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3 Things Record Labels Could Learn From Startups

Guest Post by: Mike Fabio, Director of Digital Marketing at New West Records

The music business is finally on an upswing. A lot of the old entrenched ideas are slowly fading, and we’re creeping into the 21st century, sometimes kicking and screaming. Dare I say it? There’s never been a better time to work in the music business.

I’ve worked in the music business for the better part of my career, both as a label guy and as a startup guy. I’ve learned a few things about the way the music business operates, and even more about the way that startups operate. While I could write a book about all of the differences here, I’d like to offer up some friendly advice to labels and other companies in the music business struggling to perform the way that startups do.

Hire 10x Employees

Software companies often speak of 10x engineers – the supermen and women who bring 10 times as much productivity to the table as the others. It’s a term that dates back to 1975, from Frederick P. Brooks, Jr.’s book The Mythical Man-Month. In the startup world, this means that in many cases a single 10x engineer is more productive than 10 of her 1x counterparts, not because she has some kind of magical powers, but because ten 1x employees clog the system, and wind up having negative productivity.

And while this concept has been refuted by everyone and their brother, I think there’s some truth to it: hiring great people is the very foundation of any business, and ours should not be an exception to that rule. 10x employees are the lifeblood of the music industry, whether we’re talking about the artists or the executives or the interns. But more often than not, music companies struggle to attract these employees.

I believe one of the biggest challenges facing the music industry is that the potential talent pool is scared away by the industry’s mythology. The cutthroat politics of rapidly consolidating corporations, or the legendary antics of drug-fueled madmen at the helm, or the steady decline of revenues during the stratospheric rise of the Internet – these are the kinds of things that would easily turn off would-be employees when the competition is offering catered lunches and free dry-cleaning and four-day work weeks.

And it’s not just mythology either. In many cases, the issues are very real: disparate salaries, mediocre benefits, unhealthy hours, bold personalities, a distinctly low-tech, sometimes luddite environment. Why would any tech-savvy person work here?1

The result, of course, is that there simply isn’t enough 10x talent to hire, when the alternative is hip, lucrative, and sexy as hell.

Unfortunately, this is just a marketing problem.

You can argue all you want that software engineers are the new rock stars, but everyone knows that rock stars are the new rock stars. The music business is a magical place, often unkind, always unpredictable, but mostly just great. I can’t speak for you, but I’d take this over coding in a cubicle any day of the week. We just need to ensure that the next generation of rock stars – musical or otherwise – is as excited about working at a record label as they are about working at Google.

Failure isn’t an option, it’s a requirement.

Every startup knows this.

As the old NASA adage goes, if you want to increase your rate of success, you need to double your rate of failure.

There’s one simple reason to justify failure: it’s the fastest way to move on from something that simply isn’t working.

Song’s not reacting with fans? Move on. Album sales aren’t what you hoped? Move on. Radio is slow to respond? Move on.

Don’t just fail. You want to fail fast.

And here’s the best part: we now live in a world where the success or failure of any given thing can be discovered in an instant. Song streams aren’t as high as you hoped? Tickets not selling in advance? Black t-shirts selling better than purple t-shirts? You can see all of this in near-real-time! And if your purple shirt isn’t selling, you cut your prices, make your money back, and start hustling those black t-shirts as fast as you can.

Maybe we’ve lost the hustle. Maybe we’ve got shareholders and quarterly earnings to answer to. Maybe we’ve got artists and managers and A&R who simply can’t understand why anyone wouldn’t want to hear my totally awesome really freaking rad new song. But the data rarely lies, and the best business decision is to simply move on.

Embrace Things That Terrify You

Historically the music industry has been very, very bad at responding to perceived threats. I could recommend Steve Knopper’s Appetite for Self-Destruction, or Stephen Witt’s How Music Got Free if you want to read up on it.

But what we need to do now is to try all the things that scare us.

Yesterday, in a marketing meeting, we were discussing whether or not to release an album on a three-day weekend. Our grizzled veteran VP of Marketing immediately said, “Absolutely not. Record sales are terrible on three day weekends!”

To which I said, “Prove it.”

And here’s the thing: he didn’t have the data, and neither did I (I’m actually doing a little research on this right now, I’ll let you know what I find). But just because we think something is true doesn’t make it true.

How can we take things for granted anymore? Three years ago, there was no way streaming would ever earn enough money to help the industry survive. Ten years ago, direct-to-consumer deluxe packages were going to save the industry from the rapidly declining revenue in the digital age. Twenty years ago, the CD was never going to die. And for as long as I can remember, master owners were never going to get paid for terrestrial radio spins (this might still be true, who knows!).

So if releasing music on a three day weekend sounds like a bad idea, let’s try it!

A man much wiser than me once told me, “The day before something is truly a breakthrough, it’s a crazy idea.”

And if ever there was an industry built on crazy ideas, it’s this one.

  1. For the record, my employer, and many others, buck this trend. I’m not saying it’s the rule, I’m just saying it’s common. ↩︎
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