In January, I went to MIDEM, one of the music industry’s biggest conferences. One thing that was repeated time and time again (somewhat as a sardonic joke) was that the recording industry was best poised to weather the current economic storm, because it had been facing an economic crisis for the last decade — so everyone was already used to it!
While there may or may not be some truth in there, there are some lessons that small business owners can take, not necessarily from the old school execs who are still complaining — but from the innovative “upstarts” who have figured out how to create successful music “businesses” even as the rest of the recording industry stumbles.
My own contribution to the discussion was a case study I did on Trent Reznor, of the band Nine Inch Nails, and how he was able to craft a business model that worked, despite the troubles facing the rest of the business. In fact, part of the genius of what he did was to use the things that most of the old-timers saw as “threats” and turn them into opportunities. You can see my presentation below (it’s 15 minutes, but it goes by quickly):
As you can see, the key “formula” that Reznor used again and again and again and again was: Connect With Fans (CwF) + Reason To Buy (RtB) = The Business Model ($$$$) Now, that’s obviously focused on musicians, but it’s not much of a stretch to see how that can and should apply to small businesses today. You need to focus not on connecting with “fans” per se, but with your market. The market is more scared than ever before. People and companies are afraid to spend, afraid to lend, afraid to make commitments. They’re not sure where things are headed and taking risks of any kind is something to be avoided. But if you can connect with that market, you can better understand how their needs are changing due to the crisis as well as how to help them through it. Along those same lines, you don’t necessarily need to focus on giving them a “reason to buy,” but on “serving their new needs.” It’s about making sure that your product or service actually provides a real benefit in these rapidly changing times. Customers are looking for less risk, less expense. That means cheaper products — but also ones that are certain to be more effective. If you can show them how they can move to you from an old supplier by providing something better and cheaper, then you’ve turned the economic crisis into a useful opportunity.
And part of that is not being afraid to experiment. As Reznor clearly showed, part of the process was throwing a lot of different ideas out there, and seeing how the fans responded. Don’t bet the farm on a single solution — but offer up a variety of solutions and see what really resonates with the market. The closer you are to that market to begin with, the more likely those experiments will succeed. It may not involve rock concerts with thousands of screaming fans, but there’s no reason to believe you can’t use the current economic crisis to make your business rock.