In Tune With Innovation
Max Fergus disrupts the mainstream music industry with a new streaming app
Max Fergus (BBA ’18) still has the screenshot of the text conversation in which he pitched the idea of a startup to his friends. He didn’t know at the time that that text conversation marked the beginning of a journey—and a year consumed by the launch and success of his own company. He did know, however, that he didn’t want to spend his senior year of college leisurely sliding to the end; he wanted to sprint to the finish line.
A finance and investment banking major, Fergus had a job lined up at a major New York bank that he was excited to start after graduation. That job didn’t quite satisfy Fergus’ long-held passion for entrepreneurship, however. Seeing his final semester as the last chance to do something with that passion, he mobilized his friends and fellow students—many of whom he grew up with in Stoughton, Wisconsin—and LÜM was born.
LÜM (pronounced “loom”) is a music streaming app that aims to do what mainstream services do not: give lesser-known artists a voice and a platform in the age of social media consumed by millennials. Users can listen to and download music while connecting with local artists in real time, allowing the process of music discovery to bridge digital and physical spaces.
The app is free to both consumers and creators—anyone can share, interact, or upload music. Fans can be directly involved in the lives of the musicians they follow, and the musicians in turn can use the buzz generated to expand their networks and reach bigger labels.
— Max Fergus (BBA ’18),
The idea for LÜM stems from a desire to harness the potential of updating an antiquated business model.
“The financial problems in the mainstream music industry are directly tied to the disappointments of the majority of its users,” says Fergus. “Spotify, Apple Music, Pandora, SoundCloud—they are all doing terribly financially because they highlight the top one percent of music that requires them to pay the most expensive royalty in licensing payments.
“After four months of research, we came to realize just how corrupt and problematic the music industry is for all the really talented emerging artists out there,” Fergus says. “We saw a legitimate financial opportunity in a disruptive market.”
After spending an entire winter break crafting a 42-page business plan, the LÜM team entered and won the Greater Madison Chamber of Commerce’s pitch contest, Pressure Chamber. LÜM was the youngest team—in both age and tenure of company—to ever make it to the final round.
The win, which gave the team an all-expenses paid trip to San Francisco to meet with Silicon Valley investment firms, catapulted LÜM into the music scene.
LÜM acquired more than 1,000 users on its launch day in August 2018, and in May 2019 officially closed its seed round of funding at a total of $1.25 million. With a goal of reaching 200,000 users by the end of 2019, the company intends to generate revenue through ticket sales, advertising, and selling its data insights.
Fergus, who turned down his job offer in New York after graduating, is now LÜM’s CEO. He credits the Wisconsin School of Business—specifically the Bolz Center for Arts Administration and the Weinert Center for Entrepreneurship—with helping him learn the skills necessary to build a successful company. The company, which was admitted into prominent accelerator program gBeta, also landed a spot in Madison’s new entrepreneurship center, StartingBlock. The space, a home for early-stage startups, provides companies with access to educational opportunities, mentors, financing, and venture capitalists.
“In the end, we knew that there was no better place to start this company than in Madison,” says Fergus, “and that really comes down to the people and the resources available to us here.
“Madison is growing rapidly, but is still small enough that you can reach out to anybody you need to. It’s a special place.”
LÜM’s success speaks to Fergus’ greater goal of helping others form connections that further innovation.
“Everyone’s always looking for a purpose, right?” he asks. “I want to help further innovation, and I want to help put the next generation in the best possible position to succeed so that they can do that, too.”
Fergus has always been motivated by leaving his mark on the world, and taking his chance on LÜM during that last semester of college points toward a successful career in entrepreneurship ahead.
“You’ve got to be willing to dive in and just do it,” says Fergus. “If you really believe in the law of attraction—if you really believe in anything—then you’ve got to believe in yourself.”