On Slush Music Day 2, Gregor Pryor from Reed Smith shared the greatest 10 mistakes that a company can do in the music business. Here are the top failures, what some startups have done, but more importantly, from which the other companies have then learned from!
Mistake 1: Corporate Vehicle
“A friendship founded on business is better than a business founded on friendship”, Pryor quotes John D. Rockefeller. Foundations are important, and establishing something in the right place and at the right time is critical.
Mistake 2: Not Understanding Equity
Understanding equity in terms of trading or sharing your company is significant. Giving preferences to one shareholder over another might cause issues.
Mistake 3: Brand
If you get the brand wrong, it can turn into a really big mistake. Choosing a name that nobody else uses is a good start in creating a strong brand.
Mistake 4: Funding
Every time you’re raising money, you’re giving out a share of your business. Always have an eye on whether the funding is going to be deployed.
Mistake 5: Music Isn’t Just Another Industry
Remember, that music is a unique industry and not comparable to any other one. Entrepreneurs who have been successful in other areas, might sometimes forget that.
Mistake 6: Contracting and Compliance
Don’t sign a bad contract. Like really, do not sign a bad contract!
Mistake 7: Business Model Failures
Being curious about the business model is critical. To avoid a failure, focus on choosing the right business model and acknowledge the models that don’t work.
Mistake 8: The Team
Having the wrong person in the team can kill the company. Get the right people, and make sure the company culture is defined by the people.
Mistake 9: Moving Too Slowly
“If you’re not embarrassed of the first version of your product, then you’ve launched too late”, Pryor quotes Reid Hoffman, the co-founder of LinkedIn. Don’t delay the launches and wait that everything is 100% perfect.
Mistake 10: The Hype
In the music industry, people are always excited and hyped about the next big thing on the scene. Success doesn’t come overnight, but expecting it might kill the dreams of many startups. Save the hype for the right moment.