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🎢 #45 - How to democratize music creation (story of Rapchat)
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Hey there! Welcome to my email newsletter. My name is Leo Luo, a student entrepreneur at the University of Michigan. I write about startup stories, consumer trends, and unique behaviors in the early-stage B2C space.
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🔥 Startup Story
How to democratize music creation
(Image credit: Rapchat)
You probably know someone that loves free-styling or perhaps aspires to be a famous Soundcloud rapper. They probably make a ton of songs and send you a bunch to listen to and provide feedback. They make the song-making process look easy. For most people though, creating music can be both incredibly daunting and expensive.
Rapchat is a startup trying to democratize music creation by enabling anyone to record and share songs from their phone. It started as a college side project and eventually became a popular app used by over 6M users. I sat down with Seth Miller, founder and CEO of Rapchat, to dive deeper into the founding story and learn more about the challenges he faced along the way.
“I started Rapchat in college almost seven years ago to scratch my own itch. I wanted to build a platform where I could easily record freestyles and share them with friends.
I am not an actual musician but I always enjoyed freestyling with my buddies in high school. We would drive around and freestyle. And then, in college, I noticed that at any party, people would always be freestyling at 3 am. It was around that time when many media creation tools popped up like Snapchat and Vine, but nothing existed for music. It seemed like a big opportunity for me and the initial concept was to make it like Snapchat for music. It has since evolved and even outgrown my own use case.”
💡 Problem to solve
“Historically, it's been really expensive and difficult to make music. You always had to have a recording studio, a marketing budget, and you had to learn complicated software. We wanted to democratize the industry by providing the easiest way to make music on your phone.”
🚗 Product Journey
First Experiment/Private Beta (2014):
(Early product UI)
Seth started Rapchat with a strong vision which he first experimented with through a Beta app.
“The first experiment we did was to ship a Beta to see if people would actually record their vocals and share it.”
Seth tested the private Beta with 50-100 friends and saw a glimpse of the huge potential behind his idea.
“I loved seeing one friend send a rap to another friend. People just had so much fun doing it. At the time, due to resource limitation, you could only send a rap to someone that had an iPhone, was logged in with their Facebook account, and was Facebook friends with you. It was super constrained, but it ironically created a trust loop where people were super comfortable sending whatever came out of their brain to their friends.”
Public Beta (2015):
To test with real users, Seth launched a public Beta on the Apple App Store. Within a year, the app had gained over 10k users. Rapchat saw some incredible organic growth.
“I worked as a systems engineer for six months at Progressive Insurance after college while still working on Rapchat on the side. After we launched the ability to share links on Twitter, it started to blow up and go viral. It was the biggest validation seeing people talking about the app and having so much fun.”
Seth and his team iterated from the Beta and built out a full-fledged social network and many other features to improve the creation experience. Eventually, they also had to make an important decision about their business model.
“We went from a closed messaging app to a full-on social network with profiles, feeds, leaderboards, followings, and challenges. We iterated on the social network aspect for a year or two, because that's what people wanted, especially the power users that were making real songs. They wanted to network, collaborate, and grow their social capital.
The next chapter happened last year when we had to look inwardly and ask ourselves - Do we go the social network route and try to get a billion users, or do we build a really strong business around a core segment of users’. One option was an ads business and the other was a creator subscription business. We did a lot of financial modeling and decided to focus on supporting our core creators.
Then, we spent a ton of time retooling the entire creation experience by adding a whole new suite of vocal effects, redoing a lot of the studio stuff that was outdated. At the end of last year, we shipped a subscription product that had more powerful creator tools - that was the first time that we shipped a business model. So far, it’s going really well.”
🤔 Challenges and key learnings
1. Filtering information
“When I just got started, I was so hungry to learn from people. I would consume as much information as possible, reading TechCrunch and all of Andrew Chen’s posts. I was obsessed with learning the best ways of doing things. I think I failed to add my own lens and took a lot of random advice. I got caught up in taking in too much information from people who didn’t have any context. The biggest lesson from that was context is everything and you have to develop your own philosophies by doing experiments and thinking inwardly.”
2. Difficult to get high-caliber people in the early days for first-time founders
“The importance of getting super high-quality talent is obvious to everyone yet it’s so difficult in practice in the early days for a first-time founder. You probably don’t have the experience in recruiting, interviewing, and hiring and you probably don’t have the capital needed to be competitive comp-wise. I feel like it’s just something you learn as you embark on the journey and as you scale fundraises, align it with scaling an elite team”
3. Constantly re-qualify yourself
“You have to re-qualify yourself and evolve as a founder, especially as a founding CEO. I’ve had to change my role so many times. For the first two years, I was a product builder. I taught myself how to code, how to design, and everything related to building a product so that I could ship a product myself. For the next two years, I had to fundraise so I had to learn how to talk to investors and build an investor pipeline.
Now, I am more of a coach than a player because I have to get the most out of every player on my team and set the strategy. This stage is new to me and I am learning again. You have to be comfortable changing seats and learning new skillsets, and I have seen people fail by not doing that.”
“Our vision is to be one of the top music platforms in the world. We've spent the first part of our journey disrupting the creation aspect by focusing on mobile. Going forward, we want to enable people to monetize the work that they create on Rapchat through distribution.
This will bring everything full circle where we are enabling people to participate in the music industry without a ton of money, experience, or connections. It’s a similar disruption to what you've seen with Substack or Anchor both of which give people the ability to monetize or launch a career off of their creative craft.”
Check out Rapchat 🎤!
👨💻 What I’ve been reading
Heartcore, a consumer-only European VC just released a report on consumer trends ranging from food to housing
Old people’s guide to NBA Topshot - Alexander Taub explains how this NFT marketplace works, from pack drops to challenges (I am addicted to Topshot already lol)
Interesting read on how to identify the riskest assumption based on what stage you are at - problem-market fit stage, problem-solution stage, product-market fit stage, and growth stage
Story of Cameo and how it turned D-list celebs into a monetization machine - inside the surreal and lucrative two-sided marketplace of mediocre famous people
😍 Jobs & Internships
AngelList - Portfolio Ops Associate (Remote)
Pilot.com - Product Manager (SF)
Village Capital - Innovation Associate (DC)
Better Place Forests - Strategy Associate (SF, Remote)
Magic Spoon - Logistics Associate (NYC)
Galaxy Digital - Business Analyst (NYC)
Dispo - iOS Engineer (LA)
TikTok - Monetization Strategy & Analytics Associate (NYC)
NBA 2K - Growth Strategy Intern (Remote)
Coda - Software Engineering Intern (Remote)
Lucky Card - Growth Intern (Remote)
Zendesk - PM Intern (SF)
Two Sigma Ventures - Intern (NYC)
Glynn Capital - Summer Analyst (Bay Area)
Reddit - Marketing Intern (Remote)
Plug and Play - VC Intern (Sunnyvale)
I would love to chat and learn how I can improve the newsletter in the future. Book a Zoom meeting with me here.