What it would be like to open up ALL aspects of CD Baby
2007-09-20
Had an interesting conversation with an ex about what makes you feel loved.
Turns out we had quite opposite definitions.
Mine was feeling transparent. Holding nothing back. Revealing everything, faults and all, and still feeling accepted.
Later, I was thinking about CD Baby and how fun it's been to open up and show our numbers. (See a history of this, below.)
Then I was thinking about collaboration, Wikipedia and all that. How the collective intelligence of the world is always better than what you've got in-house.
Combine those two thoughts, and I'm imagining what it would be like to open up ALL aspects of CD Baby:
* show not just our sales numbers, but ALL numbers, including expenses, salaries, income, taxes and everything else
* (clients' and customers' info would be show only collectively not individually, for obvious privacy reasons)
* if a paper supplier sees what we're paying for our mailers and knows they can beat it, they can contact us to let us know
* show performance numbers, such as # of CDs shipped per-day, emails answered per-person, # of albums added each day
* post audio of our company meetings on the site for all to hear
* open all of our internal knowledge-base, form-letters, etc
* encourage suggestions on how we could be running things better
* open the PHP source code that runs the site
* allow any webdesigners to make their own CSS skin for the site
* encourage corrections to anything on the site. spelling fixes in artist bios, etc.
I like this for a few reasons:
* keeps us on your toes by encouraging competition
* reminds us that the real value here is in our relationships with the musicians. anyone can take our PHP source code and make "another CD Baby", but not anyone can win the trust and relationships we've built one at a time over the last 10 years.
* makes us double-check our internal decisions against public scrutiny. (we already always do this, but this would emphasize it even more)
* shows everyone we've got nothing to hide. that we really are trustable. (hey - was there any doubt?)
* gets others involved. allow anyone to buy shares in the company, so they can have a vested interest in our success.
* makes it easier to get our financials to our accountant :-) (“just go to the site. it's all there.”)
* it's contrarian.
What are the downsides?
* big security risk if my PHP code has bugs that can be exploited to get customer/client data
* pain in the ass, having to hear the world's opinions on every internal thing every day.
Any benefits or downsides I'm missing?
A walk down CD Baby numbers-posting memory lane...
2002-01-03 = 3147 checks for $69,050.13 last week!
2002-01-13 = CD Baby Has Paid Over $1 MILLION to Musicians for CDs sold
2002-06-04 = CD Baby Sales - doubled again!
2002-10-24 = CD Baby has now paid $2 MILLION to musicians
2003-03-11 = CD Baby pays out $3 million to musicians. Sales doubling.
2003-08-12 = $4 Million Paid to Musicians. Sales keep growing.
2004-01-13 = CD Baby sales doubling. Over $6 million paid to musicians.
2004-02-16 = CD Baby passes $10 MILLION in CDs sold
2004-03-30 = Over $7 million paid to musicians. That's $100,000 a week.
2004-10-22 = CD BABY PAYS $10 MILLION TO MUSICIANS FOR CDs SOLD
2006-01-03 = CD Baby pays $429,023 to artists for THIS WEEK alone
2006-02-08 = CD Baby CD sales chart through 2005
2006-06-06 = Biggest one-week CD Baby payout ever : $1,046,317
2007-09-04 = Sales numbers at CD Baby
2007-09-07 = How much each Digital Retailer has paid (+ %)
Hey Derek,
You've done something absolutely wonderful with CD-Baby, and if there's ever any questions in anyone's mind about your operations and financial side - they're most likely going to be "how can you do all this for so little?"
Your service is certainly one of the most reasonably priced on the whole web (to the point of incredible, actually) and THAT is probably one of the reasons why CD-Baby gets so much love and street cred from everywhere. And the fact that you can still make it work financially is simply phenomenal. Definitely a model for others to follow!
But as for revealing "all"... it's a gutsy move. One that only a completely decent and honest person would even consider. The only downside to this might be the amount of uninvited scrutiny you'll get from not just your competitors, but also the more financially-minded public. All of a sudden, the time you'd have to spend on dealing with their probes, questions, etc - might become overwhelming. This said, the ethical aspect of such a decision is beyond question.
The only thing about that kind of statement is the potential for its motives being misunderstood. As in Shakespeare's "the lady doth protest too much, methinks." The cynics may take this transparency the wrong way (they always do!).
For us (HUGE fans of CD-Baby and what it stands for), no further proof is needed. And, according to a large(ish) poll of our artists we've conducted less than a year ago, CD-Baby is THE most respected Indie Music site by a huge margin. We've had lots of love given to our Fame Games site as well (yeah!) and mixed, but generally positive comments re MySpace. But the unreserved 100% support, from all the people we've polled, went out to CD-Baby!
And that's another reason why we've been running CD-Baby music charts on Fame Games almost from the day we started webcasting!
One thing is for sure - and it hardly needs any further "proving": CD-Baby is a model for us all of how honest business can be combined with providing people with what they need! If other businesses (most particularly record labels, woe) should adapt similar principles - the world would be a hell of a lot nicer place!
Take care,
Paul + Laura
MMI / Fame Games Radio
You have the PERFECT long tail model - I'm jealous
I would LOVE it if you posted more detailed collective information about sales. When it comes to finding metrics on independent record sales from which to base some of our record label business plans, we refer to CD Baby's Top Sellers often, to see what's motivating buyers. It would be GREAT to have a reliable place to find more detailed info!
Hi Derek,
Nice to see you have a blog!
It'd certainly be very unique to see a company do this and I woudn't be surprised that you do it, knowing how you think
The only word of caution I could add is that it is something you cannot go back with. Once you spread the info, it'll be forever and even though it might not be the case, if you'd ever decide to stop it, you'd lose your credibility instantly (why did he stop sharing his stuff, does he have something to hide?)
But hey, when I did Atanata, it'd have been awesome to have the code!
This is something I'd be particularly concerned about:
"pain in the ass, having to hear the world’s opinions on every internal thing every day."
Not only a pain in the ass, but almost unaffordably time consuming.
Possibly commercial software projects that went open source could serve as an example on how to deal with the sudden impact of public scrutiny. You'd have to be prepared for
- the sheer volume of comments
- how to find the gems
- how to filter out spam, self-promotion, karma sluts
Thanks for all your really nice, clear and important advices and ideas.
It would be great if it could be translated in french. It would certainly help a lot of my friends and a lot of people in the french music business.
I'll send the link to some friends working at the SACEM.
Georges Chatelain
Paris, France
IMHO that would be way too much of a security risk. I definitely like how your mind works though. I struggle with how much transparency I need in my own (tiny) company having recently made a trusted partner able to use our business banking account because frankly I cannot do this as well as someone locally can. To me it is all about data management. I need the company to run optimally and even grow without worrying that it is going to get crashed by someone who isn't so careful. Although I can't really see how it would be possible to destroy anything of true value, which is intangible, because that is experience and relationships and the music itself. Still, there is a reason we buy our domain names. Theft is not cool.
It's far too late now to consider the cdbaby part of your hypothesis, and the numbers certainly show trends, but there are more downsides to this than you realized back when you write this.
1. Virtually every business now makes the i.t. techs work under a ticketing system. From my experience, especially in large companies, it's NOT the tech who closes tickets fastest or closes the most tickets that is actually providing the highest benefit to the company, it's the tech who resolves the most difficult and most financially relevant problems.
"Bob reset 15 passwords today" and wins the awards for most resolved tickets and fastest resolution times, but "George spotted the gitch in the Excel spreadsheet that let us submit a bid 15% lower than our original budget suggested" was the man who was instrumental in making a winning 17 million dollar project bid happen.
When backslaps and bonuses come around, more often than not it's quantity of service that is rewarded, not quality.
2. Between high school and college I worked the evening shift in a busy bookstore as a cashier. One night after closing, the cafe above had a pipe break and flooded. The night manager and I spent six hours saving over two thousand books and barely crawled home before the opening shift was supposed to come in. The district manager (on the other side of the US) fired us both the next day because, while the value of the books we saved had not been documented (probably over $20k), we HAD left over $200 in my till overnight, unsecured. Getting canned from a summer job was no skin off my back, but I will always think of that bookstore chain bitterly because the manager had been with the company for almost a decade.
Here we see the mistake of trusting your numbers more than your emloyees.
3. In many of those 'retired F500 CEO spills all about business success' books, one of the most respected employees is the "enabler", who (in often undocumented ways) makes it possible for others to do their jobs more successfully. The receptionist who brings in bagels and her own coffee blend for her co-workers for that "all-day meeting," the matron in the mail-room who doesn't mind picking up your dry cleaning when the specs for your sales presentation at the last minute...
If you can successfully quantify all the hidden interactions that make up a successful workplace, then the people working for you are no longer human.
I -love- website analytics, but the decimalization of employees is one of the bigest reasons I took myself out of the I.T. rat-race.
It's one thing to optimize the process (continuous improvement, six sigma and all the other jargon), and humans are a part of that procees, but if that's all they are, your business -deserves- to fail.