 Wow, what's up everybody. Once again, it's brand man, Sean. And today I want to talk about something that's pretty serious to me. And that is why I stopped doing my fast growing music festival. Because so many people have actually asked me this over time, so I decided to do a video specifically talking about it. I touched on it in some places, but we went from zero to 1,000 pretty quickly in terms of attendees. We went from $900 in production costs to $10,000 in production costs by the time the last one occurred over a three year span. And then I just stopped doing it, right? At least that's how most people see it. But for those of you who might have heard some of the other backstories in terms of the personal life things, there's actually also a very real business sense in the way, in the reasoning that I stopped doing it. So I'm gonna talk about that in this video. First, we're gonna do three things because this isn't just for artists, right? This is for music entrepreneurs or entrepreneurs in general in the way I wanna break down this particular video. So one, I'm gonna show a clip where I just answer somebody telling them my whole thoughts on the festival industry period. But after that, I'm gonna talk about some formulas and some things that I think anybody should consider. If you really wanna have a career, especially as an entrepreneur, but it's some things that apply to life period, how you should think about making moves and what businesses you choose to partake in, what do you cut out of businesses, and just how you succeed them in them in general. So without further ado, here's the clip. Well, I have some drawbacks about the festival industry as well, but if we get to talk about it. I would love to hear those. All right, so one of the reasons, when I got into that, I didn't initially plan it to be a full-on festival. I kinda actually was working with my homies who wanted to be artists and they're collective. I was the only person who didn't wanna be seen, right? Everybody, there was all these different front-facing brands except for me, I didn't care. And I threw the festival almost as a bigger event, a better way to market them initially, but they didn't have their stuff together first time around. Everybody's an experience, cool in that regard. But as the festival was super dope and people wanted me to bring it back, now I'm like, this might be an actual business, but now I instantly start to go look at the business and understand it as a whole. So you gotta remember, I'm coming from a tech background and I'm like, I'm not the most people person. I'm more introverted really. So there's low margins, festivals are low margins, right? In comparison to especially looking at tech where you can have something like WhatsApp, have 19 or 50 employees and sell for 19 billion, not that that's the most common thing in the world, but you understand the difference of margin and scale, which is where I was used to, to now I'm dealing with hundreds of people, all these kinds of risks and things like that. Just, this is just a personal thing for me and the margin wasn't great. And I was profitable from the very beginning because I didn't know any other way. To me, it's just like you're running a business or doing the kind of event you have to profit. I learned after as it started to grow and a lot of grimy stuff started to happen and festivals started to see us as a threat, which I didn't even understand why at that period of time. To me, it's just like, I don't know, I didn't understand why at the time. I didn't, so I didn't know things like most of these festivals had investors behind them and a lot of money behind them. I did not, cause I had my money and my homeboy who was working at Domino's and my other homeboy was a valet, right? And then I didn't, and then also even looking at bigger festivals when we look at, like all the way to tomorrow world and all these things, right? Still smaller margins in comparison to a lot of other products. However, it's just on a far bigger scale but that's a lot of different moving pieces to move with. So to me, that was why I eventually stopped doing it because it took, it takes so much effort and for it to not be my main business. The margins small, I believe the industry is just becoming more and more saturated. I watched the bubble happen in Europe and so many people are doing these festivals and events and then regular parties and events are starting to become, start to be called festivals and differentiation is becoming more and more difficult and so many people fund their festivals with sponsors and I'm looking at bigger festivals that are far more established that have still have trouble getting sponsors. So there was like, there's so many things business model wise that I didn't necessarily appreciate about it unless I wanted to dedicate myself to it. Okay, so I wanna start off by saying this isn't a festival bashing video. I actually think festivals work for certain people but if you hear me stay in this video that I just show is not for me, right? It wasn't something that I wanted to do. I wasn't gonna commit to it long term which is something that I think that you had to be if you wanted to actually be successful to the fullest, right? So let me break down one of the categories. So we're gonna start off with just personality, things that work for me. When it comes to events, you gotta deal with a whole lot of people for relatively low margins and it could seem like a lot of money if you're not used to money at the time, right? But just generally speaking, all of the resources, all of the people you have to bring together for people and the frequency in which events and festivals in general can happen creates a pretty low margin business, right? And it's not extremely repeatable month over month, especially at a certain scale. For me, that's not attractive when I've just seen more money for less things or I've looked at business models I could bring more for less, especially when that's just not my thing, right? That's not who I want to be long term in a career and we'll get deeper into some of the margins later. Cause another thing about it though is a huge part of business model is raising money not only through sponsors but then also a lot of these people as I kind of mentioned had investors, right? And for me, I actually bootstrapped mine from ground zero pretty much 90% of it was all my money, right? So probably 95% of the last time. And the thing about that is that's a lot of risk to be throwing in based off of how these festivals are ran. They can be pretty stressful. It's almost an accepted thing that people won't buy tickets to the last minute. That's just the event space in general. Even if you can get a lot of front end tickets, the majority of the money won't come in to pretty close to the actual event. So you have a lot of money floating and you're putting that all up yourself and you're not necessarily in a position to you know, whether that storm then it could be pretty stressful and then managing the artists and all those things. And granted, I like to say I was doing a lot of this stuff a lot more work than I should have been. I could have had a lot better systems in place or a lot more people in place to take as much responsibility. But that was just the nature of how this thing grew didn't expect it to really grow as fast as it did. So that's another part of it, right? Just the personality in general, I'm not trying to deal with as many people on a regular basis, that's just not me. And then the stress that it brings and I wanna make sure I don't even skip anything. So the fact that big festivals struggle sponsors period. Not just any festival who is trying to get sponsors. A lot of big well-known names have issues getting sponsors. It's still a game that you have to play and that's just not a thing for my personality as well. Like that selling, selling, selling, trying to ask people for money. Again, you see, I bootstrapped. I'm more the personality where I'm gonna go do it myself as opposed to waiting for people to kind of improve it or green light it or support it, all right? So those primary things just personality wise make it a little more or a little less attractive to me. But again, that's just me. So I don't fault people who really pursue that industry and do it at full time. But also it became a question of impact, right? And impact is the huge part for me. That was the biggest, biggest part because at the end of the day, even though it was only one time a year, it took about three months, at least of a lot of focus and prep and leading up to that event and then even at least two weeks, at least two weeks afterwards to kind of close everything in, make sure everybody was paid, get all the production, we'll post production ready and have things tied in the bowl just in case it got ran another year, all right? All that takes a lot of time and there were other areas that I was a far more impact outside of being a festival. So that means I have to deal with these switching costs. And let me break it down like this. I'll pull up my nice little graphic. All right, check this out. Here's the model. You got two things. One thing is over here. One thing is over there, all right? We can call this thing the festival and this thing, let's just call it other stuff for now. The other things that I'm doing. And as I said, the ceiling was a lot higher. It's greater impact for me over here, all right? And the big thing though that most people miss out when they're doing too many things and too many businesses, let's just stick with two things. Cost, the cost of time, money and resources. So you can say I'm over here and when you're over here, you're not spending the energy that you have or could be spending over here. That alone can be detrimental, especially if you have some competitors and you need to be moving alone because while you're over here, all right? Somebody's moving ahead over here or they're catching up. And then while you're over here, somebody over here is getting that much further ahead of you, right? But that's what a lot of people can easily understand. What a lot of people miss out on is something even greater. You think you're super efficient with your time, right? All right, I start this at five o'clock and then I start doing this at 5.30, all right? Nah, it sounds great. But at the end of the day, there's that switching cost, that 30 minutes. How long did it take you to get there? How long did it take you to get from starting one thing to starting up the next one? Because it's not just on switch, off switch, all right? You have this additional cost, the switching cost of your mind having to stop focusing on one thing and then starting to take in the information to begin to focus on another thing. And then if the worlds are too attached, at least there's some synergy between festivals and some of the other stuff I was doing in music. But if it's too unattached, then you're really starting over. It was like if I'm doing something in festivals and then some other space in music and tech, which I was at some point, right? Like tech or real estate, right? Like things that have nothing to do with each other. There's an additional cost, but again, another thing unseen other than switching costs is the big one, which is momentum. You cannot undervalue momentum when it comes to business and when it comes to competition, sports, any of these things, because when you have momentum, that's when you start to get an exponential result, right? One starts to equal 10 versus one equaling one and then one equaling two and then one equaling three. Like you build that momentum to the point that you put in an input of one and you get back 10. But if you start over and you go back over here, you lose all of that momentum, right? Or you lose half of that momentum at the very least, just some of that momentum. And when you're starting with very few resources, you don't have the ability to split those resources up into too many things, because you also have to consider your regular life and whatever else you're doing, you split those resources up into too many things, then you'll never get to a level of excellence. And if you never get to a level of excellence, then you're not gonna be able to truly do multiple things and take advantage of those new things because now you have resources to invest in them other than your literal physical presence and time. So that's the way I thought about it and how I started to make that decision. And that's what I was left with, right? Could I get more impact by continuing to do these things, even though I can do it eight months out of the year without any distraction from the festival? What happens when, let's say I have a competitor, and I'm not even, there was really no competitors to really think about in that way at that time, but what if I had a competitor, right? In that time where I'm stopping and they're still going and they're either catching up or getting that much further ahead of me, right? Or just the fact that I'm that much further away from my goals and I could be that much closer. Like that simple formula and thought process for me is paramount in understanding what I'm gonna put my energy into and what I'm not going to because at the end of the day, like nobody can do this multitasking thing like people say they can. Like when you're thinking about one thing, then you're not thinking about another thing. When you're focused on too many things, then you're not focused. It's a lie, right? Like distractions exist the moment you choose something to focus on without focus, then there is no distraction. So if you're just doing all these things, you're literally not focusing, you're probably not doing anything well. And that's what I found myself getting to because everything started to get to a point where it was on such a high level that for anything to move forward, something had to go. And the festival is what was the choice. And that was actually not just a festival. It was like two or three other things that I was doing that. Well, some of them just, I mean, it wasn't that I shouldn't have been doing them. It was just that I just didn't have the capacity to do everything, just period. I didn't have the capacity and I felt like I was gonna let a lot of people down. And I'm never gonna put myself in a position knowingly where I can't give people the energy and commitment that I think that they're worth, right? Especially when they're committed to doing their goals. So that's how we get to choosing the festival. Well, choosing the festival to be the thing that went. I'm not gonna get into the other things, but last but not least, a huge thing that I wanna talk about is business models. And this is something that reminds me of what a lot of music professionals really need to avoid. This is super prevalent in music. I see a lot of entrepreneurs on this in general, but it's super prevalent in music where people think they need to have four or five different business. They think they're popping because they have one LLC and another LLC and I managed some artists and I got this and I got that. You're doing too many things, especially alone. Because again, when I talk about switching costs and the level of being great, you're not gonna be doing that many things, especially when you're starting from ground zero and you don't have the resources. Breaking through to another level, right? It takes concentration, like a nail breaking through the wall. It's concentrated at that point so it can break through and then you can start to spread out a little bit. So that's the thought process that I had to go through, but why I say music professionals in general is because everybody thinks that they're a owner, right? And everybody's coming from an entrepreneur perspective, but if you really start to look at the landscape, it's a lot less entrepreneur, entrepreneur, or a lot less companies and a lot more self-employed people, right? There's a lot of contractors for hire and yes, you own your LLC on paper, but it's just you and there's nothing wrong with that either. I don't knock anybody who wants that for themselves because again, I know a lot of people who do that, they love that and that's what they want, but there's a lot of people who think they're in process of building an empire. They think they're in process of building a business or a company when they don't realize you don't have any assets that you can sell. You don't have any systems that you can sell because that's what gets sold. People buy systems, people buy assets. You can't just have yourself and a lot of these people, if you start to look, right? Even people that are successful, you might consider them successful. They have all these great artists that are associated with them and they're in their 40s and they make good money. They're really living a day-to-day middle-class life or a month-to-month middle-class life, which again, especially if you come from a certain environment, is nothing wrong with that either. But the truth is though, when you have a moment happen, when you have something like all touring stops or when you have something happen like whatever, like anything major that stops the money in that way, they're in the same place as so many other people that are working regular nine to five jobs. And the whole point for me, especially if entrepreneurship is, yes, to have the freedom in terms of my day-to-day work. I love that aspect of it, but when I think about money, I'm talking about generating wealth that doesn't have to be threatened by one month of no paycheck, right? Or one client leaving, right? Like actually building something that's not completely reliant on connections and that's what most businesses, that's the biggest intellectual property, right? That a lot of these businesses or movers and shakers in the industry typically have. It's like, oh, okay, yeah, I got this connection and this connection and because you know these people, you get this business, but at some point you have to transfer that because I'm not saying that you need to leave that be. That's a real thing that you can use to your advantage. It is leverage, but at some point, you gotta move that over into real assets, right? Something that can be sold. And that's my goal when I think about companies. I don't really care to build a business just to be a lifestyle business, but I can build a lifestyle business to help me have the leverage or time to build a business that I believe that can give me true wealth. So there's a process. And the reality that you can get yourself to in the same way I even looked at the music, not the music industry, the music festival, is at some point you have to understand business models and have realistic expectations because a lot of these business models, well, pretty much all business models, they have their limitations. They have a ceiling. And the ceiling that I was looking at when it comes to the festival was a lot lower than the ceiling of what I wanted to achieve. So let's look at Coachella Festival. We know that's pretty much biggest festival out there. In 2017, they made $114 million, I believe in those weekends or those days that it happened, that's great. That's a lot of money, but there's a lot of that money that goes into overhead and so many things. And there's so many people connected to it. But even if we look further back, Coachella was started by the promoters who own Golden Voice. It was a promotion company, right? And that's something I would have had to do, right? I would have had to really to make this really, this thing work as a festival. It couldn't have been one festival. Those guys were throwing like 50 punk rock shows in a year, right or over two years, so maybe 25 a year. That's a lot of shows and that's one thing I realized. Oh, to extend this business model, since my festival exists one time a year, I'm gonna have to do more events to make more money because this is my circle of confidence now. And that means I should create a promotion company. I don't wanna be a promoter. I never wanted to be a promoter. My festival was really just a way to get my creativity and do a really, really dope idea. I just happened to be somebody who knows how to market very well. And a lot of people even mistook me for a promoter, right? So understanding that those guys did that in 1981, that's when they started. And then in 2001, I believe, two years after Coachella, they were bought out by AEG, right? On shoots, they were bought out, $7 million, 20 years, $7 million. That's too low of a margin for me, right? Just because I come from, probably there's a bias of coming from the tech world and things like that where I've seen numbers, certain numbers happen faster, but also that's a long time to be in something that I don't like and is a lot harder for me to do just because I can be good at it. We all know after a certain period of time, there's a ceiling when that's just not, there's not a certain level of passion or joy attached to it or, you know? So I knew that wasn't gonna be something I wanted to stay in that long to make, granted it might be a little bit more money now because of inflation and the saturated market of events, but that wasn't something I wanted to do. But if you look at that again, 20 years, $7 million, that shows you some sense of a ceiling and they were bought out, right? So they were bought out for only $7 million and they had to be bought out by this investor group to scale over another 10 years, 15, well, maybe, well shoot, almost 20 years now to get to that $100 plus million. Now you have to say, okay, what really are the margins? Because that means the investor group is probably funding most of that and I would be in the founder role. So going that long just to sell out or relatively speaking, that little, even though it goes to a higher multiple, what is my actual ownership in that? That's just not the business that I'm looking to run, right? And it's not worth my particular time and what you should do is always understand the limitations of your business model. It's nothing wrong with any business model, in and of itself. But it's you understanding the business model because the problem comes when your goals exceed the actual business model you have and you think your business model will help you achieve that. Again, like I said, lifestyle business. I can create a lifestyle business and a lifestyle business essentially, it's a company that you can't sell, right? It's just you, you're making an income but no one's gonna buy it because there's no real assets, there's no real IP, there's no real, there's just nothing to buy, no real systems. Without you, it really doesn't exist or it's not worth somebody else's time and you see this a lot on shows like Shark Tank. People are like, ah, yeah, that's cool. It's a great company but that's a $5 million a year business. I'm an investor, I'm never gonna make my money back, right? I'd rather build business ultimately that if needed I can exit for a certain amount of money. But a lifestyle business could put me in a position where I'm still free in my own time. I'm making a certain amount of money and I take some of that extra money to then start the other business, right? So again, you can use these business models as tools but if you don't pay attention to the limitations that exist in certain places like, I'm not gonna even get into certain nuances of businesses in the music industry or certain types of businesses because I'm moving through certain things right now and I wanna save that after I do certain things. So you can hear me talk about certain things and I can even show and speak on my own experience but that's the overview and that's how you should start thinking about your business. You have to walk through these logic. You have to walk through this logic because there's a lot of traps that make you feel like you're an owner, a boss, a CEO or whatever it is especially in music when at the end of the day, even if you are, the limitation and the ceiling is so low that it's not even worth it. That's it for this particular video. I'll be doing more videos every once in a while from this type of voice in terms of just like, look man, I made certain mistakes or I went through certain things that made some decisions you guys can learn from it and also make sure you subscribe to the channel, hit that notification button. We will be giving out every once in a while some subscribers, some subscriber prizes. If you follow, you subscribe, we will send subscriber specific free, free ads out there for you guys to get some things. And other than that, as always, if you like this video, hit that like button. If you like it, might as well share it and if you're not subscribed, baby, you know what to do. Hit that subscribe button.