Tag: entrepreneur

Organizing the Chaos of an Entrepreneur’s Life

Entrepreneur getting organized
Image by StartupStockPhotos from Pixabay

I often hear first-time entrepreneurs fret about structuring their workdays and organizing their work.

If they came from the corporate world, their employers had already structured their work. These entrepreneurs talk about being shocked by the chaos of starting a business. It is even more challenging for entrepreneurs who have never had a full-time job. Those fresh out-of-college entrepreneurs talk about feeling lost, lonely, and overwhelmed.

If you are a first-time entrepreneur, take a breath!  There are many resources to help you organize your business and your job as founder and CEO.

Getting Organized

Entrepreneurs often use the excuse of, “I’m an entrepreneur. It’s not my nature to be organized.”

Without organization, your productivity suffers. Without productivity, your company’s performance suffers. Without company performance, your bank account suffers.

Peter Strack, Founder & CEO of The Strack Group, argues that organization is a habit, not a character trait. Stack recommends creating a habit of being organized by addressing all aspects of your everyday work.  Map out your week, manage your days with to-do lists, and organize your digital work life, including emails, files, and passwords. It may take practice, but with a persistent and dedicated approach to work, even the most disorganized entrepreneur can control the chaos of a startup.

Neil Patel recommends batching your tasks into everyday activities to aid in productivity. He also says that the most successful, organized entrepreneurs focus only on the tasks that actually move their businesses ahead. Many entrepreneurs spend hours on things their business will not need for a long time or may never need.  Your job in a startup is to find your market and ensure you give them what they want. Period. If you can’t build sales, nothing else matters!

Your calendar is a critical tool to help you get more organized. Jeanne Rossomme recommends finding a calendar tool that enables you to structure your time and organize your workflow. Here is a review of many popular calendar apps that work well for entrepreneurs. I am an Apple guy. My calendar of choice is BusyCal. It integrates my to-do list into my calendar and allows me to manage it across all my Apple devices. Ultimately, it is a personal choice as to which app works best. Don’t just look at the free options; spending a few dollars a month is worth getting a system that works well for you.

The Need for Speed

Kartik Mandaville, Founder & CEO of Springworks, says that the market conditions of many startups demand that they organize for speed. Mandaville says:

“Startups invariably face competitive pressures from both incumbents as well as other startups. To get ahead, they have to continuously crank up their speed of decision making, product development, distribution and iteration.”

Many startups have a narrow window of time to launch and establish market share. This adds even more urgency to the need to get organized and productive.

It’s All About Time

Our phones and computers are full of apps that are rabbit holes that eat up your valuable time. Jen Glantz, founder of Bridesmaid for Hire, describes it like this in her article at Business Insider:

“Whenever I felt anxious, overwhelmed, or became eager to procrastinate, I’d pick up my phone and scroll through social media. When I took inventory on how I spent my time during the day, I realized I was spending 90 minutes of my workday wasting time on social media.”

Glantz says she puts her phone out of reach during work time and only brings it out three to four times a day during the fifteen-minute breaks she builds into her day. She also has scheduled time during the day to read and reply to emails and limits each time to about twenty minutes.

David Lavenda, VP of product strategy at Harmon.ie, suggests that entrepreneurs are well served by starting their days with “me time” in his article at Entrepreneur:

Hannah Rodriguez, Founder of Dream Daily LLC, describes her approach to creating “me time” as an entrepreneur in Entrepreneurial Voices:

“I like to have a start and end to my workday. I wake up, and before I start work and I journal. I have my coffee, read my Bible, and walk outside to get some sunlight before I’m in my apartment all day. And then, towards the end of the day, I’m ready to turn it off. I know a lot of entrepreneurs like work late into the night. I’m done by 5 or 6 p.m. Even though I love what I do, I’m ready to have my night routine and read, watch TV, talk to friends, or whatever. I’m trying to build those boundaries.” (“Hannah Rodriguez” from Entrepreneurial Voices)

Find Well Organized Mentors

Entrepreneurs always benefit from hanging out with other entrepreneurs. They provide both practical advice and moral support for each other. They also help mentor each other.

But be careful who you hang out with. Good habits and bad habits can picked up from your peers. I would make sure to hang out with some entrepreneurs who are already well organized and manage their time effectively. They can serve as role models as you build your business and offer a wealth of handy tips to help organize the chaos of your life as an entrepreneur.

Hard Lessons Learned

What's next?
Image by Gerd Altmann from Pixabay

Not if, but when.

In every horror movie there comes a point when you know something is going to happen.  You don’t always know what and are never quite sure when. That’s where I think we are right now.

It could be an economic crisis. It could be another pandemic. No one knows what, and no one knows when.  But something will happen that disrupts the economy and puts many entrepreneurial ventures at risk. It could happen this year or it could happen sometime in the next several years.

We’ve seen this movie before.  COVID. The Great Recession of 2008. The dotcom bubble bursting. As someone who entered the workforce in the 1970s, I’ve lost count of how many economic shocks I’ve witnessed firsthand.

Economic shocks can be devastating for small businesses, but they also can create amazing opportunities.

Prepare Ahead

Be ready to act decisively and quickly. When the next bad time comes, it may come with very little warning.

For startup entrepreneurs, you need to be lean from the get-go. New businesses will still be forming, even when the economy takes a turn for the worse. Some of these new businesses will be opportunistic entrepreneurs who see ways to meet the needs created by the dramatic changes taking place in our economy and society.

Bootstrapping is always a good approach to entrepreneurship, but it becomes essential when times get tough.

There is less money being invested in, and lent to, new small businesses right now. Be prepared to find creative ways to get the resources your business needs. When things take a turn, the money flow may dry up almost completely.

Watch your overhead carefully, and know what you can cut quickly when the economy turns south. Pay down debt and take good care of the customers you have so you don’t lose them to stronger competitors.

Hire new staff prudently. I am not saying that you should not grow your staff, but make sure you have the cash reserves and/or cash flow to support each new hire.

Opportunities Await on the Other Side

Opportunities will present themselves if you are prepared for the next downturn and manage to muddle your way through it.

As the downturn unfolds, more of your competitors will probably fail, which presents an opportunity to attract new customers to your business.

This can be an excellent time to expand and take advantage of a larger market share. If you do expand, continue to bootstrap and try to keep your use of debt to a minimum. Labor and real estate costs will likely come down, making expansion more affordable.

Don’t be afraid to use this time as an opportunity to innovate.

In 2018 and 2019, Ryan Pruitt’s business, Frothy Monkey, was getting ready to grow:

“We spent 2018 and 2019 learning how to operate what we have created for ourselves, beefing up our admin team, working on our processes, learning the beauty of systems, such as ops systems, and checklists.  These are all bad words for entrepreneurs.  You sit in meetings, and you start hearing, ‘This is going to make us too corporate.”’ People work here because they don’t want to work in corporate.  And so we began that beautiful tension of having enough systems to set yourself up for success and some scale, but in a way that supports the creative and emotional leaders that we have in our company.” (“Ryan Pruitt,” from Entrepreneurial Voices)

Just as they were about to open a new location in East Nashville, a tornado struck the city on March 3rd, and then the world shut down due to COVID less than two weeks later. Like almost all small businesses, Frothy Monkey was forced to drastically downsize and try to find a way through the pandemic. By listening to their customers and taking quick action, Frothy Monkey made it through. Said Ryan about what came next:

“Our loyal customer base rewarded us.  Quick decisions rewarded us. And we’re very happy to say that we’ve not only made it through, but we’re a company three times stronger than we were before.  We’ve opened our first out-of-state location since then. We’re up to 342 employees, seven locations open, and the eighth one, Knoxville, getting close. We’ve also just announced location number nine for 2023, which will be the second one in Birmingham.  This will be our first time opening three locations in a twelve-month period.” (“Ryan Pruitt,” from Entrepreneurial Voices)

New Adventures

Sunrise on 30A over Gulf of Mexico
Sunrise over the Gulf of Mexico. Jeff Cornwall

Well, my retirement has looked nothing like I imagined.

During the first six months, I filled my time with as many projects as possible. I went from working full-time for the University to working full-time on various interesting projects. I enjoyed everything I was doing, but it looked nothing like retirement.

Then, in early 2023, I was diagnosed with non-Hodgkin’s lymphoma. Chemotherapy was not on my bucket list for retirement, but it is what dominated much of last year.  The good news is that my treatment was successful, and I was told I was cancer-free after my last round of chemo.  I am so grateful for all the prayers and support we received from friends and family.

Our New Adventure

Toward the end of treatment, I was sitting on our back porch feeling miserable. I wondered why we needed our big house. As Ann always said, we lived in only a small part of it. When Ann got home from pickleball that day, I asked her if she was really serious about downsizing. She assured me that she was.

So, we sold our house, got rid of eighty percent of the “stuff” we owned, and moved into a small apartment a few miles from our house. We then began the process of exploring what our next adventure would be. We knew we were ready for a warmer climate and ready to live in a community with people at our stage in life. We have always enjoyed Hilton Head, but it can get almost as cold there in the winter as it does in Nashville. So, we settled on Florida.

Specifically, we decided to move to the panhandle of Florida, along the area known as 30A.  It offers a nice climate and is easy to get to from Nashville, where our kids and grandkids all live. We bought a lot and have begun the process of building our new home in Latitude Margaritaville Watersound.

Entrepreneurial Voices

Since I retired from the University, I have been working on my new book, Entrepreneurial Voices. My progress was slowed a bit during treatment, but I have been plugging away at it for the past eighteen months.

I’ve been talking about writing this book for decades.  It is inspired by the book Working by Studs Terkel, in which he interviews more than a hundred and fifty people from all walks of life about their work.  Most of his book contains direct quotes as people talk about “what they do all day and how they feel about what they do.”  My wife and I have always believed it would be compelling to develop the same type of book about entrepreneurs and small business owners.  When I retired, Ann said, “You now have the time to write this book!”

So, I spent much of the first year identifying dozens of interesting business owners and conducting long-form interviews about their journeys as entrepreneurs. Like Terkel, I wanted to capture not only what they have done as an entrepreneur but also the affective side of owning a business. The book presents the lessons and challenges of entrepreneurship from the business owners’ own voices.  The world is full of books in which authors give their views about entrepreneurship, including several written by me. This book offers lessons and insights from the words of entrepreneurs.

Entrepreneurial Voices will be published sometime in 2024.

My next several blog posts will offer my reflections on the lessons from various stories in the book. Although the chapters in the book are in their voices, my upcoming posts will offer my reflections on these interviews. Conducting, transcribing, and editing these interviews not only inspired me but also taught me many important lessons about not only the process of entrepreneurship but on being an entrepreneur.

 

 

 

The Beast Comes Roaring Back

The beast is back.  Inflation is roaring, and showing no signs of letting up.  Small business owners concerned about inflation has increased from 74% in Q4 of 2021 to 85% in a recent update of the Metlife/Chamber of Commerce small business index.

Vulnerability of Small Businesses

The problem for smaller businesses is that they are less able to adjust to inflationary pressures.  Small businesses are the weak player when it comes to market power.  Time is your enemy right now, as inflation is raging at levels we have not seen in decades.

If you have big suppliers or customers, they can tie your hands.  Your costs go up, but you are unable to pass along these costs with higher prices quickly enough to keep up with the inflationary squeeze.

An additional worry is that we have a weak economy with inflation — this is called stagflation.  In this scenario, customers begin to sit on their hands.  When you raise prices they either buy less from you or even decide not to buy at all.  Consumers go out to eat less often and when they do, they buy less expensive meals.  They travel less and choose cheaper options.  They postpone buying new goods.  They also postpone maintenance on our big investments, such as houses, cars, and appliances.

Employee costs were already on the rise due to recent labor shortages, but now will likely accelerate as a result to their own challenges with inflation in their everyday lives.

What to do?

When inflation heats up even a little, be aggressive with frequent small price increases rather than waiting and trying to catch up at
some point with one big jump. Don’t let yourself get behind, as small businesses can almost never play catch-up if the delay price increases.

This can be tough to implement for some businesses, particularly if you publicly list your prices.  For example, it can get very costly to print up new menus each month for a restaurant owner who wants to follow this strategy.

But be vigilant.  Customers are less likely to pay attention to price increases if they are small, so it is essential to find creative ways to communicate your pricing to allow you to implement this strategy during inflationary times.  For example, a restaurant may use menu inserts that can inexpensively be replaced.  This was actually very commonly used in restaurants during the 1970s and 1980s when we had high inflation.

In addition, prudent management of finances can help a business survive inflation:

  • Find ways to cut expenses without impacting the core value offered to customers.
  • Keep overhead low.
  • Build cash reserves to buffer short term price increases that precede your ability to get higher prices from your customers.  I know this sounds contrary to the investment advice we are now hearing about holding cash during inflation.  Don’t think of this cash as investment — it is your lever to hold back the rising tide of inflation.  Think of it as an internal line of credit to hold off the impacts of inflation.
  • Watch your margins carefully. Worry about growing profits, not sales.
  • Don’t lock into long-term contracts that have narrow margins with large customers.
  • Pay down variable interest loans ASAP, especially now that interest rates are temporarily relatively low. As soon as inflation heats up, interest rates will continue to rise.  And given the stubbornness that the Fed is now showing with interest rates, we may soon see huge spikes in rates over just a few quarters as inflation takes hold.

Expand Your Dashboard

A financial dashboard is an important tool for business entrepreneurs.  The dashboard provides a quick overview of critical metrics that summarize the health of a business.

Standard ratios derived from financial statements serve as the foundation of most dashboards.   However, relying only on financial statement data means the entrepreneur is managing the business using numbers based on past performance.

Lessons from a Parking Lot

Many years ago, an entrepreneurship professor shared an exercise he used with students to teach them the limitations of relying only on historic data in their financial dashboards.

He would have his students meet him in a commuter parking lot on campus on a Saturday morning (when the lot was empty).  When they arrived, there was their professor standing next to an old car.

The professor set up a simple course for the students to drive using orange cones.  When the first student got into the car, he realized that the professor had blacked-out the front windshield and side windows.  He was told he must drive the assigned course going forward.

“But I can’t see where I’m going!?”

“You can only use your rearview mirror,” said the professor.

The result was hilarious.  Student after student careened through the parking lot,  driving over cones along their path.  Most thought their professor had gone mad.

Eventually, one of the students would understand the point of the lesson.

“This has to do with financial dashboards, doesn’t it.  We don’t know where we are going because we can only see where we’ve been!”

Lesson learned.

Finding Ways to See Where the Business is Headed

Although I have never actually used this exercise with entrepreneurs I work with, I do often share this story.  I challenge entrepreneurs to find ways to “tear away the black paper” so they can see the road ahead for their businesses.

I give them an example from our healthcare business.  We monitored various metrics related to inquiries and referrals, which proved to be good predictors of future revenues and helped us time the hiring of new staff more effectively.

My rule of thumb is that no more than half of the metrics on a financial dashboard should come from historic financial statement data.  The rest should be specific numbers for the business that indicate where it is headed.

The Lost Art of Business Communication

We used to teach courses in business writing in business school.  Students learned how to construct effective business letters and memorandums.

Over the past decades, those courses faded away as formal requirements in most business schools.  Business schools opted to integrate writing requirements into various courses in their curricula.  Students now graduate with experience in writing business case study analyses and research papers, but get little or no instruction on how to construct formal business communications.

Emails Show the Result

I see the outcomes of the lack of training in business communication in emails that I receive from students. Most students use a highly informal communication style in their emails.  It starts with the salutation.  “Hey, Professor”, or my least favorite, “Hey, Jeff”, are common salutations in emails I receive from students.  Although this might be fine in an informal text message, email has become the new medium for business communication.  Therefore, it needs a higher standard of formality and writing style.

From there, the content of the email then proceeds to go downhill.  The text of the messages are full of poor grammar and language that sounds like it is pulled from a hastily constructed personal text message sent to one of their friends.

From what I hear from employers and investors, students carry this informal, unprofessional style of writing with them into their careers after college.  I frequently hear from people in the business community about students and alumni of mine who send emails that are so long and rambling that they give up trying to understand the purpose of the communication.  They complain about emails full of typos, muddled messages, and poor grammar.

David Cohen, an investor and founder of Techstars, wrote in a blog post that he commonly receives emails sent en masse to a large group of investors, many of whom he knows personally. At best, this shows a lack of respect for the recipients. At worst, it makes the sender look just plain lazy.

In a follow-up post, Cohen highlights what he calls “the perfect email.”  The sender is clear about the purpose of the email.  The sender takes the time to personalize the email to the recipient.  The email is well-written with a clear and concise message.

Creating Effective Emails

If a student graduates and gets a corporate job, they will quickly get trained in effective business communication (however, these employers do wonder why it is left up to them to teach this skill).

For those pursuing a purely entrepreneurial career path, they are on their own to develop effective business communication skills.  There are plenty of good resources out there (for example, here, here, and here).

By all means, find someone to proofread your important emails.  If you are in a co-working space, find a group of fellow entrepreneurs who are will and able to review each others’ communications to help everyone get better.  Effective business communication, like any skill, takes learning and practice.

 

Good Debt. Bad Debt.

Image by walkerud97 from Pixabay

Young entrepreneurs generally seem to be reluctant to consider using debt to help finance their businesses.

The reasons they cite are many.  Often, they are concerned that they already have a heavy debt burden due to student loans from college.  Others tell me they watched their parents get deep into debt and don’t want to do the same.  The requirement to sign personal guarantees for business debt terrifies many young entrepreneurs.  More than a few tell me that Dave Ramsey’s anti-debt message shaped their negative perceptions about debt.

When I tell my students that, generally, I prefer debt over equity financing, I see shock on many of their faces.

Bad Debt

There are certainly many instances when taking on debt financing for a business is not a prudent decision.

When I hear of entrepreneurs maxing out credit cards to finance a startup, it sends shivers down my spine.  I know that there are countless stories in entrepreneurship magazines about “heroic” entrepreneurs who went tens of thousands of dollars in debt with credit cards to create incredibly successful businesses.  But for every successful use of credit cards to launch a business, I have seen dozens who end up with failed businesses and mountains of credit card bills that haunt them for years.

Bankers can tell countless stories of business owners with business models that are no longer competitive seeking loans to keep their failing businesses afloat.  Rather than keeping these businesses on life support by continuously pouring money into them, these entrepreneurs need to come to the hard realization that they have come to, what I call, an “Old Yeller” moment.  Sad, but true.

Some debt funds short-term needs for cash, while others fund longer term investments in your business.  However, sometimes we use debt for the wrong purpose.  For example, when I was a young entrepreneur, I used a line of credit to invest in things that were actually tied to growth capital.  A line of credit is meant to fund short-term timing issues with cash flow, such as funding inventory purchases or paying for payroll on a project that will be billed upon completion. I used it for hiring staff and adding new space that would take much longer to generate cash flow. 

Fortunately, I had a good banker who helped coach me on the proper uses of lines of credit. He also provided us with a long-term term loan to use to fund the investments we needed to make in staff and space to grow our company.  I never made that mistake again!

Good Debt

Good debt begins with debt that your business and you can support.  This is how bankers make decisions on making loans.

Bankers always look to multiple means of repayment when making business loans.  The first source of repaying is a healthy business with more than enough cash flow to fund the debt.  The second line of defense to ensure loan repayment is the personal guarantees of business loans by the business owners.  If your financial house is not in order, your chances of getting a loan for your business are diminished.  Finally, bankers will use assets pledged as collateral to pay off business loans, but only as a last resort.

“Bankers only give loans to people who don’t need it,” is a common refrain I hear from small business owners.  The reality is, bankers only give loans to people who they are highly confident can repay those loans.  After all, it is our deposits in the bank that they are using to fund loans.

Bankers understand what makes good debt, and you should understand and follow their criteria for using debt. 

Use With Caution

The requirement of personal guarantees are a sobering aspect of taking on a loan for your business.  Keep in mind, personal guarantees are not only a financial tool used by banks.  It is also a psychological tool.  If you are not confident enough in your business to personally back the loan, then why should the bank?

Another risk with taking business loans is that although your business might be solidly bankable when a loan is made, times can change.  We need to look no further than the thousands of loans that went from safe and solid earlier this year, to being rated as highly at risk for default after pandemic took hold.

When you need to use debt, make it a priority to pay down your business loans as quickly as possibly. Certainly, don’t pay off your loans so aggressively that it hurts your cash flow. However, once you have a good cash position, the next most important goal is to pay off your loans.

The reason I prefer debt to equity is that debt is like a house guest.  When you pay it off, it goes away.  Equity is like adding a new member to your family.  Once you take their money, they are there to stay!

2020 Disruptors

2020 CNBC Disruptor 50 — Deadline for Submissions – CED – Council ...

Disruptive companies fundamentally change their industries.  While many entrepreneurs tout that they will be disruptive — in fact, almost every one that I have ever heard pitch for money has made such a claim — very few actually deliver on their intended disruption.

Every year CNBC identifies fifty companies that they believe are truly disruptive.  I have had the pleasure to serve on the Board of Advisors for the CNBC Disruptor 50 List for the past several years.

Nothing has created more opportunity for disruption in my life time than has the coronavirus pandemic and accompanying economic collapse.  The creation of this year’s list included explicit consideration of the impact that the coronavirus is having on the potential growth and disruption of this year’s finalists.

The coronavirus is transforming how we shop, how we work, how we seek healthcare, how we play, how we learn, and how we get our food.  This year’s Disruptor 50 covers a broad spectrum of industries, which illustrates the fundamental economic transformation now at work around the globe.

Top 5 Disruptors of 2020

The top five are as follows:

  1. Stripe — digital payment platform company that has now created a financing program, Stripe Capital, that is a quick and easy source of funding for small business
  2. Coupang — the “Amazon” of South Korea that delivers packages ordered by midnight before 7:00 the next morning
  3. Indigo Agriculture — seeks to use natural microbiology and technology to improve sustainability, profits for growers and consumer health
  4. Coursera — hitting close to home, this company offers individuals anywhere in the world access to online courses and degrees from top universities at a fraction of the cost
  5. Klarna — this already profitable Swedish fintech company has an app that lets customers buy at their favorite stores now, entering only their email and Zip code, but pay later

You can see the entire fifty companies on this year’s list here.

I planned to get this posted as soon as the list came our earlier this morning. However, I got lost reading about all of this year’s startups.  What an amazing group of companies! Just as in past economic crises, there is fertile ground for disruption, and this year’s Disruptor 50 offer us a peak into our future.

Methodology

Here is how CNBC describes their methodology:

All private, independently owned start-up companies founded after Jan. 1, 2005, were eligible to be nominated for the Disruptor 50 list. Companies nominated were required to submit a detailed analysis, including key quantitative and qualitative information.

Quantitative metrics included company-submitted data on workforce size and diversity, scalability, and sales and user growth. Some of this information has been kept off the record and was used for scoring purposes only. CNBC also brought in data from a pair of outside partners — PitchBook, which provided data on fundraising, implied valuations and investor quality; and IBISWorld, whose database of industry reports were used to compare the companies based on the industries they are attempting to disrupt.

 

Getting to the Other Side: Music

Image by Pexels from Pixabay

The best governments can do to help pull us out of an economic crisis is create conditions favorable for economic recovery.  It takes entrepreneurs to actually do the work that can get the economy growing and take us to “the other side.”  When looking back, this has been true for every economic recovery since the Industrial Revolution.

Entrepreneurs are already beginning to do what they do best: find opportunity in the chaos.  Financial author John Mauldin goes so far as to say that right now “the greatest entrepreneurial and technological boom in the history of humanity is brewing.”

To see where entrepreneurs will be leading us, it is best to examine things industry by industry. Given our home is in Nashville, there is no better place to start than the music industry.

From Performance to Product

Historically, the music industry has been resilient. Facing numerous disruptions over the past century, the music industry has adapted to every fundamental change in its business model.

The technological disruptions from Edison’s invention of the phonograph and Marconi’s (or was it Tesla’s) invention of radio brought music directly into people’s homes. Music evolved from only being experienced through live performance, to a product to be “consumed.”

As usually happens after entrepreneurs creatively destroy what was, the industry consolidated around the new business model that emerged. The large companies that emerged became very efficient at making money from the production and distribution of music as a product. Musicians made money by working for these companies.

From Product to Digits

The next disruption of the music industry came from the Internet.

The digital age took away the value of music as a physical product.  We no longer had to purchase an album or a CD to consume music. Music could now be streamed directly to us via the Internet.

Over the next two decades, new business models evolved for music. Tech companies replaced music labels as the dominant players in the industry.

When music was a product, singers and songwriters made money by getting a small piece of the revenues generated by the music they wrote and performed. But as music was no longer a physical product, the share of revenues available for the artists from the digital distribution shrank to almost nothing.

Singers and songwriters had to adapt.  To earn a living required that they develop a new relationship with their fans. They had to tour more and develop alternate revenue streams, such as merchandise for their fans, to make a living.

However, just as a new equilibrium in the industry was settling into place, along came the coronavirus!  Live performance of music ended abruptly, and artists are now struggling to find a new way to make money.

From Artist to Entrepreneur

Yesterday, our family gave a musical gift to Mrs. C. for Mother’s Day that would not have been available a few months ago. City Winery and a group of their regular artists got together and offered a personalized video of a mini-set to give as a Mother’s Day gift.  The video was waiting for  Mrs. C. in her email inbox yesterday morning. Mark Broussard, one of our favorite artists, opened with a personalized message to “Yammy” (her grandma name) and he then performed the four songs that he wrote for each of his four children.

Artists and others in the music industry with an entrepreneurial spirit are starting to innovate and experiment with new business models.  Private Zoom concerts. Live streaming.

What we are seeing so far is that people want to keep the personal connection with their favorite artists. This is the value proposition that artists tapped into over the past decade through live performances and social media.  But with the outbreak of the coronavirus, it will be a long time before we are comfortable sitting shoulder to shoulder at a concert with our fellow fans.

So what comes next?  That story is just starting to unfold.  The funny thing about markets is that they often surprise us.  The odds are that anyone who says they know what will be next for the music industry will probably be wrong.

But, there will be a next act for musicians. Whatever comes next will be a result of musicians and others in the industry stepping forward as entrepreneurs.

A dear old friend once described entrepreneurship as being a lot like sausage making.  We love the finished product, but we really don’t want to see it getting made.

The process of innovation and entrepreneurship is messy, confusing, and frantic. But when it’s done, the outcome is quite satisfying!