This Week in Startups - E1004: Yousician CEO & Co-founder Chris Thür created an interactive platform to master musical instruments, shares insights on acquiring 1M+ users, increasing retention through gamification, using profitability as leverage while attracting investors as an international startup

Episode Date: November 26, 2019

1:06 Jason intros the Pegasus concept & Yousician's Chris Thür 3:52 Chris explains Yousician 5:22 How did Yousician start and what did Guitar Hero have to do with it? 11:02 Capitalizing on Apple's inclusion of subscriptions 16:00 What were the early days of Yousician like, and was it hard to raise $? 20:32 Is being based in Finland an asset? 27:00 Chris gives his best advice for founders 29:34 Does Chris feel pressure to take $ off the table through secondary shares? 30:45 What does Chris look for in investors and what motivates Finnish employees? 34:55 Jason & Chris talk speeding tickets in Finland 42:19 Chris demos Yousician and Jason sings along 45:25 Jason tries to get on the Yousician Cap Table 47:21 Why Jason believes Yousician will get to 10 million subscribers in the next few years

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Sign up at brex.com slash twist and get card fees waived for life by entering the code twist during sign up. Also, sign up by November 30th and get $250 back after spending your first $1,000. Upcoming launch events. Apply for the next launch accelerator cohort. applications are due December 23rd. Learn more and apply at launchaccelerator.com. We've been talking over and over again on this podcast about the concept of the Pegasus.

You've heard of the unicorn? That's a startup that becomes worth a billion dollars. I coined the term Pegasus. These are more powerful and more glorious than even the mighty unicorn. Why are Pegasus so coveted now in Silicon Valley? Because they are so profitable. fly on the wings of profitability and skip rounds of funding which preserves the cap table. And we've had a number of companies that we've invested in from Com to FitBod and others

who are so profitable, they pour that profitability back into the product and the virtuous flywheel begins. A great product at a great price, sometimes, a little bit of pricing power and a profitable price, so we're not trying to lose money. And then profits. And you pour those profits because you're running a frugal operation back into growth. And if you can get that flywheel going where, let's say, calm is charging, I don't know, $59 a year, $69 a year, $79 a year. And they figure that out, but they can acquire customers for $10, $20, $40, and they subscribe for the year.

It's profitable. Then they take that extra $20. They acquire another customer. And the flywheel begins. And oh boy, when that gets going, yum yum-ymskis. Well, my guest today is from a company called Usician, which when he emailed me and said, I'm in town, I said, I love your software. I use Usician. I'm a paying member. I think I pay $100 a year for a musician because I've been, as everybody knows, obsessed with Mark Knopfler and playing electric guitar. And someday I want to be able to play just one, just one song by Mark Knopfler before I die.

And our guest is Chris Turr. I hope I pronounced it reasonably well. Very well, yes. TIR. You are the CEO and co-founder of Musician. You heard my preamble about it being a Pegasus. Explain to me how you funded the company. I know there's 100 employees now, which means, gosh, you're spending at least a million dollars a month on salaries, etc.,

So you're spending tens of millions of dollars a year, which means you must have 30, 40, 50 million a year in revenue or something in that range. Are you public about those numbers? The range that you said. The range is good. Definitely over 20 million of revenue, which means it's $100 a person. So you have hundreds of thousands of subscribers all to a musician. Explain to people what musician is and how you started it and funded it in the early days. Yeah.

Great. And thanks a lot for having me on the show. Of course. And thanks for the business. Yeah. Thanks for practicing and helping to make the world a more musical place. Our mission is to make musicality as common as literacy. So we believe everyone can and should play an instrument.

And that's the basis behind it. So musician is an online service. You can use it as an app or on the laptop that teaches people how to play a musical instrument. The idea behind it is that you can use any real instrument so you don't need any special devices. If you have a dusty old guitar in the corner, that will work just. as fine. The microphone of your device will listen to what you play. We'll give you instant feedback on accuracy, on timing. And then a bit in a game-like manner, you unlock harder levels, you prove that you can do it, and then you can go to more advanced songs. There is all kinds of practicing

features that you can slow it down. You can loop the section over and over again if you really want to learn that solo. And so, yeah, a musician, we launched in 2014. We have now five instruments available. The guitar, piano, ukulele bass, and the newest in the front is using for voice. You can also learn to sing. Really? So you added singing. The product cost what? 20 bucks a month, $10 a month? It's $120 a year. $120 a year. And that unlocks everything? Everything, yes. Everything. So if you want to learn to sing and play guitar and play piano, 120 bucks a year, 10 bucks a month, you're done. And then it gets 50% more expensive if you want to learn the famous songs, because there we pay the licensing deal.

So you have to pay an extra, whatever, four or five bucks a month. Yep. All right, 100 employees, you're making well over 20, 30 million a year. You've got hundreds of thousands of subscribers. How did this all start? Well, the founding story was me and my co-founder

met at the university in Finland. So I'm recently from Switzerland. I worked in a laser research center trying to get a PhD laser physics, and we met at the university in a course, and we worked well together, and we were just thinking before our real career start, let's do a startup,

or let's start something of our own. And the idea to make music education, frankly, came from an own experience of both of us not succeeding in learning to play an instrument. I took piano classes when I was around 12 years old and pretty soon quit. It wasn't motivated to practice. Just stopped and my parents let me gracefully leave the classes. And my co-founder wanted to learn the guitar. And at the time, well, it was the end of the guitar hero era.

Yeah. We were like, why isn't anyone doing something like this? I mean, anyone who has ever seen anyone play guitar hero had that same. idea, which is, why don't they do this for real guitar? And why don't they? Why didn't they? I honestly, I don't know. I think Guitar Hero sold really well. It was a very good service. It was also easier to get on board. It was less intimidating, right? You just had like four keys you had to press, right? Yeah, I mean, Guitar Hero is definitely, it's a guitar-shaped

gaming controller rather than actual guitar. Right. I do give a lot of credit still for Guitar Hero in that way that, and many teachers told us that as well. When Guitar Hero was popular, a lot of the kids would go and take guitar lessons because they said, I love this thing. Why don't I do the real thing. So there was a lot of drive from doing. It was an onboarding kind of for that. In some form, yes. So you started when?

We met in, well, we started in 2011. And the first product was also launched in 2011, which was at that point a kids app for kids to learn to play a guitar. And it had already the same idea that technology would listen to you. And you can. Was it called musician or is it called something else? No, at that point it was called Wildcords. It was a very cute game for children where you collect the animals.

And to keep them motivated to practice, the market research clearly shows that most people learn to play an instrument when they're kids. But there was still in the early days, I think even for the apps. Yeah, it was the first or second year of the App Store, right? Yeah. And at that point, it seemed like the business model on the App Store is the Angry Birds model, which is 79 cents for the whole thing. And people were not willing to spend more money, particularly, I think also parents spending for digital music education. It was early. So it was a great product.

People loved it, frankly, didn't make much money. And this is the era of apps being like goofy, pet rock, $0.99, get the beer or the lighter app where you like flick a lighter or you pour a beer. I mean, it was like apps at that time were gimmicks, weren't they? To some extent, yes, definitely. I mean, even Angry Birds was like, they were like, here's 10 levels of people throwing birds at, you know, buildings. It was kind of gimmicky. Yeah. But at some point, it changed.

And the App Store started supporting subscriptions. and was that the thing that really changed everything for a musician? I would say there is two things that changed everything. One is the idea that we actually went away from a game to a music education service. Got it. Because before, I think we had half of the idea right, which was the idea, let's combine what games do well with music education to keep people motivated to practice. You mean gamification.

There was a good idea, yes. Unlocking, giving instant feedback. It's hard when you play an instrument, you're like, you don't realize you're getting better, but when we can do it note by note, you realize like every turn around, you're like, I'm getting a bit better, I'm doing a bit more.

That's what I love about the product is when I was doing the lead guitar, it would tell me, perfect, keep going. And then it gives you a rating, and you get one to three stars. And it only lets you go ahead, like one or two levels. So you can't, like, go all the way ahead, right? You have to like unlock them. Yeah.

And so it doesn't give you this feeling of like, oh my God, I'm terrible. It just says go back a couple of lessons, warm up, do the stuff you already know, and then you're unlocking levels, and then there's a leaderboard, and I saw my friend Stonley was trying to learn how to play guitar, and Stoney and I are on the leaderboard together, and I was like, oh, I've got to get a little practice in now, so I beat Stoney. So you had the gamification in the leaderboard as well. Yeah, and there is another aspect to it where if you start to learn an instrument, let's say on YouTube, and you're like,

okay, beginner lesson, you learn two chords, and then the next thing you're going to do is stairway to heaven. It, you will like, yeah, it's just too big of a jump. And so it helps to, you know, pace it a bit for people. And tell them, look, you are making progress. You're having fun, hopefully, as well. And you're getting better because time is really, you need to put in the time to get better. And how many people have downloaded the software now? How many people are using it every day?

We have, I think, monthly active users on all the product is about 15 million. Wow. But we count it as a real, they have to have a good, I mean, a real experience. And we count it like you have to really sit down with the instrument. So it's not enough to turn up on the app. You really need to sit down and play a few meaningful things so that we count you. You get the benefit of the product. And you know that because you turn the microphone on and you can tune your guitar or if you play a G chord, it says, great, you did a G chord.

It knows that you did it right. Yeah. And that's a key part of this too, is you made some sort of framework for listening over the just crummy microphone on people's laptops or people's iPads, right? Yeah, that was quite a hard thing to solve, actually, because there is also backing track. The backing track often sounds similar, so we have to actually filter that out. On top of that, there is background noise, if somebody vacuuming in the background or traffic. So it's quite a hard thing to do. And then with all the combinations of Android speakers and latencies, it's not an easy thing to do, but it works.

So the first thing you got right was the gamification. And then the second thing that went right for the business was subscriptions, correct? Yes. That Apple supported subscriptions. Yeah, I think the subscription worked then really well. But the first point still, we went away from half. The musician was then a major pivotal point for us where we realized people are looking for music education service. So we can still keep some of the game like features, but it should not be a game.

Right. And that's, I think, when people started recognizing, it changed from, you know, $2.99. It's ridiculously crazy to then when we charged at $10 a month, which people felt like, that seems like a reasonable thing for music education. prefer to spend $10 a month for two years than spend $2.99 or $29 up front for whatever psychological reasons. Subscriptions are easier for people to get behind than one-time purchases, correct? Yeah, yeah. Why is that?

Any psychological reason? I have my own reason. I'd love to hear yours. For us, I think personally, I also really like. subscription, I think, is a good model because we are not spending most of our effort to make a great ad to convince you to buy something that is then bad. What really happened with the subscription is, and it's still true today, which is our marketing team and our product teams, they are fully in line where they say the best thing we can do is to add another couple of months

of retention, keep the people more motivated. As long as they learn and as long as they're motivated to create alignment. Yes, it's beautiful. It's really actually great. And for the users, it is a nice incentive. And still, I mean, an upfront product. Like ours would probably cost more around $100 or something like this. And then $100 for something I haven't even tried. Sounds like a lot. Correct. That's what I think it is.

It's the considered purchase and the dilemma of what if I don't like it? It's not easy to return an app. You can return any app in the app store, but you have to email customer support. And they don't make it like one press a button and get your money back. So, but with a subscription, you're like, well, it's $10. If I don't like it, I can always cancel. So it feels freer. When we get back from this break, I want to know how you funded this company,

because I know you got a $2.5 million grant or something, which is equity-free. I want to know how much of this company you still own and how much to investor's own when we get back on this week in startups. Software should not dictate how you work. You should dictate how you work. That's where Airtable comes in. It's an all-in-one collaboration platform that is sweeping through Silicon Valley and tech startups. People are going crazy for this, including the investment community. I use it. Everybody's using it. Brian Alvey uses it. Everybody's crazy about it. air table. An air table is an ideal product for founders who are price sensitive, huh? And who are time poor. You don't have a lot of money. You don't have a lot of time. You want to use Airtable. And you want

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He is the CEO and co-founder of Musician. They're making tens of millions of dollars with a subscription app that I love called Usician. That's Y-O-U-S-I-C-I-N.com. You can look for it in the app store, which is where I subscribe to it, but you can also use it on the web, as well as Android and iOS. people use an iPad or a phone? Most or probably on the phone.

The best experience is on the bigger screen. You got to have an iPad. Use your laptop? At some point, somebody said, this was, the musician was the reason why my wife allowed me to buy a tablet. It's really, it felt like that's what it's made for. Tablet is great. It's great on the iPad.

It's cool on the go. I use it on the phone or then on the laptop that I can put on my piano. All right. Have you taken any investment money? Yeah. And when did you take money? in 2012. So way back then, you raised some small amount of money, a half million dollars, a million

and a half million. One and a half million. Those investors suffered with you through four or five years of the product, let's face it, going sideways or no growth or low growth? It was okay. We had, so True Ventures is our investor. At that time, I told you, we had this animal product. And we had to ask ourselves, do we want to start from scratch or do we want to continue

building on this thing? and because we felt that kids' parents is not the right market, at least for now, we looked at adults. And so we built the next product called Guitar Bots. That's also where we met. I remember when Guitar Potts, you came to launch, and it was a physical guitar, and you played it for me. Yeah, we had, yes.

There was a physical guitar, right? It was not. The idea was still the same. It was also a product, but it was clearly a game. It had robots and historian characters. So that's what we did. And we actually did, that's also. We rolled out the subscription,

and we managed to somewhat become profitable at that point. We were a very small team, but we were able to kind of grow it profitable from then. I think the exciting days came then when we really switched to musician, where we were able to... When was that? 2014. Got it. So your investors were like, I wonder if this company is going to make it. They're pivoting and pivoting.

And it was the third product that actually clicked. Yeah. Wow. Did they give up on you? Did you feel like they maybe wrote you off a little bit? I wouldn't say so. I think True has been really incredible for us. They kept showing up for the board meetings?

Well, to be fair, there were no board meetings. No, not at that time, no. No. But they were happy enough with us, I think, because we didn't need any additional funding. We built something and we invented the category of digital music education, the way it is now.

I think that is still something we are proud of. And then it started growing. And I think True has been very happy. They also always said, we're going to support the entrepreneurs. I think they built a true brand around this thing. I can speak as a portfolio company of true ventures. It's definitely true.

So there was never a push, hey, let's go raise more. Let's just build a good product. And that's what we did. So you also raise $2.5 million from the government and a grant at some point? Yeah, I think it's less than that. But yes, something like this. So that's non-dilutive. Yep.

And that's the only fundraising you've ever had. Yeah. Those two. Yeah. So less than $4 million. between the grant and the original investment, four million to hit a 30, 40, 50 million a year run rate. Incredible.

Yep. So what is the lesson that founders who are listening can take from this? What should they learn about what you did to maintain your cap table and not get addicted to raising money and the road to just nowhere of just raising money, raising money, raising money, as opposed to growing revenue? Yeah. What's the secret? Well, to be fair, we have been trying in the beginning quite hard to raise money because

neither me or my co-founder had any useful skills to build this thing, no coding. All right. So you were unqualified and you needed money. Yeah. I like that admission. We were essentially rejected over and over again. How many times? 50, 100?

I would say 50. 50 is really. 50 people say no. True Venture says yes. Yeah. At that point then we had launched the product and it was in our favor, definitely, that I met John in person at some event and his kid used to use it. wildcours the product said he really likes it.

So that's how it got started. And he was really excited about. He said, look, Chris, I've never met anyone more excited about music education than you. My kid loves it. It was, and then we showed the numbers. I did pitching competitions off with about less than $100,000. We built the first product that Apple featured it. Wow.

At that time, it was a huge deal. We featured by Apple. And he said, look, if you do this with this little money, frankly, the idea or our perception is let's give the boys a million and see what they can do with it. Right. So that's a bit the starting point how we met and we got then together with True Ventures. So the fact that you were able to prove that you were frugal with 100,000 unlock the over the million dollars in a way. Yeah. And I think it is fair to say, well, I still have the same enthusiasm for our mission and what we're doing.

I think music education is very important. And I think, I mean, you say this very often here as well, which is like if the founders really like they want to do this because there is something bigger behind it. I think John recognized that. And that's where it started, yes. And you're based in Finland. Yep. Is that an asset to be out of the bubble in Silicon Valley? Or is it a challenge because you have to get people more ambitious and, you know, thinking bigger? I'm curious.

I think it's a bit of both. The one thing is definitely, I mean, salaries compared to here. Half price. I mean, yes. So you can pay a developer 75, 100 there? We can hire some of the best engineers in the nation and we have because they choose also based on their passion. And we don't have maybe that big of a pressure like you have here from the big ones who just pay this. Absurring.

Yeah, let's use the word. Two or three times what you have to pay. Finland's starting salary for an engineer, 75, 100, 125, 125, something in that range? I would say less. Less even. Wow. Yeah, well, on the low end. A low end of what I said, yeah.

And do they stay longer? What's the tenure like? Because that's one of the big promises here is that the tenure of like Facebook and Google employees, I understand, is like under two years now. I would say it's probably depends on the company as well. For us, it's very good. People are staying. I think one thing is if you actually continue doing what you do. And one of the reasons that we do well with the retention is that there is, well, Finland has the highest per capita heavy metal.

band density. So my generation of Finns, they had all this passion for heavy metal and that wanted to become heavy metal guitarists. How did that happen? How did that happen that Finland became the death heavy metal capital of Europe? I don't know. I wasn't in Finland. How many people even live in Finland? Like five or ten million? Five and a half million. And they are obsessed with heavy metal. Yeah, I think it has been maybe phasing out a little bit, although it's I mean, heavy metal is a mainstream music genre, which is if you listen to the casual radio in the car, they'll play heavy metal songs. Oh my God.

If you meet the adults of our friends, some of them, yeah, listen to heavy metal. When you go to heavy metal concerts, then there is more gentle. Do you teach death metal in music? There is some metal songs there as well. Yeah, see, we are probably slightly over. Sorry to everybody listen to that part. We are not doing it on the singing, although that would be a really cool lesson on learn to singing heavy metal.

Basically just blow out your vocal cords. Yes. I can't take it. I hate it. Anyway, so there is a cold generation. You like that stuff? Personally, I do, yes. You do.

What do you listen to? Who's the famous Finnish heavy metal band? There's some band that's famous in Finland. I mean, Nightwish is probably the most famous. Yeah. They've sold 300,000 albums. It's amazing. I'm joking.

I've never heard of them. Night wish. It's a bit older now as well, but it's probably one of my favorite bands. Really? How many times have you seen Nightwish in concert? Three. Three times.

Yes. And the smile on your face right now, if only people could see it. Was this a peak experience for you going to see Night Wish? To be fair, I actually prefer to listen it on my own. But yes, it's definitely a cool thing to do. It's a personal experience for you. Now we are maybe drifting, we're happy to go back. But what is interesting, in Switzerland, when you...

Look at the producer over here. He's like, let's get back to a heavy metal concert in Switzerland. Yeah. I grew up. Everyone is black, long hair, white. I mean, this is kind of how you. you picture it. When you go for the same band in Finland, there's just

everyone there is a grandma and the kids are there. It's just kind of a different thing. It's a different thing. It's just like apple pie. It's just hot dogs and apple pie and just basic Finnish culture. It's part of it, yes. But so the good news for us was that there is a lot of coders who are great guitars

and really into it as well. And that makes us very attractive because it's not just that we deal with music, music education. It's also you get to actually, I mean, most of our employees have a guitar next to their desk, you need to test it all the time. And so for them, it's like, look, working on something they're passionate about, we pay well, we have a cool company,

it's going great, we keep some of the engineers for, well, since they started, since we started, frankly, our first engineer that we hired this deal with us. So there must be a non-stop line of late-stage investors offering you 10, 20, 30, 40,

50, 100 million dollars investment in musician in the hopes that you, you're you'll go to onto an IPO or maybe hit, you know, 250 million in revenue, something that would be in that IPO range. When we get back from this quick break, I want to know why you've turned down all these late stage offers for tons of money at high valuations. We get back on the Swedish startups. Walker Corporate Law is a boutique law firm specializing in the representation of entrepreneurs and startups and they encourage fixed fees. They believe that billable hours reward in efficiency,

So they will tell you what you're going to spend for each of the things you need to get done with your legal team for your startup. Whether that's things like your terms of service licensing agreements, mergers and acquisitions, whatever it is, you're raising money. You know how to do this IP assignments. All this important stuff are going to be done by lawyers with decades of experience. You're not going to get an associate who is learning on the job and your startup is their grand experiment. No. Walker corporate law only uses people with decades of experience. experience. And if you want to call the founder himself, Scott Ed Walker, call him at 415-9-79-99-98.

And you can email Scott at Scott at Walker Corporate Law.com. He's been the longest running advertiser and partner here on this weekend startups, for which I thank him. You can visit them at Walker Corporatelaw.com. Thanks again, Scott, for partnering with us and supporting this weekend startups all these years. It means a lot to me. 415-9-99. 98 or email Scott, Scott at Walker Corrupted Law.com. Okay, let's get back to this amazing episode. All right, Chris Turs here. He is the CEO and co-founder musician.

They're making eight figures in revenue off of less than $4 million invested, $1.4 from our friends at True Ventures and then a couple of millie from a grant. You must be getting nonstop offers because you've hit this incredibly high revenue mark with people who want you to go public, but you haven't taken some big giant mega round? No, we haven't done that. And actually, I can answer the question from before the break where you said

any advice I can give. Yes. We had struggle in the beginning to get investment for good reasons. And I tell the entrepreneurs, the best way to raise is if you don't need it, become profitable. Then it changes.

Then you're the one getting the emails. How does it change? You're the one getting the emails. You're no longer reaching out. And you're the one who's like, oh, I'll reply later. And I'm like, yeah, happy to talk. But right now is not the right time for us.

Really? When you say that to a top-tier investor, we're not raising money right now, but would love to talk to you in maybe a year or something like that. And you neg them like that. What is their response? Do they say they're getting on a plane to Finland? We've had a few. Yes. That came to Finland.

Yes. They said, we'll come to Finland. To be fair, it's more like while we're in Europe anyway, we are meeting somebody. And then you're like, why were you in Europe? I was like, no, we just came here for you. So they make up, that was my move. that you make up that you're in the area can I stop by and see you?

But really they sent it the trip around you they just didn't want you to feel guilty about it. Something like this, yes. There is the Slush startup event, the biggest startup event in Europe, which happens in Helsinki. So a lot of investors actually go there anyway. Yeah, they invited me to speak about Slush.

You should go there. It's a very interesting experience. I'm going to do Slush one of these years. I get paid really big speaking fees now. And I get up. So these corporate gigs are so profitable for me, Yeah. And I only do two or three of them a year, but it's big money.

And I get so many other offers that I'm just like, you know what, I'll just do two or three paid speaking gigs a year. And I don't think that that's like a community thing. Like they're not going to pay somebody to come from America to speak. They might pay for your flight or something. As far as I understand. But yeah, CDC, a voluntary run nonprofit organization. Exactly. So I would feel bad trying to like charge them.

So that's what happens is like I get some great speaking gig in Hong Kong or Japan or Qatar or whatever. I take that one first and then I run out of weekends to go somewhere. But I need to go there because it's supposed to be a lot of fun. So the reality is when the investors reach out and say like for them is still very often. I think it's also genuine that they say, look, we also are happy to build a relationship. We want to know what's going on. Right. Over time for many of our investments, we have met them like years before even just to see.

And to be fair, I have a few of those relationships with some investors and that if we feel Like there is a right moment for us to actually raise around when it really makes sense that we could actually build on that. Yeah, I mean, you have a co-founder or two? One co-founder. And you guys own 80% of the company with the team, some large amount. So it would make sense at this point for you to do a secondary offering, be able to take a little bit of money off for yourselves, maybe for your long-term employees, people over four years. We get to sell a little bit. How do you think about those secondary market transactions?

When that make you even longer? Because right now you've been at this business for eight years, nine years, and you haven't been able to take money off the table, or I guess you can pay yourself a dividend? We could, but we haven't done that either. How long are you going to push off you making some money here? That is maybe one of the luxuries living in Finland. It is a bit of a different thing there because living there is not that expensive as it is here.

So you don't feel that acute pressure. It's just not there because health care is paid for when your kids want to go to college. The government is giving them money to do that. So it is really like the other way around. So there is maybe not that pressure. That being said, I think for some of the employees, definitely who also in the very early days took very low salaries in exchange for the equity. So we have been talking about this.

So secondary is definitely not off the table. I think that's the way to do it is for you to just set up like a $50 million secondary offering. People can buy in and out of it. And then what you can do is you can just use it. You just tell everybody on the team like you can request how much you want to sell. up to 25% of your holdings, and then you approve it. So you get to make a decision, like, I think this person has done a great job. I'm going to invite them into this pool that will be able to do it.

And it's a nice reward for people. And it becomes a way for you to have these golden handcuffs, but not be, make it real for people. That's the problem is if it's been eight years, six, seven, eight years, it becomes like, well, this is never going to happen. Yeah, there is a bit maybe. Well, to be fair, I think there is a lot of enthusiasm about what we do as a company. and I think that starts with the founder as well. And when it comes to then the investors as well, for us, it's really important.

We want somebody interested in the long run as well because we believe there is a massive opportunity in the future. Music education is going to remain important and creativity, or at least that's how we look at it. Playing an instrument is more than just learning to play the instrument is actually addressing one of the fundamental issues, in my opinion, going forward in the education system, because it's a transferable skill of creativity, making music trains your creativity. And that's why I don't have anything.

I mean, I'm still as passionate as day one. We have many of the employees who are as passionate as day one. So for us, the funding round is and the financial incentives for us as a company really have to make sure that they work from a company mission perspective. Right. You don't want to bring somebody in there who's going to blow the thing up and is not long term like you and your team are. Yep. That would be terrible. So it's not like you take the highest offer for somebody who's just interested in a quick head.

you want to have somebody who's in there for the long term and believes in the mission. Exactly. Are people in Finland motivated by equity? Because I don't think there's been many huge exits there. Maybe they see Spotify or Klarna or some of the things or Clash of Clans. What was that company? Yeah, Super Sell. Super Sell.

Maybe they see a couple of those. And has that gotten people into the, hey, there might be a lottery ticket like event for me here. I could buy a house or something? Or are the Scandinavian countries not motivated and then? is not motivated in that way to try to become millionaires. And is that just too ostentatious? You seem like all very reserved about how much money could be made in all of this. It's uncouth to talk about.

It's definitely not as big of a thing as it is here. I think that is fair to say. We do, of course, all our full-time employees have equity. They hope that it goes well. And they hope there is benefit from them financially as well. I think to win, it's maybe not as extreme as here where you really like you compare the package. is like we have a very good work environment.

We do something meaningful. The company is going well. That is why people want to stay there. The equity is a really nice bonus, of course, to have. But the startup ecosystem is not, let's say, S-PIC there. So most people don't have equity in what they do on a normal job. So the startups is the only ones, or at least that I'm aware of where you would actually get equity.

And it's not that big of a deal with the exception of the games companies. So Supercell and Robio the Angry Birds got there were a couple of them. How do people look at those founders who became? worth tens or hundreds of millions of dollars, do people in the society, on a societal basis in those Scandinavian countries, do they look up to that? Or do they think, oh, that is not fair that one person made all that money? I know it's a complicated question, but I'm curious about the culture. And to be fair, I mean, I understand Finland, of course, better than the other Scandinavian countries. So it might be different. In Sweden, there is much more of these unicorns,

also that has happened. In Finland, it is definitely, in general, a very reserved nation with regards, and the culture is not very braggy. So the big deal is not about like the unicorn exit type of thing. I think also the founders that you know or that you may know, they are extraordinary, humble, modest people. Yeah, Daniel, Spotify, is the humblest of the humble. You know, Daniel?

I don't know him personally. I think the super cell founder is now good. In general, they are good examples. helpful in the community. Don't make a big deal out of it. That it was really fantastic. I heard when you get a speeding ticket, they match it to your salary. Is that true? As far as I know, yes, if you go a bit too fast, I mean, there is just speeding tickets,

but I think once you cross a certain line, it's no longer, it's no longer just a fixed fee. It really depends on how much you make. And the idea here is that if you make, it's unfair that the rich people are punished. For them, it doesn't matter. Go easy, Chris. All right. I'm not moving to Finland anytime. But no, it is true.

Like, I get a ticket for $200, you know, and at this point in my life, I'm like, okay, well, that's VIP parking. I've given $100 tip to the valet before. Like, I don't mind. Yeah, in Helsinki people don't go around. I heard you can get like a $15,000. Some guy got a $15,000 ticket or something.

That's probably an extraordinarily wealthy individual. But the good news is you don't have to speed in Finland because we only have traffic jam one day a year. Well, here we go. The Sabers, Ramos, Ristoli. and earned himself a ridiculous speeding ticket in Finland. What? 120,000 euros.

Takes the lead in Finnish NHL player speeding ticket, sand. Hold on a second. Do you realize that that speeding ticket of 120,000 euros is likely more than the car cost? I believe. Oh, my Lord. That is unbelievable.

A 120,000-year-owned. What do you drive? You drive a Tesla? A bicycle. You drive a bicycle. Do you own a car? No. Oh, my Lord.

Look at you. Founder of a unicorn company, and he drives a bicycle. I cycle every day to work. I'm not very disciplined with sports, so that's the thing that gets me. What is Europe? What are those Scandinavian countries, also Germany, getting right about bicycles that makes it so empowering for people to use that as their primary form of transportation. Is it just that it's a smaller footprint

geographically or is it the safety of the bike lanes? Yeah, I think the cities, at least again in Helsing and a few others, the cities have already historically been not laid out entirely for cars. They've grown. So that's one thing. Then again, Finland, it gets super cold. So there is a seasonality to it as well. But yes, we have.

So I cycle about half an hour and I have to cross once two streets. So I'm really on. Electric bike or a regular? a regular bike. You cross only one or two streets. Something like this, yes. It's very convenient. You have your own lane. It's like traffic jam almost with the bikes on a nice day. I couldn't believe when I was in Denmark and we were riding bikes and just going for long, I like going for long walks, like four or five mile walks around cities. That's my like dream vacation and so just walk five or six miles around Tokyo or, you know, Denmark. And I was amazed at how many

of the roads along the water, the beautiful, most picturesque, had no cars. Cars couldn't go near these lanes. Yeah. And it was just wonderful. Yeah, I lived about half a year in San Francisco. I also went around here by bike, but it's definitely a much scarier thing. My God, is it scary? Plus, it's hilly. That's maybe the other thing I'd probably get any. That's why I think these electric bikes, the pedal assist or the ones with the throttles are going to be the game changer of all game changers. Like once people get on that new bird bike, Bird has one in L.A. They're testing, which is you can just walk on and off.

It has no pedals. It's just like almost like a little mini moped. Yeah. And it has a throttle on it. You don't sweat. So yeah, you don't get exercise. But then there's these, you know, in between ones. Yeah.

Where you can pedal assist. Petal assist is getting popular there. Half electric or no? I think still most of the bikes I see on the street are not electric, but Helsinki is a very flat city as well, so you don't go up and down. I think one more thing that maybe now when I think about it comes to mind still it's a bit of a culture of cycling in I'm I'm I'm curious to hear it from you for us we have a shower at the office and really there is a queue in the morning so people cycle

I mean it's their morning exercise oh they cycle and they really get sweaty and then you take a quick shower and you get to work and that is it's popular I mean we are thinking now getting a second shower to get ready for work it's great you have a locker people can go take a shower Exactly. Wow, that's brilliant. I love that. Yeah, it's super. And then it's different because then it's like if you get sweaty or not, look, you get half an hour exercise in.

It's actually great. It is absolutely fantastic. And the other thing that was amazing to me as an American was getting out of the train station and seeing 400 bicycles in a square on their kickstands not locked. in Finland do people lock up their bikes or not yeah they're locking them up now I don't remove my lights but I do lock the bike you do lock the bike yeah

ah goes there's a little bit of crime people will still a bike yeah I've lived there now for 10 years and the only crime I've ever witnessed is that my bike got stolen really yeah that was it happened once that's crazy because in Denmark like people are leaving their bikes everywhere and they're not even locking them up maybe things have changed

this is a couple years ago yeah it probably depends also on towns That's probably it. All right, when we get back, you want to play ukulele for me? You play Freebird or something? What are you going to play on that ukulele for me? Well, unfortunately, I probably have to get music rights issues. Yes, so I'm going to play something that we did ourselves, basically.

All right. Here we go. When we get back, a little demo from Chris, who's going to tickle the ukulele here, four nylon strings when we get back on this week and starters. When the Brex founders, Henrique and Pedro came to the U.S. from Brazil working on their VR startup. They were rejected for a corporate card. Well, they pivoted and they built Brex.

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All right, welcome back to this week in Startups. Chris Tur is going to play the ukulele or a guitar that's missing two strings, but I think it's a ukulele. It's a ukulele, yes. My main instrument is the piano, but to travel, this is just so much easier. All right, and here we are, for those people who are just tuning in, I see you've recently played banana boats. Yeah, that's the one I'm going to do.

Which is a level five, and I see you've got the green circle is one quarter finished. Yeah, I mean, it just indicates how good I am. There is 15 levels on musician, and level number 15 is like crazy difficult. Level five is like you can play with your friends around the campfire. Got it, intermediate. Yeah. Beginner intermediate. Yeah.

I mean, you'll hear it right now. All right. Let's see how bad you. I mean, great you are at this. So you're going to do. And this is what I love. By the way, I'll just pause for a second and describe. This is why I love the service.

They've broken the song into five parts. You have gotten three stars on parts one, two, and five, but you haven't even tried parts three and four yet. They are actually silver stars in this. Oh, those are silver stars. So gold stars means I made zero mistakes. Right. And then on the top, it says your best score, $238,000 on this song, Banana Boats,

and you see your other friends who've played it. Yeah. And you can either go into play mode or practice mode. Practice mode lets you set a loop or slow it down. But play mode, you're on your own. Yep. So you're going into play mode, aren't you? It's kind of the performance.

Here we go. Okay, Chris. I'm going to do part one. Just part one, the one that you've got three stars. Here we go. Banana boats is loading and the ball's bouncing. Tick, tick, tick, tick, tick. Part one.

Get ready. Oh, you miss one. Bada da, da, da, da da da da. Da da da da da da. I love a good Pegasus company. I like a Pegasus. your series A, J-Cal makes more money, skip your series B, oh, pure joy and glee, let's make so much money. All right, that's pretty good.

All right, let's see how you did. You got three silvers. 4405 was your score just below your best. Yeah. So we're going to do it one more time. Okay. Let's go. Here we go.

I made the mistakes deliberately so people can see that. three-time speed. You're bouncing along. Here we go. Chris started, musician. Took him three products to get product market fit. Now he's going to be rich. In Finland, going to buy his first car.

And he's going to speed. Get a hundred euro fine for his mazorati all the time. You can give him more fines. It doesn't matter because got product market fit and he's never going to quit. There we go. The gold stars. Very good. Good.

You and I are going to take the show on the road. The Pegasus and the Angel. So there's no way for me to participate. You have a board? We do have a board, yes. Who's on the board? John Callaghan from True and then Josh Deion. He was at Control Labs, which was just sold to Facebook.

All right. So here, let's do a little business here, Chris. You need to because you have your two founders on the board. You have the two investors or one investor. One investor, one independent. You need to have an evangelist type Silicon Valley high profile independent board member. This is what you need. Sounds like for like two years.

Do you know anyone that would think that? Well, it's got to be somebody who love the product. Yeah, that is true. buyers to be great at the product and who can be out there, you know, just banging the drum for you for 50 basis points. What do we think? Two years, 50 basis points, maybe 35 basis points. I'm flexible here. I mean, I've already made my money, but it's got to be something to get me on a plane. I'd love to talk about that. All right. Here we go. This could be the start of something. And I'm just for the people out there who are investors. Sometimes you miss. I miss Uisition. I missed it.

I missed it. I blew it. But boy, do I love your product? And I mean that sincerely. When you email me and I saw a musician and you're like, I happened to be in town. You know what? I just thought, God, I respect this product so much because I love it. And it really is everything that's great about this moment in time for startups. And I think you're a great example to people, even though you didn't consider yourself like a natural founder. You weren't a developer. You didn't consider yourself qualified. You know what? You're qualified because you're passionate. You don't give up. And you constantly refine that goddamn product through two failed versions. And I should even say failed versions. You had two versions that were moderate successes, which is even harder to shut down, isn't it?

It's hard to move on from a moderate success. Yeah. But that is a lesson, isn't it? Yeah. You got to kill those moderate successes in order to have a breakout. Yeah. Congratulations, Chris. I'm really excited for you. Good luck. I think you're in town for this True Ventures CEO summit. Founder camp. Are you given the keynote? No, I'm just... You should be given the keynote. Let me tell you something. I believe you will be sitting here and couple of years, I think you're going to get to 10 million subscribers. I believe calm, musician, FIPBOD will all have 10 million subscribers and people's minds are going to be blown because they don't see it, Chris. They don't see what you and I see clearly, which is if people, 150 million people subscribe to Netflix, and that's passive. And that doesn't fulfill them. It just fills the time. Netflix and chill. But learning an instrument or learning how to meditate or learning how to do CrossFit, these are things that have a deep and lasting impact on people's lives.

And that's what you're working on. So it's a slower burn on the way up. But, you know, I think Com has been pretty clear that they now have over a million subscribers. You'll be there soon, I think, paid subscribers. Not there yet, but you will. And I think Apple and Google, you're the reason people are going to be buying phones. is that that's their new place to go have an enriched experience in their life.

It's not about the stupid throwaway apps. Now it's about stuff that actually brings joy and meaning to people's lives. That's what you're part of. That's the tip of the sphere that you're part of. And I think it's tremendous. And everybody who's out there listening, if you have an idea, just think ESPN for sports, right?

So what are the, people would subscribe to that, right? They had 100 millions, over hundreds of millions of subscribers to ESPN across all of these networks. There's going to be an ESPN equivalent or a CNBC or a CNN equivalent for every passion people have. Whether it's cooking, whether it's music, music, whether it's meditation or yoga or cross-fitness, any of these dance. They're all going to have millions of subscribers. Oh, my God. All right, listen, sorry.

I get very excited about your business. I'm happy to hear it. And I share the excitement, the enthusiasm. I think it's a beautiful thing to get people actually do something meaningful. Yes. They use of stories we hear. They are fantastic. I mean, some of those people.

That makes a big difference in your lives, whether it's a casual thing that you do on the site or you really, really get into it. Also, I think gamification gets a bad rap because people are like, oh, you're gamified it to get people addicted to their Facebook feed, their Twitter feed. And those things are not healthy for people. Being addicted to Instagram, Twitter, and Facebook is not healthy for kids or young people. But if you can use gamification to make young people or even adults, addicted to fasting and losing weight, meditation, playing music. That's beautiful in the world. That's a beautiful use of gamification. So in a way, you're taking the superpower that can be used

for evil or good, and you're using it for good. And I think that's going to be just a beautiful thing you've done for the world because there's people out there who don't have access to education. And now with musician, literally, you could make it a dollar a year in Africa, right, or in South America you make it $5, you could actually change the price by location. How many languages are you in now? It's only English at the moment. Oh, my God.

Can you imagine when you translate this into Chinese, Japanese, and Spanish? Oh, my Lord, revenue is going to go 5x, 10x. What's taking so long to translate the languages? It's not so much about, I mean, it's just a question of focus. That is the thing. We want to do it well. And I believe it's a good product. I think there is still a few more things we have to do, but we are talking about

localizing to different languages. Music, though, is a bit more culturally rooted. So there is a bit more to it than just translating the words because different cultures listen to different music. And they also appreciate and learn differently. So there is some work to be done, but we'll tackle that as well. I think it's a universal language. Yeah.

So we're going to go back to making. Do you ever think you'll make instruments to pair with this? Because that, like, Peloton was kind of like the magic is that. I love that Peloton treadmill. I mean, I am in love with it. But it's the magic of the whole experience. Do you think there is an opportunity to make a guitar or partner with somebody on a guitar? We've been looking into this as well.

Yes. What would that do? Would it just make the, would you be able to light it up or something and show people where to head? What would the key thing be? The key benefit. I would say with Peloton, I don't know how much time we have. As much as you want to go. With Peloton, I think what they got right is.

that they said the reason why people don't buy these bikes is not because they can't afford it. They said they know that they're probably not going to use them. And that's what Peloton was not trying to convince those who are going to buy bikes to buy their bike. They were convincing people to say, this is a thing that's cool, that's fun. You're going to get one and you're going to use it. And that is the kind of the stumbling block. I think for the instrument, we have that part, which is with musician, you're going to use it, you're going to enjoy it, you're going to learn.

So people are not not buying guitars because, can I have. afford it or where do I find one, but it's really, am I going to use it? So it's the outcome in a way? Of course. I mean, what do you want in the Peloton case, you want to be fit and healthy. In this case, you want to be able to make music express yourself. So that's really the goal. I think the one thing we see is that buying an instrument is quite an intimidating experience.

It is. Because there's so many, which one should I get? It's a 50 and 50,000. Should I get an electric guitar? Should I get acoustic? Should I get a semi-acoustic? Yeah. And then on top of that comes like, and then how do I learn this thing? Is there like a book or can I do it on YouTube?

How do I load the strings? How do I put it in tune? Which strings do I get? Do I use a pick? It's a lot of questions. Yes. And I think the benefit probably could be that we say we have a beautiful one solution, which is like we get you the instrument.

You can try it out. If it doesn't work for you, just send it back. Right. And you can put people on a monthly plan. You could blend that cost into the plan. So imagine I take out my app and I say, I want to learn guitar. I've been using it for piano. I have a piano.

And you say, buy this guitar and unlock these guitar things for one. one low monthly price and we'll ship you the guitar. That would be amazing. Just take all the risk out of it. Also, for Christmas gifts and for holiday gifts, being able to gift somebody two years of lessons and the guitar for $600,000, let's say the guitar costs you $200 or $300 and then you, oh, my God, now you've sold the whole package to people. Yeah.

On top of that, you probably give that person the most valuable Christmas gift they'll ever gotten in their lives. Absolutely. Mark Knopfler begged his dad for a guitar. That's all you ever wanted. And he got like a really crummy one and he slept with it. And then he gave the world all this beautiful music. All right, listen, Chris, you're my hero.

Congratulations on having a Pegasus. And I'll see you at the board meeting in Finland. I need an excuse to go there anyway. The food's good. You got good fish, right? Yep. What's the fish in the mustard sauce? The herring or the mackerel and mustard sauce?

Yeah. You know what I'm talking? It's herring. Yeah. What do they call that, oh, for breakfast when you have that mustard herring? Mustard herring. There's a name for it, but oh, I love that. Yeah, I mean, it's the funny word is,

Silly Silly is the fish and tilly is the... Sauce? No, what is the green? Oh, like... The herb that's green like parsley? Yeah, something like... I'm not sure, but anyway, it's funny. Dilly-dele-Silly.

And that's what you get for breakfast. I had that when I was last time in Sackholm. Oh, maybe it's dill. Dills, so yes. That's what it is. It's the dill. So they have the mustard and the dill and the herring mixed up and they put it like in a...

I don't know, like in a bucket or something with a wood cover on it. And you open it up, you spoon it out. And oh, my Lord, they smell so good. I can eat that. And the brown bread. If you come to Slash, they'll for sure put you in a hotel where a beautiful breakfast has dedicated. I love that. You know what I like, too, is those Schmurberg, you know, the open-faced sandwiches.

Schmurberg. Oh, I get that. Ida Davidson when I'm in Denmark is the place. Ida Davidson have the big open-faced sandwiches. Brown bread with butter. What's Finland? What's their major dish? I think they are similar.

I think the salmon soup is big. Salmon soup. And then the reindeer stew. Oh, I want that reindeer. Oh, give me a little bit of that. In some market,

I saw you can buy a bear salami if you're into that. I don't think I want to eat a bear. Yeah. I don't know why. I'm fine with the reindeer, but I don't want to eat an apex predator. Yeah.

I don't know why. The reindeer is fairly, you can get it in many restaurants. Yeah. There's also... Elk, reindeer. Like, it's sustainably sourced. I mean, they are kind of herded, but they're really open there.

Yeah, they're open herded. Yeah, there's just a zillion of them. There's a lot of them, yeah. All right, we'll see you all next time on This Weekend Shurvers. Bye-bye.