The Pandora Challenge at Stanford University
DH: Why are college students helpful to a company with Pandora’s resources?
MH: When I started my career in the early 90’s, I was 22 or 23 and the web was getting commercialized and broadly available, and we knew as much about the web as people who were thirty years into their careers. This allowed us to create new types of businesses that others couldn’t even imagine.
“College students just see things differently and it is incredibly valuable to learn from them.”
I didn’t realize it at the time, but the opportunity to see around the corner was only available to people who weren't looking at things through a cloud of experience and who were more naturally early adopters of technology. Today, within the walls of most companies, we have our own biases, and there is an additional set of biases in the tech world. But college students haven't been introduced to those biases yet; they see things differently and ask super-interesting questions, and the ideas and feedback we get from them are amazing. They give us new perspectives that we wouldn’t necessarily come across otherwise.
DH: Great to hear, do you have an example? What can you share?
MH: I taught a class at Columbia several summers ago with a hedge fund expert. We hosted an interesting talk, with a Q&A session, about the economics of licensing within the music industry. Because of the students' fresh perspective, they didn’t see streaming as replacing one service with another, but rather as a way of layering a new business model on top of an existing model, which was shrinking anyway. This conversation helped clarify and reinforce my thinking that by transitioning to a economic model that addresses shifts in consumer demand proactively you retain customers and also expand your market. While this is obvious to me now, and something I talk about constantly, I hadn’t appreciated the magnitude and opportunities of how current media consumption is being done until my talk with those 40 Columbia MBA students. At the time, I was negotiating with the publishing industry, so this talk gave me ideas for conversations with the publishing industry that I otherwise would not have thought about.
A History of College Visits
When I was at Omniture (Chief Financial Officer, 2004-2009), we did similar things to Real Industry’s Pandora Challenge. We started with Northwestern University and by the time we sold Omniture to Adobe, we were working with 14 different universities. We would provide real client data to marketing students to come up with marketing optimization ideas. Not only did we hire the winners of the challenges every year, we also offered internships to the best participants. Some of the optimizations and recommendations would make it into our best practices consulting group. We also got ideas for product development. Adobe continued these university programs post the acquisition of Omniture.
For the Pandora and Real Industry partnership, the goals are to see similar fresh perspectives and ideas about how to work with the music industry, how to work with artists, and how to promote. Pandora has multiple constituents - advertisers, ad-supported listeners, artists, and subscribers. And so you have to look at everything from how people use the product, to how artists can promote their careers, to how to market live events through digital technology. The way to do that is to understand how these audiences are consuming media in those environments and how to reach them most effectively. There is no better way to do that than to talk to customers themselves: Students at the cutting edge who are smart, engaged and passionate about music and business.
DH: What do Real Industry and their founder Jay LeBoeuf do that works for you and for Pandora?
MH: Jay comes with a trademark that we can work with right off the bat. He understands the university systems and he’s got connections in entrepreneur programs, engineering programs, and audio/music programs, in all the target schools. He speaks their language and helps to frame the programs that work both for us and for the schools, which is really important. And, I like Jay as a person, he’s great to work with and you know that matters. His experience working in both industry and within universities gives him the perfect Venn diagram overlap that makes it successful.
“Within the walls of Pandora, we have our own biases, and an additional set of biases in the tech world. Students haven’t been introduced to those biases yet and the ideas and feedback we get are amazing.”
DH: I know Real Industry strives for a win, win, win. Events and initiatives have to be right for the company, the university, and the students. Do you see it this way?
MH: Yes, Real Industry understands a sponsor’s objectives and spends time with them to learn what we are trying to achieve and provide a framework. They provide that bridge of aligning the objectives for students as well as the sponsoring brand. Sounds easy as a sound bite, but that’s a very hard thing to do. In working with schools, you can’t just walk in and show up with the Pandora program for the Michigan entrepreneurs program or you won’t be invited back. Jay teaches a well organized and popular entrepreneurship program at Michigan and has the connections to make it happen.