strategy

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Rather than an “about” page on your site/blog, may I suggest you replace it with a “how we’re different” page.

On the very rare occasions when I see “how we’re different” along the bottom or top of a site – instead of the more typical “about” – I almost always click on it, and I’m almost always glad I did.

It seems that companies who can quickly sum up their competitive advantage (i.e. what makes them different), and do so in human speak are pretty excited to highlight this.

Oh, by the way, if you can’t sum up how you’re different, don’t bother with a web site…or a business.

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Our People

If I think a person I work with should meet a specific person, I invariably say, “She’s one of us.”

If, on the other hand, I have to recommend avoidance of a certain person I say, “She is not our people.”

Both I and those to whom I’m giving my opinion know precisely what I mean.

Jan Wenner, upon seeing the iconic photo of the Infinite Jest-era David Foster Wallace (but before reading word one of DFW’s work) reportedly said, “Oh, he’s one of us.” He then dispatched a writer to profile Wallace.

I think we all know who “our people” are.[*]

Remember to build companies with and for these people.

Remember it’s ok to fire your employees and customer if they’re not one of you.

If you mis-judged (or, more likely, didn’t trust your initial instinct) and are working with the wrong person/serving the wrong customer, make a change fast. Doing so not only benefits you, but will allow the person you mis-judged to more quickly find his own people.

Speaking of “our people,” don’t forget to sign up for the 9GiantSteps email newsletter group. It’s a fantastic group of like-minded people to whom I send out SHORT email blasts presenting a digest of links and music of interest to our growing community.

[*]In an abundance of caution, and because I’m feeling sensitive, let me just say that it, of course, has nothing to do with age, gender, race or even political disposition. But, if you know me, you knew that.

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Products companies scale more easily than service companies. Fair enough.

Which, however – product or service – are artists? Essentially, they’re both. Too often, however, artists view themselves as service companies, with the occasional product thrown in (merch for musicians, books for authors, etc.) as an afterthought.

Simple economics tells us that as demand goes up, prices must rise. What economists don’t tell us (know any rich economists?) is that when you raise prices to correspond with rising demand, you often leave money on the table.

Sure, there are apparently a near-endless stream of customers willing to pay increasingly high prices to see certain artists perform (they are paying for a service), but you know that there are countless others who simply can’t afford $100+ tickets (and in an age where price elasticity of demand is very high, you better be careful about how high you raise those ticket prices; this summer’s concert season emphatically demonstrated that). By not offering these customers some product that acts as a substitute for the service they can’t afford to go see (i.e. concerts), money is being left on the table.

It used to be for musicians that this substitute product was a CD (perhaps a live DVD). It’s a bit trickier now as streaming is essentially replacing the physical or digital “product.” Any recording artist will tell you that, currently at least, the revenue from streaming is almost laughably low.

You realize of course that when Steve Jobs talks about (however trutthfully or not) how the iTunes store doesn’t make money, he’s showing us the primacy of products (iPods, iPhones, iEtc.) over services (running and maintaining the iTunes store, which is essentially a service for the labels).

It’s why Jeff Bezos pushes the Kindle soooo hard: it’s Amazon’s lone product in their otherwise service-oriented business.

The challenge, therefore, for those of us who are essentially in the service industry is to determine how to scale while not leaving money on the table. It comes down to reinventing our product offerings.

To be clear, this does not mean (exclusively) more touring (which seems to be the default answer). That’s a service, and, believe me, you can’t really scale that quickly and sustainably.

No, it’s about products.

You have to have a “thing.” Something that can work for you even while you’re not working. The good news is that the channels are there. The middlemen are increasingly being cut out, and now when you develop that “thing” it’s far easier to get it from creator to constituent.

Have a look, for example, at how Seth Godin has elminated the middle man, and uses existing channels to bring his “thing”/product to his constituents:

When you begin thinking about your service elements (being in front of customers) as a way to increase your customer base for your product rather than for your service, you’re on the right track. The iTunes store is a way for Apple to increase its customer base for iPhones; Amazon’s massive storefront is a way to leverage all of those content owners’ work (their books) so that Amazon can increase its customer base for Kindles; Seth Godin’s blog/Twitter account/speaking engagements are ways to increase his customer base for his books.

So, artistic service provider get out there and increase that base, but make sure you have a product that makes money for you while you sleep.

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I gave a lecture on entrepreneurship last night to a group of incredibly creative students. One of them made the statement that he was conflicted about the idea of merch. In particular, he felt that selling t-shirts at gigs didn’t align with his values (my words, not his – his words were more along the lines of: “selling out.”)

I told him I understood, and referenced the fact that I had recently had a conversation with Zoe Keating, and she told me she doesn’t sell t-shirts; she doesn’t feel that they fit with her values (again, my words/paraphrase).

This student was clearly swirling around on this issue, and as Mr. Hitchcock has taught us, “Swirling takes up all [your] time.”

The student followed me to my office after the lecture, where an overly-tired version of myself listened as patiently as I could, before saying, “Look, man, sell t-shirts, don’t sell t-shirts…who the hell knows? Try it. If you try to sell some, and people buy some, and it feels OK, keep doing it. If you try to sell them, and no one buys them, stop and figure out why. If you try to sell them, and people buy them, but you feel like you’re “selling out” – whatever that means – then stop, and come up with something else. In the amount of time we’ve been discussing this – let alone the amount of time you’ve been debating it with yourself, your bandmates, etc. – you could have tried it out, and gotten some data/feedback/learning, and either embraced or moved on. Instead, here you sit, not doing anything, not moving forward…just cogitating.” (This is the version of myself that Lauren Markow calls my “evil twin.” So it goes).

I don’t know if selling t-shirts is or isn’t right for this artist. The reality is, he doesn’t really know. How could he?

A wise man taught me that the thing to avoid is the “big mistake;” making small mistakes is the transaction cost (the toll) on the road to success.

When we get bogged down and worry about making any mistake, we are stuck in cogitation mode. There’s a reason why Deming put “do” in second position in his Circle (before “check” and “act,” and just after “plan”).

“Mistakes” are part of the iteration process, and iteration is good; it leads to feedback, refinement, and eventually success.

I hope this student makes some t-shirts and sees how it feels (both internally (to himself) and externally (to his customers)), and then moves on.

The alternative isn’t good.

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I still wake up on Wednesdays with a little shudder. You see, Wednesdays are (and, I guess, always will be) soundscan days. Back when there was still a record business, you got your report card every Wednesday morning. I remember so well hauling my pale ass out of bed and using the sweet dial up modem to log in to SS. 90% of the time, this was immediately followed by an “ugh.” The numbers were rarely what you wanted them to be (for more on SS’s continued irrelevance, read this).

Numbers indelibly etched in my brain, off to the office I’d go. I’d hit the fax (yes, fax) machine to look for the radio and press reports from the indies, and check my inbox (and by that I mean a little box in which paper reports were inserted) for internal press and radio reports. Ugh. Ugh.

Wednesdays sucked!

And, typically (almost always) with each subsequent week after the initial numbers, Wednesdays sucked exponentially more. You see, 99% of the time, the only week you might have any type of non-ugh reaction over SS numbers and other reports was that first week.

From there the numbers tended to drop precipitously. In fact, it was often considered a win if your SS numbers only halved from week 1 to week 2. Same with the other reports: radio and press (linked, and, in many respects, taking their cues from SS) tended to start with optimism (“So and so from such and such magazine/newspaper/radio station really likes the record, and promises to listen!!!”), and got increasingly depressing (“So and so says they’re on deadline/add week, but they’re going to try to listen;” “So and so doesn’t really dig it/feel the heat/will give it a review instead of a feature/will try it on the specialty show, but won’t add yet”).

Here’s roughly what the report card looked like:

What my scrawl is saying is that in week 1 if your SS number was 1000, by week 2 you’d often decrease that number by 75% (so, from 1k down to 250); the press and radio interest would decrease by half. Week 3 would continue apace with your SS numbers being a tenth (in this case, 100) of the first week, while radio and press interest was 25% of what it had been in week one. This is probably a little dramatic in order to make a point, but it’s not that dramatic, and this is, sadly, often exactly what it looked/looks like).

Can you imagine how hard it became to do this week after week? Don’t get me wrong, I (and many more others) had weeks where the SS numbers went up, press went crazy, radio added the song, etc. But, for every one of these, there were literally dozens where it went the way I described above.

Just from a psychological standpoint, it caused a ton of psychic torment; rather than being excited and finding ways to create energy and positivity about a project, you were left sugar coating: “The numbers weren’t that bad;” “Hey, we laid a foundation for the next record.”

This type of laying it on thick was particularly important in terms of artist relations. You had to present things in some sort of positive light to artists or they’d lose their minds; they’d just spent many moons and much blood, sweat, and tears creating a piece of art, and entrusted it to you, and to tell them that the general response to their work was, “meh” was simply cruel. (In hindsight, it was equally cruel to sugar coat, but I wasn’t as evolved as I am now (hah!)).

In any case, as the negativity began to become almost endemic, the process became surreal: what were we doing? What is real?

Happily, we have a new report card, and it’s sort of the inverse of the above.

Below is a quick (I know, given the looks of it, it’s hard to believe that I didn’t labor over it; I have a gift) list of some of what I feel are the more important elements that should be on your new report card.

[The legend to my map: email addresses; twitter followers; Facebook fans; Google Analytics (you should look at visitors, time on site, bounce rate, etc. Also, you should be looking at Google Alerts); downloads; subscriptions (i.e. people subscribing to some offering, ala Kristin Hersh's Strange Angels). The calculation is just an example. Here, I've got week 1 as "X," and the subsequent weeks' numbers increasing by 20, 30 and 40% of X. So, if week one, you have 100 email subscribers, by week 2 you want 120, and so forth. This is arbitrary. You should set whatever goals are difficult but attainable, and you should adjust as the weeks go by.]

Couple of things to note: 1. You can do this daily. 2. You should measure what I’ve suggested, but you should also have your own things you’re measuring; I’m sure I’ve left off some obvious things (one thing I’d love to be able to measure is how effectively your music is being shared, I know Topspin is making some great strides with this; another is gig attendees/number of gigs played – you need to measure this!).

The big distinction, however, between the old skool report card and the new skool report card is the shift from pessimism to optimism it represents.

Where the old skool report axiomatically led to depression due to the inexorable decline in numbers (SS, reviews, spins), the new skool report axiomatically leads to hope (and thus energy): if you haven’t increased – even by a teeny bit – your email subscribers, etc., something is wrong.

The good news now is that once you realize that something is wrong you can take strides to fix it.

Not getting enough email subscribers? Do you have an email-for-content widget rocking on your site; have you done what you need in terms of SEO to make sure people know you have a site; are you leveraging Twitter or FB to go to where people already are congregating and giving them a decent value proposition to go to your site; etc.

You know what your “remedy” was for bad ss numbers? Spend more co-op dollars. Fuck. Bad radio numbers? Payola. Double Fuck. Bad press? Cry. Sigh.

Again, the real beauty of this new type of report card is that it should be exciting and encouraging. You can see incremental progress, and, most importantly, you (band, manager) are in control.

This is vastly different than placing your hopes/destiny in the hands of a sales rep, publicist, promo person, label.

You note that nowhere on this new report card is a category for radio play or press reviews. You know why? They don’t matter. Yes, a teeny bit of an exaggeration, but even if they might matter a bit (and, really, only for artists who are already established) – you largely can’t control them. Please focus on what you can control. I did, by the way put Google Alerts as a measurement; think of this as your press report, and when you see that someone blogged about your work (via Google Alerts), respond/comment, etc. Remember, markets are conversations/relationships.

In a comment to my earlier post about The Leveling I was gently criticized for not supplying specific enough instruction in my writing. Well, as much as I agree with Mr. Godin’s statement about not drawing maps, I guess this is an attempt at something resembling a map.

Map:
What you have to do is figure out what you need to measure (I’ve tried to give you some ideas). This should lead to an overall strategy (i.e. big picture goals), and this should lead to action plans (i.e. small, daily steps that help you hit those goals).

Don’t try to go from 0 email subscribers to 1000 in a week, and then deem it a failure when/if you don’t hit that. Try to go from 0 to 25 in a week. Before you can get any, you have to do some work (as above, email-for-content widget, SEO, etc. – these are elements of an action plan that lead to success at a strategy of getting more email subscribers).

Measure your progress weekly. Use a google sheet that can be updated each week. Have a band meeting and look at the numbers. Assess what’s working, and what’s not. Where things are working, there is energy; do more. Where things aren’t (no addition of FB fans, etc.), figure out what actions you can take to change it.

Do this for three months, you’ll be shocked by the results.

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