There’s so many people with great ideas. There’s also many people who have the technical know-how to build products. And then there’s a seemingly endless list of problems to solve in the music industry. The idea of an accelerator is to put your company through a crash course in building out your product, learning from experienced hands, and staying hyper-focused on your ‘true north’. Often, founders get matched with mentors and after a number of weeks they come out finding their company in a place where they’re ready to go out. They move beyond bootstrapping and start to look for a seed capital funding round. One of my favourite recent start-ups, Fave, has seemingly benefited from swimming with narwhals during Music Tectonics and being part of Techstars. What this example also shows is how US-focused most of this culture is. What happens when you accelerate outside of a country that has a strong venture capital culture? How do you help to focus companies on growth? And what kind of program should you offer to the start-ups involved?
Accelerators galore?
Even when you step outside of the VC bubble in the US, there’s many accelerators around: Abbey Road Red is an incubator whose core is music production technologies; MidemLab focuses specifically on consumer experiences; Marathon Labs is an accelerator, part of Marathon Music Group, which aims to support innovation in our digital music ecosystem. Another accelerator program wraps up this week: Music Tech Accelerator [MTA]. This is a program for start-ups in the ideation phase. In other words, there’s plenty of options for start-ups in the music & tech space to find partners to help them grow. Moreover, as the examples above make clear, most of these accelerators have a specific target group themselves. What this does is that it helps them hone in on the skills they can provide to the start-ups involved.
The programme
If I’m a bit more specific than the MTA finishes their pre-accelerator program this week. In this period, the start-ups involved focused on getting a business case together.
This is quite different from, for example, Marathon Labs, which looks at companies who have that first business case and who have recurring revenues in place. With that, their lab hones in on business development more than ideation. I firmly believe that more labels should do what Marathon does with their lab as it would allow them to work sustainably across the music value chain.
What’s striking about the MTA programme is that they help to pinpoint that first business case. As I mentioned, there’s a lot of great ideas out there. Those ideas, however, are only useful if they solve an actual problem. Proving that requires a business case, or at least someone signalling their enthusiasm for the solution offered.
Start-ups and solutions
To continue to put Marathon Labs and MTA next to each other for a moment, the solution offered often already exists for companies in Marathon’s lab. They need to develop it further and try to achieve a critical mass of users to become sustainable as a business. Start-ups in the MTA might need to find their first clients still. The MTA program pulls start-up founders out of their comfort zone by making them talk to potential clients.
This helps sharpen the story they tell as founders about their companies. Moreover, it forces those founders to think about what promises they make to their clients, and who their clients really are. WeShared, one of the start-ups in the current MTA pre-accelerator program, offers a solution for barrier-free tickets. If I look at their problem, my first instinct is that WeShared is a solution for the barrier-free ticket buyer.
The opposite, however, is the case. WeShared offers a solution to ticket sellers. The amount of time it take for a customer to purchase a ticket is annoying, but the app is also a time-saver for the sellers. For them, the incremental gains become a big saving overall. What’s more, barrier-free tickets become a revenue prospect instead of a loss-leader. Basically, what they have is a SaaS plugin for ticketing companies that solves a real-world problem. In doing so, they also immediately make life better for people needing a barrier-free ticket.
Start-ups and growth
The music industry has a serious problem with both metadata and copyright management. We often hear that blockchains can offer solutions for this. However, I’m personally more excited about companies that use blockchain as a tool integrated into a solution. Faniak, for example, sees obstacles with metadata across the production and distribution chains right into world of the performing rights organizations. They turned to a blockchain solution, but mainly for storage and validation. Mainly, they provide a cloud service that automatically allows metadata to synchronize across data points. All Faniak needs to do is make sure the smart folder they create with tags and other data is interoperable with various forms, websites, and tools.
Similarly, Copyright Delta aims to provide a solution for a broken royalty system. They use a blockchain, but only because it allows them to create a great technology that verifies credentials. Moreover, it allows them to create complete and consistent analyses of musical works and their recordings with streaming and other broadcast data. The gaps currently existing in this field are real and create issues for musicians and broadcasters on an almost daily basis. Streamlining data flows will help fix these issues.
What these two start-ups share, then, is that they provide solutions to real-world problems. That said, how do they make sure that their solutions become part of their potential clients everyday behaviour? This is where an accelerator can play a role. Not necessarily by providing a network, or by providing mentors, but instead by pushing founders outside of their comfort zone. They need to acquire new skills and punch through their objectives. A business model is as much about a great spreadsheet as it is about getting that first letter of intent from a client.
Next up?
When you have an idea, or when you know you can build a great product, what you need is a little push to leave your comfort zone. What’s great about accelerators like Marathon Labs and the MTA, while looking at companies in different stages of their development, is that they provide this push. Being in the growth zone forces you to go through challenges like finding your first client, talking about your idea and product, and requires you to set new goals in your business model.