Pacemaker’s 18-Year Journey – Acquired by Tuned Global

So at some point, there was an email from Spotify and they said, you know, bye, go get the music elsewhere. And that email actually was delivered on Friday the 13th. So that was not on purpose. I have been lucky to call Jonas Storberg a mentor for a little while. He has built a company. It took 18 years from inception to sale. He's sharing a story here on the Exit series, and it's quite an impressive one.

And it really shows a mentality of longevity. Thank you, Jonas. Hi, guys, and welcome back to Sound Connections podcast. Today, we have a mentor on the podcast that I've been using for a while. Jonas, welcome. Hello, everyone. Good to be here. Jonas, you are a part of the Exit series here on the podcast, and thank you for joining and being willing to join this podcast. You have built up a company called Pacemaker that you have sold to Tune Global.

We have had Conrazzo on the podcast as well. Amazing company. And we're going to talk about your journey. And I know it's been long and bumpy, so I'm really looking forward to this. But Jonas, for the sake of our listeners, could you just briefly explain who you are and what you do right now? So I am Jonas Norberg, and I currently work as the head of AI at Tune Global. And that started with the acquisition of this company that I founded twice, which is Pacemaker.

Great. And Jonas, we'll spend a lot of time talking about Pacemaker and your journey. And I'm very excited to get into it because I've had an on-the-surface introduction, and I've understand some things. But I know it's been long and bumpy, and I think that is absolute gold for listeners and for myself. Jonas, I want to set the scene. You got into music at one point. Like, how did you get into this world of music and building companies? Can you go all the way back to the start so I can understand that? Yeah.

So music has really always been present in my life. So I grew up in a hippie collective back in the 70s. And back then, you know, everyone was playing music, like all the time, live music, guitars, drums, keyboards, really, pianos. But keyboards started to come at that point as well.

And if they weren't, you know, playing music themselves, they were, you know, having music on. So, like, vinyl record or cassette tapes and so forth. And we were frequent visitors to different music festivals. And this hippie collective even arranged their own music festivals. So music was really there all the time.

So, you know, in some sense, I was born into it. Amazing. Before we talk about your whole intramural journey with Pacemaker, we also just need to understand what Pacemaker was. So I know there's different iterations, but at the point of sale, what was Pacemaker? So at the point of sale, Pacemaker was an app.

It was an app that made it very easy for people to create mixes and share those mixes with other people so they could consume them. And, I mean, you could say it was a DJ app with ambitions. And we, yeah, I think we made it as easy as possible to create, you know, long format DJ mixtapes.

And then we also, and I should say we used an AI to do that. That was kind of like, we started with having kind of a, the app launched as a standard DJ thing, you know, with two decks and a mixer. But then we kind of figured out that people actually didn't want to DJ. They just wanted to, you know, create, you know, this musical journey for others to consume. And that's where this AI DJ innovation came in.

Because we realized that, you know, to give our users what they wanted and make it as easy as we wanted this experience to be, we had to ship a DJ with every app. And that's where the AI DJ came into the picture. And then we also went to great length to be rights holder friendly. So the mixes that people created were never saved as files. We only saved how mixes were done.

And we call this the recipe solution. So if I would create the mix, we would save how I did that mix. And then I can send this recipe for how the mix was created to you. And then, you know, you can get the tracks. And then we will recreate the mix on your device. And the advantage here is that when I create the mix, it goes pling, pling inside the reporting system. And all of the rights holders are paid their fair share.

And when you consume, it goes pling, pling inside the reporting system. And everyone is paid their fair share. And that was what Pacemaker was when Tune acquired Pacemaker. That's amazing. And we'll get into why Tune Global probably was the best company to buy you, because they do some really interesting stuff. But we're going back in time. So you grew up with this hippie collective, people playing drums, piano. There's a big step from that to being an entrepreneur.

What happened in between you starting your company the first time and that upbringing? And the hippie collective. Yeah. So I've always been interested in technology. And I think it's one of the members of the hippie collective. And he's my godfather. I'm not baptized, but I think my parents, you know, they was like, hey, you can be the godfather.

And then he became. And he really took on that responsibility. And he was interested in, like, big questions. And he had a telescope. So we would watch the moon, the stars, and so forth. So that's kind of a fascination for space that I still have today. And I think that also led to interesting technology. And my godfather was also kind of techie. He had a radio-controlled car very early, radio-controlled boat early.

So that kind of sparked my interest for technology. And then I chose a technical high school. And then after a few bumps on the road, I ended up in the Royal Technical University in Stockholm here. And a master of science in mechatronics. That's basically computer-controlled mechanics. Okay, wow.

And I did my master thesis at the Swedish Space Corporation. Wow. And worked on a satellite. It was a technical experiment that would take a satellite from a geostationary orbit to an orbit around the moon using an electrical motor. So an ion engine. And I did only like this small thing, which was like a software reprogramming interface that could be used in a matter of emergency.

So I never did anything that actually flew. But my co-founder, my co-founder of Pacemaker, Daniel, we met at the Swedish Space Corporation. And he had, you know, real things that flew into space. So, and after my master thesis, I was offered a job at the Swedish Space Corporation, but it didn't feel right. And instead, I started on a PhD.

And that was a bit difficult for me. I struggled for a few years, and I eventually realized that, you know, this isn't for me. And I decided to drop out. So I'm a PhD dropout. And in that sort of process, dropping out and trying to figure out what to do, I started an idea agency, we called it.

So it was a couple of friends. We met once a week, and we had dinner, and we brainstormed four ideas. And we came up with lots of bad ideas and a few good ones. And Pacemaker was one of the good ones. And that was kind of the start of this. And there was this moment, like, I think, having this idea agency, really a think tank kind of friends meeting and brainstorming for ideas.

And that was the foundation that was needed. So I think it was, like, January 2005 or something. A friend came home to me with his latest iPod. And it landed in my hand. And I don't know if you remember how the iPod looked like, but it had this wheel on it. And I was a DJ at the time. And, you know, being an engineer, I understood that the processor inside should be able to decode two MP3s concurrently and mix them.

So I was like, hmm, maybe it's possible to do a DJ system in the iPod form factor. And then if we, you know, there's lots of struggle here. And maybe you wanted the struggle, but, you know, that was the birth of… Yeah, I do want the struggle. Yeah. Yeah, so that was, like, the epiphany moment. Yeah. And I went back to my friends and I was like, hey, guys, what do you think of this idea?

And they were like, yeah, that sounds cool. And we had a meeting booked with, like, a state-driven innovation agency here in Stockholm for another idea. And we went to the meeting explaining the idea we booked a meeting for. And then towards the end, we introduced this DJ iPod idea.

And that one, like, that idea was what really made him excited. And he was like, hey, I know a guy in Hong Kong, Shenzhen, you know, let's see if he can help you with production, blah, etc. And I think that meeting was really pivotal in making it possible for us to kind of believe that we could do this. And after that, we, you know, I was free, basically.

I was, you know, trying to figure out what to do in life. And I was doing, you know, some work here, some work there, just to get by. I was cameraman. I was event organizer. You know, I did a bit of everything. I really lived on, you know, a minimum budget. And we started to talk to investors. And you, of course, you, like, you build up a network.

And I used my network to get access to people that were investors. And those investors knew other investors. And they started to ask a whole bunch of questions. Like, what's the market? Like, you know, blah, etc. Before we get into investors, because that's really interesting, I do want to comment on something. It sort of feels ironic. Masters, you know, satellites, space station, PhD, and then to minimum wage club gigs.

I just want to understand what happened in that decision making. Why? First of all, did that change feel right? And if it did, why did that feel right? I mean, so, I was having fun. And, you know, it's a lot of struggle when you start a company. Especially if you, like, I don't come from an entrepreneurial background.

Like, there's no network from the beginning, really. At least not in the entrepreneurial sense. So, I have asked myself, like, you know, why? And those kind of things. And I really think it's like, even though I was poor, I was happy. Because I could be my full self, kind of. And I think that is kind of what drives me. I like to be my full self.

And I'm also very passionate about creating efficient organizations. Because I think if you have an efficient organization and a foundation, it's much easier to be creative on top of it. So, yeah, I think it was kind of an easy transition. And also, you know, hippies, they weren't really rich. So, I come from a poor background.

So, you know, being poor was not a problem for me. It was like, you know, it was the standard situation. But, I mean, I do, from, you know, at some point, I was so poor, so I actually lost weight. Now it's perhaps a bit extreme. And there were moments, like, especially in the fundraising, that is, it's such a rollercoaster ride.

Because without these funds, like, nothing will happen. And that's really, like, wow, that's an emotional rollercoaster. Amazing. Well, thank you for taking us through that journey. And now you ended very nicely, thank you as a good storyteller, to where I interrupted you. So, you have this product. You had this innovation office that thought this was, like, really interesting. And you started talking to people. Did I understand correctly that you had almost, like, investors seeking you out?

Or, like, what kind of work did you do in order to start seeing if you could launch this? I mean, so, one of my closest friends, boyfriend at the time, now her husband, he was a successful entrepreneur. And I knew him a little bit. So, he was one of the first people that I talked to about this. And he quickly introduced me to another friend of his, who's now a very successful music tech investor, actually.

And they started to ask a whole bunch of questions. And that was really how the business, the first sort of rough business plan evolved. And then, eventually, like, they wanted to invest and they wanted to engage in the company. But they wanted 50%. And I was kind of okay with that. No, I mean, you know, I was actually okay. Because they would have been, maybe it wouldn't have been the right thing to take their money and give away that, you know, bigger chunk of the company at that point in time.

And this was kind of when I was starving. So, I was ready to do it. But my two friends, they were not. So, they said, no, that's too much. And I think maybe, maybe we hope we would get a negotiation in place. But that didn't happen. They just said, okay, no, no problem. And then, they kind of left the conversation. But that actually ended up being a good thing for us.

Because they did help us get a lot of the things that we needed in place. And, like, you know, think about the market, you know, the business plan, all of those kind of things. Like, investors, they're really good at honing in on the money. And that is helpful for many entrepreneurs because it is about the money. So, and then, you know, they kind of dropped off.

And then, we got accepted to this innovation program at the Royal Institute of Technology in Stockholm. And that was a pivotal thing because the mentor for that program was, I think, she's now Sweden's most successful business angel ever.

Oh, wow. Okay. And she's a close friend now. I meet her, like, every, like, third month. And we have dinner, like, it's her and a couple of friends. But she really made us believe that we could do this. Yeah. And the sort of output of that program was a prototype and a proper business plan so we could go to investors.

And then we sort of started to, you know, raise money for real. We had, you know, a real deck. We had a real, you know, business plan spreadsheet and all of those kind of things. And I think January 2005 was when my friend came home with this iPod. And this is, like, spring of 2006. And we got some more innovation money and we could work with a really good industrial design agency that sort of, you know, created this design for the pacemaker hardware, pacemaker device, if you like.

Yeah. And it's an iconic design. It will go on to win all of the design awards. Like, I think it's 18 international industrial design awards, something crazy. Yeah. Wow. And it's red dot, best of the best. It's the German design prize. It's the Swiss design prize. It's like, you know, it's kind of all of them. And no picnic is the name of that industrial design agency.

And they were really, really good. They also did work for Sony Ericsson, who's not around anymore, but, you know, mobile phones, huge successes, et cetera. So we had, you know, the business plan. Now also, the team changes because the original co-founders, they didn't want to quit their day jobs. One of them had kind of a successful architecture career going, and the other one was going to have a kid soon.

So they decided to drop off. And Daniel, the, you know, the engineering genius behind pacemaker, went full in. And then we got two other people engaged, and it's Ola Sars, who is Soundtrack Your Brand, if you know. Yeah. And Martin Renk, who is the brother of Johan Renk, who's a famous director.

He did this Chernobyl series on TV, if you know it. So it was like the team sort of reformed. And also the presentation with Martin, he's a genius when it comes to branding and looks. Very much because of him, like, no picnic could deliver this iconic design because Martin was such a good buyer from our side.

And in the autumn of 2006, we had this wonderful, gorgeous prototype and a pitch deck that looked like gold. And we started to pitch. And there was, you know, a lot of meetings. And in the end, sort of the thing that really made it happen to us was there was a smaller firm that took the lead.

And they took the lead because we could get interest from Max Martin, you know, the producer. Oh, wow. Okay, hitting it high. Nice. So he wanted to take a chunk. And then the smaller VC took a chunk. And then the Swedish Industrial Development Fund, which is Industrifonden, if you know, like big state, you know, thing.

So they basically gave us the funds we needed to get going. Wait, I'm going to stop you. I'm sorry, because I have a background as a music producer. I need to, maybe I'm a bit starstruck. How in the world did you get Max Martin as an investor? Yeah, so Stockholm is a small community. And when, so it's about the network.

And when you're doing parties, I was an event organizer, like one of the ways I was hustling to get by. And you meet people. And, you know, I asked around. And then, you know, all of a sudden I had this Martin Rink. And his brother then, U1 Rink, he was like very well known. So he made the introduction to Martin Sandberg, you know, Max Martin.

So he made the introduction. And met with him and he thought this was cool. And that was it. Amazing. Yeah, the other thing about Max Martin, you know, is you can't really find anything on him. He's so subtle and anonymous. Okay, good on you. Sorry, I just, that was for my own interest from my past life. I just needed to understand. Yeah, no, he's a very cool guy also, like down to earth.

Yeah. Amazing. Okay, so you get these three investors, got in capital in order to build something. What happened from there? Yeah, so this is like end of 2006. So in the beginning of 2007, you know, we get an office, we employ people. And then we embark on this insane journey because if you remember the iPod, you know, iPod had an iTunes because this is the MP3 era and you had to sync.

So we had to develop our own iTunes, of course. And then we also had this mix sharing website so users could save the mixes and then export it to the website so others could listen to it. And that was kind of like a MySpace. So MySpace was big at this time. So we developed, like we said we were going to develop an iPod, an iTunes and a MySpace in like a year's time, starting with, you know, kind of no resources.

And we did that. Okay, well done. It's like, it's, yeah, there's a price to it. And the price was that everyone had to work so incredibly hard for such a long time. So, uh, like in the beginning of 2008, when we launched this, like people were exhausted.

Um, and I was probably the person that was the most exhausted because, you know, if, if you want others to work hard, you need to work hard yourself. Um, and, uh, the company grew from, you know, this small group to like 35, 40 people, something. Um, and I was kind of, you know, exhausted and over my head in managing this kind of company that pacemaker had become, uh, quite burnt out, to be honest.

Um, and that's when, uh, the, the board convinced me, uh, it was a good idea to, you know, hand over to a real CEO. Um, and, uh, um, I could kind of absorb because people weren't really happy. Like I had been pushing them very, very hard. So I could sort of absorb that and then someone else could come in with clean sheets and, uh, you know, take the company to the next level.

Problem being like, this sounds good and rosy. Problem being that, uh, iPhone, uh, was launched in the spring of, uh, 2007. Uh, and, uh, seven, yes, 2007. Uh, and, uh, in the beginning of 2008, they opened up, uh, for third party developers to develop apps. Uh, and that was basically the beginning of the end of the iPod era.

And, uh, we launched this DJ iPod in March, 2008. Uh, so the timing was terrible. Uh, you know, iPhone basically, uh, killed the market. For a DJ iPod. Um, now that, that wasn't my problem. It became the problem of, for the new CEO. Um, and, uh, they, they couldn't really ever solve that. Like they, they managed to ship, I think some 60, 70,000 units, um, at the like average price around 500 euros or something.

Um, but, uh, it, it never really took off. Uh, because iPhone and DJ apps for iPhone came a bit later. So the world changed, um, and that project, uh, they managed to keep it up for quite some time. They never pivoted to apps. They never did that. Um, and I think sometimes when you raise, because there was a lot of money, like I think, depending on the exchange rate, it's like kind of $12 million, something.

Yeah. Um, which was a large investment at the time. Like these days, $12 million is nothing. It's like, here's some coffee money, $12 million. Um, but, um, uh, if you take on a big chunk of investment, it can be difficult to pivot the company because you, you're taking this investment on this business plan. Uh, and, uh, yeah. So they never pivoted.

Um, and, uh, can't really remember when, but, um, the bankruptcy manager, uh, called me and asked if I was interested in buying the assets. Um, and, uh, I think this is, it's like 2011, I think it is, um, spring of 2011. Um, and, uh, I asked Daniel, uh, co-founder of old pacemaker, this pacemaker device project, if, if he was interested in it.

Actually, we had been meeting and discussing an app because we could see that the company didn't do a DJ app and we could see that there's DJ apps being successful. Um, and, uh, yeah, we were interested, uh, because basically, uh, Daniel thought that we could, uh, take the, um, uh, the, the code, uh, that was developed for the hardware and, you know, just fork it and port it to, uh, iPad.

Um, so, uh, we, uh, managed to acquire. Uh, the assets. Um, so, uh, we, uh, bought all of the IP that was developed for the $12 million for a lot less. And, and then we could restart. And the weird thing here is that, uh, kind of out of the blue, it, it's a bit of a out of the blue because a friend of mine, his company was acquired by BlackBerry.

And then he was tasked with getting interesting apps, um, for BlackBerry. So he called me, we just acquired all this IP and we didn't have any funds, didn't really know what to do. Um, and he asked me like, uh, can I get in touch with Pacemaker because, uh, I, I would like a DJ app for our iPad competitor, the BlackBerry Playbook. And I was like, let's, dude, they won't be able to help you because they, they've gone bust, but I can help you.

Amazing. Oh, wait, before we get into that, which is really, really interesting, we need to talk to it. I, I need to understand, so the interim period between you not being CEO anymore, what happened? Like, did you get some share buyouts or just retain the shares? And just like, what happened in, in that situation? You burned out a new CA came to, to what you're describing now. Yeah, so, uh, that part is, uh, not so fun. Okay, so this is what I wanted. Thank you so much. Yeah.

So, uh, they, uh, they didn't want to buy me out, um, because, uh, they, they wanted me to still be present in the company, uh, as a kind of a figurehead. Um, and they wanted me to retain my shares, uh, because that was better for the company if they could say that the founder was still here and I was on the board. Um, so I, I couldn't, I couldn't sell, um, which was a bit frustrating because I could see where the company was going and they wouldn't pivot to, to apps.

Um, and, uh, yeah, so that basically, you know, all of that investment turning to zero in the bankruptcy. And. Which is a bummer, but, you know. That must have been sort of sad seeing your, seeing your baby or the project that you've worked so hard to, you could see that it's just going, going down and you can't influence that decision. Yeah. And even more, uh, so when I was a board member, um, because then I really had, you know, insight, uh, into what was going on.

Um, and, uh, you know, after a while I realized I just have to cut here. I can't be on the board, it doesn't work. Uh, so I, you know, um, in time for the, uh, shareholder assembly, uh, I basically said that I, I will not be board member for another period because that will drive me insane. So, and, and that, that made it easier for me to cope with like, you know, just cut. It's like, it's like a divorce, like, I, I think you need to cut and then maybe you can come back to it or her or him at a later point in time.

And you did get back to her, him, app, whatever we call it. Uh, yes. And, and you got contacted by, um, Blackberry. Seems like a, like a crazy coincidence. So what happened from there? Yeah, so basically they, uh, they offered assistance, like, you know, they were launching an iPad competitor, uh, Blackberry playbook. Uh, so it was a fully fledged tablet with, you know, an app ecosystem and everything. And, and this was when Blackberry was trying to, uh, compete with Apple because remember they used to own the smartphone market and then Apple came with iPhone and turned it all upside down.

So they acquired a Swedish company to develop kind of the operating system for their smartphone, all glass all screen kind of competing device and then this tablet also and you know so he had some money for us and we realized that this is a very good opportunity for us to soft launch and we used to say that it's better to be kings in the shit land than to shit in the king's land and we were really you know kings in the Blackberry world and we even made a little bit of money on that selling apps and more and you know

Blackberry always knew that we would go to iOS you know so they were they were so easy and good to work with like my sort of impression of Blackberry is a very good one like it's very good smart people easy to work with but for us this soft launch was really good because if you put the pacemaker device here this Blackberry playbook app here and then the iPad app over here it's a progression yeah and back then apps were kind of skeuomorphic so it would look like real leather and you know real paper and all of those silly things from the real world and maybe that was important for people to transition away from the real world into like a digital

World with the iPhone wall glass screen thing so you know pacemaker device and then the Blackberry playbook was very much skeuomorphic and it had lots of things from the pacemaker device but for the iPad app we realized you know this skeuomorphic wear idea will introduce real world limitations into the digital domain and we don't need that like if we drop all that we can have things move around and like it's so much more dynamic there was this really cool app that was launched on Blackberry playbook for some reason called scorekeeper that was fully skeuomorphic and it really showed a new world and new design a new design paradigm and then another app called figure by propeller heads if you remember it that was also a huge inspiration

To us and you know we launched Blackberry playbook we started working on the pacemaker for iPad and it went it went well and we worked on it and you know we had some funds left from the Blackberry investment and money was kind of tight and we I met with a friend and he saw he saw this you know this is also one of the Blackberry guys that came from the company the Blackberry acquired and I showed him the pacemaker for iPad like early stages and he was like this is really good I'm interested and

We started a conversation and then we were going to launch pacemaker for iPad so this is without investment this is like bootstrapped on the money that we got from Blackberry and Daniel was working really hard he was like kind of the older developer maybe we got Vic in at that time as well and we had like you know four months of runway something and this is 2013 spring of 2013 and we go to we booked the trip to South by Southwest because we felt that's a good place to launch pacemaker and we even had

A guy in Austin build a huge speaker portable speaker for us that we would pull around and you know play DJ gigs in the corner problem being so South by is like March so this is March 2013 and the app quality isn't there like we realized we won't be able to make it and we decide to go anyways because you know we have all these tickets and they're non-refundable and we have the Airbnb and blah so we go and we drag this big speaker around and we have a camera so we take shots and so forth so we basically had a lot of fun with you know just a little bit of money left and we have

A big barbecue I should mention so the chairman and one of the founding partners of the new pacemaker project is John Aquaviva do you know him I don't think so plus eight plus eight equity so John is famous for so do you know Richie Houghton plastic man so many great names I should know but I don't I'm so sorry so John and Rich they basically grew up in Windsor Canada which is just across the river from Detroit and Detroit is where techno music was born so John and Rich they were really influenced by techno music and they started DJing and they started to produce their own techno music however techno is black music from the beginning and John and Rich they were two goofy white kids from Canada so

The black labels the black techno labels didn't want to release their music so they maximized John's American Express bought the studio and everything they needed to have their own records and they took techno from Detroit to Europe and started the rave scene in Europe in like late 80s early 90s and they're both kind of techno legends today and Joey is a founding partner I was for a very long time the chairman of Pacemaker and he was on this trip to South by and he arranged this barbecue so we had people from Beatport coming and you know all kinds of places huge barbecue lots of fun and then in the morning directly afterwards we were hangover like

Crazy hangover and an early morning flight and we're at the airport and I'm like you know I didn't feel well and then Olof goes like hey that's Daniel Ek over there you know Spotify CEO and I was like yeah that's Daniel you're right so I grabbed the iPad and I went over to him and I was like hey Daniel I have something to show you and I showed him Pacemaker for iPad it was you know a prototype demo at that point wasn't commercially available and he was like this is great and I should mention that we had been meeting with Spotify for a very long time and you know telling them we want to have Spotify integration just nagging and then you know serendipity we bump into Daniel at the airport and we

Will get home to Stockholm we have an email in the inbox like you know come see us and then they were like don't launch quite yet let us you know get your licenses and you work on the app and then we launch when you have a Spotify integration in place and I should say that there was some other conversations as well at that point that could have led to an acquisition of pacemaker but we said no which was probably one of the more stupid decisions in my life but you know you live and learn but then you know we came to an agreement with Spotify and they

Provided us with some funds and then we could launch pacemaker for ipad in like February 2014 and it became a huge success Apple loved it so they were featuring us even though it was like you know a Spotify heavy experience like you know Spotify premium was basically required so they would feature us anyways and people really love that experience yeah amazing but I do know that something happened yeah so this is February 2014 so it's yeah it's a long and bumpy road I mean there's ups and downs and this is definitely up like it was yeah it went very

Well and people loved the experience however we you know people loved it for a bit and then they churned and fixing that churn like increasing retention was always like a challenge for pacemaker and we you know realized that people actually didn't want to DJ that's why we developed the AI DJ and we called it autopilot and that improved things because that meant that the DJ and pacemaker for iPad was predominantly used in college dorm room house parties we could really see you know the usage go up and down with the semester and yeah

So AI DJ helped things and we realized that with the AI DJ we kind of develop the interface that we were looking for iPhone because iPad is very much like a traditional DJ system with two decks and a mixer which is fun but it doesn't retain it's only for a few users the iPhone experience it's much more like it's not as fun because it's waveforms like you move a waveform you add second waveform you move them and so forth and then the AI will sort of fix things so it sounds good so it's more of a studio thing and that improved retention the other thing that really improved retention was when

Users could share and consume mixtapes from others and at some point we had we had good growth on the iPhone experience poor iPad we never really looked back so the iPad experience you know stayed in the 2014 version pretty much for 10 years something sadly nine years and the main problem then because we had a thing that was working it was growing and people liked it like we had a core group of users and at the peak we were around 100,000 monthly and around $100,000 in MRR so you know healthy numbers but the problem was

That we could never acquire Spotify premium users scale which meant we were never in control over the acquisition we tried to go to Spotify and you know see if there was a way for us to target the users but we could never get that to work so when we acquired users on you know social media Facebook Instagram mainly Instagram TikTok tried some TikTok as well and Google we could almost never come to more than 30-40% Spotify premium that meant that you know we were basically wasting 70% so having this you know requirement that Spotify

Premium was necessary was huge friction in the funnel and it meant that we could never really get control over the acquisition and when we realized that and also we couldn't convince Apple to you know invest the engineering cycles that was needed to give us the kind of interface that we had with Spotify because you know to do that they wanted to see growth and we were like in the catch 22 because with an Apple music integration we would have had the growth that was necessary to convince them so in the end Spotify got tired and you know investors too so because investors

We were growing but not VC level growth and Spotify they were doing this because they wanted to see growth and we could never prove them that we were important enough and that was you know true for the entire DJ vertical because it wasn't just us it was kind of like you know everyone so at some point there was an email from Spotify and they said you know bye go get the music elsewhere and that email actually was delivered on Friday the 13th so that was not on purpose from them and you know they were very good with this transition and they helped us and you know it was just a business decision from them and they basically pivoted towards you know podcasts and those kind of things I think that's at least

My take on it so DJing less important and you know we try this it doesn't really mean anything so why should we do it and that was that was quite a shock we also realized that it was an opportunity for us to go get direct licenses and we knew that would fix the biggest problem which is the Spotify requirement because with direct licenses the funnel would be so much better and we were like a little bit afraid of doing that but you know it was either that or we died yeah and we actually managed to do it Becky Brooke if you know her I know

Her yeah she's finally a person I know finally she's great she's just wonderful I love Becky and I mean without her pacemaker wouldn't have been able to survive the transition but she really helped us get the licenses in place and I should say that the industry was also very supportive we got really good like deal it was innovation so of course over time they would have wanted to have the normal royalty rate but they were really nice to us and helpful so we made a transition and we you know substituted Spotify for Toon Global as the back end that's when the relationship with Toon started and Toon is a great was a great partner easy to work with they have great technology

And we survived because users I mean we did churn a lot of users I can imagine yeah but it was like this it wasn't this boom and we died it was like this and the idea was kind of like you know let's see if we can do this and you know figure things out and I think we did figure things out so we saw this opportunity in the radio market and radio is very like still the same as it always have been the only thing is that it kind of is available online now but it still is like you know it's a top down thing it's a taste maker that sort of caters to an audience and so forth and the

Radio industry is being consolidated so it's becoming less more and more of the same at the same time we saw this creator economy booming and you know everyone is creating content and so forth so we were like let's do a social radio experience that makes it possible for anyone to start a live show play music talk to their friends and followers and you know fog horns lasers smoke we developed a really cool experience yes only problem is that you know that required like 10 million dollars and most of it was for licensing and when I say licensing it's there's like there's a cost for licenses

Regardless of how much money you bring in and remodel that we would go under for quite some time because music industry on the recording side of things is a low margin business and therefore you go down under and then when you reach scale and I think we could have done it like I believe in the business case we could have gone up and then it could have been a great business billion dollar company maybe even but ten million required and as we were out looking for that ten million Russia decided to invade Ukraine and capital markets really changed when that happened and crazy music tech projects risky

Risky as hell and we just realized that this is not going to work and let's see if we can find a buyer and we had some opportunities with really big tech companies but again this Russia invading Ukraine and all of the changes that came with it with a higher interest rate and growth companies changing to profit and all of those kind of things meant those conversations went cold and then we had a number of discussions with smaller companies and one of those conversations was with Tooned they were like hey you know come with

Us and we had been working with them for two years and really enjoyed working with them loved their technology their platform it was very easy for us to use and that just felt like the right thing to do so we agreed on the price and the entire team moved over and that was signed and sealed like a bit more than a year ago wow that's been such a long journey with so many twists and turns so many bumps so many wins it's amazing if I remember the timeline right you started in 2007 and your exit was in 2022 then or something like that 23 even and actually if you count that moment the epiphany moment when a friend gave me

His latest iPod that's January 2005 so that's almost that's like 18 years 18 years yeah well you really did have a baby and it did move out at one point it's just when it was 18 years old yeah I was just you know 18 years old good age for moving out that is very true Jonas it's been I love this story I loved this is so contrary to how most founders imagine themselves doing this and I think there's so much value in that thing like one of the things that I'm learning these days is the longevity mindset is like oh that's great good with the fun fast go but like what do I really want to do and like the things that I'm working with now is like can I see myself in 15 years absolutely 100% and I would I would actually prefer it to take a long time if that makes sense so it's very

Inspiring for me because I also need myself role models that has been in the longevity mindset where like no I'm not giving up I'm you know I could probably should probably that would be best to give up but I'm not and I think that's very inspiring and Tune Global is an amazing company and it's good that you found a home for your baby Jonas it's been a pleasure thank you for sharing the whole thing thank you for being on the South Connections podcast thank you for being here thanks for having me