Shazam: The Proof That Business And Friendship Go Together
'Hey, do you know that song that goes like this- Mmm-hmm-mm-m-hmm?'
Doesn't ring a bell? Well, perhaps Shazam can help!
Turning your hums and chants into that one particular song that has been stuck in your head for days, Shazam makes an essential addition to today's world of music!
Far from the lyrical side of it, building Shazam in a world of still-no iPhone and Android apps was no walk in the park for its founders. But, for those prepared to wait, a thorny path would eventually bloom in all its glory!
The faces behind the product, Philip, Avery, Chris, and Dhiraj, made the best of what 90s technology could offer, and put in the blood, sweat and tears to succeed at any cost!
What did it take to get there, you ask?
Here's the epic story of the birth of Shazam and the four men behind it:
The Most Versatile Background Stories Ever
At first glance, it might seem like four people with such different backgrounds will never work in harmony, let alone start and run a business together - but these four had a lot in common, starting from their interests in computers from a young age, all the way to holding the same principles regarding friendship and loyalty in their young adulthoods.
Chris was a child of college professors - a mother who knew everything about computer science and a father who loved nuclear physics. They were the reason Chris developed the desire to invent and build stuff, and it only intensified when his mother brought the Sinclair computer into their home.
Almost immediately, Chris fell in love with computers. He might have been a business and finance graduate, but he always knew that if an opportunity arrived, he'd use his computer knowledge to create a revolution in the world of technology.
Philip also pursued a career in two fields - technology and investment banking. Even so, he was a tech geek at heart, and even his decision to attend Berkeley's MBA program in 1998 was driven by San Francisco's amazing location and proximity to the Silicon Valley. In a single year, he transformed himself into a complete tech whiz.
The stories of the other two founders are completely different but equally fascinating.
Dhiraj was born in Delhi, India but he's a child of the world. With a father employed as an airline manager, he moved cities every three years. This helped him develop a versatile character, learn multiple languages, and understand different cultures - a trait that would turn out important once they launched Shazam. He went to Dartmouth in New Hampshire, a university that required every student to own a computer if they wanted to study computer science.
However, he quickly discovered that he wasn't made to become a software engineer, but he didn't want to call it quits on his love for technology. So, he decided to go with his second-best option: becoming a consultant for launching online businesses, priming himself for the encounter to come.
Perhaps the most unique character of them all was Avery, the multitalented child.
He was a biology major-turned-math-whiz and later on became an electrical engineer graduate. Avery was also interested in neuroscience and attended the Center for Computer Research in Music and Acoustic for a short time. Safe to say, Avery spent his life training to be an irreplaceable jack of all trades! He ended up working on developing algorithms, which represents his true nature - problem-solving.
So, how did four men, as different as they could be, manage to get together and create a music app years before the iPhone was made?
There's a story there too!
The Late '90s: The Making Of 'The Beatles' In The Mobile World
Chris and Dhiraj are John Lennon and Paul McCartney in this story - they were the first ones to meet each other, bonding almost instantly. They knew each other way back in 1990 when they both lived in San Francisco.
Back then, Chris was in his second year at the Haas business school, and he also worked for Microsoft, while Dhiraj moved there to set up the international headquarters of Viant, the startup he worked for at the time. And then, one night, while sharing a beer and brainstorming, two friends came together and decided they would become entrepreneurs and create something outstanding. Boy, were they right!
Initially, it was Chris who brought Philip into the story, as they were friends since college and knew their exact type of work ethic thanks to the many projects they'd collaborated on. Luckily, all three of them had amazing chemistry and enthusiasm for starting a business and it was easy to start working on their dreams with that type of group passion!
The three of them would even schedule brainstorming sessions in the local cafe and make lists of business ideas worth investing in. But the real brain behind Shazam was Chris and his passion for solving problems!
The Birth Of Shazam
Chris felt excited to have his closest friends ready to start a business together, so he used all his energy to think of a good idea. The music industry was the first thing that came to his mind, specifically a problem tormenting millions around the globe: not being able to identify random songs regardless of the source - radio, local cafe, restaurant, etc.
So how do you solve this problem?
In the beginning, he was focused on discovering ways to identify songs played on radio only. Installing software in radio stations was the only way to identify songs at that time and since this was 1999, it wasn't easy to do it. Plus, if the users wanted to know the song, they needed to type the actual radio stations they listen to the song to - not the user experience we're looking for, right?
Well, he also found out that many companies before him, tried to do the same as him, but failed miserably.
So, the real A-ha! moment occurred after he attended a Strategic Innovation class, taught by professor Costa Markides. Professor Markides talked about the importance of thinking outside of the box for developing truly useful innovations. Naturally, Chris took this advice home with him and his mind started thinking differently - what could a competitor do to beat his idea about installing software in radio stations?
Using mobile phones to identify music, without being limited by the radio stations!
If anyone had come up with this innovation before Chris and his team, they would beat them up to the punch on the market. So Chris did what any brilliant innovator would do - he started working on developing the priceless idea.
Together with Dhiraj and Philip, he developed the algorithm that could potentially help users identify music. However, it was 1999 and mobile phones were not as nearly advanced as nowadays. Shazam was so ahead of its time, it came before iTunes, the iPhone, and the Android stores!
Nevertheless, the team believed in their idea and set the headquarters of Shazam in London in 1999, as one of the few cities at the time that offered Premium SMS service, a mobile payment mechanism. Chris and his team could use the Premium SMS service to charge the users for Shazam - an advantage that the US market didn't offer at the time.
Avery's Addition To The Team
There was one piece of the puzzle missing - having a technical co-founder on the team. During their research, Chris, Dhiraj, and Philip discovered that they needed someone with exceptional knowledge and skills in the audio signal processing niche, a subcategory of the digital signal processing (DSP) - and not many people knew how to do it properly!
They kept hearing about one professor who worked at the Center for Computer Research in Music and Acoustics (CCRMA) at Stanford, professor Julius Smith. Out of all the people they have contacted regarding their problem with DSP, Julius was the only one that gave them any indication it could be done - although even he didn't know how! The guys invited Julius to become an advisor of the company, which he happily accepted.
Soon on, Julius gave them names of people working in the DSP sector and are skillful enough to complete this task. The name Avery Wang was on the top of that list and the trio was excited to reach out to him and explain the entire idea. Avery liked their passion but even more so their dedication, professionalism, and seriousness in embarking on this journey to success!.
Eureka, First Customers, First Investors!
Once presented with the idea, Avery had one great task on his mind- discovering a way to develop a music recognition algorithm, something he knew nothing of at the time. Initially, Avery considered several different ways to solve the music recognition problems. The most promising one was to connect a phone line and every time the user listened to music, they'd dial a number and hold the phone to the music. The number Shazam team picked up was 2580, as these were the only four digits that were in a straight line on the phone keyboard. Nice little twist, right?
Once the team did this, they started to chase investors.
They raised the first million in seed rounds by August 2000, targeting business angels in the industry and people with similar backgrounds, as they would be more accepting of their ideas.
However, it was the worst possible time to search for investors. The dot-com crash had just happened, so it was twice as hard for the guys to find venture capitalists to invest in their ideas.
Finally, after pitching to numerous venture capitalists, they closed their Series A funding at $7.5 million, weeks before the tragic September 11, 2001. Their main problem was finding a lead VC, but Ajay Chowdhury, the co-founder of $100m European venture capital fund IDG Ventures Europe, saved the day when he became the lead VC.
Once the guys had the money in their bank accounts, major changes started to happen. They rented an office in the middle of Soho and hired three engineers, but they also had people in Palo Alto and Munich. Chris, Philip, Avery, and Dhiraj were getting closer to the finishing line.
Exactly 13 months after the Series A funding ended, on August 19, 2002, the team officially launched the app in the UK! Almost immediately after launching, they started advertising the service in any place with music on - bars, restaurants, night clubs - everywhere!
The 2580 service was branded from day one and it worked this way: the user listens to the music, dials up the number, and waits 15 seconds. Afterward, he/she would receive a text message with the name of the artist and the song. The guys charged 50 pence on the phone bill if they guessed the song and nothing if they couldn't - easy peasy!
But it wasn't all rosy - money was still an issue.
The Hard Road To Profitability
Even though Shazam was a revolution in the tech world, it took ages for the concept to become profitable.
The first obstacle was the lack of quality of mobile phones who would support the app. Apple released the first iPhone in 2007, five years after the official launch of Shazam. The Google Play Store saw the light of day in 2012 - ten years later!
It was exceptionally hard for the Shazam founders to keep the business going, especially in those first years, being completely dependent on investors - at least until the iPhone was released.
In 2009, more than 10 million users in more than 150 countries used Shazam.
In 2016, the app finally became profitable after billions of downloads!
Today, the app has 100 million active users, more than what the founders initially planned!
Sadly, all four of them left Shazam in 2018, when Apple bought Shazam, an acquisition that cost $400 million - one of the largest in Apple's history!
But even though Shazam is no longer run by the Beatles in the tech world, their legacy remained. Chris, Philip, Avery, and Dhiraj proved to themselves and to the world that the ultimate recipe for a successful business is mutual understanding and passion for the same goals.
It was their friendship that made all the difference and thanks to it, no song is an enigma for us today, and no more unknown earworms either!