Shazam co-founder Dhiraj Mukherjee on the Apple buyout, internet bubbles and his new book

15 min read

12 April 2019

Features Editor, Real Business

Dhiraj Mukherjee is the co-founder of Shazam, an app that tells you (based on an audio fingerprint from a time-frequency graph) the name of the song that's been bugging you all night. Mukherjee takes us back to the early days of Shazam, and details how they raised 5.3 million dollars in funds by 2001 despite the burst of the bubble.

What happens when you put four budding entrepreneurs with an insatiable appetite for success in a room at the dawn of the digital era? The answer? You’ll come out with one of the most iconic apps of the twenty-first century. Let’s start by giving you a clue, (as if the headline weren’t enough), that we are talking about Shazam, the app that tells you the name of the song that was playing in the bar last night.

We sit down with co-founder Dhiraj Mukherjee to talk about the early days, the app’s subsequent success, and to ask him that eternal question, namely, what’s next for entrepreneurs after they hit it big?

Let’s party like it’s 1999: The dawn of digital innovation

1999 was a seminal year, we were at the dawn of the new millennium, and facing a series of new beginnings in politics, society, and business.

In the world of enterprise, (and a little like today with the advent of fintech), a whole wave of new technologies were at the forefront of business culture in 1999 that was stimulating rapid innovation, with inventions such as the World Wide Web, inspiring entrepreneurs to take their thinking digital.

This is exactly what the Shazam co-founders were doing that year, “Shazam was started in 1999, at the time there was a wave of entrepreneurship because of new technology and the possibilities of the internet,” says Mukherjee. “My business partners and I were desperate to become entrepreneurs, it was the perfect time to come up with new ideas for a business,” he adds.

Shazam: A business idea built from the customer’s perspective

Now, you would think that the Shazam team were music enthusiasts if they were to devise an app that could categorise unknown musical tracks for consumers? Not the case, says Mukherjee…

“None of us knew much about music – and that’s how the idea for Shazam came about. Chris, my business partner would hear songs all the time and had no idea who was playing. He thought ‘wouldn’t it be great if there was a way to identify music – how could one do that, anytime, anywhere?’. And that’s where the idea for Shazam was born.”

Putting ideas into action: An early stumbling block

What’s important to remember about the Shazam story is that Mukherjee and co were building the business right, (it wouldn’t be an app until 2008), at the frontier of digital technology era, “very few people believed the business was even feasible,” says Mukherjee.

“We had to invent the technology and create a massive library of fingerprints to be able to identify music,” says Mukherjee. There was also a lot of leg work to do when it came to partnering up with mobile operators in the pre-smartphone age, he adds, “we partnered with all the mobile operators in the UK to provide a single four-digit code to dial from mobiles to use the service, which was no mean feat.”

Building Shazam before the advent of smartphones

“I remember we were trying to get a letter of engagement from an operator and we called our prospective partner many many times and never heard back. In fact, if I remember correctly, we called them 43 times before they returned our call and then finally we got the deal done and launched the service in 2002,” says Mukherjee.

So, what did they learn from this tricky early stage? “I think the lesson learned in any entrepreneurial venture is it just needs that sheer persistence and dogged determination to get things done because, in the early days, the odds are stacked against you, friends are thin on the ground. One needs the perseverance to push through and get to the destination,” says Mukherjee.

Dialling in to use Shazam’s service: The slow road to digitisation

“People had to dial a number to be able to access Shazam’s service and it took many, many years for Shazam to be widely used,” says Mukherjee. “In fact, it took 10 years before we recorded the first billion users of Shazam. Once the iPhone was introduced in 2007 and the app was launched in 2008, that’s when the business really took off – when it became an easily accessible app,” he adds.

The i-phone changed everything

“From that point on, the next billion took one year and the next billion after that took two months. So there was a real exponential growth of users and we were very fortunate that Shazam ended up being a household name,” he says.

Gaining funding when the internet bubble burst

“We had started the company in October of 2000 and shortly afterward the internet bubble burst,” says Mukherjee. “There was literally no funding available for early-stage projects, so just the fact that we managed to pull it off and get funding was a major high point for us,” he says. “We managed to raise about £5.3 million – which gave us the capital we needed to get the business off the ground.”

Working together: Democracy or dictatorship?

“One of the core principles was always that we, (Chris Barton, Philip Inghelbrecht, Avery Wang) were all equal partners in the Shazam project,” says Mukherjee. “We all had 25% of the business at the beginning. Even though Chris played the role of CEO it was very much a team effort and we each brought our experience and own instincts to the company,” he continues.

But did this flat hierarchy work in practice? “I think it was actually a big strength because we have stayed friends throughout the life of the business – over 18 years. However, the complexities sometimes were having to reach an agreement and sometimes having long discussions! But at no point did we fall out,” he says.

But how does a founding team operate and make decisions without set practices in place? “We didn’t have a rule book to tie break or overcome disagreements. We talked, thrashed through issues, and made joint decisions. I think ultimately that was really beneficial to the business, certainly in the early days.”

Shazam and Apple: A long relationship that ended in a buyout

Although Shazam was only acquired by Apple last year for 400 million dollars, it wasn’t out of the blue for Mukherjee and his co-founders, in fact, it was the conclusion of a decade long relationship between the two brands…

“Last year’s acquisition by Apple started almost 10 years ago when the iPhone first launched. Shazam was one of the first apps available on the app store,” says Mukherjee. “From that time on Apple and Shazam have had a close relationship and in fact, a lot of Shazam’s growth came from the popularity of the iPhone and the app,” he adds.

“So, eventually, when Shazam received an offer from Apple to buy the company we were delighted because we knew it was a fantastic fit. We’re looking forward to seeing how Shazam continues to evolve as part of the Apple family.”

Shazam stories: Lessons learned in starting and scaling up a business

“One of the lessons I learned from my Shazam journey is to never give up, and to push on even in the face of people saying ‘no, it’s not possible’, or ‘no, it can’t be done’ or ‘it’s never been done this way before’,” says Mukherjee. “I think at the early stages it’s about having a dream, a great team around you who can support each other, and try to make the impossible real,” he says.

But is a sparky and positive attitude enough to take a successful business to the next stage of growth? “To scale up into a grown-up business what one needs is to create a repeatable way of doing things, so have a method to the madness,” says Mukherjee.

“You need to understand what it takes to enable people to grow and develop and for the business to become more grown up – like a bigger company is, but more agile and more flexible,” he says. “Those are the two things I would recommend to entrepreneurs, – resilience and to always think about what it takes to scale.”

Dhiraj Mukherjee post-Shazam: Business speaker and adviser to entrepreneurs

“I really wanted to use the benefit of my experience as an entrepreneur to give back to early stage start-ups and particularly to tech for good businesses,” says Mukherjee. “After Shazam, I was Head of Innovation at Virgin Money for a time. In my advisory work as part of that role, I enjoyed helping innovators in a formal context to try and be more entrepreneurial and break new ground,” he says.

These days, Mukherjee is focussed on using his skills to help businesses make the ultimate impact goals, namely saving the planet from the ravages of climate change, “I’m looking at how one uses technology and creativity to create a more sustainable planet,” he says.

“We have sustainable development goals which are agreed by 193 countries and include things like eliminating hunger. These are big, ambitious goals and as part of this project, we’re trying to think about how technology can be used to create mass movements to help achieve these goals. It’s something that I’m really passionate about.”

Thinking like an entrepreneur: Try thinking like a child, he says

Mukherjee is an impassioned advocate for ‘childish thinking’ in business leadership, but what does it mean and why does he believe it’s so effective in making better decisions? “I think that what happens with experience is that we create rules in our heads,” says Mukherjee.

“We accept that things are done in a certain way in a business or in an industry. That limits creativity,” he adds. “The beautiful thing about a child’s perspective is that those rules have not been drilled into them. So they ask ‘why?’ or ‘why not?’ or ‘why can’t I?’ and that curiosity and that openness is actually what we need to capture as innovators.”

Dhiraj Mukherjee, the business author

“The commercial power of childish thinking is a theme I explore in my chapter for the new book Fast Forward Files, which I’ve contributed to along with other speakers at The Fast Forward Forum. It’s about looking at the world through kids’ eyes and seeing what we take for granted but also getting insight into what kids find challenging or frustrating – or the kind of situations they’re likely to face, or the things they don’t have the tools to deal with.”

Applying child-like thinking to business decisions

“We need to not take the status quo for what it is but to look at the world through fresh eyes and to imagine what’s possible and ask the question ‘what if we did it this way?’, ‘what if it could be done in the opposite way to the way everyone else is doing it?’ That’s where you can get real breakthroughs, which come from having that fresh perspective.”

Dhiraj Mukherjee is the co-author of Fast Forward Files: Opening Up, published by Molden Verlag, which is available now