There is a better way to make money in podcasting.

Having to build an audience from scratch in a country where most people have never heard of podcasts, showed me a different path to audience growth, creative freedom, and $170 CPM.

The strategy is not without social risk, but it works. And it’s also a way to bring new ears to podcasting, and that’s important.

Podcasting is at a crossroads today. Edison Research showed that while more content than ever is produced, the number of listeners is leveling out.

Many podcasters have responded by turning inwards and focusing their marketing on people who already listen to podcasts. That’s sound business logic, I suppose, but it’s a zero-sum game. The end result is an advertising arms race targeting a fixed pool of listeners, and where a show’s reach is determined by its marketing budget.

That would be the end of independent podcasting.

The good news is that attracting new listeners to podcasting is actually far more profitable than competing with everyone else for the attention of existing listeners.

But before I explain how, let me back up a bit.

Podcast Nation

Japan is not a podcasting nation. Most popular podcasts are recycled radio produced by major media companies. Good independent shows exist, but you need to look for them. As far as I know, I am the first person to earn most of their income from podcasting and to make enough to live well in Japan.

I’m glad I didn’t know how much work it was going to be before I started.

I’ve founded a few startups in Japan, and the podcast was supposed to be me just talking with my founder friends about startups and innovation in Japan; about what it’s like to be an innovator in a culture that prizes conformity. Since many of my friends weren’t comfortable in English, alcohol was involved in a lot of these conversations.

I christened the show “Disrupting Japan”, and launched to decidedly little fanfare in September 2014.

The podcast totaled 42 downloads that month. I thought that was great.

How Not to Grow a Podcast

My audience rose steadily each month, and after six months I had about 400 listeners. At this point, I decided to invest in improving my show, but most of the common sense approaches I tried either had no effect or actually backfired.

I rented a studio to improve production quality, but it made my guests uncomfortable. Most simply could not relax in the unfamiliar environment and spent the whole interview looking at their mic rather than at me. I tried this with three different guests, and I didn’t get a single usable conversation.

I gave up on the studio, started going to their offices and using a pair of small lapel mics. The sound quality was lower, but after a few seconds, my guests forgot they were wearing them, and we could talk like two human beings. Showing up with beer also helped my guests relax and made the recording less if an interview and more of a conversation.

Sacrificing a bit of production quality for more personal, honest conversations was one of the best decisions I made.

Marketing my show proved counter-intuitive as well. None of the “foolproof techniques” everyone uses worked for me.

I’ve had good results using social media advertising for some of my startups, but it was worthless for podcasting. I poured money into multiple campaign strategies on Facebook and Twitter, but I saw no perceptible increase in listeners. These platforms reported lots of “engagement,” but there was no significant difference in site visits or downloads between the episodes I advertised and those I did not.

Appearing on other podcasts is supposed to be a great way to grow an audience, but it didn’t work for me. I greatly enjoy the conversations I have with other podcast hosts, but my appearances never resulted in a noticeable bump in listeners.

Now, these techniques do work for many podcasters, and they may work for you. But they clearly were not working for me. I finally realized why. Disrupting Japan was addressing a very small niche — innovation in Japan — and there were simply not enough existing podcast listeners interested.

I would have to build an audience from scratch and bring new listeners to the platform.


What Really Works (At Least for Me)

The way I grew my audience with was via interaction.

Online, this meant finding the handful of Facebook and LinkedIn groups interested in Japanese startups and then joining the discussions. Most groups welcomed my contribution.

However, my offline efforts made the biggest impact. I sought out any event or seminar where I speak about Japanese startups and innovation. Every time I spoke, I saw a small uptick in listeners and email subscriptions.

That email list turned out to be more important than I expected for two reasons. First, casual surveys indicate that about 25% of my fans were not subscribing to the podcast, but going to the site and listening from the browser or simply reading the transcript. Second, people were more conformable engaging over email. Even today, when an episode is released, one or two people may comment at the site, but around 20 will reply to the email announcement.

Disrupting Japan fans were, and still are, extremely engaged. Guests received significant positive feedback about their appearance, and fans occasionally mentioned that Disrupting Japan was the first podcast they had ever listened to. September of 2015 was the show’s first anniversary, and 120 people paid a $20 cover to watch a live podcast and to meet each other.

In May 2016, the startup I was building blew up, and at that point Disrupting Japan had about 3,500 listeners. Three friends urged me to try podcasting for a living. I had no better options, so I gave it a try.


God Help Me. I’m a Media Company!

My first problem was that there were no ad agencies serving podcasters and no sponsors who understood the medium. There was a lot of work to do.

My audience consisted of startup founders, aspiring founders, and others interested in innovation in Japan. I brainstormed what kinds of companies that really wanted to connect to this audience. After a week, I had a list of 50 likely sponsors.

Of course, almost none of them had ever heard of me or of podcasts, but that could be fixed.

I began knocking on doors and pitching in Powerpoint. It was tedious, but the feedback from potential sponsors was invaluable in crafting my sponsorship package. It turned out that my sponsors didn’t really want what I thought I was selling.

Direct response advertising dominates podcasting in America, but it’s a losing game for most podcasters. We all focus on CPM because it is easy to standardize and measure, but with standardization comes commodification. Once you accept that you are selling impressions or downloads, you resign yourself to competing with a nearly infinite number of other podcasts.

The foundation of $150+ CPM podcasting is helping companies build their brand.

With this in mind, I crafted sponsorship packages that combined podcast ads, banner ads, and in-person appearances at my sponsors’ events. These in-person appearances required a significant time commitment, but these live appearances both consistently drew people to the events and drove new podcast subscriptions. A virtuous cycle was set in motion.

If you decide to go this route, however, you need to be prepared to spend at least as much time with your sponsors as you do on your podcast. Writing and re-writing ad copy, explaining metrics, brainstorming messaging, and creating custom presentations for your sponsor’s events will place huge demands on your time.

But it’s worth it.

Companies like Midroll and PodGrid are great, and it’s tempting to just let someone else deliver sponsors to you. However, you give up a lot when you make that decision. In the end, your CPM rate is directly proportional to the amount of effort you are willing to put into finding the right sponsors.

Nine months after going pro, I had an amazing group of sponsors and about 4,000 listeners. I was releasing an episode each week, with three ads per show at $680 per insertion, and earning a bit of additional revenue selling banner ads. I was earning over $8,000 a month, and since I was still a one-man show with minimal advertising costs, this was mostly profit.


Building A Podcast Empire

Disrupting Japan had become financially successful, but I was spending 70% of my time finding and working with sponsors and only 30% of my time creating the podcast.

Perhaps I am better at selling ads than I am at podcasting, but I enjoy podcasting more.

On its own, Disrupting Japan did not generate enough revenue to hire someone to handle the advertising, but a podcast network might. At this point, the logical step was to start selling ads for other podcasts and to bring together a team to grow the business.

Bootstrapping this venture was fairly simple. I went down iTunes’ list of the top 200 podcasts in Japan, crossed out the ones produced by major media companies, and then emailed the remaining podcasters asking if they were interested in sponsorship. Most of them were.

Finding sponsors wasn’t difficult either, but I found couldn’t command the high CPM rates that I could when selling ads on my own show. Sponsors paid an average of $42 CPM, and I kept 30% as commission. Both the sponsors and the podcasters seemed happy.

I pitched some of Japan’s largest ad agencies on podcast sponsorship, and several had clients they felt would be interested in experimenting. Unfortunately, to make financial sense, the agencies would need to sell at least $10,000 in podcast advertising per month, and there was nowhere near enough podcast inventory for advertising at that scale.

I had a plan to fix that.

Podcasting may not be big in Japan, but YouTube is huge. I was confident that with a bit of training and the promise of a 10x increase in their CPM rates, I could convince a number of high-profile YouTubers to take up podcasting on the side.

I was pretty busy at this point. I was interviewing potential co-founders and sales staff to help get this podcasting empire off the ground, and I was, of course, podcasting. I still had a weekly show to put out.

And here, our story reaches its anti-climax.

I had good product-market fit and a path towards scalability. The startup narrative practically demands that I bring together a fanatically dedicated team to pursue the vision and fast-track the company towards IPO or acquisition.

That didn’t happen. It could have happened. Perhaps it should have happened. But it didn’t.

I was working 80-hour weeks. I was making progress, but I wasn’t really finding anyone who shared my vision of what podcasting could become in Japan. I was burning out.

Japan’s largest electric utility asked me to help them set up their innovation and startup investment program. It seemed like interesting work, and it paid a lot better than podcasting.

I took the job, and I walked away from podcast advertising.


Wait! What?!!

Yeah, I know. That was not the ending you expected, but it’s actually a happy ending.

From a startup perspective, my decision may look like selling out, but from a podcasting perspective, it is exactly the opposite.

My podcast advertising empire was a failure, but my podcast is a success. Disrupting Japan has been ad-free for over a year, and I slowly and steadily continue to gain listeners. My current audience is about 4,500.

People still occasionally tell me Disrupting Japan was what turned them onto podcasting, and four Japanese founders have told me that listening to the guests on my show gave them the courage to start their own startups. That means a lot to me.

Our fourth-anniversary show had 250 people show up. Once in a while, I see a Disrupting Japan sticker on a random laptop or two in a co-working space, and it makes my day.

Companies like Gimlet and Earwolf create great podcasts, but as businesses, they are forced to focus on the simpler strategy of targeting existing podcast listeners rather than making the effort required to bring new people to podcasting. I don’t blame them for that. Media is a tough business.

If podcasting is going to continue to grow, it’s going to be the independent voices rather than the media companies that drive that growth.

It has to be.

You and I, we independent podcasters, are not really podcasters. We are people who create podcasts, and that difference is important. Our medium is not our message.

Even when I was a full-time podcaster, my podcast did not define me. None of my sponsors were really paying for ad space on the podcast. What they were really paying for was a chance to deliver a sincere message to a community they could not reach any other way.

Podcasting lets me tell stories that cannot be told in any other medium. It let me create a community that would not have formed around video or print. Podcasting has been financially rewarding and an amazing tool for networking and building a personal brand.

All the benefits you hear about podcasting are absolutely true, but there is also something I never expected going into this project.


Podcasting Made Me a Better Person

Interviewing people is easy, but having a meaningful conversation is hard.

It’s hard to get people to go off-script — particularly if they are not media-trained and are not speaking in their native language. I wanted people to open up about what really worries them and to talk about the problems that keeps them up at night. But that takes a level of empathy and sincerity that I simply didn’t have when I started podcasting.

Ironically, it turns out that the best way to get people out of their comfort zone is, for lack of a better term, being comfortable outside my own comfort zone.

Everyone is happy to give abstract advice and recite clever anecdotes, but I found that if I wanted people to open up and be honest with me, I had to go first. Being an objective, detached observer simply didn’t work. Only when I shared my own hopes and fears and insecurities, were others were willing the share theirs with me.

I discovered this was true not only in podcasting but personally as well. Every time I pushed myself to talk candidly about something that made me uncomfortable, whether it was the search for my birth parents or the catastrophic failure of a recent startup, I was rewarded.

Every time, the stream of support was overwhelming. Every time I shared, people contacted me to let me know they were in — or had been in — the same place. They told me that it made them feel a bit better just to hear someone else talk about it.

Podcasting changed me. I listen more and talk less than I used to. I find myself going into interview mode at parties and drawing life stories out of people I have just met. I enjoy these parties a lot more than I used to.

People seem more interesting than they were before, but of course, I’m the one that’s changed. These people have always been interesting, I just hadn’t noticed before.

I’ve become friends with many of my guests, not “expanded my network” or “leveraged my platform”, but simply become friends. We get together for drinks and exchange crazy ideas.

Today’s world is filled with click-bait content, influence marketers, and fake-it-till-you-make-it founders, but we are desperate for honest connection. I think the reason people have responded so passionately to my stories is not because they are exceptionally interesting, but because it gives them permission to share their own.

Podcasting is uniquely suited to intimately sharing oneself. We have the ability to literally whisper in people’s ears and tell them our secrets and our truth. That kind of honesty and connection is rare today. It is valuable

Bringing new listeners to podcasting is simply a matter of providing this level of honesty. Listeners will come to podcasting because there is nowhere else to find it.

That honesty is the future of podcasting.