Chicago startup Jammber was faced with a tough decision during its 14-week Project Music program earlier this year. The company left for the Nashville accelerator with a goal of being the LinkedIn for the music industry, a platform for musicians to find other artists, photographers, stylists, producers or anything else they needed.
But after working closely with Nashville artists, producers, and the musician's union, Jammber's co-founders saw a chance to pivot. Instead of a talent discovery app for musicians, they would create an online platform for processing payments and filing documents between artists and their labels.
Essentially, Jammber was transitioning from a social app to a SaaS accounting platform for the music industry. And that initially spooked investors who were excited about the scale and potentially fast user acquisition of its LinkedIn-stlye app, CEO and Co-Founder Marcus Cobb said.
"It was a difficult decision to pivot. It was so hard that I went back to my room after the pushback from investors and spent time alone, and I cried," Cobb said. "They weren’t tears of sadness. They were tears of fatigue."
The accelerator was 14 weeks straight of 18-hour days, and the thought of shifting the platform was daunting. But while investors were wary of the idea, the music industry was overwhelmingly on board, Cobb said, as artists and their labels were looking for a better way to handle documents and process payments.
Today, Jammber considers itself "Slack meets PayPal for the music industry." The new product is an organizational tool for bands and their labels to communicate with each other, share documents, and process payment. Jammber handles all the forms artists need, from tax documents to union forms, making the process more efficient and completely paperless. The Jammber platform also facilitates payment transactions for artists, making it easier for them to pay their team or collect payment.
Cobb said for every three hours a musician spends in the studio, they're spending an hour on paperwork. Jammber wants to free up that time to allow artists to spend more energy on the creative side of the business.
"Now, what used to take hours to do, they can do on Jammber with the click of a button," Cobb said.
With the new model now in beta, Nashville music labels have quickly jumped on board. Jammber secured Big Machine (Taylor Swift, Steven Tyler, Rascal Flatts, and Reba's label) during its first pitch meeting with the Nashville giant, and the label will get all of its artists to start using Jammber's technology. And Jammber also got an LOI from Sony Music Nashville (Carrie Underwood, Brad Paisley, Garth Brooks) for all of their artists to use the product as well, Cobb said.
But the biggest opportunity for Jammber, Cobb says, is in the payment data the company will collect through its platform. For the first time, the music industry will have data on every person on a record who needs to be paid, from producer to frontman to drummer to writer. This information is especially important when paying artists per song played via YouTube or Spotify, Cobb said. Companies that pay artists based on digital song clicks now have a list of every contributor who is owned money for the song--not just the singer--making payment much more transparent and efficient.
"Jammber is building up that database of who to pay," Cobb said.
All in all, Cobb said Jammber has 31 clients waiting for them to come out of beta, which should be later this year. Cobb added that within the next 12 months, about 80% of all the data and payment information for country music will be going through Jammber.
Jammber will also still have the LinkedIn element of its platform so artists can connect with other industry professionals, Cobb noted.
Cobb found that as Jammber continued to bring on big-name clients, investors started to come around. Jammber is working on a $650,000 seed round with investors from Chicago, Nashville and elsewhere. Cobb added that Jammber will remain headquartered in Chicago--as it's had luck here with engineering talent and access to capital--but will have a Nashville office as well. Jammber's model is built to work beyond country music, Cobb said, and it plans to add movie, television, and performing arts professionals as it grows.
Jammber has built a recurring revenue model where labels are paying the startup $250/month per admin license, and Jammber is taking a 3-7% transaction fee on payments. The company expects to start collecting revenue in the next 35 days, and plans to expand out to LA and New York next, Cobb said.
Jammber has opted for the more "boring" route of a payment processing app than a popular social app, but Cobb said he feels confident in his company's direction.
"We had to decide ourselves if we wanted to go the sexy route, or if we wanted to go the money route," he said. "We decided to go the money route and do what's best for Jammber. And we're now meeting investors who get that."