Earlier this week, Abbey Road Studios revealed the next three startups taking part in its Abbey Road Red incubator.
Qrates, The Audio Hunt and Scored will follow in the footsteps of OSSIC, CloudBounce and UberChord, who took part in the first round of the studio’s initiative to give a leg-up to promising music/tech startups.
Music Ally talked to Abbey Road Red project manager Jon Eades to find out what the studio has been learning so far from Red, as well as how it might develop in the future.
“All the feedback I’ve got has been really positive: there seem to be good vibes around it in all directions, internally and externally as well,” he said.
“We thought we could help startups, we thought we had skills and things to offer these businesses, but until we did it, we hadn’t validated that, so when we took in our first official intake, we were somewhat jumping in. There was a lot of learning, but it more or less went how we thought it would.”
In fact, Eades said that over the course of the first program, the team at Abbey Road realised that they could help in some areas they didn’t expect to, drawing on their own knowledge, parent company Universal Music and other friends in the industry.
Eades praised colleagues from Universal for their support for Red, including UK head of strategy and investments Julia Hawkins; SVP of business affairs and business development Alex Doherty; director of digital Paul Smernicki; and director of research and planning Jack Fryer.
“They’ve been incredibly supportive and forward-thinking,” he said. “Abbey Road is a huge brand, but operationally a small business, with 70 people working here across lots of different areas. To be able to call on Universal for help on licensing terms, even HR and trademark law, things outside the remit of what we do here, has been massively helpful.”
Like many incubators and accelerators, some of Abbey Road Red’s best applications have come from startups referred to it by those trusted contacts.
“One of my priorities is to keep good contacts and get out to events regularly. It’s a small world, startups, and the world of music startups is even smaller,” said Eades. “There’s a fairly tight-knit circle of people in that space, and they’re friendly and helpful.”
So, the new intake. Qrates is a crowdfunding platform for vinyl releases, where fans pre-order to help artists cover the costs (and risks) of pressing. The Audio Hunt is an online marketplace for audio gear and services, aimed at musicians, producers and engineers. And Scored is a music library and film-scoring application that helps filmmakers score their soundtracks.
“We wanted to make sure the businesses we were choosing were offering something genuinely different,” said Eades, who has been keenly monitoring trends in the music/tech startups world. “If anyone sends me another presentation for an online marketplace for venues booking bands, I’ll cry! There’s about 50…”
There has been a shift from Abbey Road Red’s first cohort, which were more technology-based startups, to the second, which is “more on the platform level and marketplace level” – something Eades says was partly intentional, and partly a trend within applications for the program.
There are no social music apps, one of the most overcrowded and heavily-covered in the media sectors in the music/tech world, yet also one of the most difficult to make a success of.
“I think the public opinion of music technology businesses is slightly skewed by some headline-grabbers, but underneath, if you scratch away at the surface, there is some really cool stuff going on,” said Eades.
“They’re not massively high-growth businesses a lot of the time: this market compared to something like social media is relatively small. But these companies are doing some really interesting stuff.”
“We’re not positioned like a normal incubator: we’re not just in this for the equity cash-out. We’re in the business, we want to build partnerships and long-term relationships. We can be slightly less aggressive in trying to find things with high growth.”
Of course, Abbey Road Red wouldn’t reject the opportunity to have both – “a big cash-out would be amazing, it would make my life very easy!” laughed Eades – but while Abbey Road does have small stakes in its graduating startups, lucrative exits are less of a priority for Red than they might be for other kinds of investors.
Those first three startups are off into the wild again this week, with Eades confirming that Abbey Road Red is “in ongoing discussions with all three of them” about how the relationship will continue, although he cannot announce any details yet.
“We’ll have a little equity stake in those businesses, so we’ll be supporting them long-term, but there are lots of areas we can work on, so we are going to maintain a close relationship,” he said.
For now, three-at-a-time will be the mantra for Abbey Road Red, rather than rushing to expand its incubator based on the positive experience so far.
“I’d always thought we would be tempted to go for more when we launched, because when you see most programs of this type, it’s in the order of eight to 10 startups at a time. Three might not look like that many, but it’s the right number for us,” he said.
“I don’t foresee we will change that for the next intake in March, or even for the one after. It just seems to be working at a good level right now: we have enough capacity to help those businesses in a really meaningful way, and adding in more would just dilute that.”
“If you’re an incubator or accelerator with a curriculum to wheel out, and maybe even doing classes with multiple companies at once, you can do that, but we decided to take a different approach. It’s me getting to know these companies as intimately as if I was an employee, working out their challenges and finding out where they’re going.”
Running an incubator, whatever the size of its intake, means plenty of late nights and stress, but Eades was enthusiastic about his “dream job”, and positive about the prospects for the companies that come through Abbey Road Red’s doors.
“It’s genuinely a joy each day. These people are crazily set on building businesses. It’s really inspirational.”