Going up Against Spotify and Apple Music with Stephanie Scapa

Intro: Hey, everybody. Welcome to Episode 119 of How I Built It. Today my guest is Stephanie Scapa of Weyv. I enjoyed this conversation because Stephanie is the co-founder and CEO of Weyv and they are backed by a large company. Which means that they conduct market research a little bit differently than myself or most of my guests, so I’m excited to share her story about that with you. She also talks about software development from a higher level with a larger team. She talks about things like the waterfall method and switching to agile. I like a lot of the insight that she’s able to provide for us today. We’ll get to her story in a minute, and if you do stick around till the end, you will hear the continued story of how I am building my podcast course and some insight into that. We’ll get into all of that in a minute. But first, a word from our sponsors.

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Joe Casabona: Hey, everybody. Welcome to another episode of How I Built It, the podcast that asks, “How did you build that?” Today my guest is Stephanie Scapa, and she is the co-founder and CEO of Weyv. Stephanie, how are you today?

Stephanie Scapa: Good. How are you?

Joe: I am fantastic. Thanks so much for joining me. I’m excited to talk about Weyv and exactly what it is, and some of your plans and business models. I don’t feel like the show talks about business models a lot, so I’m excited to have you on the show.

Steph: Thank you for having me. I appreciate it.

Joe: Absolutely. So why don’t we start off with a little bit about who you are and what you do?

Steph: Sure, absolutely. I have dual roles, and it’s a little bit about the history of Weyv. Weyv is a subsidiary of a parent company named Altair. For Weyv I’m one of the co-founders and I’m the CEO, but I also within the parent company Altair, I run the corporate development department for all of the software companies that we engage with. So I split my time, which can be a little bit tough, but Weyv is my passion.

Joe: Cool. Very cool. What exactly is Weyv?

Steph: Weyv is a digital entertainment app. If you think about it, it’s really in comparison to other streaming applications that offer offline accessibility– Right now we’ve got music we’ve got magazines, we’ve got e-books, and coming soon we’ll have podcasts as well. The idea for us is this multimedia platform using a unique business model for users to gain access to all their digital media needs.

Joe: Gotcha. So, it does– It sounds like it’s in competition with a few of the other platforms that we will talk about shortly, but how did you come up with the idea for Weyv? What about it– What’s that different piece that you’re like, “This is going to be better than everything else?”

Steph: Yes. So, how we came up with it relates back to the parent organization Altair. The whole concept for Weyv centers around this business model, and the business model is the same business model the parent company uses for all the B2B interactions that it has with other distributed software. The idea was to take this same business model that has been successful for Altair in the B2B world and apply it for digital consumer content. Now at the time we were looking at the marketplace and seeing free music was at the height with Napster and ripping CDs, and slowly streaming was being introduced. But it still has a little bit of a challenge, where you still have a lot of these freemium models where it’s ad subscription based for the payment out to the artists, and so forth. So you see companies like Spotify who are struggling to turn a profit because of that, and for us, that’s how the idea originated, was really around this business model. But it goes a bit further for us because we view it in our vision for Weyv is to transform the digital economy to a new and more equitable model for artists, creators, and consumers. We believe in that because we think that it’s important in market for everybody to be feeling like it’s a fair model. The consumers need to feel like it’s a good model for them, but so do the artists and creators. It’s got to be something great, and we think that we can transform the digital economy here around that. In the music industry, it’s starting to transform already with streaming and page streaming becoming more and more commonplace, but you still have other types of digital economies out there that haven’t given that shift over quite yet. If you think about news or even blogs, podcasts, there’s tons of free content that’s available that we think we can change the way people are thinking about it and make it a more equitable model for everybody.

Joe: That sounds fantastic. I’ve been having this same conversation in the online course space because it’s either you sell your online courses on your own platform and spend all this time marketing and trying to do your best to sell the $300-400 course. That’s fine, that works. You can also take advantage of a platform like Udemy, but they’re going to take advantage of you too. They are selling your courses for a song, and you get $2-3 per sale on a course that took you 20 to 30 hours to develop. So, I can totally level with what you’re saying here. It sounds awesome.

Steph: Great. It’s all around what we’re thinking. I mean for us, we pay artists and creators based on the usage of their content. When users are accessing, they’re able to make money off of that, and that’s pretty standard I would say. But what makes it different is that we have the flexibility side on the pricing, because not every piece of content, not every song is equivalent. The challenge right now with a lot of the streaming mechanisms that are out there is that it creates this stream effect across everything, where every song is effectively equal in value. For us, we allow with the units model the ability to have different prices in different content, and so forth.

Joe: That’s great. As we talk about moving from how you came up with the idea to researching this product, you mentioned that you’re taking a business model from your parent company Altair. Then you’re also looking at the status quo in other markets. In the preshow, we talked a little bit about how you plan to compete with Spotify, Apple Music, and Amazon. Do you want to elaborate on that a little bit? What research did you do to figure out how to best compete and how to break into this market that’s seemingly getting more saturated?

Steph: Yeah, absolutely. For us, you have to do competitive research. Anytime you’re going into a new market, which Weyv is a very new market from Altair, it’s now we’re going– Altair is B2B, and now we’re B2C with Weyv. We spent a lot of time understanding the other platforms that were in market already. We did a lot of market research with the users in particular, so that we could better understand the right age range we’re targeting and what motivates users, what features they feel are most important, and pricing. For us the biggest differentiation is based on the units model because we give users more flexibility to have more of a bundled package, so the closest competitor on the bundling side that offers you the multi-content would be Amazon. But they withhold content because you can’t get the right price effect across all the content. So Amazon doesn’t give you a full catalog of music, they only give you a partial catalog, and then you can purchase an additional package to have the full music catalog. For us, what we’ve done is by allowing for these different pricing, we let everybody have access to everything. It’s a question of the moment you’re using it. It’s all about simultaneous access and what you’re using it for, then, in addition, you can have up to 25 people in your group to share your units. So there’s no restriction on family, and so forth,  it’s a very open mechanism. Again it’s totally based on simultaneous access.

Joe: Gotcha. So, for example, I have let’s say 100 units for easy math. I want to stream the new Taylor Swift album the moment it comes out, so do a bunch of people, so maybe it’s going to be ten units on the day it comes out as opposed to 5 units 6 or 12 months down the line.

Steph: That’s absolutely the idea. At the moment though one of the challenges that we’ve faced, being very open with your audience here, is that it’s a bit complicated to introduce within the single type of content the different pricings because users are used to music all being the same price. So, while that’s our vision as we keep going, at the moment all music is priced completely the same at 10 Weyv units whereas magazines we’ve had more flexibility in. You find magazines within the application that might be ten units, and some might be five units, there’s more flexibility in the number of units. The idea is that while you’re accessing the content units are pulled from your group’s pool, and they’re held out to run the content if you think about it. But then as soon as you pause your music or you close the reader, then your units go back into the group’s pool and can be used again by anybody in your group, up to 25 people across any of the different types of content.

Joe: That’s super interesting. So, it’s not like you’re spending Weyv units, you’re actually– It’s almost like borrowing a book from a library.

Steph: It’s exactly like that.

Joe: That’s really cool. I can see why you would struggle with the music side of things, but that does seem to make it a lot fairer to the artists as opposed to getting some percentage of one cent per stream. Right?

Steph: Yeah.

Joe: If a bunch, if you have math worked out to say “This many units are currently going to this latest song, then we know how much that translates to for the artist.”

Steph: Exactly. For us, we’re– Weyv, the advantage we have of having a parent company and not being VC funded is we’re in it for the long haul. We’re slow and steady in our approach and the fact that on the music side that’s not the approach we’re taking right now, that’s OK with us. We’ll get there. It takes time to get users to understand the model and see the value in it, but we believe that over time as we continue to add more content as we ramp and more users that we’ll be able to make the shifts occur.

Joe: Yeah. That makes sense too, because if you’re VC funded there’s pressure to– If I start a company in Silicon Valley and I get some exorbitant amount of money, there’s pressure for me to either sell it to someone like Spotify or to go public and then be beholden to the investors, but also the board members. There’s a lot of pressure to make things happen more quickly.

Steph: Exactly.

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Joe: I’d love to get to the title question at this point, which is how did you build it? This is a subsidiary of a parent company, and you’re the co-founder and CEO, I assume there’s a development team and a marketing team and a research team. I’d be interested to see at whatever level of involvement you’re at, how you put this whole thing together.

Steph: Yeah. I will tell you it’s very much a how “We” built it. I don’t think there would be any possibility of building anything without the entire team. We’ve got a really strong team, so my role specifically started where I did all the negotiations with the labels, actually with the publishers, to onboard all of the different content into the platform and then slowly– We originally actually outsourced our development, and it was a big lesson learned for us. We changed pretty quickly and built our own in-house development team because we realized that there are so many things that are unique for this product and for the industry that we needed to build ourselves, and have our hands on in order to better control. You can imagine recommendation engines, all of those things we’ve built from the ground up. So we built up each team, and you’re absolutely right, we’ve got a marketing team. We just hired somebody that focuses on user engagement and can help us driving where our users are putting their time and energy, and better helping our users within the app. There’s a lot of lessons learned. We’ve been doing this for 5 or 6 years now, and easy ones to see are from a development methodology standpoint. We started more with waterfall, and then as we got more established in our development process, we switched over to agile. We’re constantly making changes and adjusting, but for me having been part of the beginning, it’s interesting to see some of the shifts. It’s not like Agile process would have been better for us in the beginning. It’s more just over time you have to be willing to adjust to what you need in that moment, because sometimes what you need now versus in the future is going to be different. You have to recognize when you need to change and make those changes. So, it’s been quite a big process for us.

Joe: Absolutely. Speaking specifically to the waterfall versus agile process for listeners who are not familiar, those are two development methodologies where with a waterfall things have to happen in a certain order for you to get to a finished product. Agile is more fluid, where you get the requirements but then you realize maybe later you should change it, and things theoretically can happen more quickly. But when you’re building out a platform as big as Weyv seems to be, it’s probably really important to lock down those requirements early on so that you’re not dealing with scope creep and failure to launch.

Steph: It is. What we’re at right now is a little bit of a hybrid. With waterfall, it’s usually feature based, as far as your sprints and your releases go. But right now we’re more on a time-based sprint release, and what that means is if a feature doesn’t get in and doesn’t make the cut for that sprint, it pushes to the next sprint. So we’ve come up with our own hybrid model between a little bit, where we’re striving to lock down more of the features especially when we add a new big type of content in, like podcasts, which are coming. Because for us, if you’re constantly changing things, you’ll never get anything out. But at the same time as you start to implement and you start to get more and more prototypes then finished product builds done, you realize that now that design you put in doesn’t quite work the way you wanted it to and you have to adjust. For us at least, what we found is having a little bit more flexibility gives us just what we need to get the right product out on time.

Joe: That’s great. It allows you to iterate quickly while also making sure that for some of the major features that things are done the right way, and they’re not just shoved out the door for the sake of shoving them out the door. Cool.

Steph: Yep.

Joe: There’s one more question I want to ask you in this section, and that’s about your– You have somebody who focuses on user engagement. Something that I’ve been experimenting a lot with lately is hot jar and some other analytics tools to figure out for my site where people are failing to purchase, like where do I lose the potential buyer for my courses? Or, how are users who have bought the course using it? What kind of tools are you using to figure out how your users are using your platform?

Steph: Sure. It’s a good topic because we’re in the middle of re-evaluating our toolset here too. Historically we’ve used amplitude for all the in-app tracking, and then Google Analytics. But we also do, because of our licensing model with the units, we’re checking in and out content and the plays and all of that, we’ve got quite a bit of back end data that we collect just naturally. So, for us, we’re trying to figure out the right way to pair that back end data with a lot of the in-app data which is more about what the users are clicking on, and where they’re looking at, and things like that. We’re really in the middle of evaluating some of the different tools, and there’s millions of tools out there. It’s a question of identifying the requirements that you are looking for and then seeing all the way through the process because I think that’s the biggest mistake we made originally when we implemented some of these tools. We thought, “OK. This tool will give us that piece of information we’re looking for, and that tool will give us this piece of information we’re looking for.” Now we’ve got the information we need,  but you have to be able to connect it for it to add value. So it’s something that you don’t really think about when you’re putting the whole process in place in the beginning often, but now that we’re knee deep in it we’re realizing it’s really critical for us to be able to have the continuity of exactly what the user is doing from download all the way through purchasing, and playing, and all the activity that they’re actually interacting with.

Joe: That’s great. I love that we need to have the– We have the information we need, and now we need to connect it to add value. That makes sense. Because if you, if I have a list of everybody who visited my course and everybody who purchased the course, but I don’t know why they purchased the course, I can’t then change my copy to attract more people to purchase the course.

Steph: Exactly.

Joe: That’s fantastic. As we come to the end, towards the end of this episode, I like to ask what transformations you’ve been to versus what your plans for the future are? We’ve touched on them a little bit, but I would love to hear the big– What was the one of your favorite evolutions from the time you launched until now?

Steph: My favorite evolution? I don’t know about favorite, but one of the bigger ones I would say is a shift that we’re in the middle of making at the moment. When we launched it, we liked this idea of connecting charities into our app. So the concept was that we allow an artist to choose their favorite charity and then the more users listened to that artist the more that artist charity would receive from Weyv, and we are donating a half percent of our revenue and over time what we’ve learned is that by listening to our partners and to customers that’s not adding enough value and actually isn’t meaningful enough. So, on the partner side, artists aren’t engaged. It ends up just automatically going to a default charity which sort of defeated the purpose a little bit. We’re hoping to build more artist-fan relationships and connections, and then on the customer side users aren’t as engaged on it and aren’t as interested. For us, it’s one of the transformations we’re going to make. We tried it, now we’re hearing from everybody out there that it’s really not working, and so we’re going to try something new and we’ll pull that and see what else we can do. Another way to get engaged in society and so forth. But it’s really, and I have to admit, it’s a disappointing one which is why it’s not my favorite. But you have to be honest about what works and what doesn’t work, and it sounded like such a cool idea in theory, but if it doesn’t work, it doesn’t work.

Joe: Absolutely. I’m with you, and I would have thought that artists would have loved this, especially there are a lot of maybe politically active artists out there, and this would be an easy way for them to generate some extra donations to their charity of choice. Depending on what they like and what they want to promote.

Steph: Yep. But what we’ve learned is that really in the end, for the most part, we’re dealing more with the labels directly, and the artists aren’t as engaged on these platforms as you would imagine that they are. It was a big lesson learned for us, but we continue to make updates and improvements based on user and partner feedback and keep going.

Joe: Gotcha. That makes sense. If the labels aren’t telling their artists, they can do that or exactly how to do that, and the artists aren’t going to do that. Cool. With that in mind, what are your– You mentioned podcasts, but what are some of your other plans for the future as far as Weyv goes?

Steph: Within the app, you’ll notice we’ve got a videos tab. Certainly something top of mind for us on videos. We’re also thinking about news and other types of content that could be interesting for users, but to be honest, nothing is solidified. We’re still really constantly serving users to get feedback on what’s most interesting for them and making changes based on that, so we are surprised how popular podcasts were when we surveyed the last time. The time before that lyrics were the number one request, and so we’re slowly adding in the features that users are most interested in and keep moving.

Joe: Very cool. It makes me happy to hear that podcasts are very popular, naturally as I have my show.

Steph: Yeah.

Joe: I want more people to listen to it. So, that’s cool. I will say that one of my favorite features of Spotify that they took away at least from the desktop app was the lyrics or whatever song I happen to be listening to because I constantly go to Genius.com or whatever just to read the lyrics or the meaning of the lyric.

Steph: Well, you can get it in Weyv now. On all our platforms, mobile and web.

Joe: Very cool. I will ask you how people can get there in a second, but I do need to ask perhaps my favorite question, which is, do you have any trade secrets for us?

Steph: I would say the key is listening and hearing what other people are saying, especially your customers, and being willing to be agile and make changes quickly. Because if somebody is giving you feedback you need to understand why is that feedback coming. Is it relevant? Does it make sense? If the answer is yes, when you’re honest with yourself about it, you have to be able to move super fast because if you take six months to make changes or a year to make changes especially in a startup environment, it’s just not fast enough. You have to be willing to look at your favorite ideas like charities, and say, “Not working,” and move on and make that change super quick.

Joe: Yeah. That is great advice. As a software developer myself, I know there will be a feature or maybe even a plugin or an idea that I’m married to, I love that idea, and my mastermind group will tell me “This is not it, Joe. This is not a great idea. You should spend your time elsewhere.” I’ve listened to them in the past, and I haven’t listened to them in the past and turns out I should have listened to them when I haven’t.

Steph: It’s hard because not always is the feedback you’re going to be receiving the right feedback, and so it’s important to be able to recognize when to listen and when it’s OK to go against the grain. But it’s so important to be understanding where the feedback is coming from, and why they’re thinking the way they’re thinking because that can tell you and guide you “Should I be listening?” You have to be a little bit cut throat. If the answer is yes, then you got to move on.

Joe: Absolutely. On that, I had one more thought as you were saying that, and it’s because you mentioned the “Why.” It’s almost like when somebody recommends a TV show to you, and they’ll say “You know a TV show I think you’ll like?” And in most cases, it’s actually, “You know what TV show I like?” Unless it’s a close friend, who understands what I like. If they recommend a TV show, I’m more apt to listen to it.

Steph: Yep, absolutely.

Joe: Very cool. Stephanie, thank you so much for your time today. Where can people find you?

Steph: You can go to Weyv.com. We made a promo code for any of your users that would be interested in 2 months free. It’s HOWIBUILTIT. It’s as simple as that.

Joe: Awesome. If you are interested in trying out Wave.com for all sorts of content, magazines reached out to me– Jumped out to me, specifically. Two months free using the code HOWIBUILTIT. I’ll include that and everything that we talked about in the show notes today. Stephanie, thank you so much for your time. I appreciate it.

Steph: Thank you.

Outro: Thanks so much to Steph for joining me today. I appreciate her time and her advice on everything from deep market research to software development. Her trade secret rings true across several episodes of this show, which is keep listening to your customers, and hearing what they have to say. Be agile and make changes quickly. I like all of those things. If you want to try Weyv out, you can get two months free by using the code HOWIBUILTIT. You can get that by going to HowIBuilt.it/Weyv. Thanks so much to our sponsors, Plesk and Pantheon, their support makes this show possible and those are two tools and two services that I can highly speak to. I am a big fan of both of those. My question of the week for you is, how has Steph’s story changed your outlook? I know that she’s coming from a different perspective, being the CEO of a larger company, and I’m interested to see exactly what piece of advice you took away most from this. Let me know by emailing me Joe@HowIBuilt.it or on Twitter @jcasabona.

Miniseries: To continue my story of how I’m building out my podcast course, I told you a little bit so far about how I came up with the idea. I told you a little bit about the research or lack thereof, and in pivoting, I want to continue that story a little bit because I think it’s important in deciding to pivot the course. I realized that I need to look at the entire scope of podcasting, and the way I came to that conclusion– I want to make sure I’m answering the questions that people have, and my biggest hesitance in creating a full soup to nuts podcast course is that people much more popular than me are already doing that. Pat Flynn for example, John Lee Dumas is another person who’s already doing that, and they have a much bigger audience than me. Their courses come with a bigger price tag, and it’s because they’re giving their personal time. So as I’m pivoting my course, the way to garner feedback that’s worked best for me is with a lead gen for a podcast workbook. If you go to HowIBuilt.it/podcasts, you’ll be able to see the course. You’ll also be able to opt in for that free podcast workbook, and I give people who sign up to get that workbook a five day or seven-day sequence where the first question is, “What is your biggest struggle in podcasting?” A lot of people respond to that question, and I’m using those responses to build out the content for my course. Now over the next few days, they get more pointed advice that I’ll also integrate into the course, but those questions and hearing people’s struggles are the things that I know people are going to want the answer to and in depth. So, that’s been very helpful. The other thing and I ran this by a few of my friends in a mastermind group, is the idea of doing an air check. I want to provide some extra piece of value. My friend Ryan gave me this idea, and then I nearly simultaneously was reading a book about podcasting that talked about the idea of an air check, and as part of the value add for the course I want to physically help people improve their audio quality. I’m going to offer an air check which is where they’ll send me some piece of audio, and I’ll give them advice on how they can improve their audio quality. For the higher level bundle, I’ll listen to their podcast and give them advice on how to improve their podcast as well. That is part two of the research, the better research I’m doing to make my course better. Next week I will tell you in some detail how I’m building out the course, and that’ll probably take a couple of episodes because I want to try to keep it short at the end of these episodes. So, thanks so much for listening. If you want to learn more about my podcasting course, you can head over to How I Built.it/podcast. Until next time, get out there and build something.