Tiny, bootstrapped, and highly profitable

 

Yesterday I read a great post about DistroKid, a music distribution service I will use soon.

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DistroKid lets musicians upload unlimited songs to digital services and stores such as Spotify, iTunes, Pandora, and 150+ others, all for $20
. It’s simple. It’s affordable. And it’s a valuable service to its users, as shown by its popularity and their praise.

Philip built the profitable company from scratch, running lean since the beginning. He was the only person doing everything for many years. Now there are 2 support people to help Philip, who is still the sole developer.

DistroKid wasn’t Philip’s first project. He was famous for F*cked Company, as well as many others. Philip leveraged the community of musicians from a previous project to help DistroKid succeed. Having an engaged community, even if small, always helps you succeed. It takes effort to build, but truly helps.

DistroKid also wasn’t the first digital distributor – CD Baby and TuneCore are two other big players, and there were others. But his is smaller, cheaper, and a better-value. Philip didn’t take VC money, so he has no pressure to have a huge exit. This allows him to run as lean as he wants, which he has taken to an impressive extreme.

To understand the company more, here are some numbers from his article:

  • 500 new albums uploaded every day
  • 2,100 new songs uploaded every day
  • 100,000+ artists
  • 250,000 albums uploaded since launch
  • 1.2 million songs uploaded since launch
  • $2 million paid to artists this month
  • $17 million paid to artists since launch
  • 3 billion streams

How do they do it? By automating everything. “DistroKid has dozens of automated bots that run 24/7. These bots do things that humans do at other distributors. For example, verifying that artwork & song files are correct, changing song titles to comply with each stores’ unique style guide, checking for infringement, delivering files & artwork to stores, updating sales & streaming stats for artists, processing payments, and more..These are the reasons why we can charge less (lower overhead) while delivering to stores faster & providing more features (almost everything is automated).”

Some lessons from DistroKid, which will apply to many products:

  1. Building something people want paves the way to a profitable business
  2. Building and growing your community of users is key
  3. Leverage previous communities to help grow your new user base
  4. Automate what you can – it keeps costs down, keeps things fast, and can help to create a good user experience
  5. Laser-focused products can be understood easily by people
  6. An affordable, better-value service, can beat more expensive competitors, even if they have more bells an whistles. Especially if it has a better user experience.
    • There are different positioning successful products can take. DistroKid’s success is fueled in part by being the cheaper, better-value service, even if it has some missing features (e.g. no vinyl service)
    • It’s possible (and in many cases, easier) to do this without taking investment money – otherwise you might have pressure to grow huge and create a big exit, possibly leading to the implosion of your company

A bootstrapped, profitable, lean company that users love, building something people want.

As a fellow drummer and developer, DistroKid is an inspiring success.

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