The improbable story of the small-town Canadian tech company powering the world’s largest music festivals
The mid-to-late 2000s were a dark period in the music industry. The aftermath of Napster created a world where no one bought CDs, artists wondered how to make money, music stores went bankrupt, and major record labels collapsed. It was not the time to be an artist, a record label, or anyone selling to an artist or a record label.
Darren Gallop was all three.
His band, once on the verge of success, had petered out. His record label, in which he’d invested all his money, was about to follow suit. It was 2010 and the two main competitors for his software, Marcato, were going under.
He’d seen his own numbers: Marcato, for which he’d made personal financial guarantees, looked like it was going to prove the rule that deaths come in threes. Gallop had given most of his life to the music industry, and it was about to chew him up and spit him out.
“Oh my God, I just built this whole business model around a market that doesn’t exist.”
It’s spitting rain at the waterfront restaurant just a few blocks from Marcato’s office. Recalling those dark days, Gallop leans his arms on the table and says, “It was like ‘Oh my God, I just built this whole business model around a market that doesn’t exist.’”
Marcato, a music festival management software, is not headquartered in or near any sort of traditional tech center like San Francisco or Boston. It is, by many standards, in the middle of nowhere: Sydney, a community on the eastern extremity of Cape Breton, Nova Scotia, almost but not quite as far east as you can go in North America. The only thing that separates Cape Breton’s steep coastal cliffs from the United Kingdom is more than 2,000 miles of churning waves that turn to frozen slush in the winter.
In the 20th century, Cape Breton was dominated by the coal and steel industries, both of which steadily declined after World War II. By the 90s, the region was facing severe economic ruin wrought by depleted mines and an obsolete steel industry. Since then, Sydney and the surrounding communities have been facing a desolate economy, an evaporated labor market, and substantial out-migration, especially among young people. 2011 was the first time since 1931 that Cape Breton’s population fell below 100,000.
Even today, Sydney has a graying population. Late night at Tim Horton’s isn’t full of teenagers scarfing down donuts; instead there’s a muted shuffle of a few middle-aged people quietly nursing coffee. Dinner patrons at the pub were mostly gray-haired; the youngest person in the place was the waitress, perhaps in her late twenties, who lamented that all her friends had long ago left for a big city like Halifax or Calgary. She never explained why she didn’t follow suit.
And yet in a city with a slowly-contracting, aging populace, Marcato is an oasis of under-40s sporting fashionable glasses and checkered button-ups. A number of its 16 employees have small children. The office has a college dorm feel, with a ping pong net stretched across an undersized office table and a mission statement peppered with mild profanity. An errant string of white lights is wrapped unevenly around a pillar, a remnant of last year’s Christmas celebration
It’s a four-hour drive from Halifax, the capital of Nova Scotia, to Sydney. It’s mostly on undivided highway that winds around ponds, coastline, and through thickets of trees that are, in the fall, ablaze in fiery orange and aggressive gold. Flying to Sydney from most cities in the United States takes two to three flights and most of the day or night. That is to say, Sydney is not the most accessible place.
So how is it that two guys from this rural island on the eastern tip of Canada start a tech business that becomes the premier software platform for music festival management and lands Coachella as a client?
The answer starts, as many tech stories do, with the fact that they weren’t even trying to.
When Darren Gallop was trying to make it, “it” was not the software or entrepreneurship game — it was the music industry as a percussionist in, most notably, the rock band Slowcoaster and later, as a manager with his own record label. “I think a lot of people go into music because it’s sexy,” Gallop theorized. “[But] I don’t think many people know the amount of work [it takes] and how hard it is to be successful in the music industry. It’s probably one of the hardest jobs, still to this day, that I’ve ever done.”
Slowcoaster toured the Maritimes for a few years and toured nationally after the release of their 2004 debut album Where Are They Going? 2005 and 2006 were good years, when they headlined music festivals like Evolve, won Music Nova Scotia’s Alternative Group of the Year award and an East Coast Music Association (ECMA) award for Alternative Recording of the Year. Their song “Patio” charted. They were at their tipping point.
But like so many great bands, Slowcoaster never tipped despite the band members’ best efforts. It made Gallop admittedly a little bitter about playing music — but not enough to get out of the business entirely. During his stint as percussionist for Slowcoaster, he got interested in the studio side of music and started his own record label, Company House Records, which was affiliated with EMI. They signed artists like Carmen Townsend and The Tom Fun Orchestra, which is how he met Morgan Currie.
As a vegan punk musician and programmer with an affinity for any instrument with four strings, Morgan Currie is not your stereotypical chief technical officer. In high school, he was part of the hardcore punk band I Was a Spy. “We were all high school band nerds but we … wanted to play that fast, aggressive, and weirdly politically aware, socially conscious music,” Currie recalled.
“[I Was A Spy] was a band that could have blown up,” confirmed Gallop. “They had a really cool record, a very successful Canadian record label. I wanted to sign them but they broke up for personal reasons right at the cusp.”
Gallop didn’t have to wait long — he signed Currie’s next band, The Tom Fun Orchestra, to Company House Records. Gallop worked closely with them, and even went with them on a tour of Ireland and Scotland. “We landed at the airport and Darren wrangled us all together and said, ‘Okay, you guys stay here, I’m going to disappear. When I come back, I’ll know how to drive on the other side of the road.’”
Currie’s UK tour with The Tom Fun Orchestra didn’t look like an endless string of hangovers and groupies — for the 30 days Gallop drove them around Ireland and Scotland, Currie was in the back of the van building web apps and living in a world of PHP/MySQL. He had spent a lot of his childhood surrounded by instructional programming books and Nintendo games. “If you’re the right kind of nerd,” speculated Currie, “you start to think ‘I could probably make [a game like this].’”
Gallop noticed that Currie was the right type of nerd, and soon after hired Currie on a summer grant to help with technical stuff at his record label.
“Originally I was just going to be the computer nerd who hung out in the office and helped with whatever,” recounted Currie. “One day [Gallop] was complaining about the hour-logging software they were using … Being young and eager to impress I said ‘I bet I can make a better one.’ By the end of the day I had a little prototype.”
Currie got excited, thinking it meant they could start a company that made hour-logging software, but Gallop realized that it meant they could make anything — and he saw opportunity with the bands he’d managed and played in. “If you’re driving around in a van [on tour], it’s very important to know exactly when and where you have to be at all times, and keeping track of all the messages … was starting to get heinous,” explained Currie. “So [Gallop] started to dream up this idea of Basecamp on steroids for a musician.”
It was late 2007 and Gallop, who had put all of his money into Company House Records, which would fold in 2012, was looking for investors in Marcato. He got the ball rolling when he won $100,000 of investment money from Innovacorp in early 2008. Shortly thereafter, Currie dropped out of university to become Gallop’s first employee. Gallop quickly hired someone to help with administration and bookkeeping, and soon after brought on a small sales and marketing team. But investment and early employees didn’t make it a smooth growth transition — at all.
“We might have built the team up a little quicker than we should have,” Gallop recalled. “I hired a sales and marketing team … prematurely. I think I thought that the product would be ready for market quicker than it was, and I wanted to get people in there and build a culture. Our first sales and marketing team didn’t sell much and we ended up letting them go, [which felt] pretty shitty.”
At that point, Marcato was a software for musicians struggling to keep details straight like venues, loading times, and tour dates, and Gallop slowly rebuilt a team. If Marcato’s story were a movie, this would be the time for a classic montage of romanticized bootstrapping and hard work. “Our [first] office was a bit of a hand-me-down shithole,” recalled Gallop, but “it was really fun. We worked really long hours, did a lot of late nights … sitting around drinking beers and working late at night.”
“We were still just a couple of goons who also played in bands, but now we had an office,” is how Currie remembered those days. “My friends would randomly show up with acoustic guitars and a six-pack at noon not realizing that now [we had] deadlines.”
Gallop and Currie launched their product at South by Southwest in 2009. “Two of our competitors who were launching at the same time [were] there, and our booth was super sketchy,” recounted Gallop. “It was a shitty table with a black cloth over it and a little poster that said ‘Marcato’ on the back, and then me and [Currie] sitting there with business cards.
It made us feel small town and not ready for the world.
“And then [our competitors] Bandize and BandCentral came in, and they had screens and a fully-branded, proper booth … and hot girls in little dresses passing out candies and all that stupid shit … And we were just two dudes sitting their with our tails between our legs. It was a ‘holy shit’ moment for sure, and we were really re-evaluating everything … It really made us feel small town and not ready for the world.”
Currie remembers that feeling too, but felt it most acutely when the heavy metal band Gwar walked in. Gwar’s musicians appear in public in elaborate but grotesque, often violent and explicit costumes. “It was about as small town, bumpkin-in-the-big-city as it could get, when these giant made-up dudes on prosthetic legs hovering about seven feet tall with blood dripping down walk past our little booth,” Currie recollected.
Big things happened in the music space over the next year or two — artists were wondering how to make money in a world where no one would buy their albums; major labels were falling because of the same problem. This lead to another huge “holy shit” moment: Marcato’s competitors started going under — and Marcato’s numbers indicated that they’d be soon to follow. Gallop summed up the problem: “[Artists] were more concerned about the big pieces rather than ‘How do I organize my tour schedule?’ Like, ‘Maybe I just write it down in my f-ing binder and move on.’”
It’s impossible to talk about any small business — even the successful ones — without addressing failure. Failure is an unshakable specter that hangs over every small business; conventional statistics show that about half of new small businesses fail within their first five years. If you Google “Why small businesses fail,” you’ll get dozens of different answers, from poor financial health and management to entrepreneurial shortcomings.
But even back in 2012, when Marcato had fewer than 10 employees, failure would have significantly impacted the community. On an island where it’s been more than 50 years since the word “thriving” has been used to describe the local economy, a tech start up provides some hope.
“[The tech] space can have a real, meaningful impact on Cape Breton,” said Laird Wilton, Marcato’s chief revenue officer. “The idea of [providing] good employment for professionals, for people that have the skill sets to fit the technology world, it’s awesome, the concept of being able to help build that.”
“There’s a lot of optimism in the community around start-ups … It would be really bad for the community if any one of us failed.”
According to Industry Canada, Canada has just over one million small businesses. Seven percent of those are located in the Atlantic provinces, and about 29,000 of those are located in Nova Scotia. Most of those businesses, like Marcato, have fewer than 100 employees. Statistically speaking, if Marcato were to fail, the economic impact of its failure would be far more significant than it would were it located in Toronto.
“There’s a lot of optimism in the community around start-ups,” said Gallop. “There’s not that many of us … It would be really bad for the community if any one of us failed.”
While its competitors kept trying to sell directly to musicians, Gallop and Currie realized that selling to starving artists wasn’t a great business model. Marcato’s platform for musicians helped them schedule load times and organize tour dates, and it’s still a product that Marcato offers. But music festivals not only have bigger budgets than small bands, they also have a lot of logistics that need organizing.
Currie had spent time programming for Celtic Colours, a Celtic music festival based in Cape Breton.“[One day Gallop] blurted out something along the lines of ‘What if we took the thing you made for Celtic Colours and incorporated that into a musician app so you could also have a festival base inside?’” recounted Currie. “Then we … realized how silly it was that we weren’t doing that in the first place.”
They officially launched that idea — Marcato Festival — in September 2011. Sales started slow, but they were enough, and this time instead of building up the team too quickly, Gallop built the team slowly, adding a person here and there only when it became absolutely necessary.
“We had outbound calling campaigns, web campaigns, everything we could do just to build a client base,” recalled Wilton. “The one thing we were careful of, though, was not to overcommit, or go after clients [that were] too big.”
Barely a year later, Gallop was at a music festival and met a man named Martin. Martin worked for Intellitix, a technology solutions provider for festivals, and one of their clients was Coachella. A demo call with Martin led to discussions with Coachella, and suddenly, caution about big clients went out the window.
“We were f-ing terrified,” Gallop remembers of that time. “They have a very high bar.”
After a series of intense calls and a weeklong visit to Marcato’s office in Sydney, Coachella, one of the largest music festivals in the world, signed on with Marcato. At that time, Marcato still had fewer than 10 employees.
“The idea of a small company based in Cape Breton, that we had had success — we were really proud. To pitch and sign one of the biggest festivals in the world … it felt like such a huge win,” Wilton recalled.
And it was. But, “the celebration was pretty short-lived,” said Gallop. “Reality quickly sunk in, which was the amount of work and attention that we were going to have to put in over the next year to get out of this alive.”
Thus began a very difficult year of meeting the demands of working with a music festival that sells almost 200,000 tickets — more than six times the population of Sydney. Coachella’s innovative operations stretched Marcato’s capabilities well past their limit.
“It was completely different from anything we had ever seen with smaller festivals,” Gallop explained. “The volume of people coming in was greater than the entire festival attendance of most of our other clients at the time.”
Coachella’s needs essentially initiated and heavily influenced Marcato’s entire credential management tool. “They really challenged us and pushed the envelope, while at the same time giving us more cred in our investor community … They had a really big influence on our company.”
And then Tom Petty took down their app.
It was early February 2013. Marcato was hitting milestones like signing Coachella and the Country Music Association. It was business as usual. One day Currie noticed they were getting a lot of emails complaining that the app was slow. “Because we have users all over the world, it’s a normal thing that oftentimes has nothing to do with us. Maybe the Internet in Australia in a particular town [has] ISP troubles,” Currie explained of why he didn’t give it much thought.
But then he noticed the emails were coming from all over. “Our app was just getting hammered with requests … and everybody started to freak out,” Currie recounted, building the suspense. Initially, they thought it was a DDoS, or Direct Denial of Service, attack where hackers set up bots all over the world to inundate a website with requests. When servers can’t keep up, they crash.
But it wasn’t a hacker. Natasha Hillier, Marcato’s chief product officer, had been working with Firefly Festival, who had just announced the headliner of their secret lineup: Tom Petty.
“I’m glad it was Tom Petty. That’s kind of bad-ass.”
The announcement was a huge deal: Millions of people were going to the Firefly website to find out who the headliner was. Petty’s profile picture was on the page, but the photo wasn’t cached. So every time someone visited the page, the site had to download Petty’s photo from Marcato’s app.
Currie sounded proud as he said, “So many people viewed that one picture of Tom Petty that it actually crashed the whole thing. It was kind of awesome … I’m glad it was Tom Petty. That’s kind of bad-ass.”
In 2015, Marcato has done more festivals than ever before — they did 146 in the summer alone. Their clients are located all over the world — and it turns out that even if they’re in the middle of nowhere, it’s a very convenient middle: four hours behind London time, four hours ahead of Los Angeles time.
Everyone at Marcato is focused on the future of the business: improving the product, working with more festivals, growing the team. But growth is about more than Marcato — it’s about Cape Breton.
For many employees, Marcato is an opportunity they never thought they’d have. With the downturn, “there was an acceptance that … you’d have to leave the island for work,” explained Wilton, who is from Glace Bay in Cape Breton. “I was looking at where will I make a career for myself? Where will I raise a family?”
Like many others, he left the island for Halifax, where there was a small pocket of tech jobs. He spent time in Boston, the province of Alberta, and Halifax. Making a career in Cape Breton just didn’t seem like a viable option.
After his wife had their first child, they decided to return to Cape Breton and try to make it work. He ran his own business consulting in tech, marketing, and recruiting. But then in 2010 he met Gallop, and all points converged — a tech job, in Cape Breton, that gave him the opportunity to use all his expertise and experience. He describes it as the “perfect culmination” of everything he was looking for.
Marcato wants to be that perfect culmination for a broader swath of skilled Cape Breton workers. “Many people at Marcato lived through the downturn,” said Wilton. “We see Marcato as a space that can have a real, meaningful impact on Cape Breton, that can provide good employment for professionals with skill sets in the tech world.”
There’s a lot to do before that can happen, a burden that weighs on Gallop. Walking back from lunch through an yearly fall Canadian drizzle, he expressed existential concern that perhaps he might not be making a difference.
But Marcato is in the stage where it won’t be for another 10 or 20 years that he knows how much of a difference Marcato made — to the music industry or to Cape Breton. For now, he just takes it one major music festival at a time.
This is part of a Small Business Saturday series underwritten by Infusionsoft to celebrate the struggles and victories of small business owners. If you enjoyed this story, please take a moment to recommend and share. Thank you for reading, and for celebrating with us those folks who make the world a better place through small business.
Ellis Friedman is the planning and acquisition manager at Infusionsoft, where she helps small business owners share their stories. Ellis has a diverse media background in magazine publishing, blogging, film, and photography, and is the author of the novel A Valediction. Follow her on Twitter @ellisredpen.