The little engine succeeded. It made it over the hill.
This week’s Slacker announcement that it was once again retooling brought to mind the story of the little engine that could. Not because we think it will succeed. We don’t think it will.
No, the story came to mind because we suspect that the venture capitalists who bankroll Slacker must read the story every night to keep their hopes up.
How else can they explain pouring over $65 million into keeping Slacker afloat, with the service no closer to breaking through than when it was just a concept on a beer-stained napkin in 2004.
First it was an Apple wannabe. It invested millions into creating its own player. With a price tag of $200 for a 2GB player, it was over-priced, under-featured, and hopeless.
Needless to say, up against the iPod the player never caught on. You can still buy one at Amazon for $17.
Slacker blew-out its CEO, and refocused its energy into becoming a Yahoo Launchcast/AOL Radio wannabe. It offered 150 curated “radio stations” on a desktop player and mobile app.
There is no more crowded segment of mobile audio entertainment than the generic radio station segment, so you can imagine how that worked out.
Seeing how well Pandora was doing, Slacker again refocused, this time to become a Pandora wannabe, adding music discovery tools to its player.
How’s that doing? Pandora is approaching 90 million registered users, Slacker 26 million.
According to Triton Digital ratings, Pandora has over 230 million session starts a week to Slacker’s 16 million. On average, over half a million people are listening to Pandora compared to Slacker’s 40,000.
You can guess Slacker’s response. Yes, time to retool. Slacker just announced that it will become a Spotify wannabe.
Now for a monthly fee you have access to 8 million songs that you can play on your mobile device. Of course we already have Rdio, Rhapsody, Grooveshark, and MOG, just for starters, and maybe soon the European superstar, Spotify.
There have been more rumors about Spotify coming to the US than Elvis sightings, but if it ever really happens (Spotify, not Elvis returning), then Americans will have another option, all around 10 bucks a month, all with larger libraries than Slacker.
We can guess how that will work out for Slacker.
Slacker is what we call a dabbler. Rather than choose a strategy and focus all its energies in one area-–like Pandora had done until recently, Slacker lives up to its name by dabbling in hardware, curated radio, music discovery, and now unlimited play.
This fuzzy thinking was recently on display in an interview with the Los Angeles Times.
Declaring that Slacker isn't just going after Pandora, that it is also aiming at traditional radio stations, Jonathan Sasse, senior vice president of marketing at Slacker declared:
If you look at where broadcast radio is going, it looks like they're trying to become what online radio used to be. What we're trying to become is what broadcast radio used to be, which is radio that's expertly programmed and tailored to you.
It used to be that when I came to a new town, I'd find an awesome station with a local DJ that talks about the music in my city, the concerts in my city and play some new music.
Radio done right can be really good. And broadcast radio is really missing out, because they've just turned into generic hit machines.
We suggest you reread Sasse’s comments just in case they made sense to you the first time you read them.
This is the Senior VP of Marketing talking to the Los Angeles Times. If this befuddled gibberish represents the level of strategic thinking within Slacker, the service is hopeless doomed no matter how much money is sunk into it.
First, to belittle a successful industry of over 10,000 radio stations and suggest dismissively that it is vulnerable to a heretofore pathetic me-too service displays a breathtaking level of over-confidence and egotism.
If this is the best the marketing VP can come up with, what’s the chance Slacker can develop a coherent strategy for becoming something other than an also-ran? Nil.
To win, one has to first identify the competition, learn everything about their strengths and weaknesses, then find means to exploit their weaknesses while leveraging your own strengths in an original and creative way.
Slacker seems to just not get any of this. How else can a company burn through $65 million and still be so hopeless?