SoundCloud Is Now the Poster Child for Berlin’s Startup Scene

Wilkommen! This is part two of Betabeat’s new mini-series, Die Startup-Szene, a peek at the up-and-coming tech hub of Berlin, Germany. We

Mr. Wahlforss, left; Mr. Ljung, right.

Wilkommen! This is part two of Betabeat’s new mini-series, Die Startup-Szene, a peek at the up-and-coming tech hub of Berlin, Germany. We sat down with entrepreneurs from three leading young companies here in the city that is only very, very occasionally referred to as Silicon Allee.

SoundCloud is many things: near-infinite audio hosting platform, sweet dubstep remix discovery site, and recording app; its founders believe they are adding the dimension of sound to a too-quiet web. “Sound as a sense and as a medium is missing on the web,” spectacled cofounder Alex Ljung told Betabeat. Berlin DJs and clubs are quite taken with SoundCloud; browse events on, for example, and every music listing is dotted with cloud icons. Ask a Berlin entrepreneur which startups to pay attention to, and SoundCloud is the first name off their tongue. So when Betabeat started planning a trip to Berlin, we knew there was one stop we’d have to make. We wanted to see where the aural magic was made. And we wanted a t-shirt.

Betabeat met the founders of SoundCloud at an afternoon rendesvous in the Janis Joplin conference room, which contained a bright orange beanbag on which Mr. Ljung was reclining as well as a Rubrik’s cube the size of a dog. For a music startup, SoundCloud’s office decor is surprisingly verbose; quotes printed on letter paper were taped up in a line around the walls: “Objectivity is the view from nowhere,” attributed to the philosopher Thomas Nagel; “The violent and righteous are hard of hearing,” attributed to German writer Gunter Grass. One conference room was called “T.S. Eliot,” because Mr. Ljung likes T.S. Eliot. Of course, a poster of Kurt Cobain watches over the adjacent office bullpen.

When SoundCloud moved to Berlin, the startup scene was much different, Mr. Ljung said. Everything was “the German version of this” he said, referring to Germany’s infamous reputation for producing American clones. “Now it’s like, we’re doing this and we’re launching internatioanlly… people have more unique ambitions with what they’re doing,” he said. Now, people associate Berlin with innovative, consumer-facing startups with precise and beautiful design, Mr. Wahlforss said, noting that he was surprised at how quickly the perception changed.

Over the past four years, SoundCloud has emerged as arguably the most visible web 2.0 startup out of the burgeoning Berlin startup scene. SoundCloud has more than 80 employees in its Berlin office, which is in an art gallery-studded neighborhood in the highly accessible center of the eastern part of the city, Mitte, an area popular with startups. (SoundCloud, which has raised about $83 million and has revenue from premium accounts, also has an office in San Francisco, an office in London and a “lone ranger” in L.A.) The employees add up to 25 different nationalities among them, said cofounders Mr. Ljung and Eric Wahlforss, who themselves moved from Stockholm, Sweden to start SoundCloud. The diversity of the staff, pretty typical of startups in cosmopolitan Berlin, contributes to the company’s international visibility. Its high profile is also bolstered by heavy integration with Twitter, Facebook, Foursquare, and especially Tumblr, with whom SoundCloud enjoys mutually fawning respect. SoundCloud’s founders also gave a shoutout to New York-based Hype Machine.

SoundCloud’s founders have only recently gotten used to their prominence. “I think it’s because there is a microcosm in SoundCloud,” said Mr. Wahlforss, who is lanky and was dressed in a hipsterish, bright blue sweater evocative of Charlie Brown. “We embody the contemporary spirit of Berlin. It’s a city of great music, great creativity. It’s a little bit punk.”

“In the beginning, it felt a bit weird,” Mr. Ljung said of SoundCloud’s relatively new status as Berlin startup role model. “Like, who are we to give advice about stuff?” But the cofounders now reserve Sundays for meetings with the myriad Berlin entrepreneurs who seek their guidance, and they find they’re able to help new entrepreneurs at least avoid a few of SoundCloud’s early mistakes.

The startup scene is still very new, the cofounders said, with many cells and pockets that are just recently starting to meet up with one another (through, of course, as well as Gidsy and coworking spaces like Betahaus and coffee shops like St. Oberlholz, one of SoundCloud’s early headquarters). Mr. Wahlforss subscribes to both the NYC Startup Digest and the Berlin Startup Digest, he said, and recently he’s noticed the number of events in the Berlin version is reach parity with New York. “It’s more like a tabula rasa, clean canvas situation,” Mr. Wahlforss said, more like Silicon Valley in the 60s. “It’s punk, it’s art, it’s tech,” Mr. Ljung agreed.

Berlin’s scene still lacks venture capital infrastructure, according to most people in the startup scene. There is one VC firm, Early Bird, which moved from Hamburg to Berlin because there was “no point in being anywhere else,” the cofounders said.

Mr. Ljung gave us a quick office tour on the way out, and we glimpsed orange cloud-shaped lamps, Marilyn Monroe and Elvis on the bathroom doors, and the Johnny Cash conference room (the “finest,” according to Mr. Ljung).

“We don’t really live in a country. We live on the Internet,” Mr. Ljung said. “The idea of countries is secondary.”

SoundCloud Is Now the Poster Child for Berlin’s Startup Scene