Elastic Artists: A cautionary tale
Host: Olaf Furniss, Music Tourist
Guest: Jon Slade, Elasticine (UK)
Growing far too fast and achieving all your ambitions, bad planning, breaking apart the old agency model, financial derailings, defections, betrayal, personal illness and more. The collapse of Elastic Artists is a hell of a story and multiple cautionary tales lie darkly wrapped together within it.
Founder Jon Slade (now of Elasticine) gave a brutally honest overview of all the things that went wrong (and there were a lot) and explained that an agency going bust was without precedent, so there was no reference manual for what to do.
Interviewer Olaf Furniss called it “a particularly brutal chain of events” with Slade responding that, “I probably had too charmed an existence up to that point […] It was like Keystone Cops. It was calamitous.”
He had worked his way up as an agent in London and wanted to set-up his own company in 2002, to do things differently – which proved to be both the blessing and curse of the company. It was a pretty rapid rise and at its peak it had 30 staff and was making £1.5m in commissions.
He wanted to reconfigure the old model and implement a software system where everyone could share information and not have a couple of agents at the top hoarding their contacts. They wanted “green” agents to come in who would be slotted into a standardised workflow – and that worked for a while.
“One of the reasons we were successful was we liberated data from senior agents from the get go,” he said.
The sharp ascent of the company – and Slade promising everyone a massive party when they crossed £1m in a year – was to prove its undoing.
“We stupidly said we’d take the company out on a massive bender if we made £1m in commissions,” he said. “When we hit that number, it had a negative impact.” As requests for business class travel and assistants began to appear, Slade admits he also misjudged giving junior agents their own autonomy and targets. “I thought it would make the company kinder,” he said “It just made people more ruthless.”
At this point, they took a five-year lease on a new office and spent £70,000 fixing it up, which was a huge punt. Two days before they moved in, he found that two agents were leaving and taking their acts with them. They hadn’t signed the lease so they bailed but still lost the refurb money.
He talked to Coda, CAA, X-ray and Agency Group about an acquisition but nothing came through. He described how he wanted to be an entrepreneur outside of music and didn’t want to be an agent. “The fact I didn’t want to stay in the organisation made it a difficult sell.”
Added to this he had serious health issues (Crohn’s disease) and increasingly frosty politics with his staff (including a costly legal case with former employees). “I lost everything. I didn’t have a house; but if I had had one, I would have lost it.”
Towards the end, Elastic had £250,000 in forward commissions but that proved worthless as it evaporated in a few days when their problems went public. “Once people get wind the company is in trouble, every fucker runs to the hills.”
Using third-party software for their accounts was something they had done from the off but as they scaled up it became unmanageable and the software was compromised and threw their accounts into total chaos. “In 18 months it went from being completely audited to a complete car crash.”
Inevitably, Elastic had to tell staff that the company had reached the end and was filing for administration. “It was like a bomb going off,” he says of when he told his staff. “It was the worst thing you could imagine – telling 30 people they had lost their jobs.”
Slade presumed someone would want to buy his company because it had lots of acts and good turnover. But most of their agents were outside of London and a new buyer would have wanted them to be in London – something that he felt would never happen. Their software was designed to let people work anywhere – but he said the other agents didn’t want to set a precedent with copying their lead.
“Going into administration is a very alarming surrendering of responsibility,” Slade says of the loss of power that comes with a business collapse.
Whle the collapse of Elastic Artists remains a controversial topic - particularly amongst those left owed money - Slade spoke about being adamant that he did nothing with malicious intent; he was at the mercy of a chain reaction that made things worse and worse so that the collapse, when it happened, was spectacular.