A longitudinal study of a social enterprise

Tim CurtisSenior Lecturer

The University of Northampton

Entrepreneurship• Innovation

– Music styles• Punk• Reggae• Indie

– Artist/Label contract• non-binding 50/50

– Cartel regional distribution• Network rather than ownership

– Community fanzines– Encouraging home-made music

• Ethos– Equal pay/equal say– Communist/anarchist roots– Eventually an employee trust

• In their analysis of the emergent field of entrepreneurship, Davidsson et al. (2001) find developments in terms of definitions, research problems, methodologies and theories – but not in terms of discussing the underlying view of reality, knowledge and ideology... without questioning the views of human beings, knowledge and “truth” that underlie these research practices.

• Still seeking ‘the social’ in social entrepreneurship, and thereby also in entrepreneurship per se....

An interesting, if noisy empirical case study, but also with theoretical challenges

Why longitudinal?

• entrepreneurial processes could be studied as organic processes, as open-ended series of events in which people create/develop things together (Pettigrew, 1997; Aldrich, 2000).

• Such processes are continuously emerging, becoming, changing, as (inter)actors develop their understandings of their selves and their entrepreneurial reality.

• In order to understand how development within entrepreneurship unfolds we therefore need to study processes and follow these continuously over time.

• Consequently, if we are interested in development, change and critical moments we need to follow processes in a longitudinal way and preferably in real time (Pettigrew, 1997).

The evidence base• Secondary data:

– Neil Taylor (2010) Document And Eyewitness: An Intimate History of Rough Trade: The Rough Trade Story

– Rob Young (2006) Rough Trade: Labels Unlimited – Anon (2011) Do it Yourself: The Story of Rough Trade BBC Documentary

• Detailed interviews with all the key actors.• Naturalistically presented. Re-analysis of ‘raw’ data to elicit grounded

theory• Possible primary interviews with trustees and GLC parties (if

available)• Underlying questions of primary researchers’ editing of interviews

(are originals still available? What is missing?) i.e. ‘trustworthiness’ and authenticity (Lincoln & Guba 1985)

Record Shop

• Founded in 1976 by Geoff Travis as a record shop• Operated as a co-operative (equal pay/equal say) but

privately owned and invested in by family• Added fanzines (1977), record distribution, (the Cartel)

network (1978) and music label with Metal Urbain (1979)• 1982, shop becomes employee buy-out• 1991 overtrading and cashflow problems bankrupt Label and

Distribution• Relaunched as artiste house in 2000, owned by private equity• 2007 was sold to Beggars banquet- a group of labels

stemming from a similar punk/indie 1970s start-up

Growth in Indie

• In the three years after 1978, the number of specialist record shops in Britain increased from 1750 to 2370.

• The most significant for British punk music and based in London were Beggars Banquet (Earls Court), Small Wonder (Walthamstow) and Rough Trade (Notting Hill)

Hesmondhalgh, 1998

Metal Urbain

• http://www.youtube.com/watch?v=KW-peug4e8s&feature=player_detailpage

• Movement from record and fanzine shop to• Music label• Getting a record made worked out to be

relatively easy- not just RT.• The harder thing was promoting & distributing

the record to the shops.......

(mainstream) Entrepreneurship Theory

personal characteristics of entrepreneurs, suggests they need to evidence:

• Risk tolerance• Uncertainty tolerance• Vision• Capacity to inspire• Creativity & Innovation• High internal locus of

control• Emotional stability• Commitment to others

• Resilience & Tenacity• Self awareness• Self confidence• High energy• Achievement orientation• Proactive• Desire for autonomy• Flexibility• Initiative• Assertiveness

Knight (1942) (Timmons, 1978). Deakins (1999)

‘entrepreneurial orientation’ is linked to environment to create ‘opportunity recognition’

Opportunity Recognition

Lumpkin, G.; Hills, G.: Shrader, R. (2004). “Opportunity recognition” in Welsh, H.P. (Ed), Entrepreneurship: The Way Ahead, Routledge, New York, pp. 73-90.

Entrepreneurial orientation

Some relationship with external environment

But no theory as to ‘how’ this happens

Communal Vibe

• “no where to go” – main labels were not publishing punk, “obscure and challenging music”

• “play music all day”, “more then buying records”, “naive, innocent, we could change the world”

• “ A kibbutz is a utopia isn’t it” affirms Goldman, so he [Travis] was trying to create a utopia here in the ghetto of Ladbroke Grove” p19

• Contrast Curtis, 2012 on ‘danwei’

The environment

• Ladbroke Grove• In Kensington & Chelsea,

but Rachman’s exploitation of Afro-Carribean immigrants in Notting Hill area led to slum like conditions in the 1970s

• Highly racially mixed• Full of squats and reggae,

rock steady & ska ‘sound systems’

Geoff himself

• Son of a ‘loss adjuster’ borrowing £4,000 from his father to help cover the costs of stock and premises- financial capital

• Philosophy & English at Cambridge-social capital• Could afford to travel extensively in US and

Canada- 400 LPs shipped back- cultural capital• Travis senior, ‘invested a lot of time and energy ad

was extremely supportive’ (p29) doing accounts

DIY design ethic

http://collectornotcompletist.blogspot.co.uk/2010_04_01_archive.html

http://www.cdandlp.com/item/2/0-1108-0-1-0/1047588327/scritti-politti-2nd-peel-session-:-messthetics-hegemony-scritlocks-door-opec-immac.html

Democratising music-making

• scritti politti • 2nd peel session

• Notes on how to make an album

• Transparent costing• “mere mortals

couldn’t do that kind of thing”

http://www.cdandlp.com/item/2/0-1108-0-1-0/1047588327/scritti-politti-2nd-peel-session-:-messthetics-hegemony-scritlocks-door-opec-immac.html

Community & communication• Fanzine• Xerox technology• Open editorial• aesthetic of anti-

professionalism. – Letraset was one-use only

and expensive, they'd cut letters out of newspapers, blackmail-style.

– photo-size reduction was too pricey (it required a process camera, which cost £1 per shot), they'd just run their pictures giant-size.

– Strips of typewritten and typo-riddled text would be glued at skewiff angles, with pencil-scribbled addenda in the margins

• Sniffin Glue, the first punk fanzine, was produced by Mark Perry in July 1976 a few days after seeing US punk band The Ramones for the first time at the Roundhouse in London.

• He took the title from a Ramones song 'Now I Wanna Sniff Some Glue'.

• It reported the moment immediately as it happened, reporting it from an insider's point of view.

http://www.guardian.co.uk/music/2009/feb/02/fanzine-simon-reynolds-blog

http://www.bl.uk/learning/images/21cc/counterculture/large8676.html

Reconfiguring the contract

• Usually an artist receives an advanced payment that is considered to be a loan against money which the musician's recording will generate.

• The level of royalty is set by the contract and depends on sales.

• However, in most contracts, the artists have to pay for their own recordings and promotions.

• Moreover, a company retains copyright.• Most contracts are long-term, which makes artists

dependent on a company.Hesmondhalgh, 1998

Reconfiguring the contract• Rough Trade, Mute and Factory challenged the relation between artists

and companies. • Deals were often on a 50:50 basis. • The companies did not introduce long-term contacts and relied on

personal trust. • Rough Trade created a situation for where artists could easily change

recording company if they desired. • Factory was liberal with its policy on copyright. The company did not own

a lot of copyrights. • On the other hand, the companies could not offer significant ‘loans' for

musicians, but musicians stated that they felt as if they shared their cultural and creative industry with the companies.

• Some musicians worked in Rough Trade in order to subsidise their activities.

Hesmondhalgh, 1998

The contract1. We... agree to make records

and sell them until either or both of the parties reasonably disagree with the arrangement.2.We agree that once agreed recording, manufacturing and promotional costs have been deducted we will share the ensuing profit equally.

Signed

ROUGH TRADE

Shifting Ethics 1980’s

• "We had gone from being a collective to this huge company," he recalls. "At that point all these management people appeared. They talked crap, mostly, and dug a big wedge between distribution and the record company. There was this huge clash of cultures and I was completely marginalised on the board.” Geoff Travis

• Over time there is a “tug of war” for the destination of profit. “Like the discovery of the profit niches themselves, the discussion over and eventual destination of these profits is culturally embedded” (Lindh de Montoya, 2000, p. 349).

Theory: structure/agency debate• Did RT create their own

entrepreneurship, or did the socio-economic climate create the opportunities?

• Is ‘opportunity’ (cf Lumpkin) out there to be discovered, or is it created, constructed, performed?

• Does the bricoleur find objects to use, or lend meaning to objects

• knowledge about entrepreneurship is knowledge on how individuals and collectives perceive, define, produce and re-produce entrepreneurial action in society.

• multi-level research that tries to combine individual and context (Aldrich and Martinez, 2002);

• Giddensian structuration theory

Does Actor/Network Theory (Latour) just add ‘technology’ into the structuration of social relations?Narrative (Berger & Luckman) and performativity (Butler) flesh out Giddens

Defining ‘the social’ in social entrepreneurship

• If ‘the social’ is concerned with how social relations, identities and inequalities are created.

• Then ‘the social’ in entrepreneurship is concerned with how social relations, identities and inequalities are transformed through entrepreneurial processes

• Sociologies of entrepreneurship?• After Susan Smith (2010): Scholarship self-consciously

labelled ‘social entrepreneurship’ may be radical or conservative, life changing or mundane, engagingly relevant, comprehensively bland or uniquely quirky.

Conclusions

• Standard entrepreneurship theory fails to explain the sociality of the innovation- just the fact of the new venture

• As personal & organisational ethics mature and change, so does the social mission (cf Mondragon)

• Market-making social enterprises get out competedNevertheless,• It is a scaled social enterprise because it changed some

fundamental social relations– Music industry- adoption of indie label– Garage, computer, laptop, now ipad album creating

Am I mistakenly searching for a meta-narrative for ‘the social’?

• Deakins, D. (1999), Entrepreneurship and small firms, (2nd edition), McGraw Hill• Knight, F.H. (1942) Profit and entrepreneurial fuinctions, The tasks of common

history: supplement to Journal of Economic History, 2, pp. 126-32• Timmons, J.A., (1978) Characteristics and role demands of entrepreneurship,

American Journal of Small Business, Vol 3. pp. 5-17• Monica Lindgren, Johann Packendorff, (2009) "Social constructionism and

entrepreneurship: Basic assumptions and consequences for theory and research", International Journal of Entrepreneurial Behaviour & Research, Vol. 15 Iss: 1, pp.25 – 47

• Lindh de Montoya, M. (2000). Entrepreneurship and culture: The case of Freddy, the strawberry man.

• In R. Swedberg (Ed.), Entrepreneurship: The social science view pp. 332–355. Oxford: Oxford University Press.

• Susan Smith (2010) Introduction: Situating Social Geographies in The Sage Handbook of Social Geographies (co-edited with Sallie A. Marston, Susan J. Smith, and Rachel Pain, John Paul Jones III). Los Angeles: Sage.