{"id":1309,"date":"2009-06-04T07:39:45","date_gmt":"2009-06-04T14:39:45","guid":{"rendered":"http:\/\/www.artsjournal.com\/artfulmanager\/wp\/2009\/06\/yes_virginia_you_already_have\/"},"modified":"2009-06-04T07:39:45","modified_gmt":"2009-06-04T14:39:45","slug":"yes_virginia_you_already_have","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/artfulmanager\/main\/yes_virginia_you_already_have.php","title":{"rendered":"Yes, Virginia, you already have a business model"},"content":{"rendered":"

One of the best ways to redirect a wandering conversation about ‘new business models’ in the arts is to ask the basic question: What is your current business model, and how does it work? It’s surprising how even really smart cultural managers can’t answer the question. Admittedly, we don’t talk much as a field about the architecture of our businesses, so we lack the specific and nuanced language to sketch out the blueprint. But without such knowledge of our current business model, it’s hard to imagine that we’ll stumble into a better one.<\/p>\n

Seth Godin takes a shot<\/a> at simplifying the elements of a business model, suggesting four key questions that any business model will answer:<\/p>\n

    \n
  1. What compelling reason exists for people to give you money? (or votes or donations)<\/li>\n
  2. How do you acquire what you’re selling for less than it costs to sell it?<\/li>\n
  3. What structural insulation do you have from relentless commoditization and a price war?<\/li>\n
  4. How will strangers find out about the business and decide to become customers?<\/li>\n<\/ol>\n

    The answers to the first two questions are pretty obvious for the traditional nonprofit professional cultural business model:<\/p>\n

      \n
    1. We create work that people are passionate about, and want to experience — or want their friends, neighbors, children, or great-grandchildren to experience.<\/li>\n
    2. We don’t and we can’t (nonprofits are designed, after all, to deliver goods and services at below<\/i> their total cost). So we access revenue beyond the traditional market in the form of gifts, grants, and subsidies (while we also reduce our costs through volunteers, low wages, deferred maintenance, and number shuffling).<\/li>\n<\/ol>\n

      The answers to the third and fourth questions are a bit more problematic. For number 3, most arts organization don’t have a specific and ongoing strategy to create barriers to competitive market entry (new theater groups, other entertainment options, or the like). The smart ones build a tight network of supporters and advocates, as Godin suggests, which buffers the tidal forces of the marketplace just a bit. <\/p>\n

      For number 4, we’ve tended to retrofit marketing after the fact — after our seasons or exhibit schedules or cultural calendars are set — here’s the season guys, now go sell it.<\/p>\n

      And while Godin’s four questions are dramatically oversimplistic (buried within question two are all sorts of complex strategies around capitalization, asset management, scope\/scale of production, supply chain management, and on and on), the exercise of answering the questions for your own organization is a productive one.<\/p>\n

      How would your organization answer those questions? And what specific element of your current business model isn’t working anymore and demands innovation? Once you have a specific problem, your odds of evolving a productive solution rise dramatically. <\/p>\n","protected":false},"excerpt":{"rendered":"

      One of the best ways to redirect a wandering conversation about ‘new business models’ in the arts is to ask the basic question: What is your current business model, and how does it work? It’s surprising how even really smart cultural managers can’t answer the question. Admittedly, we don’t talk much as a field about […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4],"tags":[],"class_list":{"0":"post-1309","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-main","7":"entry"},"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/posts\/1309","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/comments?post=1309"}],"version-history":[{"count":0,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/posts\/1309\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/media?parent=1309"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/categories?post=1309"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/tags?post=1309"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}