Tim Westergren: How The Band Kept Playing At Pandora | Starting Greatness with Mike Maples, Jr.

Key Takeaways

  • Tim Westergren was a rock musician before he became a startup founder
  • The goal of the “Music Genome Project” was to capture the essence of songs by using various attributes, or “genes” and comparing them to other songs (via “matching algorithm”) for a better recommendation experience
    • The genome became a core technology used for Pandora
  • The doors slam shut behind them on March 2001 (the peak of the dot-com bubble) 
    • They began to stretch their money out; asking for employers to defer their salary
    • Tim maxed out 11 credit cards, racked up hundreds of thousands of dollars in debt
    • He pitched Pandora 348 times before getting their second round of financing
  • Two things got them over the hump: the product was magical and they wouldn’t die
  • The key moments in the first 5 years of Pandora were moments when Tim influenced someone important to make a decision that helped them (key employe, consumer, journalist, etc.)
    • This is where the skills of an artist seem more suitable than that of a businessman
    • “I believe an ideal combination is an artist who is a salesman.”Tim Westergren
  • The best piece of advice came from his wife; she told Tim to stop being self-conscious about being an entrepreneur and embrace it
    • It’s okay if it fails because life’s biggest regret is saying “I wish I had tried.”
    • And if you are the kind of person that finds it hard to deal with uncertainty, then maybe this is not your “gig”, and it’s great to recognize that

Intro

  • Starting Greatness podcast shares startup lessons from the super performers
    • “The podcast is dedicated to ambitious founders who want to go from nothing to awesome, super fast.” Mike Maples, Jr.
  • Tim Westergren (@timwestergren) is a musician, award-winning composer, and the co-founder of Pandora Radio
    • Tim joins Mike Maples, Jr. of FLOODGATE to talk about the inspirational tale behind the invention of Pandora Media, how to “keep your cool” amid “WFIO” moments, and why rock musicians make the best startup founders
  • Host: Mike Maples, Jr. (@m2jr)

Dynamic Evolution of Pandora

  • Tim was a rock musician before he became a startup founder
    • This led him to create the “Music Genome Project“, a mathematical algorithm to organize music
    • The genome became a core technology used for Pandora
    • They raised their first round of financing in the early march of 2000, a couple of weeks before the peak of the dot-com bubble 
  • The goal of the “Music Genome Project” was to capture the essence of songs by using various attributes, or “genes” and comparing them to other songs (via “matching algorithm”) for a better recommendation experience
    • They hired musicians to analyze around 10,000 songs and hundreds of musical attributes
    • They joined all the data in Microsoft Excel; a table of 10,000 rows by 200 columns
    • Will Glaser (co-founder) wrote a macro for ranking every song by proximity
  • The first song they tried it on was a Beatles song and the first ranked by comparison was a Bee Gees song 
    • They thought the program doesn’t work because the Beatles and Bee Gees generally don’t share many similarities
    • However, that particular Bee Gees song sounded a lot like Beatles 
    • Bee gees were originally a Beatles knock off band
    • The algorithm worked and joined two artists that no system would ever put side by side
    • Unlike every other recommendation technology at the time (primary data collaborative filtering based approaches), the genome was just about the sound of the music
  • The fundamental reason for this technology
    • The one way to make recommendations as blind to popularity
    • And the only way to be a democratic system
  • It was a promising promising beginning, but then…

The Carnage of the Tech Bubble (And Pandora’s Perseverance)

  • The doors slam shut behind them on March
    • In 2001, they began to stretch their money out; asking for employers to defer their salary
    • At the end of 2001, they stopped paying people altogether, about 50 people worked 2 years without getting paid to get them across the bridge
  • Why did the employees stay for 2 years without a paycheck?
    • Everyone was excited about the thing they built; it was like a fountain of discovery
    • The 3 founders were the first to defer, they led by example and the staff was inspired
  • Tim maxed out 11 credit cards, racked up hundreds of thousands of dollars in debt
    • He pitched Pandora 348 times before getting their second round of financing
    • “I pitched anybody with a pulse in Silicon Valley.”Tim Westergren
  • Eventually, he got better at pitching and understanding how to position the company
    • Two things got them over the hump:
      • The product was magical; investors got password-protected access to the product
      • They wouldn’t die – the company was tough; it was inspiring for someone to take a risk and invest
    • They raised 9 million dollars for the 2nd round (2 million went out the next day to pay the salaries)

How Did Being a Musician Help Being a Startup Founder

  • It’s about insight and invention
    • A startup is an art; pushing yourself to think outside the box
    • “It is a weird, chaotic, unnormal place, and rewards people who are comfortable with that.” Tim Westergren
  • The early days of pandora were all about keeping people together in the service of an idea that mattered
    • This is where the skills of an artist seem more suitable than that of a businessman
    • Mike Maples, Jr. tells agrees that you can’t learn that at a business school
    • “I believe an ideal combination is an artist who is a salesman.”Tim Westergren
  • The key moments in the first 5 years of Pandora were moments when Tim influenced someone important to make a decision that helped them (key employe, consumer, journalist, etc.)
    • To influence people you have to be creative
    • You create a crumb trail that gets you to key decision-makers
  • Tim is a decent basketball player
    • One time he had to influence someone from a legal profession
    • That person played basketball; 3-on-3 pick up game down in Los Angeles
    • He figured out how to get invited and play on his team
    • “All of a sudden, I got his number and we are talking, and it’s just one piece of a puzzle.” – Tim Westergren
  • Essentially, a startup is hundreds of those things
    • He learned this while in a band, trying to influence club owners to get a gig, open for another act

“We’re F*cked, It’s Over” (WFIO) Moments

  • WFIO – startup acronym standing for “We’re f*cked it’s over”
    • The horrible moment when your startup is dead and when all seems lost
  • Pandora experienced a big WFIO moment in 2007
    • The Copyright Royalty Board issued a ruling that essentially tripled the royalty rates they were paying for the music
    • At the time, as a radio company, they operated under a statutory license that let them play all the music without directly licensing the content ( a way of empowering radio)
    • The new royalty rate was so high that it almost put them out of business
  • Pandora’s WFIO solution: They emailed their listeners and asked for help; to contact their member of Congress
    • The response was overwhelming; 2 million people called, wrote, or visited their member of congress to protest
    • “We actually broke the fax infrastructure on Capital Hill because so many faxes were sent it.”Tim Westergren
    • The Congress finally intervened and reached out to the founders to arrange a meeting
    • They negotiated the rates for almost a year and got them to a more normal place that allowed them to survive
  • For more information on how to prepare, cope, and ask for help when your company is face-to-face with the inevitable WFIO moments check out these Podcast Notes

Tim’s Advice for How to Get Out of an Entrepreneurial Rut

  • “How do I know when to quit?” – The most common question among startup founders
    • They are all looking for validation because they think they are wasting time
  • “The most important mindset to have as an entrepreneur is ‘Ok, I’ve chosen this, and this is my life, and I’m not doing it because I’m guaranteed a reward at the end.”Tim Westergren
    • Embrace the “I’m doing it because that’s what I do.”
    • The best piece of advice came from his wife; she told Tim to stop being self-conscious about being an entrepreneur and embrace it
  • It’s okay if it fails because life’s biggest regret is saying “I wish I had tried.”
    • And if you are the kind of person that finds it hard to deal with uncertainty, then maybe this is not your “gig”, and it’s great to recognize that
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