Don’t fuck up the culture... wasn’t what we were expecting to hear from someone who just gave us $150M!

An interview with Headliner CEO and founder Stan Mcleod

?Highlights

• How getting married helped the founders realise the scope of the opportunity for Headliner
• Having a first client like Facebook can get you into Abbey Road studios
• Why the founders chose TechStars over YCombinator
• How the company uses a "highs and lows" meeting on Friday to get to know one another better 

What type of culture is your company developing? Is it an asset or a potential liability? Is it a strong, clearly defined culture that’s embedded into every corner of your company, or is it a weak subconscious and invisible culture that’s everywhere, and yet nowhere? Is your culture one where your team will be able to develop, thrive, fulfil their potential, achieve excellence and self-actualise? Or could it become a toxic sludge that will slow everybody down? Is it the type of culture where an investor, who has just invested $150m in your business, would respond “Don’t fuck up the culture” when you ask him for advice?

 In 2013, Airbnb co-founder Brian Chesky wrote a letter to everyone in the company titled “Don’t Fuck Up The Culture” . This succinct piece of advice came from Airbnb Investor Peter Thiel and Brian then asked him to elaborate on this. It turns out that one of the reasons Thiel invested in AirBnB was their culture, but he believed that it was practically inevitable, once a company gets to a certain size to “fuck it up.”

Brian’s letter explains why investing in a company’s culture is so important:

“Why is culture so important to a business? Here is a simple way to frame it. The stronger the culture, the less corporate process a company needs. When the culture is strong, you can trust everyone to do the right thing. People can be independent and autonomous. They can be entrepreneurial. And if we have a company that is entrepreneurial in spirit, we will be able to take our next “(wo)man on the moon” leap.

Ever notice how families or tribes don’t require much process? That is because there is such a strong trust and culture that it supersedes any process. In organizations (or even in a society) where culture is weak, you need an abundance of heavy, precise rules and processes.”

 I was surprised during the interview with Stan Mcleod the co-founder and CEO of Headliner, when he said that one of the two things that keep him awake at night is how to develop a sustainable culture. The majority of the startup CEOs I speak to, consider culture to be something that they will get to when they have the time, missing the point that their company culture, the glue that keeps the team together and the company moving forward, already exists and has the potential to be a serious liability if left to develop without any input from them.

?BP

How did you get involved in the music industry?

SM

My family was involved in music and they didn’t want me to follow in their footsteps. They wanted me to get a proper job so I started studying a Medical Degree, I was studying foot and ankle biomechanics in London. I was a big music fan and had a passion for music. I live in South London and became frustrated with having to travel to north or east London to see live music. I decided to start to promote events in my local area. I met Maria who was a band manager and booking agent and we teamed up. We had quite a few successes, we set up the first gig of 60 people for an act called Elena Tonra, who went on to become Daughter. She is now internationally acclaimed and doing really well. It was great experience working with bands and generally being in the music scene.

?BP

What brought you into the tech scene?

SM

In 2010 we came across and were really inspired by CastingCall Pro, which is a marketplace that connects actors with casting directors. At the time MySpace had died and we felt like that we could offer a better technology based service to the music industry. So we set up Bandwagon, which is a platform and marketplace for unsigned talent and music festivals. This was the beginning of our fantastic 4-year journey.

We ran the business from home and built a great community of 16000 artists with 11,000 gigs across the UK, US and Europe. Although we built a solid business the economics were not great and when the opportunity presented itself we sold the business to a social music platform called CrowdMix. Fortunately we had a clause in the contract, which meant we retained the business if CrowdMix failed, which it did once it had burnt through the investment it received. Instead of closing the business down we decided to scale things down but keep Bandwagon running for the community. It’s live and a nice asset, who knows what might happen in the future?

BP

Where did the idea for Headliner come from?

SM

We realized that there was a really big opportunity in the private events space. We had one part of the marketplace sorted as we knew how to find and book the talent and corporate clients had the budget to spend. Also Maria and I got married and our own experience with access to great talent combined with a decent budget for the music gave us the added impetus to start Headliner.

BP

How did you approach building the team in the early stages of the business?

SM

We knew from our experience with Bandwagon that we needed to bring in a tech co-founder. We had decided, just before the acquisition happened, to hire a CTO for Bandwagon and put an ad out. Post-acquisition, we didn’t need a CTO, however, one of the candidates Rosario had applied for the position and really stood out. Her CV looked amazing as she had built out the API team for Mendeley. When we caught up with her she had become disenfranchised by the startup scene and wanted to go and play music instead. We met for a coffee and had an initial conversation where we really hit it off. She loved the idea of what Headliner could be and we convinced her to join us as the third co-founder.

BP

What was your approach to building out the tech platform?

SM

We initially ran the business off a spreadsheet because we wanted to first get a complete understanding of how the agency model worked. We did it all manually booking acts for private and corporate events and through that process learnt what worked and what didn’t.

Our first corporate client was Facebook where we booked their summer party. We had 15 acts playing at Abbey Road across all three studios, which was a great once in a lifetime experience to work in that incredible venue. We spent a lot of time speaking to musicians about how agencies work and unsurprisingly musicians are ripped off hugely by the incumbents in the market. This research gave us the insight to build the Headliner platform and to push the boundaries with the technology we are building.

BP

How did you approach fundraising for the company?

SM

Although we had no product, no traction and only one customer we decided to apply for Y Combinator. We got an interview but didn’t get in. We were too early in our development and at the time we were trying to do too many things. One of the suggestions from the YC team, which we took on board, was to focus on music and do it well. We launched Headliner focused purely on music - DJs, musicians and bands and decided to put on hold any other opportunities beyond music.

We launched our MVP in March 2015 where an artist could create a profile and search for gigs and then reapplied for YC’s 2015 winter batch. We also applied for TechStars and were offered the 2015 batch. We had to choose between TechStars and YC. At the end of the day we weren’t sure that the YC environment was right for us. We asked ourselves whether it made sense to build a music startup in Palo Alto. Culturally we weren’t sure that they would understand our space as most of the domain expertise is in NY, LA and London. The other concern is YC takes 200 companies into the program, which we thought would mean less hands-on interaction with the mentors and YC executives. We decided to join TechStars, which had 10 other companies in that program. TechStars was the right decision for us as we could stay in London and ended up meeting lots of important mentors and worked closely with the program directors

BP

What progress has the company made over the past 2 years?

SM

We have built a strong engine for generating the supply side of the marketplace by essentially replacing the talent agent. We are now pushing to grow the demand side further and drive more customers to our artists. We understand the unit economics of our business, we are generating revenue. Now it’s a case of growing market share here in the UK. We have also been approached to white label our platform and have a number of options available, we are excited by where we are and where we can take the business.

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?BP

When did you start to think about and invest in the company culture?

SM

The bottom line and developing a sustainable culture, are the two things that keep me awake at night. We spend a lot of time as founders talking and reading about culture. The three of us got together on day one and spoke about our vision for the business to see how aligned we were. This is something we still do regularly to ensure that we are still aligned. A lot can change in a business and in life, so it’s important to make sure that we are still all on the same page.

BP

What are Headliner’s mission, vision & values?

SM

Mission:

We believe that artists have the right to a sustainable career through live performance and provide a platform that helps them to do this.

We believe that every event in life can be enhanced through live entertainment and performance.

We believe that artists should have more control over their career and decide which opportunities are best for them.

Vision:

We want to make the booking of entertainment simpler and more accessible, making the world a happier place through the performance of live music and entertainment.

We have written down our values. But it’s not important to us that you can repeat what’s written down on a piece of paper. Rather you need to really understand and resonate with the values and be able to live the culture. It’s important to us that as a team member you understand that there is a reason for your contribution and there is value in your contribution.

Our values are:

Experience: We want live music to be an incredible experience for each and every customer.

Trusted: We want the customer to trust the artist and the process.

Sustainable: We want to provide a platform that is sustainable for artists careers.

Fun: We want to be the facilitators of fun and deliver a culture that fosters and encourages it.

Transparent: Headliner cares about transparency. We will be transparent, open and honest in all situations.

BP

What do you find challenging about embedding your culture into the team and the company?

SM

Culture broadly is a massive challenge to get right. We are trying to build an environment of transparency, freedom, self-expression and open communication and the people who have previously been in challenging or different cultures don’t necessarily get our culture, especially in the beginning, because they are used to something else. An example of this is where we needed more help with customer support. Musicians work odd hours and bookings can happen quite late at night so we have support requirements in the evenings and weekends. Maria, Rosario and I were doing it and we decided to introduce the idea that the team needed to get more involved in support. We discussed this with the team, didn’t get any push back and thought that everyone was happy and OK with it because nobody disagreed or raised any questions. Then a couple of days later two of the team mentioned that they didn’t feel that it was right or fair. What frustrated me is that we are trying to build an environment of transparency, freedom, self-expression and open communication but those team members didn’t react immediately and bring their concerns up straight away. It turned out, once I explained it in more detail, they were more than happy to pitch in and help. Looking back on this there were two issues, 1. I didn’t communicate in detail the context for introducing shared support and 2. They didn’t feel that they could bring the issue or misunderstanding up immediately. I was pleased with the feedback and clarification, but for our business to succeed we need that feedback and misunderstanding to be dealt with in real time. People will step back into the negative culture that they are used to, where they were told what to do and couldn’t question it, if we allow them to. As leaders it is our job to make sure that it doesn’t happen, that we are embedding our culture and our people are living the culture every day. Our people should be comfortable challenging me or the other leaders at the point of delivery of the information, especially if my communication is not clear. I know what it feels like to be told what to do and how to do it, from my time working in the NHS. We want to foster a culture where everyone is listened to, understood and respected. I care about working as a culture not as a business.

BP

How are your company values integrated into your interview process?

SM

Our interview process happens in 2 stages. We start off with generic questions about the candidate’s experiences and the companies they have worked at. We want to understand if they have worked in an environment that was self-led and if they have the skills and relative experiences we require.

We then ask them to do two task-based interviews. The first task is related specifically to their ability to think about our business. The artists who sign up to the platform are given a quality score and a behavior score. We ask the candidate to score 10 artists. The score isn’t that important, we are rather looking for the rationale behind their thinking, how they came up with each artist’s score. For the second task-based interview we ask them to present to the team about why the Headliners platform is important and how it will contribute to the development of the music/entertainment industry. We then they spend 15-20 minutes with the team having a conversation. After the conversation the team will evaluate them on how they presented, interacted and engaged with the team

It doesn’t matter if they are tech or marketing, everybody goes through the same interview process, which allows us to assess all aspects of the candidate. We have found fantastic candidates who have completely excelled beyond our hopes and expectations.

 BP

Which companies did you get inspiration from when it comes to hiring?

SM

We got some inspiration from the Mailchimp and Google hiring processes, who do something similar with their onboarding documentation. We have an onboarding document that we give to a new joiner after they have joined. We ask them for their feedback about what worked and what didn’t and how we can improve the onboarding document and process. In this way the person who was hired most recently is responsible for taking the version they received and improving on it so that they can pass a better version on to the next hire.

BP

How many members of your team are into music?

SM

We are all into music and have a have a bunch of musicians in our team. Rebecca our bookings manager is an ex singer and talent agent for DJs. Louise who is in charge of content is a professional jazz musician.

BP

How often do you have team meetings?

SM

We have one to ones with the team every month and the founders meet quarterly. We have a weekly team meeting on Wednesdays that lasts for less than 30 minutes and we do daily stand ups every day at 10 o’clock for 10 minutes. We are not blindly doing things at Headliner and aren’t just looking for a report at the stand ups: we want our people to talk about what they have been working on, what the rationale is, why we are doing it, how it fits into the bigger picture and how it fits into the values. We also have a highs and lows meeting on Friday in order to get to know one another better and encourage transparency from people. Not everybody in the team may realize that you had a low so having our people open up about their experiences is invaluable. Everybody has lows so we don’t accept it if someone says they didn’t.

BP

What is your biggest business challenge at the moment?

SM

We have a positive conundrum to sort out at the moment. With our platform the artist sets the fee and we add our service fee on top. Sometimes this means that our price is a little bit more expensive than the agencies because the agencies squeeze the prices and the artists. The agent says to the artist, give me your fee and I will negotiate with potential customer. The artist will say ￡1500 but it’s up to the agent to negotiate a deal. The agent may accept ￡1200 instead of ￡1500 requested by the artist. The problem there is the agent still takes his cut but that negotiation and agent’s fee really eats into the artist’s earnings.

So the question for our company that cares very much about the artists and performers is how can we create an effective balance and how will it affect the community? We have spent a lot of time discussing this internally.

We need to go through an education process because artists are used to working with agents and we need to inform them about how to get the most out of the platform and how to price effectively.

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