Founder Interview
How Scribd Reached 500,000 Paying Subscribers and 100 Million Monthly Users (Interview with CEO Trip Adler)
- Interview Date
- November 1, 2017
- Interviewee
- Trip AdlerCEO and Co-Founder
Company Metrics at Interview Time
Paying Subscribers (2017)
500,000
Monthly Users (2017)
100,000,000
Subscription Price (2017)
$9 per month
Team Size (2017)
120
Total Funding Raised
$50M
Historical Snapshot
These numbers were reported by Trip Adler during the interview recorded in November 2017 and are a historical snapshot, not current figures. See Scribd’s current numbers.
Key Takeaways
- 01Scribd had 500,000 paying subscribers at $9 per month as of the most recently announced figure in 2017
- 02The platform reached over 100 million monthly users, primarily through organic SEO from a library of 70 million user-uploaded documents
- 03Scribd was profitable at the time of the interview and not planning to raise additional capital
- 04The company had raised approximately $50 million in total funding, starting with $12,000 from Y Combinator in 2007
- 05Scribd grew from zero to 100 million monthly users in roughly four years, from 2007 to 2011
- 06The team numbered about 120 people, based primarily in San Francisco with offices in New York and Phoenix
- 07Publishers are paid per read, with payment triggered when a user reads approximately 20% of a book
- 08Trip Adler's next milestone target was reaching 1 million paying subscribers
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Paying Subscribers (2017) | 500,000 | Founder interview, Nov 2017 |
| Monthly Users (2017) | 100,000,000 | Founder interview, Nov 2017 |
| Subscription Price (2017) | $9 per month | Founder interview, Nov 2017 |
| Team Size (2017) | 120 | Founder interview, Nov 2017 |
| Total Funding Raised | $50M | Founder interview, Nov 2017 |
| User-Uploaded Documents in Library (2017) | 70,000,000 | Founder interview, Nov 2017 |
| Time to Reach 100M Monthly Users | 4 years | Founder interview, Nov 2017 |
| Y Combinator (2007) | $12,000 | Founder interview, Nov 2017 |
| Angel Round | $40,000 | Founder interview, Nov 2017 |
| Round (Redpoint) | $3,500,000 | Founder interview, Nov 2017 |
| Round (CRV) | $10,000,000 | Founder interview, Nov 2017 |
| Debt (Silicon Valley Bank) | $10,000,000 | Founder interview, Nov 2017 |
| Round (Khosla Ventures) | $25,000,000 | Founder interview, Nov 2017 |
| Book Read Payment Threshold (2017) | 20% of book read | Founder interview, Nov 2017 |
Growth Breakdown
Subscribers and Users
Scribd had 500,000 paying subscribers as of the most recently announced figure, with the company noting it had grown past that number by the time of the interview. The platform also served over 100 million non-paying monthly users, driven mostly by organic SEO traffic to its library of 70 million user-uploaded documents.
Team
The team stood at approximately 120 people at the time of the interview. Most employees were based in San Francisco, with a publisher relations team in New York and a customer support team being built out in Phoenix.
Profitability and Funding
Scribd had raised approximately $50 million in total across multiple rounds, starting with $12,000 from Y Combinator in 2007 and culminating in a $25 million round from Khosla Ventures. By November 2017 the company was profitable and not planning to raise additional capital.
Revenue Model
At the time of the interview, Scribd ran a single-tier subscription at $9 per month, giving subscribers unlimited access to books, audiobooks, magazines, newspapers, and documents. Publishers were compensated on a per-read basis, with payment triggered once a user had read approximately 20% of a book.
Growth Strategy
Organic SEO as the Primary Acquisition Channel
From launch in 2007, Scribd built its audience by allowing users to publish documents and then surfacing that content through long-tail Google searches. This strategy took the platform from zero to 100 million monthly users in roughly four years without significant paid marketing spend.
Freemium to Subscription Conversion
Scribd first tested a freemium model before committing to subscriptions, and the early uptake of premium features signaled that a paid subscription tier would work. The company then marketed its subscription service directly to its existing base of 100 million free users rather than paying for new user acquisition.
Iterative Publisher Partnerships
Scribd approached major book publishers about including their catalogs in the subscription, and while most initially declined, the company signed smaller publishers first. Those early deals created a tipping point that eventually brought larger publishers on board, growing the catalog to about a million books.
Content Deals Funded by Subscription Revenue
The two primary uses of capital were headcount and content licensing. By securing deals with book, magazine, and newspaper publishers and paying them per read, Scribd created a growth loop where more subscribers generated more revenue to license more content, which in turn attracted more subscribers.
Targeting the Next Subscriber Milestone
With 500,000 paying subscribers already surpassed, Trip Adler named one million subscribers as the next milestone the company was aiming for, and one the team was looking forward to celebrating.
Best Quotes
“So Scribd is a subscription service for reading. So what you can do is pay $9 a month, and then you can read books, audiobooks, magazines, newspapers, documents on whatever device you like. So it's all basically funded by our consumers who pay the monthly subscription fee.”
“We've raised $50,000,000 at this point, so basically the trajectory was it was the first $12,000 from Y Combinator, then we raised $40,000 in angel money. And then at that point, we got some tractions. We really quickly went to raise $3,500,000 from Redpoint, and then another 10,000,000 from CRV, and then another 10 from Silicon Valley Bank and then another 25 from Khosla Ventures.”
“So we reach about 100,000,000 non paying users a month, then we have, the last number we announced is 500,000 paying subscribers.”
“Well, we have this library of 70,000,000 documents that are uploaded by users. Basically we have over 100,000,000 people a month who come to visit that library of content. And mostly people are searching for things on Google and then long tail searches bring them to our library of content.”
“We're blowing past 500,000. So we're on our way to the next big one we're gonna be announcing soon, hopefully.”
“We definitely pay them. So we have a number of different types of deals in place these days. The main type these days is we will pay by the read of the book. So this way, from their perspective, it more or less looks like a sale. So just like they're selling the book, we'll pay them anytime the user reads the book.”
“So, yeah, so we have a threshold that we use for when the book counts as a read. So it's usually about 20% of the book is when that triggers the payment.”
“I would say just to trust my gut a lot. When I look at mistakes I made, it's usually from not trusting my gut. So always trust your gut.”
What Happened Next
This interview captures Scribd at a specific moment in November 2017, when the company had grown past the 500,000 paying subscribers it last announced, drew about 100 million monthly users, and ran profitably with a team of about 120 people. The figures here reflect what Trip Adler reported on tape and should be read as a historical snapshot. Visit the Scribd company profile on GetLatka for current revenue, subscriber, and growth data.
View Scribd’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and What Scribd Does
- 0:25Revenue Model and Subscription Pricing
- 1:18Founding Story and Early Days at Y Combinator
- 2:20Total Funding Raised and Path to Profitability
- 3:03Where Capital Was Spent: Headcount and Content
- 3:53Team Size and Office Locations
- 4:26Solving the Chicken and Egg Problem with SEO
- 7:03Subscriber and User Numbers Today
- 7:45How SEO Drives Free User Acquisition
- 8:02Growth Past 500K Subscribers and Next Milestone
- 9:37How Publisher Content Deals Work
- 10:37Payment Threshold and Per-Read Economics
- 11:16Famous Five: Books, CEOs, and Tools
- 12:46Lessons Learned: Trust Your Gut
Introduction and What Scribd Does
Nathan Latka
00:00Hello, everyone. My guest today is Trip Adler. He is the he's an American entrepreneur. He's the CEO and co founder of Scribd, digital library and document sharing platform. He grew up in Palo Alto, California and graduated from Harvard. He launched Scribd in 2007 and they now have over 80,000,000 monthly readers and 500,000 subscribers. Trip, you ready to take us to the top? Sure, sounds All right, good. So for those people that are not familiar with Scribd
Revenue Model and Subscription Pricing
Nathan Latka
00:25or they're not subscribed yet, what does it do and what's your revenue model? How do you make money?
Trip Adler
00:30>> So Scribd is a subscription service for reading. So what you can do is pay $9 a month, and then you can read books, audiobooks, magazines, newspapers, documents on whatever device you like. So it's all basically funded by our consumers who pay the monthly subscription fee.
Nathan Latka
00:49Okay. Just there's that one simple pricing, just $9 a month?
Trip Adler
00:53>> Yeah, it's really simple. I mean, rather than you know, the old model for media where people would pay for each piece of content one at a time, we now just have one simple monthly subscription, same price for everyone, and then you can pay once and once you pay, you can just read whatever you like. And with the subscription model, the beauty of that is it gives users really the freedom to just kind of explore different types
01:14>> of content, discover new types of content, you kind of focus on what to read and not what to buy.
Founding Story and Early Days at Y Combinator
Nathan Latka
01:18And where were you at? Get us in your head a little bit back in 2007. Did you just graduate? Did you just have a big financial windfall so you could take a risk with Scribd? Did you have to make Scribd work because you were broke as hell? Where were you?
Trip Adler
01:31>> I had just finished college.
Nathan Latka
01:33So you were broke as hell.
Trip Adler
01:36>> Broke as hell, but at the same time had supportive parents, I could at least live with them. So I didn't have to worry about
01:44>> my living expenses. On top of that, we did apply to Y Combinator and we raised $12,000 So that also was at the time a pretty large amount of money that
01:56>> covered our basic expenses.
02:01>> So Y Combinator and living at home, we had a few thousand dollars to build a website, get that online. And that was really enough to get started. Back then, 12,000 was really it still is sufficient to get a service up and running. Then we were able once we got some traction, we were able to raise venture money and scale from there.
Total Funding Raised and Path to Profitability
Nathan Latka
02:20Going down that funding path, so up to us today, how much total capital has been infused?
Trip Adler
02:25>> We've raised $50,000,000 at this point, so basically the trajectory was it was the first $12,000 from Y Combinator, then we raised $40,000 in angel money. And then at that point, we got some tractions. We really quickly went to raise $3,500,000 from Redpoint, and then another 10,000,000 from CRV, and then another 10 from Silicon Valley Bank and then another 25 from Khosla Ventures. I think that adds up to 50, but I've only got my math wrong. So
02:53>> it's about 50 to date. And at this point we're profitable, so we're just living off profits, which is a good spot to be. We're not really intending to raise any more money for the time being.
Where Capital Was Spent: Headcount and Content
Nathan Latka
03:03Where has most of that capital gone? Headcount or just channels where the CAC to LTV worked and you wanted to just pour more money in those channels?
Trip Adler
03:10>> So for us, it's really two things. It's headcount and it's content. So we don't actually pay for users. We started the service as just a free service for publishing and sharing content, and it today reaches over 100,000,000 monthly users. So we basically just market our subscription service to those 100,000,000 users. We don't have to actually pay for marketing. We pay for a little bit, but just a small amount. Our two costs are really just hiring good
03:35>> people, hiring good engineers and designers and all types of people that build out the product. And then also on the content side, we do deals with book publishers, with magazine publishers, with newspapers, and we make all that content available through the subscription model.
Team Size and Office Locations
Nathan Latka
03:53And where are you at now today in terms of team size?
Trip Adler
03:56>> It's about 120 right now.
Nathan Latka
03:57Okay. All there in Palo Alto?
Trip Adler
04:00>> Especially in San Francisco now. I'm from Palo Alto, but live in San Francisco. You could see the view behind me.
Nathan Latka
04:04I was about to say, yeah.
Trip Adler
04:05>> Yeah, we're right in Financial District on the 24th Floor.
04:12>> Most of them are in San Francisco. We've now got a small team in New York who does our publisher relationships. We have also offices in Phoenix. We're building our support team out there, a few other people around the world.
Solving the Chicken and Egg Problem with SEO
Nathan Latka
04:26Walk me through how you make the You have a market, right? This is a traditional marketplace. You got to get the content and you got to get the users. So early on when you were solving that chicken and egg problem, usually marketplace creators did something very creative to make the wheel start spinning. What did you do in the early days?
Trip Adler
04:42>> Yeah, that's a good question. Yeah, we've basically been perpetually solving this chicken and egg problem for the last ten years.
04:49>> So in the early days, the initial idea was we would just allow someone to take a piece of content, publish it on the web, and then we would find audience for them primarily via SEO. And then of that SEO traffic, a small fraction of people would come in, upload their own content, and that would kind of get the cycle going. So we really got that growth going early on, and that's what took us from launch to
05:13>> a 100,000,000 monthly users pretty quickly. And then the nice thing
Nathan Latka
05:16was How quick was that trip? How long did it take it to hit a 100,000,000?
Trip Adler
05:20>> Probably four years.
Nathan Latka
05:22Okay. So up to about was that 2010 or '11?
Trip Adler
05:25>> Yeah. 2007 to 2011. I I went from roughly zero to a 100. And then we had to figure out a business model. We tried advertising that didn't really you know, advertising is not really an interesting model unless you're huge like Google or Facebook. We tried allowing publishers to sell content that also didn't really scale. Eventually, tried the subscription and that worked really well. And since we already had an audience, we were able to market the service.
Nathan Latka
05:50You don't have Hold on. Hold on. I have to stop you there because you take it for granted now. But take me back to that moment. You were running all these tests. What was the early indicator? What was the test you ran to see if subscription would work? And what was the feedback from the test where you said that's where we're going all in?
Trip Adler
06:05>> So we just put up a simple freemium model that offered some freemium features, and that quickly became the most dominant business model for us. So that was kind of the indication that subscription was working. The big moment for subscription was that when we decided to go partner with all the publishers to put their content in. So at the time, the idea of a book subscription service was pretty crazy. Most people couldn't even envision that. And we
06:28>> went and we talked to all the publishers about including their books in our subscription. They pretty much all said no unanimously, but we were able to get some small ones on and then those led to bigger ones. And over time, it started to lead to a tipping point where we're able to now get up to a million books in our service. So it actually all happened very iteratively. And the way we've been able to solve this
06:51>> chicken egg problem over time is just each step leads to the next. And as long as we keep kind of inching forward in various directions, both on the content side and on the consumer side, on the business model side, it all kind of together over time.
Subscriber and User Numbers Today
Nathan Latka
07:03What are at now today? I think you said, is it 500,000,000? Or what are you at today now in terms of readers?
Trip Adler
07:08>> So we reach about 100,000,000 non paying users a month, then we have, the last number we announced is 500,000 paying subscribers.
Nathan Latka
07:17Okay. That 1,000,000, That 100,000,000 user number though, you said that was what you hit in 2011, right? I imagine you grew between 'eleven and 'seventeen, right?
Trip Adler
07:28>> Yeah, we've grown. We just haven't announced the new traffic numbers. At the same time though, the non paying audience hasn't grown as much over the years just because it's very SEO driven. And we've kind of plateaued in terms of the non paying audience.
Nathan Latka
07:42The How was it SEO driven? Help us understand that.
How SEO Drives Free User Acquisition
Trip Adler
07:45>> Well, we have this library of 70,000,000 documents that are uploaded by users. Basically we have over 100,000,000 people a month who come to visit that library of content. And mostly people are searching for things on Google and then long tail searches bring them to our library of content.
Growth Past 500K Subscribers and Next Milestone
Nathan Latka
08:02Got it. That makes sense. So with 500,000 folks paying now a minimum of $9 per month, sounds like that's your only price point. That's about 4,500,000 in MRR or well over 54,000,000 in ARR. And when was the date? When was that date? Because those are just your most recently announced. When was that announced?
Trip Adler
08:20>> When we announced that, like six months ago.
Nathan Latka
08:24Okay, so it's accurate in terms of today.
Trip Adler
08:28>> We've grown past that quite a bit. We're growing at maybe 50% per year right now.
08:38>> Yeah, mean, revenue is going pretty nicely. We're pretty profitable. Yeah, I mean, more we grow the subscriber base,
08:45>> the more revenue we add to return to publishers and authors, we can get more and more content in the service. And we're just trying to continually get that kind of growth loop going.
Nathan Latka
08:55You're about twenty, twenty five days from a holiday party there in the Financial District with your team before everyone heads out. Are you celebrating and shit you with champagne? Do you pass 56,000,000 you think in ARR by that holiday party or no?
Trip Adler
09:09>> Yeah, well, 100,000 subs, we have a big celebration. The next one for us is a million subs. That's really what we're aiming towards. So that's a big one that we're looking forward to celebrating.
Nathan Latka
09:20That's good. Do you think you'll pass 600 before the end of the year? 600,000?
Trip Adler
09:26>> Yeah. I I don't wanna comment on numbers too much.
Nathan Latka
09:29I'll skip over. I'll skip over if you don't wanna talk.
Trip Adler
09:32>> We're blowing past 500,000. So we're on our way to the next big one we're gonna be announcing soon, hopefully.
How Publisher Content Deals Work
Nathan Latka
09:37That's exciting. What do you help me understand now. You said all your user acquisition is free, but I'm very interested in how you're more about how you're getting this content. So for example, I just signed a big book deal with Portfolio, right? And I'm curious if I want to go talk to them and say, I really like, Trip, I want to figure out how to get my book in Scribd. What does that negotiation look like
09:55on the back end?
Trip Adler
09:58>> Well, I mean, if we work with a publisher, the book kind of shows up automatically on our service. So the main thing for us that we've had to do is work with publishers to get them comfortable with this kind of model.
Nathan Latka
10:13Are you paying them though, or is it just a trade?
Trip Adler
10:16>> We definitely pay them. So we have a number of different types of deals in place these days. The main type these days is we will pay by the read of the book. So this way, from their perspective, it more or less looks like a sale. So just like they're selling the book, we'll pay them anytime the user reads the book.
Nathan Latka
10:33What if the user only opens the first 10 pages and doesn't complete the read?
Payment Threshold and Per-Read Economics
Trip Adler
10:37>> So, yeah, so we have a threshold that we use for when the book counts as a read. So it's usually about 20% of the book is when that triggers the payment.
Nathan Latka
10:47When are you guys gonna start releasing? Amazon has started getting more aggressive about releasing their top 10 most it's funny how they label it. They say like most sold and most read. They don't say which one's actually driving the list. But when are you guys gonna start publishing your own best seller or best read list?
Trip Adler
11:02>> We do share a bunch of those. It's a good idea that we should really, we do have a lot of interesting data. Mean, we have people reading different books in our service than they read in others just because of the nature of the model and the types of content we have. So would be a really interesting thing to share. We should share that more.
Famous Five: Books, CEOs, and Tools
Nathan Latka
11:16Interesting. All right, Trip, let's wrap up here with the famous five. Number one, what is your favorite business book?
Trip Adler
11:24>> Favorite business book? I would say Good to Great.
Nathan Latka
11:27I was gonna say, this is like asking you to pick a baby considering all your book relationships, Number two.
Trip Adler
11:33>> Good to Great is on Scribd both in ebook and audiobook form. You should listen to it.
Nathan Latka
11:38There's the pitch. All right. Number two, is there a CEO you're following or studying, Trip?
Trip Adler
11:49>> Not really, but I guess if I were to pick a couple, I think
11:57>> The other one's doing big subscription services. So I'm a big fan of other services that have kind of pioneered some ideas we're pursuing. So like Reed Hastings at Netflix or Daniel Ek at Spotify. I mean, they both accomplished really interesting things where we're trying to do something similar for reading. So I think those are two that I pay a lot of attention to.
Nathan Latka
12:16Number three, in terms of building Scribd in the business, what's your favorite online tool?
Trip Adler
12:22>> I think Tableau is really great.
Nathan Latka
Trip Adler
12:26>> lot of data, so fun to look at data.
Nathan Latka
12:28Number four. How many hours of sleep do get every night?
Trip Adler
12:32>> Seven, eight.
Nathan Latka
12:33I think it's pretty healthy. And what's your situation? Married, single, you have kids?
Trip Adler
12:37>> Married as of a year ago.
Nathan Latka
12:39Oh, congratulations. Any kids yet or no?
Trip Adler
12:41>> Not yet. Not yet.
Nathan Latka
12:42None yet. And how old are you, Trip?
Trip Adler
12:44>> 33.
12:45>> 33.
Lessons Learned: Trust Your Gut
Nathan Latka
12:46Last question, take us back thirteen years. What do wish your 20 year old self knew?
Trip Adler
12:53>> I would say just to trust my gut a lot. When I look at mistakes I made, it's usually from not trusting my gut. So always trust your gut.
Nathan Latka
13:03There you guys have it from Trip, Founder of Scribd. Trust your gut. He founded his company back many years ago, got his first 12,000 from Y Combinator. He's since grown the service. Again, that was back in 2007 launch date. He's since grown the service, supporting over a 100,000,000 readers, 500,000 of them paying $9 a month. So about $4,500,000 in monthly recurring revenue or about 54,000,000 in ARR growing super, super fast with his team of about a
13:29120 people out there in San Francisco looking at, again, how to get more content in the system, more readers, and more value to the end subscribers. Trip, thank you so much for taking us to the top.
Trip Adler
13:38>> Thank you. Great to talk to you.