Episode 114: Tim Westergren on Pandora.com and the Human Genome Project, Revolutionizing Radio and Being an Un-Self-Conscious Entrepreneur

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Imagine if great music you loved could find you? Well, it can.

Tune in as former DishyMix guest, Traction CEO Adam Kleinberg, fills in as the first-ever DishyMix guest host to interview Tim Westergren, founder of Pandora.com. They really "dish" it up in this one.

Pandora is a service that creates radio stations on the fly that are "genetically" mapped to your music tastes.

Imagine a radio station that knows you. Intimately. You've just imagined Pandora.

Find out how the Human Genome Project is creating DNA maps out of hundreds of thousands of songs so that Pandora can serve the perfect ones up to millions of listeners based on their individual tastes.

Learn about his grand dream of a world where any musician could quit their day job the moment their song gets uploaded to Pandora. Be inspired by his wisdom on what it really takes to be an entrepreneur with vision.

If you haven't discovered Pandora yet, you'll want to after this show.

Transcript

Susan Bratton: Welcome to Dishy Mix. I’m your host Susan Bratton, and on today’s show I have a special treat for you. You’re going to get to meet two guests this episode. Adam Kleinberg cofounder and CEO of Traction, whom I recently interviewed on Dishy Mix - you may have listened to the show - is going to me my guest host. I enjoyed him so much, we have such a nice connection, and I feel like he, I just had this sense that he would do a really good job with the Dishy Mix interview. I asked him if he ever wanted to be a guest host, just for fun, just to mix it up a little bit. He said “Hell yeah” and he knew exactly who he wanted to interview, and lo and behold they did a fabulous job. You’re going hear Adam interviewing Tim Westergren. Tim is the founder, cofounder and CEO of Pandora Radio; you probably use the application. One of the interesting things about the show is that Tim shares the numbers with Adam and the numbers will blow you away. Like literally billions of thumbs up, thumbs down feedback on songs, millions of iPhone app downloads, very interesting. Tim is a jazz trained piano player with a lot of empathy for musicians and that’s how Pandora got started. He also talks about the future of car radio, which sounds like it’s about time for a great change. So I’ll let you tune in now to Adam Kleinberg interviewing Tim Westergren. I’d love your feedback on it. I hope you enjoy it, and if you have any other ideas for guest hosts I’m always open to it. Alright, enjoy and here we go.

 

Adam Kleinberg: Hey, this Adam Kleinberg, guest host on Dishy Mix. Happy to be here with you today. Today I’m going to be interviewing Tim Westergren, the founder of Pandora.com, one of my favorite websites, although it’s much more than a website, and Tim’s going to tell you all about that when we get back.

 

Adam Kleinberg: Alright, we’re back. Tim, thanks for being here today.

 

Tim Westergren: My pleasure, on my first Dishy Mix.

 

Adam Kleinberg: I’m a little, I’m as nervous as you.

 

Tim Westergren: I’m glad to be your inaugural guest.

 

Adam Kleinberg: Tim, I really appreciate you being on today. Tim and I met a couple months ago when he came into the agency, Traction, to talk about Pandora. And, Tim why don’t you tell the story, I think it’s really fascinating about how Pandora came to exist.

 

Tim Westergren: Sure. So I’m a musician and prior to Pandora I spent about 10, 12 years trying to make a living at it, first playing rock bands for a long time…

 

Adam Kleinberg: What did you play?

 

Tim Westergren: Keyboards. I’m a jazz trained piano player. So I spent most of my 20’s kind of living out of a van and, you know, working to build a performing career. So I got pretty closely acquainted with the challenge that musicians face of, you know, being found, being heard; thousands of really talented folks out there that nobody knows about, and got interested in that problem and have sort of thought for a long time about how could that be solved. That was the first piece. The second piece was I was a film composer for a while, so I wrote music for movies. And when I did that I thought a lot about sort of the construction of music; you know, how music works and why people like it and why it has the effect that it has on people, and so very a sort of deliberate approach to composition. And I had the idea one day – it was sort of late 1999 – to sort of combine this musicalogical approach to music with technology, to build a recommendation tool that would be a powerful way of helping people find all these bands I’d been in and among for years, and that was kind of where the original seed was planted for the Music Genome Project that became Pandora.

 

Adam Kleinberg: Did you, were you a technology guy? Did you have that background?

 

Tim Westergren: I’m not a computer programmer, but I’ve long been interested in kind of the intersection of music and technology, so recording arts, sound synthesis, that kind of, the marriage of computers and sound.

 

Adam Kleinberg: Okay. I’ve always loved Pandora.com since I discovered it a few years ago, because back in 1999 I was kind of still, I didn’t have kids yet and I still had friends who would be, like, turning me onto music, and as I’ve kind of not been in the hangout scene so much its been, it became really hard for me to find good music all the time, so I’ve loved that I’ve been able to use Pandora. Explain to us and to the Dishy Mix listeners how the Music Genome Project works, ‘cause this is really fascinating stuff.

 

Tim Westergren: Sure. So the Genome is what powers Pandora and it is an enormous collection of songs, that are about seven hundred thousand now, that have all been manually analyzed by a trained musician, along close to four attributes per song. So we actually have a team of people here at Pandora who come in everyday, slap on a pair of headphones and have been doing this for almost a decade…

 

Adam Kleinberg: How many people?

 

Tim Westergren: Forty about. They put on headphones and listen to songs and actually score, sort of measure every granular musical detail of each song; melody, harmony, rhythm, form, instrumentation, you name it; sort of capture the musical DNA of songs, which we then use as the connective tissue that create playlists.

 

Adam Kleinberg: What made you, or was it a conscious choice or not to use recommendations and, you know, collective consciousness to rank and rate songs?

 

Tim Westergren: Well we actually do use the feedback from our audience, what you might call the wisdom of the crowd, which are the thumb feedbacks that we get; we’ve gotten close to four billion pieces of thumb feedback from listeners on Pandora. So it actually is a part of the equation, but the original reason that I went with this approach is that it’s the one form of recommendation that doesn’t, it’s not a popularity contest. So with a Genome, the Genome doesn’t care if you’re a hit artist or you’re a brand new garage band, all it cares about is the musicology, so it’s a great way to introduce you to stuff you’ve never heard before that wouldn’t pop up on the people who bought also bought this list.

 

Adam Kleinberg: Got it. Joe Kennedy, the CEO of Pandora, told me about a story about the Brittney Spears sounding a lot like Sarah McLachlan…

 

Tim Westergren: Celine Dion.

 

Adam Kleinberg: Celine Dion.

 

Tim Westergren: Yeah, well the interesting thing about the Genome is that it really has no concept of kind of social stereotypes or, you know, the sociological layer that we all slap on to music. So it makes for some interesting bedfellows in the playlists, and we did, I had a very funny exchange with someone who wrote in to complain to me about us playing a Celine Dion track on his Sarah McLachlan station.

 

Adam Kleinberg: What’d you do about it?

 

Tim Westergren: Well I had a very rigorous back and forth with him, trying to sort of figure out what it was that bothered him, and it was clear he just didn’t like the idea of having a Celine Dion song on his station. But he eventually wrote me back saying, you know, “Wow, maybe I like Celine Dion.” So it was a victory.

 

Adam Kleinberg: So do you still get time to interact with your customers?

 

Tim Westergren: Yeah, I spend most of my time doing that. I do it certainly online, but I also do a lot of traveling and giving talks, like I did at your organization, to all over the country to Pandora listeners. I’ve probably given something like 250 or 300 of these…

 

Adam Kleinberg: Wow!

 

Tim Westergren: we call them ‘town hall meetings’.

 

Adam Kleinberg: Awesome! Awesome! So you’ve had over 8 million – that’s an amazing number – of iPhone app downloads. How big a part of your future is mobile?

 

Tim Westergren: It’s a huge piece of it. It already accounts for about thirty percent of our listeneing…

 

Adam Kleinberg: Thirty?

 

Tim Westergren: Yeah.

 

Adam Kleinberg: Okay.

 

Tim Westergren: So between the iPhone, the Blackberry and the Palm Pre, which are three sort of highest volume devices, over thirty percent of our listening is done on those devices. And about half, over half, of our new registrations everyday are coming on mobile. So we see it as a cornerstone of the future for sure.

 

Adam Kleinberg: What are the numbers on Palm Pre and Blackberry?

 

Tim Westergren: Well the iPhone’s about a little shy of thirty thousand a day…

 

Adam Kleinberg: Okay.

 

Tim Westergren: The Blackberry’s about twenty. Palm is a significantly smaller number; it’s a brand new device…

 

Adam Kleinberg: Right.

 

Tim Westergren: And we do something like sixty-five thousand a day overall.

 

Adam Kleinberg: Is there a reason you’re focusing on those particular devices? I know Nokia has a platform that’s out. Are you focusing on iPhone because it’s kind of sexy and the buzz thing, or…?

 

Tim Westergren: Well we look for a couple things in a device and we’ve learned the hard way, and we built Pandora on, gosh, fifty different feature phones over the course of a couple years before the iPhone and never had very much traction on any one given device, and it was a lot of development but it never had a big audience. So we’re trying to find what we call sort of hero devices, you know; devices that have the potential to have millions and millions of users on them. And the device itself has to accommodate, you know, an elegant version of Pandora. And Smart Phones tend to have that capability because they’ve got these nice touch screens, they’ve got a really, it’s a great user interface platform. So we sort of select our phones based on those criteria.

 

Adam Kleinberg: Are other platforms like Face Book a big part, are they very successful for you or is that secondary?

 

Tim Westergren: I think we have something like six hundred thousand or so people on our Face Book account…

 

Adam Kleinberg: So mobile’s dwarfing that?

 

Tim Westergren: Yeah. No, the engine of our growth is mobile and the broad web sort of word of mouth.

 

Adam Kleinberg: How many listeners do you have overall?

 

Tim Westergren: We have about thirty-two million registered listeners and about eleven and a half million a month that come to Pandora.

 

Adam Kleinberg: Wow, that’s a lot!

 

Tim Westergren: Yeah.

 

Adam Kleinberg: Tell me, what are the, you know, obviously a lot of advertisers and marketers are listening to this podcast; what are the unique opportunities that Pandora offers for reaching customers?

 

Tim Westergren: Well I think fundamentally the site is reaching a very large, very engaged and very passionate audience of people who are, you know, care a lot about what they’re listening to, have spent a lot of time sort of crafting and curating their listening experiences on Pandora, so it’s a very personalized environment, and they’re paying attention. We have a very, very high interaction rate on the website from people going back to Pandora over and over again during a session - typical session’s over three hours long – to skip a site, to do something on the station; so to essentially improve their experience. And so what you actually have is this, kind of this very virtuous situation where somebody’s very engaged, they spend a lot of time looking at the site, but their principle reason for being there, the value of Pandora is auditory, so if you’re listening to something, which means you can put these really beautiful canvasses around the experience; we call them ‘valences or skins’, whatever you want to call it. So, it’s like the back of a cereal box, you know; while you’re listening you can enjoy this visual treatment, and I think it creates a really compelling marriage of a brand or a visual with an auditory experience.

 

Adam Kleinberg: And how do you think, what’s your opinion on how engagements should be measured? Is it time? Is it, you know, the initial impression that’s important? I think, you know, with the Pandora experience, especially with those take overs, I think that there’s a great, you know, obviously, you know, full in-your-face brand impression on Pandora.com; are people keeping that in the foreground as they’re listening and what do you think should be the way for measurement to mean?
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Tim Westergren: Yeah, well I think the metrics for success vary by campaign. If it’s a movie what matters is that the people look at a video trailer, a fifteen or thirty second video trailer, which you can do on Pandora, and it’s a pretty simple metric, how many people listen to it and how many people watched it and how many people watch it all the way through. If you’re just trying to build brand awareness and imagery, then you’re looking at recall. You go back and see how many people remembered it, was the impression favorable, those kind of third party studies that you can do. If you’re selling a product you can do click through rates and conversions so you can track those things. And what we do is we tailor the actual advertising product to meet the goals of the campaign. And so if there’s a very particular objective you can have that call to action on the site, so this beautiful valence or take over can have a button on it or some image that you click to go do something; to go sign up for a contest, to go register, you know, for a trip, to go look at a car, to go, you know, spend some time with the brand and we can just tailor the experience to try and accomplish what the advertiser wants to accomplish. And, you know, what you said is true that you would think that a radio experience would essentially be a background experience, and it is mostly. People will launch Pandora and then go do something else while it’s playing and it’s maybe just sitting in your tray. But the thing about the site is people go back to it continually to do something, because they’re rewarded for interacting, for thumbing songs, creating stations, it gets better, so people are always going back to it, and that’s when and only when we sort of refresh with this new creative.

 

Adam Kleinberg: Have you ever considered audio ads?

 

Tim Westergren: Yeah, we do have audio ads…

 

Adam Kleinberg: You do have audio ads.

 

Tim Westergren: And the beauty of course of this connected form of radio as opposed to broadcast radio is we know who’s listening, where they are and who they are and what they’re listening to. So all the advertising, whether it’s audio or video or visual, can be targeted based on the age, gender, zip code and musical style of the listener. So if you had a new car you could say, “I want to put this image up in front of women in their 30’s, you know, on Friday afternoon, listening to country in the New York metropolitan area.”

 

Adam Kleinberg: And then in between songs they could hear an ad for that, a radio type spot…

 

Tim Westergren: Exactly. They could have an audio spot, it could be connected to the visual…

 

Adam Kleinberg: And you’re delivering those mobile…

 

Tim Westergren: Mm hmm.

 

Adam Kleinberg: and everything. That’s great.

 

Tim Westergren: Yeah. And then, you know, the sort of, the implication of the mobile phone success is that Pandora really is becoming an anytime anywhere experience, so… You can get it on your computer of course, but you can take the iPhone jogging, you can dock it at home, stream it through your home stereo system, you can plug it into the car, which you can also do with the Blackberry, the Palm Pre, and we’re becoming sort of a 24/7, you know, traditional kind of radio like presence.

 

Adam Kleinberg: Right. So tell me about the car. You’ve been spending time in Detroit?

 

Tim Westergren: Yes we have. Yeah, the car is actually really exciting. I know the industry’s having its issues, but there’s a lot of innovation going on and forty percent of radio listening happens in the car. So we’ve been spending a lot of time investing in sort of integration into the car, and there’s all sorts of really fascinating stuff that’s happening there.

 

Adam Kleinberg: That’s great. I mean, it seems like, you know, the entire world of radio could be revolutionized by what you’re doing.

 

Tim Westergren: Yeah, in fact, you know, I use Pandora in the car for the first time only about six months ago actually. And it was a really eye opening experience; I realized when I was driving and this radio was coming out of my, the speakers, and I thought, “Wow, this really, I really like this radio station. It’s as if it knows me.” And of course it does…

 

Adam Kleinberg: Right.

 

Tim Westergren: And I realized how unaccustomed I was to relevance in a radio. And then a song came by that I didn’t like and I reached over and I skipped it. And again I had that kind of, sort of cognitive distance of, “Wait, I’m in the car listening to radio and I just skipped a song and it’s not what I’m used to doing. But that’s what it’s going to be like in the future.

 

Adam Kleinberg: I think it’s interesting, you know, I got kids and they’ve grown up in this TiVo world where….

 

Tim Westergren: Yeah.

 

Adam Kleinberg: everything is on demand, and when we’re in the car and they hear a song that they can’t listen to again, you know, or they don’t like a song, they don’t understand, so I think it’s really interesting how the whole dynamic of how we consume media is changing.

 

Tim Westergren: Yeah, it’s like the story of the baby who is crawling behind the TV to look for the mouse, you know…

 

Adam Kleinberg: Yeah.

 

Tim Westergren: who’s used to the screen as an interactive on demand, you know…

 

Adam Kleinberg: Yeah.

 

Tim Westergren: computer. And I actually think, you know, the, it’s true that on demand is kind of the buzzword of the web. But when it comes to music I think it’s important to know that historically – and it remains true to this day – people don’t want to spend a lot of time administering their listening experience, you know. And in spite of the iPod phenomenon and all this sort of capability we now have to actually customize playlists song by song and load them onto these devices and really kind of create a very particular listening experience, people don’t generally want to do that. They want to hit a button and press go, and of the average twenty hours a week that an American spends listening to music, historically seventeen of it has been radio and only three of those hours have been music people own, and that’s still true today. ‘Cause I think that people ultimately want is easy. And what the web does is gives you easy and personalized.

 

Adam Kleinberg: So who do you see as your competitors? Is it radio? Is it, I mean, it’s Clear Channel, like…

 

Tim Westergren: Yeah, our biggest competition is, our biggest competition’s been broadcast radio, and that’s really the bulk of where radio listening is still done and that’s where we look to for growth. We’re not competing with other websites. You know, Pandora’s by far the largest stream or music online already. But, you know, for us to be where we want to be, which is, you know, a billion listeners worldwide, we need to grab those hours from broadcast radio.

 

Adam Kleinberg: You spend a lot of time in DC lately and you’ve gotten some big press, and you even sent out an email to all your listeners, which I know because I’m one of your listeners. You know, tell us about the legal battles you’ve been fighting, ‘cause I think it’s really interesting and the new royalty victory agreement just had in congress.

 

Tim Westergren: Sure. So we have had a long, pretty hard fought negotiation around what’s called a performance fee, which is the royalty that we play every time we spin a song, and its been a negotiation with the record industry essentially, which we resolved finally just a few weeks ago after, you know, over two years of pretty tough negotiation. And it was a royalty that left unchanged would’ve left us in some hot water, could’ve really sort of snuffed out the webcast industry. But largely thanks to the support of listeners we actually did organize a grassroots kind of political campaign in Washington to kind of get our listeners to call and fax and, you know, write in to their members. We created so much energy on the hill that congress actually forced the parties to this negotiation to get back to the table and redo the negotiation, so it was a really amazing experience with the power of the consumer, you know.

 

Adam Kleinberg: How did it feel to be a lobbyist?

 

Tim Westergren: You know, I did put a tie on and walk the hill and met members and staffers and, you know, fortunately just about every staffer on the hill is a Pandora fan, so we had a real warmly welcome by testifying as the Joe on the senate and the house, and we went up a pretty steep learning curve. But ultimately the kicker was just the sort of raw volume of listener and constituent opposition, you know. There were offices that were getting tens of thousands of calls from their districts saying, you know, “You need to support this”, and it couldn’t be turned back.

 

Adam Kleinberg: That’s great. So you have these passionate fan base and they’ve gotten used to accessing everything completely free…

 

Tim Westergren: Uh huh.

 

Adam Kleinberg: And you had to add a cap of forty hours per month…

 

Tim Westergren: Mm hmm.

 

Adam Kleinberg: this summer, about a month ago right?

 

Tim Westergren: Right.

 

Adam Kleinberg: How’s that been received?

 

Tim Westergren: Well it’s…

 

Adam Kleinberg: I mean for me I would pay it. Like, you know, forty hours seems legitimate and fair, and I think that having that brand love, but, you know, like gives me the… I think you guys are great and I want to ask you a little bit more about just being an authentic brand. But for me my perspective, my perception is that having that authenticity gives you that leeway to do that. But I’m really curious to hear from you if I’m right.

 

Tim Westergren: Well we’ve felt some pain for sure; it’s, no one likes to have their service, their beloved service go from free to paid. But like you said, it’s, you pay for the unlimited listening beyond forty hours and it’s ninety-nine cents a month, so it’s a pretty modest request, and it affects a relatively small percent of our listeners, so it’s a single digit percent of listeners. And since we’ve launched it, a very, very large percentage of them have opted in to pay that extra ninety-nine cents when they hit the forty hour cap. So there have been some very unhappy people to be sure. We’ve had to spend a lot of time with our listeners in the last few weeks, you know, talking people down and just explaining why we’re doing it, and I think the vast majority of folks who objected at first, when you get a chance to really have a conversation about it understand why you’re doing it and don’t think, “Oh, this is the beginning of a whole bunch of changes I’m not going to like.” It’s sort of a very particular fix that we had to sort of inject into the business model.

 

Adam Kleinberg: I think it’s really interesting how people just are so passionate about their digital rights in a way… I saw somebody on Twitter the other day, you know, post a tweet that if anyone tweets their own press they should be shot or something like that. And it amazed me that, like, you know, most people on Twitter are there to promote themselves in some way or, you know… I shouldn’t say that; that’s kind of a lot of people on Twitter there to promote themselves in some way and to put that in a crime that sounds like murder, I just think it’s kind of goofy, but it’s legitimate because if people feel it it’s legit.

 

Tim Westergren: Well one of the things that we always try to remember whenever we get some number of, you know, sometimes pretty darn heated emails is underneath it all is a lot of passionate. What drives somebody being so upset is that they care about this relationship they have with Pandora. If they didn’t care they wouldn’t write us back. And so the, it’s a good, it’s good to remind yourself that even if it’s scary sometimes to sort of open your, fling your door wide open and invite in any kind of feedback you want, that sometimes the most vocal critics, the most upset people are also your biggest evangelists and they’ve been the ones spreading the word for a long time and you just really need to kind of bring them closer, you know. When they really are upset about something bring them closer, talk to them about it, explain, bring them inside the decision. And if someone still doesn’t get it then you’ve got to say, “Okay, well we’ve got to agree to disagree.” But I think the bulk of people if you’re really honest with them and if what you’re doing is fair and justifiable, they’ll come around to it, you know. You just have to be prepared for a long conversation.

 

Adam Kleinberg: That sounds like a good point for us to take a quick break for Dishy Mix sponsors, and we’ll be right back.

 

Adam Kleinberg: Alright, we’re back. This is Adam Kleinberg, here with Tim Westergren from Pandora.com. Hope I’m doing okay on my first interview. I…

 

Tim Westergren: Fabulously.

 

Adam Kleinberg: I downloaded Susan’s Talk Show Tips, so I kind of used that to help me prepare for today and hope that it’s working out for everyone out there. I thought it was very helpful.

 

Tim Westergren: You’re looking very natural.

 

Adam Kleinberg: Thank you. Thank you. You know, so lets get back to that thing about authentic brands. You know, as I was doing research for this interview it occurred to me that authentic brands, companies like Pandora, Craig’s List, have higher expectations from their customers…

 

Tim Westergren: Mm hmm.

 

Adam Kleinberg: Do you think that’s the case and does that put you in a box?

 

Tim Westergren: I think it’s definitely true. We invite that. We invite that by inviting people to participate. You know, we make a promise that we’re going to answer every email that we get personally and we’ll listen to all the input and we’ll hear out all the arguments, and we realize that’s going to lead to, you know, a lot of input. But I do, I’m a believer that if you have a strong set of principles as a company – one’s that you’ve thought through, that make sense, that’s sort of justifiable and fair – and you really stick to those and you just, you stick to those and you let people transparently watch you, you know, execute on those principles, that ultimately the crowd is fair, the audience is fair to you. They will punish you – and sometimes badly – if you violate your principles. They’ll forgive mistakes, you know, and you have the opportunity to correct if you do something wrong, but they’ll recognize whether you’re authentic or not. And that’s certainly something the web can sniff out is whether you mean what you say. And provide you do, they’ll, they will, I think they’ll come along with you, you know. If you have to make an adjustment in your business model or your product or something, people will understand.

 

Adam Kleinberg: Yeah, I think it’s interesting how many companies get that and want to be authentic, but are challenged just by the sheer resources it takes to be authentic…

 

Tim Westergren: Mm hmm.

 

Adam Kleinberg: You know, you need to have a team or, you know, a really committed CEO or somebody who owns that conversation.

 

Tim Westergren: Yeah, we have a team. I mean I do a ton of it obviously, but we have a team of folks who we call listener advocates and their full time job is to communicate with listeners.

 

Adam Kleinberg: How many of those do you have here?

 

Tim Westergren: We have between tech support and listener advocacy about eight. And, you know, I go out myself and hold these town hall meetings all over the country, and when I walk into a room with a couple hundred people I have no idea what’s going to happen. I don’t know if I’m going to have a room full of people that are really upset about something, you know. It’s a completely, there’s no filter between me and what the agenda of the audience. But once you’ve done that for a while, once you’ve kind of bared yourself and, you know, experienced this input that covers the whole gamut of your business, you become pretty tough and you also, in a way it kind of force you to, you know – I’m struggling for the word here, but – you’re company is really scrutinized and it becomes water tight. You know, you really do work out the kinks…

 

Adam Kleinberg: Mm hmm.

 

Tim Westergren: Where you were doing something that you shouldn’t be doing, you’re not doing it anymore. Or you have a feature that was, you know, poorly presented, it’s more clear now. Or you have some kind of ethical or moral issue or privacy issue or you name it, you work it out. And after some time there’s just like nothing, you know, there’s no chinks in your armor anymore. But that’s a painful process.

 

Adam Kleinberg: I’ll bet. I’ll bet. I want to shift gears a little bit because I want to talk about Joe, alright. I initially met you through Joe Kennedy who I met…

 

Tim Westergren: Right.

 

Adam Kleinberg: My agency was working with Virgin Mobile; we do advertising, we also do a lot of interactive work, and they’d come to us a few years ago and asked us to write a proposal for what their digital phone experience might look like…

 

Tim Westergren: Okay.

 

Adam Kleinberg: And as part of that we, they had software that basically you could hold it up to the radio and it would listen to what song was playing and play it back…

 

Tim Westergren: Right.

 

Adam Kleinberg: which is essentially what Shazam is now…

 

Tim Westergren: Yeah, fingerprint.

 

Adam Kleinberg: on the iPhone, right…

 

Tim Westergren: Mm hmm.

 

Adam Kleinberg: And I thought it would be amazing if they could take that functionality, marry it with Pandora and, you know, have that as kind of a unique thing that only Virgin Mobile could offer…

 

Tim Westergren: Mm hmm.

 

Adam Kleinberg: And they didn’t hire us, but - for that assignment – but I met Joe Kennedy through that experience and he and I have become pretty good friends, and he’s a very modest guy, but he’s got a very interesting background…

 

Tim Westergren: Mm hmm.

 

Adam Kleinberg: You know, he was the VP of marketing at Saturn during their heyday years and when they introduced that whole concept of a different kind of company…

 

Tim Westergren: Yeah.

 

Adam Kleinberg: a different kind of car and worked with Hal Riney…

 

Tim Westergren: Yeah.

 

Adam Kleinberg: to develop that. And, you know, we went out to lunch one day and he said to me, “Nobody really knows how to build a brand anymore.” What are you guys doing to build your brand? I mean, this authenticity is really part of it, but…

 

Tim Westergren: It’s interesting, I’ve never heard him say that. I don’t think in the last four or five years that we’ve really uttered the word ‘build a brand’ in Pandora, you know, very much, if at all. I think that we do what feels right, what feels sort of like us as individuals, what feels like us as a company and what feels like us in terms of the service that we’re providing. You know the town hall is a great example; so that happened completely by accident. I didn’t have this notion that, “Oh, we’re going to go do this strategy of, you know, blanketing the country with these meetings and developing focus groups, blah, blah, blah.” It was, I was going out to look for music for the Genome and to go sort of investigate local music scenes, and someone in my office said, “Hey, you should have a meet up.” I thought, “Wow, what’s that?” And we did one thinking, “I don’t know what this is going to be like”, and it felt good, you know, it was a great conversation…

 

Adam Kleinberg: You used meetup.com for that?

 

Tim Westergren: No, we just did it on a blog. And only two people showed up to the first one. But it felt like the right thing to do, so we just kept doing it. And after a while I think it’s fair to say that they’ve become part of who we are, and I think of how people have come to understand how Pandora is. That wasn’t a conscious brand building exercise. It was more like a natural outgrowth I think of who we are. And I think to some extent that’s the new quote ‘brand building’, is, you know, be who you are and do it authentically, you know. If you’re really doing a lot of strategizing and calculating you’re probably, you’re probably off course a little bit is my guess.

 

Adam Kleinberg: Got it. So you’ve got a pretty lofty goal you said earlier, you want to have a billion global listeners…

 

Tim Westergren: Mm hmm.

 

Adam Kleinberg: I mean do you think that you’re going to advertise one day?

 

Tim Westergren: To attract listeners? No. I don’t think we need to. I think this service grows by itself, and the bigger it gets, the faster it grows, which has been our history.

 

Adam Kleinberg: Mm hmm.

 

Tim Westergren: We’ve just, we’re just the tip of the iceberg, you know, with this I think.

 

Adam Kleinberg: Yeah. I mean what’s your vision? What, what is your vision?

 

Tim Westergren: I think of the vision a few ways. One is from listener perspective, which is, you know, a billion or more listeners all over the world who are consuming music from all over the world and connecting bands from one country to another and kind of on this virtually infinite musical discovery that has not respect for geographical boundaries, and that’s there’s this huge audience of folks who had been checked out, you know, who love music but hadn’t been listening to it for years because they weren’t being served by a broad cast and they’re back in the game again and, you know, reinvigorated and enjoying music and, you know, back in it, and it’s a global phenomenon. That’s the first piece. The flipside of that coin is that you’re also changing what the world looks like for musicians, specifically the working musicians who don’t have, who’ve never had access to a big promotional channel like this, and, you know, I hope that one day, you know, there will come a time when the day your song gets added to Pandora as a musician is the day you quit your day job, because you are immediately pushed out into this absolutely gargantuan highly targeted channel where everybody in the world who likes your kind of music hears it. And that audience then becomes your patron.

 

Adam Kleinberg: That’s great. Do you see video as part of that or is it really just about music?

 

Tim Westergren: It’s always going to be about radio principally. But video is a very logical appendage there, you know. You want to see the band, you want to experience them in different ways. Pandora will have a whole ecosystem that’s wrapped around the radio experience, whether it’s, you know, finding out about live shows, going to watch video, joining fan clubs, community groups, etcetera. You know, we’ll feed into all of those avenues of the way people want to interact with music, but our core sort of, our core capability I think will always remain building the best personalized playlist for each listener.

 

Adam Kleinberg: So I think there’s this notion of distributed consumption that’s an important trend right now for marketers to understand that people are empowered to consume content on their own terms, however they want; so kind of I think the website, as a core destination is becoming very quickly passé, right, because as you’ve seen you’ve got thirty percent already in just a year already accessing your…

 

Tim Westergren: Yeah.

 

Adam Kleinberg: your service through mobile. How do you, what’s your advice to brand marketers who need to make sense of how to reach people when they can consume media on their own terms?

 

Tim Westergren: Yeah, so I think… so starting to answer that question, I start with the publishers, the folks where you’re going to, where, the places where you’re going to advertise. And I think that the spots that were the most attractive are the services who are continuing to solve a problem for the consumer; making something easier, making something more affordable but legal, you know, making something ubiquitous, all of these things. If a service is providing that value to this person who can choose from a myriad different ways to consume product, then they’ll view that service as kind of a friend, you know, as an ally, as someone who’s helping them who’s providing them value. And any brand that associates itself with that service becomes associated with that relationship. So, you know, if Pandora’s the one, the place you go where you just get that musical itch scratched and while you’re there you see Toyota or you see, you know, what, you name it, essentially that becomes a proxy for the thing providing you this value. And that I think is the fundamental equation that marketers need to look for.

 

Adam Kleinberg: You know, we talked quite a bit already about the marketing as a conversation; you know, and marketers can’t talk at their customers, they have to talk with them. How are you going to scale this grassroots conversational marking you have going on with your user base?

 

Tim Westergren: It doesn’t really scale. I mean, you hire people, which we’ll do. You know we have eight people right now; that’s going to grow. And they’re going to be all over the world. And it’s built into our business that for us to remain who we are, and therefore to continue to grow the way we want to grow, we’re going to have to feed that and resource against it. And we already, you know, we have a hundred and fifty people in this company; eight of them do nothing but email people. There are a lot of investors or business people that will look at that and say, “Hmm, you know, you’ve got all of this automated stuff out there, these soft, these email programs and sort of ways to reduce the use of human beings in that particular function. You ought to be doing that instead”, and we’re never going to do that. We’re just going to be, you know, build that work force up.

 

Adam Kleinberg: I think if you look at the price of eight peoples salaries versus, you know, maybe ten commercials on broadcast television, you know, it’s probably about close to equivalent…

 

Tim Westergren: Yeah, I know. It makes sense in a hurry if you really understand the full ramifications of it.

 

Adam Kleinberg: Tim you’re the quintessential entrepreneur that maxed out their credit cards, faced rejection after rejection to bring your vision to life. What’s your advice for entrepreneurs out there that might be facing tough times right now because of the economy and trying to decide, “Should I max out my credit cards, keep my vision going, or should I call it quits?” I mean, that’s a tough one, I know, I know. You know, I’ve also been the entrepreneur…

 

Tim Westergren: You’ve been there, yeah.

 

Adam Kleinberg: whose had to make things happen, so…

 

Tim Westergren: You know, it’s certainly an individual decision; it’s not for everybody for sure, and you’re right, I got way, way down in the whole. And I think that’s, I don’t have much risk aversion in my personality, so I was okay with that decision and it worked for me. It can be torture for people, for certain people depending on your disposition. It think that, you know, it’s easier to answer that question when you get, when you get started, you know, when you get started what you should prepare yourself for. I think you need to find a sustainable life. So if things are hard you need to think about your life holistically. It’s not just, “Can I literally afford to pay the bills and eat during this time”, but “Can I mentally survive what is likely to be a lot longer period than I ever, than I think.” And you need to have people around you that can support you, so make sure that you have both colleagues and family, friends, a kind of network that can kind of keep you through it. And I think the last thing I’d say is don’t be self conscious about it, ‘cause I think one of the biggest challenges for an entrepreneur, especially if you’ve been working at it for a while and I’m sure you can relate to this, and you, you know, you just feel like, “Gosh, man I’ve been grinding and grinding and I don’t have a lot to show for it and I’m, you know, 35 and, you know, my friends are doing this and that and they’re on these paths to security and here I am kind of lost”, you know, my case, you know, under an enormous amount of debt. But I think that’s what an entrepreneur does, and most successful entrepreneurs that we all know, the big iconic entrepreneurs, all had times in their life when they were, you know, on the wrong side of this, and I think you can’t be self conscious about it. You have to sort of embrace that that’s the path you’ve chosen, you know, and run with, you know. Once you get self conscious and you start to feel like you’ve made a mistake and you’re, you know, you’re worried that you’re not keeping up with your friends, etcetera, I think that really preys on you mentally and emotionally. And I think ultimately the biggest challenge of all this is mental and emotional; it’s not financial, it’s not physical, you know. Anybody can work hard; it’s surviving it sort of in your head that’s the hardest.

 

Adam Kleinberg: Yeah, I think it’s easy to let being an entrepreneur consume you…

 

Tim Westergren: Yeah.

 

Adam Kleinberg: and not focus on the rest of your life. So I think that’s a great spot to thank you for having this interview for me and spending some time with me today, and I hope Susan’s listeners enjoyed our conversation; I certainly did. And…

 

Tim Westergren: Right. Thanks for having me.

 

Adam Kleinberg: Thank you.