How Techstars Music Startups With Music Biz Help Will Try to Raise Millions at Tomorrow's Demo Day
All it takes is a vision and 90 days straight of sleep-deprivation at an intense accelerator boot camp.
"I really like the idea, but you have to explain to me how you're going to make any money," says Randy Jackson, the famed musician, producer, entrepreneur best known as a former judge on American Idol.
He's sitting comfortably on a leather cushioned chair in late-April in an open office space located in Los Angeles' Miracle Mile neighborhood next to another mentor, Kathryn Frazier of Biz3 Publicity and the Owsla record label. The duo are giving some blunt but much-needed criticism that is eminently constructive to the founders of eleven music start-ups. There's a near universal inability to emote, project their voices or even speak clearly. They go on tangents and down rabbit holes never to emerge. There are place-holder slides and technical malfunctions. Clearly these pitches need a lot of honing because what's at stake is no less than millions of dollars in capital investment.
This because tomorrow (Thursday, May 18) at Los Angeles' El Rey Theater the very first class of Techstars Music startups—Amper, Hurdl, JAAK, Pacemaker, Pippa, PopGun, Robin, Shimmur, Superpowered, SyncSpot and Weav—will pitch their businesses to a full-house of invite-only power investors and music business execs for an event known as Demo Day. This follows three months of Techstars Music's intensive and grueling accelerator program which includes more music business execs, guidance and resources than anywhere on the planet.
"It's designed to be a year's worth of work in three months," says Bob "Moz" Moczydlowsky (formerly of Twitter, Topspin Media and Yahoo! Music), who heads Techstars Music which is part of the larger Techstars program that's invested $120,000 in each of the eleven music start-ups. He, along with a team that includes former music manager Jen Hall Nicholas and Techstars program veteran Kara Gomez along with Entrepreneur in Residence Matt Sandler are pushing these entrepreneurs about as hard as they can.
"It's been an invaluable experience," says Betsy McHugh, co-founder and CEO of Hurdl, a start-up that makes interactive wearables that claims to both enhance live experiences and capture consumer data like no one else has yet been able to. "It's a boot camp in the best of ways," she says of the accelerator program, "you come out fitter, better and stronger."
By the end of the session each startup will have met with somewhere between 60 and 70 mentors from a vast swath of the music industry. The impressive power list of nearly 200 mentors predominantly from the music business, includes high ranking execs from most every facet including the three major labels, promoters, agencies, management firms, streaming services, tech platforms, publishers and more.
Some of the more high-profile music execs include RCA Records' Tom Corson, Sony's Julie Swidler, Atlantic Records/APG's Mike Caren, Sony Legacy's Adam Block, John Silva of Silva Artist Mgmt., Gary Gersh of AEG, Emagen's Anthony Saleh, Live Nation's Michael Wischer, Paradigm's Tom Windish and Eric Greenspan of Myman, Greenspan, Fineman, Fox Rosenberg & Light. Other major music businesses with mentor execs include Q Prime, CAA, Azoff MSG Ent., Snapchat, Red Light, Big Machine, Disney, Viacom, UTA, YouTube, Downtown Music Publishing, YG Entertainment, Kobalt, Sonos and far more.
There are also a number of creatives who like Randy Jackson provide help with pitches and business strategies. This includes skateboard legend, filmmaker and entrepreneur Stacy Peralta, electronic musician Richie Hawtin, comedians the Sklar Brothers, film producer Peter Lawson and Avenged Sevenfold's Synyster Gates.
What these mentors can potentially provide in terms of guidance, networks, material and investment seems infinite. Last month, for example, Hurdl's McHugh was able to a mount a four-show activation test at a series of Deadmau5 shows at the Shrine. McHugh says her product was able to have a 66% activation rate which she says is a better rate than any other marketing company ever has ever been able to achieve. She also cites working with mentors from Ticketmaster, Coca Cola and Pandora as indispensable. This from a veteran who formerly worked at CAA and Borman Entertainment where she managed Keith Urban and Hunter Hayes and has just closed a seed round of $2.5 million.
Lars Rasmussen and Elomida Visviki of Weav have created adaptive music technology with incredible potential that can change tempo, energy, and the mood of the music to match movement and biometrics and which the couple explained they invented while making love to a metronome (for real). Among the many benefits they've gotten out of the accelerator is something far more tangible: music.
"We met Warner Music's Alex Kamins [senior director of innovation] before the program in the selection process," Rasmussen (who, by the way, co-created Google Maps) says referencing the making it past the initial round of 800 music start-ups that applied for Techstars some eight months ago. "He introduced us to people at Atlantic's Big Beat label," he says. Through that introduction, Weav was able to secure music from Atlantic's Big Beat electronic-dance label subsidiary for its product.
"We had people on both the corporate and on the label side working with Weav," WMG's Kamins explains. "We helped to craft the first ever adaptive license for adaptive audio."
This the WMG exec said while acknowledging that music start-ups in the past have had a difficult time both attracting capital and getting attention from strategic music industry players, but that's starting to change. "Techstars is really exciting for both of those reasons," he says, "and it shows Warner Music's commitment around innovation and to support the next generation of platforms."
Warner, along with Sony, Silva Artist Management, Harmonix, Q Prime, Sonos, Era of the Engineer and Bill Silva Entertainment, are all member companies that have invested in Techstars Music.
Sony's evp of digital strategy Mark Piibe concurs with Kamins. "We’re continually looking for ways to work with the startup community and support innovation from young companies that have the potential to grow the music business," he says. "Techstars Music has given us a unique opportunity to do that bringing together a group of extraordinary music startups with whom we’ve been able to dig in and explore ideas to help translate their visions into market-ready solutions."
Amper, it would seem, is one these companies whose vision is being translated in a big way and to the tune of some $5.1 million in investment already. The artificial-intelligence-based company automatically composes unique one-of-a-kind music tailored to any and all content (film, tv or syncs or otherwise) in seconds. Songwriting is something Amper CEO and co-founder Drew Silverstein has been honing since he was a kid (he knew early-on that he either wanted to be "a composer or a fighter pilot"). But as he and his colleagues tried to make it in film and TV music business they kept hearing the same feedback from directors and producers. "Time and a large budget were luxuries that they didn't have," Silverstein explained.
While Amper is more developed than other Techstars music entrants having started more than three years ago, Silverstein still says the experience has been invaluable. "Speaking with mentors and potential customers, we were able to deepen our understanding of our business, refine our strategy, and hone in on the tactics to best set us up for success."
For Chris Rigopulos, coo of Harmonix, a video game development company known for its integration of music, he saw coming to TechStars as an opportunity to "get a front row seat to a broad cross-section of companies that are innovating in areas that are adjacent to our mission and core business." Rigopulos said he's most impressed with Weav, as well as two other companies: SyncSpot a cross promotions platform that uses AI software to match brands for value added promotions; and SuperPowered that allows consumers to listen, watch and play longer by using software to reduce CPU load.
"Each of these companies is trying to do something really interesting," he says. "We had to go through a process of evaluation, matchmaking and then relationship building with the goal of targeting a couple of participants where we can really add the most value as mentors. I guess, the fruits of that labor will be on display this week and hopefully, well into the future."
But tomorrow is hardly the end of the Techstars journey for any of the eleven music companies. "After Demo Day they become alumni with full-fledged members of the Techstars network," Moczydlowsky explains. "Our portfolio of companies that have gone through our accelerators have a market capitalization of $8 billion dollars. 48% of our companies go on to raise at least a million dollars of institutional capital within a year following them being in one our accelerators. In fact nearly 5% of all Series A investment goes to Techstars alumni, that's a big deal in a world where Series A investment is hard to come by."
Jonas Norberg is the ceo and co-founder of Pacemaker, an AI company that allows anyone to make and distribute DJ mixes with licensed streams. The accelerator program he says has been a game changer helping him to understand the music industry better and how to grow it and even getting a better understanding of himself. "Techstars is amazing," he says. "And with Demo Day we have an amazing chance to tell the world about what we do." His plan after Demo Day: "Get some rest."