Startups: Bands for Hackers

Growing up as a young musician in suburbia, I fantasized about being in a band:
playing music in front of thousands of people, signing a record contract,
enjoying the successes (and excesses) of stardom and celebrity. As I grew older,
I began to realize how difficult it would be to achieve that goal.

Years later, as I started university and was accepted into VeloCity,
Waterloo‘s startup incubator, I noticed a lot of familiar dreams.
Although their domains are vastly different, startups are just bands for hackers.

Wonderful doodles courtesy of Younjin Kim.

Like many bands, many startups begin in parents’ garages - serious business
in a non-serious atmosphere. Founders (or band members) spend every waking
moment together, working hard to perfect their craft and their endeavour. While
bands work to perfect their lyrics, melodies and rhythms, startups work to
perfect their pitch, product and business plan. Instead of fans, startups get
users; instead of trying to impress the A&R rep that may show up to a
performance, startups try to impress the investors in the audience on demo day.
For bands, this demo is a rough CD - for startups, it’s their first product.
Both are MVPs.

Then comes recording. Record labels often finance their artists, allowing them to
spend months in studio making a record, toiling day and night behind a recording
console. This is where the product comes from, the hard work that is initially
the band’s raison-d'être. (Their private IP, if you will.) Startups are often
financed by VCs, or by themselves, to make their initial product. For months,
they toil in their studio apartments, toiling day and night behind a Linux
console. By now, both band and startup have something nobody else does - their
work. While they both have funding, neither of them have revenue.

Then comes touring. It’s no secret that this is how many musical artists make
most of their revenue. While the original music may be great, one purchase of
their album makes them pitiful amounts of money. Many SaaS startups are in the
exact same position. Selling their software directly would be equivalent to
selling the copyright on a band’s music - a nice one-time sale, but the loss of
all of the private IP. Startups tour just like musicians do, and attempt to
generate revenue. They acquire customers, attempt to gain virality, live off
user (fan) counts and try to bring in whatever cash they can. They could take
the advertising approach, and play a show sponsored by a large brand, or they
could make money from their users directly by charging for tickets.

Then comes the pivot. A startup can quickly realize that their idea isn’t
profitable, or that nobody’s interested. Their team obviously has the skill, so
they choose to make a different product. A band can quickly realize that their
music isn’t liked, or that nobody’s interested. They obviously have the skill as
musicians, so they broaden their artistic horizons and make new music in a
different genre. Neither type of pivot is bad for the organization, although
they will both lose fans or customers. In either case, the funding
party (VC or Record Label) will definitely be involved in the decision.

Bands and startups are also identical in one other important area - motivation.
There exist bands that are motivated by money, just as there exist startups
whose sole goal is to generate income. These bands still make art, although
it is rarely well accepted (or noticed) by critics, and often written for hire.
(The Backstreet Boys and Justin Bieber are two examples that come to mind.)
Startups with the one goal of profitability may achieve success, but are often
similarly panned, and often stumble frequently on the way. (Groupon.)

On the other hand, musicians who set out to make great music are, at the very
least, taken seriously. Music reviewers devote their attention to those who care
about their work, and it’s rare to see a “classic” or universally-adored piece
of music that was written for hire*. Startups that set out to make a great
product are, on the whole, adored for their work, and often enjoy success as a
side-effect. Google was originally a PhD research project, motivated by passion
and interest rather than profit. Dollar signs were not the focus of Zuck‘s
attention when he frantically wrote the first incarnation of Facebook, nor as
Jack Dorsey brainstormed how Twitter would start.

The best bands are made of those who care about their music, not their profits.
The best startups are made by those who care about their work, not their profits.

*EDIT: A few good commenters on Hacker News have reminded me that
European classical music (i.e.: Mozart and the like) was most certainly
for-hire. My point here was merely to highlight the commodity of modern,
hired pop music, and I neglected to think about any time period other than our


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