Aging rockers used to buy pubs in rural England or get interested in organic farming. Not Linkin Park. The band behind Hybrid Theory, 27m copies sold since its release in 2000, have their eyes on a tech-filled future.
Machine Shop Ventures, their newly formed investment firm, has begun acquiring stakes in companies like ride-sharing service Lyft, Blue Bottle Coffee and the hot shipping startup Shyp.
The six guys behind Machine Shop – Chester Bennington, Rob Bourdon, Brad Deslon, Joe Hahn, Mike Shinoda and Dave Farrell – can also walk onstage to the roar of crowds, and have sold millions of records and won a few Grammys along the way. But they are taking business seriously too.
In May they wrapped up a semester-long study done with Harvard Business School professor Anita Elberse and her students, that looked at the group’s business and brand. The band had formed Machine Shop back in 1999 as an umbrella entity for different projects, then around 2013 they decided it needed to get busy mapping out its future, especially as streaming services had started to fully come in to their own and change the business equations for countless bands like theirs.
Fueled by input from Elberse’s students – who looked not only to the examples of music and business line-straddlers like Jay Z, Trent Reznor and Tyler, The Creator but also to creative brands like Vice and Red Bull – the band has been on a tear. In addition to backing some of the hottest start-ups they have hired Lisa Kidd, who helped with the business development of Gwen Stefani’s fashion lines, as well as former Beats by Dre executive Michael Seversky.
Machine Shop Ventures, executive vice-president Kiel Berry wrote in the Harvard Business Review, will “focus on investing in early-to-growth-stage consumer-focused companies that align with the band’s ethos of connecting people and innovation through tech and design”.
Linkin Park is betting on a future that has shaken the foundation of the industry that made them rich and famous. Taylor Swift may have had the clout to shake up Apple when it threatened not to pay musicians, but in a world where consumers increasingly prefer to subscribe to vast song libraries instead of buying individual tracks, making money in music alone is increasingly difficult.
“The environment today has changed such that Machine Shop is reinventing itself for the current market landscape,” Berry said.
“From a business standpoint, we do really well with things like touring and merch. In fact, we’re getting ready to do a five-stadium tour in China. All those things are very healthy. The guys also need an infrastructure with which to express themselves in creative ways outside of music. These people are overall creatives with a big C.”
Berry’s job, he said, is “to build a sound business behind it”.
Berry, Linkin Park’s innovation svengali, joined their Machine Shop company in 2013. He also played a key role in helping launch their venture capital arm this year. Berry is a fast-talking, buzzword-dropping brand captain who gives the impression he’d fit in just as easily at a rip-roaring Silicon Valley startup as he does within the organization of a band.
His crew, meanwhile, also has plenty of forward-looking, tech-focused ideas of its own. Linkin Park guitarist, keyboardist and rapper Mike Shinoda, for example, is also the frontman for Fort Minor, Shinoda’s hip hop-centric side project that released a new song, Welcome, recently.
To support the song, Shinoda released a music video on the news site Mashable. Other similarly creative diversions for Shinoda have included things like creating stickers for use on the social network Line, which is popular in Japan.
Linkin Park teamed up with Line late last year as a way of extending its already robust social presence.
Linkin Park and Berry also look to outside examples, like rapper Tyler, The Creator and his creation of clothing and other merchandise elements as well as Pharrell Williams’ entity i Am Other as inspiration for various projects.
This line of thinking, plus the analysis done in tandem with Harvard Business School, led the band and Berry to decide on an organizational model built around four verticals – according to Berry, they are video content, global brand partnerships, merchandise and, the newest, venture capital.
“These are really smart guys,” Elberse said about Linkin Park. “This band is really pushing boundaries on the music and business side.
“They came to us in the fall, and the band was involved from the get-go. Early on, the band members were discussing what this project could be. There was a lot of benchmarking, and the students did most of the work here, under the direction of Kiel, deriving lessons from the examples.”
The band’s takeaways from the Harvard study included things like the need to diversify its revenue streams to mitigate financial risk and to extend its brand. In his HBR essay spelling out the new approach, Berry explained that Linkin Park’s business “now operates like a tech startup, with less hierarchy and far more agility”.
He stresses that the band’s recent moves will exist in tandem with its continued music experiments, releases and performances. But that’s also why music industry analyst Bob Lefsetz, who publishes a widely read email newsletter, sees the band in danger of taking its eye off the ball.
He’s not convinced the band ought to be purposefully dialing back the level of attention it used to give to the thing that made it a band in the first place in order to try something new. “Why can’t everybody stay in their area of expertise?” Lefsetz said. “Why can’t they make good music and see where that leads them?”
Berry’s point, though, is the band will indeed keep creating and selling music, playing shows and meeting fans. It’s just that, now, the band is as focused on its art as it is on how to deal with the reality that the music alone is not enough.
“Music always was a hustle,” says Casey Rae, CEO of the nonprofit Future of Music Coalition. “The terrifying moment about this modern economy is you’ve got so many variables now to keep track of, but the flip side is there are so many more things now under your control.
“There are all kinds of ways now to fund music projects and get stuff off the ground that don’t necessarily have to conform to a traditional way of doing business. It depends on where you are in the industry and at what stage of your career, but the real top line takeaway here is you have to make use of a diverse set of revenue streams across multiple venues and platforms. It’s not any one thing.”
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