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Speaker 1: Get technology with tech Stuff from dot com. Hey there,

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Speaker 1: and welcome to tech Stuff. I am your host, Jonathan Strickland.

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Speaker 1: I'm a senior writer with how stuff Works dot com,

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Speaker 1: where we explained how the universe works one topic at

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Speaker 1: a time. And as you probably know, I am one

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Speaker 1: of the people in charge of the computer and Electronics channels,

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Speaker 1: senior writer for those channels, so I cover all stuff

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Speaker 1: what goes beep, as my former co host Chris Palette

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Speaker 1: would say, and uh, today we're going to talk about

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Speaker 1: a web based service, one of the really popular ones

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Speaker 1: that has suffered some problems recently. In August, this particular service,

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Speaker 1: the streaming music service SoundCloud, wasn't really serious trouble. The

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Speaker 1: company was teetering the brink of collapse. It was in

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Speaker 1: desperate need of investment money to stay afloat, and for

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Speaker 1: about twenty four hours, the tech world, including myself, watched

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Speaker 1: to see if a rescue line would be thrown to

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Speaker 1: the company or if it would sink, leaving the people

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Speaker 1: who still use the service completely stranded. I guess marooned.

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Speaker 1: Perhaps I should keep using the ocean metaphors. As it

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Speaker 1: turns out, SoundCloud lived to stream another day, but I'm

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Speaker 1: getting ahead of myself. Where did the service come from,

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Speaker 1: and what's the story behind it and how did it

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Speaker 1: get so close to going under and what pulled it back?

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Speaker 1: At least for now, well ten years before SoundCloud found

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Speaker 1: itself in this precarious position, it was born Alexander Leong

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Speaker 1: and Eric wall Force. And I know I'm butchering their names.

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Speaker 1: They're both Swedish, and my Swedish is as as bad

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Speaker 1: as any of my completely unfamiliar languages. Right, I know

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Speaker 1: I'm going to butcher names. I apologize from this point

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Speaker 1: forward for all of that. I just know that I'm trying.

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Speaker 1: I might be failing, but I'm putting forth an effort.

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Speaker 1: So Leung and wall Force joined forces to create these

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Speaker 1: streaming service SoundCloud. But let's learn a little bit more

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Speaker 1: about both of them before we get into the company itself.

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Speaker 1: So Alexander Leong was born in the United Kingdom, but

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Speaker 1: he spent his childhood in Sweden. From the sounds of it,

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Speaker 1: he was quite the little brainiac. He attended Stockholm University

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Speaker 1: from two thousand one to two thousand four, and there

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Speaker 1: he studied such diverse topics as literature, politics, international relations, philosophy,

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Speaker 1: and film music. He went on to study marketing at

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Speaker 1: the Stockholm Technical School from two thousand five or so,

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Speaker 1: and then he took more courses in human computer interaction

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Speaker 1: at the at the Royal Technical Institute. And this guy

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Speaker 1: would leave me in the dust unless we were to

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Speaker 1: get into a real deep discussion about Chaucer or Milton

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Speaker 1: or Shakespeare. I bet I could hold my own in

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Speaker 1: those cases. But it sounds like he was really interested

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Speaker 1: in a huge spectrum of topics. Now, while he was

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Speaker 1: learning all this stuff, he was also working in a

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Speaker 1: sound design company called A L. C. Lud Design from

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Speaker 1: two thousand to two thousand three. He was a sound

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Speaker 1: designer and composer for that company. So he was filling

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Speaker 1: his brain with tons of different subjects while also working

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Speaker 1: as a creative professional. Now, he got that job because

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Speaker 1: he recorded an album. He was a musician and decided

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Speaker 1: to record his own music and it got some notice

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Speaker 1: in the professional world, and this company said, hey, why

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Speaker 1: don't you work for us in sound design? Sounds like

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Speaker 1: you're really talented. Uh. He would actually go on to

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Speaker 1: say that he was making quote very very very very

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Speaker 1: bad music end quote. He did not He really downplays

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Speaker 1: the quality of the work he did back when he

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Speaker 1: was a kid, but it was good enough for him

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Speaker 1: to land this gig, so he was working at the

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Speaker 1: same time as he was studying. Now after his studies

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Speaker 1: were over, Alexander moved on to work with SF Anytime,

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Speaker 1: which was a video on demand service that serves customers

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Speaker 1: in Sweden, Finland, Norway and Denmark. Uh And I looked

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Speaker 1: into SF anytime while I was researching this podcast. I

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Speaker 1: wanted to see what it looked like. And the library

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Speaker 1: is really impressive, though there are a lot of boomlouts,

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Speaker 1: like a lot of them. Alexander's job at s F

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Speaker 1: Anytime was as a business and product developer. While he

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Speaker 1: was working with s F Anytime, he also founded his

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Speaker 1: own cross media production studio called Young Studios, and he

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Speaker 1: founded a company called acril P, a media production agency.

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Speaker 1: So as that media production agency, he worked with some

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Speaker 1: clients of some renown a few companies you've probably heard of,

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Speaker 1: like Coca Cola and MTV and Phillips. And this guy's

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Speaker 1: resume makes me tired just from reading it. So he

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Speaker 1: had founded two studios, plus he was working at SF

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Speaker 1: Anytime all concurrently, so he's doing all this work around

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Speaker 1: the same time. He left SF anytime in two thousand

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Speaker 1: and six, he stuck with the companies he founded acrol

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Speaker 1: P and Young Studios until about two thousand seven, and

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Speaker 1: it was in two thousand seven that he partnered with

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Speaker 1: Eric Walforce to form SoundCloud. So now let's go and

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Speaker 1: talk about Eric. We've learned about Alex. Let's learn about Eric. Well,

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Speaker 1: first of all, there's less information that's publicly available about

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Speaker 1: Eric than there is about Alex. He was also raised

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Speaker 1: in Sweden. His grandfather was a member of the clergy

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Speaker 1: and his mother directed his local churches choir. Though Eric

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Speaker 1: would say that as a kid he resented being dragged

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Speaker 1: to church, he found it to be intolerably dull. It

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Speaker 1: was only later, as an adult that he began to

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Speaker 1: develop an appreciation for religious music. He says that even

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Speaker 1: secular people can have an interest in that style of

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Speaker 1: music and its complexities and harmonies, and the various aspects

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Speaker 1: of religious music that you can encounter, particularly things like

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Speaker 1: intricate chance that can date all the way back to

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Speaker 1: the medieval era. He would attend the Stockholm School of

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Speaker 1: Economics for three years, and then he also earned a

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Speaker 1: master's of Science degree from the Royal Institute of Technology

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Speaker 1: in Stockholm. He later would move to Berlin, Germany. He's

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Speaker 1: an avid supporter of various nonprofit organizations and he does

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Speaker 1: a lot of volunteer work now. In the mid nineteen nineties,

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Speaker 1: he worked as an interaction designer for a company that's

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Speaker 1: called Gate five. Gate five was a company that designed

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Speaker 1: location based services for mobile devices that included stuff like

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Speaker 1: mapping programs, route planning software, personal navigation tools, and content management.

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Speaker 1: In two thousand six, Nokia would go and acquire Gate five.

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Speaker 1: In addition to his work and technology, he also pursued

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Speaker 1: a love of music. He is known as fours fo

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Speaker 1: r s S a musician who creates music tracks that

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Speaker 1: are experimental in nature. Typically, his work fuses different elements

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Speaker 1: to make something new. You might find a piece that

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Speaker 1: combines elements of jazz, house music, ambient music, and Gregorian chant,

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Speaker 1: for example. Or there's a piece I love called funk

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Speaker 1: for Nerds that makes great use of piano, bass, guitar, cello, percussion,

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Speaker 1: and glitchy digital sounds to create a really cool vibe.

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Speaker 1: You can actually find it on SoundCloud. So wall Force

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Speaker 1: and Leon met at the Royal Institute of Technology and Stockholm,

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Speaker 1: and the thing that first united them was a common problem,

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Speaker 1: and it was not a problem that involved music, despite

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Speaker 1: the fact that both of them were musicians and both

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Speaker 1: of them were avid seekers of music online. The initial

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Speaker 1: problem that brought them two together had to do with

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Speaker 1: the Mac operating system. Now, as le Young would explain,

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Speaker 1: he says, I was having this problem where I couldn't

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Speaker 1: sink my calendar with I cal the school's calendar feed.

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Speaker 1: And I go up to this guy with a Mac

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Speaker 1: laptop and I'm like, hey, I notice you have a Mac.

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Speaker 1: Do you know how to do this? And no joke,

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Speaker 1: He's sitting there trying to get the exact same thing

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Speaker 1: to work. And that's how Eric and Alex met. They

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Speaker 1: met over the difficulty in sinking their personal calendars to

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Speaker 1: their school's calendars using Max software. Just think, if this

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Speaker 1: school had been using PCs instead of Max, SoundCloud might

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Speaker 1: never have existed. It was only through this chance meeting.

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Speaker 1: Who's to say if that's true or not. I mean,

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Speaker 1: the chance meeting part is probably true, but the whole

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Speaker 1: PC thing is me just being silly. Before long, both

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Speaker 1: young men were running into a different, but equally frustrating problem.

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Speaker 1: Each was interested in composing and recording music, which they

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Speaker 1: could do that was pretty much easy for them. They

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Speaker 1: had all the tools they needed in order to compose

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Speaker 1: and record stuff. But then, how where do you publish it?

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Speaker 1: How where do you host it? How do you get

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Speaker 1: people to discover the work you've created so that they

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Speaker 1: can actually listen to it and hopefully enjoy it. They

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Speaker 1: decided that it was a problem that they could solve

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Speaker 1: themselves by making their own platform. They decided it was

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Speaker 1: going to be a web based music service that would

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Speaker 1: allow people to upload their tracks and then share them

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Speaker 1: with the rest of the world, and it would give

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Speaker 1: amateurs and independent artists the opportunity to reach audiences and

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Speaker 1: share their work, as well as discover other work that

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Speaker 1: might serve as inspiration for further musical exploration. It could

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Speaker 1: allow for collaborations and remixes and all sorts of creative expressions,

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Speaker 1: and it wouldn't have all the hoops you'd have to

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Speaker 1: jump through to get your music onto some other services

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Speaker 1: like Spotify. They decided to call this new service SoundCloud,

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Speaker 1: as it would store audio tracks in the cloud of

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Speaker 1: the Internet. So this was an idea to help democratize

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Speaker 1: music publishing. Obviously, if you're a musician, the traditional route,

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Speaker 1: especially before the web based days, was that you had

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Speaker 1: to get discovered by a music label and have that

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Speaker 1: music label sign you to an agreement where they would

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Speaker 1: produce albums or otherwise, you know, publish your your work

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Speaker 1: so that a larger audience might be able to find it,

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Speaker 1: and it would be up to the music label to

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Speaker 1: promote that and maybe you go on tours to support it,

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Speaker 1: that sort of thing. But not everyone has access to that.

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Speaker 1: Only a very few people ever are lucky enough to

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Speaker 1: follow that particular pathway. If the web opened up the

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Speaker 1: opportunity to get discovered in brand new ways, entire audiences

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Speaker 1: could find your work based upon your efforts to get

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Speaker 1: it out there. You could publish your work to the

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Speaker 1: web and get that link out and through viral sharing,

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Speaker 1: you could actually become a known quantity and you never

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Speaker 1: even had to speak to a music label in order

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Speaker 1: to do this. Now, there were some questions about how

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Speaker 1: would you make money from that if you were hoping

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Speaker 1: to make music your career, But from a perspective of

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Speaker 1: actually getting out in front of people, it suddenly became

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Speaker 1: way easier. If only the platform were there, and that's

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Speaker 1: what Alex and Eric sat out to do. They wanted

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Speaker 1: to make a platform where the average person could upload

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Speaker 1: audio and find an audience. That was their goal. So

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Speaker 1: they got to work and they started to build out

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Speaker 1: this company. They chose Berlin as their headquarters. While Course

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Speaker 1: has said that they chose Berlin because it was a

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Speaker 1: city that was friendly to businesses, meaning there were fewer

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Speaker 1: barriers to get around when you're getting started, and also

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Speaker 1: because Berlin is a city filled with creative people, including artists, musicians, actors,

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Speaker 1: and more. Designing the service itself was no small task. Obviously,

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Speaker 1: you're talking about anything that's based on the web. There

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Speaker 1: are multiple components that go into play. It included designing

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Speaker 1: the back end of the service, which meant you had

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Speaker 1: to go out and buy hardware that would host the

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Speaker 1: actual files and interface, or you had to rent that

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Speaker 1: space from some other company to actually hold all the

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Speaker 1: physical audio files that would be uploaded to the service.

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Speaker 1: It also meant creating the user interface, something that would

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Speaker 1: allow people to easily navigate the site, upload audio, discover

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Speaker 1: audio tracks, and all of that would take several months

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Speaker 1: of work. So they started in two thousand seven, but

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Speaker 1: It really wasn't until two thousand eight that they were

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Speaker 1: ready to unleash SoundCloud and allow people to come in

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Speaker 1: and use it once they get the beta testing phase.

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Speaker 1: One goal the two had from the very beginning was

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Speaker 1: to target a global market. They could have just focused

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Speaker 1: on a service that would cater to Europe or two

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Speaker 1: areas like Sweden, Finland Norway, the areas they had been

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Speaker 1: working in up to that point, but they were very

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Speaker 1: sure that there were artists all around the world who

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Speaker 1: were feeling the same sort of frustration that they had

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Speaker 1: out to an audience. And this wasn't limited to musicians.

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Speaker 1: Any sort of audio work would apply on SoundCloud, so

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Speaker 1: you didn't even have to make it be music. It

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Speaker 1: could be anything. It could be spoken word, it could

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Speaker 1: be poetry, it could be a lecture series. Any of

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Speaker 1: that was fair game for SoundCloud, and the two set

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Speaker 1: their sites pretty high. They wanted something that people around

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Speaker 1: the world would be able to take advantage of. To

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Speaker 1: get funding to run the business, the two held a

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Speaker 1: couple of rounds of seed funding. Now the full numbers

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Speaker 1: This typically is a relatively small amount of money that

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Speaker 1: a company will will get from angel investors early, early

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Speaker 1: in the right in the phase. It's typically when you

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Speaker 1: don't even have anything to show yet, but you have

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Speaker 1: a plan. You're able to articulate that plan, explain how

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Speaker 1: you're going to carry out that plan, and you can

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Speaker 1: usually get a small investment up front, and again relatively small.

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Speaker 1: This These are amounts of money that I would consider

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Speaker 1: enormous on a personal scale, but on a company scale,

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Speaker 1: when you think about all the stuff that goes into

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Speaker 1: running a company, it's not that much money in the

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Speaker 1: grand scheme of things. So based upon interviews, it sounds

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Speaker 1: like the first couple of rounds of seed funding gathered

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Speaker 1: around a hundred fifty thousand euros in one round and

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Speaker 1: two hundred fifty thousand euros in the second round. Again

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Speaker 1: significant to an individual, but in the big scale, it's

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Speaker 1: not much that gave SoundCloud the starting capital and needed

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Speaker 1: to launch. In two thousand and eight, Leon would become

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Speaker 1: the CEO of the company and wall Force would take

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Speaker 1: on the role of chief technology officer. The co founders

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Speaker 1: were able to get the project running on that amount,

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Speaker 1: but they realized they would need to scale up, and

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Speaker 1: they would need more money in order to do so.

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Speaker 1: If they wanted to be a truly global entity, right

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Speaker 1: and to offer more services to users and to have

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Speaker 1: all the space they would need to hold all the

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Speaker 1: files people were uploading, they're gonna need more money than

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Speaker 1: just that seed funding round. So they had the decision

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Speaker 1: to make do you concentrate on generating a revenue model,

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Speaker 1: so a business plan where you're actually going to be

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Speaker 1: making money so that you can make your business profitable,

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Speaker 1: or do you first worry about scaling up and getting

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Speaker 1: enough users so that when you do develop your business plan,

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Speaker 1: you're really in good business and you've created something that

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Speaker 1: works at the scale you are at, as opposed to

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Speaker 1: making something when you're small and then having to adjust

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Speaker 1: that as you grow. So they weighed these options. They said, well,

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Speaker 1: do we want to make money now or do we

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Speaker 1: want to get really big and then figure out how

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Speaker 1: we're gonna make money. They decided to go with option

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Speaker 1: number two, which would mean that they would need to

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Speaker 1: hold a major round of investment funding to get enough

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Speaker 1: to scale at the business. In April two thousand nine,

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Speaker 1: SoundCloud would hold a series a round of investment funding.

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Speaker 1: So what the heck does that mean? Well, I'll tell you,

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Speaker 1: but not right now. First, let's take a quick break

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Speaker 1: to thank our sponsor. All Right, I promised you guys

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Speaker 1: to tell you what Series A funding means. And this

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Speaker 1: does tie into technology. It's it's beyond technology because this

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Speaker 1: is for any sort of company. But there are a

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Speaker 1: lot of technology companies out there, startups that have gone

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Speaker 1: through multiple rounds of funding, and I think it's useful

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Speaker 1: to understand what is going on so that when you

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Speaker 1: hear about these different companies and you hear about how

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Speaker 1: many rounds they've been through, you can start asking some

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Speaker 1: tough questions such as does this company actually have the

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Speaker 1: potential to become an entity that will pay back on

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Speaker 1: that investment. So Series A rounds are typically the first

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Speaker 1: significant round of venture capital financing. This is beyond those

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Speaker 1: seed finance rounds, which were really just to get the

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Speaker 1: business started. Series A and future rounds are more about

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Speaker 1: growing a company so that it can scale up to

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Speaker 1: a certain level. So in return, the investors get a

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Speaker 1: type of steak in the company they're investing in. You know,

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Speaker 1: usually it's a top of preferred stock called Series A stock.

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Speaker 1: And while there are some variations in this, typically, if

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Speaker 1: you were to buy Series A stock in a private company,

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Speaker 1: should that private company ever hold an initial public offering

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Speaker 1: and turn into a publicly traded company, your Series A

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Speaker 1: stock would convert into common stock. So if you owned

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Speaker 1: a certain percentage of the company because you had funded

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Speaker 1: it in this round of venture capital funding, you would

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Speaker 1: get that equivalent amount of ownership in common stock if

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Speaker 1: that company went public, and then you could say, all right, well,

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Speaker 1: I'm ready to walk away. Maybe you're making a profit

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Speaker 1: now because the amount of investment you made versus the

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Speaker 1: amount of value the company has once it goes through

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Speaker 1: its I p O. You might have made a mint

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Speaker 1: or maybe you lost money on it. It It all depends

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Speaker 1: on how well the company is received when it goes

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Speaker 1: through that I p O process. It's a moot point

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Speaker 1: with SoundCloud, it stayed private. It's probably a good idea

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Speaker 1: to take a little tangent here and talk about the

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Speaker 1: realities of getting money in the startup space as a

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Speaker 1: startup company, because there's so many tech companies these days

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Speaker 1: that trace their roots back to being a startup. I mean,

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Speaker 1: there are some big, monolithic companies that have been around

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Speaker 1: for decades or even a century or more in the

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Speaker 1: technology space. But so Cloud provides a good example of

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Speaker 1: how this can work, though I'll explain how some details

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Speaker 1: have changed over the years to make it more complicated today.

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Speaker 1: So we begin with this round of seed funding. This

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Speaker 1: is typically a relatively small amount of investment money in

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Speaker 1: the grand scheme of things, and we're talking about a

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Speaker 1: few hundred thousand dollars, typically enough to get a business

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Speaker 1: up and running from basically nothing at all. Now, unless

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Speaker 1: your new business has a killer way to generate significant

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Speaker 1: revenue right out of the gate, you're probably not going

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Speaker 1: to be profitable at least at first. You might need

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Speaker 1: to scale up before you can put your business plan

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Speaker 1: into play. So it's kind of like that that joke

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Speaker 1: about making it up in volume. In this case, the

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Speaker 1: volume you're talking about is not a volume of products,

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Speaker 1: but the volume of customers. You may need a certain

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Speaker 1: number of users before you can unveil your revenue generating

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Speaker 1: plan to make it a profitable business. And until you

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Speaker 1: get that number of users, you're going to be in

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Speaker 1: a losing proposition. So you may want to scale your

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Speaker 1: business up before you try and make generate revenue Uh.

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Speaker 1: This obviously varies from business to business, and it absolutely

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Speaker 1: depends upon that revenue strategy. So you might say, once

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Speaker 1: we hit a million users, we will start to make

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Speaker 1: more money than we spend, and that is a good thing.

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Speaker 1: Only of course, your specific number of users could be

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Speaker 1: different from that, and if you don't have any means

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Speaker 1: of generating revenue, it doesn't work at all. So you

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Speaker 1: would start burning through your cash reserves faster as more

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Speaker 1: people start using your service, because you have to meet

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Speaker 1: the demand of more users. And if you have no

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Speaker 1: way of making money, you're burning through that cash at

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Speaker 1: an increasingly faster rate. So it becomes a double edged sword.

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Speaker 1: You're getting more popular, but you're not creating a way

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Speaker 1: to make money based off that popularity. And meanwhile, that

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Speaker 1: popularity is placing a greater demand on your resources. So

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Speaker 1: you might keep your business going for a year or

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Speaker 1: more on that seed funding alone, depending upon what you

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Speaker 1: are doing and how wisely you are spending the money.

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Speaker 1: After that, assuming you aren't yet profitable, which is a

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Speaker 1: pretty safe assumption with many startups, you would hold that

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Speaker 1: series A round of funding. Series A funding is typically

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Speaker 1: on a much bigger scale than seed funding. Seed funding

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Speaker 1: is on the order of a few hundred thousand dollars,

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Speaker 1: whereas Series A can range between a couple of million

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Speaker 1: to fifteen million dollars. That's the range of averages. SoundCloud

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Speaker 1: had its Series A funding and netted the company about

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Speaker 1: two and a half million euros, so roughly around three

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Speaker 1: million dollars. That was not enough to or that was

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Speaker 1: rather enough to not only keep the company in business,

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Speaker 1: but also to allow it to grow at that time. Now, sometimes,

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Speaker 1: such as with the case of SoundCloud, a company must

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Speaker 1: hold further rounds of funding in order to stay in

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Speaker 1: operation while it attempts to generate enough revenue to support

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Speaker 1: itself and become profitable, or maneuver itself in such a

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Speaker 1: way that someone else acquires the company. A lot of

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Speaker 1: startups have begun with their goal not being to generate revenue,

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Speaker 1: but to become so enticing that a larger entity comes

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Speaker 1: along and says, hey, that's a nice business you got there,

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Speaker 1: how about I scoop it up for you know, like

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Speaker 1: a billion and a half dollars. How's that sound And you,

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Speaker 1: as the founders at the startup, would say something like, yes,

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Speaker 1: that sounds wonderful. Please cut me a check. So there

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Speaker 1: are startup companies that, when they get going, the founders

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Speaker 1: their plan is to get big enough so that someone

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Speaker 1: else will come along and acquire them, and then they

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Speaker 1: don't have to worry about making the business profitable because

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Speaker 1: they will have made their money by being purchased by

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Speaker 1: someone else. But there are plenty of other cases where

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Speaker 1: the founders set out from the start to say, we

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Speaker 1: want to own our own business, and we want to

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Speaker 1: make sure we can make the business profitable. So you

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Speaker 1: see all the different variations. It's not like everyone sets

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Speaker 1: out just to get acquired. So SoundCloud is one of

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Speaker 1: these companies that has held held multiple rounds of funding.

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Speaker 1: And again, the more rounds of funding a company holds

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Speaker 1: in order to stay solvent so that keeps doing business,

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Speaker 1: the more challenging it can be to convince investors to

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Speaker 1: hand over that kind of money, because if you've been

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Speaker 1: around for in the case of SoundCloud, a decade, and

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Speaker 1: you haven't turned a profit, there may eventually come a

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Speaker 1: question of will you ever turn a profit? Will I

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Speaker 1: ever get a return on this investment I am making?

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Speaker 1: Or is this throwing money away on a sinking ship

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Speaker 1: that is doomed to be at the bottom of the ocean.

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Speaker 1: To go back to my metaphor from earlier, SoundCloud held

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Speaker 1: a Series B round in two thousand eleven, which is

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Speaker 1: exactly what sounds like. It's like a Series A, except

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Speaker 1: obviously it's the next one. And they held a Series

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Speaker 1: C in twelve, and a Series D and fourteen, and

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Speaker 1: a Series E T sixteen, and this year, just as

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Speaker 1: we were wondering if SoundCloud was going to fall apart completely,

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Speaker 1: it held a Series F round of funding. The amount

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Speaker 1: raised in those rounds range from ten million dollars back

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Speaker 1: in Series B all the way to an astounding one

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Speaker 1: hundred sixty nine point five million dollars with Series F.

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Speaker 1: That was the largest round of investment fundraising by far

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Speaker 1: in Soundclouds history. Was the one that happened August, with

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Speaker 1: a hundred sixty nine point five million dollars in investments.

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Speaker 1: The company also held two rounds of debt financing during

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Speaker 1: that same span of years. The first was in January

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Speaker 1: sixteen and the second was in March seventeen. Collectively, they

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Speaker 1: raised about a hundred million dollars for this debt found financing,

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Speaker 1: so all told, if you were to count both the

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Speaker 1: debt financing and all the investment money the company raised

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Speaker 1: four hundred sixty million dollars or thereabouts in various rounds

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Speaker 1: of fundraising and debt financing. Four sixty million dollars has

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Speaker 1: gone into this company without it being able to turn

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Speaker 1: a profit. Uh, the reason for not being able to

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Speaker 1: turn a profit is pretty complicated. There are actually quite

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Speaker 1: a few. Now I'm gonna step away from SoundCloud again

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Speaker 1: just for a second to mention the fact that startups

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Speaker 1: today are facing a really interesting challenge. On the one hand,

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Speaker 1: there are so many different angel investors out there, people

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Speaker 1: who have the money to pour a good investment into

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Speaker 1: a small start up just as it's getting going. So

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Speaker 1: there are a lot of For example, there are a

435
00:25:42,280 --> 00:25:44,720
Speaker 1: lot of people who have founded other companies who are

436
00:25:44,720 --> 00:25:48,280
Speaker 1: now flush with cash, and often they are looking around

437
00:25:48,280 --> 00:25:50,840
Speaker 1: to see what other interesting ideas are out there, and

438
00:25:50,880 --> 00:25:53,679
Speaker 1: the ones that they really like they might support financially

439
00:25:53,800 --> 00:25:56,320
Speaker 1: in a round of angel investment funding. So this would

440
00:25:56,320 --> 00:26:00,119
Speaker 1: be that seed funding early on. So there's lots of

441
00:26:00,200 --> 00:26:04,240
Speaker 1: seed funds out there. If you are getting your startup going,

442
00:26:04,560 --> 00:26:08,919
Speaker 1: it's not that difficult to get that initial amount of

443
00:26:08,960 --> 00:26:12,960
Speaker 1: money that that's smaller round of funding, but obviously that's

444
00:26:13,000 --> 00:26:15,199
Speaker 1: only going to keep you going for so long before

445
00:26:15,280 --> 00:26:17,560
Speaker 1: you either need to be turning a profit or you

446
00:26:17,560 --> 00:26:22,399
Speaker 1: need to seek out a Series A uh venture capital round.

447
00:26:23,600 --> 00:26:28,200
Speaker 1: Here's the problem. Series A is way more competitive. Series

448
00:26:28,240 --> 00:26:32,640
Speaker 1: A investors are far more cautious when they're looking around

449
00:26:32,800 --> 00:26:36,720
Speaker 1: at properties they might invest in. So it's very easy

450
00:26:36,760 --> 00:26:39,560
Speaker 1: to get that initial investment and you might stick around

451
00:26:39,600 --> 00:26:42,280
Speaker 1: for a year or so, but then trying to get

452
00:26:42,280 --> 00:26:45,000
Speaker 1: a Series A round is much more difficult. So there

453
00:26:45,000 --> 00:26:47,520
Speaker 1: are a lot of companies that get started to have

454
00:26:47,600 --> 00:26:50,200
Speaker 1: a promising beginning, like they get a lot of interest

455
00:26:50,480 --> 00:26:52,919
Speaker 1: right out of the gate, but they are not able

456
00:26:52,960 --> 00:26:57,600
Speaker 1: to sell themselves to investors at a later date, and

457
00:26:57,640 --> 00:27:02,080
Speaker 1: thus they end up going away. There are countless numbers

458
00:27:02,080 --> 00:27:04,600
Speaker 1: of startups that could have been huge if they had

459
00:27:04,600 --> 00:27:07,159
Speaker 1: secured a Series A round. Now, there are a lot

460
00:27:07,160 --> 00:27:08,960
Speaker 1: of people who say that this is not a bad thing.

461
00:27:09,160 --> 00:27:12,960
Speaker 1: It means that there's kind of a quality control, but

462
00:27:13,040 --> 00:27:16,680
Speaker 1: it comes after you've already reached the point of launching

463
00:27:16,680 --> 00:27:21,360
Speaker 1: a company. So from the person who launched the company,

464
00:27:21,440 --> 00:27:25,160
Speaker 1: from their perspective, it's really kind of dark and scary.

465
00:27:25,640 --> 00:27:27,119
Speaker 1: You don't know if you're going to be able to

466
00:27:27,119 --> 00:27:29,760
Speaker 1: get that next round of funding to keep your business

467
00:27:29,800 --> 00:27:32,040
Speaker 1: alive and scale it up to the size you wanted

468
00:27:32,119 --> 00:27:35,200
Speaker 1: to be. But from an investment point of view, you

469
00:27:35,280 --> 00:27:37,359
Speaker 1: might say, well, this is a good thing because it

470
00:27:37,440 --> 00:27:41,000
Speaker 1: cuts down on all the companies that would have continued

471
00:27:41,160 --> 00:27:44,719
Speaker 1: on for years and years and years without ever turning

472
00:27:44,720 --> 00:27:49,439
Speaker 1: a profit. And some people would say that SoundCloud falls

473
00:27:49,440 --> 00:27:53,840
Speaker 1: into that category of a company that has gathered more

474
00:27:53,920 --> 00:27:57,960
Speaker 1: investment money than perhaps it was warranted, that perhaps it

475
00:27:57,960 --> 00:28:01,880
Speaker 1: would have been better to see SoundCloud be a noble

476
00:28:01,920 --> 00:28:05,879
Speaker 1: failure early on, rather than continue on for years and

477
00:28:05,960 --> 00:28:10,440
Speaker 1: years and years, continuing to gather investment funds but yet

478
00:28:10,520 --> 00:28:14,280
Speaker 1: not being able to turn a profit. Is that really

479
00:28:14,320 --> 00:28:16,600
Speaker 1: the case. It's hard to say, because the story of

480
00:28:16,600 --> 00:28:20,359
Speaker 1: SoundCloud isn't over yet. Getting back to that story, in

481
00:28:20,400 --> 00:28:24,879
Speaker 1: two thousand nine, Wired cited SoundCloud as a credible threat

482
00:28:24,960 --> 00:28:29,120
Speaker 1: to another music based social platform that was online, one

483
00:28:29,240 --> 00:28:34,679
Speaker 1: called my Space. Hey do you remember my Space? I

484
00:28:34,720 --> 00:28:37,200
Speaker 1: did an episode about it. Actually, I think I've done

485
00:28:37,200 --> 00:28:40,440
Speaker 1: more than one episode about my Space. But yeah, my

486
00:28:40,560 --> 00:28:44,160
Speaker 1: Space used to be a thing, guys, and SoundCloud helped

487
00:28:44,280 --> 00:28:47,160
Speaker 1: bury it. Though. I really think any reasonable person would

488
00:28:47,280 --> 00:28:51,320
Speaker 1: point at Facebook as the real reason my Space ultimately floundered,

489
00:28:51,360 --> 00:28:54,680
Speaker 1: and these days no one really talks about it at all,

490
00:28:54,840 --> 00:28:57,080
Speaker 1: even though it's tried to reinvent itself a couple of

491
00:28:57,120 --> 00:29:00,600
Speaker 1: times since then. SoundCloud, I would say it would be

492
00:29:00,640 --> 00:29:04,400
Speaker 1: an additional blow, like a little kick on my Space

493
00:29:04,440 --> 00:29:08,720
Speaker 1: when it was down after Facebook had delivered the massive

494
00:29:08,960 --> 00:29:15,560
Speaker 1: body slam. So SoundCloud had all the musical aspects of

495
00:29:15,600 --> 00:29:19,280
Speaker 1: my Space more or less, something that could duplicate my

496
00:29:19,360 --> 00:29:22,840
Speaker 1: spaces ability to allow artists to upload their music to

497
00:29:22,920 --> 00:29:25,800
Speaker 1: a platform, and SoundCloud actually made it much easier for

498
00:29:25,800 --> 00:29:29,560
Speaker 1: you to get your music everywhere else because of their approach.

499
00:29:30,240 --> 00:29:32,640
Speaker 1: They were also seeing a lot of success with recognized

500
00:29:32,760 --> 00:29:37,440
Speaker 1: artists joining SoundCloud groups like Sonic Youth or musicians like

501
00:29:37,520 --> 00:29:41,200
Speaker 1: Moby We're using SoundCloud to promote tracks or entire albums.

502
00:29:41,560 --> 00:29:45,440
Speaker 1: Beck was also using SoundCloud to reach fans online. And

503
00:29:45,440 --> 00:29:48,160
Speaker 1: one of the things that really set SoundCloud apart was

504
00:29:48,200 --> 00:29:52,600
Speaker 1: that you could embed a SoundCloud player into another website.

505
00:29:52,840 --> 00:29:55,400
Speaker 1: You would just get some code that you would put

506
00:29:55,440 --> 00:29:58,560
Speaker 1: into the HTML of your website, and that would create

507
00:29:58,640 --> 00:30:03,680
Speaker 1: a little player inside the confines of the website you

508
00:30:03,720 --> 00:30:06,959
Speaker 1: had built and within that player, you could play the

509
00:30:06,960 --> 00:30:10,600
Speaker 1: tracks that you were uploading to SoundCloud. That gave SoundCloud

510
00:30:10,640 --> 00:30:13,640
Speaker 1: a huge advantage because it could be everywhere instead of

511
00:30:13,640 --> 00:30:17,640
Speaker 1: forcing users to go to a centralized location to experience music,

512
00:30:17,720 --> 00:30:20,440
Speaker 1: So you didn't have to log into SoundCloud to listen

513
00:30:20,480 --> 00:30:23,600
Speaker 1: to SoundCloud files. You could encounter a SoundCloud file on

514
00:30:23,640 --> 00:30:26,320
Speaker 1: any website at all. If you had a band and

515
00:30:26,360 --> 00:30:28,360
Speaker 1: you wanted a few of your songs to be available

516
00:30:28,400 --> 00:30:30,800
Speaker 1: on your website for people to listen to, the just

517
00:30:30,880 --> 00:30:33,600
Speaker 1: stream it while they're they're viewing your site. You could

518
00:30:33,640 --> 00:30:36,960
Speaker 1: use a SoundCloud embettable player to stream that music and

519
00:30:37,080 --> 00:30:39,400
Speaker 1: your fans will be able to listen to it. On

520
00:30:39,520 --> 00:30:42,440
Speaker 1: top of that, uploading a track to SoundCloud would generate

521
00:30:42,480 --> 00:30:44,880
Speaker 1: a unique u r L that you could then share

522
00:30:44,920 --> 00:30:48,560
Speaker 1: on various social platforms like Twitter, and that helped musicians

523
00:30:48,560 --> 00:30:52,760
Speaker 1: promote specific tracks and encouraged sharing online. Making music is

524
00:30:53,520 --> 00:30:57,240
Speaker 1: already challenging, but making your music discoverable is an even

525
00:30:57,320 --> 00:31:01,600
Speaker 1: bigger challenge. There's so much con tent going up online

526
00:31:01,800 --> 00:31:03,840
Speaker 1: all the time, and finding a way to reach your

527
00:31:03,880 --> 00:31:07,720
Speaker 1: potential audience gets harder with every minute of content that's

528
00:31:07,800 --> 00:31:11,760
Speaker 1: uploaded to the internet. These strategies helped put SoundCloud on

529
00:31:11,800 --> 00:31:16,040
Speaker 1: the path to becoming the YouTube of audio files. Every minute,

530
00:31:16,040 --> 00:31:19,440
Speaker 1: twelve hours of audio content joined the vast amount of

531
00:31:19,480 --> 00:31:22,920
Speaker 1: audio already on SoundCloud. Now that is dwarfed by the

532
00:31:22,960 --> 00:31:26,080
Speaker 1: amount of video content that's going up on YouTube every minute,

533
00:31:26,240 --> 00:31:29,680
Speaker 1: but still pretty impressive all on its own. One of

534
00:31:29,680 --> 00:31:32,200
Speaker 1: the neat features in SoundCloud is that you can leave

535
00:31:32,240 --> 00:31:35,360
Speaker 1: a comment about an audio track and even have that

536
00:31:35,440 --> 00:31:39,000
Speaker 1: comment associated with a specific moment in the track itself.

537
00:31:39,080 --> 00:31:42,520
Speaker 1: So the tracks on SoundCloud are represented as wave forms.

538
00:31:42,560 --> 00:31:44,920
Speaker 1: You see the wave form and you see the progress

539
00:31:44,920 --> 00:31:47,200
Speaker 1: go from left to right as you play the track.

540
00:31:47,320 --> 00:31:50,080
Speaker 1: It starts to highlight the track as it's going down

541
00:31:50,120 --> 00:31:54,120
Speaker 1: the timeline of this audio track. Meanwhile, you can leave

542
00:31:54,120 --> 00:31:57,840
Speaker 1: a comment at any point along the track to say

543
00:31:57,880 --> 00:32:01,400
Speaker 1: something about how that track made an impression on you

544
00:32:01,640 --> 00:32:04,800
Speaker 1: or what you felt about the choices the artist was making,

545
00:32:05,280 --> 00:32:08,000
Speaker 1: and it will actually show up at that point along

546
00:32:08,040 --> 00:32:10,480
Speaker 1: the track, and people can read your comments and see

547
00:32:10,480 --> 00:32:12,800
Speaker 1: what you had to say about it and digested and

548
00:32:12,880 --> 00:32:15,160
Speaker 1: decide whether they agree with you or they don't agree

549
00:32:15,240 --> 00:32:18,200
Speaker 1: with you. And it's actually a really cool feature. I

550
00:32:18,240 --> 00:32:22,680
Speaker 1: like it a lot because people can get feedback not

551
00:32:22,800 --> 00:32:25,680
Speaker 1: just for the audio track, but for the specific decisions

552
00:32:25,720 --> 00:32:28,560
Speaker 1: that went into making that track what it was, whether

553
00:32:28,600 --> 00:32:32,200
Speaker 1: it was spoken word or a lecture or music or whatever.

554
00:32:32,560 --> 00:32:36,480
Speaker 1: And those moments of creativity that resonate with the audience

555
00:32:37,120 --> 00:32:39,760
Speaker 1: can stand out. If you are a musician and you

556
00:32:39,800 --> 00:32:42,960
Speaker 1: create a music track and you change up the tempo

557
00:32:43,200 --> 00:32:46,560
Speaker 1: or you insert a new instrument and people respond to

558
00:32:46,600 --> 00:32:48,720
Speaker 1: that moment within the track, you know that you did

559
00:32:48,760 --> 00:32:51,960
Speaker 1: something right, and you might explore that further with future songs,

560
00:32:52,600 --> 00:32:56,520
Speaker 1: or you might get some criticism and find out the

561
00:32:56,560 --> 00:32:59,600
Speaker 1: stuff that people don't like. Now, in my experience, those

562
00:32:59,640 --> 00:33:02,520
Speaker 1: comments tend to be less helpful and more aggravating because

563
00:33:02,600 --> 00:33:05,640
Speaker 1: of the nature of the way people tend to word them.

564
00:33:05,680 --> 00:33:08,320
Speaker 1: There are nice ways to offer criticism, is what I'm

565
00:33:08,320 --> 00:33:12,480
Speaker 1: getting at. It's just that most people don't exercise that.

566
00:33:12,960 --> 00:33:16,960
Speaker 1: They go with declarative statements that aren't terribly helpful and

567
00:33:17,200 --> 00:33:23,880
Speaker 1: often are hurtful. By May, SoundCloud had hit a million users.

568
00:33:24,560 --> 00:33:27,640
Speaker 1: In those early days, there was no advertising on the site,

569
00:33:27,920 --> 00:33:31,320
Speaker 1: so you could have an ad free experience when you

570
00:33:31,480 --> 00:33:34,840
Speaker 1: came there, and then basic accounts were free. Those free

571
00:33:34,840 --> 00:33:37,160
Speaker 1: accounts did come with some restrictions. You had a limit

572
00:33:37,160 --> 00:33:40,800
Speaker 1: to how many songs or audio tracks you could upload. Really,

573
00:33:40,840 --> 00:33:43,880
Speaker 1: it was in the amount of time collectively that all took.

574
00:33:44,000 --> 00:33:47,720
Speaker 1: So your basic free account would include a hundred eighty

575
00:33:47,760 --> 00:33:50,920
Speaker 1: minutes of audio that you could upload. After you hit

576
00:33:50,920 --> 00:33:54,000
Speaker 1: a hundred eighty minutes, you hit your limit. Or it

577
00:33:54,040 --> 00:33:56,080
Speaker 1: also would put a limit on how many contacts you

578
00:33:56,120 --> 00:33:59,560
Speaker 1: could have within SoundCloud. So if you wanted to have

579
00:33:59,600 --> 00:34:02,920
Speaker 1: a bunch of contacts and then every time you upload

580
00:34:03,000 --> 00:34:06,000
Speaker 1: a new piece of audio it informs those contacts that

581
00:34:06,040 --> 00:34:08,400
Speaker 1: you've got something new there, you had a bit of

582
00:34:08,400 --> 00:34:10,320
Speaker 1: a limit there. If you had the Basic Free account,

583
00:34:10,360 --> 00:34:15,320
Speaker 1: you could choose to enter into a tiered premium account selection.

584
00:34:16,000 --> 00:34:19,399
Speaker 1: SoundCloud would get a lot of feedback on this. People

585
00:34:19,440 --> 00:34:23,399
Speaker 1: would argue that the various tears were kind of confusing

586
00:34:23,760 --> 00:34:27,719
Speaker 1: and messy, and that it made it more complicated than

587
00:34:27,760 --> 00:34:31,560
Speaker 1: what was necessary. But if you went to the premium account,

588
00:34:31,640 --> 00:34:34,600
Speaker 1: it would ease up on restrictions. At the first level

589
00:34:34,680 --> 00:34:37,719
Speaker 1: of Premium, users could upload up to six hours of

590
00:34:37,760 --> 00:34:42,680
Speaker 1: audio content at the basic Premium level, so three times

591
00:34:42,719 --> 00:34:45,520
Speaker 1: what you were rather two times what you were able

592
00:34:45,560 --> 00:34:48,759
Speaker 1: to do previously with the Basic Free or you could

593
00:34:48,800 --> 00:34:51,279
Speaker 1: splurge and you can go all the way. With SoundCloud

594
00:34:51,320 --> 00:34:55,600
Speaker 1: Pro unlimited. That meant that you could have unlimited audio

595
00:34:55,719 --> 00:34:58,319
Speaker 1: time to upload, so you can upload as much as

596
00:34:58,360 --> 00:35:01,279
Speaker 1: you wanted to do. There was no limitation there. But

597
00:35:01,320 --> 00:35:03,200
Speaker 1: in those early days, there were no other means of

598
00:35:03,200 --> 00:35:06,920
Speaker 1: generating revenue. That was it. You just had these premium

599
00:35:07,120 --> 00:35:10,680
Speaker 1: subscription based things, and it really premium accounts that you

600
00:35:10,760 --> 00:35:13,799
Speaker 1: could uh enter into. But that was the only way

601
00:35:13,840 --> 00:35:16,880
Speaker 1: that SoundCloud was generating revenue in the early days. In

602
00:35:16,920 --> 00:35:21,400
Speaker 1: two thousand twelve, the website underwent a major redesign and

603
00:35:21,440 --> 00:35:25,080
Speaker 1: one of the features that the company introduced was called repost,

604
00:35:25,400 --> 00:35:29,920
Speaker 1: and boy did this feature cause some huge problems. A

605
00:35:30,040 --> 00:35:32,600
Speaker 1: repost is pretty much what sounds like. It's like a

606
00:35:32,680 --> 00:35:37,200
Speaker 1: retweet or tumblers reblog feature, and the intent was good.

607
00:35:37,239 --> 00:35:40,280
Speaker 1: It was meant to help users share music discovery viral

608
00:35:40,320 --> 00:35:43,920
Speaker 1: e through the platforms. So you know, you discover a

609
00:35:44,280 --> 00:35:47,680
Speaker 1: track you really like and you repost it, and then

610
00:35:47,719 --> 00:35:50,319
Speaker 1: the people who follow you see that track, maybe they

611
00:35:50,320 --> 00:35:53,000
Speaker 1: like it, they repost it, it goes to the people

612
00:35:53,000 --> 00:35:55,800
Speaker 1: who follow them, et cetera, and that way music discovery

613
00:35:55,800 --> 00:35:59,560
Speaker 1: could filter through the entire system, but people began to

614
00:35:59,640 --> 00:36:03,680
Speaker 1: abuse use the system almost immediately. Some artists would repost

615
00:36:03,800 --> 00:36:07,120
Speaker 1: their own tracks frequently because it would push it to

616
00:36:07,160 --> 00:36:10,480
Speaker 1: the top of all of their followers feeds. So let's

617
00:36:10,480 --> 00:36:15,160
Speaker 1: say you're following a band. Uh, let's say it's ilor

618
00:36:15,200 --> 00:36:18,920
Speaker 1: Again the Monsters. That's a reference to a live stream

619
00:36:18,960 --> 00:36:22,000
Speaker 1: I did earlier today about Tetris so I Lori Agan

620
00:36:22,080 --> 00:36:25,279
Speaker 1: The Monsters has their new surf album out and they've

621
00:36:25,320 --> 00:36:28,719
Speaker 1: got this one track that they're really promoting. Um, let's

622
00:36:28,719 --> 00:36:31,680
Speaker 1: call it Soviets in the Sand. Soviets in the Sand

623
00:36:31,719 --> 00:36:34,319
Speaker 1: as their new track, and they want to get a

624
00:36:34,360 --> 00:36:37,279
Speaker 1: lot of reaction to this track. So they post the

625
00:36:37,320 --> 00:36:40,279
Speaker 1: track and their followers see it. But you know, if

626
00:36:40,280 --> 00:36:43,880
Speaker 1: you're following lots of bands, it's just like Facebook, those

627
00:36:43,880 --> 00:36:48,160
Speaker 1: notifications can push that initial announcement further and further down

628
00:36:48,239 --> 00:36:50,760
Speaker 1: the page, making it less likely that you will actually

629
00:36:50,800 --> 00:36:54,680
Speaker 1: see it. So the next day Elrigan the Machines, they

630
00:36:54,880 --> 00:36:58,000
Speaker 1: repost Soviets in the Sand and so now it pops

631
00:36:58,040 --> 00:37:00,319
Speaker 1: up at the top of everyone's feet again, and they

632
00:37:00,360 --> 00:37:02,120
Speaker 1: do it again and again and again, and that way

633
00:37:02,120 --> 00:37:04,040
Speaker 1: it keeps on popping at the top of the feed.

634
00:37:04,520 --> 00:37:06,879
Speaker 1: This is a form of abuse, especially if you are

635
00:37:06,920 --> 00:37:09,320
Speaker 1: not following a whole lot of bands. It just means

636
00:37:09,200 --> 00:37:11,440
Speaker 1: that you keep seeing the same track getting posted by

637
00:37:11,480 --> 00:37:14,440
Speaker 1: Ilrigan the machines over and over again. Is not a

638
00:37:14,480 --> 00:37:17,719
Speaker 1: good user experience. So what was intended to be a

639
00:37:17,760 --> 00:37:22,440
Speaker 1: way to help music discovery flourish on the service turned

640
00:37:22,480 --> 00:37:26,040
Speaker 1: out to be a massive pain in the butt. On

641
00:37:26,160 --> 00:37:29,759
Speaker 1: top of that, you had some artists that were ending

642
00:37:29,840 --> 00:37:34,759
Speaker 1: up making deals with other artists. Uh, they were essentially

643
00:37:34,760 --> 00:37:37,680
Speaker 1: creating an arrangement of I'll repost you if you re

644
00:37:37,800 --> 00:37:44,320
Speaker 1: post me, and that way they were artificially boosting these numbers. Uh.

645
00:37:44,360 --> 00:37:47,440
Speaker 1: There were people who are offering to repost tracks for money,

646
00:37:47,560 --> 00:37:50,520
Speaker 1: so essentially paid for impressions of different audio tracks. There

647
00:37:50,520 --> 00:37:54,359
Speaker 1: were people who are paying for listens to tracks because

648
00:37:54,400 --> 00:37:56,480
Speaker 1: if you're a musician and you've got a track out

649
00:37:56,520 --> 00:38:00,319
Speaker 1: on SoundCloud, you might want a music label to take

650
00:38:00,360 --> 00:38:03,600
Speaker 1: a look at your your tracks, and if you have

651
00:38:03,760 --> 00:38:06,680
Speaker 1: huge numbers, that's going to look pretty attractive to that

652
00:38:06,760 --> 00:38:09,560
Speaker 1: music label. It might mean that you get signed. So

653
00:38:09,680 --> 00:38:12,880
Speaker 1: there were artists out there that were paying a fee

654
00:38:13,480 --> 00:38:17,440
Speaker 1: so that they would get an artificial boost to their

655
00:38:17,520 --> 00:38:23,000
Speaker 1: their listen numbers to help out with that, and it

656
00:38:23,040 --> 00:38:25,600
Speaker 1: all boils down to gaming the system in one way

657
00:38:25,719 --> 00:38:29,120
Speaker 1: or another. The problem would persist for years before SoundCloud

658
00:38:29,160 --> 00:38:32,120
Speaker 1: managed to address it, and in the meantime, many artists

659
00:38:32,120 --> 00:38:35,120
Speaker 1: and users began to look at alternative services. They did

660
00:38:35,200 --> 00:38:37,800
Speaker 1: finally come up with a solution to the repost problem

661
00:38:37,920 --> 00:38:41,239
Speaker 1: in two thousand fifteen, so three years after they had

662
00:38:41,320 --> 00:38:44,520
Speaker 1: launched it. That's when they established limits to the number

663
00:38:44,520 --> 00:38:47,719
Speaker 1: of reposts you could actually do, and they stated that

664
00:38:47,760 --> 00:38:51,160
Speaker 1: breaking the rules could lead to banning or suspending accounts.

665
00:38:52,600 --> 00:38:55,800
Speaker 1: Well back in two thousand fourteen, so this is after

666
00:38:56,320 --> 00:38:59,920
Speaker 1: the repost feature had been launched, SoundCloud began to introduce

667
00:39:00,120 --> 00:39:05,160
Speaker 1: advertising on its website. This was a big move soundclass.

668
00:39:05,200 --> 00:39:08,120
Speaker 1: SoundCloud at the time was boasting about dred seventy five

669
00:39:08,239 --> 00:39:12,480
Speaker 1: million listeners. That puts SoundCloud behind YouTube make but it

670
00:39:12,560 --> 00:39:15,360
Speaker 1: made it the second biggest streaming service in the world

671
00:39:15,480 --> 00:39:19,080
Speaker 1: at that time. But they had no system too to

672
00:39:19,280 --> 00:39:22,120
Speaker 1: pay out royalties to artists who are using the service

673
00:39:22,160 --> 00:39:25,240
Speaker 1: to reach an audience, So for the early years, artists

674
00:39:25,280 --> 00:39:29,000
Speaker 1: pretty much accepted this as just part of the system.

675
00:39:29,120 --> 00:39:31,680
Speaker 1: SoundCloud gave them a chance to find an audience in

676
00:39:31,680 --> 00:39:35,319
Speaker 1: the first place, but there was no direct monetization that

677
00:39:35,400 --> 00:39:37,919
Speaker 1: they could take advantage of in that model. But over

678
00:39:38,000 --> 00:39:41,520
Speaker 1: time there was a growing expectation among artists and music

679
00:39:41,600 --> 00:39:44,279
Speaker 1: labels that they should be able to receive compensation in

680
00:39:44,280 --> 00:39:47,040
Speaker 1: the form of royalty payments. And that makes sense. You

681
00:39:47,160 --> 00:39:50,080
Speaker 1: might make music because you love it, but if you

682
00:39:50,120 --> 00:39:52,480
Speaker 1: want to make it your career, you gotta get paid,

683
00:39:52,880 --> 00:39:55,320
Speaker 1: because most landlords are not going to accept a song

684
00:39:55,400 --> 00:39:58,400
Speaker 1: in place of the rent. For more on this topic,

685
00:39:58,960 --> 00:40:02,440
Speaker 1: see the musical rent. Actually, don't get me started on

686
00:40:02,440 --> 00:40:04,839
Speaker 1: that musical. I get really grouchy about it. So back

687
00:40:04,840 --> 00:40:08,160
Speaker 1: to SoundCloud. The company itself had reached a valuation of

688
00:40:08,239 --> 00:40:12,840
Speaker 1: seven hundred million dollars, but that was from the perceived

689
00:40:13,000 --> 00:40:16,160
Speaker 1: value of the company, not its ability to make money.

690
00:40:16,200 --> 00:40:19,520
Speaker 1: It still wasn't making money. It was making money from

691
00:40:19,560 --> 00:40:22,799
Speaker 1: advertising and from premium subscriptions, but not enough money to

692
00:40:22,880 --> 00:40:26,480
Speaker 1: offset the costs of operations, so it wasn't making any

693
00:40:26,480 --> 00:40:30,239
Speaker 1: sort of profit. Premium subscriptions has only gone so far,

694
00:40:30,280 --> 00:40:33,320
Speaker 1: and the company was already in the midst of holding

695
00:40:33,400 --> 00:40:37,200
Speaker 1: numerous rounds of venture capital investments. Meanwhile, music labels were

696
00:40:37,239 --> 00:40:40,760
Speaker 1: starting to place larger demands on SoundCloud. The labels wanted

697
00:40:40,800 --> 00:40:43,840
Speaker 1: the reach of the service, but companies rarely are pleased

698
00:40:43,840 --> 00:40:46,640
Speaker 1: to give away their products for free, and so SoundCloud

699
00:40:46,719 --> 00:40:50,400
Speaker 1: turned to web advertising, that traditional revenue generator of the web,

700
00:40:50,760 --> 00:40:53,120
Speaker 1: and ads would play after a user listen to a

701
00:40:53,120 --> 00:40:55,600
Speaker 1: certain number of tracks. You listen to a couple, you

702
00:40:55,600 --> 00:40:57,920
Speaker 1: would get an ad. And when the ads first launched,

703
00:40:57,960 --> 00:41:00,400
Speaker 1: it appeared only on the US version of sound Cloud

704
00:41:00,440 --> 00:41:02,640
Speaker 1: and the various SoundCloud mobile apps. So some of the

705
00:41:02,680 --> 00:41:06,440
Speaker 1: advertising was visual advertising, you know, the kind of ads

706
00:41:06,440 --> 00:41:09,000
Speaker 1: you would discover on any sort of app or web page.

707
00:41:09,239 --> 00:41:11,400
Speaker 1: Some of them were audio ads that would play in

708
00:41:11,480 --> 00:41:15,719
Speaker 1: between tracks. It all just depended upon what version of

709
00:41:15,719 --> 00:41:19,279
Speaker 1: SoundCloud you were listening to and where you were. Later on,

710
00:41:19,360 --> 00:41:22,399
Speaker 1: they would actually roll out this advertising strategy to other

711
00:41:22,480 --> 00:41:26,000
Speaker 1: regions besides the United States. Now, alex had made it

712
00:41:26,040 --> 00:41:28,839
Speaker 1: a point to make sure that artists had control over

713
00:41:28,920 --> 00:41:32,200
Speaker 1: when advertising would play, so they could actually choose to

714
00:41:32,239 --> 00:41:35,279
Speaker 1: have some tracks play free of advertising entirely. They could

715
00:41:35,360 --> 00:41:39,319
Speaker 1: turn off ads for whichever tracks they wanted. SoundCloud also

716
00:41:39,440 --> 00:41:42,320
Speaker 1: planned out a subscription plan that would allow users to

717
00:41:42,320 --> 00:41:44,880
Speaker 1: pay a monthly fee and in return, they would go

718
00:41:44,920 --> 00:41:47,840
Speaker 1: back to an ad free experience when using SoundCloud, so

719
00:41:47,960 --> 00:41:50,480
Speaker 1: something similar to what you can find on other music

720
00:41:50,520 --> 00:41:53,040
Speaker 1: streaming services. You can listen to them for free and

721
00:41:53,080 --> 00:41:56,600
Speaker 1: get ads, or you can pay a subscription fee and

722
00:41:56,640 --> 00:42:00,960
Speaker 1: get unlimited listening without any ads. It's pre standard throughout

723
00:42:01,040 --> 00:42:04,680
Speaker 1: streaming services now. At that same time, big music labels

724
00:42:04,680 --> 00:42:07,360
Speaker 1: were in talks with SoundCloud about taking some percentage of

725
00:42:07,360 --> 00:42:10,440
Speaker 1: the company in return for supporting it. This put the

726
00:42:10,480 --> 00:42:13,120
Speaker 1: service in a delicate situation. So how do you balance

727
00:42:13,160 --> 00:42:16,160
Speaker 1: the need to generate revenue to stay in business while

728
00:42:16,200 --> 00:42:18,880
Speaker 1: also keeping your service as close to the vision you

729
00:42:18,920 --> 00:42:22,200
Speaker 1: promised your users as you can? And SoundCloud ended up

730
00:42:22,239 --> 00:42:25,360
Speaker 1: getting a couple of opportunities, but we'll talk about those

731
00:42:25,440 --> 00:42:28,920
Speaker 1: in just a second. First, let's take another quick break

732
00:42:29,160 --> 00:42:40,080
Speaker 1: to thank our sponsor. In two thousan fourteen, SoundCloud got

733
00:42:40,120 --> 00:42:44,480
Speaker 1: the attention of a little company called Twitter. So talking

734
00:42:44,480 --> 00:42:46,560
Speaker 1: about companies that have had to hold multiple rounds of

735
00:42:46,600 --> 00:42:50,160
Speaker 1: venture capital fundraising, Twitter is another poster child. But anyway,

736
00:42:50,200 --> 00:42:54,080
Speaker 1: Twitter was looking to expand its services, and it already

737
00:42:54,080 --> 00:42:56,640
Speaker 1: tried to build a music product that would keep people

738
00:42:56,760 --> 00:42:59,880
Speaker 1: using Twitter longer per visit. It was called hashtag mu

739
00:43:00,040 --> 00:43:02,200
Speaker 1: sick and if you don't remember it, that's not a

740
00:43:02,200 --> 00:43:04,200
Speaker 1: big surprise because it didn't get a lot of traction

741
00:43:04,239 --> 00:43:09,040
Speaker 1: when it launched. Hashtag Music was a supplemental app that

742
00:43:09,120 --> 00:43:12,319
Speaker 1: was supposed to focus conversations about music and musicians on

743
00:43:12,320 --> 00:43:15,880
Speaker 1: Twitter and improve the ability to discover and share music.

744
00:43:15,960 --> 00:43:19,440
Speaker 1: But Twitter ran into a problem. There were already a

745
00:43:19,440 --> 00:43:22,520
Speaker 1: whole bunch of music centric services that were already on

746
00:43:22,560 --> 00:43:25,080
Speaker 1: the market, And honestly, at some point you just reach

747
00:43:25,120 --> 00:43:28,000
Speaker 1: a level of saturation which you're not likely to switch

748
00:43:28,080 --> 00:43:31,600
Speaker 1: from one app to another or add yet another app

749
00:43:31,680 --> 00:43:35,239
Speaker 1: to your growing list. So a new app has to

750
00:43:35,239 --> 00:43:38,800
Speaker 1: be incredibly compelling to convince people to adopt it beyond

751
00:43:38,880 --> 00:43:44,120
Speaker 1: that initial curiosity phase. See also every social networking site

752
00:43:44,160 --> 00:43:47,520
Speaker 1: that isn't Facebook or Twitter in the United States. Well,

753
00:43:47,680 --> 00:43:52,320
Speaker 1: hashtag Music had started off as a different music discovery

754
00:43:52,320 --> 00:43:56,160
Speaker 1: service called We Are Hunted, which Twitter acquired back in

755
00:43:56,200 --> 00:43:59,640
Speaker 1: two thousand twelve. So, with the door closing on hashtag Music,

756
00:43:59,680 --> 00:44:03,120
Speaker 1: but are still eager to get into that music sharing space,

757
00:44:03,520 --> 00:44:07,480
Speaker 1: the company turned its sights to SoundCloud. Now, this next

758
00:44:07,480 --> 00:44:12,799
Speaker 1: part of Soundclouds history is shrouded in mystery, or at

759
00:44:12,880 --> 00:44:15,319
Speaker 1: least it was never made totally public, but the two

760
00:44:15,320 --> 00:44:20,480
Speaker 1: companies definitely entered into negotiations to talk about an acquisition. However,

761
00:44:20,960 --> 00:44:24,439
Speaker 1: it ultimately went nowhere and Twitter decided to back out

762
00:44:24,440 --> 00:44:28,120
Speaker 1: of the agreement. The general consensus is that Twitter had

763
00:44:28,200 --> 00:44:31,400
Speaker 1: made an offer based more or less on the seven

764
00:44:31,480 --> 00:44:35,520
Speaker 1: hundred million dollar valuation of SoundCloud, but that the company

765
00:44:35,560 --> 00:44:40,400
Speaker 1: wanted something closer to a billion dollars and Twitter said thanks,

766
00:44:40,440 --> 00:44:43,120
Speaker 1: but no thanks, and went on its merry way. And

767
00:44:43,120 --> 00:44:45,799
Speaker 1: it became something of a joke in interviews to ask

768
00:44:45,800 --> 00:44:49,080
Speaker 1: either Alex or Eric about the Twitter deal and they

769
00:44:49,080 --> 00:44:54,000
Speaker 1: would respond with an exasperated no comment. Other troubles would

770
00:44:54,040 --> 00:44:57,440
Speaker 1: follow in two thousand fifteen when labels like Sony Music

771
00:44:57,480 --> 00:45:00,799
Speaker 1: began to remove some artists work from sound Cloud. So

772
00:45:00,840 --> 00:45:03,759
Speaker 1: apparently Sony felt that the company was getting less than

773
00:45:03,840 --> 00:45:06,560
Speaker 1: what it was worth to have the artist music hosted

774
00:45:06,640 --> 00:45:10,560
Speaker 1: on SoundCloud service. Also, there were issues with users uploading

775
00:45:10,640 --> 00:45:15,160
Speaker 1: music that you know, didn't belong to them, so, in

776
00:45:15,200 --> 00:45:18,600
Speaker 1: other words, there were copyright infringement problems. YouTube has also

777
00:45:18,680 --> 00:45:21,719
Speaker 1: experienced this sort of thing like a lot, and that

778
00:45:21,840 --> 00:45:26,320
Speaker 1: also falls into issues with remixes and mashups. Who owns

779
00:45:26,360 --> 00:45:30,359
Speaker 1: the copyright to that and the copyright infringement issues so

780
00:45:30,440 --> 00:45:33,680
Speaker 1: quick aside, I think it's a cool point here to

781
00:45:33,760 --> 00:45:37,080
Speaker 1: share uh that. I think sharing a link to an

782
00:45:37,120 --> 00:45:40,080
Speaker 1: artist's work is great. So if there's an artist you

783
00:45:40,160 --> 00:45:44,400
Speaker 1: like and there's a link to a legitimate SoundCloud file

784
00:45:44,640 --> 00:45:47,879
Speaker 1: or YouTube video and it leads to that music, by

785
00:45:47,920 --> 00:45:51,160
Speaker 1: all means share it. It helps get the word out,

786
00:45:51,360 --> 00:45:58,240
Speaker 1: and obviously if it's an official U SoundCloud or YouTube stream,

787
00:45:58,320 --> 00:46:02,920
Speaker 1: then everyone's cool with it. I do not think it's

788
00:46:03,080 --> 00:46:06,680
Speaker 1: super cool to upload audio that doesn't belong to you

789
00:46:06,920 --> 00:46:09,600
Speaker 1: and share it that way, because artists put a lot

790
00:46:09,640 --> 00:46:12,160
Speaker 1: of work into creating stuff, and even if they don't

791
00:46:12,239 --> 00:46:15,480
Speaker 1: choose to monetize it themselves, it's at least respectful to

792
00:46:15,520 --> 00:46:19,520
Speaker 1: point folks toward an official source rather than pirates stuff. Now,

793
00:46:19,560 --> 00:46:22,799
Speaker 1: I often will hear the argument that sharing creates exposure,

794
00:46:23,200 --> 00:46:26,359
Speaker 1: but exposure ultimately means nothing to an artist if they're

795
00:46:26,400 --> 00:46:28,560
Speaker 1: not if they're actually trying to make a living off

796
00:46:28,600 --> 00:46:32,399
Speaker 1: of their music, Because you cannot pay the rent with exposure.

797
00:46:32,719 --> 00:46:36,280
Speaker 1: You can't say to your landlord, hey I'm not gonna

798
00:46:36,320 --> 00:46:39,359
Speaker 1: pay rent this month, but don't worry, I'm gonna talk

799
00:46:39,440 --> 00:46:43,399
Speaker 1: this place up to everybody, So you're gonna get great exposure,

800
00:46:44,080 --> 00:46:48,400
Speaker 1: all right, rant over Sony withdrew artists from SoundCloud in

801
00:46:48,400 --> 00:46:51,080
Speaker 1: two thousand fifteen, which was the same year that Universal

802
00:46:51,200 --> 00:46:54,880
Speaker 1: Music Group began working on a licensing agreement with SoundCloud

803
00:46:54,920 --> 00:46:58,200
Speaker 1: in return for what Business Insider reported was a quote

804
00:46:58,560 --> 00:47:02,920
Speaker 1: significant chunk of equity end quote in the company. Now,

805
00:47:02,960 --> 00:47:07,040
Speaker 1: this would allow other people to actually do those remixes

806
00:47:07,040 --> 00:47:10,000
Speaker 1: and mash ups because of the licensing agreements, and it

807
00:47:10,120 --> 00:47:13,359
Speaker 1: also followed in the footsteps of Warner Music. Warner Music

808
00:47:13,360 --> 00:47:15,360
Speaker 1: had actually made the same sort of agreement back in

809
00:47:15,400 --> 00:47:19,080
Speaker 1: November two fourteen for a five percent stake in SoundCloud.

810
00:47:19,880 --> 00:47:23,440
Speaker 1: The negotiations with Universal Music Group took some time. It

811
00:47:23,520 --> 00:47:27,480
Speaker 1: started in but it wasn't announced as an official partnership

812
00:47:27,560 --> 00:47:32,640
Speaker 1: until January. The agreements did have some benefits for users

813
00:47:32,760 --> 00:47:36,759
Speaker 1: because with those mashups and remixes, getting the licensing meant

814
00:47:36,800 --> 00:47:41,120
Speaker 1: that people could actually practice their their skills and upload

815
00:47:41,160 --> 00:47:44,960
Speaker 1: work without fearing of being pulled down for copyright infringement.

816
00:47:45,080 --> 00:47:47,560
Speaker 1: So people were all on the up and up here now.

817
00:47:47,560 --> 00:47:50,040
Speaker 1: It did also mean that if you own the copyright

818
00:47:50,040 --> 00:47:52,880
Speaker 1: to a certain song, you could get the monetization for

819
00:47:52,920 --> 00:47:56,319
Speaker 1: that instead of the person who made the remix. That

820
00:47:56,400 --> 00:47:58,799
Speaker 1: was an issue. So there was still kind of a

821
00:47:58,840 --> 00:48:01,880
Speaker 1: mess because has not everybody had the same deal, and

822
00:48:02,280 --> 00:48:05,160
Speaker 1: sometimes you might be mixing artists from two different labels.

823
00:48:05,160 --> 00:48:07,719
Speaker 1: So it wasn't like everything was smooth sailing from that

824
00:48:07,800 --> 00:48:11,799
Speaker 1: point forward. Around that time, Spotify began to express an

825
00:48:11,800 --> 00:48:15,000
Speaker 1: interest in acquiring SoundCloud, but it would also back off

826
00:48:15,000 --> 00:48:17,640
Speaker 1: from the deal, kind of following Twitter's lead in a way.

827
00:48:17,760 --> 00:48:21,080
Speaker 1: It was because Spotify was looking at an initial public

828
00:48:21,120 --> 00:48:24,400
Speaker 1: offering and getting involved in an acquisition just before an

829
00:48:24,400 --> 00:48:26,840
Speaker 1: i p O would mean that it could potentially scare

830
00:48:26,880 --> 00:48:30,960
Speaker 1: off investors. So Spotify ultimately said, you know what, while

831
00:48:31,080 --> 00:48:34,200
Speaker 1: I would like to remove competition from this field and

832
00:48:34,239 --> 00:48:38,080
Speaker 1: get access to some of SoundCloud's technology, I'm not sure

833
00:48:38,120 --> 00:48:40,960
Speaker 1: it's worth the risk to investment if we actually go

834
00:48:41,080 --> 00:48:43,719
Speaker 1: for an i p O. Now. During all of this,

835
00:48:43,960 --> 00:48:49,440
Speaker 1: SoundCloud still managed to really shoot itself in the foot

836
00:48:49,440 --> 00:48:51,560
Speaker 1: when it comes to try and to find a profitable

837
00:48:51,600 --> 00:48:55,560
Speaker 1: business model. In July, the company had to lay off

838
00:48:56,800 --> 00:49:00,880
Speaker 1: of its staff. That meant one seventy three people lost

839
00:49:00,960 --> 00:49:05,120
Speaker 1: their jobs, and SoundCloud closed down two of its offices,

840
00:49:05,160 --> 00:49:08,279
Speaker 1: the ones in London and San Francisco, which meant that

841
00:49:08,360 --> 00:49:10,879
Speaker 1: only its offices in Berlin and New York City would

842
00:49:10,920 --> 00:49:14,719
Speaker 1: remain open. At that time, SoundCloud would only say that

843
00:49:14,760 --> 00:49:17,640
Speaker 1: the company had enough money to last through the fourth quarter,

844
00:49:17,760 --> 00:49:22,000
Speaker 1: of which many took as a sign that the company

845
00:49:22,040 --> 00:49:24,560
Speaker 1: would be out of money by the end of the year.

846
00:49:25,200 --> 00:49:28,080
Speaker 1: Tech pundits then began to suggest that the vultures were

847
00:49:28,080 --> 00:49:33,359
Speaker 1: circulating SoundCloud as a result. In augusteen, SoundCloud was known

848
00:49:33,440 --> 00:49:37,280
Speaker 1: to have entered talks with potential investors about another round

849
00:49:37,280 --> 00:49:41,000
Speaker 1: of venture capital funding. This would be Series F of funding.

850
00:49:42,040 --> 00:49:44,600
Speaker 1: It was at this time that people in the technosphere

851
00:49:44,600 --> 00:49:49,200
Speaker 1: began to say that unless someone swooped in, SoundCloud was doomed.

852
00:49:49,880 --> 00:49:53,040
Speaker 1: But swoop they did, and boy hawdy it was with

853
00:49:53,080 --> 00:49:56,879
Speaker 1: a big change. The swoop happened in mid August. An

854
00:49:56,880 --> 00:50:00,239
Speaker 1: investment bank headquartered in New York called Rain grew coup

855
00:50:00,520 --> 00:50:04,160
Speaker 1: and a Singapore state owned investment fund called tim Asek

856
00:50:04,600 --> 00:50:08,000
Speaker 1: provided the moolah that was that hundred sixty nine point

857
00:50:08,080 --> 00:50:11,319
Speaker 1: five million bucks i mentioned earlier in this episode. With

858
00:50:11,440 --> 00:50:15,520
Speaker 1: this investment also came some changes at the top for SoundCloud.

859
00:50:15,719 --> 00:50:19,240
Speaker 1: There were demands for some changes at the executive level,

860
00:50:20,080 --> 00:50:25,000
Speaker 1: so Eric Walforce would transition from Chief Technology Officer to

861
00:50:25,080 --> 00:50:30,080
Speaker 1: a newly created position, Chief Product Officer. Artem Fishman, who

862
00:50:30,160 --> 00:50:33,400
Speaker 1: was once a vice president of engineering over at Yahoo,

863
00:50:33,520 --> 00:50:37,680
Speaker 1: would assume the role of CTO. Alex Leung would step

864
00:50:37,760 --> 00:50:40,640
Speaker 1: down as CEO and become the chairman of the board.

865
00:50:40,960 --> 00:50:44,840
Speaker 1: In his place will be Carry Trainer. Trainer was the

866
00:50:44,840 --> 00:50:48,360
Speaker 1: CEO of Vimeo once upon a time, and Video is

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00:50:48,400 --> 00:50:51,920
Speaker 1: the video streaming service that's a competitor with YouTube. This

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00:50:52,000 --> 00:50:55,279
Speaker 1: has led some people to speculate that video content might

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Speaker 1: find its way onto SoundCloud, but there's been no confirmation

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00:50:58,920 --> 00:51:02,200
Speaker 1: of that so far as of the recording of this podcast.

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00:51:02,880 --> 00:51:06,240
Speaker 1: At this time, SoundCloud has around eighty eight million active

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00:51:06,360 --> 00:51:09,520
Speaker 1: users according to similar Web, and earlier report in twenty

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00:51:09,600 --> 00:51:12,920
Speaker 1: seventeen showed that SoundCloud had lost more than one hundred

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00:51:13,120 --> 00:51:16,080
Speaker 1: million users over the course of a year, and those

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00:51:16,160 --> 00:51:20,479
Speaker 1: users were moving on to other platforms like Pandora and Spotify.

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00:51:20,880 --> 00:51:24,239
Speaker 1: So is that a hundred sixty nine and a half

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00:51:24,360 --> 00:51:28,080
Speaker 1: million dollar investment a wise one in the wake of

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00:51:28,239 --> 00:51:32,480
Speaker 1: seeing how many users have abandoned SoundCloud over the past year.

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00:51:33,320 --> 00:51:36,680
Speaker 1: I don't know. I'm not wealthy. I don't make those

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00:51:36,800 --> 00:51:40,560
Speaker 1: kind of calls. From my outsider perspective, I would be

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00:51:40,800 --> 00:51:44,360
Speaker 1: very hesitant to make such a huge investment. However, that

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00:51:44,400 --> 00:51:47,520
Speaker 1: being said, SoundCloud does have some valuable technology, and there

883
00:51:47,520 --> 00:51:49,719
Speaker 1: are a lot of artists who have used it effectively

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00:51:49,800 --> 00:51:51,920
Speaker 1: over the years, and there are a lot of people

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00:51:51,960 --> 00:51:55,000
Speaker 1: who still use the service, so maybe it can come

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00:51:55,040 --> 00:51:59,880
Speaker 1: back from that precipice it was teetering over. That being said,

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00:52:00,160 --> 00:52:02,560
Speaker 1: my Space tried to do the same thing a couple

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00:52:02,600 --> 00:52:05,000
Speaker 1: of times, and it's still kind of an also, Ran,

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00:52:05,200 --> 00:52:09,279
Speaker 1: I don't hear anyone talking about my Space anymore, so

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Speaker 1: I don't know if this was a wise decision. I

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00:52:13,200 --> 00:52:15,920
Speaker 1: guess we'll have to wait and see, and maybe in

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00:52:15,960 --> 00:52:19,239
Speaker 1: another year or so we'll see another attempt to run

893
00:52:19,280 --> 00:52:23,880
Speaker 1: around of financing, or maybe they'll actually turn things around

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00:52:23,880 --> 00:52:26,319
Speaker 1: and make it a profitable company and it will be

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00:52:26,360 --> 00:52:29,239
Speaker 1: generating enough revenue so it can operate on its own.

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00:52:29,920 --> 00:52:32,919
Speaker 1: But so far, that is the story of SoundCloud. It's

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00:52:32,960 --> 00:52:36,160
Speaker 1: not the end, and I'd be lying if I said

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00:52:36,200 --> 00:52:39,759
Speaker 1: I wasn't kind of hoping for a different result when

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00:52:39,800 --> 00:52:43,280
Speaker 1: they were holding this most recent round of funding, only

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Speaker 1: because it would have been convenient for me to say

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00:52:45,880 --> 00:52:49,080
Speaker 1: the end on a podcast. I certainly don't wish anyone

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Speaker 1: to be out of a job. I don't want SoundCloud

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00:52:51,800 --> 00:52:54,480
Speaker 1: to go away, but it would have been awfully convenient

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Speaker 1: for me in my podcast. So that's it for this episode. Guys.

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00:53:00,120 --> 00:53:03,400
Speaker 1: If you have suggestions for future episode topics, send me

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00:53:03,440 --> 00:53:06,920
Speaker 1: a message. Let me know. The email addresses tech Stuff

907
00:53:07,000 --> 00:53:09,520
Speaker 1: at how stuff works dot com, or you can drop

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00:53:09,520 --> 00:53:11,920
Speaker 1: me a line on Facebook or Twitter. The handle of

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00:53:12,040 --> 00:53:15,239
Speaker 1: both of those is tech stuff hs W. Remember I

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Speaker 1: stream live, so if you want to see me record

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00:53:17,800 --> 00:53:21,120
Speaker 1: an episode live on the air and ask questions, including

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00:53:21,200 --> 00:53:23,920
Speaker 1: questions that have nothing to do with whatever I'm talking about,

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00:53:24,200 --> 00:53:27,200
Speaker 1: you can do that. Go to twitch dot tv slash

914
00:53:27,239 --> 00:53:29,759
Speaker 1: tech stuff, join the chat room. I'm always happy to

915
00:53:29,840 --> 00:53:32,120
Speaker 1: chat with you, guys, and I'll talk to you again

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00:53:32,960 --> 00:53:41,600
Speaker 1: really soon. For more on this and thousands of other topics.

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Speaker 1: Is it how staff works dot com.