I’ve spent over a decade writing about music. Much of that decade I’ve also spent in senior product roles at music streaming services. When not working in full-time roles, I’ve helped founders with strategy for their company, product or community. Below are some of the most important things I’ve learned – often the hard way as a young dreamer.
Forget about ‘disrupting’
Yes, your startup is going to reinvent the entire industry. Fix all the broken things. Cut out all the people who profit while contributing very little. Cool. But in the beginning, you need traction. To scale, you will typically need world class music involved. Telling everyone you want to disrupt them is not going to make you any friends. There are many people in the industry (that you’d like to disrupt) who think exactly the same way you do. Hone a message of partnership and of co-investing time, energy and money into solving a specific problem.
Common trap: Proudly proclaiming “I’m going to cut out the middlemen” to the decision-makers who have been hired by artists so that they can stay focused on their art.
Understand the industry
People have oversimplified ideas about how the industry actually works, as well as hopelessly outdated perspectives that date back to the early days of p2p filesharing when CD sales reigned and iTunes was just launching. This oversimplified perspective can cause you to waste a lot of time (and resources). For example, people hear “Spotify pays too little” and think “let’s build a streaming service that pays more, easy-peasy” and then start building a product before understanding who takes a cut from streaming royalties, why royalties are as low as they are, what it means to compete in this space with tech giants, how little the industry cares about platforms without an audience, how much time it takes to license music, what type of technical measures you have to comply with when handling licensed music, etc. And that is just one specific example.
Common trap: Not spending some hours to read the most recent edition of All You Need to Know About the Music Business by Donald S. Passman before overcommitting resources.
Know whose problem you’re solving
Many startups try to solve industry problems, without understanding exactly who their customer will be. Many startups, initially pitching to fans and artists, end up pivoting into B2B-models down the line. Those are the ones that actually survive. Spend time up front to interview people. Build very basic prototypes to see if people actually use your service the way you imagine. Don’t rationalize towards the answer you want to see: if people don’t exhibit repeat-behaviour, meaning they come back to your service over and over, then you are not solving the right problem for the right person.
Common trap: Thinking you’re solving the artist’s problem, rather than that of their management, marketing team, record label, tour promoter, etc.
Speak to your customers
A lot of startup founders spend entire conferences talking to other startups. Unless you’re building something specifically for startup founders, then I’d say it’s a big waste of time. Yes, build a network of startup founders, so you can learn from each other about building a business, but don’t mistake that time as contributing to your product’s success. The #1 most important thing you can do with your time, besides hiring the right people, is spending it with (intended) customers. Learn about them, get their feedback, get them involved.
Common trap: Believing in the “build it and they will come” trope and spending weeks or months building a service while spending not even 1/10th of that time actually speaking to the people that will use it.
Speak to your partners
Most music startups have a dynamic where two groups’ problems need to be addressed. Your source of revenue may be with one group of end-users, e.g. concert-goers, but you need to spend time to understand the need of all those around them: venues, teams of touring artists, etc. The key to success with your partners will be how well you solve your customer’s problem. Consider what relationships augment that solution most effectively.
Common trap: Trying to solve a problem without understanding how partners might help you (e.g. it may be faster to license great music than to wait for independent musicians to show up & upload a sizeable catalogue).
Be honest about competition and don’t underestimate ‘switching cost’
It’s not enough to do something incrementally better. People have established routines. They’re happy with apps that get the job done and it’s typically not worth establishing a new habit for minor improvements.
Let’s say your app is the best way to discover new artists. The app has a novel interface the world has never seen before. There is simply nothing like it. Yet, there is. People have developed complex behaviours for discovering new music, this may involve concert line-ups, various social media platforms and accounts, streaming service algorithms, curated playlists, YouTube channels, etc. You are competing with all of these services for this music discovery behaviour. Understand the whole behaviour and the key differences in behaviours that may exist. Understand the trigger “I’m at work and I quickly want to find something new to listen to that’s not too demanding of my attention” and the end state “the music is playing from my WiFi-speakers and I can save new songs I like to my favourite playlist with one tap”. Can your solution achieve such an outcome? If not, is it so great that it’s worth the switching cost?
Common trap: Thinking you have no competition due to a lack of direct competitors (sidenote: they may all have struggled to gain traction and died). You are competing for behaviours. What behaviour are you targeting? Has anyone already monopolized this behaviour? How do you get in there?
Concluding
The music business is a highly appealing space for startup founders. Everyone loves music. Investors like to take a risk occasionally and add a fun project to their portfolio. Unfortunately, a lot of startups I’ve seen in over a decade of writing about music tech no longer exist. While I actually value naivety, since it can lead founders to pull things off that nobody thought was possible, I hope sharing some of these common pitfalls will help more of you succeed and create more amazing tools, experiences and a blossoming artist-centric music business as a result.
P.S. Never stop dreaming. 💖