Rexly's Social Music Discovery App Is What Ping Should Have Been

So, it's time to move on to our second exciting start up. I think are you guys ready?

Yeah Please welcome to the stage Joe Restnikoff. Welcome to Josh. Welcome back from Rexley.

Hello world. My name is Joel Reznickall. I am the CEO of Rexly. My co-founder is Brad Lodenback and Kyle Flemming are here with me today. At Rexley, we are building a service that delivers superior quality recommendations and true social discovery for media content. We started this company because discovery is still a big unsolved problem.

Think about it. There's millions of pieces of premium content that are delivered through a multitude of devices . Finding what you want, where you want, is an enormous headache. In fact, it's more than that. It's a pharmaceutical grade pain.inpoint . When you go to the front page of Itunes, you see a tiny, miniscule sliver of their catalog, and some people love Beiber; some don't.

Brad does? But we think there's a better way to find what you want in iTunes and in other premium content channels as well. So, like any good entrepreneurs who went out and studied the problem, we talked to the top hundred in the Netflix prize, we read every paper on recommender systems and the answer is pretty clear to us, it said the discovery is fundamentally a data problem and not an algorithm problem.

In other words, getting good data is far more important than tuning models, and don't take my word for it. Those words come from the best algorithm tweaker in the world. So, what kind of data are we talking about, there's 2 kinds. The first is behavioral. It's when you actually spend your time and money on, on the services you actually use, which is measurable by us on the account level.

it's social data. We all know that social is important, but the really critical thing is getting the signal from the noise. So, for any product category, there are four to six people that I truly trust and that list is steroids for collaborative filtering. And all this fuels what we believe to be the ultimate recommendation.

Let's take a look at that. The social actionism, implicit recommendation, instant gratification, it's object level similarity based on what you actually listen to. It's social consensus from a wider circle, and the opinion for critics you explicitly trust. We give you the most important dimensions and then you can decide where you wanna buy it based on pricing and accessibility.

So on that note, let's check out the demo. What you're seeing right now is a streamlined feed follow system for iTunes. Our goal is to show you the most important items from the most important people. Any action you take in iTunes creates a story item that your followers see. Every story item has a play button, which streams samples directly from the iTunes store And also one click to buy directly from the store.

You can socialize around any item and send comments out to Facebook and Twitter for your non-Rexly user friends to enjoy. So, we weave actions in our algorithms, so think about a single song listen versus a repeat album listen. We also rate friends by their importance. Not all friends are created equal.

So we allow users to create a short VIP list that we call "Super-trust." It's limited to 6 people, it's completely secret, so it's not biased by friendship, and you can promote friends in and out of this list, and those people eventually dominate the user experience. You try to add a seventh person, sorry, denied, it's limited to six people.

So we did a lot of need finding in our product development. We talked to more users than you can possibly imagine. What we found is different people want different privacy settings which is crucial to sharing data with us. On one hand, there are people who want to share everything with everyone and we love Love those influencers, they are great on our site right now.

There are certain people who only want to share certain things with certain people, and that's okay, we tailor a setting to their needs. But for the most part, we're in the age of sharing, and people are okay with sharing most of what they do with all of their Facebook friends, and this setting is really popular and reduces a lot of friction for social discovery.

Another thing we heard from users is that they wanted to be able to curate their feed. This is the Britney Spears effect. Everyone listens to her, but no one admits to it. Who here listens to Britney Spears? 98% of you do. So there's a hide button, so you can hide any item on the song, artist, or album level and it won't appear on the site or in social media until you un-hide it.

On the other end of the spectrum, users told us they want to scream discoveries from the mountaintops. Oh my god, I just found this great- Hi mom. That's not what I was gonna write in that comment. But you can scream from the mountain tops, it's published out to social media, and what's really important to know is that when an affiliate link and we are effectively monetizing product that users are going gaga over.

And it's just the beginning, though. We're gonna expand to more mediums, more channels, so we're gonna blow out music through the next most ubiquitous channels,we're gonna add But not for long. We want to be wherever you consume and purchase content - whether it's on a tablet, a mobile device, or a living room device.

And we've seen Don Cauldwell's speech about why not to do a music so affiliate sales is our core revenue stream with modest conversions across all the product categories we can cover. We can get a $1.75 monthly ARPU, that's monthly, and we're already surpassing our ARPU contribution from music alone.

Advertising is another important revenue stream. We're already talking to advertisers, our data is solid gold for them, but, for us, the holy grail is licensing. Thinking about bringing your recommendations with you wherever you go We're creating a deep personalized taste graph which will be extremely valuable to media and brand marketers.

Once again, we are Rexly, this is just the beginning. Thank you very much.

That's Rexly, every one. Nice high five there at the end.

He did a good job.

Anyone want to jump in? Straight away Michael.

I think in the same way that the judges are expected to be more like the judges on American Idol and have those same comments. When I see this I'm reminded of Susan Boyle of Britain's Got Talent, which is I dreamed the dream. And I am wondering...

Are you saying our site's ugly?

Well, no.

But it can sing, that's the main thing.

And it does.

I think that the question is, if you really can solve this in a way that iTune's genius and Ping hasn't, I mean Ping, not Bing, then you've done something extraordinary, so but, how are you going to get past, is this an experience that users are really going to have to decide, how does it compare to what they're getting somewhere else?

Not necessarily. We don't want you to start using new media platforms. You don't have to stop using Netflix or stop paying attention to the recommendations. It's very easy to set up our site and we're going to engage deeply with you through email and social media, and eventually, we want to help out Netflix.

We want to make you a better Netflix customer. We want to be the best iTunes affiliate, so in a sense we can do something as a third party that no other party can do themselves which is cross platform data and we want to serve users just as much as we serve the industry because we come from the industry and we care deeply about content.

Bradley? Or Hillary? Either way.

I actually have two questions; one is technical and one is frivolous. So, I'll start with the technical question.

We take frivolous questions, too.

So, I've spent a fair amount of time thinking about recommendation systems, and you have what I would call classic 'cold start problem', and that it's very hard to give quality tune recommendations when you don't have a lot of data, so how are you addressing that? My second question is, where does your name come from and what does it mean?

Okay, so we have thought long and hard about 'cold start' problems, which is why our first feature is a feed-follow system. You don't need ten thousand users on the site to get utility, you can get utility from day one with 3 friends on the site; to us it's a Trojan horse to get at data and from there that's when we start layering in the true algorithmic horse power.

And you know what, recommendations in themselves are not a value proposition to most people. It's a see it to believe it. Maximum value with minimal effort and then wow them even more once we layer in those features to get the data. And the name is, it 's another way of saying recommendations without saying it and it's a five dollar domain that was available for ten dollars.

Bradley.

In the event that Apple launched a music oriented social network that was deeply integrated with iTunes itself, do you think this idea would stand up?

I think they already did.

Oh yeah I forgot.

So let me tell you a quick story, 2 weeks into our development, iTunes launched Ping and we thought, shit, we're dead. But, we took a close look at the product. We realized we were fundamentally different. We're web based and we're also cross-platform and also we learned a lot from their launch.

We went on to Core and every other forum on the internet and we actually tabulated what people wanted and those are the features you're seeing today, that was a big part of our need finding. It was all or nothing publishing the social media. We think it should be on a case by case basis. it's not all or nothing with who you can share, it's the Facebook friends.

Quite honestly we don't think there's gonna be a joint venture between Apple and Facebook. We love both companies. You throw Amazon and Hulu, and other folks into the mix - this is something we know can't be done, and we've talked to a lot of those companies already. Like I said we're from media, and we care about media.

Bonnie.

Yeah, so I agree with Michael's comment about the level of vision here. So I think, that's great, you're really dreaming big. Ah, I'm stuck by 2 questions. One is still trying to figure out: When would I, as a user, use Rexly instead of using Netflix of iTunes, sort of is there really a cross media value proposition here of using TV and the rest.

And then, related to that, is to look one of your key innovations is that there is like 6 sort of super trust people, and you can't have any more. So I have trouble believing that you know even if I wanted these recommendations, I would actually want just 6 people. Much less 6 people across music and TV and video and everything else like that.

So we ask for 6 but we also pay attention Everyone else you interact with on the site in they are weighted in our algorithms as well, and if you super trusting someone, you actually never try their stuff e're probably gonna ignore that. Remind me of your first question.

When would I use this, you know, when would I decide to use Rexly as opposed to going to Netflix or iTunes and relate to that is, do I really value sort of TV friends recommedation combined with music ?. Is it really an all media proposition here.

Got it. So, you're right. We have a very big vision, we dream very big. That doesn't mean we know exactly how we're gonna get there, so there's kinda 2 use cases or 2 paths we can go down. Rexley could either be the place you go to when you say "Hey, I got an hour to kill, what will, what in the world will make me the most happy?" or it can be a lean forward shopping experience, you can think of it as Netflix, Walmart for Digital media that's highly personalized, that helps and doesn't hurt the value chain.

And on your point about having multiple media, the people that dead media, we can say, you know, a lot of super trust list for music, another one for books and another one for movies. We don't believe you're gonna trust the same six for all those categories.

Mike you had another question?

For all of us in the entertainment business the challenge isn't finding the Rhiannas or the Justin Biebers and let's hope my six don't really like Justin Bieber. It's really finding, it really is that word discovery, which is so overused. It's about, in the entertainment business, it's about how do you get these new artists to break and also, I as a user, I can go to AOL music, I can go to Yahoo and I get the same.

I get Rhianna, Rhianna, Rhianna. So, am I gonna be able to find something like Odd Future or some other band that nobody else knows about or am I just gonna rely on my 6 friends?

It depends on what you want to get, our view is that your reasons for liking what you like are no better than mine and you can follow whomever you want that's gonna help you out. We're not seeing a self fulfilling prophecy on our site, we envisioned as ideal long tail for everyone is perfectly matched to what they want.

And the way that differs from the real world right now is the head's a little smaller but the tails are a lot higher and the area underneath is actually growing. So, we...

Brad.

That's about it.

Well we're out of time anyway. A round of applause for Rexley.

Thank you very much.

Thank you guys. Alright. We 're seeing some good t-shirts this year. I'm really excited by the quality of t-shirts. So it's kind of a Rexly one, maybe a Do@ one. All right let's move on to the next, let 's move onto the next startup. You guys? Are we ready? Or we're popping out laptops?

So, yeah, judges, if you want to just interrupt