An Insider View of "The Grateful Dead Marketing Philosophy"

“Let’s start a company,” is the entrepreneur’s equivalent of “Let’s start a band.” Start-ups are everywhere. They have passionate founders, and they seek new and better methods to promote and structure their businesses. Infusing a start-up with a creative culture has resulted in some very successful companies (like Google and Facebook) and has given rise to a plethora of off -the-shelf, “silver bullet” solutions.

I’m a Dead Head and one of the lucky few who had the opportunity to work as a freelancer for the Grateful Dead Merchandising taking pictures from 1987 -1995 (See the album cover above). I'm also a fan of the many articles and books written by prominent business management tacticians that point to the Grateful Dead as marketing geniuses. The Dead are frequently touted as brilliant strategists who tapped their audience zeitgeist and rose to a $100 million powerhouse act capable of leveraging their customer value to increase merchandising and ticket sales. Yes, it’s true, but it was never really a goal.

In Seth Godin’s article, “What Would Jerry Do,” he wrote, “More than Campbell's Soup or American Airlines or CAA or Cisco or McKinsey, the Grateful Dead is the template for how organizations are going to grow and succeed moving forward.” I agree, but the truth is that the Grateful Dead never had a bullet-point set of rules that could be used to develop a business practice. What they did have was a healthy skepticism for “best practices,” a willingness to fail and a passion for what interested them above everything else: music. Most importantly, the Grateful Dead were willing to share. 

There’s a wealth of business strategy to be learned from Brian Halligan and David Meerman Scott’s book, Marketing Lessons from The Grateful Dead, but as someone who was active within the band’s circle for some 16 years, I find myself both interested in seeing the Grateful Dead family get credit for breaking new ground, and uneasy with the idea that Jerry Garcia left us a set of rules to be followed.

Take a look at this list used to promote Barry Barnes book, Everything I Know About Business I Learned From The Grateful Dead, touting the band’s marketing wisdom:

  • Creating and delivering superior customer value
  • Incorporating and establishing a board of directors early on
  • Founding a merchandising division
  • Giving away your product for free to increase demand
  • Learning do-it-yourself business by in-sourcing
  • Creating a business tribe by collaborating with fans

Sure, it’s a list that would make a Sloan School MBA cheer but it’s a Cliff Notes version that leaves out some of the most important influences and milestones within the history of the Grateful Dead such as:

  • Be inspired by psychedelics — The Dead were the anarchic house band immortalized in Tom Wolfe’s book, The Electric Kool-Aid Acid Test
  • Allow your capital to be depleted by Tech — Their sound system was the most technologically advanced in its day, but it also nearly bankrupted the band trucking it from show to show and hiring crew to maintain it.
  • Find interest in everything — Sticking solely with music, the Grateful Dead were influenced by everything from classical, the jazz of John Coltrane, early country music star Lefty Frizzell and the Chicago blues of Howlin' Wolf and Paul Butterfield.
  • Take a year off — Even though the bulk of the band’s income came from nonstop touring, they played only four shows in 1975.

I doubt MBA’s at MIT are learning the positive effects of acid on marketing, and without taking a year off to rethink their strategy, or “pivot,” there would be no “do-it-yourself business insourcing.” Time away from the day to day of touring will allow a band to make better music and business decisions. The Grateful Dead became successful because of their ideals, not because they followed a planned list of rules. Their business philosophy emanated naturally from the band members’ beliefs, as well as from contributors such as John Perry Barlow, lyricist and founder of the Electronic Frontier Foundation, and author Ken Kesey, of One Flew Over The Cuckoo Nest fame and driving force behind the Acid Tests.

A good example of a company that has followed the ideals of the Grateful Dead is Wistia, Adam Zais’ video hosting start up. Wistia is a company with a parallel philosophy that was inspired by but not copied from the Grateful Dead.  Zais has said, “We followed our path even though we were told we were crazy,” and, “We have never tried to be anything other than who we are.” Zais’ goal is to build an audience that will join him on his business journey, collaborate in product development and participate in and share the video content they use to inspire and educate. The guiding principle for his team is, “Are we happier now than we were then?” This is a fundamentally better understanding of the way the Grateful Dead conducted themselves in business and life, or as Bob Weir sang in an autobiographical account of life with the Grateful Dead, “At least I’m enjoying the ride.” 

Brian Halligan and David Meerman Scott are both brilliant marketing strategists and Dead Heads. Scott said, “The Grateful Dead broke almost every rule in the music industry playbook. Their contrarian thinking helped them become the most popular touring band in history.”

Scott is correct, and Blair Jackson, the author of Garcia: An American Life, expands upon Scott’s point. Jackson provided his list of guiding Grateful Dead business principles, that he states, are among the hardest to live by:

“1. Rule by consensus. The Dead were not a real democracy; rather the band and other significant members of the organization, from managers to roadies, tried to reach consensus on all major decisions. A really loud negative vote from any band member was enough to scuttle an idea or project. Conversely, however, everyone encouraged each other to try new things and come up with bold ideas, and people fundamentally trusted each other.

2. Don't play the blame game. The Dead made lots of mistakes, they were burned by unscrupulous bad guys and had more than their share of financially perilous situations and outright failures. But their philosophy was to try to learn from the bad, and not dwell on it or waste energy demonizing those at fault. Onward! The members of the Dead also never criticized each other in the press — an amazing accomplishment.

3. The Dead hired their friends and family members, as well as a lot of people they met along the way which seemed cool and philosophically compatible. This occasionally backfired, but in general, it made the work environment more pleasant and, surprisingly, more efficient, because folks liked each other and were working with a common goal—serving a vibe they truly believed in and made Dead Heads happy. The Grateful Dead's merchandising wing at the height of the group's popularity in the late ’80s and early '90s was the envy of every other band out there.

 4. Hire professionals to do what you can't do. In the early and mid-’70s, when the Dead started their own record labels, they learned how difficult, time-consuming and expensive it can be to manufacture and market albums, arrange tours from scratch, juggle salaries, keep employees happy, make sure the accounting is solid and on the up-and-up, etc. The band found sympathetic lawyers and business folks to handle the significant issues and mega-deals, leaving the Dead to do what they did best—play music that blew minds.” 

The Grateful Dead song Scarlet Begonias has a line that says: “Once in a while you get shown the light in the strangest of places if you look at it right.” The key is to look closely and understand the context within which the Grateful Dead developed their business philosophy. The takeaway is to be intuitive and not be afraid to break with convention, but don’t fall into the trap of following an oversimplified version of the Grateful Dead’s philosophy. If you do, you just might find your smooth-running Jefferson Airplane-like start up company diluting their passion into a pitiful version of the band Starship. The last thing the world needs is another version of “We Built This City (On Rock and Roll).”