Music Startups and the Passion Problem
The music tech business is a graveyard littered with ideas that seemed cool at the time
Ask almost any music startup founder why they started their company, and you’re likely to hear a variation of the following: “I love music! I’m such a passionate fan and music changed my life.”
Which, on one level, is fine. Music is great! Working in an area you’re passionate about is awesome. But that passion can also be a double-edged sword, leading you to think that everyone is just as passionate as you are about a certain subject, and clouding your judgement about whether your product is actually something that can scale.
A few months back, Google User Experience Researcher Tomer Sharon posted a fantastic talk about perfectly executing the wrong plan. His presentation wasn’t specifically aimed at music startups, but much of it rang true to me. As someone who has been to countless music hack days and demo events, as well as consulted and worked for several music startups, the six problems he outlined mapped perfectly onto many of the failed startups I’ve seen.
The first problem is that creators assume their personal pains translate to something the wider world actually need. Now, sometimes this works — the founders of Uber probably noticed you couldn’t get a cab in San Francisco. But in music, that’s not often the case — just because you want a fun way to share playlists with friends, doesn’t mean everyone does.
The truth is that most people don’t care as much about music as you do. Most people are happy to buy a few albums a year, maybe check out a few concerts, and listen to the radio in the car. That’s hard for intense music fans to fathom sometimes, but it’s true.
Unfortunately, if you surround yourself with other music fans, you’re not likely to see this. The second problem is that startup founders often seek feedback from friends and family, who are likely to be biased. It stands to reason that if music is a big part of your life, you’ll be drawn to people who also love music and are likely to think your music startup idea is a great one. As for asking the non-music fans in your life, they’re also unlikely to be brutally honest. Your dad might not have bought an album since the 80s, but he’s not going to be negative about your idea, either.
Even after all that, let’s say you go ahead and build your music startup. You put something together, you test it with users, and the users like it — but it still never takes off. Alas, fatal flaw number three: listening to users rather than observing their behavior.
Concert subscription startup Jukely raised $8 million this week, and good on them. They are joining a crowded market, and I fear that they are going to fall prey to the same fallacies that have plagued other live-music startups. It’s not that concerts aren’t easy to find; it’s that they are not easy to attend for many people. The live music audience, for the most part, is made up of people in their twenties — mostly because people in their twenties in major cities can afford to go to shows and stay out late. They’re just competing for the same small piece of the pie as everyone else, without addressing a bigger problem — concerts are off limits for people older than 30, for the most part. The real problem for many people isn’t that they don’t want to see music, it’s that they can’t stay out until midnight when they have careers and kids to think about. Rather than innovating around that problem, most concert startups simply write off older audiences and assume that only young people want to see music and just need new ways to access it.
This leads into the fourth problem, which is that most music startups don’t test their riskiest assumption. Spotify, Tidal, etc. all operate from the assumption that enough people care about music to pay $120 a year (or more) to listen — and that might not be the case. Even at the height of the boom in the late 90s, the average consumer spent about $28 a year on recorded music, and that was without all the free options available today.
The other risk startups take when entering the music space is that they simply don’t know anything about the music business. The “launch first, ask questions later” mentality is hard to pull off in music — love it or hate it, the rights holders still call shots, and trust me, they’re reading Techcrunch. If you launch a music startup without deals in place and raise a big round, prepare to kiss most of that money goodbye.
But by this point, founders are buried deep in problem five — the Bob the Builder mentality. They’ve lost sight of if they should build something and become totally focused on whether they can build something. I should point out here that I’m not opposed to building things as learning exercises; if you want to come to a Music Hack Day and build the 10 millionth playlist sharing app just to learn how to manipulate a certain piece of code, go for it. Just don’t try to raise money for it.
Because here’s what will happen: You will have perfectly executed the wrong plan. You’ll have a sexy, cool music app that no one wants, needs, or cares about. The music tech business is a graveyard littered with startups that seemed so cool at the time, because the founders loved them. And maybe those founders found some people with money who thought that working in a bank was boring and investing in a music startup would be a great way to meet famous people and get dates. They all went to SXSW, and lit some money on fire, and crashed and burned a few years later.
And look, no one dies when this happens. The money goes to money heaven and everyone just goes and does something else. But the problem with building startups because you just love music and assume everyone else does is that you don’t come any closer to solving the real problems. There are interesting businesses to be built in the music space; you just have to come at them from a colder, more analytical perspective. Passion is great, but in the end, it often fades.
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