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Guest post by Hugh McIntyre
Last week at the 2017 Music Biz conference in Nashville, Project Music, one of the most exciting music-focused startup accelerators in the world, graduated four new companies, each with their own ideas about what it will take to fix the business and make the industry slightly more sustainable. The presentation marked the end of year three for Project Music, and though the program may have wrapped yet again, the organization, and the entire music startup world for that matter, is already looking ahead to year four.
I spoke with Heather McBee, who is incharge of all program operations for Project Music just as the four startups were about to present to a crowded room of music industry figures and, perhaps most importantly, investors, about what was different in year three and what is coming next for the established accelerator.
What is different this time around?
This year we have four teams, whereas traditionally we’ve carried seven to eight, and that’s made this especially exciting and energizing, even for all of the advisors and industry folks that are involved. It’s allowed them to spend more time with the startups and be more involved with them on a day-to-day basis. The advisors that have connected to each team have been able to spend even more time with them, whereas in the past, we had those advisors doing double duty, as they were attached to a core team and advising the other seven. Now it’s basically four teams really attached, getting out into the industry as much as having the industry come to them. It was cool to get some of them out and actually working alongside someone in the industry in their own office.
Why was the decision made to work with fewer companies this time around?
It was about that less is more mentality. Being able to put more quality resources into them. We’ve got these great resources, but we’ve spread them so thin the past two years. It’s about giving more quality experiences to the entrepreneurs, because at the end of the day, it’s about them and what we can do to give them an amazing foundation in the short fourth months that they’re with us.
You think it’s worked for the better?
I think it has. The companies that we got in this year, two if not three of them already had a user base and had done some validation around their concept. All we did was help them pour some gas on the fire. The program vetted them for scale and what they could build and the potential there. Once they got into the program, we helped them build a model towards profitability and being able to generate revenue by understanding the customer and knowing how to reach the customer and really understanding that pain point the customer has.
You might have fewer companies, but are you seeing Project Music grow over the past three years?
Yes. Definitely seeing it grow. The first year of the program, we had one international application and the bulk of them, there were about 90 applications that year, the bulk of them were from the southeast U.S. They were idea stage companies. Last year we saw more traction around both of those. The stage of the companies, what they were bringing to the table, where they were coming from. Now in the third year, we’re drawing applications from about 25 states and about 30% to 35% of the applications are international, and from places as far away as Belarus, Trinidad and Tobago, Nepal. Places you wouldn’t expect there to be a bubbling of music tech going on.
In that respect, the word is getting out, and the quality of what we’re offering is growing. That’s why people are coming here.
What do you want to do next time around?
One of the things we’re doing at the EC [Nashville’s Entrepreneur Center], we’ve got this program that is three years in and that has been a success, but now we’re looking at is the accelerator model the right thing to be able to support as many entrepreneurs as we can that are in this space? Traditional accelerator models are typically connected to an investment piece, and what we’re looking at is, how do we deattach that? How do we make the introductions so the teams that come in don’t have the expense of giving up equity for their company, but instead there’s a different way. We don’t know what that is yet. We’re working through that. We’re spending a lot of time with entrepreneurs to understand their needs.
We’re moving that investment component from the core of the program and focusing on the needs of the entrepreneurs. That may still be a 14 week project that’s an immersion, or it may be an extended program which operates as something of a case management program.
We have a new CEO and a new vision at the EC that is let’s open the doors wide to what the potential could be for this program.
What have you learned about the startup or the music startup world having done this now for three years?
We have learned that it is a sexy industry, that’s for sure! There’s more competition in the space. There are other programs out there doing what we’re doing.
How closely do you follow other music startup programs, and do you view them as competition?
I think we’re all complementary to each other. It’s not about being competitive. Say we got 130 applications in for our program and we’re selecting four or five, or even eight, that’s such a small drop in the bucket for entrepreneurs that want to be in this space that truly need help that we can’t get to. Having more out there that are willing to do that is amazing.
One of the things we do at Project Music is we spend a lot of time helping entrepreneurs that may not have a music industry background or may only be familiar with one sector of the industry, we try to make them understand the industry as a whole. It’s about helping different parts of the industry understand one another’s pain points, because if one part of the industry does something and it impacts another part, that has an affect on all of us. We want to make sure that those entrepreneurs that don’t have their sights on the big picture or how the ecosystem is all connected, we want to prove that foundation and that baseline understanding, if you will.
You read about ti in the news all the time, but for us, it’s the baseline thought of, impacting the idea of compensating the creator. Whether or not we agree or anyone else agrees on what copyright law says, there is still a right here, and it’s art. We should be paying people for their art. Teaching people that respect for the art and the content they are working with and that their model has an opportunity if they use that content, make sure you compensate whoever the creator was or whoever owns it, who then pays whoever the creator was. With the industry being the primary investors in the program and the sponsors, that’s really important. They didn’t even dictate that on us, that just came from my background from being on the label side and from working with entrepreneurs and having to say, “I’m sorry, but all of your revenue comes from not paying artists! I don’t know how I can support that.” Now that experience can benefit those entrepreneurs so they have a chance when they walk in those rooms.
The music startup world has a habit of garnering a lot of attention, but not many of them make money. What do you deem a success coming out of project music?
At this point, coming out of this program, we have two different levels of companies. We have one company that we were focused on getting the model down. They have something solid. They’re going out the door with some customer validation, and now they can keep building. We know that making the investment in them was the right thing to do, as they will stay in Nashville and we can continue to work with them.
The other three companies, two of them have baseline customers, and they are just growing and launching and building. It’s not about leaving this program already generating revenue or high revenue, but it’s about having the opportunity to validate their customer and having a launch plan sooner or later.
You’re not so much worried about when they make profit.
I think the investors would be. I think they’d like to have some sightline into that. Our focus is on building that foundation and on staying in communication with the entrepreneurs. We can’t crack a whip or snap our fingers and suddenly make them revenue positive or ready to exit. They have to build towards that, and they are all at their own place on the way to that.
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