How Buzzsprout CEO Tom Rossi grew Buzzsprout to $5.6M revenue and 3.3K customers in 2024.

hello everyone my guest today is tom rossi he's one of the co-founders of the product development company higher pixels he's been leading the company since 1996 and has seen it shift from a client services company to a product company higher pixels currently has four products buzz sprout stream care tick and donor tools each product has been built with ruby on rails and continue to be actively developed today all right tom are you ready to take us to the top sure which one of these which one of these babies is the one you care about most it's the biggest in terms of revenue oh you're asking me to pick my favorite child yeah uh i think buzzfront is the one that we gravitate towards a lot just because it's fun you get to deal with interesting people and it's a you know it's kind of a fun product to work on let's focus on that one then what's the product do and is it a pure place sas company sure so buzzfrow uh helps people get their message out there to the world so we've been we've been doing that since 2008 and it started uh we were working we had another product called m sites which was a content management system we had people that needed to get their audio out and they struggled with you know how to do that and that eventually became podcasting you build an rss feed and people subscribe and listen to it so we built buzz sprout um for that audience was mostly churches and right after we launched it we just started having people sign up from all over the world really who wanted to you know they wanted to get their audio out there and it was really complicated and we made it very very simple and so to this day that's what we're focused on with buzz proud is making it really simple for you to be able to get your message out and what and what's the pricing model is it a sas model yeah totally a sas model um price is based on the number of hours of content that you upload every month so again our audience is they want it simple if they're low-tech users and so we don't charge for megs and gigs we charge for hours they get a certain amount of duration that they can upload every month we also have a free plan for people that are just getting into podcasting so they can experiment with it and try things out and we'll host their content we give them a limited amount of content two hours every month that they can upload and then from there they can um we'll host it for 90 days that's great so give me an average what's the average customer paying per month right now would you say um probably somewhere around fifteen to nineteen dollars that's probably our average so this is definitely not like a kind of enterprise hundred thousand dollar per year kind of account you're focused on volume right yeah yeah definitely and that's kind of the way that that we want our products to be right so that way you don't have that client that can just demand changes um we can really build it the way that we think it should be built and we're not beholden to you know some contract that we have with somebody who's paying us you know tens of thousands of dollars spoken like a guy that has come from a consultancy right all right very exactly when did you guys launch the bus sprout product what year 2008 2008 okay heck of a year to launch a company and then what have you scaled that to today in terms of total customers um probably on the order of i mean it's definitely the tens of thousands is the number of podcasts that we currently support um yeah but you have a free you are free you have a free plan too though so i'm just curious in general like are you talking a thousand how many paid yeah we don't we don't share those numbers but yeah it's in the thousands okay so okay can we just put a big range on that so between a thousand and five thousand is that fair sure yeah yeah okay good um i mean look at the reason i do this i wanna understand growth right so if i take a thousand times that fifteen dollar average price point that puts you at you know fifteen grand a month today about for this product is that about accurate sure sure i mean yeah it's it's in the right it's a it's a lot more than that but okay we don't share we don't share those numbers because we don't want to focus on that it's not what we got what we got into it um i think what's important for people to hear is that it's profitable it's very profitable you don't have to uh you know make a million dollars a month to be a very profitable company yeah especially when you bootstrap it we didn't we've never taken any money from anybody and we've been profitable since the day that we launched because even if you're making you know a couple hundred dollars that's more than what it's costing us to uh to host it yeah yeah so you know no tom i by the way you're you're almost hedging like this is a weakness i actually love it when i find a bootstrap ceo and like i actually wish people like you had more confidence to say this is where we're at and we're bootstrapped and it's profitable and we're happy doing it and it's exactly what we want um i mean and the reason i i don't i don't go after data just for data's sake but what i do know is that people listening will basically say oh i'm in that range i don't have to raise capital i could be tom and do it too so i mean it would be really helpful for me i mean can you give me a better range of where you're at i mean are you at just south of a million bucks run rate right now or uh but i don't think that's what's important i think what's important for your for your listeners to hear is within the first year we're making whatever five thousand dollars a month which is great because it's growing every month and so when you look at your numbers is it growing because if it's growing then you can you can say hey i can i can map out my future right so what do you want what are you growing at what are you growing at what are you growing at you every year your year over year we're doubling okay that's that's great it's great growth yeah yeah and and i think it's it's tracking along with the industry but like you said i love for bootstrappers to to hear look you don't you don't need to accept money from outside you don't need to hire a massive team for years it was really just two of us it was just uh kevin um one of my partners and i and that was it and he won today now there's uh there's 13 of us in the company but we're you know spread out across four different products yeah so who just whatever product that we're actively uh developing on how many just focused on this product none none we all float between our different products i see i mean okay so how does that how does an a week look like i mean a lot of people have troubles building one product you're building four people would say like is the switching cost there alone would be immense yeah so that's we don't do a lot of switching especially during the day um but what will happen is we work in work cycles so we'll work for a six-week work cycle and in that work cycle we'll have certain projects that we're working on and so some of them might be on buzz sprouts some of them might be on tick um and we'll just work on those projects however we want to chunk up our work so typically what will happen is you'll you know you'll pick one product and you'll work on that for a good period of time and then maybe you want to take a break and you want some variety and so then you go and you work on one of your other projects for one of the other uh products yep yeah that makes good sense um and where's everybody based jacksonville florida okay good so the whole team's down there yeah we don't have any remote workers yet but we would like we would like to be able to do that in the future that's good um take me back to again doubling down on on uh buzz bro the product obviously you're focused on um sure customer growth where are you getting most of these new customers most of our customers are coming through either organic searches paid acquisitions through affiliates or search engines okay like paying the google adwords we're not doing we haven't done really well with twitter or facebook but uh google has done pretty well for us that's great and affiliates working with affiliates people that are actually out there building content that can link back to us um you know that's been a good growth strategy for us and what's the incentive structure there is at 30 per month as long as the people they drive are still paying you monthly or what's the structure it's different depending on the affiliate but it's uh we'll either do a single payment so this is how much you get paid every time you refer somebody and it's a portion of the lifetime value of a customer um or if it's somebody who's got a massive network you know we might work out a different arrangement with them how do you have confidence so a lot of people have gotten themselves in trouble paying out a percentage of ltv on a sign up because you don't know if that affiliate's cohort is going to perform like your historical cohort so you're going to base like the ltv payment off your historical cohorts not the cohort from the affiliate how do you make sure you keep that in check we track it we track it but they they are in line so...