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SoundCloud's Collapse

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Re: SoundCloud's Collapse

#51

Post by rrdharan »

thinbeige wrote: post #23
iagooar wrote: post #14

This shows us, that company valuations are ridiculous and actually mean nothing. Is SoundCloud worth a billion dollars? Well, it might be on paper or in the imaginations of the founders, but what does it really mean? To me, it's worth nothing. The real problem is: these companies start to operate from the perspective of "having" those millions of dollars. This is why they hire too many people for too much money. They…

> Is SoundCloud worth a billion dollars? This reminds me of the current ICOs and the token economy. Early adopters try to push new currencies like crazy to cash out once popularity peaks. SoundCloud was never thought as a real business. Everybody involved in the music industry should have known that it's not possible to build a solid business based on the oligopoly of three music labels and with Spotify having a head…

Traditionally pump and dump meant taking advantage of unsophisticated retail investors. I don't think this qualifies as pump and dump unless you mean the earlier stage VCs somehow managed to cash out at the expense of some later naive shareholders? In this case sounds like everyone (except maybe Ljung) lost out..

Re: SoundCloud's Collapse

#52

Post by WJW »

Myrmornis wrote: post #28
iagooar wrote: post #14

This shows us, that company valuations are ridiculous and actually mean nothing. Is SoundCloud worth a billion dollars? Well, it might be on paper or in the imaginations of the founders, but what does it really mean? To me, it's worth nothing. The real problem is: these companies start to operate from the perspective of "having" those millions of dollars. This is why they hire too many people for too much money. They…

No, it shows us that our economies make it very hard to maintain a valuable and beautiful cultural/artistic ecosystem as a commercial entity.

I feel it is also a culture thing: Some artistic subcommunities seem to revel in the image of the 'starving artist' and making a lot of money is often regarded as 'selling out'. Certainly anything liked by the mainstream immediately loses its appeal for the groups that like to think the have exquisite tastes. (almost by definition)

So, websites like soundcloud find themselves in a bind: on one hand they can't start making lots of money because they would lose their artistic street cred, on the other hand their servers and bandwidth cost money. Blaming this lack of money for artistic on the economy seems a little bit off, this has basically been the case since Roman days.

I feel sites like github have a nice middle ground, charging a little bit to professional users while offering the service for free to open source users. It doesn't lead to billion dollar valuations quite as fast as an advertising model though...

Re: SoundCloud's Collapse

#53

Post by yeukhon »

vertex-four wrote: post #39
yeukhon wrote: post #30

Earlier quoted context omitted.

Staying small != don't grow business. I would never hire crazy so people in the startup can imagine spinning up new projects new microservice new crazy revolutionary database/big data/ new KV store/new cache layer out of curiosity. Till one point, when the business is so big, growing engineering team to over 100 is inevitable. But plently of really successful tech companies did not overgrow their team size for a numb…

The issue is that the investment market seems to be partially built on selling the idea that you're doing something so new and different that you need all these fancy architectures and hundreds of developers. If you don't sell that idea, you're just another CRUD company so why should anyone invest?

Look at all of the really successful tech companies out there, they startrd with tools already available. I see this too often. Everyone has nice ideas and wanted to write something better because they don't like the interface or they had to hack around (look at you Jenkins). We are all guilty of that. But if you hire people and they begin to create new fancy architecture that doesn't pay off, trust me, that money went to waste. This is not even a math problem.

Again, find a company out there did not create their infratructure with common solutions and only begin to develop custom solution when they afford and they really needed it. Several years later.

Re: SoundCloud's Collapse

#54

Post by thinbeige »

snom380 wrote: post #50
thinbeige wrote: post #4

I read this article few hours earlier when crawling through the new section. It's a surprisingly interesting piece from Buzzfeed but there's a lot of bashing of the CEO, the CTO and one recently hired senior for label relations (who seem to be really odd). This is typical: SoundCloud was an iconic company, its founders worshiped and idealized. Once money runs out, people but especially former employees start to backs…

I didn't downvote, but: - Presumably the people inside the company has tried for years to pressure for a change. When that doesn't work, and especially once a big layoff happens, it's understandable that employees vent their frustration in public. And that might be what it takes for outside people (investors etc) to make necessary changes at the top. It's not about backstabbing. If these employees didn't care at all…

> it's understandable that employees vent their frustration in public

They still break an agreement.

> YouTube is evidence that it _is_ possible,

Music isn't their core. And btw the agreement between Youtube and the German GEMA took a decade.

Re: SoundCloud's Collapse

#55

Post by tuxxy »

thinbeige wrote: post #32
k-mcgrady wrote: post #29

Earlier quoted context omitted.

>> So what. There also many excellent major label artist and it's good to have them. You're missing the point. I've no problem with major label artists but when you start dealing with them you start dealing with licensing. Then you waste time, don't develop the platform, and abandon the indie artists that got you to where you are. You need to take the point in context of the rest of my argument. When Spotify/Apple Mu…

> You're missing the point. I've no problem with major label artists but when you start dealing with them you start dealing with licensing. You think all those mixes come for free? They have to be licensed as well once the embedded song snippets exceed 30sec which most of them do (also depending on the local jurisdiction). Soundcloud had to find agreements with the labels sooner or later anyway because of the mixes a…

> 99% of the mixes on SoundCloud are crap.

Spoken like a person who didn't understand all that was on the platform. You do realize that SoundCloud had basically spawned a different genre of hip hop and rap, right? It's not just dance mixes, there's a lot of stuff that's super unique on there and it's not just hip hop, rap, or edm.

Re: SoundCloud's Collapse

#56

Post by mailshanx »

erikb wrote: post #12

If anybody else is also put off by the writing style: There is some actual content there. One just needs to get through the first third which basically just repeats the headline. TL;DR (without my opinion added): Top Management started too late to think about making actual money. They also hired an asshole for their US offices. When they got an opportunity to be bought by Twitter they asked for way too much money. An…

Maybe he already cashed out? We increasingly hear of founders taking money off the table by selling a part of their share when it comes time to raise a series-B or later round. SoundCloud was likely well past the series-B stage, and i wouldn't be surprised if the founder already has a few million in the bank.

Re: SoundCloud's Collapse

#57

Post by kristopolous »

manmal wrote: post #19
iagooar wrote: post #14

This shows us, that company valuations are ridiculous and actually mean nothing. Is SoundCloud worth a billion dollars? Well, it might be on paper or in the imaginations of the founders, but what does it really mean? To me, it's worth nothing. The real problem is: these companies start to operate from the perspective of "having" those millions of dollars. This is why they hire too many people for too much money. They…

Once you have investors, they want their money to grow, and this is not possible by staying small. We have invested in a startup we work with, and given the high risk of failure, I would not be happy with a meager growth rate of I'm a big fan of bootstrapping myself, and it's the best model IFF you can get by without investors. If you, like SoundCloud, have a product that does not break-even, then you will need inves…

The x5 return takes partial responsibility for the 80% failure. These foolish business pivots trashes the brand. If there's only one high-return idea in the room and it's clearly hazardous and unlikely to work - there should be no obligation to take it; an investor didn't drop millions to be squandered foolishly.

Re: SoundCloud's Collapse

#58

Post by din-9 »

elmar wrote: post #44
dzhiurgis wrote: post #41

Earlier quoted context omitted.

I was about to say the same, but it’s not exactly the same. You are free to build anything, but using existing stack. Not pickup new stack and rewrite something that’s not even broken. That said, probably more often than not, there’s an actual value in it.

I think reality is more serendipitous, ny view is that if you have hardworking creativy people working on side projects sometimes magic happens. For example: Android was a completely diferent tech stack from google.

Android was bought in though.

Re: SoundCloud's Collapse

#59

Post by thinbeige »

rrdharan wrote: post #51
thinbeige wrote: post #23

Earlier quoted context omitted.

> Is SoundCloud worth a billion dollars? This reminds me of the current ICOs and the token economy. Early adopters try to push new currencies like crazy to cash out once popularity peaks. SoundCloud was never thought as a real business. Everybody involved in the music industry should have known that it's not possible to build a solid business based on the oligopoly of three music labels and with Spotify having a head…

Traditionally pump and dump meant taking advantage of unsophisticated retail investors. I don't think this qualifies as pump and dump unless you mean the earlier stage VCs somehow managed to cash out at the expense of some later naive shareholders? In this case sounds like everyone (except maybe Ljung) lost out..

Technically you are right.

Still it's a long-term pump and dump game. VCs praise their investments to the utmost (which is their job and because their believe in their investments) but mainly to attract more investors (pump) and at some point to find potential buyers (dump) where you can exchange retail investors with dumb corporations.

Re: SoundCloud's Collapse

#60

Post by sdenton4 »

erikb wrote: post #12

If anybody else is also put off by the writing style: There is some actual content there. One just needs to get through the first third which basically just repeats the headline. TL;DR (without my opinion added): Top Management started too late to think about making actual money. They also hired an asshole for their US offices. When they got an opportunity to be bought by Twitter they asked for way too much money. An…

Actually, I could see an argument that SoundCloud has to have a presence at burning man... It's the ground-zero meat space for their content corpus.
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