If you’re a founder and/or a frequent Bootstrappers reader, you’ve probably heard entrepreneurs warn against chasing products before profits. Some of the worst startup failures occur when a company tries to build first and market later.
However, in November of 2022, we interviewed a rare pair of founders who successfully bet on their product before finding customers.
Oskar Eichler and Evan Sacks wanted to turn their budding music analytics app, Songstats, into a high-demand subscription-based tool, but their backend data sources were insufficient. Instead of taking outside capital to grow their technology, they staked their budget on a full-time development team and risked burning their cash reserves.
Despite a few scares, Songstats became the best music analytics tool on the market, pulling data from over 15 different sources. And when large record labels built competing products, Oskar and Evan beat them through sheer volume of data.
But they learned one thing from their larger competitors: They needed to make data look cool. In 2020, they created a sleek mobile app and website and ramped up their marketing. Now the team is bumping up against seven figures in annual revenue and expanding its market lead into new and exciting products for musical artists and labels.
These two founders created their dream company by finding unconventional ways to be frugal. Now, they want to help other founders make better bets on tech.
Hiring Passionate Fans
Evan and Oskar are unlikely cofounders. Evan is from Philadelphia and Oskar is from Germany. They’d never have met but for their shared love of technology, electronic dance music, and 1001Tracklists – a platform that would later become the backbone of the Songstats data ecosystem.
1001Tracklists was created by a German dance music enthusiast and developer named Jahn Baers. In 2016, unbeknownst to each other, Evan and Oskar began emailing Jahn asking if they could help with the project.
Oskar describes 1001Tracklists as a Wikipedia of DJ sets. For example, you could search which tracks David Guetta used during his one-hour mix at Ultra Music Festival. All information on the site was the result of devoted fans eager to stay on the pulse of new dance music. It made money purely through ad revenue.
At that time, Oskar was already deep within the Asian music scene. Working as a contractor in Shanghai, China, he moonlighted as DJ and producer, Styline. He also ran a company called Arcane Network that licensed music from record labels for YouTube mixes and frequently used 1001Tracklists to trace rights holders.
“1001Tracklists was quite useful for Arcane Network for determining which labels were behind certain tracks,” says Oskar. “It was also helpful for creating the tracklists for the DJ sets that we had in our licensing network.”
Eventually, Oskar exited the licensing agreement and channels for Arcane Network. He says this was in response to the infamous YouTube “adpocalypse” where businesses became uncomfortable placing ads in front of certain videos. Later, he sold the domain name (Arcane.com) to none other than League of Legends creator, Riot Games, as it was the name of a new Netflix show they were creating called Arcane. That little sale netted him $100,000.
While Oskar made big wins as a solopreneur, Evan followed a more conventional career path. After graduating, Evan joined an IT consulting firm as a business analyst in Washington DC called Ventera.
Jahn first agreed to let Evan moonlight as a project manager on 1001Tracklists in 2016, later becoming the CEO. Then Oskar joined the team full-time in 2017 (after contracting for a while) to develop an analytics tool called 1001Trackstats, moving from Shanghai to Bali to take advantage of the easy visa process, cheap cost of living, and great weather.
Seeing the success of tools like Spotify for Artists, Oskar and Evan believed the information from 1001Tracklists could be incredibly valuable. They hoped to turn 1001Trackstats into a subscription service for labels and musicians looking for better data on their tracks’ performance.
“Let’s say you find out that Martin Garrix performed your new release at Tomorrowland on the main stage,” says Oskar. “Then maybe you can get some cool footage of that because there was a recording and then you can use that for your social media and grow your release. It’s essentially influencer marketing with DJs.”
Once the cofounders had finished building the new tool, however, they couldn’t pull enough data from 1001Tracklists to entice subscribers.
“Smaller artists might receive one notification a week at first,” Oskar continues. “We were niche in electronic music and only listed tracks people entered into the 1001Tracklists database. It wasn’t ready to go out to the masses because it was so intensive on the manual side.”
To start, the cofounders tried pulling additional data from Spotify, Beatport, and Soundcloud APIs. However, the application still felt unimpressive. It was more like a live feed than an analytics tool. They realized if they wanted subscriber income, they needed better tech, so in late 2017, Oskar and Evan gambled on building an in-house development team.
Taking Development In-House Despite Low Cash Flow
When Oskar moved into the role of CEO for 1001Trackstats, he decided to update the backend of the business completely. But before doing so, he would need to replace their expensive contract team with in-house developers.
Until then, Evan and Oskar had worked with a contract development agency in Shanghai. Due to the experimental nature of the assignments, the cofounders paid their contractors as much as an in-house team, if not more. “It’s hard to build momentum and an incentive structure because you’re paying people to build the product, break it, and fix it,” says Evan.
First, they hired a University of Virginia Ultimate Frisbee connection of Evan’s named Jack Crawford-Brown as CTO. Jack had previously worked as an app developer for an acquired handicraft tutorials startup called Craftsy. At that time, he was traveling in Southeast Asia, and without much convincing, moved to Bali to lead development for 1001Trackstats.
Evan, Oskar, and Jack eventually scouted another Bali-based developer named Garrett Simpson when he showed up at an ultimate frisbee game in Bali. He happened to be a former SolarCity and Tesla employee between jobs and attending retreats in the country.
Some might call hiring full-time developers at an early-stage startup a risky move. After all, employee salaries can drain large amounts of profit. However, the team needed to act boldly and were willing to take pay cuts in the beginning. It also helped that they lived in Bali where the cost of living is comparatively low.
“If they can, more founders should bring the development team in-house because that controls cost well and incentivizes progress,” says Evan.
The Problem With Focusing Too Much on Technology
Once the development team was in place, Jack and Oskar brainstormed exactly how they wanted the Songstats backend to work. They say that the original plan hasn’t changed one bit. “We wanted to make an app that notifies people when anyone anywhere plays or supports a track and makes it easy to share these accomplishments with fans online,” says Oskar.
To do this, they created a process they called “The Tunnel”. New tracks come into the top of the 1001Trackstats ecosystem and connect to applications like Spotify, Apple Music, or their own 1001Tracklists. All of this metadata then aggregates into an analytics feed for each customer.
“We’d been too focused on the technology side of things. We needed to relaunch this entire thing and make the data cool.”
They worked on the project diligently throughout 2019. By the end of the year, 1001Trackstats was sitting on several data integrations and about one hundred customers, but it was losing money. “We started to ask ourselves what was missing here,” says Oskar. “We thought it might be worth us looking for strategic investment because we were a bit nervous.”
Competition cast a shadow over the team too. Around December 2019, a major label built a similar product that appeared to compete with 1001Trackstats. Fortunately, its narrow scope didn’t pose a serious threat.
“They launched a cool-looking mobile analytics app,” says Oskar. “We were shocked and worried. But luckily for us, it was intended for their artists only. They leveraged their marketing and design and it looked good but hardly anyone used it. It showed us we’d been too focused on the technology side of things. We needed to relaunch this entire thing and make the data cool. And that’s exactly what we did.”
And so, at the end of 2019, they renamed 1001Trackstats to Songstats. Around that time, Evan finally decided to quit his day job. He moved to Bali to become the full-time COO for Songstats and CEO of 1001Tracklists while Jahn moved to a background role as CTO. It was time for stage three.
How to Make Data Cool
The Songstats team originally planned to spend the next year growing the platform, but Covid accelerated their plans. “We decided that instead of watching negative news, we’d hack this project together in four months and launch in April of 2020,” says Oskar.
Covid lockdowns were the perfect time to work on a music app. Many artists were stuck home and focused on music production. Once they released their tracks, they feverishly looked for as many sources of data as possible to monitor performance.
The Songstats team gave artists a taste of the data they’d see if they used the app. Their most successful customer acquisition method was tweeting artists or commenting on their YouTube channels whenever their music reported a surge of traffic on Songstats.
“Subscriptions picked up and growth was super steady,” says Evan. “We expanded the team and hired some Indonesian locals who’ve been a great asset for supporting and scaling the business.”
By our interview in the Fall of 2022, the platform had grown from 300 to 6,000 customers.
The Manual Advantage
Although Songstats now pulls data from most major streaming services, Evan says the fan-sourced data from 1001Tracklists helps fill important gaps.
“The 1001Tracklists users are better than Shazam,” Oskar says. “They’ll label a track correctly even if they’ve heard a brief snippet on an artist’s Instagram account. This is particularly effective with DJ sets. DJs play lots of unreleased music, edits, and mashups. It’s almost impossible to use audio recognition technology to catch which track was played.”
Be Frugal if You Want to Bet on Tech
Oskar and Evan think they would be more cautious about entering the music analytics industry today. They say it’s become harder to catch up on all of the required data sources and features that customers have come to expect from music analytics platforms.
While VC-backed competitors spar for more space in music data, the Songstats team is thankful they chose to be frugal rather than dominate the market.
“We host all of our servers. It’s pretty easy to do it that way. We don’t use AWS because it’s too expensive.”
“I feel like the constraint in money made us super efficient,” says Oskar. “For example, we host all of our servers. It’s pretty easy to do it that way. We don’t use AWS because it’s too expensive. For a lot of companies with a high budget, they’re just throwing money at problems and that was never us.”
Evan, Oskar, and Jack could deviate from conventional startup wisdom because they’d spotted a trend and minimized costs. Rules are often bent, if not entirely broken, to achieve something. Remember that when you spot an entrepreneurial opportunity before anyone else.
Want to share your bootstrapping story with the world? Enter your details in this form and we’ll be in touch.
