Throughout history tech has run head first at industries, redefining the rules of the game. We call this initial assault disruption, and have lauded it as a positive force for change. And it is! But though it steals the headlines with its glitz and glamour, disruption alone will not always bring about the long term change people expect.
We expect a quick and painful revolution, but in reality we often see a slow, pragmatic evolution. Disruption is absolutely key, but it’s only half the story. For real, deep, long term change you need the flip side of the same coin, Partnership.
The Power of Partnership
Successful partnerships are slow, steady, and rarely grab the headlines. Every industry must form partnerships to flourish. The most exciting are those that help bring about real change, often involving a more traditional industry and a new, emerging tech firm who can help evolve their business.
There are countless examples. Thanks to partnering with the likes of Netflix, BBC Worldwide have driven their US business to record highs. Apple Pay, Square, and PayPal help thousands of traditional retailers get paid every day in brand new ways, broadening their reach. We all know about UBER, Lyft, Google and Apple disrupting the taxi and car industries, though we rarely read about the intricate web of partnerships they’re forming with the existing industry to gradually bring about real change (read here, scroll down to the diagram).
I work in the Label Relations team at Spotify, a tech company with its heart in music. My role is to help guide the recorded music industry, a diverse group of content companies grappling with the changes that technology has introduced. Spotify have successfully partnered with artists and the industry for many years, succeeding in reaching fans in new ways whilst helping to return the industry to growth. Much of what I discuss below will draw on my experiences so far.
The Secrets to a Successful Partnership
Why do so many industries partner with others? Because they can’t do everything themselves, and nor should they. They each specialise in different areas, find their niche, and build the most successful business they can. Partnerships introduce unique experiences, skills and perspectives without the hassle of having to learn them yourself. However, within these positives are inherent challenges which must be overcome. So how do we understand and manage these challenges?
Companies are large, incomprehensible entities but at their core, they’re as simple as you and I. As individuals, the secrets to our successful partnerships with friends, family or loved ones are (of course) far more nuanced than they seem. Difficulties will inevitably arise. There’ll be arguments, disagreements, and opposite ways of viewing the same damn conundrum.
Our differences can seem unfathomable, and companies are just the same. But it really shouldn’t be a surprise. We’ve all had unique experiences, leading to differing skill sets, resulting in vastly different perspectives on the challenges ahead. Each of these can bring huge positives, but the secret to a successful partnership is to manage the challenges these differences introduce. Let’s look at each of these factors in turn.
Understanding our Differences
As a teenager, I once made myself very sick by eating a huge bowl of Cheese & Onion Pringles. It was disgusting, let’s not go into details. I quickly learnt never to eat crisps again, and I haven’t. A little extreme perhaps, but I learnt my lesson.
Companies learn from their experiences too. To an established company, a history of plucky upstarts growing to own your space will make you wary of newcomers. Consider the music industry’s experience with US commercial radio, or MTV. Each innocuously arrived offering welcome promotion to sell more physical product, but soon built huge empires based on less-than-ideal royalty payments.
Labels learnt the lesson to be very wary of new entrants entering their space, and started to demand large payments or part ownership of partners up front before allowing them to launch.
This was unfathomable to the tech industry. Their experiences were in fixing problems, in moving fast and breaking things. Growing a business from scratch often relies on VC funding, who allow time to figure out how to make a profit. They’d never known the pressures of having to post consistent profits year-on-year, with even the slightest dip meaning you get gobbled up by your rivals (there were 6 major labels in 1999, now there’s 3).
Just as with me and crisps, an extreme reaction to your experience is not ideal. The solution will be to understand your partner’s history, appreciate their concerns, and meet halfway. Just as Spotify and the music industry did.
(…to learn what happens when you don’t, listen to this fascinating history of Grooveshark from podcast Reply All)
Skills (…and hammers & nails)
I’m comfortable writing, mainly because I’ve practised lots. But ask me to draw something and I’ll collapse into a sweaty mess. No matter how hard I try the picture in my head just won’t appear on the page, so often I won’t even bother attempting it.
Perhaps my brain’s just not wired that way, but I’ve also never taken the time to learn and improve my artistic skills. If something needs fixing, my instinct is to fix it with words. This may help fix a communication problem, but it won’t help hit a monthly sales target.
Companies each have a core skill-set too. Ask a media company to license, release and market content (a film, book, or music) and they’ll know exactly what to do. They’ve practiced lots, and are really good at it. They’ll be quick, effective, and are as likely as anyone to make a success of it.
But ask them to build a piece of tech and you’ll get a very different response. There’ll be lots of meetings. Different teams will compete for the same task, decisions will stall and u-turn, and office politics will explode. A tech company’s first steps into working with content may lead to similar results.
“If all you have is a hammer, everything looks like a nail”
(aka Maslow’s Hammer)
Because of the difficulties of doing what you don’t know, companies will instinctively use their known skills to solve every problem. Or worse, they’ll ignore the problems they can’t easily fix.
When competition intensifies, what do companies do? They start doing more of what they’re good at; a content company will acquire and release more content (A&R label budgets have steadily increased through years of industry decline), whilst a tech firm will ship more products.
Breaking out of this comfort zone and learning new skills is challenging and painful, but incredibly valuable. Just look at what Netflix and Amazon have achieved in learning to produce or license their own content.
Partnership can fix these problems; complementary skill-sets enable you to do more together. But it can also be the cause of disagreements. A tech firm may assume that a content firm can build a piece of tech just as easily as it could itself, which of course is not true. One will get frustrated that the other doesn’t fix a problem as they would, or ignores the problem entirely.
Be mindful of each other’s skills and habits, and don’t be perplexed when a partner has a totally different perspective on how a problem should be solved.
We all view things differently. I view my clothes as garments to be comfortable and useful. My non-skinny jeans are well fitting and practical with ample pocket-space for my wallet. Everyone else views clothes as ways to look nice, who view my baggy jeans as unfashionable and ridiculous, especially as nobody but me carries a wallet anymore (btw you won, my boot cuts are sadly banished). We each view life through our own unique lens or perspectives, and forget that others do too.
And so do companies.
“I often talk with people about the conflicts between technology companies and content companies. One of the biggest issues is that technology companies view movies, music and television as information. Directors, producers, musicians and actors view them as feelings, as expression. Not to be searched, sorted and viewed — but experienced.”
Evan Spiegal, Snapchat CEO (via Recode)
This quote summarises how conflict can seemingly exist on every issue, when in reality you just have a slightly different way of looking at things. Behavioural science has discussed this in depth by asking if our minds are Creative or Logical, or if our decisions are Emotional or Rational.
For example, how do we figure out if a song is a future hit? The traditional approach is simply to play it, big it up, and let the music do the talking. But Spotify may prefer to look at the data, check for trends, and use evidence to back up their argument. We’ll both be asking the same question — Is it a SMASH? — but we’ll be approaching the problem from very different perspectives.
If there is a “correct” answer, it’s probably a mix of the two. There are calls within the industry for a change of culture, a move to focus more on data and dashboards, whilst companies such as Soundcharts are partnering with the industry to help them make that change. Meanwhile, Spotify has a global editorial team who spend their days listening to music, curating playlists, and taking punts (not always based on data) on picking out the hits of tomorrow.
Here’s another example. Giving artists their data (on their Spotify plays, saves etc) is very important, but does a creative mind value it to the same level a logical mind might? How do artists know they’ve “made it” — when they see a graph steadily going up, or when they look out across a huge crowd singing back their songs?
An artist may simply not view their music as something to be measured, and no amount of data will help them change their opinion on something. That’s why they hire others — managers and labels — to follow that info and make those decisions for them.
And just as an individual thinks in certain ways, so do entire companies. The creative industry is built on finding and selling expressions of emotion, so will naturally be more Creative and Emotional in their thinking. Tech will inevitably be Logical and Rational. This isn’t a problem, but if we ever forget it disagreements can seem unsolvable. Many times, I’ve presented facts, figures and graphs to prove my point, but been met by “It just doesn’t feel right.” This is an absolutely valid answer. Any lack of progress will be my fault for coming at the discussion from my own perspective, looking at the problem through my own lens.
I’m also never going to agree with most people on which jeans I should buy. Lets start by understanding each other’s perspectives, and working through our problems through the eyes of our partners.
The Complexities of Disruption & Partnership
(…and getting stuck in the middle)
Industries must all evolve over time. Disruption may begin that change, but partnerships will be the opposite side to the coin that help make true evolution a reality. This doesn’t mean disruption must end, quite the contrary, but we must be conscious of the value of long term collaboration.
In some extreme cases, partners may even be directly competing with one another. We forget now that for many years Google and Apple were close partners, with iPhones being pre-loaded with many Google Services (e.g. Maps, YouTube). All this whilst being in direct competition, and suing each other on a monthly basis.
These complex dynamics won’t exist in every partnership. But regardless of the scale and complexities of the challenges we face, both sides must step up to meet them. The best way to do that is by being considerate of your partners’ different experiences, skills and perspectives.
And one final word… don’t forget that in the middle of these partnerships there’s often a group of people mediating between the two, bridging the gap. They understand the skills of both companies, can see both sides of the argument, and speak both languages. Yet they’re often the most misunderstood of all.