been up and running, and our second show, “Reply All” was up and running. And it was a shit show. Like it always is. In the early days as a startup, we didn’t have enough people. We didn’t know what we were doing. Everybody was running around– like, we were being very, very inefficient. And we’re trying to get out these podcasts. And there was some very, very late nights on the “Reply All” for everybody. And PJ– and then we decided to sort of document what was happening the week where we had this sort of horrible late night– Things kept on breaking and not working. And then stories ended up being not that good. And we would do edits, and they wouldn’t work. And then we’d have to reconfigure everything. It still wouldn’t work. And PJ, the host of “Reply All” ended up being at the office And then he was there till midnight on New Year’s Eve. And the he was in the morning on Christmas Eve. It was just crazy. And so we decided to document it. And then talk about what happened. And in the documenting of that, I learned something I think– a very valuable lesson I want to share for other people. So, I’m going to play two little pieces of tape. First– so this is just PJ sort of talking about the week.

[AUDIO PLAYBACK] You know, I have a weird rash on my foot that I need to see a doctor about. And I think I have gingivitis, but I can’t see my dentist. So I’m just like– I don’t know. I have, like, mouthwash at work now because I’ve got, like, anxiety that I’m getting really bad, like, weird mouth rot because I can’t see a dentist. [A WOMAN GIGGLES] Um, I’m out of laundry. And I think if I don’t wear clean socks, the weird things here on my foot is going to get worse. Ha. Like– I keep thinking I’m going to have a stroke. I had a friend who was a manager of a bunch of American Apparels, and she was like 23. And she had a stroke. And I was like, how do you– how does that happen? She’s like, I was under an insane amount of stress. And like, a 23 year old shouldn’t be managing bunch of stores. And it could just happen. And I keep wondering like, was this how she was feeling and could she possibly have been feeling worse than this. Like, I wanted to call her. What do you– what do you think should be done? We need another Alex. Like, it’s weird because like, he’s genuinely my hero. And I’m kind of like, what the fuck, man, a little bit this week. [END PLAYBACK]

[AUDIENCE LAUGHS] And– so– that’s really weird to hear, you know, as the CEO. And you’re like, I’m also obviously working my ass off. And you know– so Lesson (one) Hard work isn’t enough. Right? You have to be sort of giving your employees a reason and a glimmer of hope that things are going to change and there’s a reason for them doing this. But then I came back and I tried to address it, and then this is the moment that, like, really resonates with me, and I think about all the time. And hopefully, it will help you.

So Lisa Chow is one of our reporters. And she was sort of interviewing me about was going on. It got all very meta. But at a certain point, she asked me this. She told me this thing on tape.

[AUDIO PLAYBACK] PJ said we need another Alex. And so the other day when you’re talking to PJ, you were like, we’re not going to get another Alex. And there’s also no conversation about potentially hiring more producers for their show. Um– Did– I said that we’re not going to get another me? Yeah. Ha ha! It was so funny to hear you say that because that comment you had forgotten, it was on tape. We had recorded it the day before. [AUDIO PLAYBACK] We’re not going to get another me. Uh, unless you know one. [END PLAYBACK]

I’d totally forgotten I’d said that. And– and I hadn’t forgotten I’d said it. I didn’t understand that that’s what I had said. In my mind I had said, “Absolutely. We need to staff up. We need more resources. We need to do all these things. I’m with you. It’s not going to happen right away. I got to figure it all out.” But my employee did not hear that. He heard a whole different thing. And that was just such a powerful, powerful realization, is that– and, you know, when before you’re a CEO like, what you say doesn’t really matter. People aren’t really listening to you that much. [AUDIENCE LAUGHS] And all of a sudden– and you, sort of, become comfortable with that, especially if you’ve been living with that reality for 45 years.

So– and then all of a sudden, I’m in this place where like, people are really paying attention to what I’m saying. It was a very, very powerful lesson. And it was a powerful lesson of sort of like, um– again, the power of recording– recording what’s going on in your office is not a bad– is not a bad thing to do. I’ll leave it there.

Alex Blumberg: Your Best Selling Points Are the Mistakes You’ve Made

Standard

blumberg_big.jpg

About this presentation

Startups often have “creation myths” about their early days. But real life is much messier than that. To prove this, former This American Life producer Alex Blumberg recorded nearly every painstaking moment in creating his new podcasting company, Gimlet Media. With plenty of audio examples, Blumberg highlights the ups and downs of turning your creative art into a business, culminating in a cringe-worthy pitch to a venture capitalist.

“The story that you tell, it’s like you’re killing it all the time,” says Blumberg. “But deep inside every single person who has ever tried to start a business, I’m sure, has had a pitch like that—if not worse.”

About Alex Blumberg

The uncomfortable details of starting a company are often glossed over after the fact. So what happens when an alum of “This American Life” records every part of the process?

Alex Blumberg is an entrepreneur, radio journalist, and CEO of the podcast company Gimlet Media. He currently hosts the Startup podcast, and is a former producer atThis American Life and the co-founder of the podcast Planet Money.

Blumberg has won every major award in broadcast journalism, including the Polk, the duPont-Columbia, the Peabody, and several Emmys. Blumberg’s award-winning documentary on the housing crisis, The Giant Pool of Money, which he co-reported and produced with Adam Davidson, was named one of the last decade’s top ten works of journalism by New York University. ??He lives with his wife and two children in Brooklyn, NY.

Links

Startup
Planet Money
Twitter

Full Transcript

Note: Press the “CC” button on the embedded video player to view this transcript as closed captioning.

I’m going to be talking about my, uh, my journey from nonprofit journalist to CEO. And what I learned along the way about the crazy world of capital and enterprise formation and running a company. And it was a pretty improbable journey. Just how improbable? Well, I don’t have an MBA, obviously. Not only that, I don’t have any business experience at all. And in fact, before I was the CEO of my own company, the last time I had worked as a– the last time I had worked in a for-profit entity, uh, was when I was a bagger at the supermarket in high school. And yet, I did it. I am now the CEO of my own company, which is why I’m standing on the stage. Spoiler alert.

Uh, so, um, and so I want to talk a little bit about where I came from and sort of like– because partly what I’m talking about is also sort of turning, you know, your craft or your art into a business. And so I want to start with what that craft and art is. I worked for a long time at “This American Life,” which is a show on public radio and a podcast. And I, uh– while I was there, I learned a lot. I– I developed a deep love for audio as a medium and the power it has to do a lot of very special things that I think other forms of media can’t do. And one of the greatest powers it has– I’m going to play you some examples. I’m going to be playing little clips of sound throughout this talk. But one of– I think one of the great powers of audio is the power of narrative. And I just want to give you a little example of what I’m talking about here. And this is a story that was on “This American Life” a while ago and it involves an actor, maybe some people have heard of, named Tate Donovan. Tate Donovan was sort of a character actor, not very well known. He’s not the kind of actor you recognize in the street, although for a brief window in the ’90s he had a sort of a recurring role on “Friends.” and so he all of a sudden was getting recognized. And this was really exciting for him. He was a working actor. He was doing pretty good. But, like, it was exciting to be recognized because finally he could be the kind of actor he’d always dreamed of being, magnanimous, sort of, I’m going to shake your hand. Yes, I’ll sign the autograph, absolutely. And then there was this moment where he got to be that guy, that actor. And it all came to head one– one night he was at a Broadway show. And all these people were coming up and recognizing him.

[AUDIO PLAYBACK] I was– I was exactly how I wanted to be. I was doing it. I was doing great. And then, the kid with the camera came along. This nervous kid. I don’t– he must have been 16 years old. He’s in a rented tuxedo, unbelievably, like, shy and awkward. And he’s got acne. And he’s got a camera in his hand. And underneath the marquee is his date, who is literally, like, in a prom dress. And she’s got a corsage. And she’s really, you know, nervous and sort of clutching her hands. And he sort of comes up to me and he sort of mumbles, you know, something like, you know, something about a picture. And I’m like, I just feel for him. So I’m like, ah, absolutely, my gosh, sure, hey, no problem, my God, you poor thing. And and I go up to his– to his girlfriend, and I wrap my arms around her. And I’m like, Hey! Where are you from? Fantastic. Uh, going to see the play. It’s great. And the guy is sort of not taking the photograph very quickly. He’s just sort of staring at me, and he’s got his camera in his hands, and it’s down by, like, his chin, you know. And, uh, she’s very stiff and awkward. And I don’t know what to do, so I just lean across and I kissed her on the cheek. And I’m like, all right! Come on, take the picture. Hurry up! And finally, he sort of, like, snaps it. And I’m like, OK, it was really wonderful to meet you. And he just, like, st– stammered over to me and was like, Um, c– could you take a picture of us? Oh! And the whole time, he just wanted me to take a picture of him and his girlfriend underneath the awning of the play. Eh! He didn’t want a picture of me. He had no idea who I was. Ha ha ha! Ha ha ha! [END PLAYBACK]

So that’s one thing, the power of narrative. Uh, but the other– another great power of audio– there was a study done where they did– It was a study about, like, the abil– how– how– easy it is to lie through the media. And they– researchers made up a fake story. And they had– and they put it on the TV news. They– they wrote a fake article about. They did a fake news report about it. And they did a fake radio story about it. And they asked people how– who, um– and then they asked people to determine whether it was a lie or not. And the people listening on the radio had the easiest time determining the lie. In other words, radio is the– audio is the hardest medium to lie through. And I think that’s because all you have is– it’s, uh– you formed– When you’re listening to audio, you sort of create a connection with the voice. You don’t have a picture. You don’t have any of these implicit biases they we’re talking about. You just connect with the voice. And you create the picture around that voice. And often the pictures that we create look more like us. And so we feel more empathy with the voice that we’re hearing. And there’s a lot more authentic connection, so it’s harder to lie through. So authenticity is this amazing power of audio.

So this is a piece of tape we were– that I had at “This American Life.” It was a story that we did on “This American Life.” It’s a guy named Dave Ramsey. And Dave Ramsey has a radio show– do anybody know who Dave Ramsey is? So Dave Ramsey is like– he’s like this sort of money guy. He does this call-in show. People talk to him, and they come up with their money problems. But it also sort of– And so he talks about getting out of debt and all that sort of stuff. But it’s also sort of, like, a little bit of a community. And he ends up giving, sort of, more than financial advice and that’s what this clip is.

[AUDIO PLAYBACK] We’re going to start this segment off with Carrie in Kankakee, Illinois – WKAN 1320. Hi, Carrie. How are you? Hi. How are you? Good. How can I help? [END PLAYBACK]

All right, so Carrie is calling into “The Dave Ramsey Show.” And this is a clip of “The Dave Ramsey Show” that appeared on the radio show, “This American Life.” And, uh, her problem is that she is living with this– Her problem is her boyfriend. She’s living with the boyfriend. She has a very, very low-paying job. He has a higher-paying job. And things aren’t good.

[AUDIO PLAYBACK] The thing is, um, he’s like very– to a point– controlling. We share expenses. I have to give up half of my paycheck to pay for the bills– Mm-hmm. –to help pay for the bills. When I’m done doing that, then I have hardly any money left to do for my kids or for myself or to try and put money back. Mm-hmm. OK, he says that I can’t leave because I would never be able to make it on my own. Mm-hmm. I will admit, I’m not very good at handling money. I don’t know how. Well, let me ask you something. If you were sitting down with a cup of coffee– How old are you? I’m 41. OK. If you were to sit down over a cup of coffee with a 27-year-old single, young lady that was living with a guy, and she told you what you just told me, what would you tell her? To get out. You can make it on your own. Mm-hmm. Good advice. OK, but where did I– how do I start on my income. I mean– Well, I’m not positive– You don’t make a lot of money. I agree with that. Right. But let me tell you what, you’re in a really unhealthy relationship. You’re dealing with a guy who– he’s not hitting you is he? No. You sure? Yeah. I’m not sure I believe you. Yeah. It’s fine. I’m sorry. It’s OK. He– I just, I mean to– You got to get out of there, girl. You get to get out of there now. OK. You think– He says, you know, that it’s me. It’s because– No. It’s not you, darling. This guy is sick. OK. You got to get away from him. OK. OK. You think I can survive– Well, I can tell you this. If nothing else, you could start by going to domestic violence shelter right now. Mm-hmm. And checking in with your kids. And they will help you. And– and– you know, you may have to take a part-time job. Um, you may have to move into subsidized housing– Mm-hmm. –of some kind. I don’t know exactly what the short term, the next six months is going to look like, but I can tell you this– Carrie, you were not designed by God for this man. OK. [END PLAYBACK]

That clip, obviously, is very– you feel something very real happening in that exchange. And you feel it. Dave Ramsey felt it. You can hear the honesty when she finally– you can hear that she’s not being entirely forthcoming. And then when she finally admits it, you hear the change in her voice. You hear all these things that I don’t know if you would have detected necessarily if it were video and certainly not in print. It’s just harder to render those things and because we are creating our own picture of– I’m sure if I went around the room and asked what does that caller look like. Every single person would have a different description of her. And because we’re creating that picture in our minds, we– she’s ours in a certain way. And we connect with her. And that is, I think, one of the greatest powers of audio, the ability to sort of help people empathize.

So you have this power of narrative. You have this power of empathy. And that can sort of combine in this wonderful way to help increase understanding in a way that, like– where you feel something on an emotional level. And that’s this last clip I’m going to play. This was a, um– This was– back in the housing crisis, we decided to do a show about, like, what was going on with the economy. And it was a show called “The Giant Pool of Money,” and it ended up– We found a guy who had been, sort of, affected by the housing crisis. He had taken out a very large– he’d had a couple part-time jobs. And yet he had– the bank had given him a very, very large home loan.

[AUDIO PLAYBACK] for round figures. You basically borrowed and they didn’t check your income. Right. It’s a no income verification loan. They don’t call me up and say, you know, how much money– They don’t do that. I mean it’s almost like you pass a guy in the street He say, Well, what do you do? Hey, I got a job. OK. It– it– it seems as if it’s that casual even though there are a lot of papers that get filled out and stuff flies all over with the faxes and emails and all like that. Essentially, um, that’s the process. Would– would you have loaned you the money? I wouldn’t have loaned me the money. And nobody that I know would have loaned the money. I mean, I know guys who are criminals who wouldn’t lend me that money. And they’d break your knee-caps. So– Ha ha ha! You know, yeah, I mean– I don’t know why the bank did it. Ha! I’m serious. person with bad credit. [END PLAYBACK]

So that– that began that show that we did on the mortgage– on the mortgage crisis, which was essentially asking– asking and answering Clarence’s (question) why did the bank lend him and many, many, many hundreds of thousands, if not millions, of people like him large sums of money that they probably wouldn’t pay back. And that– so that and that became sort of a hit. And that led to the show that we did called, “Planet Money.” And so we realized like, oh you can take these tools that we’ve learned, that I’ve used, that I thought you could just– I thought you could just use on a show like “This American Life,” sort of a storytelling show. But you can actually apply them to really tough financial concepts. So we did “Planet Money” for five years. And during “Planet Money,” I realize like, OK so “This American Life” worked. “Planet Money” started developing this large audience. And then I was like, wait. I think there’s a business here. And we did a, uh– we did this project at “Planet Money” where we went around the world. And we talked to all the people who are involved in making a t-shirt. And we actually made that t-shirt. And then we told our listeners that we were going– you could buy the t-shirt that we are going to be documenting the making-of. And we thought, like, a couple, maybe, I don’t know, a couple thousand people would maybe buy the t-shirt. And we ended up selling I was like, that is some really interesting audience engagement. It feels like there’s something here. So after mulling it over for a long time, I decided, OK I think there’s a business here. And I set out on my own to launch it. And I put together this deck. And I was, sort of, talking to people about like, look. I’ve done this show, and this show, and they’re at the top of iTunes. So give me money and I’m going to make more shows. I was telling people like, look. Podcasts are coming to the dashboard. And I thought I had a pretty sweet– sweet deck. And then– But once I actually started going out and pounding the pavement, trying to raise money, it was much more difficult than I thought. And that made me realize, like, wait a minute. In the creating of the business, I’m going to go backwards. There’s an actual story. So I started recording my conversations with investors that I was trying to raise money from. And I put it into a podcast called, “StartUp.” And it also went very well. But I’m going to play a couple of clips from that. So– so– and the very first episode featured my disastrous attempt to pitch Chris Sacca, a venture capitalist in California. Anybody familiar with Chris Sacca? Um, yeah, so this is me. I get together and I’m, like, making my pitch. And I had put it– and basically we met in a sushi restaurant. He got me out. I thought that we’re going to be in some boardroom. And he was like, Nah, let’s go out on the street, make your pitch there. I didn’t have my laptop with me. And so I’m sort of stammering through everything. And this is just a sample section from the pitch.

[AUDIO PLAYBACK] You got to tighten up your story. So this– Well, start again. Yeah. So you’ve now kind of– All right– Really tight this time. How are you going to make money doing this? So, you make money a combination– so there’s three major– there’s three major revenues– streams. I start again. I meander my way through the ad rates, “Planet Money.” At a certain point, I find myself deep into an explanation of my friend’s successful Kickstarter project. Chris interrupted. So, [INAUDIBLE] your own outline. I did. What you haven’t given me is the outline of your story. Right? If I were calling in Uber right now, and it said, it’s going to be here in two minutes and that was all the time you had– Uh-huh. –what are you doing? So I’m making a network of digital podcasts that we will– that is going to meet– [CLEARS THROAT] Sorry. [END PLAYBACK]

At a certain point, then in the pitch, he just stopped me. And he was like, here’s how you give your pitch. And he gave me my pitch back to me. [AUDIENCE LAUGHS] But that– I put out that podcast and actually that was like– it became, like, oh this is a really interesting world. Nobody’s gone inside this, and so we continue to do these podcasts. We did, you know, two episodes, three episodes. I thought I’d maybe do four to six episodes. But they kept on going. And we started doing a podcast about all different phases of building this business. And it was like me– sort of me bumbling my way through this thing. But in baring these sort of like– What I realized as I was putting this out there, I got all these emails from people and tweets and stuff. And it was like, Oh my God. I had the exact same thing happen to me. And I realize that the story that you tell, it’s like you’re killing it all the time. But deep inside every single person who has ever tried to start a business, I’m sure, has had a pitch like that– if not worse. And has gone through these things, so then we started– and so we did a whole episode on naming, for example. We couldn’t come up with the name of our company. And I had the American Podcasting Corporation which I really liked, APC. But my co-founder hated it. And then, we kept on getting these things like destroyed by trademark law. And then finally one night, we were at my co-founder’s house. And we went on this foreign language kick. And that sort of led us into the Esperanto dictionary. And we were like, that’s it! We’ll name our company an Esperanto word. And so I have I recorded us having that conversation. And then I came home and I told my wife that we’d come up with the name.

[AUDIO PLAYBACK] Orelo. Orelo? Orelo. What is that? What is that supposed to mean? Well, it’s “ear” in Esperanto. [GUFFAWS] The most odd idea. [SNORTS WITH LAUGHTER] It’s so dumb! That’s so dumb. Ha ha! [CLAPS] God. Ha ha. You said that one’s good, though, right? Ha ha! What? Who’s idea was that? It came up organically. How does that come up organically? I was like– You guys were speaking Esperanto? [END PLAYBACK]

All right, so you get the idea. Thank you. [APPLAUSE] So– I’m just going to speed ahead here. I’ve badly miscalculated how long this would take. So, uh, so, anyway it worked. The weird thing that happened is that telling a story about your own futility at fundraising actually makes people want to invest in your company. We ended up raising $1.5 million. And we have now two shows that are up and running. We just launched the trailer for our third show that comes up. And where we are now– we have two shows on, a third on-the-way. We have a total audience And we’re actually making money. There is actually– you get money. The ads are doing pretty well in podcasting. We have 15 employees.

But we’ve continued to sort of do the “StartUp” podcast. We continue to do it about our company, and then we just launched a Season 2 about another company. I think we’re going to try to make this into a franchise of, sort of like, documenting startups in the process of going through the thing. But the piece of– the last piece of tape I wanted to play for you is from a more recent episode of “StartUp,” which was actually after our company was launched. And we’ve been up and running, and our second show, “Reply All” was up and running. And it was a shit show. Like it always is. In the early days as a startup, we didn’t have enough people. We didn’t know what we were doing. Everybody was running around– like, we were being very, very inefficient. And we’re trying to get out these podcasts. And there was some very, very late nights on the “Reply All” for everybody. And PJ– and then we decided to sort of document what was happening the week where we had this sort of horrible late night– Things kept on breaking and not working. And then stories ended up being not that good. And we would do edits, and they wouldn’t work. And then we’d have to reconfigure everything. It still wouldn’t work. And PJ, the host of “Reply All” ended up being at the office And then he was there till midnight on New Year’s Eve. And the he was in the morning on Christmas Eve. It was just crazy. And so we decided to document it. And then talk about what happened. And in the documenting of that, I learned something I think– a very valuable lesson I want to share for other people. So, I’m going to play two little pieces of tape. First– so this is just PJ sort of talking about the week.

[AUDIO PLAYBACK] You know, I have a weird rash on my foot that I need to see a doctor about. And I think I have gingivitis, but I can’t see my dentist. So I’m just like– I don’t know. I have, like, mouthwash at work now because I’ve got, like, anxiety that I’m getting really bad, like, weird mouth rot because I can’t see a dentist. [A WOMAN GIGGLES] Um, I’m out of laundry. And I think if I don’t wear clean socks, the weird things here on my foot is going to get worse. Ha. Like– I keep thinking I’m going to have a stroke. I had a friend who was a manager of a bunch of American Apparels, and she was like 23. And she had a stroke. And I was like, how do you– how does that happen? She’s like, I was under an insane amount of stress. And like, a 23 year old shouldn’t be managing bunch of stores. And it could just happen. And I keep wondering like, was this how she was feeling and could she possibly have been feeling worse than this. Like, I wanted to call her. What do you– what do you think should be done? We need another Alex. Like, it’s weird because like, he’s genuinely my hero. And I’m kind of like, what the fuck, man, a little bit this week. [END PLAYBACK]

[AUDIENCE LAUGHS] And– so– that’s really weird to hear, you know, as the CEO. And you’re like, I’m also obviously working my ass off. And you know– so Lesson (one) Hard work isn’t enough. Right? You have to be sort of giving your employees a reason and a glimmer of hope that things are going to change and there’s a reason for them doing this. But then I came back and I tried to address it, and then this is the moment that, like, really resonates with me, and I think about all the time. And hopefully, it will help you.

So Lisa Chow is one of our reporters. And she was sort of interviewing me about was going on. It got all very meta. But at a certain point, she asked me this. She told me this thing on tape.

[AUDIO PLAYBACK] PJ said we need another Alex. And so the other day when you’re talking to PJ, you were like, we’re not going to get another Alex. And there’s also no conversation about potentially hiring more producers for their show. Um– Did– I said that we’re not going to get another me? Yeah. Ha ha! It was so funny to hear you say that because that comment you had forgotten, it was on tape. We had recorded it the day before. [AUDIO PLAYBACK] We’re not going to get another me. Uh, unless you know one. [END PLAYBACK]

I’d totally forgotten I’d said that. And– and I hadn’t forgotten I’d said it. I didn’t understand that that’s what I had said. In my mind I had said, “Absolutely. We need to staff up. We need more resources. We need to do all these things. I’m with you. It’s not going to happen right away. I got to figure it all out.” But my employee did not hear that. He heard a whole different thing. And that was just such a powerful, powerful realization, is that– and, you know, when before you’re a CEO like, what you say doesn’t really matter. People aren’t really listening to you that much. [AUDIENCE LAUGHS] And all of a sudden– and you, sort of, become comfortable with that, especially if you’ve been living with that reality for 45 years.

So– and then all of a sudden, I’m in this place where like, people are really paying attention to what I’m saying. It was a very, very powerful lesson. And it was a powerful lesson of sort of like, um– again, the power of recording– recording what’s going on in your office is not a bad– is not a bad thing to do. I’ll leave it there.