E142: Alex Ljung of SoundCloud on This Week in Startups




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TWiST Episode #142 with Alex Ljung, CEO and founder and SoundCloud

When most people think about sound on the web, they think music. But SoundCloud founder and CEO Alex Ljung is changing that with his Berlin-based company that’s on its way to becoming the YouTube of sound. In this interview, Alex and Jason cover everything from the perils of the music industry to the E.U.-versus-U.S. startup environment to how Alex got VC Fred Wilson to invest in SoundCloud.

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0:00 – 2:00 Intro.
2:00 – 4:15  Join TWIST-LIST.
4:15 – 6:45  GoToMeeting Ad.
6:45 – 8:15  Intro to Alex Ljung.
8:15 – 9:00  Are you going to stay in Berlin?
9:00 – 10:15 What is the origin of SoundCloud, what does it do?
10:15 – 11:15 Jason walks through the SoundCloud site.
11:15 – 12:00 Who is the main user?
12:00 – 12:30 Beastie Boys on SoundCloud.
12:30 – 13:00 This is very API driven.
13:00 – 14:45 How did you get the Beastie Boys on board?
14:45 – 15:15  Moby built app on top of Facebook to launch his album.
15:15 – 16:45 How do you make money?
16:45 – 17:15 We don’t artists sell their own tracks.
17:15 – 18:00 SoundCloud + RSS and iTunes means any time it’s mentioned I can buy the track.
18:00 – 18:45 How have you avoided getting sued by RIAA?
18:45 – 19:15 How do you police the system to avoid copyright issues?
19:15 – 19:45 You have been proactive in discouraging piracy via sound verification.
19:45 – 21:30 What about a remix that is a 60% match?
21:30 – 22:45 Working with the music industry from the beginning has helped collaboration (Watch the clip).
22:45 – 23:30 Question from E.P. Geoff Clapp: How is it different being a startup in the E.U.?
23:30 -24:15 How about privacy issues in different countries?
24:15 – 24:45 Going from the U.S. to E.U. is harder?
24:45 – 27:15 This was Fred Wilson’s first E.U. investment?
27:15 -27:45 Less is more when you are pitching.
27:45 – 29:45 Squarespace Ad.
29:45 -31:15 How did you change Fred Wilson’s mind?
31:15 – 33:45 How you decide between eight different term sheets?
33:45 – 35:00 Jason and Alex Ljung reenact the Fred Wilson call (Watch the clip).
35:00 – 35:45 How did you learn to handle this negotiation so elegantly?
35:45 – 37:15 Alex does a live demo on the iPhone (Watch the clip).
37:15 – 38:45 How is the audio fidelity on the iPhone?
38:45 – 39:45 Why can’t I post audio on Path or Facebook?
39:45 – 41:15 Why didn’t audio blogging take off?
41:15 – 42:00 When will we be able to edit audio like we do text, and just recently video?
42:00 – 42:45 Jason demos Fake Arnold Takes Questions.
42:45 – 43:15 Jason takes a look at the SoundCloud Labs apps.
43:15 – 44:15 How does Gobbler use SoundCloud?
44:15 – 46:10 Tyler’s thoughts on SoundCloud.
46:10 – 48:00 Associate Producer JD asks: How did you know when to go to the U.S. market?
48:00 – 49:15 The role of press in bridging the gap.
49:15 – 51:30 Alex talks about hiring and firing in the E.U. (Watch the clip).
51:30 – 53:45  Describe the work ethic in Berlin.
53:45 – 56:10 Entrepreneurship is a young person’s game. Stop people using “gay” and “retarded.”
56:10 – 57:00 R-word pledge.
57:00 – 58:30 Discussion of TWiST fans in the Middle East.
58:30 – 1:00:00 Jason asks Alex: What is your favorite show?
1:00:00 – 1:01:00 Thanks to the producers.
1:01:00 – 1:03:00 Shenanigans.
1:03:00 – 1:05:00 Insight from Tyler: Its like hanging from a bar for 5 minutes.
1:05:00 – 1:08:15 More shenanigans.
1:08:15 – 1:09:00 Jason wants oatmeal everyday. Beer at 4:00 PM every Friday.

Multilingual? Translate this episode of TWiST into another language and email the transcript to translate@thisweekin.com


Jason: @jason
Tyler: @steepdecline
Alex: @alexanderljung

About Alex:

  • Born in U.K., raised in Sweden
  • Received his MSc in Media Technology in Sweden in 2007
  • Founder of a cross-media production studio and media-production agency
  • Worked as a sound designer for commercials, TV and movies; found it repetitive
  • Started SoundCloud because he wanted to do something exciting
  • Has published research on human-computer interaction
  • Has exhibited interactive art installations
  • Realized in 2009 that business-wise, sound was more than music
  • Says sound is important enough to have its own platform (YouTube is known for video & Flickr for photos)
  • Believes it’s easier to go from Europe to U.S. market than vice versa

About SoundCloud

  • Platform for recording and sharing all types of sound files — not just for musicians
  • SoundCloud allows users to place notes/annotations in the stream
  • Micropayment site Minno just created SoundRain so SoundCloud users can sell their tracks anywhere
  • Founded in Berlin in 2007 and site launched in late 2008
  • Chose Berlin because of art scene and lower cost of living — like NYC in late ‘70s
  • Opened office in San Francisco in January 2011 to be close to U.S. developers
  • Employs 50 people total, including an experimental developer in L.A.
  • Has over 4 million users, mainly U.S. & Europe w/strong growth in Japan, India & Brazil
  • Site content not localized for different markets yet
  • Site growth has been organic, no paid acquisition
  • Recently launched SoundCloud Labs, home for different hacks and apps
  • Apps for SoundCloud (iOS & Android) have surpassed 1 million downloads
  • Received seed funding of 500K euros from angels in 2008
  • 2.5M euros Series A with London-based Doughty Hanson in 2009
  • Undisclosed Series B in October 2010 with Fred Wilson of USV and Mike Volpi from Index Ventures
  • Alex says they wanted a U.S. VC before opening office in S.F.
  • Use cases include public companies’ earning calls and neighbors’ noisy dogs


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