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Last Updated: Thursday, 6 September 2007, 11:57 GMT 12:57 UK
How to be a hi-tech start-up success
Screengrab of Last FM website, Last FM

Music website Last FM may have only been founded in 2002 but it has grown up fast.

For those that do not know, Last FM taps people's tastes in music to all kinds of ends.

At the heart of what the company does is the downloadable audioscrobbler software that keeps an eye on the music you listen to on your portable player, home computer or via the net.

It takes all the data about what people listen to and what they like to help members search out music similar to the sounds they already enjoy.

"We are solving an old problem," said Martin Stiksel, one of the founders of the site. "How do you find something that you don't know anything about?"

The success of Last FM has shown that a lot of people have that problem - the site now has more than 17 million active members.

The site can also be used to find other people who like the music you like or gigs of bands you like when they are playing nearby.

Last FM logo, Last FM
Founded in 2002, Last FM now has 17 million active members

Said Mr Stiksel: "We are learning from people's listening behaviour, we are looking at what people are listening to together musically and can use this data to find new recommendations for you."

"You have one page where you can send your friends and show them what you like instead of rattling along a long list of names out of the top of your head."

Tough times

Last FM's status as a start-up officially ended in May 2007 when it was bought for 140m by CBS Interactive - the net arm of the music giant.

But, said Mr Stiksel, this success followed years of hardship.

Back in 2002, he said, no-one was interested in investing in online music sites. The echoes from the dotcom crash were still being felt and money was hard to come by.

"There were many bleak moments in the history of Last FM," he said. "We were cooking our programmers lunch and letting them camp on our roof terrace. It's all we could do because we could not pay them."

What got the company through those hard times, said Mr Stiksel, was its belief in what it was doing and its refusal to be sidetracked.

"We've got a good team, a very diverse team that just never lost the faith in the product," he said.

And, he added, if he had any advice for companies starting up it was that dedication made all the difference.

People at rock concert, BBC
Last FM helps members find local gigs of bands they like
"It is very confusing the different things you can do," he said. "So it's important that you stay focussed on your core products and core strengths and you know your core strengths and you stick with them and never really veer from that path."

"A lot of people have good ideas at the right time but they don't continue, they don't pull it all the way through," said Mr Stiksel. "That was the recipe for success with Last FM, we just never gave up."

The other key ingredient, he said, was cash. "Try to raise some finance, don't spend your own money, spend someone else's and just continue, never give up.

"Money was one of the biggest problems going through this whole process for sure. The patience of family and friends runs out. It's very difficult to still carry on."

Now that Last FM has got a hefty chunk of cash to invest in its business, life is not all plain sailing.

"The cash means you can concentrate on building the community and the product," said Mr Stiksel. "There are still a lot of challenges."

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