Company
SoundCloud
SoundCloud, as described on the show by Hazel Savage.
Episodes (2)
Xavier Péters, Thierry Baujard, Hazel Savage, and Florian Stadler discuss team, timing, and proprietary AI when deciding which music tech startups to back.
Hazel Savage, VP of Music Intelligence at SoundCloud and former Musiio CEO, explains how she built an AI music-tagging startup and sold it to SoundCloud.
Questions these episodes answer
What do music tech investors look for in a founder?
Xavier Péters says LeanSquare prioritizes team first, preferring a strong team with a basic project over a great project with a weak team. They also look for product, commercial traction, and achieved milestones.
From: WISE Festival: Investing in the Future: Navigating AI Trends in Music Tech
How important is timing when investing in AI music startups?
Thierry Baujard says timing is always very important, and with AI, too early may be too early and too late is also not very good. Technology also needs room to keep developing.
From: WISE Festival: Investing in the Future: Navigating AI Trends in Music Tech
Do VCs understand AI well enough to invest?
Florian Stadler estimates 90 to 95 percent of VC partners do not understand foundational AI models, which makes investment decisions tough. Generalists fall back on pattern recognition that is still missing in AI.
From: WISE Festival: Investing in the Future: Navigating AI Trends in Music Tech
Should founders pitch themselves as an AI company?
The panelists say no. One warns against claiming AI when there is no MVP; another says calling yourself an AI company will soon sound like a company pitching itself as an internet company 20 years ago.
From: WISE Festival: Investing in the Future: Navigating AI Trends in Music Tech
How much AI due diligence do investors actually use?
Thierry Baujard uses ChatGPT and similar tools to research markets, and Xavier Péters uses AI for data and market understanding. Hazel Savage still relies on her own AI expertise and her co-founder's validation for angel decisions.
From: WISE Festival: Investing in the Future: Navigating AI Trends in Music Tech
How did the idea for Musiio's AI come about?
Savage and her co-founder Aaron listed the worst problems in the music industry during their first week at the incubator Entrepreneur First and picked the one with a technical fix: too much new music is released every day for any human or streaming service to listen to and judge. They set out to build an AI that could act as a first pass filter on that flood of music.
Why are investors hesitant to fund music tech startups?
Savage says it is very hard for a non-specialist investor to properly evaluate a music tech opportunity, since the industry has quirks that only someone who already knows it can judge. She also says recorded music brings in only around 20 billion a year, a small market next to industries like healthcare or HR software, which makes specialist music tech investors rare.
How big is the recorded music industry compared to other industries?
Savage points out that the total yearly value of recorded music is only around 20 billion, which sounds like a lot until it is compared with far bigger sectors such as US healthcare or a single HR software company she says is worth around 70 billion dollars on its own. That size gap is a big reason generalist investors stay away from music tech.
How did SoundCloud's acquisition of Musiio actually happen?
SoundCloud had been a paying client of Musiio, using its AI tagging across roughly 345 million tracks, for about a year and a half before the deal. Savage says the pattern repeats with every acquiring client: someone whose title turns out to be in corporate development suddenly asks to join a call, and then asks if the company is for sale.
How did selling Musiio change Hazel Savage's life?
Savage says the exit was financially life-changing given her background: her first job was at a record store on minimum wage, where her take-home pay after tax was only about 900 a month. Day to day, though, she says her actual job changed less than expected after the acquisition, apart from no longer having to run payroll herself.