By Trevor Scott; Published November 2, 2009
When new bands need access to fans, managers, record labels, and industry professionals, where do they turn? That’s the question Jed Carlson (Fuqua ‘05) began asking himself while an MBA candidate at Duke University. Soon after graduation, and armed with a small cadre of self-starters like himself, Jed and three others took the plunge and began ReverbNation.com—one of the web’s fastest-growing platforms to help musicians utilize the power of the internet.
Think Madison Avenue meets Facebook and iTunes. ReverbNation.com offers musical entrepreneurs a powerful arsenal of e-tools designed to help new bands succeed. Delivering high quality e-products aimed at bringing bands, fans, and music industry professionals closer together, ReverbNation.com offers proprietary online tools under such names as FanReach, TunePaks, and TuneWidgets. Through these unique web-based applications, artists who utilize ReverbNation.com have the power to extend their music, information and ultimately their success, to almost anywhere.
How did you get started as an entrepreneur?
As crazy as it sounds, my start as an entrepreneur actually began when I was five years old. I gathered up the junk mail that came to our house and went door to door trying to sell it to our neighbors. I thought that having a coupon for 20% off a box of cereal was something valuable that others might want. Yes, I was THAT annoying kid. I had a lot to learn about the economic concept of scarcity.
During college, my entrepreneurial interest surfaced again. I sold cutlery door to door and discovered the amazing shame of rejection and the equally amazing thrill of making a sale. It was a humbling experience, and very formative. After graduating, my cousin and I acquired a failing printing company with some loans from our families. In retrospect, we were ill equipped to turn the company around. We were young, undisciplined, and full of ourselves.
As a result, we came to the brink of failure. I remember a specific moment in August of 1997 when it looked as if we might miss a payroll and the company might fail – those were very dark days for me. Staring complete failure in the face was a cathartic moment, both personally and professionally. My family was full of self-made successes, so this felt like an unacceptable outcome. Ultimately, I was sort of re-born around a profound fear of failure, and we got really serious about taking the right steps to turn it around. We managed to borrow additional money and time; re-built the company, doubled the revenue, became profitable, and had a decent exit in the year 2000.
Looking back on it, I think that being an entrepreneur is a bit like being a parent – you can read all the books, take all the advice, surround yourself with good counsel, but you still won’t understand exactly what it requires of you until you do it. One of my takeaways from this experience was admitting to myself that I needed to head back to school to master the frameworks and tools that I was missing. Self recognition is so critical to running a business.
After exiting the printing business, I consulted for a compact disc manufacturer and contemplated pursuit of my MBA. This was my first exposure to the music industry. I was interfacing with independent record label owners who were struggling to cope with the effects of the internet on their CD sales. I saw an opportunity for a company that could help them.
From there, the seed crystal for ReverbNation began while I was enrolled in a business plan writing class at Fuqua. After Fuqua, I shopped the idea around to potential partners, investors, collaborators, etc. Although the business plan endured a host of revisions, it was eventually the input of my co-founder, Mike Doernberg, and two incredibly talented software engineers, who gave the project wings. Together, and by that time only loosely based upon the original business plan, we decided to give things a go – and ReverbNation.com was born!
What role did Duke University and The Fuqua School of Business play in terms of building and growing the business?
Coming to Fuqua helped me learn more about who I was and who I wasn’t. This was essential for me to understand where I might fit into my own business idea, and what roles needed to be filled by other people. Attending Fuqua also gave me the skill set I needed to be a successful entrepreneur in anything. Whether in the music industry, e-commerce, retail, or whatever, I knew I had the individual passion to succeed as an entrepreneur. Fuqua offered me exactly what I came for – a greater understanding of the meta-principles of business and the courage and confidence to live them out on my terms.
What factors did you consider when building your team?
I knew from early on that I would never be able to make this dream happen solely by myself. I knew I needed other people who had different, complimentary skill sets to join me in the operation. It took me 8 months to find the right partners for ReverbNation.com, but once we were all onboard and the wheels started turning, we began an incredible journey.
Today, we operate much like one big team. Like most technology companies, we try to sniff the air and discover what problems, or potential problems, might exist for our customers (in this case, bands and musicians). We gauge potential issues that band members, fans, or industry professionals might face any number of months from now. This way we can focus our efforts toward future success: delivering solutions that arrive just in time, or even before a problem surfaces – hopefully before they are addressed by our competitors.
Further, our team constantly reminds each other that everything we do should be about helping bands become more successful. If we aren’t designing tools or channeling resources to help artists succeed, then we are missing our mark entirely. We are successful when our artists are successful – and because of that we are consistently looking out for ways to develop products and services to support our customer’s needs.
Have there been any exceptionally memorable successes along your journey with ReverbNation.com?
One successful highlight is undoubtedly our commitment to setting a clear strategy early on. In the heat of battle, you don’t have time to stop and think about which direction you should be going in. In the early days, the business plan I developed while at Fuqua served as a comparative structure to guide us. However, it soon became obsolete due to widespread changes in the music industry environment at that time. This is where our big picture company strategy became incredibly valuable.
How about challenges?
One lesson we learned is to be careful about where we fall on the continuum of “rushing to market” versus “perfectly thinking things through.” Oftentimes, businesses can assume there is a rush to rollout a particular product out of fear that their competitors might beat them to market. This usually ends up looking like a hastily put together product that arrives in the market—alone—and looking rather haggardly and unpolished. The other extreme is to over think through the design or research behind a product so as to miss out on delivering the product when it is needed most. It may be beautiful, but it may also be late. Over the years, we’ve tried to strike a balance between properly researching concepts versus panicking that we might be getting scooped. It takes a lot of practice to get this right, but our experience, combined with continual research provides the guidance we need. That isn’t to say we don’t get it wrong from time to time, we do. But so far, we seem to get the big things right as we stay close to our customers and their needs.
What advice would you offer to others who aspire to launch their own businesses someday?
Don’t expect to be the next Facebook, Google, etc. starting out on day one. You won’t be. Even if your product is better. The biggest thing I recommend is to know yourself, know your products and know your industry. When we launched ReverbNation.com, our first product was an email service for bands to connect with their fan base. We started small, started realistic, and we grew. We knew that a band’s success depended on exposure to and loyalty from a network of fans. When we rolled out our email product, we knew it would be the first of many independently valuable tools which could be combined to augment a band’s reach.
Another piece of advice would be to realistically understand the commitment that you are signing up for. Starting a new business or even joining one can be a huge commitment, and one that usually tends to get bigger with time. As the company grows, gains employees, customers, financiers, etc, the demands placed upon the owners can become enormous. Being aware of this before you start out is critical for long term success. You need a support system that is flexible and understands the process. This is not a trivial thing.
Keeping close watch on your priorities as a business and as a business owner is also very important. Especially when conjoined with investment capital, pressure to grow profits can start to creep up on the priority list, and rightly so. At ReverbNation.com, we have to periodically remember that at our most fundamental level, we exist for the musicians. If we lose sight of our commitments to our customers, then our future financial profitability could easily be jeopardized. The customer is the top of our list and we make every effort to make sure that every product and every service falls in line, profitably, with this mission.
Read more profiles of Duke alumni entrepreneurs