How to Avoid Making a Gigantic Mistake When Buying or Selling Sponsorships with David Tintner: An EOFire Classic from 2021

0:28Light that spark fire nation. intelligence platform. And today on Foundation, we'll talk about understanding the importance of a decision and keep pushing forward, how sponsorships give creators a chance to show off the products and services that they really care about, and building up a loyal audience who really cares about what you have to say, and oh, so much more. And a big thank you for sponsoring today's episode goes to David and our sponsors. The Next Wave, your chief AI officer, hosted by Matt Wolf and Nathan Lands, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals.

1:01Matt and Nathan are leading AI creators in your guiding light in the AI and technology frontier. AI technology is transforming the way we do business and the media landscape is fragmented. The Next Wave strives to be the leading podcast on AI technology and how you can apply it to growing your business. Listen to The Next Wave wherever you get your podcasts. David, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with? Hello, Fire Nation. Thanks for having me. And something I believe about being successful that definitely a lot of people maybe misconceive or disagree with is that it's all about surviving.

1:49I used to think that you got to have a brilliant idea and just execute it quickly right off the bat. But what I've seen over the past 10 years or so in my career is that sometimes it's just about surviving, getting to the next level, if you will. This is like a kind of a video game of career path and entrepreneurship and survive, get to the next level and fight to see another day. And then if you keep doing that and keep pushing on, good things do happen eventually. You know, I saw that in my career as well. I mean, it was three or four years of just pushing, pushing, keeping my head barely above water.

2:28And then it's like, oh, I can touch the ground now. Oh, I can walk out. And now I can stand on shore, look back and watch the sunset. So Fire Nation, stick with it because it will be worth it. And as I mentioned in the intro, David is the co-founder and CEO of Thought Leaders, which is a sponsorship intelligence platform. We've worked with them in the past and I really do admire and think highly of his overall sponsorship intelligence. So let's talk about that, David. Let's talk about sponsorship intelligence. How can we as creators use data to sell our podcast sponsorships? Well, I think something that's really important is to understand what your customer as a creator, a customer as your brand or the sponsor is really looking for.

3:17And then when you're going to go pitch them, you need to use data to show them why you are the right fit for them. So for example, if you can see that a product or a brand that you really like and you wish was sponsoring your show or your content was sponsoring another podcast and you could see that they're repeating there and use data to see that they're repeating and they're coming back, that's a sign of success. So then you can say how you're similar to that podcast that they actually had success with. And that can be an indication to them that they would likely have success with you. Whereas if you imagine you go the opposite route, you pitch them and you say, oh, look, I saw that I heard you once on that podcast I listened to and they never came back.

4:02You didn't use data to see that they're actually renewing their and they're repeating. That can actually have the almost opposite effect for you. They can say, oh, crap, his podcast is similar to that one that didn't work for us. So it's not going to work for us either. Fire Nation, this is really key, especially for someone like me who for nine years now have been having sponsors on my podcast. And one of the biggest things that I like to tell my sponsors when we're kind of finalizing the deal is like, listen, this is only going to be a win for me if it's a win for you. So my number one focus is your ROI.

4:31I want this investment you're making to be high. I want you to have a great return on investment because I want this to be a fruitful relationship where hopefully we're going to be having a long-term relationship on this. And like, I just signed a two-year deal with HubSpot that was in the seven-figure range. And then I've done multiple year annual deals with companies like ZipRecruiter, Thinkific, Klaviyo. And like, that just makes it so much better of a business when you have these longer-term deals and aren't just scrabbling week to week, month to month for that next sponsor. So let's get down to the nitty gritty.

5:07What are brands really looking for when they purchase sponsorships? Well, I think you're actually an excellent example of what brands are looking for. And that that's something that feels natural where the audience actually cares about that product. And you've managed to endorse that brand or that product to your audience and show them how you're using it yourself or why it's such a great product and they should get behind it. If it doesn't feel natural, if it doesn't feel like the creator is genuinely behind the brand, it's going to be a disaster. And it's really difficult to fake that. I do love that Warren Buffett quote that it takes 20 years to build trust and five minutes to destroy it.

5:49So Fire Nation, when you're running your business, you want to make sure that you know, you like, and you trust the product, the service, whatever the company is behind those that you are promoting to your audience. because your audience gets a bad taste in their mouth, like literally, if it's a food product, or figuratively, if it's like a software or a service, they may never trust you again, no matter how much value you've given them over the years. It can sometimes just take once. So be very cognizant of that. So let's get into like the specific details of what their definition of success means.

6:25Like what keeps these brands coming back for more? What are they looking for for quote unquote success? Well, look, 99 % of the brands that are buying sponsorships today have some sort of performance metric that they care about. They're looking for conversions, whether that's sales of their product, signups to their website, downloads of their app, registrations, leads. They have some sort of conversion that they're looking for, and they have a price that they're willing to pay for that conversion to happen. and I think that a lot of times I felt this a lot myself as a creator is sometimes we get kind of we we think that our content is the most special thing in the world there's nothing like it and that a brand has to pay you know top dollar no matter what to be inside of my my content and it's definitely true that that you bring something really special to your audience and you built up an audience that is loyal to you and and trust you but I think we also have to realize that the end of the day, that brand is going to have some kind of ceiling of what they can pay you, which is going to be calculated down to some sort of performance metric.

7:31So the best thing a creator can do is have that conversation with the brand beforehand and really set expectations of what the brand is looking for and what they believe they can achieve. Especially as you mentioned, it's all about getting renewals and long-term deals, right? So as a creator, you're going to have a lot more success if you can have these conversations beforehand with your brand sponsors and you can fit the expectations to what you can deliver, set prices accordingly, and then do long-term deals where you're consistently delivering that performance metric the brand wants to get.

8:03Now, let's talk about building a business specifically. I mean, I want to know how you were able to bootstrap an R &D heavy SaaS company. And now you are speaking to me with over 30 employees. And you did this, by the way, by earning revenue from day one. And there's companies that are out there in the world that, by the way, that we all know, like, and trust Fire Nation that have still not earned real revenue, that have still not brought any profit. They're maybe doing great things in the world, but they are operating at massive losses. Like I'm picturing even like the Ubers, the Lyfts, all the meal deliveries of the world.

8:40And there's countless examples of that. I mean, Amazon for decades, that's just the reality. But you know, not Not everybody wants to live in that world of perpetual debt and having to raise funds and all these different things. So talk us through that. So something really, really important to me when I founded Thought Leaders was that we would deliver value to real customers from day one. That we would be a business that actually grows organically from our customers paying us money for us delivering them value that's worth more than what they're paying us, right? now there was always a vision and thought leaders that we would build out a sponsorship intelligence platform and actually a content intelligence platform is what we're really building and what we're getting at and that takes a huge R &D investment we're collecting millions and millions of pieces of data on a daily basis we have a giant big data operation we have NLP and machine learning processes that are running night and day and that kind of stuff was not able to start up from day one.

9:44So what we needed to do was to find a way that we can actually get revenue in and get sales from not just any money, but from the type of people, the type of brands or clients that would be able to continue to give us feedback and help us go down the path of what we really wanted to build. So what we did was from the beginning is we operated an agency, a media agency where we were using our technology as we continue to develop it and piece by piece it got better and better but rather than from day one sell it as a subscription or sass to a client and then not really um hold that client's hand or or um do a touch sale we always did from day one was touch sale where we essentially sold a service at the beginning and gave our technology away as part of that service offering and as the technology got better and better and better and we got the feedback from our clients that we were dealing on a day-to-day basis from a service offering, then we were able to finally start selling it directly as a SaaS and without any service component at all.

10:49So Fire Nation, you might be asking yourself, what exactly is SaaS? I mean, the details are software as a service, but of course, let's get into a little bit deeper than that. I mean, share with us what the quote-unquote agency SaaS business model is, and then maybe continue going forward from there and share with us, you know, why don't more companies do this? Well, I think something that's really special about starting a company as an agency and then building out a technology product and selling it as a SaaS later on is that from day one, you get enterprise customers, right? The type of customers that joined our agency are the customers that were spending the most money that would later on become the SaaS customers that were spending the most money.

11:33And rather than build out a SaaS product from day one, where at the beginning when the technology is not that good or it's not that complete, you kind of have to sell to the bottom end of the market. The people are willing to pay the least amount of money per month for it. So rather than do that, we never opened our product up to, let's say, the cheap end of the market. We started at the high end from the beginning, got the feedback to continue building it out from the high end, towards the high end of the market from the beginning. And as we transitioned into a SaaS business model, what was really cool is that the agency product that we were selling actually became kind of a consulting service that fits perfectly in line with our SaaS.

12:16What I was actually pretty shocked about as I started going down this path is how many SaaS companies actually do have a service component to them, whether it's an agency offering or some sort of white glove service or consulting, I didn't realize that that was such a huge element of most SaaS companies' business plans and such a huge driver of revenue. So if that's where you're going to go anyway, only after your SaaS is built up, why not do that from day one and then get feedback from enterprise customers from the beginning instead of the low end of the market? So Fire Nation, I hope you're taking this in and really realizing the different opportunities that you have out there.

12:55I mean, you can go a lot of different ways as far as bootstrapping, getting capital, you know, all this different jazz. And then also everything that David just explained as well with this agency SaaS business model. And you can really kind of say, you know, what kind of business do I want to create? Which one feels right? What kind of lifestyle do I want to be living? We're going to be talking about the future of the internet and digital content in general. We'll be talking about why David believes sponsorships specifically are so valuable and, you know, really why we should be rooting for content monetization methods and so much more when we get back from thanking our sponsors.

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16:36Well, there's one trend that's coming in really hot right now. and I'm actually, I'm really curious to hear your thoughts on that, but that's, um, that's live, uh, streaming audio and, and, you know, clubhouse. Um, I don't know if you, if you caught it, but Facebook is launching something. Spotify just bought a company, um, and, um, actually launched that as well. Uh, I mean, this is coming in as hot as any trend I've ever seen before. What do you think about that? Well, let me talk about that for a second, because I will say it came in really hot. It came in smoking hot, specifically Clubhouse.

17:10And I know a lot of people in my audience have gone on the app and checked it out and all that jazz. And it really does seem like it's lost a little bit of its steam here. And, you know, I was always the person saying, hey, whatever is great for audio is great for audio. Whatever is great for, you know, Clubhouse is great for podcasting. So I was always in support of it. I was on the app a lot. I think it was literally on fire for a while. I think it's cooled off a little bit. Um, you know, it's probably just kind of lost that initial early buzz. And like, I think it still has the real core people that are getting on there and using it and stuff like that.

17:43But you mentioned there's been a lot of competitors that have come up because they've seen what's happening. You know, that's one reason why HubSpot launched the, their HubSpot podcast network where they asked six business podcasts to join because they see what's happening in the audio space. And, you know, I was one of those six podcast, you know, signed a two year, seven figure deal with them. And that was fantastic. I'm actually having a call with Mark Cuban, um, and then the other co-founder of Fireside next week, um, which will have already happened by the way, by the time you're hearing this fire nation.

18:13So that'll be cool. I'll be able to give you some more details there. And then I'm actually meeting up with them at podcast movements where Mark Cuban, um, and the co-founder, I'm just kind of forgetting her name right now are giving a presentation like Mark Cuban and and his co-founder of Fireside are giving a presentation from the keynote stage at Podcast Movement, which is happening in August, which is super cool because Kate's actually also a keynote at that conference, which will be fun. You're going to go, right, David, to Podcast Movement? I think so. That's definitely on our list. I would be shocked if the CEO of Thought Leaders was not a Podcast Movement.

18:48I'm just putting it out there in the world. I would be shocked. A challenge accepted. It's just a no-brainer, man. No-brainer. But so, I mean, I'm kind of just kind of building a little story around live audio. I love it. I think that interaction is amazing. Whenever you feel like you're sharing a space-time continuum with somebody, it just feels different. Like being live and conversing with myself or a Mark Cuban or somebody else just feels different than listening to a podcast that may have been recorded a month or two months prior or in some cases years ago. I still think there's massive value, of course, in that content you're listening to.

19:25I mean, I listen to audio books and podcasts every single day because I love them, but there is a special component to live. And so I think it came in on fire, had the early buzz. I think it's cooled off a little bit. I think things are gonna kind of shake out a little bit. And then I'll be curious to see like where we're at in a year on that. Like are people actually going to be, you know, spending their time consuming that live content enough to make it worthwhile for the creators. So that'll be really interesting to see where that goes. But I'll hand the mic back to you now, David. I think you've made a lot of really good points about it.

19:55And I'm super excited to see what you do down that path and also how you mesh that with your recorded content. I think one of the major challenges that creators have and that audience has is figuring out what exactly fits for live and what exactly fits for recorded and planned and thought out content. because at the end of the day, it was definitely that cool thing about being live and being able to talk with people that maybe you didn't have access to before. But if I'm just, I don't know, on my way to work or something and I wanna consume some content, I actually prefer to hear an episode of yours where you've thought it out, you researched beforehand, your guest has been thinking about it and you come almost as kind of like this audio guide for me that I can pull lessons from immediately instead of just a loose conversation that people are kind of, you know, shooting and and it's a bit tougher to pull away actionable insights from.

20:52So I'm really interested to see what happens there at Thought Leaders. We're watching this really closely, especially as we go down the content intelligence path. We are constantly adding new sources of content to our platform that we are analyzing. And Clubhouse is is right at the top of our Trello board for like next source to add. Really interesting things. Like I said, I think it's worthwhile checking out Fireside. I think that they're going to be doing some really cool things that Clubhouse didn't maybe get right the first time. Because of course, when you're the pioneer, you're going to miss some things.

21:23And sometimes it's the pioneers that get the arrows in their back. And it's the people that kind of come afterwards that are successful. Sometimes it is those first movers that always have the advantage. So let's talk about why you believe sponsorships are so valuable. Talk to us about that. I think sponsorships are the best way to monetize high quality content. And that's what we're all about at Thought Leaders is encouraging the people who are creating high quality, long form content to give them the power to continue doing that. But as you know, and as all the other creators who are producing podcasts or YouTube channels know, it's not cheap.

21:58It's not easy to produce really good content. And I think sponsorships are the best way to reward those people who are doing it. Because when you build up a loyal audience that really cares about what you have to say and listens to your opinion, then you can also use that to push a brand or product or an offering forward and actually have it be successful in that sponsorship much more so than performance advertising where the creator is not actually getting behind the product or brand it's kind of something that stands in the way right if i go on youtube and there's like this annoying ad that isn't really what i care about and i have to wait five seconds and i can't skip it that's really different than if I'm listening to a podcast or YouTube video where the creator that I come back to every week for their latest content tells me, this is why you should buy this product.

22:54This is how I use it myself. And I've been a client of theirs for the past five years. It's really different. It is different, Fire Nation. And again, I think you need to think about both sides of the equation when you're going forward and saying, what type of business am I looking to build? What type of lifestyle do I want around that? So that's why I want to ask you, why do you believe that sponsorships are the content monetization method that we should all actually be rooting for? Two main reasons. One, to give creators a chance to actually show off the products and stuff and services they care about rather than, let's say, like performance advertising or display advertising where it's all based around following the internet user around and checking what sites they've been on and the context of what they're currently viewing is not really taken into account.

23:47It's all about like, oh, I checked out some shoes yesterday. So today when I'm at work and I'm going through my sales force, I'm going to listen to a podcast in the background. If there's a display ad or performance advertising, it's like for those shoes again. But actually I'm at work. The context matters. I, you know, give me an ad for a Salesforce plugin because I'm in the middle of Salesforce or I'm thinking about work. And I think that's what sponsorships can really push forward. They are about the context that you're currently in and the stuff that you've consciously chose to consume. That content you consciously chose to consume right now is what you're going to be advertised.

24:28Second thing is that there's another method of monetization that could work really well and does have a place, which is subscriptions. And nothing against subscriptions. I do think there is a place for it. But I think we should all be rooting for the people who are creating awesome content, educational content, high-quality content, to keep that open and to give everyone access to it rather than closing themselves off with paywalls and only allowing the people who can afford it in. because I don't think that's really a terribly great future for us if the best content is hidden behind paywalls and only people with more money who can pay for it are the ones who get to consume the best stuff.

25:14Yeah, I think there's two ways to look at it. I mean, the one way to look at it is, of course, we pay for Netflix, but it's a very low dollar amount. But that allows them to create billion-dollar epic entertainment for us and other companies as well. but at the same time, you know, I, I really agree with you. Like we love the fact that we can keep entrepreneurs on fire free because of the sponsorship and the revenue that comes in through that. Like when people come to me and say, John, like, I love your podcast, but man, like, yeah, you know, you have two sponsors per show. Those, those, those sometimes get a little annoying.

25:48And I'm like, okay, listen, I love you for listening to my podcast, but do you really, really think that I could do this show without making money somehow, some way, some shape, some shape, some form. And the majority of the revenue that I make is through these sponsorships. So if you're able and willing to sit through literally the two to three minutes of total sponsorship time that I have over a 30-minute show, you do realize that that's why you're getting this podcast for free. So just like David mentioned, there's definitely problems with subscriptions and paywalls and just overall programmatic advertising because we want to keep this content free.

26:27We want there to be libraries in the world where you can go and read the books you want and get the information you want. When you do a Google search, it shouldn't cost like 25 cents per time you do it because we want people to have as much information as possible because information is power. So I agree with all of that. And David, why don't we sum it up here? What's the one key takeaway you want to make sure Fire Nation gets from everything that we talked about here today? Anything you want to add that maybe didn't get to throughout our chats? And then give us any call to action that you have for us to connect with you and your company and to learn more about you, whatever you want to use there.

27:00And then we'll say goodbye. Well, I was thinking more as we've been talking now. I was thinking more about your original question to me about what I think it takes to succeed and my answer to you. Something I wanted to add on to that is something that I thought a lot about. I think that this was in one of Jeff Bezos's investor letters. Don't quote me on that, but I think that's where I heard that. And he said something along the lines of like disagree but commit. And I think this really ties into being successful as an entrepreneur and especially as a leader in a company. I find myself a lot of times trying not to understand the importance of a decision and then not make every decision in the most important thing in the entire world.