Entrepreneurship: New Business, Same Principles
Exploring A New Sector
Becoming involved in a new startup business has reminded me that in entrepreneurship the same principles apply to a large extent. This is regardless of the sector or product. Even though I’m a huge fan of music, I didn’t expect to be involved in the business end of it. But as always, life continues to surprise, providing one stays curious.
I had been discussing helping a talented young music producer, Raf Riley, for a while. When he decided it was time to stretch himself beyond music into developing an independent music label, I was supportive. He has worked with an experienced manager and music industry veteran, Marc Williams of OddChild Music, for a while. Before I knew it there were three of us. We decided to develop an independent music label not only as a platform for Raf’s talents, but also to give young producers and artists a chance too.
Twice As Much, Twice As Long
Two new studios were built from scratch. One for Raf to work in, the other to be a base for other producers somewhere down the road. For now, we are renting it to a podcasting company, to help defray the property cost. A wise investor once told me that early-stage businesses take twice as long and cost twice as much. Knowing what I know now, that’s conservative. Anyway, in our case the studios cost pretty much twice as much and the build took almost twice as long as estimated, so the rule held true. Same principle, number one.
We are up and running in a well-equipped studio. The first EP is being finished now. Loup Ent is up and running. We expect to have the new Etta Bond and Raf Riley recording in distribution by December. Again, twice as long. But it’s an artistic process, so I’ve had to learn that the process doesn’t always work on a tight project plan. The first recording has been 90% ready for a time, but it’s now 80% ready. Artists can’t always pull the trigger and say “finished”. We are also being patient and waiting to get the right distributor handling it, so December it is.
Same principles apply, number two. Teams don’t come together and gel immediately. There’s the classic norming, storming and performing cycle to go through. It’s been a harder norming phase for a number of reasons. My background is larger scale, product-driven businesses and I’m used to structure and deadlines and clear measurables. Raf is an artist and everything in business is new to him. Marc is steeped in the music business. The culture of the music business is very different from anything I’ve been involved in. Understatement.
With such diverse backgrounds, we have had a serious storming phase recently. Like all good storming phases, once through the other side, we all understand what the business is about a bit more. For me, it’s important to work with capable people and perform to a high level, but it’s also important to like the people and enjoy it. We will be ok. If you don’t fundamentally like and respect the people, then you don’t survive the storming phase.
Our diversity as a team should be an advantage. But we need to remain self-aware and harness the diversity.
Sound Foundations, Aim High
Same principles apply, number three. We were all determined to build the business on sound foundations. That meant structuring the business properly. Bringing in the right advisors, even if money was tight. So we went with music industry legal advisors and accountants. Knowing each other’s roles and responsibilities is important and we have had a couple of tilts at that and have got it clear. Set your business up the right way, it seems expensive and unnecessary in the early running, but it pays dividends later.
Same principles apply, number four. Aim high. I’ve always gone into a venture wanting to build something substantial. I could have given Raf a modest amount of cash to live on, rented him a small studio and then sat back to see if his career went anywhere. But we met early on as a trio and thought that with a decent injection of cash we could build an independent record label and use it to launch the careers of young artists and producers. That’s the route we took. We have a vision. Whether we get there or not, who knows? I suspect we will do ok.
Cash Is King
Same principles apply, number five. Cash is king. We burned through 80% of our cash very quickly. The capital expenditure on the studios accounted for 60% of the cash. The rest on structuring the business. Setting up the company, getting the tax structure right, the right advisors, etc. We weren’t as on our game as we could have been, so cash is tight. But we have also focused on getting some revenue through the door to cover the monthly bills. We are getting there, with some production work and small amounts of revenue existing music by Raf. Buying enough time to allow the new music to hit the market.
Let’s see how we go. As mentioned in other blog posts, it’s important to me to remain curious. A venture in a completely new sector certainly feeds that part of my character.
Keep an ear out for Loup Ent. Our first release in December. Here’s ‘Let Me Hit It’ from Etta Bond’s 2019 dual recordings, produced by Raf Riley, to give a feel for this talented duo.
Originally published at stephenmoon.com.