Want to recognize the next big thing before everyone else? Here's how it's done.
Panos Panay, founder of Sonicbids
How do some people seem to know about the next big thing way ahead of everyone else?
Because they know how to recognize early signs of change.
To get a look at how it's done, I talked to Panos Panay, founder and CEO of Sonicbids, an 11-year-old social music marketing service that connected bands with more than 95,000 gigs in 2011. Panay says the music industry is among the three most competitive (the other two being media and technology), and the ability to spot trends before they happen is a life-and-death skill. Here's how he does it:
1. Stop talking and listen.
"Today, there's too much broadcasting and not enough receiving," Panay says. "Everyone is focused on pumping out information, but turning off our own signal and receiving and digesting, that's a skill that has gone away."
Panay says that he likes to immerse himself in a topic by reading about it. "I dedicate an hour in the morning, and again before I go to sleep, to reading. I actually schedule it." He says he started Sonicbids after reading Blur, published in 1999. "The book talked a lot about how the Internet was about to change everything and I started thinking, 'How will it affect my industry?' Playing that scenario through gave me the inspiration for Sonicbids."
2. Look beyond your own business.
"You have to look around and ask: 'What are the general trends going on, even though they haven't affected my business yet?'" Panay advises. Early this century he noted that people weren't yet ready to buy music by the download, but the way they found new music was shifting. "I thought, today it's record labels, but I can see how companies will become major players launching new music, such as Apple through its commercials, or Starbucks with its stores. I saw a trend where people weren't necessarily interested in discovering music by walking into a record shop or watching MTV anymore."
3. Visit your alma mater.
When Panay studied business management at Berklee College of Music, all his fellow students wanted to become record company executives. "Today, if you ask the graduates of any school, they'll say they want to be in social media, or media. Technology is such a big part of the conversation."
Panay recommends visiting colleges and asking students where they want to work after graduation. "Looking where the brightest minds are flocking now can inform a lot of your decision making about the future."
4. Kill your products before anyone else does.
"Ask yourself, 'If I were starting a new competing company today, what would I do to put me out of business?'" Panay says. In Sonicbids' original model, bands paid for a membership, and then paid an additional fee each time they applied for a gig. That fee provided about 65% of the company's revenues, but they also provided an important disincentive to prevent bands from simply flooding every promoter and venue on the site with applications.
But noting the e-commerce trend toward free services, Panay knew Sonicbids could be undercut by a newcomer, so it began a transition away from charging for applications. To keep down the flooding, members get a limited number of free "tokens" allowing them to apply for gigs, after which they must pay.
5. Think 'yes' not 'no.'
"Be opportunistic," Panay advises. Sonicbids was intended as a pure matchmaking site, sort of a Monster.com for bands. Early on, Jeep's ad agency came calling. They wanted Jeep drivers to be able to vote for the band to appear at an upcoming Jeep event. "It would have been easy to say, 'No, that's not what we do,'" Panay says. Instead, he asked how the people would vote, and offered to build a website where they could do it. It turned out to be an important decision.
"That was the beginning of the consumer brands part of our business, and the branded business is quickly becoming the majority of our revenue stream," he says.