Tapping out is a recession survival strategy. Some entrepreneurs absolutely refuse to consider failure as an option. Not only is an option but it can also be an opportunity to prosperity.
This situation is illustrated in the music industry. Independent record labels are facing their toughest battles right now. The odds are against them.
Records are passé, CDs are on their way out that’s a fact of life and the music entrepreneurs running these labels are fully aware of that fact. Add the fact that in a recession, the few vinyl record and CD buyers that were left will save their money to more pressing needs and the situation is hopeless to say the least.
After all, even the die-hard record and CD buyer will turn to digital downloads (free or fee based) as the alternative.
Yet entrepreneurs who own record labels refuse to see failure as an option.
There’s a company I am working with and it absolutely fails to recognize a powerful opportunity that could turn the company into a winner thus financing its record and CD operations.
Today, to run a record label, revenues must originate from another source. Book authors figured that one long ago. The book itself does not make them rich (except for a very few. In the music business only a few labels make money by selling their music. Those are the winners who take all).
What makes authors rich are the opportunities that come as a result of publishing a best seller. J. K. Rowling is one of the few authors to make a killing from the sales of the books themselves.
Other authors make their money from movie licensing, merchanding, speaking engagements, consulting, seminars and so on. But their books drive their empires and thus have gone from being the business to being marketing tools.
Indie labels need to learn that lesson especially in these troubled times. The money is not in the releasing of records and CDs but in seemingly ancillary projects.
The labels are now marketing tools and should be viewed as expenses or investments depending on a company’s accounting practice.
The label I am working with is refusing to jump on a cash cow that will eventually save the company. Trying to keep the CD and record sales alive is a slow death. I advise them to look at the situation from a different perspective: exploit the goldmine and use the riches to keep the record label alive.
Recognizing and embracing failure is an option that can save a company in the long-term. That’s because it allows is to save its money and go where the money is.
In this world, there are no shortages of opportunities for observant entrepreneurs. Even big corporations have learned to embrace failure to exploit opportunities. Imagine if IBM had stuck to its PC hardware division and refuse to exploit the Services division where the opportunity laid?
The whole company would have sunk like the many computer companies have in the last decade. Now, IBM is alive and well.
Jiu jitsu wrestlers become even more skilled by tapping out which is a way of surrendering in a grappling match, learning from their mistakes and thus drawing their lessons. Thus, they become better practitioners and are able to advance in ranks toward the coveted black belt.
