The Rolling Stones are celebrating 50 years as a rock and roll band. That’s 50 years in the music business, and the Stones are one of the greatest entrepreneurial successes in the history of rock and roll. Their story — and that of other great classic rock acts — reinforces some important lessons for entrepreneurial success.
We don’t normally look at great popular music icons like the Beatles, the Rolling Stones, Eric Clapton, and U2 as entrepreneurs. And especially not in a day and age when entrepreneurship is defined by terms like: technology, VC funding, and exit strategies.
We tend to think of classic rock bands as a group of rebellious individuals who got lucky with hit songs and ended up making a pile of money. The truth is, some of these bands have done an outstanding job of developing enduring brands and franchises. These are remarkable stories of value creation, involving some very sophisticated marketing and digital content strategies. In a day and age when the music business seems to be broken, classic rock bands — or should I say brands — are raking money in more than ever before.
At the same time, innovation is alive and well, as many rock acts redefine their customer experience, revenue models, and raise money through crowdfunding platforms like Kickstarter.
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 time-tested values of entrepreneurship — ones that have held up well even in the crazy world of rock music.
- Do it because you love doing it: Keith Richards wasn’t thinking of building a global brand and business when he started playing guitar. He did it simply because he loved it. This is a refrain you hear from most classic rock greats. Many never intended to even make a living off of the music, let alone obtain “VC funding” and plan for a “strategic exit.” 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. The Beatles played 6 hours a night, 7 nights a week, for 6 months straight, in a seedy nightclub on the Reeperbahn in Hamburg in the early sixties. By the time they returned to Liverpool, they were a far more polished and entertaining act than any of the Merseyside bands.
- Nurture your community: The Grateful Dead built a loyal base of Deadheads that followed them around everywhere and supported the band in its early days. The Dead played many free concerts early on, many of them for just their community. I happened to meet the great blues musician Buddy Guy last year, and he mentioned he played for free for a very long time before he started getting paid for performing. The common theme here is this: they did it simply because they loved it and were passionate about it. The money came along later.
- Make sure you have good management discipline: The Beatles wouldn’t have been the great commercial success they were without the brilliant Brian Epstein as their business manager. Many people don’t know that Mick Jagger went to the London School of Economics and is widely recognized as a brilliant businessman. U2’s Bono is a savvy investor who runs a successful private equity fund that was an early investor in Facebook, and made a ton of money during the IPO.
- Don’t self-destruct: Greed, ego, and lack of discipline are often the causes for great bands to break up at the peak of their success. It’s the equivalent of co-founders falling out. We saw the movie where in-fighting among Facebook founders nearly brought down the company early on. Keep the personality differences aside and remain committed to what is good for the business.
- Don’t hesitate to fire the misfits early on: The Beatles got rid of Pete Best and replaced him with Ringo. As John said at the time: Pete was a great drummer, Ringo was a great Beatle. The best code jock on the block may not be as good for your business as a great team player who is aligned to the team’s mission and vision.
- Don’t be afraid to reinvent yourself: Faced with declining record sales, bands have reinvented themselves by hitting the road more often and enhancing the stage shows to draw concert-goers back to the arenas. If anyone has seen U2, Roger Waters, or Paul McCartney, you’ll know what I mean. In another example of revenue model innovation, Radiohead decided to make a recent new album available for download for any price the fans felt it was worth. Surprisingly, they made an average of $8 per album.
Successful classic rock bands have built their brands and businesses over a long period of time. They manage the core brand experience exceedingly well, and have creatively built brand extensions that continue to generate additional revenue streams through all kinds of merchandise (e.g. Beatles Rock Band or AC/DC boxer shorts). They also carefully manage their IP — which, in their case, is the copyright to their songs and music — and in many cases is the greatest revenue earner from licensing.
Many successful artists have also turned their entrepreneurial instincts to social causes. Bono is well known for savvy fundraising for his many projects in Africa. Eric Clapton auctioned off his beloved “Blackie” Stratocaster for $1 million to raise money for his Crossroads project, and he also promotes events where he sells off old gear and memorabilia to collectors for big sums of money. The list goes on.
There’s a reason we use the term “rockstar” to characterize everyone from CEO’s to software programmers. Let’s pause for a moment the next time we use the term, and salute the entrepreneurial geniuses of rock music that continue to survive and thrive in popular culture.