From Zero to $400M with Shazam founder Dhiraj Mukherjee

We have had some amazing speakers, very wealthy people in Inner Circle Elite over the last decade or more. The measure is always how excited Mark gets. So Mark didn't even know who our guest speaker was. And then we were on the train. I said, it's the. The founder of Shazam. He said, oh my God, I still use the app. Look at this. I've got it on my home page on the iPhone 16. It's now my homepage. He actually showed you, didn't he, Dhiraj? Yes, he's very excited. So this is a huge moment because we have the founder of Shazam, Dhiraj Mukherjee, who has got a huge cv, not just with Shazam. So we're going to kind of do two parts to the interview. One is the Shazam story and then one is after Shazam because he's a full on big time investor as well. Actually, we're going to do three parts because then I've been given permission by Dhiraj to turn the cameras off. That's all I need to say. So we're not normally that official Inner Circle Elite, but I think this is worth it. Please could you all stand up and give Mr. Dhiraj Mukherjee, the founder of Shazam, a huge round of applause. Thank you. Take a seat.

Thank you for the warm welcome. You absolutely didn't have to do that. But it's such a pleasure to be here.

Right, so David would just like to do a couple of sound and video checks just to make sure we're all good. Are you good, David? Yep. Okay. If you would like to speak into your microphone first. Iran.

How does that sound, David? One more time. 1000. 2000. Testing. What do you want me to say, David?

Okay. Yeah.

Okay. Fantastic.

All right. So, dear A.J. how did you sell Shazam for $400 million to Apple? I would like the answer, please.

That's a great question. Well, what happened was we had got to the point in the journey where it felt like it was a natural time to exit. It took us 15 years to get to profitability, so we worked our socks off. I know. Here we go.

Some of you moan, 15 years, no profit.

That's right. Yeah, that's right.

Is that strategic?

Not at all, no. It was accidental. But there comes a point in a company's life where a different partner or different fit. Makes sense. And we had known Apple for years and years, right from the time that the iPhone launched and the App Store appeared and. But when the stars aligned and there was an offer on the table, we said, take it.

Okay, so when you started the company, the goal was not to sell.

When we started the company, the goal was to misspend our youth with the quick wins. It didn't work out for us, unfortunately, but no, it was never meant to be. Sort of a long 18 year journey from start to end, but that's what ended up happening.

Right, so how did you go 15 years without making any money?

It's called other people's money. Yes. So we had very patient investors and I'm glad to say that they were all happy at the end. But, yeah, it was a long haul, which we didn't sign up for.

Right. So if we're all thinking about starting a tech business, how can we be profitable in 14 years or less?

Don't follow an example. Try to come up with a business model which works, don't spend a ton of money upfront, prove the concept as early on as possible and then ride off into the sunset. So.

All right, interview over. Do you think now with tech AI, you need to spend as much as maybe you did 18 years ago, or can you be more lean and agile now?

Oh, you can be so much more agile today. Because back when we started, and I'm showing my age, a lot of the tools which we take for granted today didn't even exist. So we were inventing stuff as we went along. Hardware was much, much more expensive, software development was much more expensive, testing was much more expensive. And frankly, you get bogged down in details nowadays you can develop and launch and test much more quickly. And then words like pivot didn't even exist back in 2000. So, yeah, so people can pivot if they choose to.

So I'd like to talk. There's three things that have come out of this. One is AI in the future. One is your journey towards the exit, and then another is the exit itself. Because I know many people have sold their businesses and that stage of selling is quite intense, as I understand. So let's do the business journey, the 0 to 400 mil. What was the plan with Shazam?

So the plan with Shazam was always about solving a personal problem, which is you'd hear a song and we didn't know what it was and we wondered and we didn't have any answers. So my business partner, Chris, actually came up with the original concept because he wanted to connect with all the radio stations in the country and work out what was being played at any given point in time.

So he was solving his own problem first?

Absolutely, yeah. So he was building his own back scratcher and then he realized that actually what would be much better than that would be if you could use your mobile phone to identify any song. And so that was the origin of the idea for Shazam.

And how much money did you need to put in from investors to get it ready to sell?

So we started off with just, you know, putting our own money in to get things going. Our first round was, I think it was a million dollars. This was in 2000. And then we raised our first venture round, which was $8.5 million, and then just snowballed from there. So I think in total, we raised over $150 million across five or six rounds.

Wow. And how much of the company did you and your partner still own and retain on the exit?

Not enough. I wish it were more.

Can you tell us how much?

I wish I could, Robert.

I bet we could find it on the Internet. What was your shareholding at the end?

So, as I said, unfortunately, I can't discuss that.

Oh, really?

Well, no, because what happens is that you have investors which come in at different times. And naturally, when you've got a VC investor, then they take a big share of the company. And sometimes these stories end badly when people don't feel that they got something in proportion to hard work that they put in. We were very fortunate because we had a good exit and everyone was happy. Everyone, yeah, as far as I know. But, yeah, it's the miracle really was being there for 18 years because people lose patience, investors run out of time, you know, funds close, etc. So I look back and I'm very grateful that we were allowed to have that run.

So raising money, then you've done it five or six rounds. 150 million.

Yeah.

What are some top tips on raising money?

So, top tips on raising money? I think that it's about projecting an idea into an investor's head which matches your own. So I call it magical thinking. You've got a vision, you're trying to communicate that, and initially no one believes you, no one buys into it. But the more you try it, the more you try to make this idea come to life, paint this picture of what the possibility could be, the more likely you are to succeed. That's not the full answer, but that's the starting point, I guess.

And each time you got to bigger funds and VCs, did raising money get easier or harder, or the way you had to pitch for money become different?

It depended on the conditions of the market. And so there are good times and bad times. There are VCs who are sympathetic they're ones who are skeptical and so it's always an art. But I would say that it's about spending lots of time, having lots of conversations and then narrowing down to a few group of people. You can tell when you look in the eye that they're starting to believe the story. And you go from there.

And did any investors get itchy or want to exit because it took 15 years to make any profit?

Oh, yeah, absolutely. I mean, the way VCs typically work is you have a fund which lasts seven, eight, nine years and you're trying to return the capital at the end of it. So that's the normal time horizon. So 18 years is anomaly. And I have the distinction of being one of our early investors. We were the slowest investment he's ever had to exit. So. Yeah.

Are you proud of that achievement?

Very proud.

The slowest return ever.

Yes, that's exactly. I should hang a wooden spoon above my topic. Wow.

Okay, so the exit itself then. Yes, Start to finish, that is somewhere the idea comes or you receive an email or someone says you should sell to. Selling to Apple for $400 million. How long did it take? And take us through that part.

Okay, so there's two parts of the story. So the first part took about nine months or so. And the reality is that, you know, it's a consensus on the board when you say this is the right time to sell and then you look for suitable buyers. And they were the usual suspects and we hired very good bankers who help with this process because they understand the dynamics, etc. There was a second part of the story which I've not talked about very much, which was once the transaction was completed, it was subject to approval by the eu, which we thought would be a formality. It turned out not to be a formality at all and took about nine months to get the approval. And so end to end, it was about 18 months. The first nine months were nerve wracking, the second nine months were fingernail biting. But we got there in the end.

So it took 18 months. And did they pay all cash?

You know, I wish I could give you more direct answers to these questions and I'll tell you why, because this is not an official figure.

It's reported getting things out of people nearly as good as your app.

So.

Surely the part in cash and the part in earn out, we could find that on Google, couldn't we?

You know, the reality is that these kinds of transactions are structured in different ways. But what I can say is that it was very simple it was very transparent. It was not complicated. It wasn't any bells and whistles which anyone was unhappy about. So it was a good, clean transaction. Yes.

So mostly cash.

You are a master, Rob.

Well, I'll tell you why I'm asking. Because Mark and I talk about this all the time.

Yes.

We've been going 18 years.

Yes.

And we've seen so many people sell their business. And in nearly, in fact, in every instance bar two that I've ever seen of my peers, the earn out has come to zero.

Yeah.

So Mark and I are like, well, the odds of us getting the earn out, I. E. You get 20 or 30% of your cash now and then the rest when you hit certain metrics which I think you refer to as bells and whistles. So I just want to know if these earn outs do actually come to fruition or is it just best to get all the cash up front? And would the VCs do all cash up front?

Okay, so. So let me answer this. So theoretically, rather than specifically, which makes. In theory, you can't structure the deal to be optimal. So cash is king. So if you can get cash, then by all means. I can't speak from experience about earnouts, but they come as a mixed bag as well.

So if you can't come from experience about earnouts, you didn't do an earn out.

My goodness. However, you may not be in that position. So if there is an earn out involved, then the reason for that is because the buyer wants certain things to be.

They want to lock you in.

Exactly, exactly. So one doesn't always have the choice about the structure of the transaction. Yeah, of course.

And I guess you'd get lower cash. No. Earn out, higher upside. With earn out, I guess it's a negotiation.

That's exactly right. And it depends on how critical the founders are to the business. I can say openly that we were not very critical to the business at the time of exit, so.

But that's a good thing though, isn't it?

It's a very good thing indeed, yes.

What was the multiplier or the earnings ratio that you sold for?

Oh, Rob, I love these questions. Yeah.

Does that mean you hate these questions?

There's an open offer that we can discuss this afterwards, but as you know, I'm not in a position to reveal that.

So we'll wait for the cameras off.

That's right. Yeah.

All right, fine. Did you stay on?

No, I didn't stay on. No.

You took your maybe cash.

Yeah.

Ah, you didn't stay on. So there was no. Earn out.

No, let me, let me explain, let me explain. So I, by the way, I'm having.

A lot of fun. I didn't know it was going to go down like this.

Oh, nor did I, otherwise you wouldn't have come. No, I actually I put in a shift when we started and I had the distinction of hiring my boss and my boss's boss. And so it came to the point where I felt that, you know, the company was in safe hands. So I left after doing that first sprint, if you will, and I went and joined Save the Children because I wanted to give something back. So my, my career path was non traditional in the sense that my side gig was my startup, my day job was working for a charity. So that's what happened.

So when, so did you leave? Immediately after the sale or before the sale?

Oh, no, so long before the sale. Yeah. So after about three or four years, I stayed on the board for about 10 years or so and then my business partner Chris was on the board for many years after that. So we always had equity in the business and representation on the board through to the exit. But I wasn't full time. It was always, it was another sort of thing in my life which as a founder you can never kind of let go and you can never take your eye off the, off the ball.

Right, so you'd like a bit of a master of leverage then, because you put the early years in, got your partner to do all the work, sat on the board and then cashed out at the end.

You know, I'd never thought about it. Yes, you're right. Yeah, you're right. That was really clever. I should do that. Maybe we can write it together. Maybe we can. That's clever of me. Yes.

Yeah, that is clever of you. And what did you do with the money that you made afterwards?

Oh, the money I made afterwards, unfortunately, is under the BDI of my wife. So she is, how should I say, part of the investment committee.

She is part of the investment committee, yes.

It's a two person investment committee, my wife and I, and so she keeps a sharp eye that it's invested wisely.

Right. Oh, are we allowed to talk about that part?

Oh, yes.

Oh yeah.

All right then.

So I mean, as I understand it now, you're an investor and you invest in other tech companies.

Yes.

Is that right?

Yes.

So, yeah. Do you want to talk about some of the investments you've made?

Sure. So I like to call myself a tech for good investor. So I try to invest in companies which are aiming to make a difference in the world. And that covers a wide multitude of sins, anything from climate action to helping with diversity, to helping girls learn how to code. So, yeah, so it's very rewarding in the sense of intellectual stimulation. I'm not quite sure if it's going to be rewarding financially that the jury is out.

Right. Is this a problem because you know you can invest in tobacco and alcohol and just make billions and trillions in these more moral and ethical type business models. Is it kind of a harder thing to make money in them?

I'd like to think not, but I'm going to find out. What I do know is that it's just as hard to build a purpose driven business as it is to build any old startup. So it doesn't make it any easier. If anything else, it adds to the challenge because you're trying to measure are you having impact, et cetera, et cetera. But I'd like to think in five, 10, 15 years down the road I can look back and say I made some small difference to a company which is trying to make the world a better place. Now, if it all goes horribly wrong, then you'll find me in tears, but I'm keeping. And in tobacco and alcohol, I can't promise, but I'm keeping my fingers crossed that this strategy pays out.

Right. And other than the sort of the moral ethical criteria that you invest in, which is great, thank you. Because we need more people doing things like that. What are the other drivers for you to invest in a company like what do you want to see or not see?

Yeah. So I don't invest exclusively in impact because it's almost impossible. So I try to avoid, I try to negatively screen for things like extractive industries or arms. Ammunition.

What's an extractive industry?

So for instance, you know, oil exploration, for instance. But that's difficult.

Ammunitions.

Did you? Yeah. Yes. Yeah.

You don't want to fund wars?

No.

Like our government. You didn't say that. I did. So you don't got anything to edit out.

But it's a challenge. It's a challenge because you can't buy a footsie tracker because you'll have lots of companies you don't necessarily want to support. So you create a rod for your own back. But I think that if more people make the effort, then we look back on our portfolios with perhaps less guilt and more pride. But it's not easy. The impact part of my portfolio is much more selecting individual companies. And that's all about the entrepreneur. It's all about their drive, their vision, their commitment, you know, proper entrepreneurs, as I call it.

Right. And how do you find that out about someone?

I think it's just a personal experience. And how they interact with you and how they follow up and how they address you and how they, you know, walk through any doors that you open for them. And I'd like to say it's an art, but as I said, you know, the judgment hasn't come in yet. Whether I'm right or wrong. I'm just following my instincts and deploying my capital as I see fit. And now I'm on a journey with these entrepreneurs for the next five, 10, hopefully not 15 or 18 years, but yeah, and then. And then we'll find out.

So nearly, in nearly every professional investor I know and have met, and I have met many, they say the same thing. They say they're investing in the person more than the business.

Yes.

You would back that up, would you? And you would say that definitely?

Yes, because that's the absolute minimum. The problem is that businesses can change. I had a CEO who very sadly was diagnosed with cancer and needed to be operated. That affects the business as well. But at the end of the day, particularly if someone's going to be there for the long haul, it's down to character, I believe. And that trumps individual business circumstances or business cycle setbacks or whatever that might be.

And what character traits do you particularly like and look for?

I guess people who don't take no for an answer. People who are relentless about trying to win. Supporters who can get the message across, whether it is to investors or employees or partners or distributors. It's just the grind of communicating what they're looking for. And people who have the flexibility to be able to lead from in front but learn from their team. Yeah. It's a multitude of skill sets which I don't analyze. It's done more on a field basis, I guess.

And have you found over your 18 year journey of building up Shazam. That you're really trying to continually sell the goal, the vision, the outcome that are good that you're doing every day to your team, but you look at the bank account, you've got a load of stuff going on that's hard. How did you find that paradox?

Oh, yeah, absolutely. I think that everyone here knows what it feels like where you're trying to tell a story and talk about a rosy future, but you're worried about having three weeks of cash in the bank. And I spend a lot of time with fellow entrepreneurs, mostly tech entrepreneurs and I know the butterflies you have in your stomach when you're coming up, you know, for a big contract or a big round. So that never goes away. And I guess that my blessing is that, having been there, I feel I can be a good shoulder to cry on, or I can understand that you might have a brave face but be grinding your teeth at night, you know? And that's why I believe if I can do anything at all for my CEOs and portfolio companies, it's the empathy.

And what would you say was the hardest either phase or just constant challenge you had in building up Shazam over 18 years?

Well, just the first 18 years was the hardest part.

Just all of it. Come on, sell it to us.

No, the joke always was that Shazam. Was two years away from success. We were convinced another two years, we'll get there. But no, I think in all seriousness, our good fortune was that we thought we had a good idea. We managed to get it off the ground. The bad luck was the timing was exceptionally bad. So we started in 2000. We literally incorporated the company the week that the NASDAQ was at its max. And then it went off the cliff like a roller coaster. And it was a real struggle from then just to, I guess, keep the lights on.

And how did you just keep going?

Well, my other business partner, Philippe, he uses the analogy, if you are a parent and your kid is starving, you're short of food, are you going to give up on that kid? Never. You can do whatever it takes to keep that child alive, feed it, scraps if necessary, and that's what we had to do. And we had some breaks along the way as well, but went through some really difficult times, having to let people go. We lost investors along the way as well, people who just didn't have the stomach for the ride, I guess. But we were lucky that we survived to be able to tell the story.

Did you ever have to let, like, quite a high percentage of staff go?

No, no, no. More than sort of, you know, maybe 20%.

A lot.

Yeah. But, you know, close friends, people who had worked 16, 17 hours a day, shoulder to shoulder, that you had to let go. Yeah.

How did you do that? Get your business partner to do it?

I should have thought of that. I didn't do that. Unfortunately, I'm still friends with some of those people even today, so they've forgiven me for the brutality, but it's very difficult because it's a world of pain for them and for you. But it doesn't feel that way. It feels like it's coming in one direction, which is, I'm sorry you don't have a job, but that's what we sign up for as entrepreneurs. That's the reality, which is no one has a smooth ride, nobody just sails through. Except the founders of YouTube, who sold in 18 months. Yeah, I still wonder how they did it. Maybe that you could interview them. But no, it's always this roller coaster that's par for the course.

Is it worth it? Because I've spoke to James Watt very recently. He's been become a friend of Brewdog, my friend Al Barra, who's taken grenade from nothing to now worth 611 million. And both of those look at me and go, it is hard. So is it worth it?

I definitely think so. I think just because it's hard, it makes it more worthwhile. So if it was a breeze, you wouldn't value it as much. I'm not saying it should be so hard that it kills you off, because then that's no fun. But as long as you survive, I believe it's character building and that's what you're left with. You're left with that character, that resilience, that belief in yourself. And I hope I can carry that forward and I hope I can contribute to that in the generation of startups and entrepreneurs after me.

So if there's one trait that you think is vital for every entrepreneur and one almost cancerous trait that's going to kill entrepreneurship, can you give us both of those?

Yeah. So I think the one trait which is vital is to be sort of mentally fluid, so to know when to stick.

You have a name for this something? Adaptability, I think you call it.

Oh, yeah, yeah, I've got it here. Oh, I can't.

The art of adapting.

The art of adapting, I call it.

The art of adapting.

Yeah, that's right. And you talk about adapting as well, isn't it? And so it's not about changing your mind every 10 minutes, it's about knowing when to stay the course, when that's what's needed, and knowing when to change your mind when that's what's needed. Now, that's not something you can write in a textbook, because it all comes down to it depends. But that characteristic, I think, is vital.

Right, so are we talking about agility or are we talking about being able to change our decisions or even change our beliefs? Can we drill into that a bit?

Sure. I mean, the way I think about it is that the market is constantly moving, so you have new technology, you've Got new opportunities, you've got competition, you've got new products being launched, etc. And your job as an entrepreneur is to learn faster than the market. So to move faster than the market.

If I had something to write, I would be writing that. Learn faster than the market. In fact, I do. Okay, where's my phone? Where's my phone? Joe, have you got my phone?

I'm stolen Rob's phone. Here we go.

Yeah, right.

So how do you do that? I think it's about processing new information, paying attention to weak signals, having conversations which are not just in your domain, learning from your newest employee, you know, coming up with crazy ideas and doing them outside of desk. So it's all those things. There's no. There's no magic recipe.

No, but I love that. Learn faster than the market. And then what about the trait that you see over and over that just kills entrepreneurship? There's just. Is you're never going to be able to be an entrepreneur if you have this trait.

I think it's. It's the opposite, which is if you get locked into ideas to the extent that it sinks you. So if you're like Cap Na Hub and Moby Dick, which is you're so fixated on a problem that you can't detach yourself from what's actually happening.

But that's a paradox, because we need that monomaniacal obsession of our app or our business.

Exactly.

So how do you know when you're insane? But aren't we supposed to be insane?

That's right. You put your finger. It's the paradox. So that's the tough part. That's the act, which is difficult to pull off because if you just carry on exactly the way you're going, despite changing circumstances, you're a fool. If you change your mind every 15 minutes depending on what's happening, you're a fool. So between those two things, there's this holy grail. But if it were that easy, everyone would be an investor and every startup would be successful. This is what distinguishes the great entrepreneurs from the ones who fall by the wayside. And that's what I have not discovered yet. That's the. That's what I've signed up for in this journey as an investor.

Did you meet Steve Jobs?

I never met Steve Jobs, no.

That would have been great, wouldn't it?

It would have. Although I get the impression that Steve Jobs was a difficult taskmaster. I think he was quite tough on his teams.

Were you not, then?

No, I'm a softie. Really? Well, I like to say that.

What would your wife and your kids.

Oh, I don't know. I'm glad you're not asking them. No, I think I like to look at, you know, what makes people happy, you know, what makes them perform to their best, you know, what brings out their natural talent, you know, what makes them curious. And that doesn't come from ruling with an iron rod or sort of dictating terms. But, hey, Steve Jobs was highly successful and so maybe you should listen to him and not me.

Yeah, that'd be difficult right now. So I want to go there, actually, because in theory, ideology, I am more like you and I like to lead the way. You've said, but I'm not sure that's working right now, where we have a pretty low work culture where things are harder. And, you know, I see on LinkedIn every day all these sort of fluffy, wanky posts about how micromanagement and, you know, corporate culture is toxic, but at the same time, it's toxic to not hit accountability and not have goals and not win and not perform well and expect that you've got a job for life and be carried. So I sometimes think, you know, sometimes a bit of accountability and a bit of drive and a bit of micromanagement, it's not always a bad thing. Do you disagree?

I don't think there's a single answer. So the phrase I use is. Is creating a compelling vacuum. So I like to set up a problem and then ask my teams to run into that space which I've created, and then come up with their own ideas and their own way of doing things.

What if they're all shit?

Well, then I'm in trouble.

He's got to be back on you.

Exactly. So now I'm sticking with my story for now. And the reason for that is because my team are much smarter than me. So, unfortunately. Are they?

Or are you just saying that because you seem pretty humble? Guy, I.

It's all an act, really. My team are so smart, and I'll tell you why, because they're super young, they're native AI users, they're very patient with me, they teach me all the time. I struggle with Google Docs, for instance, is a major challenge for me nowadays. But by basically asking the right questions rather than dictating the answer, I get fantastic solutions.

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All right then, let's go.

Let's talk about AI then.

Okay.

Because that's on the list. Yeah, you're. Have you got any AI companies? You invested in any, or are you involved in any way in AI?

I don't know much about artificial insemination, to be perfectly honest.

That's a good one. That is a good one.

Can I name drop? I stole that from Peter Gabriel. I heard him say that on stage. No, so more seriously. Yes. I think AI is all around us and I've got a number of different investments in that domain and I'm learning every single day because it's such a powerful tidal wave of change. And the really smart people I talk to describe it as drinking from the fire hose because there's so much change and so much happening that yeah, it's. It's quite mind boggling.

Wow. And do you think it could be a huge one of the biggest growth industries? Are you bullish on it?

Yeah, I'm really bullish on it. And the reason for that is, you know, some things are fad, some things just come and go. I don't think it is. It's got a long history. So it started off in 1956, so it's been around for a little while. I think this vintage of Genai definitely has legs.

And what's Genai?

For those that don't know, Genai is generative AI. So it's actually a step on from machine language, which was basically what we think of as AI, is really machine learning. So using data to be able to detect patterns and build from there. Genai is different in the sense that it produces new pictures and text and so forth, which hasn't been done in this way before. But what's scary is that this is very early days, even though. So I'm an early investor in OpenAI, which is a creative ChatGPT. We're on to ChatGPT 4. But even then it's progressing at such a pace that this is going to look like ancient history in a couple of years from now.

Wow. So what practical things can we all, you know, I guess what you might just call normal business owners. Where can we use AI in our business?

I think the starting point is to just get familiar with it and to start using it on a personal level. So I've got chatgpt on my phone now and I use it to ask simple questions. My kids make fun of me because I should just ask my wife. She usually knows the answer. But.

You should get an AI of your wife.

That's a great idea.

I. E. That's not a great idea.

I think that that's sort of the starting point, which is just getting personally comfortable. And beyond that, what happens is that the expression I use, it's the operating system of this decade and probably beyond. So where you would start with a Google, where you would start with, you know, a phone call or whatever, if you start with AI, you get materially different responses. And whether you're writing an email, whether you are putting together a proposal, whether you are trying to summarize a document, you know, AI will do the whole lot for you. There's only one way to figure it out, which is to try it. Yesterday I had this experience where AI drafted a response to an email I'd written. And I was like, wow, like, who wrote that email? I don't remember writing that email. Where did this come from? And it was the AI.

Wow. Do you think Shazam might have made profit in like 14 years if he could have used AI? Would it have been quicker?

Well, here's the problem with Shazam, which is it's breakthrough technology and the way it works is that it works on millions of songs and it finds exactly the right song. So it's very specific in Its search. So it doesn't use a conventional AI thinking, which is. It kind of sounds like Madonna or I think it's Prince. So it's very black and white. And we had competitors who used much more of this fuzzy matching, but we were fortunate enough to beat them off.

In the market because it actually worked all the time.

Yeah. Shazam just worked better.

Yeah. And so what was the tech?

Oh, the tech. Okay, so I'm going to explain all. Okay. I can't possibly tell you the tech because I don't understand it myself, but you have to speak to my business partner, Avery, who's a genius. He has a PhD from Stanford in digital signal processing.

You have an MBA?

I have an MBA, yes.

Yeah. Where from?

From Stanford. There you go.

So you have one.

No, I have an mba, which means I can switch on my laptop.

Sorry to interrupt. Yeah, the tech of Shazam, right?

Yeah. So, I mean, when we came up with the idea, this is what three MBAs do. Let's have some beers and come up with an idea for a startup. And that's how Shazam came about. We're like, now what? We need to hire someone really, really smart. Where do we find this person? And it turns out that the experts in this new field of digital signal processing, which we had never heard of before, were at Stanford and Berkeley, which conveniently, is where the three MBAs went to business school. So we spoke to the top experts in the field, and they pointed us towards a really, really smart 4th co founder called Avery, who fortunately came on board, invented the technology, we've raised millions of dollars, and the rest is history.

Wow. So we have no more idea how the tech works.

I wish you wouldn't put it that way.

Find a smart tech guy. But I'm fascinated, because how does it work?

So the way it works is that I believe that the best teams have different skill sets. And Avery, who's a certified genius, although I'm not sure if he has a certification other than his multiple degrees, he really appreciated what the rest of us brought to the party as well, which was energy, enthusiasm, going out and chatting up investors, producing PowerPoint, talking to mobile operators, hiring people, getting office space, all these things which good MBAs do. So he respected that. He couldn't have done it by himself. In fact, any. Any two of us or three of us out of the four couldn't have done it ourselves. But it's the teamwork, it's the collaboration, it's the mutual respect. So hopefully that explains the technology.

Yeah, really explains the technology. And I get all that. And I can see how that was a good synergy. How does the tech work?

Oh, yeah. So now I'm going to explain all.

Okay, is this just an act?

You're putting me on the spot here, Raghavi.

This is my job.

Okay, good. Well, I. I will respond in kind. So when we started and Avery came on board, we said, you've got three months to invent this technology. And he's like, okay. So he disappeared into his basement, tried to invent it, and it was really hard because what he was trying to solve for was 10 or 15 seconds of music over the microphone of a mobile, which is not great with background noise over GSM network and matching against a million songs in real time so we could actually give the person the answer. And he was on the verge of giving up, and he was in a cafe in Palo Alto rehearsing his speech to tell us that he couldn't do it. And when he had this breakthrough and the breakthrough and this. I'm going to talk tech to you now, Rob, so bear with me. It's a hash function which basically takes all the information and spreads it out as wide as possible. And then he uses this process to be able to match. I'm getting looks here, which says, oh, I'm with you on this one now. So to match the time sequence between the fingerprint of the song, which is in the database, and the clip, which. There's a diagonal line which emerges, which is a match in the two dimensional time, time. And so you get this line which converges a little bit like a phone book. So if you're trying to look up Dheeraj Mukherjee in a phone book, you'd get to the M's and you get to the mu's and the mukas, and then you'd find my name fairly quickly. Whereas if you start at the beginning, went to the end, it would take years. So that's how the technology works.

I'm really glad I asked.

I'm glad you accepted that answer.

Actually, the phone book analogy works.

Oh, good.

Yeah, yeah, Great. Was there any time you thought, I'm out, we're giving up?

No, never, Never, never.

Not once.

Not once.

Not when you ran out of money.

No, we didn't run out of money. We came close, but we never ran out.

Right.

Yeah.

Okay. Not when you were running and nearly running out of money.

And this is. And I need to be serious. So if you're trading insolvent, that's a very bad thing. And they can lock you up.

Yeah.

We never traded insolvent. I'd like to go on record for.

Saying that as well, but you obviously must have looked and thought, we're a few weeks. I think you said sometimes three weeks.

Exactly. Yes, that's exactly right. We looked at it, looked hard, like, nope, we're solvent, keep going.

Yeah. What was the closest you got to running out of money?

I can't remember exactly, but it was certainly weeks. And on a more cheerful note, I think this happens to all entrepreneurs and that's the time when you feel you're close to the edge, when you might be tempted to give up. So my advice would be, don't give up. Don't trade insolvent either.

Maybe you become the most resourceful at those times as well.

That's exactly right. Yeah, that's exactly right. Because there are things like R and D tax credits, for instance. You know, you can extend your payables and there's. You can get grants. Several of my investments have, you know, non dilutive grants. And so it forces the creativity, which I think is vital because if you're going to endure in the long run, you need those challenges and to be able to have to dig deep.

So as someone who's got an MBA at Stanford, which is very impressive, I'm fascinated on your thoughts as to whether a college degree is worth it or not. Bear in mind as well how much it would have cost you to go the debt that you might have built because people are getting 100 grand plus into debt now to do a three or five year business degree.

You know, I completely understand that and I think that in my case it was quite different. It was a world where I went to an Ivy League university. I went to Dartmouth College in New Hampshire and had the benefit of a very generous financial aid package which was funded by somebody who had never met me but had made a gift to the college which allowed me to study there and opened doors which otherwise I could never have accessed.

Wow, so you got a scholarship.

Yes, it was a grant, it was a gift. And so you are good at raising money. So I believe in doing the same now. So we give money to our local school which offers bursaries for kids who can't afford it. Now that's not the only path. I think one can be very successful without a formal education. Back in my days, it was difficult to access knowledge. Like you needed to go to the library and Dartmouth had a wonderful library. Today the world's library is at your fingertips. And if you have that drive and that desire and that Interest and that passion. By all means. You don't need a formal education to make your dreams come true.

Wow. All right, so we do a disrupt us round.

Yes.

Before we turn the cameras off.

Okay.

And do an inner circle round.

All right.

What's the biggest disruption that's ever happened in your life?

The biggest disruption that's ever happened in my life. Do you mean from a business standpoint or.

Let's do both business and life, if they're different.

Okay. Well, I remember actually the first time when I used an Internet browser. This was in 1994. Netscape had just launched and you could then access the World Wide Web using this new piece of technology. That was a game changer, actually. That's what got me started on this entrepreneurial journey. And today I remember to the day when I was introduced to ChatGPT and Genai, which was in December of 2002. So just as an example, so at Shazam, it took us three months to get to 100,000 users. I think with ChatGPT, it took them a day and a half or something like that. So that's been completely revolutionary.

So was seeing ChatGPT for the first time as transformative a moment for you? As the first web browser, it wasn't.

As transformative, but because it was the.

Second and not the first.

No. I could see the pattern. I could see like, ah, this, this is going to explode. And the best time to get started is now.

All right. And then in your life, the most disruptive thing that's ever happened, the most.

Disruptive thing that's ever happened in a positive way, I guess, was when I applied to business school. I didn't get in. And they said, look, we're full, but why don't you come back next year? And so I quit my job, sold my car, gave up my flat and just went traveling for 15 months. And that experience really shaped me. It made me more adventurous and more risk seeking and more, I guess, willing to go with the flow. So that was not the plan, but that ended up being a really good disruption in my life.

What's the biggest risk you've ever taken?

Coming onto this podcast, Been a couple.

Of good moments there for you. What's the second biggest risk you've ever taken?

I don't actually believe in taking risks, so. No.

You went 15 years making no money as an entrepreneur, raising £150 million in the process.

Sorry, I need to set the record straight. We didn't make no money. We made very little money. But we were trying hard. The whole Way through. Come on.

It must be. Is it that you're just comfortable with risk?

Yes. I think that risk is addictive, so taking risk is foolish. Beating risk is addictive. So I like taking risk and beating it, and the only way to do that.

But isn't the point of risk that you're not guaranteed to beat it, therefore it's a risk.

Exactly. So I don't talk about those bits. So if it goes horribly wrong, then I brush it under the carpet and I don't bring it up.

What's your most brutal life lesson not coming on this podcast?

My most brutal life lesson, I think, sadly, my father died five years ago or so, and bizarrely, it didn't have a big impact on me on the same surface, but I think deep down it did because I realized that we spend our time working hard and trying to be successful and accumulating. But at the end of the day, I don't think that's the meaning of life. I think it's much more about spending quality time, finding balance, giving back. And I think it's affected me in ways which I can't really fully articulate, but it's appreciating not what we have, but all the things which we perhaps take for granted or which surround us, which we don't give enough time and attention to.

You're giving back a lot, but that's because of what you achieved as an entrepreneur for 18 years. So I hear you and understand and also feel the emotion with your father about. It's not about accumulating. Yes, but have you not got to accumulate to then be able to give back?

Oh, I don't think so at all. Because I think that it's philosophy, which I'm a capitalist in the sense which I believe in starting businesses, you know, creating value, you know, building something. But I was listening to a talk by Michelle Obama at the Democratic Convention a month ago, and she was talking about the way her family was brought up was you help your neighbors before you try to accumulate. And I completely buy that. You don't need to have wealth or possessions or even learnings to be helpful to those around you. So that's a much better philosophy, I believe.

Okay, what's the most disruptive thing anyone's ever said or done to you?

I had a great privilege of hearing Al Gore speak. He was former Vice President of the United States. He was a climate activist long before that term was popular. He made a movie called An Inconvenient Truth. And he was also a partner at Kleiner Perkins A celebrated Silicon Valley venture capital firm who invested in Shazam. We were their first international investment. And he came and did a talk for us, and he talked about his conviction about climate change. And that was a real turning point. I understood this was in 2009, how critical this issue was. And ever since then, that's really influenced me in terms of the people I try to meet, the investments I make, the learning about the energy transition, and then to a certain extent, getting on a soapbox, talking about the importance of leaders and trying to make a difference. It's not just down to governments or charities or Al Gore as an individual. It's all of us collectively to try to achieve those goals over 20 or 30 years from now.

What's the best advice you remember receiving?

I'm not sure if it was advice. There's two things. One is, my grandfather was the admiral of the Indian Navy, and I knew him when he had retired as a granddad. But he always used to say to me, if you put your mind to it, you can make it happen. And that advice stuck with me, which. It's about sort of mind over matter, and that's pure advice. The other part, which was not really advice, in my summer between my first year and second year at business school, I worked at Oracle, and my boss's boss was French. And every couple of weeks he'd walk by my desk and he'd say, are you having fun? And I'd say, yes. And he'd say, good, and he'd walk off. That was the only thing he ever said to me. And that has stayed with me ever since he was so wise, which is, as long as you're having fun, it's all good.

Are you having fun?

Absolutely, yeah. Loving it.

And what's the worst advice you ever remember receiving?

Yeah, it's not a specific piece of advice, but I don't believe in solving for wealth, or I don't believe in going, you know, wealthier is better. And unfortunately, I think it's a trap which we can fall into. We judge people or, you know, this person is a billionaire, or this person has. And to me, that's not meaningful. So I tend to look at people's hearts and look at, you know, what are you doing for your teams? What are you doing to give back? What are you doing to make the world a better place? And that is, you can't judge it in quite the same way. And I use the word judge perhaps advisedly, which is, I'm taking a view, but I guess the philosophy of wealth equals Success is not one which I buy into.

How do you balance the paradox of having that attitude and mentality and looking at your profit and losses every month and wanting to make a meaningful living and charging me a huge amount for this podcast?

Oh, yeah, you're right. Maybe this is why it took 18 years. If I was a bit more sensible, then my investors would be a lot happier. I think that.

Do you see what I mean? The balance between not being able to be focused on wealth, because I love to talk about the brand, the vision, the culture, and I have to sit in board meetings with very real numbers in front, and in that moment, you kind of do have to be focused on the money. Do you see the paradox?

Yeah. No, absolutely. I think that the way I think about it from a leader's perspective is that it's a learning journey. At any point in time, we're evolving and we're learning, and any success or any milestone where we are today is a false peak. There's always a climb ahead of us, and if we judge ourselves by where we are today, then that takes the eye off where we're going in the future. So, just again, as an anecdote, I did a mountaineering course in the Himalayas when I was 24. And there I learned to climb in rarefied atmosphere. And it plays tricks on your mind. You think that you are, you know, climbing and you're actually going down. You can get hallucinations. And I think at those times, it's not about where you are. It's like, how deep can you dig to go further? And that's where, as a climber, if you go it alone, you're almost definitely doomed. It's all about the team. It's about collaboration. It's about relying on your partner's strength when you need. And that's where I think much more important than what have we done this month or this quarter is where we're going in the long run as a group.

So three more questions.

Sure.

Before the cameras go off, and you will get to ask yours. So be ready. Especially this side. Who these don't know how to ask questions.

Okay.

What would you regard your biggest failure?

My biggest failure? Not to have thought about my biggest failure before coming on to this. Maybe it's something which I. Maybe it's a gap which I need to reflect on. Yeah. As I said before, I don't tend to dwell on failure. I prefer to airbrush it out of my mind. But, no, I can't. Nothing.

I think that's a skill of yours, being Able to do that just like, yes. Oh, really?

Yeah. No, absolutely. And I'm saying this because I'm on the spot here, but yeah, I do think so. Because otherwise you can get bogged down with regret and memories of failure. Let me put it a different way, which is I've invested in entrepreneurs whose business has failed for one reason or another, and that can leave emotional scars. And what I try to do is when that happens, I try to be there for them and just remember your quality. What brought you here is everything you did, your drive, the things you've accomplished, don't be left with that failure, because a business failure has got nothing to do with life, has got nothing to do with your character, has got nothing to do with your ultimate happiness. So I don't like that word failure. I tend to think of it as a setback. Use that setback as a stepping stone.

And so have you invested in businesses and entrepreneurs that have gone under, but even though your money went under, you were still there supporting you?

That's exactly right. I would love to have a word with those CEOs and ask them, was I able to make a difference at the lowest point in their lives? And I'd like to say that if I can help that person bounce back, then I've done a great job and may they go on to great things in the future.

Wow. What's your biggest regret?

My biggest regret, I gave up playing golf when I was 13 years old and I've got back into it at age 53 and it's a disaster. So my advice to everyone here would be, if you want to play golf in your old age, start now. Because I've learned the hard way that it's a very difficult sport to come onto. And I'd like to give a shout out to my coach, who's done a wonderful job, but it's not paid off for me so far.

What's your biggest non sporting regret?

My biggest non sporting regret. You'll have to come back to me on that one. I can't think of any.

Which, by the way, is a not uncommon answer.

Oh, I see.

Let us sit in this moment, which is a great moment, but often when I ask best advice, they've got a lot of answers. Worst advice, most successful people can't even remember it because they block it out, because they ignore it.

Yes.

There's a theme here of failure and regret.

Yes.

They're not burning in your mind, you're not carrying them, you're going blank. Which I think is telling.

I think that's exactly right. I'm also a relentless optimist, so no matter what happens, I'll always think that tomorrow will be a good day. And let's move on from my business.

Partner for 10 minutes.

Give him some relentless afternoon.

Which, by the way, is really refreshing to hear because I think it's not that easy to be optimistic nowadays. So Labour, don't ruin your optimism.

Not at all. I think that my daughter, who's 17, is a politics student and so I'm learning a lot about politics as I go, just trying to keep up. The reality is that politicians are human beings. They have blind spots, failures, things they don't know, stuff they're trying to work out, personal issues, et cetera. So I think if we can be gentle on other people as well as ourselves, then we're better off. But I'm not trying to be difficult here. If I had an answer, I would cough up. But the reality is that, you know, I think it, it becomes a trap if you dwell on those regrets and those things which are holding you back. So I'm quite happy that I've binned them somewhere in my. In the mental dustbin.

Awesome. And then the final one for me is this show is called Disruptors.

Yes.

What does the word disruptive mean to you?

Disruptive is sort of buying into the philosophy of being unconventional. So I don't like to be conventional, but that's not a decision. You are who you are. And I think that people choose company, they choose to be with like minded people. I think entrepreneurs are a certain type. They're inspired. They are always keen to exchange ideas and learn, try different things, break the mold, stretch the boundaries, etc. And all of these are cliches to a certain extent, but I think to me, disruption is about not kind of enjoying the comfort of the familiar and the known and embracing all those things which put you a little bit on the edge. But for me, what's the most important is the group, the company, the tribe, the fellow travelers. And that's what I seek and that's what I wish on everyone here. And thank you for convening this group. Thank you.

Could we have a big round of applause, please? Thank you.

Thank you so much. Thank you. Thank you very much.

This episode was brought to you by Disruptive Media, helping bold entrepreneurs stand out through podcasting, video and social content. Visit disruptive media.co.uk to learn more. It.