I recently hooked up with Martin Stiksel, one of the company's founders, in last.fm's new offices near Old Street in London, to discuss progress to date and to find out more about the service.
The interview with Martin is right after the jump...
Can you explain the initial vision for last.fm and how it has evolved into today's service?
The vision for Last.fm is simple: it helps you improve your musical life! We help you find new interesting music, rediscover your old favourites, connect you with other people into the same music as you, recommend concerts that you will be interested in… there is so much music and so much choice, so you need good recommendations to find the interesting stuff.
Last.fm was founded in 2002 by Felix Miller, Richard Jones and I. We had an online record label, where unsigned artists and bands could upload their music and we got swamped with great music, but we had a problem: nobody knew any of the artists. So we had to develop a system that connects the unknown music with the right ears, to promote the right music to the right people.
What are the key benefits of the service for users, and for subscribers you can use Last.fm without logging in, as a great resource for music, finding charts, artist pictures, artist biographies, blogposts about music, and so on.
Once you are signed up the whole experience enters a new dimension and everything becomes personalised for you. Your personal music recommendations, your musical neighbours (= musical soulmates), concert recommendations… all just for you. It's the difference between looking at Stonehenge on a picture and actually going there!
How many users and subscribers does last.fm have? How have you achieved user growth?
We have 15 million unique active users every month. And we have not done any marketing - last.fm grew purely by word of mouth.
What's great about last.fm is that you have really engaged your users, who have in turn helped you generated content for the site. Can you provide us with an overview of some of the areas where community participation is working well?
"Scrobbling", aka submitting your music taste to your Last.fm profile, is the easiest way to contribute. Currently we get 350 million scrobbles a month, so 350 million times in a month people tell us what they are listening to.
Tagging music is another favourite. We have more than 300.000 different music tags, where our users are classifying music based on genre or mood.
Other places where the community participates include the music wikis, artist pictures, music journals, etc.
There is a social networking aspect, driven by a person's music tastes. Is this limited to online / last.fm, or are you seeing examples of people interacting offline?
The new event system, where we recommend you concerts based on your music taste, should take care of this. If you go to a new town you can find out who of your favourite bands is playing and you can also find a girl (or boy, depending on your preference) to go there with.
We’ve seen anecdotal evidence of people finding boyfriends/girlfriends via Last.fm and their shared music taste. Now, I don't know personally if similar music taste is a great basis for a relationship, but it's a start. At least you don't have to chuck out somebody's CD collection if you come back home from the date. With Last.fm you can check beforehand!
The system works brilliantly in terms of linking like-minded music fans. My musical neighbours are largely 4AD fans and I like to check out their record collections to discover new music, as I would in an offline environment. Can you shed a little light on how this recommendation system works?
It's simply based on the scrobbling, the 350 million datapoints we are receiving every month. This allows us to do recommendations with the help of some clever maths and magical software.
It's actually quite simple: people who listened to this artist also listened to these other ones. Last.fm does all this automatically for users. And yes, it is just like comparing record collections with a friend.
Presumably you're generating revenue via Amazon, but are there plans to distribute music digitally? Are you engaged in dealmaking with the likes of iTunes?
The download market is extremely fragmented because of the format issues. We have talked with everybody, but to be quite honest, we think DRM sucks bigtime, so we found a partner who specialises in MP3 downloads, which we will launch with before christmas. Watch this space.
What do you make of Microsoft's plans to move into the digital music sector? Will you be working with them / supporting their software as you do with Apple?
Sure, we are totally platform independent. We don't discriminate, our services work with everybody. There is little difference between Apple and Microsoft. We are even supporting pandora: http://pandorafm.real-ity.com/
You started programming in 2003 and bootstrapped until the VCs wisely came along and threw some money your way. Who invested and what were the terms of the deal?
We are not particularly keen on revealing the facts. We found a UK based investor, Index Ventures, who has done great stuff in the space (Skype etc) and that was that.
What have you been doing with the VC money? Are there plans to raise any more?
We are investing it 100% into product development. No other plans to raise more cash.
What is your team set-up looking like these days? Are you profitable?
We’re almost profitable, but we just took on some more good staff. We were profitable once in the summer of 2005.
In terms of headcount, we have grown to 27 people, mainly working in development. There are some music biz types and a few designers too.
Many people might reasonably assume that you're based in Silicon Valley, but in fact last.fm has a rather boho office in Old Street, London . Will you be sticking around? And if not, why?
Sure, we’ll stick around. London is the best place in the world to do something in music. This city has the BBC World Service and RinseFM, my favourite Hackney based pirate. Geographically, our office is pretty much in the middle.
What have been the key challenges of starting up a tech company in the UK?
Working in isolation is great, helps you to stay focused. Otherwise it's all good – and flights are cheap to the US and to Europe. Money is here, too.
Can you give us a glimpse of the future? What can we expect from last.fm over the next 12 months?
You can have the future now as we just released a major update. Needless to say there is a lot more coming from us. We have ideas from three years ago that we still haven’t had time to implement.
So when are we having that party for UK tech startups?
Who else are we gonna invite...?
And that, reader, is where you come in. If you work for a tech startup send an email to if you're interested in getting together sometime soonish in London, for some strategic beverages.