Paul Kemp: I want to say I'm really thankful for you coming on, as well. I know that we've got some really interesting topics to go through, and I think that will be fascinating for listeners of the appster tribe.
Let's start with your story, Leela Apps, first of all. Tell us what Leela is and what it does.
Sandeep Jain: Sure. We actually have two apps on the App Store. The first is the Leela Podcast App, and the second one is the Leela Kids Podcast App.
Regarding my story - I was not planning to start that company on podcasting. What I was investigating was to start a company on online marketplaces. Then a friend suggested to me to listen to a podcast episode from Andreessen Horowitz, the podcast called a16z on online marketplaces. I was like, "I'll listen to that."
First of all, it took me quite some time to find that particular episode on the podcast app, and on the iTunes standard podcast app. But when I started listening to it, it was exactly what I needed to listen... Because here was a VC who invested in and out in this space, and they were giving a framework for an early stage founder like me.
When I finished listening to that, what really stood out to me was -- I live in Silicon Valley, and I was really not aware that this content existed. My knowledge sources are going to the search engines, looking at business magazines and analyst reports, but that podcasting has this interesting draw of information, both for personal and professional use. To me, that sounded like a really big opportunity to tackle, and that was my entry into the podcasting universe.
Paul Kemp: That's why I love having you on this show. My show has been running for a long time now - you are episode 534 - but what I love is that you were inspired by one episode, and there's so many different wonderful resources out there, and I cannot remember in my entire life being that inspired when listening to the radio, or just watching a TV program... But you're right, podcasting has this impact on you. What happened after listening to that episode?
Sandeep Jain: First of all, an idea struck in my head that "Hey, this is information that most people are not aware of." There had been studies on it, and the research says 40% of Americans are not listening to podcasts. I talked to my friends and folks that I know in Silicon Valley, and about 5% of those listen to podcasts. Then I looked into the industry, the products... Most of the podcast apps I found for listings of channels and shows - to me it was like what internet used to be before Google came along. Like, you have to go to the Yahoo! search engine, in the directory, in the right place, and then you have to look for things. Then Google came along and was like "Look, just tell us what you're looking for and we will just tell you what is the right resource there." I found a similar problem in podcasting. But the thing is, for me to leave the job and start working on this full-time, there needs to be money that could be made.
My two early observations were that music companies like Spotify, Pandora, Soundcloud - they have a challenging business model in my mind, because they have to pay license and cost at the backend everytime you and I are using their app. They have to pay the creators.
In the podcasting universe, 95% of the content is free, which means that apps or the platforms are not incurring any licensing costs when they are playing the content. That was a big plus for me as a business to run.
Secondly, I looked at the online radio ads industry. I think that's about 18 billion dollars in the U.S. Podcasting, I believe, is around 200-300 million dollars annually. For me, that's a big, big opportunity for growth, and I needed to find out "Can this growth be driven by Leela Labs? Is this a technology problem or is this something else?" In my mind it's a technology problem, and that's when I decided to really leave my job.
Paul Kemp: Let's talk about that part of your journey. I always love tapping into how entrepreneurs like yourself actually have the courage to leave a very stable salary. Tell us how you actually did that.
Sandeep Jain: I have started a little late, I'm not a 20-year-old getting out of grad school and having tons of ideas, can sleep on the sofa and work on the startup. I have a family, I have a wife and I have a child, and I'm middle age, and I'm living in Silicon Valley, which means the salaries are really high... So it was a really tough decision to do that, though if I look back, I would have done it slightly differently.
Here's my theory on this now - when you're working, you have a lot of money that you're getting through the salary, but you don't have a lot of time, because you're doing a full-time job. When you leave your job, that equation changes. You suddenly have a lot of time, but you don't have this incoming money.
The right way in my mind to leave your job is if you're convinced about a particular idea, then spend at least 20% to about 75% of your salary in your idea that you are working on. Let's say an engineer in the Silicon Valley would be paid 120k annual salary. Your monthly salary is $10,000, so 20% of that is $2,000, and 75% is $7,500. Take aside that money from your incoming paycheck and invest in your idea.
Maybe it's for paying the contractors to get your app done or your mobile website done, maybe it's to get the designers to get your logos etc. You will tend to overspend, because you are not trying to maximize or optimize every dollar, so to speak, but what this gives you is when you have incoming money into an idea, there is a momentum in your idea, in the sense that you are seeing a product being built. Now, maybe it takes more money, a little bit more time, but you are putting the resource that you have, which is money, to the best use. When in three, four months you see some sort of traction, then you can leave your job and work on this full-time.
Leaving the job just based on an idea in your head - I don't think it's a wise financial decision, which is what I did, by the way.
Paul Kemp: It's what I did as well, Sandeep. You know, in all these episodes, that is one of the best pieces of advice about leaving a job, and you've almost boiled it down into a very scientific formula. It makes a lot of sense, but I guarantee not a lot of people are actually following that advice. They just go on a feeling... Or like me - I was unhappy, I needed to do something else, and I just quit. I now regret that. I wish I had followed this advice.
In terms of your story, you did actually quit... Why did you go in with someone else? What's the importance of having a co-founder?
Sandeep Jain: My story was I left my job and I worked on this full-time myself. I knew that I wanted a co-founder, but I did not spend time to do that until I was about 10-11 months into that. That's another thing that I think you should not be doing, or I would advise anybody not to do that. My background is in tech and product, so even if I hadn't coded for the last five years, I thought I could do it, and I did end up doing it.
My theory was that it would take me quite some time to find a co-founder, and once I left my job, I would rather invest every minute of my time in building the product that I thought about. That's a fallacy, that's the wrong thing to do. I think your every minute needs to be spent in growing your company. The product is there, but you need to think about the company. That's the role of the CEO of the company.
A company is built on multiple people, not just a single person, and the only way to attract multiple people is through capital. You would have to have a co-founder no matter what. It's not a if-question, it's a when-question. The problem in hiring much later is that this person has not gone through the decisions that you have to make on a daily basis on what to do and what not to do. This person will be joining you late in the game, and they will probably take a similar amount of equity that they would have taken earlier, and what you just lost on was the value that they could have delivered to your company from day one.
The challenge is it takes time to find a co-founder; I would say at least 1-2 months. It is not a phone conversation thing, it is not like "Hey, let's meet on a coffee thing and I'll like you. You seem to be the tech guy that I needed, let's work together." There needs to be a dating period, which means I would highly advise your audience that if you're thinking of somebody as a co-founder, just figure out a few tasks that you can work together on without this equity and this money business. Just get a feel of each other. "Do you like the things I like?" Do you like each other when you're disagreeing on things?
Once you pass all these milestones or barriers, then only start into that conversation about equity and "Let's work together." I've had too many of these bad steps... You meet somebody and say "Let's just do it together." That's not how you build a company, that's not how you build a professional relationship, that's not how you marry somebody - which is the analogy that I use for myself when I'm building a company. It's like a marriage, so you've got to get to know each other carefully. Sorry, that was a long answer.
Paul Kemp: We've had many past episodes where one of the biggest challenges of a startup is founder disagreement as well, so you're right to call it a marriage, and having a good dating period is probably important, because then it tries to avoid a messy divorce.
You mentioned coffee, and having these coffee meetings. Many of us do have these little chats... I wondered how you make these productive, because often they're just chats and they seem to get nowhere.
Sandeep Jain: Right, I used to be on that side of things as well, where I am living a corporate life, and I get out of the office and I do need a coffee; how about just meeting somebody over coffee for that? The problem with that is - at least from my perspective as a startup founder, I don't have a lot of time, I don't have a lot of money... All of my time and these coffee meetings need to be productive.
Once you leave your job, there are people e-mailing you, "Hey, let's meet up for coffee. It's been a while." I think as a founder - and I quickly realized that - you want to be polite to your friends as well, but you need to quickly think that all these meetings are at least one hour of your time, and time is money for you as a founder.
If you are meeting somebody, make it goal-oriented. Have a -- not like an agenda, keyword or something like that... But just say "Look, here is what I would like to discuss or get out of the meeting." I think that the social meetings of "Let's just get together and have coffee" is just a sheer waste of time.
If a founder is trying to get out of their daily work routine and have some relaxation at a coffee shop, that's okay. But if you really want to extract something out of this, do set that expectation with the person that you're meeting, that this is what you want to get out of it.
I was getting some repetitive things from somebody, and if you don't reply or you reply late, people get an idea that you're probably too busy, and I think you are.
Paul Kemp: You know, you mentioned something there about the transition of working in a corporate environment and you don't worry too much about having coffee meetings, because it's not really your expenses... And yet, there is a culture shock when you transition to this other side of life, where you're then responsible for your income, you're supporting your family. Any advice on how to get over the culture shock of jumping straight into a startup from a corporate environment?
Sandeep Jain: I think for me it was -- I call it a "culture shock" in the sense that you expect, when you leave something behind and you're working on an idea, you want validation; that's the number one thing that you are looking for as a founder, either from customers, your family, and even from your friends, that "Hey, what you're doing is the right thing. Just keep on moving!"
It's not like they should not be telling you what your blind spots are, but what you look for is somebody that has got your back. "Hey, look, whenever you need help, we will be there."
The challenge is that I think some people do not help you the way you think they should have helped you, and when that happens, it kind of hurts emotionally. When you are doing your own company at my age, you need all that support. It's emotional, and all that kind of support from your friends and the people that you trust. This is the sort of thing that will happen to people where some people will not help you the way you think they could have helped you, so it's just being emotionally prepared that this is going to happen, it's not whether it's going to happen.
If you have that thing in your mind -- I did not when I started... I thought "Everybody's going to help me in this", but then people did not. It was tough, it was hard. What I decided after some point was that "Look, I will put people in two categories." Maybe it's not the right way to put it or say it, but at least this is how I put that in my mind. One is the people who really care about me as a person, and who are invested - not financially, but invested in me being successful.
The second is the people who are just drive-by friends, so to speak, who are there just because of your social strata, but they do not care about my success or my company. I quickly decided where to spend most of my time and to ignore the rest. I don't know if that makes sense.
Paul Kemp: I'm really connecting with you here, because I had the same kind of feeling. A lot of people are in your professional life because of your work; all the friends you think you have in the company, that as soon as you're on the other side, you're out of the family. You have to get used to that, and it was really hard for me initially to have that adjustment, and then realize that "Oh, you're on your own, and you have to meet these new like-minded people who share your values", and that's why I jumped into podcasting eventually. That's where I've met like-minded people, not in the circles I was going around in my previous career... So I'm really feeling for you here.
One of the big challenges is getting PR and getting out there... I know that you mentioned in your e-mail to me that you had a PR hack. I wondered if you could share how do you PR hack yourself.
Sandeep Jain: Sure. When I was releasing the apps I used to look at a lot of blogs as to how to get the attention of the media - unpaid media, in particular. There's a lot of articles on that, and I did read most of them, I would think. I'll tell you my strategy was. It may not be different from some others, but I'll just share it with you.
My business was in podcasting, so I did a Google search and Google Alerts for all the reporters who were talking about podcasting in the last year. I made a list of them. You can get their e-mails, it's not that difficult; there are multiple tools out there. One thing that I did not know and I realized months later was most of them are on Twitter. Actually, I knew they were on Twitter, but this is one thing that I didn't know - most of them have their DM's (direct messages) open.
I'm not a social media wizard or whatever - I sometimes stick to Facebook - so I'm still discovering all these new things... And what I found was that if you DM a reporter with a small text which really applies to what they have done, they will correspond back with you in some ways, and you have to ping them once or twice so that they do it. That really helped me, so that's one.
The second is I did not spam any reports, which means that if you are a reporter covering food in a publication, you would not see my e-mail. It has to be highly relevant. That's a discipline I would say people need to maintain.
The third is the subject line. That's all you have got. I think most blogs talk about this. I'll give you a concrete example. Leela Kids App - this is an app where kids can enter their age and the category of what they want to listen, and it starts playing stuff. We were the world's first podcast app for kids (we are, actually). So I said "Look, what does the subject need to be for this Leela Kids App?" We started with "World's first kids' podcast app", and we got a few clicks on that. I later realized that it is maybe too boastful. Reporters look at it and say "Maybe this is too good to be true", so they're not clicking it.
Then I thought what would a reporter write in their article? They're not going to write that it's the world's first kids' podcast app; they don't have time to do the research. They would probably write something like "How to take kids off your phone and make best use of it", "How to make your car trips with kids enjoyable." Once I started using these lines in the subject lines of the e-mail, I started getting more responses from the reporters.
Paul Kemp: Alright, so what I'm learning from you here which is fascinating is almost write the headline for the reporter, which would grab their attention, and they may actually use that in their own writing.
Sandeep Jain: Correct. The problem - and I think everybody knows that - is as a founder, when you're writing about your product, you are just much into your head and you write it as if you're writing a product feature rapport, which is not emotional. There needs to be some emotion in the headline. "World's first kids' podcast app", even though it may be factually true - and it is in our case - it is not emotional. My advice is to come up with a line that is emotional. All of us like those headlines, and I think it's best to turn on the time on each side with those things.
Paul Kemp: In the few minutes we have left... Basically, this is a very genuine podcast, we like to get to the raw truth of how hard the app business is. I remember when I first got into apps I used to just go around telling everybody, and they would say "Oh, you must be a millionaire then. You're in the app business." It has this perception that it's so easy. You just go build it out, put it on the App Store, and then you just watch your money coming in. It is really hard, as I've found... Did you find the App Store really hard? How hard is it?
Sandeep Jain: It is very hard. The problem is there are just too many apps out there, and unfortunately today the primary way to discover apps is on the App Store or on the Play Store itself, so you have to invest in something called app store optimization. In a world where we have limited time and we have given this time to apps like Snapchat, Instagram, Facebook, Twitter, in the just the sheer number of minutes that you have in a day, you are trying to carve out a space in that time saying "Look, it makes sense for my app to be useful for you." That's really hard, because people are spending a whole lot of time on these other apps, and what you're telling them is that you need to take out time from there and they need to start using your app. That's a very hard proposition, especially when you're competing with ten other apps that may be doing something similar to what you're doing.
Even though it sounds sexy to be in the apps business, people need to be aware that for consumer apps to become the likes of WhatsApp, Instagram, Snapchat, it is a lot of luck, and of course, product execution. Just don't go into this for the lime lights or the successes that you see; for consumer apps building traction is hard, so just be prepared for that is my advice.
Paul Kemp: I'm doing a podcasting app, I'm a podcaster, and I just wondered what trends do you see in podcasts? I was very interested when you said initially that there's only 300 million dollars going into podcast advertising, whereas there's an 18 billion dollar industry for radio. Do you see that there is movement in the amount of money flowing into podcasting?
Sandeep Jain: There is some movement, though not to the pace that I would expect, and I think that's a problem of technology. The reason it's 300 million and not a billion plus is because brand advertisers are still not embracing this medium. When brand advertisers spend money, that's when you get the likes of Facebook, that's when you get the billion dollar plus market size.
For brand advertisers, they are looking for two things, in my mind - either it's scale, that you get on television or radio, or you need precision, which is what the likes of Facebook and Google give them. Like, "I need moms who are between 20 and 30, living in this particular city, who are doing this particular thing", which is what Facebook gives. The challenge with podcasts is the audience is not that big like that of radio or TV, and nobody as of today has given the audience-based ad targeting to the extent of what brand advertisers are looking for. Once that happens, I think things are going to change very quickly, but it has to happen from the technology side - how people are consuming that content.
Podcasters are struggling for monetization as well, so I believe this is the tech platform that needs to solve that, for both users and podcasters.
Paul Kemp: How can the appster tribe listening to this best make use of your app? What sort of group are you looking for to download your app?
Sandeep Jain: We have two apps. The latest app, Leela Kids Podcast App is made for parents and kids. I have a four-year-old, and he likes to listen to stories before he sleeps, and we can do only so much justice with that. In our app, you can just select the age category of the child, and there are different topics, like science, dinosaurs, animals... We are adding something new, like meditation for kids, tech and gadgets, world war histories, and lots of different topics. Parents and kids can make use of the app, so these are the kinds of users that we're looking for.
We are actually looking for podcasters as well, because there are a few things that we are working on in our app. Some podcasters, as you know, raise money through Patreon, and we are building features in our app so that with a single click, users who really like a particular podcaster, they can donate it from within the app. They can message the particular podcaster on their Twitter, Facebook or whatever social media from within the app.
We are trying to bring all the workflows that users and podcasters want to have in the listening app itself, instead of going out and probably not doing that.
Paul Kemp: Well, that's a wonderful mission. I'm so glad you got into this space, because we need more innovation like that. Sandeep, it's been just a wonderful chat with you, I'm so inspired.
I wondered, how best can people reach out to you? What is the best way of getting in touch?
Sandeep Jain: They can e-mail me, I think that's probably the best way. My e-mail is Sandeep@leelalabs.com. Maybe that's the best way to reach me.
Paul Kemp: Wonderful. Of course, there will be full show notes. This is episode 523 of The App Guy. Just go to theappguy.co. Sandeep, that's great! Thanks for coming on the App Guy Podcast, and all the best with this project. You sound like you've put a lot of effort and work in, and you're very knowledgeable in this space, so I'm sure it will be a great success. Thanks for coming on!
Sandeep Jain: Thank you, Paul. Glad to be here!