Evolving with market forces

An excellent example of a company and it’s value proposition evolving – innovating in the liminal space, you could say – is given in detail by David Hornik on VentureBlog. He writes about a company called Savage Beast, and their innovations in the space of musical choice. I’m going to attempt giving the gist of the story here, but please do read his entire post.

Savage Beast was built upon the premise that if you could describe a
piece of music in terms of its constituent parts, you could do a better
job of finding music that was similar to that particular piece of
music. Tim devised a way to categorize music (working with some
Stanford music professors) that he called the Music Genome Project.
The Music Genome is a set of about 400 characteristics that best
describe the nature of a piece of music. As Tom Conrad, Savage Beast’s
CTO, describes it,
the Music Genome captures standard things like tempo, key, etc. but
also captures more subtle things like guitar picking style or "how much
cowbell" (which, of course, you can never have enough of).

Shortly after I began talking with Tim about his ideas back in 2000,
Tim and his cofounders raised some angel money and began building the
Genome and the infrastructure to put the Genome to use. They initially
envisioned being the back end recommendation engine for music
experiences. They set about selling their concept to online and offline
music stores alike. But, as it always is, selling into huge
organizations like Best Buy and AOL was a big battle and took longer
than they anticipated.

In the early 2000s, Tim had to make some tough choices about Savage
Beast. He had to let go a number of great employees. He had to hire
others on a contract basis. And he had to do a pile of the leg work
himself. Tim became CEO, Chief Evangelist, VP Biz Dev, VP of Product
Management, whatever it took. He remained completely committed to his
original vision and to the idea that the Music Genome provided huge
value, particularly as it became more complete. So he marched forward
with a skeleton crew in the company trying to close deals with revenue
attached that could provide him with the necessary capital to continue
building his company.
Over time Savage Beast managed to land a number of the big music
store deals. They are the back end to AOL’s and Barnes & Noble’s
online music experiences. They power kiosks in offline record stores
like Tower, Best Buy and Borders. And on the strength of those deals,
were able to raise nearly $9M in venture financing in late 2004 and
attract a really strong consumer marketing oriented CEO.
With that money, Tim was able to hire back a number of the great people
he had let go and make real progress on filling out the Genome.

Most impressive, I believe, is that through it all Tim and Savage
Beast have remained flexible enough to morph the direction of the
company to meet the needs of the market, not some arbitrary vision of
the ideal music search engine. And as a result of that flexibility,
they have recently released what I believe is one of the most —
perhaps the most — interesting music listening experiences on the web.
It is called Pandora.   

I believe that this is a clear example of a visionary, adapting in between, to create an innovative offering build on the roots of his original vision. For reference to my previous thoughts, and to give context to this example, here are links to my posts on this topic.

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