Were the Grateful Dead business as well as music gurus?

We’re used to some startling revisions of history these days but not many people would have foreseen the acid-head, hippie band of the 1960s and 1970s, the Grateful Dead, being hailed as pioneering business and marketing innovators.

A stream of books about the band’s business model, if you can call it that, are on the way, with people pointing out that the Dead used classic social media marketing techniques decades before the internet became mainstream.

Led by quintessential hippie Jerry Garcia, they actively encouraged fans to tape their concerts, specifically providing “tapers” sections at the venues and dedicated tickets for tapers. In 1971 they created the first band mailing list by putting a flyer in an album asking fans to send them their details. Within months they had a list of 30,000 with many more being added in the following year.

Then they set up their own mail order ticket service which, by cutting out the middle man, gave them a higher cut of the ticket price but also allowed them to keep their prices lower than other bands.

While the Dead commissioned their artwork, posters, stickers and other merchandise, they were happy for Deadheads to create their own merchandise and sell it from makeshift stalls in the parking lots outside the concert venues.

Part of the reason this all worked was that the Dead were first and foremost a live performance band, with an average of 80 concerts a year, and never one of them the same. The albums were secondary.

Along with their other innovations, this enabled them to establish a powerful, tribal community of fans who felt they had a real lasting relationship with the group and so happily bought into the brand. In other words the holy grail of social media.

Of course it didn’t last. As they became a mega band in the 1980s, corporate pressures forced them to veto the taping and merchandising and adopt the conventional commercial procedures of the music industry.

Yet many people believe they inspired Steve Jobs and Apple. After all he used their album American Beauty to promote new products and played their famous song, Friend of the Devil, during his introduction of the iPad earlier this year.

All they need now is to turn up on a module in the Harvard Business School's MBA programme.

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About David O'Reilly

David is a former deputy editor of Campaign and writer for a number of leading titles including Management Today and the Sunday Times. He is a partner in The Editorial Partnership.