Phish: When Band and Business Intersect

Many people enjoy music – especially live music. My spectrum of interest is wide, ranging from classical to jazz, from rock to funk and hip hop. after our children are tucked in, my wife and I usually have something playing in the kitchen as we prepare dinner (actually, she prepares dinner and I sit at a bar stool and answer email). And last summer, I attended the Phish shows when their tour brought them to Atlanta. If you missed them I am truly sorry.

The first time I heard of the band and listened to their music was April 1994. Then, on August 14, 2004, Phish began the first of a two-night run, playing what was supposedly their final two shows. The band stayed “broken up” for just a few years, finally reuniting in 2009. Order in the universe was restored.

Phish has been at it for more than three decades, and regardless if you are a “Phan,” they clearly have proven their longevity. Many music critics say their current shows are the best the band has sounded and there is not a better live act on tour right now. Clearly a debatable topic, but the point is simple – Phish keeps producing and people keep buying.

It is not uncommon for Phish fans to be the only one of their close friends who is a devout follower. If you were to poll your inner circle and ask them who their favorite band is, it is unlikely “that jam band” would be in the mix.

Consider the Priceonomics article “The Business of Phish” about what makes the band special. It is pretty remarkable when one accepts the following truths:

  • Only one original album made the Billboard Top 10 Rankings; and
  • They have 883 songs (300 originals) in their catalog – none of which is a radio hit.

So how does Phish remain among the leaders in the music business when they haven’t hit any of the traditional milestones typically associated with music industry success? And how did they generate $120 million in ticket sales from 2009-2014 (which was more than The Black Keys & One Direction during that span)? The short answer: Phish is an expert in their space. They know their business plan and they execute it to perfection.

Underlying Phish’s success are sound business practices. Below are seven points they execute successful that I believe are transferable to any industry.

  1. A True Startup: Rather than taking on money from established players, Anastasio, Fishman, Gordon and McConnell bootstrapped the company. They just kept playing the same local venues in Burlington generating predictable revenue. Eventually, they had a solid base of customers, became profitable, and were autonomous to the point where they were not forced to accept capital or one-sided terms from major record labels. If you are starting a business, do not take on more capital than absolutely necessary. Conduct customer discovery and engage market validation before trying to scale. Phish achieved financial independence before anyone even knew about them, which is rare in the music industry.
  2. “We Talkin’ ‘Bout Practice”: Like Malcolm Gladwell’s well-known theory on honing a craft to achieve world renowned expertise, as described in his book Outliers, Phish literally outworked their competition. From practice to number of days on tour, the band was always working. Each member is an expert at his instrument and studied music in college (the band boasts degrees from University of Vermont and Goddard College). They are regarded among the most obsessed musicians in the world with practice. Phish puts in the necessary hours of work and they apply themselves rigorously during those times of practice. And you thought it was entirely improvisation!
  3. Business Model: Phish does not make money by selling music in the conventional way, i.e. radio play followed by marketing leading to album sales. They sell a live act with emphasis on crowd interaction. People buy the experience that the band offers. Phish’s most valuable asset is their ability to entertain and keep fans clamoring for the live experience. They have played more than 1,500 shows and (unofficial) band archivists claim the band has never played the same set twice. Phish’s value proposition has never changed and remains essential to their core business – the live music experience or bust.
  4. Learn, Adapt and Survive: As noted in the Priceoconomics article, “when the ‘music business’ cratered in the 1990s because of file-sharing and radio’s importance declined because of the internet, Phish remained unaffected and profitable as ever.” Why? The live music experience. Today, every Phish concert ticketholder can use a code to download the show they attended minutes after its conclusion. Know your core business model and stick to it, but be willing to learn and adapt and you can survive the downturns. Apply those learnings when charting your company’s next course.  If you are not learning along the way, you are dying. Don’t keep making film, Kodak.
  5. Attention to Detail: It’s not only the four musicians who make Phish successful. Lighting designer, Chris Kuroda, is considered among the best at his craft. Chris is the only crew member who has been with the band since their Vermont college days and regarded as the “5th member” of the group. He also has 32,000 followers on Twitter – not bad for the dude who does the lights. (To maintain Chris’ street-cred, I will NOT share that he also helps out Justin Bieber). Every employee in your business should contribute value regardless of how the role is perceived in terms of importance or stature. A great team inevitably pays attention to details. Those details accentuate your business and make a difference.
  6. Support System: Whether or not they admit it, every person needs someone to lean on. Every businessperson can use a mentor. Every business can use advisors. Phish members will tell you that their families were always supportive and influential. In December 1994, when Phish reached a professional milestone by selling out Madison Square Garden – headlining its marquee – Dr. Len Fishman, who was not quite sure this “band thing” was going to work out, told his son that he was glad Jon “stuck to his guns.” The pathway to success can be daunting at times. Remember who is in your corner and use their support as motivation. Those people are always there for you in good times and bad. They also tend to give brutally honest and sincere feedback while also offering ideas worthy of consideration.
  7. Be Authentic: News flash – not everybody likes Phish. The folks who do, however, are undyingly loyal and devout customers. Unless you are Uber, not every potential customer is going to need/want your company’s services or products. Recognize what makes your business unique and why your customers value it. Phish drummer Jon Fishman is an accomplished percussionist and boasts a vacuum is his repertoire. What originally began as a dare at a party has transformed to one of the most treasured (and admittedly bizarre) stage performances at a Phish show. Since March 1992, only eight times has Mr. Fishman “taken center stage to give the audience what they paid their hard earned money to see: 100% pure, uncut vacuum cleaner music, played by a little hairy beast man in a donut muumuu.” When asked how others could learn to play a 1962 Electrolux canister in The Phish Book, Fishman simply replied with a grin: “My only advice to anyone wanting to play the vacuum would be to not to – because I’ve done it and you’d only be ripping me off. And if you’re not careful, it can rip apart your gums and teeth.” Be authentic – it’s much more fun.