This is my first public exploration of the business and art of podcasting. I still have much to improve, but I’m ready to share a few lessons learned. It’s my hope that they’ll save you a ton of time.

I’m still flabbergasted by how this experiment took on a life of its own.  It started with too much booze with Kevin Rose, and I expected it to die a quiet death after six episodes.

That said, here are a few quick stats on The Tim Ferriss Show after 150 episodes of mucking about, screwing up, and refining (as of this writing):

• Nearly 70,000,000 downloads as of April 2016 [Update: As of October 2016, more than 100M]
• More than 2,500 reviews on iTunes, 2,100+ 5-star reviews
• Selected for “Best of iTunes” in 2014 and 2015
• Out of 300,000+ podcasts on iTunes, it’s generally the #1 business podcast and an overall top-25 podcast
• Won “Podcast of the Year” in 2015 for the Jamie Foxx episode (via Product Hunt)

I’ve certainly stumbled a lot, but that’s how you figure things out.

I’ll share the first batch of big lessons in this post. If you like it, there’s a whole lot more to divulge (e.g. exactly how I get guests, etc.). If the response is a collective “meh,” I’ll play with my dog instead.

I’ve formatted this little ditty as a Q&A, based on the most common questions from readers, podcasters, and journalists.

Hope you find it useful!

The overarching principles explored apply to a whole lot more than podcasting…

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QUESTION: Why did you start the podcast? How has it evolved over 150 episodes?

The podcast was never intended to be a business.

I was burned out after The 4-Hour Chef, which was nearly 700 pages, and I wanted a casual but creative break from big projects. Since I enjoyed being interviewed by Joe Rogan, Marc Maron, Nerdist, and other podcasting heavies who really move the needle, I decided to try long-form audio for six episodes. If I didn’t enjoy it, I would throw in the towel and walk.

My rationale: Worst-case scenario, the experience would help me improve my interviewing, which would help later book projects. This is a great example of what Scott Adams, creator of Dilbert, would call “systems” (win even if you lose) thinking. He discusses this at length with me here.

Flash forward to the current day, the podcast has found a nest in my “business,” but there is a clear hierarchy. Here are the pieces, in descending order of importance:

1) E-mail newsletter and “5-Bullet Friday” — Unlike, say, Facebook or Twitter, I own this communication directly and it’s less subject to the whims of algorithm changes (e.g. “Oops! Now you only reach 10% of your audience.”). Some people insist that e-mail is dead for younger generations, and they’re right… until those young people get jobs. E-mail will stick around for a while, despite attempts to kill it.

It’s still the most reliable delivery mechanism, although mobile push notifications are increasingly interesting to me. Though I use Slack for internal team communication, email is still #1 for external.

2) Blog and website — Based on WordPress VIP, ditto for the above. Even if Automattic goes out of business (disclosure: I’m an advisor, so I think this unlikely), WordPress is open source and I’ll survive. Video and audio are fantastic, but few things travel as well as text. Unlike video and audio, I feel there is a greater appreciation of page value with solid long-form, evergreen text content. The vast majority of my most popular posts are years old (e.g. Hacking Kickstarter: How to Raise $100,000 in 10 Days, Scientific Speed Reading). The best SEO is good, non-newsy content that remains relevant for years.

3) Podcast — This is the fastest growing piece of the puzzle, and I’m heavily investing here. Unlike the above two, audio can be a secondary activity. In other words, people can listen to my podcast when they commute, cook, walk the dog, work, etc. There’s also no degradation of experience when moving from laptop to mobile. Last but not least, I’m currently having the most fun with audio.

All that said, I put “business” in quotation marks in this answer because I don’t rely on my writing, etc. for money.

The majority of my finances come from early-stage startup investing, which I started in 2007 (portfolio) and stopped about six months ago. For this reason, I don’t feel pressured to monetize, per se. I put out what I want to put out, when I want to put it out, and that’s it.

Paradoxically, this seemingly lax approach appears to generate more revenue than if I focused on pushing product. My fan dedication (and occasional conversion) is high precisely because I don’t constantly bombard them with sales pitches and calls to action. Sure, I could make $5-10M additional per year for 1-3 years until I burned my audience out, but these people (you!) are worth far more to me than that. They’re a high-calibre bunch, people I want to be friends with rather than irritate.

Your network is your net-worth, and there are many ways to build it. Content is definitely one tool.

QUESTION: Does the podcast make any money directly, though?

Yes. If I wanted to fully monetize the show at my current rates, I could make between $2-4M per year, depending on how many episodes (“eps”) and spots I offer.

So why “if I wanted to fully monetize?” Because “fully monetizing”–bleeding the stone for all it’s worth–is nearly always a mistake, in my opinion.

I want to convert casual listeners into die-hard, fervent listeners, and I want to convert casual sponsors into die-hard, fervent sponsors. This requires two things: 1) Playing the long game, and 2) Strategically leaving some chips on the table. As a mentor once told me, “You can shear a sheep many times, but you can skin him only once.”

So, don’t skin your fuckin’ sheep, kids. In practical terms…

The podcast over-delivers for sponsors (here’s one example), partially because I deliberately undersell downloads. If I hypothetically get 1M downloads per episode, I might only guarantee (and charge for) 750K downloads.  This has attracted and kept sponsors ranging from Audible and Wealthfront to MeUndies and 99Designs.

I don’t have any sophisticated “funnel” or loss-leader campaign. I charge each sponsor per thousand downloads/listens that I guarantee. This cost per thousand (e.g. downloads, impressions, delivered email, etc.) is abbreviated as “CPM,” and the amount you charge per M (“thousand” in Roman numerals) is your “CPM rate.”

I’m not going to give my exact rates in this post, but I’ll give you something better: the bigger picture.

Premium podcasts tend to charge between $25-100 CPM. By “premium,” I mean high-converting, (often) single-host (due to Oprah-like sales impact), iTunes top-50 podcasts.

Let’s look at some numbers. If you can hypothetically guarantee 100,000 downloads per episode, as measured at six weeks post-publication (which seems standard for some odd reason), here is how the math shakes out at different CPM rates:

$50 CPM x 100,000 = 50 x 100 = $5,000 per sponsor per episode
$75 CPM x 100,000 = $7,500 per sponsor per episode
$100 CPM x 100,000 = $10,000 per sponsor per episode

Now, if a podcaster can guarantee 500,000 or 1M downloads/listens, you can see how the numbers add up.

To put these rates in context with other advertising, consider banner ads and email newsletters targeting high HHI (household income) demographics.

On the cheaper end, display/banner ads often cost less than $10 CPM, but a high-converting email newsletter can sell ads/sponsorship at $200-250+ CPM (with no guarantee of opening, only delivery). Premium podcasts currently fall in the middle.

Some podcasts charge $100 CPM or more and are worth it, but… I like setting numbers I can easily beat.

Any marginal short-term loss is made up for by repeat sponsors and larger, long-term purchase orders.  I also rig the game to tilt ROI for sponsors by including blog posts (~2.5M uniques/month), e-mail newsletter (500K-1,000,000+ with sharing), and social (2M+) in the podcast sponsorship versus charging separately a la carte. That might change, but it currently guarantees that 90%+ of my sponsorships clobber competitors, as the cumulative CPM is probably 50% below market.

(Related: If you spend at least $100K per year in marketing and are interested in test sponsoring the podcast, click here for more. Minimum test spend is, at least, $50K-$100K. Seriously inquiries only, please, and pricing is non-negotiable.)

Note to everyone asking “How do I get sponsors?”:  It’s critical to realize that I didn’t accept advertisers for the podcast until I had 100,000+ downloads per episode, as measured six weeks after publication.

Novice podcasters (which I was) and bloggers get too distracted in nascent stages with monetization. In the first 3-9 months, you should be honing your craft and putting out increasingly better work. Option A: you can waste 30-50% of your time to persuade a few small sponsors to commit early and stall at 30,000 downloads per episode because you’re neglecting creative. Option B: you can play the long game, wait 6-12 months until you have a critical mass, then you get to 300,000 downloads per ep and make 10x+ per ep with much larger brands. If you can afford it, don’t be in a rush. Haste makes waste; in this case, it can make the difference between $50,000 per year and $1,000,000+ per year. To reiterate a phrase more often used for blogging: “Good content is the best SEO.” Read The 22 Immutable Laws of Marketing to be different, not just incrementally better.

But…all this advertising talk is important to consider in the context of higher-level strategies. In podcasting, it’s easy to get stuck in the CPM and what-preamp-do-I-need? weeds. Decide on your larger framework and philosophy first.

Example — In general and across the board, I split my content in a very binary fashion: free or ultra-premium.

“Free” means that 99% of what I do is free to the world (e.g. podcast, blog) or nearly free (books). I write on topics A) that I enjoy and want to learn more about, and B) that I think will attract intelligent, driven, and/or accomplished people. This is what allows “ultra-premium.”

“Ultra-premium” means:

• Once in a blue moon, I offer a high-priced and very limited product or opportunity, such as an event with 200 seats at $7,500-$10,000 per seat. I can sell out a scarce, ultra-premium opp within 48 hours with a single blog post.

• I use the network and contacts I’ve built through “free” to find excellent non-content opportunities. I already mentioned one example: my early-stage tech investing. This came from the first book, blog, and social. I found Shopify, for instance, via my fans on Twitter while updating The 4-Hour Workweek. I started advising Shopify when they had ~10 employees. Now they have 1,000+ and are a publicly traded company (SHOP).

An openness to indirect paths means I don’t obsess over selling my content, and I never have. If the podcast sponsorship stuff turns into a headache, I’ll just drop it. Not to beat a dead horse, but let’s restate the most important takeaway — my network, built through writing, is my net worth. That travels with me. If you’d like more practice thinking laterally, try the work of Edward de Bono as an introduction.

Back to the money…

Whenever possible, I avoid what I consider the “blood-bath zone” — products or services priced from $20-100. This is where your customers will be at least 1/3 high-maintenance and cost-sensitive. For my minimalist preferences and operation, that’s too much customer service headache for the ROI, unless it’s automated like my book club with Audible.

[Afterword: I asked my Managing Editor to proofread this post, and he gave me the below comment. I’ve decided to simply copy and paste it.]

*** Tim: I think you should dig in more on just how much money you actually pass up. Including:

1) You don’t do more than 2 sponsors per ep (you could).

2) You vet [and use] all products and turn down >80% of advertisers.

3) You turn down sponsors that want you to do ridiculous reads. I’ve seen it multiple times where advertisers are like, “We need this to be longer” and you tell them to fuck off. This is important. You value your listener waaaaaaay more than they ever realize, and do it to the tune of legitimately millions “lost.” It’s not lost, but is worth mentioning and understanding.

4) You want the ads–like the content–to add value. You’re hoping when you hear it for the first time that you think it’s cool, new, different, or interesting. Otherwise, you wouldn’t share. When you hear it the 4th time, are you tired of it? Maybe. But your fourth time might be someone else’s first. It’s like complaining about shared content on social media. Just because you’ve experienced something before, that doesn’t mean everyone has, and your job is to best serve the audience. You do pre/post roll [instead of mid-roll] to make avoiding this easy: if you don’t like it, they can simply fast forward.

QUESTION: What’s your long-term revenue strategy with the podcast?

There is no long-term revenue strategy. I focus solely on making it as fun as possible for me to do. But — perhaps this itself is a solid strategy, not a lack of one. Simple can be effective. At least 50% of the venture capitalists I’ve met over the years laughed at my simplistic “scratch my own itch” investing approach. Net-net, I’ve now beaten most of their IRR. (Don’t get me wrong; many investors perennially kick my ass.)

For me, the moral of the story is this: Revenue opportunities often present themselves if you focus on creating something you’d pay for yourself.  If you can easily sell it to 10 friends and do some basic market research on top of that, the odds improve.

Of course, “scratching your own itch” doesn’t always work, but I think of it as necessary but not sufficient. If you have enough at-bats, and if you know how to limit losses (knowing when to fold ’em and walk away, like my six-episode commitment), you’ll eventually hit the ball.

The recipe is straightforward — Study the craft like it’s your job (e.g. Find people like master interviewer Cal Fussman), make yourself smile, don’t rush, don’t whore yourself, test a lot of wacky ideas, and think laterally. If you want to increase your income 10x instead of 10%, the best opportunities are often seemingly out of left field (e.g. books → startups).

Just remember that, even in a golden age, podcasting is a squirrely opportunity and not a panacea on a silver platter. Even if you work smart, you still have to do the work and take your lumps.

Amelia Boone, the world’s top female obstacle racer, said on my podcast that she’d put the following on a billboard: “No one owes you anything.” I think that’s a good mantra for life.

Try your best, take notes, and do better the next time.

QUESTION: What gear do you use for the podcast?

The recording gear is better and cheaper every year. It’s extremely easy for me to travel with a small recording studio in my backpack. If you’re on a budget, even an iPhone will do, but–bang for the buck–the ATR-2100 is hard to beat.

My mantra for gear is borrowed from my podcast with Morgan Spurlock: “Once you get fancy, fancy gets broken.”  Keep it simple.

For post-production and editing, I used Garageband for the first 30-40 episodes, but I now outsource to people who use primarily Ableton and Hindenburg. The simplicity of the latter is very appealing to me, but as a pure editor, it doesn’t include sound effects, transitions, etc. as a Garageband does.

Pat Flynn, a seasoned podcaster who’s helped me a ton, made a great and free podcast-editing tutorial for you all. This covers nearly everything you need to know for basic post-production.

For free options, Audacity is also popular. My suggestion: use the simplest editing software you can, or pay someone to do it for you. If Garageband appears too amateur for your first 1-3 episodes, I’d bet money you quit before episode 5. Keep it simple.

Regarding consumption and promotion — I love Marco Arment’s Overcast, both as a listener (smart speed) and podcaster (can link to specific time stamps). My wish and ask for them: to embed a small player on my blog instead of having to link out.

QUESTION: Is it too late to start a podcast? Don’t you feel pressured by all the competition? it seems like thousands launch every week.

Competition makes you better.

Everyone should try podcasting for at least 3-6 episodes, even if just to get better at asking questions and eliminating verbal tics. Those gains transfer everywhere.

If someone ends up better than me (or ranking better than me), they deserve to beat me. I’ll be the first person to buy them a beer. Remember that podcasting isn’t a zero-sum game, and a rising tide raises all ships (Check out the “Serial effect”). There’s plenty of room for more good shows, and the pie is expanding. Bring your A game and the cream will rise to the top.

Of course, you don’t need to be perfect (and you won’t be), but you need to try your best.  As Michael Gerber, author of The E-Myth Revisited, told me over coffee before I wrote The 4-Hour Workweek: “If you’re going to write a book, write a fucking book.”

If you start out bad but are incrementally improving towards awesome, that’s totally fine. If you’re half-assing it and coasting, find something else you can whole-ass.

QUESTION: How much time do you put into the podcast? Aren’t you The 4-Hour Workweek guy?

The 4-Hour Workweek is, first and foremost, about 10x’ing your per-hour output. I have no problem with hard work, as long as it’s applied to the right things, and I never have.

This is partially why The 4-Hour Workweek and the podcast have attracted some of the world’s most successful hedge fund managers and start-up founders. They might work 80+ hours per week, but they value efficient and elegant solutions.

The objective is to control your time — a non-renewable resource — and apply it where you have the highest leverage or enjoyment. For me right now, the Archimedes lever is clearly the podcast. I get to interview the most fascinating people I can find, including Rick Rubin, Jamie Foxx, Maria Popova, General McChrystal, Tony Robbins, and dozens of others. I would pay a small fortune to do this. Instead, I somehow get paid. For the time invested, especially when batching (e.g. I try and record eps on Mondays and Fridays, two weeks a month), it has the most disproportionate hours-to-ROI imaginable.

I don’t want my readers to be idle. Mini-retirements are wonderful (here’s a month-long example), but I’m not going to spend my entire life on the sidelines. This is all covered in the “Filling the Void” chapter of 4HWW, but it bears repeating.

For those curious, here’s what one of my days looks like. No two are quite alike.

QUESTION: But–for God’s sake–I don’t have bestselling books or a big blog! You had an unfair advantage. What can I do?

Get started.

Remember Amelia Boone, the most successful female obstacle racer in history? No one owes you anything. So… gird your loins and fucking get amongst it. Prepare to bloody your knees and learn a lot.

Yes, I came into podcasting with a text-loving audience, but guess what?

#1) Like everyone else, at one point, I had zero readers and zero listeners. We all start out naked and afraid. Then your mom starts checking out your stuff, or perhaps a few friends give a mercy-listen, and the fragile snowball grows from there. Here are a few ugly first versions of popular blogs. Mine was incredibly unpopular and hideous.

#2) Coming to the party with a pre-existing audience isn’t enough. Celebrities, YouTube icons, and bestselling authors start podcasts every week that get abandoned three weeks later.

Fortunately, the most common pitfalls are easy to avoid.

Here are a few things I found helpful that might help you:

1) Upload at least 2-3 pre-recorded episodes when you launch your podcast (real-world example). This appears to help with iTunes ranking, which — like bestseller lists — can be self-propagating. The higher you rank, the more people see you, the higher you continue to rank, etc.

2) Keep the format simple. Most would-be blockbuster podcasters quit because they get overwhelmed with gear and editing. Much like Joe Rogan, I decided to record and publish entire conversations (minimizing post-production), not solely highlights. I also use a tremendously simple gear setup and favored Skype interviews for the first 20 or so interviews, as the process is easier to handle when you can look at questions and prep notes in Evernote or a notebook.

As Tony Robbins would say: complexity is the enemy of execution. You do NOT need concert hall-quality audio; most people will be listening in the subway or car anyway, and they’ll forgive you if recordings are rough around the edges. Audio engineers will never be fully satisfied with your audio, but 99.9% of listeners will be happy if you’re intelligible and loud enough.

3) Don’t pursue or even think about sponsors until you have a critical mass. I discussed this earlier. It’s a distraction. Play the long game.

4) Get transcripts and send highlights with pitch ideas to print/text journalists. I have done this with several outlets, and it’s resulted in some outstanding original pieces like this one from Business Insider, who came up with the story angle on their own. I suspect this type of coverage also helped the Jamie Foxx episode win “Podcast Episode of the Year” on Product Hunt.

5) If you use blog posts, utilize graphics to increase podcast downloads/listens for your target platform. This is a tip I got from podcasting veteran John Lee Dumas. Here is one example of mine, where the iTunes button is exceptionally clear.

6) Experiment constantly. I have tested conversations in a sauna (Rick Rubin), solo Q&As based on reddit submissions (e.g. Maria Popova, Round Two), drunk dialing fans via Skype, audiobook excerpts (e.g. Tim Kreider), and more. It’s easy to assume that labor-intensive, polished episodes get the most downloads. Luckily, sometimes the opposite is true—the easy, low-labor stuff kills. This experimentation also keeps things fun for me. Podcasting isn’t radio, and there aren’t any hard-and-fast rules. Go nuts and let the world tell you what works.

A Few Closing Thoughts

There is no reason to bore your listeners (or yourself) because you’re slavishly following someone else’s playbook.

This post explains a few things I’ve found useful, but they’re guidelines at best, not rules.

Borrow, be ridiculous on occasion, and be yourself. This is one medium where it can pay 100-fold to simply be you: warts, weirdness, and all.

How about throwing chimpanzee screeches in the middle of an episode? Fuck it, sure. Making weird Mogwai noises during the intros with no explanation whatsoever? If I’ve had enough wine, definitely.  Recording last-minute guest bios in an airplane bathroom? Done it.

If you make yourself laugh every once in a while, at least you will have fun.

And that is perhaps the best strategy of all.

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Last but certainly not least, I want to thank a few smart people who generously spent many hours educating me on the details, tech, and craft of podcasting. In alphabetical order by first name (and if I forgot anyone, please let me know!):

Jason DeFillippo of Grumpy Old Geeks
John Lee Dumas of Entrepreneur on Fire
Jordan Harbinger of The Jordan Harbinger Show
Lewis Howes of The School of Greatness
Matt Lieber and Alex Blumberg of Gimlet Media
Pat Flynn of Smart Passive Income
Rob Walch of Libsyn

If you’re curious to know my top-10 most popular podcast guests (as of April 2016), here they are.

If you enjoyed this and would like more on podcasting, please let me know in the comments, and I’ll write more. Specifically, what would you most like to know?

Posted on: April 11, 2016.

Please check out Tribe of Mentors, my newest book, which shares short, tactical life advice from 100+ world-class performers. Many of the world’s most famous entrepreneurs, athletes, investors, poker players, and artists are part of the book. The tips and strategies in Tribe of Mentors have already changed my life, and I hope the same for you. Click here for a sample chapter and full details. Roughly 90% of the guests have never appeared on my podcast.

Who was interviewed? Here’s a very partial list: tech icons (founders of Facebook, Twitter, LinkedIn, Craigslist, Pinterest, Spotify, Salesforce, Dropbox, and more), Jimmy Fallon, Arianna Huffington, Brandon Stanton (Humans of New York), Lord Rabbi Jonathan Sacks, Ayaan Hirsi Ali, Ben Stiller, Maurice Ashley (first African-American Grandmaster of chess), Brené Brown (researcher and bestselling author), Rick Rubin (legendary music producer), Temple Grandin (animal behavior expert and autism activist), Franklin Leonard (The Black List), Dara Torres (12-time Olympic medalist in swimming), David Lynch (director), Kelly Slater (surfing legend), Bozoma Saint John (Beats/Apple/Uber), Lewis Cantley (famed cancer researcher), Maria Sharapova, Chris Anderson (curator of TED), Terry Crews, Greg Norman (golf icon), Vitalik Buterin (creator of Ethereum), and nearly 100 more. Check it all out by clicking here.