Lessons from Working with Nas, Jay-Z, Kobe, LeBron, Steve Jobs & More | Steve Stoute

Key Takeaway

When facing a career decision, choose the unknown over a declining industry. At 29, Steve Stoute left a multi-million dollar music executive role to join advertising at a fraction of the salary. His reasoning: the music business was selling one-hit CDs for $16.99—a model doomed to fail. The advertising industry, though unfamiliar, represented opportunity. When the known path is heading toward obsolescence, run toward the darkness of the unknown.

Episode Overview

Steve Stoute shares his journey from music executive to advertising pioneer, explaining how he identified the decline of the music industry and bet on cultural marketing. He discusses groundbreaking campaigns like the Men in Black Ray-Ban integration, non-athlete shoe deals with Jay-Z and 50 Cent, and a legendary pitch to 18-year-old LeBron James who turned down $10 million to bet on himself.

Full Transcript

Transcript of Lessons from Working with Nas, Jay-Z, Kobe, LeBron, Steve Jobs & More | Steve Stoute from David Senra. Auto-generated from episode audio; may contain minor errors.

Dude, I've been a fan of you for over 20 years because I grew up listening to hip-hop and everybody in hip-hop knows who you are. So, I'm very excited to have a conversation with you. Yeah. One of the fascinating things that Jimmy I told me about you was you made a very unusual decision coming out of a record label. Like, you could have started your own record label and you said, "No, I'm not going to start a record label. I'm going to go full on into advertising and marketing." Can you tell me about that?

It was 1999 and I get a lot of credit for seeing that whether it was Napster MP3s were going to shift the music business from the CD. We started to see signs of it, but it was very in it was in the fledgling, you know, stages of that. So, I didn't quite see it. What I did see was an industry that didn't know the difference between good and great. What I mean by that is that when an industry is booming, sometimes when it's booming because of the business model itself, mediocre gets rewarded and like and then over time it catches up.

But in the beginning, mediocrity is applauded and financially awarded. And I knew that because we were selling CDs for $16 and people were paying for it when there was only one song on the album that that wasn't going to sustain itself. Like there was something wrong with that. Like why would you pay $16.99 and you only liked the first single and executives were getting paid tons of money on that, you know, idea know, idea know, idea and they weren't even talented. And I'm like, this is going to have to cave in.

Outside of that, what I seen was an advertising business that felt like archaic. The advertising business at the time looked at the world through the lens of black, white, Hispanic. And I'm like, that's not the way people relate to products in marketing. It doesn't No one looks at them and goes, well, oh, they're speaking to me because I'm I'm white or like that's how I prefer to get spoken to because I'm black. like these things weren't real. And the music business did teach me that. The music business taught me that the idea that people listen to certain records had nothing to do with their ethnicity.

DMX was selling in Iowa. The radio station in Iowa didn't play DMX. Where Eminem was being played was being was being purchased in Harlem. It had nothing to do with white and black. But why were products treated that way? Why would like we're gonna, you know, when you want to sell a Cadillac to a black person, you put a deep voice over like the new Cadillac Escalade. Escalade. Escalade. Nobody wants that. And Spanish people don't want an ad that just says Ola. Like these things don't work.

My whole idea was like, why don't you just find shared values? Like if you're an 18-year-old African-American from Compton and you're an 18-year-old white kid from Greenwich, Connecticut, and you like skateboarding, like it doesn't make a difference if you just speak about skateboarding, you're both going to find the shared value in that I in the culture of skateboarding. But this other thing that was happening just felt like it was dying. And I knew that if I got into that industry, I could make a difference. difference.

difference. But what Jimmy um I think admired most is that like you you didn't care what was expected like you didn't make the decision that everybody else was making or the decision that uh was expected of you. It's like you you forge your own path. path. path. So I'm giving you the rational you know how I seen it. The idea of seeing it that way and then jumping and to go into a business in which you didn't understand. understand. understand. Exactly. Exactly. Exactly. Yeah. Look, I can reference a lot in the Jimmy podcast.

It's not that I want this podcast to like be the advertising for all your others, but you know, you've had a lot of interesting people and there's a is a lot of six degrees of separation in the way we think. When the unknown is a better option than the known run in that direction, run towards darkness. And the unknown was what I didn't know, right? The advertising business. But the known was this industry that was going in the wrong direction in a direction where they was selling one song for a lot of money.

They had a monopoly on the distribution of CDs and they control radio and MTV and those things didn't seem like they were going to last forever. So running towards the unknown became very easy. Not because oh and also cuz I was 29 years old, right? M and I didn't have a family yet. I didn't have kids. have kids. have kids. I had already made a lot of money. I had already done well. So, I wasn't like needing money and I didn't have like a family that was relying upon me to like earn instantly.

If I didn't make that decision at that point in time, I would have never made it at all to change industries. [ __ ] it. We going in the advertising business. And I had a big proof point. The proof point was when I was at Sony, I made the soundtrack. I was fortunate to make the soundtrack for the film Men in Black. I had known Will Smith and his manager James Lassader for many, many years. And when they were making that film, they wanted to make the soundtrack.

They were making it with Sony, who also distributed that film. I was a Sony executive and they, you know, said, "Look, you know, Stout, you know, you do this." I wanted to do it. I I was excited to do it. And the song became a hit. Right. Here comes the men in black with Will. with Will. with Will. But what was bigger than the song was the glasses. the glasses. the glasses. And he said, "I make these look good in the movie." It was all in the music video.

God knows what the impressions were when you measured that. if you measured it in today's sort of uh metrics metrics metrics and the glasses became contagious because of the popular culture impact of that song in that video and I'm like if we're in the music business why aren't we getting paid off those glasses like why do Rayban has nothing to do with any of this other than they gave Will the glasses like why aren't we make so the guy in the company that did product placement for those glasses.

While I was thinking this, he was trying to find me cuz he wanted to find the next thing that did that. And I was like, if we could sell 14 million glasses or whatever the number was, I could do this [ __ ] all the time. The idea that Vid Jimmy was putting the Beats headphones in music videos was literally a derivative of that idea. I had seen that idea very early and my peers and others in the industry would tell you that. I seen that I was I was infatuated with the idea and to the to the point that I left the industry to learn the advertising business to understand understand understand the language, the dialogue, the people, the movements, the shakers.

I wanted to understand that business. So I put I immersed myself in it not by studying it by quitting and doing it. Jimmy allowed me to do that. I had worked for him at that time. I had left in uh Sony, had gone to Innercope. I'd done great work with Innercope. Jimmy and I was close. He's a mentor of mine. And when I told him I wanted to do it, the deal was like, "Look, man, I got your back, your back, your back, but bring the deals to Inncope first." So, a lot of the early things that I had done were based around Innercope artists.

And I mean I I I got great great stories about me, Jimmy and Steve Jobs, you know, trying to get bring when I was working on McDonald's early around the I'm loving it launch. we wanted to do was around the same time as iTunes was launching and um the thing about Apple at that time the stock was at 9 or 10 you know very you know it was like there and uh you know it was so in 2001 I I not to go over but Enron had just take this wherever you want man in 2001 the Enron thing happened right where where where the CEO O and the CFO they had they they no longer could the CFO couldn't say oh well the C the CEO told me to do it that's why I did it that was Sarbain Oxley came out of this whole thing whole thing whole thing and everyone was scared about insider trading so I remember when we knew that the iPod was coming because of Jimmy's relationship with Steve we all wanted to buy stock in in Apple and the stock was like nine Not that we knew that nine was cheap.

We just knew that that something good was going to happen. And we were all scared to death about Ste. Ste. Ste. We were like, "No, we're going to we're going to go to jail and we're going to be Jeff Skilling." I like, "No, no, no, no, no." But back during that time, I was transitioning out and you know, the iPod launched before the iTunes. People think they launched at the same time. So when iTunes launched, the one thing about Apple at that time is if they could put distribution, the expense of distribution to a third party, Steve was all about that.

He was all about how can I find somebody else. Remember HP was the partner for the iPod. They they're the ones who put it in all of the Best Buys and Circuit Cities or whatever the retailers were around the world. Apple didn't have the sales team to do that and they didn't have their stores. They they relied on a third party to do that. They did HP. HP happened to be one of my clients call it Fiorina at the time. And with iTunes, same type of thing.

Who could we get to distribute it? Jimmy was trying to get a deal done with Coca-Cola. An executive at Coca-Cola, Steve Hire, turned it down twice. I was representing McDonald's and we wanted to do I had the idea we're going to do the music meal, you know, Big Mac and large fries and or hamburger fries and a song and and and McDonald's turned him down as well. The the the the executive at McDonald's sort of was like posturing and uh Steve went nucleio I mean nuclear on them.

I mean, at the time he went he said some [ __ ] to them. I was like, "Holy shit." He said like like it's like you're in a meeting and like the meeting hasn't quite gone bad yet, but it's going directionally in a place where you kind of predict that it's going to not end correctly. And he he seen that coming and he just said, "Man, don't you don't you guys know you make food that kills kids?" It's like, "Oh shit." Now, I'm a young executive trying to I'm trying to do the right.

I'm trying to come up. Jimmy knows Steve Jobs. I got McDonald's. Jimmy and I have worked together. We're doing the tango. We're going to go bring this McDonald's, iTunes, Apple thing together, you know? And then he says that and the guys at McDonald's are looking at me like, "You walk me into this shit." And I'm like, he's just playing, man. He don't he don't mean that. I I remember that feeling at that time. It was like [ __ ] the [ __ ] am I doing? Did they try to kick Steve Jobs out of the meeting?

How'd the meeting end? Kick Steve Jobs out of the meeting? Yeah, I guess. Yeah, it was. First of all, the meeting was at Apple. They weren't kicking Steve Jobs out of any meeting. So, we're we're actually going to do an episode with uh Ed Catwell, who's the founder of Pixar, and he worked with Steve Jobs for a long I think he worked with Steve Jobs uninterrupted for like 24 years. 24 years. 24 years. Yeah. and he tells a story about what a meeting with uh in his autobiography Creativity Inc.

what a meeting with Steve Jobs is like. Remember the ma I think it was like Magnavox uh uh uh of course Magnavox they made video games they made television. Yeah. And they used to have this um commercial probably in I don't know maybe ' 80s or 90s where somebody's like sitting in a chair and the the music is so loud it's like blowing the guy's hair back. back. back. Was it Magno? It could have been Maxwell or Maxwell. Sorry. Yeah. And uh the tape company. Yeah, that that makes more sense.

And uh Ed Ed's like, "You remember that commercial?" I was like, "That's what it's like being in a meeting with Steve Jobs. He's just so so overpowering. He's like just such a force of nature. Like kind of blows you back in your chair." Look, I didn't have the exposure to Steve Jobs like that. That was I was in that'd be two meetings with him. Um where I mean like real meetings where like there was feedback and that kind of thing. And uh that was that. I mean, I'm I'm close with Eddie Q and he tells amazing Steve Jobs stories along with Jimmy.

That was just my version of getting a taste of it and it was like, [snorts] holy [ __ ] I want to tell you about the presenting sponsor of this podcast, RAMP. I have been reading a lot about SpaceX lately. SpaceX is one of the most valuable private businesses in the world, and one of the main themes in the history of SpaceX is constantly attacking and questioning your cost. Ramp helps many of the most innovative businesses in the world do exactly that. The median company running on ramp cuts their expenses by 5%.

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Much my you know at 16 when I was 16 was 1986 when you know Run DMC performed at Madison Square Garden and like it was Fresh Fest. It was like a sort of the the coming out party of that hip hop could have actual rock stars. So that was my wheelhouse. And the only reason why I wore Adidas shell toes was because of them. Like we knew that. So it wasn't like it was a new idea or you know Grand Puba advertising for Sprite which is an amazing amazing.

amazing amazing. amazing amazing. Wait, did you do that deal or is that before you? before you? before you? That was way before me. And I remember when he said, you know, the the line, like he said the line, you know, first thing first, obey your thirst and like he talked about Sprite. Like you've seen these things or St. Ives malt liquor. You should look at these ads with with with Ice Cube and St. ID. like these these these things were so powerful that hip-hop that hip-hop that hip-hop would be working with these brands and like it would influence urban culture immediately.

And when I talk about urban culture, I'm talking about dense cities, not even black hits. I'm talking about just dense inner city uh uh uh uh you know, I use it as a measurement of space, uh density of people. they would gravitate towards these products that these artists talked about either in their in their music or did blatant acts for. So by the time I had gotten to Will Smith and Men in Black, I mean, I had seen it for 25 years, but it still wasn't mainstream cultural impactful yet for reasons that I still don't understand.

like it was very clear and obvious. But you know, like most things, when the alternative is working, when the incumbent can still rely on the old business practice, business practice, business practice, they won't disrupt themselves. They'll just keep doing that, right? Like, why would I invest any money in understanding hip-hop when Kenny G is still selling? still selling? still selling? I mean, no disrespect to Kenny G, Michael Bolton is still selling, whatever it may be. But if those things are still working, you're not going to pay attention to Wuang.

You're not going to pay attention to things like this. Or if you're still selling under the in a world in which you can say, "I'm going to target white consumers." I used to talk about this all the time, like like black consumers are the best consumers in the world because they buy products that aren't marketed to them. I I grew up in a world where I'd see African-American women buying products, L'Oreal products, in which there was only white women with blonde hair on the box or in a commercial and African-American women would buy it or the same thing with African-American men and and like people took advantage of that.

But when brands leaned into being authentically connected to where culture was, which also spoke to those segments, they were taking market share. They were taking that attention. So to me, it was just a matter of time before it tipped and that became the new marketing paradigm. And that's why I called my company translation because I wanted to translate that cultural insight for Fortune 500 companies. And the first company that gave me a shot that's still my client today is McDonald's. Okay. So, this is what what I was curious about.

So, you're at Innercope. What are the assets that you have when you start translation? So, you're young, you don't have a family, you can take more risks, you have an insane network, you've already been you were managing Nas at that time like what were the asset the non-financial assets you had going into this like jumping into a new industry? When I first left, remember I said I learned first, right before I started translation, my marketing services company. I learned and I worked at an intern uh company before that.

Which one was this? It's called Arnell Group. Okay. Okay. Okay. So, I worked at this company um and I not I worked at I became partners with when I left the the record business. you know, I was making a couple million dollars a year at 29 and uh I went into an agency in which I got paid $150,000 and 20% equity. Um I didn't necessarily understand the value of equity at all. I certainly understood $1 150,000 was a lot less than 2 million, 2.5 million, but I wasn't even betting on the equity, man.

I was really betting on the education. I sincerely sincerely sincerely mean that. I I did not know what was going to happen at all, but I knew I was going to learn. That was the period in which I had gotten exposure to certain clients like McDonald's and Reebok. So at Reebok, that was a client that when I was partners in this agency, I'd met Adam Silver at that time who was the deputy commissioner of the NBA because we were doing all the marketing. Reebok had the license for the NBA and I was doing all the marketing around the throwback jerseys and then like I was seating them and all the artists back then were wearing throwback jerseys.

So it became this really big deal that like wow this guy knows what he's doing. He has you know I had gotten that's where the market was going but I gotten a lot of credit because it was just selling like crazy and and Reebok was the beneficiary of it as the NBA license. They were the NFL and the NBA licency at the time. Um, gentleman by the name of Paul Fireman was founder of Reebok who did an amazing job. He trusted me and and and put a lot of investing behind my ideas.

And then the thing that was like the loudest was this idea that every artist wanted to be a basketball player and every basketball player wanted to be a rap artist. And And And I came up with this platform called the sound and rhythm of sport. And we made this commercial for Reebok with Allan Iverson and Jedakus and it was explosive. And I had Hype Williams, a music video director, shoot it. And no one thought like it was like this sounds crazy today. I mean to think, but it was like how could Hype Williams a music video director shoot a TV commercial?

I'm like I don't even know what you're saying. It's not a TV commercial. It's entertaining content, whether it's a music video, music video, music video, right, which was Men in Black, or a 60-second same idea, but you call it a TV commercial only because you run it on television, not because the format is different, just because you're running it on television. So music videos ran on MTV, but if you took the music video off MTV and made it a 60-cond spot, just run it on television, it's a television commercial.

commercial. commercial. I heard you like six years ago say you're like everything is advertising. That like you jumped advertising earlier, people thought you were bugging. That's the term you use. Like everything is advertising. I just talked to Brian Armstrong about this, founder of Coinbase, and he said the same. It's like everything is marketing. It's just like you have to entertain or get people's attention and then you get a message across that serves some kind of thing you want to happen in your business. In his case, you know, the new products that Coinbase is building or the financial performance of, you know, the stock or whatever the case is.

But I love that you everything is advertising. Again, at that time, it was just, you know, when you're trying to explain something that you fully don't understand, understand, understand, but you just know it's instinctively correct, it's hard to get people to buy into it because they're like, most people are risk averse. So, it's like, why would I what are you talking about? Like, why would this guy be able to shoot a TV commercial? He's never shot one. I'm like, because it's the same thing. same thing.

same thing. I mean, what is a music video? It's an advertising for a song. It's a TV commercial for a song if you wrote it on television, right? So, anyhow, we shot this uh content as we've evolved. And it blew the [ __ ] up because it was Jada rapping to the sound of a basketball bouncing. And Allan Iverson can dribble a basketball and make it sound like a beat. So, it sounded just like any other hip-hop beat, but it was literally a ball bouncing while this guy wrapped over it.

And the commercial was beautiful and it was boom. And that changed the trajectory of Reebok. And when that happened, that was a big deal. And then I started doing artist deals around sneakers. I did the Jay-Z Carters. But that's the first ever ever ever non-athlete shoe deal. This [clears throat] is again why I wanted to talk to you. You just see stuff before anybody else. anybody else. anybody else. Yeah, we did that. We did the the Gunit. Uh was just hot at that time. What was the marketing?

Didn't didn't and you guys did something smart if I remember correctly like wasn't didn't Jay put out a mixtape around the It was like the like the like the escarter. We did the escarter mixtape um which was a mixtape around the the the sneaker marketing the sneaker the escarters. escarters. escarters. Then we did a commercial with 50 and Jay-Z. No one understood it at the time like why would you be doing this? Like why are we spending money on this? And I'm like, at the time I all I could say to them was like, it's like a commercial.

Imagine trying to sell a product to housewives, to women overall, and you got Martha Stewart and Oprah. That's what this is. This is like the equivalent of the that level of power between these two guys. And that's the only way I could explain it to somebody who didn't understand it, you know. And you know, the S Carters were big, the Guns were big. Then I did the Fel sneaker and Farel would tell you that was his foray into footwear uh and gives me a lot of credit for like his path in the design because I gave him that opportunity very early.

What's clear was Nike wasn't doing lifestyle at that time. They thought like just do it was all about athletes and performance. So, what I was trying to do was tap into the truth, which was people were wearing sneakers, not to perform at all, just so it could match their hat, their shirt, that other thing. It was it was fashion. So, I just started choosing guys that didn't want to work out or run or jump at all. Jay-Z being the number one version of that. Like, he doesn't, right?

He doesn't give you the athletic vibe. He gives you the vibe of like, I'm chilling. And then it was 50 and then it was forel and it was all just playing along the lines of of fashion. fashion. fashion. Dude, how many people are wearing Jordans, not playing basketball on them? It was the only white space left because there was no way I could market Reebok as the a as the agency of record at the time. I told Paul I like Mr. fireman. There is no way I can convince a 16-year-old they can jump higher or run faster than Nike and Reebok.

Like like that's not happening. Okay, so like let's go into the other thing which is the non-performance stuff. And it got so hot that we got a chance to go into the performance business again and we were trying to sign Kobe and I have great stories of you know pitching Kobe. First of all, I signed Kobe to a record deal recording contract when he was a a rookie. And then we pitched LeBron. That's how me LeBron and I became good friends to this day. When we pitched LeBron and he um there's a famous story of LeBron.

Uh we're pitching him for Reebok. Reebok. Reebok. We, you know, they send a plane, everybody wants to sign him. I I tell Paul while he's coming from Akran, we're flying from New York to uh to Boston to meet him there. And I'm like, Paul, we do this in the record business and it works. You give an artist in advance and you give it you bring the advance right there there there like in cash in a duffel bag. And it Well, that has been done in the music business, but this was like this was gonna be a check.

And I I seen Paul [ __ ] this was some balling [ __ ] call his wife cuz he couldn't get the company to get the check. And his wife wrote a personal check for $10 million and the driver when we landed had the check. We went to the meeting and Paul says, "LeBron, I know you know $100 million, you know, Adidas is going to offer that when you go see them next, and then Nike is going to offer that when you see them. I'll match that deal and give you a $10 million signing bonus right now to not take those meetings.

That's the number. We'll give you the number plus the $10 million. So, Paul took my advice all the way. LeBron, he's he's going back. He has to be in home room the next morning. Okay. Okay. Okay. He's in high school, right? He's in high school. He's going back to home room the next morning. He's in there with his mom and and his team, his agent at the time. But he's clearly LeBron James. He's he's making the decision. We leave the meeting. He asks for some room.

We leave the boardroom. Paul and I, we go in the other room. We're like, "Oh, you think he's going to do it?" I'm like, "Man, I think so. I like it's $10 million, man. The guy we're paying him exactly what he's going to get paid. We're not This is just a bonus. It's not This is not coming from the money. This is a signing bonus to sign it now and not take the other meetings. We come back in the room. This 18-year-old kid says, "No, I'm betting on myself." He didn't say that, but we knew that he was going to take the other meetings.

He walked away from $10 million check signed to his name to go back to the projects in Akran and back to home room. I I applauded him because I knew at that moment in time that the world had changed when a young African-Amean African-Amean African-Amean that was in poverty knew that his talent was bigger than that check. It taught me a lot. a lot. a lot. It taught me a lot of where the world was going and that we were already there. there. there. And um it's something that I'm proud of him for to this day.

Not that Reebok was the bad choice or anything like that. It wasn't even about that. It was the fact that he that he that he believed in him more than the money at that moment in time. That was a big shift for a a community of people. But I think that's one of the main themes that runs through your entire career is like you're encouraging other people around you to like bet on themselves. even the story you told about the Ray-B bands. We sold the glasses.

We didn't get anything for it. Like I read um Andre Agassy's uh phenomenal um autobiography called Open and he uh goes out one night is hung over and you know he's a wild boy and he winds up playing a tournament the next day, wins the tournament, but he's wearing Oakleys like the crazy multicolored ones multicolored ones multicolored ones and just because his eyes are bloodshot, he's hung over, right? He wins a tournament, there's a crazy photograph that gets put on like the cover of Sports Illustrated.

He winds up selling a ton of Oakleys. Did he get equity in Oakley? No. You know what he got? He got a Dodge Viper sent to his house by the founder of Oakley. So, it's like if that guy bought you a $60,000 or $80,000 car, how much money did he make? Yeah. And so, your whole thing is just like, why aren't why are you giving it away? Why don't you This is very entrepreneurial. It It happens all the time again when the incumbent is already making money doing what they're doing.

When you're making all this money, if you're in the record business at that time, think about this. The music business used to sell singles, right? So you'd buy the single for $4.99 or $3.99 and then the single was a way to get you to buy ultimately buy into the artist for a less expensive price and then ultimately when they dropped the album they buy the album. When the CD came, they didn't even [ __ ] around and sell singles no more. They removed the single. single. single. The single was on cassette.

The single was a cassette. Okay. Okay. Okay. Or 45 or you know back before that. But it was a cassette. So when they stopped selling singles, they wanted the artist so badly that one song, one music video, you heard Hot in Hair and you seen that video, you're 1699 without even knowing what song number 2 3 4 5 6 was. You didn't give a [ __ ] And the industry took advantage of that. that. that. What's the first single? Let me tell you what happens in that environment.

You spend all your time making one single. the rest of the album, right? So, the creativity suffers because they're buying it anyway. So, let's just try to make the first single. What's the thing that's going to work on MTV and what's the thing that's going to get on radio? That thing. In fact, a lot of artists would make an album and then go to like all the top producers just to make the first single. So, they'd make a whole album with one guy or two guys and then go to one specific person to make a song that was the radio record.

and that song could sound like nothing else on the album. They didn't give a [ __ ] They just wanted to sell obviously the thing and it worked. So when you're making that margin on that product, the last thing on your mind is who's making money off the glasses, all of the [ __ ] that's being sold in the music video. music video. music video. What are the other businesses that we should be building on the back of this because we're giving it away? And that's what Jimmy talked about.

Why don't we own the end customer? Why don't we build businesses with artists? Why don't we build businesses with artists? When I first started United Masters, my music distribution company, the first thing I tried to do, the only thing I wanted to do was build a universal universal universal uh not a record company agnostic CRM system. My whole idea was like if like anything else, you go on Amazon, it's like if you buy this, then you buy that, right? So they if they're selling you toilet tissue or whatever they're selling you the next thing there's a plunger there's this there's other things that have associated with that product that you just bought.

My whole thing is that if you listen to Yeezy Yeezys the Kanye album Life of Pablo you know 30 times why the next thing I'm referring to you a pair of Yeezys or a hoodie that he made. It's not that. not that. not that. and the record companies and the artists had no CRM tools. Every other, you know, product that I've seen, um, digital product, you found a way to go, okay, the margins are going to be a lot lower, but the remarketing is going to be cheap because I know who the customer is.

So, even if I make this amount of margin on the first transaction, the fact that I now have your name and your taste, I can sell you the next product. This is what you talk about that you learned Jeff Bezos knew about selling windshield wipers. Once you bought on the platform and he had your intelligence, your information, he could find out what else you wanted and he had could speak to you directly. The record business doesn't own their customers at all. I mean at all. I have a theory around this.

At least as of late. If the artists knew who their fans were, they wouldn't need a record company at all. all. all. [gasps and sighs] If you're an artist and you have 200,000 people who love you, you know how much money you can make with those 200,000 people selling them higher margin items or selling them the the the music and then the higher margin items like hoodies and t-shirts and merchandise and other things that go back to the essence of why they fell in love with you in the beginning.

When the record companies cut the deal with Spotify and this whole 7030 split, they had all the leverage in the world. In fact, they took equity in Spotify. The record companies owned a piece of Spotify. There was a big thing that came out. It's like, was that value passed along to the artist who was the leverage that they utilized in order to get that equity? But putting that to the side, rather than negotiating the equity, why wouldn't you renegotiate the access to the data, the real access to the data, the data, the data, so that the artist would know if you listen to that, if Taylor Swift has a fan that listened to her album 700 times, why wouldn't Taylor Swift be able to communicate directly with that artist to sell him the ticket directly, sell her the fan, the the the gear directly?

The record companies, I believe, never negotiated that when they had that leverage because they didn't even want to have to share that information with the artist. Time has passed and maybe there's privacy laws around it, but they could have still had the option to opt in. Like, do you want Taylor Swift to be able to contact you? [ __ ] yeah. [ __ ] yeah. Do you want Kendrick Lamar to be able to contact you? [ __ ] yeah. Beyonce? Hell yeah. Hell yeah. Hell yeah. But they didn't negotiate that because then they would have to share that and once the artist had direct connection to their fans, record companies would then become obsolete.

I was trying to build CRM tools for the artist. So like any other brand would have CRM tools. These CRM tools would allow you to, you know, navigate with your customer and that you could be able to manage that relationship. The root awakening was there is no data to be gotten. There's no data to be gotten. Meaning that the data source Spotify or YouTube or whatever it was were not going to ever give you the user IDs, right? So like on Apple wouldn't either either, right?

No. Or Apple. No, they're not going to give you the user IDs. So, it's not like if that phone downloaded something, you know, or streamed something x amount of times, I wouldn't be able to send an advertising directly to that phone. They wouldn't allow you to do that. Years later, there was a law around it, GDPR, that that talked about this. So, that that definitely got in the middle of this and it was around um Facebook and voting and things of that nature that that sort of brought this to light.

But prior to that, if it would have been shared and the artist had an opportunity to get that intelligence that intelligence that intelligence and the fans had a chance to allow the artist to get an opportunity to that intelligence through those platforms, I think we'd be talking about a completely different industry today. When I was building United Masses that I started in 2017, the idea about building an independent distribution company was driven by the premise that the record business at one point for many yet for decades since its inception was you have to find a record company in order to find an audience.

You get a record deal, we control radio. We're going to get you on the radio. We're going to get you an MTV. Oh my god. Because trying to get on MTV and radio if you didn't have a record company at a point in time was almost impossible. Since this whole digital content revolution, artists would find audiences before they found a record company. So if they found an audience before they found a record company, why would they have to give over their rights? Why would they have to sell to sell to sell off their name, image, and likeness in perpetuity to somebody because they gave them a half a million dollars when they were 18, 19 years old in the beginning of their career.

So, we started United Mass with the premise to invert the the economics so that the artists got the lion share of of the of the economics because they actually did the work. work. work. They kept the ownership. That's why you called it United Masters. Yes, you got it. And um Ben Haritz was a big supporter of that in the beginning. Tim Cook strongly believes in that. Tim Cook is a big believer. It's the Apple ethos to support and give the creative tools. They believe in that.

Whether it's an architect, a designer or artist themselves, they believe in that at its core. So, it's not like it's an idea that doesn't have massive support behind it, but it takes a generational shift because the artists for so long, it was it Stockholm syndrome. They're stuck in these deals. They believe that if I'm signing to a record company, a I'm going to get a lot of money. They're going to make me global. I'm going to get awards, you know, and recognition around it. So, I'm going to keep doing that.

Then you have another generation of artists that are coming up right now that like, are you [ __ ] crazy? I own my [ __ ] I market myself anyway. These guys don't do anything for me. At least I don't believe they do. I I rely on myself first and foremost. I am the best marketer of myself. I'm the best marketer to my audience of myself than anybody else can do a third party can do. So, I'm betting on that. So, you have artists, independent artists right now that are blown the [ __ ] up, that are done really well.

You know, we have an artist on United Masters, a big extra plug. He's made $20 million this year. I mean, more more more. And it's his and he owns this and it's something that he can give to his family, his kids, he owns it. this idea when you seen years ago like people ask like when Prince wrote slave on his face he Prince changed his name from Prince to a symbol to get out of a contract because Warner owned his name image and likeness so he said if I change my name to a symbol doesn't that navigate me out of the contract that I signed wrote slave on his face one of the most successful artists of all wrote slave on his face because he knew that I don't even own the [ __ ] that came out of my brain.

That's crazy. That's crazy. That's crazy. When you explain this to technology companies, I explain this to Larry Pageige was the first guy that invested in United Mass. I said, could you imagine if every time a seed investor came in, they actually owned the IP and intellectual property? They owned it. That's what it is in the music business. The guy comes in first and gives you a check for half a million dollars. He owns your name and image and likeness. The people look at you can't be [ __ ] that can't be real.

I'm like I swear to God that's real. That's why these artists at the end of their career they die broke cuz they don't own anything. It's owned by the person who discovered them. It's not owned by them. Even though they have the unique gift to create something that others can't, they don't own it. They actually have the thing that's rare and therefore valuable. Yes. And Yes. And Yes. And why I love where we are today and the democratization that digital has provided is that an artist can now and not only musicians artists painters painters but like I'm a painter I draw substack I'm a writer I'm a journalist a journalist a journalist podcasters podcasters podcasters like I don't need the publisher to be a third party that owns this anymore.

I can find an audience audience audience on my own. And the power in that and the economics in that long-term value of that is something that we've never seen before in the hands of the actual creators. Deal is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade. And one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority. A players recognize other A players, which is why top companies like Ramp, Shopify, 11 Labs, Uber, and Door Dash all use Deal.

Many of the top founders I know have personally invested in Deal after using their product. And what they discovered is that deal is the best company in the world at building infrastructure for global hiring. deal will help your business hire, pay, and manage any worker anywhere in the world so you can retain the best talent anywhere and spend the rest of your time focusing on what you do best, delivering value to your customers. The founder of 11 Labs has a great description of the value Deal can give your company.

He said, "We built 11 Labs to break down language and communication barriers. With deal enabling us to hire and support exceptional talent anywhere, we can accelerate our innovation and bring more voices, stories, and ideas to every corner of the world. Deal is trusted by over 40,000 businesses. Learn how they can help your business today by going to deal.com/enra. That is deal.com/enra. There's a long history of the music industry, you know, the executive industry essentially [ __ ] over artists. I read uh Jay-Z's fantastic book Decoded and he talked about reading this book called Hitmen and I think it was all the stuff crazy going on in the 70s and 80s and oh 60s 60s yeah 50s60s7s crazy book crazy book crazy book you have to read that book it's almost like reading uh it's the like the the the move the movie that they turn the book they turned into good fellas really really really that's what it feels like when you read it it it what was the name of the book they called good that turned into good fellas the movie um I don't remember but Jay-Z's point was just like all it did is like I just read the book I'm like I'm going to avoid that wise guys.

Okay. So, I read Jay-Z's like, I read the book and I'll just avoid doing that. And then he came into the game independent. I think he the the the founding of Rockefeller. So, he got it and he got it back in what 96. How the hell are you still telling the story in 200? 200? 200? Oh, wait. What's that? You know, Jay got it because he was turned down. Record companies wouldn't sign him. Okay. A guy that talented, they wouldn't sign him. him. him. He had no choice but to go independent.

He figured it out. And then when he got independent, he obviously figured it out. Master P figured it out. Cash Money figured it out to a certain extent. Cuz there's different versions of this. There's different versions of guys figuring it out. Like there's a figuring it out where you like, I own the whole [ __ ] thing. It's mine and you're my partner and I pay you a percentage. Right? Then there's a version of it like, look, I'm not going to allow one contract to hold everybody, which was Wuang's thing.

Larza had a record deal and it didn't work. Then he came back and invented this thing called Wuang and he made sure that he did not sign what he had signed prior um when he was Prince Rake an artist. What was the difference? All those artists could could be allowed to sign. Wuang was signed one place but the artists had a uh the right to sign in different places. They weren't stuck under one agreement. Right? So what happened in the record deal like if I signed a group that if anybody in that group ever went solo they also had to be with me.

That's what record companies deals look like at the time. So if I signed you in a group if you decide to break off from the group you're with me first. When he did the deal immediately with with Wuang none of them had to sign with the record company that originally BMG RCA which originally gave them the deal. That was a breakthrough that guys got hot off the album, the Wuang album, and it was signing deals in other places. People had never seen that before. And then when you seen Masterp No Limit, this was independent and putting out number one top five records every week and talking about how much money they were making and selling records out the trunk.

It was like, what are they doing down in New Orleans? These guys were finding ways in resourceful manners and were making a ton of [ __ ] money. But how did they get in? How did they get on radio or MTV if they were independent? This idea, the power of emerging subculture, subculture, subculture, they were building something on the way up. Remember, man, if you get 200,000 people who love you, the amount of money in that is tremendous. And they grow with you. They didn't need MTV and radio at the time.

They may have had a local radio station. They were down in New Orleans. They had a community of people who bought into this idea and they were building No Limit Records and that contagion and growth kept going throughout the South and and you know at some point MTV had to play it. You couldn't be left out, right? So it wasn't about you you you needed it at some point because it was so popular versus it needing you to break. Okay. So this is the difference between like top down record companies at time.

They're like we have these relationships with national radio and MTV. We're going to make you a star. we're going to push it from the top down. Master P and these other guys, they did bottom up. I remember hearing uh Sean Parker on uh an interview one time and he said this unnamed uh record company executive was just like, you know, give me anybody in the world even though they're not talented and with enough push behind them, I can make like them a popular musician. Basically saying they controlled the system.

They did control the system. They control radio. Is this related to what you were saying earlier how mediocrity was like was like was like you you know and I I'll use references like I like I said you know Kenny G who's a great musician or Michael Bolton that and sometimes I just say these things because I know it brings like shock value but just to make the point I shouldn't know the Britney Spear song Oops I Did It Again. There's a lot of Insync songs I shouldn't know but they were pounded in your brain.

You couldn't avoid it cuz MTV and radio, local radio, they had a monopoly on it. So all of a sudden you started listening to this music. By the way, I grew up my whole life thinking whole notes was black because you wouldn't even you you would listen to these songs and they were like there were a time in the 70s where there were no music videos. So you'd hear the voices and like a lot of these artists were trying to sound African-American or like R&B artists.

So you would hear it and you'd be like, I guess they are black and then they you find out, you know, obviously they were not. But like when they control the system, they could push something on you and the power of reputition will force you to have some recall whether you like it or not. Now that's a whole another story. But the awareness is more than there. And like if I got 50 if I got a 50/50 shot because you already heard it. I love those odds versus the shot that you never heard it at all.

at all. at all. Repetition is persuasive. So again, I think we both have a love of like I love to study the advertising industry. And I'll go back to like the early 1900s when it was just copywriters were the best advertisers. But even if you think about the 50s and 60s when they're building all the um the massive advertising firms, the global advertising firms on Madison Avenue, it's like they talk all talk about this for 100 years. You're not repeating your ads enough. Repetition is persuasive.

Do it over and over and over again. And if you see all the deals we do with our partners, I don't you can't buy an ad on any of my podcasts, a single ad. You're doing at least a year, in many cases many, many years. You have to repeat this. It's so important. So going back to you're realizing, hey, what is the purpose of a record label? You're essentially creating almost like a record label infrastructure in your in United Masters or through United Masters, but you're the artists maintain ownership.

maintain ownership. maintain ownership. Yeah. Yeah. Yeah. So you're taking the parts like you guys can market better than we can. You have control. Like I I've watched all your interviews. I love Russ, the rapper Russ. Russ. Russ. Love him. Love him. Love him. You've done a bunch. Yeah. You've done I've taken so many ideas. He's so [ __ ] good. The way he's so the way he explains it, his passion around it. Dope as [ __ ] And I've taken ideas from the way he markets his music to the way I run my podcast.

It's the exact I don't see any barriers here. It's the same thing. Whether you're a filmmaker, you mentioned a writer earlier, a rapper, a podcaster, a founder, it's all the same thing. thing. thing. Painter. Russ is a rapper, but he's really an entrepreneur. 100%. 100%. 100%. His product is He is Yes. First of all, a he is an entrepreneur. entrepreneur. entrepreneur. Like, full stop. A good one. A really good one. We We should tell people that don't know him, he's the first person in history to a single person that wrote, recorded, engineered, produced, mixed, and mastered an album that got a billion streams.

A single person. I don't know all of the stats around him as a artist, him as a business person and the way he how prolific he is at explaining his business and the the amount of songs he puts out knowing that you know if you don't like this song, I may put out 12 songs and then you like the 13th song and then all of a sudden you like song number one and then this whole catalog. when he was explaining that at the beginning of his, you know, of of my sort of entering his journey, I was just blown away by how prolific he was as a business guy to explain it.

And then, you know, Chance the Rapper, like there were a lot of guys that took independence in the whole digital era and like took it and turned it on its head and they were proud about it. I don't want a record deal. Are you [ __ ] crazy, P? You can't give me $200 million. You can't buy me out of this [ __ ] That was a next step. Like when I just talked about LeBron James saying, "I wouldn't take the $10 million." That's Russ saying, "I wouldn't sell my publishing for $200 million." Right?

Like you start to realize the power of ownership. ownership. ownership. There's a funny story I got to tell you about Russ. He might have said it to you on the interview did with him, which again, both of them were excellent. Uh when his business manager said, "Hey, this company wants to buy, you know, your catalog." He goes, "I just need to know the number." You obviously know the answer is no. I just want to know the number so I can put in a song. I can rap about the fact I turned down this much money.

money. money. Lar Russell Russ, uh, Toby Niway, um, um, um, Big X the plug. Like, but it's so Larry June, this Brent Fires, there's so many artists that your audience may not even know their name. They're making so much money because they're independent. And now you're watching the artists that were signed for many, many years. Usher is an independent artist now. Usher's independent. Usher was the first independent artist to play the Super Bowl. Bowl. Bowl. Then Bad Bunny Bad Bunny is an independent act. independent act.

independent act. Are you serious? I Yes. He signed to Remos. Bad Bunny is an independent artist. independent artist. independent artist. These these are these guys are making a fortune. fortune. fortune. They own themselves. That's the future of the music business. That's the future of all of these media businesses. You own this podcast. What does it mean? You the power of that. [ __ ] look at Joe Button. When I talk about Russ, I think about Joe Button, too. Joe Button walked away from a lot of money, man.

And you know, forget me and going into the advertising business. This guy left, you know, a a rap career, whether he left the career or the career left him. He went into the podcast business very early and he's done an amazing job. Then he turned down Spotify and went to Patreon Patreon Patreon because he wanted to work directly with fans. He said, I don't want to any obfiscated version of money. I want to know exactly what I want to get paid exactly what I deserve because I have the audience who pays me directly and he uses Patreon.

uses Patreon. uses Patreon. This is these are great things that are breakthrough in business models. I look at all of these artists as solo entrepreneurs as SMBs. The SMBs that used to be flower shops and bodeas and this that and the third are now streamers, independent artists, independent artists, independent artists, influencers, influencers, influencers, podcasters, vloggers, and and and and writers on Substack. They're the new SMBs. And I don't think industries has caught up to that idea yet. I don't think the insurance companies understand it. A lot of the new um uh fintech companies understand that, but there's so many incumbent industries that don't see that yet.

So, they're still looking at the old uh version of SMBs and they're so locked in with that. You know who gets it? like it's the founder companies because just like you had that observation when you were 29 years old it's like I'm in this industry that's like maybe dying or this can't be sustained it's being attacked by technology right you're not going to sell these high margin CDs anymore when NASA exists same thing that Jimmy I realized you realized as well and so like even look at like some of our big partners like I'm a huge partner with this company called ramp it's like it's a founder like company they think they think like founders and they place a huge huge a multi-year bet on me because of all they asked they didn't there's no numbers you talk about being intu intuitive they didn't even know how big the audience was all they said is like us and all of our founder friends the most elite people are listening to you let's figure out how to work together together together 100% 100% 100% and that's what hell founder say he's like I don't care if state farm hasn't come to podcasting they have now but like all the money that's flowing from TV and radio is going going into podcast I've seen this with uh cash app was in very very early it was a marketing guy at cash app so [ __ ] good seen it early placing bets on emerging subculture subculture subculture is on its path to mainstream culture.

So placing the bets on the right guys who are driving this emerging subculture, whether it be podcast or whatever it may be as a medium, it's just a matter of time before those things become the next mainstream goto mass consumed product. And the founder, I mean, dude, I've talked to Mark Zuckerberg about this. I've talked to Jeff Bezos about this to Daniel like they see what I'm doing like they get it completely. They understand the power of this especially when you have a very you know wealthy you know you you do the work.

[gasps] The one thing about you is that you actually do the work. You're well read. You understand the topic of each person that you are interviewing. This whole idea now that and you and Jimmy sort of got into this And I'm a big believer in this that we're at odds um with fame and talent. Fame and talent historically always had this relationship where they they knew how to coexist. In fact, fame was an accelerator would blow the flames so that talent can get to get bigger.

So they had a great partnership and I would say in the last 20 years maybe longer but like 20 years has become very profound that those two things are at odds. In fact, fame believes it doesn't need talent at all. And I've come to the realiz real realization that talent believes that. And what I mean by this is this whole idea that you are famous without having any talent or if you're talented, you actually will put the talent to the side and do the thing that will get you most famous rather than actually utilizing your talent to get that attention and that fame.

that fame. that fame. And that's a very dangerous aspect of where we are in society when talent is not being not being not being incentivized to be talented, where fame is being incentivized to be famous for things that are not necessarily driven by talent. by talent. by talent. Yeah. It's not a world I want to live in. in. in. It's the world that we do live in. And I don't know what the long-term unintended effects are of this, but I've seen this affect many different industries, including politics, where fame is more important than the talent in corporations, in politics, in popular culture, whether it be films or or or or podcast, you name that fame is the driver, not the talent itself.

Now, you find the rare cross-section of talent and you do all the work and you have a great following, but that's rare. I think this also plays into what you're saying is like why independence and retaining ownership is so important because like Russ may not have obviously the audience that Taylor Swift does, but Russ makes a phenomenal living. You know, I think he's got like whatever 10 15 million listeners. So, it's not a small audience, but it's not, you know, power. It's not a 100red million monthly listeners.

But if you own it and you retain control, his unborn grandkids are already rich. already rich. already rich. And if you really owned it, he would have the CRM intelligence around the people who loved him. And that's the next step of the music business. That's where these industries have to go next. That's cuz the creators are going to demand that. They're one step removed from demanding that. Like I need to know exactly who listens to this podcast. I don't give a [ __ ] or you're not going to get the podcast.

Whoever the distributor is or whoever the platform is, you know what, the next evolution of this in the next 3 years, I have to be able to go direct and I have to be able to collect that fan data. I want to send out the newsletter. I want to send out the fan uh uh uh uh sort of correspondence like it's the platform you own. I now want to be able to have my direct relationship with the fan. And somebody's going to build the next platform that's going to become the one that drives consumption is the one that allows that to happen fluidly for that's for certain.

Book it. That's what Jimmy is talking about what he wants to do with his company. That's that's exactly what we're doing. That's that's why you're seeing these shifts right now in the marketplace. Um there's a company called 11 uh or even rather 11 Labs is the difference. All right. Uh even even even we use 11 Labs for our transcripts. Shout out 11 Labs. 11 Labs is an Andre Harowitz uh uh le company. They're [ __ ] awesome. They invest in and they believe in founders. They believe in CEOs.

They bet on good CEOs. They have great CEOs in their portfolio. portfolio. portfolio. What does the company even do? It even allows artists to sell directly to their fans and they're selling uh merch and vinyl and vinyl is now considered merchandise merchandise merchandise and a lot of the independent artists have used them for a while and now artists on labels have used used them and they have found success using their platform to sell directly and now UMG is moving in that direction. They just signed a deal with them.

So I guess the good news out of all of this since we started United Masses is that the independent music space and there's a lot of us have outgrown on the front line the major labels. So if you talk about new releases market share the independents have obviously the record companies make a lot more money. They have catalog and all these other things. But because of that trend line, what the major labels are doing now are borrowing tactics from the independents, including buying the independents. Uh UMG just completed the sale of the purchase of Downtown Records, which has a lot of independent all independent music assets.

assets. assets. Sony has an independent uh the fastest growing part of their business is a company called the orchard which is all about independence which is where um uh Bad Bunny for example is signed to or through his company Remas. So the majors are now following the independent watch and see what happens. Pay attention to what Ryan Cougler has just done with Sinners. Sinners. Sinners. Oh, so Ryan Cougler, top three, if not the best director, uh, Fruitville Station and obviously Black Panther and now Sinners, which got nominated for the most, you know, uh, Oscars and, uh, probably ever.

I think 16 is the most ever. The rights of that movie reverts back to him. So what he did when he negotiated his deal with Warner to put out Sinners, which he wrote and directed, was that he would only put it with a studio that would allow him to get the rights back in a certain period of time. So they put up the money and he gets that is unprecedented is unprecedented is unprecedented in the film industry. What we just talked about is happening in the music business with Russ does not happen in the film industry.

We're talking about hundreds of millions of dollars as the initial bet. He says, "Son, you're not getting the movie. You're not getting my intellectual property unless you allow me to this movie to revert back to me. I'm not giving this to you." They agreed to it. The movie went on to make $400 million at the box office. It's the most awarded movie, definitely this year, probably ever, with 16 Oscar knobs. What do you think every other director and film producers thinking right now? Cuz once you break that ice, right, that's the door's now open.

I want Ryan Cougler's deal. Cougler's deal. Cougler's deal. I want to get that. I want I want ownership. That's where this is going. Ben Harwood said to me, you know, we were sitting there one years ago. He said, you know, he talk about the evolution of like the work force and it like it went from the indentured servant to the slave to the employee to the owner. owner. owner. We're at the owner. People want ownership whether it's stock in the company or ownership of a print or ownership you know in in the art business you know one of the big thing with artists is like artist sells gallery finds artists artists work gallery markets artists and sells to you buy you buy it for you know $100,000 artists are so happy you know David owns his his his David sells that work for that he paid for $100,000 for $10 million.

Artist doesn't get any of the lift from the from the 100,000 to the 10 million. Artist feels like why don't I get a carry on all of this? It's it's my name. It's my my intellectual property. How come I don't get a piece of this? You're going to start to see that take place when artists sells work and they get a carry every time that work is sold. The galleries galleries galleries which are the at this point necessary middleman because the galleries are like you wouldn't have an audience if it wasn't for me as everything else is taking place.

You're going to start to see the galleries start to lose relevance because the artists are going to start finding audiences directly without needing a gallery to authenticate the fact that they are great artists and this is where the world is going. Yeah. The common theme through everything we're talking about is just the constant elimination of middlemen. Brian Halagan founded HubSpot 20 years ago and he has this line about AI that I keep thinking about. He said, "Most companies are using AI to make their teams more productive, but the companies that will thrive make the company itself the intelligence." And that is exactly what HubSpot does.

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That's hubspot.com. So, we've been talking a lot about like ownership, going your own path, making your own independent decisions. We had dinner at our mutual friend Rick Gerson's house several months ago, and you told this amazing story. Rick Gerson just got paid. He's coming. He's coming on the show. Uh well, we'll let him talk about We'll let dad out. No, no, that's staying [clears throat] in. He definitely did an incredible deal just now, which which we're going to talk about on the podcast. But something you told me that night which was very fascinating.

Like I really admired the fact that you like bet on yourself just like you talked about LeBron betting on yourself, the people you uh you respect the most cuz like people don't understand you built a phenomenally successful not only was translation influential but it was making a ton of money and you took the unusual another unusual decision to roll that in to United Masters. United Masters. United Masters. Yeah. Yeah. Yeah. Can you talk about that? Yeah, you know, I believe strongly that music and marketing, at least the segment that I focused on with translation, translation, translation, it's the same customer.

And if I'm going to make marketing ideas that focuses on, you know, Gen Z primarily and understands that culture is what drives drives drives decision making, decision making, decision making, if I have a music company that distributes artists at scale, I'll be able to gleam intelligence from that in order to make that a marketplace offering that no one could [ __ ] with. That was really what I was the idea like in my heart of hearts. Building a company today, if you want to disrupt and do something that is groundbreaking, you have to live at the convergence of culture, technology, and storytelling.

They have to be able to coexist. coexist. coexist. The culture people can't be too cool for the technologist. The technologist can't be too nerdy to give a [ __ ] what culture is talking about. like these things must work as one. So when Jimmy was talking about his school at USC and he talked about like so you know software people don't make hardware because they don't respect design or these these worlds must collaborate. must collaborate. must collaborate. So the the the emotion that brings these things together are obviously it's curiosity but the emotion that drives it is empathy.

You have to have empathy for things that you actually don't understand and know that the power of these things working together is going to create something phenomenal. Bono said something to me one time which is so profound that we should all take with us which is you can get anything done in this world if you're willing to not take credit. So this idea that you're going to put the idea of doing that thing and you're not going to let the politics of who gets the credit for it affect everyone's incentive for doing that thing.

If you can actually remove that feeling of needing to be self applauded for doing that you can get anything done. anything done. anything done. And I believe in building a company that's disruptive, to be able to get culture, technologists, and storytellers to work together, they have to be able to put themselves second to the idea and be in service to that idea. Um, and that's the company I'm building and that's the company I want to be a part of. That's the only thing I want to do is be a part of things like that that bring worlds together.

And I did that in the music business. I I was always working on like, you know, how do we tell stories that are going to bring that and that together? So whether it be basketball and and and and that or or you know, Eve and Gwen Stefani, you know, these things that I was working on was always about like if you could put two worlds together, you're going to find a synergy that's going to compound each one of those worlds as individual worlds. individual worlds. individual worlds.

Yeah. You kind of you like uh a habitual like line stepper. You don't really respect boundaries between anything else cuz you don't think there should be boundaries. Like even your decision to sign it. sign it. sign it. Exactly. Well, it's obvious to be like me studying your career for so long, but even your decision to sign Kobe. Yeah. Yeah. Yeah. To rap. To rap. To rap. Well, let's talk about that for a second. second. second. Let's talk about Kobe cuz you had a relationship. relationship. relationship.

God bless that man and his family. When Kobe came out as a rookie, I had found out that he was part of a group actually when he was in high school. and they were recording. But the one thing I knew about him, which we all knew about him, was his competitive nature with Shaq. Shaq was a successful musician. Shaq sold millions of records. Shaq really sold millions of record. Shaq has a song with Wuang. Shaq has songs with Notorious B.I. on Shaq's first album. I know this sounds crazy.

So when I went to Kobe, I already knew he wanted to do better than Shaq. So So So he wanted a record deal and my bet was that he was going to like really do his thing because he wants and the first thing is Kobe Bryant would do I signed the group. Three months later he gets rid of the group and now and now and now he's the solo act. You know, I had a guy got a chance to know him really well. He spent um a month at my house in New Jersey at the time working on recording the album.

And I watched his routine which was phenomenal. And I watched this and I remember watching a 19 I had to book a local gym and watch him shoot a thousand shots and then he had these tapes of Michael Jordan going right, Michael Jordan going left, Michael Jordan guarding people going right, Michael Jordan guarding people going left. And you know, you realize that he didn't come to America till he was 15, 14, 15 years old. He had all this footage that I guess the team had made for him of of these cut downs and [ __ ] But watching him go through that taught me a lot about like discipline and he had that [ __ ] early.

I mean, he he obviously I'm not saying anything that's not obvious to everybody at this point in time, but uh his recording career, we made the first song. Uh, it didn't go over well, but he met his wife. He met Vanessa at the set, so it went over very well. Yeah, Yeah, Yeah, he met his soulmate um on the set, but the experience of working with him was amazing. He worked really [ __ ] hard, even on rapping, man. He immersed himself in it, man. He was around Nas all the time.

And, you know, obviously Nas and and and and Foxy Brown and, you know, he he came to New York. He lived with me. I mean, he was in it. He was in it, man. Yeah. I love the idea that's like the way you do one thing is the way you do everything. everything. everything. Everything. That's that, by the way, if you look that that's the one thing I learned in life. That idea, whoever said that coined it perfectly. How you do anything is how you do everything.

That guy was hardworking. You know, you ask athletes, whether it be Tom Brady, LeBron, like you go to these guys lockers, it's perfect. It's it's it's how they play on the court is how they [ __ ] make sure that their locker looks. It's like pristine like all the great athletes. It's not sloppy. It's not sloppy because somebody comes and does it for them. They don't leave it sloppy. They are very pristine. If you just look at a player's locker, it will tell you a lot about how that players play.

play. play. And that's everything about that. I was just saying about Kobe, everything he did, he went all the way. And then and then like he came to New York and I have great stories where you know he was training to play against Allan Iverson and he got like 10 New York City type point guards and he stood he I had a guy go get him for me and my man shout out to my man Anton who worked for me at the time in the music business but always had a love for basketball.

He's now a recruiter for the Cleveland Cavaliers. But back then when I said look Kobe wants he's going to go down Iverson. wants 10 like New York City point guards with handles. Can you find them? This guy go finds him. They go to Chelsea pairs. Kobe the these guys are lined up at half court, 10 of them with basketballs. Kobe's at half court and they at the foul line and they start coming through full one by one and they with a head of steam they have to get by him and go to the basket.

He's stripping the ball, blocking the ball and as soon as he gets that one the next one comes. He does not play offense like an assembly line. I was like, this is after a thousand shots and this that and this like who am I dealing with? And he's 18, 19. 19. 19. Is there anybody in the music industry that you thought had a Kobe level work ethic? ethic? ethic? Beyonce. She's at the top. I mean, the work from everything I've seen like work ethic. I I I know Michael Jordan obviously has a strong work ethic.

I I don't but I don't know that firsthand. Beyonce, firsthand. Beyonce, firsthand. Beyonce, Kobe, Ed Reid, Ray Lewis, and Ed Reed. Who's the rapper that has the best work ethic? ethic? ethic? I would say Jay has the has out of all of them has the strongest work. Okay. I wanted to ask you about Jay-Z. I didn't expect you to answer that with him. Uh I heard you tell this hilarious story years ago on a podcast that uh Jay-Z like rolled I think this before you guys were close.

He like rolled up on you with like his crew at the office. I think you were so Sony. You're like this is the first thing. This is when we started to get close. You told the story that you were barefoot. Yeah. Yeah. Yeah. I remember I was like why are you barefoot at Sony and head to Sony? You know, hold on. You know, I don't know if it's cuz I'm from the West Indies and from Trinidad and [ __ ] I love be I would be barefoot right now.

Well, next time I don't know why I'm I don't know why I'm not barefoot. not barefoot. not barefoot. Next time we do the podcast together, we both both both always I'm I love being barefoot. I feel comfortable being bare. My son and my daughter, they take off their shoes all the time. I have a lot of stories about being barefoot. being barefoot. being barefoot. Well, this is the first time I I heard about you. This is like 99 and I think this is like a remix of like a Maya song or something and that was a result of it.

So, tell us to holl at me, man. That was before that that led to that. The story is like obviously I I had known of Jay and in New York there was this thing like after there was like Biggie and Nas and then Jay was the guy coming up behind them in in the in the New York rap scene thing because Ilmatic and Ready to Die came out before Reasonable Out before but people were judging it just rap skills. It's almost like a it was a sales and notoriety and skills and it was just like Biggie was the best who's or Nas was the best.

Jay was coming up to be in that conversation. He he says that on the record people on streets is watching who's the best rapper Biggie J or Nas. He talks about that cuz that was like a thing. He inserted himself in that conversation. It was really smart. It was very smart because the conversation really was Biggie or Nas. But anyhow, But anyhow, But anyhow, there was something going on with an artist that they were supposed to sign and they had never signed them. They basically as let's say you and I you're doing a deal and then you don't sign the deal for 6 months but the paperwork is there and you're basically holding an option without even holding it because you don't sign the deal.

So when after six months or there's time that goes by I'm like look I was working with the artist there was a lot of other interest for more money in the artist and I'm like he's going to do a deal over here and then Jay and his team were like no we can you keep your word he has to keep his word bro it's been [ __ ] six months like his word is like expired I mean it's been six months and they did not like my response so It's nine o'clock in the office and they roll into the office.

Him and four or five other guys. guys. guys. This is Jay-Z. Jay-Z. Uh uh. Tata. Had you met Jay before in person or No, I'd seen him before, but like we didn't know each other like that and I didn't give a [ __ ] And neither did he and he come to the office. I'm at Sony at the time and they're like, "So, we speak on the phone and he's like, "We're coming to see you right now." I'm like, "Great. I'm at 550 Madison." And they come upstairs and I'm sure that I didn't even know this at the time.

They thought, "Oh, we're going upstairs and he's probably going to have some guys and this is going to be like a, you know, some face off or some version of that." I guess they came upstairs. I let them upstairs, you know, front desk, let them up. They come upstairs and I'm by myself barefoot myself barefoot myself barefoot and I'm like and you seen their face and I'm like listen I don't want to have an argument about anything about anything that doesn't involve big houses. They just start laughing.

I'm like big houses involved. This is a stupid conversation. And then like literally after Wait, wait, wait. What? What do you mean I don't want to be involved in anything big house? You say it's like a small deal. deal. deal. Yeah. Okay. Yeah. Okay. Yeah. Okay. If we're not talking about a lot of [ __ ] money, what are we talking about? So my my analogy to that was just big houses. I'm like, are we talking about big houses? [laughter and snorts] Cuz it doesn't even matter unless we're talking about big houses.

They love that [ __ ] Started laughing and then Jay and I I I became friends and started playing Madden all the time. and then realized that our not realized but my my cousin was his cousin. My uh my father's brother's brother's brother's my father brother married a woman that happened to be m uh connected to his side of the family. They were cousins. So my my my cousin was his cousins. So he was we were second cousins. And like that all came out because we started to hang out with each other.

I was like, "Oh [ __ ] right. That's true. [ __ ] I didn't even realize that." And we, you know, ensued a and then how soon after did you guys start doing business together? Because you did you did you did immediately. Immediately. immediately. Immediately. immediately. Immediately. Okay. So, you did his shoe deal. The first deal we did was I got him to write still Dr. for Dr. Dre. So, Jimmy comes to me. This is Jimmy. Jimmy. Jimmy I Jimmy I Jimmy I love that you're in podcast mode like Jimmy.

The audience doesn't know that. Jimmy I Jimmy I who was on the last episode in case you were go and listen to that again. [gasps] Dr. Drake comes in with the album, The Chronic 2001, which is a [ __ ] amazing album, classic, classic, classic, right? And he plays it for Jimmy and Jimmy goes, "Are you sure that's the that's it?" that's it?" that's it?" Dre's like, "Yeah, this is the [ __ ] D." So Jimmy's like, "What does Eminem think?" Cuz Eminem's hot at the time. So I know.

So Dre's like, "The [ __ ] you mean what is Eminem thing?" You know, and I'm sitting in the meeting and Jimmy's Jimmy's so good at reading the room. He bets on his nose more than his any other sense. [ __ ] his eyes. [ __ ] his ears. His nose. Does [snorts] Dre know confidence tell me that this is the [ __ ] Or is there any [ __ ] crack in the door that he can go further? And whatever qu line of questioning he asked led to like let's try to make one more.

He's Jimmy's always one more one more one more one more. So Dre plays a bunch of beats for the one more and like I pick five beats. They cut me a CD with five beats to make the one more and Steve's going to go help get the record made. Man, I'm honored. I'm I'm [ __ ] is Dr. Dre. [ __ ] all that. [ __ ] Dr. Dre. [ __ ] all [ __ ] [ __ ] Dr. Dre. [ __ ] all that. I can't believe I'm getting on a plane plane plane with Dr. Dre Beats and I'm flying to New York with it.

It is that there's nothing there's nothing I could be more responsible for than having a [ __ ] with this guy cooks on me and I go to New York. There's a beat I like, but I don't say anything. I played a beat for Timberland. I remember playing it for Timlin. He's like, "You got [ __ ] Dre Beats?" I'm like, "Hell [ __ ] yeah." Play it for Timberland. Timberland's like, "That [ __ ] right there is crazy." Call Jay. Yo, Jay, listen to this [ __ ] You got [ __ ] Doc. Yes, [ __ ] Listen to this.

He hears that [ __ ] He picks the same exact beat. The same beat I like, Timlin picked, and then Jay-Z picked. I told Jimmy, see if I can get Jay to write it. I asked Jay to write the record. And Jay writes [ __ ] still Dr. And he doesn't actually write, right? Is is this at the point in his career where he stopped writing? He still did. Yeah. Yeah. He But he he he [ __ ] raps like a West Coast artist. Listen to still Dr. Every line Snoop says in the hook is [ __ ] JR wrote.

I was like, "This guy's different." He wrote Snoop's parts on that song. He knew knew knew West Coast lingo. He understood the nuance of being from the West Coast. If you listen to that song, talking about the 405, talking about khakis with the cuff in the crease, like he understood that thing. and they they did it word for word. It ended up becoming the first single. You just brought something to my mind because I've I've been reading a lot about Bob Dylan and you know it's like I'm always interested in like who influences the influencers.

So like some of the greatest living musicians are like like Bruce Wayne saying it's like I just followed Bob Dylan and when you study Bob Dylan's early career he was so good at mimicking. He could sit in Club Waw Wa in Greenwich Village and listen to you play and then be able to recreate your st sound exactly as if he was you. Kobe could mimic. We're talking about people Bob Dylan. Great, right? Can mimic people. Kobe could mimic. I mean, look at his look. He could mimic Michael Jordan.

Now you're saying the exact same thing. Jay-Z is not from the [ __ ] West Coast yet. He could rap as if he grew up. grew up. grew up. It's not even a problem. It wasn't even an issue. Jay-Z can write R&B songs. What people need to know is I am not taking anything away from the great writers. Maya Angelo, Shakespeare, you name the writers, nothing. Nas Nas and Jay-Z are in that conversation. They're that good. The way they can paint pictures paint pictures paint pictures that you would never with words like you're watching a film is a phenomenal gift that because of the art form being rap gets overlooked because of the beats, the clothing, the media surrounding it.

But the words that they paint, they paint, they paint, the feeling that they can give you if you listen to those songs, this is why you love it cuz it you could actually put yourself in an environment that you didn't grow up in and you could live through those lyrics. They painted the pictures more vividly than anybody else. And one of the greatest things that I've ever done, if like people give me a lot of credit for doing many things, the greatest thing I've ever done was be able to manage Nas.

One of the greatest writers of all time. time. time. You went into the hood Queensboro projects to find this young prodigy. Can you tell that story real quick about like how the hell did you even hear about Nas and then what lengths did you go to manage him? Yeah. Yeah. Yeah. So, let me let me back up too. This is why we shout out to our mutual friend Jared Kushner for putting us together. the way I met you. I'll tell the story real quick. Right. So, listen.

Queensboro Queensbridge Projects Nas Jared Kushner. That's the what you just did. Yes. Exactly. But we're going to go back. But like this because I was like a little like sad the first time I met you because obviously Jared's a close friend of both you and I and he's like we're having this private birthday party at this private restaurant in Miami and there's Get in that room. There's not a lot of people. There's like eight 10 people and there's just [ __ ] killers. I heard Steve Style. I was like, "Oh shit." And I'm sitting across from you and you're like, "Who is this big-headed [ __ ] dude that like I was lighting you up with questions all night?

I couldn't believe that you knew." No, you know what it was? No. No. I'm glad you said that. We never talked about this. I was shocked by the nuance of what you knew. The spe spe spe spe specificity and the spe spe spe spe spe specificity and the nuance of what you knew was alarming to me. It was alarming to me. It that's what it was. It was almost like wow. But it wasn't it was wow in a in a scary way now that I but I didn't know what you did.

Yeah. Because because if you knew that level of information and you didn't DO THIS BE PSYCHOTIC. BE PSYCHOTIC. BE PSYCHOTIC. YEAH. YEAH. YEAH. YEAH. I DIDN'T KNOW WHAT YOU DID. So I didn't know that I was speaking to a journalist or journalist or journalist or I'm not a [ __ ] journalist. But I that's why I told Okay. What the [ __ ] A You're more than a podcaster. a podcaster. a podcaster. Yeah. Yeah. But like that's why I I was like Jared like I need you to because it felt that way.

I was like, "Dude, I need another shot of Stout because this was" And so Jared, you know, said something to you, vouched for me, and then Rick, when they told me what you did, then I got it. But when you started coming at me with these hip-hop [ __ ] Jeopardy [ __ ] insights, I'm like, "Fuck off." We tried to eat a dinner. It's this guy's birthday. You [ __ ] attacking me. Anyhow, me. Anyhow, me. Anyhow, let's go back to Let's go back. Jared Kushner definitely played a role in this big time.

I'm at home. I live at I live with my parents and um you know I decided that I wanted to be in the music business. I didn't know what I was going to be. I didn't know what was going to turn out. All I knew is that that was a my calling at that time. I you know whatever. And what nailed it for me was I was uh sitting in my had my car was in my driveway listening to Nas. It ain't hard to tell. to tell.

to tell. Before I Maddox out or no? Yes. This there were two singles. Okay. Okay. Okay. Halftime and then It ain't hard to tell. Is halftime the one he did with large professor? professor? professor? Yes. Yes. Yes. Where it's like uh Yes. Yes. Yes. Street Disciple My Rapster Trifle. I shoot Slugs for my brain just like a rifle. That's one of my favorite. That's that that that that's live at the barbecue. barbecue. barbecue. Okay. Okay. Okay. And then he live at the barbecue was was him part of a there's four other rappers on that uh thing.

Halftime came out and it ain't hard to tell. This is a Michael Jackson sample and I heard it ain't hard to tell. to tell. to tell. I was in my driveway. I was like, I need to know this guy. Prodigy. Prodigy. Prodigy. I I I can't. This is the thing that he was saying [ __ ] I I couldn't even believe what this person was saying that he wrote, but he was like 16. 17. I didn't even I can't even believe. It was like so [ __ ] genius. So anyhow, I was on my journey.

I'm like, you know, like for me, my idea of trying to figure something out when there's no clear path is to start from ground zero. Ground zero was where does he live at? Queensbridge projects. Go to Queensbridge Projects. There was no other way to find this guy. Not that I knew of at that time. So when I went to Queens Ridge Projects, you know, I make this joke. The projects, it's not even a joke, but the projects doesn't have a front door. It's it's a bunch of buildings.

There's no like clear front door. So you basically are walking to a building and I'm trying to find somebody who I could ask, yo, where does Nas live or hang or whatever? And that person immediately goes to get a gun. because I looked like one of the guys that they had beef with. And then somebody tell you, "Wait a minute, wait a minute. I minute, wait a minute. I think that guy works with these producers and shit." And that that the second guy who said that happened to give the first guy reasonable doubt to like go further in in the question.

It happened to be Nas's brother jungle that I asked. So, I did ask the right person immediately randomly randomly randomly uh or the wrong person depending on how that thing ended. And yeah, knowing about jungle like he's gonna have a gun. [clears throat] He's never leave home without it. And that led to me meeting him. And when I met him, I realized that as brilliant as he was and as successful as Ilmatic was, that the infrastructure around him did not give him the opportunity to be able to be everything he can be.

And as much as I credit for going there and having the guts to do that, I was one of 50 people who tried to seem that he was an undervalued asset. I wasn't, it wasn't a unique idea. He chose me and he put his career in my hands at 25 years old and I had not done it before. Why he chose me, I'll never understand. I do know that 30 years later, later, later, 31 years later, that's my brother. We're really good friends. And I I look at a lot of relationships in the music business and whether the person's died or they're no longer friends or partners or whatever it may be.

Him and I started our careers together and not one thing has ever interfered in our relationship and us being brothers. I love him. He's one of the greatest things that ever happened in my life, in my family's life. life. life. That's a beautiful place to end. Stout, thanks for taking the time, man. I really appreciate doing this. All right, man. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast founders.

For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.