Six years ago, three Northwestern students quit their jobs after graduation to pursue a startup in the music industry.

Last week, Pandora Media, Inc. agreed to acquire their company, Next Big Sound, this summer.

Next Big Sound is a data analysis company that focuses on the music industry. The company, launched in 2009, collects data and uses it to gain insights on a band’s popularity to help bands make smarter marketing and sales decisions, said co-founder Alex White (SESP ’08).

White, Samir Rayani (McCormick ’09) and David Hoffman (Weinberg ’09) created the tool as part of their Entrepreneurship and New Venture Formation class, taught by Kellogg Prof. Troy Henikoff, in 2008. Their assignment was to write a business plan, but they took the idea a step beyond.

“It was one of those classes where we would spend all of our time on it,” Rayani said. “It was one of those things where it became more than just a class for us.”

Their original idea was to create something that would allow anyone to create their own record label and allow people to sign their own bands, similar to a fantasy sports platform for music, White said. However, they weren’t making money and weren’t satisfied with the product.

After attending Techstars, an international program that provides funding and mentoring to entrepreneurs, in 2009, their focus changed from the discovery of music to a more analytics-based platform.

“We were still pretty obsessed with figuring out how bands become famous,” Rayani said. “How do you go from playing in your garage to being famous?”

They started by working with Sony Music Entertainment, and looked at coordinating their sales activity with their social activity. They were interested in seeing how tweeting more and going on tours affects a band’s sales, Rayani said.

Now, Next Big Sound gathers information from online and social media platforms such as Twitter and YouTube and sells the findings to artists.

Working with Pandora will allow Next Big Sound to operate on a larger scale because it will give them access to data from Pandora, such as the number of stations created with a certain artist’s songs, Rayani said.

“It’s a great outcome for them,” Henikoff said. “Their people worked really hard, they made something valuable. It’s a win-win-win. Everybody wins.”

The Pandora deal will not significantly change how Next Big Sound operates or interacts with customers but will increase the amount of data available to it. He hopes working with such a large music company will allow the startup to make a bigger impact on the music industry.

“It’s always been our No. 1 most requested data source and a huge data spot for us,” he said. “It’s just the start of another chapter in Next Big Sound … I’m excited to get to work.”

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