A few years into Steve Jobs’s second stint as Apple’s CEO, the company hadn’t yet reinvented itself as one of the world’s most-important technology companies, but it was a big-enough distribution channel for the two-year-old Gracenote. At that point, Gracenote had built a respectable business collecting and providing metadata for the compact discs that people were ripping onto their computers, and it relied on software partners to get in front of the music consumers doing the uploading. One of those partners was a popular Mac jukebox application called SoundJam MP.

Ty Roberts Source: Gracenote

So, Gracenote Co-founder and CTO Ty Roberts told me during a recent interview, his company heeded Apple’s warning and bought more servers. At some point around that time (details on the date of the acquisition are sketchy), Apple bought SoundJam MP. Then, at MacWorld in January 2001, Apple released the first version of iTunes (based on the SoundJam technology) and grew Gracenote’s footprint by putting it on more machines. In October 2001, Apple released the iPod and changed Gracenote’s life forever.

The holiday season — particularly Christmas morning — provides a clear example of how stark the change was. “We used to call it iPod day,” Roberts explained, because the company’s servers would go crazy as people opened up their new iPods and immediately began ripping CDs onto their computers. The company’s chief scientist would stay up 20 hours a day for 5 days straight to make sure the database didn’t crash under the load.

From that point on, Roberts explained, a graph showing the rate at which people were uploading music to Gracenote would go from a steady incline into a vertical line. At one point the company was getting metadata from — by Roberts’s estimate — literally every CD being ripped onto personal computers. There was so much database traffic — both writing and reading — because Apple didn’t release the first version of the iTunes Store until April 2003; if users wanted to use their iPods, they had to upload music first.

Scaling like the big boys

Today, of course, Gracenote (which Sony acquired for $260 million in 2008) is pretty much ubiquitous, at least when it comes to metadata. It has metadata for about 130 million songs — and growing — from all over the world and provides metadata to everything from iTunes to Path to your car’s entertainment console. Even if they’re not available for sale as MP3, if someone somewhere at some point ripped a CD and entered its information, Gracenote has data on those artists and songs.

Its database now gets 15 billion queries a month, or 500 million a day (“We’re probably bigger than Bing,” Roberts joked), and the company’s infrastructure has scaled a few times to meet this demand. What began as a small web database running on a few servers grew into an Oracle environment that provided better performance. And when Oracle became cost-prohibitive because of Gracenote’s expanding scale, it shifted again into a highly optimized system that spans thousands of cores in four global data centers.

Now, GM and VP of Automatic Content Recognition Michael Jeffrey noted, almost everything from the chip level up is optimized specifically for Gracenote.

There’s no “world music” when you’re in the “world”

And this setup lets Gracenote do a lot more than just recognize music listeners’ files and give them the album art. For one, Roberts explained, it lets Gracenote be a global company. “We want to have all the music in the world,” Roberts said, “… because our customers ship their products globally.” In fact, part of the reason it’s now part of Sony is that Sony was distributing Gracenote so widely as part of the music player in its Vaio line of laptops.

In order to ensure that everyone has a natural experience wherever they’re accessing Gracenote, part of the job of the company’s 100-person editorial team is to categorize music hierarchically by locality. So, when a user in Japan uploads a CD and Gracenote returns the metadata, it’s categorized as “rock and roll,” for example, rather than a catch-all category like “world music” that a U.S. user might see.

“We want music to feel like a person in your country actually organized it,” Roberts said, “not some dude from California.”

Better music and television through data science

All that data also makes Gracenote a natural fit for recommending new music, although right now the company prefers to let partners handle the algorithms because recommendations tend to be highly product-specific. For example, the iTunes Genius feature is a pretty run-of-the-mill recommendation engine, but, Roberts explained, Apple places a premium on accuracy because its recommendations cost users 99 cents (or more) a shot. With a subscription service like Spotify, though, trying new music is risk-free, so it can play a little faster and looser with its algorithms.

Because Gracenote is present in so many cars — about 35 million — the company has put a lot thought into how to optimally deliver services there, too. Until drivers can bring their interest graphs and music libraries with them to their cars, he explained, any sort of in-car recommendation engine has to be pretty simple and non-distracting — perhaps like thumbs-up or thumbs-down button on the display that will eventually be able to recognize someone’s tastes.

The company has even developed what Roberts calls “machine listening,” which is the ability of an algorithm to recognize the mood, tempo and other audio attributes of music. This is comparable to what Pandora offers, but Gracenote has data on pretty much any song someone could possibly have, which means it can make even your personal music library that much smarter. One idea the company is tinkering is something Roberts describes as “audio coffee.” Depending on any variety of factors — time of day, location, driving conditions or behavior — the stereo system could pick music that either picks up a driver’s pulse or maybe relaxes him.

For Gracenote’s next chapter, the company is banking tablets to deliver a kick like the iPod did last decade. Gracenote is already working with television partners on real-time ad-swapping and intelligent content recommendations, and now it wants to dive deep into the second-screen world. Its new product called Entourage uses a tablet’s internal sensors to hear the television show or music playing in a room and then surface related content, perhaps from the web — like what Entourage user Zeebox provides — or perhaps produced, interactive material like the SyFy channel delivers via its Sync app.

Two ads for two different viewers.

Later this year, GM and VP Jeffrey said, Gracenote will be doing pilots with some large sports broadcasters around a “cheer and jeer” feature that measures how hard people in a room are cheering for or booing their favorite sports teams. If you’re elated, you might see an ad for season tickets. If you’re sad, maybe it’s an an for beer.

Even Roberts is impressed, especially considering that the company’s first use of audio recognition was to make sure users got the right data for their exact version of a song: “I never thought the recognition would break open these kind of new fields.”

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Not the same opportunity as the creators of Angry Birds, or any number of design shops that popped up to help stores, online publications and everyone else build apps. No, these five founders — who met in a an aviation club at the University of Texas at Austin — saw in mobile the chance to make substantive changes in how enterprises do business. So they founded a company — Mutual Mobile — to do it.

The bootstrapped startup has built a successful business developing mobile apps for companies as varied as Google and Adidas. Companies such as this one, a quiet success that has gone relatively unheralded in the press, are defining our shift to mobile, as much as the obvious hits are. Here’s how it did it.

Lesson 1: Find your passion, then follow it

Mutual Mobile made its debut in April 2009 in Austin and two months later signed PeopleFinders.com as its first client. It wasn’t an enterprise company, but it was money in the bank, and the resulting app (Are They Really Single?) was more than just porting that company’s website to a mobile platform. Instead it took the premise behind the site — doing background checks and lookups on people — and packaged that expertise into a single purpose mobile app for checking out if that person you just met at the bar was really single.

It took one month for PeopleFinders.com to recoup the cost of developing the app. “That’s how powerful a mobile experience done right can be for a business,” says John Arrow, the CEO of Mutual Mobile.

Several other clients soon followed until the firm was doing well, with about 75 employees by the end of 2010 and 100 revenue-generating clients. But with the launch of the iPad that year, and some self reflection from Arrow, the team realized that the consumer business might be big, but it wasn’t what they cared about. So Mutual Mobile started firing its clients.

The result was those two dips in revenue as it ditched lucrative consumer-facing customers, including its last holdout Adidas, so it could focus on the enterprise and what they needed. “It was a tough decision to make, but it was the right one for us,” Arrow said. “And while it was hard to see those dips in revenue, we knew where we wanted to go.”

Today the firm only has 48 clients and $26 million in revenue — all from enterprise companies — at the end of 2012. Plus, it has 375 people who are thinking about mobile computing as more than just apps, but as an overall trend toward computing everywhere.

Identify the real trend

What does Arrow find so compelling about developing mobile products for enterprise customers? It’s not the devices.

“Apple isn’t going to make an iPhone 15,” Arrow says. “If you think that, you’re not thinking about mobile in the right way.” For him mobile is shorthand for adapting the computing to our daily lives and habits as opposed to expecting us to adapt to them. Sure, we may still need desktop computers, but Arrow is confident that computing will be everywhere.

The Briggo coffee-making robot lives inside that cube.

For example, his firm last year built an application for a robotic coffee kiosk on the University of Texas campus for a company called Briggo. Students and professors can order their coffee through their phones or at the kiosk and pick up a made-to-order beverage on the way to their class. The app tracks their location and gives the wait time for their coffees based on where they are as well as how busy the machine making the coffee is.

Other examples are further out there, such as the research Mutual Mobile is doing on haptics — the vibrations your phone makes are an example of haptics — as a source of ambient information. Arrow wonders if it might become a type of code for conveying information, akin to Braille. He sees it having potential in places like airplane cockpits or other information-dense environments, but stresses that its use in an actual product is at least six months out.

No VC means no one to break your fall

In the meantime, Arrow’s staying focused on the business, which he said he wants to grow to $100 million in revenue by 2015. This is a big number for a company that is entirely bootstrapped and has no venture capital investment. Arrow says he’s well on his way to achieving that goal. But to get to this point he’s had to do some detective work in the early days trying to find enterprise customers — or partners with enterprise customers — that were ready to change the way they did business with regard to mobile computing.

His first enterprise client came really early on, and is still with Mutual Mobile. The customer, Greenway Medical wants to help doctors use mobile devices when completing rounds and to access patient records. But getting Greenway as a client was more about Greenway seeing the iPod touch as a potential solution and seeking someone — anyone — who might be able to help, and stumbling on the young Mutual Mobile.

The Greenway Medical iPad app.

It was also important that they would trust an unnamed startup headed by a 20-something CEO. When Arrow co-founded Mutual Mobile he was 21. This week he had his 26th birthday. That was one reason that Mutual Mobile veered into serving consumer clients such as PeopleFinder.com or Gowalla. Those clients were eager for mobile apps and trusted startups.

“Back in 2009 there weren’t enterprises betting on mobility and we had to figure out how to bootstrap this company when there wasn’t even an addressable market yet,” Arrow said. “We knew consumer was our only option … and when Philips and Google and Verizon came around later we were able to apply all that we had learned. If we had started this company in the early part of 2011 or late 2010 we would have lacked credibility and had no infrastructure and no skillset to help, and clients would have been right to avoid this immature company.”

Arrow also thinks that if he had VC backing he wouldn’t have been able to pass up the lure of easy dollars from more consumer-facing clients. Those dips in revenue may never have happened. He probably would have also been asked to move his company from Austin to the Bay Area. So far he’s content to stay VC free, but given the appetite VCs have for putting dollars into older companies with big sales in hot markets, someone may convince him.

In the meantime, Arrow and Mutual Mobile are content to ride a massive wave of interest in enterprise mobile. One of the strongest signals for Mutual Mobile may have come last month when IBM announced its mobile first initiative, validating the type of experience and work that Mutual Mobile has been pushing on its clients since 2009.

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It’s easy to forget that it wasn’t always this way. Remember when you had to delete emails before receiving new ones? Back in the late ’90s, providers like Hotmail and Yahoo allowed users on a couple of megabytes—essentially, the size of a single song.

From Hotmail to Gmail to Dropbox, here’s a look back at some of the key moments in the evolution of free online storage.

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• A New York Times article examining the mobile world’s current patent landscape includes some vital history on how Apple’s founder suddenly became obsessed with filing patents, and what’s happened at Apple since.
• We’ve already heard that Apple has begun production for a smaller iPad. Now comes a report of just how many it’s ordering: 10 million units right off the bat, according to the Wall Street Journal. That’s a pretty good indication Apple’s planning on selling a bunch of these.
• In order to price an iPad mini competitively, it’s been reported the device won’t have a Retina display like the larger iPad. But All Things D quotes an analyst today who’s been poking around Apple’s factories in China and says the smaller device does not “skimp on the aesthetics” and could even “outshine” the larger iPad’s design.
• Fortune argues for why the iPod — whose sales are shrinking every quarter — still matters.
• Good news for iPhone 5 owners: Apple is reportedly beginning to clear a backlog of Lightning adapter orders. MacRumors says shipments of the backordered items have begun.

Image courtesy of Flickr user opensourceway

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Apple is forcing a migration to a new, smaller dock connector called Lightning with the latest model iPhone and iPods introduced this week. Besides standard Lightning-to-USB and Lightning-to-wall-plugs, Apple is also planning to sell other Lightning cables. However, not all of these were ready at launch.

Apple plans to sell Lightning-to-HDMI and Lightning-to-VGA cables for those who want to display video to another source with a wired solution. But when will these video-related cables be available? The company didn’t mention it at the launch this week, but Apple told The Verge on Thursday night rather vaguely that these will be available in “the coming months.”

Apple’s also selling converters for $30 or $40 that will keep a new iPhone or iPod compatible with older 30-pin cables and docks. However, the first round of inventory is already sold out. According to Apple’s website, just about 7 hours after it went on sale, three models of 30-pin adapters are backordered until sometime in October. Even the basic Lightning cable now won’t ship for two to three more weeks.

Luckily, if you’ve already bought an iPhone 5 or new iPod, one of the basic cables is included in the box.

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• Apple’s September event used to be about iTunes and new iPods. The iPhone, however, has usurped the attention (and profits) from Apple’s iconic music player, but iPods still account for three-quarters of all MP3 players sold. So let’s not forget: before Apple executives get around to announcing the new iPhone tomorrow, they’ll probably show us new iPods. (via MacRumors)
• CNN walks us through Apple’s careful event choreography. For those planning to follow along the iPhone event tomorrow (we’ll be live blogging!), check this out first and see for yourself how closely Apple sticks to the same basic script.
• David Schuetz, the mobile security expert that tracked those Apple device IDs leaked by Anonymous, tells us how he figured out the true source of the UDIDs — an appmaker in Florida, not the FBI.
• American Airlines is the first major airline approved for iPad use in “all phases of flight.” And it won’t just be the pilots who’ll use the tablets to replace flight manuals, charts and maps. Soon AA flight attendants will use the devices to keep track of passenger details and in-flight service, says Smart Planet.
• Thompson Reuters analysts attempt to divine the future of the iPhone by combing through Apple’s mobile patent portfolio. (via 9to5 Mac)

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Glassy Media says its SuperPACApp, coming to the iTunes store in time for the Republican Convention — will provide commercial “objective, third-party information” about the campaign ad’s message. Users hold their iPhone or iPod Touch up to “audio footprint” or identify the ad and SuperPACApp provides information on who is funding the ad and by how much. Oh, and it also includes whether the claims are factual or not so much. The free app requires iOS 5.0 or later.

The company, which grew out of MIT’s Media Lab, says more than $240 million has already flowed into more than 650 Super PACs. And guess where most of that money goes?

As Dan Siegel, co-creator of the SuperPACApp told The Boston Globe:

“Your TV is going to be screaming political ads at you, especially if you live in a swing state … To help users or voters to learn a little bit more about the information that is being thrown at them: We think that’s incredibly important.”

Some say that there may not be enough broadcast air time to soak up all this ad money — and that even web ad inventory is getting stretched to the max. And now the ad spending is spilling over into mobile devices, as well, as GigaOM’s  Jeff Roberts reports here.

Nimblebot.com, another Cambridge, startup, launched Reactvid a fact-checking web application that seeks to crowd-source the fact checking process of these ads. Volunteers watch the video on the Reactvid site and vote up or down as to whether each claim is true. The responses are then shared and moderated.

Applications like these reflect the growing trend of TV watchers using other devices to enhance or, in this case, check up on what they’re seeing on the big screen.

Feature photo courtesy of Flickr user Elvert Barnes

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