08/03/2011 02:28 pm ET Updated Oct 01, 2011

Kloudco's Hank Williams: A Bubble Survivor Returns to the Valley

Despite the fact that he has no relation to the country legend, Hank Williams was on some level destined for the music industry. Williams, an engineer-turned-entrepreneur, has no honky-tonk bona fides to speak of, but in the late 1990s, he created an online music service called ClickRadio.

He described ClickRadio as a "little DJ inside your computer -- it would grab content and load it onto your machine. The music was played locally off the hard disk." Williams explained proprietary technology enabled encryption of the songs to prevent piracy -- no small feat in the days of Napster.

Most notably, ClickRadio was one of the first online music providers to sign contracts with major labels including Universal, BMG, Sony and Warner Music.

These days, in the pantheon of online music services, streaming is king, but back in the heady days of the Internet 1.0, "it was more about storage than bandwidth," said Williams' business partner, David Benjamin -- now the senior vice president for anti-piracy at Universal Music. "So ClickRadio leveraged that, storing content locally rather than streaming for every listen."

While streaming music has since become ubiquitous, ClickRadio showed potential to be a major player in the online space: with $40 million in investment capital, and legal access to major label catalogues, the company could have been a competitor to industry heavyweights iTunes and Pandora. But when the dot com bubble burst, ClickRadio fell victim and ended up one of its numerous casualties -- its potential never realized.

The company certainly did no shy away from the extreme expenditures that characterized the era -- its blowout launch party featured Sisqo performing "The Thong Song" -- but Benjamin attributes ClickRadio's demise to September 11th, and a set of venture capital backers who "were putting knives in [each others'] backs. And in ours." He added, "They somehow came to the opinion that they could do a better job running the company, instead of advising and nurturing. History showed them to be as bad at running the company as they were at advising and nurturing us."

Williams, for his part, cited a protracted and messy legal battle: "The company died because of lawsuits among investors. Good investors versus bad investors."

Speaking to ClickRadio's demise in 2001, Williams said, "For a while, it was quite depressing. But mainly because its death didn't feel natural. That was troubling -- that was probably the most upsetting part of it."

After a multi-year hiatus spent investing in a retail business and a music label, Williams is now stepping back into the role of tech entrepreneur. This summer, he is participating in the NewMedia program in Silicon Valley -- a nine week program launched this year that targets minority-led start-ups. NewMe, as it's known, puts up its selected entrepreneurs in one group house in the Valley and brings in a roster of speakers to advise and guide them as they get their businesses off the ground. The program is akin to nationally known accelerators like Y Combinator.

Williams is the elder statesman in a program that counts a fair share of twenty-something impresarios among its portfolio of eight companies. And he has found himself, once again, in a frothy market -- where entrepreneurs dot the horizon and venture capitalists are kingmakers. But if the situation is familiar, the technology has changed considerably.

Williams' new venture is called Kloudco, which he described as a "single, unified interface to your cloud-based services" -- everything from Dropbox to Google Docs. Kloudco will provide users "a unified interface to search, aggregate, gather and share." Williams used the example of a virtual paper folder into which you could put anything, including emails, documents and photos.

"We're really in the business of creating a way for people to use information across all services -- for search and collaboration and information," said Williams.

Kloudco is in what Williams described as "Private testing," and while he's spending some of his time in the Valley sussing out investment opportunities, he acknowledged that simply being back in the swing of things has been valuable in and of itself.

"As many relationships as I may have, I've met many more through the accelerator, through dinners, through established relationships with speakers, participators, people in the house," he said. "I find that hugely valuable."

Williams is frank about his return to ground level. At one point during ClickRadio's heyday, Williams recalled that he "had the opportunity to hang out with Prince several times." He continued, "Anyone in the industry would take my call. I knew lots and lots of folks and it was a very heady time, independent of the whole bubble."

Starting from scratch -- as an entrepreneur with little name recognition -- must have been, to some degree, ego-bruising. But Williams seemed resolute, and described the NewMe program as "a magical process of re-entry and reconnection."

And while some parts of the tech landscape may be different, certain aspects have remained frustratingly similar. Racially, Williams said, Silicon Valley -- and the tech sector on whole -- "is exactly the same as it was" nearly two decades ago. "There are more Asians and Indians, but there are definitely not almost any African American or Latino folks in the industry."

Williams said he felt like the relative homogeneity could be attributed to certain practices. "It's sort of a clubby world, if you don’t have access to the right people," he said. Citing a practice known as "pattern matching" Williams said that "Investors are making decisions based on example patterns -- and the current pattern is Mark Zuckerberg: young, male and white."

Conversely, he posited, "People of color have been less interested in technology than in being a doctor or a lawyer."

Compounding this, Williams said that among Valley denizens, "age is something that's discussed openly. Sex is beginning to be discussed. But race -- not at all."

That said, Williams has proven himself to be resilient, regardless of what the industry -- or the economy -- might throw his way. As such, he is unlikely to allow whatever barriers are in place to stop him from moving forward. "You have to, on occasion, put those issues out of your mind," he explained, "and do what you need to do."