
After big layoffs SoundCloud founder says its strategy is to ‘take back control’ - weitingliu
https://techcrunch.com/2017/07/12/after-big-layoffs-soundcloud-founder-says-its-strategy-is-now-to-take-back-control/
======
ChuckMcM
I can't help but feel badly for SoundCloud and their CEO. Over the years I've
seen dozens of companies get to a point where its clear that the future is not
what they had envisioned. It's that moment of facing reality of "If we were
likely to win, we would have by now, but we didn't so really what is next for
us?" It is that point where the investors have seen perhaps three or four
internal projects that haven't pushed them into that accelerating growth
point, and there really isn't enough money to go further. So the investors
have said to themselves, "I'm thinking this one isn't a winner." Let's focus
on some of the more promising companies in our portfolio.

The CEO is massively constrained in what they can say when a company reaches
this point, so they all say the same thing, "We've got great things happening,
really hated to have to let go some great people, we're aligning the company
on this awesome plan to take us to the next level."

The alternative is saying "Nothing we've been able to think of to date has
created a viable business. We're now at the point that we are losing money so
fast that even our most optimistic ideas about what might work were beyond the
point where we cross $0 and go negative. We're laying off a bunch of staff
which will slow are burn rate enough to pursue both a "Hail Mary"[1] strategy
and look for a way to liquidate the company and claim victory anyway."

Hedge funds and other private equity firms will come out and review what
things they have and how they might be re-packaged or sold, internal investors
will squabble over terms and conditions of bridge (aka Debt) financing to let
them live long enough to get there, management will be constrained by this
effort to focus mostly on selling the company and less on actually making it a
viable proposition. It sets the clock, and when the debt financing runs out,
everyone goes home sad.

But nobody ever says that. They say "We've got this new direction we are super
excited about."

[1] "Hail Mary", made popular by quarter back Roger Staubach
([https://en.wikipedia.org/wiki/Hail_Mary_pass](https://en.wikipedia.org/wiki/Hail_Mary_pass))
is a plan that conceptually can be successful but is probabilistically
unlikely to succeed.

~~~
harmmonica
Do you think that employees stick around because the CEO/leadership says
"we've got this new direction we are super excited about" and they would bail
if they got "nothing... has created a viable business"? That is, are the
employees who stick around happy to stick their heads in the sand as long as
the leadership throws out the "we're excited" bone?

I would prefer the honesty about the hail mary and I would think most HN
readers would feel the same, but I wonder if that's the norm and CEOs/leaders
just can't/won't (shouldn't?) admit the reality regardless of how obvious that
reality is.

EDIT: I should also say that I'd likely go to the mat for the person who's
honest about the hail mary.

~~~
ThrowawayR2
> _Do you think that employees stick around because the CEO /leadership says
> "we've got this new direction we are super excited about" and they would
> bail if they got "nothing... has created a viable business"? That is, are
> the employees who stick around happy to stick their heads in the sand as
> long as the leadership throws out the "we're excited" bone?_

I think you underestimate the capacity for people to delude themselves. Change
is painful and a change that leaves behind a projects that you've invested
heavily in is even more painful (sunk cost fallacy). Talking about the
realities of the situation shatters that self-delusion.

You also fail to account for morale. We've all heard of tightly-knit teams who
managed to succeed against incredible odds because they believed in what they
were doing; the converse is much less talked about: teams that believe they
cannot succeed, inevitably won't.

So, from a management perspective, it never makes sense to admit one is in a
"Hail Mary" situation, even when it's patently obvious.

> _EDIT: I should also say that I 'd likely go to the mat for the person who's
> honest about the hail mary._

Bluntly, why? Your family and your future retirement depends on your income
and career success. If the prospects for success are that bleak, how does it
make sense for you to take on that risk personally? "For the good of the
company?" For your own sake, I would hope not.

~~~
stillkicking
The capacity for self-delusion is indeed great, but in my experience, the only
people deluding themselves in a situation like that is management thinking
they are successfully saving face. Which is really what it's about.

Employees know what's up. The people who just lost their job are plunged into
chaos regardless, and the ones who are still part of the ride are now
wondering when they'll be next. If management has shown they will keep up
appearances right up until it becomes untenable, that teaches employees a very
destructive lesson: you won't have any clue you might lose your job until it's
already a done deal. That doesn't create peace of mind, it creates paranoia.

Worse is when such a restructuring is paired with lofty visions of how the new
strategy is going to work out in 6 months or a year, often presented in a very
long and painful meeting. All anyone really wants to know is what is going to
happen next: how are the next few weeks going to play out, now that a bunch of
people are no longer here, and everyone else has to pick up the slack
regardless?

That's why you should respect people who are actually honest with you. Being
given the information you need to plan for the future is far more important
than pretending you don't need to.

------
josephpmay
It's a huge shame that SoundCloud is likely dying, because large segments of
the music industry and literally entire genres of music are solely on
SoundCloud. This may sound hyperbolic, but I feel like them shutting down
would be the "burning of the Library of Alexandria" of 21st century music

~~~
cr1895
As another mentioned, the Alexandria analogy is best applied to what.cd being
shut down last year. Here's an article describing it.

[https://qz.com/840661/what-cd-is-gone-a-eulogy-for-the-
great...](https://qz.com/840661/what-cd-is-gone-a-eulogy-for-the-greatest-
music-collection-in-the-world/)

I wasn't ever a member, but it's clear to me that an immense body of knowledge
was lost when it was shut down. Much more so than SoundCloud shutting down,
unfortunate as that may be.

edit: anyone who was familiar, how did the categorization and documentation of
what.cd compare to Discogs now? I find Discogs invaluable and immensely
useful, but it certainly doesn't have the rigorous QC that what.cd had. Anyone
can edit entries, and it's not infrequently that I encounter something
incorrect.

~~~
kough
The private torrent sites (What, and others that I won't name here) all tend
to refer to Discogs as the authoritative source of catalog information. The
difference is that while Discogs knows about metadata, it doesn't have any
music.

I think I was depressed for a week when What shut down.

------
macawfish
I wish they would partner with services like Patreon and flattr instead of
limiting everything to a stupid subscription model. I imagine that many
artists could get a lot more revenue through voluntary payment services than
through forced subscription models.

~~~
jaggederest
Not gonna lie, I find it really amazing that I see really niche projects with
three- or four-digit patreon income levels, things like that. I'm really glad
that as a society we've found a way to support public goods directly.

~~~
toomuchtodo
SV Delos, known for their sailing videos, is pulling in $10k per video.

[https://www.patreon.com/svdelos](https://www.patreon.com/svdelos)

[https://www.youtube.com/user/briantrautman](https://www.youtube.com/user/briantrautman)

------
rfrank
This seems strange, given that another article from TechCrunch today states
that the layoffs bought them very minimal runway.

[https://techcrunch.com/2017/07/12/soundshroud/](https://techcrunch.com/2017/07/12/soundshroud/)

> Instead, sources at SoundCloud tell TechCrunch that founders Alex Ljung and
> Eric Wahlforss confessed the layoffs only saved the company enough money to
> have runway “until Q4” — which begins in just 50 days.

> A core question from staff during the all-hands was why there wasn’t
> transparency into the finances or a strict hiring freeze. The message from
> management was that a hiring freeze would show weakness and lead to people
> asking questions. That wasn’t satisfying when the company ended up shedding
> almost half its staff.

~~~
valuearb
If they actually thought a hiring freeze would actually show weakness, then
they deserve what they got. Not being transparent with employees basically
shows these two aren't suited to motivate or lead anyone.

~~~
rfrank
My take on the matter too, particularly the hiring freeze thing. Yeesh.

------
thinbeige
I am still waiting for some words from Fred Wilson, one of their loudest VCs.
After he was worshipping SoundCloud in so many posts and glorifying the future
of 'sound' for (too) many years I'd like to hear an update. A VC should not
just hype a company when he invested but also comment on tough times.

Fred, what happened? What did you tell your LPs? Bad luck? Let's gamble on the
blockchain now?

------
redm
The biggest problem is what the article touches on, loss of the best
employees. They kept who they thought were key, but the best employees, the
ones who really move the needle and have lots of other opportunities are out
the door first.

Losing your best talent means time to market goes up for new products and
quality goes down. It's also really hard to get top talent again. This makes a
bad situation far worse and its why so few companies can recover.

On top of that, the investors are going to push for a sale or write off the
company completely. It becomes toxic very quickly.

There's still time for SoundCloud, it still has value, but they have to make
some good choices in the near term.

~~~
di4na
At the same time, Netflix discovered that keeping only the good one accelerate
your time to market and productivity by a huge factor.

------
matt4077
I wish I could somehow archive some of their content. They have a serious
amount of audio data and are the only source I know with annotations attached
to specific seconds within a track. I've been thinking about building a music-
generating neural network–something that may work especially well for
electronic (and often instrumental) music that soundcloud has a lot of.

Unfortunately, they have limited their API access to approved developers, and
I haven't even gotten a response after applying two months or so ago....

~~~
aeontech
ArchiveTeam is discussing archival efforts I think, but I doubt they'd be able
to get all of it, it's a pretty big dataset (several PB, I think).

It sounds like youtube-dl tooling works with soundcloud though, so you could
write a crawler to at least archive your favorite artists' tracks
individually.

Example: youtube-dl
[http://api.soundcloud.com/tracks/182804938](http://api.soundcloud.com/tracks/182804938)

------
flyinglizard
They should start begging for money, Wikipedia style. I'd happily pay $50-$100
a year for a service I use for like 10 hours a day (I already pay di.fm
something like that).

~~~
nemo44x
That's how charities, not businesses work.

~~~
flyinglizard
It's a long standing model in the software world (freemiums, sharewares, etc).
I suspect SoundCloud demographics won't withstand a mandatory subscription.

~~~
nemo44x
Right, but I was taking that from the CEO of MySQL. In a presentation (after
they were sold) he mentioned that he once got a donation from Craig's List for
$15,000.00 since they were big users of MySQL. It was at that point he
realized the problem with their open source business model.

------
erikpukinskis
They seemed to remove the in-browser recording feature so I stopped using it.

------
scopecreep
Remember the employee you guys had that said "Comment timelines are neat but
this is not enough to establish a working business"?

Find him/her - rehire him/her, and fire all of the fucking idiots that ignored
them. They should have sold the idea to Google - at least then we might all
benefit from it.

Instead, SoundCloud, and comment timelines, will be a neat idea strangled by
poor leadership.

~~~
draw_down
Dear lord, no. That feature is not ever anything but annoying.

~~~
weego
I have actively spent a good amount of my free time finding or maintaining
chrome addons to block that garbage. It's the most inane and vacuous product
feature I've come across and that's ignoring that it used to be so badly
optimised that changing the comment caused a noticeable browser slow down

~~~
draw_down
On the other hand, it's really useful to know that DragonSlayer69 thinks 0:41
of this song kicks ass.

~~~
empath75
If you're a producer or DJ, it actually is incredibly useful.

------
likeclockwork
AGAIN? All these companies saying come put your content here and then they
fold.

I still remember mp3.com. I feel like we need some kind of distributed
federated service for self-publishing music at this point.

------
moomin
I've heard that slogan before. It didn't end well.

------
capex
I thought Soundcloud would truly become the 'Youtube of Audio'. But it seems
to be trying to do too many things. Right now, there is no place on the
internet where I could search a keyword and find relevant podcasts about a
topic. Why can't Soundcloud do that? Just be the Youtube of podcasts, leave
the music part to others.

~~~
cr1895
Curious...why doesn't <any search engine> fit the bill? Not a podcast
listener, so maybe it's not as simple as searching for music.

------
9gunpi
well, laying off the most expensive part of SC + focusing looks like business
is getting mature and practical, given the competition and turning from
'exciting new thing' into regular normal business.

