Nico Perez On Where Mixcloud’s Founders Turn When They Have Startup Questions
Nico Perez of Mixcloud
I recently spoke with Nico Perez about how Mixcloud shares CEO duties among three co-founding board members and where they turn when they need help. It’s the second in a series of interviews in which startup CEOs or those in related roles discuss how they learned to do what they do with an emphasis on their information sources.
The series began with an interview with Shehzad Daredia, CEO of Bop.fm which has since been acquired by Lifelock.
Mixcloud is a streaming music company that features radio shows and dj mixes. I first wrote about them at Hypebot when I discovered that EDM artists had embraced Mixcloud in the same way as they and other musicians had embraced SoundCloud, Twitter, Facebook, Instagram and YouTube, as a basic tool in an active artist’s toolkit.
Nico Perez clarified that EDM’s embrace helped them grow but, as evident on the site, they feature a wider range of genres as well as talk radio.
DJs and related creators upload mixes and radio shows. The basic service is free and Mixcloud pays for licensing the music. Shows can then be embedded off-site using their music player.
A Company of DJs
Many on the 12 person team share backgrounds as djs and mix creators which is an important part of Mixcloud’s identity. This involvement also provides a great deal of domain knowledge that’s constantly renewed.
As Nico Perez stated in our phone interview:
“I think that’s actually really fundamental and crucial to the company DNA itself…over two thirds of the company have at least some dj and radio experience…It means we have these insights into some of the problems and issues that our users face that I think are crucial to building a good product.”
“So the very fact that we put together mixes and do weekly or monthly radio shows puts us in a position where we can spot what’s going on, what needs fixing, what are the most urgent things that we need to develop in a very kind of advanced and early way.”
Ruling By Triumvirate
“We actually have never had a formal CEO title. We’ve always split the responsibility between the three directors. There’s myself and Nikhil Shah and Mat Clayton so those are the three directors of the company. And there’s a fourth co-founder [Sam Cooke] who’s not quite director-level because he came in a little bit later but he still has the co-founder title.”
“And the reason we did that is that we felt that everybody sort of brought something to the table that was different and distinct. To use a fancy Latin word, this triumvirate of three directors created a really nice decision framework where everybody got to input their thoughts and opinions and it wasn’t ruled by one and chaired by one.”
“Obviously if you have two people you get a conflict where both are opposing. But with three you have this situation where even if one person opposes but two agree there’s a majority there.”
I had to ask, “Do you every find yourself going, you know, damn it, I wish I was the CEO so I could just make it go where I want to go?”:
“Yeah, of course, I think that’s a natural instinct that many people would have but, at the same time I really recognize the value of what the other directors are bringing to the table. And Nikhil is an incredibly savvy commercial business person and Mat is an incredibly talented developer. And so I think that the mix of our three own personal outlooks on things is greater than the parts really, to use a cliche.”
Perez also described his activities at Mixcloud:
“My role involves content, licensing, outreach, and business development. Bringing new radio presenters and new DJs onto the platform, keeping them excited about what we do. Educating them about how we’re different as a service to some of the others out there. How we pay royalties. How we are built by DJs and radio presenters for DJs and radio presenters.”
In contrast to Daredia’s preplanned “incremental path to entrepreneurship,” Mixcloud emerged organically from the co-founders’ university days. In fact, they initially had no plans to start a company together.
Nico Perez and Nikhil Shah met at the University of Cambridge in 2002 through their respective roles as founders of the breakdance and hip hop societies. Six months later they launched a radio show together:
“It used to be called the Get Down Show. Used to play funk, hip hop and soul. And that would go out every Thursday night. But, as I mentioned we didn’t have a huge audience…”
“We probably broadcast to a maximum 14, 15 people but that experience of going to the student radio station, putting together a show, selecting tracks, kind of curating it, was I think incredibly formative for our friendship but also just for what our passions were and it kind of grew from what I guess was a hobby to something that was a whole lot more than that.”
The pair got to know co-founder Sam Cooke through the breakdance society and met Mat through mutual friends soon after their University days.
Encountering A Problem
But they didn’t start thinking about starting a company until graduating and finding themselves in the workforce. As Perez recounts:
“I was designing wind farms and Nikhil was working for a branding consultancy. It was really during that year of formal employment that we started to brainstorm a few different ideas.”
“I spent most of my working time at my desk trying to hunt down good radio shows and good dj mixes. Because very often my favorite djs would come on at 3 or 4 in the morning on a Tuesday.”
“And with a 9 to 5 job it’s kind of difficult to tune in then. So I would essentially trawl the internet and try to find these shows and mixes. And at that time it was really just YouSendIt.com, Zshare, Megaupload and places like that where people were hosting things.”
“And so I had this conversation with Nikhil where we talked about this problem. And he was talking about a few recent dj mixes that he’d put together and had only been able to use some of these filesharing services. And so we kind of decided somewhat naively that we could fix the problem in three months and that would be it.”
“But obviously it was a bit chunkier than that and it’s come a long way since then. But I think the fundamental, core raison detre of Mixcloud was to connect radio presenters and djs with listeners. And that remains the same to this day.”
The search for a technical co-founder can be difficult but that role was filled in Mixcloud’s organic manner through an initial skills exchange:
“When we first started talking to Mat Clayton he was actually working on a separate website, a ticketing service.”
“In the early days one of the challenges for many startups is trying to find a technical co-founder. And what was unique about our relationship was that we basically released an agreement that in return for myself helping Mat out with a lot of the design, UI and front end side of things, Mat helped us out with backend coding and more technical systems we needed to set up and get in place.”
“And so we had this great skills swap where Mat was able to help us. We were able to help Mat. And that proved to be an incredibly effective way of getting to know each other. Getting to know our working habits. Getting to know that we were all serious about what we were building.”
“And after about 6 or 9 months or so Mixcloud had a little bit more momentum. We had more uptake amongst users. A few more people were interested in us. We had a little bit of press at that point. And so the pendulum swung a little bit towards Mixcloud and eventually we asked Mat if he’d like to join us fulltime and become the CTO and he happily agreed.”
The Self-Educated Startup
Perez developed front-end design skills as he needed them. This ad hoc approach to self-education fit well the realities of startup life:
“Yes, I was pretty much 100 percent self-taught. I had started building a few very basic websites at University for myself, for the radio show, for a few friends, for a photographer, things like that. Pretty much just picked up a few books to read them, a lot of trial and error, figured out how things worked.”
“And then kind of took it from there and… being really honest a lot of it was learning as we were doing it and learning as we were growing. So we definitely made mistakes in our early days. And kind of got code wrong. And shipped things that broke.”
“But that’s the thing about doing a startup. It’s a very clear approach to things…If you’ve been in an agency role or things like that, people often work on a project, ship the project out and then it’s done.
“Whereas in startup life it’s very different. You’re always shipping a new version every few weeks or months or whatever it may be.”
Learning By Bootstrapping
Being a predominantly bootstrapped company, with revenue coming primarily from advertising, required much learning as well:
“We’re kind of a very rare and unique story, especially in the music streaming world, of a company that’s been entirely self-funded. I don’t want to exaggerate though cause we did at the very beginning receive a grant from the UK government that was for about $150,000 in total and that was to work on a few different research projects with a university in London that was specialized in audio engineering. So we had, I guess in effect, that was sort of our seed money.”
“We did put in a small bit of our savings but…it wasn’t huge.”
“We had to figure out very early on how to make money and how to survive and stay afloat as an independent self-funded startup. And that learning curve was incredibly steep and an incredibly difficult process. But in the long run it’s made us more robust and reliable in some senses.”
“The rest has kind of grown and the good news is that the revenue has been growing inline with the traffic and obviously our costs have been growing too. But we’ve kind of managed it and managed to keep probably one of the leanest teams around so even today we’re just 12 people.”
In the realm of music streaming self-funding is so rare that even Perez can only think of one other company that’s successfully bootstrapped:
“The only other people that we know are Anthony Volodkin and the guys from Hype Machine.”
“They are an independent company and they’ve never raised funds and they’ve managed to survive and grow despite that so I think they’re kind of the other guys we look up to and are our peers in this relatively unique category.”
Peers, Friends & Family
I asked Perez, “So at some point in this process did you go, hey, we need some advice about how to create a business? Did you find yourself running into questions and having to reach out? How did you find other people to help you?”:
“At the beginning a lot of it was very kind of organic, we reached out to peers who were doing similar things. So Ian Hogarth from Songkick had started about a year before us and helped us out a lot, gave us a lot of really good advice.”
“And then reaching out to friends and family who were either business people or entrepreneurs.”
Perez also mentioned such startup peers as Hype Machine’s Anthony Volodkin, former Topspin CEO Ian Rogers and co-founder Shamal Ranasinghe who’s now at Pandora and Steve Jang who started Soundtracking.
Mixcloud has access to a rich range of peers with relevant domain knowledge. They’ve also taken a next step in formalizing some of those relationships.
“In the last couple of years we formalized a few of the relationships that we had with some of these friends and advisors and we just announced…last year, the advisory board is now made up of Richard Cohen, who’s from a company called LoveLive, does a lot of work around video live music streaming. Fred McIntyre who was previously at Last.fm and before that at AOL Radio and also an advisor to 8tracks and a few other startups. And then Alex Schultz, who’s head of growth at Facebook and a good friend of Mat’s.”
“With all three of the cases we’d kind of known them, each of them individually for a while and we’d pinged them for advice and asked them questions about things. They’d been incredibly helpful and we thought it was worth formalizing the relationship because they’d proven how helpful and valuable they were to us and so we thought to take it to the next level we should formalize it and offer them share options in the company.”
Which Advice To Take?
Given that startups get all sorts of advice I wondered how the folks at Mixcloud sorted out which was worth taking:
“That’s a very good question and I think that a lot of times, especially when you’re early on in the startup stages and kind of figuring things out, everybody has an opinion. And it’s sometimes very difficult to figure out who’s actually right and who’s making sense. And in a lot of cases actually there isn’t a single right answer.”
“But I think that what we looked for in the advisors was people with very practical experience in the areas that we were focused on. So if you look at Richard with LoveLive, he’s built a business that works with music rights. It’s built around the major labels that they’ve done deals with. He very much understands that ecosystem and he understands brands and how to work with brands and things like that. So it’s very directly applicable to what we’re doing.”
“Similar with Fred. He had experience at Last.fm which was arguably the kind of first real superstar streaming startup.”
“And then Alex from Facebook, he had an incredible experience growing a community and growing a website to hundreds of millions of users.”
“In all those cases there’s very direct, applicable formal knowledge that they can bring to the table.”
“And I do definitely also recognize that in the early days we would hear a lot of different advice from a lot of different people and not always know who to trust or whose advice was most pertinent to us. And I think there’s not a huge amount that one can do there besides just kind of living it, going through it, kind of learning by experience. And hopefully in time kind of figuring out actually who the people who you can really trust and look to for advice, who they are.”
Going Online For Answers
I was surprised to find out that, despite their rich direct contacts, online networks are an important starting point when questions arise:
“I think a lot of times we’ll try and find an answer first on something like Quora. Which is an incredible resource for entrepreneurs. It’s heavily populated by people who’ve either started companies or been very involved with companies from early stages so a lot of the questions and answers are there…I’ve definitely uncovered a lot of great answers to questions that I couldn’t find anywhere else.”
“And if not there we ask our friends and immediate connections. In addition, Nikhil, for example, is part of a group of fellow startup founders in London that’s called ICE list. It’s an email group that people often will throw out questions on, get answers, things like that.”
Given that Nico Perez studied such topics as turbine design at the University of Cambridge, I asked if he saw relevance in that education to his work today:
“It’s a good question. My first instinct is to…say no, it didn’t, because the skills I built up in terms of web design I did outside of work. I was seeing it as a hobby and a passion. The radio show and the dj mixing was always a passion project as well. But I think that would be probably not the full answer.”
“The education that we got and the simple fact of going to university, which is where I met the other co-founders, in and of itself was an incredible experience. I think it was very formative. I may have not been able to take direct technical knowledge and apply it to what we’re doing now. But definitely the way that we worked in group projects together. We got to know people socially, outside of the classroom, things like that.”
“Those sort of experiences I think all come together and help, essentially to educate you and to be a more well-rounded person who can go on to do things in different types of jobs later on in life.”
At this stage it‘s tempting to compare the approach of Shehzad Daredia and the approach taken by Nico Perez and company in preparing themselves to lead startups and in seeing things through from early visions to functioning business. However there is one more voice to be heard in this series, that of Jukely founder Bora Celik. His interview will be followed by a post comparing the similarities and differences in their paths towards becoming a successful startup CEO with a focus on where they turn when they need questions answered.
Learning To Be A Startup CEO:
Bop.fm CEO Shehzad Daredia’s “Incremental Path To Entrepreneurship”
Tips From Startup CEOs:
College Or Startup? A Thiel Fellowship Mentor Shares His Advice
Clyde Smith is a freelance writer and web publisher with a doctorate in Cultural Studies from The Ohio State University. He began building websites and creating content in 2000 eventually launching ProHipHop, the first hip hop trade blog, in 2005. From 2011 to 2014 Clyde wrote about music tech and the DIY music biz at Hypebot. He is currently planning a relaunch of DanceLand.