More often than not, startups are in pursuit of venture dynamics that exhibit benevolent economies of scale: cost per unit, or per user fall as the number of users increases. When licensing key inputs, rational startups pursue ceilings and not floors: license terms that place limits on the obligations rather than really high minimums for the obligation. Music service startups face their own very special sort of “anti-scale.” Really high minimum obligations alongside ceilings that scale 1:1 with user growth or music use. Eric Eldon of Techcrunch claims to have…read more
Nearly fifteen years ago I began hashing the plans for what would become, as far as I can tell, the first subscription-based music service online. What we built was pretty straightforward and, as a result, the initial business model was nearly identical to that model later adopted by services such as Spotify. (Aside: True old-timers will remember that Patronet would also launch, but it offered music from only one artist, Todd Rundgren—who built Patronet). Importantly, neither technology nor copyright law were ever really the roadblock to opportunity, even back in the…read more
Just about everyone wants to succeed at what they do. As a result of this basic desire, a basic human instinct often kicks in to help out—mimicry. In business speak, this mimicry operates under the term Best Practice. In marketing this instinct is triggered through classic marketing campaigns such as “Be Like Mike.” How might we succeed? The answer: Do what winners do, or Be what winners are. Unfortunately, the methods for and outcomes of mimicry often get conflated. The result of this conflation is something we might call Best…read more
A brief paper written by WIll Page (of MCPS-PRS Alliance, in the UK) and myself has been made publicly available. The piece was meant to stir a larger discussion around alternative licensing structures rights societies might put to use, particularly in the context of new, music-related startups. These startups usually (1) cannot afford the rates societies have set based upon the financials of more mature businesses, and (2) are trying to use music in novel ways, for which a collective license may not already exist. The paper can be downloaded…read more
One of the most frustrating challenges when working, researching or teaching around the subject of entrepreneurship is the “what” of entrepreneurship. What the hell is it? More important, how do those assumptions people hold about this thing that is entrepreneurship stack up to reality? Scott Shane, at Case Western Reserve’s Weatherhead School of Management, has written a book, The Illusions of Entrepreneurship, that is (imho) an absolute must read.