Below the picture I could read: Next Generation Lifestyle, Founder. So this guy is also an entrepreneur, which is actually not such a big surprise looking at P.Diddy and Jay-Z. After “googling” him and his company I stumbled across a very interesting thing.
He was actually releasing his new album without iTunes, Amazon, Spotify or the likes. He used his own platform. “Brilliant, a strike of a genius”, I said to myself! This made perfect sense to me, as I was doing the exact same thing for my book, although it bugged me because I had to pay $12 to listen to the album...
So what I did is that I went on Soundcloud and listened to the only available track called “Higher”, which was shared by the guy who made the beat. It was mind blowing. The beat was incredible. I listened to it over and over again.
So after having listened to it over and over again I forgot all about his speech. Nevertheless, I suggested a couple of friends that are currently building startups to have a look at how Ryan built his membership club/platform and told them that they might want to consider it for their businesses as well.
Just a week ago or so I came across Ryan again. I don’t remember how it happened, but I somehow decided to search for a recap of his speech at this conference. Luckily I found a video on YouTube. You can watch it here, it's totally worth it: http://www.youtube.com/watch?v=7I5bj4LfDZE
So I started watching it. Honestly speaking, it simply blew me away! This guy standing there with his shades on was spot on. He knew exactly what he was talking about. The story he was telling about his life, how he got his first record deal, how he’s currently turning the entire music industry upside down was just amazing.
Forget about all these books on entrepreneurship, on customer development, product development, lean startup and so on. Just watch this damn video and you’ll understand everything you need to know to build a successful company, although some of his messages are not very easy to spot.
After I finished watching it, it was clear to me that I needed to write about it, I just didn’t know how or when exactly I would do it. I already had a big list of things I wanted to write about and didn't quite know how I could build a nice story line.
Then just a couple of days later I read a very inspiring article from James Altucher that gave me an idea about how I could do it. It was also the inspiration for the post's title. So here are the key takeaways for the people that are too lazy watching the video:
Ryan knew exactly who his customers were and he knew exactly where they were hanging out. So he printed a couple of flyers and advertised his beat making skills where most of the hip hop heads were hanging out. That way he could keep marketing costs as low as possible, but at the same time as targeted and effective as possible. Something most startups struggle with these days.
He quickly realized that he couldn’t make it on his own. So he needed a partner and because big names would never collaborate with him, he had to find a hidden star to partner up with. He needed a guy that was as talented, ambitious and dedicated as him and at the same stage of his career. That way they could leverage each other’s talents, boost each other’s businesses and multiply their success. A classic case of business development. Another big issue for many new startups.
He had a clear business model, which was based on selling beats from day one to find out whether or not people would be willing to pay for his “product”, instead of working on his idea for years and years without ever pitching it to real customers. He adapted and tweaked it over and over again until he got it right and had enough references to start charging more. That’s what we call trial and error combined with instant learning. A lean startup classic I would say...
When his skills were good enough and he knew people were willing to pay money for the stuff he was doing (proof of concept) he was ready to approach record labels. He knew exactly which record label would fit best, aka which investor would be willing to put money in his business. The best fit was P.Diddy. So he stalked him, figured out where he usually hangs out and tried to befriend people that might get him some sort of introductions. Hence, he didn’t try to raise money too early and waited until he had a proof, which might ultimately get him a better deal.
Ryan went to a guy he got to know that was managing and djing at some of the hottest clubs in NYC, that P.Diddy usually goes to. So here’s what he did: he gave the dude one of his records, told him to play his song over and over again at all the six venues that P. Diddy usually goes to on the weekends. P.Diddy called him the next day. BOOM! That's how you close a deal!
6) Stay hungry, stay foolish
Ryan realized early on in his career that he couldn't really get in touch with the people that bought his albums or were interested in the stuff he was doing. Existing platforms such as Facebook, Twitter and iTunes wouldn't allow him to directly get in touch with them either. He either had to pay for advertisement or give away some of his revenues.
You need to own the customer relationship!
So what did he do? Well, he just built his own CRM platform that would allow him to directly communicate with is fans for free, know their preferences, see their profiles and send them special offers. This did not only allow him to make more money per album, but it also decreased his marketing costs for introducing new albums, selling tour tickets or merchandise...