The music industry has seen more upheaval than most industries in the last 20 years, from pirating to iTunes. Yet, another player has entered the game and changed everything: music streaming.
The dedicated music player is being replaced by a combination of smartphone and streaming services. With my own company, Pluto.TV, we’ve seen this trend and created music channels for continuous music streaming. In fact, according to Nielson’s U.S. music report for the first half of 2014 single and album downloads are down — downloading is down 12 percent while on-demand listening is up by as much as 42 percent.
It’s indeed a strange moment to try to burst onto the scene with an audio company, and NudeAudio founders Tom Dudderidge and Peter Riering-Czekalla know it. Yet Dudderidge and Riering-Czekalla are still willing to throw their hats into the ring with NudeAudio, a company producing bluetooth speakers made specifically for audio streaming in mind. The speakers play music from apps like Pandora and Spotify at a high quality standard which most streaming fans aren’t accustomed.
But even with a clever idea, jumping into an industry in turmoil is a brave step. Here are seven tips from NudeAudio CEO Tom Dudderidge about starting small in a turbulent industry:
1. Skip the Big Box Stores At First
Big box retailers are a dicey bet, especially for small companies. While big box is the dream for most entrepreneurs, it’s not always the most reasonable of goals, or even the best way to be successful. Chasing after this model is a fool’s errand unless your business fits perfectly or you have the cash to make it work.
Instead, Dudderidge advises building up your brand and going direct to consumers to create demand. He suggests using social media to go directly to the fans and build up an audience clamoring for your product. Once that demand is in place and you can quantify your market, retailers will come calling.
“Tell your story and let people hear it from you first,” Dudderidge said. “You have to speak and communicate directly with the consumers and fans, serving their needs. Go to retail too early and it can be an expensive lesson.”
2. Don’t Be Afraid to Kickstart
Kickstarter is an incredible outlet for small businesses looking to scale and needing a little extra help. In the case of NudeAudio, the team took to Kickstarter in order to get into mass production and make a first batch of product. Its Kickstarter was launched on July 16 with a goal of more than $75,000; by the afternoon of the same day it broke through their goal, and by July 23rd more than quadrupled to over $350,000.
“We’re using this mechanism in order to build momentum around the product and maximize its fan base. Crowdfunding is the tip here,” Dudderidge said.
3. Play to Your Strengths
When your resources are limited, your strengths become even more important. Ask yourself what sets your company apart and what you can do that no one else can. The answers to these questions are what you should focus your business on. Don’t get caught up in the small stuff and lose sight of your value.
4. Choose Partners Who Believe In Your Vision
Strategic partnerships are always a good idea for small businesses, especially when those partnerships come complete with a built-in fanbase. The NudeAudio team met the French band Yelle through mutual friends and was surprised to connect with them so quickly. Avoid the wrong partnerships by ensuring the person on the other side of the equation actually cares about and believes in your business.
“It needs to be a meeting of philosophies. It’s something mutually beneficial,” Dudderidge said.
5. Embrace The New Model
When Dudderidge started his first company Gear4 in 2006, a leader in Apple accessories which by 2012 saw $50 million in revenue, he was subverting the conventional models by accident. In fact, he just didn’t know how things had always been done. Now, he has to make an effort to forget everything he knows in order to come at common problems from new vantage points. If you want your business to thrive and survive, you have to approach your business model differently than everyone else in the game.
“You have to be open to the changes in the landscape,” Dudderidge said. “It’s not about learning the rules. It’s about forgetting the rules.”
6. Seek Advice When You Need It, But Don’t Go Overboard
Knowing when to seek advice and when to keep your own council isn’t an exact science. However, Dudderidge cautions against adding too many cooks to the kitchen. Advice is great and often necessary when getting a business off the ground, but soliciting too much advice might lock you in a standstill. Know when to filter out all the other voices and listen to your instincts.
7. Use Technology To Stay Efficient
Thanks to free tech tools, it’s easier than ever before to connect with the right talent you need for your company and work together collaboratively. Dudderidge and Riering-Czekalla work together closely using these online tools, even though both often find themselves on the road. As a small company, use everything at your disposal to keep your costs down, while still attracting the most talented people possible to bring you to the next level.
Launching a business in a tough industry isn’t impossible, you just need to cultivate an audience, utilize the right technology tools, and build your brand steadily instead of swinging for the fences.