What Entrepreneurs Can Learn From Artists

When musician Darden Smith put out his first record in 1986, it was a different world. For one thing, records were so expensive to produce, the sheer fact of having one was significant. And his eight years with Columbia, a major label, was a clear sign of having ‘made it.’ “It was a big deal back then,” he recalled during a recent guest appearance for my Duke Fuqua School of Business Marketing Strategy class. “You got a major record deal, boom, we're in. You're in the club. It's like all of a sudden you've been signed to the majors in baseball.”

In the late 1980s, says Smith, “There was a very clear pipeline between artists and consumers.” You’d put out a record, and make money through royalties when you sold records or received radio airplay, or perhaps through merchandise sales like T-shirts. “It was really clear cut.” But not today. “The whole structure of how that system works has changed so radically, it's almost unrecognizable.”

These days, artists like Macklemore can create bestselling records not just on an indie label, but without a record label at all. Any thanks to the proliferation of cheap and easy recording and editing tools like Garage Band and Audacity, anyone can have a record. That democratization is great for fostering creativity, but it’s a lot more complicated to know how to make money – a predicament that a lot of businesses, not just artists, are facing in a disrupted economy. “Now it's the same amount of resources flowing through the pipeline,” he says, but “you have to work a lot harder and be a lot more creative about how you're going to sell and collect royalties and money and resources.”

Smith, who embraces the entrepreneurial spirit and served as entrepreneur-in-residence at Oklahoma State University, is still making a living 30 years later from his music. His success shows the way for other artists and entrepreneurs in today’s complex economy. Here are the lessons from his experience.

Diversify your revenue stream. You can’t make money the same old way as a musician anymore. “Pandora, all that stuff, it's basically ripped the bottom out of our royalty streams,” says Smith. Instead, he now mixes and matches his income streams, deriving his revenue from a mix of live shows, including private shows; royalties, especially from networks like Sirius XM; royalties from movies that feature his films; corporate training, including creativity workshops; and nonprofit teaching, including his program “SongwritingWith: Soldiers,” in which he works with soldiers to put their experiences to words. “I remember what my core business is; it's songs,” he says. “I have to keep writing songs and then keep looking up every day going, ‘How do I get paid?’ And looking for new ways to get paid.”

Stick to your core competency. Smith tried to use Twitter; it didn’t go well. “I would go weeks without tweeting because I just don't think that way. I tried really hard to train myself. It just wasn't taking.” Instead, he now pays a PR firm to handle that element of his social media presence and he focuses contributing to the platforms he loves, Instagram and Facebook. “I look at everything from an art spectrum. Is this art or is it not? How do I approach all of this stuff as an artist? The one thing that resonates in art is authenticity. You have to be real.”

Do what needs to be done. Plenty of people view art as a mysterious calling; you write when you’re inspired, and spend your free time beckoning the Muses to you. Smith says that’s nonsense, and you have to be organized and efficient. “Art is really no different than any other business,” he says. “Before you go to bed at night, what are you going to do the next day? Make a list. Here's what I'm going to do, here's who I'm going to call. Look at three months, six months, one year, two years, five years down the road. Where do you want to be? What are you going to do? It's basic stuff. Be nice. Close the sale. If you want something, go for it…Book the gig. Get the record deal and keep going.”

Reinvent yourself. As I discuss in my book Reinventing You, reinvention is the only constant in our professional lives: we have to keep adapting and changing. Smith agrees. “Your business will crater at some point, just like your personal life will crater at some point. If you know why you're doing something and you have a very strong belief in your goals and your purpose, you'll be able to make it through that fog successfully. If you do not have a firm belief in that, you will crater and your business will go away.” It’s about knowing yourself, says Smith. “Before you start a business, before you start anything, find out what you believe in. Know why you're doing it. I don't care what people do. I want to know why they're doing it. If you know why you're doing it, you're going to be OK…As an artist, you have to redo who you are every seven years. Just get ready. It's going to happen.”

Be authentic. For a while, Smith branched into other disciplines of music. “It was weird,” he recalls. “I got commissioned to write a symphony. I don't even read music and I got commissioned to write a symphony…I was like, ‘That's awesome.’ So I tried to go out and actually move into the composing world and I got almost there and then everything fell apart on me. Looking back on it, the reason it didn't work is because I'm not a composer. I can get lucky and I can write some music, but it's a whole different thing than being a composer. It's just not who I am. I write songs, not orchestral pieces.” It’s good to stretch yourself, Smith believes, but not beyond your true interests and capabilities. “Be authentic. Love what you're doing. If you're going to start a business, love it. If you don't love it, if it's not who you are, it's not going to work.”

You’re in the “you” business. You’d think after 30 years of making music, Darden Smith is in the music business. You’d be wrong. “Let me say, I don't consider myself in the music business anymore,” he says. “Music is part of what I do. I'm in the Darden Smith business. Music is one part of my portfolio. I don't understand the music business, quite frankly, anymore. It's a mystery how it works now.” Disruption has changed the landscape – but that’s OK, because he keeps sight of the big picture, which is finding a variety of ways to make money through songwriting. “I love music now more than ever,” he says. “I write more songs more than I ever have and I feel like my effectiveness as an artist and as a musician has never been higher…I quit caring about [selling records]. I quit using that as a marker for my success.”

We’re all business people. Artists get a bad rap (sometimes deserved) as businesspeople. But Smith says that’s not the full story. “Artists are businesses,” he says. “We're small and people don't think we're business people because we have a bad reputation because we hang out at coffee shops all the time. But artists, it's just a different way to work; we have a different uniform. Artists are smart; they're street hustlers. You wake up every day and you go, ‘I've got to pull a rabbit out of a hat. Where's the hat? I've got to go find a new hat.’ Everyday. That's what art is. That's what business is.” In fact, he’s planning to launch a joint mentorship program in his hometown of Austin, Texas, in which businesspeople mentor artists – and vice versa.  “I believe that artists can mentor business people about how to be nimble,” he says. “How to think creatively. What makes a good product. A painting? A shoe? It's all the same thing.”

Do your most important work first. Finally, Smith believes it’s essential to do your most important work first thing in the morning, when you’re freshest. “I don't do any marketing or business stuff before noon,” he says. “I wake up and the first thing I do is I sit down at the piano or the guitar. I play music first. I don't even look at emails. I wake up and I do creative stuff first.” That helps give him the perspective he needs. “I fill my day first with what makes me happy and what is my core, my source - music. I don't make a living because I return emails. I make a living because I write songs.” Additionally, he says, you have to focus: “I've learned I have to say no to social things in my life. I just don't have time. Not for everything. I've also just learned to work faster. I have to get it done.”

Smith’s mission these days is to “look around for different ways to work…Different ways to continue to make a living with songs. That, to me, is fascinating.” The traditional record industry, he says, is “a dead business.” But by understanding that his core business is songs, it opens up a world of new possibilities to make money and connect with others. “I have to keep that fluid and vital.”

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