Arts Entrepreneurship

Creating a New Venture in the Arts

Richard Andrews

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781317495529
• Edition: 1
• Topic: Media & Performing Arts
• Subtopic: Theatre

Arts Entrepreneurship: Creating a New Venture in the Arts provides the essential tools, techniques, and concepts needed to invent, launch, and sustain a business in the creative sector.

Building on the reader's artistic talents and interests, the book provides a practical, action-oriented introduction to the business of art, focusing on product design, organizational planning and assessment, customer identification and marketing, fundraising, legal issues, money management, cultural policy, and career development. It also offers examples, exercises, and references that guide entrepreneurs through the key stages of concept creation, business development, and growth. Special attention is paid to topics such as cultural ventures seeking social impact, the emergence of creative placemaking, the opportunities afforded by novel corporate forms, and the role of contemporary technologies in marketing, fundraising, and operations.

A hands-on guide to entrepreneurial success, this book is a valuable resource for students of Arts Entrepreneurship programs, courses, and workshops, as well as for early-stage business founders in the creative sector looking for guidance on how to create and sustain their own successful venture.

1What Is Arts Entrepreneurship?

The term entrepreneurship can be interpreted and applied in many different ways depending on the ambitions, skills, and opportunities available to the artist or founder of an arts organization. In this chapter we explore the meanings of entrepreneurship as a concept and as a set of behaviors. How can entrepreneurial thinking and action be employed to produce measurable results that link the business owner’s values with the needs of the marketplace? How has entrepreneurship been understood in the past, and what are the current and future prospects for applying entrepreneurial techniques to new business concepts? How is arts entrepreneurship distinctive in its approach to business design, launch, and sustainability? How does an organization’s location, size, and intended community shape the entrepreneurial activity pursued by the company’s founders, supporters, investors, and other stakeholders? Conceiving of a novel business idea is a crucial starting place for launching a new venture. However, a successful entrepreneur must also develop that idea, test it in the marketplace, use customer feedback to make refinements and adjustments, and work toward creating a viable business capable of growth and sustainability.

Definitions of Entrepreneurship

The Merriam-Webster dictionary tells us that an entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise.¹ Management consultant Peter F. Drucker emphasizes entrepreneurship’s role in creating change and introducing new business concepts and practices that replace older models:

Entrepreneurship rests on a theory of economy and society. The theory sees change as normal and indeed as healthy. And it sees the major task in society – and especially in the economy – as doing something different rather than doing better what is already being done. That is basically what [French economist Jean-Baptiste Say], two hundred years ago, meant when he coined the term entrepreneur. It was intended as a manifesto and as a declaration of dissent: the entrepreneur upsets and disorganizes. As [Austrian American economist] Joseph Schumpeter formulated it, his task is “creative destruction.”²

Texts about entrepreneurship in theory and practice will often mention disruption as a key component in designing and launching a new venture. This is particularly true in the tech world, with examples such as Google, Facebook, and Amazon creating enormous changes in social and economic behavior. Industry disruption often implies the introduction of entire new ways for consumers to interact with one another and make purchases that satisfy their needs. Examples include Netflix disrupting the previous market for videotape rentals, Uber, Lyft, and other ride services displacing conventional taxi companies, Airbnb capturing market share from hotels and motels, and Amazon displacing traditional “brick and mortar” retail outlets for transactions involving a wide range of products and services.

Although disruption and “creative destruction” are certainly key factors in the entrepreneurship examples listed above, they are not the only ways to think about entrepreneurship, especially for an artist or founder of an arts organization. How might a skilled musician, actor, dancer, designer, or other creative individual imagine themselves as an entrepreneur in the formulation, launch, and sustained operation of their business concept? It is not always necessary for the arts entrepreneur to embrace disruption as a key element of establishing a new venture. For example, a photographer might decide to launch a new company based on teaching digital photography techniques to young learners from the nearby community. A new online business could offer web-based sales of fine art from a collection of artists whose work examines political and social issues. A composer and performing musician might create a new organization providing original music for commercial applications such as radio, television, live events, or web broadcasting. These types of businesses can follow many of the principles of entrepreneurship without needing to displace existing organizations or cause “creative destruction” within the economy. The arts entrepreneur does need to organize, manage, and assume the risks of the enterprise, as presented in the Merriam-Webster definition. Beyond handling risk, however, arts entrepreneurs must also work toward connecting their own values, passions, and long-term commitments to their creative practice with measurable consumer interest in their products or services in order to establish a new venture and allow it to thrive. Art entrepreneurs have the freedom to decide what their new venture is based on, where it is located, and whom it is for. They also have the freedom to choose what type of entrepreneurship they want to pursue, either through disruption and “creative destruction” or through the introduction of a new business that finds a home in an existing marketplace alongside – and even in collaboration with – similar organizations.

Developing a Business Idea

Developing a Business Idea Based upon Personal and Professional Values

How does one define a business concept that will provide a specific product or service to a target market and ultimately achieve growth and sustainability for the long term? For the arts entrepreneur who has already found employment in the creative field of their choice, it can be a natural next step to develop a new venture based on their real-world experiences. For example, a film student who has worked as an intern or part-time employee in an established film distribution company might design their own venture around what they have learned through direct exposure to established business practices in that field. Creating a new business based on your experience as an employee of an established arts organization can turn out to be an efficient and well-conceived pathway to launching a new venture. This approach – finding employment in your area of interest with an established arts organization before launching your own business – might be worth considering for a newly graduated student looking to gain experience and mentorship as an intern, employee, or volunteer. However, not everyone has the opportunity to work for an established firm in their area of interest before developing a new business concept of their own.

In the Business of Art workbook by the Center for Cultural Innovation (CCI),³ we find a series of three exercises designed to help the artist or prospective owner of an arts organization define their business concept by first exploring their personal and professional values. The aim is to create a foundation of values from one’s personal and professional life that will support the creation of a new venture. For example, the values of community building, creative inspiration, and opportunity generation could form the basis for a new venture focused on teaching artistic skills to people in the business owner’s immediate neighborhood. Or, the values of personal expression, international relationships, and cultural exchange might help shape the creation of a new business that brings cultural products, such as music, painting, and photography to foreign destinations. The next exercise in the Business of Art workbook asks us to imagine our future lives and describe in some detail where and how we might want to live in the future. The aim of this exercise is to articulate a vision for our future selves in both professional and personal terms. By writing down specific goals for our professional and personal lives, the vision exercise helps us create an actionable plan that guides decisions affecting both business development and our quality of life. The third and final step is to take the results from the exploration of values, along with the goals and ambitions identified in the vision exercise, and write a brief, clearly composed statement that is informed by the insights provided by the first two steps. This vision statement – and future versions of the statement that become increasingly relevant as we make progress toward the goals we have established – serve as a guiding light that leads us into a future where our values and ambitions shape the key decisions in our personal and professional lives.

In The $100 Startup, author Chris Guillebeau presents three lessons that can be applied to the entrepreneur’s process for identifying a business concept and turning it into a sustainable venture:⁴

1. Convergence: The intersection between your passion and what others care about. This is where the arts entrepreneur seeks a connection between their creative practice and the interests of the marketplace. For example, a skilled visual artist who works with pen and ink drawings could easily spend time making art purely for the enjoyment of the process. The convergence lesson requires that an artist who seeks to build a business must find a connection between their chosen art form and the interests of the potential consumer.
2. Skill transformation: Turning your talents into a business concept. As the owner of an arts-related venture, you will need to make use of many different kinds of skills. The ability to develop and distribute creative products and services is just one of them. You may also need to develop skills in communications, accounting, and managing other people. This lesson emphasizes the importance of using your existing skills, or developing new skills, to serve the needs of your growing enterprise.
3. Passion or skill plus usefulness equals success: This lesson presents us with a formula for creating a business concept that directly links the founder’s interests and abilities with the perceived value of product or service being offered to the market. Success is possible, the author tells us, when we design a business around the combination of a business owner’s abilities with the customer’s perception of how the company’s products can improve their lives.

The planning exercises and lessons described above, along with others you can discover through research, will produce some early-stage written material. You can use the results of these experiments to produce a framework for designing a business concept – and a life that is designed intentionally around it – that are both grounded in your genuine interests and capabilities and positioned to attract customers for the long term.

Finding a Business Opportunity

There are aspiring arts entrepreneurs who begin with a thoroughly developed business idea that connects their passions and skills with a well-understood market to deliver a product or service that is likely to succeed. Others are driven by their desire to produce and distribute their own creative work, but have not yet identified the business model they will need to establish a new company. There are also those who have too many ideas for arts-related businesses they might some day want to create. In each case, the ability to identify a business opportunity and establish a new venture in that space requires a combination of experience, imagination, and willingness to learn from the data generated by customer feedback.

As mentioned earlier in this chapter, some arts entrepreneurs will develop their idea for a new business based on their current or former position working for someone else. An employee of a fine arts gallery, for example, might choose to open a gallery of their own by using the many practical lessons found working for an existing organization. Other arts entrepreneurs will launch a new venture without the benefit of previous experience as an employee in a similar business. In either case, finding a business opportunity means identifying the intersection between the founder’s interests and the public’s willingness to engage in the new company’s products or services.

In his influential book The Lean Startup, author Eric Ries recommends the entrepreneur work quickly to produce what he calls a Minimum Viable Product.⁵ The aim is to test this prototype, even if it has some design flaws, to see if it can capture the interest of consumers and serve as a foundation for business growth. In software development, this method can be used to build and test early-stage beta versions of an application before it is refined and ready for wide distribution. For the arts entrepreneur, the Minimum Viable Product could be a small-scale version of what might eventually become the larger vision for the business. For example, an arts education business could start with a very small number of students to experiment with instructional content and measure customer response levels. Ries describes what he calls the “build-measure-learn” feedback loop. The idea is to rapidly create a prototype without excessive planning or development, test the product with customers to understand its likelihood for success, then learn as quickly as possible what works and what doesn’t. The learning is the key to launching and growing the sustainable business. Ries uses the term “validated learning” to describe the process of measuring and understanding the customers’ needs and wants in relation to the product category and the specific value delivered by a unique product. Validated learning seeks to demonstrate empirically that a new venture has discovered some basic truths about their customers and that the business concept delivers value to those consumers.

In The $100 Startup, Chris Guillebeau suggests developing a product that you yourself would want to purchase. He describes the creation of value in terms of delivering what the customer actually wants, not what the business owner thinks the customer wants or should have. For example, the founder of a new venue for live music might want to create a nightclub featuring the latest in electronic dance music. However, the patrons in the immediate neighborhood and surrounding region might actually want an intimate concert space for world music, jazz, and acoustic singer-songwriters. Adapting to the needs and interests of the marketplace may take the arts entrepreneur into areas of business opportunity they may not have considered at the outset. Responding to customer preferences and adapting to customers are something every business owner needs to consider if the venture is to find a reliable base of support for the long term.

How does an arts entrepreneur identify and pursue a business opportunity? There are several ways to approach this question. One method is to conduct market research in the prospective business owner’s immediate vicinity to map out which areas of creative enterprise are already fully covered by existing businesses. Studying your local environment for music, photography, theater, or other visual and performing art forms can help clarify opportunities for the introduction of a new venture. Another technique is to interview friends, family, and colleagues – people who have known you well for an extended amount of time – and ask them to describe how they perceive your creative interests and skills. These interviews can provide insights into your recognized artistic abilities and could provoke some interesting business ideas from your network of contacts, some of whom may end up supporting your new venture as investors or consultants. Another method is to reach out to highly experienced professionals in your field of interest and ask for their advice on where current and future opportunities for a new business might be located. For example, an arts entrepreneur looking to create a new theater company could contact managers at established venues in the region to explore opportunities in the local market. Each of these methods, or a combination of all three, can generate ideas for a new arts-related business and reveal opportunities worth exploring.

Evaluating and Managing Risk

As indicated in the Merriam-Webster definition of entrepreneurship found at the beginning of this chapter, the entrepreneur is responsible for identifying and managing all of the risks associated with the new venture. The types of risks encountered during the idea formation, business launch and growth phases of an arts-related organization will differ, depending on the nature of the company and its relationship to investors, customers, and ot...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Illustrations
• Preface
• Acknowledgments
• Chapter 1 What Is Arts Entrepreneurship?
• Chapter 2 Planning and Assessment
• Chapter 3 Marketing
• Chapter 4 Fundraising
• Chapter 5 Legal Issues
• Chapter 6 Money Management and Entrepreneurial Finance
• Chapter 7 Cultural Policy and the Arts Entrepreneur
• Chapter 8 Organizational Design, Career Development, and Future Trends
• Index