Small podcasts can make real money.

I run the Disrupting Japan podcast. Like many podcasts, the show dives deep into a small niche. It has no real hope of mass-market appeal.

It turns out that if you want to make a living from a small podcast, its best to ignore most conventional advice. At least, that’s what I had to do.

But before I explain, 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.

I’ve built 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.

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 growing my show, but most of the common sense marketing and production 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 didn’t get a single usable conversation.

It’s obvious in retrospect, but few things make people more nervous than shoving a microphone in their face.

So I gave up on the studio. I 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 these little microphones and we could talk like two human beings. Showing up with a couple of beers also helped my guests relax and made the recording less if an interview and more of a conversation.

It turned out that sacrificing a bit of production quality and so-called “professionalism” for a more personal, honest conversation 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 real increase in listeners. These platforms reported lots of “engagement” with my ads, but whatever form that engagement took, 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 also supposed to be a great way to grow an audience, but it didn’t work for me. I really enjoy the conversations I’ve had with other podcast hosts, but my appearances never resulted in a noticeable bump in listeners.

The other problem I ran into here, was that most of these podcast appearances are expected to be reciprocal. I’ll go on their show and tell my story, they’ll come on mine and give theirs. Well, the obvious problem here is that Disrupting Japan is a show about startups and innovation in Japan, and if you don’t have meaningful experience in that area, it doesn’t really make sense to bring you on the show.

Most of the podcast hosts said they understood and polity withdrew their request to have me on their show. Two were clearly irritated and insisted that since their listenership was significantly larger than mine, I should be grateful that they were even giving me this opportunity. And of course, a few said they didn’t care and just wanted me to share my thoughts with their audience.

I appeared on all of those shows. I enjoyed it. I had some good conversations, but these appearances didn’t really impact my download numbers.

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

I would have to build an audience from scratch.

So what really worked? At least for me.

The most effective way I found to grow 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, it was my offline efforts that made the biggest impact. I sought out any event or seminar where I could 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 indicated that about 25% of Disrupting Japan fans were not subscribing to the podcast, but going to the site and listening from the browser or simply reading the transcript. Second, people seem far more willing to engage over email. Even today, when an episode is released, one or two people may comment on the site, but around 20 will reply to the email announcement.

Disrupting Japan fans were, and still are, extremely engaged. Most guests tell me that they receive a lot of positive feedback about their appearance. September of 2015 was the show’s first anniversary, and 120 Disrupting Japan fans paid a $20 cover charge to watch a live podcast and to meet and hang out with each other.

Things were going well for the show, but I still viewed it as a hobby.

In May 2016, the startup I was building blew up. 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 and wound up becoming Japan’s first professional podcaster.

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.

The Disrupting Japan audience consists of startup founders, aspiring founders, and others interested in innovation in Japan. That’s an important and influential group of people. So I sat down and brainstormed what kinds of companies really wanted to connect to this audience. What specific companies really needed to reach Disrupting Japan listeners, and who I would feel good about recommending. After a week, I had a list of 50 likely sponsors.

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

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

Direct response advertising, where every click and impression is measured, dominates podcasting in America, but it’s a losing game for most podcasters. The industry focuses on CPM rates (the rate advertisers pay per thousand listens) because that metric is easy to standardize and measure, but with standardization comes commodification. If you ever buy into the idea that you are simply selling impressions or downloads, you resign yourself to competing with a nearly infinite number of other podcasts.

This is a terrible situation to be in. Because there are a limited number of advertising dollars but an almost infinite supply of podcasts.

The secret to making real money with a small podcast 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 brought new listeners to Disrupting Japan. A virtuous cycle was set in motion.

Now, I have some advice for any aspiring podcasters who are thinking of going this route. 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.

Podcast advertising companies like Midroll and PodGrid are great, and it’s tempting to just let someone else bring sponsors to you. However, you give up a lot when you make that decision. In the end, your sponsorship and advertising rates are directly proportional to the 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 well over $8,000 a month, and since I was still a one-man show with minimal advertising costs, this was mostly profit.

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.

And then it hit me. “God help me. I’m running a media company.”

As far as media companies go, Disrupting Japan was at an awkward size. It wasn’t generating enough revenue to let me hire someone to handle the advertising and the business side, so the logical step seemed to be to start selling ads for other podcasts. This would increase the amount of revenue coming in and give me the cash flow I would need to bring together a real team to grow the business.

Bootstrapping this podcast advertising venture was pretty simple. I went down iTunes’ list of the top 200 podcasts in Japan, crossed out the ones that were produced by major media companies, and then emailed the remaining podcasters. I introduced myself, explained that I had been selling ads on Disrupting Japan and asked if they were interested in sponsorship. Most of them were.

Finding sponsors wasn’t difficult either, but I found couldn’t command the high 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 Dentsu and a few other larges ad agencies on podcast sponsorship, and several had clients they felt would be interested in experimenting. Unfortunately, to make financial sense, even on an experimental level, these companies would need to sell at least $100,000 in podcast advertising per month, and there was nowhere near enough podcast inventory in Japan for advertising at that scale.

But 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.

Looking at this podcast advertising business in startup terms; I had good product-market fit and a path towards scalability. At this point, 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.

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

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

It was right at this time when TEPCO 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 walked away from podcast advertising.

Wait! What?!

Yeah, I know. That was not the ending you expected, but it actually is 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 it slowly and steadily continues to gain listeners.

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

Our fourth-anniversary show had 230 people show up. Once in a while a see a Disrupting Japan sticker on a random laptop or two in a co-working space I’m visiting, and it makes my day.

But I’m not really a podcaster. And many of the other independent voices in podcasting aren’t really podcasters either. 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

I discovered that Interviewing people is easy, but having a meaningful conversation? That’s 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 keep them up at night. But that takes a level of empathy and sincerity that I simply didn’t have when I started this project.

Ironically, it turned 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, where 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 something real, people contacted me to let me know they were in — or had been in — the same place. A lot of people 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. At parties, I find myself subconsciously slipping into interview mode, and people I’ve just met end up telling me their life stories.

And I enjoy those kinds of parties a lot more than I used to. People are a lot more interesting than they used to be. 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 our 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 this intimately sharing of oneself. It gives us 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.

And I don’t mean valuable in the simplistic capitalist sense of creating something that can be monetized. I mean it in the “whole is greater than the sum of its parts” sense of value.

That kind of personal, honest communication; that kind of connection is a big part of what makes us human.

Over the past five years Disrupting Japan has evolved from a hobby to a full-time job to a passion project. I have no idea what it will be five years from now, but it feels like it’s just getting started.