With the backing of music industry executives whose clients include bands like Kings of Leon, it's not hard to imagine the eight music startup founders gathered for a New York City showcase rising to stardom.
At the closing event of accelerator Project Music's 14-week boot camp, the entrepreneurs made their case for how their products would revolutionize the music industry. The time appears ripe for change in a business that has seen traditional profit sources like CDs and digital tracks dry up as more people stream music online.
The culmination of a partnership between Project Music and the nonprofit Nashville Entrepreneur Center, the May 6 event at Inc.'s offices was an opportunity for the music-tech startups to pitch their ideas to angel investors. Their products include apps like KaraoQ, which aims to substitute karaoke songbooks with digital song libraries, and ear.IQ, which adjusts music controls for better song quality.
"The music industry recognizes it can't survive if it doesn't change," says Heather McBee, an industry expert who works with Project Music. "We may be dragging them kicking and screaming, but they know they have to listen."
During the training camp, the music-tech startup founders learned about strategies in areas such as hiring, marketing, and finance. So far the companies together have raised $2 million in the Nashville market, says Mark Montgomery, the founding member of the Nashville Entrepreneur Center, which provided about 40 mentors specializing in the music business. Classical music distribution site DART has been the biggest winner, attracting $1.5 million. DART is a service that allows classical musicians to stream or sell their compositions online, something that didn't exist before.
Project Music provided training and $30,000 in seed funding for each startup in exchange for 10 percent of equity for investors. After leaving the accelerator, the companies will divide 3 percent of the 10 percent they each gave up among mentors they want to continue working with.
While they are breaking new ground, the startups are in good company. Businesses that passed through the Nashville Entrepreneur Center's mentoring program have a greater than 70 percent success rate, says its CEO Stuart McWhorter.
All of the startups will launch out of Music City. Nashville is the ideal place to grow a music-tech company, says Jack McCann, CEO of On The List, an app that provides perks to fans at music events.
"Nashville is cosmopolitan. [There's] a strong community behind Project Music," he says. "It's a great way for the music industry to wrap its arms around technology."