If you watch hit television shows like The Voice, Real Housewives of Atlanta or American Pickers, you’ve already heard the work of a Manhattan-based company called Jingle Punks. Co-founder and CEO Jared Gutstadt, who plays six musical instruments and won an award from the American Society of Composers, Authors and Publishers for writing the theme music on Pawn Stars, met his business partner, Dan Demole, at a Black Keys concert a few years ago. The pair invented a proprietary platform called Jingle Player that lets television and film producers and editors select, download and license music from a vast online library.
Since late 2008, Jingle Punks has built a client list that includes ABC, NBC, Comedy Central, MTV, Bravo, the History Channel and A&E. The company is on track to bill about $5 million this year, up from $2 million in 2011 and $900,000 the year before, Mr. Gutstadt said—not bad for an outfit that was launched in the murkiest depths of the recession. In a recent conversation, he talked about how a startup is like a rock band, how to choose the right investors and more.
What gave you the idea to start Jingle Punks?
We’re not the first or the only ones providing music to TV shows, but we saw a huge gap in the market because the companies who came before us were not offering tunes by hip, indie composers. What happened was, I was working as an editor at MTV and Fox and some other places during the day and playing in a rock band at night. When the downturn hit and networks’ budgets got really tight, I started putting my friends’ music into shows. My bosses were like, “Oh, good, it’s cheap, great; do whatever you want.”
That was really the beginning of the company—tapping into that network of composers and musicians, and then creating a new way for them to sell their work. And the people I already knew at the networks became our first clients. We were actually profitable from day one, partly because our costs were so low. At the beginning, it was just me and Dan working out of my apartment on the Lower East Side.
You’ve said many times that you see lots of parallels between rock bands and startups. What are they?
Well, the leader of a band is really a CEO. In my band I was playing drums and bass and writing songs, but I was also organizing rehearsals, getting publicity, putting tours together. Tours are a necessary evil for a band. In a company, meetings are. Another element of a band is how you pick the right people and put them in the right roles, either creative or operational or both. It takes a lot of management skills to pull it all together.
But you must have found differences, too.
The biggest one is that, with a company, you have infinite possibilities. You can grow in several directions at once, and as you get bigger, you attract partnerships that strengthen the brand. For us, the endgame is becoming established enough in our industry that Jingle Punks can survive past my involvement, and Dan’s. As a band, there’s only so far you can go. When the key people leave, that’s the end of it.
You now have about 40 employees in New York, Los Angeles, Toronto and Sydney, and most of them are musicians. What else do you look for in new hires, besides musical knowledge? How do you spot the right fit?
The biggest thing we look for is problem-solving ability—and most musicians have been entrepreneurial enough to market themselves and their work and find creative ways around obstacles. We also want people who can reach out to clients and interact well with them. But we don’t read résumés. A bunch of us sit down in a big room with candidates and talk to them. Although, you know, I do miss things by not looking at résumés. One time we needed to find a vocalist fast, for a track a client wanted, and we had an intern who spoke up and said, “I can sing.” It turned out that, besides working with us, she was an understudy in Spring Awakening on Broadway. I was like, “Really? Wow, I had no idea.”
Jingle Punks got an infusion of cash from Hammerline Capital two years ago. Do you have any advice for other entrepreneurs looking to attract investors?
It’s super-important to take your time and get to know a potential investor really well before you sign anything. We started talking with Hammerline in late 2009 and didn’t close the deal until May 2010. It took a while to do a realistic valuation, because we were growing so fast, and our cash flow was increasing every month, so Hammerline came back with a dozen letters of intent before either side committed to anything.
The Hammerline people wanted to help us grow the company, but they didn’t expect total control, which is not always the case. And they really helped us professionalize the business—they analyzed our tax situation, made sure we had lawyers, showed us how to build cash reserves for a rainy day—but they didn’t want to run the whole show. That was partly because, when they went with me on a road trip to Los Angeles and sat in on some client meetings, they realized they didn’t understand what I was doing well enough to try to run it. And again, that’s a realization some investors don’t get, so you have to be careful.
They’re still involved in the company. They have two board seats, and we hang out together on the weekends. They came to my wedding. Our relationship with them has always been great, but it’s especially friendly now that we’re cutting checks to them instead of the other way around