SaaS Interviews with CEOs, Startups, Founders
969 How Scribd Passed $54m in ARR Building Netflix for Books
20 Mar 2018
Chapter 1: What is the main topic discussed in this episode?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs.
We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Tripp Adler. He's an American entrepreneur.
He's the CEO and co-founder of Scribd, a 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 million monthly readers and 500,000 subscribers. Tripp, are you ready to take us to the top? Sure. Sounds good. All right, good.
So for those people that are not familiar with Scribd or they're not subscribed yet, what does it do and what's your revenue model? How do you make money?
So Scribd's a subscription service for reading. So what you can do is pay $9 a month, and then you can read books, audio books, magazines, newspapers, documents on whatever device you like. So it's all basically funded by our consumers who pay the monthly subscription fee.
Okay, and there's that one simple pricing, just $9 a month?
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 of content, discover new types of content, and you kind of focus on what to read and not what to buy.
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Chapter 2: What is Scribd and how does its subscription model work?
Especially in San Francisco now. I'm from Palo Alto, but live in San Francisco. You can see the view behind me. I was about to say, yeah. Yeah, we're right in Financial District on the 24th floor. So most of them are in San Francisco. We've now got a small team in New York who does our publisher relationships. We also have offices in Phoenix.
We're building our support team out there and a few other people around the world.
So walk me through how you make the kind of, you have a market, right? This is a traditional marketplace. You got to get the content and you got to get the users. So when 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?
Yeah, that's a good question. Yeah, we've basically been perpetually solving this chicken-egg problem for the last 10 years. 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. Uh, so we really got that, that, um, that growth is going early on. And that's what took us from, from the, from launch to a hundred million monthly users pretty quickly. Um, and then the nice thing was how quick was that trip?
How long did it take you to hit a hundred million?
Probably four years. Okay.
So up to about, was that 2000 or 11?
Yeah. 2007 to 2011, I went from roughly zero to a hundred. Um, and then, and then we had to figure out a business model. Um, so we tried advertising that didn't really, you know, advertising is not really interesting model unless you're, you're, you know, huge like Google or Facebook. Uh, we tried, you know, allowing publishers to sell content that also didn't really scale.
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Chapter 3: What challenges did Trip Adler face when starting Scribd?
And 24 seven support, which we love, right? We love that. I bug the hell out of them. They always get back to me. So I've got you 30% off along with $100 in free AdWords credit. To grab it, just go to HostGator.com forward slash Nathan. But you got to do it now. Again, HostGator.com forward slash Nathan. What do you got now today?
I think you said, is it 500 million or what do you got today now in terms of readers?
So we reach about 100 million non-paying users a month. And then we have, the last number we announced is 500,000 paying subscribers.
Okay. That $100 million, sorry, the 100 million user number though, you said that was what you hit in 2011, right? I imagine you grew between 11 and 17, right?
Um, the, yeah, we've grown. We, we just haven't announced the, the new traffic numbers. Um, the same time though, the, the non-paying audience hasn't grown as much over the years just cause it's very SEO driven. Um, and we've kind of like plateaued in terms of the non-paying audience.
So how is it SEO driven? Help us understand that.
Well, we have this library of 70 million documents that are uploaded by users, and basically we have over 100 million 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.
Got it. That makes sense. So with 500,000 folks, you know, paying now a minimum of nine bucks per month, it sounds like that's your only price point. That's about, you know, four and a half million in MRR or well over 54 million in ARR. And when was the date? When was that date? Cause those are this, your most recently announced. When was that announced?
Uh, when did we announce that? Like six months ago?
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Chapter 4: How much funding has Scribd raised and how is it being used?
I want to figure out how to get my book inscribed. What does that negotiation look like? on the back end?
Um, well, I mean, if we work with a, with a publisher, uh, the book kind of shows up automatically on our service. So the, the main, uh, the main thing for us that we've had to do is just, uh, is, is work with publishers to get them model, uh, comfortable with this kind of model.
Are you paying them though? Or is it a, just a trade?
Oh, we, we definitely pay them. I mean, uh, so we have a number of different types of deals in place these days. The 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 any time the user reads the book.
What if the user only opens the first 10 pages and doesn't complete the read?
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.
When are you guys going to 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 going to start publishing your own bestseller or best read list?
We do share a bunch of those. It's a good idea that we should really, we do have a lot of interesting data. I mean, we have people reading different books in our service and they read in others just because of the nature of the model and the types of content we have. So it would be a really interesting thing to share. We should share that more. Interesting.
All right, Tripp, let's wrap up here with the famous five. Number one, what is your favorite business book?
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Chapter 5: How does Scribd ensure profitability in its business model?
So listen to it.
There's the pitch. All right. Number, number two, is there a CEO you're following or studying trip?
Um, uh, I not, not really, but, um, I guess if I were to pick, um, Uh, I think a couple, I think, um, um, I mean the other ones doing big subscription services. Uh, so like, I mean, I'm a big fan of, of other services that have kind of pioneered some ideas we're pursuing. So like, uh, read Hastings at Netflix or Daniel at Spotify.
I mean, they both accomplished really interesting things where we're trying to do something similar for, for reading. So I think those are, those are two, two that I pay a lot of attention to.
Number three, in terms of building Scribd in the business, what's your favorite online tool?
Um, I think Tableau is really great. Number three, a lot of data. So fun to look at data.
Number four, how many hours of sleep do you get every night? Um, seven, eight. It's pretty healthy. And what's your situation? Married, single, you have kids, uh, married as of a year ago. Oh, congratulations. Any kids yet or no, not yet. All right. None yet. And how old are you trip? Uh, 33, 33. Last question. Take us back 13 years. What do you wish your 20 year old self knew?
Um, I would say just to trust my gut a lot. You know, when I look at mistakes I made, it's usually from not trusting my gut. So always trust your gut.
There you guys have it from Tripp, 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, sporting over 100 million subscribers. readers, 500,000 of them paying nine bucks a month.
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