EPISODE 20: I invited Phil Morse to the show because he’s the co-founder of the legendary institution Tangled, Manchester, U.K.’s longest running club night (celebrating 20 years in September), featuring popular artists such as Groove Armada, Above & Beyond, Gareth Emery, Way Out West, Plump DJs and many, many, more.
I was curious to know how the DJ and nightclub business models worked, and how to get started in these businesses. There’s plenty of info about those models in this case study with Phil, but I observed a bigger picture midway through my chat.
As Phil told me his story, I noticed he had constantly changed his business models based on his interests, age, profit potential, market trends and desired lifestyle. Oftentimes we think that once we start a business, we have to continue doing the same thing till death do us part. But no, you change your business model based on what your objectives are. And oftentimes, a business model that actually works appears years after you start your business. My point? Go start, and don’t be afraid.
There’s so much to learn from Phil Morse the entrepreneur no matter what business you’re in, so jump in. Here’s the case study:
• Phil was born and raised in Manchester, U.K. and has been a DJ since he was a teenager (a good 25 years ago!).
• Always been a writer, often for music publications. The two have gone hand in hand.
• More recently (around 5 years ago) he has taken to internet marketing. He took over email marketing for the company he was working for. Got really into it and ended up as a director of a web company. Started doing internet marketing to prove to his clients that it worked.
• Started a website called DigitalDJTips.com to help DJs to learn modern DJ equipment. Just like in publishing to photography to everything, digital has completely transformed what DJs do. Gear changed overnight in a way it hadn’t done for 30 years. There was a big need for assistance to help people make that switch.
• Within 6 months it was looking as a viable business (that was 3 years ago).
TEENAGE ENTREPRENEURIAL BUG
• In school, there was an initiative where students were allowed to set up their own little businesses. Along with friend, he decided to sell candy, crisps, fast food, etc. Bought £10 worth of candy, sold it and continued till they had a little candy empire going. For 16-year olds, it was a lot of money.
• As music fans, they spent that money in the music store buying lots of music. This led them to throwing school parties and DJing. And making more money.
• So at the age of 16, Phil was promoting parties and DJing. He did this on and off through college.
• After graduating from college he started working for a magazine as a journalist.
THE LEAP OF FAITH
• Manchester in the 90’s had an extremely vibrant music scene that he immersed himself in, which caused problems for him first thing in the morning, rolling into work ☺.
• The editor of the publication he was working for called Phil in and said, “You’re 10 minutes late again. It’s the DJing or the journalism – what’s it going to be?”
• Phil did a bit of soul searching and gave up his full-time job and threw himself to being a DJ full-time.
• When he quit his full-time writing job, it wasn’t like he was a popular DJ earning a good side income by playing gigs.
• He was DJing 2-3 nights a week in local bars for very little money. He doesn’t know why he quit his job and wanted to do this full time. “When you’re young you just feel you have time to try these things. I had a feeling it might work.”
• He worked extremely hard for a good 5 years before it started paying off.
THE OPENING ACT
• The very first thing he did was to get organized, which really meant having a piece of paper in his pocket with his to-do list written on it. Whatever needed to get done, he would religiously get done.
• He spent time walking from bar to bar with his pitch, looking for DJ jobs. He spent a lot of time meeting people.
• He took every slender opportunity that came his way: he DJ’d for £20 on Tuesday nights when there was no one at the bar; he DJ’d between bands on open mic nights, doing it for a couple of drinks and a lift home. That’s how he slowly built a reputation for himself as a DJ.
• “You never really are as good as you think you are. There’s so much to learn.” It was a long apprenticeship, and he did it by being out there and taking his chances.
• He claimed unemployment benefits and also got a few government grants when he started working for himself. It was a very poor time, a time when he used to land up at people’s houses and hoped someone would feed him.
• He realized very quickly that the money was in promoting DJs, not being a DJ. His business plan soon included promoting events at the venues he DJ’d.
• The business model came out of two things – 1. Getting good at his craft, and 2. Spotting opportunities and working out how the area he was working in actually worked. You can’t know how something works unless you’re part of it. It took him 5 years to perfect this business model.
• Initially, the motivation to change the business model was not to make more money (Good DJs were still being paid a lot of money). Instead, it came about from wanting to promote himself.
• He wanted to promote himself so he could meet other better DJs, which in turn would lead to more opportunities for him. So he started promoting events and inviting other DJs to play at them.
• And opportunities came. He traveled the world with the DJs he met, playing at top nightclubs – all this as a direct result of meeting them through the events he ran.
• This is how he realized that promoting events were far more lucrative than any money he was making from DJing. Very quickly, he stopped DJing at gigs that weren’t part of his promotions.
THE NIGHT CLUB PROMOTION BUSINESS MODEL
• As an event promoter, you tie up with a club manager and strike a deal for a regular night. The way it worked in his case was the night club arranged the security and the bar; Phil took care of marketing and music, which involved booking DJs, putting flyers and posters, having a website, forum, email list and so on.
• Assuming you have a 500 person venue (filled to capacity) and charge each person £10 each, you’d probably pay £500-£1000 to the venue to hire the room. You might pay a couple of guest DJ’s £1500-£2000. Promotion spend would be about £500. The rest is profit (after overheads like printing, website maintenance, etc.). All these are possible figures. Not real numbers.
• It’s a wheeler-dealer kind of business. Sometimes you’d get DJ’s for a very low rate if they don’t have a booking that weekend, boosting your profits. But if people don’t show up, then it’s out of your pocket. It’s a fun game to be in, but you need a bit of nerve to be a promoter.
• This is a very mature business, especially in the UK. He believes this model is taking off in the U.S. There may be opportunities around the world as well. There’s always room for new talent to bubble to the top.
• Music is a highly vibrant thing. There’s always a new generation coming through that want to kick away the old stuff and do it their way. So there will always be opportunities for young promoters if they keep their ear to the ground, know what their generation likes and do things that their older peers are going to miss.
‘TANGLED’ CLUB NIGHTS
• Phil and his DJing Partner promoted events in Manchester under the moniker ‘Tangled’ for around 12-13 years.
• ‘Tangled’ was a brand rather than a home; Phil used to put up special events every week at different clubs. They had a mailing list and followers whom they could motivate to come out to wherever Tangled was held that week.
• The ‘Tangled’ brand is still alive and about to celebrate its 20th anniversary.
GETTING CLUBBERS IN THE DOOR
• Phil’s biggest secret weapon that stood him in good stead ever since: his email list.
• It actually started as an address list (snail mail). Grew to 5000-6000 people. As mobile phones began to become popular, he used SMS as well.
• Sent out personally signed flyers to people on their list.
• Personal touch, sending stuff in the mail, texting people and emailing people regularly were very important.
• At the events they were very accessible to their customers. They made it a point to stand by the door and shake everyone’s hand on the way out and personally hand them a flyer for the next event.
• It was quite an unforgiving game if the numbers didn’t turn up, so they were always coming up with clever promotion ideas. Driven by panic more than anything else.
• He invented an event that became monthly…if you could produce a statement from the bank machine proving you had overdrawn your account, you could enter the event for free.
• Near payday, most people in their 20s would have a negative bank balance. The beauty of this was there were always one or two people in a group that said, “We’ve got to go there (Tangled), I can’t afford anything else.” Then the whole group would go there, but every one barring these one or two people in the group would have to pay to enter.
TWISTS AND TURNS – HOW HE ENDED UP IN SPAIN
• He realized he was getting older and Tangled’s patrons weren’t; so he decided to move away from promoting.
• He didn’t want to be that guy who wasn’t in touch with the people as he was 10 years earlier.
• It was very easy to keep promoting – he knew everyone, knew how to make money doing it. So if he didn’t make a big, bold change, he would’ve been stuck with promoting for longer.
• He left England with his girlfriend (now wife) and moved to the south of Spain. Had absolutely no plan at all. Just waited to see what would happen.
• A year later, he found a job as a copywriter. He clawed his way up in his company (a real estate business) from copywriter to online marketer.
• The 2008 crash decimated real estate. Within 6 months, he got out of there and joined a web agency in 2010.
THE BIRTH AND GROWTH OF DIGITALDJTIPS.COM
• He started his own internet business (DigitalDJtips.com) to prove to the clients in the web agency that online marketing works – YouTube marketing, Facebook, content marketing, etc. It (internet marketing) was quite a hard sell otherwise.
• DigitalDJtips.com became popular very quickly, so he quit the web agency and worked on his website full time although it wasn’t bringing in much revenue at all.
• The turning point was when someone offered to pay him US$40 for advertising on his site. That’s when Phil knew he could make this work.
• His goal was to make €2,000 per month, else he would find another job. He reached his goal in the first month itself, and has never looked back.
• He published DJ-related tips on his website; once he wrote about DJ gear, did compare-and-contrast reviews, etc. and realized that’s what his audience liked reading about.
• He then started contacting DJ gear companies and had them send him gear to review. This started to pull traffic to his website.
• It took 6 months to do really good numbers. When he had a 100,000 impressions/mo. within a year, he started selling to ad networks.
• He also added Amazon affiliate links, Google Adwords, etc., which contributed to his revenue of €2,000 per month.
• The website still focuses on tips/tutorials and product reviews.
• To get traffic, he guest-posted a bit; his review strategy was to try to be one of the first to post a review of newly launched gear. Google seemed to like the first person to write something.
• The only SEO he did was basic: product names + the word “review”. He’s never paid an SEO person. It’s just happened naturally.
THE BUSINESS OF PRODUCT REVIEWS
• Usually, companies would give you their products in order for you to write the reviews.
• Phil didn’t want to do that – he had a bigger picture in mind.
• He said to the companies that he wasn’t interested in keeping their products and that they could collect it once he was done reviewing them.
• His value proposition was that if equipment makers buy advertising, he would make sure reviews of their equipment were timelier than those of the makers that didn’t buy advertising. That seemed like an ethical incentive without affecting the partiality of the reviews.
• The problems with this model: 1. Some companies would put pressure on you to write partial reviews; Phil refuses to go down that route; 2. There’s a limit to how much companies are going to pay you; 3. The industry, like more consumer industries, is very ‘up-and-down’ – very seasonal depending on when the big equipment shows are.
BUSINESS MODEL EVOLUTION, PARTE DOS
• Since the review business was seasonal and Phil wanted more reliable income, he started teaching his audience the basics of DJing.
• It turned out Phil liked teaching his audience.
• A year and a half ago, on a random Sunday, he made a few video tutorials, put them up online and sold them. These videos have made him enough money to not do anything else every single week since. It was a real penny-dropping moment.
• Very soon he realized the website is not to be one that just dealt with reviews and advertising. Selling in-depth DJ courses and training was the way to go. His most popular course is called “How to Digital DJ Fast”. The advanced course is called “The Digital DJ Masterclass”.
• He works with a small team to produce and deliver these courses. It’s proven to be extremely fulfilling and a lot of fun.
• This is another example of your business model ‘appearing’ as you go along.
3 ACTIONS YOU CAN TAKE TO BE A DJ
• You need to know where you want to go, who you want to be. At 17, Phil had a very clear vision of where he was going by watching the people who were the generation in front of him. You can’t do this in a vacuum. You need to have that visceral contact with where you want to go artistically. You need to visualize it by having seen it. Surround yourself with what you want to do.
• You need to find people who are doing it to help you, i.e. mentors. Someone who can shortcut the process and save you years of trial-and-error.
• Have a piece of paper in your pocket with your priorities written on it. When someone suggests an idea, whip out that paper and write it down. Just a small piece of paper stood Phil in good stead, helped him not to forget things and be reliable. Young DJs think success is all about being different musically; actually it’s about being reliable, likable and professional. That’s what people who are paying you want.
About Phil Morse: Phil is a DJ, writer, events promoter and digital DJ trainer. He is the founder of Tangled, Manchester, U.K.’s longest running club night. More recently, he founded DigitalDJTips.com, a leading website offering tips and training on how to use digital DJ equipment and become a world class DJ. He lives in Marbella, Spain with his wife.
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Hey! I’m Faheem Moosa. In my quest to live life on my own terms, I quit my corporate job in 2009 and started a consulting business that allows me to live and work from anywhere in the world. I am fascinated by how regular people start and build six and seven-figure businesses with little or no capital and live the lives they want. I created this site so you and I could catch a glimpse of their world and learn exactly how to do the same. Read More...
Hey! I’m Faheem Moosa. In my quest to live life on my own terms, I quit my corporate job in 2009 and started a consulting business that allows me to live and work from anywhere in the world. I am fascinated by how ordinary people start and build six and seven-figure businesses with little or no capital and live the lives they want. I created this site so you and I could catch a glimpse of their world and learn exactly how to do the same.