Troy Carter is founder and CEO of Atom Factory, a talent management and entertainment investment firm that counts Lady Gaga among its prized clients. Not that Carter would describe Atom Factory with those words. When I asked him if his company has a definition, he replies, “Absolutely not. Purposely. The biggest thing to be afraid of in this business is the box. Once you’re locked into talent management, you’re locked in. Once you get locked in to pop music, you’re just pop music.”
“Small is a huge advantage,” Carter says. “The more you grow, the harder it gets.” He operates in a particular niche--the music industry--but his 16-person operation shows how much impact a modest-sized operation can have.
Being big, he says, has paralyzed the music industry. “With Napster and iTunes, a lot happened in a short time. But the cost structure of the industry stayed the same, the leaders stayed the same. The mentality of music labels didn’t change. Then new artists came along with a new mentality, digital natives. Kickstarter and Indiegogo and others allow these artists to get money from fans. They don’t need the labels as intermediaries the same way. I think we’re in a new era. For us, that’s very exciting. If I’m at a multibillion-dollar conglomerate that’s not very nimble, I’m very scared right now.”
With just a couple dozen staffers, Carter runs a global operation that impacts billions of dollars in transactions--not just music and concerts, but merchandise, licensing, social media, angel investments, and so on. Carter has already built a custom social network for Gaga, tapping into former engineers from Apple and Facebook in Palo Alto.
He says he’s not interested in scale. “I can’t see us going beyond 25, 30 people tops,” he says. Riding atop other platforms and technology, “we are already a global operation.”
“We had a debate last week about weekly staff meetings--are they productive? I personally think those meetings are a waste of time,” Carter says. “You don’t necessarily get better by sharing information in that forum. You want information to be always flowing. Our email flow is more valuable. The bigger a company gets, the more bureaucratic it gets.”
The Atom Factory team works with a high degree of trust. “People make decisions on their own,” Carter says. “We all talk a ton, share hundreds of emails a day, everybody in everyone’s offices. Mastering that no-look pass, it’s part of working together for a while.”
“I ask folks at the tech firms, how many people does is take before you can’t know everyone’s names? How big can you be? How small can you be? The limit seems to be 40 to 50 people.”
Carter is turning the standard music industry model on its head. In the traditional approach, you don’t know which artists are going to succeed, so you cast a wide net, you try to bring in as much talent as possible, and you grow when a new star breaks through. At Atom Factory, Carter is focused on taking a few artists and helping them to go deeper. “How do we grow their business?” Carter explains. “We want to increase their income and their profile by building their relationship with fans. Fans are looking to be more part of their world.”
Carter is tapping into what he sees as the democratizing of information and access, and the swift advantages that leveraging technology can offer. “I was playing golf with a buddy yesterday, and I downloaded Golf Shot Pro on my iPhone. Five years ago I would have had to spend $300 for a range finder. If you go out sailing, you can get a navigation app for $20, for what used to cost $1,000 at a marine store. This is happening in every single industry.”
The revolutionary pace of change can be paralyzing, particularly for big companies. So what about the rising risks the giants face, the risk that a handful of college dropouts or enterprising outsiders can come up with a new idea, a new product and beat established brands? Isn’t it reasonable for corporate kingpins to lament their new stresses and try to hold on to their perches?
Carter has no sympathy. “That’s the risk entrepreneurs take every single day.” All of us, he is implying, need to view ourselves as entrepreneurs, one step away from obsolescence if we don’t step forward. “The biggest mistake,” he says, “is to sit still.”