Pivot to K-Pop leads to possible US$400,000 seed funding
By A. Asohan December 4, 2012
- Team started with a generic music video site, but decided to pivot with a sharper focus on K-Pop
- Pivot has paid off, with Eumakh close to securing US$400,000 in seed funding
THEY started with an online music video platform, but a pivot into a more focused site – Korean pop music – has led Eumakh close to sealing US$400,000 in seed funding.
The team behind Eumakh, Korean for “music,” first worked together on AtticTV, a ‘music discovery’ site which allowed users to view music clips and personalize their own library of ‘mixtapes’ to share with friends.
According to a report in e27, AtticTV grew at a steady rate in the first three months of its live beta, hitting 15,000 monthly unique visits. However, those halcyon days did not last – people just weren’t sticking to the site, said founder and chief executive officer Johnson Goh.
“Because of the lack of focus, the cost of customer acquisition was pretty high. When we ‘niched down,’ we found acquiring customers to be a much smoother and cheaper process,” he told Digital News Asia (DNA) via email. “Thus the pivot.”
AtticTV has been put on hiatus for the time being. “We feel that we should serve fans of particular genres of videos really well, and then expand from there into different niches, rather than creat a generic music service and compete with the likes of Spotify and Rdio right off the bat,” he added.
That pivot has paid off. According to TechCrunch, Eumakh is currently closing a US$400,000 seed-funding round, with investors including Taipei-based venture capital firm TMI, information which was confirmed by Goh. TechCrunch also reported that the start-up “plans to make money through selling intermission video ads and merchandise using music videos as a sale mechanism.”
Goh is working with the same team he had at AtticTV, including his partner and co-founder Grey Ang.
Goh, who has a degree in mechanical engineering, has worked in sales for a direct-selling company and an insurance firm previously. “Plus, start a plethora of ventures that failed,” he added.
Ang, with a degree in graphic design, had previously worked at a tech outsourcing company called Motionworks.
“I hired Grey (Ang) on an outsource project for a gaming site. And I found him to be an awesome developer, so the relationship hit it off,” Goh said.
His partner develops the applications as “he is an excellent self-taught programmer,” he added. “I, on the other hand, handle marketing, design and business relationships -- also self-taught.”
The idea for a music delivery service came from Goh’s frustration. “I got the idea because I hate searching for music on YouTube. The discovery mechanism is not geared towards music in that it doesn't help me find songs to listen to.”
“Additionally, it's time-consuming and I need to click and search for new songs after every song played. So, we thought that there should be a better way,” he added.
When asked what Eumakh’s differentiator was, beyond its choice of Korean pop or K-Pop, Goh said, “We are creating a website/ application that aims to become the easiest way for people to consume the videos they care about. Each niche has very different needs for video.”
“For example, people who are passionate about sports highlights may only want to watch videos that are related to the sports teams that they follow, and not highlights of all matches as currently provided by highlight shows on TV.
“And they might only watch it within a 72-hour window from the time the match is played,” he added. “Similarly, K-Pop fans have a particular set of videos that they care about, and our job is to bring those videos to them in the fastest way possible, and provide continuity to the videos.”
K-Pop is not just about Psy of Gangnam fame or Rain. Eumakh estimates the total market size to be about 100 million fans worldwide, with about 30%-40% being English-speaking or those who consume English content, which is the start-up’s initial target audience.
“In terms of geographic strategy, we are targeting South-East Asia and also South American countries to start off with, because of the large fan-base and low penetration of K-Pop content there,” said Goh.
Eumakh is also working on Chinese and Spanish versions. “We don't have an exact estimate (of the market size), but we found via our analytics that a lot of our users use these languages,” he added.
As for the US$400,000 seed fund, Goh said it would be used to set up a development team of three to four programmers, and to also give Eumakh an 18-month runway “to find a sustainable way to acquire and retain users by providing them with value that is important to them.”
This lead time would also be important for Eumakh to figure out the lifetime value of a customer and work towards hitting a break-even point.
DNA also quizzed Goh on life as an entrepreneur.
DNA: What has been the toughest hurdle so far?
Goh: I personally think that prioritizing time is always the hardest. There are a million things to do, and yet we only have probably eight hours of really productive time.
DNA: How do you keep yourself motivated?
Goh: I’m not sure. Being an entrepreneur is something that I always wanted to do. And I tend to make public declarations to ensure that I won't have a choice but to push myself to do it.
Plus, the hot Korean girls do help. :)
DNA: What have you learned about being an entrepreneur so far?
Goh: I’ve learnt to look at entrepreneurship as a 10-year career, rather than looking to be a quick overnight success story. You try something, you fail, you learn. And it's a rinse-and-repeat process of finding that formula that works.