Five years ago, in her home country of Belarus, Alena Golden had the idea of creating an app based on hip-hop – her favourite type of music.
The first version of the app the co-founder and CEO of Rap Tech Studios came up with allowed people to record the lyrics they had written and hold “rap battles”‘, with other users voting to decide the winners.
“I have always loved rap music,” says Ms Golden, “and my co-founders and I were inspired by the 8 Mile movie, where Eminem tells the story of his life and how he became rap star.
“We created ‘Rap Battle Arena’ for people who dream of becoming the next Eminem.”
Relocating to London, she managed to raise £255,000 to develop her app further. However, she swiftly met with scepticism from prospective investors when she tried to raise another tranche of money. They doubted whether her app could ever attract a significant number of users.
“We spoke with many different investors,” she says, “both angels and institutional investors. From all of them, we kept receiving pretty similar feedback. They were all questioning how big it can get. How big is the market?
“They pointed out that we were only targeting a sub-category of hip-hop enthusiasts – people who want to compete with each other.”
After two years of trying, unsuccessfully, to raise more money for the app’s development and marketing, Ms Golden decided to rethink her business model based on the feedback she had already received from prospective investors.
“At first, of course, we were a bit annoyed,” she says. “We thought that investors just don’t get it. They don’t understand it.
“But I think it’s important to stay humble, and to look at your business not only as founders but also from the commercial perspective. Obviously, investors have a lot of commercial expertise in that!”
She re-launched the app as “Rap Fame”. It now caters not only to competitive rappers but also provides a platform for newcomers. They can record their lyrics onto backing beats, which the app provide,s and then post them for feedback from other users.
“People can not only battle on this site,” she says, “but they can collaborate, and find new friends on the platform. That’s why the most important thing about the app is the community element.”
Rap Fame has now gained a large following: 800,000 people worldwide use it every month. It employs 20 people at its headquarters in central London.
Recently, the site celebrated its first “Rap Fame baby”. Two users who collaborating on a rap project struck up a relationship and now have a child.
Ms Golden says the main lesson she has learnt from her time starting up Rap Fame was to listen carefully to the feedback of investors to whom she was pitching and act on their advice.
“I’m so thankful to our investors,” she says. “Both to those who invested in us, of course, as well as to those who didn’t invest in us.
“The feedback we were receiving helped us be more critical about our business idea and as a result, we see now amazing growth.”
And her advice to young entrepreneurs is to regard the investors to whom they are pitching as allies – as opposed to adversaries.
“My attitude to investors changed over time,” she says. “Stage One: I was a bit afraid of them. I was trying to tell them things that they might want to hear. Stage Two: we became confident in our product, and we probably became a little bit overconfident. We didn’t really take on board the advice from the investors.
“But Stage Three, where I’m currently at,” she adds, “is where I consider investors as really interesting people who’ve seen lots of businesses in their lives, and who look at the products from a commercial perspective. I consider them as advisers.”