I’ll look at three ways of reaching your first 10,000 fans, and how I used each in music and at Posse, to varying levels of success.

1. Paid marketing, PR and hype

All these methods aim to put your brand in front of as many people as possible in a way that says, “Try me.  I’m cool and I’ll make your life better.”  All work, otherwise no one would use them.  PR may create more exposure for cost than paid advertising, although some new marketing tools like paid Facebook ads can be effective at reaching targeted audiences.  Hype helped raise sites like Pinterest and Wanelo from hundreds of thousands of users to many millions.  But do they work for the first 10,000 fans?

A new start-up with a good story can score both PR and hype.  That’s easy.  It’s also easy for a new band to set the whole music industry talking through rumours that a major record deal is imminent.  But hype, PR and paid marketing are like cotton candy.  It tastes sweet; you get an instant sugar high, and then crash when everyone goes away.  Big record labels used to burn through artist’s careers by launching them like this.  They had pots of money, were impatient, and – a bit lazy.  Does anyone remember the girl group ‘Cherry’, or ‘Jackson Mendoza’?  One big label launched both in the late 1990′s / early 2000′s, coupled with massive marketing budgets.  Both failed to connect.  They never found the first 10,000 fans so they never got the momentum they needed to build a community.

It’s the same in tech.  At Posse, we’ve had a lot of great PR.  Every time a headline story breaks, our user numbers jump – but often we don’t gain quality users.  They join the site, add a couple of places and don’t come back.  If we depended on PR, marketing and hype to build our user base, we’d be dead.

2. One-by-one engagement and community building.

This is the long, slow, painful, effective way to build an engaged audience.  In a previous blog, I wrote about our early experiences launching the band Evermore.  We had no money, and spent two years driving all over the country playing in high schools by day and small pubs by night.  After they played, the band would hang around and meet fans, personally selling CD singles and signing them.  They met a lot of people in two years, and these fans felt special.  They’d seen a show, had met the band personally, and became evangelists, calling their local radio stations requesting the songs.  Momentum started to build.

Matt Corby playing in a fan’s backyard

The bad news?  It’s a process that takes time, hard work and can’t be accelerated.  In 2008 my music company, Scorpio, signed the musician Matt Corby.  In 2009 we released is first EP and his manager, Matt Emsell, arranged for Matt to play ‘secret shows’ at fans’ houses, in their back gardens, so long as they could organise enough people.  Over four years of constant touring and many EP releases he built up a passionate army of fans.  So, when his new record was released in 2012, they rushed to buy it and share it with friends.  The fans felt that they were responsible for Matt’s success – and they were.  This real momentum created hype which led to the 2012 EP reaching 5X platinum sales and winning the ARIA Award for Song of the Year.

Communities in tech that have stood the test of time often also took years to develop.  Twitter launched in 2006 and developed a passionate but small user base before taking off more than two years later in January 2009.  Pinterest launched in 2009 by issuing a handful of invitations to designers to use the platform, and they each received invitations to give to friends.  By October 2010, they had 40,000 users and started organising user meet-ups to help fans build real-world relationships.  Founder Ben Silbermann often tells the story about how he had trouble raising money from VCs because his initial growth curve wasn’t steep enough.  It wasn’t until January 2012, more than two years after they launched, that Pinterest became airborne, and in August 2012 they lifted the need to have an invitation to join.

We’re still in the early stages of building our fan community at Posse.  Of the strategies we’ve tried, two have been powerful.

Advisor program: We advertise on free student job boards all over the world for ‘advisors’ to intern from home for our startup.  These advisors commit to completing two activities a week for a four-week program, and at the end we provide them with a letter for their résumé.  The activities include running user experience tests and writing up product feedback and suggestions, recruiting friends to join Posse, promoting Posse to retailers in their area and distributing stickers for the store windows, and creating a blog about the best places in their town.  We run the program every four weeks and aim to have 120 advisors participate.  We’ve now run it six times and improve it each time.  This has been an incredibly effective, low cost way for us to build communities of engaged evangelists and seed new geographies for Posse.  The advisors themselves love the program, they report that they learn a lot, use the reference letter to gain entry to places in university courses, and many ask to stay involved with Posse as brand ambassadors.

Our blog:  We post 2 – 3 blogs every day featuring the favourite places of well-known people or lists of the best places to do X in a town.  For example, check out this blog post featuring Sydney Lord Mayor Clover Moore’s favourite places to eat and drink.  It’s very easy to ask a chef, fashion designer, musician, actor or politician for a list of their favourite places to visit in their home-town; people love to share their recommendations.  Our community manager Justine writes up the blogs and encourages the person who’s being featured to share it on Facebook and Twitter (which they usually do, often to hundreds of thousands of followers).  She also reaches out to each of the featured stores and they all post and tweet the link.  Everyone is looking for content to post to social media, and the blog generates a huge amount of traffic for Posse.

3. Aligning yourself with another brand

I’ve found this to be the most effective way to accelerate desirable growth.  In 2004, we had spent two years building Evermore’s community one by one.  There was good momentum but they were not a national name.  But everyone was aware of a new show on Channel Ten called ‘The OC’.  It was edgy, young, cool and loved by the right crowd of teenage girls and sophisticated young women.  I also noticed that Channel Ten hammered the promos in every ad break.  I called up the Channel switchboard and asked reception: who makes the promos for the OC?  Eventually, I reached their producer, introduced myself, described Evermore, and said I’d courier a CD of the song straight away (no emailing MP3s then!)  Later that afternoon he called me back, said he loved the track and would use it as the theme to the promo that would start playing during the final of Big Brother that Sunday.

Channel Ten continued to play Evermore’s song ‘It’s Too Late’ as the theme for The OC trailers for another month.  Thousands of new people signed up to our website every day.  The OC had captured the imagination of a huge audience.  They emotionally connected with the characters and the sentiment of the show.  The brand alignment worked for us because of the emotional connection.  The audience transferred their feelings for the show to Evermore so by association we were a hit too.  No one remembers which song was the theme of Dancing with the Stars or The Rugby World Cup, even though they received the same level of exposure.

Brand alignments for startups often mean working out how to leverage another platform’s audience.  AirBNB’s growth thanks to Craigslist is a good example of this.  I’m working on a couple of opportunities for Posse right now; I’ll tell you if one of them comes off!

Finding the right first 10,000 fans takes careful thought, hard work and patience.  There are few examples of bands or companies with longevity that took off overnight without some kind of granular community strategy.  We’re always looking for new ways to engage our users and turn them into evangelists.

If anyone else knows stories of how others have succeeded in music or in tech, or if you’d like to share your own ideas please add them as comments below.  I’d love to hear them!

Between 2003 – 2010, I came to SXSW four times; each visit launched a different artist.  My job was to set up a stunning show – the best sound, lights and vibe – and ensure it was packed with influential people, folk who’d write about the band or sign them to a record deal.  Each trip cost the artist a wad of money, so I had to work out how to make an impact cheaply.

The Posse street team at our stand (made from items bought at Wal-Mart!)

This year I’m back at SXSW, launching our internet company and App.  I applied many of the tactics I learned in music, and we had amazing success at securing media coverage and traction.  I can safely say that Posse is one of the ‘buzzing’ companies people are talking about after the conference.  Check out this Best of SXSW wrap up in AdAge this morning.  Here are six tricks I learned in music that I used to launch Posse at SXSW this week on a budget.

1. Get influential people talking about you before the festival.

In music, we focused on being heard by high profile producers: these guys are great talkers and they aren’t pitched every day.  For the Posse launch, we worked out which US tech influencers love SXSW and asked them to share their five favourite places to eat, drink and shop in Austin.  Everyone likes to share places they’ve discovered; it was easy to get the lists.  We secured big names like Elspeth Rountree (NBC & Fox), Maya Baratz (ABC News) and David Tisch (Boxgroup) asking them to contribute – and turned it into a ‘Tech Elite’s Guide to Austin’.  We published the map on our site at www.posse.com/sxsw and distributed printed copies around the festival.

We posted blogs featuring the list of a different influencer daily in the two weeks leading up to Austin, all of which were retweeted by the featured people themselves, their businesses, media and the retailers they recommended.  There was already demand for the complete map when we published it the day the festival started.

2. Timing is everything.  

Bands save releasing records until right before SXSW.  Every company has an interesting story to tell – the kind that could be covered in TechCrunch or Pando Daily.  When something awesome happens (like you release an App or secure a round of funding) don’t write a press release straight away.  We saved our App Launch and funding announcement so we could land a major press story right on the eve of SXSW.  We offered an exclusive to TechCrunch who ran this awesome article on Friday.  This meant Posse was top of the mind for any other tech reporters covering the festival, as everyone reads TechCrunch.

3. Guerrilla marketing works – but you have to be clever.  

Every pole in downtown Austin is covered by 9am each morning.  Big companies spend thousands designing and printing fancy-looking posters and then hire people to cover the poles.  The most effective posters are simple, and if you’re on a low budget like us, you must find a way to stand out.  Today, plain blue posters all over town say ‘Where is Biffy Clyro’?  They had a lot of people talking.  It’s a conversation starter – ‘what ever did happen to Biffy Clyro?  I wonder if he’s here?’

We ran a super-effective campaign promoting our Austin Map.  The notices were designed like handmade ‘Lost’ posters, and then we found the ugliest and funniest looking animals we could and put them in the middle with a prompt for people to find the best places to eat, drink and shop at posse.com‘s Insider’s guide to Austin.  We printed 100 posters at the UPS store and stuck them up ourselves the next morning at 7am.  By 10am everyone was talking about the posters and we were even mentioned in Mashable.

4. Hustle all day and all night!

If you come to SXSW launching anything, you have to be prepared to hustle from 7am to midnight every day.  I brought Jen from our office; there was just the two of us from Posse here but it’s safe to say we met thousands of people.  We were on the streets handing out stickers and our maps of Austin, lurking in hotel lobbies where influential people might stay, meeting people and spreading the word.  We were at all the parties we could make – if you’re influential and you’ve been at SXSW, there’s a good chance we spoke to you and tried to get you to download our app.  Opportunities were everywhere – on the first day when everyone was waiting to register, we combed through the queue meeting everyone and offering cupcakes to anyone who signed up on the spot.

The reporter’s still holding the stickers we just gave him!

Hustling pays off because you get to meet some amazing people!  Jen and I were getting out of a cab on Saturday after buying stuff at Wal-Mart to build our tradeshow stand.  We handed stickers to two guys as we stepped out of the cab door.  They happened to be journalists for NBC and asked to interview me for the evening news.  Five minutes later, I was being interviewed on the street and they filmed us handing out stickers and sprucing our company.  That night, we were the lead story on NBC News in Austin!  The next day our tradeshow stand was packed with people who saw us on TV the night before.  We’ve met too many amazing, helpful people to mention while hustling, but it’ll all lead to media, speaking opportunities and partnerships in time.

5. Get a street team

You can only cover so much ground by yourself.  To maximise your impact it’s important to try to get as many people as possible representing you at the festival.  A month before, we advertised on the University of Texas jobs board for student volunteers to help launch our startup at SXSW.  Students would have the opportunity to help promote Posse for four days over SXSW, to learn how to launch a company at an event like this and would get a letter for their resume at the end.  Astonishingly we were the only company to advertise for volunteers at UT and we had an influx of awesome applications.  We chose a team of enthusiastic marketing students who did an excellent job signing up users, distributing maps and helping run our tradeshow stand.

6. Tie yourself to other people’s events

Randi Zuckerberg was at an event we hosted!

The key trick of SXSW for a band is to get on the bill at an event where everyone is going to be.  If you try to put on your own show, you have the near-impossible job of promoting the show to a large group of people you don’t know and who already have a plan of events they want to go to. One of the most successful launches I ran at SXSW was when I managed to get Operator Please to play at the NME Party.

It’s the same for an internet company.  SXSW will try to convince you spend $10K to throw your own party.  Don’t!  We don’t have that much spare cash; even if we did, I know it would be hopeless to attract the right people to our party.  For Posse the people I really wanted to get behind us were influential women in technology.  So we teamed up with a Women in Tech advocacy group called ‘Change The Ratio’ who were already throwing a power women’s brunch.  We paid a very small sponsorship fee (even a startup like us could afford it) and they brought all the power women along.  With virtually no effort and very little cost we got to own the hottest women’s event of the festival, and people like Randi Zuckerberg and Cindy Gallop were at our event!

I’m writing this blog on the last afternoon of the festival while waiting to get a cab to the airport.  Before I came to SXSW this year, I read a lot of blogs warning startups to avoid it.  ‘There’s too much competition,’ they said and ‘you can’t make an impact unless you’re prepared to spend up big.’  We decided to give it a shot, and I’m happy to report that we did make an impact.  We signed up more than 4000 new users this week, raised our profile in the US considerably, enjoyed a tonne of press, made a lot of amazing connections and we did it all on a budget of less than $10K.

Jen and I are exhausted, but we’ve had so much fun. I’d definitely recommend SXSW and other trade shows like it if you want to make an impact, so long as you’re prepared to work incredibly hard to make it all happen.

I caught Jen sleeping backstage at our tradeshow stand after a hard day networking!

This made me think about my strengths, and those of my entrepreneur friends and mentors.  I know I’m not the best manager of people, I’m not great with details and accounts and I can’t write a line of code.  You have to be someone who takes risks, just does it and works hard but there’s more to it than that.

As you might have read in my previous blog posts, I’ve made just about every business mistake in the book.  But, two years after I quit music to launch Posse we’re still here and, finally, starting to make real progress.  To answer the student’s question I reflected on core strengths I think are critical for all entrepreneurs.  This is what I came up with.

1. Winning people over.  

It’s hard to build a great business on your own.  Whether you need to raise investment money, recruit team members or gain customers – every entrepreneur needs to have or acquire the ability to win people over.

I honed my skills in this area working as an artist manager in music.  I had to convince the industry, the media and then an audience that the new artist I represented was great and worth supporting.  You’d think this would be easy; people would hear great music and fall in line to be involved.  Not so.  I shopped my first artist ‘george’ for two years to record labels and even longer to commercial radio programmers before we got a break.  Every label passed on Evermore and knocked back great success stories like Lisa Mitchell and Matt Corby many times before signing deals.  In music, I learned that the biggest opportunities didn’t always go to the best artists.  It was about the number and credibility of the people who wanted to be involved, the momentum of the project and the excitement about the future.

It’s the same in tech.  You might think that when someone hears a great idea they just want to get involved – not so!  My pitch isn’t about the awesome features on the site.  It’s all about the team, our momentum and inspiring the person to share our vision.  Winning people over is an art and it’s critical to all aspects of business.

2. Creativity.  

Entrepreneurs see everyday problems and dream about solutions.  They’re interested in people, ask probing questions about the way they do things now and jump to ideas of how to make things simpler, faster, better or more fun.

I have a whole book of unused business plans dating back to 1998.  When it became obvious that my first idea for Posse in music had scaling issues, I immediately saw a new and bigger opportunity.  My team and I spent months designing a strategy for this new direction and then dreamed up creative ways to both solve problems and engage our audience.  We took what we learnt from the old business and designed something much stronger for our second attempt.  Looking back on this time now I can’t help but wonder what would have happened if we hadn’t been able to come up with a better idea!

Being passionate about continuous creativity is an essential quality of successful entrepreneur.  It’s rare that the first idea is bang on and if you can’t innovate then you’re dead!

3. Tenacity.

I would say this is my personal biggest strength.  Someone recently asked me if I thought I was tough to which I replied, ‘no, but I’m tenacious.  I’m like a cockroach – you can’t kill me!’

I’m not sure where this comes from, but throughout life I’ve started and run quite a few major projects.  None of them has been easy; I can name times in all of them when things looked grim and I thought I’d fail and lose lots of money.  But each time I stuck at it and every time things worked out well.  Posse has been the hardest and longest slog yet but knowing that I’ll never give up gives me a lot of confidence that we’ll make it.

These are my three strengths and I think they’re all you need to be successful.  So long as you can keep bringing onboard great people, keep winning customers, keep raising money, keep innovating and keep going.  You might not get there the fastest, but I don’t see how you can lose.

People from my past are surprised because I used to be the opposite.  For years, I worked in the appearance-obsessed music business.  Mistake and failure are dirty words as everyone is as popular as their latest hit.  Dud records vanish from view, and everyone strives to look as if they’re doing ‘amazingly’, constantly on the verge of the next big thing.  But, the music industry is very hard and can be brutal.  I struggled many times as an artist manager: my first band fired me; people didn’t return my calls; I made hiring mistakes, wasted wads of money, and frequently fell out with record company execs.  I remember a series meetings with one record company that left me driving back to my office in tears.  Back then, I didn’t believe it was acceptable to be open about my challenges and mistakes.  People, I thought, wouldn’t want to work with me or invest in my artists unless they thought I was perfect.

When I started Posse I quickly learned that keeping my cards close to my chest didn’t work and had to recalibrate.  It all started with my first board meeting.  Before starting the company, I didn’t even know what a board did, or how they functioned.  Then, someone suggested it would help me raise money if I persuaded a few well known people in the industry to be on my board.  A friend with a fancy office in the city let me use his boardroom, and I called our first meeting.  I walked in, pleased that I’d assembled such an impressive group of people, only to discover that they wanted to know everything.  So, that was what a board was for!  It was scary: we were months from running out of cash, a lawyer was suing us for a bill I thought outrageous, and our product wasn’t working.  But as I unloaded my catalogue of disasters, something strange happened.  To my surprise and delight, they weren’t angry or disappointed.  We just put our heads together and worked through the challenges.  It felt like an amazing therapy, and I walked out of the meeting ten times lighter.

From then on, I switched 180 degrees and practised complete transparency with everyone.  With our team, investors, users, even the public.  Now some people actually criticise me for being too open, but I don’t care.  Here are four awesome things I’ve learnt about transparency:

The Posse team after our Tuesday lunch meet

1. It makes teams work.  At the end of our Tuesday staff lunch meetings we have a question time when anyone can ask anything they want – nothing is off limits.  At the start of each month, I share the company’s financial position.  Although unnerving at first, I find that complete transparency creates a real sense of camaraderie among the team.  Everyone understands how their work contributes to the company’s goals, and the reasoning behind decisions to focus on various aspects of the product, user growth, PR or fundraising.  It also allows me to get feedback on key business decisions which is helpful when you’ve got a team as smart as ours and I sense it gives everyone a sense of security as there’s no unresolved questions or gossip about what might be happening.

2. People get behind you.  When I posted the ‘Redesigning our strategy‘ and ‘This is really hard‘ blogs, I didn’t know how people would react.  I thought some might laugh at my novice mistakes, but I was wrong.  Loads of users signed up as a result of those posts, and I was overwhelmed by the volume of feedback and suggestions emailed to me in the days following.  I’ve found that, by being open with our users about our vision, what we’re learning and what we plan to do next, we’re inviting them to join our journey.  Users can become a part of the process of building this great platform.  This helps get people behind you and it also helps to have lots of feedback and ideas to draw on.

3. You’ll have more energy.  If you run the City To Surf, you’ll know how, at the start, everyone looks great in their flash Sydney running gear and fake tans, but there’s a point where you’re exhausted trying to slog up the hill, you grunt, splash water on your face, and no longer care what anyone thinks about you.  Running a startup is like this all the time!  It’s hard work and sometimes downright draining.  It takes energy to maintain the appearance of perfection: give it up and you’re lighter and happier!

4. It helps everyone else learn.  I love the music business, but the need for everyone to look perpetually brilliant suffocates the industry’s ability to evolve as quickly as it must.  If record company execs, managers and promoters would talk openly and publicly about their challenges and failures then they could work together to solve problems and it would save making so many of the same mistakes over and over.  Thankfully the startup industry is completely different.  Failure is applauded – almost too much – and there’s a community of events, groups and media that encourages us all to share what we’re learning.  Startup teams and their products are evolving faster and as a result everyone is more likely to succeed and the world will get higher quality new products to experience.

So radical openness is my new philosophy.  The more open you are the more likely you’ll get the advice you need from team members, users and the startup community at large.  You’ll take people with you on a journey and if nothing else, being candid requires a lot less energy than being guarded!

Grant offered me a basic wage of $25,000 per year and said I’d earn a share of any bands that I brought into the company.  It sounded like a fun business and I would forge my own path from within an established brand and organisation.  Within three months I discovered and signed an unknown band from Brisbane called george – and fell in love with the chaotic, exhilarating music business. The industry was full of delightful characters: gig promoters, record company executives, venue owners, merch makers, radio programmers, producers and musicians.  There were no rules, anyone could make it and everyone was so passionate about their projects.  I managed george for two years; there were tough lows and soaring highs.  But every day I came into the office with a spring in my step, ready to take on the next challenge.

In March 2002, george’s début album hit #1 on the ARIA chart.  I was still only earning $25K because we hadn’t ever worked out what my cut would be.  Although I didn’t care much about money at that time, I was now 24 and my friends all earned much more than I did.  They dined at pricey restaurants and travelled on holidays I couldn’t afford.  For the first time I started to think about getting a ‘real’ job.

Sony Music had advertised for an A&R Manager, so I applied.  My interview went well and HR gave me a form to fill in.  One of the questions was, ‘What is your expected salary?’  This stumped me.  At the time, I earned $25K and was pretty sure this job paid at least three times that.  $75K would represent a massive lifestyle upgrade.  It occurred to me that since I wasn’t passionate about Sony Music, whatever number I wrote down would be the price for which I’d sell one year of my time.  The year was 2002 – 2003, my 24th year on the planet.  What was a year worth?  Surely, more than $75K.  Was it $100K?  How about $200K?  Truth is, I couldn’t come up with a number so I never finished the form!

Two weeks later, I met music industry legend John Woodruff who offered me a $10,000 loan plus a free office to start my own management company.  I bought a second hand laptop and set up a desk at the back of his Music Network Magazine in Woolloomooloo.  I had no clients, no income and nothing to do, so I went home to New Zealand for a holiday.  While there, I heard about three young brothers who’d just won a high school rockquest.  I met the band ‘Evermore’ at their house in Feilding and fell in love with the whole family.  I decided that Evermore would be my first client before they even played me any music!  They were special, we had a connection, it felt like the stars had aligned.

Me and Evermore in 2003 - happy times!

The next three years were incredibly hard.  As their manager I earned 20% of whatever they made, which for the first year was 20% of $0.  So I lived off the $10,000 John Woodruff had lent me.  Now I really couldn’t afford to go to fancy restaurants or on holidays!  I couldn’t even afford to take a permanent spot in a share-house.  I put all my things into storage, lived on the road when the band toured, and stayed with friends or went back to NZ in between.  The band had no money either – we had a beat up old Ford Falcon that we’d bought for $3000 and often drove overnight between gigs to save on accommodation.

We adopted a scrappy ‘whatever it takes’ attitude – we were a team and we were going to make it no matter what.  I negotiated a deal with Warner Music, but by the time their debut album ‘Dreams’ was ready to release in 2004 the label had little faith that we’d succeed.  At a marketing meeting before the release, I saw Warner’s sales projections for ‘Dreams’.  5000 copies.  They weren’t prepared to spend much to reach that target.  These meetings were so frustrating they ripped me to pieces.  On hearing about our non-existent marketing budget, I announced to Warner Sales Director John O’Neil that this album would go Platinum even if the band and I had to drive around the country selling it door to door.

So, I sat in my free office in Wooloomooloo, phoning high schools from the yellow pages.  I organised for the band to play during lunchtimes, and kids would pay a gold coin entrance.  The band heaved their own PA system around, and the money they made just covered the cost of driving there and a backpacker hostel (all paid in gold coins!).  Over two years we hit hundreds of schools and built a groundswell of young fans.  They called up their local radio stations and requested the songs, so we soon had mainstream airplay.

Within thirteen months, ‘Dreams’ reached Platinum sales.  The band continues to have great success, selling more than half a million albums in Australia and New Zealand.  And three years after moving into my free office at the Music Network, I could afford to rent my own office space.  I signed more artists – notably Lisa Mitchell, Van She, Operator Please, Matt Corby and Amy Meredith.

I spent ten years in the music business, managing bands.  Some years I lived on $10,000 and some years I made over $500,000.  When I think about each year individually and rate how happy I was, the interesting thing is that the amount of money I made has absolutely no correlation to how much fun I had or how satisfied I was with what I was doing.  I was equally happy all the time.

Some moments still make me smile. Like the time I climbed up on the sound desk at the Melbourne Big Day Out to see Evermore play to a tent that was so packed, people were hanging off the poles to see them.  Or playing driving games with the band in the van on tour, or having a meeting over dinner at their farm in Fielding.  For me, happiness and work satisfaction come from creating, learning and achieving as part of a team of people who you respect and love.  Nothing else matters.

The Posse family at our offsite in Avalon last night

Two years ago, I decided to take a gamble and start a tech company.  It was lonely to start with, but I’ve built an awesome team of people who are both smart and wonderful.  They are people I enjoy spending time with.  As I’ve mentioned in past blogs, what we’re doing is really hard but we’re learning so much every day and now we’re starting to make significant achievements as well.  It’s so exciting to feel a part of something where we’re all out of our depth but we’re just all so passionate about what we’re creating that we know we’re going to make it – even if we have to sign up users door to door!

A few weeks ago, my former assistant Shawn sent me an email asking for advice.  He’s 22 years old and just about to finish his degree in Brisbane.  He said he’d always wanted to be a band manager, but had worked out that band managers made on average $40,000 per year.  He wanted to earn more than that, and so was thinking about following another career path.

I have some years behind me now, and it frustrates me that money is such a consideration for people deciding what to do with their lives.  It explains why I meet so many guys in suits in their mid thirties or forties with heaps of cash yet who are miserable.  They can’t figure out what to do now they have a mortgage and family to support.  By then it’s much harder to make a change.  My advice is: do what you’re passionate about, challenge yourself every day, and make sure you’re surrounded with a team of people you respect and love.  Money is incidental to happiness.

P.S. Last time I was home, I dug up an article I wrote for my school yearbook when I was sixteen.  Back then, I was concerned about casinos being introduced to New Zealand, and by university fees.  It’s a beautifully idealistic stance that represents my views on money at the time.  They haven’t changed: stumbling on that yearbook inspired me to write this blog.  Check my old article here.

I’ve worked as a band manager, A&R consultant and web entrepreneur and I’ve struggled to make great creative choices every time.  Through managing bands, we created brands for the artists involving the selection of record producers and songs, cover artwork, band photographs, music video ideas and directors, websites, merchandise and live touring themes.  As the manager I’d sometimes work with a huge number of people to create the band’s brand – the record company, publisher, touring agent, our own management team, band girlfriends and family members and of course the artist themselves!  Now I have Posse and we have to make creative decisions every day – big stuff like what should the town and store designs look like, what kind of font should we use and then hundreds of little decisions about the style and content of copy, shape of buttons, how dialogues close, whether we should have straight corners or curved corners!  There are more decisions than you’d imagine and now we have a big team it seems like everyone has a different opinion.

The music industry is an wild training ground because there’s no formal system to anything.  In my nine years in the business, I led the release of twelve major label albums in ten countries and not once did I create a framework for making creative decisions for an artist. Too often, decisions about the next single or the right video were made by committee.  These represented everyone involved: the group with the loudest voice or the biggest cheque often won out.  At a record company, these people were usually 40+ males, completely out of the artist’s target market.  As decision-making processes go, that was as bad as it gets.

Some of the creative my management company produced was truly great, and some was truly terrible.  Looking back, I can see that most of the great stuff tended to be made under quite different circumstances from the bad stuff.  With this hindsight, I can take what I’ve learned in music and create a framework for making functional, creative decisions at Posse.  Here are my views on the process.

1. Define your values

At Posse, I’m lucky to have an amazing set of investors.  Early on, one of them, James Scollay, ran a session with me to define Posse’s brand values.  To start, he asked me to dream about the kind of company I wanted to build.  In five years’ time, what would we be known for?  What would the site feel like to use; what would Posse be like to work at?  He suggested that I come up with up to five core values that, when combined, could govern the brand and company.  My answers back then haven’t changed.  They are: ‘Everyone Wins’, ‘Delightful’, ‘Greatness’, ‘Revolutionary’ and ‘Integrity’.  Even through all of our iterations, the bases for making decisions about our brand, user experience and company culture have remained constant.  Values are often a reflection of the entrepreneur and their dreams, but when there’s a team, they become the team’s values as well.

The whiteboard from my brand session with Evermore. The list on the right are the 6 core values we settled on.

Recently, I’ve been through this process with Evermore in the lead up to their next album release.  I don’t manage the band anymore but were still great friends and earlier this year I was hanging out at their farm near Melbourne.  I shared Posse’s values with them and we pulled out a whiteboard and decided to define what they stood for.  It was so easy.  They knew exactly what their brand should say, and the process of refining it to five or so brand values was incredibly helpful.  I wish we’d done it ten years ago as it would have made making the right decisions so much easier!

2. Trust the instincts of one talented person over a committee.

Great creativity is the vision of one exceptionally talented person, so it’s vital to choose this person carefully and then trust them.  Don’t try to second-guess their decisions or you’ll encourage them to play safe, then they’ll make boring and wrong decisions.  Note that safe creative decisions and disastrous creative decisions tend to be the same thing!   In music, I was lucky enough to find a few brilliant video directors, artwork and website creators whom I trusted on several occasions. They always delivered great work for me because they knew I trusted them.  So they took risks, tried different things and we always got amazing results.

Lisa Mitchell’s fourth video on her last album illustrated the process going wrong.  Vanessa Caswell, who directed the first three clips, had developed a close relationship with Lisa.  She was an awesome director, understood Lisa and her brand, and produced ‘Neopolitan Dreams‘, ‘Coin Laundry‘ and ‘Clean White Love‘ on fairly low budgets.  They’re amazing clips.  Since Lisa was an unknown at this stage, the record companies left us to it.  But when we came to make the clip for ‘Oh Hark‘, she was popular both here in Australia and in the UK.  Now everyone wanted to be involved.  The label wanted a big budget video with a high profile UK director.  Lisa knew Vanessa should have made the clip.  But when the label pushed us, we went with them.  We thought they’d give more support to a song into which they’d had some creative input.  Big mistake!  Teams get behind great creations; they don’t back mediocrity, even if it’s their own.  In this case, we should have listened to both Lisa and the original director.

For another demonstration of what I mean, here are two videos made by artists under my watch: ‘Light Surrounding You’ by Evermore and the ‘Young At Heart’ by Amy Meredith.  Both are similar songs for similar audiences, made with similar budgets.  The Evermore clip was made by awesome director Michael Spiccia, who was left alone to conceive and execute his vision.  The Amy Meredith clip was a painful process: the director’s original pitch was hacked by a team of marketers at the record company who each wanted to remove a part that they weren’t sure about.  The editing process was worse: everyone wanted to put in their two cents and remove a shot here or there.  The resulting video makes very little sense and doesn’t do justice to what should have been a major hit song.  Funnily enough, the label that made the Evermore clip – Warner – all loved the ‘Light Surrounding You’ clip and were proud to take it to media.  The song went on to hit #1 on the ARIA chart while Amy Meredith and Sony parted ways soon after this clip was made.

My point is – don’t think that by involving a committee you’ll get more buy-in, that people will feel more empowered to promote the result.  If the creative result is brilliant, everyone will want to be associated with it no matter whose vision it was.

3. Know and test your target market

In music, we had only the vaguest ideas of our target market.  There was no science behind how we defined the audience for an artist.  One strategy I must have heard a hundred times was, ‘Start this artist on Triple J, we’ll do cool festivals like The Big Day out and Splendour In The Grass, then we’ll crossover to mainstream stations like Nova and Austereo.’  That was it!  Music is somewhat easier than launching a new product, as you can piggyback onto the market of other artists.

But if you’re launching a new product like Posse, you have to think through your approach in much more detail.  Recently, we had to choose how to design our stores and town, and had five artists submit concepts.  They were all good but very different.  My first thought was to share the designs with as many people as I could to get feedback.  I sent them to about fifty friends and our whole team.  Everyone had a strong and different opinion – all five had about the same number of lovers and haters.  It was very confusing!

To help make a decision, we decided to define our target market and test people only in that market.  But would that give us a result that was too niche?  After all, we want Posse to be a global platform with millions of users, so we can’t rule out an entire demographic like ‘men’.  At the same, time I knew that if I tried to please everyone we’d have something bland that no one loved.  So I decided to define and test our target market, which wouldn’t be everyone but would be big.

We focused on four groups who would use Posse: urban females age 16 – 25; urban females age 25 – 38, urban females with kids, and urban males 25 – 45.  We interviewed several people from each of these user groups and learned about the kinds of places they’d recommend to friends, how they used social media, and their creative taste.  We imagined one persona for each of our four audience segments and wrote out a detailed description of their life.  What were their jobs, their weekend activities, the media they consumed and how, their dreams, and their worries.  Then for each, we found a photo of someone who represented that persona.

Now, any creative decision we make we can sense check against these four personas.  For big decisions (like the style of the store and town), we invite a few representatives of each audience segment into the office and tested the different designs on them.  We wanted at least the majority of the representatives to love the design and we knew that none could hate it to the point where they wouldn’t use the product, or we’d rule out a giant part of our potential market.  The result was very interesting and the design we ended up with was a clear winner with our target audience representatives.  It only came third when we polled everyone and didn’t bear in mind the target market – but many of the people who didn’t like it were not in our target market and never would have used the product anyway!

I wish we’d used a framework like this to make decisions in music.  In music, if you are in A&R, you’re supposed to be a music expert with magic ears. You can hear hits and read the wishes of eighteen year-old girls.  I’m sure the industry would have a much better hit rate if music marketers thought through the target market, interviewed them, built personas and then tested single and video choices.

As a music manager, I relied a lot on the artists’ creative instincts and they generally had the final say.  But at Posse, I found myself in the daunting position of having no artist to be the genesis of ideas.  I had the final creative say, although I’d never been in this position and am not an artist myself.  One thing I am good at is spotting great creative talent when I see it, and by following a framework of defining our values, trusting the talent, knowing and testing our target market I feel like I’m in a much better position to make critical creative decisions that will define our product.

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.