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"YE COMBINATOR" ALREADY EXISTS (SORT OF)

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"YE COMBINATOR" ALREADY EXISTS (SORT OF)

By Cherie Hu

Kanye West is back on Twitter for more rants. Water is wet.

This time around, though, he’s talking about issues that are hard for the music industry to ignore, in a way that leaves few stones unturned. On September 16 — a frenzied day for music-business Twitter — West tweeted over 100 individual pages (thank you Dani Deahl) of his recording contracts with Island Def Jam and Roc-A-Fella Records, dated between 2005 and 2016. Yesterday, he followed up by laying out a proposal of music-industry “guidelines” that included the removal of blanket licenses, a shift towards one-year, short-term licensing deals and an 80/20 royalty split in the artist’s favor. And today, he proposed forming an artist’s union.

Many industry commentators have rightfully pointed out that aside from his contract details, 1) nothing West has pointed out is actually new, 2) some of his guidelines are unrealistic to pull off without collective action and 3) and he may have even put himself at a legal disadvantage by being so transparent with the terms of his own deals. That said, many of West’s critiques around artist equity, transparency and leverage parallel the key pillars behind recent initiatives like The Show Must Be Paused that have put unprecedented pressure on music companies to be more accountable for their actions, or face the consequences.

Amidst all this buzz, though, I personally think there’s too much of a focus on how to improve existing recording contracts, and too little imagination of what other models might be possible for growing artists’ careers outside of the incumbent label system.

This brings me to the topic I want to focus on today. On September 15, West claimed mid-rant that he spoke with Katie Jacobs — founder and general partner of Moxxie Ventures and board member of Vivendi, Universal Music Group’s parent company — about the possibility of creating “a ‘Y combinator’ for the music industry so artist[s] have the power and transparency to to [sic] be in control of our future … no more shady contracts .. no more life long [sic] deals.” The tweet got excited replies from powerhouses in the tech world like Sam Altman (former president of Y Combinator, now CEO of OpenAI) and Alexis Ohanian (co-founder of Reddit), and the nickname “Ye Combinator” soon emerged from the noise.

In case you don’t know already, Y Combinator (YC for short) is a startup accelerator that has funded over 2,000 startups over the past 15 years. Aside from now-ubiquitous tech companies like Stripe, Airbnb, Dropbox and Reddit, YC’s current cohort and alumni include several companies like Twitch, Genius, The Ticket Fairy, Jemi and Gigwell that have direct interests in the music, entertainment and culture industries.

YC makes its terms transparent on its website: A $125,000 investment in exchange for 7% of the company, through a post-money simple agreement for future equity (or SAFE). There are two YC cohorts a year, lasting three months each, in which startup members get access to the accelerator’s extensive alumni network, weekly speaker sessions and office hours, vertical-specific founder communities and other benefits. Each cohort also concludes with a flashy Demo Day that consistently draws hundreds of investors in person (and many more online, especially this year).

One implicit point that West makes in his “Y Combinator for music” proposal is that record labels don’t fit the bill. Indeed, a common misconception is thatlabels are to artists what accelerators or VC firms are to startups. This comparison makes sense in that both labels and VCs tend to take higher risks with more capital on artists/founders that are relatively unproven in the marketplace, while also embracing a high-volume, portfolio approach to diversifying their risk. But the similarities stop there: A record-label advance is not an equity investment, it gives the label a financial interest in only one specific revenue stream in the artist's entire business (for the most part) and the outcome often makes artists feel less entrepreneurial, not more.

That said, West’s idea is far from original, as many versions of “Y Combinator” for music already exist outside the traditional label model.

Music accelerators began to emerge in full form in the early- to mid-2010s. Some, like Techstars MusicAbbey Road Red and Project Music, service founders of music-tech startups; others cater more to emerging artists looking to embrace a founder mindset in their careers. I reported on this trend for Music Ally back in 2016, and the playing field has widened significantly since then — ranging from formal, focused accelerator programs to more freeform incubators, residencies and coworking spaces, all serving the increasingly influential artist-entrepreneur archetype.

A non-exhaustive list of examples:

[Note: Some people would categorize songwriting campsrap camps and independent music distributors like UnitedMasters and Stem as the equivalents of a Y Combinator for music. I disagree with this analysis because 1) startup accelerators need to focus on business models, not just on product development; 2) songwriting camps run by major labels benefit major labels, instead of providing an alternative path to success; 3) distributors are mostly self-serve SaaS platforms, not more focused educational programs.]

If you click through these accelerators’ websites, something you may notice is that they are not necessarily catering to the aspiring Kanyes of the world. Instead, many of them have the goal of cultivating self-sufficient, local music communities in cities that might otherwise be overshadowed by major industry hubs like New York, Los Angeles and Nashville. Many of these accelerators also intentionally encourage their artists to use startup terminology — e.g. prototyping, testing, customer development, design thinking — as a tool for crafting a self-directed music career beyond just getting signed to a label and hoping for the best.

This lies at the heart of what I see as the main limitation of West’s discussion of “Y Combinator for music,” which was ultimately framed within the relatively more conservative context of improving major-label deals. If you take the concept of “artist as entrepreneur” or “Y Combinator for music” seriously, you can’t approach the problem just from the vantage point of making existing label contracts better; that immediately presupposes a business model that doesn’t have to be etched in stone. Instead, the discussion should be more about changing the entire decision matrix altogether, such that an artist starts to question whether they even want to sign a standard deal in the first place. Anything less falls short of the idea’s imaginative, progressive potential.

The financial gulf between music and tech


When thinking about what “Y Combinator for music” can look like, one immediate red flag that needs to be addressed is that music and tech are vastly different businesses.

Major artists and entertainers can build up enviable business empires by diversifying their brand beyond music into beauty, fashion, alcohol and other verticals. But by many investors’ standards, even this massive amount of wealth ends up being relatively paltry and slow to come by.

Let’s look at West as an example. According to Forbes, West’s business interests in music and fashion make him one of the wealthiest celebrities in the world, with a net worth of $1.3 billion. But he only got to this point after grinding nonstop in the music business for nearly 25 years. Similarly, Rihanna has a net worth of $600 million, but she worked tirelessly over the course of the last 15 years to get her career to this point. Beyoncé’s net worth is $400 million, and she’s been in the business for 23 years.

Measured against Silicon Valley’s expectations, these growth rates and market caps would be considered meager, even abysmal. For comparison: West name-dropped Airbnb and Dropbox in his tweet about Y Combinator. Airbnb is 12 years old, and is already valued at $18 billion (which is only half of its peak valuation of $31 billion three years ago). Dropbox is 13 years old, and is currently valued at around $8 billion. In other words, Airbnb and Dropbox individually achieved more than 6x the value of Kanye West’s brand in just half the time.

This is an apples-to-oranges comparison — and that’s exactly the point. Building a celebrity brand is a fundamentally different business from building a tech platform. In being inextricably tied to human talent, celebrity brands are harder to scale, grow much more slowly and end up being much smaller in size than SaaS and marketplace products of comparable fame. Hence, simply copying and pasting the Y Combinator incentive structure for emerging artists is arguably inappropriate, and runs the risk of even more churn-and-burn on the artist side without laying out clear expectations for a different kind of growth and development.

This financial gulf also holds true when you expand your view to music corporations, not just celebrities. The market value of the world’s biggest recorded-music company (Universal Music Group at around $34 billion) is only 1% that of the world’s most valuable tech company (Apple at $1.9 trillion), and nearly 25% lower than that of the world’s biggest music streaming service (Spotify at $44.5 billion).

In general, investors still view music as a relatively small niche compared to other entertainment sectors like film and gaming, and especially to other industries outside of entertainment like software services. Major music corporations are trying to compensate for this value gap by holding mutual stakes in streaming platforms; celebrities are also investing in tech startups to have an individual upside in Silicon Valley’s growth. Note that the everyday artist, unless they own stock in Warner Music Group or Spotify, is essentially nowhere to be found in this financialized picture.

It’s hard to argue against a more even distribution of wealth between the millions of artists around the world and the handful of media and tech corporations that command eleven-figure valuations off the backs of these artists’ works. Indeed, in his Twitter rant, West addresses this issue in a rather capitalistic way (emphasis and punctuation added): “I am the only person who can speak on this because I made multi billions outside of music — no musicians make billions inside of music — I’m going to change this.

That said, I wish West took more time to address the vast majority of artists — hell, the vast majority of people, period — who will never be billionaires. Among the modern generation of music distributors and music-tech startups, there’s increasing discussion about growing the “middle class” of artists and enabling them to live sustainable, healthy lives off their creative work without feeling like they need to chase outsized growth projections. A truth that West neglects in his public discussion is that if the music industry is to be more equitable, you don’t need to make billions of dollars to be deemed “successful.”

In general, the music and tech industries both tend to suffer from the same myopic view of success in entrepreneurship — whereby case studies from the top 1% of the top 1% of companies are treated as the rule, rather than as the exception that they truly are. While celebrities’ growth trajectories are certainly illuminating and informative, an education in music entrepreneurship that paints these stories as the “norm” will automatically set emerging artists up for disappointment.

This brings us to one last fundamental question:
 

What is the end game?


While YC has transformed how early-stage startups get their footing, the program also arguably serves the incumbent investment world by grooming startups for the next level of more traditional VC deals (Series A, B, C, etc.). Moreover, the notion of a lucrative “exit strategy” (i.e. a big IPO or acquisition by a larger company) being the primary north star for many startups has only become more intense in a world of accelerators, not less.

If we made a Y Combinator for music, what would that “next level” look like for artists? Is it still to “exit” to a traditional label deal, or potentially to arrive at a totally different business structure altogether around an artist's work? Is the goal simply to have more leverage against incumbents in deal negotiations, or to decrease reliance on incumbents as a whole and build a fruitful, independent business on one’s own terms?

Interestingly, recent history has suggested that independent music companies who claim to be a “one-stop shop” for the next generation of mainstream, culturally influential artists actually have a hard time keeping them from major labels’ grasp. Amuse couldn’t keep Lil Nas XUnitedMasters couldn’t keep NLE ChoppaHuman Re Sources couldn’t keep Pink Sweat$. In all of these cases, the best opportunity to go to the “next level” was to partner with an incumbent.

West’s stance on what this “next level” actually looks like in his perfect world isn’t clear. For one thing, West’s solution for “freeing artists” seems to rely mainly on improving major recording and publishing contracts. That is not a startup accelerator — that’s an arduous political debate that requires decades worth of collective action. Moreover, the fact that he discussed this idea with a Vivendi board member implies that an initial iteration would be additive, not disruptive, to a major label’s business. For instance, a company like UMG would likely invest in a YC-type set up as a self-serving A&R funnel, upstreaming the most promising talent directly from each cohort to a more standard deal (major labels invest in independent distribution businesses for a similar reason).

I’d like to think that West’s idea of “setting artists free” can have room for multiple different kinds of careers, not just a slightly better or more efficient version of the dominant model. I’d like to see a Y Combinator for music focus on the more than 40 different revenue streams that artists can potentially make from their work — spanning the likes of direct-to-fan memberships, grants and teaching, not just recording, touring or merch — and on the wide range of company structures and fundraising strategies that can support a profitable, “middle-class” artist business. In the tech world, organizations like Indie.vc and Zebras Unite, and movements such as “Exit to Community,” provide a potential blueprint for how to prioritize sustainability and profitability while exploring alternative financing models for startups such as revenue-based financing and equity crowdfunding. (A lot of these alternative models are already underway in music, but not with the endorsement of someone like Kanye.)

Journalist David Sax's recent op-ed for Bloomberg, "It’s Time to Reclaim the Meaning of the Word ‘Entrepreneur,'" rings strongly here:

“For too long, we bought into the notion that all we needed to do was create and support the entrepreneurs building the biggest businesses, assuming the trickle-down of money, jobs, and innovation would benefit everyone. But a healthy economy needs a full complement of enterprises: the high-tech, rapidly growing companies and midsize manufacturers; the MBA-educated innovators disrupting markets; and the small businesses run by minorities, immigrants, women, and seniors that make our neighborhoods vibrant. Silicon Valley talks a lot about the ‘ecosystem’ for startups, but we need to remind ourselves that the healthiest ecosystems are diverse. They need microbes and ants — not just elephants.”

To borrow Sax’s analogy, West is, in multiple senses, the elephant in the room: A problematic celebrity figure whom many of us are reluctant to talk about, and an ultra-wealthy entertainment magnate who is the exception, not the rule, in the vast ecosystem of artist success. Arguing for artists’ freedom and rights without acknowledging the sheer diversity of career paths in the industry runs the risk of feeling like Tidal’s 2015 press conference — shiny, but tone-deaf.

This is all to say: When you hear "Ye Combinator" or "Y Combinator for music," I encourage you to dream harder about what might be possible. In a way, West’s tweetstorms and their resulting debates serve as a litmus test for the kinds of solutions that people in the industry want to have come to life. I invite you to take this test yourself: What end game do you see? ✯

12
Mar

Barack Obama - His Tracks of 2020

Recently released via Instagram, Barack Obama - Tracks of 2020, the annual eclectic collection of music that accompanied his, and his family's day to day. In 2015, President Barack Obama was declared the only President you could reliably trust to DJ a party. An elder of the Hip-Hop Generation and still younger than Chuck D, he helped endorse American made music for the 21st Century. That year, he gave us a kind of 'Desert Island Discs' of the tracks which had got him to, and through two presidential terms. The list was in most part, exactly what you would expect from an educated man in his 50's. However, there were some interesting additions, including Bob Dylan's - 'Maggie's Farm', credited as the track to get him into the right mindset for the political season and the country track by Brad Paisley - 'Welcome to the Future', with Obama declaring himself accepting of the indelible impact country music has had on the USA. Since then, Obama has created an annual listing of his favourite tracks. For his tracks of 2020, he has 'fessed up to having help from his daughter Sasha, and together they have created another interesting collection of old and new. A few of Obama's tracks of 2020, have already been put in the 'Best of' spotlight by many music bloggers. Tracks like Dua Lipa’s - 'Levitating' [ft. DaBaby], Waxahatchee’s - 'Can’t Do Much' and Phoebe Bridgers’ - 'Kyoto'. Added into the mix is a little bit of country, with the next generation of Nashville stars, Ruston Kelly’s - 'Brave' and Chris Stapleton’s - 'Starting Over', plus some old school legends, including the President's go-to, Bob Dylan with 'Goodbye Jimmy Reed'. With over 34m followers on Instagram, it makes this list quite an appealing one to find your name on. Listen to Barack Obama's soundtrack for 2020, below. https://open.spotify.com/playlist/37i9dQZF1DX5gYucl3g9Ad?utm_source=embed_v2&go=1&play=1&nd=1

17
Jan

Invest in JEENI

Grab your share of JEENI - the ethical streaming entertainment platform.   Our new funding round is about to go live on Crowdcube. We've been approved by market-leaders Crowdcube and Seed Legals for our funding vision and due diligence, and our company value has nowgrown from £2.4million to £5million.   Thanks to advance pledges from our wonderful Jeeni investors and followers, we've already reached £80,000 of our £150,000 target in less than 3 days. Now we want to reach 70% of our target before we go live, which means we’re likely to overfund with Crowdcube in record-breaking time, just like we have done in our previous rounds.   The value of Jeeni lies in our IP and user databases, and here’s where these stand at the start of the 2023.• 4million total audience access across all media.• 200,000 Jeeni artist online followers.• 57,000 Jeeni partner online followers.• 20,000 Jeeni business online followers.• 5,000 registered independent musicians and performers.• 4,000 registered social media champions.• 2,500 artist showcases.• 500 award nominees.We have money in the bank, no loans, no debt, no creditors, no factor-invoicing, and a zero burn-rate. We will use your investment to expand our databases and boost our value for exit by acquisition.   We invite you to join in now, before we go live on Crowdcube, so simply email shena@jeeni.com with the amount you’d like to pledge, and she’ll add you to our priority list.   We look forward to hearing from you and welcoming you on board!  

12
Mar

A Christmas No:1 for 2020?

Rob Copsey from the website Officialcharts.com has given us the low down on the runners for the coveted UK Christmas No:1 single slot. The winner of the biggest chart of the year will be announced on Christmas Day itself, Friday December 25. The Christmas Number 1 is a British institution and has been claimed by some of the world’s most iconic music stars. Queen, The Beatles, Spice Girls, Cliff Richard and, ahem, Bob The Builder have all landed Christmas chart-toppers in the past. In 2019 YouTuber and dad-blogger LadBaby claim the festive crown for a second year in a row, with his second sausage roll-themed charity single, I Love Sausage Rolls - a spin on I Love Rock N' Roll - in aid of foodbank charity The Trussell Trust. He also topped the chart in 2018 with We Built This City, making him only the third act in chart history, after The Beatles and Spice Girls, to land consecutive chart Christmas Number 1s. "It’s the best feeling in the world - a Christmas miracle yet again!" LadBaby, real name Mark Hoyle, told us at the time. "It’s going to the Trussell Trust – to the 14 million people living in poverty in the UK. Who doesn’t love a sausage roll at Christmas?" Could this year could see a festive classic bag the top spot? We recently reported that Christmas favourites have re-entered the Official Singles Chart earlier than ever before, and Mariah Carey's All I Want For Christmas Is You has reached Number 1 in the UK for the first time ever this month.  However, they face competition from several big new releases for 2020. So who is in line as a challenger for this year's Official Christmas Number 1? The Official 2020 Christmas No: 1 Contenders 1. LadBaby - Don't Stop Me Eatin' https://youtu.be/s-shDEK85uA Can LadBaby make it three festive chart-toppers in a row? The dad blogger and his family are back with another sausage roll-themed song, this time to the tune of Journey's 1982 hit Don't Stop Believin'. Once again, the release is raising money for foodbank charity The Trussell Trust, who have seen a huge rise in demand after a difficult 2020. Out now 2. Justin Bieber ft. The Lewisham & Greenwich NHS Choir - Holy https://youtu.be/jXy0s9pexCo Five years after Bieber helped the choir claim the 2015 Christmas No: 1, the superstar has joined forces with them on a new version of his hit single, Holy.  Recorded at Abbey Road studios, proceeds from the song will be split between NHS Charities Together (which represents over 230 NHS charities) and the Lewisham and Greenwich NHS Trust Charity in recognition of the extraordinary efforts of those on the medical frontline during the Coronavirus crisis.  3. Jess Glynne - This Christmas https://youtu.be/F6Py60ponQo Jess Glynne has recorded a cover of Donny Hathaway's This Christmas as part of Amazon's Originals series. It's already proving popular, set to enter this week's Official Singles Chart Top 100, and CD and vinyl singles will be available to purchase from December 18. Similarly, Justin Bieber's new Amazon Original, a cover of Brenda Lee's Rockin' Around The Christmas Tree, is also shaping up to be a hit this Christmas. Last year saw Ellie Goulding's Amazon Originals track, a cover of Joni Mitchell's River, reach Number 1, so don't underestimate these. 4. Liam Gallagher - All You’re Dreaming Of https://youtu.be/TwX3_lQmYMQ A song that Bing Crosby would be proud of (according to Liam), All You’re Dreaming Of is a track that the Oasis legend says “is perfect for this time of year, considering the year that we’ve all had”. Billed as ‘Imagine meets Wonderful Life’ Liam is confident of his chances for a good chart performance; responding to a fan on Twitter who asked if it is going to Christmas Number 1, the rock legend said: “it’s gonna be rite up there you gotta be in it to win it.” All You’re Dreaming Of is available to stream and download now, with 12" and limited edition white 7" vinyl versions released on December 18. Proceeds of the song are going to UK charity Action For Children, who work to protect and support vulnerable children and young people across the country. 5. Rig Aid - It’s Christmas Time, It’s Time To Lash Archie Curzons is a social media influencer, the self-proclaimed CEO of London's Clapham, and is the host of The Rig Biz podcast - a comedy show with celebrity guests packed with lashings of #banter and #ladchat. He's roped in an impressive line-up of his so-called celebrity pals/podcast guests including Danny Care, James Haskell, Jeremy Irvine, Alex Paine and Darren Gough for a Christmas single - a light-hearted song to wave off a disastrous 2020 to raise money for Restart Rugby. Out now. 6. A Candle for Carson The Christmas Number 1 race is often about singles giving back to the community, and an example of that kindness this year comes from Blackburn music producers Chris Dewhurst and Andy Rose and vocalist Miranda Myles. The three have teamed up to record and release the track for Carlson,  who sadly died in November after battling congenital heart disease, which he was born with. Carson's family are hoping to set up a charity in his name with the proceeds. Out now. 7. Shine A Light To Fight – Together In Electric Dreams Recorded by a collective of choral and orchestral musicians performing from their Somerset bedrooms during lockdown, this heart-warming rendition of of Phil Oakey and Giorgio Moroder's Together In Electric Dreams is released on December 18, in remembrance of those we have lost in the UK during the Covid-19 pandemic. The song is led by Jeremy Millington of music duo The Portraits, and social media group Shine A Light To Fight, which was set up in March as an online meeting place for those affected by Covid-19. 8. ICU Liberty Singers - Every Breath You Take The ICU Liberty Singers are made up of NHS Critical Care staff from all over the country, who have come together virtually to create this rendition of The Police's Every Breath You Take. Out now. https://youtu.be/pm3z0qoDbo8 9. Cameron Barnes & Blythe Duff ft. The Red Hot Chilli Pipers - Fairytale of New York Scottish actor Blythe Duff and singer Cameron Barnes have teamed up for a re-imagining of The Pogues' Fairytale Of New York to raise funds for freelance creatives and their families. Their version tells the story of single mum called Christina Chalmers – or Chrissy - who encourages her son Guy to leave Glasgow and follow in her footsteps to find fame and fortune in New York City - but it didn’t work out. Out now.  https://youtu.be/g911zLtlmUQ 10. Rock Choir - Keeping The Dream Alive The Rock Choir have joined thousands across England, Wales and Scotland to form one virtual choir to record a rendition of Keeping the Dream Alive. Led by Vikki Hewitt and creator/founder Caroline Redman Lusher, the track is to raise awareness for the Mental Health Foundation. Out now. https://youtu.be/bVrL9zdDlH0 More Official Christmas Chart Contenders: Russ Abbott - Atmosphere - Two Nottingham University student radio presenters - George Scotland and Damian Stephen - have launched a campaign to get Chester comedian Russ Abbot to Number 1 this Christmas with his 1984 single Atmosphere because, well, why not? The campaign has been endorsed by Abbot himself and Paul Chuckle.  The Dancing Binmen - Boogie Round The Bins At Christmas - Three binmen from Wolverhampton - Jack Johnson, Henry Wright and Adrian Breakwell – shot to fame in the city earlier this year for dancing on their routes during the first lockdown. Now they've got their eye on the Christmas Number 1 with Boogie Round The Bins At Christmas. Money raised from the song will go to charity. Out now. Gemma Collins & Darren Day - Baby It's Cold Outside - can the GC land this year's Christmas Number 1 with a cover of a festive classic? Sam Fender - Winter Song - The musician has released a stunning cover of the '70s folk track by Newcastle legends Alan Hull/Lindisfarne. Money raised from the song goes to social enterprise People Of The Streets. Out now. Matt Lucas – Merry Christmas, Baked Potato - a seasonal continuation on from Thank You, Baked Potato, Matt’s first UK Top 40 single that he released in during the first lockdown which benefitted the NHS. Out now. Robbie Williams - Can’t Stop Christmas - a feel-good tale about how we need to enjoy ourselves over our five-day Christmas bubble this year, complete with references to social distancing and Zooms. The Celebs - Merry Christmas Everyone - a cover of Shakin' Stevens' classic featuring Sam Bailey and Good Morning Britain's Richard Arnold and Laura Tobin, released in support of the Alzheimer's Society. Out now. Collabro - Christmas Is Here - The successful musical theatre group and winners of 2014’s Britain’s Got Talent will be donating 100% of profits from the download of their original Christmas single to military charity Help for Heroes. The Kut - Waiting For Christmas grunge ballad released on December 18, raising money for the Red Cross Coronavirus Crisis Fund. Tone Def Tony - I Got Pissed With Santa Claus - Novelty track which is giving 50% of its royalties to help those in the pub trade who a struggling this year due to Covid-19. More info here. Raise The Woof! - The first ever Christmas single for dogs. Christmas in Denmark Street - British punk band Spizzenergi teams up with producer Tony Visconti to release this 'punchy, festive protest anthem'. Tune in to The Official Chart with Katie Thistleton on BBC Radio 1 on December 25 from 2-4pm to hear the Christmas Top 40 countdown and the exclusive reveal of the winner of the Official Christmas Number 1 2020. You can also catch Top Of The Pops on Christmas Day, more details of the broadcast to come. The full Top 100 Official Christmas Singles Chart and Albums Chart will be published on OfficialCharts.com from 5.45pm.