After the Grateful Dead, Phil Lesh Shows He Has a Head for Business

By CLAIRE MARTIN BY Times.com 9/19/15

A few times a month, Sam Satenstein lines up outside Terrapin Crossroads, a music hall and restaurant in San Rafael, Calif., for performances by the band Phil Lesh and Friends. The hall is owned by Mr. Lesh, the 75-year-old Grateful Dead bassist, and his wife, Jill. Mr. Satenstein is almost always first in line; when the doors open he rushes in to secure a spot on the side of the stage favored by Mr. Lesh. He plops down on the floor to protect the space.

“You can feel Phil’s giant bass when you’re standing up there, so I try to get that spot right up at the front,” said Mr. Satenstein, a 32-year-old online retailer who sells vape pens and lives a couple of miles from the hall. As soon as the band starts, Mr. Satenstein and others let loose, bobbing their heads and grooving to meandering renditions of Grateful Dead songs.

The Leshes consider Terrapin Crossroads to be an extension of their home, said Ms. Lesh, adding that Mr. Satenstein “has become like family now.” The venue is named after the Grateful Dead’s ninth studio album, “Terrapin Station.” The Leshes opened it in 2012 after Mr. Lesh decided to end his relentless touring schedule of the last 50 years. He was not interested in retiring, or even in performing less. He just wanted to stick close to home. Ms. Lesh had spent 30 years on the road with him, and she managed Phil Lesh and Friends.

The Grateful Dead was well ahead of its time in encouraging fans to record its music, taking the emphasis off its album sales and instead relying on live concerts for its main source of revenue. After disbanding upon Jerry Garcia’s death in 1995, the group’s remaining members continued touring for decades with new bands such as the Other Ones, Furthur and Phil Lesh and Friends. By staying put, the Leshes were putting a new spin on the band’s live-performance business model.

In the mid-1980s, the Grateful Dead briefly contemplated making a similar shift when a concert hall in another part of Marin County came up for sale. But the band decided to keep touring. Around 2010, Mr. Lesh began feeling road-weary again. That year, he played at the barn in Woodstock, N.Y., that his friend Levon Helm, a former member of the Band, had converted to a 240-seat concert hall. Mr. Lesh realized that he preferred the intimacy and “community vibe” of Mr. Helm’s barn to the stadiums and large theaters he had grown accustomed to. “You’re in a bubble with like-minded people who love the music just like you do,” Mr. Lesh said. “That’s what the Grateful Dead’s always been about, and I realized we had lost touch with that.”

In a quest to create a similar place of their own, the Leshes searched for real estate near their home, eventually finding a restaurant space with a separate ballroom, located on a canal. In just six weeks they remodeled it and then reopened it as Terrapin Crossroads — a frantic push that Ms. Lesh says created a start-up-like work environment. Their sons, Grahame and Brian, and a few of their friends, all musicians in their 20s, were hired to man the doors or work as lighting or sound technicians. They pitched in on other tasks, as needed. “Everybody did everything,” said Ms. Lesh.

The Leshes saw their new venture as a community gathering space first and a business second. “We had no idea whether it was ever going to be profitable,” Mr. Lesh said. Yet they wanted Terrapin Crossroads at least to sustain itself financially.

Early on, Mr. Lesh’s presence at Terrapin Crossroads was crucial for business. In a single day, he could be seen playing in the bar, eating in the restaurant and jamming late into the night in the Grate Room, the former ballroom, which was refurbished to reflect his acoustic preferences. As Mr. Helm, who died in 2012, had in Woodstock, Mr. Lesh began inviting well-known musicians to join him onstage. Guests have included John Mayer, Gregg Allman and the former Grateful Dead and Furthur member Bob Weir. Nearly every Phil Lesh and Friends concert has sold out; tickets are $79. Unlike Grate Room performances, music sessions in the bar are free.

Around the time Terrapin Crossroads opened, Mr. Weir became an investor in Sweetwater Music Hall in nearby Mill Valley. According to Aaron Kayce, the general manager and talent buyer, Mr. Weir performs there occasionally. Mr. Lesh has played there as well.

The music side of the business came easily to the Leshes, but their lack of restaurant experience proved to be a challenge when making decisions such as whether to cater to Marin County locals or Deadheads. “They like certain kinds of food,” Mr. Lesh said of the Deadheads — things like burgers, fish and chips, and vegan offerings. “It’s not fine dining.” The Leshes realized that they needed a flexible staff that could adapt to menu changes and last-minute schedule adjustments — for instance, Mr. Lesh’s impromptu jam sessions in the bar.

In February, Terrapin Crossroads began turning a profit. It also received a significant bump because of this summer’s sold-out stadium concerts by former Grateful Dead members. The performances, timed to coincide with the 50th anniversary of the band’s founding and billed as a final reunion, pulled in an estimated $55 million. Terrapin Crossroads live-streamed the shows. In further homage to the anniversary, it is hosting a series of shows in which Mr. Lesh and other musicians revive the set lists from memorable Grateful Dead performances. The business experienced a 50 percent increase in revenue this July over last July.

Terrapin Crossroads also sells merchandise like tie-dyed T-shirts and Phil Lesh bobblehead dolls. And it offers a $7 live stream for each of Mr. Lesh’s Grate Room performances along with $25 thumb drives loaded with recordings of them.

But Mr. Lesh’s shows at Terrapin Crossroads are not full-scale band reunions; if that is what some customers expect, they could be disappointed. And since the band’s influence may dwindle over time, it is important to broaden the customer base beyond the Deadheads, said Timothy Calkins, a marketing professor at the Northwestern University Kellogg School of Management.

“The Grateful Dead is an incredibly powerful brand, but it’s not out there on a day-to-day basis,” Mr. Calkins said. “So you can’t plan over the long run to rely on the connection back to the band to sustain the venue. You’ve got to create a new, distinct brand that’s going to stand for its own thing.”

To that end, Terrapin Crossroads books national touring bands in the Grate Room and has assembled a corps of in-house musicians that rotates through the bar, including the Leshes’ son Grahame. And the Leshes are adding an outdoor stage in an adjacent park for free community concerts, along with an area for bocce courts and campfire pits. It will open in the spring. Already the restaurant has pulled ahead of the concert hall in profitability, Ms. Lesh said.

Over all, she said, the business “would be very, very profitable, even if Phil didn’t play there again.”

Advertisements

Tags: , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: