How I Started a $650k/year Transcription Service

Learn how Rajiv built his $650k/year transcription business from scratch.

1. Hello! Who are you and what is your business?

I am a 90’s kid. I grew up in a small town in North-East India called Silchar. I think I heard about Google when I was in high school and was fascinated by startups ever since. I enrolled in Engineering with the intent of starting up on my own one day. I finished my graduation in 1999 and worked for a couple of companies before taking the plunge in 2006. 

My first startup was a hardware startup. It failed and we closed it down in 2008. I repurposed one of the internal tools into a Skype call recording plugin and released it for free. It took off and even got featured in LifeHacker! I started exploring various freemium business models around it and stumbled upon the audio/video transcription industry. 

I noticed a gap in the market and decided to target it. Transcription is a painful and laborious process. The quality depends largely on the skill of transcriber. My idea was to build a crowdsourcing system for audio/video transcription with in-built quality control mechanisms. The goal of the system was to produce accurate, consistent, and repeatable transcripts. It was like a managed marketplace with flat rates and a quality-of-service guarantee. 

I was broke after my first failed startup and decided to bootstrap this one. I kept working on it as a solo developer and was soon ramen profitable. By 2010, it had grown big enough for me to incorporate a company. In 2013 we opened our first QA center in Bangalore and in 2016, we opened our office in San Francisco. But I had to return back to India in December 2016 due to visa issues. That forced me to change the strategy and in 2018 I decided to turn Scribie into a “lifestyle” business. 

Right now, Scribie is a fully remote company with just two employees. I do all the coding and business development and Aaron, the other employee, does Data Science. We have two independent contractors from Philipines; Vivian is our Customer Success Manager and Judith is our Operations Manager. The rest are all freelance transcribers from all over the world. 

We have transcribed more than 4.5 Million minutes of audio and certified around 30K transcribers. Around 150K people have attempted our transcription test and more than 20K customers have used our services. 

Our revenue in 2019 was around $650k.

2. How do you attract and retain your customers?

Our first users came from the Skype recording application. Some were academics recording interviews for dissertations. Others were journalists and podcasters. We offered the service free initially but quickly had to make it paid because of the high demand. Thereafter it spread by word of mouth. Word of mouth is still very strong for us. We still have customers who signed up 8 years ago.

We have been fortunate in a way that we always had a high demand for our service. We never really had a sales or marketing team. We just followed the best practices for SEO and organic search was always strong for us. We always keep our blog fresh and post articles every few weeks. We also use AdWords and run PR and promotional campaigns whenever required.

Good customer support has been the key factor for customer retention for us. Vivian has been with us since 2015 and she has done a fabulous job. Our NPS score is in the high 60s. We don’t have many customer complaints and we diligently follow up whenever there is. 

3. What were your challenges and obstacles of growing your business?

Our biggest obstacle has always been the dearth of skilled transcribers. Transcription is not everybody’s cup of tea. Only people who like repetitive and monotonous work are able to excel in it. It also requires good typing and comprehension skills. Therefore we have a low transcriber conversion rate. That limits our capacity and therefore our revenue. 

We have tried various approaches to solve this issue over time. We started with a 4-step transcription process that distributed the effort and optimized the workflow. The idea was to reduce as many pain points as possible for the transcribers. It helped but didn’t solve the issue.

In 2013, we tried training our in-house transcribers. That did not work as a good comprehension of English is a valuable skill and there are better jobs available for them. We abandoned that approach in 2016. 

In 2017, we turned towards technology. We built our own speech recognition engine and released several productivity tools to assist our transcribers and increase their productivity. Our capacity growth rate has increased since then, but the growth is still linear. 

I have mostly resigned to the fact that our capacity growth will always be linear. We are not going to be the next unicorn and will never have that hockey stick growth that SV startups aim for. But we will still be around in 10 years’ time when automation takes over the market as high-accuracy manual transcription will still be required for niche cases.

4. What has been helpful to help you to grow your business?

Hacker News has proved to be a valuable resource for me. Everything I learned about startups, I learned from HN. It is a great community for tech entrepreneurs and it would be my top recommendation. I am actually a YCombinator reject.

My best decision was to keep focusing on quality. Quality is a hard problem to solve, especially in an industry that requires manual labor. Manual labor is hard to scale, which is why there is no dominant player in this industry even though the market is large and there are tons of services to choose from. Our single-minded focus has enabled us to carve a niche and survive in this highly competitive space. And we are still working on this problem. 

The other good decision was not to diversify and start offering other products/services. We are good at transcription and we know how to keep our customers happy. We have built a well-oiled machine that works and works well over a period of time. That’s one of our strengths.

It however remains to be seen if we are able to survive the 2020 recession. This is going to be the hardest year for us. We have prepped for it and I am confident that we will make it through. 

5. What is your advice for those that are starting productized services?

My biggest learning has been that our transcribers are our most valuable resource. We have always believed in paying honest money for honest work. We have our share of detractors and there are many negative reviews about us, but we still have active transcribers who signed up years ago. Our service runs because of our transcribers and we would have died long ago if our transcribers did not value us. I am a big fan of worker-owned coops and I hope that one day we’ll be able to convert Scribie into a coop. 

The one thing which I feel others miss out about transcription is that quality is a hidden requirement. Customers will not state it upfront, but everybody wants the best possible transcript for their file. And if they are dissatisfied, they will just leave and vote with their feet. That does not mean speed and cost are not important, but you cannot have all three. 

6. What are your plans for the future?

Our goal is to achieve a modest 10% year-on-year revenue growth. However, given the oncoming recession, our first goal is to survive 2020. This recession is likely to shake up the market and the companies which survive this will be placed very nicely.

We are working on a full redesign of our website. A new state-of-the-art UX will help us optimize our conversion funnel and achieve our revenue target. 

On the personal front, I want to get back into books. I used to be an avid reader before Scribie consumed my life. I am looking forward to getting back to that habit.

7. Where can we learn more about you? 

I sometimes post on Scribie’s blog. I am not on Twitter or Facebook (deleted my account in 2008). I am a long timer lurker on HN.

I hope my story starts a discussion about lifestyle businesses. Scribie is a fully bootstrapped solo founder company. We never raised any external funding (I did try but it never worked out) and that has given me a lot of freedom to choose our path. There is nothing wrong with running a lifestyle business. It can still give you a lot of satisfaction and impact many lives.

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