A while back I started writing a book about entrepreneurial leaders in the music business for Music Industry and Music Business students.
I was inspired to do this as a result of guest lecturing at several music industry colleges and universities. It dawned on me that a vast majority of the students I was meeting were not being taught what I think is the critical factor to success. Now that I am collaborating with Middle Tennessee State University (MTSU) on their Cyber PR® Course which I’m thrilled to say launches this fall, I’m revisiting my treasure trove of interviews.
Here are my favorite take-aways from this deep dive with the brilliant Panos Panay, Founder of Sonicids:
• You’re not just in the music business, but you’re also in the Internet business, it’s a critical thing to understand.
• Look for opportunities – whenever you say to yourself “what if there was a…(fill in the blank) there is a OPP there! Recognized the vehicle (the Internet) and he was not in a place of fear – he took risks: I want to be part of it. I don’t want to be squashed by it.
• Many times, interns go into situations and say, “Well, all I’m asked to do is file or go get coffee”, but if you pay attention, you will learn a whole lot of things. That was a start for me.
• To succeed you must be somebody who perseveres, however adaptability is paramount
• “Hire for attitude, train for skill. Don’t give in to the temptation of just hiring people because of what their resumes or their pedigrees say.”
Panos understood no one was going to take him by the hand and coddle him; he had to just CREATE RESULTS. Even when doing so got his boss angry (Look for the story of the Airborne Express bill in this interview)
Ariel Hyatt: Can you give a little bit of background on how you got started in the music business, how old you were, why you decided to choose the music business?
Panos Panay: I came to the States in 1991 to go to Berklee College of Music in Boston and, like many people, aspired to be a musician. Thankfully, I realized early on that I didn’t really have the talent to be a professional musician, and around the same time Berklee introduced their Music Business program. It was brand new and I, like many people born and raised on a small island like Cypress, had no idea what the music business meant. I knew business and I knew music, but I didn’t know you could put the two of them together, and I was intrigued. Through the program, I got a summer internship at a local talent agency called Ted Kurland Associates that represented a number of very famous jazz artists, and caught the bug of the music industry. I thought, “Wow, I really want to do this,” so I actually pitched to the head of the agency about taking Pat Metheny, who we represented, to Cypress. A few months later he called me to lunch and said, “I’m looking to hire an international agent to help me book tours. Even though you’re inexperienced, it looks like you’re a hungry guy, so I want to give you a chance.” That was the start of my music business sojourn. I ended up being a talent agent for almost seven years, rose through the company ranks. By the time that I left, I was vice president in charge of the agency’s international division and I had the chance to book all the artists that I grew up admiring. People like Chick Corea, Pat Metheny, Sonny Rawlins, Branford Marsalis, Isaac Hayes, and Patti LaBelle. It was a great education for me, taught me a lot about how to negotiate, and a lot about the international music scene. One thing that I’ve always said to people who are interested in breaking into the industry is take your opportunities and make the most out of them. Many times, interns go to these situations and say, “Well, all I’m asked to do is file or go get coffee”, but if you pay attention, you get to learn a whole lot of things. That was a start for me. Then, after almost seven years of being there, I left to start Sonicbids.
Ariel: What gave you the inspiration to start Sonicbids? Obviously, being in touch with all those musicians and seeing a need must have opened up something for you…
Panos: It’s funny. I think the early seeds for Sonicbids were planted maybe in the first month that I started working as an agent. The guy gave me basically a phone and a list of people to call and he said, “just do what you have to do to book these guys.” Initially, he gave me the lower level artists on the company’s roster, a lot of emerging artists, so I wasn’t booking the big guys like Metheny. I remember calling all these folks on the other side of the globe and them just saying, “Oh, send me a press kit.” Of course, I went downstairs to the person who was in charge of sending out these press kits, filled out all these forms and they sent all these promo kits to the other side of the world. Then the Airborne Express bill came. It was like four or five thousand bucks, when normally it was more like eight hundred. My boss just hit the roof. He was like, “Who the hell sent all this stuff?” I said, “You told me to do whatever I had to do so I sent all this stuff out.” Looking back, that planted the early seeds, maybe as early as 1994.
What really got me going getting barraged with all these press kits of artists who wanted to get booked by us. A lot of them were really good, but I had no easy way of separating the wheat from the chaff. Also, because of the economic model of an agency, if any of them was making under $3,000 or $4,000 a night, I just felt that it was impossible for us to even take them on. So I thought, “Wow, what if an online meeting place existed where any band on the planet could go and, in theory, connect with anybody who is looking to book a band.” In a perfect world, I felt, there’s always a promoter. There’s always somebody out there for any band. It’s just an issue of connecting them with each other. That was literally the genesis.
I spent about a year researching the opportunity, wrote a business plan, and set aside more than half of what I was making from being an agent. I was fortunate, being 25 years old and making well into the six figures. I had originally pitched it to the guy who ran the company, but he didn’t show any great interest. Then, in September of 2000, I quit my job and went for Sonicbids full time.
Ariel: That’s a great story. It couldn’t have just been that you saw all these press kits flooding in. Why didn’t you just decide to rest on your laurels? Six figures is pretty darned good.
Panos: I’ve always been motivated by a mission rather than money, and the need to accomplish something and change things for the better. At the time I felt that the industry was sort of, let’s just say top-heavy. There were a few folks at the very top of the ladder making a heck of a lot of money, but there were all these other people that just didn’t really have opportunities. Having grown up on an island in the 1980’s, pre-Internet, I always felt a hunger for information, so there was a part of me that always believed in this egalitarianism where people should be given equal opportunities. In many ways, the Internet accomplishes that. I think I was definitely motivated by the need for me to create an environment where, in theory, any band could connect with opportunities. But I also felt, at that time, that the Internet was a disruptive phenomenon. I saw how it shifted the entire dynamic of buyers and sellers and the auction space. Back then I couldn’t have told you about Napster. I wouldn’t have been able to tell you about the iPod. I wouldn’t have been able to tell you about any of the stuff that happened, but I did feel that there was this big sort of, I hesitate to call it a storm, but this big event about to hit the music business. I thought, “I want to be part of it. I don’t want to be squashed by it.” Even though I wouldn’t have been able to say exactly what the impact was, I did see that in many ways the industry would move more towards niches rather than capitalizing on the artists that appeal to the masses. The Internet had the ability to do that. That’s what I saw and it’s actually rather amazing to look back and see how pressing it was in many ways.
Ariel: What would you say is the most important skill that you’ve learned or needed to learn in order to have success in your music business career?
Panos: It’s a simple statement, but one that can’t be underestimated: the ability to articulate an argument, and just sell. I think being an agent helped me learn how to be an effective presenter of an argument, of a position, and how to get somebody to shift a bit closer to my reality. It also taught me how to read people, especially because I had to do a lot of sales over the phone with people who were not English speakers. I learned how to boil down an argument in a fairly simple way, and I got a natural high every time I was on the phone with someone who started the phone call totally against hearing anything that I had to say and by the end was saying, “Just tell me where to sign.” I think that skill set is important because, as an entrepreneur and as a person in the business, you never stop selling. Whether you are trying to attract people to work for you, trying to attract capital, talking to a very skeptical reporter, a prospective client, a prospective customer. It just never, ever stops. It’s something that I’m trying to encourage in the people that work at Sonicbids. Learn how to make an effective argument. Learn how to present. Learn how to sell, because you never stop selling.
Also, along with sales is the skill of perseverance. Being a young agent from a different country, I was rejected maybe ten times more than accepted. These two skills, selling and being somebody who perseveres, were by far the most important skills I developed over the past years.
Ariel: Out of everyone I’ve interviewed, no one has said sales.
Panos: Really?
Ariel: Yes. I think you’re dead on. That’s what is at the core foundation of being a successful entrepreneur.
Panos: If you’re the tenth coffee shop opening on the street, you no longer need to convince people that drinking coffee is a viable habit. You just need to convince people to come to your coffee shop. But if you’re the first person setting up shop, then you need great salesmanship to not just convince people to come to your shop, but to convince people to fundamentally change their habits. When I started Sonicbids, people were hesitant if not downright hostile to doing stuff online. I think that had I not developed those chops of articulating a position, painting a picture for somebody to buy into what was, in many ways, just a dream, I wouldn’t be here talking to you.
Ariel: This is a good segue into what I want to talk about next, which is staying afloat. The industry is changing so fast, especially now. Nobody seems to know what the golden ticket is. I think when you and I both started out in the 1990s, there was somewhat of a formula. If you could plug a band into a formula, tour consistently, repeat the same markets, build your fan base, etc., you strategically build your fanbase and support yourself as a fulltime musician. Obviously, that has shifted radically. So my question is how many times and ways did you have to adapt or adjust your Sonicbids vision and your mission and your company?
Panos: I think adaptability is paramount. Whether you call it adaptability or a survival skill, it’s super critical, especially if you’re in the eye of the storm or the hurricane. Storm is a bad word. In many ways, that’s the exhilarating aspect of running an Internet company in the music business. I can’t think of two industries that are more rapidly changing. As challenging as it is, it’s always been an opportunity. In many ways, it hones your own skills. Your survival and adaptability skills are continuously tested because the minute you’ve adapted, it changes on you. On the other hand, I will say that what has never changed is the basic destination of where I want to go. When I read the original business plan that I wrote over ten years ago—I wrote it in August of 99—you’d be shocked how similar Sonicbids is to that original vision. What’s continuously changing, however, is the means and the ways that you get there. I think that one of the common mistakes a lot of entrepreneurs make is being inflexible. I always feel you should be inflexible when it comes to your values. You should be inflexible when it comes to where you want to end up. Otherwise, you get lost.
You should always be adaptable and ready to change course if clearly you know that you picked the wrong path, or the path you picked was right but the conditions changed and therefore you have to take a different route. It’s paramount to know where you want to go, have a clear vision for it. It’s clarity that helps people join you in the march towards that particular destination. But, on the other hand, you’ve got to be quick on your feet and be adaptable. You’ve got to say, “Oh, okay, dead end over here, great.” What do you do you? Do you just keep banging your head on a particular wall or do you say, “It ain’t going to work this way. I’m going to try it another way.” I’ve described Sonicbids as a quintessential web 1.0 business. We’ve been very successful in getting you from A to B faster than anybody else and better than anybody else. But the web has evolved, so a company like us says, “Okay, how do we indoctrinate all these new tools, widgets, collaborative filtering, social networks? How do we indoctrinate this new world order into what we do?” It doesn’t change where we’re trying to go, but it makes the process of getting there a lot more fun. It makes it a lot more interesting, and sometimes more effective and more rewarding.
It’s a combination. You have to have this core mission that I think you don’t waver from, and you’ve got to be willing to adapt and change your way.
I think people at Sonicbids know this and sometimes I infuriate them because they’re like, “Yesterday was this, today it’s that. What changed?” A lot of people don’t understand. Yes, I changed my mind but it’s because I’ve been presented with a much better way of getting somewhere. Here’s why. Hopefully I can always explain why I’m course correcting. Sometimes the reality of yesterday is different than the reality of today, and I think you see all around you in our industry how inflexibility and lack of defining why you’re around gets in the way of you even being around when then your reality comes.
Record labels are clear examples of this. They got trapped into defining the means by which they were going somewhere, rather than the destination, and when those means were challenged they tried to fight it rather than adapt to it.
Ariel: That’s a really good point. What was the biggest lesson that you learned the hard way throughout this journey, and what happened?
Panos: I think, like many people, when I started a company I hired a lot of friends. I think it’s inevitable. You tend to attract the people that are closest to you, but it becomes very hard when you realize that just because they’re your friends doesn’t mean they’re going to be the right people to help the business perform, especially once a company grows to a certain point. It’s always a very hard discussion to have when you sit down and say, “It’s not working. I want to preserve our friendship but unfortunately, you can’t work here anymore.” Letting people go is a very hard thing to do, but it’s a necessity when you’re running a business. Unfortunately, there are people who were close to me that are now relationships lost. Looking back, maybe I would have tried to keep some separation, if you will.
Then the next big lesson for me was that somebody who makes a lot of money isn’t necessarily better than someone who makes less. It’s something that I learned the hard way. As a business grows, there’s a tendency to want to hire “experienced people”, and you learn that at the end of the day it’s not about what you pay somebody, but who they are. There’s an old adage of hire for attitude, train for skill, and I think I violated that in many ways over the past year. The past year was one of tremendous growth for us, both in terms of head count and sales. You say, “I’ll go play by the regular playbook. I’ll hire experienced people. I’ll pay them the big money and I’ll get the stars.” You realize it’s about who the person is rather than what they were compensated by their last employer that makes all the difference. I’ve hired people at low salaries that have been amazing performers and have grown the business and I’ve hired people with all kinds of pedigrees and experience that have been abysmal disasters. You learn it the hard way because you look back and think, “Wow, I spent a lot of money on a lot of folks who didn’t work out, whereas these other people that I hired for a lot less money have been amazing performers.” It’s something that I would do absolutely different next time, or in the future. I’m going to go back to my basic principles of being very circumspect about who you hire. Insist on building a great team. Don’t give in to the temptation of just hiring people because of what their resumes or their pedigrees say. Look for attitude.
Ariel: If you could give some critical advice to a young person who wants to get into the music business, what would it be?
Panos: First of all, it’s the best time on the planet to be in the music business. I don’t care what anybody says or what the media says. There are so many more opportunities today to get into the music business that there’s no excuse for anybody to get you down. In some ways, the old order was a bit like a fascist regime. It’s kind of like you had to go through a very particular path and if you didn’t adhere to that path you had no future. Today’s industry, yeah, it’s a bit more chaotic, but that’s the fun of it. There are so many ways to “get there”. If you’re just starting out, realize this tremendous opportunity. Don’t be a slave to the past.
Second, understand that the music industry today is a lot more intertwined with the technology industry. You have to be just fully lettered in the Internet and everything from blogging and Twittering and SEO and SEM and social networks, and all that stuff that was practically meaningless to people five years ago. You have to be as adept in all those areas—let’s call them technology areas—as you are in music industry areas. The fundamental awareness that you’re not just in the music business, but you’re also in the Internet business, is a critical thing to understand.
Lastly, don’t be so hung up on making money, especially if you’re trying to get your first job, because most great opportunities presented to you may not pay much. When they’re presented to you, you’ve got to say, “Why am I going to do this? Is it just to earn a salary? Is it to build a career? Is it to learn?” I find that too many young people are so caught into their salaries that they miss out on opportunities. When I was an intern I actually volunteered to stay in the business for free for an extra six months because I really wanted to work there. Just being visible and showing my face and engaging people made a very, very, very big difference. We employ interns at Sonicbids. We take the program very seriously. I tell this to them all the time. Be visible. Walk around. Talk to people. Don’t just stay in your little box, because that’s what will distinguish you from everybody else. That’s what enables you to capitalize on opportunities that present themselves. The Interns we then choose to hire are the ones that stand out. Who stands out? It’s the people you interact with, the people who are not shy about asking questions. It’s the people who take initiative and send you ideas even though you never asked for them. There’s a ton of opportunity. Make sure you stand out and drink from a fire hose wherever opportunities are presented for you. Then just realize the industry has changed a ton and you’re not just talking about the music industry anymore, but you’re really a part of the broader Internet business.
Ariel: On that note, if you could tell a young person to avoid a certain pitfall while building their dream of being in the music industry, what would that pitfall be? What would you tell them to watch out for?
Panos: Putting the concept of making money on a pedestal and thinking that that’s the end-all and be-all. I’m not saying that money’s not important. It’s absolutely important. It’s very, very, very important. But it’s not the most important thing. It’s so critical because if you just follow the money, you make the wrong decisions, whether it’s a job you’re going to take, building a business, or whatever it may be. I think it’s a critical misstep to confuse money with professional advancement or money with happiness or money with fulfillment. Again, I don’t want to sound like an idealist. I think money’s very important. I was fortunate to make good money very young. But I wasn’t successful because I was chasing money. I was successful because I was focusing on being great at what I was doing.
With Sonicbids, I always feel that money is a reward for a job you’re doing well, rather than an endgame. If you focus on performance and giving value, whether it’s for your employer or your customers, money comes. I’ve always believed in that. As an employer, it’s the biggest turnoff if somebody’s sole reason for working for me is money. As a matter of fact, they won’t get it, because they’re trying so hard. I think it’s the same for a businessperson. If your customers feel that all you’re trying to do is squeeze every penny out of them and you’re not focusing on delivering value, you lose. At the end of the day, you will lose, whereas people will gladly give you raises and give you opportunities, and gladly give you their money if they feel that your sole focus is on creating value for them. When I was somebody else’s employee, I never asked for a raise. I think I started out as a $22,000-a-year employee and, as I said, when I left I was well into the six figures. But I earned it. I went in there and I said, “I’m going to show you that I can deliver value for you.” I always just had that faith that, and I know it sounds extremely Zen-like, but the universe will present its opportunities to you.
Ariel: Do you think you have something that separates you from other people? You talked a little bit about perseverance and not giving up and being highly focused. Do you think that there’s something else there?
Panos: That’s a hard question. Who doesn’t think they’re special? I think that I’ve always been keenly aware of a couple of things. First, I always felt that I was given a lot in my life. To whom much is given, much is expected from. The second is that I think there’s nothing worse than wasting your potential in life. There’s really nothing worse. People say to me, “Well, what drives you?” I think, “Hey, you’re given a gift.” The people that succeed, in many ways, are people who are keenly aware of what they have and are so determined to work at it that they become successful. I think I’m one of those people. I don’t look at myself and say, “I’m the world’s most talented person,” because I’m not. But I’ve always said, “I’m determined to make the most out of the things that I have been given and continuously improve on them.” If there’s one thing that I want to say when the end of the road comes around, it’s that I gave it my best shot, that there wasn’t a day that I didn’t work towards improving and attaining my potential in life.
Maybe that separates me from other people. I’m not somebody who’s comfortable with sitting back and doing nothing. Even in my free time, I don’t watch TV. I love to read books. And I never read novels. I like to read practical books that have application to what I’m doing.
Ariel: That’s so funny, because that’s my last question. Is there a book that you think young people should read to kind of jump-start their brain? Or a movie they should see? What’s on the Panos required reading list?
Panos: It’s not an easy answer, because I subscribe to 50 or 60 magazines. I read a ton of blogs. I don’t think I’ve ever walked into a Barnes & Noble and not come out with five books. I’m a book/magazine addict. From a music business standpoint, maybe the best book I’ve read is Bill Graham Presents. I don’t know if you’ve read it.
Ariel Of Course! It’s out of print, hard to find. But you can find it still on Half.com or on E-Bay. It’s a great book.
Panos: I read it when I was much younger, I think in 1993 maybe. It was a few years after he died. The book blew me away. It was profoundly influential for me. The other book, it’s almost the polar opposite. Maybe you can’t think of a more opposite human being to Bill Graham than John Rockefeller. This guy called Ron Chernow wrote an 800-page biography about him called “Titan”. It profoundly influenced me because, even though this guy was the richest man in the world, he was never motivated by money. He’s somebody who I think was very criticized during this lifetime, yet left a legacy that endures to this day. He founded the University of Chicago. He helped Helen Keller get an education, even though she was a vocal critic of him and she never knew that he was the guy who helped her get an education until after he died. I think those two books were influential for me. As a general business book, a book called Built To Last definitely influenced me a ton. It’s hard for me to point to one book because there’s just so many.
Ariel: These are great book suggestions
Panos: These just stand out because they’re very, very different. Biographies have always been immensely influential for me. They’ve given me a lot of strength, even when you go through really tough times. I’ve always enjoyed reading about other people.
Ariel: Do you have anything else you’d like to say, parting words of advice or some thought that maybe I didn’t touch upon around this topic?
Panos: I’ll say just go for it. Sometimes people sit around too much and analyze and talk to everybody, and they over-think. Unless you put yourself out there, you just don’t know. The world presents you with opportunities that you will miss unless you are willing to put yourself out there and fail and get up and do it all over again and fail again and get up and do it all over again. You have no idea what the world is holding for you. I think that’s the fun part of being in today’s music business. As you said, maybe ten years ago there was a much more defined path of how to get somewhere. As glamorous and exciting as it sounded, it was really, really boring. Today, there’s a million ways to get where you want to go. It’s a cliché to say a journey of a thousand miles begins with a single step, but it does. It’s harder to take that step. It’s the hardest step to take, but you just have to take it.
My parting words of advice: Just go ahead and do it.
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