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How Rap Genius Raised $1.8M in Seed Funding Without Knowing What We Were Doing (rapgenius.com)
146 points by tomlemon 1487 days ago | hide | past | web | 102 comments | favorite

> It’s not just about the merits of your website – if it were we’d be at the Four Seasons 6 months earlier – it’s about whether you project energy, excitement, and confidence.

Thank you, Rap Genius, for packing everything depressing about what the industry I chose to spend my life working in has become into a single convenient sentence.

Let's be clear, Rap Genius is a consumer and social focused web startup and by definition exists in a highly competitive space. It is technically simple and can be replicated fairly quickly by a competitor. The product itself must exude energy, excitement and confidence to differentiate itself.

Why would anyone invest in something like that if the founders don't project those values?

If you have a product that's the result of real technological innovation or time consuming R&D and has real growth potential, you'll find investors regardless of your confidence and energy levels.

Even more depressing for you, probably: exactly the same thing is true about virtually every other field of human endeavor as well.

This seems like it should be true, but actually I can think of dozens of counterexamples just off the top of my head. There are in fact many fields of human endeavor where, if you're sufficiently good at your core competency, nobody cares if you project energy, excitement, and confidence.

> There are in fact many fields of human endeavor where, if you're sufficiently good at your core competency, nobody cares if you project energy, excitement, and confidence.

Probably because they're the bottum rung working for someone who is energetic, excited and confident. Essentially, if you don't need to lead anyone, you can have these traits. Or you work for the government.

Confidence is the only really defensible trait of the three. Lawyers, surgeons, accountants, and so on probably need to project at least that one, but nobody cares if those people seem energetic or excited.

Even the ability to project confidence isn't a universal requirement though. Nobody gives a rat's ass what an athlete in a solo sport projects.

Not true. Doctors come to mind.

The top doctors in any given field are some of the cockiest motherfuckers on planet Earth. There's no lack of confidence in that field. None.

And think about it: at the top of that profession (especially surgical specialties), you're basically selling to the uberrich. The field is highly competitive. It's a market predicated on referrals, networks, and especially social proof. Your skill is critical, but skill is a table stake.

Your average, run-of-the-mill, family doctor is a different story. But "baller ass" doctors need to project, well, ballin' assness.

Top by what standard?

If it's not objective, they're not top.

The doctor who rescued MY life from a disabling illness is humble, because people who are cocky have something to lose if they admit they don't know the answers.

"Top by what standard?"

I am specifically talking about top by money earned per year. Not top in terms of best outcomes, or most effective.

Ever get a diagnosis from a doctor who doesn't exude confidence when she gives it? It is the most unnerving experience I've ever had (in a hospital)...

Ever get told that you're "just un-fit" when merely standing up causes you to nearly pass out, by a doctor who exudes confidence?

Better to lack confidence than have too much.

Great point! I hope you're okay - that sounds like a really ugly thing to go through...

Thanks for asking. I'm ok. Turns out I developed a medical issue that caused my body to dump salt, one of the causes of POTS (Postural Orthostatic Tachycardia Syndrome) which is a known disorder.

Electrolyte pills solved it (at least, the symptoms). I discovered this by accident, when I had another reason to take electrolytes and then suddenly I could stand up again. Stupid doctors.

Competency can compensate for a demeanor that is listless, dull, and uncertain but if your profession requires direct engagement with customers you will likely be at a disadvantage. What are the counterexamples you developed?

Given a choice between someone who projects energy, enthusiasm, and confidence and someone who doesn't the latter person will normally have to demonstrate considerably more competence. In particular low energy and lack of confidence in an expert undercut a perception of competence.

Including, in my estimation, most of software engineering.

> about what the industry I chose to spend my life working in

Would that be the VC-raising industry? Because there are many web startups out there that have had no such experiences, have avoided VC and chosen to simply grow slowly, happily and by investing the founder's time and energy rather than other (often highly dubious) people's money.

Don't be depressed because some fools are handing out millions to other fools, you don't need to compete with that. All that counts is your product.

Everyone seems to be stuck on the word "project"

It's unquestionable that you need energy, excitement and confidence to be good at something. Anything from being a doctor, lawyer to professional athlete.

So let's clarify these words before we start the strawmen arguments of "So lawyers should be jumping for joy and act like Billy Mays in the courtroom, right columbo?"

Energetic (Possessing, exerting, or displaying energy.) - You need to have energy about what you do. Stephen King is energetic about writing horror fiction. He doesn't high-five everyone around him but you can tell he puts his energy into his books.

Excitement (A feeling of great enthusiasm and eagerness) - What you do needs to excite you. It should be something that keeps you up at night thinking about it. A good surgeon should be excited to learn about new techniques and discoveries in his field.

Confidence (a feeling or consciousness of one's powers or of reliance on one's circumstances) - You absolutely must know that you are going to sink that next basket. You don't need to walk around like you're the best person at the game but you need to believe that you yourself have the ability.

So yes, you need these traits to excel. To argue this is really just leading towards a debate of "Well I choose a narrow definition of excitement and since doctors aren't that then it is irrelevant".

Projection (The act of projecting or the condition of being projected.) is going to be the only thing people can fall back on. I don't believe they are saying to fake some part, but it definitely is not what I'm saying. Having these traits leads to projecting these traits. Your excitement, confidence and energy comes out when you talk about what you love to do. It just does.

I'm sorry, I'm all in favour of loving what you do and agree that this generally leads to good results, but that interpretation frames the sentence in a completely different context than the original story, which is the following:

> So fundraising is a psychologically trying experience that depends very little on any sober analysis of the quality of your product

Smile or die, motherfucker!


> It's unquestionable that you need energy, excitement and confidence to be good at something. Anything from being a doctor, lawyer to professional athlete.

Oh, that is VERY questionable. The first two are focussing on positive emotions and ignore the important role negativity plays. Smilarly, confidence does not in any way equate capability.

> Projection (The act of projecting or the condition of being projected.) is going to be the only thing people can fall back on.

No, that's just our intuitive mind being too lazy to do a rigorous analysis of the situation. I recommend "Thinking Fast and Slow" by Kahneman to fix this.

> The first two are focussing on positive emotions and ignore the important role negativity plays.

There's no definition of either that I know of that includes "positive emotions" and ignores "negative emotions". That's a made up definition.

> Smilarly, confidence does not in any way equate capability.

Never said it did. I also never said these were the only things you need. But you do need them.

There's no way forward without going to specifics. I guess I'd need to see an example of 5 or 10 industry leaders or greats, from any industry; Linus Torvald, Mary Roach, Warren Buffett, Jon Stwart etc... that did not have energy, enthusiasm and confidence.

Have you ever listened to an interview with Michael Jordan? He specifically stated he "knew" he'd make the next hoop.

Confidence is extremely important in athletics, engineering, business, etc. Some more than others. But someone with confidence issues will never be as efficient and consistent as someone who is not. You must have personal belief invested in yourself and your corresponding ability before you can really use it effectively.

I agree with excitement and energy though. I know quite a few people who hate their jobs but do them successfully.

My point was that being confident in itself doesn't make you good at something.

I think this is more true for the startup funding industry, which is sort of its own little world. The core of business development doesn't necessarily depend on that kind of thing.

So true. The startup funding industry is much like a sales gig. One where you often are selling a product that doesn't even exist yet. But not to customers, to investors in hopes that customers will be there on the other side.

Nothing against the VC industry but it represents a majority of discussions on HN and little outside.

If you, as a startup founder, can't authentically and sincerely project energy, excitement and confidence about your idea, then something is either wrong with your idea or you are in the wrong business.

The problem with this logic is that "energy, excitement and confidence" don't have anything to do with the merits of an idea. An idea can be good without any exhibitions of personality. The tree still falls, after all.

However, if expressions about an idea do relate to the quality of that idea, each taken in isolation, what does that say about the concept of meritocracy? That perhaps meritocracy applies only to people and not ideas, and that "meritocracy" in this context has a much narrower definition than a plain reading of the word would suggest.

The merit of execution is equally important, if not more, and execution will require taking risks, and risk will require confidence.

Sure, but neither are the expressions described components of execution.

Not all startups are purely technical execution.

What do you mean?

I mean confidence can be a part of execution... for example, when you are trying to sell a product. Ingenuity, perseverance, etc, are also attributes of execution and they are not strictly technical.

In other words, if you just have technology (and we're assuming not groundbreaking patentable-technology), you'll likely fail if you have no perseverance and no ability to convince people why it's useful.

It's not about the idea though.

The problem is game theory.

All startup founders know they stand a better chance if they project energy, excitement, and confidence, and this is very cheap and easy to do, so they all do it.

As a result, experienced investors become inured, skeptical of it, and ignore it, knowing it's the easiest thing a founder can fake. They look for signals of more substantial stuff, be it the Three T's (Team, Technology, Traction) or something else.

In fact I would argue these days you stand a better chance of distinguishing yourself among investors if you pointedly do not exude energy and excitement at least, but rather sober, quiet confidence, competence, domain expertise, focus, and resolve.

That said, his points about actually being confident, and managing your own psychology, are right on.

How does it go from

"The problem was that even if every warm lead invested the maximum plausible amount we’d still barely make it to $1M."

on to: "PG advised us to dream up some way of lowering our cap for our existing investors to get more takers, which would have been a hella-beta conversation to have and who knows whether it would even work because showing that kind of weakness is a major turnoff."

then: "And yet it ended up totally fine!"

-- all this fluff about sockless bearded russians, and apartments with track lighting but they left out the most important part?

BTW.. does track lighting in apartments state some level of wealth that I'm unaware of?

I explain more in http://news.rapgenius.com/1901085 (Click the green lines FOR ANNOTATIONS)

But what's the deal with track lighting?

I see track lighting and immediately assume a botched renovation job or if it is a new space they ran way over budget and then realized they needed lights in the room.

It's funny, when I think of track lighting the first thing that comes to mind would be art galleries or renovated high-end loft spaces. I guess it must be whatever type of track lighting you're most used to seeing.

I didn't know what the heck the OP was trying to indicate about track lighting either. Given the context I figured it was some type of insult about him being cheesy though, I didn't really understand it.

I should have been more specific with my comment. It should have read "When I see track lighting in a residence...". Track lighting and art galleries go hand in hand for me as well.

That being said high-end lofts are just as susceptible to crappy renovations or going over budget and forgetting to light a room. The way I see it lighting should either be a flourish of design (pendant lights in a kitchen / chandelier-esque hanging thing in a dining room) or not seen at all.

good point. I still can't figure out if the OP was trying to say that the "baller" track lighting indicated he was really rich (ala art gallery) or if he was really cheesy (ie, cheap condo renovation). Also mentioning $600 per night on AirBnB would seem to indicate that the place was swanky, seeing as how that's towards the high end even for San Francisco. I don't know what they were trying to say, I'm confused!

About that $600 figure, if you click the text you get something closer to the truth:

It was actually closer to $300 / night, but $600 sounds better

These guys are loud, belligerent, arrogant and outright absurd [1]. But they are doing something incredible.

They have a product with widespread adoption and a massive scope of new verticals to tackle, and they (I think) have a vision for this technology to make the web a better place for all of us. Just as Facebook was brilliant to attract the love of the cool kids (first Ivy league, then all college kids, then high school + college, etc.), which led to worldwide adoption, RapGenius is taking a far more creative approach than to just build an annotation layer over the entire web without any common beliefs, passions or interests to galvanize the community.

I'm excited to see it pan out.

Edit: I probably shouldn't call someone loud, belligerent, arrogant and outright absurd without a link. :)

[1] http://www.youtube.com/watch?v=4NAzQPll7Lo

For a social site, they are doing great but how could they possibly have any technology that the CIA would need?

And while I realize their personas are a joke, to me, they represent everything I dislike about music.

Also advocating amphetamine use (not much different than meth) and openly talking about delusional theories of having sex on them would somehow produce smarter kids is just insane. I know some of it's a joke but their narcissism seems authentic.

"And while I realize their personas are a joke, to me, they represent everything I dislike about music" and pop culture in general. The decline of authenticity is depressing.

The transition from "give me love... We decided to ballersource it" to "the technical limitations of the web dating back to Netscape" and "our vision for annotation as a new form of communication" is breathtaking.

It's nice to see someone calling out fundraising for what it is: an enormous mind game. Imagine how hard it would be to be that confident if you weren't the hottest YC company in the batch. The RapGenius guys had everything you could ever want in terms of traction, network, and social proof, and they still had to convince themselves that they were worth it.

I'm not sure if its disrespectful or awesome that they're referring to a VC as a "baller ass Russian dude".

I suppose being able to talk like this is a privilege only available to a site like Rap Genius. I think I love it.

"Baller ass" might be some of that rap lingo. We don't have rap genius annotations here, so I can't verify.

We should get Rap Genius annotations on HN comments.

Heh, I hope you're kidding. If you're not in this context it means the dude is extremely rich and shows it.

This would be perfect for that annotation!

(I was kidding :D)

"Baller ass" in this context is equivalent "badass" or "awesome"

Edit: Source: Grew up in LA?

I thought it was extremely clear that they are selling their image instead of just saying:

"So, we've got this wiki-ish kind page but when you click on a link you get this modal popup thing where stuff is explained to you instead of visiting a new page."

They know they are selling their name and image and they do it full-force.

I really hate this style of writing.

Whaat?? That writing steez totally rules. It sounds totally natural to me, like the same as I would talk to my boys, chilling at the park. You must be totally lame.

Totally should be tots, "This writing steez tots rules"

Odd...i thought spelling of that was "totes". Tots makes me think of taters (which are delicious...so that's ok).


Same. It als really rubs me the wrong way how he claimed the baller ass Russian dude's AirBnB listing was $600, only to later annotate "It was actually closer to $300 / night, but $600 sounds better". Everything sounds better when you exaggerate.

It is not just you. I was constantly distracted by the writing style. How can a "saucy" sub taste like cardboard? Why bread-y and not sauce-y?

I do not know if this overly affected style of communication is prominent in the valley or if it is done in the service of pump priming for newsgenius annotations. I am still curious what a "hella-beta conversation" is.

In this case "beta" (weak, subordinate) is being contrasted with "alpha" (confident, in charge).

By asking for money you are already in a position of subservience. The whole thing about being alpha is that there is no person/animal above you in the hierarchy and therefore no person to ask.


I'm assuming they are speaking of beta in the kind of male-dominance sense it holds in the animal kingdom.

So being "hella-beta" is kind of backing down and giving up the power to someone else who is the alpha of the group.

I had no idea that the animal kingdom was male dominated. I am not familiar with a lot of animal group dynamics, with wolves it is the alpha male and the alpha female; aka the breeding pair. Moreover asking for any amount of money from someone seems "hella-beta."

I think it's a typo of "betta" for "better."

Initially I thought the same thing but after rereading the sentence/paragraph it seems that the situation is not "better."

I think this style of communication is specific to rap genius. It's just their particular way of merging tech/VC and hip-hop vernacular. I agree it can come off as disingenuous, and sometimes confusing. Like some other posters, I was wondering if "beta" was a typo of "betta."

Also, although they were part of YC, they're based in NYC, not the valley.

I have only met two legitimate baller gangsters in my life and they did not talk like this. Moreover I think I would have gotten my ass kicked if I talked like this to them.

If something sufficiently awful happens to you, everything you eat can and will taste like cardboard.

So it should have been "sauce-y"?

  Saucy (adj): 
    1. impudent, flippant
    2. bold and lively 
    3. sexualy suggestive

Most people would have not idea what we're talking about in most threads here. Lingo, context and style.

How does Rap Genius make money?

It looks like they sell equity to investors for cash. This is a perfectly reasonable startup business model, provided you have a good potential to make money in the future.

1. start project 2. sell equity 3. ??? 4. profit

Did i get that right?

"Today at TechCrunch Disrupt, the Rap Genius founders told me they plan to monetize by building installation of their site for big companies and government agencies. Biz Genius is coming."


That is, for lack of a better word, "genius". The Warren Buffet example is interesting in terms of background, but this idea would be even better for "translating" from legalese to something that an average person could understand.

Imagine if every government bill was annotated or available online for the public/scholars to annotate. This would be really cool for terms of service, as well.

they don't

edit: they ask for it

Really? Zero money?

I think your comment would be better if it were better-substantiated. Or any substance at all.

As of 2011: http://thenextweb.com/apps/2011/09/03/why-the-music-industry...

By placing advertisements on their site, Rap Genius could generate significant revenue, with Web traffic that would make almost any content-driven site green with envy. Lots of other avenues are open for turning the site into a business. A premium version of the site is one possibility. Creating sponsored pages, where musicians or labels generate activity around new album releases and other content. There have been discussions with an agent to pitch network Comedy Central the idea of a Rap Genius television show, which could be similar to Mystery Science Theater 3000.

So no monetization strategy has (had?) actually been deployed yet.

Rap genius is the first site in a long while that I discovered and then promptly spent HOURS on in the next few days. Now I can't listen to a song without checking it out. The annotations on all of Kanye's song have a wealth of amazing back story and information. This site is pure gold even if it only ever did lyrics. The idea that they can expand to other verticals is pure diamonds. This site will slay. I think it already leaves Quora in the dust. IMO it's the next big thing blue chip tech co.

PS rap genius annotations implemented on HN would make it a lot cooler. The comments about particular writing style here... u guys should just hop over to Rap Genius and annotate what "hella betta" means. You're living in ancient technology land!

The interesting thing is that there have come and gone browser extensions to do just this for 15 years. Maybe it makes a difference that it's all contained in the rapgenius site rather than overlaid on other sites (propriety problem) with the content served from the extension provider's servers (data protection problem).

The tech isn't enough without the community. Clearly there are some great annotators over on RG. I agree that starting it on a closed website is key. We all know the big hits were just refining things that had been existing in some form or other in the past. FB not first social network, Google not first search engine, etc.

I think there's a moderation angle too, since the old browser extensions invariably resulted in a hundred "LOLFAG" comments on random CNN stories.

You needed RapGenius to figure out what 'ye's was saying? lulz. I wonder if people realize this is the equivalent of an old lady saying "I need Kompozer to edit my CSS". For some reason - albeit illogically - I look at that site and just see a bunch of outsiders monetizing someone else's creativity. Yes there are all the arguments about how the technology can be expanded to other verticals but I mean really. It's mad corny. Next you'll have Oxford tutors walking around singing So Solid Crew lyrics. Sorry I mean Funky Dee's Ruby on Rails remix (what happens in 'napa stays in 'napa..) - Conlige suspectos semper habitos.

Saw Ilan talk at a music tech meetup in NYC and he was about as open as you can get about the behind-the-scenes of starting a community and raising funding. About as open as the blog post but in much greater detail.

This is pretty much spot-on with what it's like to fundraise.

RG is such a breakout star today that it's remarkable to see they went through similar fundraising adventures to everyone else in YCS11.

I wonder how many groups have gotten rejected from TechStars but accepted into YC. That seems somewhat surprising to me, although I guess the individual TechStars programs are smaller.

My impression is that both programs rely heavily on in-network recommendations, and the programs largely have non-overlapping networks.

You can enjoy that sockless look without giving up the benefits of a comfy sock. Look up low-cut, "incognito" or "no show" designs.

I feel you, but if someone happens to CATCH you wearing incognito socks (perhaps while you're mid step or something).. well, that's basically the most beta feeling in the world (so I don't think it's worth the risk!!)

I mostly understood the post, but why is it baller not to wear socks? You can afford to burn your shoes every evening?

Signed, a proud beta stealth sock wearer.

Also, there is no such thing as too much pink

socks really don't add that much comfort if you wear nice shoes.

And since it worked for the Seed, they continued it with the Series A. And it worked again.

I think A16Z invested for the entertainment value.

This doesn't really describe much about how they raised at all. In fact, it seems to focus on pretty much everything except for what they actually did to successfully raise the money, just that they eventually got it...

Love the writing style, and the fact that these guys manage to keep it so light, and not take themselves too seriously. Keepin' it real... Nice gimmick.

Posting using your own software to pimp it is a good idea, too. I'm not sure I like annotations in this case, because I really read them all anyways, which means that it's just annoying to click them all. There should be a way to expand them all into the body of the article, if you wanted to (is there?).

What I want to know is when Code Genius comes to fruition. I think it would be a much better version of Stack Overflow for some specific use cases.

Is this supposed to be a good thing?

Super relevant meetup happening tonight with SFHN for those that are interested in knowing more about raising a seed round: http://sfhn-seedround.eventbrite.com/

These are very respectable people: http://www.youtube.com/watch?v=4NAzQPll7Lo

Best sentence about the attitude: "The shoes aren’t magic, you have to force yourself to dance."

I absolutely lost it at the "hockey gear" annotation. Would have been hilarious.

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