Tag Archives: Management

My Friday Post Went Viral. Here’s Why.

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Last Friday, I wrote a post that felt more like a personal update than anything else.

It went viral anyway, and I know why. 👇

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Quick Message — I’m Here to Help

☝️ First, let me say: I know the crunch that’s happening all over the country (and the world), which is why I’m cutting my rates and making them as flexible as possible. I do personal branding, relationship-building, content editing, and networking consulting.

I teach people how to get in front of anyone; tech investors, company CEOs, journalists or media, etc., and I do it by teaching basic tactics that anyone could use (patience, value creation, consistency, etc.). If you need help—growing your network, developing your brand & reputation, building relationships for a new job—then reach out to me. I will work with your budget —just send me a message on Twitter or LinkedIn.

What We Expect of Our Companies

When we apply for jobs at companies, we expect that the contracts they give us are mutually beneficial at their core. For our part, these contracts require us to show up on time, excel in our skills & dedication, produce results, etc. And for that we get paid. It often boils down to a base concept:

“You give me time and skills, and I’ll give you money and benefits.” 💰

But sometimes in our readiness to accept these terms and get paid, we can overlook the things which we should be expecting & requiring from the companies hiring us.

And one of the core things that every employee should expect of their employer is a safe workplace. This isn’t innovative thinking; it’s a necessary cost which every employer should figure into their overhead.

Here’s the problem with that:

Safety isn’t sexy and profit rules the day.

Many people like to think that their company has their back; that the organization will catch them when they fall. And indeed this is true of many companies, but unfortunately not all.

And I think this is exactly why my post went viral. 🤔

Companies in Two Camps

With all the coronavirus stuff happening globally, there’s a lot of fear about how to weather the storm. Many companies have taken it upon themselves to step out on the limb with their employees and help as best as they can. Some of my favorites like Slack, Airbnb, Zoom, PagerDuty, and Box are cutting costs to their premium products so that the sudden influx of people now forced to work from home can continue to be as productive as possible. Many companies recognize that they may see a financial loss in the coming weeks, but they accept that this is bigger than that.

They’re placing their employees’ safety above their fiscal bottom lines. 🙌

And then there are companies which are not.

Even with social distancing requirements going into effect all over the world, there are companies that don’t seem to be taking the situation seriously. Hobby Lobby has adamantly refused to close locations and GameStop declared the same.

These are the poster children for companies which are sticking to the gray areas of what is defined as an “essential business” apparently so that they don’t have to close up shop or move online. And this is going to jeopardize the health of their workers. 😷

When this is all over and the dust settles, there will only be two camps of companies:

  1. 📈 Those who placed the health of their employees over the fiscal bottom line, and
  2. 📉 Those who placed the fiscal bottom line over health and everything else

(For the record, the companies I’m referring to en masse are not the typical essential businesses; i.e. police, medical personnel, grocers, firefighters, etc.)

Why My Post Went Viral (I Believe)

My post went viral (perhaps a poor adjective given our current situation…) because I have been documenting the struggle that one of my close friends is having with some such company. My friend works for a company that is doing its damn best to stay in one of these gray areas; they are not “essential” on the same level as a homeless shelter or police department, nor are they 100% remote as software engineering might be.

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My original post from Tuesday, 3/24/20.

What I do know, though, is that the work my friend does—operations, bookkeeping, customer support—could all be done remotely. Certainly in an extenuating circumstance like the one in which we now find ourselves, 98% (if not more) of my friend’s work could be done from their laptop at home.

Yet the company refuses to allow them to do so.

The optics are even worse: the partners and employees who work in corporate are already working from home and have been for a week. 😡

My post went viral—I believe—because this kind of management of employees is not only reckless and irresponsible, it’s dismaying and unconscionable. People have a right to work in safe conditions, and a right to request leniency in extenuating circumstances like this. They have a right not to fear retaliation for desiring to work from home in the middle of a pandemic.

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My viral follow-up post from Friday, 3/27/20.

This Isn’t Leadership — It’s Extortion

I’ve run startup companies before and I’ve worked for bigger organizations, and here’s a rule I never break: I would never ask my employee or team member to do something I wouldn’t be willing to do myself.

Like, say, risk my life for a good quarterly profit.

The irony is that these companies who are putting profit before safety will see cataclysmic retribution when this is all over. Not from me or even from governments most likely, but from their employees, customers, investors, and advertisers. Nobody wants to work for, buy from, or promote a company which places profits over employee health and safety. Investor Mark Cuban mentioned as much just last week.

My post went viral because people are angry at my friend’s circumstance (and probably those of their close ones as well) and know that this is not right. This is not what my friend signed up for, and certainly not what the company should be expecting of them.

Leaders lead from the front, and what this company is doing now isn’t leadership—it’s extortion. 🚨

The Upshot When This Is Over

For those of you out there running companies the right way and doing your very best to hear your employees and put their health first, thank you. I applaud you. I will patronize your businesses and continue to lead with you in the right direction.

But for those who are not following suit—who view any desire for leniency & safety as insubordination and are living in the gray areas intentionally for profit—, you do so at your own risk. The optics are not on your side, and any profit you manage to make during this tough time will undoubtedly be used on public relations damage control.

And for the hardworking employees out there: you deserve to work in a safe environment. If you know that your company truly doesn’t fall under “essential business,” also know that your health and safety are paramount. This isn’t a normal corporate situation; this is an extreme that we’re living in right now and people need to adapt to that.

I’m truly grateful for all of your support. Keep moving forward. 🚀

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Follow me on Twitter and LinkedIn @adammarx13 and continue to 😎 #LookForTheOrangeSunglasses.

P.S. — Leads on new jobs for my friend still greatly appreciated. To my knowledge, skills include: asset management, operations, bookkeeping, customer service, company relations, & extensive real estate experience.

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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.

Spotify’s Sony Contract: What It Means for Everyone

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With the leak of Spotify’s contract with Sony last week, there’s a lot of attention on the streaming service right now. I’ll be taking a closer look at that contract over the next week, but for now I’ll focus on the fallout over the last week. In particular there seems to be a lot of renewed interest on the music space, more so than I’ve seen in a while. I think, though, that this has to do with a lot more than simply one contract between two companies; for the first time perhaps, the general public (including music producers, artists, and general music listeners) is aware of the kind of deals being struck behind the scenes.

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Even as Spotify soars in newer valuations that have the company somewhere in the $8B range, yesterday’s leak shows that such a valuation may in fact be misleading—Spotify has to cough up around $43M just for licensing from Sony alone. How much do you think they need to cough up for the other two majors, Warner and Universal? Even if we snip off the extra $3-4M, and assume an upfront licensing fee of $40M from Sony—and then simply assume similar prices for Warner and Universal—then Spotify has already spent $120M of investor money. And that’s just for the privilege of having access to the major labels’ stable of artists.

Also, don’t forget that’s before royalties and any other metrics that Spotify has to hit. Therefore it’s more like $43M upfront for the privilege to pay more later on; it’s not a one-and-done purchase. And most unfortunate for Spotify, this latter number is also predicated on how an artist performs in popularity, something they have essentially no control over.

I’m not going to rewrite Micah Singleton‘s article, but I will draw on a number of points he highlighted and what they mean in reality. There are numerous points of importance, but these are the ones I think the general public really needs to be apprised of. Though the contract has since been removed, we got the basic gist:

  1. Written by Sony—First let’s just take a moment to note that the contract was written by Sony. Of course this is their prerogative, but when considering the fact that Sony holds the rights to much of the content that Spotify wants to license, it clearly illustrates who is subject to whom. Frankly, since Sony holds the content rights, they (and the other major labels) essentially hold Spotify’s lifeblood in their hands—that’s not an opinion, it’s a fact. Realistically Spotify is not built around an independent and free model, so they need to play ball with Sony and the other labels, or they won’t play at all. Period.Screen Shot 2015-05-21 at 8.01.23 AM
  2. Advances—Spotify paid Sony $42.5M just for the right to license the music. That’s an upfront fee just to get in the door. This means that anyone looking to compete head to head with Spotify or Rdio needs to magically have about $130M lying around or in funding before they even get their feet wet (projecting the combined upfront licensing fees of the Big Three major labels). One of the reasons that Spotify has to raise such massive funding rounds is because these advances are somewhat annual, and thus need to be renegotiated all the time. And as the major labels continue to get squeezed in their wallets, these numbers are only going to rise for services looking to use major label content.
  3. Screen Shot 2015-05-21 at 2.36.33 PMDivided How and Among Whom?—As Singleton points out, Sony can essentially do whatever they want with that money; there’s no stipulation that it has to be divided in any particular way, or that any of it has to go to artists or songwriters. According to multiple sources, that money usually stays with the label and is generally not shared with artists. This particular point has raised such criticism that its prompted both a response from the EU, which is now looking into Spotify’s contracts, and virtually obliged Sony to come out with a public statement on the matter. Screen Shot 2015-05-21 at 2.36.56 PM
  4. Most Favored Nation Clause—Essentially a clause that guarantees that Spotify’s balls remain in Sony’s vicegrip. The clause guarantees Sony the right to amend  any portion of the contract if it perceives that any other label has a better deal than it does. This means that Sony is essentially never bound to Spotify in any way; it can decide—based on its own perception—that another label has a better deal (which it may or may not) and rework the entire deal for its own benefit. And Spotify has to swallow everything.
    Screen Shot 2015-05-21 at 2.41.24 PMScreen Shot 2015-05-21 at 2.42.20 PMWhere this really kills Spotify is when used in conjunction with the clause dictating payment based on market share. Thus, if another label has a better deal in that regard—perhaps double what Sony is getting monetarily—then Spotify has to cough up and pay Sony the difference.
  5. Spotify’s 15%—Basically exactly what it sounds like. Spotify takes 15% of the revenues from third-party advertising right off the top. What they do with this money is unknown, though it’s quite plausible that they’re not redistributing it to the artists, and are probably giving third-party advertisers a raw-ish deal. Next time Spotify releases a statement saying that they don’t have the funds to pay the artists more money, let’s all remember this little financial tidbit.Screen Shot 2015-05-21 at 2.47.16 PM Screen Shot 2015-05-21 at 2.48.28 PM
  6. Sony’s Ad Spots—This one’s pretty easy to understand: essentially Spotify is obligated to give Sony a certain amount of free ad space on its service. The ad space—which is clearly worth a fair amount of money—is given to Sony at a massive discount.Screen Shot 2015-05-21 at 2.53.33 PMScreen Shot 2015-05-21 at 2.54.09 PMBut that’s not all; Sony retains the right to sell the credited ad space to whomever they want, whenever they want. Again, Spotify gets squeezed.Screen Shot 2015-05-21 at 2.54.41 PM
  7. User Metrics—Spotify essentially has goals it needs to hit in terms of its user metrics (on both payment tiers), and if it misses those, it could be penalized. Conversely, if it exceeds expectations in either of the tier metrics, it recalculates that number so that Sony gets paid more. In English, what this means is that the better Spotify does, the more money Sony is entitled to, but doesn’t necessarily mean that it all works out for the streaming service.Screen Shot 2015-05-21 at 3.07.40 PM Screen Shot 2015-05-21 at 3.07.51 PMIt’s important to remember that Sony isn’t in the business of making sure that it backs up Spotify. It—like the other major labels—is licensing its music to numerous services, so its only real loyalty is to its bottom line. How that affects Spotify is essentially irrelevant to the major label.
  8. The Royalty Distribution (Forget About the Artists)—Without going too deeply into it (Singleton’s initial analysis and infographics are worth consulting), it basically boils down to this: the royalties per stream are so miniscule that you need to be getting millions of streams in order to make any real money (and by real, I mean anything more than $10.00). We all know that independent artists are never going to get to that level trying to compete on an unfair playing field, so let’s just put that point to bed right now. One thing that is worth noting now, though, is that not even every artist has a contract entitling them to royalties. So for all the bluster about royalty payments, many of the artists signed to major labels aren’t even entitled to fair cuts from the streaming.Screen Shot 2015-05-28 at 6.33.02 PMBut even more so, the way in which streaming royalties are calculated is so incredibly convoluted you almost need a degree in economics just to understand it. That’s not how it should be. For independent artists—and even mainstream artists who simply want to understand the financial dynamics—this is yet another way of keeping them in the dark. No one in any other industry would accept some sort of voodoo economics principle when it came to calculating their earnings, so why should music artists—mainstream or independent—have to settle for that? That’s the point, they shouldn’t.

There are numerous other points worth discussing, but these are some of the major ones that discussions of the music industry revolve around. Though arguably a major embarrassment for Sony and Spotify, the leaking of the contract between the two really shines a bright light on what goes on behind the scenes. It clarifies that what happens behind the curtain affects every type of artist, and underscores why more transparency and reform is needed in the music industry. And it highlights something else: the music industry is not dead and foregone. We’re now right on the precipice of a whole new type of music industry that’s taking shape every day. Those who accept and embrace the new dynamics will be the ones who benefit most from them when they inevitably come.

 

Thanks to Shelley Marx for reading early drafts of this.

Tidal Is Losing More Lifeboats by the Day

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Yesterday, TechCrunch ran a piece from Kelli Richards postulating the viability of Tidal as a service, and its likely outcome in the streaming wars. The article was essentially an overview of what’s been going on with Tidal lately, with Richards doing a good job of zeroing in on a couple of things I’ve discussed and underscored in my own mind as the real deal-breakers.

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Before getting into the two main things of her article, I think it’s important to note a very short—but important—sentence in Richards’ piece: “…the prospects of Tidal upending Spotify in the near future are slim…” This falls right in line with something that I wrote earlier concerning SoundCloud, namely that trying to out-Spotify Spotify is a losing battle and a very poor battle-plan. Going head-to-head with Spotify and playing their game their way (that is, general popular music streaming) is such a poor decision because it means you’re starting way behind the starting line. And in Tidal’s case, this goes double for any sort of exclusive content which might be your main attraction.

Now, Richards’ two main points, and my takeaway from each:

1. Premium/Exclusive Content—Firstly, I’ll be the one to say it: “exclusive content” as one’s main gameplay is a very tough sell. It’s a tough sell because it’s a drastically diminished niche of a larger market, which is basically popular music. That means you’re trying to play on two different levels with two completely different mindsets.

The “exclusive content” play is difficult because it requires your customer base to desire those exclusives almost as much as (or more than) the original content. This isn’t anywhere near the same thing as looking at an independent market, since those content producers are increasingly giving away their material for free (including “exclusives” like remixes, acoustic sets, etc.), and making money elsewhere. For a service like Tidal though, they need to first out-Spotify Spotify to gain the market share of the original popular music demographic, then they need to persuade those people to convert to “exclusive” consumers and pay a whole lot more for something they could just as easily get on YouTube if they wait a couple weeks or a month. This is one of the major flaws in Tidal’s plan in my eyes.

Also under the first point is a small comment included by Richards made by Tidal’s CEO Peter Tonstad, which basically asserts that the industry is moving away from the freemium model, and that “it’s going to be the content richness” which listeners begin to look and pay for. This is bold, but false.

First, the sorts of audiences which Tidal is looking to court—general consumers of popular music—are not about to leave the freemium paradigm anytime soon. Secondly—and funnily enough in my opinion—the rabid, content-rich focus which Tonstad identifies as Tidal’s silver bullet doesn’t really apply to popular consumer audiences on a general level anyway. Ask anyone listening to Spotify if they’d pay double (or anything) for higher quality which they can’t even discern anyway, and I’d be surprised if large numbers converted over. Ironically enough, the rabid thought process which Tonstad is alluding to is alive and well—in the independent music industry—where free plays a much bigger part than it clearly does with Tidal.

2. Celebrity Backers—This point made by Richards is a lot easy to wrap one’s head around; people simply don’t feel so bad when Jay-Z and Kanye West start lecturing about needing more money because, well, they’re rich. And not like “we perceive them as rich but they’re really not;” they actually are rich. Being lectured about money from people like that, then, is not only not welcomed, but it’s really irritating. There’s really no way you can look at that celebrity-backed list of Tidal promoters and take them seriously.

Even more so, though, it really alienates artists who are not rich—you know, like everyone else. For the singer-songwriter playing in dingy clubs, or the band on the road and sleeping in their van, Jay-Z might as well be speaking an alien language. Their thought process is almost indignant (and why shouldn’t it be?); they’re thinking “dude, you have all this money and influence, why the hell do you need any more?” And frankly, if I was still an artist, I’d be thinking the exact same thing. Celebrity-backed things like this are rarely ever a good idea, especially when it alienates others within the same industry.

Richards notes that Tidal has someone who Spotify doesn’t—Taylor Swift—but as I explained here months ago, here’s why Taylor Swift is on the same level as Jay-Z in terms of “not getting it.” She’s so engrossed in the major label paradigm and its trappings that she doesn’t see what life is like for normal artists anymore. And, just like Jay-Z, her disparaging remarks about artists “devaluing their music” strikes a sour and indignant chord in a lot of musicians who think she takes her good fortune for granted.

But if one needs any more convincing of why it’s going to be a very tough road ahead for Tidal, you can read about:

  1. Jay-Z’s hissy-fit onstage
  2. Their firing of their previous CEO, Andy Chen
  3. Criticism from producer Steve Albini
  4. Criticism from other mainstream artists
  5. Their highly criticized and misleading relaunch

The storm isn’t about to end anytime soon, and it seems the lifeboats have left the ship.

SoundCloud’s Failed Highwire Balancing Act: The Sony-SoundCloud Breakup

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Trying (and Failing) to Balance Two Completely Different Paradigms

The SoundCloud-Sony Breakup

The Sony-SoundCloud Breakup

It’s been a tough week for Sony between its leaked contract with Spotify and criticism over its moves with SoundCloud. And yet, inasmuch as the former is embarrassing and will certainly come back to bite the two companies, the latter is arguably more problematic because it’s not simply between Sony and SoundCloud; it’s between Sony, SoundCloud and the independent artists and fans. That last little caveat is something that Sony can afford to ignore—but it’s going to become an increasingly difficult reality for SoundCloud.

SoundCloud, now a platform for major labels and advertisers

SoundCloud, now a platform for major labels and advertisers

News broke over the last couple of weeks that Sony has started pulling their artists’ music from SoundCloud—regardless of what the artists want. To Sony, SoundCloud isn’t a viable option since it doesn’t presently have a strong monetization plan (as if services like Spotify and Rdio do), and until the label and streaming service can come to terms, it seems that any and all Sony-controlled material will be stripped from SoundCloud.

This has put SoundCloud in quite a precarious position. On the one hand, it doesn’t want to alienate its initial die-hard independent fanbase, but on the other it’s been actively seeking out a deal with Sony, as well as with the other two major labels, Warner and Universal (already having one in place with Warner). SoundCloud is trying to balance two completely different bases and paradigms that are moving in opposite directions: 1) the major label paradigm which is still predicated on an obsolete business model, and 2) the independent paradigm which is increasingly embracing “free” as a big part of the future.

What the major label industry really looks like; The Big Three

What the major label industry really looks like; The Big Three

What I Said a Month Ago

On April 9th, SoundCloud signed a deal with Zefr—that same day, I wrote a post on why independents should very soon kiss SoundCloud goodbye; why the Zefr deal was essentially irrelevant for them. It seems I wasn’t the only one who’d identified SoundCloud’s prospective problems, as a day later on April 10th, PandoDaily writer David Holmes came to the same conclusion and published a piece with a similar premise. Holmes’ post validated many of my points, and cleverly brought up a few others, all to conclude, as I had, that the Zefr deal was a band-aid for a bullet wound. And now the bullet wounds are really beginning to gush blood.

This week, electronic artist Madeon released a heavily critical statement regarding he Sony-SoundCloud breakup, noting: “Thank you SoundCloud for being such a great discovery platform over the past five years. Well done Sony for holding your own artists hostage.”

Ouch. Snap. Burn.

Clearly Madeon (along with droves of other EDM artists who’ve gained significant followings on SoundCloud) isn’t pleased with Sony’s “money first” thought process and strategy. And while Sony has the legal right to pull music which it holds the rights to, in the grand scheme, it’s not exactly a play which will endear it either to the fans it seeks, or the artists it works with. Actually, it has the complete opposite effect.

Who’s the First Priority?

But what lies beneath the surface of this very public breakup is not simply an issue for Sony, but a major issue for SoundCloud. People expect Sony to act like a major label—because that’s what it is. But increasingly, SoundCloud has been chasing the major label content which it thinks could help it become more competitive with Spotify, Rdio and Apple. In the process, it’s spitting in the faces of the people who loved SoundCloud for what it was before: free discovery.

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Excerpt from my original April 9th article

And as SoundCloud moves closer to the major label paradigm, it becomes increasingly irrelevant for independent artists, regardless of genre. Independents are where SoundCloud cut its teeth, so now, moving away from the free-model will leave them somewhat toothless. Case in point: SoundCloud’s new NMPA deal, which, again, is irrelevant for independent artists.

The thing about the independents is that, unlike major label artists who are tied to the major label business model, they’re not tied to anybody. Their loyalty can and will be to whoever gives them the best service as a first priority, not an afterthought. This means the best service for the independents, not the best they can do after the major labels have had their fill. SoundCloud is trying to perform a balancing act on a razor-thin highwire and it’s 600lbs overweight. It’s trying to straddle two completely different business paradigms, and managing to piss everyone off in the process.

Free Is Here to Stay—Live With It

The free paradigm which the labels are beginning to get fed up with isn’t going away—something which Peter Kafka seized on in his article on Spotify. Free is a way of life now, and as independent artists continue to explore the benefits that free affords them, they will increasingly detach themselves from the obligations of the major label paradigm. Services like SoundCloud will eventually have to choose a side—something that’s going to be exceedingly difficult for SoundCloud now that they already have a deal with Warner and are chasing deals with the other two major labels.

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Excerpt from my original April 9th article

It seems that they’ve already made their choice, and it won’t be too long before droves of independents notice. They don’t have to and won’t settle for being second-tier priorities, and will look for alternative options. In the meantime, Sony and SoundCloud will duke it out until the former signs the latter to a major label-style contract.

I said it before and I’ll say it again: if you’re an independent, kiss SoundCloud goodbye.

Jay-Z’s Tidal “Freestyle” Was Basically a Hissy-Fit

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A couple of days ago, during one of his Tidal concerts, Jay-Z went on a rant, and basically laundry-listed a bunch of people whom he felt have been wronging artists in the music industry. He called it a freestyle, but that’s not really what it was. To anyone who’s not a Jay-Z fan (and probably to many who are), it came off as a hissy-fit.

Jay-Z at one of his TIDAL concerts

Jay-Z at one of his TIDAL concerts

It’s not surprise that Jay-Z and company have been having a hard time of it with their new Tidal streaming service. I posted about their launch here, and then followed up with posts on criticism of Tidal from folk band Mumford & Sons, famed producer Steve Albini, and the sudden removal of their (now former) CEO Andy Chen. It’s been a tough couple of months for Tidal, yet instead of putting his head down and working to find a solution to differentiate his music service, Jay-Z thinks it’s a better tactic to antagonize the competition. Though it might make him feel better in the moment, it comes off as petty and juvenile. He looks like a kid throwing a fit for not getting his way.

In his “freestyle,” Jay-Z attacked not only other music services (Google, YouTube, Apple), but called out a few people by name (Jimmy Iovine). Jay-Z asserts that he came into the music game as an independent…which may be true, but that was more than a decade ago, and the musical landscape has changed a hell of a lot since then. The same rich people he’s insulting are his peers—I don’t think he goes home at the end of the night wondering if he’ll make enough money to tour next month.

Frankly, watching him play the victim is getting tiresome. Jay-Z needs to accept the fact that running a music streaming service may in fact be more difficult than he had originally thought. So stop whining about it, put your head down, and work out the problem until you have a solution. That’s how everyone else does it. Getting up on stage and attacking your competitors doesn’t make you a good business person. It make you appear socially and strategically tone-deaf.

Here’s the (mainly) full text from Jay-Z’s rant:

“…So I’m the bad guy now I hear,

because I don’t go with the flow

Don’t ever go with the flow, be the flow…

Pharrell even told me go with the safest bet
Jimmy Iovine on for the safety net
Google dig around a crazy cheque

I feel like YouTube is the biggest culprit
Them niggers pay you a tenth of what you supposed to get

You know niggers die for equal pay right?!?
You know when I work I ain’t your slave right?
You know I ain’t shucking and jiving and high-fiving, and you know this ain’t back in the days right?

…You know I came in this game independent, right?

TIDAL, my own lane, same difference

Oh niggers is skeptical about they own shit
You bought nine iPhones and Steve Jobs is rich…”

Product Hunt Doesn’t Sell Products—It Sells Community

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A Very Telling Thread

Earlier today, I came across a post on Medium by Product Hunt CEO Ryan Hoover. Simply titled with a captioned quote, “The world doesn’t need another blogging platform. But I did.” is Hoover’s response to a question he posed in the thread of a new PH product, Buffalo.

 

The product in question is yet another blogging platform, the necessity of which Hoover muses on. The subsequent series of responses between Hoover and Buffalo founder Drew Wilson is brilliant.

Hoover first posits that another blogging platform might be overkill, as he’s even more inclined to use Medium than his own blog simply because of its ease and reach/social engagement.

Screenshot of Hoover's comment on Product Hunt

Screenshot of Hoover’s comment on Product Hunt

Notice that Hoover began the entire thought with a positive comment—that he liked the clean design. Already a high note has been struck. His subsequent statements are made from the point of view of his own opinion, and thus are disarming, rather than aggressive.

Wilson’s response is equally brilliant.

Screenshot of Wilson's response on Product Hunt.

Screenshot of Wilson’s response on Product Hunt.

In one fell swoop, Wilson answered Hoover’s thought with his own disarming postulation. He’s not defensive in the least; simply enthusiastic to give a brief overview of what he likes best about his product, and why he thinks it’s different. Beyond that, though, his tone and diction clearly illustrate his desire for a product like the one he’s built. He even concedes that Hoover is essentially right, and that the world doesn’t need another blogging platform. But those three words—”But I did”—would make any reader excited to interact with such an honest and positive personality.

Hoover’s second response was much more terse:

Hoover's second response on Product Hunt.

Hoover’s second response on Product Hunt.

What this tells me is that I was right when I tweeted this last week:

Product Hunt isn't really selling products; they're selling community.

Product Hunt isn’t really selling products; they’re selling community.

It’s Not About the Blogging

I use a number of blogging platforms (Medium, WordPress, etc.) because I love writing and reading what others have to say. And while I most certainly will check out Buffalo after reading the comments on PH, in the end, this entire exchange wasn’t about the blogging platform at all. Not really.

The exchange—deeper, below the surface—is really about and a testament to the kind of community that Hoover and the rest of the Product Hunt team have built. They don’t sit up on top of their mountain acting with God-like hubris, deciding what will and won’t be popular (though, with the popularity of PH, one could argue that they could if they wanted to). Rather, they encourage discussion throughout their network, and concede that their tastes and opinions do indeed come from personal preference. I have yet to see any post by a PH team member that purports to “know better” than any of the product makers or users on PH.

This lack of arrogance is exceedingly palpable—people notice. It’s what makes Product Hunt a real community rather than a forum. A forum has moderators and editors who have the final say. And while PH does employ some extent of moderation when choosing products for the front page (and how could they not, with so many products posted every day), they don’t condone or foster any sense of superiority within the community.

The Product Hunt cat

The Product Hunt cat

Product Hunt Sells Community

Product Hunt is called Product Hunt (I assume) because people post new products on it (duh). But they’re not selling products; they’re selling community. They’re selling a level playing field so open that the team members who built it continue to engage in conversations with their users. And they don’t need to be “right;” they don’t need to have the last say, or come out looking like product soothsayers.

Product Hunt will continue to succeed because of this dynamic. It wouldn’t even matter if their product-content base dried up tomorrow; the people who have come to love the community would find something new to post there. It could end up as Healthcare Hunt, or Garden Hunt, or maybe Airplane Hunt. The products on it would be relevant insofar as the core sense of community remained intact. And I expect it will.

“Why? Because we can.”—An Artist’s Perspective

Hoover capped off his Medium post with this:

Screenshot of Hoover's post on Medium

Screenshot of Hoover’s post on Medium

This tells me two things.

First, Hoover (and the rest of the PH team, I assume) won’t tolerate dynamics of superiority or condescension that would undoubtedly taint the PH community.

Secondly, by way of using the example of a new drummer experimenting with his first skins, he illustrates the notion that he sees the PH community (product makers as well as users) as artists. This statement explains away any necessity there might otherwise be to explain why someone made something. Hoover’s statement makes that irrelevant. Artists create for the sake of creation, and they learn new things from the process every time they do it. Product Hunt’s community is at its core a community of product artists, therefore the question of “why?” is no longer relevant. Why? Because we can.

My gut tells me that’s exactly how Product Hunt started, if you look deep enough below the surface. Hoover started a product mailing list. Why? Because he could, and he wanted to. Everything else is irrelevant (even the success). Artists are artists because that’s how they see the world. Clearly the same is true for Product Hunters.

Music Startups Are About the Artists, Not the Code

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You Can’t Hack the Music Industry in a Weekend

You can’t hack the music industry in a weekend by talking to a few artists and trying to extrapolate from there. This is a mistake I see music startups make all the time, and a reason I think that a lot of them fail. The music business is a much more complex system than I see people give it credit for, and I think this really throws a lot of would-be music startup founders. It’s also very different from the tech industry in a number of important ways, and I think that this also scares people away—making the music business seem like a losing battle, and an inevitable death. But it’s not.

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Me on my show, Underground Takeover

I wrote here how and why music startups do indeed succeed because of passion, not in spite of it. Unlike other startup industries where an overflow of passion might very well blind founders from the realities of customer desires and industry trends, the music world works on its own axis. It’s much more intricate than is reported on by the press—so much so that I would even argue that many within the established model may have a skewed view of what’s possible and probable. Thus it’s precisely that overflow of passion that leads to one’s desired immersion in the culture, arguably the real key to building a successful music startup.

I recently read a short blog post from a little while ago, wherein the founder of a failed music startup wrote about the problems which were encountered. As I read through it, I noted a number of mistakes which I think should be deeply examined. Let it be noted here, though, that this is not an attack on the author, nor is it meant to call anyone out; as such, I will steer clear of any terminology (including specific pronouns) that might reveal the author or their failed company. Let’s begin.

The Realities

1. A Few Conversations Aren’t Enough

In most startup industries, talking to your customer base is key, and fast iteration is the name of the game.

But music is different. Music is different because people seem to forget that it’s an industry that can’t be understood by reading a few articles on Wikipedia or having conversations with a few artists.

Who are these artists? Where are they from? How big is their fanbase? How rabid is their fanbase? How many albums or EP’s have they released? Are they teetering on the point of break up, or are they solid? Do they tour or don’t they? These are just a few questions you need to ask yourself before relying on the feedback given to you. It helps qualify the types of answers you get. Different types of artists think different types of ideas are “cool” (which means nothing until you qualify that word as well), and without understanding where in the ecosystem these artists exist, such feedback is essentially useless.

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Never stop talking to artists.

That was the author’s first mistake. The second one was much more egregious. Never ever stop talking to the artists. If you stop talking to them, you’re dead. Period. The music landscape changes every day, much faster than a lot of other companies, even within the context of tech. The artist who was nobody yesterday is a national name tomorrow. If you stop talking to artists and stop putting your name out there, you become irrelevant so fast it’s not funny.

This is not an industry where you can have some conversations, gather feedback, go back and recode something, then collect more feedback. You need to find a way to be coding and strengthening your reputation among artists simultaneously. The artists don’t care about your iteration cycle; the only thing that they understand and connect with is your passion and their voice through you.

Me interviewing (clockwise): Felice LaZae, Alabaster, Christopher Linden (Neverblue), Me vs. Gravity, Isobel Trigger, Diamond Eye, and Heel

Me interviewing: Felice LaZae (left), Alabaster (top), Christopher Lindén (Neverblue) (mid, top-right), Me vs. Gravity (mid, top-left), Isobel Trigger (mid, bottom-right), Diamond Eye (mid, bottom-left), and Heel (bottom)

2. Music Isn’t Neatly Splintered Like Other Industries

In the music industry, the first thing to understand is that things aren’t as splintered and unbundled as they are in other fields. In other arenas, being an expert in data analytics or e-commerce sales might very well be enough of a foundation on which to build a company. But in music, understanding only one aspect means not understanding all of them. This is where the author failed (or rather, misunderstood) in this respect.

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Music isn’t neatly splintered.

“Sales” in the music business can mean different things to different people; it could mean sales of tickets, merchandise, music files, special gifts, etc. And it could mean understanding those sales from the point of view of an artist, fan, promoter, venue, etc. Thus to say that one isn’t a “music sales domain expert” essentially means that one doesn’t understand that there are a very many different types of music sales domain experts, and that they are all very intricately interconnected in different ways. In approaching a music startup with this skewed notion of understanding, I believe the author began on a misleadingly difficult path to come back from.

3. Never Keep Anything from the Artists.

Understand that this is an industry where artists and people are used to being taken advantage of. That’s the norm. For many artists, industry experience has taught them to be wary, and anyone who is familiar with the dynamics of the industry can understand why. Sexual harassment, broken promises, money troubles, and limited access to resources are just a couple of things that plague artists daily.

The music industry is full of all kinds of realities that music consumers rarely see, and even more rarely care about: breakups, bad blood, intra-band politics, collaborations, no money, live touring, ridiculous royalties payments, new releases, band tragedies, sleazy industry “professionals,” loyalty to particular people—these are all things that music startup founders should understand way before writing any code. If not, you’re doing it ass-backwards.

The meaning of this is very simple: if you keep secrets from or mislead the artists you want to work with, you’re dead. Done. Finished.

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If you mislead or keep secrets, you’re dead.

The author did the company a massive disservice by misleading an artist they were working with. Artists are not VC’s; they don’t give a shit if your product is subpar and you need to pull it back, if you’ve missed multiple ship dates, or even if the damn thing works right the first six times they try it. They don’t care. The only thing they really care about is not feeling taken advantage of. If you’re honest and up front, you’re golden, no matter how many ship dates you’ve missed. Their deepest loyalties (most artists, anyway) are to people who they perceive as supporting them the way their fans do. This is where you need to be speaking with passion, not tech logistics.

The music industry is very much like the tech industry when it comes to interconnectedness; everyone knows everyone. They tour together, play together, promote each other, and rely on each other to steer clear of sleazy people. Keeping secrets and misleading artists is one of the sure-fire ways to quickly find yourself a pariah in the music community. (And no, genre doesn’t matter. People talk, and word gets around. It doesn’t matter if you’re dealing with rappers or heavy metal bands, a bad reputation is a bad reputation).

4. Free Is Ubiquitous. Live With It.

Free is ubiquitous in the music industry. No matter how much people might try and fight it, it’s a big part of the future. Period. Fighting the free dynamic will only give you headaches and lead you faster toward the deadpool.

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Free is here to stay, live with it.

If your company can’t exist in a very competitive way within the free paradigm, you’re fighting a losing war. And no, royalties aren’t going to save anyone, so don’t believe that they will.

The fact of the matter is, many artists embrace free. They see it for all its benefits. Again, this has to do with understanding the differences between different types of artists. If you can’t even make those distinctions, then trying to understand this whole point is useless and thus irrelevant.

5. Artists Tend to Be Open-Minded By Nature

The reality of it is, many artists tend to be open-minded by nature. These are not engineers focused on the logistics of how realistic something is. They don’t care about market-cap, valuations, competition, or which programming language will run the best.

This is the music industry, it’s inherently filled with dreamers. These aren’t people who care which classes you took in college, or how many programming languages you know. They are perfectly happy to tour the country in a crappy van, and hang all their hopes on the notion that they might be able to make a living playing music. And there are a lot of them.

Me with: Those Mockingbirds (top left), Bloody Diamonds (top right), The Steppin Stones (bottom left), Sunshine & Bullets (bottom left)

Me with: Those Mockingbirds (top left), Bloody Diamonds (top right), The Steppin Stones (bottom left), Sunshine & Bullets (bottom right)

This means that if your ratio of yes:no doesn’t skew heavily towards yes (like 80-85%), you are doing something very, very wrong. In an industry where the content producers are dying to try new avenues every single day, if you don’t at least capture the attention of 8/10 with your pitch, you have a real problem.

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If you don’t capture around 8/10, you’re doing something wrong.

Again, these are people who live on passion, and are not super bothered by logistics. If you put out a soft beta and it doesn’t load the first six times for an artist, no big deal. As long as they really believe in your vision, they will keep coming back. Period. And they will wait as long as they need to.

(In fact, if you’re not getting emails from artists apologizing for not signing up for your beta fast enough, you’re doing it wrong. This actually happens, and if your inbox isn’t full of apologies for delayed responses, you haven’t gotten through to your key demographic. I actually have emails sitting in my inbox from artists apologizing to me for not signing up for a small test fast enough, hoping that they haven’t lost their spots).

6. Artists Don’t Care About Your Software

Artists are not engineers. They don’t give a shit about your software. None. Zero. Zilch. They don’t care if it’s written in Ruby or Python. They don’t care how many iterations it’s gone through. Many times, unless they’re programmers themselves, they won’t understand what makes your software unique or special. And frankly, they don’t care to understand.

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Artists don’t care about your software. Period.

Artists care about what the software will let them do. What kinds of doors will it open for them, and how many of their fans will they be able to reach through those doors? Is your software just like SoundCloud’s or Spotify’s? Doesn’t matter. The only thing that matters is their understanding of what the core dynamic is that the software is attempting to solve. This understanding is again distilled down to passion.

Most every artist I know—whether they’re from the U.S., Canada, Europe, or Australia— doesn’t give a shit how good your playlist-making algorithm is. It isn’t aimed at helping them, so they don’t care. If that’s your pitch, you should really reexamine your status.

This is where the author made a major error. There wasn’t a clear argument made for how this startup’s software would augment the passion dynamic of the artist. How would it affect the passion of the his fanbase? Would it give the him more dynamic tools to address the passions of the fans with regard to his music? Clearly there wasn’t enough of a distinction to dissuade him from using another platform.

This actually brings up another important point: if your music startup is so threatened by the existence of other music platforms that they can’t be used in conjunction, you have a major problem. The music landscape is populated by numerous services, platforms, apps, and companies. If you need to unseat one or more of these to be successful, go home and redesign your company.

7. You Need to Speak Their Language

All of this culminates in one singular, important point: you need to speak their language. Artists are like engineers, bankers, lawyers, doctors, or journalists in that they have their own language; their own buzzwords (both good and bad), their own tone, diction, emphasis, and colloquialisms. If you don’t know or understand these, you’re out of luck. No amount of good programming will make the difference if you can’t sell it to the artists.

Me in Dublin, Ireland with Chris ____from the Riot Tapes

Me in Dublin, Ireland with Chris O’Brien from the Riot Tapes

If you want to be a music startup founder, you better have at least a few years’ experience in actually talking to artists. Understand that conversations between you and the artists, and you and the music fans will be very, very different. Do not speak to artists the way you would to music consumers. They are not the same as music consumers, and if you treat them as such, you label yourself as someone who can’t distinguish between the two.

If you don’t have a cofounder on your team to translate the tech speak into artist language, you will have a very, very hard time. There’s no substitute. Being comfortable talking to other startup engineers or investors means very little in this respect, except for knowing how to put words together in a sentence. Other than that, you’re speaking a completely different language than the artists you’re most likely talking to. Artists are not engineers, so assuming that they are will kill you.

Me interviewing Cherri Bomb (now Hey Violet) from Amsterdam, Netherlands

Me interviewing Cherri Bomb (now Hey Violet) from Amsterdam, Netherlands

To artists, metrics rarely, if ever, speak as loudly as passion. The passion is what comes across first and last. Most everything else sandwiched in between is somewhat secondary. If you’re a founder of a music startup, accept the fact that you’re going to be speaking to artists and music industry professionals (promoters, venues, organizers, merchandisers, etc.) a hell of a lot more than you’re going to be talking to your music consumers. And if you’re working in the major label paradigm, get used to talking to major labels (that means lots of lawyers and executives). All of these people have different dialects of the same language. This doesn’t mean that the music industry is impossible to crack for new music tech startups. It just means that if you’ve never been in the industry before, you’re starting very far behind the line.

 You Need to Live This Passion

In the end, what this all means is that being a music startup founder has to come from a deep-seated passion. It has to almost be a nagging need that you wake up with. It’s not a one-and-done scenario, where if your first crack as a music startup doesn’t work you move on. If that’s the case, you don’t care enough—you don’t love it enough. You need to live this kind of passion. From how you dress to the slang you use, the little things matter, even if they shouldn’t. And trust me, the artists notice. It becomes an “us/them” mentality. You’re either with the artists—you know them, you understand them— or you’re not. There’s rarely a middle ground.

Me at Warped Tour 2012, with: June Divided (left), The Nearly Deads (middle), Might Mongo (right)

Me at Warped Tour 2012, with: June Divided (left), The Nearly Deads (middle), Mighty Mongo (right)

In the music industry, if you’re an artist and don’t use every tool at your disposal to try and grow a fanbase, you simply don’t care enough. That sounds callous, but it’s true. The same is true for music startups—the only thing that will really get you through to the other side is your passion. You need to breathe the relationships with your artists; you need to be friends with them on Facebook, know them by their first names, know their birthdays, why they started playing music, what their ambitions are—everything short of how they take their coffee, and maybe even that.

Your Code Can Wait—They Can’t

All of this information comes from conversations that never stop. If you stop messaging an artist because you’re busy fundraising, sorry, you’re dead. If you can’t be bothered to respond to their emails because you’re too busy fixing you’re code, sorry, they don’t care, you’re finished. Your code can wait—they can’t and they won’t.

Ironically, this is what I find the most invigorating about being a music startup founder. I love talking to the artists and contacts—I thrive on it. I’ll respond to Facebook messages from artists in Canada, Denmark, Ireland, or California at 4 AM. And I do it because I love it. If you’d rather be writing code at 4 AM than talking to artists in New York or Germany, don’t do a music startup. Do something else that’s not people-based. Because in the end, you can’t hack your way into personal relationships. These relationships take time and care—they don’t happen on your schedule just because you’re trying to code your next app update.

But the flip-side is also true. If you have them going in, you’re lightyears ahead. You have a built-in base that’s invaluable. That’s how you really need to build a music startup: based on the relationships you develop with the artists. Everything else flows from that.

Music Startups Succeed Because of Passion, Not in Spite of It

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The Lead-up

Full disclosure: I am a music startup founder. 

Right now my earbuds are in, and my music is turned up so loud I can feel my spine shaking. Not because I’m angry or sad, but because I’m determined. I’m determined to put to rest the jaded notions that surround music startups, even if it takes me more than one post to do it.

I read an article on Medium today that postulated that part of the problem with music-tech startups is the passion which those music-tech founders have for their products or services. The piece concluded with this sentence: “Passion is great, but in the end, it often fades.” False.

The article, though written I’m sure with the best of intentions at shining a light on the challenges of music startups in the tech arena, is fraught with generalizations and assumptions, none of which are good to have for an objective point of view. The piece referenced a talk from Google User Experience Researcher Tomer Sharon, using it to bolster the premise that “music startups go at it about all wrong” (of course I’m taking some creative license here, but that seems to me to be the basic paraphrase of the piece).

In his talk which the piece points to, are six main points about executing the wrong plan, and how this dynamic seems to plague numerous founders. By the author’s own admission, the talk wasn’t music startup-focused, and the resulting analysis is just a serious of personal views. The application of these points to the large deadpool of failed music startups is understandable. After all it makes sense to look at a slew of failed projects and calculate the correlation and causation of their respective deaths. However, the piece takes too much latitude in my opinion, and shines a shadow on all future music startups for the sake of bolstering a (misleading) argument in the present.

Statement admitting most everything that follows is personal opinion.

Statement admitting most everything that follows is personal opinion.

The (Asserted) Problems and the Responses

Here are my responses to the six points in the talk, and subsequently in the article (the asserted points are paraphrased for the sake of simplicity:

Asserted Problem #1. Founders assume that their personal struggles are mirrored by a larger struggle that the world needs a remedy for (which the author admitted is something that does happen). Further, most people don’t care as much about music; most everyone besides you and your music friends is essentially a casual listener, and thus an insignificant statistic and/or demographic.

Statement asserting that mostly no one cares about music.

Statement asserting that mostly no one cares about music.

Response #1. In many areas, and in music as well, there are problems that avid fans/users identify that other, “more casual users/listeners,” might not identify until they can see an improvement (the proverbial before and after picture). Not every identification of a problem can or needs to come from a “casual” user. Sometimes it takes a trained and experienced eye to understand and be able to identify something as broken and to be able to innovate a way to fix it.

This has nothing to do with the passion that music startup founders have for music. It has to do with their ability to dissect an industry that they have come to know better than most, and be able to see room for innovation within it. The generalized statement that “most people don’t care as much about music as you do” is misleadingly false.

It first assumes that one (the founder) cares too much about music, or is in same way too in love with music so as not to be able to strategize accordingly. Secondly, it presumes to know what the music founder has in mind for an innovation, and already moves to the assumption that such an innovation will fail. And lastly, it presumes to generalize peoples’ unique affections for music without citing any real statistical proof.

People do care about music—in fact they care a lot. That’s the reason that Napster was such a snafu in 2000, and the reason that the music space will be the next crowded arena as numerous companies try to cut a niche in the space. People do care, though with each person at a varying degree, how can one possibly know that “most people don’t care as much as you do[?]”

Asserted Problem #2. Startup founders seek validation from friends and family, who tend to be biased.

Response #2. This is a problem that all startups face, not just music startups. The piece’s assertion that founders of a music startup essentially only congregate with similarly “music obsessed” individuals presumes to know the particular group dynamics of every music startup founder.

Statement asserting that "music people only congregate and seek feedback from other music people."

Statement asserting that “music people only congregate and seek feedback from other music people.”

I am a music startup founder, but my social circles are filled with people who populate the music, tech, theater, science, medical, and legal fields. Therefore, to reduce my social circles down to individuals who “think like I do” is fairly pandering and presumptuous.

Asserted Problem #3. Listening to users rather than observing their behavior can lead to disaster, as it can lead to building something people say they want, as opposed to something they will actually use.

Response #3. Much like point #2, this is a conundrum that plagues all startups, not simply music-related ones. Therefore, it should be relegated to the list of startup mistakes to avoid, not used as a reason to forego building a music startup.

The author’s use of the company Jukely as a buttress for the argument actually brings into question the author’s own view of the music industry. The analysis is filled with wild generalizations like “[t]he live music audience [is mostly] made up of people in their twenties” and that “many people [can’t stay out late and see music because] they have a career and kids to think about.”

Statement asserting that the only relevant music-goers are in their twenties.

Statement asserting that the only relevant music-goers are in their twenties.

Statement presuming to know the career and family dynamics of music-goers.

Statement presuming to know the career and family dynamics of music-goers.

The former is false because it’s a gross generalization (and assumption, for that matter), of the age-range of all music-goers everywhere, failing to take into account different music scenes, tastes, geographical dynamics, or any number of other factors. The latter is negated (and thereby false) because it presumes to know the intra-familial and career dynamics, realities, and responsibilities of all music-goers everywhere. As a result, the whole analysis can’t be put forward in any sort of objective way, and must therefore be taken as a matter of opinion, not a matter of fact.

Asserted Problem #4.  Most music startups don’t test their riskiest assumptions.

Response #4. This entire point negates itself because it purports to know every assumption that every music startup has, and every failure that came as result of ignoring those assumptions. Again, gross over-generalization is the culprit here.

In the midst of arguing point #4, the author makes a bold statement that I can personally bear witness to as wholly false. The author writes: “The other risk startups take when entering the music space is that they simply don’t know anything about the music business.” I am a music startup founder, and I have spent nearly a decade in the music industry.

Statement asserting that music startup founders know nothing about the music industry.

Statement asserting that music startup founders know nothing about the music industry.

Though the author does make a good point—that the “launch first, ask questions later” approach isn’t suited well to the music industry—the point is negated by the assumption that all music startup founders are simply overzealous music fans with no understanding of the inner workings of the music business. I for one take offense to that.

I was in a band in high school, and after graduating, took a gap year before college, during which I was a music journalist. I continued my journalism well into my college career, even as I simultaneously ran a radio show and conversed with artists daily. In fact, I had press access at Warped Tour in 2012 precisely because of the connections I’d made and things I’d learned during my tenure as a journalist and DJ. All of these experiences and understanding are what I draw on every day to help formulate the best decisions for my music startup.

Me on my show, Underground Takeover

Me on my show, Underground Takeover

Me with: Those Mockingbirds (top left), Bloody Diamonds (top right), The Steppin Stones (bottom left), Sunshine & Bullets (bottom left)

Me with: Those Mockingbirds (top left), Bloody Diamonds (top right), The Steppin Stones (bottom left), and Sunshine & Bullets (bottom right)

Me at Warped Tour 2012, with: June Divided (left), The Nearly Deads (middle), Might Mongo (right)

Me at Warped Tour 2012, with: June Divided (left), The Nearly Deads (middle), and Mighty Mongo (right)

Asserted Problem #5. Music startup founders become obsessed with can I build it, and lose sight of should I build it.

Response #5. Again, this is a problem that all startups must contend with. It seems that the author takes the most general points of avoidance made to most and/or all startups and sets them up as tools to bolster an argument that takes aim at music startups specifically. But in reality, if these are simply more general avoidances (seeing a pattern here?), then they have no place in this argument anyway, and are thus negated by their own generalization.

Asserted Problem/Response #6. The author actually doesn’t actually make a point #6. I assume it was meant to be taken or gleaned from the concluding paragraphs, but all that is left at the end of the piece is more generalizing. Statements like “[t]he music tech business is a graveyard littered with startups that seem cool at the time, [but no one wants or needs]” and “[the music founders] all went to SXSW, and lit some money, and crashed and burned a few years later” are more presumptuous than perhaps anything else in the piece.

Screen Shot 2015-04-30 at 8.14.56 PM

Statement asserting that music startup founders just go to SXSW and build companies no one wants.

The former of the statements asserts that no music founder could ever possibly create a music app or service people want/need, and the latter elevates SXSW to the pinnacle of godhood in the realm of music festivals. Yet if the author was familiar with the trends and grumblings that go on below the surface, then it would be understood that SXSW has in fact become sour to many independent music fans in recent years, as it leans further towards a mainstream agenda.

The last paragraph in particular is annoyingly pandering; its tone and diction betray a bitter and jaded writer using generalizations to bolster arguments of arrogance and assumptions.

The Last, False Sentence

Which brings us back to the last sentence yet again: “Passion is great, but in the end, it often fades.” Clearly the author is surrounded by other jaded personalities who forgot (or perhaps never knew) why most people get into the music business in the first place. It’s not about being the next Led Zeppelin or being rich and famous (though it’s fun to entertain fantasies); it’s because our passion is visceral—a part of us that we can’t turn off and on at will. It just exists as a nagging need, like the need to breathe when we wake up in the morning.

Passion can transform or ebb, but it rarely fades in the way that the author asserts it does. In the end, many of us in the music industry chose this business not because we wanted to solve some major problem (not at first); we chose it because it speaks to us in a way few other things do. That passion doesn’t fade. If anything, it gets stronger with every subsequent experience.

The Secret’s Out: Secret’s Dead

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The Background

So it was announced today that Secret is shutting down. Part of me is completely shocked, and another isn’t all that surprised. Secret has had a lot of problems over the last year and frankly, I haven’t seen them do anything to fix any of them.

The old Secret logo

The old Secret logo

Secret blew up last year at SXSW and was everywhere after that. I’m serious, you couldn’t get away from the damned thing. Along with Whisper and Yik Yak, Secret made anonymous messaging handy and fun. Secret screenshots and threads showed up on Facebook and BuzzFeed and essentially took over spring of 2014.

The Fuckups

  1. Yet, like Yik Yak did, Secret encountered a lot of criticism over the issue of cyberbullying. As far as I’m concerned as a spectator and casual user, Secret never really addressed any of these issues. Cyberbullying continued to plague the service (at least that’s what I heard from other users), and I never really saw any major PR campaign by Secret to really dispel any of the criticism. In my opinion, that was their first major mistake.

    Screen Shot 2015-04-29 at 6.54.42 PM

    Criticism of Secret’s cyberbullying; courtesy of TechCrunch

  2. Then in December of last year, they made their second major mistake. Secret completely “redesigned” their entire interface. The app was redone from top to bottom. Here’s why the word “redesigned” is in quotes: they didn’t redesign anything, they just copied Yik Yak. No, they weren’t “inspired” or “influenced” by Yik Yak—it was just a shameless, lazy, total ripoff clone. And I wasn’t the only one who thought so.
    New Secret Redesigned Logo (left) and Yik Yak Logo (right); photo courtesy of TechCrunch

    New Secret Redesigned Logo (left) and Yik Yak Logo (right); photo courtesy of TechCrunch

    New Secret Redesigned Best/Hot Page (left) and Yik Yak Page (right); photo courtesy of TechCrunch

    New Secret Redesigned Best/Hot Page (left) and Yik Yak Page (right); photo courtesy of TechCrunch

  3. If their second major blunder set the stage, their third and final misstep locked in their fate: they really didn’t do anything about the criticism they got for essentially cloning Yik Yak’s layout and design. I don’t know if Secret’s leadership just kept hoping the backlash would go away or just didn’t care, but their inaction signed their death warrant as far as I’m concerned. Frankly, after such a series of serious blunders, today’s news isn’t as much of a shock to me as it might otherwise have been.

What They Should Have Done

Here’s what I think Secret should have done over the last year:

  1. They should have acknowledged and met criticism of cyberbullying head-on. They should have addressed it and appeared to take it more seriously than they did. They should have dumped major amounts of money into both looking for a cyberbullying-solution, and a massive PR campaign to set themselves apart from their anonymous messaging peers. The PR campaign should have centered on the fact that cyberbullying was their top concern, and that they weren’t hiding from or shirking responsibility; they were facing the problem head-on. This would have endeared them more to their userbase and the public, and possibly could have served to give them a leg up on their competition in the space.
  2. They should not have shamelessly cloned Yik Yak’s design. It was painfully obvious to everyone (even non-users), and pretty much tarnished their reputation. They came across as having no vision for their company, and as preferring to copy one of their competitors rather than do the hard work to underscore and highlight their unique qualities. The major redesign had to cost a pretty solid amount of money. I would have used that money instead for the cyberbullying problem, and put it towards the solution and PR campaign outlined above.
  3. This is the biggest kicker: they should have pulled back the “redesign” within a week and admitted their huge mistake. People understand and respond to others who act in humble and human ways, even if that means sometimes making mistakes. By not admitting their major blunder, Secret pretty much alienated the rest of their userbase.

Here is word for word the statement I would have released if I was Secret’s CEO:

Earlier this week we made a huge mistake. Our redesign did not convey the message we wanted, and we have decided to revert back to the original Secret for the moment. We do not want to be anyone other than who were are, and we know that our next step forward will better convey our vision for what we know Secret can be. Our next step will act as a tribute to our past even as we embrace our future. We never want to lose the unique qualities that make Secret so special, and we will go back to the design-board so we can better convey those qualities which we love so much. This is not the end; just a little bump in the middle. Our next step forward will be our best yet!

Unfortunately, I did’t see any release statement like that from Secret.

Why Are They Giving Up? Where’s the Fight?

That is all that it would have taken to convey to me that the people at Secret are human and have the best intentions. It would have confirmed for me that the leadership at Secret is committed to succeeding as themselves, and not trying to as someone else. Unfortunately that wasn’t the case, and now Secret’s hitting the deadpool.

What must be the most bitter pill to swallow for investors is the question of “why.” If I was an investor, knowing that Secret still had ~$35M in the bank, I would be wondering why they don’t just pull back and regroup. Where’s the fight? They have the funds, the (somewhat) intact userbase, the reputation, and the manpower, so why are they just throwing in the towel? That must be the most disappointing question for everyone involved to be struggling with right now. I know that’s what would be going through my mind as I cleaned out my desk.