It fell out of my price range whereas 20 bucks does feel like something that you can spend at the farmer's market on pops,
clothes and coffee or something. When we launched we said it's the cost of like basic Starbucks coffee. So now that it's $2 per month,
what do you get for $2 a bus ticket? Actually cheaper than the bus right in Seattle.
Hello, Hula and welcome. Episode 63 of the Metacast Behind the scenes podcast. I am Arnavdeca,
co-founder of Metacast and with me today we have all of Metacast. Why don't you introduce yourself?
I'm Liebizd with another co-founder of Metacast. I'm Jenny. I'm a software engineer at Metacast
and I'm excited to be here at the Saul Hands. It's a public all-hands today, right? About six months back,
Jenny we had you back on our episode number 18. So welcome back and today I think we have a pretty
big announcement and a pretty interesting thing to talk through. So stay with us. Lia, do you want to
talk about this big thing? Introduce the topic. Yeah, so we launched Metacast with the Metacast
premium subscription which costs 50 bucks a year or five bucks per month. We even actually wrote a case that you know how we came up with this pricing but a couple of days ago we had another all-hands private one and we sort of started talking about how that number just doesn't feel the
right. It feels like too much and then within a few minutes we made the decision to lower the price and then we spent another hour or so justifying the decision that we made in a few minutes
because I think that decision was cooking for a long time. I think we all felt that it kind of
had to be made and I think we came to that independently. It was one of these decisions we made
in the last few months. Yeah, we were feeling like it already but there was also a few
Reddit or even private messages. We heard from a few people saying that that's like too much.
Right and some of that was explicit. Some of that was implicit where we were on the
Reddit of another podcast app where they were discussing pricing. I mean users were discussing
pricing. Yeah, we kind of got the ballpark idea from that discussion of what people expect to pay
for a podcast app because we are not in this market alone. We have competitors who also have
premium subscriptions. So folks like pocketcasts and overcasts and others but we also have three apps like Apple Podcasts and I guess Spotify is sort of free but if you're already paying for premium
subscription the podcasting kind of comes for free with that. We are competing with an option that
essentially is zero. Zero dollars per month even though it's crappy but it is available. Yeah, we just had this thought that maybe 50 dollars is a bit too much for an app that's not critical.
So the price needs to become more affordable and just to recap initially we wanted to have three plans.
Actually, I think we want to have four plans way back when I was in Vancouver. It was going before
Jenny joined. We were sitting on your porch and we were doing this table together. So we had the
free plan which was ad supported with a bunch of limits like you don't see the transcript. You
don't have the custom playlist and stuff like that. Then we had the no ads plan which was basically
the same as free but the ads removed and we had a premium plan. That's what we launched and then we also had like a supporter plan which was double the price of premium with no extra stuff.
Triple the price of premium. Yeah, like when supporters you can pay more and then what we launched
with we decided to not do the supporter plan because it just didn't feel right. They even got
some extra money from super supporters. It would be confusing for everybody else because normally
you don't want to have too many plans. And then because we didn't have ads, we did not have the
ad free plan. So we ended up with just the premium plan. And the pricing that we arrived at was
in big part dictated by two factors. So first was how much it costs us to do the transcription.
And I think it was probably like 10 times more expensive a year ago than it is right now. It was
way more expensive back then. And second, we didn't know how many episodes per user would have to
be transcribed. So we were worried about the cost that we would incur. So we set a price point
that would keep us safe from the costing perspective. And it also felt kind of a good number
50 bucks. Yeah, the other. I think the time has passed because when down we also now know more
about user behavior. One thing I would say is maybe the three of us were all feeling that $50 is
too much. But I'll point out in that meeting, Jenny was the first one to outright say it's like
50s too much or something like that, right? And till that point, at least for me, I had a feeling that 50s too much, but it had not become like that obvious to me yet until like both of you echoed
or not even echoed like you spoke out loud about it. Jenny was a trigger for the discussion
for sure. I have been thinking about this too, but I don't know how much longer it would take me
to actually voice this out if Jenny didn't. So thank you. We all I think are living on budgets,
working for a bootstrapped company for a year plus. And it fell out of my price range. And
a podcasting app is something that is not mission critical to most people's daily lives. Whereas 20 bucks does feel like something that you can spend at the farmer's market on popsicles and coffee or
something. And it's just like, okay, you know, that was a bit lower bar to justify treating yourself
to some premium features in a podcasting app. When we launched, we talked about it in the podcast
the pricing last time. We said it's the cost of one Starbucks like basic Starbucks coffee because
it was $5 at that time. So now that it's $2 per month, what is that? What do you get for $2?
A bus ticket? Actually, cheaper than the bus ride in Seattle, I believe. The last time I checked
it, I think it was $2.25. I guess $20 per year, that would be like a nice sandwich. Like if I go to a nice Vietnamese restaurant, I might get a ban me and that ban me with taxes and tips might come
up to about $20 in Seattle or Vancouver. So I also want to share an anecdote from a password app
that I use. So around this time of the year, you know, this one password app. One password app, okay.
A password app. I get an email that my subscription is going to renew for another year. It happens
sometime in October and I believe it's about $35 or $50. Something around our price range.
Oh wow, you're on a personal plan. I'm on the family one. It's like $65 or $70.
So you have two password, three password. Yeah, I just have one password app. Every time I get this,
I'm like, shit, 35 bucks. It's not much and it's a critical app that I use every day, but I'm
still annoyed so much at that charge. Maybe I know it is not the right word, but it bugs me.
It bugs me that I have to pay this. So imagine how you would feel if you paid 50 bucks for a
podcast app. So it does feel is a reference point. Yeah, now that you say this, I now remember every
year in August, my drop box subscription renews for $155 per year. So here's the thing like every year,
I decide, okay, I need to move all this. I have a lot of like all my life history documents,
everything is in there. And I need to move all that stuff over to Google docs because I already paid for Google one and it would save me a lot of basically $155, but then I forget about it.
And I think it's October now. So I already paid for this year. I think I need to calendar,
diorize this and do it at some point. But anyway, $50 because of these reasons, it felt too much.
We were also hearing from a few users and Jenny came out and said, it's just too much.
Also, yeah, so we decided to we had a good conversation about it. So like Ilya, you said,
we were going to have four plans. Then we already came down to three, the free, the ad free,
and the premium. And we just had the premium at this point. So we were going to have a ad free
plan at $20. But as we thought through it, it became apparent that adding ads would make the
free experience even worse. Well, I mean, even worse. I am playing with our free experiences bad.
No, so if the free experience was great, then you'd think more and more users would convert.
$50 is probably a barrier to that already. But right now, if you're a free user, unless you go through the act of signing up for the free trial, you actually don't get most of
the benefits of the app. And that itself, the act of going through the free trial, even though
you know that you have free for two weeks, is a commitment. That is one. But on top of this, so if you don't sign up for free trial, you get like a podcasting app, but adding ads on it
makes that experience even worse. So what we decided was to bundle up everything, like the current premium option and the ad free option into a single $20 plan.
We also were incredibly reticent to add ads to our app because we want to build an app that people
enjoy. Of course, we want to make money off of it or in a living, but it's kind of a gut punch.
No one enjoys ads in an app. So to add that to an app that we've put some love into does not
sound like fun. So I think that we're kicking that can down the road as far as we can. And ideally, indefinitely, because if we can make money off of our existing plans, then you know,
hopefully we don't have to ever add ads. I would rather work on like adding features than adding
ad support for sure. Absolutely. At the same time, I would say ads can be done tastefully, but that
itself requires a lot of work. So typically, what you would do is slap on something like ad mob
or Google ads or something like that. And then you don't really control what exactly will be shown.
I think Ilya, you were talking about it the other day. Your son was using a dinosaur game app, right?
Yeah, and there wasn't ads. It's a first person shooter where people have been shot and there is
blood. It's not too bloody, but it's violent enough for a six-year-old, okay? And then it's one of
those ads where to dismiss it. You need to play the game a little bit. So it offers you the option
to like pull a trigger a few times on people. And it just doesn't feel right to have that kind of
experience in games. But I think the matter point here is just how bad ads are. They sometimes are
not just irrelevant. They are actually disgusting to say the least. And like you were both
were saying, is that the experience that we want to have in our app? Unless you're super desperate, I would say no. I think what would force us or force anybody to add ads is if they have a very large user base, but almost everybody is a free user, not enough people are converting to the
premium options. And that would make you add ads, right? Like that's the classic end-scientification
of like pretty much every app we tend to see. But I think that's where like we would rather lower the price of the premium and make that experience better and better so people convert to that.
This is actually with point. I think what we are seeing with the inscientification is mostly social networks where actually if you start charging for the app and you lose with the 80% of the user base, then the app becomes less valuable because you actually want to have people on it for
the app to be valuable. Since our app does not have the network effect, at least not yet. And some
other apps don't either, right? So I don't know, maybe it's better to have fewer users than to have
a shitter app. I think dual English actually is a good example. It doesn't have a network effect, but it has so much value that people are actually willing to sit through ads to get the experience or they're just willing to just pay for it and remove the ads if they can afford it.
There's another reason I can think of why companies add ads. And I'm remembering a while ago,
you know I'm an Android user, and I was using Stitcher as my podcasting app. And Stitcher got acquired by SiriusXM and there was an email sent out that it was shutting down within
X number of months. So I started researching other podcasting apps for Android. This was well before I joined Metacast, but I was reading reviews for this one podcasting app and all of the most recent reviews for people complaining about how it had recently gotten so much worse because
of the ads that were added. And the customer support person clearly was just like copy pasting.
The response was, I'm sorry, but we are a VC backed startup and we need to make money basically.
So that was another reason clearly like the investors were expecting the earning to be higher than
it was. And so they were told, hey, ad ads in. To be fair, I think VC backed, they were forced to
add ads by the VCs possible. But let's say you have an app, right? Our app, a lot of people use it,
but not enough people convert to it. We have costs associated with the app. We have to figure out a
way to like support that. Or otherwise, it's basically game over. Yeah, or you take away features,
make them paid, and then some people churn, some people stay and pay. So talking about that,
let's spend a few minutes talking about our costs for running the app itself. And that was one of the reasons like Ilya you said originally, we didn't know how much it would cost to run the app.
So we were like, okay, let's start with 50 plus it's always easier to announce that you're reducing
the price than to announce that you're increasing the price. So it's always better, I would say,
to start higher, figure out how much your costs are, how much you're pricing. I don't know that we've achieved a sweet spot or we would with this change, but you're at least getting more and more
visibility, more data about what feels right. So our app, we have some infrastructure costs, like website and transcribing episodes and all that, which is all of that is decreasing.
And overall, I think at our current scale, how much were we spending about 120 dollars a month?
Yep, some of which is actually fixed cost. So we decided, okay, that's not a big huge risk.
We have more information about it now that we've been running it for a few months, at least at this
scale, right. Plus we figured out that we have put spend limits. Most providers of infrastructure
allow you to put like spend limits and we've put spend limits. So the worst case is like if Metacas explodes tomorrow, right, like somebody goes to like Kamala Harris, I don't know, somebody goes and says,
Oh, use Metacas. And the whole world is like, okay, I'm going to get Metacas. What's going to happen is our spend limits will kick on and things will start failing versus the other possibility of us
not realizing this and us having like a million dollar bill at the end of October. So this is a
better problem for us to have, I think. And we take a decision at that time. What do we want to do?
Do we want the service to fail or we're ready to start paying for all these?
Right. Yeah, we were also talking about if it gets too expensive to run, which cannot happen in one condition is because we have too many users who probably don't pay, but we do have users
who use it, right. That would be a good problem to have because then we can figure out what to do
with that. Maybe even take investment if that's what it takes to survive. We don't know, right?
Because right now we've just launched, but overall, I think it's a better problem to have
than to have very low costs because normally it's easier to wrap. It would be a lovely problem to have.
It's like the ultimate risk conversion. Yeah, right. We're safe. No one's using it.
Let's not publish it. Okay. And finally, I think we combined the price, made the premium
$20. We haven't implemented it yet. We'll talk about that too. If we want to in the future, like let's say we do want to have like a super pro or premium or supporter or whatever,
with extra things in there, we can add that. That option is always open.
I have a name for this. If you follow the Microsoft Playbook, we call it the premium one,
which will be the one notch above. And then the next one we would premium one 360.
And then the one above that will be premium one 360. If you have no idea what I'm talking about,
just follow the Xbox. We're pretty names. Yes, there are some hilarious cartoons about it too.
Like Xbox one X Xbox one Xbox X. They should follow the Elon's Playbook. They just X
all letters in the name. So what's our plan for rolling out this pricing change? What are we
going to do for people who are currently paying? When this podcast comes out, we will have already
reduced the price to 20. It actually will be 1999. And for the people who have started subscriptions,
all of them had the 50% off deal. So they paid 25. Except for me, I paid like the full price,
Ilya. Are you complaining? No, no, I'm not. Well, I wanted to pay the full price, but I didn't have that option,
unfortunately. Maybe I should sign up with another user ID to say, can also pay double to support
our little team. No, you can't, right? In our app, you cannot pay the full price. Right now,
because of the intro offer is there, you don't have an option to pay the full price. But if I sign up from two different accounts, maybe my mother-in-law signs up and I just give her the
money back. So we have two paid accounts that I'm paying for. So then we'll be in the same boat.
It's too complicated. Anyway, so those users have paid 25 bucks. So when we announce the price reduction, I think what we will do is we will just say that if you feel like getting the five bucks
back, send us a note and we will figure it out, the way to refund it. Personally, I think nobody
is going to ask for this. If you leave that option on the table, I don't mind giving the refund.
I also don't mind keeping the money. So the good thing is like nobody paid 50 bucks except PRNM because that would be annoying to pay 50 bucks and then have a price reduction two weeks later.
Yeah. So, Ilya, what's your plan for that blog post we have up there, like discussing why we
arrived at $50 and all that? The case study. We could update that blog post. That's the cool thing about those blog posts that live on your website because it's not like a social media post.
If you send out and then it's acting for a couple of days and then it's gone, they can be updated
indefinitely until it's no longer the same content. But I think it will be important to document
our decision there too. And actually, over time, if we see some changes because of the pricing,
we could also keep updating that blog post. All right, that's a pretty good suite and short
and I think especially suite update for people who want to pay for the app. Let's close like we
always do with what we are all listening and reading and all that. Let's start with Jenny.
I've been kind of getting more into watching like stand up comedy. So the podcast that I've been listening to lately and enjoying just going through their back episodes because I recently
discovered it. It's called Handsome and it's got three comedians, Tignitaro,
May Martin and Fortune Femester, I think her name is. And they truly are unscripted and they're just like chatting and then somewhere in there, if it's one of the longer episodes, there's an audio clip of someone famous asking them a question and then they respond to the question themselves.
But it's like they just go off on these tangents. Sometimes it's very funny and other times it's just like you're listening to people talk like you're at a dinner party and you're just enjoying
hearing what they are talking about. So that's my recommendation. I am actually I have a follow-up
question on that. I've never heard a stand up comedy podcast. I'd actually never even considered that as a format because for that I usually go to like YouTube because I want to see the video also.
Sorry, I think I was unclear. I'm getting into like watching stand up comedy on Netflix and I was on prime like those back catalog things that I just have never really paid too much attention to.
And because I've been watching some Tignitaro things, Tign actually has a really good documentary on Netflix, then I started listening to this podcast.
Gotcha. Cool, cool, cool. All right, Ilya. Yeah, my most favorite episode of the last couple of
weeks was the Mark Zuckerberg interview on the acquired podcast. It was a live show in Chase
Arena or the Chase Center. Actually, I don't know how big it is. I said a few thousand people
were in attendance and they interviewed Mark live. I changed my perspective on Mark Zuckerberg
after listening to that. I can freely enjoy the discussion that they had and I think the point
that I took out from it, like the meta point is how meta is really good at execution. They're
really good at out executing others. It's a business book called The Fast Second, which was one of
the required reading when I was doing my MBA. The idea is that it's common wisdom that it's
important to be first to the market. But what the book authors argue about is when you're first to the market, you sort of stumble a lot, you fail a lot, and you have all that cost burden of being
the first. Whereas a company that comes following footsteps and not making your mistakes and they're fast and really good at execution, they can actually outperform you and they have a bunch of examples where the thing that actually became the industry standard in different industries
was not the first to market. It was The Fast Second who followed in footsteps. You know, like in Formula One, if you drop behind the car, you actually get the benefit of being behind that car
because of whatever. The airflow goes in different ways, right? That's what meta has done with
the stories and they bought the Instagram. They were late to messaging. They bought the messaging.
I was listening to this and I'm like, wow, this is a really strategic way of thinking. It requires some of the sort of ego-less approach to work overall where you're like, okay, so Facebook is dying.
So let's buy something else, work on something else. Snap introduce stories. It's like, yeah,
existential threat. Let's add this to Instagram. Now, who hears about Snap? Maybe it's like kids
who use Snap? I don't know any adults who use Snap, but Instagram is all over the place. So yeah, and just like hearing to Mark talk was really inspiring in many ways and I really enjoyed that.
And I bookmarked it episode all over in the awesome app called Metacast that allows you to bookmark
transcripts. I do think we need to add some more functionality to the bookmarking, but that's for
another episode. You should be able to search through them. Right now, you can see a list
of all your bookmarks and you can jump to them and all, but there's more things we need. It's coming.
Should we rename them to podcasts? There's probably a thing called podcasts already out there.
Yeah. And so there's a method to listen to the Mark Zuckerberg and make podcasts.
Yeah. Talking about your Mark Zuckerberg that interview, did you listen to the hard fork?
So Meta announced like lots of new things, right? There's a new VR glass, like a cheaper one,
new ribbon version two coming soon and all that. So it was really cool. The thing that I really found interesting is for Apple and Google and even AWS, all these announcement conferences, the keynote speaker or the first person like the CEO or somebody would come in and set the high
level stage and then other people come in and do like exciting introductions of different things.
Whereas the whole meta thing apparently Mark Zuckerberg did it himself. And hard fork has a really good take on why maybe it speaks to some of Mark Zuckerberg's personality and how much invested
he is in the company and all that. Have you listened to the acquired interview? No, not yet.
I am still unacquired on the Microsoft part two, I think. So it's still with like our six
or five episodes. So at the end of the episode after the interview, Ben and David, they reflect
on how the interview went. And one of the points that they brought up, which is really good, Meta point, is how for Mark, it's been 20 years of him working on this thing and Meta has more of quite a bit
from doing the Facebook website and then into like mobile apps. Now they have this, they all pack
a long model and all that stuff. They have become a platform. They have the open data center, open compute project that actually changed the standard, help standardized on the data centers
on the same standards across the industry. So this kind of stuff is just so interesting actually,
I didn't even know about. But the sort of serial lining there is that it's Mark's project.
So Mark is the founder that just keeps doing this. So he's been doing this for 20 years and he'll
probably keep going until maybe he's too old or incapable to do it anymore. Unlike some other
founders who just like move on to other things, actually folks like Bill Gates come to mind. So he
eventually stepped out from Microsoft all together. Whereas Jobs, if he wasn't kicked out, he would
have been doing Apple like his entire life. So you can't imagine folks like Jobs just walking away
from his baby. And that's kind of similar to Mark and also compared him with Jensen Huang from
Nvidia. It's just like he's going to keep doing this until the end of time. Right.
Anyway, so what about your? I am into ancient history and all that. Like history is one of the genres I spend a lot of time with podcasts on history, science and right now like daily news,
politics and all that because of US elections coming up. So episode 4446 on the Lex Friedman podcast is with Ed Barnhart about South American and more interestingly, North American
ancient cultures and civilizations that have been lost. So there's a fair amount of talking about
Mayans, Aztecs and all that. And I learned a lot of things that I had had not known. But I also
kind of I had a pretty good idea about the Mayans and Aztecs at that superficial level. He also
talks about like these in the Mississippi, Louisiana area in the US. Apparently there's a lost
civilization. And now we are starting to call them Mississippians. They used to build pyramids and
all that. That was like fascinating. So it's a good episode. Think about three and a half hours
long. I finished it over about three days. And that's my other second meta point is Lex's episodes.
I feel like they're becoming more and more engaging now. Whereas even earlier, he would have super interesting topics like alien civilizations and all that right or Big Bang or the universe,
how did the universe start and really good guests coming in. But I could not listen to them for
more than an hour or so. Both the guests and Lex would start drifting into very abstract kind of
ideas and all that and you could not relate to that anymore. I've started listening to Lex end to end now the last few episodes and I'm in the middle of the another episode right now maybe
next time I'll talk about it. But I feel like he's doing a great job of keeping it engaging,
coming back to like stuff that I would love to listen to again and again. Yeah.
Nice. It took me forever to start listening to Lex. From what I saw, I didn't feel like listening
to him at all. And until I came across this polaroidly episode because polaroidly was so engaging.
I kind of like Lex's style and sort of calm. In some way Lex and Rogan, they have similar guests and they drift into sort of similar topics quite often including the alien civilizations,
the psychedelics and I think the political views are pretty close. But Rogan is sort of a little bit more like out there more extroverted Lex is almost like behind the scenes just asking the questions.
I feel like I prefer Lex's style. I think political views wise to Lex is very central. Rogan is
definitely not. Okay. I think that was a good hopefully this is within our 30-minute
Puta ish. Maybe a little over 30 minutes or a little under we'll see. Yeah. So where can people
download that? All right Jenny why don't you talk about it this time? You can download our app
at medacast.app or in whatever app store you download apps. You can go to Google Play Store in social medacast or you can search for medacast in Apple app store where we launched just a few
weeks ago. And this podcast and if you want to reach out to us about the podcast have any feedback
you can send us an email at helloatmetacastpodcast.com. Yeah we've been getting a lot of feedback at that
email with like how I see your in the B2B space do you want to scale your sales team? Most weird but
it felt like human written spam. I don't even know if it is spam exactly I don't want to classify
the spam. Recently we received was construction industry. We can help you build something physical
and we're like I don't know if this is spam or not was weirdly interesting. And on that weird note we will see later.