Tag Archives: Business

The Minimum Viable Network: Introduction

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A few months ago, I was discussing with my friend Jason Rowley how it seemed to me that so many people on Twitter talked about how to build and ship a minimum viable product, yet didn’t seem to be utilizing similar strategies to build their networks. A lot of thought appeared to be given to the prospect and process of building a product prototype, but little seemed aimed at cultivating the seeds that real networks take to germinate into robust synchronicities.

For those unfamiliar with it, the “minimum viable product” (or MVP) concept is a strategy for efficiently building, releasing, gaining feedback on, and improving a product and/or service with as few financial and personnel resources as possible. It’s become a mantra in the tech world, and there are whole books and courses dedicated to understanding how best to achieve this.

(Another friend, Andy Sparks, is currently working on a project compiling some of these great resources for founders.)  

During the course of our conversation, though, it struck me just how much people’s strategy seems to differ when it comes to building and maintaining one’s network. It occurred to me after some reflection that this is because building a network—cultivating relationships—is everything that the MVP strategy is not. Whereas the MVP strategy is barebones (bootstrapped), fast, clean, efficient, direct, and requires comparatively little personal nuance, building real relationships can be robust, messy, time-consuming, arduous, abstract, and doesn’t just require a human touch, but a touch all your own.

And as I thought more about it, I began to conceive of a new idea—a new strategy: the Minimum Viable Network.

How could one build a network without having the same benefits that others might have? What if you don’t have the “required” skills? What if you’re in a different city than many of the other people you want to connect with? What if you’ve studied something different in college? Or not gone to college at all? What if your passion and drive is in an industry that others already consider over? What if your overall strengths are different and sometimes hard to articulate?

A lot of these questions came from a place of personal experience. I’m in the startup tech industry, and yet:

  • I live in Atlanta, not San Francisco, LA, or New York
  • I studied history and art history at Brandeis, not engineering at Stanford
  • I’m a non-tech founder; I don’t code
  • My passion is music; my first startup was a music-tech startup
  • I still see huge signs that music—an industry many argue is already over—is still very much up for grabs
  • I don’t excel at code or designing, but I’m a good writer and I’m good with people

I began to think about all the strategies of the MVP process and how to augment them for the MVN process. Bullet-points and adages need to become more fluid—less rigid—and the length of time needs to extend greatly, from trying to build and ship within a couple of weeks to focusing on cultivating a persona and relationship over the course of a few years.

People, after all, are not products, and won’t act as such. They are irrational, emotional, passionate, driven, and abstract—everything which the MVP doesn’t account for. In the end, it’s all about the human calculation factor.

So this will be a continuing series on how to do just that: understand people and relationships, and how to build your own Minimum Viable Network.

Among other things, I’ll discuss:

  • How to approach people and broach new relationships
  • How to be valuable without being aggressive
  • The difference between reading someone and manipulating them (strive to understand the first, never do the second)
  • How relationships evolve over time
  • How to work with flighty or mercurial individuals
  • How to weigh potential relationships
  • How to match-make
  • How to create a personal brand as “someone to know”  

Life is relationships.

Let’s begin.

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Find me on Twitter @adammarx13 and let’s talk music, tech, and business.

Uber Chaos, and How to Fix It

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Background

The tech world is awash this week in phrases like “sexual harassment,” “toxic values,” and “#DeleterUber” after a blistering blog post from Susan J. Fowler went viral on Sunday night. The post describes the sexual harassment that Fowler experienced during her year working at the transportation company. And it has exploded everywhere, from BuzzFeed and TechCrunch to Recode, Vox, and Huffington Post.   

Yet in all the noise that’s come down about the piece, there hasn’t been a real discussion of what appears to be the root cause of the problem: why Uber’s professional environment was allowed to reach this level of discrimination. Only by understanding that can Uber and other companies begin to reform their corporate policies and cultures.

We can already see the outlines of the usual responses of a corporation under fire for sexism and harassment: statements of outrage at the highest levels (Uber CEO Travis Kalanick and Uber board member Arianna Huffington), assurances that these types of things do not represent the corporation’s ideals and will not be tolerated, promises of an investigation, the offending sexual harasser has already been shepherded out of the organization, and the HR managers who responded in such a woeful manner to Fowler’s complaint of sexual harassment undoubtedly will be next. And as necessary as these things are to hear and read, none of them will change anything in the long run because they fail to deal with the root causes.

Where the Problems Come From

As with any environment where sexism and discrimination exist, it all goes back to the corporate culture. And so to solve systemic issues, one must deal with the corporate culture. While the most incendiary aspects of Fowler’s post deal with sexual harassment and her experiences trying to report it, the harassment—which I will discuss in a moment—is but the symptom of a larger corporate issue of sexism.

In Uber’s case, the main problem can be distilled down to three main things:

  1. An environment where egalitarianism and respect were not prioritized.
  2. A weak and ineffective HR department with no real power.
  3. The evaluation of women through a prism of prejudice.

It thus becomes necessary to examine the typical corporate mentality, and how this mentality contributed to the current situation at Uber.  

Ineffective and Reactive Corporate Mentality

As with most corporations, it is clear from Fowler’s post that Uber prioritized “high performance” and bottom line-data points over an egalitarian work environment. Time and again, Fowler describes reporting issues to mid-level and upper management, and receiving the typical—but completely inadequate response—of “well he’s a high performer,” or some such phrase.

Employees in any corporation will do what they believe they need to do to keep their jobs and to get promoted, and visa versa, will refrain from doing things that they believe will jeopardize their job security or advancement. If employees believe that sexual harassment will not be met with remedial action, they will feel empowered to engage in it. By contrast, if they feel that sexual harassment could get them fired, they may think twice before engaging in it. This is not complicated.

Elaborately stated corporate policies against sexual harassment, typically contained in an employee handbook, are a good first start but won’t by themselves end sexual harassment. Despite the best intentions at the highest levels of the corporation, it is clear that the message at Uber was not effectively communicated to the broad base of employees, including mid-level managers. Why this is so springs in large part from Uber’s corporate structure which is actually typical of most every corporation in America. Fowler’s post provides a public service because it reveals that the problem was also caused in part by Uber’s corporate organization.   

HR with No Real Power

Fowler goes on to write in her post that she was told by upper management that they would not feel comfortable punishing the sexual harasser. This reveals three new things:

  1. The corporate priorities are to protect their fiscal bottom line.
  2. HR is not seen as contributing to the fiscal bottom line.
  3. As a result, upper management essentially makes all of HR’s decisions, and HR is essentially powerless. Given this, is it any wonder that HR told Fowler that they were not prepared to do anything?

Since the HR department recognized its inability to deal with the situation, it effectively told Fowler two important things:

  1. HR knew it was harassment, but that they were not prepared to do anything about it.
  2. Uber’s concern for the sexual harasser’s “high performance” was more important than Fowler’s right to work in a workplace free of sexual harassment.

In fact, HR’s response that it “wouldn’t feel comfortable punishing him for what was probably just an innocent mistake on his part” highlights an intent on HR’s part to excuse sexual harassment and to marginalize victims of sexual harassment.

Here’s the main issue: most HR managers have to persuade the line managers to agree with their recommendations regarding appropriate remedial action. This inherently plays out in a conflict of interest for the managers who have no incentive to remedy sexual harassment if it will result in losing an executive who has generated revenue for the company.

Because so much of corporate upward mobility is tied to revenue generation, those who generate the most revenue and do so most efficiently are most likely to reap the rewards of that work (i.e. promotions, bonuses, etc.). As such, these managers have no corporate incentive to make waves, and every incentive to keep things quiet, and make sure they go away.

Thus, HR managers’ hands are tied in most cases since they typically do not have the power to override the mid-level managers. Even when outside consultants are brought in to “assess” the situation and recommend solutions, those solutions are only as effective as HR’s power to enforce them. Stripping HR of this power and incentive almost ensures that none of those potential solutions will be effective.  

The real solution is to give the power to HR to decide upon the appropriate corporate response without the involvement of upper management, and even against the wishes of upper management, which institutionally will be loathe to part with a “highly performing” employee who is ostensibly contributing to that profit sector’s bottom line.

As Uber can now attest, a properly functioning HR department contributes substantially to the bottom line by avoiding the mess it is now in. It is time to view the HR departments as equal contributors to any corporation’s bottom line, and to give them the corresponding power to deal with issues such as sexual harassment which if not treated properly will substantially take away from a corporation’s bottom line.

A Vicious Cycle

It is clear from Ms. Fowler’s article that the sexual harassment did not exist in a vacuum. It was facilitated by sex discrimination throughout the corporation. I’m no statistician, but a diminution of women in the corporation from 25% to 6% would not seem to be explained by a suggestion that all those women left for better jobs or were inadequate performers. Especially in a universe where managers feel empowered to tell women that the corporation will buy leather jackets for the male employees but not for the female employees, it seems more likely than not that at least part of the reason for the reduction in female employees was caused by sexist attitudes in the corporation.

If those sexist attitudes are not eradicated, they will provide a warm Petri dish in which will grow the next cases of sexual harassment. Harassment, like any other resulting symptom, results from something, and in this case that something is a corporate environment that has been stunted in its ability to prevent such problems before they arise.

While attitudes and seminars are discussed regarding how to handle sexual harassment and/or discrimination issues when they arise, the real solution is to ensure an environment where that doesn’t happen, not because people are discouraged from reporting issues, but because people are discouraged from engaging in any inappropriate behavior in the first place.   

At the same time, it should be made clear by action at the highest levels that sexual harassment will not be tolerated. Diversity training should not only be mandatory, but it should be attended by the CEO, who by his or her simple presence will give it the importance it needs to be effective, or by his or her absence would give the unintended signal that profits are more important than dealing with the issue of sexual harassment and discrimination.

It is more difficult to deal with ingrained sexist attitudes than with the more obvious cases of sexual harassment. If management has a predisposition to view female engineers as somehow less talented, women will be judged through a prism of sexist attitudes, resulting in women receiving lower performance evaluations. Then the failure of women to advance in the corporation, or their dismissal, will be ostensibly explained by the lower performance evaluations. It is a vicious cycle: women are initially perceived as less talented than men, resulting in lower performance evaluations, which ostensibly “prove” that they were less talented after all.

Meltdown and How to Fix It

The response to Fowler’s blog post, in words at least, has been biblical. Coverage from all the major tech media sources, as well as incendiary tweets from a variety of high-powered individuals in the tech community. If Fowler hadn’t already been working at Stripe, she likely would have found her email inbox flooded with job offers this morning (my guess is that happened anyway).

Uber has the opportunity and ability here to actually effect immediate change and help its image—if it’s so inclined.

Kalanick responded to Fowler’s blog post with a staunch statement that the actions described therein are unacceptable and will be met with swift termination. Uber board member Arianna Huffington similarly voiced sentiment about how the Uber board intends to conduct an independent investigation and get to the bottom of the issues which led Fowler and other women to leave the company.

I’m glad to hear that Kalanick and Huffington appear to be taking this matter seriously. But doing an independent investigation—even if it turns up some managers behaving inappropriately—will do nothing in the long term unless Uber’s upper management is committed to adjusting its corporate philosophy and structure, and making sure that this change is felt throughout its ranks. Being outraged by Fowler’s experiences at Uber is a good first step. The next step is to deal with the root causes of her experiences.

If Kalanick and Huffington really want to effect change, there are three things they must do:

  1. They need to structure, or restructure, their HR department so that the Head of HR reports directly to Kalanick himself as CEO, and has the ability to override mid-level and upper-level management regarding appropriate remedial action.
  2. Kalanick and Huffington need to restructure the corporate mentality so that HR is not viewed as a drag on the company’s bottom line, but instead is seen as saving the company money by resolving these issues before they make their way into the public eye.  
  3. Kalanick and the Uber board need to make it crystal clear that diversity and harassment seminars are mandatory, not simply suggested, and they should attend those seminars personally.

How Other Companies Can Be Proactive

Corporations at the highest level—and that means CEO’s—need to make it clear that sex discrimination and by extension sexual harassment will not be tolerated. They need to do this by not only saying so, but by acting so. They should give real power to HR departments to deal with sex discrimination and sexual harassment without the participation or approval of line management.

Managers whose subordinate employees are found to have engaged in sex discrimination or sexual harassment should see the trajectory of their careers affected just as if the profit sectors they manage had lost money. If sexism and sexual harassment cost employees their jobs, it hopefully won’t then happen. It’s just that simple.

Other companies would do well to examine their own corporate structures. While the hashtag #DeleteUber looks great in a tweet, it doesn’t actually change anything. Real change will only come when those who are supposed to deal with discrimination and sexual harassment have the power to do so, and when it is made clear at the highest levels that discrimination and sexual harassment will not be tolerated.

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Find me on Twitter @adammarx13 and let’s talk music, tech, and business.

Unbundled, Part II: Shifting the Paradigm

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How a new music paradigm is rising out of the wreckage.

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This is a continuation of the Unbundled series on music dynamics. Read the previously published pieces here:

The second act in the “bundled/unbundled” production is the “bundled” piece. It’s about exploring the bundling process as it pertains to music, and really trying to determine the proper scope of examination. Said scope, when broadened enough, shows a shifting paradigm of power and perception rising out of the wreckage of the previous music landscape. It’s similarly divided into three parts:

  1. Bundled in the Wrong Way
  2. Power and Paradigm Shift
  3. Sexy vs. Unsexy

The first of these is an exploration of what types of bundling already exist, and how it might not be the right kind of bundling to pursue. The nature of peoples’ interaction with music has changed, so it follows that the things bundled in music should change as well. This is a particularly difficult thing to accept because it requires a reworking of thought regarding something already perceived as “done.”

The second part is a discussion of how power naturally shifts during these seismic events, and how the new power should be held by a previously dismissed faction: the artists.

This flows right into the last part, which is an exploration of how many of the things which should be considered and bundled may not be the “sexiest” or most exciting of things to include. But “sexiness” and utility don’t always go hand-in-hand, and reality prevails at some point.

BUNDLED

Bundled in the Wrong Way

This is the biggy. Inasmuch as many things in the music universe(s) have become unbundled, so too are there a variety of things that have also become bundled. In the light of all the unbundling going on (Chris Saad blew through an extensive example list from everything including music and news to relationships and war), it appears somewhat unsexy to talk about the things going through the bundling process.

Where unbundling is fast and sexy and simple, bundling appears slow and outdated. But in music at least, this is far too simple an assessment.

The reality is that there are many things in music that have always been bundled, but bundled in such a way that they appeared to be unbundled. Many of the things which “music” apps are now trying to tackle separately—distribution, marketing, social, ticketing, analytics, messaging and/or communication, and live booking—have always been bundled under the banner of the record label.

The label controlled virtually everything, from distribution and radio play (yes, payola is real) to marketing and fan engagement. If you wanted to exist as an artist, you needed to be a part of this world in some way. Otherwise, you were relegated to the “independent” pile, which in the years prior to 1991, was much less glamorous than it is now.

Power and Paradigm Shift

When the digital age hit, the unbundling of the record labels’ power began. Since around 2005, major label power has seeped, and independent power has reached new heights. However, in their new-found power, independents were also sold a myth that everything they needed could be solved by partaking in a variety of unbundled services, from analytics to social platforms.

What this myth fails to address though, is the massive time-suck it really promotes. There are a great many things that should be bundled. Things like analytics, ticketing, distribution, radio play, social engagement, community, and marketing should all be offered under the same banner of a startup or new company.

But—and this is so important—done so in a way where the artists retain their power.

Sexy vs. Unsexy

The unbundling that has occurred has amazingly and unexpectedly taken much of the power away from the labels and delivered it to the artists. Artists now have the ability to control nearly every aspect of their operation, from recording through distribution through community engagement. But they don’t really have it all in one place, for free (yes this is huge), with the level of choice they need.

They have a variety of music discovery sites to choose from, a variety of analytics engines to use, and a variety of social platforms to post on, among other things. This is too much, and simplification is necessary. A music company should offer all of these types of functions under its purview, wherein artists can then choose to use them—or not—as they like. Choice and freedom remain intact while efficiency and simplicity are underscored.

But why stop there? Why not tackle the unsexy things that major labels have always done and give that power back to the artists as well?

Have a company that encompasses all the functions above, and then add (fan-driven) radio play, legal information and resources, management, copyright, and informational context. In making the experience of one site all-encompassing, you then succeed in changing the artists’ paradigm, thus changing the music landscape.

Giving artists access to these “unsexy” things is just as easy as (easier actually than) giving fans access to the music they want to hear.

The only difference is that instead of focusing on half of the equation, you instead complete the circle, and do so independently of the former rigid structure.

The Power of Knowledge

Whereas the points of the previous piece—choice and format—led to the overarching concept of community, the three points here point to something different, but equally important: knowledge.

If knowledge is power, then bundling things in a new way to give artists access to more knowledge clearly translates to a shift of power in their direction. This upends the previous paradigm immensely.

As artists gain perspective and knowledge on things like music analytics, marketing strategies, and engagement statistics—as well as “unsexy” things like legal resources and contacts—the power shifts significantly away from the major record companies. Their power has always been cemented in two main things: money and knowledge. But once artists and creators have access to the second of these two things (knowledge), they can apply it flexibly to attain the first of these two things (money).

This creates major fissures in the current music landscape, and opens up a splintering ecosystem of new opportunities for creatives at all levels of music creation and engagement.

The next movement in the symphony will be Part III: Democratizing the Future, which will take a look again at a new unbundled dynamic. Concepts discussed will touch on how the new unbundling will change music ownership and identity.

Stay tuned!

Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

Unbundled, Part I: Reformatting the Barriers

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How unwrapping the previous barriers is changing music.

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This is a continuation of the Unbundled series on music dynamics. Read the previously published piece here:

The first movement in this symphony is the “unbundled” piece. It’s all about “reformatting” the conceptual barriers that initially existed for decades. It’s divided into two parts: Choice and Format.

The former is an exploration of how choice has evolved with the changing technology, and how it’s taken on a power it previously lacked. The latter, however, discusses how new formats have changed music and broken down barriers which artists historically were—most times—unable to scale. Similarly, it’s given light and life to format types which for decades have been ignored by the broad base of music consumers, except perhaps for the most die-hard fans.

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Choice

The first and most obvious form of unbundling in the music industry is the industry itself; no longer is there simply one music industry to partake in.

Now there are multiple, and they exist as completely separate universes; the major label mainstream, the exponentially growing independent industry, and everything in between. Along with this kind of unbundling of different musical arenas comes a freedom for music fans to explore in new ways.

Where non-mainstream fans were once relegated to shoddy mixtapes and bare-bones independent releases (which many times meant lower quality), now they have a plethora of music sources to choose from, as do all music listeners.

This leads to a level of choice the likes of which has never been seen in music. Now, it’s realistically possible to exist as a music fan outside the mainstream in a holistic way. You’re able to not only find the music that you like, and which speaks to you, but are similarly able to take advantage of growing communities of people like yourself. With the free access to all this new material comes access to other like-minded people.

This is community.

Chris Saad pointed to two distinct contributing factors which have lead us in this direction:

  • Reducing the cost of inventory and discovery to, in many cases, zero or near zero
  • Reducing the cost of direct communication and orchestration with more people at once—bypassing the need for manual mediators/editors/orchestrators/curators

Format

Saad’s post also mentioned this within the scope of musical format. What was once a record and CD has now become digital information, thus with more power to disseminate. Even the album format itself is restructuring, as fans looking for a single-song experience are abandoning the long form in favor of something musically shorter.

But this has a swing dynamic as well; while some argue that the album format is dying (or is already dead), many see the opposite.

The unbundling of the album format has actually given it more power than it had before. Now, when an artist chooses to create a full album, a fan knows that there is an artistic meaning behind that, rather than a record label’s fiscal bottom line.

It also lends long-overdue validation to releases that fall in between singles and full albums. EP’s and double-sides have long been ignored by most but the hardcore fans. Now, however, they exist with the same legitimacy as their gaunter and fuller peers.

The Ironic Thing

The ironic thing about these two points—choice and format—is that they’re inherently about one overarching concept: community.

As choice expands and begins to encompass formerly ignored genres and artists, new communities have the ability to coalesce and thrive. Choice isn’t merely about having new material for already established communities to engage in; alternatively, it can lead to a mixing of communities that otherwise might not happen.

Punks and jazz fans may begin to mix over a new punk-jazz fusion genre, and people who otherwise would never have met one another can now suddenly exist alongside each other. This leads to an increased level of creativity and an exponential production of creative material.

And this material is further disseminated throughout communities—splintering them and rebonding them—through new formats of information technology. Communities cease to be rigid and orthodox in their functionality towards music and instead become more elastic—they become living, breathing things which grow and continue to evolve.

This is the unbundling process within music as it should be: an unwrapping of previously rigid dynamics that lends more flexibility and power to the overall process of community cultivation.

The next movement in the symphony will be Part II: Shifting the Paradigm, which will take a look at the BUNDLED dynamic. Concepts discussed will touch on how bundling — but doing so incorrectly in the new era — impacts music consumption and community cultivation.

Stay tuned!

Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

Unbundled: Introduction to the Bundle

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Why the unbundling of the music universe matters.

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In recent years, the dynamics of bundling and unbundling have changed everything in media. But they’ve had an especially palpable effect on music.

This is an exploration of the bundling and unbundling dynamics taking place in the music universe right now. Because of the massive amount of information discussed herein, it is necessary to cover it in series of parts, each explaining a particular aspect of change and restructuring.

This series will appear as the following:

  • Introduction to the Bundle
  • Part I: Reformatting the Barriers
  • Part II: Shifting the Paradigm
  • Part III: Democratizing the Future

Additionally, all four pieces (including the introduction) will subsequently appear as a single, holistic text, entitled: Unbundled: The Story of Music.

This is the first entry in the story.

A New Emerging Dichotomy of Freedom and Reach

A few months ago, Chris Saad penned an article on the dynamics of bundling, and how they’re affecting a number of fields. In his piece, Saad addressed how concepts of bundling are impacting areas of creativity like art and music, among others. Ironically, it had a similar air to Joshua Topolsky’s earlier article on media companies, which itself prompted my response on music-startup realities.

Such examples were only briefly mentioned, but one can go deeper on them, particularly in the way of music. Things are happening now to the age-old structure of music that arguably haven’t changed for the better part of five or six decades. And even that is only the tip of the iceberg.

Part of what was so intriguing about Saad’s examination of these morphing areas is just how much change is going on which is not being discussed. In many ways, Saad’s piece shines a light not only on the changing bundling and unbundling dynamics taking place in music, but how these two different forms—yin and yang—are interacting with one another to shape a new musical landscape. What we see is an emerging dichotomy of freedom and reach that we haven’t seen in quite a while.

Three Trends in a Specific Order

Within the context of music, three trends—unbundling, bundling, and unbundling again—matter. And they matter in that sequence. This is so because each (un)bundling action touches a different area of the music arena, and thus their interaction together forms a new paradigm.

They lay out as follows:

unbundled

Covered in Part I, Reformatting the Barriers

  1. Choice
  2. Format

BUNDLED

Covered in Part II, Shifting the Paradigm

  1. Bundled in the Wrong Way
  2. Power and Paradigm Shift
  3. Sexy vs. Unsexy

unbundled

Covered in Part III, Democratizing the Future

  1. Power, Gatekeeping, Scarcity, and Democratization
  2. Ownership
  3. Money and Community
  4. The Expansive Powers of Identity

The music industry, like all other forms of media, is undergoing such a massive tectonic shift that we’re only beginning to now see how big the fissures are. The most interesting thing will be how these changing power paradigms affect the music coming out, and the communities which are built around the material.

Stay tuned!

Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

Stop Telling Me I Need to Code

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Originally published on my Medium on September 15, 2016.

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An argument for those of us who write best with sentences, not code.

I’m Not a Coder

Let me start off by saying that I am not and have never been averse to learning a new skill, even one outside my general comfort zone. In fact, I quite enjoy expanding my horizons and learning how to see the world in different ways.

But I’m not going to learn to code.

At least, I’m not going to learn to code well enough to build something completely on my own. I’ve done various courses on Codecademy and it was interesting to me to begin to see the possibilities of tech and information in a new light. But that’s not my background and not my wheelhouse. My wheelhouse is broad trends, analysis, synthesis, and communication.

In college, I studied a wide variety of non-tech/coding subjects. And I’m not alone. I studied:

  • Art (as did Brian Chesky)
  • Psych (like Jason Calacanis)
  • Sociology and philosophy (as did Chris Dixon and Stewart Butterfield)
  • English and Poli-Sci (like Jessica Livingston and Morgan DeBaun)
  • And come from a family of lawyers (something I feel Chris Sacca might relate to)

I also studied a ridiculous amount of history. These things—not code—are what help me put the world into a larger context.

First Coming to Tech

When I first got into tech, I felt overwhelmed. And I felt inadequate. It seemed that everyone knew how to code except me, though I resolved to find a way to learn. And I powered through a few Codecademy classes. But it didn’t stick in the way that would allow me to build an app or site myself.

I understood the concepts behind basic design, and had a better understanding of the work it took to make something materialize—but I knew I was never going to be the one to do it. It never got easier, and it’s still challenging for me.

Easy for me is sitting down for a couple hours and drafting, editing, and blasting out a solid, synthesized argument. But in those early moments, that didn’t seem to be on par with knowing how to code in java.

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While in the headspace of “I need to learn to code or I don’t belong,” I seriously underrated what I was good at. And that’s people.

I’m Good at People

I love networking; I never knew there was even a term for it—I just figured it was called talking. I love hearing the stories of others, connecting them to potential partners, and trying to identify mutually beneficial opportunities for both (or all) parties involved.

I’m better at reading people than I am at reading code. People are flexible and creative—code is not. (That is, it’s not to me).

I come from lawyers. I come from the mindset of “there is never one right answer;” it all depends on how good your argument is, and how you can continually restructure your thought process. The notion that a line of code doesn’t work because one character is out of place is foreign to me. The same way that lateral thinking—that there might be multiple, arguable right answers—is foreign to others.

Unintended Microaggressions

Whenever I read the sentence “you should learn to code,” my first thought is “you should learn to write (well).” The concept that code is the new literacy is—frankly—bullshit. It’s undeniable that coding is a hyper-important skill in the 21st century—but it’s not the end-all, be-all of literacy. Literacy spans a variety of languages, communication tools, and colloquial, idiomatic trends. There is no “one” magic bullet.

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Treating it as such is short-sighted and arrogant. Arguably, it’s an—albeit unintended—micro-aggression that dissuades non-tech founders and Humanities majors from taking the dive into tech. Similarly, telling me that it’s “easy to learn” is a matter of opinion, not fact. And again, it’s arrogant.

How Good Is Your Writing?

I read staggering amounts of material online. Much of it is posted by super smart founders, investors, and thinkers. And from a writing perspective, a ton of it sucks.

A lot of it rambles, comes off as tone-deaf, is too splayed, and hasunforgivable grammar errors. In fact, some is so grammatically jarring simply because the writers use grammar rules that are ancient, while ignoring new colloquially correct dynamics. This makes the writing unbearably stilted. When writing an article in my world, you make it tight and you make it bullet-proof. I don’t understand writing that isn’t structured like this (creative writing aside, of course).

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Growing Into My Skin as a Non-Tech Founder

I’m not bitter, though. I know I’ll never write code like Mark Zuckerberg, and I’m ok with that. I have amazing team members and connections who can do a better job there than I ever could. So why not let them win where they naturally win?

I’ll continue to refine the coding skills I have as much as I can, but I harbor no delusions of coding grandeur. I’ve now grown more comfortable in my non-tech founder skin. I’ve grown more adept at identifying the real things in code that I need to understand, and the ones that are nice, but superfluous for my skill-set.

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Instead of telling me I “should learn to code,” lend to me a plethora of tools I can use, and articulate to me that I’m not inadequate and no less a founder if it doesn’t come so easily.

In an industry with such a high rate of failure, teamwork, communication, and vision should be prioritized above most everything else. That’s the only way any of us succeed.

 Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

What Artists Can Learn from Startups, Part 2

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Who Do You Promote?

Recently, I wrote a post entitled, “What Artists Can Learn from Startups” in which I began looking at a number of strategies which startup companies (mainly tech) use to generate leads and interest in their products and services.

The more I think about it, the more certain strategies really stick out as things that artists should be considering and implementing. One in particular is something which holds my attention.

In tech (startups, at least), there isn’t the same reticence to publicize and promote someone else’s product or service as there seems to be in music. Among artists, there seems to be this gospel-like belief that if you promote an artist or song you don’t love with all your soul, then you’re somehow being disingenuous. In all forms of art, and music especially, the concept of reputation is taken extremely seriously. Sometimes to a fault.

Whereas I see founders from all over the startup world promoting one another, I see more resignation in the music community to follow suit, and truthfully for no good reason.

I have no qualms about promoting a product or service that I don’t use, or don’t use regularly. Before you come down on me for having a hidden agenda, though, take a moment to think about all the things you can promote someone for that have little to nothing to do with their service or product.

So often, I find myself tweeting and posting about the people behind the product, either because they’re so magnetic, so innovative in their thought process, or so willing to help others. It has so much more to do with their character than anything else. And this is something artists could so easily cash in on and make their own.

When someone helps you set up a show, helps promote your band or music online, or introduces you to someone new, tweeting out a “thank you” and promoting them isn’t being disingenuous at all. Quiet the opposite. It actually solidifies you as someone who returns favors and good karma, and thus builds your own reputation, even if it’s in the service of others (for the moment).

Positive service of others is service to ourselves, if only indirectly. Artists would do well to begin to reexamine their practices in how they promote others, from the decision process to the execution. Starting to have more fluid strategies here could greatly expand their networks in relatively short amounts of time.

More to come on this soon.

Why Silicon Valley Is Rebuffing the Wall Street Journal’s ‘Andreessen Horowitz’ Piece

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Marc Andreessen (left) and Ben Horowitz (right); image courtesy of Forbes

Marc Andreessen (left) and Ben Horowitz (right); image courtesy of Forbes

First Serve

Yesterday, the Wall Street Journal ran an article on the VC firm Andreessen Horowitz (hereafter, ‘a16z’). The piece took a look at the firm’s raise-rounds and returns, and was critical of a16z’s placement among other “venture-capital elite” like Sequoia, Benchmark, and Founders Fund.

While the article is quick to throw around numbers and buzzwords like “elite” and “blockbuster [investments],” the main premise is that a16z hasn’t yet earned the “premier reputation” that it has amongst those in the tech community.

Second Serve — Response

The response from the tech world basically ate up the rest of yesterday afternoon and night.

It started with a response blog post from a16z managing partner Scott Kupor, which was posted not long after the original piece went up: When Is a “Mark” Not a Mark?

One thing Kupor points out immediately is that “marks” and “returns are two very different things in the realm of venture capital. Further, “[c]ash or stock actually realized and distributed to LPs is the only real, non-manipulable measure of a firm’s interim success.”

Kupor is articulating that the data which the WSJ published is somewhat misleading because it chose the metric of unrealized returns to match the title of the article. He further fleshed out this argument as the post went on.

Then the flood began.

Mark Suster wrote a great response of his own here: What to Make of Andreessen Horowitz’s Returns?

One of Suster’s most intriguing points is when he plots the line of thinking lot of VC’s have had about a16z over time, from “ ‘We love Ben and Marc’ and ‘they raised how much’ to ‘…they sure are hiring a ton of staff…’ and ‘How can we hire more staff to keep up with the services they offer?’. ”

More importantly, though, Suster puts into context a reason why a16z might already have the reputation that it does — that most entrepreneurs perceive it as a place of great connections and services, and that he himself has had positive experiences with the firm when they’ve done deals with Upfront Ventures (oh which Suster is a part).

Twitter Thoughts

All the while, I was intrigued to see the flow of responses over Twitter:

 

 

 

 

 

 

Why the WSJ’s Focus on a16z’s “Rivals” Is Misplaced

Part of what I find so intriguing is the direct aversion to a dynamic that is perpetuated in the original piece. Whereas the WSJ article paints a broad picture of a16z in relation to its “top rivals,” here are numerous responses from VC’s who run other funds seemingly going to bat for Andreessen Horowitz. In my opinion, this is something exceedingly important which the article skates over.

Yes, these different funds and investors compete for the best deals and the best founders/companies to work with. But most don’t do in a way that makes it easy to label them as rivals.

The term “rival” has a finality to it, as if it’s a forgone conclusion that those two parties will always be on opposite sides of the table. Yet inasmuch as everyone in this business wants to “win” at deals, the metaphor I see is more of a music one than a sports one. In the latter, there’s one winner, one champion. The former, however, creates a paradigm where multiple winners can exist, and where there is a fluidity regarding partnerships and mutual benefits.

Funnily enough, the WSJ added this little blurb to the original article not long after, though really without restructuring its initial argument to account for Kupor’s points:

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So what’s the takeaway in all of this?

  • First and foremost, understand the numbers, terms, and dynamics you’re working with and writing about. That seems to be a point of disconnect between the original article and the response pieces.
  • Second, things are rarely ever as simple as they appear to be.
  • Third, there is a way to write hard-hitting journalism without [publically] making enemies; if you don’t know how to do this, you should alter your writing strategy.

While I wouldn’t call the response to the initial article “biblical” by any sense, it nonetheless provides a good window into the dynamics of venture capital thought and strategy. If nothing else, founders have now been given a good variety of response posts to read and understand, particularly with regard to VC fund calculation and long-term plays.

I know what I’ll be doing this weekend.

If you enjoyed this, find me on Twitter @adammarx13 and let’s talk music, tech, and business!

Playlists Will Not Save Your Music Business

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My media business will not be saved by video, bots, newsletters, or Slack integration. That’s what Joshua Topolsky told me yesterday. And he’s right.

A still from High Fidelity (2000); Captures the sentiments pretty will I think

A still from High Fidelity (2000); Captures the sentiments pretty well I think

The New Thing that so often arrives just in time as the savior of the whole machine is many times bullshit. It’s a desired escape from an already challenging (dire?) situation that is causing headaches upon ulcers upon headaches. That’s why it seems so magical in the first place; it seems to appear out of nowhere like some miracle from a higher power. You prayed to the media gods for deliverance, and so they delivered unto you newsletters, bots, and Slack.

But Topolsky is right about the misleading nature of these new things: they have the potential to help, but none has the power to deliver us, to part the seas of stubbornness and ego.

While it appears to me that he sought to write about media in general, Topolsky could easily have been talking about any of the media industries in particular. Music, for example, fits right into his sardonic diatribe in a way that must chafe for the megalithic powers who used to control the industry. In music, it goes: yay for playlists, analytics, offline access, curation, and exclusives—build those in, and then we’ll be saved. No, these won’t save your (music) media business. And that’s painful for a lot of people.

More and more, the posts on changing media dynamics which garner shit-tons of feedback are the ones that are the truest. They are radically brilliant—radically poetic in a way—because of their sheer shunning of “conventional wisdom.” Such is more or less an oxymoron nowadays anyway.

I saw an earlier example of this back in November with Chris Dixon’s post on independent gaming, and was similarly moved to write my response on independent music, something he was also referring to (knowingly or not). Now with Topolsky doubling down on a similar idea, it’s becoming an even starker point.

“Because that [former media] system was built on the concept of scarcity and locality—the limits of what was physically possible—it was very easy to keep the gates and fill the coffers.”

And here we come to the prickly point that so many music businesses have trouble with now: scarcity is obsolete; democratization wins. I underscored this in my Dixon-response piece, but now it seems all the more palpable. What used to serve as a power play by music companies—the scarcity squeeze by the major label—has lost most of its bite, if not its bark as well. Maybe it’ll work if we call it “windowing” and stagger the release on multiple services! Nope, we all know that you simply changed the name of what you were doing instead of trying to actually change the action. And it’ll end up free somewhere anyway. Live with reality.

Wait, I’ve got it! We’ll tell people that we have the best playlist-making feature around! Great, so does everyone else. And, by the way, the people who really matter for your music business don’t care. The general consumer/listener might care (and I stress might), but the artists who actually produce the content you rely on for your lifeblood won’t give a shit. Why? Because it ultimately does little for them.

Ah, then we will give them the deepest, best set of analytics they can have! Awesome, so will everyone else. You can join the swaths of sites telling them they have a couple thousand streams, have made essentially no money, and then tell them they owe you $4.99/month for that wonderful data. The reality that you don’t want to hear is that the vastly growing demographic of artists—independents—are smart enough to know this already, and all you’re really doing is giving them numbers with no context. You’re giving them the numbers, the locations, the graphs— but with no real way to actually affect change in those numbers.

Offline access and exclusives then! Right! Except not, because exclusivity doesn’t help these artists long-term, it only helps you in the short term. It’s why artists immediately understand the opportunities before them now while other people struggle to see the big picture. Because they have long-term vision, and patience. Because exclusives are not where the long-term strategy is, either for the artists, or the music business.

It’s in the community cultivation and the relationship bridging. Social and messaging then! No, stop, that won’t be an easy save either. The reality that so few people want to hear is that community cultivation is a long-term process. It’s about knowing things about your content producers—in this case the artists you work with—that your competition doesn’t bother taking time to find out. Don’t ask me how many registered users I had yesterday. Ask me how many conversations I had yesterday with ten artists in seven different countries with fanbases numbering in the tens of thousands. Ask me what comes out of that. And then remember that was only ten artists.

Over the last few years, we were asked who we thought would win the streaming wars, because streaming is obviously the future of music. Except that’s too simple a magic potion because it’s going to take a lot more than that to reach the new horizon. It’s not about fixing the faulty component in the engine. They’re all faulty, and have been for near 40 years.

You have to rebuild the engine completely. Bottom up. You need to construct a music company that does everything that will change the reality for a new artist; after all, there are so many more of them than anything else. And they never stop creating and producing. You need to take your time to do all the sexy things—the playlist functionality, the radio, the streaming, downloading, profiles, social, live—and all the un-sexy things you never thought about—the legal stuff, the business stuff (more than just analytics!), the financial, and the marketing. Fixing the broken paradigm is a losing proposition; building a whole new one is (ironically) cheaper, better, and much, much more powerful long-term. That’s the strategy I’m committed to.

Topolsky was dead-on:

We’ll have to learn a thousand hard lessons, most of them centered around the idea that if you want to make something really great, you can’t think about making is great for everyone. You have to make it great for someone. A lot of people, but not every person.

And that’s what’s missing from the music-business discussion right now. The “everyone” that most streaming services are targeting is already saturated with competition, high prices, and a lot of bad press (from artists and artist agencies like ASCAP and BMI). The “someone” that Topolsky refers to, though, is the independent demographic, clear as day. They’re underserved, undervalued, dismissed, marginalized, pissed off, and not tied to any major label contracts—just right to woo and capture with something as easy as a conversation and explanation of a better future.

I’m as shamelessly self-promotional as Topolsky admits he is because these are the people I love. I know they see what I see, and they’ll wait around as long as it takes to make it work. Because they’re not jaded or angry—they’re just waiting.

Waiting for something better to come along for them.

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Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

Why Ignoring the Independents Means Thunderstorms for SoundCloud

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SoundCloud logo

TechCrunch published a post recently, the premise of which was SoundCloud’s recent tapdance with major labels. The post discussed SoundCloud’s $35M in debt funding, and newly signed deal with Universal Music Group. The fact that the aforementioned funding was actually finalized last May notwithstanding, the piece concluded that the upshot of the whole situation is that SC would end up being worth more than rival Spotify. Here’s why that’s not exactly the case.

The Background: Courting the Mainstream Players

While the TC piece makes some astute points, its most important argument—that SoundCloud has the opportunity to become the YouTube of audio—doesn’t exactly stand on its own. SoundCloud has a major issue in that it’s caught in between two completely different paradigms—that of the independent and that of the major label—and doesn’t seem to know how to resolve those differences. Up until now, the ill-fated balancing act it’s been trying has been somewhat workable, but going forward it will be tenuous at best. As such, the real story here is how SoundCloud is evolving, and not in a way that is wonderful for the independent artists who have historically been its core constituency.

As SoundCloud moves further into the major label fold, it simultaneously does two things:

1) It resolves (at least for the moment) the issues which the music service is having with some of the labels over licensing and royalties. The new deal with Universal clearly comes with it an agreement that the label will drop any pending legal action against the service, as music will now be licensed directly to SC. (It does, however, do nothing for the mass of pending litigation  between Sony and SoundCloud, as the former is that last major label holdout to strike a deal with the service).

2) It effectively continues the alienation of the independents upon which the service has historically built its core and more loyal following.

Leaving the Core Content Base

To be clear, there’s nothing wrong with serving the mainstream. However, most every one of the major music companies already does that, leading to an already crowded crawlspace of competitors vying for mainstream supremacy. While the major music companies set their collective focus on mainstream material, the independent demographic is left languishing in the wind time after time. Initially, SoundCloud was an exception in this respect, cutting its teeth in the independent arena long before it signed deals with any of the major labels (starting with Warner Music Group last year). Since then, however, SC has been moving further and further away from the paradigm from whence it rose and closer towards the crowded party at the mainstream table.     

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The music pipeline

While SC battled other services for mainstream consumers, it had for a while been the favorite among independents and underground artists looking to cultivate their fanbases from the ground up. Even Alex Moazed in his guest TC piece acknowledged that this is what makes SC win: the fact that this is where the content stream starts for a lot of new artists (a rapidly growing demographic) and where they begin to build their initial fanbases and cultivate their followings. That SoundCloud is not only moving away from that, but seemingly shunning it in the long run, is a palpable kick in the face for a lot of independents.    

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Growth of independent music between 2003-2012; image courtesy of Techdirt

What Moazed doesn’t address in his piece is exactly what I discussed last spring: why independent artists should essentially kiss SoundCloud goodbye, why their subsequent deal with the NMPA was irrelevant for independents, and ultimately why the precarious high-wire balancing act was leading them down a difficult path. Independent artists, unlike major label performers, are not locked into any required loyalty as a result of record label contracts. They can come and go as they please on any variety of services, and thus are free to explore any new ( and better) opportunities that might arise.

SoundCloud’s error in judgement here is assuming that the independent demographic (arguably its only real unique demographic of content producers) will stick around when the winds change, and the focus of the platform shifts to mainstream desires. Already there were grumblings in the independent underground when SC premiered its new layout early last year. The simple reality is that SoundCloud fundamentally cannot serve two masters (the independents and the major labels) because each is moving in an opposite direction, with desires and mentalities divergent of one another. Now, with the Universal deal, I see only one way SC can continue to struggle towards profitability, and that is in the major label direction.

That, however, presents another can of worms.

Money and Equity

As some have already pointed out (or could simply guess), the Universal deal could not have been cheap by any means, particularly as it meant Universal dropping its legal action against the music service. Furthermore, as Warner gained around a 5% stake of the company when it licensed its own catalogue, one can calculate that Universal settled for nothing less than a similar deal (likely pushing for more equity in order to drop the legal suit).

That’s a huge premium to pay for Universal’s recording and publishing catalogues, and doesn’t yet take into account all the royalties SC will now have to cough up on the backend. The real hard hitting numbers come when one imagines what Sony, the last major holdout, will demand for its material. Seeing as it currently has legal qualms with SoundCloud, it’s conceivable that Sony could demand even more cash upfront and equity in order for access to its musical coffers. At a minimum, one could calculate the collective equity of the major labels to total somewhere around 15%—at a minimum.

Though not listed specifically, the chart below gives one a good idea of where SoundCloud will inevitably fit within the royalty paradigm, and just how much friction it will cause between both the service and artists, and the service and the labels. Two different (divergent) interests make for a massive headache in the long term for SoundCloud.

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Royalty rates, minimum wage, and reality; image courtesy of informationisbeautiful.net

This may seem like a paltry price of doing business until one considers the fact that the relationship dynamic is not an equal one: the major labels hold the keys to the material which SoundCloud wants (and desperately needs, in order to win the mainstream game), but are not equally in need of SoundCloud itself. They similarly license the same material to a variety of competing music services, and essentially can dole it out to the highest bidder, through contracts which then become renegotiable every few years. Thus, SoundCloud (and others) are beholden to the major labels for their lifeblood, but the opposite is not true. SoundCloud has entered into a paradigm that’s nearly impossible to backtrack from. They’re tying their own concrete shoes.

Operating in the Red

All of this firmly underscores the uncomfortable news recently that SoundCloud took a $44M hit in 2014, making their raise of the above-mentioned $35M almost irrelevant. That the raise of the $35M in debt financing will essentially have to go to cover SC’s 2014 losses must be a bitter pill for investors to swallow, particularly as much of their customer base uses the service for free. The simple truth, as it appears to be, is that SoundCloud is hemorrhaging money with no clear path to take to fix things, either quickly, or in the long term. That being the case, it’s fairly probable that SoundCloud will need to start raising another round of money somewhat soon, even if it’s just to weather its current storm.

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SoundCloud losses (in Euros); image courtesy of Music Business Worldwide

And then there’s this, the Reddit thread that must be the most painful thing for SC right now. Titled “SoundCloud could close after $44m losses,” the thread spent a few nights recently blowing up, and had an upvote-percentage of 96%. What does this mean in reality? It means a lot of people were reading this conversation, and the commenters are not wrong. In fact, many of them are quite astute and know exactly what’s going to happen:

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These comments highlight the discussion going on regarding SoundCloud not only among its general consumers, but among the artists who create the content on which the service was built. It’s important to remember that before SC had any major label deals in place, it was doing quite well because of the huge influx of independent material coming in from independent artists and DJ’s. In moving further and further away from this core demographic, SoundCloud is quite aggressively biting the hand that feeds it. SoundCloud’s response to the Reddit thread was equally underwhelming and unpersuasive.

The loyalty of such independent artists is a complex thing; on the one hand, they aren’t tied to any one particular party, and thus their loyalty to any one service may be thought of as ephemeral. On the other hand, however, their loyalty has the potential to be ferocious and dogged if and when they find a service which works for them, in their favor. SoundCloud used to be that service, but it isn’t any longer. They’ve traded the long term loyalty of these smaller—but much more numerous—independent artists for the short term benefit of being able to peddle major label mainstream material. The same exact mainstream material which all their major competitors are already selling. They’ve traded the long term benefit of being unique for the short term “benefit” of being just like everyone else.

Short Term Gain, Long Term Loss

The big kicker though, is that SoundCloud didn’t start as Spotify of Apple Music did, with deals with the major labels. It doesn’t come from that part of town. It comes from the less expensive, more experimental street of independent artists, covers, and remixes. It blew up among independents long before mainstream listeners got wind of it, and now it’s moving away from those early adopters towards a more corporate clientele.

As far as I can see it, this is incredibly ironic: the independent music universe is just now starting to mature and expand rapidly, while the major label world is getting cramped and hideously expensive. Over the last decade, independent music has grown immensely while major label-signed content has actually decreased. Put simply, the number of expensive, mainstream artists which big music companies are fighting over is shrinking while the number of free and/or inexpensive independent artists is actually growing at an almost exponential rate. Insofar as the independent universe might not be as lucrative as the mainstream arena in the short term, it nonetheless is where the most growth is happening.

So where does all of this leave SoundCloud? In the short term, the Universal deal is a great breakthrough, and certainly will help them more aptly compete with Spotify and Apple. However, it’s clearly been overshadowed over the last few weeks by their financial woes and discussions of possible paths forward.

In the long term, though, they will end up dismissing the demographic and core base that made them special to begin with. Someone else will pick up that gauntlet and run with it, and that’s where the growing independent base will go.