Bootstrapping is a term often used in the startup world to indicate self-financing using founders’ own money or the operating revenues from the business. Although it is not always a choice it teaches entrepreneurs to focus on the essential aspects of the business and lets them implement their vision without outside constraints from early investors.
Maurizio Bandi’s startup story is emblematic of the true meaning of bootstrapping.
Maurizio is a former L’Oreal executive who, at age 30, quit his “cushy” job in Italy to go to Silicon Valley and turn his passion for music into a startup. He left Bologna with a few dollars in the bank and 10 slides, but soon after he got to the U.S. he realized his convoluted business idea needed some fine-tuning.
To achieve his dream on a shoestring, he needed a team with complementary skills but a common passion for music, so he started looking for co-founders.
Maurizio says: “The good thing about Silicon Valley, besides the perfect weather, is that there are networking events everywhere and for everything. It is easy to interact directly with great entrepreneurs, investors as well as other people in the startup ecosystem.” In this vibrant community he met his two co-founders: an American programmer who previously worked for a startup in the music space called WE GO CONCERT and a Canadian-Egyptian entrepreneur who had founded his own record label in Canada.
A career spent in marketing and sales has given Maurizio an appreciation of the importance of market research. In fact, as soon as he got a team in place, he immediately started testing his initial idea. Based on the research results the team quickly pivoted from the original concept, which was based on taking independent artists and introducing them to record labels, into a full-fledged startup called Scoutmee.
Scoutmee is a new community-based platform that connects independent musicians and fans for on-demand Live performances and music lessons.
In the U.S. the live performance market is very large with 4 million events per year and a market size of about $ 4.5 billion. The market for online and off-line music lessons is worth $ 3.5 billion and growing. Additionally, a recent Nielsen study found that total music spending is $26 billion each year, and fans could spend an additional $2.6 billion annually if they had more behind-the-scenes access to their favorite artists and to exclusive content.
The Nuts and Bolts
“Before getting to our final product, we advertised on Facebook and Craigslist to test a number of different services such as music gear and musical instruments exchanges, live performances, lessons, etc. We used a Landing page to capture conversions and once we determined the most desired services, we hired a development team in Egypt to build the platform. Egyptian programmers are very affordable, good and fast. This strategy allowed us to quickly release a Beta version, which we are currently assessing in collaboration with 100 musicians from the Bay Area.“
Scoutmee’s next steps include expanding beyond San Francisco to Los Angeles, New York, and Nashville and do cross-promotions with other music start-ups that can provide access to consumers.
Now the focus is going from bootstrapping to raising $350,000 in Seed capital. Maurizio explains: “We are happy because we pitched to a number of accelerators and investors and most of them told us to come back once we have some positive traction indicators. I believe it is due to the fact that our business model is similar to Gigmasters (acquired in 2015) and Takelessons which has raised $19 million, both successful start-ups in our space. What differentiates us is an exclusive focus on Music rather than a variety of trades and arts, and the fact that we target end-users instead of a mix of booking agents and users.”
The Scoutmee website is very stylish, the Italian touch is palpable. Each musician profile looks “cool” and very marketable: there is a short performance video and social media content automatically pulled from major platforms, plus a rating system to rank each artist. Fans are constantly updated and can book directly live performances & lessons with the Musicians.
At the core of Scoutmee’s appeal is an effort to capitalize on those fans who long for special personal interactions with their favorite emerging artists.
Challenges and Fun
Maurizio says he found pretty challenging building a good team and not having a steady income. These aspects are more acute for foreigners who often need to create their network from scratch and need a Visa to work in the U.S.
He also mentions the hurdles of moving from ideation into execution on a very tight budget and limited experience.
Finally, there are the inherent issues of a Music startup: “Artists, are highly talented people, but usually broke and disorganized.” Says Maurizio: “Their business sense is often non-existent: for instance some have tens of thousands of followers on social media yet don’t know how to monetize them. Dealing with artistic souls can be a dream and a nightmare at the same time.”
Maurizio and his team got their first up close and personal glimpse inside some artists’ lives when they decided to shoot a Kickstarter video for Scoutmee: “We wanted to make it very realistic. All of us spent virtually 48 hours with 4 different artists, living in their homes while shooting the video. These hours shared with them, hearing their business calls, being together when they were booking gigs, composing new songs, eating, drinking, sleeping… were both a learning experience and lots of fun. Exactly what we needed to kick-off our project.”
Maurizio believes that, if everything goes as planned, Scoutmee can generate $15 million in revenue by year 4. Even though, at times, the responsibilities of bootstrapping can be overwhelming and the lessons can be difficult, he has no regrets about becoming an entrepreneur.