More Startup Tips From The Beatles

This part two of a series; you can access part one HERE.

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs, Mark Cuban, Richard Branson, Walt Disney, Mark Zuckerberg, Michael Dell and Larry Ellison.

Abbey RoadI recently reviewed Richard Courtney and George Cassidy's published business book, Come Together – The Business Wisdom of The Beatles in the first entry of this series.

Although the Beatles' phenomenal career encompasses numerous startup lessons, many of the anecdotes cited in Come Together are trivial, while others are painfully obvious. However, despite the book's shortcomings, it contains a number of insightful lessons emerging entrepreneurs can apply to their startup careers.

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More Beatles' Startup Tips

This entry describes some additional Beatles-inspired startup tips, which I gleaned from both their successes and their failures.

1. Remain Optimistically Pessimistic

"I know on the plane over I was thinking, 'Oh, we won't make it,' but that's the (pessimistic) side of me: we knew we could wipe them out if we could just get a grip." John Lennon, describing his misgivings during his first flight to America.

When they were four unknown, spotty-faced Liverpool teenagers, the Beatles shared a common vision. They unabashedly wanted to become "bigger than Elvis." They were the only people who did not think their audacious goal was ridiculous. No one from England had ever enjoyed sustained musical success in America, let alone sold enough records to seriously challenge the King of Rock-n-Roll's throne.

The Beatles' naivety allowed them to believe the unbelievable. Entrepreneurs should be naive, as long it is coupled with a relentless work ethic and a pragmatic ability to execute.

Although they were utterly confident that they would achieve their long-term vision, the Beatles' healthy pessimism motivated them to work extremely hard and to take nothing for granted.

Operate your startup in the same manner; assume the best and plan for the worst. Grand aspirational goals are achieved by executing innumerable, inglorious, incremental tasks. I further discuss how an optimistically pessimistic attitude benefited Oprah Winfrey HERE.

2. Dominate Your Home Market Before Going Global

Although the Beatles shared an outlandish vision to dominate the global music market, they executed their business strategy in an incremental manner. According to Lennon, they first focused on becoming popular in Hamburg, then on becoming the most popular band in Liverpool. Next they established themselves as the most successful band in Northern England before conquering London. Once the UK market was fully penetrated, they began touring the major cities of Europe. It was not until Beatlemania was firmly established throughout Europe that the Beatles embarked to America.

At their launch, many startups also aspire to audacious goals, just as the Beatles did early in their career. However, a startup that does not first achieve market validation in its home market generally does not achieve its long-term goals. In many instances, startups open international offices before their value proposition is fully formed. Kevin O'Connor, Founder and CEO of DoubleClick once told my UC Santa Barbara students (I am paraphrasing), "We went international way too early. This caused us to make the same thirty mistakes in thirty countries, when we really should have learned from those mistakes one at a time, before repeating them globally."

Internet businesses are especially prone to the allure of immediate global ubiquity. Even Facebook incrementally conquered concentric markets; starting with Harvard, next expanding to the other Ivy League schools, then major universities and eventually to non-college students throughout the US.

Dominate your domestic market before entering foreign markets. If the Beatles had arrived in America before achieving success in Europe, it is doubtful they would have captured the US public's attention. They learned from their mistakes in smaller, lower profile markets and thus did not replicate them when the stakes were higher. If you enter a foreign market too early, you increase the chances you will lose focus in your core market, while battling indigenous startups that have an inherent, home-field advantage.

3. It's Your Band – Listen To Everyone And Then Ignore Them

"Every well-intentioned, high-judgment person we asked told us not to do it (sell books online). We got some good advice, we ignored it, and it… turned out to be one of the best things that happened to the company."
Jeff  Bezos, Founder of

During the early days of the Beatles' career, their manager, Brian Epstein, played a significant role. He instructed them to discard their leather outfits for their iconic Nehru suits. He further professionalized their act by encouraging them to not smoke onstage and to bow at the end of each set.

As their career progressed, Brian's role became less prominent.  In an effort to remain relevant, he made the mistake of offering his unsolicited advice to John Lennon during a Sgt. Pepper recording session, telling him, "I don't think that sounded quite right." John did not miss a beat, saying, "Slag off Brian. You stick to your percentages and we'll look after the music."

In this instance, Lennon did what many entrepreneurs fail to do with respect to managing their investors. John made it clear to Brian that the Beatles' role was to make the product and tend to the company's operations.

Early in a startup's career, venture capitalists often play a crucial role in shaping a business. However, the investor's ability to operationally impact your business typically diminishes as your company becomes more complex. If your venture capitalist offers gratuitous advice regarding your operations, follow Lennon's lead and suggest a similar (albeit a bit less pointed) role delineation.

4. Never Negotiate From A Position Of Ignorance

Beatles MemorabiliaBrian Epstein was a 30-yr old former furniture salesman when Beatlemania hit America in 1964. When he was approached by savvy New York businessmen to license the Beatles' name and likeness for various novelty products and toys, he firmly stated that he would not accept a penny less than 10%. The businessmen had a difficult time hiding their surprise, as the expected range for such licenses was between 20% to 40% of the product's price.

By negotiating from a position of ignorance, Mr. Epstein effectively cost the Beatles tens of millions of dollars in lost royalties.

If you encounter a negotiation in which you have incomplete data, do not hesitate to pause the conversation and seek expert guidance. One of the reasons Mr. Epstein did not seek outside counsel was due to his personal insecurity. He was attempting to perform duties which outstripped his capabilities, yet he was reluctant to admit this fact to the Beatles.

A healthy startup culture fosters confidence. Your employees should never feel they will be penalized if they acknowledge that they need assistance.

5. Stay Humble & Don't Forget To Laugh

Reporter: Does all the adulation from teenage girls affect you?

John Lennon: When I feel my head start to swell, I look at Ringo and know perfectly well we're not supermen.

One of the Beatles' most appealing characteristics was that they remained self-deprecating, despite their enormous success. When they first arrived in America, they seemed as surprised by their popularity as the reporters assigned to cover them. Their humility and humor won over the jaded New York journalists whose articles and press reports were American's initial introduction to Beatlemania.

Even in a healthy culture, startups are faced-paced, stressful work environments. Once you begin to achieve some hard-earned success, it will be tempting to start believing your own public relationship bull$hit. Don't do it. Stay humble and use humor to help you, and your fellow employees, cope with life on the startup emotional rollercoaster.

Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs, Mark Cuban, Richard Branson, Walt Disney, Mark Zuckerberg, Michael Dell and Larry Ellison.

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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