Every up and coming artist is just like a startup and can practice the same business principles as any successful new venture. Here are some start up lessons you can take:
1. Bootstrapping vs. Investors
Just like any startup, you need funding! The first question is how to fund your business and when to take investments.
In the typical start up world, a company scrapes up any funds they can get from themselves and from friends and family. They use this money to get started and truly show that they have something special to offer. This seed capital is used to fund your initial operations (EPs, shows, equipment, rehearsals, etc.) and grow your customer base (fans). From the start, you'll need to continue to fund your business with the revenue that you bring in. This is called bootstrapping. When a company is bootstrapping, it's very important to make sure that every dollar spent goes the furthest for you because each dollar is very valuable.
Eventually, you want your business and customer base to grow large enough to take on investors (record labels). Now you run into a whole new realm of questions. Who is the right investor? What can they offer me? How much do I need to give up? It's important to take on strategic investors who can really bring you to that next level and share your vision. Major labels might have better resources, but independents might let you keep more of the pie. Of course any investor is going to want a big piece of the pie, but if they can grow the whole pie large enough so that the piece you are left with is larger than the original size that you had, then it's worth the investment.
2. Let your market shape itself
Many businesses have an idea of who their target market is, but inevitably, the market tends to shape itself and contributes to the perception of the company (your band). Let them have this contribution. Companies run into trouble when they try to force their market to think or act a certain way to mold to a "perceived" ideal market. Don't try to force your market into being something they're not. The best way to achieve this is to stay true to yourself at all times. This will attract like minded individuals who share the same values as you. Accept your fans for who they are and let them share the experience with you of forming something great together. You and your fans are truly in it together. If you try to force something, you will come off as disinenguine and unauthentic. Your fans are just as much as a part of the experience as you are.
A great example of this is Apple. Why does Apple have customers that line up around the block for hours for the next iPhone? Apple doesn't just sell cool products. They sell an idea and a way of thinking. They sell their beliefs. This is what causes that attraction of die hard fans. Sure other tech companies might have the same level of talent working for them and might even produce higher quality products. But people believe in Apple. When we see a company like Microsoft try to copy Apple's message, they come off as disingeniune and unauthentic.
Accept and celebrate your fans for who they are, stay true to your values, and always reward your biggest fans.
3. Take risks and try new things so others take a risk on you
How do you expect someone to take a risk on you if you're not willing to take risks yourself?
Any new startup relies on others to take risks on them to succeed. You rely on fans to take a risk on you and your music. They invest their time and possibly hard earned dollars hoping to receive value that makes them come back for more. You should consider your fans your real investors because they are the ones who are truly putting something in to get the value of what are providing. You need this investment keep your business going. Remember that you wouldn't exist without them. They are invested with you financially and emotionally.
The other risk takers you rely on are your investors (labels). They are the ones who see potential in what you are creating and are taking the chance with their investment to see you succeed.
So, if you need everyone else to take a chance on you, you need to be willing to take chances yourself. What new things are you doing to promote your music and get radio airplay? Are you doing the same old methods as everyone else or jumping on something new to get your music out there? The digital age has brought tons of new ways to market yourself online and get airplay. The only problem is, everyone is doing it! Always look for that way to get the edge. If you stay in your comfort zone and are afraid to take risks, then you will get the same old results. Try new things and stick with what works. Discovering something new that works gives you the competitive advantage. If it doesn't work out, then you don't have to continue doing it, but at least you went for it.
Most people believe you need luck to be successful. But, success comes from a balanced combination of hard work and luck. The harder you work, the luckier you get. If something doesn't work out and you don't give up, then you give yourself that chance to get it next time. Remember, most startups fail and most artists fail. But if you give up, then you have no shot.
4. Execution is everything
Like any business, it's all about execution. Let's face it. As original as your sound might be, your product, music, is not new. There are millions of other artists out there producing music all competing for the same market. It's all about how you execute your business that makes you different than the competition. How are you getting your music heard? How are you engaging your fans? What new and different things are you trying?
There are many good examples of this in the business world. Starbucks is a great example. Selling coffee was not a new concept. But Starbucks was able to become a name that people automatically associate with coffee shops. Another example is Google. Google was not the first search engine to exist. But by executing their business better than the others, they have become the tech powerhouse that they are today. The last example is Facebook. Facebook was late to the game after Friendster and Myspace, but Mark Zuckerberg executed Facebook in a way that made people want to flock to the new service and is now the most dominant social network in the world. An idea is nothing without execution. Think about this. If you went back in time with all the knowledge you have today and tried to start Google, would you be able to execute it into what it is today?