A few weeks ago I was listening to Alex Blumberg botch his first-ever pitch to an investor to get funding for his podcast startup. Now am I listening to him talk about selling that startup, also known as Gimlet Media, for $237 million. What a turn around.
In my last blog I detailed some of the first steps that Blumberg took in bring his idea to fruition. He documented his whole startup idea in a podcast, which is ironic because his startup idea was a podcast company, and he later posted this podcast about starting the startup when his startup took off.
For weeks, I have been learning about what it takes to be an entrepreneur. From risk, to dedication, to all-out hard work – founding a startup is not for the faint of heart. I have learned about making money, and finding the right team, and even have had to come up with my own idea to pitch at the MSU Hatch. But this week, I learned a new lesson.
One thing about being an entrepreneur is needing to keep your original vision in mind and doing whatever is best to capture that vision. This is what Blumberg and Matt Lieber really talked about in their podcast interview with Recode Media’s Peter Kafka.
Spotify recently purchased Gimlet Media, and many are seeing this as a negative thing. The niche uniqueness of the podcast industry, some say, is coming to its end. However, Blumberg and Lieber see it differently. When Kafka asked about what it really means to sell Gimlet to Spotify, Lieber responded:
“Our basic idea, the thing that motivates us is that we’re at the second golden age, at the dawn of the second golden age of audio. And there’s just this explosion, this flourishing of new kinds of storytelling, new kinds of programming that’s made possible by on-demand audio. And that’s growing quite fast, just globally. And it’s growing really fast on Spotify….so one of the reasons this is the right time for us is we feel like for this golden age of audio to truly begin to flourish, there needs to be global scale, there needs to be better discovery, and there needs to be better monetization. And Spotify has all those things.”
The people behind Gimlet, who have nurtured the company from day one, see this as an opportunity for it to continue its mission to bring people the content they want to hear – and Spotify, they believe, is the best way to do it.
I don’t think that Blumberg and Lieber ever really saw themselves selling Gimlet to Spotify. This is another one of the twists in their journey that was unexpected. However, the fact that they were open minded enough to consider the opportunity, and understand the potential it could bring to expanding the reach of podcasts, shows a lot of maturity and true dedication to their mission. Many entrepreneurs become so invested in their company that they lose sight of why they started it in the first place, and they hold on so tight that eventually they smother it.
Blumberg and Lieber seized this opportunity to take Gimlet Media to the next level. It wasn’t about the money. Gimlet Media could have been successful, and could have continued to have a lasting partnership with Spotify, even if they didn’t sell. They discuss this in their interview with Kafka. However, it was the growth potential and the resources that Spotify could offer that were truly the draw. It wasn’t about the money. Blumberg told Kafka:
“I don’t think you start a company and just be like, ‘I don’t care at all if I will eventually get rich from this company.’ But I can also honestly say that the money was far and away not the driving factor. To me the driving factor was, will this be better for the work we’re trying to do? And will this be better for the employees that have trusted us to come to the company?”
I think this has taught me an important lesson about making entrepreneurial decisions. There is a lot more to the life of a company than just getting it off the ground. You have to make decisions to further your mission, and the decisions you make need not be centered around the money, but rather around the heart of why you started the company in the first place. Blumberg and Lieber realized this. They protected their employees, the integrity of their content, and the promise for future podcasts, all the while making a good profit and ensuring a positive future for their company as a whole.
I don’t believe this will kill podcasts as we know them. Spotify is my main source of listening to both music and podcasts, and I believe it will be the bet outlet for growing the industry and breaking into new markets. We all knew podcasts were growing, so it’s no surprise that a major podcasting company like Gimlet Media would be acquired by a major streaming service like Spotify. I believe this is the first step into the new age of media that we have all been waiting for.
One thought on “What goes around comes around (for $237 million)”
Isn’t it great how fast an entrepreneur can go from botched pitch to $237 million? I agree that as an entrepreneur it’s important to stick to your vision and believe in yourself and your ideas. That’s exactly what Blumberg did and clearly it paid off. It’s cool to see him succeed like this. I also agree and don’t think that a deal of this magnitude will kill podcasts and podcasting in general. I think it’s smart for Spotify to prioritize podcasting as well as music in general. Great article!