I was recently at a "tech" conference that focused on entrepreneurs, and I watched a panel discussion on "legal issues" where the first speaker went on at length about why startups absolutely needed to apply for patents as soon as possible. He argued that so much of a company's value was "tied up" in its "intellectual property" and you absolutely needed to "protect" it or the company could just be copied. This shows a fundamental misunderstanding of true value. The idea, by itself, is somewhat meaningless. The real issue is the execution -- and no matter what you know about the idea, the actual execution is always a lot more difficult. Focusing on "protecting" rather than executing can actually be the death of a startup.
Thankfully, it looks like more and more startups in the "soft technology" realm are recognizing this, and are getting fewer and fewer patents. TechCrunch has a post by patent lawyer Leonid Kravets who did a study of patents and funded companies, and found that each year over the past few years, startups seem to be getting fewer patents.
It may be tough to tell from the chart, but basically, each year shows fewer patent applications from startups. There's a ton of other interesting data at the link above, including some differences between certain investors. Not surprisingly, corporate VC wings seem to like companies with patents (a very big company mentality). Whereas VCs that have been investing in some of the most successful startups today (like Accel, which funded Facebook, and Union Square, which funded Twitter, Kickstarter, FourSquare, Tumblr and many others) have a much lower number of startups they invest in that have patents. Those VCs seem to recognize that it's not the patents that matter, and the general success of both of those firms' portfolios suggests they may be on to something.
Recently, some cool new space efforts are lining up to deliver people and payloads into orbit. For example, SpaceX shipped some supplies to the International Space Station, and it's on track to providing a rocket system for ferrying astronauts to the ISS as well. More and more commercial space ventures are competing with government space programs, and this new space race will hopefully continue and create even more inspiring space technologies over the next decade and beyond. Here are just a few other interesting developments along the way.
Microsoft's new tablet computer was announced with a bit of fanfare -- and curiously, a stylus. When Apple introduced its touchscreens (not counting the Newton), Steve Jobs dismissively tossed away the idea of using a stylus and said the finger is the best pointing device around. Well, stylus technology is getting better all the time, and here are just a few examples of some styluses/styli that might beat the finger.
I first heard about the movie Fat Kid Rules The World a few weeks ago, when someone sent me to the Kickstarter page they set up for fundraising. I saw the movie was being directed (and the Kickstarter campaign was being run) by Matthew Lillard, who I like as an actor -- and, given the subject matter and Lillard's involvement, it reminded me of SLC Punk!, an all around awesome movie. I didn't write about it, because these days, there are tons of movies funding themselves via Kickstarter, so there didn't seem to be anything particularly new to write about (also, it seemed like the pricing if you wanted a copy of the actual movie -- $75 -- was a quite high compared to similar offerings, though it appears to have worked for them). However, after hearing Lillard being interviewed on a recent episode of the Mohr Stories podcast, where he explained a bit more of the plans for the movie, there are some unique things that are pretty cool. He spoke about being inspired by Louis CK going direct to fans, but recognized it's a bit different with a movie project.
In this case, they used $50k of the funding from Kickstarter (where the film raised $158k, on top of the $750k it had raised from an investor) to do a deal with the Warped Tour this summer, so that the film is basically touring with the famed concert festival -- with a very very well targeted audience given the subject matter of the film. But, perhaps more interesting is a website they just launched allowing any fans to request their own showing, using a newish platform called Tugg that basically acts like an Eventful/Kickstarter for movie showings -- allowing people to set up their own "screenings" at local theaters, where they set up the showing, and people need to buy tickets in advance. If enough people buy, the showing happens. If they don't, no showing. But it's a good way to get a bunch of fans together to do a showing in a theater. In the past, people would have to prebuy the theater and hope they could find enough people to recoup the expense.
Also, in the podcast, they explain that whoever sets up the showing (if successful) gets to keep 10% of the ticket sales, basically helping give fans even more of a reason to promote the film. I have no idea if this particular setup will work (and, it should be admitted that, historically, crowdsourcing/funding efforts that involve the community making money for promoting someone's work don't have as strong a history of success as ones where it's more about the love), but it is still an interesting model that we hadn't really discussed yet. And, as always, I love seeing new and different kinds of experiments where people figure out ways to make use of the internet to find an audience in a more efficient way and build a business model that matches better with what the fans want. So hopefully it works out, and others get inspired to try new things as well.
The Space Shuttle program is retired, but we still have the Soyuz (and maybe a mysterious secret mini-shuttle) to get people into space. On top of that, though, the private space industry is starting to kick in with more and more ambitious plans to offer rides into space -- or at least to the edge of space. Here are just a few more examples of these private efforts.
One of the things we've heard for years, whenever we talk about awesome marketing campaigns and business models that musicians and other artists have put together, is that it's somehow a "shame" that the artists are getting attention for the campaign/business model, rather than the art itself. Even Amanda Palmer expressed some concern about this in a recent blog post:
the weirdest thing right now is that everybody KNOWS about it. i’m now famous for my kickstarter.
which is a little depressing. i wish that i could steal all that enthusiasm and high-fiving i’ve getting from strangers in the street (literally) and re-route it to the album when comes out.
i don’t want this album to be remembered as “the kickstarter record.”
i do want this record to explode. and i want this record to explode because it is awesome.
There were definitely similar concerns about things like Radiohead's In Rainbows, where some said it's only known as the "pay what you want album." That said, Palmer immediately points out that she's not too hung up on this, and discusses repeatedly what a "fucking game-changer" Kickstarter is for the music business.
However, it did seem worth focusing in a bit on this point to think about it some more. Is it really that big a problem if people know you for doing something innovative that is indirectly connected to the art? I don't think so. The biggest challenge for many (probably most) artists these days is obscurity. They need ways to stand out from the crowd -- and often that goes beyond the music.
But none of that eclipses the music entirely.
Sure, some people may focus on the business model or the marketing efforts, but that's a fantastic conduit to the music. The only reason I learned about Amanda Palmer in the first place, years ago, was her efforts to get out of her major label recording deal, after the label (Warner Music) took her own videos down as part of their fight with YouTube. And, obviously, she's done lots of other interesting things that matter to the community here as well. Since first learning about her, however, I've become a huge fan of her music as well (and discovered that she puts on a fantastic live show).
Basically, everything that you do as an artist to stand out still leads back to the work. And the best gimmick in the world isn't that effective if the art isn't amazing too.
It's what we've said in the past: no marketing, no gimmick, no trick will "work" if you're not also producing awesome content. Sure, there will always be some people who support you for doing something cool in how you present yourself. But, as our critics always like to remind us, the art itself is still central. And no one's denied that. But we take it for granted that if you're going to make any of these new things work you also have to make good content. And if you make good content, but attract attention for a successful Kickstarter, it's quite likely that a bunch of those people will become true fans of the music (and the artist) as well.
Okay, here's a bit of a two-fer. With all of the attention that Amanda Palmer has been getting for her massively successful Kickstarter campaign, we had some commenters here questioning whether or not she would freak out if people then shared her music. Thankfully, in her latest update about the project she answers that and many other questions from some folks who are still a little confused about what's going on. But, for this post, let's focus on the simple question of "piracy" -- since it's one that comes up often enough around here:
i think music should be shared. all the time. by everybody. i think it’s pure insanity to make music filesharing illegal.
and with that said, i have, for years, encouraged my fans to burn, download and share all of my music with each other and with strangers.
and i will never stop doing that. all that sharing eventually comes back to me in all forms of income and goodwill.
This actually reminded me that, a few weeks earlier, famed music producer Steve Albini did an AMA on Reddit, in which he was asked a similar question, to which he responded:
I reject the term "piracy." It's people listening to music and sharing it with other people, and it's good for musicians because it widens the audience for music. The record industry doesn't like trading music because they see it as lost sales, but that's nonsense. Sales have declined because physical discs are no longer the distribution medium for mass-appeal pop music, and expecting people to treat files as physical objects to be inventoried and bought individually is absurd.
The downtrend in sales has hurt the recording business, obviously, but not us specifically because we never relied on the mainstream record industry for our clientele. Bands are always going to want to record themselves, and there will always be a market among serious music fans for well-made record albums. I'll point to the success of the Chicago label Numero Group as an example.
There won't ever be a mass-market record industry again, and that's fine with me because that industry didn't operate for the benefit of the musicians or the audience, the only classes of people I care about.
Free distribution of music has created a huge growth in the audience for live music performance, where most bands spend most of their time and energy anyway. Ticket prices have risen to the point that even club-level touring bands can earn a middle-class income if they keep their shit together, and every band now has access to a world-wide audience at no cost of acquisition. That's fantastic.
Additionally, places poorly-served by the old-school record business (small or isolate towns, third-world and non-english-speaking countries) now have access to everything instead of a small sampling of music controlled by a hidebound local industry. When my band toured Eastern Europe a couple of years ago we had full houses despite having sold literally no records in most of those countries. Thank you internets.
The key point that both Palmer and Albini recognize is that it's not about the "sharing" or "piracy" or whatever you want to call it. It's about what you do with it. Both recognize that if you play your cards right, things can be absolutely fantastic for musicians these days, because not only can they have more control over their own destinies by taking charge of their careers, the biggest challenge is obscurity not piracy. And, in fact, file sharing (not "piracy" if it's supported by the artists themselves) can help alleviate that problem, help them build up larger audiences around the globe -- at no cost -- and then do something with that fanbase later.
I keep seeing critics complain that Amanda's Kickstarter campaign only is useful to someone like Amanda because she "had a big fanbase" already. That ignores (completely) how she built up that fanbase. And part of that is making sure as many people as possible could and did hear her music. In that context, fighting against "piracy" seems to be fighting against an artist's own best interests...
Back at Midem, I did a presentation talking about the importance of being more open, human and awesome is a key component to standing out against the (growing) competition these days. I used the example of Louis CK, but Amanda Palmer would be just as good. After all, her Kickstarter campaign is getting tons of attention for raising a ton of money, leading many to wonder how she did it.
But as the numbers keep going up, it's also raised a second question: where is all of that money going? And so it should come as little surprise that Palmer has opened up and explained in fairly great detail where the money is going, and highlighting that even if the campaign ends up at a million dollars (a real possibility), a very large percentage of that money is actually going back into the "product" being offered. Here's just a snippet, but you should read the whole thing:
7,000+ high-end CD-books & thank you cards cost about $15 a package to manufacture and ship. that’s $105,000.
1,500+ vinyls & cards, at about $20 to manufacture & ship…about $30,000
2,000+ art books (bearing in mind the shipping on those, every time they need to be shipped from the plant, to the distributor, to YOU, plus the signing, is killer) will cost us roughly $80,000.
PLUS we have to factor in about $15-20k to pay our design team to actually design all this stuff, and to make it super-duper amazing and worth your money. those of you who supported mine and Neil’s last Kickstarter know what i’m talking about here. this CD is gonna be a super-deluxxxxxe work of art.
the neil and kyle books are going to cost us a LOT of dough to create…let’s just throw out about $100/copy for about 100 copies…that’s 10k.
if we sell about 100 turntable packages: ordering the tables, paying the artists to paint them, shipping all that stuff around: ballpark another $15k.
arts & crafts/7-inch packages, if we sell about 300 of them, adds about another $30k (we’re planning on spending roughly $100 each on the packaging for those, including not only the vinyl but the fun arts-and-crafts activities. oh, and postage/shipping x5)
There's a lot more, but it adds up. In the end, she basically notes that the purpose of Kickstarter alone isn't to make a profit, but to invest in all of this awesomeness such that it can help sustain things going forward:
ONE…we are committed to doing amazing things for all of you who pledged. sure, it’s going to cost more to make things extra fancy (and for us to ship things for FREE all over the world), but making this stuff amazing IS THE POINT. if i skimped on making the packaging and actual products INCREDIBLE, i’d be an idiot.
TWO...a LOT of our income for the next year WON’T COME from this kickstarter. it’ll come gradually, over the following year: from the touring show, from the merchandise we sell on the road, from money we get in donations when i make the tracks available online, from the money i get from iTunes from the people who are sometimes lazy (like me), and so forth. it’ll be a slow burn, like it always is.
Some might think it's incredible that she could "make" a million dollars, and not come out super wealthy out of that process, but as she noted: "that’s FINE with me. it’s almost even THE PLAN." Why? Because it helps set up a variety of things for the future. This is important. As much as we've praised Kickstarter, which is completely awesome, it's not a business model by itself. It can be a piece of a business model, but it's an "event" and a limited time thing, rather than a sustainable ongoing revenue stream. Amanda is using Kickstarter wisely (obviously) not to just raise a ton of money and throw it all away (like a major label advance), but as a way to invest smartly in an awesome product while also setting up a way to keep earning money in the future.
And she's doing all of this in a characteristically open and human way.
As we said, being open, human and awesome is a key way to succeed these days, and Amanda's doing it better than just about anyone else out there.
We keep hearing that these new business models and platforms really can't handle "big" projects. While part of the charm and power of these platforms is that they can fund smaller "long tail" projects that might never otherwise see the light of day, there's no reason that they can't do bigger projects as well. A few weeks ago, we told you about the Kickstarter campaign for the Pebble e-watch, which was the fastest growing Kickstarter project ever, surpassing $1 million in just 28 hours, and hitting $4.5 million by the time we got our post out.
Last week, the project surpassed $10 million and still had over a week to go. However, the folks behind the project had decided to cap the total number of watches that could be pre-sold via Kickstarter at a mere 85,000. So once that number was hit, they set the Kickstarter to show all the items sold out. While I could see some folks who were waiting towards the end get a little annoyed (thankfully, I got my order in a few days earlier), projects like this should at least open some eyes to the fact that Kickstarter is not just for small stuff. While some have argued that something like Kickstarter could never fund a Martin Scorcese film, remember Kickstarter is just three years old. If Scorcese set up an interesting project with cool tiers, I wouldn't be surprised to see it funded to massive levels.
Music reality TV has become a key feeding ground for the major labels lately. Shows like American Idol, the Voice, X Factor and the like seem to be where the labels have been picking up some of their bigger name stars lately -- allowing the shows to help build up an initial following and then picking off the stars with typical record label deals. Except... it appears that some of those musicians are realizing that they don't need the labels any more. Jordis Unga, a singer who has appeared on two reality TV shows (Rock Star: INXS and The Voice), has decided that she doesn't need to sign a label deal. While she didn't win on either show, she did build up quite a following, and she decided that for her debut album, she might as well just hit up Kickstarter, and ask for $33,000. Which she got. In less than a day. In the first day alone her project on Kickstarter raised over $50,000.
Now, perhaps some will complain that she is now beholden to her fans, but that seems a lot better than being beholden to a multinational conglomerate who claims all ownership and control of your work. Others, quite reasonably, will point out that she built up some of this following by being on two prime time network national TV shows. That's absolutely true. No one is saying that the trick to being a successful musician today is to just go on reality TV. But the point is that if you can build up a following -- in any way possible -- the need for a record label diminishes. And there are more and more and more ways to build up that audience today. If the labels aren't worried about these alternatives, they're not paying very much attention.