I was introduced to Stan McLeod who kindly agreed to be interviewed for Coffee with Entrepreneurs. Stan is a former music promoter who co-founded and launched BandWagon in 2012, which was later acquired. He has since co-founded Headliner along with Maria Hayden and Rosario Garcia de Zuniga. The Headliner team are alumni of the TechStars accelerator programme (class of 2015) and are now working with over 4,500 artists on their platform.
We had a chat about a broad range of topics including their experience starting out, interviewing for Y Combinator and getting into TechStars as well as the Headliner team and how they think about expanding the team and their role as co-founders.
BandWagon connects emerging artists with gigs and simultaneously acts as an event management tool for promoters, venues and festivals. BandWagon works with around 16,500 artists and 2,000 active promoters and festival organisers. It has booked 14,000 gigs in three years. Check it out here.
Headliner connects artists with event planners and helps to facilitate the conversation between both sides and currently has over 4,500 artists on the site. Check it out here.
On the initial idea and starting out
RB: How did you come up with the idea for BandWagon and how did you get from the idea stage to MVP?
SM: I was a massive music fan when I got to London and started going to gigs but there were no gigs in my local area at the time. So I thought why don’t I put on my own events and musicians so I won’t have to spend time travelling to venues?
I started putting on nights with my partner Maria which turned out to be quite successful! We started to work out what the elements of live music were and what musicians needed on one side and what the promoters, on the other side, needed.
Maria was working for a company that had a directory bringing actors and directors together for casting so we figured we could do the same for music so we naively got into tech in 2010. We put up our own money and went to a development company to build the site as we didn’t know anything about building companies, particularly technology companies. This led to the first version of BandWagon whose sole idea was really to match unsigned musicians with music venues and festivals.
Strangely, it was very successful in the sense that it worked! Venues and festivals connected with these artists and lots of artists stated signing up! The biggest challenge for us as a marketplace was the commercial aspect: artists at that level are making a net loss most of the time and venues are struggling to even survive. We played around with a few different models and went on to be acquired (we later got it back).
Headliner came about really as a result of BandWagon. We had built this platform and people started coming to us saying you guys know how to book talent and I’ve got a private event, I’d like to pay an artist a fee to perform. This happened a few times and we thought, actually in the private events world there’s money to be made. We know how to build a platform and there’s an obvious commission model and an opportunity to grow out of music as well.
RB: Starting Headliner, how much easier was it having done BandWagon first?
SM: When you start a second company, I don’t know if it gets any easier. You’re aware that you’re going to make mistakes, so you try and not make the same ones again. One of the main ones for us was outsourcing development, we recognised that to build a scalable platform we needed it to be in-house.
We advertised for a CTO for BandWagon and received an application from our now CTO, Rosario. Rosario had just left Mendeley, who had been acquired, where she had had a really good experience but was looking for a new challenge and loved music. We met for coffee and said this is what’s happening with BandWagon (being acquired) but there’s a bigger opportunity with Headliner and this is what we think we can do so she came on board.
On Y Combinator, TechStars and the accelerator experience
RB: What was the plan at the outset? How did you go about funding the initial stages of the business?
When we left Bandwagon, Maria and I hadn’t made the money we thought we would have from the acquisition so we were still consulting and doing other pieces of work whilst we set up the first version of the site. However, Rosario had thankfully given herself some personal runway to be able to take the time to start developing the Headliner website.
Our plan was to get into a well-respected accelerator as we felt that it would be a good place for us to start. We would then all be able to jump ship and be fully focused on the business and get a little bit of funding. As a group, we weren’t that connected to investors and we felt an accelerator would give us that aspect as well. We started building the product in April 2014 and applied to Y Combinator in June. The purpose of the application was for the three of us to really sit down and answer the hard questions that form the application.
When I speak to people now, I say even if you don’t want to get into an accelerator, take the Y Combinator or TechStar applications. Work through it as a team as it actually gets you to think about the really hard questions about the business as a team.
RB: Having then got invited to interview at Y Combinator, what was the process like?
SM: When I threw the application in, we didn’t even have a product. We heard back and they asked us a couple more questions before then inviting us to go to San Francisco and interview for Y Combinator. It was really cool, they pay for all your expenses to get out there. For us it was a bonding experience: the three of us spent 10 days out staying in the same AirBnB.
It was a crazy experience! You do so much preparation for about a 10-minute interview with a panel of four. You just sit down and you get 10 minutes where they ask you what you’re working on and, as you start to describe it, they start firing 1 or 2 questions to you at once. You’re just trying your best to deliver the proposition as quickly as possible. At 10 minutes they stand up and shake your hands and you’re out the door. We thought we nailed it which we didn’t expect!
We got a call 10 minutes after the interview asking us to come back for a second interview. We weren’t a definite yes or a no, and there were a few companies like us that were maybes. For this one I think they were looking at how we would react to a lot of pressure, so they went through it and said this won’t work and here’s five reasons why this can’t work. They had one person in the corner watching your behaviour and how you would react to the pressure.
We didn’t quite make it but their advice was invaluable. They said you’ve got a really good network in London and you know the music industry there. We were initially thinking we would build the site around all forms of talent but they said concentrate on one area (so just do music) and try to build a brand in that one space before scaling beyond that vertical and the same goes geographically. Additionally, San Francisco probably wouldn’t have been the best for what we were doing whereas London would.
When we got back we decided the only other accelerator we would want to apply for was TechStars and went through a really rigorous process with them. We got accepted and that was a big turning point for us. It allowed Maria and I to drop all the other work we were doing and the three of us came together to take on the accelerator.
RB: What was your experience at TechStars? What was it like on a day-to-day basis?
SM: With TechStars there’s a lot of structure and unlike Y Combinator, it’s only ten or eleven companies. They spend a lot of time and their resources focusing on you and the spotlight is all on you.
I think we enjoyed the structure and we were at the right stage. There were businesses that I think found it a bit more difficult as they were a little bit further on and had staff employed. TechStars breakdown your whole business and question every element of it. If you’re further down the line and have staff then I think that’s really challenging as you have to come back every day and run the current version of the business simultaneously. Timing wise it was perfect for the stage we were at.
They give you advice on everything from financial forecasting to raising funds to marketing. There’s a heavy focus on raising investment and raising capital. They introduce you to their network so I think we had about 200 investor meetings over that 16-week period, so pretty much every major VC, seed fund and prominent angel in Europe.
At the end of the programme you do your big pitch which is your chance to show what you have achieved. (RB: See the super-impressive Headliner TechStars 2015 pitch here).
What became apparent to us is that raising money in the music and entertainment space is really quite difficult. We did get two or three investors from the process and then Maria and I were able to bring together a seed round through some of the people we had met through the BandWagon business.
Even if you don’t raise investment from the investors as part of the programme, it doesn’t necessarily mean that it’s not valuable spending time meeting them. I still send updates to them regularly and they pitch in as and when they can.
RB: What have been the biggest setbacks you’ve had to overcome?
SM: In TechStars, one of the things they do early on is to identify your “big rocks” which are the elements in your business that if you don’t overcome, you’re unlikely to succeed. I love that and I think we’ve overcome quite a few of them, but we still have some as we move forward.
With all marketplaces, you’re essentially building two businesses at the same time. We initially focused on supply and one of our big rocks was how you drive demand and retain demand because for a business such as ours, it’s fairly low frequency purchases so we had to think about how we would acquire demand at the right price and then how we were going to convert them. That’s been a challenge for us and one that we’re still overcoming.
The other one is the variables in the marketplace. Unlike AirBnB where you have a room with a set number of features and a price attached to it and you say I want to book said room for three nights then you pay a price and the host accepts it and its done. With us, there’s a lot more variables in play (what type of line-up do you want for the band or how much travel is involved in the price) so there’s a longer lead time and there’s real challenge in developing a product to ensure the transaction is still smooth at the point of delivery.
The transaction is driven by the supply side and it’s been two years it trying to nail that part. Getting someone to find an act that they like, we’ve done reasonably well with. The bit that’s taken longer is: once they’ve found them, how do we help this person (on the booking side) who has no idea what they’re doing to actually go ahead and book an act? So, we need to get the supply side to drive that conversation. We’re now super confident in what we’ve built as a process and quite proud of what we’ve done as we don’t think our competition has done anything similar.
On the team and splitting equity
RB: With your team, how did you expand it outside of the Co-Founders?
SM: We tried to get a bit of a balance. Chris joined us quite early on, who is another engineer, because we recognised there was stuff that we needed to build in faster than Rosario could do as a one-person team (as great as she is!).
We’ve got product in the middle and a supply and demand side which we need to try to break up. We’ve got someone doing artist relations as the artists have wants and needs. There’s a balancing act between bringing artists on the platform and giving them work and then advocating to them how our platform will be the future of the business.
Then we need to look at the demand side and the booking process. We need to work out how to acquire more customers, how do we retain those customers and then how do we make sure that any transactions on the platform can be as successful as they can be? So we have someone doing bookings and business development.
As we’ve grown, even in the very early stages, we’ve always been conscious of the culture of our business. Also, if we’re building a scalable business, there comes a time where you need to take a step back and work out what your role is in order to empower the people you have brought in to do their job well.
What we need to do is to make sure the people we’ve brought in feel like founders so when the next person comes in, they can tell them how the business runs. There’s a lot of transparency with what we do at Headliner. Everyone knows everything so we all know exactly what point the business is at. So, if someone comes in as a new employee someone can tell them exactly where we are and what we need to focus on.
RB: How did you handle the initial equity split amongst the Co-Founders?
SM: Our viewpoint was very simple: we all took an equal share of a third. We all have different skillsets and we’re all working towards a common goal.
It was a pie that was worth absolutely nothing when we started out. Our thinking was that we’re all going to spend as much time as possible working on this, let’s just carve it out three ways.
RB: What about other people you’ve brought on. Is there scope for them to earn equity?
SM: So far, we’ve done it on a case-by-case basis. We want people to stay at Headliner and to enjoy working here and feel like they have a tangible part of the business. For me, employee share options are incredibly important and the investors we’ve got on-board understand that importance. It’s a must for us.
On competition and the business
RB: How did you think about competition?
SM: There’s validation for your idea in there being competition. When you assess the competitive landscape you should do it thoroughly and you shouldn’t be scared of it. If there’s no competition that means you’re either incredibly lucky or the more likely case that you’re not doing the right thing.
Whilst there wasn’t necessarily a marketplace connecting talent to bookers, there was and still are loads of agencies. We looked at all of them and their business models, what their barriers to growth were, what they had done really well, what was successful, what did their process look like, how many emails did they send you and what was their customer service like.
Basically, we were saying this is what we want to build, so what elements of the current competition can we use and what elements do we think can make the new entrant, us, successful?
RB: How do you help facilitate venues as part of the process?
SM: We work with the likes of Headbox because they’re similar to us and they’re tackling problems in a similar way to us by trying to facilitate the conversation around the booking of the venue. We have similar audiences as well so we have similar challenges in the product and how we grow. It’s nice to work with other marketplaces in the space and say how can we come together to figure out solutions to our common problems?
RB: With the acts on the website you have, how do you guarantee a certain level of quality?
SM: That’s a real challenge as you’re trying to build a scalable product which requires a lot of supply and getting out to see everyone one of them would be very difficult. We basically vet the artists through a process. When they join the platform, they have to create a profile and we vet that profile. They have to add photography, videos and reviews to their profiles so only about 35% of artists who sign to our platform ever actually make it through to our search function. We’re working hard to get more through but it’s quite a rigorous process.
On closing advice
RB: How did you develop your entrepreneurial network?
SM: Maria is incredible at building up networks and I’ve learned a lot from her. The question she advocated early on, even with BandWagon, was how do we get to know people? She has the foresight to know that a relationship that starts today might not come to fruition until four to five years down the line. We’ve certainly seen that with Headliner: some of the people we met in the early days of BandWagon are only now starting to work with us now on Headliner.
Start as early as possible. When we first started we just went to everything and you quickly work out what’s good and what isn’t. You start to see who’s behind events and what their motivations are. In terms of people who attend, are you getting a good experience? Are people you respect to turning up at those events?
Going to events is potentially taking time away from doing something else for the business, so you have to know what you want to get out of the event.
I felt like I got to a certain point where I wasn’t getting a huge amount of value out of them, but there are still some that are really good. TechStars do an event every second Thursday each month that you can attend as a guest which is really good.