With an open mind and a couple dozen listens, you can learn a lot from the likes of Warren Zevon or Bob Dylan.
But as it turns out, the lessons aren’t always in the lyrics.
The business of rock and the actions of certain musicians can be instructive when it comes to running your company the right way. That’s interesting, because most of the non-music attention tends to focus on the screw-ups and self-inflicted problems. (But let’s give credit where it’s due; Mick Jagger was once an honor student at The London School of Economics.)
To reach the highest levels of any business, you need to do a lot of things right – sometimes by accident, sometimes on purpose. Either way, in the case of rock music, millions of fans can’t be wrong. It’s definitely an industry worthy of inspection.
Read on, and see if your company is in tune and hitting the right notes.
Know Where the Real Money is
Sometimes it’s not so obvious. In the music business, it’s easy to focus on the musicians and their recorded work (CD, downloads, vinyl) and on their live performances. The high profile stuff catches most of the public’s attention, so it’s easy to assume that those activities are the most rewarded.
Certainly there have been fortunes made in the spotlight. But as it turns out (and it’s been this way for decades), the big, big money in rock has been accrued via songwriting royalties.
These revenue streams continue to run long after the original recording session and live tour is over… sometimes indefinitely.
Cash pours in from sources like retail sales, radio play, licensing to commercials and other television formats, and even karaoke bars. Hence the staggering fortunes amassed by the Jagger/Richards, Lennon/McCartney, Bono/Edge combinations…but also by the likes of people you’ve maybe never heard of, like Bernie Taupin (writes with Elton John), Kara DioGuardi (Britney Spears), and Diane Warren (Aerosmith). Indeed, some of the industry’s most successful songwriters have never set foot on a stage.
So where’s the real money in your industry? In a high-margin product? In service contracts? In seasonal offerings? Don’t assume! You might be surprised. A Cleveland machine tool manufacturer recently figured out there were better opportunities in refurbishing pre-owned tools, and the company is putting renewed emphasis in that area.
Take a hard look at what your company offers, or could offer, and see how you match up with your industry’s most lucrative activities.
Genius can Result from Chaos
In February 1976, Fleetwood Mac gathered at a California recording studio to record the album that would become Rumours. But there were, well, distractions.
Vocalist Christine McVie and bassist John McVie had just divorced, and refused to even speak to each other. Lindsey Buckingham and Stevie Nicks were unwinding a dysfunctional on-and-off relationship. Illicit drug use was reportedly rampant, production and engineering staff abruptly quit, and recording sessions ran weeks behind schedule.
It was a miracle the record was ever actually made. The chaos and confusion would become legendary, even by rock standards.
The result? Rumours would go on to yield seven top-ten singles, sell 45 million copies, and be called one of the greatest records of the 1970s. Stevie Nicks has said that Fleetwood Mac created its best music when in the worst shape, and she was clearly correct.
Of course, you should never invite trouble or court disaster. But sometimes when you have to deal with extreme circumstances, the results can surprise you. An unexpected personnel change, a tight deadline, or a change in your company’s financial position can push you to levels of creativity and resourcefulness you didn’t know you had.
So no matter how crazy things are at the moment, don’t throw in the towel. Today’s chaos might unexpectedly result in some of your company’s crowning achievements.
Scalability can Make You Rich
A scalable business model is one where there is potential to grow revenue and profitability significantly because the cost of producing each additional unit decreases.
Think about music downloads. The production and recording costs are absorbed up front, and the cost to deliver each download – whether a few hundred or a few million – is practically zero. That’s because the initial costs are spread across every download that is purchased.
True, the downloads may generate only 99 cents each, but the incremental cost is even much, much lower. That’s scalability (and a heckuva margin).
Not every business has the potential for scalability. Generally speaking, it involves high volume and little or no customization for each unit.
But are there parts of your operation that are scalable? An accessory that everyone in your niche needs? A downloadable “how-to” manual or e-book? The potential profitability and revenue streams make the scalability model worth investigating.
Contacts are Forever
In the early 1960s, Rolling Stones guitarist Ronnie Wood attended London’s Ealing Art College. His fellow students included Freddy Mercury, who would go on to form Queen, and future guitarist/songwriter for The Who, Pete Townsend.
It turns out that at the time, the London art school scene was the place to be for aspiring musicians. Keith Richards? Art school. John Lennon? Art school. Ray Davies? Art school. David Bowie? Art school.
It’s not surprising that inherently creative people might have initially gravitated to the art curriculum. What is surprising is that so many succeeded so dramatically in another line of work…and often while playing in each other’s bands, helping to produce each other’s records, referring each other to quality session musicians, and generally offering a hand and cheerleading for each other’s musical efforts. Bonds forged among rock’s royalty back in the art school days – and before they were rich and famous – have endured for decades.
The lesson? Well, you don’t necessarily have to have attended art school, or business school for that matter, but do stay in touch with your peers. Don’t ever throw away a business card. Attend your class reunions. Use social media to maintain friendships and contacts. Look for ways to help.
You never know when you might be in the position to be hired by them or hire them, sell to them, or buy from them. And that’s much easier than making a cold call or sifting through a pile of resumes.
Is cash flow a constant problem for your company? Are business funding problems keeping you from running your business correctly? MP Star Financial can help. Call for more information. (800) 833-3765, extension 150.
Steven Tyler photo courtesy Julio Aprea