Lessons in entrepreneurship from Factory Records

To visit a modern tech startup workplace is to walk into a room with a dozen songs playing simultaneously but to hear none of them. Everyone is sat beavering away with headphones on, alone in their own world. It has never been easier to tune in to your own customised soundtrack.

Not all music is created equal, especially when there’s work to be done. How should you choose the best soundtrack for working? Which songs will help you get energised, focused, or creative – or even just carry you through a very long day? Listen up, the research is compelling:

  • 61% of employees who listen to music at work do so to make them happier and more productive
  • 88% of employees produce more accurate work when listening to music
  • 63% of doctors listen to music in the operating room when performing surgery

Private listening to music in the workplace is only possible because of headphones, and it was French engineer Ernest Mercadier who registered the first patent for the first in-ear headphones in 1891. Nathaniel Baldwin developed ‘radio earphones’ in 1910, upgraded by John Koss in 1958, who invented the first pair of stereo headphones.

Fast-forward to 1979, and Sony introduced the Walkman portable cassette player, which reigned supreme until Apple’s iPod launched in 2001, and then we had Sound Cloud (2007). It’s interesting to look at the incremental innovation that brings us forward to today, and options such as Spotify, Beats and Apple Music.

But before headphones, there has always been music at work. For example Sea Shanties – how important were these to shipping? The saying in maritime circles was that a good chanteyman is worth ten sailors on a line in terms of aiding productivity.

Elsewhere, in the Scottish Highlands, Waulking was the intensive and repetitive process of thickening tweed, which was made easier by workers collaborating in acappella songs as they worked. In Scandinavia, Kulning is a herding call like yodeling, using high tones to carry voices across the landscape by shepherds, whilst The Song of the Volga Boatmen – that song that goes yo, heave-ho – is familiar to everyone, as a team worked together.

Finding the perfect playlist isn’t easy. With endless streaming music possibilities at our fingertips, it can be hard to nail down just the right tunes to get the wheels turning in your head. But there is an obvious source of innovation thinking for your music to inspire your listening and your startup mindset, and that’s from Factory Records.

It was in 1978 that Tony Wilson, Rob Gretton and Alan Eramus founded Factory Records in Manchester, joined by Martin Hannett (Producer) and Peter Saville (Designer). It was the catalyst of creative Manchester culture, home to great Manchester bands such as Joy Divison (subsequently New Order), A Certain Ratio, The Durutti Column, The Stockholm Monsters and latterly Happy Mondays.

Wilson started the company with the inheritance of £12,000 left to him by his mum. Factory started in the Russell club in Moss Side, and released their first EP, A Factory Sampler, featuring acts that played at the club, in 1979. Joy Division, headliners at the club many times, recorded the first album released by Factory, Unknown Pleasures.

The Factory brand became renowned for quirky innovations, none more so than its cataloguing and numbering of everything it produced with a unique reference number. Numbers, not necessarily in chronological order, were allocated to albums, posters, and even places: Joy Division’s Closer was numbered FACT 25, the Haçienda club was FAC 51.

Wilson was an entrepreneurial tour de force, his efforts, antics, shenanigans and eternal spouting off to anyone who would listen, about tales and talent from his beloved metropolis in the north are legendary. He had a romantic, missionary zeal to make an impression and a worldly confidence rarely seen in Manchester.

The ubiquitous Wilson entered my life through What’s On, his weekly teatime music show on Granada TV. He featured non-mainstream new music on his fifteen-minute slot on the regional evening news programme. Seeing the enigmatic Howard Devoto for the very first time on early evening TV whilst my mum was frying chips in the kitchen, is something that is indelibly etched onto my fading memory.

He constantly shape-shifted in his lusty pursuit of the next thing. Too big for his own boots, full of himself, banging on about his pet subjects like a broken record, yet he had a real genius for processing the discoveries and inventiveness of others. There are two particularly iconic aspects of Wilson’s story that stand out.

Firstly, in 1982, Factory and New Order opened The Haçienda nightclub, converting a Victorian textile warehouse. Although successful in terms of attendance, and attracting a lot of praise for Ben Kelly’s interior design, the club lost money due to poor commercial management. It does, however, have a permanent place in Britain’s social cultural history.

Secondly, in 1983 New Order’s Blue Monday (FAC 73) became an international hit and the best selling twelve-inch record of all time. Unfortunately the label again failed commercially, since the original sleeve, die-cut and designed to look like a floppy disk, was so costly to make that the label lost money on every copy sold.

It all fell apart in 1992, and Factory was declared bankrupt in November.  The Haçienda closed in 1997 and the building demolished, replaced by a luxury apartment block. Peter Hook, bass player with New Order, has six guitars made using wood from the Haçienda’s dancefloor.

The founders of Factory put Manchester back on the map, as a collection of ideas, as a place at the edge of reason, with audacity and a series of headlines and punchlines, just as Manchester had emerged originally in C19th. The C20th version was invented by a rousing collective of dreamers, schemers, writers, musicians and fantasists.

The moors meets machinery meets mental turbulence of the music, Factory Records had an aesthetic, and gave amplification to a sense of audacity, a lucid soundtrack of innovation and genuine disruption. The Factory Records syndicate built a fantastic blueprint for the idea of generating personal and artistic freedom.

Talking Head’s guitarist Tina Weymouth, once remarked of Factory: I grew up in New York in the Seventies, and I’ve seen a lot of people who live life on the edge, but I’ve never before seen a group of people who had no idea where the edge is.

Despite many questionable decisions and the ultimate failure, Factory remains a moment of time in music and Manchester’s history of innovative startup ventures, so what can we learn about their spirit, vivacity, attitude and creativity into today’s startup thinking? How do you keep innovating and pushing the ambition?? Here are some of the best values of entrepreneurship and disruptive innovation that I see from Factory Records that should spark a startup today.

A DIY ethic drives innovation Factory were revered for their Do-It-Yourself abilities. They made it up as they went along, like a startup they had to find their market, experiment and determine product-market fit, working out where their audience was.

The Factory ‘product’ was simple and raw. Success is achieved by a host of variables, none more so that sheer-bloodied single-mindedness to get up there and make it happen – talent rocks, but attitude is king. It’s about conviction and determination to make it happen.

Belief Factory took on an established industry with major labels in control and broke the rules with their own thinking. In doing so, they changed the dynamics and disrupted an established market. They had enduring success and created a lasting legacy, albeit measured in cultural terms, if not financial. Factory made the mind shift change that is needed to begin thinking and behaving like a startup and ask themselves the questions that an entrepreneur must ask.

Authenticity inspires customers Factory started with bold artistic expression of their own, truly authentic, not seeking to copy or replicate others. They inspired a revolution. The startup leadership lesson here is one of my favourites: you can be confident and competent all you want, but if you’re not accepted as real, and having a point of difference in what you offer customer, you won’t inspire a following. What’s your signature tune and tone of voice?

Just copying something is no good, unless you just want to be a tribute band. It’s vital to keep playing around and pushing yourself in business, create your own product. Don’t be afraid to build a business or revenue model that plays to your strengths, even if it’s non-conventional.

Be your own image If you plan on getting noticed, establishing a brand promise, and creating an image is vital. Peter Saville’s design made Factory stand out visually, just as John Pasche designed the ‘tongue and lips’ logo for The Rolling Stones in 1971, originally reproduced on the Sticky Fingers album.

Playing it safe gets you nowhere If you don’t take risks you’ll never excel. Playing it safe all the time becomes the most dangerous move of all. Deviate from routines. Rote activity doesn’t lead to the path of innovation or disruptive technology. Factory never played it safe.

Factory’s enduring appeal comes from the combination of swagger and delightful tunes, soundtracks, innovation and design locking together and producing some wonderful noise.

Open mindedness Factory’s work is drawn from a diverse range of influences. Their uniqueness is the product of constant change and combining existing elements in new ways, producing something entirely their own, with a prowess for throwing stuff together randomly to discover new combinations and possibilities.

This ability to create genuine uniqueness is a key trait of any entrepreneurial business. Not all of Factory’s experiments worked, but their willingness to try out new ideas, knowing that not all will triumph, is a trait every entrepreneur needs.

Stand for something, and be true to your purpose The founders of Factory had a vision, strong minded and did whatever they wanted but had a clear sense of purpose. It was shaped by deeply held personal and passionate values and remained true to them, quickly finding out that there are millions of people who shared those same values and aspirations.

The founders never rested on their laurels, they retained the mix of spirit, drive, and passion, more than willing to rebel against the norm. And that’s what every entrepreneur does too.

Of course, the Factory Records startup failed, through inadequate commercial management. It didn’t lack for innovation, maybe a bit more common sense could have prevailed, maybe too much experimentation.

Of the founders, Wilson, Gretton and Hannett are no longer with us, having all died young, but the legacy of Factory remains. Their pioneering thinking helped transform a defiant collective of musicians into an iconic collection of records on an iconic record label that brought the sound of Manchester to the masses.

People drop out of the history of a life as of a land, though their work or their influence remains – a quote from Manchester Man, a novel written by Isabella Banks, 1876, and words on Wilson’s tombstone. That’s a great epitaph to any entrepreneurial endeavour.

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