Money, Money, Money?

Here’s where dreams come crashing down.  This is when you’ll hear “oh man, see, I could be wicked famous if I only had the cash.”  Come on, you’ve thought it before, right?

For a lot of people, money is the root of every problem in their lives.  Not having enough cash causes enormous stress and wrecks the decision making process for more than just your music.

The best way to avoid either requiring or spending lots of cash is to be smart.  That’s not to say you can achieve all of your goals without dropping a few bucks in the process, but be prepared for it and plan accordingly.   Assuming you have music, your first goal should be finding some fans.

Your biggest enemy as a musician is anonymity.  If nobody knows you exist, they can’t buy your music, come to your shows, or get excited about your new release.  Fortunately, your fans are worth money!   Every email address and Facebook fan has value.  They’re interested in you, and probably befriended you because they want you to succeed.  In less superlative terms, they’re your revenue stream!

Taking that into consideration, alongside some realistic hard and opportunity costs for doing business, I’m putting forth the proposition that you need $10,000 to start a band.[1]

You’re thinking that’s ridiculous.  You can barely pay the rent, and now you’ve got to come up with $10k to get a band off the ground?!?

Before you scoff and stop reading, you might already have the $10k!  Consider the following table, fill in the numbers for your band, and see where you come out:

Relax.  Take a deep breath.  In with the good air, out with the bad air.   That’s better.  OK, we can keep going…

There’s no agreed upon value for a Twitter follower.  This is an average of multiple amounts/estimates. 

[1] http://www.hypebot.com/hypebot/2011/11/new-study-says-average-facebook-fan-is-worth-956.html

[2] http://www.allspammedup.com/2011/08/how-much-is-your-email-address-worth/

This isn’t an automatic solution for starting your band.  However, it’s an easy, direct way to evaluate where you’re at relative to building a foundation for your musical endeavors.  All the money in the world, spent on lavish recording sessions, doesn’t amount to squat if you’ve got nobody to share it with when you’re done.

If you hit the $10,000 mark, it’s safe (though never guaranteed!) to assume that you can approach this group once with a new project and generate $10,000 worth of return.  As you see the valuation of each platform, you’ll notice that while it’s easier to build followers on Twitter, their “per fan” value is fairly low.  Alternately, people aren’t always motivated to do something based upon a Tweet.

The classic example is Amanda Palmer selling $19,000 worth of t-shirts in 10 hours via Twitter.[2]  Excluding her incredible sense of humor and marketing abilities, it’s not quite as magical as it sounds.  Amanda had 30,000 followers on Twitter.  Each fan (on average) had to purchase $1.58 worth of product for her to sell $19,000 in merch. [3]

Selling that amount is amazing, no arguments here, but when you have a devoted fan base, it’s not overly crazy to ask them to spend $1.58 on something cool and personal from you.  The excitement of the opportunity generated a solid ROI (Return on Investment).  More on ROI soon…

As of Winter 2011, Amanda has 531,400 followers.   A similar idea could have a potential ROI of $839,612.  ($1.58 x 531,400).  Not bad for 10 hours of work, right?   Ultimately though, what makes this happen is being creative.  There’s no substitute for hard work and creativity, no matter which platform you use.  Your fans are smart and savvy.  Don’t expect them to buy a shitty product or idea.

Some things though you’ll have to pay for. Regardless of what you’ll be spending the money on, it’s nice to know that you have it there, ready to go.  Being able to “pull the trigger” on a project is exciting – just be careful.  Having the money doesn’t automatically start a clock on how fast you can spend it.  Shop around, get competive bids, and never be afraid to negotiate with people.  You’ll never get the discount you didn’t ask for.

As mentioned earlier, there are countless companies and consultants willing to take your cash.  Many of ‘em will make some very persuasive arguments and lofty promises. Remember:   you’re only interested in paying for results – not promises.  For whatever money you spend, what are you actually getting?    If you’re still not convinced or confident, get everything in writing. This way, when that marketing guy promises you’ll have 25,000 Facebook fans by next week, you’ll be able to get your money back.  Or you’ll have a stack of new fans.  Win win?

D.I.-Why