10 October 2017

Kollekt FM: changing tracks can lead to a more fruitful venture

Dutch music discovery startup Kollekt FM switched to a more lucrative model targeting businesses instead of everyday listeners.

For two years, Kollekt FM was a platform that helped people discover music through personalised feeds and a list of curators users could follow.

‘But it was hard to find the right business model,’ says founder Rolf Dröge. The startup tried selling gig tickets and even trialled a Tumblr-like website maker for musicians. Neither really worked. ‘It wasn’t clear still how we could earn money,’ adds Dröge, citing a space crowded by giants like Apple Music and Spotify.

Seminal moment

And then something changed. Observing how one of its 30,000 members used Kollekt transpired to be a seminal moment for the company. It was the spark which inspired the founders to try an entirely new model.

‘We found one of our curators using the platform was also using it for a coffee venue in Amsterdam. We discovered the coffee shop owner paid him a monthly fee, so he would have fresh music for the venue every month,’ says Dröge.

Year of research

‘That was one of the first moments when we thought [working with businesses] might be interesting. We didn’t know anything about the business-to-business space, so we took a year off to discover this market.’

Dröge and his team spoke to people in this group who would go on to be Kollekt customers: retailers and restaurant owners. ‘We wanted to know specific things about their business, and what services they were using.’

Small companies

Businesses generally wanted a playlist tailored to their brand that could be managed through whatever devices they had on-site. Small companies became a rich client source for the new venture, which Dröge christened Atmosphere. They included glasses maker Ace and Tate and co-working firm Spaces.

Dröge says the switch has been transformational. ‘We’re more focused now, and that’s helped us running the company.’

Insight: Sometimes a complete reappraisal of the assumptions the business is built on can open up a new, more effective (and lucrative) path.

Why Unmade ditched regular consumers for businesses

Unmade was set up in 2013 with the idea that anyone could design their own jumper by customising styles, colours and patterns.

Perhaps it was ahead of its time, or perhaps it was an early indicator that the trend of personalisation wasn’t going to live up to the hype. The company switched strategy to focus on businesses, giving small companies access to the machinery and software it had created. It collaborates with brands, enabling small companies to use its production equipment and the complex e-commerce platform suited to personalised sales.

First appeared in issue 19 Oct/Nov