Eric Wahlforss, Co-Founder, SoundCloud: “Berlin is Where Punk meets Tech”

Eric Wahlforss is founder and CTO of SoundCloud, the leading audio platform that gives users unprecedented access to the world’s largest community of music and audio creators. He and co-founder Alexander Ljung were recently named European Entrepreneurs of the Year at the Europioneers awards presented by Neelie Kroes.

Since its inception in 2008, Eric has been responsible for overseeing product strategy, engineering and design. The company has experienced exponential user growth, reaching over 200 million people every month and creators on SoundCloud now posting over 12 hours of music and audio every minute.

Eric has been working with the web since 1995 and, among other positions, was Interaction Designer for Gate5 (acquired by Nokia in 2007). He holds a M.Sc degree in Industrial Economics from the Royal Institute of Technology in Stockholm and has studied three years at the Stockholm School of Economics. Under the artist name Forss he has released electronic music on Berlin based label Sonar Kollektiv and toured across the world.

We spoke to Eric about his predictions for the online music industry; how being a musician informs his decisions as an entrepreneur; and why Berlin is such a fantastic place to start a business.

BP: What’s new with SoundCloud, and what’s next? What’s at the top of your mind with regard to your business?

EW:

As the CTO, my main focus is on our continued growth, innovating our mobile offering, and gradually expanding new features across all platforms.

Without going into specifics, we are continuously working to make the SoundCloud experience better for everyone, and our users can expect some amazing things to come down the pipeline.

BP: What are your predictions for the online music industry in the next five or ten years?

EW: We have already seen consumer purchase of traditional formats such as CD’s and vinyl decline and digital access through the cloud replacing physical ownership to a significant extent, and I would expect both to continue apace, with traditional formats like the album playing an increasingly smaller role as we move to continuous distribution through social media. Effective leveraging of consumer data will also play a bigger role in both discovery and management of new talent. Through various collaborative ventures such as tour sponsorship, celebrity endorsement and exclusive deals, I would expect brands to also play a bigger role in music as a promotional tool.

BP: How does being a musician inform your decisions as an entrepreneur in the online music space?

EW: Being a musician myself has helped tremendously in the creation of SoundCloud. Still to this day, I provide feedback to our product team based on how I use the platform not only as a listener, but as a creator.

Both Alex and myself very much solved our own needs with SoundCloud, which is one of the best ways to stay motivated as an entrepreneur and create something that really tackles a problem.

BP: Tell us a little about the famous Berlin startup scene? What do you believe are the ingredients to a successful startup scene such as Berlin’s and can they be replicated?

EW: Berlin is a hub of creativity; a strong intersection of technology and art with a diverse pool of talent from both technical and design mindsets.

We quite often say that Berlin in itself is a start-up, having emerged from its ‘poor but sexy’ tag and now shaping up to be the envy of Europe.

Price is of course a big factor in its success; Berlin is still much cheaper to live in than London and Paris, which attracts an array of people to our city. Access to finance is also becoming more realistic here, giving lifeblood to companies who otherwise might struggle to get off the ground.

There is no replicating Berlin, as each scene has its own particular perks and quirks from the national culture it finds itself in. That said, the triumvirate of talent, cheap rents, and finance are the key ingredients to a successful startup environment for me, and they are largely the reasons we still believe Berlin is the right home for SoundCloud.

BP: How did working at The Oberholz help in the early days of SoundCloud?

EW:

We were incredibly scrappy when we started. We all lived in the same apartment at some point, sleeping on some less than immaculate mattresses.

Working out of cafés happened a lot in the early days, as it took us a while to find an office. Oberholz is very much the ‘watering hole’ for entrepreneurs in Berlin Mitte, so it was a natural place for us to hang out.

BP: According to a recent report by a recent global study completed by Dell and The Global Entrepreneurship Development Institute (GEDI), Germany is the best place in Europe to be an entrepreneur, and the third best place in the world after the US and Australia. Do you agree with this? Why/why not?

EW: For us, Berlin felt like the most natural place to set up SoundCloud. We visited a number of different cities across Europe when looking to set up our HQ, but Berlin was the standout.

We sometimes label Berlin as the city where ‘Punk meets Tech’, to describe the alternative lifestyle feel of ‘going your own way’ that is still present in the city.

There is a fantastic startup scene here that we’re proud to be a part of, with an infectious air of optimism and determination about the place that keeps us on track to achieve our goals.

BP: Where do you see the opportunities in Europe?

EW: It’s hard to answer that question overall as the EU is a very fragmented market. Berlin specifically has been a great HQ for us, we love it here and are looking forward to building the company and extending the Berlin tech hub.

BP: Please give us three examples of up-and-coming European Startups you admire, and why.

EW: The European startups that I admire the most are companies that are really offering something to the public that’s not only innovative, but also unique. Startups like GoEuro, Readmill and ThingLink are on their way to becoming leaders in their field and I really respect their determination and focus. I should also note that I invest in each of these companies.

BP: At The NextWeb’s April European conference in Amsterdam, Neelie Kroes stated, “I have a European Dream, too. That Europe becomes a place where entrepreneurs and innovators start and stay – before growing globally.” To underscore her strong commitment to make Europe a leader in the tech world, she gave her personal e-mail address to the crowd and asked that they contact her with ideas on how Europe can do more to encourage innovation and entrepreneurship. We’ll be interviewing Neelie later this month. What is your suggestion for fostering innovation and entrepreneurialism in Europe?

EW:

I think we’re definitely still playing catch-up with Silicon Valley (everybody outside of the Valley is!) but if we keep going like in recent years, we’ll eventually get there.

In the case of the maturing web, Chris Dixon had some encouraging insight on his blog recently, and I would definitely add Berlin to Chris’s list:

“Where will this innovation take place? The historical pattern suggests it will become more geographically diffuse over time. Detroit was the main beneficiary of the first part of the automobile revolution. Lots of other places benefited from the second part. This is the main reason to be bullish on ”application layer” cities like New York and LA. It is also suggests that entrepreneurs will increasingly have multi-disciplinary expertise.”

BP: Is there anything we haven’t asked you, but you would like to share with our community?

EW:

Since your readers are predominantly entrepreneurs, I wanted to share a little piece of advice for when you are starting your own company; you should always stick with your gut instincts.

Alex and myself saw a need in the market and from this demand we grew the SoundCloud platform, that now reaches over 200 million people every month. 

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