Everywhere sleep.fm is mentioned on HN, you are around. It is funny that although it is a bad idea to you a few thousand people like it enough to go back to use it everyday. Not a lot of startups can claim those numbers.
So that's what business is for you? Are you making a product for yourself or for investors? Why should I care what investors care about - I'm trying to make a product for users, and not for investors. A few thousand people following my product is EXCELLENT, because out here in RL, a thousand people are not following me.
You have the wrong attitude if you are only focused on what investors want.
Check your Compete toolbar when you visit their site.
Plus it is a steady traffic which tells you that every single morning someone is woken up by the social alarm clock.
EDIT: To answer your other question, I am not a co-founder, but looking at pure numbers they are doing better than my last two trials and those of a lot of us.
