Are Accelerators, Incubators Really Helping Founders And Creatives Build A New Music Business?


(1)Bas Grasmayer takes a close look at startups and accelerator programs within the music business, and how well they work to help young artists and entrepreneurs advance their careers.

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Guest post by Bas Grasmayer on Synchblog

Every year, thousands of startups graduate from accelerator programs or incubators. The music business counts many startups that went through such programs, and not just startups. As young artists are increasingly approaching their craft as entrepreneurs, special programs to help them develop their business are appearing around the world. Let’s take a look at the types of programs that exist for startups and artists, the underlying trend, and where it’s all leading.


The difference between accelerators and incubators

First, we need to make an important distinction. People often, incorrectly, use the phrase accelerator and incubator interchangeably. While they serve a similar purpose – giving young companies room to breathe and test their ideas – their methods differ.

In basic terms, an incubator usually offers a place to work with your team, assistance in the form of mentorship, access to network, and some extra assistance eg. they might have a lawyer available for the teams in the incubator. An accelerator tends to do these things, but also makes a capital investment for part of the company (often around 8%). Accelerators are usually connected to venture capital and try to help their startups to further funding at the end of the program.

Incubators are often connected to large companies or institutions, that want to support innovation and bring it into their own backyard. Accelerators have more of an investment angle, and provide the type of support incubators also provide in order to make sure that those receiving the seed funding get proper guidance.

For every word in this paragraph, there’s an exception, but in very rough terms, that’s the difference. One might wonder why would a startup go with an incubation program instead of an accelerator, and that all depends on a founder’s goals. An incubator might have a special network, or an immediate practical use case for the startup to work on. Incubators typically take a smaller stake, or none at all, so if a founder doesn’t want to give up as much of their company, they might look for incubation rather than acceleration. Most accelerators won’t take on startups that only have an idea and nothing else, but for some incubators an idea is enough.

Acceleration in music tech

This month, Techstars, one of the most prominent startup accelerators globally, announced that they’re launching a program specifically for music startups. Their program will admit 10 music startups that will receive $120k investment each and office space in Los Angeles. The program is funded by companies like Sony, Warner, Sonos, and Harmonix, and is run by Bob Moczydlowsky, the former Head of Music at Twitter. Moczydlowsky wants to invest in startups that are solving original problems, such as “audio in the virtual-reality space, music in the gaming industry, and social music sharing, all of which are areas currently being ignored by most major music companies.” 

An accelerator that has already been around for a number of years is Project Music which has already had 16 startups go through its program in Nashville, TN. Funding of the program comes through a mix of companies and includes artist management, major and indie labels and publishers.

A very different type of program is MarathonArtists LABS – run by a music company and supported by a venture fund. Their 2016 program didn’t require startups to relocate to London, where the 6-month program is based, but just to come over for one week of intensive sessions each month. This way they’ve helped out a global set of startups from places like New York, Tel Aviv, Stockholm and Berlin.Music startups may also find a place in programs at more general startup incubators, such as Rockstart in Amsterdam which accelerated Kollekt.fmIgnite in the UK from which Chew.tv graduated, or the famous Y Combinator in Silicon Valley where Songkick got started.


Incubation in music tech

Abbey Road Red, by the world famous Abbey Road Studios, provides a 6 month incubation program for a broad range of startups ranging from 3D audio, to online marketplaces for audio equipment. It takes a small share of equity (2%), but doesn’t fund the startups: instead it offers network, mentorship, use of its space, and exposure.In Chicago, there’s 2112 at Fort Knox Studios, which is a bit broader in scope than just music and also includes other creative sectors. Entrepreneurs are expected to pay monthly rent for their workspace, but get access to network, educational sessions, mentorship and conference rooms in exchange.

In Chicago, there’s 2112 at Fort Knox Studios, which is a bit broader in scope than just music and also includes other creative sectors. Entrepreneurs are expected to pay monthly rent for their workspace, but get access to network, educational sessions, mentorship and conference rooms in exchange.


The artist as a startup

As music companies and entrepreneurs get more acquainted with startup methodology, they’re starting to apply it to artists. Jake Udell, who manages Krewella, is running a program for artists and managers to boost their careers. The 12-week program by TH3RD BRAIN aims to provide participants with connections, as well as training in marketing, content creation, and press.

Zoo Labs, based in Oakland, California, offers artists a 2-week residency program which “culminates in Release Day, when teams share their new music and present their strategic vision of how to get that music out into the world and above the noise.” 

Music industry conference Midem, which has hosted music startup contests and hackathons over the years, made smart use of their position in the music business. For 2 years, it has been running a contest for artists who can win a spot on Midem’s artist acceleration program, play a showcase at the conference, and get coaching sessions from experts.

Despite all of these programs being called accelerators, they actually behave a lot more like incubators, since they only invest non-monetary resources in artists.


Is this the future?

The reason why the startup model is so appealing is because it allows people with ideas to test them out fast. Build, Measure, Learn is the oft-repeated startup credo and serves as a reminder to focus on things you can measure. Tools for motivating and tracking customer or fan behaviour are getting increasingly accessible, and so it becomes more viable to take a startup approach.
 
As music companies reinvent themselves, they will look for ways to identify new opportunities and to ‘fail faster’, another startup credo, which suggests that if something’s not going to work, you better find out as fast as possible, so you can move on.
 
A&Rs could use artist incubation programs to quickly identify the potential for this, collaboration and professional attitude. Management companies could use them to understand the growth potential for artists. With changing digital landscapes also come new companies, such as YouTube channels like UKF or Monstercat turning into a new type of label. New players entering the space are going to have completely new use cases for artist acceleration.
 
Streaming services possess some of the vastest data sets in the music business. As they start to behave more like labels, and are becoming profitable in some countries, expect them to use this data and lead the music industry forward… and that leadership will look a lot like the startup paths they’ve walked themselves.

Our ‘Projecting Trends’ series is created by digital strategist Bas Grasmayer, who runs the MUSIC x TECH x FUTURE digital strategy agency and newsletter. Subscribe to our Synchtank Weekly to receive all of our blog posts via email, plus key industry news, and details of our podcast episodes and free webinars.