I used to work in the music industry back in the 90s, and sometimes the tech sector reminds me of this time hustling in the music space. There are definitely a lot of things that are different, but the business of the tech space, often reminds me of some of the business currents that exist in the music industry.
When you understand the lay of the land in the music industry, there are three distinct spheres of operating:
- Independent – Small, successful bands who build a solid audience, and are able to make a living.
- Label (Failure) – Bands that feel the need to be the next Led Zeppelin, and sell their souls.
- Label (Success) – The small portion of bands who actually find large scale success, and get all the attention.
Most of the work I did in the music promotion space, existed within the world of independent or label (failure), with only one semi successful band, that had a brief flash of success, and I’d still actually put them in the label (failure) bucket, now that I think about it. There is a lot of money to be made as a promotion company selling services to bands who think they are going to make it big–they tend to sell everything, beg, borrow and steal to pay you. (sounds familiar)
There are some independent bands understand that they can actually make a decent living, making music through a mix of selling music, merchandise, and touring. Most other bands think they need to sign with a major label, when in reality the labels are just gambling and playing the numbers on the bands they sign. Only a small percentage of any record labels catalog will make them big money, the rest–marbles on the roulette table. Smart bands know they can do well, by playing good music, and running the business side well, where the not so smart bands always have to be famous, with only a small fraction ever making it–the rest burnout and fade away.
In the end, not every band needs to sign with a major record label, and not all bands needs to aspire to be an orchestra. This reminds me of tech startups, in that not all startups need to scale and sign with a VC, and definitely do not need to scale and become the next enterprise organization.