Building a Podcasting Cooperative with Maximum Fun CEO Bikram Chatterji

Jeff Umbro: This is Podcast Perspectives, a show about the podcast industry and the people behind it. I'm your host, Jeff Umbro, founder and CEO of the Podglomerate. Today on the show, I'm speaking with Bikram Chatterji, CEO of Maximum Fun. 

Maximum Fun is a podcast network founded in 2004 by the husband and wife of Team Jesse and Theresa Thorn. MaxFun has always been a force in the podcast industry, but what really launched it into the public eye was an announcement made in March of 2023, where Jesse announced that he would be stepping down as CEO and converting the company to a co-op model. 

What this means is that the company would officially be owned by the employees of the company and they would have a vote on the bigger questions of the direction of that company. We discuss a lot of the mechanics of how this works with Bikram, but if anybody is really interested in diving in further, I do encourage you to check out the show notes of today's episode, where we link to a bunch of articles and interviews about the topic. 

Bikram has led the transition to this new model as MaxFun's current CEO. On the show today, we discuss why the co-op was formed, the major challenges in the first year, the benefits, especially to team morale in the future, what can go right and what can go wrong. So here's my conversation with Bikram.

Bikram, thank you so much for joining us. 

Bikram Chatterji: Thanks for having me. 

Jeff Umbro: So I think a lot of people listening to the show are going to know the answer to this, but just to make sure that we cover it, can you walk me through what MaxFun is? And then we'll get into some of the more recent developments later on.

Bikram Chatterji: Yeah. Maximum Fun is a pioneering podcast network. We produce our own shows and we distribute for partner shows that are all independently produced and owned. Right now we have about 35 shows on the network, 10 of those are produced in-house and [are] either owned or in-partnership with their creators, and the balance are produced independently and they just work with us on distribution, marketing, audience, and monetization.

Jeff Umbro: And Maximum Fund started in 2004. It was founded by Jesse Thorn. How long have you been with Maximum Fun?

Bikram Chatterji: I've been with the company since 2016. I joined as sort of the company's first, at that time, managing director, basically the person who would take over day-to-day management of the business aspect of the company from Jesse and Theresa who were running it at the time.

Jeff Umbro: And in terms of the scale of the company from when you joined, how many like downloads were you seeing versus today? Like what kind of revenue were you seeing versus today? 

Bikram Chatterji: You know, to be perfectly candid in terms of downloads, what a download means has changed so dramatically since 2016 in the various iterations of the IAB. So even if I knew what the download levels were in 2016, I don't know that they would be comparable. In terms of revenue, you know, there was a sharp period of accelerated growth and some of that was due to growth in our membership program. And a lot of it was due to bringing advertising in house in 2020. But that has sort of leveled off. 

So I don't know what the overall figure is. I think it's probably around 200-300% in terms of revenue growth. But like, again, that's over a long time period and it was definitely managing through that growth and now managing through the next phase is what I've sort of been focused on.

Jeff Umbro: So why would somebody come to MaxFun as opposed to like a Spotify or something?

Bikram Chatterji: Yeah, it's a thing I think about a lot because I love our team. I think they're so fantastic. And I think this is maybe the appropriate time to talk about transitioning to a worker cooperative, if that makes sense. Because I feel like that's a huge part of what Maximum Fun’s value proposition to potential employees is now. 

In 2023 in June, we converted to be a worker-owned cooperative. So as you mentioned, we were sort of founded in 2004. We were incorporated in 2011. And during that time period, Jesse and Theresa were the owners of the company. We operated by a specific set of values. We operated for long-term growth and long-term success of the company and the shows that were on the company.

And then, last year, we converted to be a cooperative. And for workers or potential workers, I think that really means that they understand the company. Everybody here really cares about their interests, that they will have a seat at the table when major decisions are being made. If the company does well, they will share in that success. Everybody here fundamentally cares about the work product that we make, the shows that we create, and I think having that connection to both the company and to the work that we're putting out in the world makes a difference. 

I can't speak to the motivations for folks going to other places, but for me, it makes me proud to be working here every day and I feel like that's a sort of a shared attitude amongst the folks who work here. 

Jeff Umbro: And so it's been, I don't know, eight months, maybe since this has become official.

I know you announced it a few months prior to that. Has there been any significant changes in the day-to-day of the business? I know that the corporate structure has changed. Is there any shift in anybody's specific role?

Bikram Chatterji: Not in the day-to-day operations of the businesses, sort of like how we develop shows, how we produce shows, and I think that's really intentional, right? There's two things: one, whenever a company goes through a major transition, one of the things you want to do is if things are going well, which they were, is to make sure you keep things going well as to make sure that you don't create a huge disruption.

And the other thing is like the conversion to a co-op was really continuous with our business strategy and with the way we conducted business beforehand. So there wasn't a fundamental driver of change. Like there wasn't a sense that like, oh we need to do this because we need to respond to the marketplace. We need to do this because some existential threat is facing us. We did want to do it, but it wasn't against a backdrop of other things that were forcing us into the change. It was a change by choice. 

The things that have changed: there is a new board of directors and that board of directors is [made up of] worker owners. They're people I work with. I was on that board for the first six months of the co-op's existence, but I'm no longer on that board. So now I report to folks who are in different places on the org structure than I am. 

And I think anybody who you talk to on that board will tell you that is a lot of work, because it is. I mean, are truly running the business. It's not window dressing. They have that same authority that a board would in a traditional corporate structure.

Jeff Umbro: The idea of like employees or people within an organization having an ownership stake is a good one. And there's a lot of work that goes into owning and running a company. And I'm just wondering, like, has that impacted anything for the better or the worse in terms of like sharing that responsibility?

Bikram Chatterji: Yeah. I mean, for me personally, in some ways I've had the easiest transition because all that has changed is instead of reporting to purely Jesse as the primary sole shareholder, I report to this board now. And, you know, I'm still thinking about all the same things I was thinking about in, you know, March of 2023. It's just that I share them with a different audience. 

And I think that's been really beneficial for me as, you know, sitting in the CEO seat, having a variety of perspectives, having folks who may not have been thinking about this stuff for as long as I have. And one of the cliches is you don't really understand a thing until you can explain it to somebody, and having to explain my thinking around why we have the ad policy we do, how we're thinking about show growth, all of that. I also get back from them a lot more in terms of insight, perspective, even people who we should consider working with that I otherwise don't know that we would have the same channel for exchanging that information.

So it really does function as like a traditional board where they're both overseeing me and making sure I'm doing a good job, but they're also a resource for me if I have a problem, if I have a challenge, if I have just a question that I want to think through out loud with somebody, and that's invaluable.

Jeff Umbro: So it sounds like you're having a really good experience and the company is having a really good experience since this transition. Is there anything that you would say has been a negative since this happened?

Bikram Chatterji: I think the biggest thing is the work. And not so much the work for me, but you know, the folks who have stepped into that board responsibility and the broader worker ownership, it's another thing on their plate.

For our chair, K.T. Wigman, like she has to prepare the agenda for board meetings, which are relatively frequent. When we have a general assembly, which we're doing every quarter for all the worker-owners. Our treasurer is not an accountant. She's not trained as an accountant. You know, Stacey Molski didn't go to accounting school. She has an art history degree. She's really smart and she can figure all this stuff out, but like that is not stuff that she ever had formal training around. 

And so it has been inspiring to see them take up those roles, but it is more work and even separate and apart from the board, just being a worker owner is a responsibility, as you mentioned.

Jeff Umbro: So let's take one step back and could you provide the cliff notes as to like what has changed and like, what a worker owner is entitled to and how that differs from the former structure of the company.

Bikram Chatterji: Yeah, I mean the former structure was basically Jesse and his wife who started the company, as is commonly the case, they founded the company and reported to them and ultimately they were the authority over the company. And ultimately they were the ones who made big decisions. The financial benefits of the company ultimately went to their favor. 

As a change to that, in a worker-owner construct, the workers own the company. So everybody who wants to be a worker-owner of the company buys into that. You're not actually buying a percentage of the company, typically you do it through payroll withdrawals, but you're saying I'm going to sacrifice a certain amount of money so that I get this right to own a piece of the company.

Jeff Umbro: As I understand it, It's a small amount of money, which is meant to be more symbolic than anything, saying it like this is intentional.Is that correct?

Bikram Chatterji: Yeah. It's supposed to be large enough so that you notice it, but not large enough so that you miss it or feeling a pinch in other parts of your life as a result of it. And that's exactly right. It demonstrates [a] sort of commitment to the cooperative because it's a serious responsibility [as] we've talked about.

Following that, you vote on members of the board. You could stand for election for board membership yourself and any major decision that we would make, we would also bring to that general assembly of worker-owners. So if we are thinking about moving offices that's something that the workers would weigh in on. Our annual budget is something that the workers see and weigh in on. 

So there's the governance part of it that they enjoy. And then there's also the sort of financial or economic part of it, where if the company makes a lot of money in a given year, and we have excess cash flow, we can collectively decide whether we want to distribute that cashflow amongst the workers – so profit share to all the worker owners, or if we want to reinvest that in the company, or if we want to put it aside for a rainy day fund.

Jeff Umbro: Is this like an HOA? Is that a similar comp?

Bikram Chatterji: When we were first going on this sort of co-op journey, having spent a lot of my professional life in New York, I was like, oh, co-ops, I understand that, those are buildings. And I've never been a member of one. So I can't speak from experience, but I think there is a sense of shared ownership and shared decision making. From the co-op boards that I was familiar with in New York, I think they're a lot more political than our company is, but it is a similar structure, I guess.

Jeff Umbro: Interesting. I live in an HOA right now and also own a business. It's funny because I would just never put the two together in the same conversation. 

How many of your employees elected to buy into the worker-owner program?

Bikram Chatterji: Yeah, at the time of conversion, we had 21 full time employees and 20 of them elected to be a worker-owner. And you need to be a full time employee to be a worker-owner under our structure.

Jeff Umbro: I don't mean to single anyone out, but one of my questions was going to be, why would you elect not to do this?

Bikram Chatterji: Yeah, I can maybe answer in the hypothetical. I also did not wish to single anybody out. I think there is the potential that some folks just are looking for a job and they don't want the added responsibility or complication of caring about what you need to care about as a business owner. So while I think there was a really strong argument for being a worker-owner, and I think like we made it really achievable, this might be doing a little bit of mental gymnastics, but in a way for me, it's a good sign that somebody elected not to do it because we wanted it to be a choice. We wanted it to be something that people were actively choosing as opposed to something that people just said, oh, well, of course I would do this. Why wouldn't I do this? 

In a weird way, you don't want to stack the deck so much in favor of worker-ownership, because ultimately you are asking something of these people and the people who participate, you want them to feel like they are invested and that they've made an active choice.

Jeff Umbro: We've talked about what happens if the business is going well and you know, you're making a profit, you maybe have a rainy day fund or can do a distribution. If the business comes up short and you have to make tough decisions, that also, I assume, falls on the worker owners. Is that correct?

Bikram Chatterji: Yeah, I mean, I think part of my job as CEO is to give a true assessment of where the company is and what I expect will happen. And unfortunately, we have not been in the situation where we've had to make a tough decision.

But right now I have talked to people about, hey, the advertising world is still really volatile. So let's make sure we're managing our cash really carefully. And let's make sure that we know what our reserves are. And let's make sure we know what happens and what our key milestones are throughout the year.

Part of that cash distribution every year that would happen out of profits, part of that actually doesn't get distributed out to the workers. It actually goes into a set-aside fund within the organization. And the intention is to ultimately distribute that out to workers, but it also acts as sort of a fallback where if there's a shortfall in a given year, and we can't cover it with cash reserves, we can also look at those individual capital accounts, the same way that as a business owner, if you needed to recapitalize your business, you may have to do that from your own pocket.

So, you know, being a worker owner and being in a cooperative doesn't eliminate any of the risks of being a small business owner, which is what every one of our worker owners is, but it does socialize those risks a bit and it makes sure that everybody who's invested in this process knows where they stand in relation to all of that.

Jeff Umbro: If it comes to the point where you feel that some kind of staff reduction is the best move for you all to make, is that something that gets voted on by the people who are being considered in that discussion?

Bikram Chatterji: This sort of gets into the governance versus management perspective on things. So I remain the CEO of the company. And so decisions around personnel continue to sit with me. And it's really incumbent on me to be able to explain those decisions to the organization. And ultimately, like I am accountable, like my job is the job that everybody would be able to vote on. In that circumstance, it would be my responsibility.

Jeff Umbro: Even if it was another owner? 

Bikram Chatterji: Yes.

Jeff Umbro: Interesting. Are there other models in media, that are not co-ops, that you think achieve similar results? I know that this is in a lot of ways, kind of like the extreme choice from like, I don't know, I'm making this up, like a public company or something, but is there any middle ground corporate structures that you think are interesting?

Bikram Chatterji: I don't know if I'm talking from a deep well of experience or knowledge around that. You know, there are other forms of worker-ownership, like employee stock option programs and things like that. I think a lot of those serve to give employees more of the financial upside of worker-ownership, but without the governance and control that a true cooperative model gives.

And there is stuff that's more extreme than what we do. Like there are things that are more like collectives where every decision gets collectively made by the employees in the business and potentially like every decision has to have a super majority or an absolute majority, or a consensus around it.

So there is stuff that is more on the side of total equality amongst everybody working in an organization. And we sort of sit somewhere in between that, but in a lot of ways, what we do is traditional corporate operations, while at the same time understanding who the ultimate stakeholder is. The ultimate stakeholder is the employee.

Jeff Umbro: So yeah, now that you're like eight months into this, how's it been going?

Bikram Chatterji: You know, it's been going really well. I think there was a purposeful intention operationally, internally to keep things sort of chugging along the way they were previously, but I think the way the change has really been reflected has been in the folks who want to work with us and the number of new shows we've been able to launch as a co-op where, frankly, working as a cooperative and having the structure that we have gives creators a lot more assurance that like, oh, these people are ethical. These people treat their workers appropriately. Like everybody here seems to get it.

Jeff Umbro: You practice what you preach.

Bikram Chatterji: Yeah. We don't have the situation where a creator, you know, has to publicly support a union drive that is being pushed down by the management of the organization, where their show is. And like [I] imagine that's a hugely uncomfortable position to be in.

The other way that sort of factors into our relationships with shows, and this has always been the case, but I think it's underlined by this new structure, is like what we care about is creative sustainability. We care about making sure that our jobs exist in the future, for sure, but we also understand that a lot of that is making sure that the shows that we partner with can exist in the future.

And so we're not into short term profit maximization. We're not into jumping on the latest trend. And I think that really, especially in a very volatile market, which is what we're still dealing with now, I think that is distinctive and I think it's really attractive for shows who ultimately the people we work with just want to make something.

They want to make something and they want to have people hear it. And so we've brought onto the network shows like Black People of Paramore, Valley Heat, which was, you know, a huge podcast, 2022 Time top 10 podcasts in the world. And we were able to bring them back. We brought on Sound Heap. We just launched a show last week called Free With Ads about all the movies, good and bad, that you can watch for you with ads on YouTube. 

And so I think part of it has been really exciting to see folks who want to work with us, and I think who care about the fact that we are a co-op.

Jeff Umbro: It is very inspiring to see, because, I've been a fan of you all for a long time and I've been aware of everything that you do.

You also did this in a year that was marked kind of by a historically bad ad market. That said, I know that MaxFun has a few different revenue breakdowns that don't necessarily apply elsewhere. I can spit out numbers that I've read, but would you mind sharing like percentage-wise, where your revenue breakdown lies?

Bikram Chatterji: Yeah, so MaxFun was founded in 2007. There really wasn't an ad market for podcasts. And that's the first year that Jesse was like, oh I got to make money from this show that I do every week. And so we were founded based on a listener-support model, an audience-support model. 

And that has been the case since 2007, where once a year we ask all the folks who listen to our shows if they can give us $5 a month, $20 a month, $35 a month, some folks give us $200 a month, and the deal is basically the understanding that our shows can't exist without audience support. Typically, about 60 to 70 percent of our revenue is coming from the audience. Maybe around 30 to 40 percent comes from advertising. 

And I think it's really great. I think it's really in keeping with the way that we think about shows, where a show does not have to have 100,000 audience members to be sustainable under this model. It just has to matter to 5000 people. Like if you can get a show that matters to 5000 people, and you manage your expenses appropriately and you think about how you're going to make that show, you can make it work, and you can make it work for many, many years. And there are a lot of shows on the network that do that.

There are also shows on the network that do make it work with 100,000 or more downloads. It really focuses you in on what are people going to care about? What are people going to value? And for me, the primary thing that drives new show acquisition, or new show development, is do I believe that somebody is going to care about this? And do I believe that enough people are going to care about it to make it financially sustainable? And if I can answer that question affirmatively, then I think we're in business.

Jeff Umbro: How has the last year changed how you do that? So you've mentioned a few times that there's been like a greater number of net new shows that have come to the organization. I know that like in theory, people are joining because of the structure that you've built, and you guys are walking the walk, but has anything changed in terms of how you would onboard a new show? Or is it still the exact same process that it was a few years ago?

Bikram Chatterji: What has changed really is if there is a new show where the organization is going to commit resources to it, that's something that I take to the board.

Beyond that, I think there's sort of this emotional change that happens within the organization where everybody's just more excited about what's happening broadly, you know, and what we're doing. So that part is great too. 

Jeff Umbro: How has that changed in terms of the morale of the employees? On the other side of that are there shows that have come to you all where you have not worked with them because of, you know, employee reception?

Bikram Chatterji: I do think in general, people have a sense that, we have a shared sense of success. So we know that, if we launched this new show and it does really well, that is a collective achievement in a way that it didn't feel the same way prior to the changeover. 

To date we have not had anybody come to us who we wouldn't work with because of worker sentiment. I will say like there have been times in the past before the changeover, where there were shows that we thought could be very successful because they were attached to high profile personalities, where there were aspects of the show that we didn't think aligned with our values. And so we did decline to work with them.

That's part of the thing here, where the values of MaxFun are what has made it special for so many years. And to some degree, shifting to a worker-ownership model was a way of making sure that we were able to preserve those values going forward as well.

Jeff Umbro: And that makes a lot of sense. And just to put this in perspective, there were a few interviews with Jesse, one of the co-founders of the organization, who still works there as a worker-owner, where he expressed that he didn't want to sell to a big organization because he didn't know if those values would be upheld. And this was a way to like, go about relinquishing some of the responsibilities that he didn't want anymore.

Bikram Chatterji: Yeah, I mean, he has said that in public. It is also something he and I discussed when he was talking about a transition from ownership, that there was a real risk. And unfortunately, it's one that we've sort of seen play out where some of the folks who [were] making acquisitions in 2020, 2021, 2022, they saw a way of making strategic acquisitions based on a strategy that wasn't fundamentally about content or wasn't fundamentally about shows. It was about other things. It was serving other needs. 

And I don't know if you could do that and also serve the values that we care about because we care about creators first. 

Jeff Umbro: If you went back in time one year, is there anything that you would have done differently? 

Bikram Chatterji: The main thing that we would have done differently, or I would have done differently, is around communication with worker-owners about all the steps in the process ahead of time. And to some extent it's just really hard to do that. It's hard to figure out what you don't know as you're going through the process for the first time. 

I don't know that this caused any, like, rupture or huge disruption within the organization, but I think there were times where, you know, on July 1st, when everybody was magically a worker-owner of the company, like giving a clearer understanding of what that meant and what that would look like, to some extent, you can't explain, you just have to live into it. But communicating around that, I think is something that probably I could have done better.

Jeff Umbro: One additional question is what advice would you have to other organizations who may be interested in exploring routes to provide more equity to employees, but maybe who don't want to go as far as, as MaxFun did?

Bikram Chatterji: I think the biggest thing, and this has always been how I sort of think about business is like, think about what the objective is that you have, and how that aligns with your business model, and how that aligns with the step that you're going to take.

So our objective is sustainable creativity. Our business model is audience support. And the step that we took to align all of those things is to become a cooperative because that is something where we are expecting to have slow but steady growth, and nobody's going to become a millionaire off of this, but we will all be happy and satisfied in our work. And we will all be able to sustain the creativity that we want to see in the world. 

You know, different people have different objectives, different organizations have different objectives for what they want out of business. I think if you look at some of the other worker owned cooperatives in media, like Defector and Aftermath, those are folks who just want to make a living writing stuff, doing the type of work that they've been doing and no longer be subject to the vicissitudes of private equity and forces that are beyond their control. 

For me, it's really about interrogating what you want out of your professional life. And I think worker-ownership can be a really excellent route to having sustainable financial growth and to having control over your destiny, or at least to the extent that any business owner has control over their destiny.

Jeff Umbro: Fingers crossed for a great 2024 in podcasting and beyond. 

One final question, and we ask every guest this, but what are you excited about today in podcasting?

Bikram Chatterji: So much of what we have seen in the last few years is like the separation of the economic value of podcasting from the creative and artistic value of podcasting. And those two things have diverged in a way that really feels like all of a sudden we were piling on this economic value, and in some cases losing sight of some of the creative value, but nothing about the creative has gone away. 

Nothing about the impulse to creativity and the ability with the right tools, and skills, and time, and labor to make something amazing. That has not gone away. It is a really democratizing art form and I think that there is a potential for us to see the same DIY style that has characterized our work since 2004 bring to bear new projects that reach as many lives as we reach.

Like sometimes I'm sort of overawed thinking about all this stuff starting from some dude's college radio. You know, we got an email last week where it's somebody who was suffering from a chronic health condition that makes it really difficult to sleep. And we have a sleep podcast called Sleeping with Celebrities. And they just wanted to write in to say like, hey, this really helps me. It means a lot to me that you do this. 

And I still think that there's so much power in what we do, without being highfalutin about it. For me, what is exciting about that is putting a lot more focus on the little things that folks can do to make the world a better place through the work that they want to create and get out there.

Jeff Umbro: Thanks again to Bikram for joining us. To learn more about Maximum Fun, you can go to maximumfun.org where they have tons of information about the co-op. You can find Bikram on LinkedIn and Twitter @chattbot. And as you're listening to this episode, MaxFun is currently running their member drive, the MaxFunDrive. I encourage you to check out maximumfun.com/join, and I encourage you all to consider donating. 

For more podcast related news info and takes, you can follow me on Twitter @JeffUmbro. Podcast Perspectives is a production of The Podglomerate. If you are looking for help producing, distributing, or monetizing your podcast, you can find us at the podglomerate.com. Shoot us an email at listen@thepodglomerate.com or follow us on all social platforms @podglomerate. 

This episode was produced by Chris Boniello and Henry Lavoie. And thank you to our marketing team, Joni Deutsch, Madison Richards, Morgan Swift, Annabella Pena, and Vanessa Ullman. And a special thanks to Dan Christo and Katelyn Bogucki. Thanks for listening and I will catch you next week.