October 4, 2022
Starting a company from scratch is a thrilling, invigorating, daunting, exhausting experience.
Ask 5 people what the hardest part about starting a company is and you’ll get 5 answers:
- Building a high-performing team
- Dealing with inevitable setbacks
- Finding product market fit
- Scaling and growing
- Staying energized through the long haul
And, if you’re crazy enough to include music in your business model (guilty as charged!), you’re going to deal with a whole other set of challenges.
Speaking as an entrepreneur who has been there, I can tell you with certainty that you need flexibility in your model as you grow, and you need to be searching for the broadest possible set of resources.
Every business journey is unique, but in order to simplify, let's think about the path to scale in 3 major phases: Idea, Product Market Fit, and Scale. We built Adaptr to help startups speed through those first two phases while still enabling them to build stellar music experiences.
Let’s explore these 3 phases more deeply.
Idea
We’ve all got a million ideas for ways to solve life’s everyday problems. The trick here is taking action and figuring out how to determine whether you’re solving a pain point for 5 people or 5 million.
So, let’s say you’ve decided you’ve got a winner and are ready to put a plan into action. The next step to validate is to build your Minimum Viable Product (MVP). Before you spend too much time and money, you really need to think extensively about your customer. Who is my buyer? What alternatives do they have to solve this problem? How much are they willing to pay for this? You get the idea.
One of the more challenging questions around building a product that incorporates music is - how do I build my MVP with recognizable songs so I can get a real read on the product from my potential customers? In order to refine your idea, you need to set up Alpha testing and get useful data from that testing. Using stock/production music will not get you accurate results, but doing a deal with major labels and publishers can be time consuming and cost prohibitive. So, what do you do? Use the content without proper licenses? That’s never a recipe for success.
This is precisely why Adaptr is so crucial for early-stage testing.
Depending on your test results at this phase, you may need to pivot your idea and repeat your experiments. Ultimately, you’re trying to validate the product idea so you can pull together a pitch and demo and raise some money to move onto the next phase. Adaptr allows you to test with commercial music for free, then publish your app with plans starting as low as $99 a month. All the music is cleared and legal so you can focus on raising money and building an incredible product.
Challenges: Validating your idea, gathering a team, building the MVP, experimentation and potential pivoting, building a convincing narrative to raise funds.
Why Adaptr works: No risk, low cost, immediate time to market.
Product Market Fit
Kudos - you’ve got market validation, you’ve raised some money and you’ve got your founding team. Now it’s time to chase the elusive Product Market Fit (PMF).
It can be frustrating to define the metrics that illustrate that you’ve found it, but everyone will tell you “you know it when you get there.”
One of our early investors helped us with a defined methodology that saved us a lot of time.
You know you’ve found PMF when:
- You can reach your target segment repeatedly and cost effectively
- Conversion rates and lead velocity rise significantly
- Your product road map becomes very clear and has very few branches
This phase is very much still about experimentation. You are looking to segment the market using psychographics, figure out Total Addressable Market (TAM) for those segments, develop your value proposition for each segment, and run quick lead generation experiments.
Running these experiments and iterating quickly should be the bulk of the company’s focus at this point. You need to know Customer Acquisition Cost, Lifetime Value, and Churn rates and the only way to get this data is with a LAUNCHED and USED product.
Let’s circle back to the music-centric experience you’re trying to build.
How do you get it into the market and experiment quickly if you want to incorporate popular music?
Your options are to leave yourself 1-2 years to do direct deals with rightsholders before you launch, infringe and be subject to legal action, or leverage Adaptr.
Challenges: Defining customer segments, reaching them in a cost-effective way, getting real usage of the product and figuring out whether you’ve found PMF.
Why Adaptr works: No risk, low cost, immediate time to market.
Scale
Congrats! You’ve achieved PMF. Celebrate for about 5 minutes, then it’s onto the next phase: scaling and growing revenue in a predictable way.
At this point, it’s time to focus on the acceleration of customer acquisition and expanding product lines into new market segments. Now is also the time to evaluate your technology plan, all your operational tools, and to think long term about working directly with rightsholders to leverage their music.
Challenges: Growing your team rapidly, supporting operations with tools and processes to create efficiencies, maintaining culture, accelerating acquisition.
How we can help: The Adaptr team can advise you on the level of effort and time needed to get direct deals done, as well as facilitate introductions to the right people.
Adaptr is made for early stage companies, and there are precise boundaries on size, revenue, and funding for the companies we support. The tool is purpose-built for startups looking to work their way through Ideation, then onto Product Market Fit. Once those milestones are reached and it’s time to scale, we also assist in introductions and guidance for working directly with rightsholders.
And, as the one and only Tony Hsieh said: “Chase the vision, not the money, the money will end up following you.”
