If You Want To Make Money As A Musician You Need To Be A Musical Entrepreneur

from the that's-how-it-works dept

One of the common criticisms we hear around here when we talk about the various business models that are working for more and more musicians these days, is that it's somehow "unfair" or even "wrong" that musicians need to think about business models these days, since they should just be spending all their time creating music. Of course, this assumes (incorrectly) that the same thing wasn't true in the past as well. For years, musicians have always teamed up with business managers and music labels for that very reason: to delegate some of the business tasks. That doesn't change in the modern era. What does change is that the different opportunities have grown significantly. Either way, Andrew Dubber (who's always worth paying attention to on these topics) recently put a comment on a blog post on this particular topic that is so good it shouldn't be buried as just a comment, so I'm going to highlight some of the key parts here:

Musicians deserve more money than they get. Most train harder and for longer than brain surgeons in order to do what they do, and then they earn less than checkout operators for what they do. I strongly believe that more money should go to more musicians more often than it does....

Making music is not (usually) a job of work. It is a creative act. You don't have the RIGHT to make money from your music. You only have the opportunity.

If you make music speculatively - that is, you create it in the hopes of making money from it, then you are a music entrepreneur. As such, entrepreneurship rules apply.

You may invest a good deal of energy, effort and expense in your creative ideas. You may make a lot of money. You will probably make none. But nobody OWES you money just because you put the work in.

If your business model is to grow and sell oranges, then it's no good picking the oranges, then leaving them on the footpath outside your house with a price tag on each one. It doesn't matter how great your oranges are, or how hard you've toiled in your garden. Someone WILL take your oranges. Some will get kicked to the side of the road. Some will get stepped on. But it's not because people are immoral and don't understand or appreciate fruit properly.

If you wish to be reliably rewarded for your music, then get employed to make music as your job.

Bingo. That's the point I've been trying to make for years on this, but said much better than I could express it. He then goes on to make another point I've tried to make in the past, which is that if you compare the situation today to what it was in the past, there are so many more opportunities to make money. In the past, it was nearly impossible to make money on music because there were so many gatekeepers.

The odds are stacked against you. History is littered with musicians who are disillusioned, embittered and broke. This was true before the internet just as it's true now. The internet is neither your saviour, nor your enemy.

Let me make that bit clear: prior to the internet, most people spent NO money on music. If they bought a record in a year, it was a gift for a nephew (and it was usually rubbish). Some people spent a lot of money on music, because it was tied up with cultural things like identity that they were really invested in.

Back when you needed a record label to just be heard, it was a lottery. The odds were bad, the lottery tickets were expensive, and most of the prizes - if you did happen to win - were just awful. Now you don't need to play that game - but you need to be smart and you need to understand what the rules of the new game are.

You CAN, of course, get signed to a record label (and that lottery is still in play) but you can also be an entrepreneur. I recommend the latter - but not because it guarantees you money.

But the simple fact is that you don't become a successful entrepreneur by making things that people will not pay for, insisting that they should, and then complaining that their morals are to blame. They may not share your morals, but that's not even the point.

It's not their job to understand your needs. It's your job to understand theirs.

You become a successful entrepreneur by meeting people's needs and wants, solving a problem for them and doing it in a way that allows you to make money.

I've said it before and I'll say it again. Even if it was true that all the people you wish to target with your art are immoral thieves who you would never invite into your home - why would you insist on trying to change their behaviour as part of your business strategy?

And he concludes by pointing out (as we have in the past as well) where the real "sense of entitlement" comes from:

You may make great and interesting music, and put on an amazing show with amazing costumes.... But decrying a sense of entitlement among those who won't pay you for what you insist on doing is back to front.

The people with the weird sense of entitlement are the ones who stamp their feet and say 'look at all this hard work I put in - where's my money?'

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Can You Teach Entrepreneurship?

from the maybe...-but-not-always dept

Paul Kedrosky has a thought-provoking post, discussing how various entrepreneurship programs don't seem to be producing more entrepreneurs. He's finding that when he talks to people in those programs, they're often more interested in participating in the ecosystem around entrepreneurship (such as by becoming a venture capitalist) rather than being entrepreneurs themselves. To be honest, I don't find this all that surprising. Most entrepreneurs I know are pretty driven to start a company now and not wait around for however long it takes to go through a schooling program. If I didn't have the opportunity to tack on business school right after undergrad (unlike most b-schoolers), I doubt I would have gone back (and I spent way too much time in business school talking to others trying to convince them to start businesses). I don't think entrepreneurship programs are a bad thing, per se, but I'd imagine the real help is in assisting those already in the process of building a business, rather than studying to be entrepreneurs. Also, while Paul talks about the importance of "creating more entrepreneurs," I'm not sure that makes sense. I think the people who are meant to be entrepreneurs become entrepreneurs.

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Congrats, RIAA: Chilling Effects Have Killed Interest In New Digital Music Startups

from the nice-work! dept

We've noticed that pretty much every single new and innovative digital music startup that pops up eventually gets sued by the record labels. The labels seem to view this as a part of basic negotiations -- and, in fact, many of the lawsuits have ended in partnership/equity deals. But, those deals tend to be suffocating. Given that (likelihood of getting sued or getting a deal that makes a profitable business impossible), is it any wonder that entrepreneurs are shying away from any sort of digital music startup these days, in favor of opportunities with no obsolete gatekeepers demanding huge chunks of whatever revenue they might one day make?

At a time when the recording industry needs innovative startups more than anything else, the record labels and their oppressive lawsuits and deal terms have basically scared off exactly the people who create those businesses.

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What Obama Should Do To Get The Entrepreneurial Viewpoint

from the we're-about-to-find-out dept

Two contrasting articles crossed my desktop this weekend, both about how President-Elect Barack Obama is likely to govern. The first, by Mark Cuban, criticizes Obama for the list of economic advisers that Obama chose to consult concerning his plans to take on the economic downturn. Cuban, correctly, worries about who is missing from that list:

Notice anything missing?

Not a single entrepreneur. Yes Warren Buffett started a business, but he will be the first to tell you that he "doesn't do start ups". Which means there isn't a single person advising PE Obama that we know of that knows that its like to start and run a business in this or any economic climate. That's a huge problem.

I absolutely agree. It is the entrepreneurial spirit that is needed right now. But, at the same time, it makes you wonder just how Obama would have accomplished this. Any one or two entrepreneurs are unlikely to do a really good job representing all entrepreneurs. Entrepreneurs, for the most part, don't all view things the same way, and there's no real organization of entrepreneurs. The reason entrepreneurs become entrepreneurs is often that they see their own way of doing things and don't want to be locked up by convention. So, while it is worrisome that there aren't any entrepreneur-types on the list, I'm not sure I'd be that much more comfortable with a few entrepreneurs representing the interests of all entrepreneurs either.

That brings us to the second article. It's by David Carr in the NY Times, and looks at how Obama's campaign ran like an entrepreneurial startup itself, leveraging the internet and new technologies to do a complete end-run around much bigger and more well-known "corporate brands" in the political space. And it wonders if Obama will continue to use those tools to govern as well.

So, at the very least, one could argue that Obama, himself, is something of an entrepreneur, but more importantly, one would hope that Obama does, in fact, continue to leverage the internet to hear from folks -- and is actually willing to listen and take suggestions seriously. Why not create an economic roundtable of sorts online that lets more people weigh in? Let ideas in the mix bubble up to the top using ratings systems (and maybe some White House moderators) and contribute them to the mix. If someone has a particularly good suggestion, why not invite them to a meeting with those "big shot" economic advisers as well? It doesn't mean that every hare-brained scheme needs to be listened to, but if there's a good way to allow the best ideas to bubble up and get recognition, it could be quite a powerful new way to govern. To some extent, there's already some indication that this is where things are headed with the transition website Change.gov, but it remains to be seen if that's just a Presidential suggestion box... or something a lot more powerful.

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Silicon Valley Isn't Ignoring China; It's Looking For The Opportunity

from the looking-for-opportunities,-not-threats dept

Echoing some of Rebecca McKinnon's claims that we discussed recently, VentureBeat is running an OpEd piece by Rebecca A. Fannin, claiming that Silicon Valley has its head in the sand about the rising "threat" of competition in China. While there certainly may be some folks who aren't paying attention to China, my take on the situation is quite different.

Silicon Valley, as a broad generalization, doesn't worry about "threats." Instead, it tries to treat them all as opportunities. So, if Fannin is upset to see folks focusing on Twitter and the iPhone rather than the fact that China is building up a healthy and rapidly innovating tech economy, she may be focusing on the wrong thing. It does little to "fret" about the next big threat. There are always people warning about this or that big threat. A dozen years ago, it was how Japan was going to take over the tech industry. That didn't exactly happen. Sitting around and worrying about a threat doesn't make much sense.

Instead, it makes sense to pay attention to opportunities. And, many, many, many people in Silicon Valley view China as a huge opportunity. And, yes, new companies and technologies will flow out of China -- and it will present formidable competition -- but, again, competition isn't a real threat, it's an opportunity to do something even better and more innovative. So, I'd disagree with the assertion that Silicon Valley has its head in the sand about the rise of Chinese innovation. We're just focusing on how to make them opportunities.

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Keeping The Benevolent Dictators Of Silicon Valley Honest

from the is-that-any-way-to-build-an-internet? dept

I don't think I've ever had more people send me a single blog post than a blog post from earlier this week by Rebecca MacKinnon discussing her worries about "Silicon Valley's benevolent dictators." It's an interesting read that brings up some excellent points. It starts off pointing out the rather insular view many folks have in Silicon Valley about "the rest of the world" and the sort of hubris that comes out of the Valley on a regular basis. That, of course, is nothing new, and is a criticism that has been leveled at Valley inhabitants for many, many years. And, indeed, there is a "clubby" nature to Silicon Valley at times, that has both good and bad sides to it.

MacKinnon points out, correctly, that Silicon Valley-ites also tend to put blind faith into the idea that technology = freedom, and freedom = good, in a rather libertarian sense. Again, that's been said before. But then she points out something of a contradiction in all of this libertarianism, by noting that in fighting against any government regulation while putting all our faith in technology, we actually end up with a system of "benevolent dictators" made up of the folks who control the technology we put our faith in. That is, she worries that in rejecting government regulation, we've approved a defacto dictatorship in the form of the companies we put our trust in. In some sense, this is channelling Jonathan Zittrain's pessimism about what happens when those benevolent dictators turn away from benevolence.

Basically, what both MacKinnon and Zittrain are pointing out is that technology is just a tool. It can be used for good or for bad purposes, and it's part of Silicon Valley's hubris to assume that good will automatically win out in the end. That is, we've been mostly blessed, because the people putting such tools into practice are doing it for good (benevolent) reasons, but there's always a risk that someone else will do something much worse with it. It's a fantastic point, and one well worth thinking about, but I think the assumptions are a little bit wrong.

It's not necessarily a blind faith that "technology" and "capitalism" are flat out "good," but more a recognition that an expanding market tends to open more opportunities for everyone, and the end result of that expansion is good at a macro level. Capitalism tends to remove the barriers for growth, while technology (or, more specifically following Paul Romer's thesis, "ideas") are what then creates that growth. Capitalism is about removing the barriers, and technology and ideas are about enabling that growth. That doesn't mean that there aren't downsides to both -- but the net gain does appear. And, one thing that has become incredibly clear throughout history is that it's nearly impossible to take away that net gain once it appears. And, conversely, asking the government to create those net gains instead almost always fails, due to the difficulty in accurately regulating a market.

In other words, by removing the barriers and enabling the potential, you've almost guaranteed that when someone tries to use the tools for less-than-benevolent reasons, it only opens up strong demand for someone else to provide the equivalent (or better) in a benevolent way again. And, at the same time, in asking the gov't to manage the benevolence, you almost guarantee less opportunities to actually provide good tools, because you've added hurdles they need to jump through. Yes, there can be bumps in the road -- and, no, it's not always a fun process along the way. But enabling for growth is not blind faith. And, there are plenty of checks and balances in place that should these "benevolent dictators" turn authoritarian instead, the end result (or "revolt" as the case may be) can often be strong enough to deal with it.

So, yes, there may be some benevolent dictators in Silicon Valley -- but they'd be hard pressed to successfully ditch that benevolence without paying a huge price.

Related to this, I've recently been doing a presentation for various corporate execs (almost all from outside the US) on "What Makes Silicon Valley Silicon Valley." It's probably my favorite presentation, because it's fun and it usually challenges a lot of the assumptions many people have about why Silicon Valley has been so successful for so long -- that is, while it discusses some of the "common" reasons, it focuses more attention on the hidden, unexpected and accidental reasons for why Silicon Valley became what it did.

The last time I gave it, I ended up getting into a huge discussion with some European execs who pointed out that many of the explanations seem to run almost entirely counter to what many countries who try to set up their "own" Silicon Valley think. That is, many folks look at Silicon Valley and try to replicate the outward manifestations (a good university, some venture capitalists) and miss the underlying details that create the real culture of Silicon Valley, because they almost seem counterintuitive. And the most basic element of this is enabling the free exchange of ideas (that engine for growth). Instead of doing that, most focus on protecting ideas and limiting that free exchange, falsely believing that hoarding information beats sharing information (even with competitors).

So, what happens is that other countries set up their own Silicon Valleys by focusing on protectionism (greater intellectual property rules, non-competes, hugely funded labs), and ignore the power of the cross pollination of ideas and people throughout Silicon Valley, which make it that much more difficult for any single company to abuse the trust of the people they serve. Should any company turn away from benevolence, that openness almost guarantees a more open competitor shows up in return (sometimes with the same employees from the older company). That openness drives innovation, but also keeps these benevolent dictators honest.

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You Don't Create A Silicon Valley By Government Fiat

from the takes-a-bit-more-than-that dept

Two separate articles came out in two separate newspapers based 3,000 miles away from each other this past weekend -- but together they demonstrate exactly why so many places have had difficulty creating their own, local versions of "Silicon Valley." Especially during the dot com bubble, it seemed like every country and every state wanted to create some area that was a "local" Silicon Valley. There were silicon islands and silicon prairies and silicon alleys and silicon mountains... and almost all of them went nowhere. An article in the San Francisco Chronicle talks about how the original Silicon Valley was created, through a mixture of strong educational institutions, easy flow of capital and a culture that focused on risk, experimentation, entrepreneurship -- and the free flow of ideas. While the government played a big role in early Silicon Valley culture, it was as a customer, not as the creator of the culture. Contrast that to the story in the Washington Post about how Prince William County set out to create a high tech hub, which is still struggling to get much traction in the high tech world. Rather than paving the way for those critical components to form, the county simply set aside some land and (it appears) some marketing efforts to promote the county as a good place for high tech companies. That seems to be about all that many other "silicon somethings" did in the past decade as well -- forgetting that there's a lot more involved in creating a true high tech hub.

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