Business is Simple

There is something I still don’t quite understand. It is the observation that some people manage to always give confusing replies to simple questions. Apart from the obvious I-don’t-want-to-answer tactic, I think it boils down to two reasons: They either don’t notice that the listener is coming from a different point of view or their thinking is simply too complex. The latter one is dangerous and I’ll side with Scott Adams when he claims that after a certain complexity threshold, failure is inevitable. I’ve seen it happen.

I was reminded of this just yesterday when I was busy bagging hundreds of CDs my band (which is still active) recently produced. We used to be signed to a major label and the entire deal was fairly standard but very complex. Here are some of the buzzwords we dealt with:

  • Percentage points on physical sales
  • Percentage points on digital sales
  • Stepwise increases on those percentage points based on units sold
  • Frontline, midline, catalog, special prices, returns
  • Published price to dealer
  • Recoupable advances
  • Cross-recoupment
  • Splitting expenses on video production, again recoupable
  • Exclusivity
  • Royalties, copyright, all kinds of other rights per territory
  • Album options, first options
  • Stakes in live gigs and merchandising
  • Deals with producers, managers, publishers
  • and many more… (Also check out this Wikipedia page.)

We managed to escape all of this complexity. (Yes, we had a good lawyer.) Now we’re doing it ourselves. And you’d be amazed by how simple the whole thing can be: We produce an album and we sell it. Let me say this again: We produce an album and we sell it. We pay for the production which these days can be very little. Then we sell it on our website and through iTunes. The difference we get to keep. We don’t deal with any of the above anymore.

When we’re deeply involved in an industry, we tend to forget that, in the end, business itself is very simple. Even at this stage, before Luis and I even have an actual business, to me, it’s the highest goal to keep things as simple as they can be. Especially ideas. And how can you know if an idea is simple? You explain it to someone outside of your field. See if they’re confused or if they understand.