BandPage | Interview with its CEO & Founder – J Sider
In San Francisco (CA), we meet CEO & Founder of BandPage, J (James) Sider. J talks about his story how he came up with the idea and founded BandPage, how the current business model works, as well as he provides some advice for young entrepreneurs.
Martin: Hi, today we are in San Francisco in the BandPage office or almost. Hi J, who are you and what do you do?
J: I am J Sider and I am the CEO and founder of BandPage.
Martin: Awesome. When did you come up with the business idea?
J: It is a bit of a long story. I grew up as a musician and I was playing and singing music when I was a kid and that kind of led me into wanting to have a career into the music business. And so I started managing bands and venues around the country and then after many years of doing that I just realized that there is a lack of efficiency in the business model in the music industry as well as the technology that was being used and so I moved out here in San Francisco to solve these problems in 2009 and then launched the company in 2010.
Martin: OK, cool. So when you came here to San Francisco what happened to be your first steps so that you just build a website or did you drop to investors. What did you do?
J: The first step for me— I didn’t know anybody around here. I just knew that if I wanted to build an app or a platform that this was the best city in the worlds to be in and it has the highest population density of engineers and designers and entrepreneurs and investors, and so as they say fish where the fish are.
I came out here for the sole purpose of just getting involved in the community. I think there are a lot of ways that you can start a business. There is a lot of ways of getting it started, but the way I started it and I think the way you have a lot of leverage as an entrepreneur is if you start with a small team.
So I came out here late 2009 and started searching, every night I went out and every night at San Francisco there are conferences and tech and startup meetups. Every night you can go out and meet people so I did that for a couple of months and I talk to, I am sure, over a thousand people to try to get introduced to the right people that will be interested in the idea. And so my first step was to find one engineer and one designer that would work with me out of my living room to get the idea, build it and put it online.
Martin: How did you convince them?
J: It is not an easy thing. I think the most important thing when you are starting. There are lots of many important things but one of the most important things for me was simply being resourceful and driven. Finally, when I did find the right people to join me I realistically and probably talked to close to a 1000 people about it and some of those people were interested and started working with me and stopped and others worked a little bit longer and then it didn’t quite work out and then finally I found these individuals. And the way we did it was set up in a structure similar to some other startups around this area which is it is a small team that starts and we all work with equity and you believe in the division and all get behind it. And if you are lined on what you want to build you believe you are joining a team that can build it and incentivized through equity. That is how we did it and I think it aligns everybody on the early team to be able to have a go at it.
Martin: So once you have developed your MVP of the BandPage what type of traction did you gain in order to find some investors?
J: When I first moved here I talked to everybody, yes designers and engineers and folks but also investors and other entrepreneurs to really try to get to know a lot of people. And so after we had launched the product, if you can get a team, a small team and start building something and launch it you have far more leverage than you do if you go to investors before that point. If you go with a wire frame and idea versus you already have a product and traction you have more leverage and you could give up less of the company for more funding.
We launched the product, we had really strong market fit so it took off pretty quickly. When we had a couple hundred bands sign up and then a couple of thousand artist sign up and so at that point investors saw that we had created product that was creating a lot of value for our customers and so they are interested in being involved in this. So one of the things I did to really help us is I got to know this guy Larry Marcus and he is a managing director of Walden Venture Capital and just a brilliant guy, especially he has a lot of connections in the music industry. His name is in Billboards’ 100 most powerful people as well as in general Walden tech investor. And so I worked very, very hard to get him involved. Once I did that, he helped introduce us to other people.
So one of the first things I tell entrepreneurs is when you land in a city and you start to build your startup make sure as quickly as possible to find advisors that you can put around the company. As powerful as you can find at different levels as you are building the company, you will be able to get more and more powerful and you need people around your company. You just kind of look out whenever can you find the most influential or powerful person that you can and try to get them involved. As you continue to build the company you find even more powerful and influential people that can help because it really makes a difference and in this case with Larry Marcus it was probably the sole reason we put together a seed ground funding. And then he has continued to be just incredibly powerful and helpful and just build this business.
BUSINESS MODEL OF BANDPAGE
Martin: J, let’s talk about the business model of BandPage. What is it all about? What type of value proposition do you deliver to what type of customer segment?
J: Our main goal as a business is we help musicians reach and monetize their customers in the most cost effective way you could reach revenue. We look at musicians, their business and they have a product to sell to their customer. The clear service that we provide is helping that business sell their products – tickets, merchandise, VIP offers and distribute those up to their customers where the customers are most likely to buy those products. And when the customers buy one of those products we take a 10 percent cut of that sale and so we have half a million musicians on the platform now. We distribute and display those musicians’ content and commerce to hundreds and millions of fans across most of the major streaming platforms today.
Martin: Does this also mean that you only display the content on your platform or website but also on other media like YouTube and so on?
J: Yes. Actually the whole point of what we do is to help the business musicians reach their customers wherever they are. If you think about yourself as a fan where you are spending your time these days with musicians, it is probably not on their website of Facebook page anymore. You are probably spending a lot more time on streaming services listening to music and interacting with them there. And so instead of us being a destination to tell you have another place for bands to tell their fans to go we are truly a B2B, B2B2C if you will where we help the businesses reach their customers on the streaming services. There is now one billion a day active users across streaming services and we are just about the only way for every musician in the world to reach the customers on those platforms.
Martin: And do you also have a way, unless you are in the Silicon Valley so many big data machinery startups. Are you also offering a way of matching the supply and demand in the meaning of the musicians and the customers in a more efficient way based on pattern recognition or something like that?
J: Yes, absolutely so especially in the music business we really have this incredible opportunity that is happening right now where for the first time ever as a musician as a business you can truly segment and understand your customer based on their listening behavior or behavioral data. If you would listen to an artist 157 times versus listen to another artist 7 times there is a clear statisticly significance percentage likelihood that you would buy a ticket or a piece of merchandise or something to the artist, you listen to 157 times versus 7.
And so we start to understand that data, the behavioral data and apply a kind of qualify and quantify the percentage likelihood that you would buy something from this artist versus another one and then match it up in that way. And so today we are now sending over 1.5 million fans to musician source every month and that is growing rapidly. We are the first company in the music industry to take listening data where we apply very large data machine learning algorithm to it to understand the likelihood that this individual is going to be interested in x type of content and or commerce from that artist.
Martin: And every customer needs to be logged in before looking at the content or is It anybody can look at the website and maybe you don’t even know who he is because you only got some browser fingerprint?
J: We are distributing that to the streaming services, and we are partnering with the streaming services to analyze the data on their platform. So we do that as a service for the streaming services and then crunch the data, attach the offer from one of the 500,000 artists send it back and display it on the streaming service.
The future of the music business is truly going to be just an amazing experience for the fans where everything you are interested in will basically just be delivered to you. As we see you start to listen to more and more artists or more and more of this particular artist and we can personalize the experience to you, you will automatically be notified of your favorite artist or the type of things you like to buy or the ways you like to interact with the artist. And it really shouldn’t be spending at all because we should be able to see and understand, “Hey, you like buying tickets, but every time we have displayed a t-shirt to you, you never buy that so we stop”. We pull back on that substituting those things for you.
Martin: And when you look at the revenue streams for the musician, can you provide us a little bit of insight of the revenue split so for example digital goods or offline stuff that is merchandising, tickets, events whatever?
J: Yes, absolutely. Over the years there has been a major shift in the music business where the main product that musicians as a business sold was music, was records, CDs and downloads. But that has dropped by billions and billions of dollars in our industry. So it has shifted heavily over to tickets and merchandise and VIP experiences and the bulk of the musicians’ career now is coming from touring and merchandising and VIP experiences.
Martin: Are you organizing or have you ever had the thought of organizing some kind of collaborative concerts and because if you know what type of individuals are loving what type of music then maybe you can even combine some kind of 5 to 10 musicians where have some kind of overlap for maximizing of the people that show up and are willing to pay?
J: Absolutely. We are at the very beginning of what using this data and what this data can mean for our industry. Just like that there are going to be incredible new innovations that come from this including that where you wouldn’t normally see a country artist open for a hip-hop artist but there is a ninety percent overlap for people in Dayton, Ohio that are happy to love these two artists and you can sell out a bigger show if you book both of them than separately. So that is a great example of things to come and it will definitely be happening in the future.
Martin: What other cool stuff can you imagine just based on the really understanding the music preferences?
J: Frankly, I believe the entire industry should run on this infrastructure and I mean with any industry. The more data and better understanding you have about your customers the more you can personalize the experience, the better products you can deliver to them and the more insight you have from your customers the better you can run your business.
Understanding the likelihood that certain fans are going to like an artist coming to this town versus that town, you will be able to do these collaborative shows. You will be able to, if you are one of the biggest fans of a particular artist, the artist could happen to show up at your screen and do a private show for you and a couple of others. On the industry side the more you can understand the trends – what genre is being listened to, how is an artist rising and breaking, it is incredibly powerful and useful tool for managers to find new talent. If I am a manager and I like hip-hop I can use this to understand who are the up and coming artists instead of trying to just take it from a gut level, that is what a lot of managers and labels have done in the past. They just hear it and they believe it is good and they will use Facebook likes or they will use these different things to show, the blogs, to show that things are happening but there is no true source than people actually using a product and the musicians’ music listening to whatever trend is based on people actually consuming that.
So, I think it is going to be not just on the consumer side having you two favorite artists, two completely different genres play together but also the tools /the data that will direct our entire industry to improve our business.
Martin: I think the really interesting point for you will be to really focus and not be too diluted because there are so many opportunities that you could do and deliver some sort of service. For example if I am just thinking about helping or doing some crowd financing of artist just based on pattern analysis. You can do this, but you can also do perhaps finding some sponsors. Ok you can do that. There are so many different things that you could do, but keeping really focus seems to be an issue.
J: Yes, that is the number one, actually not number one but it is a very well-known reason why companies fail. It is because they try to do too much. So we focus very clearly on one thing which is helping this business take their products and reach and sell to their customers in the most cost effective way and increase revenue. That’s it.
Now, as the industry grows and as our platform continues to grow we can open up into some select new opportunities but like you say focus is one of the things that we are best at doing.
Martin: J, before you said that you are taking 10 percent off the revenue that you are helping the artist with. Is there any other type of revenue source involved or is this independent if it is merchandise, soundtracks, tickets, whatever, everybody is 10 percent?
J: Everything is 10 present. It is a 36 billion-dollar industry right now for those things: tickets, merchant and VIP experiences.
Martin: Worldwide or US?
J: Worldwide. And that is going to grow in an incredible amount because of some of the things we have been talking about, because we are able to reach a much bigger audience in a much more customized, personalized way. And if you think about doing a different model like charging musicians service fee to use the platform, if you calculate that you try to charge people who don’t have money. You can’t become a very large business. But on the flip side musicians have the biggest brands in the world. If collectively musicians are the most engaged category on every social network – Facebook, YouTube or etc., Instagram. And if you can help those businesses you have the biggest, most accessible brands in the world. If you can help those businesses run their business better, then ultimately it can tap into a multibillion dollar opportunity.
So again, in the effort to stay focused that is what we are doing and sticking to it
Martin: J, you said that you have a roundabout about a half a million band members. Is it band members or bands?
J: Bands. Musicians
Martin: Ok, and can you give us some kind of split of the average number of people per band so just understanding this are there so many solo artist or really some 10 people bands and also understanding of whether some people are just having fun and just starting off in the beginning or some really like well known.
J: In the beginning it was just a platform, open to any artist and we were just opening up to the world. Now, the last two years we focused heavily on the biggest artists in the world. So if you study the economics of the music industry you see that it is about 2,500 artists generate most of the traffic, most of the listening and most tour income and music sales. We are focused heavily ensuring that they have a BandPage profiles up and going. So we now keep a constant list and updating the list of those 2,500 artists based on our partners who use trending on these major streaming services. We partner with YouTube and Spotify and Vevo and Groove Music ,Microsoft service and Google etc., etc. So we can see when artists are popping up and when they pop into the 2,500 we make sure if they don’t have a BandPage profile to reach out. At this point almost every artist in the top 2,500 have a BandPage profile so everyone from Beyoncé to Arcade fire to Jay Z, on and on have a BandPage profile.
We build a large platform so that any artist can log in and update their profile. So sure we also have up and coming artists around the world. We are a worldwide platform that allows musicians to get set up and start making money.
Martin: When you just said Beyoncé and Jay Z I was just thinking why are you not organizing the music awards?
J: Well, again, focus. One step at a time.
ADVICE TO ENTREPRENEURS FROM J SIDER
Martin: Let’s talk about advice for first time entrepreneurs. So you definitely have learned stuff along the way. What of those learning can you share with our audience?
J: This has been the best experience of my life. I just learned so much and there is so much I would love to share across a spectrum of building a company.
But I think at the core of it first time entrepreneurs or people that are thinking about doing it. I think the most interesting thing I found stop entrepreneurs from going after their dream is just they don’t start. A lot of people feel like they need to have: ”Oh, I need to have an engineer and investor line up. I don’t know how to do marketing. I am not sure how to manage people or do PR.” They think about all these things before they have even started and so even just thinking about this big task stops them from starting. So I think the most important advice to folks that think about starting a business is just getting started, know that it is ok that you don’t know everything and know that you are going to make a lot of mistakes but you are going to learn from it. And frankly that is in my opinion the point of life, It is a great experience of life that we get to learn and try things. You are not necessarily failing if you don’t achieve some goal. You are learning and it is going to make you stronger and stronger and stronger.
The thing I really want to say is worst case scenario you try, you take six months to a year to try to do this and you just learn an incredible amount, you get to know the feel that you are really interested in a lot better. Worst case scenario doesn’t work out you go back to the exact same job and position that you are in right now. Worst case – you are going right back where you are. So I like to tell folks don’t think about “I am starting a company and this is going to be my life forever.” Think of it like, “I am going to take a six month sabbatical and I am going to save enough money – a couple of thousand dollars working in whatever job”. I slept of the floor and ate rice and beans I had about 3,000 bucks when I moved to San Francisco. A lot of people are like, “It is too expensive, whatever”. Well you know there are ways to do it. If you want to do it, you can find rent for four hundred bucks here.
J: Absolutely. I know a few places right now. 400-500 bucks, eat affordably, eat a lot of greens and rice and beans and you can get by for a six months or nine months. And if every day you are going out there, trying to make this happen, the cool thing is you will create some sort of progress. You will get to know people in that industry and maybe you don’t end up having a successful business but you end up getting to know a number of other folks in your industry and you are better off in the job that you had before. Finding ways to take the things that are normally scary for people, you know starting a business and venturing in this and making it more of an adventure and an opportunity to learn six months from what you are doing and knowing that you are probably going to end up doing something you enjoy more than you are today because you have spent that time. If not, getting funded and building a company and growing it more and becoming, you know, building a successful business.
Martin: Cool. Thank you so much for your time and your insights!
Martin: So next time you are thinking about starting a company and you are totally afraid of starting because of all the unknowns just keep starting, hustling your way around, living off in a very cheap apartment, meeting lots of people, working on your idea and if it doesn’t work out that is fine. You learned a lot and you met some cool people and you can go back to your old job. I mean everybody can do a normal job but maybe you are fulfilling your dream and starting a great company. Thanks.