The Grateful Dead logo seems to be popping up more lately. Perhaps it’s because Urban Outfitters is now selling the merchandise? Whatever the case is I think about this band often as they represent one of the most creative businesses of post-War America, in addition to being one of the best bands of all time.
What makes the story so interesting is it has elements of what business writer Jim Collins calls “the flywheel”, which is a heavy wheel that takes a lot of energy to put into motion, but once it starts going it has unlimited potential.
The Grateful Dead’s flywheel started by playing music everywhere, all the time. From raves to the back of a pickup truck driving around San Francisco. That attracted a fanbase, but what really set everything in motion was allowing fans to tape or ‘bootleg’ the shows. This move created a whole sub-community of people who found a sense of motivation to participate in the band’s success and help spread the gospel further.
If that wasn’t enough, there is also the parking lot, or simply ‘lot’ scene which allowed vendors of goods (both legal and illegal alike), to sell their own version of the band’s paraphernalia before and after shows. Again, people were given the chance to participate in the band’s success. This represents the flywheel concept which you can find in great businesses all around you, and Amazon’s marketplace is one of the most common examples. By offering users or fans the chance to participate in the project, it expands the horizon.
Artists and entrepreneurs often run their businesses according to ‘best practices’ which usually come from the law, but rarely do people question if the law is actually helping. The Dead didn’t care to act like police officers with their fans as they concerned themselves with making art instead. They didn’t set out to make new initiatives like letting people tape the shows or setting up DIY merch booths outside the venues, it was more a matter of going with the flow and choosing to not engage in slapping people’s wrists all the time.
While the Grateful Dead business model seemed perfect in theory, it ultimately depended on the band being alive, most specifically the star Jerry Garcia. Even though they had a dip of unpopularity in the 1970s, by the end of the 1980s they were so successful that Jerry had trouble coping which made for a tragic end.
But all is not sad with this story as the band continues to play in different offshoots, and the community was largely inherited by Phish who try to uphold many of those ideals set before them.