Quick Take: Crowdmix Bites The Dust

6a00d83451b36c69e201bb087c7c61970d-600wiCrowdmix was one of those start ups that promised to change the world. It was going to be a social network focused around music that would transform how people discover music and how audiences and influencers interact. Now it is going into administration. Crowdmix suffered from many things, not least a confused value proposition that no-one outside of Crowdmix seemed to be able to explain properly (so it failed the elevator pitch test). But more importantly Crowdmix failed because it played the venture game too faithfully. In the current venture environment, you need to be a ‘game changer’ to unlock significant scale investment. Which is fine, except that only a tiny handful of companies are ever genuine game changers. So what happens is that too many companies try to live up to inflated promises rather than focusing on building viable products and business models. Every company has to be the ‘Uber or Snapchat of [insert industry]’.

Crowdmix convinced itself it could build an entire new social network around music. It couldn’t because of 3 reasons:

  1. Music is fundamentally not important enough to enough people to build any sort of scale of social network around it
  2. As Google learned the hard way, there is only room for one major scale social network
  3. Social networks are yesterday’s technology. They are how Digital Immigrants and older Millennials interact digitally. Messaging apps have replaced social networks for Gen Z and younger millennials

The average life span of a digital music start up is 5.8 years with an average investment of $79.7 million (though those numbers are skewed up by Spotify’s $1.6bn). Crowdmix made it to 3 years and through $18 million, so below average on both counts. It was a nice enough – if slightly confused – idea that made the simple mistake of believing it could change the world.

5 thoughts on “Quick Take: Crowdmix Bites The Dust

  1. When every post is a “New Post” the term is meaningless and unnecessary! Please cease using that phrase.

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  2. Keith – as I have already told you once before, I have no control over the wording of the auto generated wordpress email.

  3. Pingback: Quick Take: Crowdmix Bites The Dust – printzblog

  4. Ah come on, lads! The business goes under and *now* you know all the answers as to why it failed?! Your Cornflake box analysis is hollow and is akin to what the Americans would call being a “Monday morning Quarterback”. I appreciate you’re a journo and have to earn a crust by giving an opinion but I hope no reader is mistaking your opinion for fact. Businesses succeed or fail for may complex reasons and this one was no different.

    Good luck to you, Sir. I hope you one day have the courage of your perceived wisdom to set up your own business and see if you then know what three simple facts it will succeed or fail on.

  5. Mark,

    This can’t be seen as good thing for an industry that is already struggling to innovate. Even if you say they were below the average on money spent, they had a massive investment without putting a product out (not a beta/mvp), testing it and finding market fit.

    Let me add a quick disclaimer here. I’m one of the co-founders of Tradiio. With 10% of their funding we’ve just found market fit, our product is out and it’s working for music creators but it was a tough to reach this point and things like this are really frustrating.

    So I have two things to comment:

    Firstly, this is bad for the music industry and bad for startups that are trying to change this space. A failure like this will make it harder for music startups to raise money in the future. Investors are already suspicious about investing in music and now this makes things even more difficult.

    Secondly, we are a music app that allows for music creators to generate recurring monthly funding. Old fan club concept, but in a digital way. Think of Soundcloud meets Patreon.

    On Tradiio, $18 million could have given $1,000 per month to almost 2,000 artists for a whole year. Imagine the real value those $18M could have generated for the industry, creating a middle class of artists and showing to millions of artists that there are working ideas that solve the monetisation problem for artists in the digital space.

    I know this comparison is far fetched and that this would never happen, but with this I’m only trying to show that there are better ways, better projects and a lot of better ways of spending that amount of money.

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