Hey everyone, I’m happy to share this week another podcast chat with Jim O’Shaughnessy on his show, Infinite Loops. (Feels like this might be a recurring thing.)
The main topic we talked about was scenes. How music and arts scenes work, how venues work, and how tension between mutual love and rivalry that is their perpetual energy source. We talked about how startups are a scene, and why designing a local innovation economy from scratch - even if you think you ‘have all the incentives correctly’ - never works. Finally, we talk about the common ingredient of all creative scenes, which is their sense of purpose.
Here’s a condensed, and somewhat edited transcript - I took some liberties for clarity and brevity for the newsletter’s sake; if you want the real unedited conversion, the podcast is where you’ll find it.
Alex: Let's define for the show first: what do we mean by a “scene”? What is a scene? I first started thinking about this not in the context of investing or in business or anything, but somewhere buried in my past, when I was in a ska band. We went on tour for a couple of years; we were on a record label. And so we were a part of the local ska scene in Montreal. It was a really great time.
And it's really interesting being in a band and getting to learn how the scene works. Because it is so intricate and multi-layered; different people trying to show off in different ways. The people in the bottom of the scene are always trying to move up into the top half and the people at the top half are trying to simultaneously lord over the bottom half, but also trying to break away and disassociate themselves. There’s tension there.
Once you learn how one of these scenes work, you start to see them absolutely everywhere, because these are fundamentals of human behaviour.
Jim: Exactly. And your most recent piece on NFTs and CBGBs is a good one to kind of explore this through. So CBGB was the preeminent kind of club scene in Manhattan that started in 1973, but a couple of things that are interesting about it. So CBGB stands for country, bluegrass, blues and gourmand? I don't know. But basically none of those made it famous.
Alex: I thought it was Country BlueGrass Blues.
Jim: No, no, I looked it up actually. And there was a third one.
Jim: Gormandizers. […”And other music for uplifting Gormandizers” was the other abbreviation; C.B.G.B. / O.M.F.U.G ] Anyway, I had a chance to go there and didn't take it and I really regret it. But what's interesting is: so founded for country, bluegrass, blues, but then famous for the Ramones, Blondie, The Talking Heads, Patti Smith. So it was a great scene, but you made a really interesting comment that I want you to talk about a little bit, which is the floor plan of CBGBs. Tell us about it.
Alex: So, David Byrne from the Talking Heads has a book called How Music Works. It's an interesting book. It should more accurately be titled “How My Music Works” because it is by not exactly an inclusive discussion about how music works generally, nor how to be a musician in today's world. This is a 400 page book which mentions selling merch zero times; which is how you make money as a musician, to be clear.
But it’s still a very interesting book, because this is David Byrne talking all about how to create art, how to create this new and interesting type of music that found its stride in the eighties, in places like CBGBs, that are these very physical, grimy, focal point locations for a certain kind of magic to come together and people to realize that they're interested in something.
There’s one chapter that’s explicitly called How to Create a Scene that goes into detail about the type of venues that you need and the specific kinds of gathering places that have to exist and the rules around them that are conducive to scenes actually forming. And he goes into some detail around like, ‘the floor plan really needs to look like this and not like that’.
He talks about how they did this remodel of CBGBs at one point, and changed the floor plan. By that point CBGBs was already well established, but it ruined some of the original magic, because it put too much emphasis on the band. You had to watch them; whereas before you could hang out in the back with the pool table, and that was essential for reasons I’ll get to in a minute.
It's fascinating to hear masters of a craft talk about the micro details of what matter, with absolute proficiency. This is what's great about this book is you hear David Byrne talking about the mechanics of how you circulate around a room like CBGBs. And if you've ever been to venues like this, these are these long and narrow buildings where you go in the front door and the coat check is on one side and there's a table where you get tickets. And you squeeze by, and then the bar's on the right hand side, and there's a stage on the left-hand side. And you can squeeze through that and then get to the back where there's a pool table and then there's stairs to go down to the bathrooms. Finally, there's a door to the back in the alley and there's a door to the front, which is how you go outside to go smoke now. So this is the basic setup of these venues.
And so he's talking about the importance of the physical layout of the venue, to how the social dynamics of the scenes get created. And specifically how there's a critical kind of layout that leads to the good kind of mixing that is, new bands being able to play and people be able to pay just enough attention to them. Because again, of the floor plan being critical, that you're able to get new music out there in a way that is just imposing enough, but not too imposing that people will not want you there. The scene regulars can still play pool, they can still hang out, but they’ll still come into contact with the musicians at some point. So the ideas can mix; new bands get heard.
So there's all these tiny details about what it takes to create these little incubator environments of cool new culture and cool new things. So this is obviously fascinating to me for a number of reasons. One, as a former musician who has played in a lot of these types of clubs and spent a lot of time in a lot of these back rooms and just hanging out generally with other musicians, you get a sense for when scenes are working well. How do people simultaneously have a good time, but also be striving for something, is the essential element of these scenes.
There has to be a concept of forward progress; navigating your way through the scene, both in terms of growing your band and your presence and your music. There is some degree of jostling and jockeying and status-ing that goes on between all these bands. Because you don't really know who's going to make it big. You never totally know. But also, it's not a zero sum game at all, in the sense that overall you are trying to grow everything.
I'll tell you a fun story. We were playing a show in Toronto, at a venue called the Opera House, opening for a psychobilly band called The Creepshow that were good friends of ours. (Great band.) We played with them a bunch. And their lead singer Sarah was also in this tiny, crappy band that had opened for us a couple times called Walk Off the Earth.
So, this is a band where it was like, they'd opened for us, so we didn't pay any attention to them. She had this bigger band The Creepshow, and that’s who we wanted to be friends with. And then over the course of that night, around maybe 7:00 PM, was where Walk Off the Earth's viral video, you know, the one with five of them playing the one guitar, that was the night it went viral.
Alex: And you could see, over the course of that evening, she stopped being friends with us. And that was where we saw, in real time, the power dynamics of the scene just shift, like that. And that was our little brush with one of those moments of like, oh, there's a change in power dynamics that happen in these sudden little jolts. It's very Breakfast Club-ish.
These human behaviours about how scenes work and how this jockeying for status and competition and half working together, but also half being wary of each other is a generally reproducible rule about how people behave in general in situations where people's status and worth and presence and value is expanding rapidly, but also very indeterminately. And the primary forum in which this takes place that matters to the world that we're in is startups.
The startup scene is almost indistinguishable from a music scene. It is virtually the same thing. Bands are like startups, record labels are like VCs. You have the press and the whole mechanics of telling people about things is virtually indistinguishable from the Techcrunches and the Twitter presences of the world.
But ultimately what matters is that it's a hits business. Nothing matters until you get a hit, even if it’s a small hit. And then once you do, your life changes and everything revolves around this idea of figuring out how to preempt who is getting these hits and why, and that's how everything organizes. And so the elements that contribute to these scenes, which are the terroir for hits happening, like the floor plan of CBGBs. This is where art comes from. This is where creativity comes from. This is where new comes from. Jim, you've obviously seen a few more of these cycles than I have or that Jamie have. I wonder, you've seen how this works both before and after the internet too.
Jim: Yep, yep.
Alex: What was this like before the internet? Was it just the exact same?
Jim: So, no, it wasn't. When you were talking about CBGBs, I thought of The Limelight, which was the most decadent disco in Manhattan, and it was not all the way downtown, but downtown. It's a shopping mall now, which is just a tragedy. But back then, this is pre-internet. So late eighties, early nineties, we would go there after having dinner and copious amount of wine with friends. But back then, if you went to a nice restaurant, you had to have a suit and tie on. So we would go to a nice place with our friends and be dressed up. And then I would always say, "Hey, let's go down to The Limelight." And everyone was sufficiently lubricated because The Limelight, I mean, oh my God.
Alex: It was the spot?
Jim: Oh boy. The stuff that went on in that place was literally crazy. When you were talking about CBGBs and the floor plan, exactly the same, except it also had an upstairs room, which was the VIP room.
Alex: Okay. That changes everything.
Jim: So this is pre-internet, we would go there, and we were seen as such exotic creatures.
Alex: Because you’re wearing suits.
Jim: Because we're wearing suits, that they would look at us and they'd pull us from the back of the line. They'd let us come up, comp us, give us passes to the VIP room. And you know me. I try to figure out-
Alex: Are you guests or are you props?
Jim: We’re props.
Alex: Yeah you were.
Jim: We're props. And that's very insightful because it took me a while thinking about it to figure out that that's exactly what we were. We were there for all of the super, super cool kids to mock and throw drinks at. We were the man.
Alex: You need a villain.
Jim: Yeah, exactly. And so we would go, and ultimately the tie would come off, the jacket would come off and all that. But as long as they were on, we were the props, we were the man. Everybody hated the man.
Alex: That’s right.
Jim: And so we realized that The Limelight became famous because it was only known to the cognizanti. So that meant the fact that people like us, that we were there, was kind of a death knell in a way. But for a while, we served our purpose. We were the villain. That's why we got comped on everything.
Alex: So one of the great elements of a scene that is essential for the scene working is having a critical mass of people who have all bought into playing the same game. You need to have a critical mass of people who have all decided that they're going to measure themselves by the same yard sticks, which is being cool within this very confined box of the Montreal ska scene, or people who go to the Limelight, or whatever it might be.
When you have a whole bunch of people who all think the same things and want the same things, and they see each other as peers. And like I mentioned before, you have this interesting juxtaposition that happens: it creates a tension. The tension is:
When you're surrounded by peers that are all competing for the same thing, on the one hand it creates this tremendous sense of camaraderie. Because you admire each other and you are grateful to each other and love each other for all validating each other's choices. You look around and you see other people who are striving and wanting and reaching for the same things you are and that makes you feel good, right? Because it validates this choice you've made to care about those things.
On the other hand, you hate them because they're your rivals, and they reveal your striving for what it is. They also want the same things and there's only one of it, there's not enough to go around. They are becoming your opponents by being the same as you; not only because they’re going after the same finite prize; but more importantly, because their wanting reveals your wanting.
So this creates this really big tension. It creates something that you would call a “double bind” psychologically, which is simultaneously you are compelled to love and hate them. You are supposed to be grateful to them, but also envy them, right?
This irreducible tension is what creates the energy of a scene. That is the potential energy that powers everything that follows. And like all human vices, envy is an infinitely, renewable resource. You will never run out of it. And that fundamentally, this sort of double bind tension of: I love you, but I envy you; And I am grateful to you, but I hate you; that is the energy source. In the middle of any scene, always. This is a fundamental rule of how people work.
And you can really transpose this into the startup world, which one of the main reasons why the startup scene works so well. This limitless source of energy that is powering people; willing to go out and work really hard and scramble really hard and not only hustle, but be creative and try things and do it in the context of the scene. The competition amongst founders, let alone the outside world, but even amongst founders or amongst peer set is immense. And people will work very hard and very long hours just to scramble out of the scene and emerge in order to break out into a really hot seed round.
But also if you look around at these founders, simultaneously, there is enormous shared love among this community for each other. People care greatly about each other because you are in this together, you are all fundamentally alike and you are all validating each other's choices to do this with your life. And that's what makes it work. That is a very important part. It really is the energy source at the middle of this start-up scene, or as with any scene, that I think is very hard to replicate elsewhere without having this critical mass kickstarting it.
It'll be really interesting to see what happens, honestly, with this experiment: can we artificially kickstart one of these scenes in Miami if everybody just decides to commit to it? Can we really get this going in Austin or in wherever it might be. And here in Canada too, can we keep building on our real startup scene.
Jim: Can you create a scene?
Alex: Surely the answer in hindsight is yes, in the sense that scenes are creative and you can always retroactively figure out how they were created. They come out of something and you can always work backwards and say, "Well, if these two people met each other at this critical time and they ended up going to the bar together after work, and then they met this third person, that's how they came up with this idea for this startup that launched the Austin startup scene retrospectively." Because then these other startups formed around it.
Backwards looking, you can always construct something. That's how narrative structure works.
Jim: Of course, laden with bias.
Alex: Of course. But nonetheless, there certainly are things you can do that help these scenes get created. And it's funny that across many different scenes, one of the recurring features that you see very frequently is old, shitty buildings.
In Montreal, there is this startup hub called Notman House that is exactly that. It is this old building that was rebuilt into a bunch of tiny, horrible offices that are way too hot. And there's this cafe in the basement with horrible metal furniture that's so uncomfortable. And it's like, you couldn't design something to be less friendly if you tried.
And it's an amazing startup hub. I would change zero things about it. It is exactly right.
I don't know if they were planning it this way or not, but down to the level of the uncomfortableness of the furniture, they got it exactly right. There's a certain quality of being in a physically uncomfy environment that is necessary for the early components of these scenes. I wonder about this a little bit. Like in CBGBs, if CBGBs were a big, comfy room where you could sit on couches and have conversations-
Jim: Would not have happened.
Alex: -isolated from other people, none of this would work. It absolutely doesn't work.
Jim: Same with the Limelight.
Alex: This reminds me of a funny way in which people have been meaningfully led astray is when people renovate their houses around what they think is good for parties. People got sold on this idea of open concept houses with these huge floor plans as being “good for entertaining.” But what's actually good for entertaining is a bunch of tiny rooms.
Alex: That's actually how you throw a party, is you want everybody to be in a room that is 10% too small. And that's why anytime you throw a party, it ends up in the kitchen, because that becomes the big attractor where people end up squeezed in a little bit tightly too much. And that's where the party is best. So it's where people go.
Jim: The reason I'm so interested in whether you can create a scene, is yes, if you understand the idea, it's almost kind of like, yes, you can do it, but only by not trying to do it.
Alex: Right. So, this is an interesting question to ask through the lens of Finite Versus Infinite Games, the book by James P. Carse. It introduces a way to categorize the purpose and the story of what we're doing in terms of games, and where there are two different types of games that you can play. You have finite games, which are games that have an end. They are games full of willing participants who all agree on a set of rules. And they agree on the ending terms of the game.
As opposed to infinite games, which are also games that you play with willing participants. But the difference is that the game doesn't end. The idea is that you play in order to keep playing. And you make things so that other people can make things. And you take actions so that other people can take actions.
And a lot of the interesting and richest parts of life are the infinite games we play, which can include, but also frame and complement the finite games that exist within them. So learning is an infinite game; school is a finite game. Culture is an infinite game; scenes inside the culture are finite games. There is an infinite component to them, which is enjoying all the culture, and participating in creating something special, but scenes are finite games. They have winning conditions. They have boundaries that are understood. They are seen as a game where all of the participants in the scene enter into it willingly and accept a certain order of things and a certain power structure that is agreed to, and everybody understands what it means to advance in the scene together.
And part of the beauty of this book, this is not infinite games are good and finite games are bad. But the beauty of living life to its fullest is in choosing what finite games you play, that serve the infinite pursuits that you have. It's picking. What finite game am I going to play in this scene? And does it really aligned with the infinite game I want to play of participating in culture?
So this whole idea of like you asked, can you artificially create a scene? The answer is, there's no reason why you can't do that. But when you're coming in from the outside, especially... for instance, there are no shortage of government initiatives around the world to try to create a local “innovation economy”. This is a great example of people coming in and they try to understand: Okay, what are the incentive structures we need to create? And what are the winning conditions we need to create? And what are all of this structure, structure, structure? And they come up with this big set of finite games that can be played. And then they put it all together and then it doesn't work.
It doesn't work because first of all, it's not within the context of an infinite game that people want to play, which in the context of software startups at least, is nerds writing code, and people making products so that they can show them off on Product Hunt and Hacker News, and this whole, other culture that is just unknown to these people. You're trying to create the set of finite games that exist outside of the infinite game that’s necessary for it to work. You cannot recreate these things outside.
But the other thing that doesn't work is that scenes are really interesting systems of behaviour that only work because people willingly enter them, like really have to willingly enter them. If you are entering them for some outside purpose, like I want to enter into this game, but only because it's my job to do so, or only because I've been told that if I do this, I will get this other promotion somewhere else, then it's not going to work. Scenes only work if people are really committed to advancing in the social hierarchy and the status ladder of the scene. That's what makes these things authentically work.
And this is part of why I think if you circle back to why crappy buildings are important. The scene needs to take place within an enclosure that reminds you that one of the outcomes of the game you're playing is escape upward and outward; but in the meantime, you’re all in it together. If you don't have that and you feel like you've made it inside the scene, then everything calcifies.
So if you look in contrast to Notman House in Montreal, which is this amazing little place, we have this thing in Toronto called MaRS, the MaRS Discovery District, which is this enormous quarter of a billion dollar building retrofit centre thing that they did, where they basically retrofitted this huge glass office tower and atrium over one of the old hospitals in the downtown core to create this hub for innovation. It's this stunningly beautiful building that costs all this money filled with all these impressive things.
And it's like, this is so missing the point. This is not just a waste... People misunderstand this when I complain about MaRS, because people are like, "Oh, if you don't think this was good return on investment, maybe we could have spent less money." It's like, this is not bad return on investment. This is actively harmful. Actively, harmfully spent money. It would be better for the startup scene if you took this money and dumped it in the lake. That would actually be better for the startup community for it to not be in a building that does not constantly suggest to you that you have made it. It's very, very important. The startup scene is no different from an art scene. And there’s no better way to kill an art scene than to put it in a fancy building.
Jim: So true.
Alex: I could go on on this all day.
Jim: But the great insight here is that when you're designing things, what you need to... So let's take a step back. Why do markets work so well? Markets works so well because they are complex, adaptive systems that are bottom up, not top down. And if you try to say, "I'm going to use a top-down solution to come up with an iPhone competitor," I'm not investing. I'm not going to invest a dime in that, because what's going to happen is, the MaRS centre is going to happen. You have to understand that in complex adaptive systems, trying to insert controls that are artificial is going to screw up the very complex, adaptive system. Now, it'll work its way around like a complex system does, but it... I think about Eisenhower. At some point in his career, he had some input about a new college that was being built. And so they came to him... The fifties, don't even get me going on that decade.
Alex: I don't know the fifties. I wasn't there. Maybe you can tell me about it.
Jim: You can read. I wasn't there either, Mr. Funny Man.
Jamie: Low Blow.
Jim: But so Eisenhower is sitting there and he's looking at the blueprints and they've got the models and everything, and they go, "General, where do we put the sidewalks?" And he's like, "Don't put any sidewalks in right now until there are students there. And I...-
Alex: Wait until they walk, and they'll show you where they should be.
Jim: Exactly. And so, that intuitive understanding is oddly not intuitive for a lot of people. It's not intuitive for people who built the centre.
Alex: I think there is. And that’s a nice way to close out how scenes really work: since they’re complex, adaptive systems, they don’t have causes or effects. You can’t just create a bunch of incentives and games and expect it work.
But scenes do have is they have a purpose. You can understand what the purpose of the scene is. And that's why we're all here. That's why this gathering exists; because the scene has purpose. That's why the startup scene exists, that's why the music scene exists, that's why these scenes of people who have these common interests, whatever they might be, tend to be so tenacious. That's why they stick around. It's because they are latching into something very authentic about how the world works and how people find motivation and purpose. A scene is essentially a collection of purpose that everybody has agreed to and that's why they're there. And that's why they help you get into those mindsets. That's why scenes actually accomplish all these interesting, creative things.
Jim: See, I think you've just closed this out, my friend, because I think that's the perfect end note. Man, I really am going to steal this from you.
Hope you enjoyed this as much as I did. You can listen to the original podcast here.
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Have a great week,