After big layoffs SoundCloud founder says its strategy is to ‘take back control’ | Hacker News Reader

After big layoffs SoundCloud founder says its strategy is to ‘take back control’

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69 pointsweitingliu72 comments

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) is a plan that conceptually can be successful but is probabilistically unlikely to succeed.

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.

> 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.

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.

Wasn't trying to underestimate. Was actually genuinely asking the question, which I appreciate you answering. I think you're likely right--many people are more than happy to delude themselves. Maybe I'm too cynical for that. And I think morale can actually improve when you're in an us-against-the-world situation, which is how I'd describe the hail mary situation.

Lastly, why would I go to the mat? Because assuming I still care about the mission of the company, I think some of the greatest opportunities for growth (intellectual, financial) can come out of the darkest hours at companies. And I'm older, but this was my attitude back in the day when confronted by potentially-failing companies. I think we often run from what frightens us instead of appreciating how many new doors may open in those types of situations. Sort of like the (Buffett?) quote "be greedy when people are scared, scared when people are greedy." Yeah, survivorship bias and all, but I'd step into an argument where someone asked if opportunity is more likely in chaos or success (might lose that argument, but I'd still have it).

I can't speak for Berlin of course, but in the Bay Area the employees are usually in a pretty reasonable position. They can leave if they want and get jobs somewhere else, often the company will provide incentives for some or all of them to stay that probably pay dividends whether or not the company succeeds at making it into a new direction.

I prefer to be honest with folks who work for me in such situations as well, but that is generally a leadership style that is particular to the leader.

But some companies actually come out of that, especially when they've built valuable assets. It took a long time before it seemed like Facebook could be turned into a profitable business from being a plaything. But the fact that they were sitting on this growing social graph gave people enough faith to believe it might be worthwhile to give them some more rope.

At least that's the way I see it -- maybe they started monetizing effectively earlier than I recall.

Where there massive layoffs at Facebook? I don't recall anything like what is happening at SoundCloud.

Cry me a river, poor well-connected CEO will have to go Serial Entrepreneur another company on the wings of investors. These people only have to deal with mental anguish, the ones with consciences at least.

I feel badly for the employees and, to a certain extent, the customers.

Yes, and I only feel bad for those who have cancer, and have no food to eat. The employees only have to worry about the mental anguish of suffering through some stupid whiteboard coding problems to get their next job. /sarcasm off.

Critical hit! I didn't realize that cancer patients and the starving were part of this discussion of Soundcloud's layoffs. I will go lick my wounds and perform the required penance of reading five PG essays for suggesting that CEOs have it relatively easy.

Do you suggest that being a CEO is an easy job - let alone of a company in the situation of SoundCloud?

This specific CEO had a reasonably easy job/life/career:

http://www.businessinsider.com/life-of-soundcloud-founder-ce...

Both him and his cofounder are paper rich from Angel investments they made (they just got a massive windfall with the IPO of Delivery Hero), by the way, so I'm sure they'll do just fine.

Everything changes. Apple was once 90 days from bankruptcy, according to Steve Jobs.

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

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...

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.

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.

I don't know, Soundcloud actually does have an extraordinary amount of independent content ("folk music") that what.cd wouldn't have ever been able to facilitate.

I'd argue that they are both quite prolific, just different.

But that involved people (say it with me now) steeeealing!

Largely already happened previously with MP3.com

Not to say "we" couldn't do better but there's always been a huge amount of content, music and otherwise, from amateurs and mostly amateurs in particular that isn't preserved in any systematic way.

MP3.com and SoundCloud are not as comparable. SoundCloud has really re-defined how new music is released and how new artists promote their music.

> SoundCloud has really re-defined how new music is released and how new artists promote their music.

For promotion Soundcloud undoubtly serves its purpose, but actually releasing the music has to happen somewhere else. And in my opinion the actual re-defining service in that regard is Bandcamp. After all, you can't buy music on Soundcloud, can you?

You can buy music on Soundcloud.

Where? As a long time Soundcloud listener and artist I have never seen an option to buy or sell music on Soundcloud. Unless you mean the "Buy"-link which you can setup to redirect your listeners to actual stores and purchase options.

Oh, you're right. I'm mistaken.

For some reason I assumed there was a buy link on the preview tracks people put up.

Another one was RCRD.LBL. Loved their daily mp3s in my inbox.

So true. I feel like I'm frantically bookmarking all the Facebook/Bandcamp pages of musicians that I've found on the service.

The Alexandria analogy already occurred this year. When what.cd was shut down.

>"This may sound hyperbolic, but I feel like them shutting down would be the "burning of the Library of Alexandria" of 21st century music"

Except that all the original content still exists and could be made available somewhere else.

could

won't

Do you believe that if Soundcloud goes out of business in a couple of months artists affected will never again make those tracks available on the internet?

Why would you believe that?

A large number of them never will. Any archive of user-created content ends up dominated by "zombie" works from creators that have moved on from that sort of thing or aren't terribly concerned with ensuring that their older works remain accessible (if they even still have their own copies).

>"Any archive of user-created content ends up dominated by "zombie" works from creators that have moved on from that sort of thing or aren't terribly concerned with ensuring that their older works remain accessible (if they even still have their own copies)."

Except when they are artists and that content is their art and that art is their passion and/or career. It's also how they build awareness and get gigs. We are talking about music not animated gifs and memes. Its unlikely that most artists no longer have the original tracks.

The music industry has always had works that have gone out of print often because the record company goes bankrupt. And those out of print works are then reissued often with enhancements. In fact there are record labels whose whole business model is reissues. And at the extreme there are cases where the original master tapes were lost and reissues were cut from secondary sources.

It would be unfortunate if SC were to disappear but if it did I doubt any appreciable amount of music would simply be "lost to the dust bin of history."

It's difficult for me to believe that they would actually go out of business. Somewhere between the price they would want and going out of business, I feel that a Google/Apple/Netflix/Amazon acquisition is a near-certainty. Not sure how that would work if they don't have sufficient runway for due diligence & acquisition closure, but I'm sure the above companies could deal with that scenario if necessary.

Agreed. Anecdotal, but I was in a "band" in high-school. We recorded our music and that music was and is solely hosted on soundcloud. I like to go back and listen to it occasionally as a part of my life that's fun to kind of laugh about, but also appreciate the good memories I have of it. It's both sad and strange to see that part of my life is fading from the world already.

I almost feel like they should go non-profit a la wikipedia.

That's the cloud for you.

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.

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.

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

https://www.patreon.com/svdelos

https://www.youtube.com/user/briantrautman

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/

> 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.

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.

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

The bridge loan in March might have helped (see https://www.crunchbase.com/organization/soundcloud#/entity)

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?

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.

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

To take things further, these failed companies become zombies, and like zombies, they become more than just toxic, they become dangerous.

When your good people start leaving, you replace them with OK people. When THOSE people leave you replace them with anyone with a pulse. Those people eventually screw things up and you wind up with data breaches and the like which further screw over customers, shareholders, employees or all of the above. Zombie companies are bad news.

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....

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

youtube-dl seems to work with soundcloud urls

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).

That's how charities, not businesses work.

Every time a company raises a round of investment they're begging for money.

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

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.

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

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.

Synchronized comment timelines are nothing new, and are particularly popular in Asia (referred to as "danmaku") where language "density" (meaning per pixel) is higher. However, it's very challenging to get this to work for general English-language comments, as other comments in this thread indicate. Perhaps timed emoticons would actually be better suited. Regardless, it's far from clear that SoundCloud has the optimal implementation of this UX pattern, and I don't think that SoundCloud's demise would mean the end of innovation on that pattern.

https://link.springer.com/chapter/10.1007/978-3-319-20907-4_...

> Danmaku comment is a comment technology that overlays user comments directly on the video and creates a co-viewing experience. It originates from Japan and becomes increasingly popular on video sharing sites in China, particularly among the young generation. This exploratory study investigates reasons for watching Danmaku videos through two focus group studies. The results show that the users who watch Danmaku videos found it a way to entertain themselves, to be in company, to have the sense of belonging, and to seek information. Those who do not watch Danmaku videos, however, complained about the abundance of information, the imperfect information quality, and the look and feel. We summarized scenarios suitable for Danmaku commenting from three perspectives: the content, the complexity of information, and the number of viewers. Possible improvements and new applications of Danmaku commenting were discussed.

https://books.google.com/books?id=MAUqDwAAQBAJ&pg=PA512&lpg=...

https://www.computer.org/csdl/proceedings/hicss/2016/5670/00...

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

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

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

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

What is a "comment timeline"?

I assume they are referring to the feature in which users comment at specific times in the song. As the song plays, these pop up on-screen.

I think Facebook does that now with live videos.

Useless feature imo. SC was better without it (noticeably faster load times). How much server cost do they save if they eliminate comments?

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.

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

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.

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.

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.

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