Meet the Entrepreneur Ushering Vinyl Into the 21st Century

Caroline Goldstein

Staff Writer at Fundera
Caroline is a small business and finance writer at Fundera. Before coming to Fundera, she received an MFA in Fiction from New York University. She loves finding creative ways to help entrepreneurs grow.

As a teenager, VNYL founder and CEO Nick Alt worked at a record store in his Ohio hometown. It would be a dream job for any music lover, but for Alt, that gig was formative: Not only did it serve his passion for interacting with people, but it also helped him develop a skill for understanding their musical tastes and introducing them to the artists they may not have otherwise discovered. Years later, Alt would funnel his passion for music and record curation into VNYL, a monthly record subscription service that launched in 2015.

The concept of a monthly subscription service may not be new—everything from your smoothies to your skincare products to your dog toys can be delivered straight to your door—but VNYL’s relentlessly personalized experience certainly is. Every month, VNYL members receive one or more records chosen by an in-house expert, based on their tastes, preferences, and current record collection; and that information is based on information they’ve provided themselves, as well as data culled across several of their social platforms. (As a bonus, they’ll get a handwritten note from the curator explaining their picks and why they’ll love them.)  

For Alt, nailing down this unusual combination of software and retail took time, experimentation, and lots of love-driven labor. Here’s how he did it.  

Entrepreneurial Beginnings

Professionally, Alt came up in the age of early web development and video. In 2006 he founded Clear-Media, a video production agency that happened to work with several hospitality-focused clients. That service-based work resonated with Alt; it harkened back to his clerking days of putting the customer at the center of his efforts. On a practical level, it taught him the importance of developing a product with the goal of solving the customer’s pain point—not solely from the desire to strike gold.

Soon Alt ventured into software, eventually developing award-winning apps, like Appetites, an instructional cooking app that was the first to feature video from a point-of-view perspective. Alt then parlayed those skills into creating an iPad/iPhone tool for video creators. That, too, proved successful; in 2013, his company Echograph® was bought by Vimeo.   

While his extensive experience in the digital space was rewarding, Alt still found himself itching to get back into the music world. Then he came up with an idea that would seamlessly blend his software experience with his passion for music, as well as his deep understanding of customer-based products. That idea became VNYL, a bespoke subscription service that delivers its 10,000+ customers with new records every month.  

Founding VNYL

Like most businesses, VNYL started with the desire to address a couple of problems that, Alt decided, didn’t need to be problems at all—they just needed to be inventively solved.

As a music lover, Alt recognized that there were a ton of talented musicians out there. But if they were unsigned or on very small indie labels, these artists didn’t have the ability to reach their target audiences as widely and effectively as, say, a Top 40 artist would. How could other music lovers discover these bands, Alt thought—and ensure that these bands are aligned exactly with their tastes—on a regular basis?

“I saw that there was a problem inherently with music discovery. Unless you’re someone like Ed Sheeran, it becomes very hard to reach fans and find your intended audience. The old business of music was a firehose approach: We used to discover music by way of radio and radio promotion, and that would lead us to a single point of purchase, which was the record store. And that would allow people to experience the music for free, and then go and buy that artist. When that all imploded with the age of the internet, I’m not sure that anyone re-thought or reinvented that model.”

The solution, Alt found, was in part to leverage valuable customer data that was already available. “In the age of streaming, a lot of that data is available to third parties, but most people don’t really know what to do with it,” Alt says. “I translated that into a music subscription box.”

How Does VNYL Work?

How exactly does VNYL retrieve all the necessary data to create a box tailored exactly for you? It’s a combination of that readily available streaming data, information you provide yourself, and the work of a VNYL curator.

Here’s how it works: When you sign up for VNYL, you’ll choose a plan—the Solo, which sends you one record per month; the Trio (three per month); the Triple Triple (nine records over three months); or the BFF (36 over the course of a year). Then, you can hook up your Spotify, Discogs, SoundCloud, Last.fm, and Rdio accounts so your curator can take a peek into what you’re regularly listening to. You also have the option of linking your Instagram and Twitter accounts so the VNYL staff can get a holistic understanding of your tastes and lifestyle.

In addition to that digital data, you’ll also answer questions about your current record collection, the type of record player you have, which genres you’re into, which artists you like and dislike, and any other information you’d like the curators to know about your musical tastes that would better inform their decisions.

Every month, you’ll also choose a marquee record or mood that becomes that month’s #vibe, which sets the tone for the rest of your month’s records. But if that month’s vibes don’t resonate with you, you can simply choose the #curated option, in which case VNYL’s team will choose a record based on the information you provide in your profile.

So what makes VNYL special—and effective—is that this service isn’t powered solely by predictive metadata. In addition to that data, VNYL’s curators, whom Alt calls “modern record store clerks,” pore over these customer profiles to match them up with the artists in VNYL’s record catalogue that they think they’ll love. “At any given time we have a few hundred titles in our inventory that refreshes monthly, so that gives us plenty of variety to match up the right music to the right customers,” Alt says.

“The VNYL staff is about six curators at any given time, and historically that’s the magic number for us to service upwards of 10,000 customers at a time. Sometimes we’ll need to scale up or down. But every piece of that information is not being driven by metadata or BPM—it’s all being driven by real humans who take the time to review a customers profile from day one.”

As Alt mentions, VNYL maintains their own, physical vinyl inventory, which they purchase “from anyone who’s manufacturing them. That could be a major label like Sony, or it can be from a large assortment of independent labels.”

In keeping with VNYL’s mission to deliver artists’ music right into their target customers hands, occasionally VNYL buys their inventory right from the artists themselves—if, that is, the artist is “scrappy enough to produce their own records.

“We love to find new content that way,” Alt says of these artists. “Often, we’ll even assist artists in producing their own vinyl. In the age of digital, there’s no shortage of amazing music out there, but I would imagine that less than 10% of the music has been made available on vinyl or a physical disc. Again, the goal here is to service our customers, as well as the artists who are like, ‘I’m killing myself making all this music, but where am I supposed to put it? I’m not really differentiated in the age of Spotify and Apple Music.’”

What’s So Special About V(i)nyl?

When Alt first created VNYL, he didn’t necessarily set out to create a subscription service centered around vinyl. Rather, he started with the problem that needed solving, and worked up from there.

That said, vinyl has been undergoing a resurgence in recent years. Leveraging its revitalization perfectly aligned with Alt’s idea for a consumer-focused subscription service, as well as his desire to return to the music world for his next venture.

The physical product wasn’t the inspiration behind the company’s name, either. Instead, it was what that tangible object represents: a human-to-human interaction. On a personal level, Alt found that a connection with the customer was what was missing from his years of building apps from behind a screen.

“When I named the company VNYL, it wasn’t because we were shipping vinyl records; it was the sentiment that vinyl represents. There was an age when you went to the record store and had an interaction with the clerk. We want to re-create that sentiment. We can kind of act as your friend in town. We can say, ‘Hey, we know what she likes, and here are some things that are definitely not going to pop up on the front page of Apple Music or in your Discover Weekly on Spotify.’ That’s huge and unique and awesome, and it’s very tangible, too.”

Incidentally, that sentiment echoes Alt’s beliefs about entrepreneurship. “That’s fundamental to building businesses: It’s about knowing your customer and trying to solve a problem for you them. As shockingly simple as that sounds, there’s no shortage of businesses that exist that don’t really line up with that, so it’s hard for them to grow and scale unless they look at themselves from that perspective.”

That said, Alt is a true believer in the pleasure of experiencing music on vinyl—which, as you’ll know if you own a record player (or did years ago), is a superior listening experience to piping a song through your phone or laptop’s tiny speakers.   

“I’ve collected vinyl for decades, and this format makes a lot of sense to me. It makes so much sense to us as humans, for some reason. It sounds different, it feels different, and it has this romance and charm to it. It’s literally the first format in which music became commercially available, and I don’t think people understand how special it is from that regard. ”

Part of Alt’s goal, then, became not only to contribute to vinyl’s renewed popularity, but to remove the elitism that’s grown up around that resurgence and make vinyl accessible to all music lovers.

“There’s this whole cohort of music buyers who consider themselves the ‘musical elite,’” Alt says. “Their tastes are precise, they focus on technicalities like fidelity and sound quality, and they’ve established what they do and don’t consider ‘good’ music. But the music business was never built on the people who are often attached to this so-called vinyl resurgence; the music, artists, were built off of fans who were impassioned and felt the emotional effects of the music, who could get into the deeper meaning of the songs. It’s a very special experience for people, and that’s what we’re going for as a business. Our overall pursuit is simply trying to expose everyone to awesome music.”

Finding New Solutions

In VNYL, Alt hit upon a model that achieved his goal of building a customer-centric business that delivered music directly into the right customers’ hands, and which made vinyl accessible to all.

Or, almost all. To experience vinyl (or VNYL), of course, you need a record player.

So, a couple of years after VNYL launched, Alt developed TRNTBL, which bills itself as “the first wireless record player.” Its setup is super-simple—it just requires plugging in a cable—and then it integrates with your home’s Sonos or Bluetooth speakers, as well as your Spotify account. Based on the music you’re playing on your TRNTBL, Spotify can then automatically create playlists for you.

“TRNTBL started from that sentiment of, if you can detach yourself from the notion that vinyl is catered to particular, audiophile segments, then playing the music is inherently part of the experience,” Alt says. “So it felt wrong for me to be sending out new music every month, but not really putting a stake in the ground and saying, ‘Hey, this is how you could experience this.’ It provides a more cohesive solution to the overall problem VNYL is solving.”  

Retailing at $499, TRNTBL is also more financially accessible than many record players on the market, which can require hundreds of dollars worth of accessories to set up.

“I thought, why are we making people buy all these records, then you still need to buy over $1,000 in [turntable] equipment? It’s ludicrous. But I would imagine that that same customer probably has a Bluetooth or Sonos speaker. So, let’s just make it work with all that existing equipment.”

TRNTBL’s wireless integration actually serves a dual purpose. It’s a unique feature for customers, but the link to their Spotify accounts also gives VNYL’s curators more insight about their listening habits. That’s valuable, precise information they can then use to put together that customer’s subscription boxes.   

“It’s the first record player of its kind that can identify what songs are being played when the listener has the device on. So, if they’re a subscription customer to the record club, it allows us to have a completely different level of insight into the records that the customer actually spends time listening to. Because streaming data is great, but it’s so ephemeral that it’s hard to create a value system around. With streaming data you think, well, maybe they just listened to that, or their kid just listened to that, or maybe they share the account—there’s all types of weird things that you can’t solve for in digital. But when it’s on the record player itself, you know what the household is spending their time playing. That makes for a better experience for us to help them find the music that they would really be excited about.”

Financing for Growth

Like most small business owners, Alt bootstrapped his venture at the beginning. As a supplement, VNYL also launched a lucrative Kickstarter campaign, which was crucial in helping them vet the market and hone their product. VNYL then grew steadily, and layering in the record player a couple of years after the launch increased their earnings. They were finding new ways not just to grow, but to optimize what was already profitable.

Once the company had proven its ability to grow with its own funds, Alt understood that they could explore outside financing. With those additional funds in hand, VNYL could do what it was already doing—growing and evolving—but exponentially so. But Alt also understood that there were plenty of venues through which to source that outside funding, some more legitimate than others.

But when he discovered Fundera, Alt immediately recognized similarities with VNYL’s technology and customer-focused service. When he signed up, Alt worked with senior loan advisors Michael Yang and Nate Causey to navigate the loans process. And while working with Yang and Causey, Alt was drawn to the human interaction inherent to the Fundera experience—another aspect that was reminiscent of his own company.  

“As a small business owner, what Fundera presented to me was quite compelling. It aggregates the more trusted names in financing, but it’s not just a dashboard of all these different products and offers. With a loan advisor, you really have an advocate—which I think of as my version of the record store clerk—to help steer you in the right direction,” Alt says.     

“I already thought the brand was really interesting and cool, and I also saw that the founding team were respected folks in the tech industry. But the minute I had a call from Yang and Nate, saying, ‘Hey, tell me a little about your business, what are you trying to accomplish’—when there was that personalized touch—I felt like that was the equivalent of VNYL sending three records a month to a customer, including a handwritten note in the box explaining why these are the best options for you.”

Like those handwritten notes his curators provide VNYL customers, Alt appreciated that Causey took the time to explain each of Alt’s loan options. With Causey’s guidance, Alt secured the funding that worked with his business’s current financials and, importantly, can facilitate Alt’s determined pursuit of building a better product.  

 

Moving Forward, Branching Out

With a business loan, Alt has more freedom for experimentation. Next up, he wants to branch out beyond the product itself and find ways to implement VNYL’s unique concept into other industries.

“The way I see it, we’re sitting on a significant amount of technology that best powers a user experience. And unlike a lot of subscription retail, we’re completely vertically integrated. Other than owning a record pressing plant, we do everything: shipping, curation, design, tech— it’s all in-house. So any one of those concepts makes for an interesting business as it relates to the age of subscription businesses. Even the concept of real-time supply and demand, and making better use of your capital so it’s not just sitting in unfilled inventory, is a whole white paper in and of itself. That’s a potential product that we could spin out and create more opportunity for ourselves around.”

As VNYL’s “exceptionally ambitious” foray into the consumer electronics space with TRNTBL proves, Alt is constantly seeking new ways to “grow, scale, and optimize” what’s already working about a proven model. That way, he and his company can best serve his customers (and fellow music lovers), who are at the heart of all of his ventures.  

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Caroline Goldstein

Staff Writer at Fundera
Caroline is a small business and finance writer at Fundera. Before coming to Fundera, she received an MFA in Fiction from New York University. She loves finding creative ways to help entrepreneurs grow.

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