Building a market for performing artists in Kenya.
Photo: Jamiekairu(at)gmail.com, artist: Fox Elijah
When it comes to public events - it is always about people. This makes things extraordinarily complicated to understand.
Yes you can lead a horse to water, but will it drink? Why will people come to an event even if they know about it and it’s location? Even if their friends are going?
There are too many variables to consider, but one thing I do know to be true is:
Bringing people to an event is much more difficult than bringing an event to where people already are.
This was the major assumption we tested in the last quarter of 2014 and now forms the basis of our business model. We believe that it is far more effective to provide performing artists to existing events rather than trying to create events for them. What we want to do is to establish a new online service that enables people to book performing artists for their events. We want to go a step further and make it easy and cheap for people to create their own events.
For MapJam, post-PivotEAST pullout (July 2014) I made an important decision - FIND A SPECIFIC CUSTOMER. Yes, one can conceive of mass market applicability - but how can one achieve product-market fit within a mass market without testing anything on a specific customer segment?
Zahid Mitha was our assigned mentor for the PivotEast session and he asked us this one thing repeatedly - who is your customer? - Break it down to the most specific segment(s) possible.
I answered him with: artists looking for gigs/jobs.
If artists can pay us to get them gigs we can get paid by venues to bring them artists and patrons.
In September I gathered together a motley crew to test these assumptions in the market. We quit our jobs and we hit the streets. For the next 4 months we tested these two assumptions that both artists and venues would pay us to connect them.
We have attracted 56 venues in Kenya to use MapJam to advertise 300 + events on MapJam.
100+ artists are registered with us, & 78% of them are willing to pay us a monthly subscription.
We have secured 45% of them a paid gig.
We have been paid in advance by event organizers on 10 occasions to program entertainment for them.
In Nov' 2014 Native Instruments (Germany) sponsored 4 micro-festivals in Nairobi we organized.
We have pioneered the concept of the micro-festival in Kenya whereby pop-up food & beverage sellers pay us to serve small concerts outside of Nairobi.
There is not an existing market for performing artists in Kenya. It has to be built.
Venues and event organizers are willing to hire artists but more than often not, not able to pay artists at all.
Venues are usually not willing to pay any money in advance to artists or to us, even with a contracted guarantee.
There is not a private mechanism to support the livelihoods of musicians in Kenya. The performing artist music scene is propped-up by public funding with the exception of the most sought after acts (30 to 50 acts), by which I mean people making a living from performing music.
How do we know this is a problem with solving?
People, public venues (bars) and events (festivals) are paying us, a little, to solve it for them.
How do we know this is a viable market?
Currently it is not a viable market! The acquisition cost of getting gigs for performing artists is far higher than the rates of return from the subscription they are willing to pay us (1000/- per month). I define acquisition cost to be efforts to get an artist signed-up on our platform and then everything it takes from there to secure a gig and make a gig happen. The following is a minimal necessary list of things that need to be coordinated:
FANS; SOUND; LIGHTING; STAGE MANAGEMENT; MUSICAL EQUIPMENT.
The picture does not look favorable even when taking a 10 to 25% commission on booking multiple artists. What we have found is that an online marketplace cannot be built on the existing market.
Assuming we organize +2 events more each month this is what the revenues from events and artist subscriptions and expenses incurred from organizing events look like. There is a clear margin of revenue but is it enough to cover the increasing costs, not shown on this chart, to any operator of organizing an increasing number of events? If it is I would hypothesize that the margin would be very tight which is why I believe that the profits to be made in the events industry in Kenya comes from the sometimes vast margins that can be made from event production depending on the client.
It does not make sense to bear these costs in an increasingly competitive market. I predict that profit margins are getting smaller as more players enter the events market and as consumers are getting smarter.
For these reasons performing artists will continue to be marginalized wherever possible by the events and entertainment industries. Performing thus artists cannot rely on the successes of the events industry in itself.
The smart approach is to vastly increase the market for performing arts latching the events industry unto this market.
There needs to be a virtuous circle of increasing gains rather than a market of diminishing returns. Costs need to reduce and simultaneously sales volumes of event services increase significantly. If such a market place can be developed it will create a slowly rising wage floor for professional performing artists that will enable thousands and even tens of thousands of them to make a living from their creativity.
An online marketplace platform is required.
It has come down to a solving the problem of how someone putting on an event can organize it [quickly, effectively and at a a short notice, or in advance]; and at the same time seek guarantee from service providers for an event.
In other words how can I organize an event confidently and quickly? Like "how can I get a taxi confidently and quickly?" kinda problem.
Basically, the events market must be expanded to be accessible to internet users in Kenya who will pay through MPESA.
We at MapJam want to develop this online marketplace.
MapJam can bring a virtuous-circle of increasing gains to the local area in which our web-plaform market place is activated.
MapJam solves the problem of how to organize events at a a short notice, or in advance; and seek guarantees from service providers. MapJam allows you to organise all the components of a party/event/gig anywhere & at anytime, including the people part. MapJam solves the problem of how to find an artist, and establish the terms you are comfortable with. MapJam assists in finding the indispensable equipment and service providers you need for your event, and seeks guarantees from them, even in an emergency.
We want to expand on our success and rapidly develop a beta product that will open up the event service provider + entertainment market to the private individual & event organiser in Kenya. The beta product of MapJam will make it easy for anyone to access the service provider & entertainment market all over Kenya.
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