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A start up business making fake plastic trees

February 17, 2014

Radiohead bassist Colin Greenwood recently gave an update on the band’s new album, not exactly an exciting one: It’s all up in the air at the minute. We’re having some quiet time. I’m sorry to be vague but we’re all just taking it easy at the moment.

I wish I could say we were going to start work and put something out then spend twelve months on the road touring but we’re just enjoying being at home right now. The bassist concluded on an optimistic note, saying We definitely want to do it all again but we’ve just got to give it some time for the dust to settle.

So that’s me waiting for some new tunes then. Radiohead have been one of my favourite bands since they were formed in 1985. They have an expansive and pioneering sound, often acclaimed as one of the landmark bands of the 1990s, but I know they are an acquired taste and not everyone’s cup of tea. Radiohead’s innovation came to the fore when they self-released their seventh album, In Rainbows, as a digital download for which fans could pay their own price.

Most of the music I listen to wasn’t even recorded in the last decade. Like most people I arrived in my fifties aware of, and not much bothered about, the truth that my musical tastes were unlikely to expand much further, if at all. I knew what I liked and, by and large. It remains theoretically possible that some or other brainstorm will bestir a hitherto utterly dormant affection for techno or trance, but aside from Frightened Rabbit, http://frightenedrabbit.com/ I’m pretty locked into a musical taste shaped by bands from my youth – aren’t we all?

But I kept listening to Radiohead. The Bends had been one of my favourite albums, and they seemed to be interested in trying to attempt something more ambitious each time a new release was issued. We all like music for different reasons – tunes, lyrics, live gigs etc, but for me Radiohead articulated a sentiment and voice felt by the people who constitute the constituency of youngish, fundamentally decent, intelligent middle-class with social conscience, born into a fortunate life crafted from grabbing an opportunity laid before them, which held no impediment to their future happiness bar the nagging suspicion that some fundamental social stuff needed shouting about and that someone else, somewhere else, needed help and that society should be doing do more.

For this audience, Radiohead’s singer and principal songwriter, Thom Yorke was the ideal everyman: an aggrieved, affronted isolated figure whose rage was borne of annoyance at the status quo. You were more than willing to rebel against whatever you’d got, but didn’t quite know where to start, but he did. Or maybe that’s just me.

Radiohead’s continued success is in part down to consolidating all the great things they’ve done in the past and the fact they continue to innovate. In 2007, when CD sales were taking a major hit due to illegal downloads, as highlighted earlier they made a decision to try something different and offer their seventh album, In Rainbows, for free or for whatever fans wanted to pay. Why? At the time Yorke said Partly just to get it out quickly, so everyone would hear it at the same time, and partly because it was an experiment that felt worth trying, really. It’s fun to make people stop for a few seconds and think about what music is worth, and that’s just an interesting question to ask people.

So they let fans download their album directly from their website, avoiding all the middlemen, and let them choose what they wanted to pay, including the option of nothing. About one third did choose the free option, but the average donation for the two months this offer was available was $8.00. It turned into a huge financial success.

From this, at the very least Radiohead learned not to be afraid to experiment with something new, and understood the value of their music to their audience. Sometimes, depending on your product, giving it away for absolutely free could be the most profitable decision you ever make! Not all companies can do this of course, but perhaps there is something aside from your primary products or services that you could offer in this manner.

Starting a new band is just like starting a new business, it’s all about the future potential and promise of what can be. The economics (and perhaps egonomics) are uncertain and unproven when things are driven and shaped by potential, but like any market, long term success is about having a product that attracts customers and continues to meet demand ahead of the competition.

So what lessons can entrepreneurs learn from the bands that have remained in business for a long time and continue to thrive, and from the new ones that are carving out market share from paying customers for music and concert ticket sales? Here are some of the best values of entrepreneurship that I see from Radiohead and other musicians:

Do it because you love doing it Thom Yorke wasn’t thinking of building a global brand and business when he started playing guitar. He did it simply because he loved it, he had talent and gave it a go. Musicians often say they play for themselves first and that it is a choice by which they can earn a living. This is a very basic principle that is common to successful entrepreneurs everywhere.

Put in 10,000 hours before you expect to make a difference Malcolm Gladwell talks about the 10,000-hour rule in his book Outliers. He states that to be good at anything, you have to put in 10,000 hours of practice to hone your skills. Radiohead were gigging for seven years before they released their first record; in business you have to craft and refine your offering before customers notice.

Nurture your community Radiohead has built a loyal base of fans that follow and support them, with an identity and substance. They played many free concerts early on to build this fan base, and subsequently nurture and cultivate their audience, today mainly through innovative online marketing – check http://www.theguardian.com/technology/2014/feb/11/radiohead-polyfauna-app-iphone-ipad-android Paying attention to your customers is the essence of any business.

Don’t self-destruct Greed, ego, and lack of discipline are often the causes for bands to break up, often at the peak of their success. It’s the equivalent of co-founders falling out. Keep the personality differences aside and remain committed to what is good for the business. Keep aligned to your vision, purpose and values.

Don’t be afraid to reinvent yourself Faced with declining record sales, bands have hit the road more often and enhanced the stage shows to draw concert-goers back to the arenas. But this isn’t innovation, it’s just tweaking at the margin, drawing the same audience. You have to keep being radical and changing as your market changes to attract new customers.

Forming the idea and iterate I get asked all the time: How do you come up with an idea to work on?  I always quote the famous chemist Linus Pauling: The best way to have a good idea is to have a lot of ideas. The thinking What kind of music do I want to make? is the same as What kind of product do I want to build?  Just start working on something you are passionate about or interested in and the rest will take care of itself. Most bands go through several iterations before becoming successful.

Creating – just do it! It is a core part of the music industry’s allure that artists can record an inexpensive demo on home equipment and get global success. Those artists that are proficient with technology can use a Mac and home recording and mixing software, such as Garageband and Cakewalk to create professional sounding recordings. The start-up analogies are obvious with tools like AWS, Survey Monkey and Google Analytics – just do it!

Build IP If you are an entrepreneur or aspiring musician, you have made the decision, whether overtly or not, that you are someone that wants to make a stamp on the world you live in, live by your own rules (as much as possible), and create your own structure.  Often it’s not really your choice, as organic events dictate your decision-tree.  Your innovations and intellectual property are your lifeblood. Radiohead are shrewd and carefully manage their IP, the copyright to their songs and music is the greatest revenue earner from licensing.

Recently Thom Yorke has been likened to an old guy shouting at passing trains – music is a tool to unite people, but so often it breaks us into subcultures. Yet Radiohead are insanely forward-thinking, extremely private and they hardly ever conduct any interviews. That’s without touching on how many people claim their music has changed their life.

The truth is though, Radiohead are perfectionists. They’re ingenious, wonderful musicians, and they really put the hours in, so much so, that Thom Yorke often complains of how physically draining it is making a record with them. That commitment is driven by inspiration by determination by hunger. That’s what we’re all after to make our business different.

But they also make mistakes. Shortly after Radiohead released In Rainbows online, the band misplaced its password for Max/MSP, a geek-oriented music software package that the guitarist Jonny Greenwood uses constantly. It wasn’t the first time it had happened. As usual Radiohead contacted Max/MSP’s developers, Cycling ’74, for another password. They wrote back. Why don’t you pay us what you think it’s worth?

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