Picking the right startup in the digital media world to back can be a challenge even for an investor with Chris Fralic’s experience in the technology arena. Fralic, a partner at the New York office of First Round Capital, spoke on Tuesday at the New Music Seminar’s tech summit held near Union Square. While he has backed companies in digital media that had lucrative exits, such as display ad tech company Invite Media which was acquired by Google, he also talked about startups that ran out of gas. Putting his experiences in the context of new ideas in digital music, Fralic gave a cautiously optimistic outlook on the future of the space.
“There’s a graveyard of companies that have failed in the music industry,” he said. However, he said demand for music keeps the market alive. “It feels like, after 10 years, the industry has kind of bottomed out and is now coming back up.”
New York is a huge hub for the music industry, given the presence of major record labels, studios, and performance venues in the city. Combined with the growth of local tech startups, it seems natural to see entrepreneurs trying to leverage their platforms and technology to serve the music industry. For example, Fralic said Turntable.fm in New York emerged from the ashes of a stalled startup that First Round had backed called Stickybits.
Stickybits was an app that let users scan the barcodes on products to discover related deals and other digital content, but it didn’t catch on, Fralic said. So its co-founders shut it down last year then pivoted to develop Turntable.fm, a social platform which lets users discover new music and chat with fans who share their taste.
Some of First Round’s other music-related investments are also showing promise, Fralic said. FanBridge in New York developed software for using e-mail to market to
