Data, AI, and Outsider's Perspective with Nexro

I think there are too many middle people uh in the industry middlemen I guess they're called um there's a lot of um there's it's very chaotic uh especially when it comes to royalty payments uh it's extremely hard to understand who owes what and who owns what and how everything is. I love when founders in the music industry does not come from the music industry. Lana and nextro is one of those. They look at the industry and see what is wrong, what can we do with our background, how can we contribute, and maybe how can we use new technology as

AI to solve the problem. Hey Lana and welcome to sound connections. Hey Jacob thank you so much for having me this is great. Absolutely so this is your F first podcast so that's interesting um I've been excited about this episode because you have an interesting profile as a founder music industry uh we get a bit into that but first can you tell me a bit about yourself who are you and where are you. Who am I uh well I am from Ukraine uh I born and raised there uh and then like fiveish years ago I moved to Norway uh did a master at nhh uh and then I was

kind of always interested and loved music my dad is an audio fill so I was kind of grew up with music uh but didn't really go into it until my last year of Masters uh and then yeah and then kind of started exploring different things uh in the industry and yeah then start next row obviously worked a bit in like startup world and here and there but then kind of nextro was it for me. Yeah we'll go a bit into that Journey because it's quite interesting uh but nextro is an interesting company that I've seen here and there a few things we've met a few conferences and I've sort of followed your journey last year and it seems to be happening a lot of

traction there um but before we get into your story which is sort of one of the core things we talking about today could you explain to me what is nextro. Sure um nextro is a startup but what we're doing is we are predicting artist careers with data and AI um right now A lot of people are using AI just kind of as a buzz word but uh we see that it's kind of nest necessary to use it to analyze data and to understand data like to the to its core basically uh and explain different data points by like using other data points if that

makes sense so yeah we're basically uh we're Gathering a lot of data and then we are predicting artist careers using that. Okay that's really interesting I Was Myself 5 years ago involved in a project where we sort of tried to do this with machine learning but you know there's a big research Grant and it's a complicated thing so I really appla you guys um that's cool and you guys have existed for what one and a half two years. Yeah two is years uh but we started with something completely different so I would say that we started like actually working on nextra about a year ago. Okay that's interesting and that's you know quite interesting speed you guys have been working at but before we get into deeper into nextro

I'm really curious about you because you're a founder and you said your dad you was an audio file uh and but you didn't really have any background music you know as an artist as a musician or as education could you just walk me through what did you study and why did you choose to do a startup in music. Oh very random actually uh so I studied uh International economics and management as a bachelor in Ukraine uh and then like I moved to Norway to study uh like economics and finance and all of that um it was technically Business Development and finance um so I did that

at NH in Bergen and then uh in the last year you have to write a master thesis or last semester uh and so we had a choice either do like a Consulting type thesis or this is with the music industry with a company called music DNA you maybe know them from ber yeah uh so with Doug Finn B the um the previous CEO he unfortunately passed away but he uh kind of walked us through the music industry and yeah obviously we decided to write with him and so yeah we interviewed a lot of different people like writing that thesis it was

artists uh sync people like record labels CMOS uh lawyers IP and yeah copyright lawyers Etc so we talked to so many different people and I kind of kind of fell in love with the industry I guess yeah and then we thought that because we figured that there are so many different problems that industry has especially on the side of the artists and like on the side of the of the main sort of value creators because they're the ones who are writing music right yeah so we figured technology could solve a lot of those or some of those at least and so

that's kind of what we started with um and yeah that's yeah we're kind of trying to continue in that uh um path. Yeah but you sort of uh as far as I understand you didn't transition directly into the startup because you involved as a sort of Innovator type person can you can you walk me through that um after my studies yeah um so after that I wanted to work in like the startup ecosystem so I went ahead and worked in company called be uh and that what we did there was um it's like incubator SL accelerator for many

different Tech startups and what I did was uh like developing a program for educational Pro program for startups to go through um it was either for very small very early stage startups which was like 8we program or uh 2E program for more mature older um more developed startups so I was doing that uh for a while or like a year is uh and then after that I transitioned into a different uh role which was more Finance um economics based uh and that was with a

company called Finance Innovation uh and there I worked uh with startups but also uh with like events and organizing different uh things in Oso and in Bergen and the main thing that I worked with was at the Norway ftic Festival which was like it was crazy fun it was amazing but also a lot of work so then now when I'm talking to people in Live or events it's like yeah I see I see your pain I know how do you feel that makes sense. Wow so what was it about startups that you fell in love

with honestly I'm not sure because I mean I never really wanted to work for somebody like I always kind of knew that I want to do my own thing uh because like my whole family is doing that and I was like yeah I get it I don't want to do it like the typical working on for somebody type of job and then um a lot of my friends or a lot of people from nhh they think that you have to go through this kind of Consulting path first and then you can do whatever you want and I get that I understand

that you definitely need to get a lot of uh experience before doing something but I didn't want to go kind of into Consulting because I was very afraid of feeling like a very small spec in a very big machine or whatever yeah so yeah I kind of wanted to just go in immediately and that's yeah that's what I did. Yeah and then you also said you fell in love with the music industry and I can resonate with that but what is in particular you fell in love with in music. Yeah I think I think it's just that people are not afraid to be themselves it's very cuz I used to be in

um I have another education uh which I almost never mentioned which is like a fashion apparel design yeah uh which I did in parallel with my bachelor and I was like a lot in the fashion gang uh in Ukraine and there people are very much like oh you have to be cool in order to fit in but I feel like in music industry you're cool because you're yourself uh so that's what I really liked uh in the industry and then also like you there's so many different things that you can do like you don't have to be a talented artist to work in music uh you

can you know uh be a label manager or an agent or like I don't know booking uh agent or whatever it could be so many different things um which is really cool yeah because I don't have any talent for singing or anything but have you uh I'm curious uh so you've sort of been exploring the music industry for two years if you were to mention some let's call it symptoms of sickness like things do you think is not very great about the music industry as an outsider what would you mention. I think that are too many middle people uh in the industry middlemen I guess they're called um there's a lot of

um there's it's very chaotic uh especially when it comes to royalty payments uh it's extremely hard to understand who owes what and who owns what and how everything is uh because we started nextro as like this royalty um exchange and it was it was first of all very hard but then also like one of the problems is that even now in like it's 2023 uh you know we're working on AI we're working on going to you know space and whatever but we still can't understand how to use Excel or

some other tools uh to figure out how much percentages a percentage wise any artist or any producer or whoever was working on the song O owns and that's kind of insane to me um so that's yeah that's one of the issues and then yeah as I said middlemen um there's too many people um trying to take a piece of whatever is left. So do you do you feel like it's sort of a mission to project protect the artist that you guys are on or like what's sort of the emotional motivation behind nextro Journey that we'll explain a bit deeper here in a few

minutes. Yeah I think yeah it's definitely the artists and everyone else that's trying to help the artists um so it's kind of artists and their team so it's the manager is the agent and everyone who's kind of on the side of the artist we want to help them help each other I guess um and yeah so that's our main motivation is to see um well for me is kind of to see the industry change for the artists because we've seen so many changes for the listener like you know there was uh vinyl CD

MP3 um you know iTunes whatever um illegal downloads Spotify but then not much has changed for on the artist side uh in the industry so I think it would be great to see some of those changes. Yeah I believe that the music industry at large is you know sort of the finances economy is going towards Independent Artists uh that's sort of standing up for themselves and owning their own rights uh because you know it's definitely a slow moving industry when it comes to Deals uh especially big major uh side of what has happened that's interesting um but

you guys just walk me through because you started with this royalty exchange approach to nextro I guess it was still called NEX at that point yeah uh and then you made the transition what happened there. It was called music bird initially uh which is the worst name I could think about for whatever we were doing but we thought it was great uh anyway yeah so we um yeah so royalties and exchange was um like it was the project of our thesis

okay and we kind of it made sense for us at the time because uh blockchain was on the rise it was obviously supposed to be on the blockchain and yeah with um uh the ethereum tokens uh but uh after analyzing the market there were so many uh different startups that were kind of similar to what we were doing like Royale and um Sono and so many others um in different um locations different countries whatever and even though like Royal I think raised 65 or something like that million dollars uh

and they did have a lot of activity on their um platform or their Marketplace but that like they are still not they still didn't reach kind of the mass Market that uh they were aiming for uh and there they had a lot of traction the founder is from the music industry and so we figured that okay maybe that's not it's not that interesting and then also um whenever we were talking to people in the industry in Norway or abroad people were like okay this is this is fine but

um what else do you have and then we had this kind of small um small thing in our uh royalty exchange which was to predict uh what would be the future value of your songs to understand how much money um what would be like the ROI of the of whatever people would put into the songs um in terms of investment and so uh people were very interested in that and we were like okay we're going to base this on a lot of different data from social media from um a streaming platforms radio Etc and then uh we would kind of somehow predict the career of

the artist and then somehow predict um the future about value of either songs or albums or the whole artist and then people were super interested in that and then after a while all of our meetings were kind of 95% were talking about that small thing uh that we didn't really think about that much so then we after some time we're like okay what are we actually doing uh maybe we need to kind of pivot and they change everything and focus on that uh that people are like worried about or want to see uh than the rest of our huge uh platform or

Marketplace that we were doing before. That's really interesting so you sort of decided after a lot of meetings that we'll close down the rle to exchange bit and focus on this thing that people are reacting to is that sort of how it turned and before we get into that who are we so who are you working with in that. Yeah so it's uh first it was me and Eric my co-founder uh and then after that uh we found our CCO um which uh yeah he changed jobs after some time but then now we have Oliver uh who's our CTO uh and well we are like seven people now or six um so

yeah we're getting a bit bigger and bigger so yeah we is not just me no we're just cool yeah that's great with me whe it happens yeah but you guys figured out okay Ro exchange is probably not the way to go this is the interesting thing how did that how was that pivot was it painful like how did that conversation go down. No it was uh we were in our office um and we're like okay maybe this is not what we want to do uh maybe we need to do this instead and we kind of kind of agreed with each other honestly uh it was obvious uh that it was obvious that the royalties changed were even though interesting

but hard to um hard to do it right and hard to make it so that people or fans or others would be actually interested in buying those royalties of artists um so it's hard to kind of push it into the market uh and then yeah we kind of saw what people wanted and it was a like it was a small part of our uh like platform already so it wasn't like a complete uh 180 it was yeah it was just like more focusing on something yeah that makes sense

and then we and then we kind of blew it up of course you focus and then oh yeah that's cool and you a you a CEO and co-founder of this not coming from music industry how's your experience been understanding the industry and also explaining to them what you guys are trying to do. Whenever you do something that people want and need it's not very hard to explain I would say uh of course at the beginning it was very hard to kind of get um get to talk to them or get uh kind of somewhere with a meeting uh if

you're not from the IND if you don't know anyone but then once we started kind of getting to know people going to different um yeah conferences like we met uh or like events or stuff we kind of got to know a lot of people and then it was very easy to kind of hey we bet blah let's get a chat or something so it was hard at first uh but I guess it's the same in any industry it's not just I don't think it's just music that is. Could you explain to me specifically what sort of artist would be the ones using your platform what sort of type of artist would be ready and interested in

deep diving into your product. There are two types of artists that we kind of see is the ones that are really they feel music they want to focus on music they only kind of they want to write 247 um and just be focused on their music uh and then there's others who do that but then they also um are interested in kind of the business side of things they want to uh understand how things work in the industry they want to understand the industry way better than they do and so those are the ones who we are primarily focused on yeah so they

are kind of um yeah they understand how data Works they understand that it's important uh and things like that but then for the other artists like we're primarily focused on uh sorry independent labels so when it comes to the other artists um they would most likely have a team or at least one person who helps them grow and move their career along and that would be their manager or um a label so that's who we're working with on those artists side. Yeah and the predictive element

of your product does that suggest like any moves they need to make or what sort of they get some data they get some insights you do some analytics for them what sort of the call to actions did you guys present. Yeah so right now we are working on a recommendation uh module uh where it would kind of say Okay Based on data you need to focus on uh Instagram and maybe put like this and this uh um uh let's say consider doing this post on Instagram or if Instagram if we see that Instagram is not important to you then consider uh this um agenda for your tour

or this these cities for your tour and so things like that is going to be quite um high level at first uh but then of course like as we get into as get into it's going to get deeper and deeper but uh unfortunately we can't uh we can't do everything at the same time no that's just a part of point of a startup um and I think that's really interesting Mission you know getting there uh you know you're someplace now we've developed u a part of the product and you're still developing that of course requires money uh and requires funding so what's sort of your approach been to

attracting investors in nextro. Yeah uh we are actually fundraising now uh and it has been a process for sure like the market now is uh probably one of the hardest ones in the last years uh maybe 10 years or so or so um so it's been a process but before uh we uh well being situated in Norway is kind of kind of one of the best places for very early stage startups because here there are so many opportunities uh for Grants or research grants or as you said you got the

research Grant we got a research Grant you know it's like op Opera you know you get a computer you get a computer and like and it's super nice um to be here uh so we got um 1 million uh student grant from Innovation Norway uh and then after that uh we kind of were using that to um hire people and for kind of research and development and then in um February uh this year we got into antler um nor Nordic uh cohort and then we uh yeah got uh bonding from them

in like May or June this year right that's great and have you have your approach primarily been like funds and stuff like that do you have you also approached Angels or what sort of been your strategy or how did you spread out in order to get that money. Um yeah I think it's uh both um for I have to say like venture capital for whoever is raising money now it's very hard to do that with the VCS and it's I have to say it's also kind of a different uh CU I was just in uh La as you know uh

and uh it's it is a different like it's way faster things are more like this there um like so much faster people made decisions way faster there uh but here it's more like oh let's think about this let's think about that maybe we can invest next year maybe not and it's so it's a little bit more um a little bit slower but it's still like um I think it's still like there are positives and negatives in that of course uh and one of the positives is that of course like they can think as long as they want uh

obviously but then also for the startups it's kind of like you can refine your strategy you can think about uh maybe hire some more people uh get to a higher level of traction with way less money spent uh because like in the US the amounts that they're raising for you know just a pitch deck is honestly kind of insane um so and like you know they're spending left and right and here is not really a thing which I think is a good thing because then here startups are learning to uh be leaner and spend

money on things that actually matter yeah and not like parties or you know. Yeah no I think that's a lot of good points you said you know you come from an economics background in education you say you know it's the hardest Market probably 10 years to be a startup could you elaborate a bit more and your practical experience with that. Yeah well from what I know from my friends and from everyone who were raising before uh it was way easier like it could take um some time to raise uh like a year two years ago uh but uh investors weren't

so um they weren't looking so much into detail in what is it exactly that you have you know they were looking at the team of course uh looking at your overall strategy and overall things but not so much um kind of nitrated details of everything that you have but now uh since they are a bit more risk averse uh they do want to uh make sure that you what you have is perfect so they want to kind of you know turn every page and see everything that you have which is fine

Uh but it just takes way longer uh to do all of that. Yeah, makes sense. Yeah, that's worrisome also for an industry in the music industry that's already hard to raise capital. Uh you know that's one of the things I, we run a venture studio and we also raising money for different startups uh with us and also including our own money and I'm definitely also experiencing a lot of more reluctance putting meone money behind your words. Um yeah, which is interesting. Uh there's a lot of investors that I've had several talks with that should have invested money like in an ordinary situation but just because of you know liquidity is tied up somewhere else and you know they don't want to sell anything on their holdings

Right now because times are bad is diffult, but although I have to say now um what I from what I've heard is um because they haven't been investing um like seven eight nine months now as the year is getting to an end they have to because their LPS uh or the people who are actually giving them the money um the LPS are not happppy um because they haven't been doing anything. So uh yeah, so they kind of have to invest something. Um so there's some hope. That's

Good to great to hear. Um cool and sort of do you have you had a lot of uh problems with investors understanding the problems of the music industry and how you're solving it? Yes, for sure. Um we but that mainly on us because it took us a very long time to like put a problem in the easiest way possible because we started explaining the problem uh that we're solving uh which is that the music

Industry professionals are not using data uh which is like very obvious problem but we started explaining it from okay here is the record label, in the record label you have this and this people, here is an artist, they are doing this and that, and that took like half of the pitch and that was too hard, it was impossible to follow and yeah it was terrible. So we, it took us a while to kind of get to the easiest problem statement uh ever like out there and so now I feel like it's way easier. It's

Just like they get it immediately which is which is where you want to be as a startup. Yeah, and I also have experience where really like do I really need to make things that simple? Uh but you probably do. Uh you know a lot of these people you don't have a lot of time with them so you know get to the point. Uh it takes some time and really refining your pitch and sort of why you're doing stuff also takes a lot of time but it's also, it's also about like because what I understood from many different meetings with them is that you don't want them to feel stupid because if you, if like you want them to learn something after your meeting but you don't want them to feel

Stupid as if they can't understand something. So that's like that's kind of a yeah that was interesting to learn. That's great. Yeah, I have a, I have a pract some practical questions that maybe you're not able to answer them because you're not the CTO but you know you guys are basing a lot of your activity around you know AI and so how practically have you gone about creating that AIC centric product? How what's your qu like how did we create AI or yeah so what did you do like how did you build it? How did you approach you know building out this model you have? Yeah uh

I think I could answer this question um so we um the first AI engineer was the one kind of making the decisions um so he uh he found this uh model that uh we could use that is primarily used in finance um so it's uh the great thing about it is that we can use a lot of factors and put them into the model and a lot of different time series data put them into the model and then therefore uh it sort of um obviously

Like does something and then uh it um it shows the result of either the prediction of one factor or many different factors or uh the graph of everything together like as a career graph so to say for the artists. So yeah, so that's kind of how we went about it and then we so we are using uh this algorithm but then we like changed it completely so that it would fit our uh industry but also our factors or the data that we're using. So it's um yeah great. Yeah well yeah it's I'm just

Interested in how people go about it because there's a lot of hype going on with AI right now but what I really like about what you guys are doing is it's a very practical impact about we kind of use this tool in order to do something very practical and solve a problem. So what is, what is the future of nextro? Where are you guys heading? Where are we heading? Well we are, we want to make sure that our technology works uh for artists, for all artists out there uh right now on the platform like the platform is not live yet but uh obviously we have access to it uh but so on the platform you can see all of the

Artists uh that have been online at some point um so you can already it's kind of automated for almost everyone um but the prediction is not uh perfect yet so that's kind of what we're focusing on right now um so we're you know building out the prediction, building out the model uh to make it more uh fit many different uh kind of sizes, locations, whatever of the artist. Yeah and then of course is the recommendations that we talked about which we started but it has to yeah there's um kind of a long

Process there um and then um so that's yeah so we're focusing on artists and independent labels right now but then we also have had conversations with Sony and Universal um which is very exciting uh but it's also um it will take some time for us to get to the point where um both either of them or both of them would be you know using nextro uh so yeah but uh after that like we don't really want to stop uh on music because

We know that our algorithm could be used in any other kind of creative um industries or whenever you create content and you need to analyze um your I don't know audience data whatever uh and so we can use it on podcasts, we can use it on um social media like Instagram influencers or whatever um so it could be used uh in entertainment industry which is where we think we'll go uh but first we have to focus on music. Yeah, that's interesting. Cool and all the co-founders like are they, are they, are they excited about the

Journey or is it like what's sort of the internal dynamics of the team you know going on right now? Yeah, I mean everyone is excited for sure uh it is like we are excited of course uh but we have been at it for U like a year-ish as I said uh so it's exciting but realistic. So we know that it will take time to get to the point where we're very happy with what we see um it will take time, will take a lot of effort so and I think everyone understands it. Yeah and uh yeah people are, people are ready. Yeah, that's

Great. Well it's been nice to have like a short chat about nextro and sort of your journey and it's really inspiring always when I see people from outside the industry trying to tackle some of the problems. Obviously I'm becoming an industry rat now uh you know been 12 years but I also do recognize that a lot of the perspectives we need in order to do transformational effect in certain areas is people from the outside thinking differently. Uh that's sort of how I approached it with my call the exterior Capel entertainment um yeah so well thank you for your time, I really wish you luck in the next parts of your journey. I hope that you know all the work you're doing with developing the product really is successful uh and let's definitely talk

About it, see if I can help out somewhere and give you some connections also in recorded music industry to land some pilot customers. I would definitely love that. Sounds fantastic, that would be great, thank you very much. Yeah and thank you so much for having me. Yeah, I hope it was helpful and interesting for people uh and yeah if anyone of the listeners uh wants to reach out I'm available on LinkedIn or email. Amazing, yeah thank you Lana, thank you for your time and thank you for being on sound connections. Thank you, have a great [Music] day

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