Marketing Lessons from the Grateful Dead by Scott and Halligan: A Belated Book Review

Since It Costs A Lot to Win, and Even More to Lose [1]

It’s hard for a DNA-level marketer and inveterate deadhead [2] to review a book that fuses both. While I first read Marketing Lessons from the Grateful Dead not long after its publication in 2010, I’d never wanted to write about it. There was too much to say, the subject too close to home, and the Dead were becoming passé anyway — who’d want to learn lessons from a band that supposedly peaked on 5/8/77 and that played its last show on 7/9/95?

Since then, three things happened:

• Since 2015, John Mayer has breathed new life into the band, bringing new and younger fans to the community. Dead tribute bands blossomed and now play at swanky Nantucket venues [3]. My son started to borrow my old t-shirts to attend NYU college parties. Unexpectedly, the Dead became cool again.
• I internalized that one of the authors, Brian Halligan, was the founder/CEO of HubSpot and that should, well, automatically make the book significant. [4] [5]
• I recently had a series of conversations with Jacquelle Amankonah Horton, the dynamic founder of Fave, where I found myself talking about community to someone in the music business, something I find pretty much impossible to do without talking about the Dead. Those chats re-energized me on the whole topic.

So here we are. Let’s do my long overdue review of Marketing Lessons from the Grateful Dead.

Before diving in, let’s note that this book is not the only attempt to take business lessons from the Dead. Other notable efforts include:

• Everything I Know About Business I Learned from the Grateful Dead by Barry Barnes, an excellent book which extracts ten core principles from the Dead’s success.
• Radical Marketing by Sam Hill and Glenn Rifkin, which includes the Dead among several examples of companies that built strong brands through customer focus as opposed to heavy marketing spend.
• Competing on the Edge: Strategy as Structured Chaos by Shona Brown and Kathleen Eisenhardt, which uses the Dead of an example improvisational strategy, relying on real-time communication and a small number of simple rules [6].
• Strategic Focus: I’m Just Trying to Get My Space Together [7], a Kellblog post which argues that startups need to “get their space together” in terms of focus before defining company and go-to-market strategy.
• A Grateful Dead Analysis: The Relationship between Concert and Listening Behavior, which shows that, even for a customer-centric band like the Dead, the fundamental tension still exists between “what we want to play” and “what they want to hear.” [8]

Once in a While You Get Shown the Light in the Strangest of Places [9]

So, does this book show us the Dead’s marketing light in a way that can be applied more generally to business? Yes. It does. Though, to split hairs, I’d argue it’s more a book about strategy than marketing [10].

The book is structured in three sections. Each chapter discusses a principle from the Dead and a company that demonstrates the principle. While the chapters-as-lessons structure works, the consistent alternation between principles and examples makes the book feel somewhat formulaic. And, because tech changes a lot in 15 years, while the principles are timeless, the examples are often not (e.g., Mashable, MySQL, StumbleUpon) [11].

The first section takes lessons from the band:

• Create a unique business model. The Dead made money selling tickets, not albums. This was, and is, pretty unusual in the music business.
• Choose memorable brand names. The Grateful Dead is a memorable name, and far superior to their previous one, The Warlocks.
• Build a diverse team. The musicians came from different backgrounds. Garcia loved bluegrass, Lesh was trained in classical jazz, and Pigpen was a blues harmonica player. You can get a 1+1 = 3 effect from the fusion.
• Be yourself. The Dead were authentic in general and transparent about mistakes.
• Experiment, experiment, experiment. A product of the Acid Tests, the band was born experimental and improvisational. They were always trying new and creative things (e.g., a song in 11/8 time).
• Embrace technology. The most notable example was The Wall of Sound, a 600-speaker public address system that delivered unparalleled sound quality (and took four semi trucks to carry), but quickly proved impractical for a touring band [12] [13].
• Establish a new category. The Dead defined a new category of music, which only after several decades got a name (“jam bands”). They were very much a category creation story [14].

The second section takes lessons from the fans:

• Encourage eccentricity. Eccentricity was embraced by the band and its fans, allowing everyone to be themselves.
• Bring people on an odyssey. The Dead, starting with a mailing list hooked to a San Rafael post office box, made fans an equal part in the journey (aka, the long strange trip).
• Put fans in the front row. The band set up their own direct ticketing operation to ensure fans fair access to tickets [15].
• Build a following. The Dead were pioneers in database marketing (and subsequent techniques) to cultivate the fan base.

The last section takes lessons from the business:

• Cut out the middleman. Their direct ticketing operation not only enabled fair access, but it reduced costs, allowing the band to gross 100% of ticket sales.
• Free your content. The Dead allowed fans to tape concerts, nearly unique in the industry, and an open source approach that helped new fans enter the scene.
• Be spreadable. Concert tapes became collectibles that were copied and traded [16], whether between individuals or in Shakedown Street swap meets before and after shows.
• Upgrade to premium. While the band allowed taping, they nevertheless released live albums, with amazing sound quality such as Europe 72 or Skull and Roses [17].
• Loosen up your brand. While the Dead had standard icons, they defined a broad visual style and allowed improvisation within it. Contrast this to typically strict corporate branding style guides that stifle creativity in the name of consistency [18].
• Partner with entrepreneurs. Rather than ban the use of their imagery, the Dead licensed it to entrepreneurs who could make and sell their own merch.
• Give back. From benefit concerts to community support to the Rex Foundation, the Dead gave back, long before it was corporate-fashionable to do so.
• Do what you love. My survivor bias detector triggers whenever I hear this, but the book’s point is more fundamental: if they didn’t love what they did, they couldn’t have kept doing it for more than 2,300 concerts.

Sometimes We Walk Alone [19]

When writing about the Dead, most people capture the contrarian, rule-breaking nature of the band. It’s hard to miss. The book does that and extracts 19 individual lessons that can be taken from the Dead’s success. Frankly, I’d have preferred if they took fewer lessons and examined them in more depth, as does Everything I Know About Business I Learned from The Grateful Dead.

What the book really misses, however, is the strategic consistency across the lessons. Using the language of Richard Rumelt, the book notes 19 different actions undertaken by the Dead, but fails to recognize that they are coherent actions driven by an overall guiding policy. Much as Costco works spectacularly well not because of the fifty things they do differently, but because of how those fifty things work together, so it is with the Dead.

The improvisational format means every show is different. That enables fans to attend consecutive shows, which enables fans to tour with the band, which in turn enables the Shakedown Street tailgates and community. The ability to tape concerts combined with the improvisational format means that each show is unique and ergo recordings become collectibles, further enabling the community. Licensing merchandising rights to small vendors enables the tailgate scene and nomadic vendors, who can effectively earn a living touring with the band (and using proceeds to buy tickets). Commitment to fan experience means playing small venues, and improvisational shows enables playing small venues for consecutive nights. This enables the community scene while the direct ticket operation keeps ticket prices reasonable despite the restricted supply.

You can allow taping, but if every show is the same, the tapes won’t be valued. You can play small venues, but if you don’t control ticket sales, pricing will box out your best fans. You can play in an improvisational format, but if you don’t repeat nights at venues and move in slow and systematic fashion, you won’t enable fans touring with the band and the community parking lot scene.

It is not any one of the lessons that matters. It is the strategic consistency across them that creates the magic.

Switching to Blue Ocean Strategy as my strategic reference, the Dead re-invented rock music in the same way that Cirque du Soleil re-invented the circus. They took the fundamental levers of the business (what the authors call a strategy canvas) and reset them to create an entirely different type of product.

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For the Dead, this is best reflected by the old deadhead saying, “there is nothing like a Grateful Dead concert.” That’s because the levers are set differently.

Come and Join the Party

I’ll conclude with the original invitation to the Grateful Dead party: the first verse of The Golden Road to Unlimited Devotion, the first song of their first album. A song about The Summer of Love [20].

See that girl, bare-footin’ along,
Whistlin’ and singin’, she’s a carryin’ on.
There’s laughing in her eyes, dancing in her feet,
She’s a neon-light diamond and she can live on the street.
Hey, hey, hey come right away.
Come and join the party, every day.

That invitation, some 57 years later, remains open.

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Notes

[1] Opening line of Deal, an upbeat song in the band’s Americana catalog. Guitar players (or those interested in music) should check out this Guitar Teacher Reacts video by Michael Palmisano.

[2] 300 or so shows and counting, including all variations.

[3] I’ll refer to the Dead as a capstone term for The Grateful Dead, the Other Ones, The Dead, Furthur, Fare Thee Well, Dead & Company, and other variations. When a band is 50+ years old, you can end up with numerous incarnations.

[4] I knew it in 2010, but somehow forgot it over the years and was frankly surprised to rediscover it only fairly recently.

[5] And the co-author, David Meerman Scott, is no schmo. He’s a well-known marketing author and speaker.

[6] The general idea being that all strategy is improvisation because things change so quickly, and ergo that companies should view strategy as structured chaos.

[7] “So can I go into the show,” to complete the famous fan quote from the The Grateful Dead Movie.

[8] Surprisngly, two of the three authors were at the Theoretical Division, Center for Nonlinear Studies at Los Alamos National Lab. Technically, this paper isn’t really trying to extract business lessons from the Dead, but I think we find one anyway in that fundamental tension, which in software would be expressed by “what we want to build” vs. “what they want to use.”

[9] One of the most-quoted Dead lyrics, from Scarlet Begonias. The complete line is “once in a while you [can] get shown the light, in the strangest of places if you look at right.” In 1976, they inserted the [can], which subtly changed the meaning, for the worse in my opinion. But to demonstate the depth of the Dead rabbit hole, go to the Good Old Grateful Deadcast for a two-hour exploration of this one song.

[10] Strategy is a little tricky to classify. Corporate strategy is definitionally company-level and I’d classify most of the lessons in this book as corporate strategy, not marketing strategy. For those who consider corporate strategy formulation a marketing duty (and I’m one of them), remember that marketing (or corporate development) typically drives the strategy formulation process (e.g., the offsite, the agenda, the topics, the pre-reading and data). But driving the process and “owning strategy” (i.e., its result) are two different things.

[11] Timeless principles can hopefully be illustrated with timeless examples. They did this in cases (e.g., Ronald McDonald house), but perhaps the temptation to use hot contemporary examples (that invariably date the work) was too strong. Songwriters face the same tension and Dead lyricist Robert Hunter did a fantastic job of resisting it, writing timeless lyrics as a result. In fact, the famous spat that ended collaboration between Hunter and Bob Weir was over Weir’s insertion of “Jump like a Willys in four-wheel drive” into Sugar Magnolia. Hunter strongly objected, I’m guessing, not only for artistic reasons, but because it would date the lyrics.

[12] A short video overview of the three-story Wall of Sound is provided here.

[13] Some enthusiastic fans recently built a half-scale wall of sound.

[14] Dispelling the myth that the category name matters enormously. Focus on building the category, the name can come later.

[15] While Billy Joel never tried to disintermediate ticket sellers, he does seem to have a fans in the first row policy as well. Few others do.

[16] In the analog tape world, copying was not lossless, so tapers would careful try to track the “generation” of the tape (original, copy, copy of copy, etc.)

[17] The amazing quality was achieved not only through high-quality audio equipment, but also through some level of studio doctoring of the recordings, e.g., overdubs.

[18] My definition of visual branding is: do we look like us? Attaining this goal is typically done via strict standards, but a few organizations manage to define a broader look and allow innovation within. The Dead were great at this. Salesforce does a pretty good job as well.

[19] From Eyes of the World.

[20] The Golden Road to Unlimited Devotion. The Summer of Love was also the inspiration for the more famous, San Francisco Be Sure to Wear Flowers in Your Hair by Scott McKenzie, and one far more famous song than that, All You Need Is Love by the Beatles.