Take a chance on cashless, and other business lessons from ABBA

ABBA is also an interesting case study in business.

All its four members - Agnetha Fältskog, Anni-Frid Lyngstad, Björn Ulvaeus and Benny Andersson – made a lot of money.

According to ‘Vackens Affarer’, a now defunct Swedish business magazine, Andersson has a net worth of about $170 million. His three band mates are believed to be in the same range.

With riches, comes the need for a manager. Enter Stig Anderson, nicknamed ‘The Business’ for his financial acumen. He took care of ABBA’s earnings and investments through most of its run.

"We control 100 percent: publishing, record royalties, production money. It’s all split between the family, so you cover the costs, and after that it’s all profit," the late Anderson once told ‘High Fidelity’ magazine. "We don’t want to mix up music with money, but money always follows success and someone must take care of it."

It helped that Anderson was a musician. Lyrics were his specialty. He wrote ABBA’s first hit, ‘Waterloo’. Early in his career, he would buy rights to whatever people were grooving to in America, and tailor it for his market with Swedish lyrics.

Andersen had four rules of success, as quoted in an article in ‘The Sun’.  Work hard, do your best, don’t forget anything and don’t take life too seriously. You could argue rule No.1 and 4 contradict each other. But it worked for ABBA.

As ABBA hit the big time, there was demand from around the world for its records and performances. Not all currencies, however, were accepted in Sweden. Andersen therefore insisted on payments in American dollars. If that wasn’t possible, the band would be paid in a different form of wealth. In one instance, it was oil, the erstwhile Soviet Union being the buyers.

“Such was the demand for their (ABBA’s) music that their management had to arrange for royalties from the Soviet Union to be paid in oil commodity rights rather than the embargoed rouble,” the BBC once wrote.

That’s one for MBA textbooks, surely.

ABBA’s other economic impact was in helping make Sweden one of the most cashless countries in the world. This is a remarkable shift for a country that in 1661 became the first in Europe to introduce bank notes.

ABBA’s Ulvaeus lent his voice to the quest for a cash-free society after his son Christian’s home was robbed. The burglars stole cameras and a designer jacket, not cash. But Ulvaeus says thieves would be discouraged to steal anything if they don’t have the option of selling their loot for cash in the black market.

“I started thinking they took these things, and they went somewhere and they got bills, paper bills,” Ulvaeus told ‘Wired’. “What if there wasn’t any paper money?”

Ulvaeus stopped using paper money in 2011. “I challenge anyone to come up with reasons to keep cash that outweigh the enormous benefits of getting rid of it,” he said in ‘Wired’. “Imagine the worldwide suffering because of crime, from drug dealing to bicycle theft. Crime that requires cash.”

According to a report in ‘Emirates 24/7’, notes and coins represent only three per cent of Sweden's economy, compared to an average of nine per cent in the eurozone and seven per cent in the U.S. This is data from the Bank for International Settlements, an umbrella organisation for the world's central banks.

In fact, 'Wired' wrote about a bank robbery in Sweden which went wrong because the intruder had nothing to steal. While leaving, he asked a teller, “Where else can I go?”

Ulvaeus must have smiled when he heard about this. Welcome back, ABBA.