“Rock and roll is a nuclear blast of reality in a mundane world where no-one is allowed to be magnificent” – Kim Fowley
What’s music got to do with anything?
I’ve long been struck with the parallels between starting companies and forming a band. The squabbles, the personalities, what to do if it goes wrong, or right, the getting things off the ground and getting noticed, and the importance of having the right team, good leadership and top class and trustworthy advisors. The idea for a book on Rock and Roll Entrepreneurship emerged from a presentation I gave last year where I combined rules for commercialising technology with stories from the world of rock and roll. A longer version of this will emerge later in the year, but for the moment let me try to explain why building a business is only rock’n roll.
Sure you can prepare for setting up a business by spending the next few years reading back issues of the Harvard Business Review or working your way through the airport business book best-seller lists of the seven habits of effective CEOs and all the others that advocate raising at 4am every morning for an ice bath and an hours mindfulness. You can even pay $100,000 for an executive MBA at a top business school. While any or all of these things might allow you to carve out a career in the innovation department of some dinosaur company, they won’t rewrite the future which is what every entrepreneur sets out to do.
It turns out that you can learn just as much by playing records and looking at how someone with an idea for a song turned it into a hit record or built a 50-year career. You can see how people with a little talent and a small idea made it stretch a very long way, while other highly talented artists made decisions that nosedived their career – in some cases literally. You can also understand how you need more than just raw talent to avoid getting ripped off by managers, advisors and investors.
Forming a company or forming a band is a similar process, with the same pitfalls. You want a hit record or a tech unicorn? It’s an identical process and it all started when a man met the devil at a crossroads in Rosedale, Mississippi at midnight. Yes, really, that’s when Robert Johnson sold his soul, started preaching the blues and via Bo Diddley, John Lennon, Keith Richards, Johnny Thunders, Noel Gallagher, and Jack White we have rock and roll. A great business, for some.
Whether being a rock star, an entrepreneur, being in a band, on a board or even being the lawyers hired to clean up the eventual mess, the parallels are uncanny. From replacing a drummer with a drum machine or replacing a CFO with an app so that, as the old joke goes, you then only have to punch in the numbers once, to lead singers and chief executives flouncing out to start a solo career there’s nothing closer to a start-up company than a band.
The relationship between the co-founders is often the same as the singer and lead guitarist, Joe Strummer and Mick Jones, David Johansen and Johnny Thunders, Mick Jagger and Keith Richards. Someone does the yelling and someone handles the technology, think Steve Jobs and Steve Wozniak at Apple. Someone writes the songs and someone sings them. It’s the same from the Beatles to the Pet Shop Boys or Abba.
The rhythm section of bass and drums is what keeps the business running while the guys at the front deal with the audience. John Paul Jones and John Bonham of Led Zeppelin, Bill Wyman and Charley Watts of the Rolling Stones or the countless unsung chief operating officers and chief financial officers who make sure there is money in the bank and it is wisely spent on growing the business, usually. (Technology and rock and roll have both had their fair share of dodgy accountants who ran off with the money their clients didn’t know that they had made.)
And the interpersonal dynamics of a board are just the same as a band. A dispute between co-founders can result in one leaving to pursue a solo career like Robbie Williams of Take That, or less successfully Will.I.Am of the Black Eyed Peas or even Mick Jagger’s pitiful solo albums (compared to what he achieved with the Rolling Stones).
The loss of a key member can result in the band calling it a day, for example, the deaths of drummers John Bonham from Led Zeppelin or Razzle from Hanoi Rocks. Alternatively, as famously executed by Australian rockers AC/DC you can just replace your singer or CEO with someone who sounds almost identical and carry on as if nothing happened.
Many good entrepreneurs are the key drivers of the business through their single-minded determination and are inseparable from the business. Think Apple and Steve Jobs. This is a great thing from the entrepreneur’s ego perspective, but bad from an investor’s, raising the inevitable question: what happens to the company if they get hit by a bus?
The Magic Sausage Machine
Innovation is often viewed as some kind magic sausage machine. Government money goes into universities at one end and high technology is transferred to the economy at the other end. There seems to be little understanding, or interest, in the bit in the middle which is often the critical part. Viewing this as a black box or witchcraft, as many seem to do, misses the real issue and the bit where the most effort is required.
Technology is rarely transferred directly from universities to large industry, and like sausage making involves a number of rather messy and unpleasant steps. Getting the technology out of a university is one way. While technology transfer offices are supposed to assist with the process, many need to do better (there are some excellent ones by the way). In fact, they are often a barrier that needs tenacious entrepreneurs to overcome.
Some universities like to staff technology transfer offices (TTOs) with people who know nothing about either technology or business. During the 2008 financial meltdown I was in Singapore trying to negotiate a licence for an interesting technology with applications in OLED (organic light emitting diode) screens, the type found on high-end smart phones and TVs. The licensing department wanted detailed and guaranteed revenue figures for the next fifteen years. “Fifteen years” I explained in horror, “given the current state of things it would be hard to predict 15 minutes.”
Other universities are more pragmatic. A US university was happy to licences a technology to me on a best effort basis and explicitly told me “our business is educating students, not spinning out businesses.”
Large organisations are generally poor at innovating. That’s why they effectively outsource innovation to start ups who are later acquired. That’s good for large organisations who are poor at managing early stage innovation, and good for entrepreneurs and their investors who can find an exit. And that’s what provides the energy to drive the sausage machine, the butchers and chefs of the innovation ecosystem turning placid hogs into tasty treats by the addition of a little seasoning.
My main objective is to delve into the dark matter of technology commercialisation, the part between idea and outcome that no one pays any attention to.
After spending most of my life making hit businesses rather than hit records, and groping around in the dark, I’ve learned a few things about what to do and when to run for the hills screaming and developed eight rules that you can apply to any business, or even a band. I can’t guarantee that they’ll make you the new Ed Sheeran, but they will definitely shorten the amount of time you have to spend busking in the rain.