This SAAS Business Will Make Over 100 Million (Software as a Service) | My First million Podcast

and he was like, oh, this is Facebook. They, um, I was like, Facebook? He's like, yeah, they have an internal podcast that they do for their employees because Facebook has, I don't know, tens of thousands of employees, maybe 50,000.

I don't know. I know I try to get past media, but I just, I love it so much. Okay, so Jeff Bezos Bezos, Bezos, Amazon guy. He owns Washington Post. And a few years ago he goes, yeah, I'm gonna buy it and I'll let the editorial do its thing and whatever else. I'm gonna completely stay out of it, but I kind of want to take your guys's— they build their own technology to publish their articles. Like, I kind of want to take that and make that like a huge business. And a lot of people try this and never— and very rarely works. But what he did was— or he didn't do it, but he was somehow part of it. They've created this thing called Arc Publishing, and it does a couple things. The first thing is companies like me pay money to use it, but it's really interesting that you and I have talked about this idea, but what Arc Publishing is doing is they're going to companies like BP, so the oil company that has 200,000 companies, and they are saying, hey BP, you have, you know, 200,000 employees. We're gonna help you publish newsletters and articles and stuff to your, to your employees, which you already are, but we're gonna help you organize it, make sure it's read, things like that. And they're saying that in the next year or two, they're gonna hit $100 Wow. Which means, which means I bet Washington Post probably does maybe $500 million in revenue in total, but $100 million in this enterprise SaaS revenue would be worth more than Washington Post is. And I wanted to get your opinion on, A, that's a cool idea that you and I have been noodling with for a while, and they're just executing on a really interesting way. And B, the idea of branching out from your main thing to doing more. And like, and a totally unrelated thing. In some ways it's totally a stupid— I mean, so there's an argument to be made like this is just a stupid idea, never do it. There's an argument to be made that a lot of people do it successfully. So what's your take on this?

So first, this— I've never heard of ARC, so this is my first time hearing about it. Just to clarify, they give other brands or other companies the tools that Washington Post— they sort of productize their own toolkit. But is it always like the use case you talked about, like BP has 50,000 employees, wants to publish internally, or is it also external publishing?

Uh, I, I think that they're still trying to figure it out and I think that they're building it for a variety of reasons. At first it was just for publishers and then they closed this deal with BP and they, I think to them they're like, huh, maybe that's the way, that's the path.

Right. No, I think there's something to that because, you know, when, when I started the podcast, I used to go to this podcast studio before you guys built a dope studio in your office. I was going to this like kind of rent-a-studio-by-the-hour place, and I was talking to the guy who did it, and he was like, they had a sports radio station, a 24/7 sports radio station, and then they were like, well, we know how to build the studio, we built one for them. What if we turned a few conference rooms into broadcasting booths and we did— we offered it to podcasters? These hipsters in SF, they love this shit. And so, um, they didn't say that, by the way.

In San Francisco, there are no studios.

They're basically the only one, and trust me, I tried.

Yeah.

And so I went there and I was like, hey, can I get 11 AM tomorrow? And he's like, no, we're booked up from 11 to 3. I'm like, shit, who else— who are the podcasters using this? And he was like, oh, this is Facebook. They— I was like, Facebook? He's like, yeah, they have an internal podcast that they do for their employees because Facebook has, I don't know, tens of thousands of employees, maybe 50,000, I don't know. But they have managers who come in and record a podcast about managing at Facebook, and it gets distributed only internally. And I was like, I never heard of a internal-only podcast that a company was doing. But of course, you know, makes sense. People want to put out content, um, training, you know, different things like that, whether it's in text or audio form. That was my first time hearing about these like internal publishing systems that I had never really considered.

And that is what Arc is trying to do. And like Facebook, that has 50— I don't know, what do they have, 20,000 employees, tens of thousands of people, um, they need to create a lot of this stuff like, hey everyone, so here's how we're addressing this situation, here's what we're gonna say, here's the words we're using, yada yada yada. Or we're quitting this product, here's why, yada yada yada. Here's how to use the internal software, yada yada yada. It's a great idea, I think, and you and I had discussed a slight variation of this, but I want the listeners to tweet at me and tell me And I always hate the idea when people say like, oh, I can't do this, it already exists. But I just want to know, does this exist? Who is solving this problem?

Um, yeah, we've talked, okay, we've talked about a few variations of this, so let's go over them. So this is all in the bubble of the theme of what I'll call, um, I mean, I want, I don't want to say internal publishing because that sounds lame as shit, but basically intra-company stuff. So, uh, I'll think of a good name in a second, but basically we talked about Q&A, or sorry, all-hands software, because, you know, big companies do all-hands, you know, for their whole employee base. Also individual, you know, divisions will do all-hands for their group. And what you need there is video streaming, you need chat or Q&A functionality, but it needs to be private, it needs to be internal, it needs to be behind a wall that nobody else can get to this. So a lot of people already have video streaming services out there, but that's for mass, you know, It's like YouTube, it's Twitch, it's things for to go get a big audience, but this is for a select audience. It's a little bit different. So we talked about that one. We talked about when we were, we were going over Hemingway and how it makes you a better writer. We were saying, what if you could do this for, uh, internal, your emails inside a company, but also just a MailChimp for your company? So how does somebody get the word out within a company? How do they make nicely formatted, easy to read, you know, company announcements and bulletins? That come with the kind of tools that Mailchimp has, like tracking opens and clicks and that sort of thing. So that's an internal Mailchimp, internal podcasting. What these guys are doing is basically internal, you know, Washington Post, which is like a whole bunch of different features and functionality. They have— these guys have, you know, broadcasting, like live streaming. They have blogging. They have—

are you reading though the website right now?

Yeah, I'm going through their products. They have a huge set of things, basically everything you would need to make Washington Post. So I think that's just an interesting thing to think about. What if you took the best-in-class products that people use to publish and broadcast to large audiences and you said, how do companies need this just for internal broadcasting, internal announcements? I remember my brother-in-law, he owns gyms, you know, like 50 gyms, and he was like, yeah dude, I just need an easy way to mass text all my employees on a text list. The kind of numbers for the day and any key announcements about what we're trying to do. He's like, you'd be surprised, it's really hard to like get this stuff set up and get this, make this a part of the onboarding of my company so that yeah, everybody knows they should join.

That's the SMB, uh, version, like the small business version, um, which is also a good idea.

And then the second thing you talked about is, you know, when do you, when do you do this? When do you take your eye off your core business and how do you expand into other lines of businesses. I think that's, you know, generically a hard thing, and it's a case-by-case thing. You have plenty of examples where it worked and it becomes a huge business unit. It— let's call AWS being the best example of this, where Amazon takes its own sort of server and compute system and services system and makes it available to any company. And now AWS brings in, you know, tens of billions of dollars a year. And, uh, so that's like the best case scenario. And then you have a probably, you know, hundreds or thousands of, of other examples that you could come up with where somebody does this, it doesn't take off, it becomes a distraction, et cetera, et cetera. And you guys have considered this too. So how do you, how do you guys think about this?

Yeah. So when we consider it, everyone says the same thing. They go, well, Amazon did it. Let's just make AWS for them. And I'm like, well, you have to understand that Amazon did it like 10 years into the business when they were 10,000 employees and throwing 250 people at that problem ain't no thing. And so at my company, it's like, yeah, okay, I could hire a person. Like, I have no problem a couple of people like doing it. But you do need to get like your main thing right first. That said, I struggle with it because I have ADD and I want to, I want to do this shit. So it's hard. I don't know what— like Twitch. I bet Twitch is in the same boat. They're big enough that they can have these same projects. And a lot of the infrastructure that they probably are built on, I bet they had to make a lot of it from scratch. Um, so I don't, I don't know.

So Twitch is 10 years into the business and you're right, they invented essentially the best in class, let's say, live video streaming at scale where you can have 100,000 people all watching one channel with low latency and it doesn't fall over and broadcasting around the world. Nobody else really had that problem, so nobody else built a solution. And so you could imagine that Twitch could say, hey, we could make this available to others and that they could spin it out as its own business unit. And I think that might be a good decision, right? Because, um, you're taking an asset you've already have that you've, that you've refined, that's sort of, um, um, battle-tested and brandable, right? Like your sales pitches, hey, we use this for the biggest live streaming network, you know, out there. Um, but at the same time, it's a distraction and they wouldn't have done it year 1, 2, or 3. They, you know, could do it at year 10 because at that point your core is stable. It's not going anywhere. It's not going to die. And so, you know, I always make these analogies and I don't know if my team really likes it, but I always talk about like, you know, the startup is like a baby and like with a baby, a baby just, they need to eat, they need to sleep, they need to poop and nothing else matters. Like you don't need to teach a baby calculus right now. You don't need to, you know, do all this other stuff. And, um, but as it becomes a teenager or gets ready to go to go off for college, you know, you don't have to watch it so intently. You don't have to worry about, is it gonna, you know, uh, keeping the baby alive every single day? That's the main objective of early stage. But as you get later stage, you don't have to worry about that, which lets you—

why don't they like those? That's a good analogy. Why don't they like it?

I think it's because I'm always like, right now we just got to keep the baby alive. And it's just like sort of a dark, a darker way of talking about it, but Uh, like I did this with one of our companies in the Idea Lab. I was like, we had one company that was already mature. It was already profitable, making millions of dollars. And we had this other project that was totally unproven. And so anytime you had to decide, where do I spend an hour? It always seemed like a good idea to spend it on the thing that's making millions in profit, never to spend it on this super speculative thing. But if we did that, we would have never invested in the new thing. And so I made a decision. I said, hey, we can't have the baby and the teenager in the same room. Because they have totally different needs. They need different type of care. And, um, you know, one will always look feeble and weak compared to the other, but that one that's feeble and weak today has the most growth potential. And so we need to be investing in that too. And so let's split these two companies up and let's spin them out.