Finding Solid Ground

Over the last seven months we’ve discussed many topics, such as: the emergence of artistic entrepreneurship in the new economy; the importance of demanding fair value for your creative contributions to society; tools of empowerment (e.g. clarity, action); the importance of strategic business planning in the arts; the merits of analysis (industry, market, and competitive); finding a blue ocean strategy; and owning your professional identity.

Are you overwhelmed yet?

You’re not alone.

At this point my students and clients are spinning with the magnitude of possibilities and choices available to them. It’s exciting to discover all the ways you can achieve your dreams, especially after benchmarking peers or peer organizations that have actually done it. However, it is also common to feel paralyzed by options.

Yes, you’ve finally “turned on the light” and clearly see the playing space before you. You finally have a comprehensive view of who the players are and how they collectively function, who your market is and how they behave; but you haven’t yet figured out:

“Where do I want to be in this world?

“How am I going to function in this environment?”

This is when you have to ground yourself in a process called, situational analysis.

Sound scary?

It isn’t.

Conducting a good situational analysis can actually provide comfort. I liken it to the feeling of coming off a six-month-two-city-per-week tour, unlocking the door of my Brooklyn apartment, dropping my ridiculously heavy luggage, and sighing: “Ahhhh….Home.” On tour, I was constantly moving from place to place, trying to decipher unfamiliar territory and figure out how to function.

In Brooklyn, I knew my way around, had my routines, and could execute strategies for daily operation. The situational analysis gives you that same calming sense of place and how in your industry and/or market.

So let’s begin.

Two useful tools for understanding where you exist in the world are: the SWOT Analysis and the Resource-Based View of the Firm (your career). I will discuss the SWOT analysis and leave the Resource-Based View description for a future posting.

A SWOT Analysis allows you to determine strategies for optimizing your strengths (S), compensating for your weaknesses (W), taking advantage of opportunities (O) and warding off threats (T).

Step 1: List all the opportunities and threats in your new found world.

The research and analysis on your industry, market and competition should have exposed some opportunities and threats. Sit with the information and brainstorm a list of these items.

Example: DIY Theatre Company’s market research revealed that a new IT park development is attracting professional singles to their metro-area. This demographic has a lot of discretionary

dollars to spend on entertainment, because they generally don’t have the expense of children and tend to frequent places they can meet other singles (e.g. bars, clubs).

Clearly, there is an opportunity to provide entertaining spaces to this target group. Additionally, their research exposed a 10% increase in bars and clubs in the metro-area, which the company sees as a competitive threat.

Step 2: Do an honest assessment of your strengths and weaknesses.

Be very honest with yourself, especially about your strengths. You’d think it would be hard to see our shortcomings, but often times we are blind to our power.

Example: Improvisational sketch comedy is a key strength of DIY’s young professional actors. However, they’ve only used it for public school performances, which is their current bread and butter gig. DIY’s major weakness is a lack of space. Without a consistent venue to present work, it is difficult to build a ticket purchasing patron base.

Step 3: Create a matrix of your strengths, weaknesses, opportunities, and threats; then determine your strategies.

Example:

	Strengths	Weakness
Opportunities	(S) Can create hilarious sketch comedy (O) Lucrative target market - young professionals	(W) Lack of space (O) Lucrative target market - young professionals
Threats	(S) Can create hilarious sketch comedy (T) 10% increase of bars and clubs	(W) Lack of space (T) 10% increase of bars and clubs

S-O strategies - pursue opportunities that fit your strengths. For example, DIY could create edgy comedic programming that caters to young professionals.

W-O strategies - overcome your weaknesses to pursue opportunities. For example, the company could partner with a venue to present a weekly sketch comedy show, with edgy content like an interactive
dating game. They could brand the show as the premier dating event for young professionals who don’t like to dance at clubs.

S-T strategies - identify ways to optimize your strengths and reduce your vulnerability to external threats. For example, the company could partner with their potential competitor; a new bar in town. DIY would produce and promote the weekly sketch comedy show in return for all the cover charge revenue. (Leaving food and drink revenue for the bar).

W-T strategies - establish a defensive plan to prevent your weaknesses from making you susceptible to external threats. For example, the company could sign a multi-year contract with the bar to mitigate the loss
of space, and look for opportunities to buy ownership in the bar (or another bar) as net profit increases.

Of course, this is a very simple example of a situational analysis, but I hope it illustrates the value of using this tool. Additionally, I hope it provides some clarity about how to ground your self in newly discovered industry and/or market space. Ultimately, I hope you find that“Ahhhh…..home” feeling in your new found world of opportunities.

If you have any questions, please contact me.

(One caveat - find you grounding, but never stop scanning your environment and adjusting to inevitable changes; or you will struggle to remain relevant and sustainable.)

Reference: http://www.quickmba.com/strategy/swot/

(Originally published on FracturedAtlas.org March 1, 2009)

Waiting for the “Anointment”

Last month, I started teaching a class called “Entrepreneurship in the Arts” at the Savannah College of Art and Design (Atlanta campus). The first class was thrilling, because I witnessed the excitement of artists and art entrepreneurs just beginning to follow their bliss. It was especially enjoyable to see those who have been working in non-artistic fields for 15 to 30 years, who have decided to finally make a go of an arts career.

Interestingly, I discovered many of my students had a misleading assumption about not being a “real” artist until someone “anointed” them as a “real” artist. Although they had been painting or taking photographs of many years, they didn’t consider themselves real painters or photographers …yet. I had to stop the class and explain, in no uncertain terms, that they didn’t need to wait for anyone to legitimize their identity as an artist; they merely needed to claim it.

This is very important for emerging artists to understand: you determine who you are, don’t let others determine it for you!!! You’ll be surprised at how people respond when you claim your identity.

For example:

When moving to New York City, I had a dream of becoming a theatrical director. However, I assumed I had to have grey hair to be worthy of that role. I had this scenario in my head that after years of grunt work and apprenticeship some theatrical master would turn to me in a “rite of passage” moment (a la Mr. Miyagi and Daniel Larusso in Karate Kid) and say, “You are ready now.”

Well, in my last year of NYU, I decided to create a show for independent credit, but I didn’t consider myself the director. One evening, I was standing outside the theatre when a passerby inquired, “What do you do with the show?” I replied, “I’m the director.” (Internal freak-out moment) The words felt so insincere and foreign coming out of my mouth that I felt like a major fraud. In fact, the time between uttering this statement and the person’s response felt like an eternity, in which my head raced with thoughts like:

“How could I lie in this person’s face?”

“How could I claim to be a director? I don’t know what the hell I’m doing;”

“I don’t even know the names of the light fixtures;”

“I’m gonna look like such an idiot if they ask me some technical thing that I don’t know about.”

You can imagine my surprise when the person said, “Oh, Awesome!” with out any questions asked and with a new tone of respect. I was shocked, “They actually bought that?” It must have been a fluke, right? Well, I tried it out on a dozen other people and guess what? They all bought it with no questions asked. In fact, they all adjusted their behavior to accommodate my new identity:

“What do you do?”

“Oh, I’m a director.”

“Really? Wonderful. I am a costume designer. Do you need any costumes for any upcoming productions?”

It really hit home a few shows later, when my producer put out a casting call inBackstage and 100 accomplished dancers/actors showed up and auditioned their hearts out…for me!!!

In reality, I was legitimately a director even though I didn’t know it. I had been organizing, choreographing and managing amateur shows on a regular basis from nine years old. Yes, there was a lot I didn’t know about directing theatre, but I learned and am still learning.

Being an artist is not like getting licensed to be a doctor, you don’t have to pass a test or complete a residency. It is a life long journey of being and becoming simultaneously.

This all goes back to the idea of empowerment and self efficacy. Many of the artist consultants we spoke with talked about the importance of focusing on what you can controlas an artist, instead of the things you can not control. If you wait for others to do it for you, you could be waiting forever.

Another Example:

Charles Huntley Nelson is a well respected afro-futurism artist in Atlanta and art professor at Morehouse College. Charles moved to Atlanta in 1995 after graduation from Howard University with his MFA. He fell into the Atlanta art scene and made a lot of connections with emerging artists like himself. Initially, he started pursuing his career in the traditional career model:

The Artist submits work to (or auditions for) a middle-entity > middle-entity gives Artist “Big Break” > middle-entity invests in artist’s work > middle-entity delivers work to market for a return on their investment.

Charles was looking for a middle-entity to accept and legitimize his work. However, his breakthrough came from being rejected by this career model. He applied to the Atlanta Biennial with eight installation proposals and they rejected them all. So, he decided to try the D.I.Y. career model:

The Artist produces, markets, distributes, and earns revenue on work.

He took one of the concepts he proposed to the Atlanta Biennial and said, “I’m just going to do it myself, if no one else is going to give me a show.”

In 1999, he did his first photo shoot for the show. He also began inviting other emerging artists to contribute work and partner on the costs of producing the exhibit. As the curator, he decided to have an urban art theme that uniquely showcased work of both black and white urban artists, which had never been done in Atlanta (as “urban” was always considered a black thing.)

In January 2000, the exhibit was up at Eye Drum. His innovative concepts and the emerging reputations of his fellow artists brought in the critics, they got great reviews, and he earned a reputation as a curator/artist.

When asked what advice he would give to emerging artists, Charles said, “Create your own opportunities. You have to bring people to your work, if you aren’t getting a response…everyone is not going to knock down your door, you have to get out.”

The first step towards being a D.I.Y. artist is empowering yourself with acceptance of who you are. Again, do not wait for others to anoint you, claim your identity, and take control of your career.

(Originally published on FracturedAtlas.org February 2, 2009)

Competition in the Arts Sucks! Or Does it?

Our research and survey responses indicate that artists and “do gooder” arts organizations struggle with the concept and reality of competition; especially because creativity is such a product of collaboration, connectedness, and reciprocal inspiration in a network of people. We need each other, yet we are in competition for the same resources, audience members, buyers, and dollars. There seems to be a constant tension between collaboration and competitiveness. How do we reconcile this? I don’t completely have the answer, but I can share the results of my investigation so far.

September 1994, I sat in the Drama Department’s freshman orientation at NYU’s Tisch School of the Arts. I was 17 years old, fresh off the plane from California, new to the big city, bright eyed, and ready to conquer the world. The first thing they told us was, “You are 1 of 900 freshman acting students at NYU. If you can bear doing anything else with your life, do it!”

900!!!!

My mind immediately drifted into random calculations of the total number of actors in all the NYC acting schools, then the total number of actors in Manhattan, then in NY State, then the eastern seaboard, then the country. Needless to say, I felt like a grain of sand in the Sahara.

What am I doing here?

Next, that grain of sand image (me) was transported to a giant hour glass with millions and millions of other grains of sand trying to get through the same little tiny funnel. I felt as defeated as the Greek mythological character, Sisyphus. You know, the one who was doomed to the meaningless task of pushing a boulder up a hill only to have it roll down again…for eternity. Yes, I am a little dramatic…why do you think I ended up in drama school?

Call it cognitive dissonance or self soothing, but this little mental freak-out was followed by a more comforting thought:

“Maybe there isn’t just one tiny hole that we all have to fight through. Maybe this dramatic marketplace is more like a sifter then a funnel. All the emerging actors are thrown into a giant sifter. We endure the thrill of the shaking and tossing, eventually falling through our own little hole, into our own little niche. Some of us will be stars, some producers, some writers, some production managers, etc. etc. etc. We don’t all want the same thing; we don’t all have the same talents to share. We each have our own fingerprint as unique as our individual talent. All we have to do is mine the gems latent in our own little mountain of potential, then we will each have a chance to feel fulfilled. Yeah, that’s it.”

I was comforted and motivated by this thought.

Throughout my career in NYC as an actor/dancer/writer/director/producer, I held onto this soothing thought to get through the rejection, the starvation, the cold, the loneliness, the fear, the empty seats, the bad reviews, etc. In hindsight, I’m so thankful, because it got me to those cherished moments of victory: getting hired for a gig, getting a rave review, traveling the world, feeling the “whooo” of synergy with your fellow performers, the adrenaline of a packed house, seeing yourself on TV, seeing your vision realized on stage, witnessing the amazing process of collaboration with other artists, and having a kid come up to you after a show and say, “You inspired me.” Those moments would have never happened if I was intimidated by the competition.

It wasn’t until a few years ago that I discovered a term that articulates this concept of finding your hole in the sifter — DIFFERENTIATION. This is a wonderful term. It says you have a value in the competitive landscape that is unique. It says that if you differentiate yourself, your audience will appreciate you for being you…well the best of you.

How do we navigate the competitive landscape?

Step 1: Define - Who is a direct competitor? Who is an indirect competitor?

This correlates to defining your professional identity (see Professional Identity: Who are you? and What do you do?). Once you are clear about who you are and what you want to offer, then you can determine your direct/indirect competitors.

Step 2: Size - How many direct competitors do you really have?

In my mind, I saw this endless sea of actors fighting for the same two line role in some infomercial. How many competitors did I really have? Let’s do research.

In the 2008 National Endowment for the Arts report, “Artists in the Workforce,” we learned there are approximately two million artists in the US workforce and only 2% consider themselves actors (39,717 to be exact). Wow! That is a very different number from the one I perceived in that freshman orientation. If there are so few actors, why does it seem like every other person I meet is an actor? Oh, because I grew up in LA (where almost half of all actors live) and went to college in NYC (where another 20% of all actors live). Research can be very revealing.

Step 3: Growth - Is this market attracting competitors or repelling them?

This is very important information. If your particular market is attracting competitors like Silicon Valley attracted venture capitalist in the late 90’s, you need to know why and strategically position yourself to be competitive. If competitors are leaving the market like venture capitalist in the early 2000s you need to know why and strategically position yourself to harvest or exit the market.

According, to the NEA report, the number of artists in the US has remained relatively constant for the last 15 years. Why? Well, the last major growth trend happened from 1970 to 1990, when the artist population doubled due to massive investments in cultural infrastructure. Some say we hit equilibrium over the last decade and a half. What does the future look like? Well, Obama’s administration says they want to make major infrastructure investments again.If they are successful, how will that affect the creative economy? Will competition increase for new resources? Will there be less competition as more opportunities open up? Are you positioned to fill an opening?

Also, look at growth in small market segments. We have not experienced dramatic growth nationally, but what about regionally? According to the NEA, the West and the South have seen dramatic growth in artist populations over the last 15 years. Georgia and Florida saw 23% growth in artists from 1990 to 2000, while places like NYC saw a dramatic exodus of artists. Why? Will this trend continue? How does that affect your business or career?

Step 4: Benchmark - Investigate your top competitors and learn from them.

This is the nitty gritty competitive intelligence that will teach you so much. Who specifically are you in competition with for grants, for audience members, for sponsorships, for press attention? Where are they located? What do they offer? What is their reputation? What are their weaknesses? Strengths? What kind of earned or contributed revenue are they generating? What is the demand for their offering? How do they deliver their offering? How do they communicate their value? What are their plans over the next year? 5 years? Pretend you are an audience member and analyze what draws you in and what could be improved. Next, look at your offering or operations and see how you measure up, what you can improve, etc.

Step 5: Competitive Advantage - How can you effectively compete?

There are two generic strategies for competing in any market place:

Differentiation - which we already talked a little about. Differentiation means that you create something that is perceived to your audience as unique, which can usually command a premium price. Many artists create uniqueness by having an innovative design; cultivating a trendy image; using cutting edge technology, using avante garde mediums, telling an interesting story, etc. However, differentiation doesn’t always have to come from the creative design of your offering; it could come from simply having better logistics. (Many talented people have failed to succeed due to poor logistics, while many not so talented people have thrived because they had a competitive advantage in logistics.)

For example, let’s say you have a theatre and your competitor is bringing in an average of $25,000 in box office receipts per 6 week run and you are bringing in an average of $15,000 per 6 week run. By benchmarking your competitor you can see there is at least a $10,000 margin for improvement. Why are they doing so much better? Is it the quality of the shows? According to audience surveys patrons enjoy your shows a little more. Is it convenience? Well, they do have a relationship with the café across from their theatre that offers their patrons free valet parking.

Cost Leadership - this strategy emphasizes efficiency. Maybe you are able to produce a $50,000 show for $25,000 due to your ability to stringently control costs. This gives you a $25,000 advantage over your competitor. In the non-profit world that cost savings usually comes from the relationships we cultivate with in-kind donors and volunteers.

Additionally, you can use either strategy in a very narrow segment of your market to really narrow the competition. This is called a Focus Strategy.

The strategy you choose is highly dependent on your competitive advantage. If you are very innovative, than a differentiation strategy might be right for you. If you are well connected to people and organizations with a lot of free stuff, but not too innovative, perhaps the cost leadership strategy will work.

Exercise - Try to determine your sustainable competitive advantage by asking yourself the following questions:

• What resources do I have or can I obtain?
• What skills and capabilities do I have or can I obtain?
• What competencies do I have when combining these resources and capabilities?
• Of these competencies, which are my core competencies?
• Which of these core competencies does my audience value above my competitors? (Competitive advantage)
• Is this advantage sustainable? Meaning, can it be easily imitated?

In a nutshell, I caution you against entering the creative marketplace blind to your competitor’s strengths and weaknesses OR to your own. Finding ways to compete effectively and to create collaborative competition will ultimately help grow and improve the creative economy. Your courage to compete will broaden the diversity of the creative offerings in our cultural institutions and entertainment spaces, as well as improve the vibrancy of our communities. We encourage you not to be intimidated by competition, but to embrace it. Find a way to communicate and deliver your unique value; because if you get intimidated and take yourself out of the creative marketplace, we all lose out.

(Originally published on FracturedAtlas.org December 26, 2008)

Market Analysis: Who Cares?

Excuse me for being M.I.A. over the last month, but I was busy producing the National Black Arts Festival’s 1^st Annual Winter Ball (“The Art of Change”), featuring special guests Dr. Cornel West and Big Boi from Outkast. I won’t go into all the details of the event (although it was fabulous!!), but I do want to give you a little background about how this event relates to the importance of market analysis.

The NBAF Winter Ball was a great success in terms of attendance, donations, branding, cultivating new sponsorship relationships, and overall visibility; but more importantly it was a great success in targeting a new market for the organization. Many established arts institutions are dealing with a generational gap that threatens their future; the National Black Arts Festival is no different. Their patron-base is comprised of Baby Boomer art lovers, who have been core supporters since the organization’s inception 20 years ago. In many respects this is a huge accomplishment, as relatively few arts organizations have been able to sustain support from their target market over two decades. However, in terms of future sustainability it is problematic, because this demographic is retiring and eager to pass the baton to a new generation.

In October, I joined the newly established Collective Renaissance Guild, a group of dynamic Urban Gen X professionals, charged with cultivating arts patronage and cultural leadership among our peers. As the planners and hosts of the NBAF Winter Ball, we were very successful in:

· researching, analyzing, segmenting and targeting our market.

· creating the right programming,

· galvanizing the right opinion leaders and gatekeepers,

· formulating the right targeted message,

· and communicating our value through the right communication channels.

The results, 450 of Atlanta’s Urban Gen X elite, with the resources and ability to support National Black Arts Festival over the next 20 years, showed up and were thoroughly engaged.

Why is analyzing your market so important? First, you need to find an attractive market, meaning a group of people or organizations that have the ability and the desire to buy/fund your work. Secondly, you have to understand their needs, wants and behaviors, so you can develop messages and select strategies/tactics that will create demand for your work. Finally, regular analysis will protect you from pending threats (e.g. investment in an internet platform on the verge of mass exodus) and open your eyes to new opportunities (e.g. being a first adopter of a new marketing and distribution channel).

For example:

In 2006 EMI, the world’s fourth-biggest recorded-music company, invited some teenagers into its headquarters in London to talk to its top managers about their listening habits. At the end of the session the EMI bosses thanked them for their comments and told them to help themselves to a big pile of CDs sitting on a table. But none of the teens took any of the CDs, even though they were free. “That was the moment we realised the game was completely up,” says a person who was there. (The Economist, January 2008 issue)

Many music industry firms missed this critical shift in the needs/behavior of their customers and are still scrambling to adjust their business models so they are less reliant on physical media sales (e.g. CDs). Good market analysis might have warned of this dramatic disruption.

In the non-profit arts arena market analysis will not only get more “butts in seats,” it will help secure grant money. According to the NEA, arts policymakers in the US are becoming increasingly concerned with measuring an artist’s ability to directly serve their community. Translation: Artists need to be able to prove to granting organizations that they effectively meet the needs of their community. How will you prove this without first researching the needs of your community and measuring your impact?

Alright, let’s get down to the nitty gritty. How do you do a market analysis?

Step 1 – Define your market.

Determine your market based on qualitative/quantitative responses to your work. Test your market. Try your stuff out in different demographics and see how they respond. When people do respond, learn as much as you can about their needs, wants, desires, hopes, behaviors, and frustrations.

Step 2 - Determine your market size.

Once you have a pretty good idea of who is responding to your work, it is important to understand how many of those people exist in given geographic area. For example, Fractured Atlas serves emerging artists. It is nearly impossible to measure the size of the emerging artist market, because the dividing line between emerging and emerged is very subjective. However, we were able to prove a sizable US market by looking at the number of visual and performing arts degrees awarded each year, along with supportive research on the number of people with arts degrees that pursue arts related careers.

Step 3 – Determine you market growth rate.

You need to know if your market is going to grow or decline in the future, so you can create the right marketing plan. For example, Hip Hop music is experiencing 4% growth in the Gen X demographic, but is seeing a 6% decline in the Gen Y demographic. An artist working in this genre has to decide whether to milk sales from Gen X or to adopt the new musical genres emerging within the Gen Y demographic.

Step 4 – Determine market profitability.

Its not just about size and growth, it is about buying power within a market segment. Gen Y wields significantly less buying power then the Boomers, who have the lion’s share of economic power in this country and the most spending discretion. However, an artist could create a fan base among the Gen Y demographic that will grow for 20+ years. Additionally, artists or arts organizations have to look at the costs in targeting a particular market. Maybe Gen Y will bring 2 times the gross revenue over the life of the creative offering, but it might take 3 times the expense to capture their interests over the Boomers. Which demographic yields a better net profit margin? In what time frame?

Step 5 – Discover or create distribution channels.

Find out how your market is gaining access to similar creative offerings. Do you have access to those channels? Can you create new channels for delivery of your creative offering? Can you make existing channels more efficient and gain an advantage in the market?

Step 6 – Determine the key success factors in your market.

What works? You can look at your own experience or that of other artists and arts organizations to determine what creates demand in your market. For example, theCollective Renaissance Guild targets Hip Hop elite. A key success factor in marketing to this demographic is having a powerful opinion leader vouch for your legitimacy. Therefore, we solicited sponsorship from Uptown magazine, who gave us a full page ad in their December issue.

Other success factors to be aware of include: access to essential unique resources (e.g. theatre in the East Village of NYC); access to distribution channels (e.g. search engine optimized website for ticket sales); and technological progress (e.g. cutting edge software for filmmaking).

There are many other research/analysis points to consider, but much of it relates to your particular set of needs and your unique creative offering. However, I hope this blog at least communicates the importance of knowing your target market.

For more information, please contact me at kamal.sinclair@fracturedatlas.org.

(Originally published on FracturedAtlas.org December 15, 2008)