Kernel: 2012 has been an amazing year for SoundCloud so far – you kicked it off with a pretty big bang!
Ljung: Yeah, we try every week to create a bigger bang. It never ends. It’s been a good year so far.
Kernel: Of all the things that have happened this year, which one would you single out as the most exciting?
Ljung: For this year the most exciting thing for us has been the private beta launch that we did of what we call “The Next SoundCloud”. We took a step back and looked at our main web application, the SoundCloud you can see from your browser. We basically started from scratch, looked at everything we learned from our different mobile applications and what is now possible to do in the browser, and redesigned the web app, put some pretty cool stuff in there. We then decided to make the slightly scary move of releasing it as a product beta super, super early. So we launched that a while ago and had a number of people from the community using that as their main version of SoundCloud, even while we were working on it.
Kernel: How many people were in this early group?
Ljung: I don’t know the exactly how big it was at the time. Anybody could sign up for an invite and try it out. But we have been actively using it every day as the main version and every day we are getting feedback and fixing things and building new stuff. That’s sort of moving towards the point where that’ll become the main web app. It’s a gorgeous experience, much faster, there’s new features like reposting, creating stuff, we have continuous playback through the entire web app, you can just listen to music, browse around, find new stuff, and you know that sound will always be flowing. That’s been one of the most exciting things for us.
Kernel: Can I take you back now a few years? You mentioned that Eric and yourself wanted to start a company and moved from Sweden to Germany, to Berlin. Why did you move, and why Berlin?
Ljung: It was very spontaneous. It wasn’t really something that we thought about so much. We visited Berlin for a day, and we both just really felt a connection to the city and the vibes so we just decided then that we would move down here and try it out. You know, at the time, we weren’t really sure why that was. It just kind of felt right. In hindsight, trying to figure out where that feeling came from – one of the important parts was that Berlin has this really great intersection of arts and technology. A very strong art scene and a very strong tech scene. I think that ultimately resonated with both Eric and me and just what kind of company we wanted to build. Berlin is this fusion of artistic creativity and amazing technology and it just felt like the city represented that as well.
The second important part was… Berlin is very much about counterculture, about doing things your own way and I think that’s essentially what startups are about, right? You look at the world and you see that something should be different, it could be done in a different way. And you set off trying to change the world and it turns into your real life. Berlin is almost like Silicon Valley in the sixties, like the hippie movement, the tech movement and counterculture thing and trying to do things in their own way… It felt like Berlin really had that. Those were the things we felt after just one day here and it made us convinced that this was the place to move to.
Kernel: You’re based there now, although you have offices in London and San Francisco and a development team in Bulgaria?
Ljung: Yes, exactly. I divide my time mainly between San Francisco and Berlin. I’m usually over in S.F. a week or maybe a week and a half each month. So yeah, we go between the places. Even though most things are in Berlin, we try to really act as a global company. And we don’t have any teams that are set up for a specific country or region or anything like that. We see the world as sort of one place. It’s kind of like an Internet way of looking at things. Countries and borders don’t matter that much, the web has really connected the world into one place, and that’s how we are trying to think about the world all the time.
Kernel: It certainly seems that the music industry doesn’t view the world that way.
Ljung: Well… the predominant way the world has been organized for centuries has been by nations and countries. Switching that over to something different doesn’t happen overnight. I mean, it’s a tremendous change. But when you look at the less complex things like just how people are behaving, you know, in everyday life… People have already given up, to some degree at least, on the idea of countries. In a given hour, maybe I’ll contact forty five different people and it doesn’t matter where in the world they are at the moment. If I send an email to somebody, I have no idea if they are in San Francisco or if they are in Paris at the moment – it doesn’t matter.
Kernel: In those early years, 2007, 2008… Did you guys go through any startup program such as an incubator, an accelerator, or any programs that are set up specifically towards helping startups grow and expand?
Ljung: No, we didn’t. We looked at a few different ones, but decided to just do it ourself instead. We did have one angel investor here in Berlin who definitely acted as sort of mentor and helped us out a great deal, but we were never part of a startup program or received any government funds or anything like that. I don’t know if that’s right or wrong, but we thought that that might end up being too much of a distraction. We felt that we knew what we wanted to do, so let’s just go and do it and we’ll figure out all the challenges along the way.
One thing that helped was that even from the beginning we had a pretty good network ourselves with just other Internet entrepreneurs, we were always happy to take advice from people around us. A lot of people helped us at the beginning, great entrepreneurs from all over the world. But it’s never been a formal alliance or a program, it’s just been like, you meet people also interested in having an impact and what’s cool is that a lot of entrepreneurs are usually very eager to share their learning with younger entrepreneurs.
Kernel: Do you ever have any opportunity or the time to do the reverse? In other words, now that you’re what they call a rock star in the start-up world, do you do any mentoring or work with people that are just starting their own projects?
Ljung: Yeah, sure. That’s what I do on Sundays. (laughs) Yeah, I do. I wish I could do even more of that. There’s a limit to how much you can do. SoundCloud is obviously the first responsibility, but outside of that I try to do as much as possible. There are a lot of younger companies here in Berlin. There’s a couple that I’m more deeply involved with, but there’s a lot of them that I help out a little bit now and then when they need it.
Kernel: You mentioned an angel investor. Was this person of any help in your first round with Doughty Hanson?
Ljung: Yeah, certainly. We had no clue how that part of the world works. How you raise money and how you structure it and why investors invest in companies. We only knew that we had to add sound to the Internet. We learned all that stuff on the way, but initially this angel was very helpful in making some of that initial connections and guiding us through how to think about it. So that definitely got us started in the right direction.
Kernel: When thinking about sound, I guess the first thing that comes to most people’s mind is music. Music is the kind of sound that is, let’s say, the most structured, or the most visible. Looking at the SoundCloud platform, how much of the content that’s on there are sounds that are not musical? Sounds that are somehow from some other walk of life – cars braking, engines running, children screaming or something like that?
Ljung: It’s not that easy to measure – there are just enormous volumes of sound on SoundCloud. And it’s not really reliable to use tags and that kind of stuff. However, what we’ve seen, especially over the last eighteen months, is an enormous growth in non-music sounds. The breadth of it is just mind blowing. If I just look at my stream… There’s a musical track, then there’s Mayor Bloomberg from New York and then somebody is recording sounds from the protests in Egypt, all in a row. So, I think it’s really exciting, the growth of sort of theaudio side of it. We’re only beginning to wrap our heads around it.
It’s completely natural for it to be that broad because, ultimately, you know, there’s seven billion people on the planet and, for every single one of us, sound is a crucial part of our everyday experience. It takes many different shapes, but sound is ultimately one of the key things of what it means to be human. Once you enable that online as well, it may take a lot of time, but it’s going to take a lot of different kind of shapes. Sometimes it takes the shape of a beautiful piece of music that someone has worked on for a long time and sometimes the shape of recording something a five year old kid did for fun.
Kernel: The whole concept of what you’re doing is really fascinating. It’s really great to see it grow and expand. Let’s step back for a little bit and go back to the news from earlier in the year. The investment was large. In the meantime, you’ve acquired one company. Are there any more specific uses for the investment besides growing the company and growing the project?
Ljung: Sure. A lot of it is about trying to make the world go faster. Sound is massively under-represented on the web, and we want to have enormous volumes of interesting sounds on the web and allow those sounds to connect people all over the world. We want to get there as fast as possible and one way of doing that is by ramping up the size of the team. We’re very aggressively recruiting at the moment and we’re over a hundred people on the team – actually quite a bit over a hundred – and trying to recruit as fast as possible just to bring more really smart people in, to help us get faster to that world of sound.
Some of the tangible stuff that we’re doing is… There’s a massive focus at the moment on The Next SoundCloud. Until that is released as a public version available to everybody out there, the main focus for us is really on getting there faster and completing that one and making it the default. Outside of that we’re also working a lot on our mobile apps. Constantly challenging what sound can be in a mobile application. We can all see the massive trends of more and more things going towards mobile which is relevant for any tech company, but I think it’s especially relevant for us. You have your mobile phone with you all the time and it’s not optimized for heavy screen usage, but it’s ideal for a lot of audio usage. So mobile becomes twice as important, not just because of what we do, but because of what is happening in the world as well.
Kernel: The cameras on mobile phones keep getting better and better. Do you feel that the audio quality of the hardware that’s built into the phones is good enough or do you think that is something that also the manufacturers need to work on?
Ljung: On the input side, the fact that everybody has this microphone on their mobile devices is great. Over the last couple of years the manufacturers have managed to make phones really, really good. I’m just blown away with the quality of the microphones and the recording on the iPhone at the moment. It’s really awesome. And as an old, you know, ex-sound engineer… It makes me really happy that the microphone on the iPhone is just fantastic. On the output side of it, on the listening side, the speakers on the phones are not that great, but there’s good headphones available. I’m still annoyed that you always have to have a cable for your headphones. I wish there was some more fluid way of getting the sound from the device into your ears, without using a bunch of cables and stuff like that. It’s a problem that’s not being answered.
Kernel: One of the key areas you want to push is the US market. On the other hand, you’ve mentioned that you’re looking at the world as one, as a single market or a single group of people. Do you have more specific plans for some of the emerging and high growth markets? Kleiner Perkins made an investment Trendyol in Turkey last year. Russia seems to be exploding with internet companies, not to mention China. You can’t do everything at the same time, but do you have plans to more actively push towards those markets?
Ljung: We don’t. At the moment we’re letting it grow organically, observing like where our users will take us. It’s something that we’ll be looking at more eventually, but at the moment we have no specific plans. We’re definitely stronger in Europe and North America. Of course we have users in other regions of the world as well, but we don’t have any local offices or anything like that planned. At the moment we’re letting users lead the way.
Kernel: You’re based in Berlin, you have a London office and a US office… Many times we’ve heard that European start-ups need to move to San Francisco to make it. Obviously you’ve made it without moving, at least full time, to San Francisco. What’s your view of Europe right now as an environment for startups? Maybe as compared to the US and maybe as compared to where Europe was a couple of years ago?
Ljung: There are pros and cons with wherever you decide to have the heart of your company. There’s a lot of convenience in being in Silicon Valley, being close to a lot of large companies that you could partner with, of having a lot of like-minded people around you, and I don’t think that there is anywhere else in the world where you can get close to that. On the other hand, sometimes it leads a little bit towards group thinking, many people doing the same kind of thing, you can get a little bit disconnected from the rest of the world.
Berlin is a great place to do a start-up. There is a penetration of arts and creativity… It’s a lot cheaper than some other places as well. There are so many startups coming here from Europe as well. The benefit you get from not being purely in San Francisco is that it’s easier to avoid falling into group thinking and be able to really do something different. I think it’s also easier for us to think about the world in a global way instead of just focusing on the West Coast of the US. In Berlin I can see so much more art and creativity that’s really interesting. And I think that that part is really important for a start-up as well. As technology and especially consumer technology become more and more embedded within culture and society, it becomes much more important to be close to cultural thinking and skills rather than just the traditional engineering and hardware knowledge.
Kernel: I’ve spoken with two other companies that, in a way remind me of you guys although they are from different areas. One is Mendeley. They are also German guys…
Ljung: Yeah, I know them.
Kernel: The other is Prezi – they are in Budapest.
Ljung: I went to school with [Prezi cofounder and CEO] Peter Arvai. We went to the same university.
Kernel: That’s interesting! Last question – aside from wanting to grow SoundCloud into, basically, the sound of the internet, are there any more concrete or specific plans, is there a vision for SoundCloud moving forward in the next several years that you’d like to outline?
Ljung: I’m not sure this will answer the question because it’s not very specific, but I think what’s really interesting about what we’re doing is that it’s super exciting no matter what timeline you’re looking at. If you’re looking at three months, if you’re looking at year, three years, if you really stretch it out to ten or even twenty years, any sort of time period you want, there’s a lot of exciting things that will be happening around sound.
If you really go far out into the future, you really think about the web as a place you can speak to, you can listen to, and you can interact with… Through your ears and through your mouth. So you can really take it far out and it’s all also very obvious, just from today. That’s one of the things that is important for me. Looking out into the future I can’t see the point where this project is complete. It doesn’t exist. There are always more things we can do for sound and for people who connect with each other through sound.
A final note on (freshly updated) numbers and metrics for SoundCloud: 180 million people come into contact with SoundCloud on a monthly basis, which equates to 8 per cent of the internet population. This includes on the homepage itself but significantly also from the HTML5 widget players that you see embedded on blogs, Facebook, Twitter etc. Registered users on the home platform number over 27 million.