Some of you know Metallica pre “Load”.
While the rest of you know Metallica since “Death Magnetic”
What happened between Load and Death Magnetic?
That concept is known as
Speed Metal Net Burn.
Net burn is simply explained by one of my heroes Mark Suster in his blog here. The amount of money you are losing per month.
“Losing per month” sounds like a bad thing. But depending on the right variables it could be good. As explained by Mark, your burn rate could be increased to grow your business faster than your competitors.
Danielle Morrill wrote a post on the
heated topic of “responsible spending in the startup ecosystem”.
If you search twitter for “startup burn rate” you will get a lot of discussion about responsible and irresponsible spending at seed and Series A startups. This makes you think of the dot com bubble.
Maybe they should call this the dot com cloud.
How does this compare with Metallica?
During high school I was Metallica’s number 1 fan.
I had them all in vinyl and cassette tape.
Metallica’s Discography - Pre (Unnecessary) Pivot
Kill Em All
Ride the Lightning
Master of Puppets
And Justice for All
Around this time I decided to sell my Metallica collection for about USD$500 so I could open my first business while in college.
Metallica’s Discography - Pivoting into Disaster
After this album they finally went to Colombia.
Then came Reload, St Anger and Death Magnetic.
Metallica’s Burn Rate
Metallica’s first album
Kill Em All has one of the band’s anthems,
Seek and Destroy.
They doubled sales with their 2nd album,
Ride the Lightning and two of the most popular songs in their history:
For Whom the Bell Tolls and
Fade to Black.
They proved they could mix melodic and rythmic songs with powerful metal riffs.
They didn’t grow much during
Master of Puppets. They kept on proving this MVP. Melodic meets Speed Metal.
Tragedy came to the group with the death of the bassist. But they increased sales lightly with
And Justice for All. Inspiration through tragedy welcomed one of their most famous songs
They won their first Grammy Award.
Their MVP reached a market fit.
It was time for growth.
They pumped burn rate with Bob Rock.
Black Album brought them $16 Million in sales.
They produced some of the most famous songs in the history of rock:
The Unforgiven and
Nothing Else Matters.
The formula for success: Melodic lyrics, short metal riffs, rythmic verses.
Do not Pivot When You Reach Market Fit
Metallica toured heavily with the Black Album.
For their next album they decided to explore into blues and country.
Why would you pivot when you have the formula for success?
Load came and they went from $16 million down to $5 million.
To make it even worse.
Reload came and they kept on diving. They tried to resuscitate the formula with
Unforgiven II but it was not welcomed.
Metallica then decided to spend more.
So they did
S&M aka Let’s see if Metal and Classical Music is a market fit.
The album only made $5 million.
And they kept on spending even more.
They hired a therapist for $40K a month.
St Anger came and they made $2 million. There were no guitar solos on any of their songs.
Burn Rate Stability
Metallica scrambled to get back to their pre-pivot era.
Death Magnetic came with
The day that never comes aka
One Part II.
Build something that people like.
Metallica started using the market fit formula of success. And it started to work again. But at slow pace.
They increased their burn rate.
But they were stubborn.
In 2011 they collaborated with Lou Reed on an album called
Lulu. Experimenting again. Another pivot. The album received negative reviews.
Burn Rate Framework
As I read in Mark’s article How to Make Sense of Conflicting Startup Advice there are a few lessons to learn from Metallica.
Follow the process of successful startups that grew into companies. (You are not a startup forever).
Customer Development > Build MVP > Iterate > Pivot > Market Fit > Grow
You don’t reach market fit and decide to pivot.
I see startups out there iterating in the Metallica way.
raise money > experiment > burn money > raise money > experiment > burn more money > loop
Still. I have seen Metallica in concert about 6 times.