Spring 2018 AFRL Commercialization Academy Series: AudioStaq


Gabriel Pendleton is the cofounder of AudioStaq, a publishing and monetization platform that allows podcasters to host, distribute, and monetize content by connecting them with relevant advertisers through their programmatic marketplace.

Tell us about your background in the gaming industry.

I started out as a video game tester working at a company called E4E Interactive, which was acquired by nThrive. I was heavily interested in video games at that time and went to the University of Baltimore to study game development. I worked at E4E Interactive for about 3 years on games produced by the top 20 video game publishers.

Over one summer, I taught myself web development, and then I used that knowledge to get my first role as a Game User Interface Programmer at a company called AmTote International, a company focused on casino games. Then I moved into product management and launching products, which is what I do now. I’ve worked on several technologies and software products and have a background in advertising technology. With this background and the fact that I’ve always had a love for podcasts, I decided to build AudioStaq.

How did you come up with the idea for AudioStaq?

I used to be a podcaster and I listened to a lot of podcasts. My cofounder, Christian Strama, and I would always discuss various podcasts we listened to. One day he came to me and said, ‘I was listening to this old podcast and it had some ads that were outdated. The products don’t even exist anymore. I wonder if there’s a way to programmatically or automatically swap out ads on podcasts.’ Because I used to be a podcaster, I knew that there wasn’t. Based on my experience in advertising technology, I thought that this should be something that exists.

What is the current outlook of the podcast market?

The podcast market is at this huge growth stage where so many more people and brands are producing podcasts than several years ago, but programmatic technology hasn’t caught up with the accelerating pace of podcast creation.

My cofounder and I did research and found a couple companies that were starting to build programmatic technology for ads on podcasts, but their products weren’t fully developed at the time. Almost no one in the podcasting market was using the technology either. And so, we saw a huge opportunity for us to create a product that was very early in its infancy and to be one of the earliest companies providing this service before it really starts to scale. It turned out to be a very good strategy for us, because that’s exactly what’s happening.

What method is currently used to switch out ads in most podcasts?

Currently, the method of switching out ads is very labor-intensive. The file is pulled down, re-edited, and all the points in the podcast where the old ads are mentioned are found. Then updated versions of the ads are recorded, clipped into the right places, the sound levels are checked to make sure they’re accurate, and so on. etc.

After discovering that a more efficient method is needed to switch out ads in podcasts, did you begin building AudioStaq immediately?

My cofounder and I talked about our idea to a friend who’s an investor in various technologies, and he talked us out of it a little bit. He said it was going to be a lot of work. It’s a double-sided market, which means both sides must be built. Then an app needed be created and we would have to get listeners to use our app. All of this would require a lot of work.

After that discussion, we decided not to work on the technology for about two years, but I still talked to podcasters about it. I also met with David Carberry, CEO of Enradius, who thought our idea would be great for radio. He said, ‘I don’t know why it’s not a huge thing on radio because it would solve a lot of problems.’ Based on that conversation and continued activity in the podcast space, I knew that we had to build the technology, so we started working on it.

On which markets is AudioStaq currently focusing?

Even though the investor talked us out of it initially, one thing we learned from him is that we had to figure out which market segment — podcasters, advertisers, or listeners — we needed to tackle first. Eventually, we’ll create an app where listeners can listen to our podcasts, but our current model focuses on medium to large podcasters. This allows us to solve the monetization problem between advertisers and podcasters. AudioStaq is the middle man between these two groups, so we’re not focusing on the listeners at this time. Currently, we distribute to all platforms, and by working with podcasters that already have an audience, advertisers are more willing to buy in because there’s already prospective customers that they can focus on.

AudioStaq cofounder Gabriel Pendleton competing at the 2017 AfroTech conference

Compared to Google AdSense or Adwords, how would you describe AudioStaq?

What Google AdSense is for bloggers, we are to podcasters. Google AdSense allowed bloggers to install code snippets on their websites so that they could include ads to earn money. It only took a few seconds to do this. That’s what we want to do for podcasts. In under a few seconds, podcasters can plug into our platform and start earning money. And then on the advertising side, Google Adwords allowed any small business or person who knew how to write text to make an ad. That’s what we want to do for advertisers: any person, small business, or large organization can buy podcast ad space as easy as they can with Google Adwords.

How likely would it be for an audience to listen to a podcast episode that is, say, 5 or 10 years old?

Some people might wonder, ‘Why would you care about an episode that’s 5 years old?’ A lot of studies show that when listeners discover a podcast, over 85% will go back and listen to older episodes. So that means it’s still relevant to put current advertisements in old podcast episodes to update them and keep them updated. Those are opportunities to for advertisers to earn revenue on content.

How did you hear about the AFRL Commercialization Academy?

I’m an alum of the Wasabi Ventures Academy, so I learned about it through the program’s director, Michele Pesula-Kuegler. I participated in the program about a year ago. I found out that there was a new AFRL Commercialization Academy cohort beginning in the spring of 2018, so I applied to be a part of it.

What motivated you to participate in the AFRL Commercialization Academy?

First, we were interested in the funding cohort startups receive for reaching milestones, as well as other resources. Second, I always look for ways to improve our business model, expand our network, and refine our product. The AFRL Commercialization Academy is another way to connect with experts, get feedback on our business model, and find new ideas to implement. There’s always something new to learn, especially from people who have built companies and products multiple times.

The third thing is the opportunity to work with some of the Air Force Research Lab IP technology. We received a catalog of IP technology, and we saw some that we really think could work very well for us, especially being in the audio space. Once we refine our product, we’d like to see how the IP integrates with what we’re doing, specifically voice-activated technology and making interactive podcasts.

What are you looking forward to the most at the Spring 2018 AFRL Commercialization Academy Demo Day on May 31, 2018?

The opportunity to refine our pitch and cater it to a new audience who may not even know what a podcast is. Also, getting more exposure for AudioStaq and what we do, getting people interested, and making connections.

AudioStaq cofounder Gabe Pendleton presenting at FounderTrac Pitch Day on April 3, 2018 in Annapolis, Maryland

What age group is more likely to listen to podcasts? Have you noticed any generational differences?

Overwhelmingly, millennials are more inclined to be core podcast listeners. Sometimes it’s a hurdle to pitch to an audience that mainly consists of people who don’t know what a podcast is. So, for those unfamiliar with podcasts, we tell them, “It’s radio, but online.”

A lot of people are listening to podcasts now that don’t even know that they are. It’s just that the terminology is still new. It was coined by Apple, so unless you were an early adopter of one of their products, you may not be in tune with the terminology.

Whether younger or older, a lot of people are familiar with Netflix. So sometimes I say, “It’s Netflix for radio. Netflix allows you to download and watch content at any time. If you’re on the road driving, in the gym, or wherever else. A podcast is an audio file that can be downloaded digitally, so it’s radio that you can download any time you want.”

Who would you like to collaborate with or meet at Demo Day, or in the future, that could further your company’s mission?

Since companies and organizations thrive through advertising, I would love to meet the ones attending Demo Day because they could potentially be our clients. We always offer free introductory services for podcasts and advertisers to see if we can build a relationship.

We’re also looking for experts in our field, such as mentors or experts in business development or financing. As startup founders, we make a lot of mistakes. A lot of those mistakes can involve legal and financial matters, so it’s nice to have people to work with that can help minimize those mistakes. Those types of mistakes can be very, very costly.

Quick Q’s

If you had to choose one thing, what would you say is your greatest accomplishment?

Through my years of experience working as a product manager, one of the things I’ve learned is how to validate a product very quickly. And so, when building AudioStaq’s MVP we spent two months and were able to sign our biggest client very early. This turned out to be our first enterprise client, NPR Baltimore. They produce a huge amount of content every day.

What one piece of advice would you give to another startup founder?

Believe in your vision. I know that sounds like something everyone says, but what I mean is, every day as a startup founder you will find a reason to fail. You will find a reason to not work on a project. And people will doubt you. You’re going to look at the market and see competitors posting announcements. You’re going to have some investor or someone else saying your product won’t work. You’ll have family members saying, ‘Why don’t you just get a job that’ll pay you a good salary and benefits?’ Your patience might not allow you to grow the company because you think you should be doing 100 times growth every day or whatever you set your expectations to be.

Every day you’ll find a reason not to work on your startup and give up. You have to fight through all the negativity and think about your big picture and work towards it. Try to stay true to your vision and know that you’re working towards something with a greater purpose.

What’s your favorite podcast to listen to?

I have a ton of favorite podcasts that I like to listen to, but the one that I’m a big fan of right now is one produced by a partnership between Gimlet Mediaand Ebay. It’s called “Open for Business”. A lot of the issues that the hosts and early-stage founders talk about are relevant to the present startup climate.

Outside of entrepreneurship, I’m a big fan of story-driven podcasts. The one I’ve been listening to a lot recently is “Ear Hustle” by PRX. The podcast series gives you an insider’s perspective of the issues at San Quentin Prison by a prisoner in the facility. Some of the team and one of the cohosts that produce the show are prisoners themselves. It’s very well-done and it gives you another side of the story that you usually don’t hear about. That’s the power of podcasts and creating good stories that show unique perspectives. There’s a podcast for every niche.

Check out Audiostaq’s programmatic technology for switching out ads in podcasts at the Spring 2018 AFRL Commercialization Academy Demo Day on Thursday, May 31, 2018. Watch them pitch to compete for the chance to win either the Judges’ Vote of $15,000 or the live Audience Vote of $5,000 at Griffiss Institute, 725 Daedalian Drive, Rome, New York!

About the author

By Gabriel