MUSIC PRODUCTION AND PUBLISHING.
STOCKHOLM, SWEDEN.
A LONG AND WINDING ROAD TOWARDS SUCCESS
Today Murlyn Music is one of the world’s most respected music production companies. Murlyn has written or produced songs for artists such as Madonna, Janet Jackson, Céline Dion, Jennifer Lopez and Britney Spears.
But 22 years ago, with hardly any previous experience, everything was at stake. Murlyn’s co-founder Christian Wåhlberg was running a record store with two friends. They took out a bank loan of 200,000 Euros in order to promote a compilation they had put together out of a few licensed songs from southern Europe. He loved the animated commercial for the compilation, which was called Party Zone, and launched the first TV campaign ever in Sweden for a record.
We needed to sell 40,000 copies to reach break-even. I think we sold 120,000 copies so, for us, the profit was huge, says Christian Wåhlberg.
However, from then to now has been a long and winding road. A success story usually focuses on the most recent part of the story, however, for Christian Wåhlberg and Murlyn Music the story goes back decades and is about failures and restarts as well as hits. Although he has come out well in the end, the choice of “wrong” partners has cost Christian Wåhlberg millions of Euros.
He started 25 years ago at the bottom of the music business, as an assistant in a record store before starting his own store. Although only in his early 20’s he reached out to investors and venture capitalists. He did not find anyone who was interested in his record store, but got a bank loan as well as financing from the state-owned SME investor Almi.
We did not really make a big profit in those years and I was never even close to affording expensive watches or cars. But it was a great life. I worked with my hobby and had my record store and enjoyed life. After a while, however, I felt that I needed new challenges and it was then we started the record company.
After the hit with the Party Zone compilation album, Christian and his partners invested in a rap group called Infinite Mass.
We decided that if we would release their record,” says Christian, “we must not make a cover or product inferior to what regular record companies would have. So we put a lot of money into this record and made a type of music video no one had ever seen before in Sweden. A lot of personal favours were collected at that time.
Looking back on his career hits and misses, Christian says:
There are a few milestones in life. A few turning-points where you have to have the courage to go ahead with your ideas. This step was really important, but at that time I never thought about the consequences. I was 22, without a family… it was a situation when it was alright to fail, so I was a bit incautious. But you need to be that. You need to be fearless.
Infinite Mass’s record became a big hit and was the first urban music record to be awarded a Swedish Grammy.
Suddenly we were a player in the Swedish music industry. But we were not prepared for that. There were lots of new opportunities but we did not have any money for them.
The company was too big to remain small, and too small to be big. A few of the big record companies made offers, but they were turned down. With some help from a consultant, Christian and his partners partnered with a German company. Suddenly they had a big office but the new and former owners disagreed on important issues.
I felt that our company acted too cowardly. So I made a deal and was able to leave and bring my bands, my artists.
Soon after that, Wåhlberg bumped into the songwriter Anders Bagge.
That was the first time I was in contact with production and I noticed how unstructured he worked, but the talent was obvious… So I asked him, spring 1997, why don’t we start a company together. You produce and I sell, and we do it from your basement. He was not really prepared and said, okay but only if I can have my own studio.
But again there was no money, so Christian Wåhlberg went back to the venture capitalists he had once approached with his ideas for a record store. As with the German company, the fact that the partner had money did not necessarily make them a good partner. In fact, the investor and new partner did not actually have any money and had to secretly borrow. Out of 400,000 promised Euros only 100,000 were delivered. Nonetheless the new partner had already gotten a big share of the company. The newly established company, called Murlyn Music, had an amazing start with a few international hits. New deals were made, but new money did not come from the external partner.
We had to get rid of him after a while, but that cost one million Euros. We had not asked proper lawyers to write a good ownership agreement.
A good partner was finally found in the venture capital firm Novax and this was a new milestone. It was not so much about the money, but rather their continuous advice: the opportunity to call someone every day and test a new idea.
I believe that entrepreneurship needs a dual leadership. Someone in addition to the entrepreneur, who is driven by the idea, can run the numbers, ask questions, set a new diagnosis and, if needed, turn down the idea.
Novax bought 12% of the company to begin with, besides a convertible loan based on a higher valuation of the shares; all in all approximately 3.5 million Euros and eventually 41% of the company. Wåhlberg emphasizes that it was not the money that was most important, but the business and strategy advice from the investor as well as the new board.
Advice was necessary in order to take the next steps. One was about selling the catalogue with copyrights for a number of international hits. Christian Wåhlberg failed in his first attempt despite having an extensive, well-designed and printed business plan.
That attracted people who thought we were on the brink of bankruptcy, so we got quite bad offers and withdrew the whole thing, says Wåhlberg. Next time only two pages of information were presented in a very simple way, and we focused our efforts on the presentation when we had some serious potential buyers.
Analyzing the different phases of his company, Wåhlberg points out the risk of the transition from rapid growth to a more mature, constant trend. It is easy to take on high costs in terms of employees and production facilities. The point is that it is easy to start a company, but difficult to keep going.
Murlyn Music has had to redefine its role in the rapidly changing music industry. Murlyn Music went from a production to a management company, with 5 instead of 20 employees, without losing a single client. It went from “a love-all and serve-all mentality” to a tighter organization where they had transformed their creative employees to small-company owners who had to own or lease their studios.
Wåhlberg concludes, although the road might seem to have been well-planned, it was not grand plans but smaller steps that were important:
It has only been about doing it. Instead of having big goals, break them down into small ones. When we first worked towards America, it was not because we had planned to instantly work with Madonna. That came a couple of years later.
***
This is the fourth part of Volante’s series Creative Business. The series is a complete version of the book ”Creative Business: 10 lessons to help you build a business your way” (Volante, 2010). The book is available for purchase in an ebook version on Amazon or Lulu (Kindle, ePub or PDF), a paperback version distributed directly from the publisher and soon also a print-on-demand version distributed globally.
