From A Free Skype Plugin To A $1M/Year Audio/Video Transcription Service
Hello! Who are you and what business did you start?
Hi guys! My name is Rajiv Poddar and I run a business called Scribie, an audio/video transcription service. Our customers send us recordings of their Zoom meetings, phone calls, YouTube videos, etc. and we send them back a document that is neatly typed out and is as accurate as possible. The work is done by freelancers spread across the world and we provide them a platform that helps them do it efficiently. Our AI, online editor, and other tools improve their productivity.
We have been in business since 2008. We are more like a professional service than a growth focussed startup. We focus on quality which is the nemesis of growth anyways. We aim to provide the best quality at a reasonable cost. Therefore, we have consciously chosen to stay a small and lean company.
We just crossed $1 Million in revenue in 2020.
What's your backstory and how did you come up with the idea?
I am a 90’s kid. I grew up in a small town in North-East India called Silchar. I think I heard about Google when I was in high school and was fascinated by startups ever since. I enrolled in Engineering with the intent of starting up on my own one day. I finished my graduation in 1999 and worked for a couple of companies before taking the plunge in 2006.
The odds are also stacked against solo founders. I have been the solo dev for the better part of the last 13 years. I am sure Scribie would have been a very different company today if I had found co-founders early on.
My first startup was a hardware startup. It failed and we closed it down in 2008. I repurposed one of the internal tools into a Skype call recording plugin (Call Graph Skype Recorder) and released it for free. It took off and even got featured in LifeHacker! I started exploring various freemium business models around it and stumbled upon the audio/video transcription industry by talking to users. Transcription was one thing my users were willing to pay money for.
However, the online transcription industry was in its infancy in 2008. It was difficult for both the customers and the transcribers. That was the gap in the market that I decided to target. Transcription is a painful and laborious process. The quality depends largely on the skill of the transcriber. My idea was to build a crowdsourcing platform with in-built quality control mechanisms. The goal of the system was to produce accurate, consistent, and repeatable transcripts. It was like a managed marketplace with flat rates and a quality-of-service guarantee. It was radically different from brick-and-mortar style services at that time.
I was however rebounding from the failure of my last startup. I just decided to put my head down and go it alone this time. This project consumed me for the next couple of years. I rediscovered the joy of creating something new with my own hands. It felt like I was doing my bit of changing the world for the better from my bedroom!
Take us through the process of designing, prototyping, and manufacturing your first product.
Building Scribie was an iterative process. I approached the problem of transcription from purely an engineering point of view. I was an Engineer after all! We started with a two-step transcription process and designed the web platform around that. I had to learn web development as I went along (I was an embedded systems programmer before this). The prototype of the website turned out to be hideous. Then someone suggested I use AJAX which was the hot thing in those days. I remember redoing the whole thing again in AJAX and going bonkers with it.
After a few design disasters, I decided to go the as-simple-as-possible route and designed a bare-bones website with lots of whitespaces. Simplicity is the best policy. I hired my first set of transcribers from freelancing forums. I already had customers from the Skype recorder. My platform put those two together. We formally launched the service in August of 2008 at the price point of $0.50/minute of audio.
I am single-mindedly focused on cracking the problem of scaling our transcription service without compromising on the quality.
I didn’t bother to register a company. I used my personal PayPal account to collect payments and pay my transcribers. I worked out of my bedroom and was the only person working. My startup costs were therefore just my living expenses. Thankfully, my living costs were quite low because I was single and India is quite cheap.
Describe the process of launching the business.
Everything revolved around the Skype recorder for the initial few years. Our recorder was the only free Skype recording plugin at that time and we got a lot of traction just because of that. Freemium model was in rage those times. We were featured by LifeHacker and several other prominent blogs. That gave us our initial set of users. We started charging for transcriptions in July of 2008 and got our first paid customers. The conversion rate was quite low, less than 1%, but it was enough to keep the lights on.
I had some money saved from the previous startup and I used that to fund the development of the transcription service around the Skype recorder. Thankfully, I turned ramen profitable exactly around the time all my savings ran out. It was kind of neck to neck. Scribie has been cash-flow positive and revenue funded ever since.
In hindsight, I treated Scribie not as a startup but as a hobby project that paid my bills. I was the solo dev in love with his own creation rather than a startup founder. It hadn’t occurred to me that it could become a legit startup on its own. It was only around 2010 I formally registered a company and in 2013 when we opened an office. We were kind of a fully remote company before it was cool.
Since launch, what has worked to attract and retain customers?
At Scribie, we never have really treated ourselves as a high-growth company. Quality was always our primary concern. Quality is anyways the nemesis of growth. Therefore, we never did any serious sales or marketing. The only marketing activity we do is content marketing -- which is we post a few articles each month on our blog. Given that we acquire most of our customers through Organic Search, I think that that approach has worked for us.
It is also surprising that word-of-mouth advertising still works in this day and age. Many new customers report that a colleague or friend told them about us. I tend to attribute that to the fact that we provide the best cost to quality ratio to our customers. That is perhaps also reflected in our high NPS score (around 63). Quality is a hard problem to solve, especially in our industry. We could have sacrificed quality for growth as others have done, but maybe that is what makes our customers keep coming back to us.
The one piece of advice I give others is that passion is the only thing that keeps you going. There were many ups and downs in my journey of the last 13 years and my belief and passion helped me through the bad times. The flip side of passion however is that you tend to fall in love with your product and become too attached. You tend to lose sight of the primary focus of a business; making money. An entrepreneur loves the business whereas the Engineer loves the product. You have to find the middle ground.
How are you doing today and what does the future look like?
We finally crossed the $1 Million revenue mark in 2020, 12 years after launching. We are a bootstrapped service and therefore have been profitable since early 2009. We had consciously chosen to focus on quality rather than growth quite early on. Our focus on quality and extreme frugality has helped us to survive in a highly competitive and price-sensitive industry till now.
Our gross margins are around 50%. Our primary metric is the total number of audio hours transcribed and that has been steadily growing. The customer acquisition cost is around $100. The lifetime value of each customer works out to be around $300. A lot of the typical SaaS metrics do not apply to us since we are a pay-as-you-go service rather than a subscription service.
I am single-mindedly focused on cracking the problem of scaling our transcription service without compromising on the quality. We have been at this for the last 13 years. Each time we have attempted to scale, we have run into capacity issues. We just do not have enough qualified transcribers to handle the demand. Audio/video content is experiencing a boom on the internet and the transcription industry has boomed along with it.
However, nobody has figured out how to scale and maintain the quality. I am betting on the fact that If we figure that out, we might have a shot at becoming the next unicorn! Till that time comes, we are more of a professional service that focuses on providing a good service to customers rather than making as much money as possible.
Through starting the business, have you learned anything particularly helpful or advantageous?
Quality is always the hidden requirement. A customer may not say it upfront, but they are unlikely to recommend you if you deliver a substandard product or service. Somebody will have to bear the cost of poor quality and it is you in the long run. We have outlasted many others in this industry because of our laser-sharp focus on quality. However, quality is a hard problem to solve, especially in a manual labor-intensive type business. It is a challenging problem to tackle.
The odds are also stacked against solo founders. I have been the solo dev for the better part of the last 13 years. I enjoy programming. The business side has therefore suffered. I am sure Scribie would have been a very different company today if I had found co-founders early on. Running a startup is hard given the ups and downs. It is even more difficult for solo entrepreneurs. Find a co-founder if you can.
At the end of the day, we are still fortunate to have been able to serve so many customers and transcribers. We have helped many people earn an honest living out of their skills. We have also helped many customers with critical projects. In the end, that is what matters.
What platform/tools do you use for your business?
My favorite business tool is undoubtedly Spreadsheets. I have been using Google Spreadsheets for tracking our metrics to do my accounting since 2008. It has never disappointed me.
Another business tool that we adopted quite early on was live chat software. We were an early adopter of Zopim which was later acquired by Zendesk. We have had a dedicated customer service team since 2015 and it has worked wonders for us.
We also use Mautic for Email marketing and engagement. I recommend it highly.
What have been the most influential books, podcasts, or other resources?
Hacker News from YCombinator is another resource that I found quite useful early on in my startup journey. I learned everything about startups from HN. I am a big fan.
The one book I would recommend is The Bhagawad Gita. It is a truly inspirational book, not just for spiritual development but also for business and managing day-to-day life.
Advice for other entrepreneurs who want to get started or are just starting?
Value your users. For us, our transcribers are our most valuable resource. We have always believed in paying honest money for honest work. We have our share of detractors and there are many negative reviews about us, but we still have active transcribers who signed up years ago.
Our service runs because of our transcribers and we would have died long ago if our transcribers did not value us. The same applies to our customers as well. The value of such things cannot be measured in terms of money.
Are you looking to hire for certain positions right now?
We are looking for a Full Stack Developer currently. It is a full-time remote position. The ideal applicant would be someone who's into Web App development, with good fundamentals, looking for a stable remote job that offers a good work-life balance and working in the Asian/European time zone. You will be working very closely with me in the near term and independently later on.
The tech stack is plain HTML/CSS/JS on the frontend, PHP/Python/NodeJS on the backend, with MySQL database.
Where can we go to learn more?
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
