Welcome to SL #11! Occasionally we like to pull in a guest from outside of the Southeast, and today’s guest has a very compelling story to tell indeed. What is an Internet music entrepreneur to do when, after surviving the dot com flameout, his company is faced with potentially crippling fees from the RIAA?
In this show, we sit down with Pandora founder and Chief Strategy Officer, Tim Westergren, for a great chat about Pandora, the Music Genome Project, the RIAA, their shelved plans for international expansion (thanks to the RIAA), and what the future holds for Pandora!
As an added bonus we throw capital brokers and people who charge money for networking and capital introductions “under the bus” as we continue to bring you truth & justice … the StartupLounge.com way, baby! We also give a nice update on our upcoming Capital Connections event here in Atlanta.
Sponsors for this episode:
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Shownotes:
This was a very strong show with a compelling guest. What was it like in the early days of building Pandora? What was it like raising capital during the bubble? What lessons were learned in the process? How did the company manage to survive the fallout from the bubble? What impact will the new Internet music licensing and royalty fee structure have on Internet broadcasters such as Pandora? How are they fighting back? More importantly, from an entrepreneurial perspective, how does a company overcome such a hurdle as it tries to expand?
Sampling of Soundbytes:
If the ruling stands, and you hit the wall, you may as well hit it at 100 miles an hour.
Most deals happen without the benefit of some kind of intermediary.
Having a (capital) finder involved can actually kill the deal sometimes.
When people invest in a company, the invest on a small number of criteria. The first is the perception that the idea could be big. The second is that they have to fall in love with you as a person.
I think its important for entrepreneurs to target their fundraising efforts. Try to find investors that at least have a familiarity, and ideally a passion, for the field you’re working in. You want an investor that looks for a reason to invest rather than a reason not to invest.
For all intents and purposes, this company should have been dead a few years ago.
Even through our worst of times, I don’t think anyone ever stopped believing that it was a good idea.
The reality of these new rates, and this is not hyperbole, it will wipe out Internet radio.
Our approach to this has been straightforward – we have to continue with our business as usual, and work as if we’re going to solve this problem.
A real rookie mistake that many entrepreneurs make when they try to raise capital is they decide to make 5,000 copies of their business plan, get a database of investors, and just ship it off to as many as they can.
Of course, there is much more content contained within the show itself. Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player.
Links referenced within this episode:
- SaveNetRadio.Org
- Adams Capital
- PeachPodStudios
- National Personnel Services
- SON Capital
- Technology Association of Georgia
Podsafe music used within this episode:
- Sundial by Bill Derome
-
The RIAA Will Kill Your Dog by Smart Bomb Radio
- All the Money in the World by Hutch
Tune in and find out!
Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) 
Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.
Here is the breakdown for the show, in case you want to hop around.
| Intro | 00:00 to 01:36 |
| Smalltalk and introductions: | 01:36 to 05:19 |
| Under the Bus | 05:19 to 12:02 |
| Announcements/Mailbag: | 12:02 to 18:56 |
| Commercial/Comedy Break: | 18:56 to 21:05 |
| Main Discussion Topic | 21:05 to 48:03 |
| Commercial/Comedy Break: | 48:03 to 48:36 |
| Analysis/Wrap-up: | 48:36 to 55:59 |
A special thanks to Tim for coming in and hanging out with us!
We’ll be back soon with Larry Villaneuva, an intellectual property attoryney with Gardner, Groff, Santos, & Greenwald. We’ll cover the basics of IP protection (patents, trademarks, etc.) for early-stage companies.
We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.
And don’t forget – the StartupLounge.com message forums are up and running. If you need help with any aspect of your venture, we welcome you to jump in and get the help you need!
Enjoy!
Gregg said
on May 8 2007 @ 11:21 am
Yet another fantastic podcast guys. Stories of real entreneurs who have the scars are the most valuable thing you can share. Keep em coming!
GeeMaxine said
on May 13 2007 @ 2:40 pm
An excellent show again guys. I especially liked his views on where the whole RIAA internet music rate hike is going. I only wish you could do a podcast every day!
-GM