🎢 #41 - How to disrupt the music industry?
+ full-time jobs and internship postings!
Hey there! Welcome to my email newsletter. My name is Leo Luo, a student entrepreneur at the University of Michigan. I write about founder stories, trends, investor POV, and unique behaviors in the early-stage consumer startup space.
All my previous posts can be found here.
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🍽 Today’s menu
Startup story - Boomy (AI for music creation)
What I’ve been reading - 6 articles about startups and investing
Who’s ballin’ this week - 5 new fundraising/developments in B2C space
Jobs - 12 full-time jobs and internship postings
Feedback - help me to deliver better content to you
🔥 Startup Story
How to disrupt the music industry?
(Image credit: Boomy)
Machine Learning has reached new heights with the advent of new language models such as GPT-3, for instance, which has already disrupted industries ranging from Healthcare to Fintech.
Boomy is an early-stage startup leveraging machine learning and AI to challenge existing paradigms in the music production and streaming industry. It allows you to create music instantly and earn royalties from Spotify and other streaming services, even if you have never made a song before. Check out the Lo-Fi beats I made here lol.
Since 2019, Boomy users have created over 1.6M songs, roughly 1.8% of the world’s recorded music 🤯 !! This is one of the most interesting startups I have come across so far, and I was beyond stoked to talk to Alex Mitchell, Founder & CEO of Boomy, to learn about his story and journey building the startup.
“I was a musician when I was younger. I played violin and was lucky enough to be able to play at Carnegie Hall and the Kennedy Center. After college, I got more involved with the music industry and co-founded a market research platform for music creators powered by crowdsourcing. We sold the company and the experience helped me to develop a profile within the music industry.
The music industry was in decline when I first started in the business, but it hit an inflection point in 2016 when we saw extraordinary growth in the music industry for the first time in a decade due to the explosion of adoption and demand for streaming music throughout the world.
Boomy came out to answer this question: How do we ensure that the $75 billion streaming music royalties market in the year 2030 [$1 billion four years ago and $12 billion last year] is not just benefitting people who are lucky and had a music education like me, ” Alex elaborated.
🚗 Product Journey
MVP (February 2019):
Alex and his team started Boomy as a part of Boost VC, which is an accelerator program in the Draper Venture Network. They followed the lean startup approach and launched an MVP product within three weeks. The MVP didn’t produce great music - in fact, it took six minutes for the system to make a song, and 98% of the time, the song was rejected by users, meaning users thought the music created was bad. Sometimes, the system would even break and create a blank song.
However, as it turned out, some of that remaining 2% was really good and was getting saved. Some users stuck around and got excited about the songs they created.
From the initial phase, they found that there were two customer segments - 1. curious musicians who were interested and asked for a lot of features but didn’t vote on the song 2. Beginners who were rapidly creating songs and having a ton of fun. Alex and his team decided to zero in on the latter.
(Early product prototype)
“We have two major engineering initiatives. One of them is the music engine responsible for creating original songs. The other is the boomy.com product, which we not only use as a training environment for our algorithm, but as a platform to answer the questions like who needs this and what do they want to do with it.
Through iteration, we found that people want distribution - the process of sending a song to Spotify or Youtube and then collecting royalties from them. Many of those users that stuck around in the early days would write to us asking for those music files and permission to put them up on those music streaming platforms.
We have a very strong music industry competency in the company, and we were able to put together that function pretty quickly. All of a sudden, we realized we had a vertically integrated instrument and rights management company. The way we monetize by offering a free product is through rights, and essentially, being a record label.
This approach of vertical integration ended up being the differentiating factor of how we got to where we are today because we realized that some people made music for an intrinsic reason, but in other cases, they were driven by a desire to see themselves on Spotify and tell their friends ‘Hey guys, let's all stream this today. And I'll get a little bit of money from that’. This became the right direction for us,” Alex explained.
Current traction -
There are hundreds of thousands of users on the platforms who have created over 1.6M songs. The growth has been further accelerating since the start of this year.
“This week we saw 24K users create 300K songs in a period of 40 hours in Turkey. We didn’t even advertise in Turkey. There was a big influencer from Turkey that made a YouTube video about us. I don’t know where he found us but he found us somewhere. I am getting dozens of thank you emails from those users, ” Alex said.
🤔 Biggest challenge so far
Sticking to the plan
“Fundamentally, you are probably wrong about whatever you are working on. All you know for sure at the beginning is that you are going to be wrong about certain things.
Boomy is free today but it wasn’t always like that. We used to limit the number of songs you could make for free because we were testing whether subscription economics were better than free economics. It just didn't work and we realized that our users, in many cases, were so young that they didn't have credit cards and they didn't want to bother their parents for it. We had to adjust the strategy.
Sticking to the plan is hard because you kind of have to iterate as fast as you can, but certain strategies take time to work. For example, we have a challenge where if you stream one of our songs on Spotify today, we actually don’t get paid for that for another three months - it's paid on a three-month delay.
For a startup, that’s a huge delay. We're seeing the streaming data but we didn't really understand exactly how much was going to come out of this because of this big royalty black box. And frankly, it wasn't until several months into getting these royalty statements that we could start really projecting and understanding the impact of some of our activities. Sticking to the plan is always hard because you want to be iterating right.”
“Our vision has been pretty clear since day one. We see an opportunity to become the biggest music company in the world by catalog size, and I think we can do it in less than five years.”
Make sure to check out Boomy!
👨💻 What I’ve been reading
Framework 1.0 by Chris Paik
Instacart Survived Covid Chaos — But Can It Keep Delivering After The Pandemic?
The Hidden World of Pricing: Uber, Trulia, Etsy, Superhuman & More
The Relentless Jeff Bezos
Flywheels And How To Create Content Communities
When did you know that your startup idea was viable? (20 answers)
🏀 Who’s ballin this week
AI Dungeon-maker Latitude raises $3.3M to build games with ‘infinite’ story possibilities
Yotta rewards smart financial habits with a chance to win $10M to encourage more Americans to save
Booksy raises $70M war chest to acquire salon appointment apps, expand internationally
Divvy Homes secures $110M Series C to help renters become homeowners
Uber is buying alcohol delivery service Drizly for $1.1 billion
😍 Jobs & Internships
Apply - hims & hers - Product Manager (Remote)
Apply - NextView Ventures - Platform & Ops Associate (NYC, Boston)
Apply - Insight Venture Partners - Investment Analyst (NYC)
Apply - Twitter - Software Engineer (Seattle)
Apply - Founders Factory - Investment Analyst (London)
Apply - Nurx - Strategy Associate (SF/Remote)
Apply - Insight Partners - 2022 Summer Analyst (NYC)
Apply - Two Sigma Ventures - Summer Intern (NYC)
Apply - Curology - Influencer Marketing Intern (Remote/SF)
Apply - Legacy - Product Manager Intern (Remote)
Apply - Buzzfeed - Product Design Intern (Various)
Apply - Affirm - Fall 2021 Software Engineer Intern (Remote)
If you have reached this far, could you please take 30 seconds to fill out this quick survey? It will help me to improve the newsletter and deliver you more interesting content in the future. Means a lot to me ♥️.
**P.S. I have adopted many of your suggestions in the past (e.g. having more bullet points, changing the order of the content, creating an archive for all previous posts, etc) so I hear you!
↺ What you might’ve missed in the last three weeks
01/31 - Story of Apothecary (personalized skincare marketplace) + Anne Dwane (Partner at Village Global)
01/24 - Story of Public (Social investing app) + Karan Mehta (Investor at Octopus Ventures)
01/17- Story of GIST (social e-commerce app) + Steve Sloane (Partner at Menlo Ventures)
Check out all the startups and investors I have featured in the past on
this Notion board