Radio Recaps: StartUp Podcast Ep. 6, “How to Value Your Start Up”

Narrative non-fiction audio is the wave of the future. Like millions of you, I’m hooked on Serial, Sarah Koenig’s “true detective”-type show where she re-examines a closed case from 1999 one piece at a time, and Start Up, NPR veteran Alex Blumberg’s attempt to create and finance a new, audio-oriented media company. Though I’d love to recap both of them, Start Up is definitely more relevant to our official interests here at the Billfold.

We’re starting with the most recent episode, #6, which is available for free on iTunes and elsewhere. Join us in discussing Alex’s progress as he liveblogs his triumphs and failures in getting his venture off the ground.

Previously, on StartUp: Alex Blumberg, of Planet Money and This American Life, decides to leave his job and strike out on his own. After some stumbles in generating FOMO among potential backers, he gets a business partner — MBA Matt Lieber — and hits his stride. In Episode 5, possibly the most entertaining of the bunch, the two men choose a name. They consider mundane descriptors as well as terrible Esperanto options that Alex’s wife Nazanin, reliably the voice of reason, snorts at, before they settle on [drumroll, please] … Gimlet Media.

Now, in Ep 6, Gimlet Media needs more investors. Alex and Matt have decided to value their still-imaginary company at $10 million. Why? Why not?

“Boring investments provide boring returns,” says Alex. “So now that things are slowly getting better, a lot of the money that was invested in safe but boring things is looking for something more exciting.” Like start ups, even / especially the risky ones. More and more start ups are valuing themselves highly, perhaps too highly; as Alex acknowledges, the whole Silicon Valley situation is a bubble. Still, at this point, naming a figure like $10 million is basically just keeping up with traffic.

Of course, you still need a story. The story you tell about yourself has to match your ambition and it has to convince other people, who might be telling themselves a different story about you. Those competing narratives might very well clash, like gladiators or the daemons from The Golden Compass, so yours needs to be as strong, coherent, and well-thought-out as possible in order to win.

The episode starts with Alex showing Nazanin the written promise of $100,000 from an investor. Nazanin bursts out laughing and then half-whispers, like, do people ever just run away with these funds? The temptation must be so great. It’s a strong moment, one that captures the giddiness of real, middle-class people coming in contact for the first time with unreal amounts of money. They return to that moment at the end of the show, when Alex checks the bank account and goes goggly-eyed at the seven figures there.

How did they get to seven figures? Well, first some more angel investors, all men btw, hem and haw over whether Alex has overvalued his company. They voice concerns about Alex. What is he, an artist or an entrepreneur? Some kind of hybrid? “If I was an artist masquerading as an entrepreneur, could that be profitable?” Alex asks, summarizing their thinking. In the end, the rich dudes vote Yea and give him their dough.

Money begets money. So does exposure. #6 is the first episode that discusses, on a meta level, the effect the podcast — created to document but also promote the fledgling venture — has on the venture itself. The podcast’s first episode doesn’t exactly portray Alex as a conquering hero; he flails, he fumbles, he doubts. Still, after hearing him on the radio, introduced by and supported by Ira Glass, rich men — including the founder of Tumblr, who’s never invested in anything before and luckily happens to have $150,000 hanging around — line up to put bags with dollar signs on Alex’s lap.

You can hear the awe, the glee but also the undercurrent of wtf?, in Alex’s voice as he talks about his success with Nazanin. Should they should grab the cash and run? “They’ll never find us,” they assure each other, melting down into giggles.

Episode Grade: B/B+. A good mixture of Business 101 info, presented well, with engaging personal stuff; a little bit of “will they or won’t they?” funder drama, although not too much, and a happy ending. Will next week present more tension or suspense? Join us next week as we discuss!

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