The Kobalt EC-1: How a Swedish saxophonist built Kobalt, the world’s next music unicorn
My favorite pieces we host on Extra Crunch are our EC-1 series of in-depth profiles and analyses of high-flying, fascinating startups. We launched Extra Crunch with a multi-part series on Patreon, and then we covered augmented reality and Pokémon Go creator Niantic and gaming platform Roblox.
This week, Extra Crunch media columnist Eric Peckham launched the first part of his three-part EC-1 series looking at music “operating system” startup Kobalt. Kobalt is not perhaps a popular household name like Roblox, but it’s influence is heard pretty much every single time you listen to music. Kobalt is upending the traditional infrastructure to track music plays to capture royalties for artists, an industry that today still involves people literally walking into bars and writing down what’s playing. From that base, Kobalt wants to expand into services to empower the next-generation of stars and mid-market talent.
What I loved about this story is that not only is Kobalt completely rebuilding an otherwise stagnant industry, but its founder and CEO is also such a dynamic individual. Willard Ahdritz was a former saxophonist whose band was essentially abandoned by their music label — even while that label wouldn’t give up the economics that would allow the band to continue (some founders may have similar experiences with their venture investors). Ahdritz would eventually start his own music label called Telegram, and a bit later started Kobalt to solve the problems he kept running into on the music publishing side.
It’s been almost two decades, but today, Kobalt offers a suite of technologies and services and has its crosshairs on the big three labels — Universal, Sony, and Warner. It’s also raised a boatload of venture capital and is closing in on a unicorn valuation. Read the full story, learn more about this analytically fascinating business, and get ready for parts two and three coming soon.
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The smartwatch category is growing, as Apple remains dominant
Smartwatches were supposed to the the holy grail of hardware sales in the coming years, what with the declining sales in the maturing smartphone industry. Following up on his earlier analysis of the current state of the smartphone industry (and also in China), our hardware editor Brian Heater now turns his gaze to smartwatches, and finds that Apple has maintained its dominance in sales (if not among the Twitterati).
Mid-way through 2019, the good news for smartwatches is that the category continues to grow. Numbers from Strategy Analytics show some truly impressive movement on that front, with shipments from 44% year over year in Q2, from 8.6 million to 12.3.
Lots of reason to celebrate there if you’re a smartwatch maker — or, rather, if you’re one very specific smartwatch maker. The very important caveat to the rosy numbers is that they start to look considerably less rosy when you take Apple out of the equation. The Apple Watch accounted for 5.7 million of those Q2 numbers. That’s 46% of the category, up slightly from 44% the year prior.
With MapR fire sale, Hadoop’s promise has fallen on hard times
Meanwhile, one of the quieter pieces of news that really shouldn’t have been so silent was the dramatic failure of MapR, which once raised hundreds of millions of venture capital only to be sold for mid tens of millions this past week to HPE.
Our enterprise reporter Ron Miller analyzes what went wrong with MapR, finding that the overall excitement around Hadoop has shifted over the years, and while open source remains a popular model for investors, it is no guarantee of company success.
But it wasn’t much better for Hortonworks. Many were surprised when Hortonworks was the first Hadoop company out of the gate to go public in 2014. It would be a rocky ride for the company, which would eventually merge with former golden boy Cloudera in a deal valued at $5.2 billion.
The merger was widely thought to be an attempt by two companies whose stock had fallen on hard times to increase their chances as a single entity. It hasn’t done much for either company. Cloudera’s market cap peaked at roughly $4 billion in March 2019 — today the company’s market cap sits at just $1.8 billion. It has been a rough time for the entire group. What happened?
‘The Operators’: Experts from Airbnb and Carta on building and managing your company’s customer support
Meanwhile, we have a great conversation with Tim Hsia and Neil Devani who produce “The Operators” podcast. In this episode, Tim and Neil interview Andy Yasutake, who is Airbnb’s Global Product Director of Customer and Community Support Platform Products (okay, I copied and pasted that title, but do you think that he actually can recite that without looking at his business card?) and Jared Thomas, who is Carta’s Head of Enterprise Relationship Management.
They discuss a wide range of topics related to customer support — how do you build the right culture, how do you hire for these roles, and how do you find your own jobs in the field to get started.
Yasutake: And it wasn’t until they realized that it couldn’t be one person just checking the email and the number of issues were actually increasing because there was product adoption, they said, “We should have hired the right people at the right time sooner so we could actually improve.” And it becomes a virtuous cycle where you’re supporting the users that are actually using the product. So they actually want to come back. Especially in the early days.
Whether it’s a product or a service, you don’t want people to use it once and stop using it because they had a bad support experience. So I would say that you don’t need to be investing as significantly early if you’re an early founder. But as it starts getting adoption, starts uptaking, make sure it’s not a necessary evil. To your earlier point, it’s something that is a voice of the customer and feedback into making the product better. If you’re actually selling them services, how do we make this better so you can sell more, right? So it’s an incredibly great opportunity for a feedback loop early on.
And as it scales, it even enhances the brand. And so a company like Airbnb, which has a big focus and culture on our brand, having investment from our leaders from the beginning on, this can’t be something that’s the third or fourth priority in the company. This has to be near the top because this is all about experiences. It’s about your trip, it’s about the homes you’re staying in.
Why AI needs more social workers, Columbia University’s Desmond Patton
It’s been a tough week in America this past week, with multiple mass shootings and a deepening discussion around the platforms that connect and enable these heinous acts. We have a wide-ranging intellectual conversation between our resident ethicist Greg Epstein and Desmond Patton, who researches how social media influences gun violence among a myriad of other topics at Columbia University. They discuss the internet and violence, how to improve AI through radically broadening the range of humans working with data, and inclusion in tech.
Epstein: Let’s get into your argument that AI needs more social workers and other non-tech folks. There has been a lot of study of late of online content moderators and how to address the stress their work causes them.
Part of what I think you’re saying is, people with social work training and similar skills are trained to listen, to pay attention, to watch for signs of violence and trouble and trauma — and tech companies should flat out hire a lot more of them.
Patton: For the past four years I have worked with Kathy McKeown and Shih-Fu Chang, who are both computer scientists at Columbia, and we have been leveraging artificial intelligence, including machine learning and computer vision, to understand pathways in trauma and aggression and violence. What has been so important about the collaboration between social work and computer science is that we [social workers] are the blindspotters in this space.
We anticipate the challenges of interpreting language, culture and context and nuance. We think about the integration and the deployment of these AI systems in diverse communities and what might go wrong, what could go wrong. We hire domain experts, community members, some youth, some former gang-involved, some former incarcerated, that really bring in their experience to help us think about how we should make meaning of language and images and how we can create the best ethical tools.
What I’ve learned from this collaboration is how important that blindspotting social work approach is [to] creating more humane and ethical tech. When I come into AI spaces to talk about my work, I am almost always the only social worker in the space.
While I’m grateful for the attention, the things I say are what I learned as a masters student at the University of Michigan. These are things that my colleagues, my classmates, do in their everyday social work practice or research.
That is: treating people like human beings. Working with communities. Not making decisions for them. Letting ethics drive your engagement. Building rapport and trust with anyone that is going to touch or be affected by these algorithm systems. These are all things you learn as a Master’s student. So [there is an] immense utility in leveraging a social work approach and social workers in every part of the creation and deployment of algorithmic systems.
ICYMI: Earlier this week:
- How to fundraise in August
- 6 steps to reduce churn for high volume subscription companies
- Consumer hardware startup North’s big pivot bet on wearable computing and seismic platform shifts
- What tech gets right about healthcare
- Not your typical startup: How being a cooperative drives our business and product development
Thanks
To every member of Extra Crunch: thank you. You allow us to get off the ad-laden media churn conveyor belt and spend quality time on amazing ideas, people, and companies. If I can ever be of assistance, hit reply, or send an email to danny@techcrunch.com.
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