Photo by Daniel Gebhart de Koekkoek
No. 27 Anthony Volodkin
Location: New York, New York
2008 Revenue: Undisclosed
2009 Projected Revenue: Undisclosed
Employees: 3 full-time, 2 part-time
Year founded: 2005
Like some of the most successful entrepreneurs, Hype Machine founder Anthony Volodkin got his start by trying to solve an everyday problem. Reed Hastings created Netflix because he didn't want to lie to his wife about late fees. Craig Newmark launched Craigslist to broadcast event listings to a wider group than just his e-mail contacts. Volodkin was looking for a better way to find cool new music.
In 2005, Volodkin was a sophomore at Hunter College studying computer science on a full scholarship. Volodkin's parents emigrated from Moscow to Brooklyn's Sheepshead Bay when he was 12, and he had been working the same part-time IT consulting job since high school. But the gig was getting tedious. "It boiled down to dealing with clients repeatedly," he says. "I thought it would be cool to invest that energy into something that left a lasting mark."
So Volodkin looked to his latest passion: finding new music. On weekends, he traveled to Philadelphia and Boston to see bands like Arcade Fire, Explosions in the Sky, and Mindless Self Indulgence, but stumbling onto the next act to obsess over was tricky. "Music magazines were the result of too many degrees of marketing," he says. "There was nothing I could trust to find something new." At the same time, Volodkin discovered music blogs like Music for Robots and Fluxblog. The only problem was that there were so many of them, it was hard to keep up.
In between classes and shows, Volodkin started to build a website he called Hype Machine. It would display the most recent posts from a selection of music blogs (there are now 1,500 hand-picked by staffers from the dozens of submissions coming in a week), sample the songs, and let visitors see what was popular. The result was an addictive amalgam of Pitchfork and Pandora, but crowd-sourced -- from a discerning crowd. If you searched for Bruce Springsteen, for example, you might find a song from a blog post about small-town anthems or a post of covers played at the Glastonbury Festival in England. In short, it lead users to music they might like that they would otherwise never find.
In the spring of 2005, in order to get some feedback on his design, Volodkin sent the link out to some of the pioneers in the online music space, including Lucas Gonze, who ran WebJay, a social playlisting site Yahoo acquired a year later. Rather than responding, Gonze and a handful of others posted the link online. "It got launched without ever being launched," Volodkin says. "People just started saying, 'Oh man, this is awesome."
The lessons of from Napster's demise -- another dorm room-incubated music start-up, which was shut down by court order in 2001 for trading copyrighted material -- were not lost on Volodkin. Rather than dilute revenue from the labels and musicians and draw their ire, Volodkin tried to work within the existing ecosystem. He added links to buy songs from iTunes and Amazon. (The site is free to use. Hype Machine makes its revenue from percentage cut of sales of songs and concert tickets, as well as advertising. The site sells tens of thousands of tracks a month.) To prevent consumers from coming back and listening to the same songs repeatedly, users are not allowed to make playlists. "We want you to go buy it somewhere or keep finding something new," Volodkin says.
As the site evolved, Volodkin incorporated social networking features that let members "follow" other blogs or users whose taste they like. Before he had graduated from college, he was already the talk of the Internet town, with impresarios like Gawker founder Nick Denton telling CNN that Hype Machine was "the future of all media."
Hype Machine's critical acclaim and play-nice attitude didn't make it any easier for Volodkin to find venture capital funding in the summer of 2007, even from investors that praised the site publicly. But that still leaves the start-up in pretty good company -- Pandora was turned down 350 times before picking up outside financing.
Volodkin responded to rejection like a seasoned entrepreneur, adjusting his strategy and transforming the setback into an asset. "In a weird way, it became a benefit to have some real checks built into the system," says Volodkin, who now has three full-time and two part-time staff, "When you have only a few people to build something, you pick very carefully what you build."
-- Nitasha Tiku
The original version of the story incorrectly stated that the Glastonbury Festival is held in Scotland.