Joey Flores On Earbits' Life, Death, and Resurrection

Story by Benjamin F. Kuo


What is it like to start up a company, and run it to the brink of shutdown—only to have it acquired and restarted immediately? That's the fascinating story behind Los Angeles-based Earbits (, which offers up a mobile music streaming service focused on discovering both new and talent. We caught up with co-founder Joey Flores on the story behind the company's brush with death, and its recent acquisition by You42, which was announced last week.

Joey, thanks for the time today. understand you actually had shutdown the service, and that the company was essentially at the brink of death?

Joey Flores: Yeah, we spend the earlier part of 2014 exploring acquisition options, because we had a pretty hard time raising money. I know I must have pitched over 200 people trying to raise funding for the company, and although we had raised $1.7M in funding, we ultimately knew last year that the things we needed to prove investors was not going to happen in the time we had left. We made a last minute effort to sell the company, but ultimately, we couldn't get it across the finish line. So, we decided to shut down the company.

In fact, my cofounder had already put in notice to move out of his place, he had bough tickets to Columbia, where he had decided to spend the next six months to work on coding. The day after we shut down the site, we got an email from this company, saying they had a big opportunity they'd like to talk to us about. I had already been hit up by other people saying similar things, but most of them were about just redirecting our traffic to them, and were terrible proposals for our users. I was just going to brush them off, but I got on the phone, and they told me—we're going to come in tomorrow. We ended up shutting off the service, the website went dark, but they called us, and we started talking, and they clearly were serious. They told us about their vision for their company, which was incredibly aligned with us, and I actually went over to my co-founder's apartment as he was literally packing his suitcase and getting ready to go to Columbia. Within 24 hours, they had a Letter of Intent to us, and wired us money to pay our hosting bill and turn the lights back on, and pretty much took care of everything while we worked through the details, and we went from there.

How did you know they were serious?

Joey Flores: For starters, we're smart enough not to believe anything until it is in writing. They told us they'd have a Letter of Intent to us tomorrow, and in 24 hours, there was that LOI, and they told us they'd pay our hosting bills while we explored due diligence. They immediately wired us money, and even paid myself and my cofounder a stipend while we were in due diligence. At that point, our choice was pretty much to find another job to pay the rent. They were incredibly fast in making sure we could turn everything back on and be able to have enough to live on.

That's a fascinating story. What was your biggest lesson from that overall experience of building the company and going all the way to the end and back again?

Joey Flores: I think the biggest lesson we learned in building the company, and getting to the point where we almost shut down—or actually, did—was the importance of staying focused. We had a lot of reasons we had to do a lot of things. We had some investors very interested but wanted us to validate some metrics, so we spent time building things to prove those metrics. In reality, those efforts probably weren't right for the business, and really were more to answer questions about fundraising. So it was a combination of spreading ourselves too thin, spending too much time proving assumptions to investors, and even spending too much time trying to turn on revenues when our audience wasn't big enough yet. Those were all things we had to do to prove our business model, but ended up not being smart things to do with our resources. We were always kind of underfunded, and never had enough money to do all of those things.

So now that the company is back, what's next for you now?

Joey Flores: We are going to focus exclusively on our mobile app, and we are overhauling our UI for listeners. We're basically getting a facelift and improving our user experienec. It's not just the design, but making it easier to use, making it more stable, and adding tons of improvements around the listening experience. We're very focused on just on iOS and Android, and not on the web side or administration. The number one thing we are doing is making a competitive listening experience for our users. We're also looking to add a lot more functionality to our app, to help it stand out from the mainstream music services. That's because we never had the resources to do this before, and we're going to bring our product up to par with other apps in the space. We'll also be working on partnerships at the back end of our service, in the content area. So, our priorities are to improve the product and catalog for listeners. Our platform already works really well for the bands, and because of that, we're going to spend a lot more time on the listeners and building the audience.

Any shift in the types of music you have on your service?

Joey Flores: Not really. We're still focused on the same music we've always been focused on. We've always been willing and ready to work with any content which is radio ready. Our requirement for our music, simply, is high quality. We're not trying to dictate taste or style, and we're also not opposed to very popular music. We welcome people who do not have a single fan, but have incredible recordings. But, we will work with anybody. We've had a number of midsized bands and midsized, independent labels we've been working with on content acquisition, We have a lot to offer them, even at the scale they are add, because we can add value to them now. We'll be adding more, bigger artists as they become available to us, although we aren't moving necessarily in that direction, but as our audience gets larger, it gets even more valuable. Your music does not need to be played a million times to be interesting.