Bob Dylan and the Beatles are two of my favorite music artists. The pathways to success for Dylan and the Beatles are interesting to analyze.
BOB DYLAN (eBay)
As a young man (either a teen or early 20s), Dylan packed his guitar and harmonica from Hibbings, MN; changed his name from Robert Zimmerman to Bob Dylan; and moved to NY city. There he quickly made a name for himself in the folk music artist community. If you have read or seen documentaries about Dylan ("Don't Look Back" and "No Direction Home" are two excellent ones), you come to realize that besides being a musical genious, he was also hugely charismatic. He received tons of critical acclaim, and he quickly took off from there. The guy was just that much better, determined and ingenious than the rest.
Bob Dylan's Internet Equivalent: eBay. Read "The Perfect Store" by Adam Cohen for the whole store. The main story line is that Pierre Omidyar founded eBay from his apartment. He then bootstrapped eBay to success. They never had an unprofitable month EVER! (I know, double negative) They did take $5 million from Sequoia, but left it in the bank.
THE BEATLES (PAYPAL)
The Beatles formed in 1962. They become a Liverpool favorite at a local tavern called the Cavern Club. In order to improve their game, they headed over to Germany where they played massive sets and learned how to play a huge variety of R&B and rock and roll songs. Their manager Brian Epstein signed on to represent them after hearing them play at the Cavern Club. Brian took them to all the major labels and got rejection after rejection. Finally they hit paydirt when they made a call to a producer at a small label called Parlophone Records, George Martin. George instantly recognized the potential and signed them up. After a few successful hits in the UK, the Beatles and George Martin moved to Capitol Records. Capitol launched a brilliant strategy to introduce the Beatles to America. "The Beatles are coming!" The launch was arguably one of the greatest marketing campaigns in the history of music. The Beatles rocked the house on the Ed Sullivan show, and the rest is history.
The Beatles Internet equivalent: PayPal. Read "PayPal Wars" by Eric Johnson. PayPal was founded by Max Levchin and Peter Thiel. Max was a young 20-something technical genious from Stanford, and Peter was a economics wiz with a successful career in finance when they decided to sign on to begin PayPal. They received VC backing and then quickly went through a few business models (mobile payments with Palm Pilots was the initial concept). They finally settled on sending money via email. In conjuction with the business plan, they came up with the massively popular $10 sign up, $10 referral bonus campaign. On December 10, 1999, PalPal had approximately 2500 users registered. By April 2000, they eclipsed 1,000,000 registered users. Although they were buring through their VC warchest, Peter Thiel was able to raise an additional $100 million in VC funding before the bubble burst. PayPal survived the nuclear winter in Silicon Valley and has become the crown jewel in the eBay machine.
Would the Beatles have made it as big as they did if they had to toil for years as an indie band? Would PayPal have become the gold standard for on-line payments without the $100+ million in VC funding? Hard to say. Lennon, McCartney, Levchin and Thiel are all geniuses. Give them Capitol Records and VC wind behind their sails, and they can and did dominate their worlds.
A rule that you hear often in business is "cash is king." Reid Hoffman from LinkedIn (and PayPal) gives great speeches on this topic. The message he delivers is that if you have the talent but not the funding, run as fast as you can to build your business before the cash runs out. On the flip side, if you have the financial resources, flex your muscles to take a dominant position using this advantage. He explains it better than this, but that is the gist of it.
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