Last week I read an article in The Boston Globe by Renée Graham (an astute pop culture critic) alleging that rock & rollers—often straight, white, and male—made a habit of bashing disco music, in part, because of their disdain for an audience that included so many gays and minorities.
I had to admit that most rockers (including me) disliked disco, but not for the reasons Graham mentioned. And so I penned a response—which the Globe magnanimously printed:
Nearly every rock musician I knew loved Motown and especially funk, from Sly and the Family Stone to Tower of Power. What we didn’t appreciate was that disco-playing DJs were replacing live music in clubs, the dance zeitgeist was shifting attention away from experiencing music in a concert setting, and disco lyrics were dumbing down the airwaves. Fortunately, acts such as Elvis Costello, the Police, Steely Dan, and even Fleetwood Mac kept things real through that period.
After a week’s reflection, I realized that the rise of disco was a perfect illustration of "business model innovation." Though I disliked disco music partly for its lack of imagination and creativity, I had overlooked that disco itself was an innovation—one that upended the conventional business model of certain nightclubs. Many urban establishments began to see a benefit in catering to dancers who would work up a sweat shaking their proverbial booty and buy more drinks. These clubs could also save money on live entertainment. (Of course there were live disco acts too, but many a club pinched pennies by employing DJs instead of bands.)
It’s the nature of business model innovation that, when successful, it destroys as it creates—for which we have the wonderful term “creative destruction." There will always be winners and losers when the conventional business logic is overturned. In this case, the winners included nightclub owners, dancers, disco musicians, and, I suppose, platform shoe manufacturers. The losers included those who earned an income from—or otherwise enjoyed the benefits of—live music in a concert setting, whether rock, punk, country, or whatever. (Fortunately, in this case the loss was not total, as the better live acts managed to survive during the disco era.)
We’ve talked a lot (including here) about the creative destruction that The Beatles caused a decade earlier. The Top 40, pre-Beatles, was in large measure a mashup of milquetoast pop and surfing music. But once The Beatles hit the airwaves, Top 40 offered a sound that was rockier (thanks also to bands like The Rolling Stones and Kinks) and more innovative (as more artists started performing original material), while teen response at live concerts approached delirium.
This too was business model innovation—though much of it unplanned. The sudden presence of young, charismatic rock acts (some more talented than others) recording and performing their own music for frenzied audiences changed the face of pop culture, opened up new businesses, and sprouted new careers. (For instance, after The Beatles appeared on TV in America, there was an unprecedented demand by teens and preteens for musical instruments and music instruction.) While the music business as a whole—and especially the recording industry and the live concert business—experienced unparalleled success, there were plenty of losers, especially among the performers who would soon be passed by. Hundreds of pop crooners, talented "girl groups," and promising R&B singers were crowded off the charts by British Invasion bands who were reinventing rock & roll. So it is with revolutions.
When disco hit, my rock & roll friends—who were on the winning side for years—were suddenly on the losing end. But that's the churn of capitalism. And life. Chicken today, feathers tomorrow. All things things change (to quote Heraclitus, one of my favorite management consultants). And so it was with disco, which faded in time. It did leave its imprint, however, on club music and electronica—for better or worse.
One business lesson here, if it’s not obvious, is that business model innovation can disrupt everything. One day you wake up to a new game, played by different rules. Think back to the golden years of Blockbuster Video when their stores were proliferating like rabbits. Then Netflix (who had approached Blockbuster about a partnership in 2000 but were laughed off) altered the playing field with a subscription model of video rental and delivery. You no longer had to drive to a store to pick up videos and then pay onerous late fees (which, truth be told, is how Blockbuster made its money). Netflix found a better way to do business. Blockbuster filed for bankruptcy in 2010.
So if your enterprise (whether a one-person operation or a major firm) isn't succeeding—and if you're concerned about "Stayin' Alive"—you may want to look seriously at redefining your core business. But if you don’t, no worries. A competitor will do it for you.