This is the first interview in the CEO & Founders Series blogged exclusively here at DarrenHerman.com. Over the past two weeks, I have reached out to a handful of my friends who are Founders/CEOs of their respective startup or established digital media company and conducted a simple email interview for all to see. I hope you enjoy as I’ll be posting a new one each morning (EST).

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Please welcome, Haystack Media, a silicon alley based media company and current nextNY participants.

1. Your name and title:
Jordan Garbis - Founder, Chief Strategy Officer
Abby Schneiderman - Co-Founder, Chief Creative Officer

2. What are you currently up to? If entrepreunering (my word), tell me about your startup.

Well, where Haystack is now and where we started are two different animals. 2 years ago we launched a music social networking site all about connecting passionate music fans to new music, through trusted sources. We called them Tastemakers. We wanted to bring the John Cusack character from High Fidelity, the guy behind the record store counter, to the web. The idea was that if people thought that a guy like Darren Herman (yikes!) had great taste in music, they could go to your profile on Haystack, see what you had in your playlist, and listen to it right there.

As we continued to grow Haystack, we realized that no one destination was going to be able to able to reach the dominance of sites like Myspace. We asked ourselves how we could future proof destination-based music marketing and still allow an artist to reach the targeted masses that so desperately were seeking their music. In our view, the ad supported music model of the future was one that would an enable an artist, brand or label to float with the user. In mid 2007, we created The Haystack Network, which is now our primary product to address that need. To date, we’ve aggregated publishers representing over 42MM monthly unique visitors that provide ad space on their website to serve viral widgets containing music sponsored by advertising. The widgets themselves can be spread to individual users’ Myspace, Facebook and social networking pages and we can centrally control the release of both music and ad campaigns on an asset ID level.

Advertisers love it, because they can reach users in a real way, paired with the music they’re already looking for. Artists are happy because those advertisers sponsor the distribution of their music to sites they would never be found on otherwise. And, the publishers love it because they’re getting paid premium CPMs for the placements.

3. Why are you doing this? You could be doing so many other things in the world, what about this particular idea strikes you?
We’re doing this first and foremost because we love music, love helping others find music, and love the excitement of being young entrepreneurs growing a business. Every single person on the Haystack team has some background in music (both on the business and performance side). Whether or not it’s through the destination or through Haystack’s distributed widget platform, ultimately what we’re doing is helping to bridge the gap between artist and fan, and enabling advertisers to reach users in a targeted way. We believe that distributed models are the future of the web and we’re excited about advances that will bring further portability to the content we’re distributing in the future. That just means we’ll have even more ways of helping people find music in the places that they already exist, on and offline.

4. All startups should be addressing a problem in the market. What is that exact problem and how are you solving it?

Artists spend a lot of time building destinations. Whether thats on Myspace, iMeem, iLike, Last.fm, or even Haystack, they make a very large investment on building out a central home for their fans to find their music and listen to it. But the fans themselves are fickle. Recent news suggests traffic on sites like Myspace and Facebook are declining as users shift from new hot website to new hot website. We want to enable an artist with the means to future proof against that and build portable applications that can live anywhere. That way, when their fans move off of a destination they can take that music and promote it wherever or however they please. And ditto for the advertiser that’s getting the benefit of riding along with an artist.

5. Have you thought about your business model yet? I’m assuming so, so tell us a bit about it.

Of course we have. We’re ad supported and always have been. We believe that we’re producing a premium CPM product and we’ve proved that with our early clients.

6a. If you’re looking at an ad-supported model, how are you going about it? Do you have in-house ad sales? Using a rep firm? What are the challenges that you’re facing with getting ad dollars?

We have both in-house and sales and ad sales partnerships across the industry. We publicly announced a partnership with Clearspring in September, and that has been going great. Haystack encourages the publishers that are working with us to throw resources at it as well, and we give them financial incentive to do so.

6b. If you’re selling a product/service/subscription, how is that coming along? What are the challenges? Are you using the freemium model?

It’s all free and all ad supported. Guess you can call it freemium if you consider that music has an inherent value and we’re monetizing that and delivering it free to the consumer.

7. As an entrepreneur, what are your thoughts on competition? How do you view competition?

We love competition; it drives us to create better products, and keeps us on our game. Some of our competitors are brilliant and offer unique approaches that we would never have thought of. We use their products every day and are always thinking of ways we might be able to work together rather than independently.

8. If your competitor called you up to have coffee and discuss shop, what would you do? Would you go? What would you divulge?

It happens all the time. In fact, on Monday, we’re having lunch with a company some might definitely call one of our competitors. We’re totally excited to meet with them and we will most likely tell them everything we’re up to. The way we view it, the minute one of our ideas launches, anyone on the web with any know-how will be able to copy us. It’s a matter of finding the right partners and seeing how we might be able to leverage each others’ strengths to be able to build the best product possible.

9. Is the current state of the economic market playing to your favor? If so, why? If not, why? What is your forecast of the market throughout 2008 and do you see affects? Macro and Micro economic theory would be interesting to hear about.

The economic market affects everything. When there is less money flowing through the economy it has a trickle down affect to the advertising market whether the big guys like Google publicly acknowledge that or not. The market is in a downturn right now and historically those cycles suggest that we should be able to pull out of it. What it means for us now is that the discretionary budgets at many agencies and major brands are being cut, so we’re having to make pricing concessions in order to entice those buyers to buy. But with anything, if the value is there, and we can create valuable and limited supply, we eventually should be able to stabilize price competition and have a healthy flow of ad dollars coming in.

10. How much of your time is spent working? How much is spent with family? Have you found the entrepreneurial quality of life yet?

Let’s just put it this way: over the course of the last few years a LOT of time has been spent on Haystack and we’re lucky to have such supportive friends and family who have been here cheering us along the whole way. There have been many sleepless nights but it’s all been fun and worth it. We’re both always thinking of new ideas and bouncing new concepts off each other. You have to be in it for the love of it, because at a startup you certainly won’t get rich unless you’ve built a product that users or businesses are dying for. We know this is a long road and we’re fully prepared to stay on this amazing rollercoaster ride that is the life being an entrepreneur.

DH: Jordan & Abby, thank you for your time… I’m sure there will be a few comments on this blog and we look forward to you participating in answering the readers questions.

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This entry was posted on Monday, March 3rd, 2008 at 8:50 am and is filed under Advertising & Marketing, Internet & Web X.0, Media & Entertainment, Music. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.