The Marketing Genius of Steve Stoute

1. 0:00 – 4:43

   Run Towards The Unknown

   1. DSDavid Senra0:00

      [typewriter sounds] Dude, I've been a fan of you for over twenty years, 'cause 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.

   2. SSSteve Stoute0:09

      Yeah.

   3. DSDavid Senra0:10

      One of the fascinating things that Jimmy Iovine 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 gonna start a record label. I'm gonna go full-on into advertising and marketing." Can you tell me about that?

   4. SSSteve Stoute0:24

      It was nineteen-ninety-nine, and I get a lot of credit for seeing that whether it was Napster or MP3s were going to shift the music business from the CD. We started to see signs of it, but it was very in the, 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 sixteen dollars and people were paying for it when there was only one song on the album, that that wasn't gonna sustain itself. Like, there was something wrong with that. Like, why would you pay sixteen-ninety-nine and you only liked the first single? And executives were getting paid tons of money on that, you know, idea, and they weren't even talented, and I'm like, "This is gonna 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 it 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 ta-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 wanna sell a Cadillac to a Black person, you put [laughs] a deep voiceover like, "The new Cadillac Escalade."

   5. DSDavid Senra2:50

      [laughs]

   6. SSSteve Stoute2:51

      Nobody wants that. And Spanish people don't want an ad that just says, "Hola, da, da, da." Like, these things don't work. My whole idea was like, why don't you just find shared values? Like, if you're an eighteen-year-old African American from Compton and you're an eighteen-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 gonna 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.

   7. DSDavid Senra3:27

      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 a decision that, uh, was expected of you. It's like you, you forged your own path.

   8. SSSteve Stoute3:40

      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-

   9. DSDavid Senra3:50

      Exactly.

   10. SSSteve Stoute3:50

       Yeah. Look, I can reference a lot in the Jimmy podcast, not that I want this podcast to like be the advertising for all your others, but-

   11. DSDavid Senra3:58

       [laughs]

   12. SSSteve Stoute3:58

       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 were selling one song for a lot of money. They had a monopoly on the distribution of CDs, and they controlled radio and MTV, and those things didn't seem like they were gonna last forever. So running towards the unknown became very easy. Not because... Oh, and also 'cause I was twenty-nine years old, right?

   13. DSDavid Senra4:42

       Mm.

2. 4:43 – 7:34

   The Men In Black Glasses Nobody Got Paid For

   1. SSSteve Stoute4:43

      And I didn't have a family yet. I didn't have kids. I'd already made a lot of money. I'd already done well. So I wasn't like needing money, and I didn't have like a family that was reliant 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. Fuck 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 Lassiter, 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. But what was bigger than the song was 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. And the glasses became contagious because of the popular culture impact of that song and 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-- Ray-Ban 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 the product placement for those glasses, while I was thinking this, he was trying to find me 'cause he wanted to find the next thing that did that. And I was like, if we can sell fourteen million glasses or whatever the mon- number was, I could do this shit all the time. The idea that Vi-- 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-- 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 the language, the dialogue, the people, the movers, the shakers. I wanted to understand that business. So I put mys-- 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, uh, Sony, had gone to Interscope. I'd done great work with Interscope. Jimmy and I was close. He's a, a mentor of mine.

3. 7:34 – 15:27

   Too Scared To Buy Apple At Nine Dollars

   1. SSSteve Stoute7:34

      And when I told him I wanted to do it, the deal was like, "Look, man, I got your back, but bring the deals to Interscope first." So a lot of the early things that I had done were based around Interscope 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 Lovin' It launch, we wanted to do-- It was around the same time as iTunes was launching. And, um, the thing about s- Apple at that time, the stock was at nine or ten. You know, very, you know, it was like there. And, uh, you know, it was r- So in two thousand and one, I-- not to go all over. Enron had just-

   2. DSDavid Senra8:20

      Take this wherever you want, man

   3. SSSteve Stoute8:21

      ... in two thousand and one, the Enron thing happened, right, where the CEO and the CFO, they had, they, they no longer could, the CFO couldn't say, "Oh, well, the CE- the CEO told me to do it. That's why I did it." That was Sarbanes-Oxley came out of this whole thing. And everyone was seared about insider trading. So I remember when we knew that the iPod was coming, 'cause of Jimmy's relationship with Steve, we all wanted to [laughs] 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 gonna happen, and we were all scared to death to [laughs] buy stock in Apple. And we were like, "No, we're gonna, we're gonna go to jail, and we're gonna be Jeff Skilling." I'm 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, H-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.

   4. DSDavid Senra9:52

      And they didn't have their stores yet, right?

   5. SSSteve Stoute9:53

      They, they, they relied on a third party to do that. They did HP. HP happened to be one of my clients, Carly 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 Hyde, turned it down twice. I was representing McDonald's, and we wanted to do-- I had the idea we're gonna do the Music Meal. You know, Big Mac and large fries and, or hamburger, fries, and a song. And McDonald's turned them down as well. The, the, the, the, the executive at McDonald's sort of was like posturing, and, uh, Steve went nuclear. [laughs]

   6. DSDavid Senra10:38

      [laughs]

   7. SSSteve Stoute10:38

      I mean nuclear on them. I mean, at the time, he went, he said some shit to them. I was like, holy shit. He said, [laughs] 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 gonna not end correctly, and he, he's seen that coming, and he just said, "Man, don't you, don't you guys know you make food that kills kids?"

   8. DSDavid Senra11:03

      [laughs]

   9. SSSteve Stoute11:04

      It's like, oh, shit. Now, I'm a young executive trying to, I'm trying to do the right-- I'm trying to s- come up. Jimmy knows Steve Jobs. I got McDonald's. Jimmy and I have worked together. We're doing the tango. We're gonna 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 walked me into this shit?"

   10. DSDavid Senra11:28

       [laughs]

   11. SSSteve Stoute11:28

       And I'm like, "He's just playing, man. He don't, he don't mean that." [laughs] Ugh, I remember that feeling at that time was like, shit, what the fuck am I doing?

   12. DSDavid Senra11:43

       Did they try to kick Steve Jobs out of that meeting? How'd the meeting end? [laughs]

   13. SSSteve Stoute11:46

       Kick Steve Jobs out of the meeting?

   14. DSDavid Senra11:47

       Yeah, I guess, yeah.

   15. SSSteve Stoute11:48

       It was, first of all, the meeting was at Apple.

   16. DSDavid Senra11:50

       [laughs]

   17. SSSteve Stoute11:50

       They weren't kicking Steve Jobs out of any meeting.

   18. DSDavid Senra11:53

       So we're, we're actually gonna do an episode with, uh, Ed Catmull, who's the founder of Pixar.

   19. SSSteve Stoute11:57

       Yeah.

   20. DSDavid Senra11:57

       And he worked with Steve Jobs for a long-- I think he worked with Steve Jobs uninterrupted for like twenty-four years.

   21. SSSteve Stoute12:01

       Yeah.

   22. DSDavid Senra12:02

       And he tells a story about what a meeting with, uh, in his autobiography, Creativity Inc., what a meeting with Steve Jobs was like. Remember the Ma-- I think it was like Magnavox

   23. SSSteve Stoute12:10

       Of course.

   24. DSDavid Senra12:11

       Yeah.

   25. SSSteve Stoute12:11

       The Magnavox-

   26. DSDavid Senra12:12

       They, they-

   27. SSSteve Stoute12:12

       They made video games, they made television

   28. DSDavid Senra12:14

       Yeah, and they used to have this, um, commercial probably in the, I don't know, maybe '80s or '90s, where somebody's, like, sitting in a chair-

   29. SSSteve Stoute12:20

       Yeah

   30. DSDavid Senra12:20

       ... and the, the mu- the music is so loud, it's, like, blowing the guy's hair back.
4. 15:27 – 19:13

   Black Consumers Buy What Isn't Marketed To Them

   1. DSDavid Senra15:27

      y- yours- Is that the first time that you're like, "Oh, wait, wait. There's like a, a... You can translate cultural influence to sales, like business success"? Is that the first time where it clicked, or was there something that happened before that?

   2. SSSteve Stoute15:39

      I had known it intuitively growing up in Queens and being around hip-hop my whole life, much of my y- 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-

   3. DSDavid Senra16:24

      Wait, did you do that deal, or was that before you?

   4. SSSteve Stoute16:25

      That was way before me, but 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. Ides Malt Liquor. You used to look at these ads with, uh, with, with, with Ice Cube and St. Ides. Like, these, these, these things were so powerful 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 kids. I'm talking about just dense inner city, uh, uh, uh, uh, it, you know, I, 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 ads for. So by the time I had gotten to Will Smith in 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, 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? [laughs] I mean no disrespect to Kenny G. Uh, Michael Bolton is still selling, whatever it may be. But if those things are still working, you're not gonna pay attention to Wu-Tang. You're not gonna pay attention to things of this. Or if you're still selling under the, in a world in which you can say, "I'm gonna 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'Oréal products, in which there was only white women with blonde hair on the box or on the 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, 'cause I wanted to translate that cultural insight for Fortune five hundred companies. And the first company that gave me a shot, that's still my client today, is McDonald's.

5. 19:13 – 21:39

   Betting On The Education, Not The Equity

   1. DSDavid Senra19:13

      Okay, so this is what, uh, what I was curious about. So you're at Interscope. 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?

   2. SSSteve Stoute19:31

      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, a company before that.

   3. DSDavid Senra19:42

      Which one was this?

   4. SSSteve Stoute19:42

      It's called Arnell Group.

   5. DSDavid Senra19:44

      Okay.

   6. SSSteve Stoute19:44

      Right. 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 twenty-nine, and, uh, I went into an agency in which I got paid a hundred and fifty thousand dollars and twenty percent equity. Um, I didn't necessarily understand the value of equity at all. I certainly understood a hundred and fifty thousand was a lot less than two million, two and a half million. But I wasn't even betting on the equity, man. I was really betting on the education. I sincerely mean that. I, I did not know what was gonna happen at all, but I knew I was gonna 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 had gotten a lot of credit because it was just selling like crazy. And, and Reebok was the beneficiary of it as the NBA licensee. They were the NFL and the NBA licensee 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.

6. 21:39 – 24:32

   A Music Video Is Just A TV Commercial

   1. SSSteve Stoute21:39

      And I came up with this platform called The Sound and Rhythm of Sport, and we made this commercial for Reebok with Allen Iverson and Jadakiss, and it was explosive. And I had Hype Williams, a music video director, shoot it. And no one thought, like, it was like, this may-- this sounds crazy today, I mean, s- 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." [laughs] It's not a TV commercial. It's entertaining content, whether it's a music video, right? Which was Men in Black or a sixty-second same idea, but you call it a TV commercial only 'cause you run it on television, [chuckles] 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 sixty-second spot, just run it on television, it's a television commercial.

   2. DSDavid Senra22:42

      I heard you like six years ago say, you're like, "Everything is advertising." That like you jumped to advertising earlier. People thought you were bugging. That's the term you used.

   3. SSSteve Stoute22:49

      Yeah, bugging.

   4. DSDavid Senra22:50

      You're like, "Everything is advertising." I just talked to Brian Armstrong about this, founder of Coinbase.

   5. SSSteve Stoute22:54

      Yeah.

   6. DSDavid Senra22:54

      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.

   7. SSSteve Stoute23:09

      Yeah.

   8. DSDavid Senra23:09

      But I love that you're like, "Everything is advertising."

   9. SSSteve Stoute23:11

      Again, at that time, it was just... You know, w-when you're trying to explain something that you fully don't 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."

   10. DSDavid Senra23:38

       I mean, what is a music video? It's an advertising for a song.

   11. SSSteve Stoute23:41

       It's a TV commercial for a song-

   12. DSDavid Senra23:42

       [laughs]

   13. SSSteve Stoute23:43

       ... if you run it on television, right? So anyhow, we shot this, uh, content, [laughs] as we've evolved, and it blew the fuck up because it was Jadakiss rapping to the sound of a basketball bouncing, and Allen 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 rapped 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 S. Carters.

   14. DSDavid Senra24:24

       But that's the first-

   15. SSSteve Stoute24:26

       Yeah

   16. DSDavid Senra24:26

       ... ever-

   17. SSSteve Stoute24:27

       Yeah

   18. DSDavid Senra24:27

       ... non-athlete shoe deal.

   19. SSSteve Stoute24:28

       Yeah, yeah.

   20. DSDavid Senra24:29

       This is, again, why I wanted to talk to you. You just see stuff before

7. 24:32 – 27:25

   The First Non-Athlete Shoe Deal

   1. DSDavid Senra24:32

      anybody else.

   2. SSSteve Stoute24:32

      Yeah, we did that. We did the, the G-Unit. Uh-

   3. DSDavid Senra24:35

      But did-

   4. SSSteve Stoute24:36

      50 was just hot at that time

   5. DSDavid Senra24:37

      ... what, 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-

   6. SSSteve Stoute24:44

      Yeah, yeah

   7. DSDavid Senra24:44

      ... the S? Like, the S. Carter-

   8. SSSteve Stoute24:45

      We did, we did, we did the S. Carter mixtape, um, which was a mixtape around the, the, the sneaker, marketing the sneaker, the S. Carters. 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."

   9. DSDavid Senra25:18

      [laughs]

   10. SSSteve Stoute25:18

       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 G-Units were big. Then I did the Pharrell sneaker, and Pharrell would tell you that was his foray into footwear, uh, and gives me a lot of credit for, like, his path into design because I gave him that opportunity very early. What was clear was Nike wasn't doing lifestyle at that time. They just 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, [laughs] that other thing. It was, it was fashion. So I just started choosing guys that didn't wanna work out or run or jump at all, Jay-Z being the number one version of that. [laughs] Like, he doesn't, right? He doesn't give you the [laughs] athletic vibe, right? He gives you the vibe of like, "I'm chilling." And then it was 50, and then it was Pharrell, and it was all just playing along the lines of, of fashion.

   11. DSDavid Senra26:29

       Dude, how many people are wearing Jordans that are not playing basketball in them?

   12. SSSteve Stoute26:32

       [laughs] It was the only white space left because there was no way I could market Reebok as the ag- as the agency of record at the time. I told Paul, I went, "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 and LeBron and I became good friends to this day, when we pitched LeBron, and he, um... There's a famous story of LeBron.

8. 27:25 – 30:35

   LeBron Walks Away From Ten Million To Bet On Himself

   1. SSSteve Stoute27:25

      Uh, we're pitching him for Reebok. We, you know, they send a plane. Everybody wants to sign him. I, I, I tell Paul while he's coming in from Akron, 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 an advance, and you give it, you bring the advance right there." Like-

   2. DSDavid Senra27:49

      Like in cash in a duffle bag?

   3. SSSteve Stoute27:51

      In a, in... Well, that has been done-

   4. DSDavid Senra27:53

      [laughs]

   5. SSSteve Stoute27:53

      ... in the music business, but this was like, this was gonna be a check. And I, I seen Paul fucking, this was some balling shit, call his wife 'cause he couldn't get the company to get the check, and his wife wrote a personal check-

   6. DSDavid Senra28:05

      [laughs]

   7. SSSteve Stoute28:06

      ... 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 gonna offer that when you go see them next, and then Nike's gonna 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. [laughs] LeBron, he's, he, he's going back. He has to be in homeroom the next morning, okay?

   8. DSDavid Senra28:43

      He's in high school, right?

   9. SSSteve Stoute28:44

      He's in high school.

   10. DSDavid Senra28:45

       [laughs]

   11. SSSteve Stoute28:45

       He's going back to homeroom 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 gonna do it?" I'm like, "Man, I think so. Like, it's $10 million, man. The guy, I mean, we're paying him exactly what he's gonna 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 gonna take the other meetings. He walked away from $10 million, a check signed out to his name, to go back to the projects in Akron and back to homeroom. I, I applauded him because I knew at that moment in time that the world had changed. When a young African American that was in poverty knew that his talent was bigger than that check, it taught me a lot. It taught me a lot of where the world was going and w- that we were already 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- Believed in him more than the money at that moment in time. That was a big shift for a, a community of people

9. 30:35 – 35:18

   Why Are You Giving It Away

   1. DSDavid Senra30:35

      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, the story you told about the Ray-Bans, we sold the glasses. We didn't get anything for it.

   2. SSSteve Stoute30:46

      Yeah.

   3. DSDavid Senra30:46

      Like, I read, um, Andre Agassi's, uh, phenomenal, um, autobiography called Open, and he, uh, goes out one night, he is hungover, 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 mu-

   4. SSSteve Stoute31:02

      Yeah

   5. DSDavid Senra31:02

      ... multicolored ones, and bec- just because his eyes are bloodshot, he's hungover, right? He wins the 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 sixty thousand or eighty thousand dollar car, how much money did he make?

   6. SSSteve Stoute31:21

      Yeah.

   7. DSDavid Senra31:21

      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.

   8. SSSteve Stoute31:24

      Because it, 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, you'd buy the album. When the CD came, they didn't even fuck around and sell singles no more. They removed the single.

   9. DSDavid Senra31:59

      The single was on cassette?

   10. SSSteve Stoute32:00

       The single was a cassette.

   11. DSDavid Senra32:01

       Okay.

   12. SSSteve Stoute32:02

       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 Herre and you've seen that video, you're $16.99. Without even knowing what song number two, three, four, five, six was. You didn't give a fuck, and the industry took advantage of 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 gonna work on MTV, and what's the thing that's gonna 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 s- make a song that was the radio record, and that song could sound like nothing else on the album.

   13. DSDavid Senra33:07

       Mm.

   14. SSSteve Stoute33:07

       They didn't give a fuck. 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 shit that's being sold in the 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-

   15. DSDavid Senra33:35

       Why do we build businesses with the artists?

   16. SSSteve Stoute33:36

       Why don't we build businesses with artists? When I first started UnitedMasters, my music distribution company, the first thing I tried to do, the only thing I wanted to do, was build a universal, uh, not, uh, 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 is a plunger [laughs] 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, Yeezus, the Kanye album, Life of Pablo, you know, thirty times, why ain't the next thing I'm referring to you a pair of Yeezys or a hoodie that he made? It's 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 gonna be a lot lower, but the remarketing is gonna 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.

10. 35:18 – 39:57

    If Artists Knew Their Fans They Wouldn't Need A Label

    1. SSSteve Stoute35:18

       If the artists knew who their fans were, they wouldn't need a record company at all. If you're an artist and you have two hundred thousand people who love you, you know how much money you can make with those two hundred thousand people selling them higher margin items or selling them the, the, the so- 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 seventy-thirty split, they had all the leverage in the world. In fact, they took equity in Spotify. The record companies owned a piece of Spotify. It was a big thing that came out as, 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, so that the artist would know... If you listen to that, if Taylor Swift has a fan that listened to her album- Seven hundred times. Why wouldn't Taylor Swift be able to communicate directly with that artist to sell them the ticket directly, sell 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? Fuck yeah. Fuck yeah. Do you want Kendrick Lamar to be able to contact you? Fuck yeah. Beyoncé? Hell yeah. But they didn't negotiate that because they knew 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 artists. 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 rude 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 gonna ever give you the user IDs, right? So like on-

    2. DSDavid Senra37:49

       Apple wouldn't either, either, right?

    3. SSSteve Stoute37:50

       No. Or Apple, no.

    4. DSDavid Senra37:52

       Yeah.

    5. SSSteve Stoute37:52

       They're not gonna 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've been shared and the artist had an opportunity to get 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 UnitedMasters, and I started in two thousand and seventeen, 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 gonna get you on the radio. We're gonna get you on 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 off their name, image, and likeness in perpetuity to somebody because they gave them a half a million dollars when they were eighteen, nineteen years old in the beginning of, of their career? So we started UnitedMasters with the premise to invert the, the economics so that the artist got the lion's share o- of, of the, of the economics because they actually

11. 39:57 – 46:01

    Prince Wrote Slave On His Face

    1. SSSteve Stoute39:57

       did the work.

    2. DSDavid Senra39:57

       They kept the ownership. That's why you called it UnitedMasters.

    3. SSSteve Stoute39:59

       Yeah. You got it. And, um, Ben Horowitz 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 creator tools. They believe in that. Whether it's an architect, a designer, or artists 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 artist for so long, it was a Stockholm syndrome. [chuckles] They're stuck in these deals. They believe that if I'm signed to a record company, A, I'm gonna get a lot of money. They're gonna make me global. I'm gonna get awards, you know, and recognition around it. So I'm gonna keep doing that. Then you have another generation of artists that are coming up right now that are like, "Are you fucking crazy? I own my shit. 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'm 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 blowing the fuck up, that are done really well. You know, we have an artist b- on UnitedMasters, Big X the Plug, he's made twenty million dollars this year. I mean more, 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've seen years ago, like people ask, like when Prince wrote slave on his face. He w- 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?" He wrote slave on his face. One of the most successful artists of all time wrote slave on his face because he knew that I don't even own the shit that came out of my brain.

    4. DSDavid Senra42:08

       That's crazy.

    5. SSSteve Stoute42:11

       When you explain this to technology companies, I explained this to L- Larry Page was the first guy that invested in UnitedMasters. I said, "Could you imagine if every time a seed investor came in, they actually owned the IP and intellectual prop- 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, uh, you can't be fucking. That, you, 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, 'cause 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.

    6. DSDavid Senra42:58

       They actually have the thing that's rare and therefore valuable.

    7. SSSteve Stoute43:01

       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, vi- painters, like I'm a painter, I draw. Sub Stack, I'm a writer, I'm a journalist.

    8. DSDavid Senra43:26

       Podcasters.

    9. SSSteve Stoute43:27

       Podcasters. Like, I don't need the publisher to be a third party that owns this anymore. I can find an audience on my own. And the power in that and the economics in that and the long-term value of that is something that we've never seen before in the hands of the actual creatives.

    10. DSDavid Senra43:54

        Deel 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, Eleven Labs, Uber, and DoorDash all use Deel. Many of the top founders I know have personally invested in Deel after using their product, and what they discovered is that Deel is the best company in the world at building infrastructure for global hiring. Deel 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 Eleven Labs has a great description of the value Deel can give your company. He said, "We built Eleven Labs to break down language and communication barriers. With Deel 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." Deel is trusted by over forty thousand businesses. Learn how they can help your business today by going to deel.com/senra. That is deel.com/senra. There's a long history of the music industry, you know, the executives in the industry essentially fucking over the artists. I read, uh, Jay-Z's fantastic book, Decoded-

    11. SSSteve Stoute45:15

        Yeah

    12. DSDavid Senra45:15

        ... and he talked about reading this book called Hit Man.

    13. SSSteve Stoute45:17

        Mm-hmm.

    14. DSDavid Senra45:17

        And I think it was all the stuff, the crazy shit-

    15. SSSteve Stoute45:18

        Yeah

    16. DSDavid Senra45:18

        ... going on in the '70s and '80s.

    17. SSSteve Stoute45:19

        Yeah, yeah, yeah, yeah.

    18. DSDavid Senra45:20

        And he's like, "Oh-"

    19. SSSteve Stoute45:20

        No, '60s. '60s.

    20. DSDavid Senra45:22

        I was-

    21. SSSteve Stoute45:22

        Yeah, '50, '60, '70s. It's a crazy book.

    22. DSDavid Senra45:24

        And so he's like, "Oh, I get-"

    23. SSSteve Stoute45:25

        You have to read that b- it's almost like reading, uh... It's the, like, the, the, the mo- the movie that they turned, the book they turned into Goodfellas.

    24. DSDavid Senra45:31

        Really?

    25. SSSteve Stoute45:32

        'Cause that's what it feels like when you read it. What was the name of the book they called G- that turned into Goodfellas, the movie? Um-

    26. DSDavid Senra45:37

        I don't, I don't remember. But Jay-Z's point was just like-

    27. SSSteve Stoute45:39

        [laughs]

    28. DSDavid Senra45:39

        ... all it is, like, I just read the book, I'm like, "I'm gonna avoid that."

    29. SSSteve Stoute45:42

        Wise Guys.

    30. DSDavid Senra45:43

        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-
12. 46:01 – 50:44

    How Jay-Z, Master P, And Wu-Tang Beat The System

    1. SSSteve Stoute46:01

       Jay got it because he was turned down. Record companies wouldn't sign him.

    2. DSDavid Senra46:06

       Okay.

    3. SSSteve Stoute46:06

       A guy that talented, they wouldn't sign 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, 'cause there's different versions of this. There's different versions of guys figuring it out. Like, there's a figuring it out where you're like, "I own the whole fucking 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 gonna allow one contract to hold everybody," which was Wu-Tang's thing. The RZA had a record deal, and it didn't work. Then he came back and invented this thing called Wu-Tang, and he made sure that he did not sign what he had signed prior, uh, when he was Prince Rakeem, an artist. He s-

    4. DSDavid Senra46:56

       What was the difference?

    5. SSSteve Stoute46:57

       All those artists could, could be allowed to sign. Wu-Tang was signed in one place, but the artists had a g- 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, then if anybody in that group ever went solo, they also had to be with me. That's what record companies deals looked like at the time. So if I signed you in, in a group, if you decide to break off from the group, you're with me first. When he did the deal immediately with Wu- with Wu-Tang, 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 Wu-Tang album, and then was signing deals in other places. People had never seen that before. And then when you seen Master P, 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 fucking money.

    6. DSDavid Senra48:04

       But how did they get in, how did they get on radio or MTV if they were independent?

    7. SSSteve Stoute48:08

       This idea, the power of emerging subculture, they were building something on the way up. Remember, man, if you get two hundred thousand 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.

    8. DSDavid Senra48:54

       Okay, so this is the difference between, like, top-down. Record companies-

    9. SSSteve Stoute48:57

       Yes

    10. DSDavid Senra48:57

        ... at the time, they were like, "We have these relationships with national radio and MTV. We're gonna make you a star. We're gonna 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 if they're not talented, and with enough push behind them, I can make, like, them a popular musician." Basically, he's saying they controlled the system.

    11. SSSteve Stoute49:21

        Yeah, they did control-

    12. DSDavid Senra49:22

        It was almost like religion.

    13. SSSteve Stoute49:22

        They did control the s- system.

    14. DSDavid Senra49:24

        Yeah.

    15. SSSteve Stoute49:24

        They control radio.

    16. DSDavid Senra49:25

        Is this related to what you were saying earlier how mediocrity was, like, famous-

    17. SSSteve Stoute49:29

        Reward.

    18. DSDavid Senra49:29

        Yeah.

    19. SSSteve Stoute49:29

        Look, 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. And, 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 Spears song Oops, I Did It Again.

    20. DSDavid Senra49:46

        [laughs]

    21. SSSteve Stoute49:47

        There's a lot of NSYNC songs I shouldn't know, but they were pounded in your brain. You couldn't avoid it, 'cause 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 Hall, Hall & Oates was Black.

    22. DSDavid Senra50:04

        [laughs]

    23. SSSteve Stoute50:05

        Because you wouldn't even... Uh, 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 would hear the voices and, like, a lot of these, uh, 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 repetition will force you to have some recall.

13. 50:44 – 54:13

    The Power Of Repetition

    1. SSSteve Stoute50:44

       Whether you like it or not, now that's a whole nother story, but the awareness is more than there. And, like, if I got fifty th- 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.

    2. DSDavid Senra51:02

       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.

    3. SSSteve Stoute51:11

       Yeah.

    4. DSDavid Senra51:11

       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, they talk, all talk about this for a hundred years. You're not repeating your ads enough. Repetition is persuasive. Do it over and over and over again. 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.

    5. SSSteve Stoute51:31

       Yeah.

    6. DSDavid Senra51:31

       You have to repeat this. It's so important. So going back to you realizing, hey, what is the purpose of a record label? You're essentially creating almost, like, a record label infrastructure in your, in UnitedMasters-

    7. SSSteve Stoute51:46

       Yeah

    8. DSDavid Senra51:46

       ... or through UnitedMasters, but you're, the artists maintain ownership.

    9. SSSteve Stoute51:50

       Yeah. Yeah.

    10. DSDavid Senra51:50

        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.

    11. SSSteve Stoute51:58

        Love him.

    12. DSDavid Senra51:59

        You've done a buch-

    13. SSSteve Stoute51:59

        Dope.

    14. DSDavid Senra52:00

        Yeah, you've done-

    15. SSSteve Stoute52:00

        Dope

    16. DSDavid Senra52:00

        ... I've taken so many ideas-

    17. SSSteve Stoute52:02

        He's so fucking good.

    18. DSDavid Senra52:03

        The way-

    19. SSSteve Stoute52:03

        By the way, he's so... The way he explains it, his passion around it, dope as fuck.

    20. DSDavid Senra52:09

        And I've taken ideas from the way he markets his music to the way I run my podcast. It's the exa- I don't see any barriers here. It's the same thing whether you're a filmmaker, you mentioned a writer earlier-

    21. SSSteve Stoute52:18

        Yeah

    22. DSDavid Senra52:18

        ... a rapper, a podcaster, a founder.

    23. SSSteve Stoute52:20

        Yeah.

    24. DSDavid Senra52:20

        It's all the same thing.

    25. SSSteve Stoute52:21

        Painter.

    26. DSDavid Senra52:22

        Russ is a rapper, but he's really an entrepreneur.

    27. SSSteve Stoute52:24

        100.

    28. DSDavid Senra52:24

        His product is-

    29. SSSteve Stoute52:25

        He is.

    30. DSDavid Senra52:26

        Yes.
14. 54:13 – 58:56

    Independent Artists Are The New Small Businesses

    1. DSDavid Senra54:13

       much money." [laughs]

    2. SSSteve Stoute54:13

       Yeah. La Russell, Russ, uh, Tobe Nwigwe, um, Big X the Plug, like, but it's so... Larry June. There's Brent Faiyaz. 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's an independent artist now. Usher's independent. Usher was the first independent artist to play the Super Bowl. Then Bad Bunny. Bad Bunny's an independent act.

    3. DSDavid Senra54:49

       Are you serious? I didn't know that.

    4. SSSteve Stoute54:50

       Yes, he's signed to Rimas. Bad Bunny's an independent artist. These, these are-- These guys are making a 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. Fucking look at Joe Budden. When I talk about Russ, I think about Joe Budden too. Joe Budden 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. And then he turned down Spotify and went to Patreon because he wanted to work directly with fans. He's like, "I, I don't want a, any obfuscated version of money. I wanna know exactly what-- I wanna get paid exactly what I deserve because I have the audience who pays me directly," and he 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 bodegas and this, that, and the third are now streamers, independent artists, influencers, podcasters, vloggers, and, and, and, 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-

    5. DSDavid Senra56:57

       You know who gets it? Like, it's n- the founder-led companies because just like you had that observation when you were twenty-nine years old, it's like, "I'm in this industry that's, like, maybe dying, or this, this can't be sustained."

    6. SSSteve Stoute57:08

       Yeah.

    7. DSDavid Senra57:08

       It's being attacked by technology, right? You're not gonna sell these high-margin CDs anymore when Napster exists. Same thing that Jimmy Iovine realized, you realized as well. And so, like, e-even look at, like, some of our big partners, like, I'm a huge partner with this company called Ramp.

    8. SSSteve Stoute57:21

       Yeah.

    9. DSDavid Senra57:21

       It's like this is a founder-led company. They think like-

    10. SSSteve Stoute57:22

        Ramp is awesome

    11. DSDavid Senra57:23

        ... they think like founders, and they place a huge, huge... You're talking about multi-year bet on me because of the-- All they asked, they didn't-- There, there was no numbers. You talked about being intuit- 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."

    12. SSSteve Stoute57:40

        One hundred percent.

    13. DSDavid Senra57:40

        And that's what f- how founders think. It's like I don't care if State Farm hasn't come into podcasting or, like they have now, but, like, all the money that's flowing from TV and radio is going, going into podcasts-

    14. SSSteve Stoute57:49

        Yeah. Well-

    15. DSDavid Senra57:49

        ... wants to know that

    16. SSSteve Stoute57:49

        ... I seen this with, uh, Cash App was in very, very early. It was a marketing guy at Cash App, so fucking good, seen it early. Placing bets on... Emerging 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 go-to mass consumed product.

    17. DSDavid Senra58:23

        And the founder... I mean, dude, I've talked to Mark Zuckerberg about this. I've talked to Jeff Bezos about this, to Daniel Ek. Like, they see what... Like, they get it completely. They understand the power of this, especially when you have a very, you know, wealthy and sophisticated-

    18. SSSteve Stoute58:34

        You, you, you know, you, you do the work. 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,

15. 58:56 – 1:04:39

    Fame And Talent Are Now At Odds

    1. SSSteve Stoute58:56

       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, so it can get bigger. So they had a great partnership. And I would say in the last twenty years, maybe longer, but, like, twenty years, it's 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- 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. And that's a very dangerous aspect of where we are in society when talent is not being incentivized to be talented, where fame is being incentivized to be famous for things that are not necessarily driven by talent.

    2. DSDavid Senra1:00:21

       Yeah, it's not a world I wanna live in.

    3. SSSteve Stoute1:00:23

       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, or podcasts, you name it That fame is the driver, not the talent itself. Now, you find the rare cross-section of talent. Uh, you do all the work, and you have a great following, but that's rare.

    4. DSDavid Senra1:01:09

       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, ten, fifteen million listeners, so it's not a small audience, but it's not, you know-

    5. SSSteve Stoute1:01:25

       Yeah

    6. DSDavid Senra1:01:25

       ... power, it's not a hundred million-

    7. SSSteve Stoute1:01:26

       Yeah

    8. DSDavid Senra1:01:26

       ... uh, monthly listeners. But if you own it and you retain control, his unborn grandkids are already rich.

    9. SSSteve Stoute1:01:32

       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 wh- 'cause the creators are gonna 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 fuck, or you're not gonna get the podcast." Whoever the, the distributor is, or whoever the platform is, you know what? The next evolution of this in the next three years, I have to be able to go direct, and I have to be able to collect that fan data. I wanna send out the newsletter. I wanna send out the fan, the, uh, uh, uh, uh, sort of correspondence. Like, it's the platform you own, I now wanna be able to have my direct relationship with the fan. And somebody's gonna build the next platform that's gonna become the one that drives consumption, is the one that allows that to happen fluidly. F- that's for certain. Book it. That's what Jimmy's 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, you're seeing these shifts right now in the marketplace. Um, there's a company called Eleven. Uh, or Even, rather. Eleven Labs is different, right?

    10. DSDavid Senra1:02:49

        [laughs]

    11. SSSteve Stoute1:02:49

        Uh, Even-

    12. DSDavid Senra1:02:50

        We use Eleven Labs for our transcripts. Shout out Eleven Labs. [laughs]

    13. SSSteve Stoute1:02:53

        Uh, Eleven Labs is, uh, is an Andreessen Horowitz, uh, uh, led company. They're fucking awesome. They invest in, and they believe in c- founders.

    14. DSDavid Senra1:03:00

        Yeah.

    15. SSSteve Stoute1:03:00

        They believe in CEOs. They bet on good CEOs. They have great CEOs in their portfolio.

    16. DSDavid Senra1:03:05

        What does the company Even do?

    17. SSSteve Stoute1:03:06

        Even allows artists to sell directly to their fans, and they're selling, uh, merch and vinyl, and vinyl is now considered 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. It, they just signed a deal with them. So I guess the good news out of all of this, since we started UnitedMasters, 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, uh, of, of the purchase of Downtown Records, which has a lot of independent, all independent music assets. And Sony has an independent, uh, the fastest-growing part of their business is a company called The Orchard, which is all about independents, which is where, um, uh, Bad Bunny, uh, for example, is signed to, or th- through his company, Remez. So the majors are now following the independent. Watch and see what happens. Pay attention to what Ryan Coogler has just done with Sinners.

16. 1:04:39 – 1:09:25

    Ryan Coogler's Unprecedented Sinners Deal

    1. SSSteve Stoute1:04:39

       This is a-

    2. DSDavid Senra1:04:39

       Now, what's that?

    3. SSSteve Stoute1:04:40

       Ooh. So Ryan Coogler, top three, if not the best director. Uh, Fruitvale Station, and obviously Black Panther, and now Sinners, which just got nominated for the most, you know, uh, Oscars in, 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 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, "Uh, 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 noms. What do you think every other director a- and film producer's thinking right now? 'Cause once you break that ice, right? That's, the door's now open. "I want Ryan Coogler's deal. I wanna get that. I want, I want ownership." That's where this is go- Ben Horowitz said to me, you know, we were sitting there one, years ago, he said, "You know..." He's talking about the evolution of, like, the workforce, and it, like, it went from the indentured servant to the slave to the employee to, to the owner.

    4. DSDavid Senra1:06:19

       Mm-hmm.

    5. SSSteve Stoute1:06:19

       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 the, in the art business, you know, y- one of the big thing with artists is, like, artist sells, gallery finds artists. Artists work, gallery markets artists, and sells to you buyer. You buy it for, you know, $100,000. Artist is so happy, you know? David owns his work. David sells that work for, that he paid for $100,000 for $10 million. Artist doesn't get any-

    6. DSDavid Senra1:06:57

       Mm-hmm

    7. SSSteve Stoute1:06:58

       ... 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 gonna start to see that take place when artists sells work and they get a carry every time that work is sold. The galleries, which are the, at this point, necessary middleman, because the gallery's like, "You wouldn't have an audience if it wasn't for me." As everything else is taking place, you're gonna start to see the galleries start to lose relevance because the artists are gonna 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.

    8. DSDavid Senra1:07:44

       Yeah, the common theme through everything we're talking about is just the constant elimination of middlemen. Brian Halligan 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. HubSpot gives you AI that works, AI that actually knows your customers and your business. Your AI needs to know what you know, your actual customer conversations, your sales history, what worked last quarter and what didn't. HubSpot connects AI to your real customer data, so when it writes an email, it knows this customer asked about pricing three weeks ago, it knows what campaign brought them in, and it knows that they already contacted support twice this month. And that's when you start seeing actual results. Visit hubspot.com to learn more. 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 Gersten's house several months ago, and you told this amazing story.

    9. SSSteve Stoute1:08:43

       Rick Gersten just got paid. [laughs]

    10. DSDavid Senra1:08:45

        [laughs] He's coming, he's coming on the show. Uh-

    11. SSSteve Stoute1:08:48

        Oh, yeah. [laughs]

    12. DSDavid Senra1:08:49

        We'll, we'll, we'll, we'll let him talk about that.

    13. SSSteve Stoute1:08:50

        Go ahead and edit that out.

    14. DSDavid Senra1:08:52

        [laughs] No, no.

    15. SSSteve Stoute1:08:52

        Okay.

    16. DSDavid Senra1:08:53

        That's staying in. He definitely did an incredible deal just now, which, which we're gonna talk about on the podcast. But something you told me that night which was very fascinating, it's like, I really admired the fact that you, like, bet on yourself, just like you talked about LeBron betting on himself, the people you, uh-

    17. SSSteve Stoute1:09:06

        Yeah

    18. DSDavid Senra1:09:06

        ... you respect the most, 'cause, 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 UnitedMasters.

    19. SSSteve Stoute1:09:23

        Yeah.

    20. DSDavid Senra1:09:24

        Can you talk about that?

17. 1:09:25 – 1:11:09

    Live At The Convergence Of Culture, Technology, And Storytelling

    1. SSSteve Stoute1:09:25

       Yeah. You know, I believe strongly that music and marketing, at least the segment that I focused on with Translation, it's the same customer. And if I'm gonna make marketing ideas that focuses on, you know, Gen Z primarily, and understands that culture is what drives decision-making, if I have a music company that distributes artists at scale, I'll be able to glean intelligence from that in order to make that a marketplace offering that no one could fuck with. That was really what I was, the idea. Like, in my heart of hearts, building a company today, if you wanna 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. The culture people can't be too cool for the technologists. The technologists can't be too nerdy to give a fuck what culture's 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 'cause they don't respect design or these... These worlds 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 gonna create something phenomenal.

18. 1:11:09 – 1:12:53

    You Can Get Anything Done If You Don't Take Credit

    1. SSSteve Stoute1:11:09

       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 gonna put the idea of doing that thing and you're not gonna let the politics of who gets the credit for it affect everyone's incentive of doing that thing, if you can actually remove that feeling of needing to be self-applauded for doing that, you can get 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 wanna be a part of. That's the only thing I wanna 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 gonna bring that and that together? So whether it be basketball and, and, and, and that or, or, you know, Eve and Gwen Stefani, [laughs] you know, these things that I was working on was always about, like, if you could put two worlds together, you're gonna find a synergy that's gonna compound each one of those worlds' individual worlds.

    2. DSDavid Senra1:12:37

       Yeah, you kind of, you, like, a, a habitual, like, line stepper. [laughs] You don't really respect boundaries between anything else 'cause you don't think there should be boundaries. Like, even your decision to sign-

    3. SSSteve Stoute1:12:46

       I don't believe it.

    4. DSDavid Senra1:12:47

       Exactly. Well, it's obvious to be, like, me studying your career for so long.

    5. SSSteve Stoute1:12:50

       Yeah.

    6. DSDavid Senra1:12:50

       But even your decision to sign Kobe-

19. 1:12:53 – 1:15:25

    Signing Kobe To Out-Rap Shaq

    1. SSSteve Stoute1:12:53

       Yeah

    2. DSDavid Senra1:12:53

       ... to rap.

    3. SSSteve Stoute1:12:54

       Well, let's talk about that for a second.

    4. DSDavid Senra1:12:56

       Let's talk about Kobe, 'cause you have a relationship with-

    5. SSSteve Stoute1:12:57

       God bless. God bless.

    6. DSDavid Senra1:12:57

       Yeah, yeah.

    7. SSSteve Stoute1:12:58

       God bless that man and his family. When Kobe came out as a rookie, I'd 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 records.

    8. DSDavid Senra1:13:25

       [laughs]

    9. SSSteve Stoute1:13:25

       Shaq has a song with Wu-Tang. Shaq has songs with Notorious B.I.G. on Shaq's first album. I know this sounds crazy.

    10. DSDavid Senra1:13:32

        [laughs]

    11. SSSteve Stoute1:13:33

        So when I went to Kobe, I already knew he wanted to do better than Shaq.

    12. DSDavid Senra1:13:38

        [laughs]

    13. SSSteve Stoute1:13:39

        So he wanted a record deal, and my bet was that he's gonna, like, really do his thing because he wants... And the first thing is Kobe Bryant [laughs] went through, I signed the group. Three months later, he gets rid of the group.

    14. DSDavid Senra1:13:53

        [laughs]

    15. SSSteve Stoute1:13:55

        And now he's the solo act. You know, I had a- got a chance to know him really well. He spent, um, a, 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-

    16. DSDavid Senra1:14:12

        You saw his work ethic

    17. SSSteve Stoute1:14:13

        ... at 19 t- I had to book a local gym and watch him shoot 1,000 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 the, I guess the team had made for him of, of these cutdowns and shit. But watching him go through that taught me a lot about, like, discipline, and he had that fucking early. I mean, he o- 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.

    18. DSDavid Senra1:15:03

        Yeah.

    19. SSSteve Stoute1:15:03

        He met his soulmate, um, on the set. But it, the experience of working with him was amazing. He worked really fucking hard.

    20. DSDavid Senra1:15:10

        Even on rapping.

    21. SSSteve Stoute1:15:11

        Man, he immersed himself in it, man. He was around Nas all the time, and, you know, obviously Nas and, 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.

20. 1:15:25 – 1:18:55

    How You Do Anything Is How You Do Everything

    1. DSDavid Senra1:15:25

       Yeah, I love the idea that it's like the way you do one thing is the way you do everything.

    2. SSSteve Stoute1:15:28

       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 fucking f- make sure that their locker looks. It's like pristine, like all the great athletes. It's not sloppy. It's not sloppy 'cause 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 player's play. And that's everything about that. And 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, where he was training to play against Allen Iverson, and he got like 10 New York City-type point guards, and he'd stood... He, 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 gonna guard Allen Iverson. He wants 10, like, New York City point guards with handles. Can you find them?" This guy go finds them. We go to Chelsea Piers. Kobe's... The, these guys are lined up at half court, 10 of them, with basketballs. Kobe's at half court, and they s- uh, at the foul line, and they start coming through, fools, one by one. And they, 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 1,000 shots and this, that. It, it's like, who am I dealing with? And he's 18, 19.

    3. DSDavid Senra1:17:22

       Is there anybody in the music industry that you thought had a Kobe-level work ethic?

    4. SSSteve Stoute1:17:26

       Beyoncé. She's at the top. [laughs] I mean, the work, y- from everything I've seen, like work ethic, I, I s- I know Michael Jordan obviously has a strong work ethic. I, I don't, but I don't know that firsthand. Beyoncé, Kobe, Ed Reed, Ray Lewis and Ed Reed.

    5. DSDavid Senra1:17:51

       Who's the rapper that has the best work ethic?

    6. SSSteve Stoute1:17:53

       I would say Jay has the, uh, has, out of all of them, has the strongest work ethic.

    7. DSDavid Senra1:17:56

       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 w- years ago on a podcast that, uh, Jay-Z, like, rolled up... I think this was before you guys were close. He, like, rolled up on you with, like, his crew at the office. I think you were still with Sony, and you're like, "This is the first thing. This is when we started getting close."

    8. SSSteve Stoute1:18:13

       Yeah.

    9. DSDavid Senra1:18:13

       You told a story that you were barefoot. [laughs]

    10. SSSteve Stoute1:18:15

        Yeah. [laughs]

    11. DSDavid Senra1:18:16

        What, what? [laughs] I remember I was like, "Why are you barefoot at Sony?"

    12. SSSteve Stoute1:18:19

        It's so crazy.

    13. DSDavid Senra1:18:20

        "The headquarters of Sony." [laughs]

    14. SSSteve Stoute1:18:20

        You know, hold on. You know, I don't know if it's 'cause I'm from the West Indies and from Trinidad and shit. I love be- I would be barefoot right now.

    15. DSDavid Senra1:18:27

        Well, next t-

    16. SSSteve Stoute1:18:27

        I don't know why, I don't know why I'm not barefoot.

    17. DSDavid Senra1:18:29

        Next time we do the podcast together, we're both gonna be barefoot.

    18. SSSteve Stoute1:18:32

        I'm 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. And, uh, and, and-

    19. DSDavid Senra1:18:40

        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 Mya song or something. And-

    20. SSSteve Stoute1:18:47

        That was a result of it. So-

    21. DSDavid Senra1:18:48

        He's like, "Tell Stoute to holla at me, man"

    22. SSSteve Stoute1:18:50

        ... well, I, I don't, that was before that. That led to that. The story is, like,

21. 1:18:55 – 1:22:50

    The Barefoot Standoff With Jay-Z

    1. SSSteve Stoute1:18:55

       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. Okay?

    2. DSDavid Senra1:19:09

       Because Illmatic and Ready to Die came out before Reasonable Doubt?

    3. SSSteve Stoute1:19:13

       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, b- who's, or Nas was the best. Jay was coming up to be in that conversation. He, he says that on a record. People on the streets is watching. Who's the best rapper, Biggie, Jay-Z, or Nas?

    4. DSDavid Senra1:19:34

       Biggie, Jay-Z, or Nas, yep.

    5. SSSteve Stoute1:19:35

       He talks about that, 'cause that was like a thing. He inserted himself in that conversation. It was really-

    6. DSDavid Senra1:19:40

       Which is smart.

    7. SSSteve Stoute1:19:40

       It was very smart, 'cause the conversation really was Biggie or Nas. But anyhow, there was something going on with an artist that they were supposed to sign, and they had never signed them. They basically... Let's say you and I, you're doing a deal, and then you don't sign the deal for six 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 gonna do a deal over here." And then Jay and his team were like, "No, we c- you keep your word. He has to keep his word." Bro, it's been fucking six months. Like, his word is, like, expired. [laughs] I mean, it's been six months. And they did not like my response. So it's 9:00 in the office and they roll into the office, him and four or five other guys.

    8. DSDavid Senra1:20:40

       This is Jay-Z.

    9. SSSteve Stoute1:20:41

       Jay-Z, uh, uh, Tata.

    10. DSDavid Senra1:20:44

        Had you met Jay before in person, or no?

    11. SSSteve Stoute1:20:46

        I'd seen him before, but, like, we didn't know each other like that.

    12. DSDavid Senra1:20:49

        Okay.

    13. SSSteve Stoute1:20:49

        And I didn't give a fuck, and neither did he. [laughs] 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."

    14. DSDavid Senra1:21:03

        [laughs]

    15. SSSteve Stoute1:21:03

        And they come upstairs, and I'm sure that, I didn't even notice at the time, they thought, "Oh, we're going upstairs and he's probably gonna have some guys and this is gonna be like a, you know, some face-off or s- some version of that," I guess. They came upstairs. I let them upstairs, you know, front desk let them up, da-da. They come upstairs, and I'm by myself barefoot. [laughs] And I'm like [laughs] and you've seen their face.

    16. DSDavid Senra1:21:31

        Yeah.

    17. SSSteve Stoute1:21:31

        And I'm like, "Listen, I don't wanna have an argument about anything, about anything that doesn't involve big houses." They just start laughing. I'm like, "Unless there's big houses involved, this is a stupid conversation."

    18. DSDavid Senra1:21:45

        [laughs]

    19. SSSteve Stoute1:21:45

        And then, like, literally after-

    20. DSDavid Senra1:21:47

        Wait, wait, wait. What, what do you mean, I don't wanna be involved with anything big house? You say it's like a small deal?

    21. SSSteve Stoute1:21:51

        Yeah, like money.

    22. DSDavid Senra1:21:51

        Okay, this deal can't buy-

    23. SSSteve Stoute1:21:52

        If we're not talking about a lot of motherfucking 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? [laughs] 'Cause it doesn't even matter unless we're talking about big houses." They loved that shit. Started laughing and then Jay and 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, my father brother married a woman that happened to be ma- uh, connected to his side of the family. They were cousins. So my, my, my cousin was his cousin, so he was, we were second cousins. And, like, that all came out because we started to hang out with each other, and it was like, "Oh, shit. Right. That's true. Uh, fuck. I didn't even realize that." And we, you know, ensued a-

    24. DSDavid Senra1:22:43

        And then s- how soon after did you guys start doing business together? 'Cause you did his-

    25. SSSteve Stoute1:22:47

        Immediately. Immediately.

    26. DSDavid Senra1:22:48

        Okay. So you did his shoe deal.

22. 1:22:50 – 1:28:08

    Getting Jay-Z To Write Still D.R.E.

    1. SSSteve Stoute1:22:50

       The first deal we did was I got him to write Still D.R.E. for Dr. Dre. So Jimmy comes to me. This is Jimmy. This-

    2. DSDavid Senra1:22:56

       Jimmy Iovine.

    3. SSSteve Stoute1:22:57

       Jimmy Iovine.

    4. DSDavid Senra1:22:57

       Yeah.

    5. SSSteve Stoute1:22:59

       I love that you're in podcast mode, like, "Jimmy."

    6. DSDavid Senra1:23:01

       [laughs]

    7. SSSteve Stoute1:23:01

       The audience doesn't know that. Jimmy Iovine. Jimmy Iovine, who was on the last episode, in case you wanna go and listen to that again. Dr. Dre comes in with the album, the Chronic 2001, which is a fucking amazing album.

    8. DSDavid Senra1:23:14

       Classic.

    9. SSSteve Stoute1:23:14

       Right. And he plays it for Jimmy. And Jimmy goes, "Are you sure that's the... That's it?" Dre's like, "Yeah, this is the shit, da da da da da." So Jimmy's like, "What does Eminem think?"

    10. DSDavid Senra1:23:30

        [laughs]

    11. SSSteve Stoute1:23:30

        'Cause Eminem's hot at the time.

    12. DSDavid Senra1:23:31

        Yeah.

    13. SSSteve Stoute1:23:31

        So I know, so Dre's like, "What the fuck you mean, what does Eminem think? I..." 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. Fuck his eyes and fuck his ears. His nose. [sniffs] Does Dre know confidence tell me that this is the shit, or is there any fucking crack in the door that he can go further? And whatever qu- line of questioning he asked led to the, like, "Let's try to make one more."

    14. DSDavid Senra1:24:09

        He, Jimmy's always, "One more."

    15. SSSteve Stoute1:24:10

        One more.

    16. DSDavid Senra1:24:10

        One more.

    17. SSSteve Stoute1:24:11

        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 gonna go help get the record made. Man, I'm honored. I'm, it's, I'm fucking, this is Dr. Dre. Fuck all that.

    18. DSDavid Senra1:24:35

        Motherfucking Dr. Dre. [laughs]

    19. SSSteve Stoute1:24:36

        Fucking motherfucking Dr. Dre. Fuck all that. I can't believe I'm getting on a 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 fucking, what this guy cooks on me, and I go to New York. There's a beat I like, but I don't say anything. I play the beats for Timbaland. I remember playing it for Timbaland. He's like, "You got fucking Dre beats?" I'm like, "Hell fucking yeah." Play it for Timbaland. Timbaland's like, "That shit right there is crazy." Call Jay. "Yo, Jay, listen to this shit. You got fucking Doc?" "Yes, motherfucker. Listen to this." He hears that shit, he picks the same exact beat. The same beat I like, Timbaland 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 fucking Still D.R.E.

    20. DSDavid Senra1:25:34

        And he doesn't actually write, right?

    21. SSSteve Stoute1:25:35

        He-

    22. DSDavid Senra1:25:35

        Is this, is, is this at the point in his career where he stopped writing? He's still doing-

    23. SSSteve Stoute1:25:38

        He, yeah, yeah. He, but he, he w- s- he, he fucking s- raps like a West Coast artist. Listen to Still D.R.E. Every line Snoop says in the hook is fucking Jay wrote. I was like, "This guy's different." He wrote Snoop's parts on that song. He knew West Coast lingo. He understood the nuance of being from the West Coast. If you listen to that song, you talking about the 405, talking about khakis with the cuff and the crease. [laughs] Like, he understood that thing. And they, they did it word for word, and it ended up becoming the first single.

    24. DSDavid Senra1:26:21

        You just s- brought something to my mind, 'cause I, I've, I've been reading a lot about Bob Dylan. And, you know, at... It's like I'm always interested in, like, who influences the influencers. So like-

    25. SSSteve Stoute1:26:30

        Yeah

    26. DSDavid Senra1:26:30

        ... some of the greatest living musicians are like, like Bruce Springsteen. He's like, "I just followed Bob Dylan."

    27. SSSteve Stoute1:26:35

        Yeah.

    28. DSDavid Senra1:26:35

        And when you study Bob Dylan's early career, he was so good at mimicking. He could sit in Club Wawa in Greenwich Village and listen to you play, and then be able to r- recreate your si- sound exactly as if he was you. Kobe could mimic. We're talking about people. Bob Dylan, great, right?

    29. SSSteve Stoute1:26:51

        Yeah.

    30. DSDavid Senra1:26:51

        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.
23. 1:28:08 – 1:31:00

    Managing Nas, The Greatest Thing He Ever Did

    1. SSSteve Stoute1:28:08

       They painted the pictures more vividly than anybody else. And one of the greatest things that I've ever done, if, uh... 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.

    2. DSDavid Senra1:28:23

       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?

    3. SSSteve Stoute1:28:33

       Yeah. So-

    4. DSDavid Senra1:28:34

       So let me, let me back up, too.

    5. SSSteve Stoute1:28:35

       Yeah.

    6. DSDavid Senra1:28:35

       This is why, w- 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?

    7. SSSteve Stoute1:28:42

       So li- listen. Queensboro- Queensbridge Projects, Nas, Jared Kushner.

    8. DSDavid Senra1:28:47

       [laughs] Yeah.

    9. SSSteve Stoute1:28:47

       That's the, what you just did.

    10. DSDavid Senra1:28:48

        Yes, exactly.

    11. SSSteve Stoute1:28:49

        Okay. All right, cool.

    12. DSDavid Senra1:28:49

        But we're gonna go back.

    13. SSSteve Stoute1:28:50

        [laughs]

    14. DSDavid Senra1:28:50

        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. There's, like, 8 to 10 people, and they're just fucking killers. I heard Steve Stoute, I was like, "Oh, shit." And I'm sitting across from you, and you're like, "Who is this big-headed fucking dude?" That, like, I was lighting you up with questions all night.

    15. SSSteve Stoute1:29:16

        I, 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- specificity and the nuance of what you knew was alarming to me.

    16. DSDavid Senra1:29:33

        [laughs]

    17. SSSteve Stoute1:29:34

        It was alarming to me. It, that, that's what it was. It was almost like-

    18. DSDavid Senra1:29:36

        Okay, wow

    19. SSSteve Stoute1:29:37

        ... but it wasn't... It was wow in, in a, in a scary way.

    20. DSDavid Senra1:29:41

        [laughs]

    21. SSSteve Stoute1:29:41

        Now that I under- but I didn't know what you did.

    22. DSDavid Senra1:29:43

        Yeah.

    23. SSSteve Stoute1:29:43

        Because if, because if you knew that level of information and you didn't do this-

    24. DSDavid Senra1:29:47

        It's scary

    25. SSSteve Stoute1:29:48

        ... you're psychotic.

    26. DSDavid Senra1:29:49

        Yeah.

    27. SSSteve Stoute1:29:49

        Yeah. I didn't know what you did, so I didn't know that I was speaking to a journalist or a writer.

    28. DSDavid Senra1:29:54

        I'm not a fucking journalist. But I, I, that's why I told-

    29. SSSteve Stoute1:29:56

        Okay, what the fuck? A-

    30. DSDavid Senra1:29:57

        I know who you-
24. 1:31:00 – 1:35:15

    Walking Into Queensbridge To Find Nas

    1. SSSteve Stoute1:31:00

       Hard to Tell.

    2. DSDavid Senra1:31:01

       Before Illmatic's out or no?

    3. SSSteve Stoute1:31:03

       Yes. There's, there were two singles.

    4. DSDavid Senra1:31:05

       Okay.

    5. SSSteve Stoute1:31:05

       Halftime and then It Ain't Hard to Tell.

    6. DSDavid Senra1:31:07

       Is Halftime the one he did with Large Professor?

    7. SSSteve Stoute1:31:10

       Yes.

    8. DSDavid Senra1:31:10

       Where it's like, uh-

    9. SSSteve Stoute1:31:11

       Yes. Mm-hmm

    10. DSDavid Senra1:31:12

        ... "Street disciple, my raps are trifle."

    11. SSSteve Stoute1:31:14

        No.

    12. DSDavid Senra1:31:14

        "I shoot slugs from my brain just like a rifle." That's one of my favorite-

    13. SSSteve Stoute1:31:16

        No. Yeah

    14. DSDavid Senra1:31:17

        ... Nas lines ever

    15. SSSteve Stoute1:31:17

        ... that, that, that, that's, that, that, that's Live at the Barbeque.

    16. DSDavid Senra1:31:19

        Okay.

    17. SSSteve Stoute1:31:20

        And then he, Live at the Barbeque was, was him part of a... There's four other rappers on that r- uh, thing. Halftime came out- And "It Ain't Hard to Tell," which uses a Michael Jackson sample. And I heard "It Ain't Hard to Tell," I was in my driveway. I was like, "I need to know this guy."

    18. DSDavid Senra1:31:40

        Prodigy.

    19. SSSteve Stoute1:31:40

        I, I, I can't. This is-- The thing that he was saying, shit, I, I couldn't even believe what this person was saying.

    20. DSDavid Senra1:31:49

        That he wrote it, but he was, like, sixteen.

    21. SSSteve Stoute1:31:50

        Yeah, he's seventeen. I, I didn't even-- I, I can't even believe. It was, like, so fucking genius. So anyhow, I was on my journey. I'm like, I, 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 Queensbridge 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 just, 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 wherever?" 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, "Wait a minute, wait a 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' brother, Jungle-

    22. DSDavid Senra1:33:16

        Mm.

    23. SSSteve Stoute1:33:16

        ... that I asked. So I did ask the right person immediately, randomly, uh, or the wrong person, depending on how that thing ended. [laughs]

    24. DSDavid Senra1:33:24

        And yeah, knowing about Jungle, like-

    25. SSSteve Stoute1:33:25

        Yeah

    26. DSDavid Senra1:33:26

        ... he's gonna have a gun.

    27. SSSteve Stoute1:33:27

        [laughs] He, he's ne- never leave home without it. [laughs] And that led to me meeting him. And when I met him, I realized that as brilliant as he was and as successful as Illmatic 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 cr- cr- credit for going there and having the guts to do that, I was one of fifty people who tried to seen that he was an undervalued asset. That wasn't, it wasn't a unique idea. He chose me, and he put his career in my hands at twenty-five years old, and I had not done it before. Why he chose me, I'll never understand. I do know that thirty years later, thirty-one 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 and my family's life.

    28. DSDavid Senra1:34:49

        That's a beautiful place to end. Stout, thanks for taking the time, man. I really appreciate doing this.

    29. SSSteve Stoute1:34:52

        All right, man.

    30. DSDavid Senra1:34:53

        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 four hundred 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. [upbeat music]

Episode duration: 1:35:16