Matthew: We know founders face unique challenges when they decide to build a company, what was the hardest part about building SoundCloud, and how did you overcome this obstacle?
Alex: God, the hardest one. There were a lot of challenging parts along the way, still is. I mean, it’s kind of like, in some ways it’s a little bit cliche, but we had a very hard time raising our a-round. It was very early for us, so we opened the site at the end of 2008 and we were, sort of, fundraising at the same time. So basically trying to raise an a-round with not really any stats or anything to prove it. So we’re raising at the beginning of 2009, the markets have just collapsed, nobody wanted to invest, we were this tiny start-up in Europe with no traction yet, so that was tough, we actually had a couple of months without absolutely no money, we had to ask our employees to work without pay and stuff like that. Everybody agreed to do it, which was, in a tough time, one of the most awesome feelings ever.
That one was definitely tough. We pulled through, sort of, and, thanks to that. I think it’s definitely been a challenge in, you know, being a founder, having an idea of exactly what the product is, trying to get into really scaling that up and understanding that, “Okay. Were actually building that, we’re building a company, we’re building a culture here,” and making that transition from being a founder to being a CEO, or CTO, or whatever is your position, that is definitely something challenging, because it’s not something you think about when you start the company. You think about, “Okay. It’s going to be this product, we’re going to be this, build this, and it’s going to be awesome.”
But then, along the way, you realize that it’s so much more, actually, about the people and you spend a lot more time working with people to actually manage to see the product and the impact that you want to see that happen. So that takes a bit of learning. It’s a lot of fun, though, it’s very challenging, but a lot of fun. And, then, outside of that I think our absolute biggest challenge overall was getting our internet to work at our old office in Berlin and having to deal with the ex-state of the Deutsche Telekom operator to get them to install our internet. That was probably, actually, the toughest thing we’ve ever done. They ended up pulling a cable from the inside through the window, down the side of the apartment and plugged that into some router in the cellar. That’s like, imagine T-Mobile comes to your house and does that, it was absolutely insane.
Matthew: Since you’ve been in operation, what have you learned about your business or your users that you didn’t realize before you launched?
Alex: I think that one of the key things we learned, which we kind of hoped for in the beginning, but I don’t think we dared to really assume that it was true, we always hoped that SoundCloud would be a place for all different kinds of sounds. So with my background as a sound designer, I was messing around with all these really particular kinds of sound and I thought it would be a great thing to have all of that shared, no matter if it’s a comment or something like that, not just music. We hoped that would happen, we always thought that would be kind of niche, it would be mainly about the music, but what we saw was how people creating our music constantly started getting drawn in SoundCloud, started using it, like podcast sites like Stanford eCorner, or the Economist, the New Yorker, journalists from ABC news, authors like Russell Brand, stuff like that, and you’re like, “Wow this . . .”
And it all of a sudden dawned on us that there’s so much audio out there that it’s massively fragmented so people don’t see how big it is, and all that started to move onto Sound Cloud, we started seeing that it was real. And all sorts of people were starting to use it as, sort of, casual tool for capturing stories and moments in their lives. So it dawned on us that sound is more than just music, and sound is a key sort of fundamental human thing that should be on the web, but I think that was not clear to us in the beginning how big that was, and how broad sound was.
I think another thing, that was a realization for us, was that once we started seeing how simple it was to create good sound and we realized that sound has its unique property and you can consume it in parallel while doing other things, you can’t do that with video or with text or with photo. So that is something really unique, that it’s that simple to create and you can consume so much of it, we started looking at that and running some numbers and we realized that sound is going to be a larger part of the web than video is today, and we really fundamentally believed that sound will be a larger component of the web than video is today. And that was something we definitely didn’t expect in the beginning, but now we’re pretty happy that that’s the case.
Matthew: Lots of people admire entrepreneurs because they appear to make starting companies look easy, we know it can be very challenging, my question for you is: What talents or skills come easily or intuitively for you? What has been difficult and how do you manage that?
Alex: Me, it’s just that I’m crazy stubborn about stuff, like I won’t ever refuse to let go, like it has to be done, and in some ways it’s nuts, like we’ve been working on this a few years now, it’s like, “Are we going to do this and the way that we want, and keep leveling up and challenging ourselves more all the time?” I think more than anything else, from what I’ve experienced so far, entrepreneurship is about persistence, just like refusing to take no, and when everybody’s saying it’s not going to work out, just, for some reason, believe that it will and you go and get it done.
Also, realizing that there may be a few things your good at, it doesn’t necessarily mean it’s the best for the company for you to work on all of those things, you need to really, sort of, take yourself out of the equation and just look at what’s the best constellation for us to get as much stuff done as possible. So that can sometimes mean, if you’re like me, you like doing lots of different things and I love doing so many different things, I love working on them, but it means that you have to, sort of, restrain yourself, step back from certain areas and be like, “Well, I’m not going to be that much involved in this area even though I like it because it’s not optimal for the company.”
So being myself an analytical and really thinking about, “How do I contribute most to this team?”, is really helpful. Somebody told me once, which I still, sort of, use to this day, which I think is very, very helpful, is that, “Does a CEO of a company not there to set orders and tell everybody what to do,” you’re there to ask people, “What do you need?” You’re there to provide people with the resources, the framework or whatever it is they need to be able to really kick ass. I think that’s one thing which is a good quality to have, to really see yourself as almost like the assistant that helps everybody else and having an environment where they can really kick ass.
Matthew: What bit of advice do you wish you would have known before launching SoundCloud?
Alex: It’s definitely hard, but it’s not that hard. Just do it, just go ahead and try it out, if it fails fuck it, start over again. There’s no reason not to try and do it, but I think Eric and I were delusional enough in the beginning to, nobody had to tell us that. We were just like, “Yeah, of course, we’ll do it.” As a founder of a company that’s growing very fast, especially if you have tons of new users coming in and tons of new people in the company, it’s to make sure that you have a lot of advisers around you, like a lot of informal advisers, but also have like a CEO coach or something like that, somebody where there’s more of a profession relationship, where you can bounce ideas with about how to lead the company. That’s something I did later on I wish I’d done earlier that’s been tremendously helpful.
Matthew: What mentor has played a significant impact in the development?
Alex: My couch, Jerry Colonna, a guy in New York who’s trying to fund, together with Fred Wilson, who’s on our board, who’s the guy who introduced him to me, he’s been great. Our board members like Fred Wilson, Mike Philippe from Index, Christophe Mayer, one of our lead angels from Europe has been tremendously influential. Those are probably the people who are there and continuously helping out all the time, but I’m so lucky enough to have a lot of different people around to ask about things and get help from, which is one of the nice things about the start-up entrepreneurial world, that everybody’s happy to help each other with things.
Matthew: What advice would you like to share with the audience about launching a start up? If you have to distill it, what are the key elements?
Alex: It’s really simple, it’s like just do it, just start, get going, put something out there, and get into the momentum of things. You don’t need to know everything in advance, you’ll figure it out. So, on starting something, I think, even if you don’t have the perfect idea, it’s worth getting it out there and do it, and you’ll figure out something along the way. About, sort of launching a product; it depends on what it is, but I think that if you’re doing something in the consumer internet space, you will likely centralize such a large component of it, you’ll like make use of networks and network effects and, sort of, virality, but the thing is, those things don’t come automatically, right? So you can start something and sort of look at how great it will be when the whole network and the whole, sort of, some viral loops are already there.
We took the approach of saying, “Well, we’re going to build something which is functional as a tool, without the network so that people can use it without the network being there,” and sharing was a key component of that product as well. So it was useful without the network, sharing was an integral part of what made people sort of spread it to other people. So people found it useful and it was growing even without the network, and then, all of a sudden, the network started being there and all of a sudden that started taking over as a more important thing for our users. I think that’s a really good path if you’re building a large scale sort of social consumer product, just to do it like that.
Matthew: Before we close, I would love for you to give our audience your vision for SoundCloud and how you hope it will continue to change the world.
Alex: Sound is around us all the time and it’s such a big part of our lives that we tend to not think about it at all. It’s really weird and I imagine a world were that’s not the case, where we are actually listening, we’re hearing all these fantastic things around us, and we’re capturing those and sharing those and having these live experiences with other people around these sounds. The flip side of that is if we all get into that behavior, it also means that we are capturing and saving all of these fantastic sounds around us which will be there for our future, because the sad thing today is that if we look back to history, it’s mute.
We have photos and text and all this stuff throughout history, and know how an historical moment looked like, I don’t know what it sounded like. Because sound is such a big part, it’s so obvious to us we’re not thinking about it and one of the downsides of that we’re missing out on a rich experience, we’re missing out on something which could be shared, something that starts a connection with people, but we’re also missing out on capturing all of these different memories. I want somebody to, in a couple of years, to look at their fist with timeline, and not just see their past, but actually be able to listen to, and then you could actually hear those moments.
Matthew: Alex, thanks for being a guest on FounderLY, we’re routing for your continued success at SoundCloud.
Matthew: For those in the audience who would like to learn more and join the community, you can visit their website at www.soundcloud.com?
Alex: Yes, and if you want to join the team, you can visit soundcloud.com/jobs.
Matthew: This is Matthew Wise with FounderLY, thanks so much Alex.
Alex: Perfect, thank you.