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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? ✯

04
Jun

Top patent strategist for the Jeeni streaming revolution!

Dr Justin Hill Streaming music start-up Jeeni is determined to give new talent an ethical deal and hand over 100% of the profits to artists who do all the hard work. Jeeni is also determined to protect their artists from the pitfalls and rip-offs that traditionally beset the world of music. So Jeeni is fortunate to have Dr Justin Hill on their side. Justin is recognised as leader in the field of intellectual property, and is Head of Patent Prosecution at Dentons, one of the world’s top legal firms. Justin says, “Thank you for the opportunity to work with you. Last year, with your support, we were recommended in Legal 500 and as Leaders in Field by Chambers, as well as top-tier patent professionals.” He goes on to say that Dentons continue to support early stage businesses like Jeeni, “who we believe have world class technologies capable of disrupting existing sectors. Venture tech and accelerator programs keep us in touch with the next generation of technology titans.”

23
Feb

A Legendary NME Journo, his New Book and Other Tales

About to release his third book, a novel entitled 'The Unstable Boys', legendary NME journo Nick Kent, is interviewed by his stable-mate, Kevin EG Perry about his new book and other tales from his extraordinary career. The Unstable Boys - Nick Kent's new novel Nick Kent started writing for NME in 1972, which was a good year to be a rock’n’roll writer. And no writer in Britain was more rock’n’roll than Kent, who was soon as notorious for wearing a perpetually ripped pair of leather trousers and dating Chrissie Hynde as he was for writing novelistic profiles of enigmatic figures such as Syd Barrett and Lou Reed. Even now, almost half a century on, stories of Kent’s escapades and expenses-claims get passed down like lore at NME. There’s a good one about the time he flew to LA to profile Jethro Tull in 1975 and somehow wound up on a bender with Iggy Pop. Holed up in the Continental Hyatt House hotel on Sunset Boulevard, they hit upon the cunning wheeze of telling visiting drug dealers that they could help themselves to whatever they wanted from the luxury shops in the lobby and charge it to Kent’s room – leaving poor old Jethro Tull to pick up the tab. Truly, a grift for the ages. NIck Kent - Legendary NME Journalist Kent published the best of his collected rock writing in 1994 as The Dark Stuff and followed that essential tome in 2010 with his ‘70s memoir Apathy For The Devil. He’s just published his third book – his first novel – The Unstable Boys, which concerns the unhinged frontman of a mostly-forgotten ‘60s band appearing on the doorstop of his biggest fan after many years in obscurity. Over a video call from his home in Paris, Kent – 69 and just as louche as ever – discussed the book’s origins and held court about a life spent at the unforgiving coalface of rock’n’roll. On his no-fucks-given style Things weren’t looking good for NME when Kent first slouched through its doors in ‘72. Sales were so bad that the editors had been given just 12 issues to save the magazine. They hired Kent and other new writers such as Charles Shaar Murray and Ian MacDonald from the alternative press. The magazine then saw a huge jump in sales – but not for the reason Kent wanted to believe. “The assistant editor Nick Logan called me into his office at the end of the year and said, ‘Well, we’ve got great news – we’re outselling the Melody Maker’, which was a big deal at the time,’” remembers Kent. “He said: ‘In fact, we’re the biggest selling music weekly in the world!’ Pats on the back all round! I was standing there thinking he was gonna say: ‘It’s all you, Murray and MacDonald, you wonderful, beautiful people!’ “Not at all. He said: ‘We’ve done a survey of new readers to ask them why they buy the thing. They don’t buy it for the articles. They don’t read the articles, except for the quotes. They might look for a David Bowie quote, but they’re not interested in what the writers are writing. The only thing they actually read is the gossip column on the last page.’ What they really wanted to know was: What did Bowie’s latest haircut look like? And were Led Zeppelin playing a gig near where they lived? “After I picked my wounded ego up off the floor, I came to the very quick conclusion that I was writing for an audience with an extremely short attention span. I realised I had to go to extremes, because I would not be ignored! 300,000 people were buying the NME and the idiots weren’t reading it! That affected the way I wrote. You’ve got to grab them with the first sentence and say: ‘The action starts here’ you cannot not read this.’ I’m living proof that going to extremes gets results. The problem is that they may not be the exact results that you set out to attain.” Access all areas Kent went to extremes on the page and off it, where he found that the road of excess led not to the palace of wisdom but to a debilitating heroin addiction. His best work included an epic feature about the tortured genius of Brian Wilson, which ran to 10,000 words and was published across three issues of NME. He was also granted unprecedented access to a Rolling Stones tour and wrote memorably about the strange, distant atmosphere backstage and the darkness lurking in Jagger and Richards’ “numb, burned-out cool”. “There’s this whole idea that the writers of that time were the reason why the NME was so successful,” he says, “and that’s partly true, but the main reason was that we had more access back then to Bowie, The Rolling Stones, Led Zeppelin and the other big names of the ‘70s. There was a kind of give-and-take there, and I was lucky enough to get into that.” That time he was a Sex Pistol Kent first met punk impresario Malcolm McLaren in December 1973, when he went to France to interview the New York Dolls and found McLaren among their entourage. The pair became close and regularly dined together – along with their partners, Vivienne Westwood and Hynde – at what the writer describes “the only Indian restaurant in Clapham South”. When McLaren sacked guitarist Wally Nightingale from an early line-up of The Sex Pistols because he didn’t think he fit the band’s look, he asked Kent to replace him. Kent spent three months playing with guitarist Steve Jones and drummer Paul Cook, but says he never quite matched the Sex Pistol temperament. “What I learned from playing with The Sex Pistols was that there’s a big difference between a middle-class guitar player and a working-class guitar player,” says Kent. “For a working-class guitar player, it’s all about repetition. It’s like that Johnny Ramone thing of playing the same chords over and over again. If you’re a guy like me, I’ll play a three chord riff like ‘Louie Louie’ for a minute but then I’ll get bored and throw something a bit jazzy in, and immediately that’s like going into Radiohead-land! My Sex Pistols experience taught me that I’m a middle-class guitar player.” On the rocker who reminds him Trump Kent’s new novel The Unstable Boys centres around the titular band’s grotesque, narcissistic frontman, known as ‘The Boy’. Given his abrasive personality traits, it’s no surprise that The Boy idolises Donald Trump – and Kent says he noticed plenty of parallels between the former President and some of the more self-absorbed rock stars he’s encountered over the years. “The rock star that really reminded me of Trump is Axl Rose,” says Kent. “I went out to America in 1991 at the height of Guns N’ Roses mania. They were the biggest group in America at that time. At almost every gig they played there would be a riot. Axl would usually be late, and then he’d come on stage and spend 10 minutes putting down whatever celebrity had said something in the press about him. I saw him once put down Warren Beatty because Warren Beatty had dated his girlfriend. “We got 10 minutes of: ‘What an arsehole!’ He was using the stage as a forum for his own narcissistic shit fits, just like Trump. At least Axl Rose could perform and could sing well, whereas Trump has neither talent. He doesn’t have any talent! He’s the ultimate huckster.” And the horror story behind The Unstable Boys In The Unstable Boys, things take a turn for the worse when ‘The Boy’ turns up at the home of a wealthy crime writer who also happens to be his band’s biggest fan. Kent says he was inspired by a real tale involving the British rock’n’roller Vince Taylor, who sang the 1959 hit ‘Brand New Cadillac’. “He was one of the best early British rock singers – one of the only ones, actually,” says Kent. “He’s probably best-known now because he became the inspiration for Ziggy Stardust. Bowie had met him in the ‘60s and became fascinated by him. By the ‘70s, Taylor had gone from bad to worse and he was basically penniless. He would just turn up on the doorsteps of people that he imagined were fans of his. He turned up on the doorstep of his  fan club president in Switzerland and of course the guy invited him in – this was his hero! Things didn’t go well. Before long his wife left him, his dog disappeared and his pub burnt down." Kent adds that he’s been working on the novel in some form or another since his wife Laurence first told him Taylor’s story back in 1990, so he’s delighted to finally see the story in print three decades on. “When I’d finished it, for about two or three hours afterwards I felt really, really good,” says Kent. “High in a way that eclipsed all the drug highs I’ve ever had.” – Nick Kent’s The Unstable Boys is out now via Constable www.jeeni.com www.nme.com

03
Mar

Jeeni proudly announces that Sammie Venn has joined Team Jeeni as Official Writer, Columnist and Blogger.

Sammie is an award-winning entrepreneur, a writer, columnist and blogger. We caught up with Sammie this afternoon and she told us about her Soul Warrior journey. "I began the Soul Warrior path after writing a series of poems based on my journey of self-discovery. Some were just late-night musings, others more conscious truths, but in essence they encompass the search for the strength that lies within ourselves. I love developing memorable stories and experiences through the emotional connection of words and images, and find writing a wonderful way to capture those inspiring moments and joyful experiences life has to offer. Preferring wild spaces that feel spirited and untamed, I’ve always aimed to be part of nature’s green army. I grew up in the countryside and have finally wound my way back home after decades of living in a densely populated city and feeling almost a stranger to the natural environment. Mindful of the future, we are providing for our children and generations to come, I have strived to turn my business “Soul Warriors” into an eco-friendly company: one that has an holistic approach to life, embracing support, learning, growth and inspiration by taking an alternative path to a traditional business plan. The “Business Garden” needs to be planted, nourished, weeded and watered, given air to breathe, sunshine to blossom and have roots strong enough to endure adversity. I believe that nature, love and adventure connect the mind, body and soul, the balance of each dependent on the other. Soul Warriors nurtures trust on both a personal and professional level, where positive and transparent ethics are key to its success. The vision embodies joyful soulful-entrepreneurship where positivity and emotional clarity are as important as the bottom line. I began making jewellery years ago and have loved the mindful dedication it takes to develop a bespoke product. Each collection is based on the poetry and stories I write and the collection of ethical treasures have been described as modern-day heirlooms that people can cherish, share and adore. Having been in the retail industry for over 25 years and winning the Business Woman of Excellence Award 2019 in Sussex, I endeavour to work with other award-winning partners who embody fair trade and eco-friendly standards, like Jeeni. In September 2019 I was invited to be part of Gok Wan’s Dream 8 retailers for his UK roadshow, a fun and vibrant event that has led to some interesting collaborations. From the moment I learnt to put pen to paper as a child, writing became a passion. My Grandmother was also a writer, I have many fond memories of typing her work on a battered Olivetti in her drawing room. My Grandfather was an accomplished saxophonist, so music has always been an central part of my life from a young age. My writing journey has been an integral part of my emotional well-being: it’s freeing, mindful and allows me to explore unique, exuberant and imaginative worlds. Storytelling is the skeleton of all my work, both in product development and the poetry, articles and blogs I write. My work has been published in the US literary journal The Starlight Emporium, which explores wonder-filled ideas relating to art, music, travel, storytelling, and all manner of things creative. I am also taking on the role of columnist with Town and County magazine, later this year. Blogging for Soulful Life Club, a company I founded with my business partner Sharron Goodyear 18 months ago, has been a springboard for my work, in creating a wellness community for women. Now my entrepreneurial journey has found a new niche." Welcome on board Sammie we are very excited to be working with you and know you will be a great asset to Team Jeeni. If you would like to find out more about Sammie please check out her website: www.soulwarriors.co.uk. Sammie Venn Click HERE to visit or return to jeeni.com