Troy Carter, whose company Atom Factory represents John Legend, Miguel and Meghan Trainor, among others, is launching a tech accelerator he's calling SMASHD Labs, a brother of sorts to the entrepreneurship-focused editorial site SMASHD.co, launched earlier this year.
SMASHD Labs will take between five and seven nascent tech companies whose focus is entertainment and culture and house them for 10 weeks in the Atom Factory's Los Angeles office, providing them with $50,000 in funding and the resources of a highly savvy group of investors and entrepreneurs that will walk them through a weekly "curriculum" in order to focus and define their idea. (Carter's venture firm, AF Square, has investments in Spotify, Uber, Dropbox and Warby Parker, among others.) SMASHD Labs begins accepting applications today, on Jul. 22 and will conclude on Aug. 5.
Speaking with Billboard on the eve of the announcement, Carter described his vision for finding the next Instagram.
Billboard: Can you walk me through this?
Carter: We've been investing in early stage tech companies since 2011 at Atom Factory, and spending a lot of time with our portfolio companies. One of the deficiencies we saw in a lot of the accelerator programs and VCs was the area of branding, customer acquisition, how to build community, communications -- all of the things that we specialize in as a company. So we decided to open up our area of expertise to a small group of technology companies.
What does this curriculum look like?
It's curriculum based, so each week it's different. For the most part, companies come in and develop their product, through a 10-week program. We're still helping companies that we invested in in 2011, so once we make that commitment, we're in for the life of the company.
What have you learned with AF Square?
It takes a village. The more brains you put around a problem the easier the solution. Gone are the days where a person goes off on their own and creates a company that becomes worth billions of dollars. It's about the network that you're able to put around that company and that founder.
For this first group we decided to bring in companies to the space we know really well, which is entertainment, media and audience aggregation.
How long had you been thinking about launching something like SMASHD Labs?
I've done stuff with Tech Stars Disney accelerator -- I've done work with Drexel University, some classes at USC -- these are the questions that a lot of entrepreneurs are asking, so we know there's a void in this space. There's definitely a huge amount of accelerators out there, but there was a void for one that focused on brand, and that's a space we have a lot of experience at and that makes this unique.
Selfishly, it works for the Atom Factory -- by being able to put 25 of the smartest entrepreneurs from around the world in your office. We get a lot of value out of that as well.
You've been talking to possible participants already?
We haven't, we wanted to make the process fair. Up to this point we haven't talked to anyone specific.
What would your perfect applicant look like?
A diverse team -- the crux of my personal mission is to open up entrepreneurship to everybody, so Silicon Valley doesn't have a patent on innovation. we want to open up the process to people outside of that network -- the team would be diverse, hard-working entrepreneurs with technical expertise that are looking to gain traction on their product.
Companies that we've invested in at an early stage, we recognized the patterns of successful companies in the space. We're hoping to find the one of those darlings.
What does SMASHD Labs get for its $50,000?
We get 3 percent equity stake in the company.
How will SMASHD Labs interact with AF Square?
This is standalone -- the idea is for the companies to have access to everybody within our company and our network, but it is separate.
What is the trend in entertainment media/tech?
The real trend is data -- we're seeing companies like Eventbrite present very compelling data, Spotify and Pandora are presenting [very compelling data as well]. Predictable analytics in music.
And what about humans?
There's always going to be a place for artists -- but when you look at what humans have actually done to devalue music, from a pure monetary valuation standpoint, this is the part where our industry needs a lot of help. SoundCloud is worth its $1.5 billion valuation, but there's no way in the world that SoundCloud should be worth more than The Beatles' catalog. From a value proposition, we have a huge opportunity to re-value our business.
Do you think some of these tech valuations are overinflated?
No, I think the music is undervalued. I think up to this point we've done a poor job of valuing our content.
Did you read the recent Berklee report on the music industry?
I thought it was interesting -- I didn't do a deep dive on the study, but I thought they made some really valid points. The whole thing is, we have to deconstruct a lot of what's been done over the last five or six decades in our business in order to accomplish some of these things. Our business, in terms of rights ownership and individual contracts are a lot more complicated than other media. So I think it's easier said than done. But the thing I do agree with 100 percent is transparency -- we have to get to a place where the music labels and the publishers can be completely transparent.
This isn't a new problem -- this problem didn't come along when streaming came along.
Do you think some of this could be ameliorated through new technological resources -- like label services companies -- for artists?
It takes a lot of work and boots on the ground to break an artists throughout the world. The cost for an artist to play the Grammy awards, there's a cost. To play Jimmy Fallon, there's a cost. To get your music played on terrestrial radio, there's a cost. It's not just as easy as signing up for label services -- dependent on the scale you're after. I'm a believer that there's a lot of value with relationships at major labels, it just depends on the deal you're looking for.