Give it away free!

Creative entrepreneurs often ask me how they can make money from their music or computer games when MP3 files and software is so easy to copy.

One answer is to use the fact that people copy your stuff to change a threat into an opportunity.

Banda Calypso's music is copied onto CDs and sold on street corners in Brazil. They don't get a cut of this income but they don't mind. In fact they supply theses street-sellers with master CDs to copy! And they organise things so that there is a plentiful supply of their music for sale in each town on the route of their tour, before they arrive to perform. They see this copying and selling as an advertising function and they don't have to pay these street-corner entrepreneurs. Their gigs are always full and they've made enough money to buy a private jet to take the band on tour.

Timothy Chan, one of the richest men in China used to get ripped off by copyright pirates. His computer game CDs were copied illegally and sold cheaply. He could have tried in vain to stop this. Or he could have let his business go bankrupt. Instead he changed his business to take advantage of the copying. He decided to make his money from online connection fees instead of CD sales. He changed the game so people had to play online and pay a very small fee per minute. The copied CDs spread like wildfire and so did his customer base. Every CD copied now helped his business.

Smart entrepreneurs see opportunities when others see only threats.
They change their business models to take advantage of changing technology, economics and social trends.

See also: 3 (or 14) Kinds of Free

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Let your heart drive you...

A creative passion is often the driving force for creative entrepreneurs.
My advice is always to recognise this, in order to understand our own motivations in business. In other words, what 'makes us tick'.

I was asked recently by Putte Svensson from Rockparty in Hultsfred, Sweden, what would be my advice if someone said they just wanted to have fun. My answer was that fun is important and essential to any enterprise. I went on to say that I do indeed want people to have fun - and for a long time! Having fun for a short while and then going bankrupt isn't much fun at all. I help people to also look at the business issues that will help them to continue to have fun in a sustainable way, long-term. Things like marketing, finance and intellectual property also need to be taken into account to make sure the fun continues.

The philosophy of T-Shirts and Suits is about combining creativity and business acumen. It's about using rationality as well as emotion - the left side of the brain as well as the right side. I sometimes talk about 'using our heads as well as our hearts'.

Sara Lönnroth, who is the project leader for Mötesplats Mode&Design (MM&D), at the Transit Business Incubator at Konstfack in Stockholm, suggested a phrase about this, which I've adapted and translated as:
"Let your heart drive you and your head guide you".

I'm going to adopt this as one of my sayings from now on!

1,000 True Fans

Instead of dreaming about having millions of fans, nurture one thousand 'true fans'.
That's the advice for creative individuals from guru Kevin Kelly.

He writes:
"A creator, such as an artist, musician, photographer, craftsperson, performer, animator, designer, videomaker, or author - in other words, anyone producing works of art - needs to acquire only 1,000 True Fans to make a living."

True fans are the people who will buy whatever you produce or drive out of their way to see you perform.It's a feasible target and these people become the core of your customer base. You can then build up from there in partnership with a publisher, distributor or agent.

The article has lots of examples of creative people using cool business methods to build a customer base and generate income streams at the same time.

The full article is online at Kevin Kelly's Technium website/blog.

We don't sell beer...

The Duvel Cafe in Stockholm is a bar which sells a range of Belgian beers.
They are tasty, strong and expensive (compared to England).

I was fascinated by the beer glasses as much as the beer itself, so I took a couple of photos.
Part of what I was buying and enjoying was the packaging and the experience, as well as the golden alcoholic liquid.

In Sweden, they use the term 'Experience Industry' for what is known as the 'Creative Industries' in the UK and elsewhere. What I like about the Swedish term is that it refers to what the customer gets out of the deal, rather than what the producer puts in. This understanding of how the customer benefits is a crucial marketing perspective.

I asked the barman about the glass and he told me how the Tripel Karmeliet glass had been designed to improve the taste of the beer. It's shaped a bit like a brandy glass so the beer can be swirled around. For the price of a beer I was getting some information about design as well as the story of the brewery.

"We don't sell beer," he said "We sell knowledge."
He might well have said "We sell an experience and a story".

The customer's experience is not just a drink of beer.
They come away with a story - about the beer and the glass.
And a story to tell their friends about their experience at the Duvel Cafe in Stockholm.

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See also: 'What are you selling, really?'

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Madonna - creative businesswoman

Madonna has recently terminated her contract with Warner Music after 25 years and signed a new contract with tour company Live Nation.

Now that digital music is so cheap, not to mention illegal downloads, Madonna recognises that her main income in future will be from performances and related products, not music sales. So she has changed her business model and Live Nation is a more appropriate partner than a traditional record label.

"The paradigm in the music business has shifted and as an artist and a businesswoman, I have to move with that shift," said Madonna.

Madonna's move illustrates that creativity is not just about being an artist. You can use creativity in business too, by rearranging your business to maximise income as technology and customers' behaviour changes.

As an artist and a businesswoman (a T-Shirt and a Suit), Madonna is a topical example of how creativity and business can be combined intelligently.