I remember how it was difficult for people like me to upload their music on the web in order to share it. The only viable option was the MySpace music section (which required a different MySpace account). Even renowned artists used it. But the music player was just a single feature among the whole MySpace package, and the resulting experience for both the uploader and the viewer was unconvincing.
SoundCloud filled a need: upload your music easily, and doing just that. The uploading experience is fluid. The player is great, easy to share, with a nice sound quality.
This startup idea should have been obvious for some, but the real key was to implement a perfect UI for a great UX and SoundCloud achieved it for me.