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SoundCloud's Collapse

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Re: SoundCloud's Collapse

#81

Post by fungi »

whofailed wrote: post #67

Contrarian here: Soundcloud is an incredibly valuable property. They have obviously had a few managerial cock-ups, but in reality they have massive user buyin, huge network effect, and anyone who can get some equity in them during this current time of massive negative sentiment is going to do VERY WELL. I wish I had a way to buy in at this point.

love it, live on it, its contributed significantly to my hearing loss. listening to https://soundcloud.com/silent-season/campfire-stories-24 as i type this spiel.

would happily become a premium++ subscriber if money went to artists, something like humble bundle... but the paid plan is brain dead and offers no value ┐(￣ヘ￣;)┌

hope it survives or morphs into a decentralised platform that artists can thrive on.

Re: SoundCloud's Collapse

#82

Post by logicallee »

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? 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.

I was curious if this was true, so I asked a genie to see if you (as a bootstrapped founder) would trade $20 to own SoundCloud. Well it turns out the genie ran the experiment and concluded that not only is it worth $20 to you, but way more - in the genie's experiment you'd actually trade both $20k and even $200k for SoundCloud!

So I looked at your comment in which you say SoundCloud is worth "nothing" to you, like a bad black and white photocopy of a hundred dollar bill, and the truth is you value it at hundreds of thousands of dollars more.

Logarithmically, your valuation (10^5.3, which is all the genie tested up to but for sure you accept) is closer to a billion (10^9) than your stated valuation (10^0 - 1).

So after reading your analysis the billion dollar valuation seems more reasonable than the analysis you offered. (Of course, that does not make it reasonable.)

/s

On a serious note: what I mean is that the next time you make an argument about valuations being "ridiculous", don't be "ridiculous."

EDIT: received several downvotes but I am keeping this.

$0 is not reasonable.

Re: SoundCloud's Collapse

#83

Post by Kurtz79 »

DigitalJack wrote: post #77
jopie wrote: post #48

Earlier quoted context omitted.

How does this compare to Spotify which has 3000+ employees, debt financing of over a billion dollars, and an insane valuation? What does the future hold for that company whether it IPOs or not?

Good grief, what the heck does Spotify do with 3000+ employees?

Definitely NOT making a mobile app with decent UI.

Jokes aside, having to negotiate with tons of artists and their labels/managers, I imagine their legal/business department is significantly bigger than that of most tech startups.

Re: SoundCloud's Collapse

#84

Post by Kenji »

sgentle wrote: post #47

Never do a music industry startup unless you have a billion dollars, can raise a billion dollars, or plan to be acquired by a company with a billion dollars to spare. That's the table stakes for going toe-to-toe with the big three. They'll bleed you to death with licensing fees, deputise you into their copyright enforcement police, upload their songs to your platform on one hand while suing you with the other, and al…

Seems to work for Bandcamp though (which I love by the way).

Re: SoundCloud's Collapse

#85

Post by elmar »

din-9 wrote: post #58
elmar wrote: post #44

Earlier quoted context omitted.

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.

I heard in a lecture of Blitzscaling with Eric Schmidt that google founders got the Google Chrome and Android projects running inside google without him knowing the real breath and intentions of the projects.

https://www.youtube.com/watch?v=hcRxFRgNpns

Re: SoundCloud's Collapse

#86

Post by sillysaurus3 »

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…

When I read stories like these, I actually feel good about my bootstrapped, down-to-earth startup. We don't make millions, we don't "disrupt" the industry, yet we solve our customers' problems and delight them. We won't ever run out of money, as we carefully check each and every expenditure, and have growing savings in the bank. When I read stories like these, I actually feel good about my bootstrapped, down-to-earth startup. We don't make millions, we don't "disrupt" the industry, yet we solve our customers' problems and delight them. We won't ever run out of money, as we carefully check each and every expenditure, and have growing savings in the bank.

Then it's not a startup. A startup is designed to grow quickly. Everything we associate with startups stems from the fact that the successful ones do make millions within a decade.

For it to be a startup, you have to have a large target market. That means any competitor that chooses to grow quickly will trounce one that moves slowly.

Re: SoundCloud's Collapse

#87

Post by cupcakestand »

sgentle wrote: post #47

Never do a music industry startup unless you have a billion dollars, can raise a billion dollars, or plan to be acquired by a company with a billion dollars to spare. That's the table stakes for going toe-to-toe with the big three. They'll bleed you to death with licensing fees, deputise you into their copyright enforcement police, upload their songs to your platform on one hand while suing you with the other, and al…

Best comment in the thread. It shows that one of SoundCloud's key problem is an oligopolostic industry they are dealing with.

Re: SoundCloud's Collapse

#88

Post by snom380 »

thinbeige wrote: post #70
snom380 wrote: post #65

Earlier quoted context omitted.

Does the fact that it's not their core contradict what I'm saying? Youtube is still hugely popular for people to share their own recordings and remixes. I know that it took a long time for YouTube to figure out the licensing stuff. As I said, tremendously difficult, yes, but not impossible.

> Does the fact that it's not their core contradict what I'm saying? Yes it does. Youtube is not about music, their focus lies somewhere else, music complements their product but they are not dependent on it and besides, it's a just one rev stream compared to their main rev channels. Another example: Apple has Apple Music to strengthen the network effect of their products, not because they want to enter the music bus…

Youtube is about user uploaded content, and without a content recognition system in place for video and audio and licensing in place with both the movie and music industry they would have been dead in the water, just like SoundCloud. What other revenue streams would they have that would have worked without that?

As the article mentions, SoundCloud eventually did reach an agreement with the music companies, showing that it didn't have to take 10 years, but took longer still than they expected.

So my theory is that the business model is not broken by design as you claim, but that SoundCloud got into the trouble it is now in by poor strategy and decision making.

Re: SoundCloud's Collapse

#89

Post by cupcakestand »

sdenton4 wrote: post #60
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.

> It's the ground-zero meat space for their content corpus

What do mean with this sentence and content corpus??

That burning man matches their DNA?

Re: SoundCloud's Collapse

#90

Post by WJW »

Myrmornis wrote: post #79
WJW wrote: post #52

Earlier quoted context omitted.

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 m…

I agree, GitHub is a nice comparison, and has been transformative in promoting a hobbyist's ecosystem while also being a viable commercial entity. However, I think you are being a bit unfair and leaning towards characterizing the artists as valuing obscurity and non-mainstreamness per se. The point about SoundCloud is that it provided access to the people making music from their bedrooms, the hobbyists of github. Art…

I think you are right about the musical value in the long tail, but what I was driving at was that the monetary value is concentrated in the 'top', in a power law fashion. Since soundcloud has to pay for its employees and servers it needs money, but most of the ways of actually getting that money will chase away users.

I think a self-hosted soundcloud where people host their own music but use the network for discoverability might be one of the few use cases where decentralization actually makes a lot of sense, because since the users are not (mainly) in it for the money the economies of scale from centralization don't matter as much.

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