David Hoffman built and sold big-data and data analytics company Next Big Sound to Pandora in 2015. He's now building Beam, which helps people create shoppable mood boards for DTC brands.
David reflects on his experience with mentorship and the long arc of the conversation that is being a co-founder and being in community. We unpack the Techstars motto "give first" and discuss the power of the Techstars community and the importance of community relationships in entrepreneurship.
We talk through the complex evolution that is founding and scaling a startup and his experience doing just that with Next Big Sound, and the challenges of becoming a leader inside a growing company.
One challenge is always scaling culture as a company scales, and David outlines some of the routines and structures that helped in defining his startup's culture. David also shares some insights on the post-startup-sale emotional roller coaster and the decision to build another company. Some of my other favorite insights from David:
Living the “Give First” motto requires approaching everything with curiosity.
“Grown ups” is a construct: When it is your idea and your company, you can make the decisions you need to make.
Your Culture is made of your routines, whether it’s Friday bagels or snap-clapping after people share wins.
Your MVP product can be much, much more simple than you think if it creates value for your customers.
David’s nuanced reflections are a gift, and I’m so glad he sat down for this conversation.
AI Summary
David reflects on his experience with mentorship and the power of the techstars community. Daniel and David discuss the principle of "give first" in Techstars and the importance of community relationships in entrepreneurship.He discusses the evolution of his company, Next Big Sound, and the challenges of becoming a leader. He emphasizes the importance of routines in defining a startup's culture and reflects on the emotional roller coaster of the past eight years.
Conversation timeline summary:
(0:51) - David talks about the value of mentorship and giving back in the techstars program
(2:30) - David discusses how he tries to save people time and be thoughtful in his conversations with others
(5:25) - David reflects on the power of the techstars community and relationships that have evolved over time
(18:54) - After realizing their initial idea wasn't working, they shifted their focus to answering the question of how a band becomes famous and started tracking song plays on MySpace to gather data
(24:47) - They launched on Demo Day despite advice not to and landed major record label deals, collaborated with them to build a pro version of their product, and generated SaaS subscription revenue
(27:58) - The transition to becoming leaders of an organization was challenging, especially while trying to build bleeding-edge software and manage people with unknown skill sets. They learned the hard way about relinquishing moral authority too early and the importance of having confidence in themselves rather than seeking a "grown up in the room."
(31:05) - David emphasizes the importance of routines in defining a startup's culture, citing examples from his time at Next Big Sound
(43:00) - David reflects on the emotional roller coaster of the past eight years and the importance of taking time to decompress and figure out what's next
Links, Quotes, Notes, and Resources
Minute 1
David Hoffman:
one of the things they taught us was the value of mentorship and learning from people who'd done what you were trying to do, and both what worked and what didn't work, and just being really intellectually honest and open to feedback, and criticism, and ideas. And, as part of that mentorship, it was instilled in us as we went through the program, successfully raised money, built a business, later sold the business, that giving back and giving first is the way to approach things and to approach life. So for me, in conversations with potential partners, or employees, or customers, or other entrepreneurs, I'm always looking for what I can provide in value before expecting anything in return.
Minute 31
David Hoffman:
We were like, we need a senior person who can teach us and who can be the "grown up" in the room, with big air quotes. Now, more than a decade later, I am realizing that the, big air quotes, "grown up" in the room thing is very much a, I don't know, made-up construct. Yes, there's wisdom that can be learned, but I think I learned the hard way that when you start something and you have insights and you have conviction around it, there's moral authority that's attached to that, especially as it relates to decision-making, and when you start to relinquish that moral authority or decision-making... and still in the early days of a startup, which I consider Series A... it puts you at major risk for wasting time and wasting money.
David Hoffman:
So, with the new business, when we started it, I brought on some more senior people and had a similar experience again of, I have the unique insight here, I have the conviction, I have the ability to execute on it. Why am I relinquishing moral authority and decision making on something? Is it imposter syndrome, lack of confidence, fear? And I think the healthy thing and that I've gone through is facing all those things head on and being confident in making those decisions myself.
Minute 33
Daniel Stillman:
What was that shift for you, realizing that you could find that part of you to rely on?
David Hoffman:
I think it was just reflection and being honest with myself about what was working and what wasn't and where I was spending time, and that's... Going back to the Next Big Sound story, the piece that was really interesting as we matured and got some confidence there, A: we found some really great senior people who we loved having in the room and who made everyone better. They didn't need to be the, big air quotes, "adult in the room". It was more just seeing them as peers and collaborating.
And the other was just getting into and being really thoughtful about the routines by which we ran the business. And this has been a pattern for me in life, both personal and work, is when things get stressful I lean on routines and try and create good routines. And with startups, it's amazing. When people talk about culture, I literally think, "What are your routines?" That's all I want to know about, because that's in my mind: what defines a culture?
Minute 37
David Hoffman:
We did regular Demo Days at Next Big Sound, and it was mostly engineers presenting, and designers and teams presenting what they'd been working on ahead of it being released, and sometimes going into the backstory or how it worked, mostly showing in.
And so, creating that both opportunity and expectation that every Friday new work is going to be shown, the person who did it's going to be sharing it with everyone. It's not a feedback session, it's a "Here's what's going on" session, being explicit about the intention of it, kept it personal and kept it so it was across the team and not just a small group.
Daniel Stillman:
Hmm. That sends really interesting message, that it's the person who made it is sharing it. It's not feedback. Was it explicitly celebration or is it a "Here it is"?
David Hoffman:
We had a big clapping culture, so after anyone would present anything, people would snapper clap, and I think that sort of just celebrating small wins and being excited for each other's progress was sort of key to the culture we built.
MOre About David
David Hoffman built and sold big-data and data analytics company Next Big Sound to Pandora. He's now building Beam, shoppable mood boards for DTC brands.
Full Transcript
Daniel Stillman:
Right. So, you actually... We're going to jump around. You said there's this principle in Techstars of "Give first". How is that delivered to you, and how do you feel like you're living that principle?
David Hoffman:
Wow. Big question to kick it off. I love it.
Daniel Stillman:
Yeah, were in.
David Hoffman:
Yeah, so it's been a long time. We went through my first business, went through the third class of Techstars in Boulder, Colorado in 2009. David Cohen, who started Techstars, was actually running the program at that time. They had just launched Boston. It was their first city besides Boulder, they're still in the early days of figuring out the program. So, I'm sure it's come a really long way in the many years since then, but even then one of the things they taught us was the value of mentorship and learning from people who'd done what you were trying to do, and both what worked and what didn't work, and just being really intellectually honest and open to feedback, and criticism, and ideas. And, as part of that mentorship, it was instilled in us as we went through the program, successfully raised money, built a business, later sold the business, that giving back and giving first is the way to approach things and to approach life. So for me, in conversations with potential partners, or employees, or customers, or other entrepreneurs, I'm always looking for what I can provide in value before expecting anything in return.
Daniel Stillman:
That's a really... I mean, that's a beautiful and important shift. How-
David Hoffman:
Yeah. It's funny how these small phrases root themselves in your brain and then you try and live them. I guess that's what values are.
Daniel Stillman:
Yeah. Give... And it's a stance, right?
Yeah. How does that show up for you? Because you said you've been talking to some first-time founders more and you feel like you're ready, you have more to give back now.
David Hoffman:
Yeah, yeah, totally. I think it's in trying to save people time, and I think it's also in being really thoughtful that your... Or I'll just speak about myself, my experiences... But one data point and what happened for me doesn't necessarily mean it'll happen for someone else, but hopefully the story and learnings are inspiring. And likewise, on the other side, when someone takes advice or tries something that's recommended and reports back how it works, I can't think of anything more gratifying. The learning that everyone gets is awesome.
Daniel Stillman:
I always like to tell people that the price of free advice is telling me how it went.
David Hoffman:
Yeah, it's, yeah.
Daniel Stillman:
Very few people pay that price, but I always tell them, "Please, I'd love to know if it was bad advice."
David Hoffman:
Yeah. I love the etiquette around double opt-in intros and moving people to BCC . It seems like that's well-rooted in the world. The thing that I try and do is boomerang that message for after I've had the meeting so I can follow up with the person who introduced me and say, "Hey, here's what I learned. Here's how it went," and close the loop.
Daniel Stillman:
And thank them for the introduction.
David Hoffman:
So few people do that.
Daniel Stillman:
Oh boy.
David Hoffman:
Yeah, exactly.
Daniel Stillman:
So, boomeranging is a really great principle here, because we're going to be going back and forth on the timeline a fair bit, because I think in a way, at the beginning of your Techstars journey, if he were in this room talking to you, I imagine he wouldn't necessarily... Well, I'll ask you, how do you think he'd sound? I won't put words in your mouth. Like, if both you now and you then were in the room together, what would he think looking at you, do you think, given everything that you've accomplished so far?
David Hoffman:
I don't know. I mean, I think Techstars has done a tremendous job of creating very valuable businesses at scale. And my first business, Next Big Sound, was one of the sort of early outcomes of that program, but it's certainly been surpassed many times over by lots of other companies and entrepreneurs now. So when I think about that, I think I am but a drop in a bucket of a huge number of entrepreneurs that have benefited from this and can learn this. And I think the scale is what, rather than me individually, is what's most exciting about it.
Daniel Stillman:
Yeah, well, I'm thinking more specifically in terms of what you were hoping to accomplish at the beginning of your entrepreneurship journey.
David Hoffman:
Yeah, yeah.
Daniel Stillman:
And now you exited well and you're starting your second company. Is that what you, what he was imagining then? Do you think he saw that?
David Hoffman:
I think so. Yeah, I think that was the hope, is people finding a path and building businesses that create value for society, and stakeholders and shareholders, and having a great enough time doing it that they want to do it again. And that's, it's funny now. I know we're definitely jumping all over in time and we can tell more backstory whenever you want to, but I just was seeking some advice and help on the new business, and one of the people that I went to was one of the LPs in the bullet time fund that invested from Techstars that invested in Next Big Sound. And so it's these people that I met now 13, 14 years ago, 2009 at Boulder, that I still have relationships with and that still are able to provide massive help and are excited about what we're doing, and vice versa. So, I think that the thing I underestimated, and maybe everyone did, is the power of that community at scale and how those relationships evolve over time.
Daniel Stillman:
Yeah. Wow, and that's a long arc. It is very hard to... And this is one of the things that's really interesting and challenging. One founder who I'm coaching, I think one of the challenges we all have is it is hard to imagine what a 13-year arc is. It's hard to know what an opportunity or a conversation or a person in front of you is going to become, which is maybe why the give first principle is so powerful, because we literally can't know, and yet we also have to balance how much we give and what we focus on.
David Hoffman:
Yeah, yeah. As calendars get busy and people are asking for time, saying yes can be hard, but you're exactly right. You never know who you're actually going to help and what impact you could have on them, and then the cherry on top of who they're going to turn into or what it could become, that's been really gratifying too now, over the last 13 or 14 years, is seeing our peers that we went through Techstars with then, seeing our friends that we were graduating from undergrad with, seeing other entrepreneurs we met around that time, and what they've gone on to do, a lot of them are now in the second or third act of their career, and it's so inspiring.
Daniel Stillman:
So, Samir isn't here to speak for himself, so we can't get his side of the meet-cute. This is the way I think of this, in the rom-com-
David Hoffman:
Yeah, yeah, you always have meet-cute.
Daniel Stillman:
I don't know if you're a rom-com fan. Yeah, there's meet-cutes like, oh, you knock over their coffee. You're like, "Oh, I'm sorry."
David Hoffman:
Yeah.
Daniel Stillman:
Do you remember the first time you met Samir, and what happened? How you two started this conversation that is now a 14-year conversation that you've been in?
David Hoffman:
Yeah, it has been a long conversation. Yeah, so we were both in undergrad at Northwestern, and Next Big Sound was started by myself, Samir, and Alex White, also, at undergrad. Alex was a year older than us, and there was an entrepreneurship class taught by this professor who was adjunct, who we knew had sold his last company and was working on something new, and also teaching, and it was a very well-regarded class. The professor name was Troy Henikoff. He went on to run Techstars Chicago, early angel investor in our first business, and then it's been running Math Venture Partners since then. So, it's a small world, and crazy, again, how that conversation with him has evolved over the 14 years.
Anyway, back to the co-founder story. We got to the first day of class, and Alex and I knew each other because we were in the same major, and we'd met a few times and talked at class and decided we wanted to work together. Samir, I think, showed up late or at the last possible minute and was brought there by another mutual friend of ours, Neil Sales Griffin, who also would actually go on to run Techstar Chicago, and run for mayor of Chicago at one point.
He had run into Samir at Norris and said, "Hey, I'm taking this entrepreneurship class. You should come check it out." And, just kind of by random encounter, Samir ended up in this class. And we knew of each other prior to that: there'd been a big student government election, and Samir and I were, as we found out later, two of the only people on campus that knew how to build websites, and we built competing websites for each candidate.
So, I built one for Neil and he'd built one for the other guy running, Mark, and we were like, "Hey, we both build websites. This is interesting." And Alex was very smart to go, "Hey, these two guys build websites, and this is interesting. We should all work together." So that was the first time we really started working together, was in that class in undergrad, and it's gone on since then.
Daniel Stillman:
Well, it feels like you're skipping some steps, but-
David Hoffman:
Yeah. And rest is history.
Daniel Stillman:
Yeah, the rest is... And a miracle occurs. So you're all in this class and you clearly all value entrepreneurship, because you're there, or Samir found himself there through serendipity or good social pressure. How did the conversation around "Let's make this thing"... Or were you thinking, "We want to make anything," and you found the thing?
David Hoffman:
Yeah. So I found, I fancied myself a designer at the time, so first print design... I'd been doing newspaper and magazine, and then web, like doing themes for blogs, and then software down the line. Samir was a designer too, but he was also a comp-sci major, so he'd been studying computer science; and Alex said a lot of great ideas and was very charismatic. He'd actually pitched me on this idea prior to the class around fantasy sports for music, and I had given him some feedback, and that's kind of where the conversation ended. When we got to the class, that was one of the early things, was figuring out what problem we wanted to solve and what the solution was. We went wide and brainstormed a lot of different ideas, but ultimately Alex, being as charismatic as he is, was very convincing that we should build The Next Big Sound and a fantasy sports for music site, and so we all got on board with that and started building.
Daniel Stillman:
That's crazy.
David Hoffman:
Yeah, so... And it was a funny... You hear about these companies that get started in classes. I don't think any of us thought anything would come of it. The sort of first indication we had were mentors and other successful entrepreneurs that Troy would bring to class. We would practice pitch them, all the different teams in the class, and they'd ask questions and give feedback. And we were getting really consistently engaging questions and feedback to the point where, as we near to the end of the class, Troy, the professor, and some of the mentors that he brought through would take us aside and say, "Hey, if you guys are serious about this you should really consider devoting some proper time and money to it and exploring it."
And there was a entrepreneurship pitch competition on campus, and we enrolled in it, and it was against all these Kellogg grad school kids, and medical device kids and people doing different things, and we ended up winning the competition and getting an oversized check, and we were like, "All right, that's more incremental positive validation." And then we found out there's this accelerator... This is pre Techstars... that was operating in Chicago, down in Champaign, Illinois, and we managed to just squeeze our way into their first or second class that they were running. And so, we spent the summer... Packed up the car, moved down to Champaign, and spent a summer just working on this idea, and that's when we built Next Big Sound 1.0.
And it was the first time any of us had ever really built software, built a business, worked together on something like this. And the way Samir talks about it, and what we'd probably say if he was here, is that that was when we learned how to work together. That was so much of the conversation that was like: who does what, how do we do this? How do we be in alignment and not conflict? What does that look like?
Daniel Stillman:
Yeah. How did you learn to navigate conflict? Because I imagine there was some.
David Hoffman:
I was going to joke and answer, "We learned to navigate it poorly," but that's not doing anyone justice. I think we got really lucky. Alex and Samir were both and are both really thoughtful, patient, kind, smart people, and I think we all approached things with curiosity. One of the things Alex would say to me many years later, that I think about all the time, is in meeting a bunch of people through building a business, he'd ask them about what they valued and how they thought about the world, and the word that always came up was "truth" and just trying to find the truth. And I think over time our collaboration got towards that too, of this isn't about our singular egos or anything else. We just need to find what's true in this world that we're operating in and build based on that.
Daniel Stillman:
That is so interesting. So, what that is sparking for me, somebody had just posted this on Instagram. So, I follow Neil Strauss who... I mean, this is a total side. I'll just read you the quote from Rick Ruben, because I don't know if you-
David Hoffman:
Oh, sure.
Daniel Stillman:
He just came out with this big book, he's been hitting hard everywhere, and there's this thing about making decisions around the moment one collaborator gives into another. By settling on a less preferential option for the sake of moving forward, everyone loses. Great decisions aren't made from a place of sacrifice; they're made by the mutual recognition of the best solution available.
David Hoffman:
Yeah. That resonates.
Daniel Stillman:
Yeah. To me, it's not about my truth or your truth.
David Hoffman:
Yeah.
Daniel Stillman:
It's about the truth.
David Hoffman:
Exactly, the Truth. Yeah. Like, capital T. Totally. It's funny, I think that's one of the things Samir and I initially bonded over, was that we both just had a love for making things, and designing things, and building things, and it happened to be software. And I remember being 20 or 21, brightest... Next Big Sound was getting started, and being frustrated, right? Because you're handling all these things that you are ill-equipped to handle, and really just leaning on this thought that I'd have every day of, "I just want to build things that people love," and just being motivated to make stuff and get it out in the world, and having that be sort of a guiding thing was very helpful. And Samir was very much of the same mindset.
Daniel Stillman:
Mm-hmm. So, the question that I'm tempted to ask is: what do you feel like you were most ill-equipped to handle together as co-founders?
David Hoffman:
Yeah. The list is too long to go into detail, but I can tell a little bit more of where the story unfolded from there, and I think it'll shed some light on it. So, we built a web app. It was a streaming app inspired by Pandora. This was when Flash was still the default technology for streaming music online-
Daniel Stillman:
Good times
David Hoffman:
... to date myself a little bit... And we signed up all these bands. Alex had a ton of connections in the music industry. We had them upload four song demos and then we sent out the site so people could listen to the music, to as many people as we could find, and they could sign with big air quotes the bands they thought were going to become famous. And we were trying to answer this question... this was sort of the genesis of the whole idea from Alex... was how does a band become famous? What happens from that small band playing in a garage to headlining a nationwide tour? What are the steps in between? What's repeatable, what's luck? How does this actually work?
And we got this... I mean, thinking back, this is amazing. We're 20, 21 years old. We've put together this site, we get a writeup in the New York Times, just dream press piece, and it sends some traffic, but what we're seeing in the numbers are just crickets. So no one is using this thing that we've built.
Daniel Stillman:
They're coming to look, but they're not playing with it.
David Hoffman:
Yeah, yeah. Exactly. And growing bands is hard, growing listeners is hard. We're talking to one of those mentors and he's like, "How are you going to make money?" We're like, "We're going to sell T-shirts." And he's like, "So, is this a T-shirt company?" We're like, "No, we don't want to build a T-shirt company."
Daniel Stillman:
Was that seriously a monetization strategy at one point?
David Hoffman:
That was earliest ideas, yeah, and Threadless was really big in Chicago. Then we had met the founders and were really inspired by them. But regardless, we realized this thing wasn't working. We went back to class, it was Samir and I's senior year Alex had graduated. He and Samir and I discussed it, and we wanted to keep pushing and figure out a way to make it work. So he pushed back his job offer and was sleeping on couches and just trying everything he could to get it off the ground. I mean, talk about grit. He really just pushed it through. And, we'd heard about this thing called Techstars and Hail Mary-applied with this idea. We weren't spending too much time on it anymore. We thought it'd be really cool to go to Techstars, though. Ended up getting in, flew out for Techstars for a day and met a bunch of people there.
We were so excited, must have made a good impression, and we drove from Chicago to Boulder overnight. Straight shot in my car... Alex, Samir and I all packed in... and when we got there on the first day, it was this full-day orientation.
David Cohen talks for the whole day, it's the only day he does that. And at the end of it, you can tell he is fried, but we really wanted to talk to him. We went up and said, "Hey, we've got something we need to share." And he goes, "What is it?" "You know that idea that you just accepted into Techstars, fantasy sports for music? It's not working and we don't want to build it." And he said, "That's fine. We invest in people, not ideas. But you need to figure out what you're going to do." And it was the best possible reaction. I mean, so much affirmation that we were there because it was us, not for a specific idea, and acknowledging that we could figure out something that we could actually build.
And so, we went back to the drawing board and we kept coming back to that first question of "How does a band become famous?" And what we realized is that we didn't need to build another destination site where bands and fans were connecting and track everything based on that. Fans were already consuming music online in massive quantities, and the most popular streaming site at the time, to date myself again, was MySpace. So we started tracking how many song plays artists were getting on MySpace, and rest is history, to use that expression as many times as possible while we chat today.
Daniel Stillman:
That's a really interesting shift, from, "We make a place" to, "We're going to go where the people are and where the information is."
David Hoffman:
I think it's, the reason I tell that story is, well, because it's the next thing that happened in that sort of journey, but also because that thing about the truth of and being married to a problem and not a solution. It's like, we want to answer this question. There's so many different ways we can do that, as opposed to, "We came up with this idea; this idea now has to be in the world."
Daniel Stillman:
And where did the seed, do you think, for monetization come from? Because clearly you were jamming on this question of this, how does a band become famous, and that was something you were passionate about, and you really found a shift in going to learn about that, and to get a better answer to the emergence of that happening. But T-shirts to getting acquired by Pandora is a big jump.
David Hoffman:
Yeah, absolutely. During Techstars, once we realized that this was something that was possible... So, as soon as we saw this on MySpace we called a bunch of people in the music industry and asked them, "Hey, are you paying attention to what's happening online and how often your artists are being played?" This is mostly managers and some labels. They're like, "Yeah, we know it's happening, but we don't know how to track it." Some of the more sophisticated ones had hired armies of interns to write down numbers by hand, in spreadsheets,
Daniel Stillman:
Spreadsheets. This is, I feel like every startup is finding a way to eliminate a spreadsheet. Is this a-
David Hoffman:
Every good SaaS startup is. Yeah, for sure. We had them send us the spreadsheets and we were like, Great. We can automate this for you, track way more artists, send it on a regular basis." And they said, "That sounds amazing." And so, we set off to build it and-
David Hoffman:
Well, we weren't that smart. So, being a designer... And this is a lesson I've had to learn over and over again, of the risk of over-designing things. I said, we can just send them a beautiful PDF of their stats and we can show time series graphs and it'll feel like an official report, and we'll send it to their inbox. So, we manually put these together before our crawling abilities were across the board, and put them together for 10 different artists, and sent them out to all their managers on a Tuesday. And we were waiting to hear back, and it was nothing. No one responded, and we were like, "This is bizarre. We've just talked to all these people. They've said they want this, we did it. We sent it to them. What is going on?" And we kind of got that feeling we had with the first version, where we built it and they didn't come.
We're like, "What did we miss?" So we were more persistent this time now, when we emailed all of them and said, "Hey, did you see the report? What's going on?" And I think more than half of them wrote back and said, "I'm on my Blackberry..." To date myself again. "It doesn't open PDFs. Can you please send it another way?" So the next week we switched to plain text emails, just writing in the body of the email a table of the stats that they cared about for their artists, and nine out of 10 of them wrote back and said, "Hey, can you please add this person? Can you track this artist? Can I share it with this person?" And the reaction was exactly what we were looking for and we were off to the races.
But, to answer your question about how do you go from those early days to the monetization piece, we put up a site in private beta and started inviting people in the music industry to it, and got the advice from everyone we spoke to not to launch on Demo Day. So, Techstars has this thing called Demo Day where all the companies present at the end, there's a bunch of investors in the audience, and get some press coverage, and you're kind of introducing the business to the world. We ignored the advice and launched on Demo Day. Luckily, it ended up working and we didn't get crushed too badly, and it got a lot of attention from the major record labels, and we found out that they were spending a lot of money trying to solve this problem already.
And, we are also very lucky to get introduced to someone who had been at the major record labels for a long time, had a deep Rolodex, and knew people there. And the timing... And this is another one of those... Like, I mentioned the word persistence earlier, that I think about constantly. Timing is the other thing I think about a lot based on these experiences. The timing was amazing. Sony had built this team that was trying to measure what was happening, and they were running a pilot for a software provider, and they didn't know who they were going to use yet, and we ended up being just in the right place at the right time to participate in this pilot, have direct connections to a bunch of people there, and I remember going into their offices... We'd fly from Colorado to New York every six weeks... and showing them a blank screen and some of the stats we had and asking, "What do you want to see here? What would make this a part of your daily workflow and incredibly valuable to you?"
So we collaborated with them super closely to build out a pro version of our free product, where you could just get stats on the artist to answer some of their more sophisticated questions, and that led to our first major label deal and SaaS subscription revenue.
Daniel Stillman:
Wow. And that's when things really took off, in that sense?
David Hoffman:
Yeah. So that, we had landed, I think, two of the three major record labels by... Started the company, went through Techstars in 2009. We were working with two of the three major record labels by 2010, 2011 and had a bunch of the smaller sub-labels signed up separately. And so, had licensed charts to Billboard. Alex is an incredible people person and great at getting to know people, and he also really believes in serendipity and just exposing yourself to chance and opportunity, and one of those things that happened were Billboard Magazine licensing charts for Next Big Sound. That gave us this big stamp of credibility.
Daniel Stillman:
Wow.
David Hoffman:
And with that progress we raised a series A in 2012 and moved the company to New York City to be closer to our customers. I think that's around the time we met, actually.
Daniel Stillman:
That's around the time we met, yeah.
At that time, when you moved to New York City and you had your series A, this is a really interesting inflection point in any company.
David Hoffman:
Yeah.
Daniel Stillman:
Right, because I presume you started to hire, and you had to become leaders of an organization.
David Hoffman:
Yeah, yeah.
Daniel Stillman:
What was that transition like for the three of you at that moment?
David Hoffman:
It was challenging, and I think it... some of the things that I learned then are mistakes I've repeated the second time around and really learned deeply from. Yeah, we were hiring pretty aggressively, and we were most focused on data science at the time, which, super nascent practice in 2012. And we were looking at all these predictive models around weather and other industries and asking, "How do we actually use this massive data set that we've amassed to predict who's going to become famous before they're famous, and make accurate predictions?"
And so, not only were we leaders for the first time in a growing group of people, and needing to figure out org charts, and routines and cadences, and one-on-ones, and all the stuff you're supposed to do, but we were also trying to build software just at the bleeding edge of what was possible at the time and manage people who we had no idea the depth of their skillsets and what they were able to do.
So, I think it was a lot of trial and error, honestly, and a lot of trying to bring in senior people who could help. And that's sort of the lesson that I've learned, more than once, is... Especially then. I think when we moved to New York... I was 25 and we were all so young we felt like kids. We were like, we need a senior person who can teach us and who can be the "grown up" in the room, with big air quotes. Now, more than a decade later, I am realizing that the, big air quotes, "grown up" in the room thing is very much a, I don't know, made-up construct. Yes, there's wisdom that can be learned, but I think I learned the hard way that when you start something and you have insights and you have conviction around it, there's moral authority that's attached to that, especially as it relates to decision-making, and when you start to relinquish that moral authority or decision-making... and still in the early days of a startup, which I consider Series A... it puts you at major risk for wasting time and wasting money.
So I know I'm not speaking in a lot of specifics here, but there's definitely a lot of learning around that time of how do we grow up in this business, and how do we just have the confidence to know that we can learn and do this ourselves, and we don't need to necessarily find someone to be the grown up in the room.
Daniel Stillman:
Yeah. So, it sounds like... You said that you're doing that again, or you're trying not to do that again?
David Hoffman:
Trying not to do that again, yeah. So, with the new business, when we started it, I brought on some more senior people and had a similar experience again of, I have the unique insight here, I have the conviction, I have the ability to execute on it. Why am I relinquishing moral authority and decision making on something? Is it imposter syndrome, lack of confidence, fear? And I think the healthy thing and that I've gone through is facing all those things head on and being confident in making those decisions myself.
Daniel Stillman:
Yeah. What was that shift for you, realizing that you could find that part of you to rely on?
David Hoffman:
I think it was just reflection and being honest with myself about what was working and what wasn't and where I was spending time, and that's... Going back to the Next Big Sound story, the piece that was really interesting as we matured and got some confidence there, A: we found some really great senior people who we loved having in the room and who made everyone better. They didn't need to be the, big air quotes, "adult in the room". It was more just seeing them as peers and collaborating.
And the other was just getting into and being really thoughtful about the routines by which we ran the business. And this has been a pattern for me in life, both personal and work, is when things get stressful I lean on routines and try and create good routines. And with startups, it's amazing. When people talk about culture, I literally think, "What are your routines?" That's all I want to know about, because that's in my mind: what defines a culture?
Daniel Stillman:
So when you think back on the routines that saved your life-
David Hoffman:
Yeah.
Daniel Stillman:
... what do you feel like is the baseline in... Especially in, when we're talking about multiple co-founders and complex decision making in a fast-paced context?
David Hoffman:
So we had a superpower at Next Big Sound, which was all living in the same house together. So-
Daniel Stillman:
The three of you?
David Hoffman:
Yeah, the three of us, and then up until we were, I think, nine people, everyone who joined the team moved into a house.
Daniel Stillman:
Wow.
David Hoffman:
And, yeah, we were all 22, 23 people were moving in from out of state.
Daniel Stillman:
What neighborhood were you living in?
David Hoffman:
Well, this was in Boulder before we moved to New York.
Daniel Stillman:
Oh, gotcha. Gotcha. Yes.
David Hoffman:
We were up on the hill in Boulder, by the university.
Daniel Stillman:
I was going to say. It's like, where do you find a place for nine people and-
David Hoffman:
Yeah, in. New York City. I know.
Daniel Stillman:
New York City, where you're living in Jersey City.
David Hoffman:
But we're deep in Brooklyn.
Daniel Stillman:
Yeah.
David Hoffman:
Yeah. But the routine that we developed there was just having dinner together every night. So even if someone had been on client calls all day, or deep working on a project, or whatever it was, we'd all decompress after at dinner and share what happened during our days and kind of stay in sync. And, as the team grew, I noticed the customer support person and the backend engineer never talked to each other. They didn't have a natural reason to at work. So we started bringing bagels in on Friday, just with the idea that we'd all have breakfast together every Friday so that we're doing something as a team on a regular basis, and that evolved into what was called Friday Bagels or Fragels: an all hands meeting once a week where we'd just go over the business and talk about what was going on. And so those sort of routines, of founders having regular dinners and team coming together regularly around a meal, you know, I think are some of the only things that kept us all pointed in the same direction.
Daniel Stillman:
Yeah. How big were you all when you got acquired?
David Hoffman:
I think we were just shy of 30 people, so not huge.
Daniel Stillman:
So it was still possible to have a reasonable all-hands at that point?
David Hoffman:
Yeah.
Daniel Stillman:
Yeah.
David Hoffman:
We'd all cram into a conference room at, benches around the table, and make it happen.
Daniel Stillman:
Did it shift... I mean, this is something that I'm obviously obsessed and nerdy about. There are major differences between a conversation of nine people and 30 people. It goes like, it's a graph theory, right? It's not the log, but it goes up fast. There's a lot of conversational density, and how did you make it as useful and rewarding at 30 as it was at nine?
David Hoffman:
Yeah, and I think it definitely changes. This was pre-remote days, but we were hybrid at that point, so there's also people calling in on Zoom every time, creates these tensions, and at 30 that communication became more challenging. I think we always approached it as a chance for anyone to share and not a "leadership is telling everyone else what's going on" type of meeting. And the way we did that was actually... Trying to think if we switched it at some point, but we had, from Techstars, the idea of Demo Day. We did regular Demo Days at Next Big Sound, and it was mostly engineers presenting, and designers and teams presenting what they'd been working on ahead of it being released, and sometimes going into the backstory or how it worked, mostly showing in.
And so, creating that both opportunity and expectation that every Friday new work is going to be shown, the person who did it's going to be sharing it with everyone. It's not a feedback session, it's a "Here's what's going on" session, being explicit about the intention of it, kept it personal and kept it so it was across the team and not just a small group.
Daniel Stillman:
Hmm. That sends really interesting message, that it's the person who made it is sharing it. It's not feedback. Was it explicitly celebration or is it a "Here it is"?
David Hoffman:
We had a big clapping culture, so after anyone would present anything, people would snapper clap, and I think that sort of just celebrating small wins and being excited for each other's progress was sort of key to the culture we built.
Daniel Stillman:
Yeah, that's really awesome and beautiful stuff, and I wish I could push more on this, but I do want to respect your time and tie up the end of what it's like to reach out to Samir, because I know you took some time between when Next Big Sound was acquired. You stayed for a while and then you had a child, you traveled the world, you took a real breather. And then, at some point, what was it like calling him up and saying, "Strap in", or, "Are you interested in..." How did you start that conversation with him?
David Hoffman:
Yeah. I would love for Samir to be here for... But I can tell you some of the pieces along the way. So, I think while we were still at Pandora, I remember... Let's back up just a little bit. So, the quick connection on the story is we get to New York, have the series A, build all this software, have all these great clients, and we launch Next Big Book. Same thing for music, but in the book publishing industry. Bring on Macmillan as our first of the big five book publishers, and are gearing up for this vertical media strategy to provide analytics and insights for every major vertical as the world's changing.
At the same time, Pandora is our only blind spot. We've tried scraping them and gotten letters from their lawyers. We've met them a few times, we've put together some concepts for them, nothing's gone anywhere. They see the progress we're making, realize that they're not being included, and want to really own it, and we're their first-ever technology acquisition. They make us an offer we can't refuse. We decide to go that route instead of raising a Series B, great outcome for everyone involved.
So we get to Pandora, first time I've ever worked anywhere that wasn't for myself, trying to just learn as much as I can, but also getting curious about things. I mean, I spent my twenties, 20 to 27 or 28 when we sold the company, working nonstop, literally living with my coworkers. You suddenly have this luxury of time, which is even more impactful than money, and you're like, "Who am I? What do I want to do with my life? What did I miss over the last eight years?" Because I was so heads-down. How do I want to spend my time? And so I did a lot of soul-searching, and walking around museums in New York, and exploring interests, and I kept coming back to design. I love design more than anything, and I kept coming back to physical things. I spent so much time staring at screens at that point. I was like, "What is in the physical world?"
And so, we were spending all this time outside of New York up in the Catskills and ended up buying this tiny little two-bedroom vacation cottage 20 minutes outside of Woodstock, and we did a gut renovation from top to bottom, and we didn't have any knowledge of this process. We didn't hire a designer, we didn't hire an architect. I talked to a few. I just hired a contractor and we designed everything ourselves. And, we would stay up at night till three o'clock in the morning, looking at pendant lights, and I narrowed down 500 choices to three, and then we'd pick one, and then they'd be the wrong size and we'd return and buy another one.
And just, we were shopping very intentionally and thoughtfully for products to design this space and design our life. We were at that sort of moment in life when you have the opportunity to do that. And that's kind of what opened the door on the next chapter. So, I remember being at Pandora and being out with some people on the team, and Samir one night, and telling them about shopping for this project and saying, "You know, we've built this taxonomy of data. We've learned from Pandora, the Music Genome project, how you can tag everything and organize it. This doesn't exist for home, and what would a taxonomy of home look like?" And we riffed on it for a little bit and then kind of dropped it. And we got to the two-year market Pandora, and I left and traveled and explored, and I just kept coming up with prototypes and building them and sending them to people and asking for feedback, Samir included.
And I thought I was building a remodeled operating system for a while-
Daniel Stillman:
Yeah, I remember that. That is-
David Hoffman:
... A marketplace. Kept coming back to this selection sheet. So, what are all the things that need to be specified when you're designing a space, and how does that live? And then I ended up working with a few different people on it, and I remember it got... I was getting frustrated with Samir. I was like, "Come work with me on this." He's like, "Man, I'm busy." And so, I would do things like say, "Hey, I don't care what we work on. I just want to work on something together."
And I was in Florida at the time, he was in New York. I flew up for two nights and stayed at his apartment, and we just built a stupid side project that didn't go anywhere, but just had fun building together; or I'd be visiting the city and go out to lunch with another friend and talk about an idea. It's just this exploration process. I finally got frustrated because he was still at Pandora, and then taking some time, and I just hired a developer on Upwork and designed everything myself. Wrote the HTML and CSS and had him build this contract proposal application software where a part of it was selections.
And on the selections piece, I wanted it to be able to support any product that you could add so you could see the products together, and the Upwork developer didn't know how to do that, and it was very similar to what we built at Next Big Sound, adding artists from anywhere online. So I sent it to Samir. I'm like, "Samir, I've got the smallest project for you. I just need you to build this scraper so you can add products to this selection sheet thing I'm building."
And so we built it and got it in there and it was working, and it was really cool. And we were like, "There's something here." So we went out to... I met up with him in Green Point where I was living at the time, and we walked over to the river there. I was like, "Look, I really want to work with you again on this next thing. I don't know what that looks like, but it's been fun working on this piece. Let's keep exploring." And it was this... it wasn't the sort of thing where it was like, okay, we sold the last thing. We're obviously going to work together on the next thing. It was like a, "Holy shit, that was an emotional roller coaster. Crazy last eight years. We all need time to decompress and then figure out what we're doing next."
Daniel Stillman:
Yeah. And I can see how the arc of this conversation was planted in that one and you kept returning to it.
David Hoffman:
Yeah.
Daniel Stillman:
We're at time, so I guess I will ask you for your parting thoughts. I mean, obviously I'll stay on this call as long as you'll let me, but I want to respect your time, because I know your wife's in the background.
David Hoffman:
No.
Daniel Stillman:
You have a life. But-
David Hoffman:
Sorry I've been long-winded. I do actually have to jump to talk to a VC right now, but-
Daniel Stillman:
No, that is more important. What is the-
David Hoffman:
But I think-
Daniel Stillman:
... the one... Yeah, sorry. What would be your closing thoughts? Wherever you want to end this.
David Hoffman:
The thing that you made me see on this call... And I'm really grateful for, I want thank you for... is this idea of a conversation over a long arc of time, over a decade or multiple decades. And I rarely reflect at that sort of scale, but the serendipity of how things connect over time and the way the small decisions that you make ripple really stood out to me in this.
Daniel Stillman:
That is beautiful. That touches me. I really, I'm so grateful for that. I'm grateful for the time. Good luck with the call.
David Hoffman:
Thank you.
Daniel Stillman:
I'll just assume that we can call scene and we don't have to bleep anything out.
David Hoffman:
No, it was perfect. Thank you so much, Daniel. Let's talk soon.
Daniel Stillman:
Thank you, brother.