I know it’s hard to believe, but according to Nielson, the Beatles were the biggest-selling rock band during the first half of 2020. No one, other than perhaps the Beatles themselves, would have predicted their monumental success in 1962 when a catastrophic mistake nearly broke up the band.
Fortunately, “Quitting” Wasn’t In The Beatles’ Songbook
“Listening to the tapes, I can understand why we failed the Decca audition. We weren’t that good…” Paul McCartney
The words “failure” and “The Beatles” seldom appear in the same sentence. However, much like a nascent startup, the Beatles’ early career was comprised of a series of failures, culminating in their unsuccessful audition with the leading record company of their era, Decca Records – a misstep that nearly caused the band to call it quits.
Entrepreneurs can draw several startup lessons from the way the Beatles dealt with Decca’s devastating rejection.
Wrong Product – The material for the audition was selected by the group’s manager, Brian Epstein. Brian’s music industry experiences were nominal, having only recently signed on as the Beatles’ manager. The Beatles were impressed by him because of his polished demeanor and the fact that he curated the record department within his parent’s furniture store.
Of the thirteen songs Brian selected, ten were uninspiring covers of American tunes, which the Beatles sang with exaggerated American accents. Brian’s intent was to showcase the group’s multi-generational appeal by drawing upon mainstream songs, including Broadway show tunes. He only selected three Lennon and McCartney songs for inclusion in the audition – none of which were subsequently released by the band, as they deemed them to be inferior. (Note: “Hello Little Girl” and “Like Dreamers Do,” were subsequently released on the Beatles Anthology collection. “Love Of The Loved” remains unreleased.)
Lesson – Entrepreneurs must have the confidence to listen to their advisors and reject their advice when it strays beyond their areas of expertise.
Wrong Audience – Per George Harrison, “It was unusual at that time to have a group where everybody did the singing. In those days, it was… one guy out front who sang.” John’s recollection is similar: “They were so dumb. When they listened to these audition tapes, they were listening for The Shadows. So, they were not listening at all.”
Lesson – Understand a potential stakeholder’s point of view before engaging with them. Focus your time wooing would-be investors, customers and employees whose believe in your venture’s product/market fit, ignore those who do not.
Wrong Team – The Beatles’ ultimate lineup was incomplete at the time of their Decca audition. The affable, yet musically mediocre, Pete Best was the Beatles’ drummer, rather than Ringo Starr.
Lesson – One of the keys to the Beatles’ ultimate success was the creative tension and balance they achieved once Ringo joined the group. A startup can likewise ill afford to compromise when establishing its core team.
Wrong Time – Timing is everything in comedy, life and business. The Beatles were simply not ready at the time of their Decca tryout. According to Paul McCartney, “Listening to the tapes, I can understand why we failed the Decca audition. We weren’t that good, though there were some quite interesting and original things.”
Lesson – Startups have limited resources to secure key customers, investors and employees which makes it challenging to recover from a negative first impression. As such, entrepreneurs must balance their desire to accelerate their path to success with their startup’s capabilities.
Wrong Motives – Brian paid Decca £15 to record the session (equal to $ 42 at the time, and $ 360 in 2020). Even though this isn’t a huge amount of money, it does seem odd to pay for an audition. Thus, it is unclear whether Decca’s motivation was a sincere desire to evaluate the band or an opportunity to score a small payday by utilizing an otherwise empty studio (the audition was held on January 1, a holiday).
Lesson – An entrepreneur’s two most limited resources, time and money, must be strictly guarded. Thus, when a customer, investor or partner makes a request, their motives must be clear. As the Beatles know, “Can’t By Me Love.”
Wrong Expectations – According to John Lennon, “I think Decca expected us to be all polished, we were just doing a demo.”
Lesson – Establishing appropriate expectations with a startup’s stakeholders is imperative, as over-promising and under-delivering will destroy your credibility. If you deliver a prototype to a potential partner who is expecting a commercialized solution, the relationship might be irreparably damaged.
Baby, You’re A Rich Man
After the group’s immense success, the Beatles recalled their rejection by Decca with bitter satisfaction.
George: “… they (Decca) signed Brian Poole and the Tremeloes instead. The head of Decca, Dick Rowe made a canny prediction: ‘Guitar groups are on the way out…’”
Paul: “He must be kicking himself now.”
John: “I hope he kicks himself to death.”
Fortunately for music fans everywhere, the Beatles handled their failures like successful serial entrepreneurs. They ignored the alleged experts, internalized their mistakes and improved their value prop by working nonstop.
Entrepreneurs can take solace in the reality that everyone, including folks who are enormously successful, suffer soul-crushing failures. Setbacks on the path to success are inevitable. What matters most is whether you allow your mistakes to define you or motivate you to reach a higher level of success.
You can follow John on Twitter: @johngreathouse.