In today’s episode, Joe talks to Craig Hewitt, the founder of both Castos, a WordPress plugin provider for easy podcast management and PodcastMotor where they provide turnkey, end-to-end podcast editing and production services. He’s also a co-host of RogueStartups Podcast.
Joe and Craig discuss the early years of Castos and joining the TinySeed team, massive growth in the podcasting industry, profitability versus growth, and the 30-60-90 Day plan.
Tune in for more business growth tips!
WordPress Plugin for Podcast Hosting
- [00:01:35] Let’s welcome Craig Hewitt!
- [00:02:54] WordPress plugin in Castos
- [00:04:55] Growth in the podcasting industry
- [00:07:30] Business growth in WPBuffs
- [00:08:50] The non-technical founder in a tech company
- [00:09:36] A peak at Castos early years
- [00:13:00] Investing in good developers, good systems
- [00:16:33] Joining the TinySeed team
- [00:23:10] Are you in the area of growth?
- [00:27:35] Profitability versus growth
- [00:32:05] How will you spend your security money?
- [00:36:06] The process of hiring key people
- [00:40:59] The 30-60-90 Day plan
- [00:42:54] Overcoming challenges when building a business
- [00:44:30] Connect with Craig Hewitt!
Episode Resources
- Castos – Stay for the Audience Growth
- Craig Hewitt’s Website
- Leave an iTunes review or binge-watch on past episodes
Podcast Transcript
Craig Hewitt:
If we were profitable, what would you do with that money? If we didn’t invest back in hiring more people to continue to make the company more solid, you have to say like, would you just take that money out and pay yourself a lot of money as the founder? Our company has like a value today and if I can dump every extra dollar that the company makes back into the company getting bigger, than that value will be much higher in the future.
Joe Howard:
Hey, hey, good WordPress people. Welcome back to the WPMRR WordPress podcast. I’m Joe-
Craig Hewitt:
And I’m Qui-Gon.
Joe Howard:
And you’re listening to the WordPress business podcast. We’ve got Qui-Gon on the pod this week. Great pick, old school pick. Star Wars fan any reason you went with Qui-Gon this week?
Craig Hewitt:
Yeah. I mean, I liked the … it’s funny. We tried to explain it for our kids, the newer, which really the original versions or the original kind of in the series, yeah. I mean, I think he’s really one of the like cornerstone of how the rest of the evolution went. So yeah, that’s why I picked him.
Joe Howard:
Yeah, totally. I was actually talking with someone recently about episode one and a lot of people regard episode one as like, one of the not so good episodes. And I think there were aspects of episode one that were like really not good. Like [Georgia 00:01:15] banks is like the big ones. Like, wow, that episode was bad or that movie was bad. But a lot of it is just because like, that was a pretty bad addition to like the whole Star Wars universe.
But I always say Star Wars, episode one, I think has the best lightsaber fighting, the best lightsaber choreography out of all of the Star Wars movies I’ve ever seen. So I thought that was super bad-ass. So I love Qui-Gon as a character. So nice pick. We’ve got Qui-Gon on the pod this week also known as Craig Hewitt. So Craig, welcome to the podcast. Thanks for being on. Why don’t you tell folks a little bit about what you do? This is like a WordPress podcast, but this is totally in the realm of like WordPress and just podcasting and digital things, growing an audience and stuff. So why don’t you tell folks a little bit more about what you do?
Craig Hewitt:
Yeah. So Joe, thanks for having me on the podcast. My name is Craig Hewitt. I’m the founder of Castos. We’re a podcast hosting, analytics and production company. And we also are the kind of owners and managers of the Seriously Simple Podcasting WordPress plugin. And so in Castos, we do podcasts hosting so just kind of storage and distribution of files to listeners, as well as kind of give folks insights about who their audience is and where they’re coming from and kind of what they’re liking and not liking about podcasts. And we also have professional services arm that does podcast editing and production for about 80 customers at this point.
Joe Howard:
Yeah, that is super cool. We’ve got a company that does something similar for us. That is really what you should just kind of be Bradley and he’s kind of grown out his company a little bit, but it’s like, I drop my podcast, the recordings coming here in Riverside, that FM, and then they’re just like magically published every Tuesday. And that’s great for me because I’m not an audio engineer nor do I really want to learn how to do that, nor am I probably really good at it. So that kind of stuff is super helpful for me. And yeah, seriously, Simple WordPress plugin as well. Is that kind of, has it always been part of Castos or did it like join the Castos family?
Craig Hewitt:
Yeah, so that’s kind of the origin of the whole business. So I guess to kind of take two steps back, I guess. So my first business as like a digital entrepreneur was podcast motor, so it’s this, what is now Castos productions kind of a professional services arm done for you, audio engineering, show note writing, marketing assets, publishing. So just like you’re saying Joe, folks record episodes, stick them in Dropbox, a week later they show up in Apple podcasts. That’s how I kind of got started.
And then through that one of our customers there actually Brad Touesnard from Delicious Brains. I’m sure most folks listening to this know of Brad and Delicious Brains, introduced me to someone who was the kind of creator and previous owner of the Seriously Simple Podcasting plugin. He said, “Hey, Hugh Lashbrooke, a guy that wrote the plugin is joining on and kind of wants to divest himself off the plugin so he can focus more on his community management efforts at Automatic. And hey, I know you’re in the podcasting space, I know you’ve wanted to get into a software product.” The plugin at that time was entirely free and not monetized at all.
And so we acquired the plugin and that was kind of the genesis of Castos, so the whole kind of all along was that it was acquire the plugin, add the hosting arm onto it as an optional kind of upsell or add on for folks who want to manage their podcast from WordPress, but don’t want to have to fuss with the lip center or whatever else that they’re kind of weirdly bolting on. It’s all very natively integrated into WordPress.
Joe Howard:
Yeah, cool. So I think I originally wanted to have you on the podcast because I think a WP Tavern article came out that said like Castos is growing pretty significantly. I think it said something like 300% growth of like users or new podcast started. I can’t remember the exact statistic, but it was something like that. Using Castos, I don’t know if it was hosting or just the entire infrastructure, everything you’re talking about around podcasting. But it sounds like you’ve had kind of a lot of growth during COVID times.
I was interested in learning a little bit more about that because I didn’t know if it was, you have more insight into the growth than anybody else does obviously. So I’d be interested to hear, are you seeing more folks just like starting podcasts, like normal people, non-business people just saying like, I want to start a podcast or is it more like people switching over from like other hosts, podcast host and coming over to Castos, like where is that growth coming from?
Craig Hewitt:
Yeah, I think it’s coming a little bit from everywhere. So we definitely get folks coming from other platforms. I mean there are fortunately and unfortunately are a lot of options out there. Some of them are very, very good. Some of them are not as good and folks say, hey, I need more options. I need more functionality and things that can extend my podcast and do things like natively integrate into my WordPress sites so that I can manage my content more easily.
And so we do get a lot of folks coming over and we make that process pretty easy for them with like automatic things like that. But like you’re alluding to, we also see a lot of people and especially brands and businesses and people that want to have brands say, “I can’t go to conferences anymore. I can’t do trade shows. I can’t even go see my sales prospects in person, kind of, we have to do something else. We already have a blog; a podcast is the next most logical option.” And so I think we see a lot of people coming in there. And then to boot depending on kind of where you are, things like paid advertising and marketing realm have gotten very expensive with the advent of COVID and people’s kind of buying and shopping pattern is changing a lot.
And so people look at the kind of evergreen value of content marketing and podcasting being a form of that as a really good investment. And so I think we’re very fortunate to be in the right place at the right time. When it comes to COVID is to say like we have what I think is a great product, something that a lot of folks want and we’re making it easy for folks to come in and get started. All of those things together are I think contributing to our growth because it is weirdly kind of across the board.
Joe Howard:
Yeah, totally. Just quick note, your video is going a little bit in and out because of internet bandwidth stuff. Don’t worry about it. We have local uploads that are happening, so it will all be good.
Craig Hewitt:
Cool, okay.
Joe Howard:
So if you see your video off, don’t worry about it. It’s all good.
Craig Hewitt:
Okay.
Joe Howard:
But I want to touch on what you said about digital companies now, because I think yeah, I mean, WP Buffs similarly has seen good growth in the last six months or so. I think a lot of like remote companies that are digitally focused have seen a lot of like, they’ve seen a lot of this. It’s like a lot of people are starting podcasts. A lot of people are doing more with podcasting and they realize its something they’re not doing. Like now is the perfect time to do it because exactly, buying habits are changing, things like that, WP Buffs similarly.
A lot of people have WordPress websites. A lot of people are taking their digital marketing and everything they do digital more seriously. And that means taking their website more seriously. So a lot of people are like, ah, I got to like grow my traffic, now’s a great time to do that. I want to focus on sales or growing everything digitally, but I’m not super technical, so I need someone to help me with WordPress. So I mean yeah, we’re seeing, I think a similar, maybe not the same, same exact thing, but a similar thing happen where we are as well.
Craig Hewitt:
Are you guys seeing it kind of all coming from one place or is it across the board, kind of different flavors of folks coming in?
Joe Howard:
Yeah, that’s a good question. I think its different flavors, but I think we’re definitely seeing a good amount of small businesses come to us. It’s kind of funny because we definitely saw higher churn once COVID hit, because we had a lot of customers who were just saying, my business is maybe not doing so hot right now, I got to cut my costs. I can try to do some of this WordPress stuff myself and that’s fine with us. In fact, we’re for that, if it’s going to help you save your business and help you save a few dollars. That’s your decision and we’ll support them.
But we’re also seeing a lot of companies that are fighting against closing that are pushing forward even during this time, because maybe they have a little bit more money in the bank they’ve saved over the past year or five years. And they know they need to invest in order to make it through COVID or like hopefully like be around next year, right?
Craig Hewitt:
Yeah.
Joe Howard:
Although we’re actually seeing some companies, we saw some companies leaving, churn was higher earlier this year. We also saw like super accelerated like sales because a lot of companies that are a little bit more comfortable right now were coming saying, hey, so it actually all got kind of worked out. I think we like probably upped the average level of like quality of customer in the process. So it wasn’t all that bad.
Craig Hewitt:
That’s good, yeah.
Joe Howard:
You mentioned in pre-call notes, just like a little note that you left was like that you’re actually not a technical founder. You’re a non-technical founder, which I find … or co-founder, maybe I got the wrong founder.
Craig Hewitt:
Founder, I’m the only one, yeah.
Joe Howard:
Single. So yeah, you’re actually just like me, single, non-technical founder of a technical company. Did I say that right? Single-
Craig Hewitt:
Yeah.
Joe Howard:
… non-technical founder of a technical company. I’m the same. So I’m always super interested in talking with other folks who are in this position. I love to hear a little bit more about like the early days of Castos. Like how did it get built in the first place when your kind of coming up with all these ideas? Here’s what I want to do. Okay, how do I like make this into reality?
Craig Hewitt:
Yeah. I mean, as you know, it’s super tough. Those early days when you don’t have money or customers or even a really, really good idea of what you should build, is really tough. And I felt I had several things going for me, and it was still really hard. I had going for me money from our product I service. So Podcast Motor existed for several years before Castos. And so that allowed me to one, fund the development of the Castos platform from Podcast Motor, and also pay myself and pay rent and support our family and stuff.
Joe Howard:
Got you.
Craig Hewitt:
So I also have been in the podcasting space, probably like you, kind of familiar with the domain that I’m getting into. So there’s a less shallower chance of me kind of totally screwing up and like missing the boat on what we’re building. Yeah, but I mean, I think I got really lucky with hiring our first developer who’s still with us and his early developer Jonathan Bussenger from Cape town, South Africa, is wonderful and came as a recommendation from Hugh Lashbrooke that I bought the plugin from. And it was really great.
I mean, I think that is super key. If you’re not an experienced founder of a technical product, but not a technical founder, you need a really strong developer, I think, to say, to kind of hold you accountable, right? Joke is like, us as non-technical founders have all these ideas, but have no concept of what it means to build them, and how to talk to developers and how [inaudible 00:12:49] in a way that is accurate and representative of what we want and to give them the grace and the time and the resources that they need to be successful.
And so, I mean, honestly it is still a giant focus of ours to say like, okay, we do pretty good with development, but we could do a lot better. How can we keep doing better at this whole development cycle process. We’ve started implementing a lot of what the base camps folks, a spouse and their shape up book. I don’t know if … I’m sure folks have kind of read it and we follow it pretty closely. And it’s done a lot to help us really shape and have a well-formed idea before the developers even see it, because I think that’s the most dangerous thing is for a non-technical founder to say, “Hey, Jonathan, let’s go build this integration.” And I mean, he looks at me and says, “What the hell are you talking about?” Like you just can’t do that, especially while I’m off in the middle of this other thing.
So I mean, it’s been, I think a challenge for everybody. We’re in a really good spot now, but I think having a strong first developer is key there. And I think there’s probably a lot of places a lot of folks make an error because they say like, I want to build this SAS app, or I want to build this WordPress plugin or whatever, but I can’t afford $100 dollars an hour developer, so I’m going to go find really the cheapest person I can. And that person oftentimes isn’t that strong lead senior developer. And that’s where folks get in trouble, I think.
Joe Howard:
Yeah. I think that thing you mentioned about having a developer who can push back a little bit on some of your ideas is actually super important as a non-technical founder. Even when you’re using good methodology to give them, to hand over ideas into something that can be developed or something that can be coded into something real, it’s hard though, especially when you’re the single founder and there’s always a little bit of this dynamic of like, I’m the founder. Like I hired you as a developer, I’m paying you your salary or your hourly rate. And like, I want to do this thing. Can we do this thing?
And I think there are developers out there who will say yes sir, or yes ma’am, let’s go, let’s do this. This looks great. But I think probably as valuable, if not more valuable is actually having someone on your team who will push back and ask the right questions and make sure that they understand exactly everything that you are trying to build and things that maybe are red flags or things that they’re already thinking ahead. Like, Ooh, I don’t know if this would work.
I think that is an enormous value in actually paying someone a higher hourly rate or a more expensive developer because of that. Because if you pay someone $10 an hour, they can maybe build an okay version of what you’re asking, but they’re not going to push back on you probably, but if you hire a more expensive developer, you’re probably getting higher quality and you’re probably getting someone with more experience. Again, I’m obviously making some assumptions here, but on average, I think you’ll probably get someone who will do these things like, “Hey, like Craig, did you think about X, Y or Z? Like that might be an issue.” And you’ll be like, “Oh yeah, I totally didn’t think about that.” And that could save you a hundred hours of development in three months because you caught this thing.
So I think, that’s really good advice. Obviously, not everybody can afford a super expensive developer to start, but I think that’s also, it’s interesting to hear how you funded the development of your podcast hosting platform with your productized service, which to me is very interesting because I’ve always thought about, well, maybe my next thing will be software because I’m interested in doing that. I’ve never done anything like that before and I think it would definitely be a cool next adventure. And I want a productized service too, that is somewhat profitable and could fund something else. So I’m actually glad I’m talking to you. This is good for me. So I’m selfishly like, yes, this is … maybe I’m on the right path here.
Craig Hewitt:
Yeah. I just, I’ll say it’s a great path. It’s a great … productized services are a great business model, as you know, because you can just stand up a WordPress site, connect it to Stripe and be profitable on the first day. As opposed to software where, I mean, we’re building for six months and that’s just cash out. And then even once you’ve built it, you’re not really profitable for years. I think anybody who has a software product would be lying to you if they said they were actually a profitable business in the first two years. There are exceptions, but not a lot.
Joe Howard:
Totally. Yeah. We were not super profitable when we were not scaled. Productized services, I think are one of those things where when you only have a few customers, when you only have 10 or 20 customers, you’re using that as learning, you’re using that to become more efficient in order to scale up because a lot of the profit margin of productized service comes in having really good systems and being really efficient in your work. And because it is a service, right? It’s not a product that you can make 10 times as much, margins probably are not as good in a productized service.
So you have to help those margins out by being really efficient with your systems. And that’s a lot of what we worked on in early days. And now that it’s much better today than it was three years ago, we can service hundreds of six, seven, 800 websites now with really good systems. And it has become much more profitable now than it was early days. So I totally hear you on that.
One other thing I wanted to touch on today was TinySeed, which is something I think at some point I knew, we were talking before we started recording. I was like, I think I saw you were part of TinySeed or that the TinySeed accelerator at some point, but then I think I forgot it. And then I was looking at call notes and I was like, oh, TinySeed. Your part of the TinySeed accelerator. Yeah, now I remember. I’d love to hear a little bit about, like I guess what it’s like to be part of the accelerator, but what I’m really interested in is your decision also to join the TinySeed accelerator, because I think that, correct me if I’m wrong, but I think that as a productized service, you were probably like a bootstrap company or a revenue funded company before.
And this may be, maybe it’s not your first venture into an accelerator or into some sort of funding for the company, but I would be interested to hear what that decision to make that transition was like, because I know a lot of people listening to this podcast are agency owners, maybe people who own plugins or themes or some piece of software or are getting into software, and that’s kind of your two options, right? It’s like I can bootstrap it and build it with small revenue over time, or I can do something like joining an accelerator. And I think in some cases, an accelerator is actually a really good option for folks as opposed to bootstrapping, depending on where you are or what experience you have and that kind of stuff. But yeah, I’d be interested to hear just kind of like what the decision tree was like in your mind when thinking about joining TinySeed.
Craig Hewitt:
Yeah. I mean, there obviously is a ton that goes into it. I think first of all, I’ve known Rob Walling and Einar Vollset, the two kind of principal partners there for kind of a long time, so I trust them. And so I think anytime that you’re giving up a part of your company for some cash, that for me is the most important thing is like you have to have a hundred percent alignment of your goals and theirs, and you have to trust the people to not screw you. There’s all sorts of legal stuff in place to help prevent that. But at the end of the day, I think you need to like and trust the people that you’re going into partnership with. And do I did.
And so really the decision for us and I’ll try to make it kind of applicable to a lot of folks is, we were already kind of decently far down the path, like Castos was 10 or $12,000 MRR when we joined TinySeed. And that is quite a bit later than a lot of the companies in the first batch. So they’re in about the middle of the second batch now and each batch is a year.
Joe Howard:
You were in the first batch?
Craig Hewitt:
Yeah, we were in the first batch. And so it’s a year long program. We started May of 2019 and ended May of this year. The second batch just started a few months. But we were pretty far along in terms of revenue when we joined, I think that number is about right. In terms of revenue, but had like a full-time developer. I was paying myself and I think we had someone on that was helping with support. But what joining TinySeed I thought would do for us is help us kind of live in the future, right?
And that’s all it does is, you give up a percentage of your company to get a bunch of money or a little bit of money, however you want look at it. And for us, since we kind of had a degree of product market fit, we had revenue, we were profitable, even though we wanted to go do more stuff, is for me the podcasting space is really dynamic right now. And there’s a lot of stuff going on. You see Spotify buying Anchor and Gimlet and who knows what’s going to happen with this and that. And you see companies like Simple Cast-
Joe Howard:
Joe Rogan as well.
Craig Hewitt:
Yeah, Joe Rogan since then, and Simplecast going and raising a whole boatload of money. But I looked at this and said, podcasting is a really dynamic industry right now. I would rather take a bet on accelerating our growth, taking this money to hire someone from marketing, do some paid acquisition experiments, try to grow much faster than we could organically to kind of solidify our space in the market because it’s growing so quickly. And that’s really what to say like we hired a full-time marketer. We brought one of our developers on full-time from part-time. And we gave our marketing person, I think, a really strong budget to play with for the kind of company that we were.
And yeah, as a result, we’ve grown quicker than we were before. And we have come back into peaks of profitability and so that’s a whole another discussion is like these peaks and valleys of profitability. And it’s like there’s this line of revenue and there’s profitability that goes over it. And then it goes below it and it goes over it and it goes below it. And for us, like we don’t try to be a profitable company, but we try to grow as fast as possible. And I think those two things are … you can’t optimize both of them to the fullest extent at the same time.
Joe Howard:
Yeah. I totally would agree with that. I want to actually come back to that point of profitability because I totally want to talk about it, but I want to touch on your point of, like why do something like join an accelerator? Why potentially raise funding? I’m not just talking about like raising $200 million from VC funding. I’m talking about like maybe there’s angel funding out there who wants to, maybe it’s $100,000 in funding to accelerate a little bit. So there’s this trade-off between being bootstrapped and funding it yourself and doing something like an accelerator, which is you can do it yourself, grow organically, probably grow a little bit more slowly, have slower growth. That’s what WP Buffs has done over five years, we’re going on six years now, slow and steady growth.
This year was the first growth or the first time it’s really started to be represented more by a hockey stick than it has by just like a linear growth. And just because we kind of eventually hit this point of, oh, like we’re kind of here now and established. But maybe I could have done that after two years had I joined an accelerator, but the trade-off I get is, I give away a little bit of more control over my company, which is why, of course, you’re talking about trusting the folks you’re working with, super important. But I’m interested in that point about looking at your industry and the podcasting industry and saying like, I want to get ahead of where things are going to be in two years or three years and establish myself now. And that will give me an advantage as this space continues to grow.
So I think what you’re saying is you’re putting a pretty significant bet on the podcasting space, continuing to grow and having Castos at the forefront or near the forefront of this industry so that in two years, when the industry continues to grow even more rapidly, Castos will be one of the big options for folks to come and host your website, or excuse me, to host your podcast, to have their podcast well-produced, all of this stuff. And that may be a signifier of, if you should do something like join an accelerator. Are you in an area that you think will be growing in the near future and will moving faster and being more established in your space really pay even bigger dividends in a year, in two years, in five years? Do you think I got that pretty right?
Craig Hewitt:
Yeah. I think you got it exactly right. And the thing I would add to the industry growing is the industry changing too. Because well, I mean, the general WordPress plugin space is one of those, right? You have theme companies buying plugins. You have plugin companies groups buying up a bunch of plugins to kind of aggregate under one brand. I would say the general kind of WordPress plugin space, you could look at the same way right now saying like, there’s just a lot of movement there. Is it growing at the same thing as I think of podcasting, but like, there’s a lot of stuff going on, right? With plugins right now, that if you’re growing in profitable plugin, there are people that want to buy your business.
To me, if your kind of forecasting ahead to a scenario like that, you say, you look at okay, if I took $100,000 or 500,000, could I in the next two years be at a place that is much better than if I did this by myself. And we said yes to that, and that’s the only reason we joined.
Joe Howard:
Yeah, I totally get that. And like, I’m on the Castos website. I’m just castos.com and when I think about like innovating into the future like another reason we got introduced is because Matt Madeiros, who does some work with Castos, he messaged me on Twitter and he was like, “Hey, like you should totally switch over to Castos hosting.” And I remember being like, I host on Libsyn right now, which is another hosting provider. I honestly, like I’m not a huge fan of Libsyn. I’m like, it hosts my podcasts like it does, I guess that, and that’s cool. And I don’t like really need to switch over right now to Castos.
But I come to your website and I see like, okay, I can host the website. There’s this audio gram and YouTube integration. I can do built-in transcriptions. There’s a podcast editing service. So it’s not just hosting, it’s like everything around podcasting I could need so that I could pretty much sit down and just like record awesome episodes with awesome people. And then my podcast gets like … like everything else is taken care of. And I think to me, when I think of like innovation in that space, that’s a really cool direction to go in, because it’s innovating in this way that like no matter what you need around podcasting, like Castos can handle it. It’s not just hosting.
So when I think about switching over to Castos, I’m like, well, now I kind of are more interested because it’s not just hosting, it’s also a whole lot of other things. So I did want to come back to what you were mentioning about profitability as well because that’s something that I’ve found extremely interesting as a business owner myself in control profitability versus growth. It’s a challenge and it’s not something I ever really thought of before it like started happening. And like let me, I guess give an example. So like WP Buffs when we did a big rebrand, a new website and revamped a lot of our marketing materials and stuff.
And we saw like huge growth in those two months after we launched or relaunched, which was awesome. And then in like the three months since then, we’ve like broken even the past three months. We haven’t been profitable. We haven’t had a big loss either, but the thing I want to get across is that it was actually like strategic. We are putting a lot of that profit margin back into the business. We’ve made a lot of hires. We’ve hired like a people ops, an HR person. We’ve hired a new sales person, hired a head of growth.
So I think it’s very interesting in this like, you can be profitable and a lot of times you’re actually probably going to be more profitable as a smaller company than a bigger company, especially when you’re going through these like times, if I have to hire a lot of new people and stuff like that. And it sounds like you’ve been through something similar over at Castos. It sounds like you’re going through this accelerator, I’m not sure if that actually raised funds for you or if you just gave part of your company in order to like be part of this cohort to folks. But I’d love for you to talk a little bit more about like the profitability versus growth thing, because you mentioned that and it sounds like you’ve at least gone through something similar.
Craig Hewitt:
Yeah. So we did get money from TinySeed. So we got $120,000 for a percentage of the company. And with that we hired, I mentioned we hired a full-time marketer, brought one of our developers up to full-time and honestly just had a lot of money in the bank that is still there. We didn’t use half of the money basically. So we kind of dipped down to profitability, spent money, burned for a while and then came back up to break even, and then profitable for a long time. And now we’re dipping down into profitability again, because the way I look at it is from a personal perspective, we have savings in the bank as more than I really want to have. That’s a silly thing to say, but like that money is not doing me any good, just sitting in the bank making 0.1% or whatever. I don’t have a lot of faith in the stock market and traditional financial instruments like that. And so-
Joe Howard:
I’m not going to look at it, it’s a mess. I shouldn’t even look at it.
Craig Hewitt:
Yeah. I mean, and so I look at like from two perspectives. Where one like stability of the company, the most [inaudible 00:32:03] time hopefully is behind us, right? When we’re just me and Jonathan and we’re trying to figure stuff out and it’s a disaster all the time. It happens now, right? So we’re about to be three developers, a full-time support person, two full-time marketing and success people and myself plus someone to run our services business. And so we’re like a real company now. And so I think that it’s much more stable because we’ve been able to invest a lot of money back into the company.
The other thing is if we were profitable, you have to say like, what would you do with that money, right? So like, if we didn’t invest back in hiring more people to continue to make the company more solid and have it be more valued, whatever metric you say, you have to say like, would you just take that money out and pay yourself a lot of money as the founder? You certainly could and there are people that do that and that’s not wrong. But for me, I say like our company has like a value today. And if I can dump every extra dollar that the company makes back into the company getting bigger, then that value will be much higher in the future.
And so that’s how I look at paying myself because as opposed to the stock market, or certainly traditional savings accounts and things like that, a company is a really great asset to own. And as much as I can [inaudible 00:33:23], which is basically what I’m doing by not paying myself more than I need, I’m [inaudible 00:33:29] the money of the company back into the company.
Joe Howard:
Yeah. I’ve totally the same mentality. Every like every six months probably, our COO who also is like pretty involved in HR. Like I mentioned, we just hired an HR person who was like taking on all of our HR and people ops stuff. Amazing. But he’s very involved in that world as well. And he like every six months is like, you got to give yourself a raise, Joe, like this is kind of like why not? Because my salary is like the same as our COO’s salary, which is the same as our head of customer success’s salary. We’re all kind of in leadership, but like, that’s how it is. And I think a lot of people assume like I must make like a pretty significant salary because I’m the CEO, but it’s like, totally not true.
But my value comes in like if I think about the salary I give myself and I add 50% of that and I add it back into the company, it’s actually like that’s good for me too, because my business is growing itself. And honestly like that’s what I want to put my [inaudible 00:34:35], I want to run a business, not only that is successful, but that is like a good business that people enjoy working at and that can provide good perks for people. We’re doing 401k now, which is exciting.
Craig Hewitt:
It’s awesome.
Joe Howard:
I’ve never done that before, right? And now it’s like we can offer people an incentive to stay here for their careers, which to me is like, oh my God, this is totally, I thought this was like a job for people, but like this could actually be a career for people. People want to save for their retirement. Whoa, people could retire from WP Buffs, that is so crazy. But yeah, I’m totally with you on the like, well, salary is, I think like Jeff Bezos, his salary is like, it’s something ridiculously low, like $120,000 a year.
So it’s like clearly the richest, one of the or the richest man in the world has such a low salary, salary does not necessarily dictate like net worth, or maybe it doesn’t have any real correlation with it, right? So one thing I wanted to ask in terms of, so raised 120K from TinySeed, maybe raised isn’t the right word, but accepted 120K to be part of the accelerator. I don’t know the exact language behind that. I’m trying to be careful with my language. Spent about half of it growing the team, dipping a little bit into profitability. How comfortable are you with the business being … like not getting into trouble, I guess, because the value for me in having a little bit of money in the bank are things like a rainy day fund. Are things like, well, preparing for the almost unpreparable, like what if something happens and we lose 30% of our customers overnight?
I’m pretty comfortable in WP Buffs. I’m pretty sure the likelihood of that happening is super small, but that could also save the business, that rainy day fund if that has to happen. So when you think about like the money you have left in the bank, is that what you’re preparing it for? Or are you already thinking like, what else could I use it for in terms of growth?
Craig Hewitt:
Yeah. So I think that it’s funny, understanding the profitability of a business is really hard because it’s super dynamic, right? Even within a month you say like, oh, we’re going to hire somebody. Like we have a new developer coming on in two weeks. Like what I think our profitability is going to change and not just what their salary is, but their salary plus benefits plus taxes plus all the other shit we have to do. So like, first of all, like it’s not my strong suit, but I think really understanding the profitability of a business is really hard.
But yeah, I mean, I’m comfortable. I kind of have loose rules of thumb for me, which is, I want to have three months of salary, of our teams salary in the bank. And like the greater of either of these two, three months of salary or 12 months of our burn rate. So if we get down to being kind of cash flow negative, 12 months of whatever that amount is, because it’s things like COVID showed us that like you don’t know what you might need money for and-
Joe Howard:
Yeah, absolutely. COVID didn’t affect our businesses. In fact, it accelerated them, but what’s the next thing, what’s the next COVID then? It didn’t really affect remote work and people who do digital stuff.
Craig Hewitt:
Yeah. So I mean that’s how we think about it. So when we get above, either of those, I say, okay, it’s time to open the faucet. We need to hire a developer, hire a marketing person, hire a support person. And so yeah, and that’s how it goes. And I think when I talk to people that have much bigger businesses than us, those swings or the leverage that reinvesting in the business just get bigger. So you say instead of hiring one person that you can go hire three or four people in this month or this quarter.
And as a result, you’re going to be breakeven or maybe burning a little bit, but then you’re going to be so much more profitable. So I think those jumps, the little that we’ve seen in talking to my friends that run 30 or 50 people companies, those jumps just get bigger. And if we’re able to keep investing in the company, we’re going to do it as long as we can.
Joe Howard:
Yeah, totally agree. We just kind of finally, after like five years reached our like, we have three months of full-time funding if we didn’t make a single other penny in the bank. And so that was like a big …
Craig Hewitt:
It’s awesome.
Joe Howard:
It feels like it took a long time. Yeah, totally awesome. And it feels like it took a long time, but that’s just kind of how it is. Our business is actually pretty comfortable. There’s pretty much no way we could lose 30% of our business overnight. It’s pretty improbable. So I never felt super uncomfortable having like one month, when we were at one month salary or two months, et cetera. But yeah, I think it’s a nice milestone to hit it. It for sure is like, it adds a de-stressor for me as a business owner, that’s like-
Craig Hewitt:
Huge.
Joe Howard:
… things could go totally sideways hence we can figure it out, and that’s great for me and be able to sleep. Last kind of thing before we kind of start wrapping up that I wanted to talk about was this new marketer that you have. I’m a marketer, that’s my background, digital marketing, SEO, content stuff. I’m not super tactical or technical. Like I don’t know how to do like a product hunt launch or like some of those specific marketing things, but SEO content, growing traffic, those are kind of things I’m pretty experienced in.
We just hired a new head of growth. You have a new marketer on the team. I’d love to hear a little bit more about like your process of bringing someone on for growth and to help grow the company because I think that it was always a hard thing for me. I’ve hired a couple marketing people in the past, it didn’t work out too well. Our new head of growth is great and he has been doing an awesome job. I’d be interested to hear like maybe some good things or things you maybe feel like you need to work on in terms of new hires around growth. Because I feel it’s a more complex hire than I think people give it credit for.
It sounds easy. Like hire someone to like do the thing, to like grow the business, but it’s really not that easy. You have to really get to know the business. You have to understand the customers. You have to understand the pain point. You have to understand the industry. You have to understand a lot of things in order to hit the right levers, especially in like a value-driven way, that’s good for folks. That’s not trying to hack into the process. But yeah, I’d love to learn a little more about your hiring of a marketing person and how that’s gone so far.
Craig Hewitt:
Yeah. So you alluded to us hiring Matt Madeiros, who is just at two months on the job now. And Matt’s title is Director of Podcast or Success, which is a little bit of a marketing, right? Success is like retention and conversion for people being more successful on the platform. So to a degree it’s a marketing role and you know Matt, Matt’s probably been on the podcast here. He’s a marketer. He’s a sales guy, like it’s where he’s happiest, but he’s also a really good podcaster. So that’s what I’ve known him for a while. And that’s what drew him to the team and me to him was it’s a perfect fit. He fills that part of the role that I had been serving as the founder is to podcasting with folks a lot.
Our first hire in marketing was Denise Michaels. So she came on pretty much right after we joined TinySeed. And she is a really good kind of all-round marketer. So she comes from a background in more of like direct to consumer or B to C market, which was something that I wanted because I very much am a B2B kind of person. We talk a lot between Matt and Denise and I, like being able to think about and think like a lot of different types of our customers, and you can probably relate. Like you have a lot of different types of customers. And I think that a place that a lot of marketers [inaudible 00:42:52] trouble with is, they come from a background or a set of experiences and that makes them think about the product or the space in our way, and doing that alienates 80% of the market.
And so we kind of purposely want to try to bring in a really diverse and wide variety of types of people into all of our company, but especially marketing. But the way that … so hired Denise, a lot of the decision of who to hire and her in particular is the same for a marketer or a developer. The first thing is like trust and communication, and like give a shit factor. And I hate to make it that simple, but that’s really like so much of it, right? I mean, it’s just like, does this person really care? Do they really, really care that if I say, look, I want to grow organic traffic by 20% every month, they are going to stress over that. I don’t put a lot of stress on people, but we have goals and we’re very transparent about those.
And I want someone to be able to say, okay, this is my weight, I need to carry this. And so a lot of it is just trying to figure that out. And someone that the company can talk to in a very open and constructive way, and for them to understand what we’re trying to say and then translate that into action. And so, I mean, I think I’m kind of answering and kind of not answering your question, but that’s how we think about like who to bring on and how to onboard them is, and it makes me feel like it’s a big kind of CEO person, but a lot of is just like vision of like, we want to build the absolute best podcasting platform out there.
That’s like the really big picture thing. And from there, we try to drill down into like the different disciplines and what folks are doing, but remembering that and so it translates to support and success and marketing and product and development. And then from there it gets more specific. But yeah, I mean, kind of like tactically, the one thing I definitely did right with both Matt and Denise is create like a 30, 60, and 90-day plan and shared it with them. And I took this from the folks at Drift that they write their job description after they have these 30, 60, 90 day plans.
So they say like, I want to hire a person for marketing. At 30 days, I want them to be able to do this, this and this. And after 60 days, I want them to be able to kind of own and manage this and this. At 90 days, the same thing. And then they go, right and then that’s the job description is in this role, you will blah, blah, blah, blah, blah. And you will have ownership over these areas. And then we check in on those twice a week for the first month. So we have twice a week calls to say, okay, this is kind of the goalpost. How are you doing? What do you need my help with to get there and be successful? Resources, education, background, training, things like that.
So I mean, that’s kind of the rough outline of how we try to structure things again, so that people can be successful. Because I think that, that’s my experience the times when people have not been successful, a lot of it comes back to me just doing a bad job of defining what that means. If you can’t say this is what success looks like, then you can’t expect anybody to actually be successful. And so I think as founders or leaders, that’s a big part of what we need to do upfront.
Joe Howard:
Yeah. I just wrote down that 30, 60, 90-day plan and also having that part of the job description. I think all of that’s really smart. That’s probably the biggest thing I’ve changed is like being really explicit about expectations and goal setting and just making sure people understand like where they need to be at certain times. I don’t think I do it this explicitly though. So I really like this idea of just having it be like one month out, two months out, three months out.
The one other thing I wanted to note of what you said was, and I’ve said this multiple times on this podcast, listeners are probably like, yes, we’ve heard this before, but building a business is all about overcoming challenges. Every business is going to run into challenges, the businesses that survive, they just overcome challenge after challenge and they like are still around, right? And you were just talking about like give a shit factor, which I think is super important, but also just having people from a lot of different backgrounds of knowledge.
You’re really at the core talking about just like having a really diverse team. And I think that’s a really like really tangible, positive outcome of having a really diverse team. There are people out there they’re like team diversity, like whatever, like you just hire the smartest people for the role, but diversity has enormous benefits. And it allows you to overcome challenges because one person with a more diverse background or one person with a different background than people who are already on your team, come at things from a different viewpoint. And they may be able to pinpoint something that the rest of your team couldn’t see. Not because they’re not skilled enough to do it, just because they come from a different background.
So this is a super tangible, like diversity really adds to your ability to solve problems and overcome challenges, which is all building successful businesses, right? Of course there’s other factors, good ideas, execution, but every successful business ever in the history of the world, in all of business overcame a bunch of challenges to get to where they are at any given time. So I think that’s probably a good place to wrap up, but I appreciate you saying that, I think that is super spot on. Let’s wrap up. I want to know where people can find you online. I don’t know if you do social media, but shoot, tell people where they can find you and your website and all the stuff you do.
Craig Hewitt:
Yeah, absolutely. So castos.com is the place to check out stuff about Castos and what we’re doing there. I’ve got craighewitt.me less frequently than I would like to, but yeah, we’d love to connect with anybody. Anybody who has podcasting questions, shoot us a message at castos.com, love to chat and help out however we can.
Joe Howard:
Cool. And last thing I like to ask our guests to do is ask our listeners here for a little five star iTunes review for our show. So if you wouldn’t mind asking folks for a little review, I’d appreciate it.
Craig Hewitt:
All right. So listeners, get out your phone, your favorite podcasting app, swipe to the left. Is it swipe to the left or swipe to the right? Give a five star review for WPMRR and leave a comment and say why you like and why you think other people would like it too.
Joe Howard:
Yes, appreciate it. And if people are leaving a little review, leave a comment with it as well. Tell us something you learned from this episode. It helps us to know what other kinds of episodes we should do. We’ll do more podcasting episodes if we get some reviews about podcasting. I will also send it over to Craig for a thank you to Craig. Oh, I’m on craighewitt.me right now, it looks like it’s run on the WordPress, so nice job. There’s another WordPress link for you.
Craig Hewitt:
Yeah, of course.
Joe Howard:
Cool. If you are a new listener to the show, go through some old episodes. This is going to be episode like 110 or something like that. We’ve got a hundred plus episodes in the bank about everything, monthly recurring revenue, WordPress, some non-WordPress stuff. Some other podcasting episodes. Go back through some old episodes and do some binge-ing on some content, it’ll actually help you grow your business. iTunes review, talked about that. Awesome. Feel free to leave one, wpmrr.com. Virtual summit is over; virtual summit was last week. Craig, we had a virtual summit last week. It was awesome, but it’s over now.
Craig Hewitt:
Awesome.
Joe Howard:
We are getting those videos up on YouTube though. So feel free to subscribe to WP Buffs on YouTube, or just go to wpmrr.com, there are a bunch of buttons on the homepage that can send you to go and watch those videos. You can subscribe if you want to. And if not, go ahead and you can get those videos for free anyway on YouTube until 2021, virtual summit. Cool. That is all for this week. We will be in your podcast players again next Tuesday. Craig, thanks again for being on, man. It’s been a real.
Craig Hewitt:
Awesome. Thanks Joe, appreciate it.
