In Part 1, I talked about my experiences applying the idea of Minimum Viable Products to music, while Part 2 focused more on the human aspects of starting a company or being in a musical group. This section takes a more broader perspective by looking at how musical groups and business models relate to each other in terms of their size. These ideas are not exclusive to perspectives that come out of the “Lean Startup” approach, but musicians who’re interested in entrepreneurship will inevitably run into the phrase scaling, so it’s a concept that’s definitely useful to have under your belt.
In his lectures and presentations, Silicon Valley guru Steve Blank uses a simple chart to explain the evolution of business models:
Startup companies come up with new and untested ideas, which they then attempt to formulate into a sustainable model to generate value (for society) and revenue (for its employees and investors). Blank argues that the goal of every startup is to discover a business model that shows it has proven value, then “reiterate” the execution of its ideas. The goal of the entrepreneur, in other words, is to move from left to right in the chart above.
All corporations, no matter how large, were at one point a startup company. (Think Bill Gates, who started tinkering with stuff in his garage.) How companies get from small to big is done through the process of scaling, which is a phrase used to describe the process of a company’s successful expansion. Entrepreneurs will spend time researching, testing, experimenting, and developing something according to their personal vision. Once something workable has been “discovered”, however, they will then go heavy into distribution mode: vendors and clients are contacted aggressively, manufacturing and production goes into an all-time high, while their marketing team goes into full-swing in an attempt to get the word out.
All of this activity is essentially motivated by the idea that the product that’s being shipped will eventually be successful in generating a profit. When the returns are high, the company can then hire more people to start the process all over again — this time, in a wider market. If you sold 100 copies of your CD and made $300, what would happen if you expanded your company to sell a million? A 100 million? This process is, in essence, an expansion of an institutional form that happens as a result of the repetition and reiteration of a single idea or vision. It attempts to increase value and influence by ballooning smaller successes into larger ones. It’s also not unlike what composers do when they write musical works.
In the music world, this chart would look something like this:
Like entrepreneurial ideas, musical innovations start with “tinkering”, whether it’s improvising chords on the piano, jamming out with the band, or just fiddling around on your instrument during practice times. These ideas are then organized into compositions, recordings, or songs for bands or groups to play.
Beyond size and , the two charts can also serve as descriptors of institutional norms and tendencies. From left to right, various types of spectrums can be drawn across these lines:
Passion, Vision Driven → Order, Rule DrivenHighly Innovative → “Tried and True”Potential for Market Disruption → Reiterates Known Ideas
Agile, Flexible → Slow-Moving, Bureaucratic
High Risk/Volatility → Highly Stable
Low Barriers for Entry → High Barriers of Entry
Having worked in both ends of the spectrum as a musician and an employee, I can say with some confidence that these descriptions tend to hold true for the most part. It’s not that one is better than another, but that people tend to have preferences for what they want to see from their artists and businesses. The “tried and true” model certainly works for some, especially if they’re not looking to waste their money on something that they don’t enjoy. This stability is, however, also a point of contention among people who’re left wondering why the movie industry makes 324 sequels to Shrek, or why their local orchestra decides to program Beethoven and Mozart 125 times every season. In many ways these institutions are just doing what they’re designed to do, which is to reiterate what they have discovered a long time ago.
When I was working for large companies and institutions (like UCLA) I used to write very very long reports that meticulously documented every detail of what I did for every project — and they seemed to love it since they could use it to justify/analyze/forecast my work within the larger framework of the organization. After I started hanging out with entrepreneurs, I quickly realized that nobody really cared about such things…most things written in print was seen as being useless, since situations and contexts changed so rapidly that by the time the report was done the company would have already moved in a completely different direction.
In a nutshell, this seems to highlight the major differences between the two ways of thinking. I’ve discovered that I’d probably be the most happy somewhere in the middle of the two, maybe leaning a little bit to the red, but this might be different from person to person.
Inspirational poster for startups. I did not take this picture. You
It should be noted that musicians don’t scale in the same way that traditional companies usually do. There are lots of examples where bands have played with live orchestras as its accompaniment, but there aren’t too many groups who started small then suddenly decided to introduce more members into the ensemble when they became more popular or successful. It’s probably best to think of music groups as an identity, metaphor — or brand — that surrounds the record label as an institution. Music groups usually debut at the size that they plan to stay at for a very long time.
The record labels themselves *can* scale if their product line proves to be a success, but for singers and instrumentalists, their identity is very much determined by the people who are in the group, which is something that typically needs to be preserved. It’s not unusual for major-label artists to have hundreds of people working to promote their work, but these efforts are, by in large, unseen by the general public.
In this respect software-based startups are now very much similar to the music business — their product is their identity, which is its main point of interaction between the people who have worked on the project and the rest of the world. You might occasionally experience something useful or insightful, but there is also an element of entertainment built into these products since its “user experience” is seen as something that is very important. Some technology-based entrepreneurs have said that they see themselves very much as being performance artists, and I think the claim is a pretty apt one.
Another thing that differentiates the music from the business world is: jobs. Musicians unfortunately don’t have the MBA -> Corporate Job career path that business majors often do, so the vast majority of them are forced to start from all the way left of the chart in high-uncertainty land. Having a high tolerance for such is usually well-advised. Learn to improvise, learn to adapt.
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