Continued from The Artist CEO, Part I
The best creatives are part artist, part CEO. You’re creating a business. You need to choose your path forward.
In Part I, we discussed finding product-market fit. It may take a few months, or a few years. But the road towards product-market fit is essential to finding your artistic voice and community.
Once you’ve nailed your product, then it’s time to build a business, which means dealing with your finances, team, building your platform, and having real goals. That’s what we’ll cover here.
A CEO is responsible for overseeing the financial operations of a business. You need to manage the bottom line.
Now’s the time to find a path to sustainable cash flow.
Cash flow positive is a position that every business owner dreams about. It’s the point when your business net revenue exceeds your monthly expenses. Meaning, you can live off your business without needing additional capital.
Let’s look at expenses first.
How much money do you need to live every month? Not how much are you making now. Not how much do you wish you had in your bank account. But how much, given your current circumstances, do you need to live?
If you’re a single person living in a major city, I’d guess that you can sustain on $2,000 – $3,000 per month.
Rent – $1,000
Internet, Phone, and Utilities – $200
Food – $500
Fun – $250
= $1,950 per month
That can fluctuate, depending on bills or circumstances. But you get the picture. Break down your spending every month to set a target revenue goal. It doesn’t matter whether that’s $2,000 or $10,000 per month. Just know your magic number.
The equation is simple from there. Your art needs to generate more income than your magic number. Until then, you’ll lose money every month and need investment capital (from another job, parents, loans, selling a kidney, etc).
We’re not covering how to make money here. How you generate income from your art is up to you. But, know that if you’ve taken the product-market fit and 1,000 true fans concepts seriously, there are plenty of ways to monetize your audience.
Three of my favorite recent examples are…
Patreon – Web platform that enables fans and sponsors to support the artists they love. Patrons pledge support to creators on a recoccurring basis for each work created, empowering a new generation of creators the ability to (hopefully) make a living off their passions.
LeanPub – Web platform for authors to write, publish, and monetize in-progress books.
See.Me – An artist-focused community of over 1 million people, across web and mobile. Creators post what they love and earn money from their creations.
You’re the CEO. Manage the budget.
BUILDING A TEAM
We can only do so much alone. Once you hit an inflection point, surround yourself with the right people — whether that be a manager, lawyer, or street team of friends and interns. Build your team.
But — don’t just hire to hire.
Go through this week marking down every task someone else can or should do. Write down every opportunity that falls through the cracks. Note any projects or ideas that aren’t being completed.
When you have a meaningful list, identify the skills you need on your team. Only then can you hire intelligently.
Nothing is more important than the people you bring a’board. A business lives and dies by the folks involved.
Take hiring seriously, and follow these three rules:
- No assholes. Life’s too short.
- Hires must be willing to work harder or more efficiently than anyone. (*This doesn’t mean more hours. As legendary UCLA basketball coach John Wooden would say, “don’t mistake activity for achievement.”)
- Hires must be the best, or striving to be the best at what they do.
Remember, you’re the CEO. You want to build a brilliant, trustworthy team. If you have folks 10x smarter working with you, you’ll have more creative time. And fun. Yes, fun.
I’m still a work-in-progress when it comes to management, so I’ll defer to the best readings I know…
- Ben Horowitz’s Blog and Book, The Hard Thing About Hard Things
- Seth Godin’s Blog
- Lifehack’s 15 Best Leadership Books Every Young Leader Needs to Read
You’re the CEO. Build your team. Lead.
Major entertainment companies — record labels, book publishers, movie studios — don’t invest in artist development anymore. Gatekeepers look for creatives with an existing audience and platform.
In years past, these same gatekeepers prided themselves on finding and developing talent early. But with social media and direct-to-fan platforms at our fingertips, gatekeepers now expect artists to do the work themselves before signing.
Do you have 250,000 YouTube Subscribers? A recording contract is in your inbox.
Can you prove that you can sell 10,000 books? Publishers are blowing up your phone.
Did you just raise $750,000 on Kickstarter for your indie film? An agent is already at your doorstep.
Only expect a major entertainment company to invest once you’ve already proven that you can move product. Plain and simple. They are not in the business of artistic risk, they are in the business of financing artistic expansion and distribution.
The point? Developing a distribution platform is half the battle in your creative business.
As I said before, building an audience and making money are different per artist. But I’m more concerned about your line of thinking.
You’re the CEO. Develop your platform.
What are your goals?
What do you want to accomplish? Making a living from your work? Win a Grammy? Make an hour standup special for HBO? Write a New York Times Bestseller?
Have vision, but don’t start by creating a five year plan. You’ll just be writing BS.
Instead of five years, look ahead five months. Where do you want to be? What do you want your business to look like? What are your revenue goals? Audience engagement goals?
Now look at your team. Have you articulated your goals clearly to them? Do they buy into the gameplan?
You’re the one leading this ship. Ultimately, you’re responsible. Start thinking like a CEO. Set goals. Go execute. Nobody else will do it for you.
To paraphrase one of my favorite writers on CEOs, Ben Horowitz — if you are a CEO and you feel awkward or incompetent when doing some of these things and believe there is no way that you’ll be able to do it, welcome to the club. That’s exactly how I felt. So did every CEO that I’ve ever met. This is the process. This is how you get made.