Name: Martin Stiksel
Nationality: Austrian
Age: 33
Job title: Co-founder of Last.fm
Last.fm is the world's largest juke box, with more than 5m tracks available for anyone to listen to online. But it is more than that - if you log on and register it will create a unique music profile for you, enabling you to link up with your "musical soulmates" and recommending you tracks and artists based on your established music tastes.
Birth of the idea
"I'd been a DJ in Austria and moved to London in the late 1990s, because this is the city to be in if you are into music," says Stiksel. "Originally I teamed up with [fellow Last.fm co-founder] Felix Miller to create an online record label for unsigned bands. Musicians were able to upload music and get people to listen to it. We had some amazing music and we wanted to work out how to get these great bands to the people - how do you promote music that people know nothing about?"
Stiksel and Miller came up with the idea of building a profile of music taste, similar to the way in which Amazon recommends books to its users based on what they have previously looked for or bought, and in this way they could lead listeners to bands they might not otherwise have heard of. "This was back in 2002, and then we came across an article in the Guardian, which described Richard Jones's Audioscrobbler - basically he was creating software plugins that work with your media player to monitor what you listen to and then builds up an accurate music profile, which means that new suggestions can be made based on what you listen to, and what other people listen to who like the same bands as you. Richard was still at university, but we got the train down to Southampton and hired him to work for us before he had finished his degree."
Stiksel and Miller had been running Last.fm for about a year before recruiting Richard and had built up about 1,000 users. When they implemented his Audioscrobbler software the traffic shot up. "It was great to have more users, but we avoided any press coverage or publicity at that time because our servers just couldn't cope with the increase in traffic that this would provoke. Publicity was an enemy at that stage," Stiksel recalls. "The site was growing in popularity purely by being passed around music fans and by being picked up by bloggers, who were able to display their most recently listened to tracks on their blogs."
Growth of the company
In the early days Last.fm was a typical start-up, with the partners using savings and loans from their parents to fund the company. They weren't even able to pay proper salaries. Richard was living in a tent pitched on the office roof. "I then managed to convince a friend to lend me some more money and with an investment of £50,000 we got to one million users. That was enough to convince an angel investor to come on board in October 2005, which allowed us to improve our technical infrastructure so that we could support the increased volume of traffic on our site. Our initial revenue was coming from Google advertising and links to Amazon to sell music. We also really benefited from user donations in the early days. Once institutional investment arrived we scaled up the whole operation."
Buy out
Last year, the three founders sold the site to the US media giant CBS for £140m, making it the largest ever acquisition of a UK social networking company. The deal made the three co-founders multi-millionaires over night (they each received more than £19m). It's safe to say Richard is no longer sleeping on the office roof.
"We had acquisition requests from as early as 2005," Stiksel points out, "but we felt it was too early for us, that we hadn't yet achieved what we wanted to with the site. When CBS came along we really felt that that was the way forward. We saw eye-to-eye on our vision - that we can become the last place for music on the internet, a one-stop shop for music online. We wanted to be solidly set up to weather any storms that came our way. With CBS behind us we felt that we could achieve more. It helps to have someone big behind you showing you support, it gives other people confidence in you that they just don't have in a start-up."
Since then, they have seen strong usage growth in all sectors. "We have been able to launch a couple of new services that we just didn't think we'd be capable of doing - such as the free on-demand service which allows listeners to play millions of tracks in their entirety. Contrary to stopping people from buying music, this has led to an increase of 66% of 'buy button' clicks, which shows that being able to listen to music [for free on Last.fm] sustains the industry rather than canabalising it."
The future
So what of the future? "Employees now feel much more secure than when we were a start-up and it is easier to hire people and to attract other business partners," Stiksel says. "Our offices have expanded and we now employ more than 80 staff.
"There was a real need for a great music site. YouTube was there for video but music didn't have a home. Last.fm is its home. Our mission is implicit in our name - we want to be the last place for music on the internet. We will continue to expand, there is so much to do."
