Bootstrapping the CNN of tech: the story of TWiT

twit duo

It all started with boredom. Leo Laporte had a few gigs with TV and radio networks back in 2005, but his work schedule left him with nothing to do half of the month. So he started an audio podcast called This Week in Tech, also known as TWiT. He asked listeners for donations, which allowed him to hire production help and add additional shows. And then, one day, he told his then-bookkeeper Lisa Kentzell about his real goal: to become the CNN of tech.

“I said: Okay, let’s do it,” recalled Kentzell when I met her and Laporte in the TwiT cottage in Petaluma, Calif. last week. Kentzell is now the CEO of TWiT, and the company is ready to take the next big step towards its ambitious goal in July with the move into a spacious new studio built with a 24/7 live video operation in mind.

Check out this video of Leo Laporte and Lisa Kentzell showing off their new studio:

[youtube=http://www.youtube.com/watch?v=wrYQN6lHbKI]

The new space is only a couple blocks away from the old studio, but in a way, the two studios are worlds apart. The old TWiT cottage, which has been Laporte’s home base since 2005, looks like your grandma’s small old summer-house taken over by a bunch of geeks. Too many geeks, actually. The 18 staffers are literally bumping into each other all the time. The new studio, on the other hand, will have multiple sets, 40 cameras, state of the art tech and lots of room for future expansion.

The move is also as sign of TWiT doubling down on live video. It’s a ambitious proposition, in part because most of its audience still thinks of TWiT as a podcast network. Kentzell told me TWiT sees about 5 million downloads every month. Live is harder to track, she said, but still much smaller.

“The live audience isn’t here yet,” admitted Laporte. “It’s a big bet on the future.” And live is expensive: TWiT recently had to shut down the live feed of its Roku channel because of exploding bandwidth costs. However, Laporte believes that these things will eventually sort themselves out with bandwidth prices going down.

Taking a step back when things get too expensive is also a part of the TWiT way of doing business. Laporte and Kentzell thought about moving to San Francisco with the new studio, but decided to stay in Petaluma to get more bang for their buck. The company only spends as much as it can afford at any given time, and has been entirely bootstrapped from day one, declining many opportunities for outside funding. “We are very committed to bootstrapping,” said Laporte. Kentzell agreed: “We wanted to have full creative and financial control.”

Speaking of Kentzell, she’s one of the lesser-known folks on the TWiT team, but Laporte couldn’t speak more highly of her. “It really wasn’t a business until Lisa came along,” he told me. Laporte initially hired her to do his books; he soon discovered that she was outsourcing the actual bookkeeping to a whole team she managed. Impressed, he convinced her to bring some of that leadership to TWiT. Laporte credits her for doubling revenue every year in the past few years, up to the tune of $3 million in 2010.

Much of that money comes from advertising these days, which is brought in by an external sales team. Initially, TWiT was entirely donation-based, with listeners shipping in as much as $20,000 per month. The company is relying on some of that loyalty to finish its new studio, which will cost about $850,000, by selling commemorative bricks to fans. “Donations give people a feeling to be part of it,” said Laporte.

So what’s next for TWiT? 24/7 live streaming is one goal; a satellite bureau in New York is also in the cards. Laporte also wants to hire more talent and add more shows after poaching broadcaster Tom Merritt and producer Jason Howell from Cnet last year. But he doesn’t believe in branching out too far. “I’m not trying to get bigger; I’m trying to serve our niche better,” he said, adding that he’s confident to have a good sense of the content that will be popular. “I really understand our audience. I am one of them.”

And as for the ambitions to become the CNN of tech, Laporte says it’s not just a numbers game. He may never reach as many simultaneous viewers as the cable channels, but he believes TWiT can be just as relevant. His team will have succeeded once “a breaking news story happens and people turn to us,” he explained. Getting there may take years, and millions of dollars that Laporte and Kentzell intend to make the old-fashioned way: through bootstrapping. Said Kentzell, “It’s a little risky, but I think it’s worthwhile.”

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