I want to launch a startup that would build apps and marketplace platforms for the entertainment industry. These apps / platforms would then feed data into a single CRM and be managed from a central dashboard. I want to pitch it to investors and clients as an on-demand “Artist Career Management and Marketing” CRM. Initially target market is the independent artist in the music industry and later expand to services other categories in the entertainment industry such as movies and TV. The problems faced in the industry: i) There is no proper career path in the business ii) Too many middlemen involved iii) Piracy and changing attitudes towards music ownership iv) Drying revenue streams v) Outdated legal framework Solution: i) Create tools that would help artists make independent and informed decisions by using smart algorithms and tapping into big data (yes big data is now available for the industry). ii) Provide artists with on-demand services so that they don’t end up getting into management contracts that can cost them a lot down the road. iii) Help artists identify new and nontraditional revenue streams. iv) Help artists diversify skills. I have talked to a lot of people in the industry and many think it’s a good idea, but they are not tech savvy and do not understand how this could be executed. What do you think?
I've launched several music startups and pitched to more than a hundred "investors."
I live in a city where entertainment tech is virtually unheard of. If you do too, I bet you already already know that it's difficult to raise investment from tech funds and incubators when the entertainment industry is misunderstood, or worse, understood as "less viable" than other industries like healthcare, for example. That's a battle you can't change over night. It takes a whole city infrastructure and culture shift to change that.
Of course, it will always remain interesting to me how a $16.5B music industry can be disregarded as a "niche" industry. There's clearly money there, but in terms of portfolio management, "niche" is a reality you're up against if you're seeking those types of investors.
Successfully raising funding for a music/entertainment tech concept often requires a completely different type of "investor" and a completely different type of vibe of relationship. If you're launching a music tech concept, spend more time building real friendships with those who have the resources to support you, as opposed to trying to "pitch" into pools of money. Share your passions with the millionaires next door who love music or entertainment. Find those who have already made profit within music or entertainment, or find those ex-touring musicians who now have discretionary income. These types of investors are the people you want on your team anyway. They're more like supporters. They're hiding behind the scenes in small cities. Sometimes they're masked as CEOs who already donate into the arts. Sometimes they're quietly living in the suburbs as successful composers for global clients. Either way, they're often genuine, heart level people who have saved their money in smart ways, know how to recognize bullshit, care less about profit, and invest in things that light them up. Wear your passion on your sleeve, dig, and you will find them.
I'll close with this -- I have two buddies who just raised $1.5M seed for their music tech concept. I also know several music tech companies around the world who are constantly grinding. Usually, the head of these companies has a background in music and a community within the music industry. They have built music tech that solved a major problem they personally experienced as artists, and they leveraged their community by sharing the story of their beta process to their friends as they tried and tested profit. They made sure every one of their potential supporters saw their hard work before they ever made an ask. Just a different vibe and process, for sure.
If you need help with your beta, launch, or want to develop new friends in the music industry, let's setup a call.
Answered 8 years ago
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