This is post #6 about the Qloud experience. The previous post was about Developing our service in Romania.
We had launched the world’s first music search service that searched on tags and usage. It was revolutionary. The problem was that nobody cared. The amount of use we had was small. Granted, we didn’t iterate on it much and maybe over time usage would have increased, but out of the gates it was DOA.
The few thousand customers we had we talked to and grabbed feedback from. They wanted more. Just a list of songs wasn’t enough. They wanted everything. Specifically:
- On-demand music. They see a track, they want to click and play it right then and right there (in the browser)
- Major label music – all the popular stuff for the 4 major music labels
- Indie label music – all the niche stuff from the dozens of indie labels
- Unlimited music – they wanted no limit to what they could do (unlike radio stations)
- Free. They didn’t want to pay because the alternative at the time (Kazaa, Bit Torrent, etc.) were all free
So, we decided to focus on delivering a full-featured music streaming service instead of a music search service. It was a bold move, but desperate times call for desperate measures.
It turns out we were right. This was the right direction as you’ll see in a later post. However, it created different problems such as:
- How do you build a business around free music? (answer: you can’t)
- How do you make the record labels happy if you’re not charging? (answer: you can’t)
- Technically, how do you get the music to serve to the users? We’ll address in a later post.
I learned a valuable lesson here in that you shouldn’t be afraid to drastically change your service if your usage is low. Don’t hang on to past work just because of the sunk costs. I’ll credit Toby for being super bold. Toby is not one to do things half-assed. He likes to pick a direction and go full steam in that direction. It’s tough to make a decision to throw away a year’s worth of work.
This would come in handy later when we did something similar at Kapost.
This is post #5 about the Qloud experience. The previous post was about launching our first product – a music search engine.
When we started building Qloud we found some developers in Romania. This wasn’t just Bucharest, this was a town 8 hours NW of Bucharest in the mountains of Transylvania. We started with 3 or 4 developers and they fit our budget nicely ($15/hr back then). The early guys were Luci (team lead), Sergiu, Mitza, Dragos and Szaby. The owner of the company was Dan Masca.
Dan is a fatastic guy. He also sort of runs the town. It seems that he employs about 1.5x more people than he needs to just because he wants them to have jobs. He also buys computers for many of the local business and schools. Walking the streets with Dan, you get the idea that he’s something of a saint in that town.
The developers were also great. We talked with them every morning at 8am EST for about 2-4 hours about what we were building. There was no language barrier. In fact, when we started Kapost in 2009 we started it with Szaby and Mitza. Those two are studs. Mitza left Kapost after 4 years to start his own company and Szaby is still with us and one of our most trusted and senior developers.
In 2006, once we raised money, we thought it’d be good for the team if we all met in person and got to know each other. Thus, Toby and I flew to Romania to see them. We flew into Bucharest and then took a train to Targu Mures.
This is post #4 about the Qloud experience. The previous post was about our getting funding from Steve Case.
Qloud’s initial product was a music search engine. It was based on a few assumptions.
- Consumers have unlimited music at their fingertips
- With this amount of supply, they are overwhelmed and not sure what to listen to
- There is no way to easily find music. Almost all discovery is social and person-to-person
Our solutions was to provide a music search engine. All existing music search engines then (and today) are based on song title and artist name. So, if you search for “dance” you’ll get Steve Miller’s “Dance Dance Dance” which isn’t actually a dance song.
So, how were we going to do this? We were going to capture demographic, play counts, and tag data from users from an iTunes plugin. Then with that data, we’d allow people to search for music. You do a search like “What is the most played song tagged ‘dance’ by 24 year olds?” and we’d display the results. It was pretty damn cool. You could find lots of good music and really see the different music being played by different groups.
We launch in the fall of 2006 and we were excited to see what happened. Ultimately, like many startups, we thought it was cooler than everyone else. We got thousands of users but none of them stuck or were passionate about it. Why? There was one problem – the users wanted to play the songs that we delivered. We just listed the songs and provided a 30-second preview. That wasn’t even close to being enough.
Back in 2006, you couldn’t easily license full tracks of music to be played in the browser. There were a few companies (like Muse) who had 30-sec clips but nobody had full tracks. That’s what people wanted. Eventually we gave it to them, but that’s a later post.
Ultimately, it was a disappointing launch and our investors started to lose faith in us and our vision. I think we were victims of not thinking large enough. We set out to solve a problem, but that problem wasn’t big enough. Providing a good music search was cool, but what people wanted was a more complete solution. We were a bit naive.
This is post #3 about the Qloud experience. The previous post was about our initial fundraising experience in Silicon Valley and DC.
Seven months into the Qloud process we secured financing from Steve Case’s fund called Revolution. We were psyched and pushed ahead on the product.
A couple of cool things happened with this such as we got to work in Revolution’s office. The office was right in Dupont Circle (walkable for me) and was really beautiful. Super pimped out. We worked on the same floor as Case and the Revolution team. Other people on that floor were folks running Club Med, Fannie Mae, and Carly Fiorina who had just left HP.
I thought at the time that signing on a big name like Steve Case would help in our product adoption and marketing (“New Music Service from Steve Case!”), but it didn’t work that way at all. We weren’t allowed to use his name as PR. Similar to how VC’s don’t want to invest/help until you show traction and growth, Revolution didn’t want to associate themselves with us until we had some success. It’s funny how that works. Only once you’re loved will others express their love of you. Read the rest of this entry »
This is post #2 about the Qloud experience. The previous post was about jumping ship and starting the company.
Once we started Qloud, we started building the product and also started fundraising. From day one, looking at our finances, we knew that we had 6 months to get the company to a place where we could raise outside capital. Not only did we need to get the product built and working but we needed to hone our pitch. We came up with what we thought was a compelling vision and set out to talk to investors.
Our pitch was that what we learned at Ruckus was that music discovery was a huge problem. Talking to students it was clear that all discovery was word-of-mouth. Qloud was going to be a way to allow people to find new music without having to ask your friend down the hall. We were going to do that in 2 ways:
- we would offer a music search engine where you could search by tags and by demographic. For instance, i want all the music tagged “happy” that is being listened to the most by men age 18-20 who live in Los Angeles. This would return a list of songs that you could then sample.
- we would allow people to tag music inside their iTunes. By creating a tag cloud, we would enable on-demand playlists for “happy” or “summer” or “breakup” inside the player. This tagging and information from the iTunes would power the search capability provided in step 1.
This is the first of some posts about the story of Qloud. It’s now been over 8 years so I should start sharing the stories. This first post is about how Toby and I made the leap to quick our jobs and start Qloud.
Ruckus, a music startup, was failing as a startup. Mostly because music subscriptions weren’t something that University students wanted. They wanted music for their iPod. We were giving them free music that didn’t work with their iPod. So, it was time for a pivot as a business. Toby and I did some research and found that music discovery was a big missing element in these student’s lives. With unlimited music, they didn’t know what to download. They couldn’t think of anything. So, we wanted to give that to them. And we wanted to do it on our own. The fact that we came up with this idea while at Ruckus led to them trying to sue us later, but that’s another blog post.
I had started a company in college (HanoverDelivers.com) but i was a student then and starting it carried no risk. I was now a 29-years old and leaving Ruckus meant leaving a good salary and a good job in a VC-backed startup. I debated it for a while. Ultimately, I ended jumping because it was a challenge that I wanted to take on. Naively, it seemed like fun.
So, I jumped. Toby and I started Qloud on Jan 1, 2006. We had no office, no revenue and no product. I had to reduce my expenses so I sub-letted my apartment and moved into Toby’s basement.
Toby lived in the ‘burbs and had two young kids (age 3 and 5). Every day, I would wake up early, work all day in the basement with Toby, come up for dinner with the entire family, play around for a little while and then retire to the basement to read, work more or just sleep. I quickly became uncle Mike to the girls. It was a really enjoyable time even though I was single and lacked any good dating prospects.
We started right away. We built some wireframes, did a deck (that’s what AOL taught us to do) and hired a few Romanian developers (Luci, Sergiu and Mitza). One thing I noticed right away once we were focused on our new company is that I never, ever, thought that I should have stayed at Ruckus longer. If you ask anyone who has quit their job and started a company they never will say that they left too early.
I also am grateful that I was single and in my twenties. I had no expenses. I had no expectations of money. I could take major risks in my life. I could focus all my energy on the company. I think about my life now – with wife, kids, house, etc. – and while I’m much better at the startup game, I’m less likely to take risks like that. My advice to anyone who is thinking of starting a company is to do it as soon as you can. You won’t learn what it’s like without doing it. You just won’t. So start as soon as you can.
The 2 years from 2006 to 2008 Toby and I built a company called Qloud from nothing to over 20 million monthly users. Those years were some of the craziest years I’ve ever had both professionally and personally. I’ve broken the time into these stories.
I’ll be posting one every now and again. Enjoy….
- From VP to the Futon: Living in the basement
- Fundraising: Striking out in Silicon Valley
- On the Case: Getting Investment from Steve Case
- Launching the worlds first real music search engine
- Developing with Romanians
- Inspiration Strikes: Pivoting
- In the Abyss: Running out of money
- Music Technology in 2007 and Our Use of YouTube
- Sean Parker and Facebook’s Platform
- Blowing Up
- Happy Walters
- Selling to Buzznet
- What Success Feels Like
We had a big addition to the Lewis family last week. On 1/1/2015 we welcomed Sasha Linda Lewis to the family. She’s already changed our world quite a bit.
When we had Hunter in 2012 I published a blog post about the birth. It was a play-by-play of the entire day. At the time I thought it’d be a fun little look at the event but over the years Diane and I found ourselves referring to it more than we had thought we would. We found ourselves getting the time and events all wrong and were thankful that it was actually posted somewhere. Also, we heard that others found it useful to hear how things actually go once you’re at the hospital. Because of that, i’m posting again what actually happened at the hospital last week. Enjoy… Read the rest of this entry »
I recently read this interview of Amazon CEO, Jeff Bezos. It’s pretty interesting. Some thoughts:
eBooks / Publishing
I had always assumed that the print/book industry was really struggling – similar to the music industry. However, Bezos’s quote of, “…the facts are wrong. Publishers are having unparalleled profitability, and the book industry is in better shape than it ever has been, and it’s because of e-books” is interesting.
It’s also interesting that they take such a long-term view for the Kindle. As Bezos states, “The vision for Kindle is every book, every imprint, in any language, all available in 60 seconds.” That’s quite a mission. They are definitely doing really well so far.
The Amazon Phone
He admits that it’s a flop but contends that it’s just the start of them being in that business. He states, “The Kindle is now on its seventh generation. The Kindle Voyage, the new premium product, is just completely killer. Fire TV, Fire TV Stick — we’re having trouble building enough. Amazon Echo, which we just launched. So there’s a lot of activity going on in our device business. With the phone, I just ask you to stay tuned.”
I wonder how many times they plan on iterating on the phone. He talks about bold bets with things like Kindle, AWS and third-party resellers, but building a phone and competing against Apple, Android (they aren’t using core Android), Samsung and others is entirely different. While audacious, i’m not sure I see how they can differentiate.
He did an interview with “60 Minutes” and showcased their drone delivery system. It was awesome. He was asked about it here. As you’d expect, he thinks the main thing holding it back is the regulatory issues, saying, “The most interesting part of this is the autopilot and the guidance and control and the machine vision systems that make it all work. As for when, though, that is very difficult to predict. I’d bet you the ratio of lawyers to engineers on the primary team is probably the highest at Amazon.“
I think it’s the same for self-driving cars (I have a bet they’ll be here by 2023). It totally works right now but the world is just not ready for it. There are so many unanswered questions, such as: if someone gets killed or severely injured by a self-driving car, who’s liable? Is it the person who bought the car, the company that built the car? Is there some level of insurance that you can get?
Anyway, some good thoughts in there. It’s worth a read.
I was out in SF these past two days. A few observations:
First, i was stuck in traffic for about 2 hours trying to get from Oakland airport to SF city. The Bay Bridge was backed up and we just sat for hours. Finally, when the traffic parted, i looked to my left and saw a rainbow and knew that everything going forward would be alright:
After hitting the city, i cruised down to Palo Alto area and saw an interesting sight. It was my first sighting of the new BMW i3. The i3 is the Bavarian automaker’s first fully electric vehicle available to buy. I thought it was fitting that i saw the electric car surrounded by the biggest polluting trucks i’ve ever seen. Check it:
I also had a great time jamming out to new favorite tune. It’s Bruno Mars’s new song which just jams. I saw it on SNL this weekend and was blown away. Check it out:
Anyway, it was a successful trip to the bay area although I’m happy to be headed back to Colorado. Given the Jan. 3 due date of baby #2, i expect i’ll be taking a little hiatus from traveling for a while.