How we blew our shot at beating Spotify, spending two metric truckloads of cash doing it

Talk from JavaZone 2010 about my experiences from the Norwegian start up company Ezmo and how we failed to become the number one online music service. This is an experience report of a failed start-up.

Transcript

1. How we blew our shot at beating How we blew our shot at beating Spotify, spending two metric Spotify, spending two metric truckloads of cash doing it truckloads of cash doing it by Espen Dalløkken by Espen Dalløkken JavaZone 2010, 8. september, Oslo, Norway JavaZone 2010, 8. september, Oslo, Norway
2. Who was I? Who was I? • Espen Dalløkken, Folldal • Chief Technical Officer of Ezmo • Part of the Ezmo leader group • Became the owner of the Ezmo Wii These are all my own subjective opinions and might differ from others... WTF??
3. The The Time line Time line • 2006 - FAST had developed mDisk and worked on mMusic • January 2007 - mMusic became a separate company: Ezmo • May 2007 – official launch of Ezmo • Autumn 2007 – lawsuit in Denmark(!) • March 14t 2008 – Ezmo shut down
4. Your friends, your music: Anywhere Your friends, your music: Anywhere Ezmo PC / Mac / Linux Mobile Wii, ++
5. Your friends, your music Your friends, your music Ezmo You 10 friends
6. The Stack The Stack Ezmo Web Application Trans coders Databases SAN Player FAST Service Delivery Platform (SDP) Uploader
7. How we'd make money How we'd make money • Recommendations from friends is the #1 reason for music purchase • Recommendations from friends in the player • Automatic recommendations • One-click buy option in the player • Advertising • Contextual advertising of music • Storage costs limited when detecting duplicates with finger print matching technology
8. The original Plan for user growth The original Plan for user growth Time Users
9. Actual user growth Actual user growth Time Users
10. User origins User origins Total users: 32555
11. Active users Active users Total active users: 2265
12. Friend pr user Friend pr user Total users: 32555
13. Numbers do not lie (well, not these ones..) Numbers do not lie (well, not these ones..) • We did not convert traffic into users • There was no viral effect, people did not invite their friends • Those who created accounts, were not active
14. So what the f**k happened? So what the f**k happened? • None of us played enough golf • We weren't a real star-up • Failed to understand what it takes to innovate • Lack of a clear market leader and competitors • Our timing, in hindsight, was not the best • We lost focus
15. The only sane thing about golf is... The only sane thing about golf is... • Penalty strokes are added to your score when they happen • Our over all Plan was not adjusted the first time we knew it was flawed • We kind of ignored The Plan, while our investors kind of did not • Recruited people according to The Plan • We should have faced the music upon our first failure
16. Internal Internal start-ups start-ups • You might end up living in a make believe world • You're not feeling the pain you should • Your legacy will hold you back, they don't care as much as you do • You should break all ties (but don't burn all bridges)
17. Innovation Innovation
18. Monthy Pythons Flying Circus: Monthy Pythons Flying Circus: The Four Yorkshiremen The Four Yorkshiremen http://www.youtube.com/watch?v=13JK5kChbRw&feature=fvw
19. http://www.scottberkun.com/blog/2007/the-book-the-myths-of-innovation/
20. http://www.americanheritage.com/articles/magazine/ah/1996/6/1996_6_90.shtml The original quote The original quote "If a man has good corn, or wood, or boards, or pigs to sell, you will find a broad, hard beaten road to his house" Ralph Waldo Emmerson 19th century intellectual
21. http://www.imdb.com/title/tt0097351/ The American dream The American dream "If you build a better mouse trap, the world will beat a path to your door" The movie “Field of Dreams”
22. http://www.scottberkun.com/blog/2007/the-book-the-myths-of-innovation/ The entrepreneur's motto The entrepreneur's motto "Build it, they will come"
23. No path to Easy Street when innovating No path to Easy Street when innovating • All the stories you hear about usually mention the good things • Innovation happens through hard work, dedication and sacrifice • Just having an amazing ideas has never been enough
24. http://www.coburnventures.com/About_CHANGE/The_Change_Function.html
25. The Change Function = f( The Perceived Pain of Adaption, User Crisis )
26. Our competition Our competition
27. No real market leader No real market leader • We where battling iTunes+iPod • Became a problem as investors did not see how our company placed it self in the marketplace • Most of our competitors are now either: • in permanent hibernation • or got swallowed by some weird company • everyone except Spotify, who rule!
28. Technology Technology
29. Chose technology best suited for the problem Chose technology best suited for the problem you're trying to solve and disregard your own you're trying to solve and disregard your own competency competency
30. The technology was not quite there... The technology was not quite there... • State of mobile technology was pretty bad when it came to multimedia • Social media platforms weren't open for extension • Cloud technology was still wearing diapers • Adobe AIR was still in beta
31. Show me your 'assets' there young man Show me your 'assets' there young man • Owning your core technology is very important • “They” don't care as much as you do • Investors look for this when evaluating your company
32. We didn't own our core technology We didn't own our core technology • Third party platform helped speed up development early on • Ended up hurting/killing us in the long run • We “only” had the brand, the people, the users, the knowledge and the player
33. Methodology Methodology
34. • Methodology is just a way... Methodology is just a way... • ..of motivating people who aren't • ..of making people who don't care, care • ..of spending time on something which doesn't matter when you're a start-up
35. Democracy is overrated Democracy is overrated • “Design should not be a democratic process” Paul Boag http://twitter.com/boagworld • You need a champion / super star / (or some crazy guy with a turtleneck sweater who loves apples ) • Without clarity in decision making you end up wasting time
36. Do you really need a methodology? Do you really need a methodology? • “Getting Real” by 37 Signals is all you need http://gettingreal.37signals.com/ • Provides more insight for start up companies than regular agile books • F**k Scrum: our method was Cake and your iterations had themes based on the team reward
37. Ezmo Ezmo Bug tracker Bug tracker™ ™
38. Backlog or a long list of things to do Backlog or a long list of things to do • Can be a distraction from your actual goal • Can prevent you from changing decisions • Instead: focus upon the vision, not the details of some list
39. In summary In summary • Internal start up? Leave the nest! • Own your core technology • When you mess things up, tidy up at once • Innovation= blood, sweat and no tears • Methodology? Totally overrated, daaah
40. I can't wait do something like this again.. I can't wait do something like this again.. • I realized that you can actually have a great job AND live in Norway • There is no better feeling than working with what you think is the coolest thing ever • Having failed once I know a few things that I won't do again, which puts me one step ahead of you other guys & gals
41. That's it! Thank you very much for coming That's it! Thank you very much for coming and I hope you all succeed where we failed! and I hope you all succeed where we failed! Abuse, praise, money or whatever you like: espen@dallokken.com http://dallokken.com/espen http://twitter.com/leftieFriele Images provided by flashbacks.com