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  • Writer's pictureEric Doades

Business Partnerships for Growth with Gareth Deakin: How to Start Up

On this episode we sit down with Gareth Deakin to talk about successful business collaborations and the various types of partnerships  – from distribution, to technology and marketing. He underscores the necessity of clear mental models and the importance of viewing these partnerships as frameworks for value creation and strong commercial relationships.

Links to shoutouts mentioned in the episode, and the Music Tectonics Conference 2024!

Seismic Activity – June 2024

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Episode Transcript

Machine transcribed

0:00:03 - Dmitri

Welcome back to Music Tectonics, where we go beneath the surface of music and tech. I'm your host, Dmit Vietze. I'm also the founder and CEO of Rock Paper Scissors, the PR firm that specializes in music tech, music innovation and marketing as well, and, as you hopefully have been following along, we've been doing this how to Startup series and we've brought some amazing conversations in from anything from mindset to good ideas to early investments, and today we're going to focus on something a little bit different that's really important for startups, which is thinking about business partnerships using business partnerships to grow your music tech company.

And my guest today is a serial startup and music tech enthusiast. Gareth Deacon works with innovative creative technology companies at the cutting edge of technology and culture. His expertise lies in guiding early stage startups and strategizing around emerging technologies, thanks to his two decade experience in major labels and as a startup operator and advisor and advisor. He runs Sonoris Consulting, a boutique strategy and business development consultancy, and mentors various startup programs, including Abbey Road Studios, red Amsterdam Dance Event and Marathon Music Group's Labs program. Additionally, he actively contributes to the music tech ecosystem as a founding member of Music Technology UK, a member of Stockholm Music City and co-chair of the Association for Electronic Music's Emerging Technology Working Group. Gareth, welcome and thanks for being here.

0:01:55 - Gareth

Hey, thanks for having me, it's a pleasure.

0:01:57 - Dmitri

Yes, indeed. Well, I'm excited to dig in on a topic that we haven't really approached on the podcast and certainly not in our how to Startup series, and I appreciate you being here, having this experience working in and with startups, with labels and beyond. So, when we talk about business partnerships and music tech, what are the variety of types of partnerships that come to mind for you?

0:02:20 - Gareth

Gareth. So I think, first and foremost, I think, in terms of trying to keep like mental, clean mental models for this sort of stuff, I don't think the first way I think about like partnerships in this space is specifically related to music tech. I think it's not necessarily different from the majority of partnerships within other industries, of partnerships within other industries, right like I think one of the challenges in music tech is often we feel like we're, you know, reinventing the wheel or bottling lightning and actually there's a lot we can borrow and there's a lot of um use for models. So often I think about there are clear types of, you know, distribution partnerships, technology partnerships, marketing or partnerships to help with kind of go to market, and those are you, you know all three of those can help with kind of growth.

All three of those can help with, you know, kind of just generally building and reducing costs for launching a product or service. But then you also have things like reseller or partnerships in some way that help you, either directly or indirectly, actually sell your product or service. Directly, actually sell your product or service um, I mean there's a lot of options even within within that. But then you know those then scale as to types of deals. If you start thinking about deals, it's everything from strategic alliances to joint ventures to cooperation agreements that might involve non-competitors, it might involve competitors or or indirect competitors, and then obviously you've got, I guess, more obvious relationships between buyer and seller kind of relationships and what those look like in terms of partnerships or partnerships that are sitting around.

0:03:53 - Dmitri

Yeah, it's interesting because we toss around the word partnership a lot. Even at our PR company we say we want to be your PR partner because we don't really want to be a vendor. We want it to feel like a different kind of thing. Obviously there's an exchange of money happening for the work we do as well, but I think what you're getting at is that, yes, sometimes those partnerships are sales specific or reseller specific, distribution specific, and sometimes they're not yeah, like completely, I think the partnerships thing you've, you've put the pressure point on like a personal bugbear.

Oh, really, I'd like to hear it.

0:04:31 - Gareth

So maybe a hot take, but from my point of view, partnerships is a framework for thinking about how you make or build commercial relationships between your business and customers or other businesses. I think is like a very valid, sensible approach. It focuses you on value and value creation and a fair exchange of value and a lot of really good and positive things. The bugbear I have is more like when so like I probably in some guys are other always worked in sales or business development and various other things like sales and business development dressed up as partnerships is like a personal like kind of like trigger moment like it's. It's like some weird virtue signaling that happens within sales, like we should all be embarrassed about selling stuff. Uh, so like that I find like less helpful. Um, and I think those sorts of things do like this all sort of leans in a little bit to like. I think partnerships is sometimes like confusing to people because I think it becomes this messy kind of interconnected web of like different things. It means different things right.

0:05:33 - Shayli

So people get naturally confused, right.

0:05:36 - Gareth

So I think having some like mental models, like frameworks for thinking about partnerships in context, helps to think about, like, what we're actually talking about and how do you structure that. Certainly, if you're a, like an early stage founder, your biggest challenge is always going to be the amount of time. I think you waste on or spend on like there's so much ambiguity, but the amount of time you spend, um, not getting to an answer, whether that's like yes, affirmative, let's carry on and keep building this thing, or no, let's pivot, or or just decide this thing's not working, we should do this thing. They're the riskiest parts of the you know life cycle of being an early stage stuff, because it burns runway, it doesn't necessarily create value, etc. So I think you know having partnerships is a great example of somewhere. I think it's very good to have a clear kind of mental model for like what you think partnerships are, what you want to do with partnerships, where you want to go, etc.

0:06:30 - Dmitri

Yeah, and I think as we go in this conversation we'll get to some specificity, which I think will help. That'll provide the context. But I do have a couple more broad questions before we get there. And so, outside of the sales, in the clothing of partnerships, where it's actually just sales but somebody's referring to it as a partnership, which, like I said, we kind of do to some extent because we want to position the relationship differently and similar, like with the Music Tectonics Conference, people often come to us and say we'd like to partner with you and they actually mean we'd like to actually support it through a sponsorship and an activation, Whereas some people say partner and they're like what can we get for free as well? But if we separate that whole, like when sales also uses the same terminology, how are partnerships different from sales or paying clients?

0:07:24 - Gareth

So yeah, I guess this is the bit where it gets confused, right, or people get confused. I. I think it's clearly like natural overlap in that conversation, right and they and any framework is only so good as like it's useful because they all break um, but I think, principally for me, okay, actually, let's do the actual way.

The overlap is like the we touched on it before, but I think one of the natural places of overlap is, you know, success in either comes down largely to a good understanding of value for both parties, whether you're selling something or whether you're going to build a partnership that's going to kind of like succeed. Both can contribute revenue. So it's not like clear cut that like one doesn't contribute revenue, one one does. I think the biggest difference is sales is generally transactional, right, so it's like it's it's pretty much not not only, but it's primarily going to like be an exchange of revenue for service or product, whatever it may be, whilst partnership may be more indirect, right like so it still may have revenue attached to it, but it may be more indirect. Um that I think.

The most important difference, though, is partnership creates like equal value for both parties in a more sustained way. So I think partnerships are typically longer. They're typically, you know, longer relationships. They're less transactional, um, you know, I think most successful partnerships are, by their nature, strategic, like most partnerships are hard things to like, not necessarily undo, but like you need to commit to a partnership for a period of time unlike a transactional thing or a tactical thing which is very much like yeah, I can quickly do this thing and I can quickly back out of it.

0:09:04 - Dmitri

Right, there's not less, less risk or dependence or you can buy it, use it and be done exactly that. So in the context of software.

0:09:10 - Gareth

It's, you know, like very transactional. I can cancel it next month and I don't pay for it next month and I'm done right, that's not the same.

0:09:17 - Dmitri

You can't really do that in a partnership right in a true sense so I'm imagining, like what you know, like from when I started a startup, one of the partnerships was working with an existing you know. So I started storing up the automated PR platform and my goal was to get lots of independent artists and then eventually you know, larger artists, management companies, record labels, even PR firms using that platform, pr firms using that platform. But one of the biggest partnership routes that I went after was working with distributors, music distributors, aggregators because they already had a base of 100,000, 500,000, a million artists and I wanted those artists to know that if they wanted to do PR, there's a new, cheaper, automated option. So getting access to somebody's existing customer base or email list seems like a very common type of partnership. I could see like reciprocal endorsement would be another one.

I don't know what that looks like necessarily. Maybe it's on blogs, maybe it's logos on websites. Sometimes it's logos on products you know, like a software product that works with a musical instrument company you know, or a more direct affiliate link, and that's the other thing. When you talk about benefit, like the financial benefit, if there's an affiliate link with one of those types of things, then there's profits to be made. What are some other types of partnerships that are as specific as that that music tech companies can be thinking about.

0:10:42 - Gareth

I think you touched on some really good ones, um, in the context of that. So, like to your point, like I think co-marketing is, is is a really valid model, right like I think the ability to, to figure out between um, two companies like how, how basically have a vested interest in doing a thing, like you know, like kind of what's the opportunity? What does that look like? That exchange of cope, like co-marketing or or reach to different audiences that mutually benefits you both, is one that is, you know, low cost potentially and like like high gain.

So I often think, like, if you, if you you're fixing on like kind of what you want to try and achieve through one of these partnerships, like one of the things obvious obvious for most startups is how do I find revenue Right, like how. How do I find customers? Like, how do I bring in revenue?

0:11:28 - Shayli

How do?

0:11:29 - Gareth

I test my hypothesis about like kind of where product market fit is, or or start building a sustainable revenue stream. Grow into my valuation. Hit break even, whatever it may be. Um the, I think you know, buy a ferrari. I don't know like. That notion of the smart move, then, is often to go well, who has? Those customers like what does the value chain look like? Like? I think it's really the. The point you made is really interesting because it plays specifically into something in in music that is happening before our eyes.

Um, so like the growth of independence is is fascinating and and you know, globally is getting bigger and bigger, and you know a lot of those independents and some of the fastest growing segment. The fastest growing segment is self-releasing artists. That puts a lot of pressure on people that are resource light, which means there's growing like sort of B2B and or service business that's building up around meeting those needs. The challenge becomes, though, like where are the aggregators right? Like so, they are obviously the distribution platforms. There are the you know um various other dsps or other platforms that you can go to, but one of the changes becomes you've got this growing market that's very decentralized.

There's an awful lot of people that forces your costs up for acquiring those customers unless you can find routes to aggregate, like either where those customers gather or ways to reduce that cost, because your alternative is I'm going to give a ton of money to meta, to like go and stick things in front of these artists.

What is it smarter? To go and find a deal that you can do that creates revenue for, say, a distributor or an art services company, whatever it may be, that allows them to do and incentivizes them to do some of the work. And the point you made about affiliates I think figuring out that incentive alignment piece is like one of the really critical bits to do in the open with partnerships is, you know, you're not deal making in a way where you're, you know, sneakily trying to work this stuff out. It's like you want to find where the mutual benefit is. Like where where's that Venn diagram where these things overlap? Like how do we put something together where everyone incentives are aligned and they're able to do and deliver on the value that we're committing together to create?

0:13:35 - Dmitri

Yeah, makes sense. You know, like I said, I want to get more specific, but first we got to take a quick break for an announcement and when I come back I'm going to throw some hypothetical situations at you and we can talk about. You know what kinds of partnerships these types of companies could pursue. So we'll be right back.

0:13:53 - Shayli

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0:14:43 - Dmitri

Okay, we're back and, gareth, I want to throw some hypothetical situations with you. I want to make up some fictional music tech companies and then have you tell us for each one what kinds of partnerships they might want to pursue. Sound good, are you game for that?

0:14:58 - Gareth

I'm game, go with me.

0:14:59 - Dmitri

Let's say there's a new type of genre-specific music streaming service. We've seen some of those come out. I don't I'm not talking to any right now. I don't know about any specific, so it is totally hypothetical. But what kind of partnerships? If they said, hey, we want to help growth through uh partnerships gareth, we want you to help us, what would you start suggesting to them for the types of uh uh partnerships they should be looking at?

so I mean, if we, if we focus specifically on growth, oh yeah, we don't have to focus on growth, but maybe start there.

0:15:27 - Gareth

Yeah, yeah, but yeah, let's, let's, let's start there, because I think that's probably where it gets really interesting, right, like. So, like, distribution is the one that sticks front of mind, a because of the specific nature of this, this potential case, but like also because the conversation we're having just before, you know, I think, um, the one upside of like something that's genre specific is there's, like you know, ideally a clearly defined audience for for this thing. There is a tribe of people that they they associate with this music right. So, figuring out, like, where the the paths to go to market, potentially, where the aggregation is, that's going to help you reduce your need to basically just keep throwing like, like media dollars out on, you know, social media, advertising, whatever else is reduced your cost of customer acquisition. It's going to be enormously helpful. So, like is that, you know, in this instance, possibly key media right, or festivals or events, or whatever it may be, it's going to vary based on style and genre and like, how these people aggregate. Like, is it global, is it local, like all that type of stuff.

But like, identifying those channels and and, potentially, brands that, like, basically have access to that target market market, it's going to help you with go to market and it's two things.

So like one is like acquisition cost in a real term we've talked about it in terms of what you might spend to a copy, but I think the most important thing, reducing your time to market, like that's probably the most critical bit out those types of distribution partnerships and what makes them, um, meaningful. I mean we used to see it in the past when streaming services were new and they were broad, like mobile bundles were like the thing right and like that doesn't really work or and or exist anymore in the same capacity that it used to, but like, like that type of model you know is tried and tested and works. I think the other one would be, you know, maybe more artist label specific. So again like that close to the culture around that particular genre and or music. It's likely there's some standout um kind of people that can act as advocates or influencers, whether that's from content or additional value, ads or just straight endorsement. I think there's two really specific ones that link into growth.

0:17:35 - Dmitri

Well, I just assumed we were talking about growth. But since you said, oh, if we're talking about growth, then what are some other types of partnerships you think about? That? The music, the music streaming service, a genre specific one might want to be thinking about, that's not growth specifically.

0:17:51 - Gareth

So I think, when you think so, we've talked about things like distribution. We've talked about marketing and cooperative marketing. We haven't really talked about technology or tech integrations, including other connectivities. So, like you know, what can you do? If you're a software based product, like, how do you plug into or build an ecosystem of other products or services that add value? What does that look like? So Spotify is a decent example, like actually, of this. You know, the customer in Spotify is the fan. Let's go for the moment. The vendor is like kind of whoever's supplying rights, but there's a series of ancillary services that are all partners that add to the experience, right, whether that's, you know, concert information or lyrics or whatever it may be, they're all partnerships, right? So how do you build that ecosystem that either differentiates you in the market? How do you build that um ecosystem of like or platform of service that helps with lock-in and keeps people on the platform, keeps people engaged? A lot of that's going to be done through technology focused yeah, that's a great point.

0:19:02 - Dmitri

it's interesting to think about a genre specific music streaming service might partner with some sort of metadata provider, a lyrics provider or photos or videos or um, or something like that, which might actually be a cost to them. Maybe they pass that cost on to the user to some extent. I mean, in the case of a streaming service, it would be hard to picture that as like an add-on fee so you can see lyrics, but more like just part of building the value. But if they have a partner that's specific to their genre in this case like a record label, where there's unique content that you pretty much could either get in the vaults of a record label or on the streaming service, that would be an interesting one. That would add value, might increase streams, for example, but not necessarily cost a lot, or maybe not cost anything, depending on what the label wants.

Or maybe it does cost something, I don't know, but that's interesting. So, yeah, so adding value is another interesting partnership and I could and actually I wonder the whole this might come up with some of my other examples but the whole idea of passing through on the cost of something too, where you have some sort of technology tool that your partner is not paying for, but they pass it through as an add-on option for their user. Eventually, too. I don't know what that looks like. Maybe if this yeah, go ahead.

0:20:16 - Gareth

Well, no, we kind of touched on that slightly before.

So when we're talking about affiliates and that type of thing, like so the you know common in software less common, I think like as a recognized thing that people talk about in music and technology, but like reseller networks, right, like so the idea that someone, uh, essentially has some kind of arrangement with a company or partner that they basically bring that in and they either represent that to a market, get kickback at the other end for, like, indirectly selling it, or potentially more interestingly, like value-added resale type models, where you basically bundle that with a service you already provide to add additional value, or you bundle it with other services to create something that has a perceived greater value that everyone then benefits from right.

So that idea of how do you pass on the cost there's or you bundle it with other services to create something that has a perceived greater value that everyone then benefits from right. So that idea of how do you pass on the cost there's different ways like that can be done. That isn't so, you know, isn't isn't necessarily transactional, um, where that cost, yes, there's a cost, but perhaps that cost is mitigated by an increase in value as opposed to, you know it being a cost, but it you know it's recognized because it reduces churn or whatever.

0:21:21 - Dmitri

Right, yeah, totally. Let me throw out some more of these hypotheticals. I think it's fun and I think it really helps to get specific. What about a career management platform for indie artists? What kind of partnerships would you be thinking they should consider?

0:21:34 - Gareth

I think your point earlier about like the aggregators, like in the, in the kind of value chain and network, becomes like super relevant for the reasons we discussed, given like the assumptions about market. Um I think the, you know that extends to not just potentially like platforms like maybe you know, like like DSPs or distribution platforms or whatever they may be, but also to maybe some other bodies that actually represent um independent labels, like you know, whether that's internationally or that that's locally like an aim or an a2im or something like that.

Yeah yeah, when, like, like, like, and most of those, those, those entities, are interested in bridging those sorts of relationships for their members, right, it's, it's, it's, uh, I mean that in itself is an interesting form of partnership, right, like, like we're, we're, we're deliberately an aggregate and a target for, like the needs of our members, like we are an easier target to reach. We have. They, like our members, have a need to understand, like new technologies or different things. That happening will facilitate that relationship, right like, that happens time and time again. Um, so, I think, for that type of management platform, that definitely sits pretty strongly.

I think it depends on what that management tool or platform looks at or does, but you can see a world where that's reducing costs or load on teams. You can see the beneficiaries of that being quite broad, right, is it managers, is it independent labels, is it self-releasing artists, is it their accountants? There's all kinds of possible fits for like, kind of where that lays out, but, like, there's a whole range of types of partnerships. I think one of the things that highlights, though, is like, uh, depends on who the customer is. Right like, so, I think not blurring that line a little bit like so who's the primary customer. Who are we primarily creating value for, and what do we then need? To help us either. Do that faster, cheaper yeah, gotcha.

0:23:37 - Dmitri

So if the primary customer really is artists, you might actually talk to a record label as a potential partner if they say, oh, actually we would like our artists to have access to this, maybe we do a discount for our artists or something.

0:23:51 - Gareth

Blah, blah, blah or actually that makes me think about another thing in terms of like a real tactic. Let's say that is the scenario, artists, or like self-releasing artists or artists are the, the beneficiary, or whatever the ability to go talk to your customer about like, where are the pain points? And then go there you go. Well, pain point is like we have to combine this, this, this and this and you're like, well, actually we could do a partnership with this and this, and like we could reduce the amount of work you do by x and actually the nominal increase in cost is is is tiny or whatever. It may be right, and I think you know like those sorts of opportunities.

0:24:25 - Dmitri

I think that points to something that's meaningful about partnerships being strategic in the sense of like that point we talked about a little bit about differentiation and lock-in um, like it becomes part of your moat, is like why you do these partnerships as we were talking about that I was thinking about, yeah, they might, a career management platform might talk to indie artists and record labels and find out that payments is actually an issue, and then they do a deal with some sort of payment solution that's integrated into this career management platform or something like that, that's yeah cool, I got a couple more to throw at you.

Let's see. Um, how about a virtual world for live music? What kind of partnerships would you be thinking about if they were your client, for example?

0:25:05 - Gareth

okay, so first, first one that jumps on this one more than anything is technology. Uh, because I guess it. I mean, I guess it depends a little bit. Is it like a a live environment for like is it live? That's then like virtual, or is it like a virtual world like there's two different things but like both of those are heavily dependent on technology, whatever that technology might be. So, assuming for a minute it's, let's assume, it's like a virtual world type environment or similar one that's a little more out the box in terms of or not as obvious from a music tech specific point of view, would be partnerships with the underlying platform or technology it's built on.

So unity or unreal, let's say right, those those sorts of platforms like platforms like aws, have um programs.

They're essentially partnership programs that basically incentivize startups to build or do things within their platform and they effectively give things that have, like you know, essentially nominal value like or nominal cost to them, but high value to startups on those programs, whether that's aws credits or you know whatever else it may be for, for unity or unreal or most of these companies do this stuff like.

So I think that's one sort of obvious one, but also like what that does for helping being able to reach uh target customers, right, like how, like, in many cases those things can help support um.

There are networks, um, surrounding those platforms.

I think outside of that, the I mean the really obvious one in the virtual world is artists, right, I mean thinking back to the travis scott fortnight thing that, like virtually no one probably saw really that talks about still all the time, apart from a bunch of, whole bunch of travis scott fans, but like it's lived on larger than life, like it literally, like it was um, but I think that bringing users in to leverage fans, um, and even things like the, as those platforms become more uh, like platforms themselves, that events, like other people are building experiences on top of, like that's increasingly becoming. You can just see how big that that technology partnership continues to play and in that context, it moves away from like the, the raw building blocks of technology, into like the, what would have been the game companies that would have been in the site of brand partnerships, you know, 10 years ago, whatever it may be, and a much more like the technology platforms that people are building on top of. They have the audience, they have the reach, they have marketing cloud, etc.

0:27:28 - Dmitri

This is cool. So like we've kind of covered a range by getting specific. We've covered a range of types of partnerships. So like when we talked about the genre-specific music streaming service, you talked about festivals and record labels that might be close to culture, that could kind of help promote awareness and interest in the service.

When we talked about the career management platform for indie artists, we talked about aggregators again obviously to reach out to distribution platforms that already have indie artists, but also this idea of like once you talk to your users, finding out that there's partnerships that you could build to solve problems that would actually differentiate your platform from, maybe competitors such as, you know, some kind of payment service or something, along with some other aspects of what's on the platform. And then with the virtual world, I love that you got into some of the underlying technology as a partnership as well as artists, like big name artists, celebrity level artists as well. Those are a good variety. We need to take another quick break and we can talk a little bit more about some of these types of partnerships, but I'm also really curious to get into how you go about setting up business partnerships like these. So we'll be right back.

0:28:41 - Shayli

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0:29:25 - Dmitri

Okay, we're back. We talked about some really interesting different types of partnerships. As we got more specific, I'm curious if you could talk a little bit about how do you go about setting up business partnerships like these? I'm sure it's as varied as as the type of partnership. It is too, but I guess, just to give, maybe maybe we've got some startups listening who have never set up a partnership before. What? What are some baseline things to think about there?

0:29:47 - Gareth

I think this this ends up varying a lot depending on the context and type of deals. So I think making some suggestions, especially considering about like particularly like early stage, like startups, um, and how you would even think about planning some of like this type of activity, like where do you even get started, right. So I think we touched on it right at the beginning. I think that probably the most critical thing and I think this is just like good advice for nearly everything you do commercially is understanding who your customers are and like being really intent on like that point, because I think that's in partnerships is a really clear path to figuring out like what are the things you should do, who does it add value to? And not getting lost in this soup of everyone's partner. And you know like you get pulled in a million direct different directions. Um, ideally, I think you take that and you map the ideally the value chain right. You, you really understand like who's this customer, what's the end-to-end process, where does that customer sit in that process? And it may not be the end, where do we sit in that? And that's part of that point of you made about like finding the aggregators right, like that's part of that way of trying to understand okay, we're adjacent to this company in this company, how do we help them do this, etc. And exploring those adjacencies is a big part of trying to understand. What does the landscape look like in terms of where we should make or could build partnerships? Um, I think avoiding doing that in um in a vacuum is is is like really really really healthy um, and I think if you've that helps you build hypotheses and you can go and test all of that stuff. I think that's really useful.

There's there's phenomenal tools for this. There's a. There's a tool called the business model canvas. It's been around for years. It gets used in all sorts of different contexts, but basically it's a. It's a.

It's a one-page map of, like any business and it's like it's decent, fun, like if you're a nerd like me to like take any business and just try and like kind of work it out, and it forces you to make decisions in a confined amount of space about like well, like, what's the activities of this company, who are the partners, who are the customers, etc. Etc. So I think you, even that type of activity on a even on a very tight timeframe, is really useful for actually mapping your business and mapping where the opportunities may be and identifying where customers are, where partners are. And I think, one last thing, I think I would really say that, oh God, two last things. I guess, guess you need to start getting out and talking to people.

I think that's one of the really, really important things, like all the internal lab work stuff is like super useful and like getting really straight on that, but only because you need to go out and then test those hypotheses by getting out of the building and talking to people. Um, and I think when it comes to one of the things that's really useful outside of like other forms of discovery, is having a reasonably firm idea, ideally loosely or greater like like collective value. By doing something together. You're not in a binary situation where you're pitching someone something where they're going to say yes right.

Your whole aim is to try and like find out where are these points for the opportunity for us to collaborate, and like then how do we together make that bigger and stronger? Right, so they're really that only comes through dialogue and communication and getting out talking to people and understanding. Understanding how you go and do that Often best if you want to drive that as a startup, to have an idea of where you want to lead that process. So I think that would be my approach. I think you build those things out, you ladder up to having some hypothesis, you want to get out to test and get out the building.

0:33:38 - Dmitri

Cool things out, you ladder up to having some hypothesis. You want to get out to test and and get out cool. So I want to ask I liked how, how far we got when we did some hypothetical situations. So I want to, I want to talk about some types of partnerships and and like what it takes to get them to partner with you. But but first maybe a more general question what are the terms of these types of deals? I know again, it totally, it totally depends. But just like if we were to catalog, like you know, this is usually a pay-for-play kind of situation. This one is like reciprocal, this is a sell-through. I don't know what are the terms on these types of deals.

0:34:11 - Gareth

Yeah, there's different. We touched on a couple. So I think you know there's some easy ones like affiliate revenue type deals, so some kind of relationship where someone gets a fee for, you know, in exchange for doing something. That fee may be quite small so it brings new customer, new customer. There is a fee. There's all sorts of ways to build networks or people that will be able to go out and do that on your behalf, or to build programs for doing those sorts of things. So I think you know there's fees. There's revenue share opportunities. I think there's the ability to take I mean, if you're talking JV or something much more elaborate, where you are taking something collectively to market, there are obviously bigger revenue splits and models for actually doing and creating these types of opportunities.

0:34:57 - Dmitri

I could see in that situation that some, a larger company, might want an equity stake in what you're doing as well so that's, that's an interesting one.

0:35:05 - Gareth

So I think when we're talking earlier about artists and celebrity artists, like like yeah, I mean like we've had recent ish examples of uh likes of udo and um, of uh likes of udo and um james blake with vaults, like where artists are, you know, on the cap table, and they may not be actually hugely significantly on the cap table in many of those instances, but the or they're on the cap table with a an interesting deal in their favor, because actually part of that is the endorsement or other side of things that looks like. So I think when you're a startup, you do have different ways to play these types of roles and initiatives. I think when it comes to trying to put together deals where potentially you're bringing in someone else's service to bundle stuff up, etc. Those partnerships may look closer to supplier relationships. They may not actually be that complicated, right Like it may be. Yes, there's a lot of value add baked in. There's a lot of additional things to do.

Um, I think some of the more critical things to think about become like what are the big pillars in those deals that you almost need to be mindful of contractually, because I think actually that's probably where there's the most similarity in terms of lots of these deals.

So so you know, if there's revenue sharing or there's some kind of revenue element, that obviously needs to be clearly defined If there's IP involved in the deal in some capacity. So either like, who owns what IP that's coming out of the partnership if it's joint, like if IP is being put into the partnership, how's that protected, how's it used, what happens once the deal is wrapped up? How's that protected, how's it used, what happens once the deal is wrapped up? And duration and exit, like actually understanding the length of time these things are supposed to kind of roll for, because I think one of the problems becomes unintentional over promising on either side, right, like I don't think anyone goes into a partnership.

I'd hope most people don't go to a partnership not thinking they're going to do the things they say they're going to do, but for varying reasons they may have challenges around that, and the longer that time frame is sometimes like that, that's more problematic. Um, and I think it then pays to live in plan b a little bit and figure out like, well, what does this look like if it all goes horribly wrong? Or what does it look like when you just the clock winds down and we choose not to to renew what we're doing, and so I think those things become like super, super critically, regardless of types of deals in terms of like what's the commercial structure I think it's a great point, really good point.

0:37:25 - Dmitri

Yeah, um to to. I mean, you've got enough experience to sort of know, to have seen certain things go south and and to sort of like think, think forward a little bit, like to contingencies what if this, this happens, what if that happens? What if this doesn't happen? What if this, you know, this other thing doesn't happen, et cetera? What does it look like? What does it do to our deal, what does it do to our relationship or expectations or even commitments to each other as partnering organizations?

0:37:52 - Gareth

Yeah, I think exclusivity comes up in this sort of context right, especially if you do deals with bigger companies or you, you, you know, you, you know. That seems like something that is like counter to the idea of partnerships, like, is that an equal exchange of value creation? I think people are allergic to exclusivity, and they should be in most circumstances, but actually exclusivity can be really useful for startups If actually thinking through, with a limited amount of resource and timeframes, there is ways to be agile and make exclusivity work in your favor. The problem with exclusivity is when there's a huge amount of ambiguity. Uh, people make these big, broad, like exclusivity things. The more specific you can make it, the better your opportunity to be able to build something that's mutually beneficial to both. Um, but if you leave it too broad, like that's nearly always the root problem of where those challenges.

0:38:41 - Dmitri

Yeah, interesting. These are great tips. Yeah, I love that. You know, I'm sure when you're thinking working with a startup or a company around partnerships, you're thinking about other growth tactics that go hand in hand with those partnerships. What are, what are some other tactics that you think about? And then maybe also, after you have a chance to respond to that, what are some unrealistic expectations of partnerships as a growth tool? But let's start with what goes hand in hand with partnerships.

0:39:10 - Gareth

So growth tactics wise, I think most right. So I think partnerships have a place both in like. I think still have a place in more tactical like kind of growth initiatives and like longer term strategic like initiatives and therefore I think a lot of growth strategies and marketing like is useful within the context of partnerships. Overall, I think, when it comes to like growth from a point of view of like, what's the growth hack?

To do x or growth hack to do y like without like saying it depends again, which is I need to put like a dollar in the like in the sin bin every time I say that now, but um, the like, giving some examples, I guess you know if you're trying to build a network, let's say, of independent artists that in some way or other is are incentivized to go out and you know kind of push your and then free distribution, web3 platform, whatever it may be right like you need to. That's then the growth hack. There is probably figuring out a mechanic that somehow or other if I'm a startup and I've got relatively little revenue gives those independent eyes maybe it's credits on my platform, like, um, something to incentivize them to go and spread this thing to temperance right like or whatever it is right and like by that you start building network effects and you start like growing.

You know your 10 customers you you brought in, suddenly bring you you, you know, like you know a hundred per thousand, 10,000, et cetera, et cetera, right. So I think that type of growth that's different from where you are trying to necessarily bring in one of maybe 15 distributors that could possibly help you right, like your tactics for growth hacking. That is very different, so I think. But you know, then we're thinking growth more broadly or biz dev more broadly. I think you know the standards not standards, wrong word but like the typical tactics kind of apply. So, like you know getting out and actually kind of like talking to people.

If it's biz dev and it's outbound, you know kind of like go and knock on 15 doors or have any multiples of people at those distributors to get answers. You know that comes down to having good qualification, knowing who you want to go talk to, etc. Etc. If it's something that's much broader, um, those growth opportunities may be. You know the the kind of you know more boring run-of-the-mill stuff like seo, and you know kind of actually starting to build. You know, uh, interesting things actually, like newsletters, right, like actually do you start building content that's super specific to people, that you can bring people in? Do you build funnels for starting to convert people? How do you leverage um marketing, the strategies you may have and bring those in?

0:41:50 - Shayli

do you use events like?

0:41:52 - Gareth

etc. Etc. Right, and so I think most of the tactics you'd normally think about how do I grow this? Depending on the context or nature of the partnership um, you may use them, of course. One of the interesting you'd normally think about how do I grow this? Depending on the context or nature of the partnership, you may use them, of course. One of the interesting things is you may actually have a partnership that's, to your point, an aggregator-focused or go-to-market distribution-focused kind of partnership. Well then, really, what's the growth strategy baked into that? How are you actually going to activate?

0:42:16 - Dmitri

that partnership.

0:42:16 - Gareth

How are you taking that to market? How?

0:42:18 - Dmitri

are you going to deliver the?

0:42:19 - Gareth

results for both of you yeah, great point.

0:42:21 - Dmitri

Yeah, you're going to have a plan. You can't just set up the deal. You've got to know what, how it's going to kind of play out as well. So, real quickly, because we just have a few minutes left. Uh, are there one or two unrealistic expectations? You hear about a lot with partnerships yeah, like not having a plan there you go right, right.

0:42:36 - Gareth

So the thing of like well, actually like making that more unrealistic, right, because like not having a plan is just like oh my God, but like I think the actual unrealistic expectation version of that is having some expectation that this thing is going to somehow solve your problems, whatever those problems are.

And I think one of the challenges for startups being very like empathetic and being the other side of the table is you deal with this ambiguity.

You are probably expert in something, but not expert in everything that you have to do, and so, like, often what occurs is like a deal will come along or an expert will come along and you'll be like, yeah, they've solved all my problems right, and it's like, well, you don't necessarily have the experience to know that that's necessarily true for one and therefore that that that can be challenging. So assuming that a partnership is going to solve all the problems with minimal amount of effort input, you can go off and do all the other things you're much more comfortable with is definitely a world of unrealistic expectations. It's going to kill stuff, I think. Then the other one is having a massive misalignment, um, and you know, not like just misalignment on incentives, misalignment, understanding, lack of good communication around, kind of like what does a partnership intend to do? And then the final one is either partner we talked about, for either part party overstating their ability to do or deliver something like drinking that kool-aid on either side is always going to be great, awesome.

0:44:01 - Dmitri

So, garrett, this has been great. I feel like you know I've thrown some pretty general questions at you that kind of span the whole realm of possibilities, and I think we've got to some really interesting points for folks who are just thinking about their first partnerships, starting to think about the variety of who they could do partnerships with, how those deals could be structured, but also some like potential pitfalls and opportunities in structuring those. Before I let you go, I'd like to ask you one of the things we do sometimes on the podcast is ask people to just shout out folks from their network. Maybe, especially you know you're across the pond there. Maybe you have some folks that I haven't heard about or our audience hasn't heard about, who are a few people or companies in music tech, uh, that our listeners should follow uh, I think, oh, that's really good.

0:44:47 - Gareth

There's so many interesting people uh in the space right now. Um, someone you probably know. I think it's probably been a guest on the show at some point or other. But um, tatiana, media is always good like media in general is just really good.

Like I I really like the work media does. Like I always enjoy my conversations with mark actually, and I think people I would pick out people I just have like really fascinating conversations with conversations that like kind of challenge the way I think about stuff and I think that then always leads to they post interesting content, they share interesting stuff. Um, martin wall raven, uh, like mine's amazing. He's written for lots of things music x, appetite for distraction, like he always shares really interesting things. I'm gonna go back to your side of the pond, actually really close to home.

So, uh, trista on your team, like so I have the like the most amazing conversations with trista whenever we get to chat and she always, she always shares stuff that's like very different or often outside our industry, gets me thinking we have these like wild, like exchanges on on LinkedIn, on on this stuff, like most weekends. So like I think, yeah, there's, there's, there's a great bunch of people.

0:45:51 - Dmitri

I love all those, those folks, and love the shout out for Trista, our chief strategy officer. She's brilliant, Um, and she does. She does have that kind of um sideways thinking, you know, like you can go further afield and then bring it back home as well, which, um we love to do at Rock Paper Scissors. And, if you haven't heard, both Mark Mulligan and Tatiana Sirisano from MIDI Research will be at the Music Tectonics Conference.

Um, Mark kicked off our opening keynote at our first conference in 2019, and we've got a great relationship with them for the very reason you mentioned, Gareth. They really do push our thinking. We get to think about where we are with the future of music, where we're going, where we've been. They have that great ability to go back in time and go into the future and start to paint a picture. So that's great. And, Gareth, love having a conversation with you as well. Another person to shout out on the podcast just spending, you know, 45 minutes with you having that conversation. So people should definitely check out what you're up to at Sonoris Consulting and LinkedIn and all the work that you're doing. Thank you so much for joining the show.

0:46:55 - Gareth

Hey, thanks for having me. I really enjoyed it.

0:47:19 - Dmitri

Thanks for listening to Music. I really enjoyed it. Tectonicscom and while you're there, look for the latest about our annual conference and sign up for our newsletter to get updates. Everything we do explores the seismic shifts that shake up music and technology the way the Earth's tectonic plates cause quakes and make mountains. Connect with Music Tectonics on Twitter, instagram and LinkedIn. That's my favorite platform. Connect with me. Dmitri Vietze, if you can spell it, we'll be back again next week, if not sooner.

Music Tectonics at NAMM 2024

Let us know what you think! Tweet @MusicTectonics, find us on LinkedIn, Facebook and Instagram, or connect with podcast host Dmitri Vietze on LinkedIn, Twitter, and Facebook.

The Music Tectonics podcast goes beneath the surface of the music industry to explore how technology is changing the way business gets done. Weekly episodes include interviews with music tech movers & shakers, deep dives into seismic shifts, and more.


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