A Bright Future For Music Tech: Lessons Learned At SF MusicTech X
The number ten is quite a symbolic number, representing the start of a whole new order of numbers, and the culmination of the numbers that came before it. The number ten also implies the completeness of order. Last Monday at the Kabuki Hotel in San Francisco, the SF MusicTech Summit celebrated its tenth summit.
With what has become arguably the most influential gathering of music technologists on the West Coast, came a degree of symbolism that the number ten represents; that perhaps this sector of the music industry is finally ready to see the beginning of a new paradigm.
"Right now, for the first time, the music tech industry is really starting to show signs of long term viability," said Eric Ferraro of LeClairRyan, an attorney who focuses his practice on venture capital, corporate, securities and intellectual property transactions (also a Founder at IRIS Distribution). “Investors have strayed away from the music technology space since – well the beginning of the space. But now there are signs that there are long-term business models here.”
And those business models have a lot more to do with real people aiming to deliver real value to the user, and less to do with big companies seeking bottom line profits.
Focus on the Product First, Profits Later
"The funding models of music tech are shifting," said Ian Hogarth, Founder of Songkick. “Creative works are being funded more by people instead of companies (such as Kickstarter and Y Combinator). Access to music is going to go through a step change. The streaming marketing is going to increase dramatically within the next year.”
Of course, one of the toughest areas for most (if not all) startups is how to even get funding in the first place:
“Focus on building a great product first and getting yourself a rabid user base,” advised Eric Ferraro.
“Make sure that you’re working with individuals who are ultra high-caliber – be ruthless about that,” said Ian Hogarth. “When recruiting, keep your eyes and ears open to people who are very passionate about your idea.”
Learn from the Mistakes & Success of Others
With all the Music Hack Days that occur around the country, the tech startups that have come and gone, and with each new integration of music into technologies, we're learning what has and hasn’t been working, and have begun to adjust accordingly.
“Focus on the first couple minutes of the product experience and then use that as a lens to gauge how effective your product is,” said Ian Hogarth.
The biggest mistake when designing and developing new music tech according to Brenden Milligan (Founder of OneSheet): "Too pretty, not useful."
“Be patient, because it will take a lot longer than you think,” continued Mulligan. “But it will also be the most fun thing you do.”
Understand the Value of Free Content
With all the recent success stories surrounding the power of giving away high-quality music, it seems that many people are (finally) beginning to recognize that recorded digital music files have now become a means to an end.
“If you look at the top 100 tours, they used to make up 90% of overall tour sales. That has now dropped to below 50%,” remarked Ian Hogarth. “The balance is shifting.”
Stop Creating Solutions to Problems We Don’t Have
The first and most critical phase of any entrepreneurial endeavor is the market research. This helps you thoroughly understand the market that you're attempting to create value for your users, and ultimately, achieve profits in.
“Too often, would-be entrepreneurs make an emotional decision to take a product or service to the marketplace without evaluating its viability – it's always a mistake,” says Growth Expert and music industry veteran Gian Fiero in his e-book better. “Once met with the daunting task of marketing and differentiation, they buckle under pressure, and eventually fold.”
Content Value = King
Building off what Gian Fiero mentioned above, the music industry as a whole isn’t suffering from a lack of CD sales or too much pirated content; it's suffering from the lack of value that music fans are experiencing in their content – not to mention the lack of value in their relationships with the music artists who are providing that content. Understanding where the value lies in your product or service will determine how long and how far your startup goes.
The Sky's the Limit
This tenth SF MusicTech Summit was easily the most packed and most robust one yet. It was symbolic of an industry that has only begun to see its best days; of an industry that is finally showing signs of long-term sustainability. Ten years from now, it will surely be an entirely different space altogether. But what will surely remain the same is the continued level of optimism among these techies, confident that with enough brainpower (and with enough resources), they can paint the sky.