The Challenges of Pricing and AI Transcription: A Deep Dive

As we embark on this journey to explore the world of AI transcription, it's essential to acknowledge the complexities that come with pricing and product development. In this article, we'll delve into the intricacies of pricing decisions and how they impact our products.

Pricing in a Competitive Market

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When it comes to AI transcription, we're not alone in the market. Several competitors have released similar features, each with their unique strengths and weaknesses. This competition creates a challenging environment for pricing decisions. If your competitors are offering free or low-cost options, it can be difficult to justify charging customers for a similar feature. On the other hand, if competitors are charging premium prices, it may be easier to follow suit.

However, this is not just about following the crowd; it's also about creating value and setting a pricing anchor that attracts the right customers. In our case, we've taken a different approach with Transcription. Instead of offering a free version with limited features, we've opted for a more comprehensive solution that includes unlimited podcast hosting. This decision has been instrumental in attracting a loyal customer base.

Pricing as a Product Design Decision

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Pricing is not just about revenue; it's also a product design decision. When we launched Transcription, I had an intuition that the market was ripe for a new pricing model. Instead of charging per podcast, we decided to offer a flat monthly fee for unlimited podcast hosting. This approach has proven to be highly effective, as customers appreciate the flexibility and value it provides.

Our initial pricing decision was influenced by our experiences with podcasting experiments. We had multiple podcast feeds and realized that offering more features at a lower cost would attract a wider audience. As we grew, this pricing decision became a key differentiator for Transcription. Agencies, businesses, and individuals with multiple podcasts found value in our solution, making it an attractive option.

The Impact of Pricing on Growth

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Our pricing strategy has had a significant impact on our growth. By offering a comprehensive solution at a competitive price, we've attracted customers who might not have considered alternative options. This approach has enabled us to tap into new markets and expand our customer base.

However, pricing is also a complex issue that requires careful consideration of costs, margins, and revenue projections. We've had to weigh the pros and cons of various pricing models, taking into account factors like bandwidth, hosting, and system resources. As we continue to evolve our product, we'll need to adapt our pricing strategy to ensure it remains competitive while maintaining profitability.

The Tension Between Pricing and Costs

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Pricing is not just about revenue; it's also about costs. We have to consider the variable costs associated with AI transcription, such as computational resources, storage, and personnel expenses. As we scale our product, these costs will increase exponentially, making it essential to strike a balance between pricing and cost management.

This tension between pricing and costs is unique to Transcription, as other features might not be subject to the same level of scalability. Our AI transcription capabilities will require significant resources to support, making pricing a critical aspect of our product development strategy.

The Science and Art of Pricing

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Pricing is an art that requires both science and intuition. We've had to develop a deep understanding of our target market, competitors, and customer needs to create a pricing strategy that resonates with our audience.

In this article, we've explored the complexities of pricing and AI transcription. By acknowledging the challenges and opportunities in this space, we can work towards creating innovative solutions that meet the evolving needs of our customers. As we continue to grow and expand our product offerings, we'll need to stay agile and adapt our pricing strategy to ensure it remains competitive while driving growth and profitability.

"WEBVTTKind: captionsLanguage: enall right fellas we are here today to talk about your journey you are coming at us from transistor.fm Justin can you give us a bit of background on yourself I started podcasting in 2012 I think and was definitely into um the idea of radio some of these are transistor radio which is on which is on on brand I grew up in Alberta which is like kind of conservative country here in Canada and so there's lots of talk radio stations and had lots of good memories of driving around in the truck with my dad listening to talk radio even like I remember being a kid and like once I got my license and I was driving by myself I would like turn off the radio and pretend I was on the show like The Host would say something and then i' pretend I was like talking back and forth so the idea of broadcasting uh via audio was always really appealing to me and when I moved to this town actually it's a pretty small town and I wanted to stay connected with the broader Tech Community one of the first things I did was start a podcast called Product people which was just interviewing product people from all over the world and um that experience I think basically almost everything every good thing that's happened in my career since then can be traced back to starting that podcast aming the relationships I built the connections I made the things I learned and then just the act of building an audience and putting something out there that people connect with um was really significant so yeah podcasting for me has been a big part of my professional life starting uh around 2012 I I think that's kind of how things work a lot of times it's why it's hard to reverse engineer uh any entrepreneurial success because often people will tell one part of the story but there's usually quite a few layers and um for me personally like if I didn't have that layer of like really being into talk radio I don't know if I would have been as interested in podcasting um if I didn't have the layers I mean this is when like those early computer experiences are foundational like those without that experience making things on computers starting in the 80s and '90s um kind of becoming teenagers right when the web was coming out so like the Mosaic web browser I think came out in '93 I mean that was when I was 13 years old um so all of those layers kind of build up and eventually culminate in you know maybe a a business bet that play that pays off or yeah I mean I I've probably been coding since I was like 11 or something um so 30 something years later like in another life I I probably would have been some sort of physical engineer like electrical engineer or something but the the feedback loop from coding is so tight it's like hard to it's hard to give up that like instant hit of uh of success that you can get um so I sort of glommed onto that pretty early I guess um yeah so I I went to school not for um not for software development at all I was I like got enamored with um finance and like watched Wall Street and thought that stuff was all super cool so I went to school for that and I'm like hearing from my friends as they're coming back from like their first jobs and they're talking about how they're just like cold calling people 12 hours a day and like trying to trying to Hawk like whatever whatever they're supposed to Hawk like that sounds terrible what you're doing so I like wound up sort of Switching gears and and um and realizing that software was like it it wasn't like clear that was a career path at the time um it it was like just becoming something that seemed like you could do professionally Jason's done a lot of cool other stuff in software as well he he had a a he was part of a video game company for a while I ran a little video game studio with uh with a couple friends and we built uh we built a massively multiplayer like 2D crafting game um it got pretty popular like we had we I think but all said and done we had one and a half million registered users yeah I think this is the one of the cool things about running a small company is that we've been able to bring in all these people we've met like um throughout our lives and like have someone like Jason's caliber on the team and we're so small uh I think Jason described at one time you're like the nice thing about transistor is like we're all killers like we just like all show up and we're really like good at what we do we're passionate about what we do and uh there's very little crft it's just like a lean team trying to build amazing product um really customer focused really customer service focused but on at the same time trying to build a really good life for ourselves and um you know having good good time off having uh slowing down during the holidays being more relaxed like we have no kpis right now really that's what we were talking about before uh we just we can just trust everybody on the team to kind of show up every day and do great work and uh yeah it's it's been really fun you can see that in the product like a lot of people often comment like how simple things are and how um like how uncluttered everything is and like a lot of that is because we just have to ruthlessly like pair down what we're building because of the time available and those those constraints are I think lead to a good product you're being very deliberate and you're being okay with it being that deliberate and not feeling like I need to add these 20 new features because that's what people are asking for John and I we developed this this this uh strategy of wait and see so like something would come up and it'd be like we got to do this or the company's G to fail and then we started realizing we could just wait and see what happened and often um you know it ended up not being a big deal or it ended up manifesting itself evolving in a way in a different direction than we had originally thought and so and then you can also see what everyone else has done the reception you know from everyone else uh I in a lot of ways AI transcription which is what we've just added was that kind of feature we've been talking about it for years for a long time yeah and it it just kind of always bubbled around should we be thinking about this you know Jason was doing experiments on his own with different models and um eventually it kind of bubbles up and then it reaches this high water mark and it's like okay now it feels like we should act like now is the time part of it is the technology kind of caught up with our needs um like the the availability of a lot of this stuff at least as far as I can tell is pretty new um at at scale and at a cost that is um viable uh that we can do it or we can price it at a at at a level that our customers fine palatable so we're we're plugging in um deep gram transcriptions now obviously which is why we're chatting um and the the speed and the quality of it has been just phenomenal like we've been we've been really really pleased with what we're getting out um we've got a handful of users beta testing it now um transcribing their podcasts and it's I I think it's going swimmingly give us a bit of background on the tool I mean simply transistor is podcast hosting uh the same way that you need web hosting for a website you need podcast hosting for your podcast we help people uh host their podcast they upload their content to us and then we distribute it via RSS uh to Apple podcast Spotify pocketcasts Google podcasts all of the different players and then we also offer uh additional services on top so podcast analytics you get a dashboard with how each episode is performing uh we have built-in podcast websites for your shows so people can go to your your domain name and uh see all your episodes and subscribe from there and get show notes uh we have Dynamic ad insertion which is another feature that Jason built once he came up on so you can dynamically insert an announcement to your podcast listeners uh you can tell them about an event you can sell actually actual ad space but that's essentially the business it's a it's a Content management system for podcasters they they create their episodes in transistor they publish them and uh manage their kind of publishing workflow through us and then we do the hosting I do love this idea of the slow movement and it makes me realize yeah I I will occasionally watch podcasts but for the most part it's just listening and it is one of those mediums where you're generally doing something else when you are listening and you just get to be a fly on the wall to a great conversation ideally so like social media is really designed to addict people right it's they want your eyeballs for as long as you can so as long as you can keep people scrolling uh accelerate their heart rate give you know outrage them or whatever um make them want to comment back or you know reply back or whatever that that system was not appealing to us and what was appealing about podcasting is its old Tech it's slow tech um RSS has been around for a long time it's very simple um it's distributed it's yeah it's it's right in the name that's right uh and there was something about this Simplicity and this idea of slow media and slow tech meaning when you're listening to a podcast first of all uh it doesn't demand your eyeballs right it doesn't demand your complete attention it's not designed really to addict you it's like you you listen to a podcast when you're commuting or when you're walking the dog or when you're working out you can't also respond right away you can't have a knee-jerk reaction like if somebody says something that upsets me on a show I have to like d finish driving home park the car say hello to my family you know and then get find a way to contact them write them an email and then say what I think there's just so much more time to have a considered reaction it slows everything down yeah and from a Creator perspective it's it's different as well because you're not beholden to the large platforms so there's lots of stories of people who you know at one point the algorithm was rewarding them and all of a sudden the algorithm took it away and then all of a sudden they have no audience whereas podcasting it's slower to build an audience but it you build a deep connection with the people who are listening and once you have those folks there as long as you have your RSS feed and your RSS feed you can bring it wherever you want you know if you decide to leave transistor you can forward your RSS feed somewhere else and it just fors the traffic right through as long as you've got your RSS feed you've got this connection with your audience and I heard uh a couple of our customer I I listen to a lot of our customers podcasts and they were talking about you know what would happen if Twitter went away you know uh what happened if you know Twitter just crumbles and they said man well we'd still have our podcast there's less people who listen to our podcast than follow us on Twitter but these are the real ones you know these are the real fans and if everything else crumbled if Twitter went away if Facebook went away or if Facebook took away our reach or whatever we'd still have this connection and these people who wake up every week looking for a show from us and you know listen and uh have built this kind of ongoing long relationship with us so one thing that I wanted to ask and Jason this is probably more direct towards you but Justin if you have any antidotes too that you want to throw in there how have you overcome challenges that you faced while building with AI the foundation of all of it for podcasts is um to have the information in some sort of format that you can use to do other things so transcription was clearly like the first thing that we need to nail before we can add any other Fe features around that so that's sort of where we're starting um there are a lot of other nice things we can do with that or things that we think could be useful I think we do a better job than a lot of places supporting chapters for podcast so you can um display at what time stamp you're talking about a certain thing in show notes and um and YouTube If you publish there just like ways you can skip around in an episode and see what's going yeah like often technology is like a solution in search of a problem right and a lot of AI stuff can feel like that it's like this is just like you're just trying to cram this solution and and and create a problem yep so the the the biggest challenge I think is to go is this something that people want is this something that podcasters want as creators is this something that podcast listeners want what job does this do for them in their lives and and what is the kind of initial version of that that we could make a bet on and then see what happens the hard part is actually the user experience it's the UI right speaker identification especially is like a huge challenge it's like uh on the engineering side like how do we identify that this is the person speaking and then on the ux side like how can somebody identify who this is and type in their name and then maybe change it and then you know uh label this section as this person but not this section that takes some thinking and some creativity one of my concerns with AI is that because the underlying Tech is so powerful it's just easy to just like slap it in there without thinking about the user experience how are people going to be using this and um you know how can we make it easy how can we make it easy or even better magical like it just feels magical so I mean it would be amazing uh Jason's also done a lot of work with in our show notes around um like you can you can insert a uh uh a tag in your show notes that says chapters and if your podcast editor has put in chapters in your mp3 we'll show those in your show notes here's the time stamp da d d d and when you experience that that feels magical it's like whoa half my show notes are already written you know um and so you know a next step for this would be something like hey we've already identified all the chapters in this episode for you it's just right here it's we've done the work for you um we're looking for those kinds of experiences I think but it's a the the challenging like the engineering side is challenging because you want to you want to make it right and you want to you know have the the the uh accuracy as high as you can and you know all that the backend stuff has to be right and then what you put on top is just even more important in some ways like how can you make this easy for people intuitive for people so that it's not adding more work and my experience sometimes with with that AI is like sometimes there more work at the end of the day um especially lately like Chad GPT 4 or whatever it feels like it's talking back to me a lot like it's like I'm like hey can you do this for me it's like I'm sorry Dave I can't do that for you it's like okay well and then people say you have to like just demand that it does it like don't be polite and then it'll you ask it three times and then it'll do what you know that's not a good experience what we want is a good experience so on the business case of transcription one thing that I often think about is how you're either going to need to charge more to the end user pass on that cost to the end user or you're going to have to let let that eat into your margin how do you think about that this is the other advantage of wait and see so we're like let's wait and see what happens and you know since then we've had a number of competitors release AI transcription um features and you know some of them have more features on top some of them have less and then there's been a bunch of third party apps that have come out as well and uh often in a market you're going to be anchored to whatever your competitors are doing so if your competitors are offering it for free it's going to be harder to charge but if your competitors are charging for it then it's going to be easier and then you also have some sort of pricing anchor and um yeah I think what it's still a betat we're going to see how it goes and I mean we've we've debated this we've debated pricing on this a lot like that's probably more more than any other part of of this feature has been that's talking about challenges that is a challenge because these de pricing is also product design so when we were launching transistor I had this intuition as a podcaster that the normal thing at the time was you had to pay an extra monthly fee for every podcast you started so if you were on libson you were paying them $19 a month for one podcast if you wanted to start another podcast you had to pay another monthly fee and then and at the time I'd done a bunch of podcasting experiments so I had like four or five podcast feeds and I said John I think we could charge a little bit more for transistor start at $19 a month but allow people to host unlimited podcasts so in a transistor account you can start as many podcasts as you want you can invite people to those podcasts to collaborate with you so like our podcast editor he'll he logs into transistor and he only sees the shows that he's been invited to um that that pricing decision ended up being a product decision because some people were looking for that feature it became a feature of the product and um early on like that was a lot of our growth was we were really one of the only people doing that and so anyone that wanted to start more than one show or if you were an agency or a business with more than one show or even if you just had a bunch of friends that you podcasted with and you're all individually paying for different shows you could just bring it all home to transistor and pay one price so pricing decisions are crucial that you can't like you can't make that decision and that decision like we we did multiple episodes of our podcast uh we have a podcast called build your sass where we like wrestle with a lot of these things and we did multiple episodes on pricing because it was like this is a big decision and uh we got to make sure we're thinking about everything like what are the repercussions of multiple podcasts per account what are the repercussions how what do we price based on what's our value metric um yeah how does that how does that interface with our costs bandwidth hosting you know all that other stuff so they're pricing is not um pricing is a difficult it's difficult to do it well and it also has this trem mendous opportunity because it it can become a real uh feature of your of your product that people are seeking um and if you get the pricing part right you can attract you know all sorts of people that you might not normally have attracted but there's a tension tension in all these ideas you got your price and then you got your costs you got your margins you've got are people even wanting that like pricing is it a whole science and art unto itself um so so this this one we've we we just did our team Retreat and we were just like debating it a lot this one's this one's different for us because it's I think it's the first thing that that has like directly measurable variable costs everything else that we've built it might need more system resources it might need uh more storage but those things sort of it doesn't scale literally with the usage but this is like if we if we do 10,000 hours of transcription have to pay for 10,000 hours of transcription so um it's a lot it's a lot different way uh to have to think about it than we have in the past guys I've taken up a ton of your time I really appreciate you coming on here uh I think we can cut it now and for anybody that is I'm just getting fired up now man let's do another two hours you you caught Justin after he's had three cofes right in the morning and ready for more pricing conversation and Ai and all the fun stuff I really appreciate you all being part of the deep gram startup Community I want to just publicly say that and it is super cool to have you in there and I look forward to all the incredible stuff that we can do together thanks man this is great us too thanks\n"