Thursday, May 3, 2007

Paul Graham - The Record Label Executive he is a mere money digger



Read more ... Paul Graham is the typical music label boss, but instead of finding bands, he finds technology companies. He goes out, finds talented people working in their garage, and tries to use them to make the one hit wonder. Like the label boss, it’s not just the hit song or the hit application he’s looking for - he’s also looking for the face to market this with.

And like the label boss, he is not looking for the guy who is going to change the face of music. He’s looking for the guy who will make money. He’s looking for the guy riding the trendwave, but doing it just a bit different.

The one-hit wonder is never the guy who creates a new type of music. It’s not the black guy Rocking and Rolling on the street corner, it’s not the Jamaican kid with the heavy bass line, it’s not the british kids with the twanging guitars, it’s not the guy with a gun on his album covers shouting to scratched records.

One hit wonders make happy music that fits in perfectly with the current market. Creating a band that will make a quick and sure payoff means not taking too much risk. It has the disadvantage that bland twists on currently existing stuff are produced, however.

It’s easy to look at Paul Graham and think - hey, he’s one of the boys! He’s a hacker, just like us! He cares about the technology! Well, if you ever were put in Paul Grahams position as a partner in an investment portfolio, you would stop being the way you are now. Being an investor means that you are playing a hacking game too, but the object of this hacking game is to make you some money. And to do that, you cannot take 10 risky investments - you have to go with 8 safe investments, and take 2 risky investments. You have to look at trends, and you have to go with the trends. You have to calculate where the biggest chance of the pay off is.

It’s a different mindset, and in its own way, it’s brilliant. A guy running a music label needs to be good at selling bands, not at making or selling music. There is money in a song, but it’s the band that produces the hit. That’s the same thing Paul does - he sells companies. Not products.

In yet another way, Paul is like a record label boss. Just like certain artists with little talent become big with good label bosses and the appropriate marketing aparatus, Paul can create a company just by the marketing machine that surrounds him. Let’s look at the classic example - Reddit. Reddit is nothing! Reddit is just a list of links. Anyone could make reddit. Reddit did not pioneer anything, they just had a different user interface on the same thing digg was doing.

What made Reddit was that Paul Graham drove traffic to it. Reddit is the sum of its users, and Reddit has sane, mature discussion because those are the very people that Paul Graham drove there. Without the Paul marketing, Reddit would not exist.

Like a label boss would market a band without value, and create value on the basis of recognition, Paul has created value for reddit by marketing it.

And it’s a brilliant thing! Paul made a lot of money off this. He gets the business game, and he played it to perfection on Reddit.

We from the downloading generation tend to see Music Bosses as the evil overlords. They are the people who take music and squeeze originality out of it so they can produce something that makes money. But these music bosses are neccesary! They market a type of music and by their marketing, they create a market for this music. Music would be a ragged mess with hundreds of competing mediocre bands all with different variations on the same thing. The music companies pick one of the bands and market it so that everyone focuses on that single band, allowing a lot of money to be made by both the band and the people behind the band.

Paul does the same thing with startups too. It’s not evil, it’s just business.
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5 Responses to “Paul Graham - The Record Label Executive”
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1. 1 Jared on May 3rd, 2007 said:

While you make some interesting points here, your analysis of Reddit and the role that Paul Graham played in marketing it is inaccurate. I thought I’d just clarify a few things:
1. The traffic that paulgraham.com drove to Reddit was just a tiny amount of seed traffic back at the very beginning. Sure, that seed traffic may have given them a little push that saved them some time, but it was the Reddit guys who took that seed traffic and multiplied it by hundred-folds to create Reddit.
2. Reddit did not copy Digg. They began at roughly the same time.
3. The fact that the Reddit software seems simple does not mean that creating Reddit is simple. First off, the software is more complex than it seems, and in particular, designing that software without someone to copy was not easy. More importantly, creating Reddit involved understanding that this was a good idea before anyone else did, and doing a lot of hard, manual marketing and community building.
Hope that helps! News by mrmr

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