Some folks are looking at that headline, thinking “You gotta be kiddin’ me!” I know, I know — Apple Corps Ltd wasn’t exactly the Amazon of the ’70s, and it’s given the Fab Four an enduring rap as inept businessmen.
But hear me out, because first of all, Apple is still around and netting a few million pounds a year. And its formation saved The Beatles more than £2 million in taxes right off the bat, in 1968 valuation.
But that’s beside the point because I want to talk about the incredibly savvy choices that helped these guys clear the kind of jack that makes £2 million in tax savings possible in the first place. Especially considering how many other bands of their time were churning out hits and netting chicken feed by comparison.
Number 1: They hired Ringo Starr
By the time The Beatles landed their recording contract with EMI in ’62, John Lennon, Paul McCartney, and George Harrison had been bandmates for four years, including two years with drummer Pete Best. But Pete never really gelled with the group. Not only was he not quite as good a musician, but like their former bassist Stu Sutcliff he didn’t share the other guys’ all-consuming passion to be a chart-topping pop band.
On gigs when Pete laid out, The Beatles invited Ringo Starr of Rory Storm and the Hurricanes to sit in. Which in itself was a gutsy move, seeing as how Ringo was the preeminent Mersey Beat drummer of the day. As George Harrison put it, “every time Ringo sat in, it seemed like ‘this is it.’” So when their EMI producer, George Martin, opted to replace Pete with a session drummer on their first record, the other three made the hard-but-not-so-hard decision to axe Pete and try poaching Ringo from Rory.
To their delight, Ringo accepted and the rest is history. Not only was Starr the perfect musical choice with his uncanny timing, broad stylistic versatility, and utter dedication to songcraft, he meshed incredibly well with the rest of the band personally, sharing their wry-but-goofy sense of humor, their workaholism, and their driving ambition.
Lesson: The team is everything. If you’re working with a team to accomplish something ambitious, it’s essential to get the mix down pat. And not just when it comes to who does what. Personal differences can shatter a business relationship, especially when the pressure is on to perform. If the mix doesn’t feel right, don’t ignore your gut, and be prepared to make changes until things click into place and start humming.
Number 2: They worked their asses off early on
The Beatles gigged incessantly in their early days — even schlepping between Liverpool and Hamburg where they played the red light district while crashing in fleabag hotels — and released two full albums in each of the first three years of their recording career, plus singles. John would later say they sacrificed their youths to The Beatles, and it was true.
It’s easy to imagine that their lives got glamorous once they hit the big time, but there was very little pleasure in it for them at first. When Hard Day’s Night director Dick Lester asked John how they’d enjoyed their tour leg in Stockholm, he responded, “Well it was a car and a room and a room and a car and a cheese sandwich.”
And during the early days, John and Paul were also stealing time to write songs, not only because they wanted to play their own tunes but also because songwriters earn royalties. As Paul told Lily Cole in 2014, “When we were writing early on, you’d kind of find a cupboard or somewhere to go away and hide.”
Of course, eventually all that sweat led to a day when they could record at their leisure, often cutting dozens of takes of a single song, then jet off to an ashram for a couple months to unwind. But it took a few years of damn hard work to get there.
Lesson: Invest your time like you invest your money. You’ve probably seen those charts showing how early investors can outperform later investors, even if they stop investing altogether. There’s a certain point where those early seeds have grown to the extent that someone getting in on the game late can never catch up. The same is true of work — the up front effort produces the greatest yield in the long run.
Number 3: They became the Fab Four
“I talked to Keith Richards a couple of years ago, and his take on it was, ‘Man, you were lucky, you guys, you had four lead singers’…. We were an entity. Mick used to call us the four-headed monster. We would show up at places all dressed the same.” –Paul McCartney
Although John Lennon formed the band that became The Beatles, and eventually ended it (despite Paul making the announcement), the quartet made a very conscious decision to showcase all its members, a move that’s still unusual for rock acts. Even their concert setup was intentionally designed to give each player visibility, including putting the drummer on a riser. The names John, Paul, George, and Ringo — in the order in which they joined the group — became an alias for the band.
Nor did the “fab four” identity end at the stage door. As Paul told New Musical Express in 2011, they would visit clubs together in coordinated outfits. And on a business level, they established from the get-go that all decisions must be unanimous.
Having four frontmen amplified their appeal to teenage girls and young women, their primary audience as budding pop stars, who would share stories about their “favorite Beatle” — iconoclastic John, cute and charming Paul, shy George, or doe-eyed quipster Ringo. Each member felt validated (although ego clashes and frustrations did inevitably develop) and their press conferences quickly became media events in and of themselves. Promotionally, it was perhaps the best decision they ever made.
Lesson: Exploit all your assets. If the standard way of doing things in your sector short-changes your assets, be willing to play the game differently so you can take advantage of every advantage you’ve got. Give your customers as many reasons as possible to choose you, and make sure all your strengths are being put to work. Otherwise, you’re just leaving money on the table.
Number 4: They cleaned up their act
The original Beatles were a bash-em-out beat group playing to rowdy audiences in smoky, low-headroom clubs. When they drew the attention of music retailer Brian Epstein who offered to manage them, they leapt at the opportunity.
Epstein told them they had to change their image, to rebrand. The jeans and leather jackets had to go, and no more smoking, drinking, and swearing on stage. The lads didn’t argue. For them, it was a means to an end they’d been working towards the whole time.
“We had to shorten our hair to leave Liverpool. We had to wear suits to get on TV. We had to compromise. We had to get hooked to get in, and then we get a bit of power and say, ‘This is what we’re like’.” -John Lennon (The Beatles, Instagram, 6 January 2021)
“To get on the Palladium and all those places we wore the suits and we played their game, but a lot of the time we were thinking, ‘Ha, we’ll show these people’.” -George Harrison (The Beatles, Instagram, 27 July 2020)
Sure enough, once they got on top of the game they ditched the tailored suits as well. After briefly donning the facade of a fictional band on the Sgt. Pepper’s album, they simply became themselves on their next effort, a self-titled offering in a plain white sleeve with four black and white photos on the interior gatefold showing each Beatle in his own clothes and hairstyle, staring directly at the viewer.
Perhaps more than anything else, the hallmark of The Beatles was change. They became an international bellwether for the cultural plate tectonics that rocked the Western world across the 1960s. Listening to Please Please Me and Abbey Road back to back, it can be difficult to believe they are separated by a mere 6 years.
Lesson: Be willing to change when the situation demands it. Don’t cling to startup culture when you’re no longer a startup. Don’t try to preserve a “family” culture when you grow to the point where not everyone knows everybody else by name. And don’t hold onto a product line when the market moves away from it. The history of business is littered with the corpses of enterprises that continued resting on their laurels while laurels were going out of style.
Number 5: They taped their audition
Decca Records famously turned down The Beatles after their January 1962 audition, telling their manager, “Guitar groups are on their way out, Mr. Epstein.” Which was quite a setback because in the early ’60s a band couldn’t just pop into the basement, plug in Pro Tools, and knock out a proper demo. That required studio time, which required money, which the band didn’t have.
But they did seize the opportunity to make a tape of the audition at Decca Studios and take it with them. And while it wasn’t the best representation of their work — the lads were nervous and it shows, sometimes painfully — Brian Epstein played it for anyone who would listen. By May they were signed to EMI’s Parlophone label. Their debut single, “Love Me Do”, was released in October and quickly made the charts. Their second single, “Please Please Me”, hit number one.
Lesson: Repurpose your assets. Writers know about this. No sense writing a blog and a book when you can roll the blog into the book. But you can also roll a successful project into evidence for a grant application. On a much larger scale, industrial installations can be designed to use waste heat from one facility as an energy resource for another. They key is, it should be a habit to examine “waste” and “one-off” products for hidden opportunities. You never know what kind of leverage they may offer.
Number 6: They insisted on their own material
“That’s one of the magic moments of The Beatles… We stood up for ourselves. ‘We just wanna do Lennon and McCartney songs.’ We actually looked [George Martin] in the eye which is very, you know, heavy for those days, as he was the producer and we were the lads.” –Ringo Starr
Today we’re used to artists writing their own material. We might even think a bit less of a band that only plays covers. In the early 1960s, you could count on one hand the number of big acts who even came close to artistic self-sufficiency. In 1962 The Beach Boys’ Surfin’ Safari contained 75% original material. And 1963’s The Freewheelin’ Bob Dylan included just one cover and one traditional tune. But it was Rubber Soul in 1965 that marked the era of the “self-contained” band, containing no covers while featuring writing credits and lead vocals from all four Beatles.
The group never looked back. As Rob Sheffield put it on the album’s 50th anniversary, Rubber Soul not only “changed the way music has been made ever since”, it also put The Beatles “full-time into the masterpiece-making business”. The lads had discovered the true scope of their own abilities as a band. And so did their audience, and the entire music industry.
Lesson: Know your core competence. There’s always a period of developing ideas. But there comes a time when you have to narrow the field and put your resources behind your core, the one thing that most differentiates you within the market, that thing you do that no one else does, or that you do better than everyone else. Once you find it, get behind it 100%. Whatever doesn’t support it, let that drop.
Number 7: They waited to tour America
The Beatles had opportunities to play in the US on package tours with other bands in 1963. But they chose not to go, despite the enormous size of the American market.
Instead, they consciously opted to focus on writing hits so they could time their tour when they had a #1 in the US, and arrive in America as the headliners. Their decision paid off when “I Want to Hold Your Hand” topped the US charts in January of 1964. By early February, they were booked for two appearances on The Ed Sullivan Show bookending a tour that included the Washington Coliseum and a pair of shows at Carnegie Hall.
Beatlemania hit the States in full force, quickly converting skeptical entertainment executives by instantly transforming a budding teen craze into an artistic and business juggernaut. This move obviated the need for the band to repeat their European slog in North America by building a reputation on the package tour circuit. Instead, they rolled one success into another and short-cut their way into transatlantic superstardom.
Lesson: Pay attention to opportunity costs. Taking one opportunity necessarily means abandoning others. Fretting over such choices can result in paralysis. And it can be tempting to take the easiest option, the “sure thing”. Of course, sometimes that’s the best deal. But if the easy option isn’t promoting your core competence and leveraging your full assets, and if there isn’t a time limit on option B, that easy option may be costing you more than it’s earning you.
Number 8: They stopped touring
It’s difficult to underestimate how jaw-dropping a decision it was for The Beatles to stop performing live shows in 1966, and not just because of the revenues involved. No rock band or pop band had ever done such a thing and there was no roadmap for how to keep a group profitable without playing live. But if you want to own the territory, the fact is, at some point you’re going to have to create the road.
This pivotal decision reminds me of a story told about Sony Chairman Akio Morita. When objections were raised to development of what became the Walkman portable music player, on the grounds that it wasn’t cool to walk around in public with headphones, his reported response was, “Then we will change the culture.”
For The Beatles, the end of touring allowed them to fully indulge the passion for studio innovation they’d discovered when making Rubber Soul. The result was Sgt. Pepper’s Lonely Hearts Club Band, one of the most astonishing and groundbreaking albums in the history of western music, and its follow-ups The Beatles (aka The White Album) and Abbey Road. The key to the success of this move was that it wasn’t only driven by being fed up with the conditions of their tours — such as having to be transported off stage in armored cars that left them sweaty and bruised — but also by a deep desire to do things that had never been done.
Lesson: Invest your effort where it yields the most benefit. It can be frightening to refuse to do what everyone says that everybody has to do. Perhaps your business does need a Facebook page, for example. But deciding whether to invest resources into that channel should be based on a clear-eyed cost/benefit analysis, not on the fear of being wrong or missing out. Resources are always limited, no matter how well you’re doing. Take the time to soberly examine the ROI for every channel you invest in, and put your time, funding, talent, and energy wherever the payoff is highest, even if it means dropping a revenue stream everyone else is in at the moment.
Number 9: They filmed music videos
The Beatles were acutely aware that the end of their tours created a gap in their relationship with their fans, which is the lifeblood of any band. To fill it, they decided to turn some of their songs into mini-movies which could take the place of live performances.
This was not an entirely new venture for The Beatles, who not only had produced three earlier feature-length movies (A Hard Day’s Night, Help!, and Magical Mystery Tour) but who had also produced short films for the songs “Paperback Writer” and “Rain” and regaled their fan club with exclusive extras like their famously bizarre Christmas discs. But in their post-tour phase, their films became much more personal, with the Goon Show antics and surrealistic clutter of their earlier films replaced by open sincerity, warmth, and chummy banter.
Their film for the song “Something”, for example, featured affectionate and playfully candid shots of each of the Beatles strolling with their respective spouses, a much closer and more intimate view of the band members than any fan could have hoped to get at one of their concerts. Their “Hey Jude” video showed Paul singing disarmingly into the camera, followed by the studio audience gathering round and joining in for the extended chorus, and the accompanying “Revolution” video offered a front-row-seat view of the band belting out a heartfelt rocker in their street clothes.
Lesson: It’s all about your relationship with the customer. When you get right down to it, everything else sums up to this. It’s the golden rule, the law and the prophets. All else is commentary. While The Beatles are legendary (and I don’t use that term loosely) for evolving with the broader culture, they never once lost sight of the fact that they were there to please an audience of individuals. It was a calculated decision to gradually reveal themselves, intentionally pacing their journey from stereotypical ’50s rockers, to identically besuited pop stars, to a cohort of individual artists baring their souls to the world in new and surprising ways, while never losing sight of the need for musicality and delight in their output.
Perhaps it was The Beatles’ own reputation for norm-shattering innovation and artistic perfection that led to their business legacy, judged principally by the Apple Corps company, suffering by comparison. But like almost everything else they did, their professional decisions hold up extremely well to examination.
OK, so maybe a boutique with no security wasn’t the best idea anyone ever had. But hey, nobody bats a thousand. At the end of the day, there’s a lot we can still learn from this pioneering, groundbreaking band. Even if they were just four lads from Liverpool.
Come to think of it, maybe it was precisely because they were four lads from Liverpool, with the common sense and practicality of Scouser boys, that they made the decisions they did, and ended up as wealthy and successful as they became. Not to mention beloved. And that, my friend, is no easy task.
Header image: The Beatles at a press conference, Feb. 1964 (Marion Trikosko, Library of Congress, public domain)
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