It all started with a call to Jason Calacanis...
Behind the scenes of Zencastr: how Josh broke into startups and built a podcasting powerhouse
Josh is the CEO and founder of Zencastr, the all-in-one platform for podcasters. They launched in 2015 when it became technically possible to record a podcast from a browser. Since then, they have evolved from a simple recording tool into an all-in-one solution for creators to record, edit, distribute, and monetize their content.
After bootstrapping for five years, Zencastr raised over $4M from VCs and recently raised ~$500k from their users via a community round on Wefunder. We interviewed Josh to learn more about his journey into the podcasting industry.
It all started with a wild call to Jason Calacanis...
Thinking outside the box
Josh's relationship with podcasting started a long time ago. He first broke into startups by getting a job at This Week in Startups, the podcast by Jason Calacanis. "I had an interview with the company, but their CTO left in the middle of the process, and I fell through the cracks.”
Josh didn't know how to get noticed again until a friend gave him a brilliant idea. The show had an Ask Jason segment, where viewers could call in and ask questions live on the air. So Josh decided to call in:
Josh: "Hey, there's a startup that gave me an offer, and I don't know how to evaluate it. It's my first real job."
Jason: "Do I know the company?"
Josh: "Yeah, it's your company."
The conversation was broadcast live on the show. "The chat room blew up, jaws kind of dropped, and it got me noticed, got me hired," Josh says.
The key lesson is to think creatively, to think outside the box. And to shoot your shot. This applies to every aspect of startups. I still remember the time when two Italian founders tracked down Jason using his Instagram stories to locate him on a beach, and pitched their startup to him. Jason was so impressed by their hustle that he posted a picture on his social media:
10 years to be an overnight success
Zencastr is now a successful product used by thousands of creators. They have raised millions from VCs and their community, and are growing rapidly. However, as is often the case with successful founders, this wasn't Josh's first rodeo, and his current success is the result of past mistakes.
After working at This Week in Startups for a while, Josh was inspired to build his own thing. "I wanted to work at small companies. I wanted to be part of building things from the ground up. So I ended up moving to Boulder because I heard that Techstars was headquartered there," Josh recalls. "I wanted to move there and bug them until they let me in one way or the other. However, I was never accepted as a company to the program.”
"But they hired me as a developer in residence to help their companies get their products ready for demo day," Josh explains. "It was a great experience, but I still wanted to do my own thing. So, I started building a company to help electronic musicians collaborate and create music - like a GitHub for music.”
Validating before building
Little did he know that there was already a graveyard of companies that had attempted this and failed. “It was a tough uphill climb.” Although he was unsuccessful in getting it off the ground, he made a ton of mistakes on that first attempt, and learned a lot.
One of the main reasons for the failure was that Josh didn't know enough about the industry. He didn't validate or test the idea before starting to build it. "We were all programmers and familiar with GitHub. We liked to share our code and collaborate. However, with musicians, we found that they are highly protective of their songs. Anything they create could be their next hit, so they don't want to share it. Additionally, they don't want anyone remixing their music without their consent."
The biggest mistake was not doing enough customer validation, and “everything that could go wrong ended up going wrong.” Despite the failure, they learned a lot about what to do next time.
"I decided to interview podcasters and discovered a real problem with remote recording. At the time, web browsers had just launched the ability to capture audio from a microphone, making it technically possible to do it in the right way. It took me six months to launch a beta, and when people started using it, they found that it really solved a pain point.”
Finding users on social media
Like most early-stage startups, the team at Zencastr had a limited marketing budget and couldn't afford to spend money on traditional channels like paid ads. But they managed to acquire their first users by getting creative, and coming up with a genius hack.
At the time, the remote recording market was dominated by Skype, but creators often received criticism on Twitter for the quality of their recordings. This presented an opportunity for Zencastr. "We searched Twitter for creators receiving negative comments about their recordings and reached out to them. This is how we acquired our first 100 users."
When your product is 10x better than any alternative, you don't really need a big marketing budget. Josh and his team simply reached out to these users and offered them a better solution to improve the quality of their recordings and produce higher-quality audio.
After acquiring their first 100 users through social media, Zencastr experienced mostly product-led growth. Some founders may assume that if a product is good enough, people will eventually flock to it by word of mouth alone. In reality, Zencastr built virality into the product, which is the essence of product-led growth.
Josh refers to this as the "guest-to-host conversion."
Since there is no reason to use Zencastr unless it's being used with someone else, users bring guests onto the show. These guests often have an idea for their own podcast, and after seeing how easy it is to log in, hit record, and create content, they become hosts themselves. This not only increases the number of users on the platform but also creates a ripple effect that brings in even more users, creating a powerful growth loop.
Zencastr’s community round
Zencastr has been benefiting from product-led growth for years. While the team was happy about this, they wanted to do something more. After exploring different alternatives, they decided that a community round was the right way to supercharge word-of-mouth and strengthen their creators' community.
"Our community round on Wefunder was a significant part of our push toward community marketing. It has helped us accelerate our efforts because users are now owners and have a stake in the company. This incentivizes them to spread the word about Zencastr, which is a great opportunity for us to align ourselves correctly with our creators, who seem to love it.”
It turned out that their initial instinct was correct. The community went crazy about the opportunity to invest in the company, and their Wefunder feed was flooded with notes of users' love.
This community round was very different from raising from VCs. "We raised just under $2M from VCs and reserved the rest for our community. Some of our biggest creators have been our biggest investors. They're not VCs or already-wealthy individuals trying to amass greater wealth. Most of them are regular people, and many of them are even using our free plan. They invested because they love what we're building, and it's been incredibly humbling to see people appreciating Zencastr so much.”
The Zencastr community round was also an effective way to acquire new users and spread awareness about the company. Indeed, while 70% of the funds raised came from their community, the remaining 30% came from existing Wefunder users who discovered the company for the first time.
👀 Fun fact: We actually discovered Zencastr through their community round ourselves, and started using it to record the Founder Secrets podcast!