This chapter explores the fledgling countercultural popular music industry in Germany in the 1960s and 1970s and summarises the economic conditions under which Krautrock developed. Compared to Britain and the United States, Germany was a disadvantaged place for popular music production. The chapter gives an overview of the places, events, and people that prepared the ground for independent popular music production away from the Schlager-focused major labels. The role of music journalist Rolf-Ulrich Kaiser in organising Krautrock’s founding event, the International Essen Song Days in 1968, and his three influential record companies Ohr, Pilz, and Kosmische Kuriere, is highlighted. Independent record labels like Kaiser’s and others such as Brain and Sky enabled musical experimentation and allowed a German avant-garde interpretation of rock music to thrive. The chapter outlines Krautrock’s reception on the international market, considering commercial successes (Tangerine Dream, Kraftwerk) and failures (Faust). Independent record producers, most notably Conny Plank and Dieter Dierks, were indispensable for their creative contribution to many Krautrock records and as intermediaries between Krautrock artists and their record companies.