Listen To The Band

Like other great radical marketers, the Grateful Dead eschewed glitz and tricks and focused on a single element, a marketing hallmark that is far too often ignored by even the biggest organizations. In essence, the Dead's story is a case study of substance over form in the context of niche marketing.

From the day the band came together, the group had a clear sense of what its "product" should be and who its audience was. Even when the band members eventually started earning great sums of money and enjoying the lifestyle the money brought, they never put the money first and never let the bottom line dictate what went out the factory door. The music was always the driver and the catalyst for all decisions and strategies.

Despite the band's roots in the antimaterialistic, counterculture era of sex, drugs and rock 'n' roll, several members became astute businessmen, aware there was revenue being generated around their popularity. The band incorporated in 1973 and, with the band members as co-CEOs and the board of directors, became a serious business venture. Each band member has an equal share of the profits and an equal vote in approving all merchandising and business decisions. The first crucial move was to agree that if a band member left or died, his shares would be brought back into the organization so control remained central and [the remaining members] could carry out their mission without struggling with outsiders.

Indeed, the grungy, spontaneous image to some degree belies the genius of the band's business acumen. Decisions were made along the way--from instituting a ceiling on ticket prices to focusing on touring rather than recording--that flew in the face of conventional industry wisdom but had a profound impact on customer devotion and the extension of the brand.

This article was originally published in the June 1999 print edition of Entrepreneur with the headline: Listen To The Band.