The Lessons I Learned from My Failed Music Startup

The following guest post comes from Zillionears founder Jordan Nemrow, who is now shutting down his music startup. 

I finally said it, my startup failed.

Fuck.  I felt like I was coming out of the closet when I first stated it aloud to my co-founder. We both knew for months it was not working out, but we never explicitly defined our situation as a failed one. Now that the elephant in the room has a name, we’ll call him “Dumbo” which stands for “Didn’t Understand Markets Brain Outline”.  That right there was our main problem. Our market demographic was musicians, and although a few of us had worked around the industry, we concluded recently we were not music SALES domain experts.

The product was a flash sale platform for musicians to release their music using dynamic pricing (  To us, this software was a no brainer for musicians to use. The artists get to engage their fans while enticing their community to share with friends. So we talked to a few artists who said they thought it was a cool idea.  BOOM!  Our idea had been validated!  After that moment we basically stopped talking to artists for a year and built (and rebuilt) the software until we thought it was acceptable.

Our first beta test was a disaster when Amazon (who was our payment processor) suspended our account for not complying with money transfer issues.  Fans were able to participate in the sale, but we were unable to capture their billing.  We ended up paying the artist out of our own pocket and giving everyone his music for free (and we never told him that happened until now).

From that beta test we found out that our software needed to be rewritten to comply with Amazons terms.  More importantly though, people really didn’t really LIKE anything about our product. No one that used the service thought it was that cool.  In fact, some people that participated in the sale didn’t even like our “dynamic pricing” system.

They were trying to support the artist, so saving a few dollars didn’t excite them.  They could easily have just gotten his music for free elsewhere.

We should have packed it up early right then, but we felt like we had already gone too far to quit.  We rebuilt (and re-designed) the majority of the software, got approved by Amazon, and reached out to over 1,700 artists (each individually through different platforms).  We got between 1 and 10 artists interested.  Again, this just screams “PUT IT OUT OF ITS MISERY!”  But we kept going.  Finally the day came for our second beta (which was totally gonna kick ass for sure).  The artist we had on board set up his sale page and was ready to go.  Only problem is he totally misunderstood what our software was all about.

Once he found out about the dynamic pricing he tells us, “I think I am just going to release with another platform.”  FUCK! Are you serious????

After that we spent another month slowly letting it linger in our day to day lives.  We went for one last ditch effort to make a press release, but couldn’t get a single artist (out of the 1,700+ we talked to) to run a sale.  My co-founder called me to tell me this news.  I asked him “Would you like to use my gun?”  I was referring to the scene in The Social Network where Zuckerberg’s lawyer asks Saverin “Would you like to use my pen?” to manipulatively sign his shares over.  I, of course, was referring to shooting this fucking company in the head and moving on with our lives!  He agreed.  We took Zillionears out back, and shot it in the head.  It felt good.

Although our company did not succeed the way we would have hoped for, we all learned more in the past year than we had in college.  Our insights and experiences have been invaluable.  For each of my future posts I will go into detail about the things I learned while on this journey, and how to apply the knowledge to future startups so you can avoid ending up in a room with “Dumbo”!

Hit me up on twitter! I just got on there. I love to talk to folks about startup experiences! @nemrow 

65 Responses

  1. Visitor

    “The product was a flash sale platform for musicians to release their music”
    Here’s the simple truth:
    Artists don’t need any new ‘music startups’.
    We have one problem:
    If you want to be of any help to the music industry — and make a fortune in the process — you may want to solve that problem.
    Anything else is a waste of time.

    • Visitor

      Piracy isn’t a problem when no one knows who you are, or doesn’t give a shit if they do.
      Solve the problem of quality and obscurity first. Piracy is a luxury problem for most artists….and also one that won’t be solved any time soon…

      • Visitor

        “Piracy isn’t a problem when no one knows who you are”
        Not sure what you’re trying to say…
        It’s very, very simple:
        People know who you are if you make great music.

        • Emanio Media

          That’s riddiculous. There are tons of artists that make great music and are unknowns. Most great artists made great music before the world knew who they were, and unfortunately even more great artists will remain unknowns unless they try something different!

          • Visitor

            “There are tons of artists that make great music and are unknowns”
            Perhaps you’re one of them? :)
            Here’s the truth:
            Before the internet, you could hide an awesome song for decades.
            Today, you can’t hide it a week.

          • @emaniomedia

            I’m not a music artist. I’m a music fan who just happens to be a decent programmer. Here are several artists that are unknowns and are really good. Pick your genre or listen to them all.
            Word of mouth works you just have been exposed to four artists you don’t take my word for it just ask digital music news.

          • Visitor

            “Pick your genre or listen to them all.”
            Nah, I’m not big on spam.
            The beautiful thing about awesome songs is that you don’t have to shove them down people’s throats.

          • @emaniomedia

            So how do you find new music? Do you just wait for some executive to hand pick the songs you hear on the radio? Do you hang around high traffic areas waiting to see a billboard with a new artist on it?
            If you are serious about supporting good artists the best thing you can do is promote them when you find them. Most people aren’t going to do that if they aren’t getting a cut.
            Which is why a lot of really good artists can’t survive on what they earn from music.

          • Visitor

            “So how do you find new music?”
            Like anyone else — friends, radio, tv, iTunes, YouTube.
            Again, you can’t hide an awesome song…

          • Visitor

            Since you are such a pro on making awesome songs, can you give some examples and a well understood method of creating them? We’d appreciate it.

          • Erik P

            He can’t because he’s full of it & doesn’t know what he’s talking about.

          • Visitor

            Here’s what I know:
            When my work fails, there’s only one person to blame:

          • Saumon Sauvage

            I don’t understand what “great” is. McDonald’s and Burger King sell a ton of product, but they are far from “great,” whatever that is supposed to mean.
            It is simply what people will buy, and most people, yes, most, have shockingly bad taste. They LOVE noise, but they call “music,” and will defend their choices based on nothing more than the fact of having ears and an opinion — even though they know nothing, are untrained and fickle.

          • GGG

            Seriously, man, you are the worst poster on this site haha.

            Guarantee there are plenty of great songs out there plenty of people will never hear. If you really don’t think that’s the case you are absurdly naive.
            Also, you always talk about music making/writing with such confidence and air of douchiness. Why don’t you post some of your songs to prove to us all how great you are.
            Or let me guess, you’re one of those guys who has 200 Facebook fans and still thinks they should be selling 50K records?

          • Visitor

            “there are plenty of great songs out there plenty of people will never hear”
            That’s what many artists believe — and a lot of ‘music startups’ profit from that belief — but it’s not true.
            You can’t hide a wonderful song.
            Never could…

          • GGG

            Sure, you can. Ask five hundred people on the street about some random great Tom Waits song and maybe 3 will know it. Hell, I can probably pick out a great Tom Waits song that even a lot of Tom Waits fans don’t even know.
            Since you always talk in Top 40 and pop hit terms, you can’t possibly believe there are incredible songs that have a fraction of the cultural impact as a, say, “Stairway to Heaven” or something. Though, if you consider “not hiding” as a band that can play 400 seat rooms, then you’re entire schtick is a falling apart.
            Also, please do us a favor and post your masterpieces so we can all learn how to write a judge the perfect song. You must have so many of them! Don’t hide them from us!

          • Visitor

            Here are 2 headlines you’ll never see irl:
            A wonderful song is a treasure; a jewel, an extremely rare object of beauty and power.
            So we can’t stop talking about it when we finally find it.
            That’s why you can’t hide it.

          • GGG

            Ok, ignoring the fact that your songs must be terrible since you clearly have no confidence to post them, let’s break the other part of this discussion down. When do you consider a song discovered? 100 people know? 10,000? a million? More? Unless you’re very inconsistent in your debates, I’ll assume you need very widespread recognition to count, in which case you throw away thousands of amazing pieces of music because maybe they can only sell out 1K seat theaters.
            We can find incredible musicians who most people will never hear of. Chris Thile is easily one of the most talented, youngish musicians alive. He won a MacArthur Genius grant. Again, poll 500 people off the street, even here in NYC and I bet the vast majority of people won’t know who he is. And he has some brilliant songs. Is he “discovered?” Obviously, but again, not even a fraction of the way Justin Beiber is “discovered.”
            Also, even trying to compare the amount of music available in the 1700s or 1960s to today is hilariously ridiculous.

          • Visitor

            “Also, even trying to compare the amount of music available in the 1700s or 1960s to today is hilariously ridiculous.”
            But the amount of jewels are pretty much the same.
            And you don’t need any ‘music startup’ to find them. They’ll find you.

          • GGG

            I’m not even talking about the need for a start-up. I’m just challenging your absurd notion that there is literally not one great song out there that only a relatively small group of people know and love.
            Also, please post your music. It must be the greatest music ever written. Stop avoiding it.

          • jw

            lol. Here’s some low hanging fruit…
            Nick Drake. Virtually unknown during his time. Never sold more than 5,000 copies of a record. Died in 1974 at age 26. Sometime in the 80’s REM & the Cure started to cite him as an influence. Then in 1999 VW put “Pink Moon” in a commercial & throughout the early/mid 2000’s he was on the soundtrack to pretty much every indie flick made. Now he’s sold a lot more than 5,000 albums.
            People in Detroit thought Rodriguez was homeless, hardly anyone knew he was ever a musician. Apparently the whole time he was huge in South Africa. Light In the Attic records rereleased his first album in 2008 which lead to a documentary which became a huge hit & now he’s selling out shows everywhere.
            There’s plenty of stories like these, but a lot more stories about artists who never got that serendipitous break, either during or after their career.
            I mean… what you’re saying is pretty stupid. It’s just common sense. Read this:
            Phrases like “posthumous success” & “before his/her time” or “belated success” all exist for a reason.

          • Visitor

            Here’s how music travels:
            When you hear a great song, you tell your gf about it.
            She tells her sister — who’s a reporter.
            You can’t hide a great song.

          • GGG

            lol, this might be the dumbest response you’ve had yet.
            Can you just admit you’re wrong? I would love to meet you in real life. You seem like one of the most hilariously clueless people.
            Also, post your brilliant music. The world is waiting.

        • Indie

          Not true that piracy is only a problem for famous musicians. Small time, indie music is pirated too. We find our music on pirate sites all the time, and free downloads greatly outnumber legitimate sales. Since a pirate site can easily list thousands of free downloads without much cost, there’s no risk in listing lots of obscure artists. In some ways, it’s the indies who are hurt most, because we need every dollar.

          • Visitor

            “In some ways, it’s the indies who are hurt most”
            And the pirates know it.
            That’s why they feel this need to talk about MAFIIA (pirate speak for evil right holders) and big Hollywood all day long.
            Most pirates don’t really enjoy the idea of stealing from individual artists.
            And yet, that’s exactly what they do…

    • rikki

      Piracy is NOT the problem
      As a DJ the problem finding decent music WORTH paying for.
      I have never seen so much useless and worthless music being made in my life
      Can anybody sing live and sound better then the cd and with no autotune?
      The worst part are those WUSSIE alternative guys, who need thier nuts squeezed to hit the high notes instead of taking singing lessons…and those waify little girlies on their Pie-annoh.
      Oh one last complaint do you know any rock band that can play a dancebale guitar solo? I’ll glady pay FULL PRICE for that….

      • Visitor

        “Piracy is NOT the problem As a DJ”
        No, piracy is not a problem — for DJ’s.
        It is, however, the only real problem for artists.

      • steveh

        I guess you’re not a techno or house DJ Rikki?
        What kind of DJ plays rock bands with guitar solos?
        You’re a wierd kind of DJ…

  2. @emaniomedia

    The Problems:
    1. Nobody knows you exist (marketing), and if they do know you exist it’s through ineffective self promotion (horrible marketing).
    2. When people do know who you are they don’t have enough reasons to buy so they steal it or ignore it.
    The Solution: Just watch the two videos on the home page and tell any artist you know!
    Insanity= Doing the same thing over and over expecting a different result.
    It’s time for something new. It’s time for Emanio Media.
    Free accounts if you start during Beta.

    • R.P.

      Someone pass this guy the gun.. Kill yourself. You owe me 4 minutes of my life back for watching that video.

      • @emaniomedia

        Thanks for the feedback! You can keep the gun but I’d totally take more detailed feedback. I’m sure you have some.

        • Visitor

          I can offer you a lot of detailed feedback.

          What, you thought I was going to offer it to you for free?

    • Visitor

      “Nobody knows you exist”
      Here’s how to solve that:
      Go back to school and learn how to write and/or perform an awesome song.
      There’s no way you can hide an awesome song!
      “When people do know who you are they don’t have enough reasons to buy so they steal it”
      Which bring us back to my point:
      We don’t need any new ‘music startups’. We have one problem only — piracy.
      Solve the problem, and we’ll be facing an unprecedented golden age for music.

      • Erik P

        If you have it all figured out then why are you trolling on this site? I mean, if it’s as simple as just writing awesome music then you don’t even need sites like this, or any other website for that matter.

        • Visitor

          “if it’s as simple as just writing awesome music then you don’t even need sites like this”
          It has always been that simple, it’s just more obvious now than ever before.
          Not sure what that fact has to do with this site, though.
          I don’t think it exploits artists in any way. I see a lot of useful information here. Nice discussions, too.

      • @emaniomedia

        I can see why you’d think that. Here is the difference.
        Pyramid schemes are illegal because they don’t sell a product. They sell an opportunity to sign up more people. The end result is people at the bottom get the shaft…. No pun intended.
        Emanio Media is different because:
        Emanio Media sells a product. It’s called music. It’s that stuff people bought in mass back in the 80’s.
        What’s different between Emanio Media and iTunes and Other outlets is that once you buy the music the fan can get paid to tell their friends about the music. If the fan dosent tell their friends they are on the “bottom” which is like you just bought music using iTunes.
        When an artist spends time and money acquiring a fan (someone who buys their music). That fan with Emanio Media has an incentive to tell their friends. Marketing problem solved and if its good enough to steal its good enough to buy and share with your friends so pirating problem solved.

        • Gilligan's Island

          It’s a pyramid scheme because money from the intial sale goes to pay others. If no one buys, no one gets paid

          Music purchasing is mostly a passive act. Since people are so hesitant to review music on Amazon and iTunes, what makes you think they will actively participate in this? For the promise of earning pennies? NOT likely.
          What research have you done to show that music purchasers- not free downloaders- care enough or are driven to participate in your pyramid scheme?

          • @emaniomedia

            Doesn’t money from all music sales go to pay others?
            At fans get 25 to 50 cents when someone buys the music they’ve shared. You can only share music you’ve bought. This is to keep people from spaming their friends.
            Who else pays you to tell people about the music you buy.
            Reasons to buy music and 25 to 50 reasons to share the music you’ve bought.

          • d0n't feed the trolls...

            Go SPAM your shitty site elsewhere please

  3. Jeff Robinson

    Ouch! Jordan, that’s a painful story!
    What was the original start-up figure for this company? Did you have venture capital support?

    • Nemrow

      It was self funded by my co-founder and me for a total of under 10k. We lived on limited savings and both moved in with some awesome roomates (our parents) for the year!

  4. david@indigoboom

    Does absolutely every post on this site have to degrade into a piracy rant???We all know about that problem. I suggest banning all discussions on DMN about piracy that do not involve a solution to the problem .

    • Visitor

      “I suggest banning all discussions on DMN about piracy that do not involve a solution to the problem .”
      One thing’s for sure:
      When we find the solution, it won’t be because of people like you.

      • jw

        Certainly won’t be because of people like you, either.

      • Econ

        You won’t find it because piracy isn’t the cause of the problems, it’s a symptom. Yes, you can make money treating symptoms, but you won’t cure anything.
        The consumer will pay to have the wheat separated from the chaff. And the music industry, since the first 4-78 “album” was packaged, has been trying to sell as much chaff as possible. By the late 70’s the industry has tried to kill the single and have felt the wrath of the consumer since. The industry DID “successfuly” kill the single in the CD era – and the consumer responded in two ways: some gravitated to downloading, most gravitated to other forms of entertainment.
        Today’s consumer doesn’t even want a hard drive full of files anymore, people have tablets with tiny amounts of storage compared to their PC’s (which they are abandoning). They see how easy it is to watch a movie or tv show on demand and that is how they want to consume music. The best news item here in the last few weeks was Rdio getting into the movie streaming biz. Eventually what will happen is something like Netflix and Spotify will join forces: Stream movies and TV shows for $X a month and for an extra $2 stream all the music you want. Try to wrangle any more than that and the consumer will not bother.

        • Visitor

          “for an extra $2 stream all the music you want”
          Sure — if the music you want is amateur music.
          Professional composers, lyricists, arrangers, singers, musicians and recording/mixing/mastering- engineers have to be paid, ya know…

  5. Mylander

    Good write up Nems, hopefully we can find real jobs now.

  6. Voice of Reason


    Right, I’ve been a pro player for 43 years and in the digital music industry for 15….Shut up and start up a muffler shop, you’ll make a LOT more money…

    • Visitor

      :) Spot on!
      I wish people would spend their time on ear training, writing classes, instruments and song lessons instead of all that junk.

      • Adam Smith

        I had told my students no long ago that I’ll gladly take their money for the lessons they are taking, but expecting any chance in the future business of music would be like a zombie-load to the head…and that is because they haven’t solved the music-fraud problem. (I call it that instead of “piracy”, because of the romantic notions associated with that term. Fraud is more accurate, but our own gov is so ‘in bed’ with Eric Schmitt, nothing will be done.). I can certainly see folks learning to play an instrument very well, though it seems most are not interested in a virtuoso of ANY instrument anymore. I can certainly appreciate someone wanting to learn how to arrange, orchestrate, etc, for their own pleasure, but c’mon! What realllllly are they going to be able to do with it professionally?

        • Visitor

          “What realllllly are they going to be able to do with it professionally?”
          Excellent question.

          The answer depends entirely on how we deal with mainstream piracy — or, yes, fraud.

          Nobody wants to spend their youth on education that leads directly to unemployment.

          So, now is the time to decide whether or not we want professional artists in the future.

        • Visitor

          The biggest fraud is the notion that people can make a living making music “on spec”.

          I know plenty of professional musicians that make a decent middle-class living. 95% of what they do is “for hire” – they check their egos at the door, network like crazy, and most importantly actually show up for jobs when they say they are going to. The biggest problem isn’t piracy, it’s people bouncing checks or cutting out before the gig is over and stiffing the hired musicians.
          My favorite musician joke:
          What’s the difference between a dead dog in the road and a dead trombone player in the road? The dog had a job.

          • Visitor

            “The biggest problem isn’t piracy”
            No, not for studio musicians.
            But it certainly is for those who hire the studio musicians.

          • Econ

            And those people are making music on spec.
            And the hired musicians in that case are usually given a choice: a flat fee or a percentage of mechanicals. Since the musicians rarely take the percebtage deal anymore, it is actually more lucrative for the artist creasting “on spec” should they wind up with a hit because they’ll be splitting the tak among fewer people down the road.

    • Nemrow

      “WE HAVE WOMEN JUST WAITING TO HAVE SEX WITH YOU AFTER YOU SIGN YOUR BIG RECORD DEAL.” I think you just inspired me for my next startup! BINGO!

  7. ASG10010

    thanks for your post, although i disagree with your choice of title.
    i don’t believe that you failed…moreso that you just haven’t succeeded yet. as you know, it’s incredibly rare for a new product/service to succeed on its first iteration…you guys learned a lot and can apply these learnings on your next attempt.
    so keep going and try some other concepts (maybe with different sets of customers that you know are willing to pay to have you solve their pain points).
    keep your head up!

    • need before greed

      There has to be a NEED before you have a product or service.
      There is NO NEED for ‘new music startups’. The market is fragmented enough already.

      • ASG10010

        @need before greed: i agree 100% with your first comment…your second, not so much. :)
        when you say there’s “NO NEED for ‘new music startups,'” it depends on your definition of a new music startup.
        from jordan’s post, it sounds like the market didn’t need or value the first version of his startup. but if he stays in communication with his artists and identifies: a) their true pain points, and b) potential solutions to these pain points, then his next version may be more successful.
        it’s clear that artists have multiple, unaddressed pain points (already well-documented on this blog and elsewhere). perhaps jordan and his team can come up with a viable solution that no one else has come up with yet?

  8. inthecloset

    i am not certain that there was a lesson learned. it’s great to be an entrepreneur and create tangible things from ideas and dreams but often this it at the expense of pragmatism. You need to ask “why did hundreds of music start-ups before me fail?” and “What were the common variables behind successful music start ups?” Momentum from an existing and relevant position, large investment and/or skirting/breaking the law are common factors behind enduring emusic businesses. Innovation alone doesn’t win in this space.

  9. Faza (TCM)

    Thanks for the interesting perspective – especially, since it’s one that we don’t often get to hear.
    I do have to point out – not so much to you, Jordan, but to other would-be start-up founders – that “innovative ways to sell music” is a solution looking for a problem. The inability to sell one’s music without label backing was a problem in the Nineties – back when CD Baby, for example, was formed. These days, there’s no shortage of ways to sell music. The fundamental problem is that people aren’t buying very much – I won’t go into the theories of why, though anyone familiar with my writing also knows mine.
    In short, Zillionears failed because it tried to sell a solution to a problem artists no longer have. The only artist-targetted start-ups with a chance of succeeding these days are ones that will offer the ability to cut through the online clutter and actually make sales that cannot be made otherwise. I’m not sure whether such a sloution is even possible, but that’s what it’s going to take.

    • Saumon Sauvage

      Agreed. Well put. Get it in front of people with the best stuff you’ve got and persevere.

  10. MusicMgr

    After reading the article and reading through the posts I’m going to offer a piece of advice. It does not matter how great you think your product or song. Some of you have posted that good music or a great product will be found just because it’s “kickass.”
    Unless your song or product is a phenomenon the likelihood of it being “discovered” just because it’s “awesome” is incredibly slim.
    Here’s the secret: Advertising, publicity, and marketing dollars. No matter what your startup; whether it’s a product or your next album you have to budget into your development costs the advertising and publicity dollars. No matter if your startup cost is $1000 or $2,000,000 a percentage of your startup has to include publicity and advertising.
    If you have a great idea and you move forward without including a publicity campaign then you have taken a step backward before you’ve taken a step forward. The old saying, “It takes money to make money” is true!
    No matter how big or small you are every failure is one step toward success.