What entrepreneurs can learn from rockstars
In 2000 I moved to Sydney, and became a band manager eager to discover the next big thing, have fun and make some money along the way.
I started by scouting around the industry, networked and sussed out how it all worked and what everyone did. It all seemed so straightforward. Success in music was about money, and that came entirely from the big record labels. With the average album costing around $100K to record, artists needed money to make an album, more money to make videos that would play on Video Hits (the average video costing around $20K), then money to secure prominent placement in the few big record store chains (HMV & Sanity charged for shelf space and for airplay on their in-store radio). Entry barriers were high, so competition was low. All I had to do was network with the right people at the labels, and when I found a good artist, they’d invest. And presto! I have a hit artist and cash starts pouring in.
I know this sounds simple, but as a 22 year-old, this was my introduction to the music industry. My formula would have worked except that it took me three years to develop relationships at the labels. And by 2003, technology had started to mess up our ecosystem, making everything so much harder!
It started with Pro Tools, iTunes and MySpace. Developments in affordable recording software, like Pro Tools and Apple’s GarageBand, meant that you didn’t need $100K to make an album anymore. You could do it in your bedroom with a cheap laptop and some microphones and make it sound like the big guys. In April 2003, the iTunes store launched. Now anyone could make and sell their music, and the number of albums released each year trebled. The strategy adopted by most major labels was a marketing budget that would drown out independents. Then in 2005, MySpace offered every band one page to make an impression. Talent, not money, attracted fans and friends, and by 2006 MySpace listed four million band pages. The barriers were down and competition intensified.
For an aspiring manager like me, this was an exciting, challenging era. I was young, not attached to the old ways, energetic and technophile, and could take advantage of the situation. Others were not; many executives that strode the corridors of major record labels ten years ago are unemployed today. They never figured out what we hit-makers had learned.
To succeed in the current music climate, an artist must offer their fans:
1. Life enhancement: Connect with deep personal emotions
2. Connectivity with others: Encourage fans to identify as a group, connecting with each other in the process
3. Greatness: Be amazing. Good isn’t enough anymore.
Gaga's fans identify themselves as her 'Little Monsters'
I’ve heard there’s too much competition now, that there can never be an artist (or group) as big as The Beatles. Why not? Lady Gaga and Adele have both broken sales records in the past twelve months. Successful artists are experts at the features I’ve listed. Can you think of an artist who is as great or moves you as much as Adele (if you’re a 25+ female that is)? Ever seen what a group of Lady Gaga fans look like? Think back ten years when bands like Taxiride and Bachelor Girl topped our charts. They wouldn’t get a look-in these days.
Now, back to my new life with a tech startup. Technology is shaking up our ecosystem too, and like the bands, things are getting tough for entrepreneurs. Five years ago, it was much harder to start a company. You had to be able to write code or hire expensive engineers, host your service and then distribute it. These days, access to cheap freelance engineers, cloud hosting, and the app store mean that anyone with an idea can build, host and sell their product. The Apple App store launched in July 2008 and already lists over 600,000 apps. Barriers are down and competition is intensifying. The market is tougher because many processes are so much easier.
So what can we entrepreneurs learn from rockstars? Good products can’t win just by spending up on marketing. To succeed in today’s climate a startup must offer their customers the same remarkable features as bands:
1. Life enhancement: Services that make people’s lives significantly better
2. Connectivity: Social connection with friends, and communities we identify with
3. Greatness: No one has time for another good app. It’s got to be so amazing you can’t wait to show it to all your friends.
The good news to take from the music industry is that there’ll still be big hits, and the products we’ll get as a society will be better and more useful then we can imagine.
We just have to work harder and think more creatively in order to break through.
I understand what you explained but have some fairly cynical responses –
Firstly, if you see Ondi Timoner’s film ‘Dig!’ – she shows how an indie artist (Anton Newcombe) created his debut album ‘Thank God for Mental Illness’ for a budget of 17 dollars, production costs – and that album can be found in record stores and public libraries in Wellington or Sydney. Its not a brilliant album, but its got a few strong tunes, and its inspirational that his work is available, and isn’t the product of corporate marketing.
That said, since the ‘great democratization’ of the internet supposedly put the system of production for consumed media in the hands of the creators themselves, what its really done is create a market where nothings for sale and nothings worth anything. Lastly, far more major new artists in this decade come from privileged, monied backgrounds than they did in the 1990′s, and in the meantime the US social system has turned into a plutocracy.
Another well-written blog post; I find it especially interesting that the types of challenges we face as artists have altered. Technology has made it more difficult to stand out in the diluted population of artists so, like you said, we really need to offer something substantially more compelling than everything else that is marketed.