Nobody knows what Jeff Yasuda’s online music startup is up against better than Jeff Yasuda. The 40-year-old San Francisco entrepreneur has spent more than five years trying to crack the market and along the way has suffered through numerous fits and starts, pivots and iterations.
So as he unveils Internet radio service Fuzz.com to the public today, he’s prepared for the obvious question: Why does the world need yet another music site? There’s already Pandora, Spotify, Rdio, Slacker, Turntable.fm and Clear Channel’s IHeartRadio in the mix, not to mention all the players that have failed along the way.
“The space is crowded and the graveyard is long, deep and wide,” said Yasuda, from the basement of his Pacific Heights home, which doubles as Fuzz’s headquarters and includes a cozy, fully-equipped music studio.
He’s not deterred by the long odds and sees a big opportunity for his six-person shop to make a splash in the online music market, which Gartner predicts will reach $7.7 billion in 2015, up from $5.9 billion in 2010. The digital media shift is accelerating as the growth of smartphones and tablets offer ready access to music throughout the day. But making money has proven to be the big challenge, with bands remiss to just give their music away and consumers reluctant to pay.
Fuzz’s answer to that is “people-powered radio,” a nod to its 4,000 disc jockeys already building online stations and broadcasting them to their followers. Yasuda expects that number to expand rapidly now that the service is out of private beta. He’s raised $500,000 in angel funding to get the company on its feet.
Unlike Pandora, which uses complex algorithms to make suggestions to its 150 million-plus users, Fuzz lets listeners type in songs, artists or genres to find relevant stations that are run by human DJs. For example, if I wanted to hear Mumford & Sons, I could enter the band’s name in the search box and click on one of the stations featuring its songs. By launching that station, I would hear whatever the DJ serves up, with the idea that I’ll discover new music from someone with similar tastes.
“There’s a big need for a curated type of experience and just getting back to the belief that the most compelling recommendations come from a human being,” Yasuda said.
The service is free, and Fuzz plans to make money from advertisements and providing premium ad-free offerings. On the legal side, Fuzz is able to piggyback on the work Pandora has already done, establishing a statute for royalty payments to SoundExchange, the nonprofit group representing the music industry.
Midway through our interview, Yasuda took a break to conduct one of his own. Eddie Roberts, guitarist for English funk band The New Mastersounds, had paid a visit to the Fuzz team, and Yasuda pulled out his Flip Video camera to record the conversation. Roberts was then able to share the interview with his fans and, hopefully, drive traffic to Fuzz.
Yasuda has taken a long, twisted route to get to this point. In 2007, following a career in investment banking and venture capital, he launched the first iteration of Fuzz as an independent record label and website for underground artists to communicate with fans. The company flopped in classic startup fashion — too many costs, not enough users.
He closed the office and opened up shop in his basement with a tiny team, including co-founder Brian Venneman, to start Blip.fm. That service let users broadcast music they’re listening to online to followers on Twitter and friends on Facebook. Blip built an audience of 1 million DJs, giving Yasuda the confidence to promote a more ambitious service. While Blip is profitable, it’s a clunky experience for passive listeners, who just want to log-in and start browsing. Yasuda figured that by focusing on a high-quality product for that crowd, he could dramatically expand his fan base.
Working from home allows Yasuda to put his studio to use for a series called the Fuzz Sessions (formerly Blip.fm Sessions), which brings in bands to play live for their fans and answer questions from a chat board in between songs. Last week, a Montana band called DAWNS stopped by, the night after playing at a local bar. Yasuda said bands will often come in after playing at the historic Fillmore, which can hold about 1,200 people.
“You do my silly little show and we can put you in front of 20 Fillmores, and they’re international,” Yasuda said.
The live online performances provide an added feature that can help promote the Fuzz brand. But to make it in this business, Yasuda knows he’s got to provide an overall service that’s as convenient and easy to use as Pandora’s seamless browser, smartphone and tablet experience. Fuzz is starting on the Web with plans to introduce apps for Apple’s iPhone and Google’s Android software before year end.
As for the original question: Why Fuzz over Pandora or anyone else?
“Differentiation is key,” Yasuda said. “At the core, it’s just trying to build a good product.”