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Whether you've watched the narrative more because of the recent presidential election or you're just a die-hard hip-hop fan, controversial rapper / producer / aspiring politician Kanye West laments that record companies take advantage of artists and consumers have become increasingly buoyant. And regardless of your feelings towards West, his argument applies that there can be two different paths to success in music, including building the next big startup.
For as long as the music industry has existed, record companies have relied on talent, often without the actual talent making as much money as they expected. In today's generation, however, there are no gatekeepers who could do it, much like startups founders no longer need a large VC to do it themselves. How have artists been enabled to build their own businesses?
Russ Vitale, whose stage name is simply Russ, is one of the most enterprising contemporary voices in hip hop. He built a career for himself through grit, guerrilla marketing, local thinking and no VC funding, which eventually resulted in a deal with Columbia Records. There is no way he has reached Kanye's level of success, but his rise is far from ordinary.
Meanwhile, West himself was just as gritty. He started his career with "five beats a day for three summers" and expertly positioned himself as the new sound of hip hop. He would produce some of the hottest songs on Jay-Z's landmark 2001 album Blueprint and would become his favorite producer in its early infancy. West had to build a path where there was none before. Over the next two decades, cash advances from big labels, big marketing campaigns, big budget music videos, and the like helped make him the ubiquitous star he is today, but they also drove some hefty drops in his earnings from last year years. At one point, Kanye even had over $ 50 million in debt.
Similarly, countless startup founders of this century have been throwing money on them from all angles by the end of the last decade, when investors began to feel drained by the results. From these two narratives we can extract various lessons that can help us be better founders and beginners than yesterday.
Related: 3 Startup Lessons From Hip Hop Entrepreneurs
Owning your "masters" can save you serious pain
For startups founders, the equivalent of a musician who owns their master's recordings would mean not giving away large chunks of equity, especially chunks that are bundled up in contingencies and conditions that may not be as favorable to you.
Michael O’Donnell, Principal of MOD Ventures, Professor of New Venture Finance, once said, "I can own 5% of a company and still be in control of everything it does."
Not all support is good support
Russ was able to approach things from a much more old-fashioned approach. He was focused on growing his TuneCore earnings month by month, and at one point he got monthly checks worth $ 100,000. This allowed him to create freely, with no hindrances and setbacks caused by an overarching label that flips the bill and calls the shots. It gave him the opportunity to make all profits from what he does, rather than being a slave to touring and other demands, which enabled efforts like the publication of a bestselling book. While artists like Lupe Fiasco have sometimes felt that their label is either preventing them from producing more material or trying to get them to pay the bill for other artists.
Related: How to Become the Kanye West of Your Industry
It's all a give and take
A mentor of mine once told me, "It is better to own 10% of a billion dollar company than 100% of a company that is worthless." But the truth is that most people cannot manage to do it all on their own. West may have lost tons of money along the way, but who says he would have seen that kind of money without the record labels?
West also has one of the longest-running personal brands in the world, which enables him to capitalize on his Yeezy clothing and related deals with Nike, Adidas and The Gap. Most artists wouldn't have known what to do, who to work with and how to even do it without the record deals they signed.
Related: 3 Business Lessons To Learn From Kanye West
You can create a winning machine without approval from a supporting entity
While it is true that many of the contestants who leave Shark Tank with no offers get funded anyway, how many of them quit, have less fires, or just fail to reach their potential after being on that show?
Just as only 300 people are allowed to play in the NBA each year, only so many musicians are signed by a major label. And if you are in the majority who are not, and that has been your definition of success, then you have already decided where things are going. However, if you approach things with Russ' entrepreneurial mindset about Russ and start making profits every day from the ground up, you can find yourself faced with a highly lucrative business that was never backed by and never needed a company. As Gary Vee advises, you can be the 10 millionth entrepreneur and still be below the 1% based on your career choices. As an entrepreneur, you don't need gatekeepers. You can make your dream a reality without a wealthy benefactor ever approving it.
Instead of waiting for a deal, create your own deals and go full steam ahead without the regrets of waiting. If you're getting money along the way, don't forget: you could run for president yourself one day.