#126 - Chris Best and Jonathan Gill

**Craig Cannon** (0:00)
Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is with Chris Best and Jonathan Gill. Chris is the co-founder and CEO of Substack. Substack makes it simple for a writer to start a paid newsletter. They were in the winter 2018 batch of YC. You can check them out at substack.com. Jonathan is the co-founder and CEO of Backtracks. Backtracks is a podcast analytics and hosting platform. You can check them out at backtracks.fm.
Chris is on Twitter at cjgbest, and Jonathan is at jgill333.
All right, here we go. So Chris, what do you do?

**Chris Best** (0:40)
I'm the CEO of Substack. We make it simple to start a paid newsletter, and also you can put audio in it now.

**Craig Cannon** (0:48)
And Jonathan?

**Jonathan Gill** (0:49)
I'm Jonathan Gill, co-founder and CEO of Backtracks. We help audio content creators know and grow their audience and their revenue.

**Craig Cannon** (0:56)
And you guys have two different strategies. Paid versus advertising.
What's your take, Jonathan?

**Jonathan Gill** (1:03)
I think from the current state of the podcasting market, ad-supported sponsorship is one way forward when people are used to free products versus television and cable, where they're used to different tiers. So there is subscription revenue, there is a la carte, but from our view, the podcast ecosystem at large is not really ready for subscription content.
And I think there's those alternate viewpoints of that.

**Chris Best** (1:29)
Yeah, I think that's actually an interesting way to put it. I mean, obviously we think that paid content, paid relationships even is sort of the way to go as a huge missing force in like the media in general. We started with newsletters, we think the default assumption that everything has to be free is kind of something that's like breaking the world in a couple of important ways.
And it may well be true that with the existing podcasting ecosystem, especially in the US, that it's really hard to do paid stuff in a compelling way just because of the way that it kind of evolved and the way that the people control the ecosystem. But I think that the podcast market that can be supported by advertising is small and sad compared to the audio market that could be supported if we had an effective way to pay for it. And the kinds of things you're seeing happen in China right now sort of hint at that.

**Jonathan Gill** (2:22)
Yeah, in terms of the Chinese market, the Chinese market is a little different than the US and worldwide in that they're used to paying for audio content. Some of it is richer in quality. They pay for educational content.
The ecosystem for podcasting and paid for content in China is much greater than even the US.

**Chris Best** (2:39)
It's like ten times as such.

**Jonathan Gill** (2:40)
Exactly.
It's different historically. I think there's a good blend of there's content that works, that's ad supported, there's directly attributable. You even see it through Patreon. You see sponsorships where people are paying for that content by being a fan, by being a patron, by the direct payment systems. But then I think there can be a mix.
I think in the US market in the current state, sponsorship is one way. There's private paywalled content. There's the blend of the two. And kind of our viewpoint at Backtracks is from the advertising standpoint, people don't like advertising when it doesn't fit with the content and the messaging. But advertising can add value if it's actually in relation to the content, if it's not in the creepy factor that Google and things have. But you can basically blend the two for a healthy ecosystem. It doesn't need to be one way or the other.

**Chris Best** (3:30)
Can I ask a question that I'm genuinely curious about? Is our advertisers today overpaying or underpaying or paying about the right amount for podcast ads in general?

**Jonathan Gill** (3:41)
So it depends on the particular piece of content, the particular advertiser. One of the problems in the industry is measurement.
And how do you uniquely measure a listener? And how do you know engagement?

**Chris Best** (3:51)
It feels a little bit like podcast downloads are almost like the banner ad impressions of the early internet.

**Jonathan Gill** (3:57)
So we have a spec in technology that's around measuring the actual engagement.
So should you base your advertising spend on a metric like downloads or more engagement or other, if you're doing advertising? But I think in terms of the industry, the metrics aren't there in the same way video and text are. And that's part of the tech stack that we have, is you can directly measure how long someone listened to a podcast in a certain case.