Dumb business decisions: House of Jubal

Two of my brothers and I have worked together for many years in business. Over Thanksgiving, we got into a discussion of our past and tried to come up with a list of our five dumbest business decisions.

Frankly, there were a lot to choose from. I cannot lie; we have A LOT of dumb decisions in our past. I could easily write a book called “My Dumb Business Decisions” and it would rival War and Peace in length.

I thought many of you would find it interesting if I highlighted at least a few of the top five in blog posts, and I am going to start with House of Jubal.

Several years ago, I got this idea to start a website selling the music of independent Christian musicians. There were a lot of reasons why this seemed like a good idea:

1) There are tens of thousands of Christian independent musicians trying to sell music. And every (yes every) one of them is looking for ways to sell more CDs/downloads.
2) We were going to model after CDBaby, a company that has seen enormous success selling the music of independent musicians.
3) We had viral marketing strategies in place. For example, we were going to provide a player that any artist could put on their website to allow their fans to listen to samples and even buy downloads.
4) I am a Christian independent musician and understand their world. I also have connections in that world.
5) We had developers that had nothing to do and could build a fairly complex website like that very easily.

Those do sound like good reasons, don’t they?

For those of you that know your Bible trivia, Jubal was the first musician mentioned in the Bible. So we named the website House of Jubal (www.houseofjubal.com) and away we went.

When you do a project like House of Jubal, there are a lot of costs. There are development costs. In this case, using people in-house, we probably spent $10,000 or about 2 months salary for a website developer. There are marketing costs. We travelled to a few places to pitch the idea to labels and musicians. We spent money on brochures and paid people to call and email musicians.

And then there are loss-of-opportunity costs. In other words, the time and effort we put into House of Jubal was not being invested somewhere else that would have been more profitable.

Last, there are credibility costs. When you do something publicly and it fails, you lose credibility. In this case, we brought in musicians and got them to invest their time and at least a little money without being able to help them. We ended up offering to return their startup fees ($35) but that does not mean that those people are going to line up to buy next time I try to sell them something.

You already know the end of this story. House of Jubal bombed. We got no more than 100 artists on it and never sold more than a few hundred dollars/month. We gave up on it years ago.

It turns out that for every reason we thought HOJ would succeed, there were a few reasons why it was doomed. Here are some major ones.

1) Yes, there are tens of thousands of potential musicians to put on the site. But the vast majority of them have no chance of selling music to anyone besides friends and family because their products are of low quality (either recording quality or just lack of talent). You would just not believe the kinds of CDs that got sent to us.
2) The market for music was already being decimated. As you know, CD sales have fallen off a cliff in the past ten years and downloads have not made up the difference.
3) The market for Christian independent music is practically non-existent. Most of you have purchased CDs of independent Christian musicians but almost certainly because you know them personally or maybe heard them in a concert. You probably do not actively go out looking for independent Christian music to buy.
4) The Christian music market is hopelessly fractured. It ranges across every genre from rap to Gregorian chant. There are frankly many things that we just did not want to sell. So we drew a line and defined what we would put on the site. Immediately that line was under attack. A lot of artists could not understand why we would not put their music on the site. Other artists refused to put their music on the site because they considered us liberal. It was just an impossible situation.

There were other problems as well. Getting music onto the site was time intensive. And we struggled because frankly, most Christian independents are so broke that the $35 startup fee was a big hurdle for them.

To be honest, we should have known about the challenges going in. They seem obvious now. But as they say, hindsight is 20/20. At the time, we were all in and had the rose-colored glasses on.

The good news is that we can laugh about it now. I have a few shirts from that era with the HOJ logo on them and while I can’t say I wear them anymore, I at least hang onto them for souvenirs. (I could say that I’ve been there and got the t-shirt but these shirts are actually collared.)

People come to me with business ideas all the time. I often sense that they leave disappointed because I don’t immediately become a cheerleader and tell them they have the next Facebook on their hands. There is a good reason I am that way. For every success I have had in business, I have probably five failures. That has taught me to proceed with caution and if you come to me with advice, I will counsel you in the same way.

So in the sense that you have the opportunity to learn from your failures, House of Jubal turned out to be a good investment after all.