The Marketing Genius of Steve Stoute

Dude, I've been a fan of you for over 20 years because I grew up listening to hip-hop, and everybody in hip-hop knows who you are. I'm very excited to have a conversation with you.

Yeah.

One of the fascinating things that Jimmy told me about you was that you made a very unusual decision coming out of a record label. You could have started your own record label, but you said, “No, I'm not going to start a record label. I'm going to go full-on into advertising and marketing.” Can you tell me about that?

It was 1999, and I get a lot of credit for seeing that Napster and MP3s were going to shift the music business away from CDs. We started to see signs of it, but it was very much in the fledgling stages, 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 because of the business model itself—mediocrity gets rewarded, and then, over time, it catches up. But in the beginning, mediocrity is applauded and financially rewarded.

I knew that because we were selling CDs for $16, and people were paying for them when there was only 1 song on the album that they liked. That wasn't going to sustain itself. There was something wrong with that. Why would you pay $16.99 when you only liked the first single? Executives were getting paid tons of money based on that idea, and they weren't even talented.

I'm like, “This is going to have to cave in.”

Outside of that, what I saw was an advertising business that felt archaic. The advertising business at the time looked at the world through the lens of Black, white, and Hispanic. I'm like, “That's not the way people relate to products in marketing.” No one looks at an ad and goes, “They're speaking to me because I'm white,” or, “That's how I prefer to be spoken to because I'm Black.” Those things weren't real.

The music business taught me that. It taught me that the idea that people listened to certain records had nothing to do with their ethnicity. DMX was selling in Iowa. The radio station in Iowa didn't play DMX, but people were buying it. Eminem was being purchased in Harlem. It had nothing to do with white and Black.

But why were products treated that way? Why would you, when you want to sell a Cadillac to a Black person, put on a deep voice-over like, “The new Cadillac Escalade”? Nobody wants that. Spanish people don't want an ad that just says, “Hola.” Those things don't work.

My whole idea was, why don't you just find shared values? If you're an 18-year-old African American from Compton and you're an 18-year-old white kid from Greenwich, Connecticut, and you both like skateboarding, it doesn't make a difference. If you speak about skateboarding, you're both going to find the shared value in the culture of skateboarding.

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.

What Jimmy admired most, I think, was that you didn't care what was expected. You didn't make the decision that everybody else was making or the decision that was expected of you. You forged your own path.

So, I'm giving you the rationale—you know, how I saw it. The idea of seeing it that way and then jumping into a business that you didn't understand—

Exactly.

Yeah. Look, I can reference a lot from the Jimmy podcast. It's not that I want this podcast to be advertising for all your others, but you've had a lot of interesting people, and there's 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 toward darkness. The unknown was what I didn't know: the advertising business. But the known was this industry that was going in the wrong direction, where they were selling 1 song for a lot of money. They had a monopoly on the distribution of CDs, and they controlled radio and MTV. Those things didn't seem like they were going to last forever.

Running toward the unknown became very easy—not only because I saw it that way, but also because I was 29 years old. I didn't have a family yet. I didn't have kids. I had already made a lot of money, and I had already done well. I wasn't needing money, and I didn't have a family relying on me to 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. I said, “Fuck it. We're going into the advertising business.”

And I had a big proof point. The proof point was that when I was at Sony, 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 years. When they were making that film, they wanted to make the soundtrack with Sony, which also distributed the film.

I was a Sony executive, and they said, “Look, Stoute, you do this.” I wanted to do it. I was excited to do it, and the song became a hit. “Here come the Men in Black” with Will.

But what was bigger than the song was the glasses. 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 them. If you measured them in today's metrics, the glasses became contagious because of the popular-culture impact of that song and video.

I'm like, “If we're in the music business, why aren't we getting paid off those glasses? Why does Ray-Ban have nothing to do with any of this other than the fact that they gave Will the glasses? Why aren't we making money?”

The guy at the company who did the product placement for those glasses was trying to find me because he wanted to find the next thing that did that. I was like, “If we could sell 14 million glasses, or whatever the number was, I could do this shit all the time.”

The idea that Jimmy was putting 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 was infatuated with the idea to the point that I left the industry to learn the advertising business—to understand the language, the dialogue, the people, and the movers and shakers. I wanted to understand that business.

So, I immersed myself in it—not by studying it, but by quitting and doing it. Jimmy allowed me to do that. I had worked for him at that time. I had left Sony and had gone to Interscope. I'd done great work with Interscope. Jimmy and I were close. He's a mentor of mine.

When I told him I wanted to do it, the deal was, “Look, man, I got your back, but bring the deals to Interscope first.” A lot of the early things I had done were based around Interscope artists.

I got great stories about me, Jimmy, and Steve Jobs trying to get a deal when I was working on McDonald's early in the “I'm Lovin' It” launch. What we wanted to do was around the same time that iTunes was launching.

The thing about Apple at that time was that the stock was at 9 or 10. We didn't know that 9 was cheap. We just knew something good was going to happen.

Take this wherever you want, man.

In 2001, the Enron thing happened, where the CEO and the CFO could no longer say, “The CEO told me to do it. That's why I did it.” Sarbanes-Oxley came out of that whole thing, and everyone was scared about insider trading.

I remember when we knew the iPod was coming because of Jimmy's relationship with Steve. We all wanted to buy stock in Apple, and the stock was around 9. We didn't know that 9 was cheap. We just knew that something good was going to happen.

We were all scared to death. We were like, “No, we're going to go to jail. We're going to be Jeff Skilling.” We were like, “No, no, no, no, no.”

Back during that time, I was transitioning out. The iPod launched before iTunes. People think they launched at the same time.

When iTunes launched, the 1 thing about Apple at that time was that if they could put the expense of distribution onto a third party, Steve was all about that. He was all about finding somebody else to do it.

Remember, HP was the partner for the iPod. They were the ones who put it in all of the Best Buys and Circuit Cities—or whatever the retailers were—around the world. Apple didn't have the sales team to do that.

And they didn't have their stores.

They relied on a third party to do that. They did that with HP. HP happened to be 1 of my clients—Carly Fiorina was running it at the time.

With iTunes, it was the 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 Heyer, turned it down twice.

I was representing McDonald's, and I had the idea that we were going to do the Music Meal: a Big Mac and large fries, or a hamburger, fries, and a song. McDonald's turned him down as well.

The executive at McDonald's was sort of posturing, and Steve went nuclear on them. At the time, he said some shit to them. I was like, “Holy shit.”

You're in a meeting, and the meeting hasn't quite gone bad yet, but it's going directionally in a place where you can kind of predict that it's not going to end correctly. He saw that coming and just said, “Man, don't you guys know you make food that kills kids?”

I'm trying to come up. Jimmy Iovine knows Steve Jobs. I got McDonald's, and Jimmy and I have worked together. We're doing the tango. We're going to 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.” And I'm like, “He's just playing, man. He doesn't mean that.” I remember that feeling at the time. It was like, what the fuck am I doing?

Did they try to kick Steve Jobs out of the meeting? How did the meeting end?

Kick Steve Jobs out of the meeting?

Yeah, I guess.

It was—first of all, the meeting was at Apple. They weren't kicking Steve Jobs out of any meeting.

We're actually going to do an episode with Ed Catmull, who's the founder of Pixar, and he worked with Steve Jobs for a long time. I think he worked with Steve Jobs uninterrupted for about 24 years.

Yeah, and he tells a story in his autobiography, Creativity, Inc., about what a meeting with Steve Jobs is like. Remember the—I think it was Magnavox—

Of course, Magnavox. They made video games; they made television.

Yeah, and they used to have this commercial, probably in the ’80s or ’90s, where somebody's sitting in a chair and the music is so loud, it's blowing the guy's hair back.

Was it Maxell? It could have been Maxell—

Or Maxell. Sorry. Yeah.

The tape company.

Yeah, that makes more sense. Ed's like, “You remember that commercial?” I was like, “That's what it's like being in a meeting with Steve Jobs.” He's just so overpowering. He's such a force of nature. He kind of blows you back in your chair.

Look, I didn't have that kind of exposure to Steve Jobs. I was in, I think, 2 meetings with him—real meetings where there was feedback and that kind of thing. That was it. I mean, I'm close with Eddie Cue, and he tells amazing Steve Jobs stories, along with Jimmy. That was just my version of getting a taste of it, and it was like—holy shit.

Going back to the Ray-Bans: you were at Sony.

Yeah.

When you were at Sony, was that the first time you thought, “Oh, wait, you can translate cultural influence to sales and business success”? Was that the first time it clicked, or was there something that happened before that?

I had known it intuitively, growing up in Queens and being around hip-hop my whole life. Mind you, when I was 16, it was 1986, when Run-DMC performed at Madison Square Garden and it was Fresh Fest. It was sort of the coming-out party for the idea that hip-hop could have actual rock stars.

So that was my wheelhouse. The only reason I wore Adidas shell toes was because of them. We knew that. It wasn't a new idea. Grand Puba advertising for Sprite was amazing.

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

That was way before me. I remember when he said the line, “First things first, obey your thirst,” and he talked about Sprite. You've seen these things, like St. Ides malt liquor. You should look at these ads with Ice Cube and St. Ides.

These things were so powerful. Hip-hop would work with these brands, and it would influence urban culture immediately. When I talk about urban culture, I'm talking about dense cities—not even Black kids. I'm talking about just dense inner-city communities. I use it as a measurement of space: density of people.

They would gravitate toward these products that these artists talked about, either in their music or in blatant ads for them. By the time I had gotten to Will Smith and Men in Black, I had seen it for 25 years, but it still wasn't mainstream or culturally impactful yet, for reasons that I still don't understand.

It was very clear and obvious. But, 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? Why would I invest any money in understanding hip-hop when Kenny G is still selling?

I mean, no disrespect to Kenny G. Michael Bolton is still selling, whatever it may be. But if those things are still working, you're not going to pay attention to Wu-Tang. You're not going to pay attention to things like this.

Or if you're still selling in a world in which you can say, “I'm going to target white consumers.” I used to talk about this all the time: Black consumers are the best consumers in the world because they buy products that aren't marketed to them.

I grew up in a world where I'd see African-American women buying L'Oréal products, even though there were only white women with blonde hair on the box or in the commercial. African-American women would buy it. The same thing happened with African-American men, and people took advantage of that.

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 became the new marketing paradigm.

That's why I called my company Translation, because I wanted to translate that cultural insight for Fortune 500 companies. The first company that gave me a shot—and is still my client today—is McDonald's.

Okay, so this is what I was curious about. You were at Interscope. What were the assets that you had when you started Translation? You were young, you didn't have a family, and you could take more risks. You had an insane network, and you'd already been managing Nas at that time. What were the assets—the nonfinancial assets—you had going into this, jumping into a new industry?

When I first left—remember I said I learned first? Right before I started Translation, my marketing services company, I learned and worked at an agency before that.

Which one was this?

It's called Arnell Group.

Okay.

I worked at this company, and I became a partner when I left the record business. I was making a couple million dollars a year at 29, and I went into an agency where I got paid $150,000 and 20% equity.

I didn't necessarily understand the value of equity at all. I certainly understood that $150,000 was a lot less than $2 million or $2.5 million, but I wasn't even betting on the equity, man. I was really betting on the education. I sincerely mean that. I did not know what was going to happen at all, but I knew I was going to learn.

That was the period in which I got exposure to certain clients, like McDonald's and Reebok. At Reebok, when I was a partner in this agency, I met Adam Silver, who at that time 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 seeding them. All the artists back then were wearing throwback jerseys, so it became this really big deal. People were like, “Wow, this guy knows what he's doing.”

I had gotten a lot of credit because it was just selling like crazy, and Reebok was the beneficiary of it as the NBA license holder.

They were the NFL and the NBA licenses at the time. A gentleman by the name of Paul Fireman was the founder of Reebok, and he did an amazing job. He trusted me and put a lot of investment behind my ideas.

The thing that was the loudest was this idea that every artist wanted to be a basketball player, and every basketball player wanted to be a rap artist. I came up with this platform called “The Sound and Rhythm of Sport.” We made this commercial for Reebok with Allen Iverson and Jadakiss, and it was explosive.

I had Hype Williams, a music-video director, shoot it. No one thought it made sense. They were like, “How could Hype Williams, a music-video director, shoot a TV commercial?” I was like, “I don’t even know what you’re saying. It’s not a TV commercial. It’s entertaining content.”

Whether it’s a music video, like Men in Black, or a 60-second spot with the same idea, you call it a TV commercial only because you run it on television, not because the format is different. Music videos ran on MTV, but if you took the music video off MTV and made it a 60-second spot and just ran it on television, it’s a television commercial.

I heard you say about 6 years ago, “Everything is advertising.” You jumped into advertising earlier, and people thought you were bugging. That’s the term you used: “Everything is advertising.”

I just talked to Brian Armstrong about this, the founder of Coinbase, and he said the same thing: “Everything is marketing.” You have to entertain or get people’s attention, and then get a message across that serves some kind of thing you want to happen in your business. In his case, it could be the new products Coinbase is building, the financial performance of the stock, or whatever the case is.

I love that you say everything is advertising. Again, at that time, when you’re trying to explain something that you don’t fully understand but you instinctively know is correct, it’s hard to get people to buy into it because most people are risk-averse. They’re like, “Why would I—what are you talking about? 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.”

What is a music video? It’s an advertisement for a song. It’s a TV commercial for a song if you ran it on television, right?

Anyhow, we shot this content. [laughter] As we’ve evolved, it blew the fuck up because it was Jadakiss rapping to the sound of a basketball bouncing. Allen Iverson could 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.

The commercial was beautiful, and it was a huge success. That changed the trajectory of Reebok. When that happened, it was a big deal. Then I started doing artist deals around sneakers. I did the Jay-Z S. Carters.

But that’s the first—

Ever.

Non-athlete shoe deal. This is again why I wanted to talk to you. You just see stuff before anybody else.

Yeah, we did that. We did the G-Units. G-Unit was just hot at that time.

What was the marketing? You guys did something smart, if I remember correctly. Didn’t Jay put out a mixtape around the S. Carters? It was like the—

The S. Carters. We did the S. Carters mixtape, which was a mixtape around the sneaker marketing—the S. Carters.

Then we did a commercial with 50 and Jay-Z. No one understood it at the time. They were like, “Why would you be doing this? Why are we spending money on this?” At the time, all I could say to them was, “It’s like a commercial. Imagine trying to sell a product to housewives, to women overall, and you’ve got Martha Stewart and Oprah. That’s what this is. This is the equivalent of that level of power between these 2 guys.”

That was the only way I could explain it to somebody who didn’t understand it. The S. Carters were big, and the G-Units were big. Then I did the Pharrell sneaker, and Pharrell would tell you that was his foray into footwear. He gives me a lot of credit for his path in design because I gave him that opportunity very early.

What was clear was that Nike wasn’t doing lifestyle at that time. They thought “Just Do It” was all about athletes and performance. What I was trying to do was tap into the truth, which was that people were wearing sneakers not to perform at all, but so they could match their hat, their shirt, or something else. It was fashion.

I started choosing guys that didn’t want to work out, run, or jump at all. Jay-Z was the number-one version of that. He doesn’t give you the athletic vibe. He gives you the vibe of, “I’m chilling.” Then it was 50, then it was Pharrell, and it was all just playing along the lines of fashion.

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

It was the only white space left because there was no way I could market Reebok as the agency of record at the time. I told Paul, “Mr. Fireman, there is no way I can convince a 16-year-old that they can jump higher or run faster than Nike and Reebok. That’s not happening.”

So let’s go into the other thing, which is the non-performance stuff. It got so hot that we got a chance to go into the performance business again. We were trying to sign Kobe Bryant, and I have great stories about pitching Kobe.

First of all, I signed Kobe to a record deal—a recording contract—when he was a rookie. Then we pitched LeBron James. That’s how LeBron and I became good friends, and we’re still good friends to this day.

When we pitched LeBron, there’s a famous story. We were pitching him for Reebok. They sent a plane because everybody wanted to sign him. I told Paul, “He’s coming from Akron. We’re flying from New York to Boston to meet him there.”

I said, “Paul, we do this in the record business, and it works. You give an artist an advance, and you bring the advance right there—”

Like in cash, in a duffel bag.

That has been done in the music business, but this was going to be a check. I saw Paul—this was some balling shit—call his wife because he couldn’t get the company to get the check. His wife wrote a personal check for $10 million, and the driver had the check when we landed.

We went to the meeting, and Paul says, “LeBron, I know you know Adidas is going to offer you $100 million when you go see them next, and Nike is going to offer you $100 million 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 that number plus the $10 million.”

Paul took my advice all the way. LeBron was going back. He had to be in homeroom the next morning.

He’s in high school, right?

He’s in high school. He’s going back to homeroom the next morning. He’s in there with his mom, his team, and his agent at the time, but he’s clearly LeBron James. He’s making the decision.

We leave the meeting. He asks for some room, so we leave the boardroom. Paul and I go into the other room, and we’re like, “Do you think he’s going to do it?” I’m like, “Man, I think so. It’s $10 million. We’re paying him exactly what he’s going to get paid. We’re not—this is just a bonus. It’s 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, and this 18-year-old kid says, “No, I’m betting on myself.” He didn’t say that, but we knew he was going to take the other meetings. He walked away from a $10 million check signed to his name to go back to the projects in Akron and back to homeroom.

I applauded him because I knew at that moment in time that the world had changed, when a young African American who was in poverty knew that his talent was bigger than that check. It taught me a lot. It taught me a lot about where the world was going and that we were already there.

It’s something that I’m proud of him for to this day. It’s 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 himself more than the money at that moment in time. That was a big shift for a community of people.

But I think that’s one of the main themes that runs through your entire career: You’re encouraging other people around you to bet on themselves. Even the story you told about the Ray-Bans—we sold the glasses, and we didn’t get anything for it.

I read Andre Agassi’s phenomenal autobiography, called Open. He goes out one night hung over—he’s a wild boy—and winds up playing a tournament the next day and winning the tournament. But he’s wearing Oakleys, the crazy multicolored ones, just because his eyes are bloodshot. He’s hung over, right?

He wins a tournament, and there’s a crazy photograph that gets put on 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 if that guy bought you a $60,000 or $80,000 car, how much money did he make?

And so, your whole thing is just like, why are you giving it away? Why don’t you—this is very

Entrepreneurial. It happens all the time, especially 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? You’d buy the single for $4.99 or $3.99, and then the single was a way to get you to ultimately buy into the artist for a less expensive price. 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 anymore. They removed the single.

The single was on cassette.

The single was a cassette.

Okay.

Or a 45, or, you know, back before that. But it was a cassette. So when they stopped selling singles, you wanted the artist so badly that, with 1 song and 1 music video—you heard “Hot in Herre” and saw that video—you were paying $16.99 without even knowing what songs #2, #3, #4, #5, and #6 were. You didn’t give a fuck.

What’s the first single? Let me tell you what happens in that environment. You spend all your time making 1 single, not the rest of the album, right? So the creativity suffers because they’re buying it anyway. So let’s just try to make the first single.

What’s the thing that’s going to work on MTV, and what’s the thing that’s going to get on the radio? That thing. In fact, a lot of artists would make an album and then go to all the top producers just to make the first single. They’d make a whole album with 1 guy or 2 guys and then go to 1 specific person to make a song that was the radio record. That song could sound like nothing else on the album. They didn’t give a fuck; they just wanted to sell 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 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 build businesses with artists?

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, record-company-agnostic CRM system. My whole idea was, like anything else, if you go on Amazon, it’s like, if you buy this, then you buy that, right? If they’re selling you toilet tissue or whatever they’re selling you, the next thing is a plunger. There are other things associated with that product that you just bought.

My whole thing was that if you listen to Kanye’s album The Life of Pablo 30 times, why is the next thing I’m referring you to a pair of Yeezys or a hoodie that he made? The record companies and the artists had no CRM tools. Every other digital product that I’ve seen found a way to go, “Okay, the margins are going to be a lot lower, but the remarketing is going to be cheap because I know who the customer is.” So even if I make this amount of margin on the first transaction, the fact that I now have your name and your taste means I can sell you the next product.

This is what you talk about, what you learned from Jeff Bezos: He 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 could speak to you directly. The record business doesn’t own their customers at all. I mean, at all. I have a theory around this, at least as of late: If the artists knew who their fans were, they wouldn’t need a record company at all.

If you’re an artist and you have 200,000 people who love you, you know how much money you can make with those 200,000 people—selling them higher-margin items, or selling them the music and then the higher-margin items, like hoodies, T-shirts, 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 70/30 split, they had all the leverage in the world. In fact, they took equity in Spotify. The record companies owned a piece of Spotify. There was a big thing that came out: Was that value passed along to the artist, who was the leverage they utilized in order to get that equity?

But putting that to the side, rather than negotiating the equity, why wouldn’t you renegotiate access to the data—the real access to the data—so that the artist would know, if Taylor Swift has a fan who listened to her album 700 times, why wouldn’t Taylor Swift be able to communicate directly with that fan to sell him the ticket directly, sell her—the fan—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 are privacy laws around it, but they could have still had the option to opt in. “Do you want Taylor Swift to be able to contact you?” “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 then they would have to share it, and once the artist had a direct connection to their fans, record companies would then become obsolete.

I was trying to build CRM tools for the artist, just like any other brand would have CRM tools. These CRM tools would allow you to navigate with your customer so that you could manage that relationship. The rude awakening was that there was no data to be gotten. There was no data to be gotten, meaning that the data sources—Spotify, YouTube, or whatever it was—were never going to give you the user IDs.

Apple wouldn’t either, right?

No. Or Apple. No, they’re not going to give you the user IDs. So it’s not like if that phone downloaded or streamed something a certain number of times, I would be able to send an advertisement directly to that phone. They wouldn’t allow you to do that.

Years later, there was a law around it—GDPR—that talked about this. That definitely got in the middle of this, and it was around Facebook and voting and things of that nature that brought this to light. But prior to that, if it had been shared and the artist had an opportunity to get that intelligence, and the fans had a chance to allow the artist to get access to that intelligence through those platforms, I think we’d be talking about a completely different industry today.

When I was building UnitedMasters, which I started in 2017, the idea of building an independent distribution company was driven by the premise that the record business, for many decades since its inception, was built on the idea that you had to find a record company in order to find an audience. You get a record deal: “We control radio. We’re going to get you on the radio. We’re going to get you on MTV.” Oh my God. 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 $500,000 when they were 18 or 19 years old, at the beginning of their career?

So we started UnitedMasters with the premise of inverting the economics so that the artists got the lion’s share of the economics because they actually did the work.

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

Yes, you got it. 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 creative 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, for so long, it was Stockholm syndrome. Artists are stuck in these deals. They believe that if I’m signing to a record company, I’m going to get a lot of money, they’re going to make me global, I’m going to get awards, recognition, and everything around it. So I’m going to keep doing that.

Then you have another generation of artists 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 rely on myself first and foremost. I am the best marketer of myself to my audience. I’m better at marketing to my audience than anybody else, any third party, can be.”

So I’m betting on that. You have independent artists right now that are blowing the fuck up, that are doing really well. We have an artist on UnitedMasters—big extra plug—who’s made $20 million this year. I mean, more, more, more. And it’s his, and he owns this. It’s something that he can give to his family and his kids. He owns it.

When you saw, years ago, people asking why Prince wrote “slave” on his face, 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 get 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, “I don’t even own the shit that came out of my brain.”

That’s crazy.

When I explain this to technology companies, I explain this to Larry Page. He was the first guy who invested in UnitedMasters. I said, “Could you imagine if every time a seed investor came in, they actually owned the IP and intellectual property? They owned it.” That’s what it is in the music business. The guy comes in first and gives you a check for $500,000.

He owns your name, image, and likeness. People look at you and say, “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 careers, die broke, because they don’t own anything. It’s owned by the person who discovered them. It’s not owned by them.

Even though they have the unique gift to create something that others can’t, they don’t own it.

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

Yes. And why I love where we are today, and the democratization that digital has provided, is that an artist can now—and not only musicians, but artists, painters—like, “I’m a painter. I draw.” Substack: “I’m a writer. I’m a journalist.”

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

There’s a long history of the music industry—the executive industry, essentially, fucking over artists. I read Jay-Z’s fantastic book, Decoded, and he talked about reading this book called Hit Men.

I think it was all the crazy stuff going on in the ’70s and—

The ’80s—and, oh, the ’60s. The ’60s, yeah. The ’50s, ’60s, ’70s. Crazy book.

You have to read that book. It’s almost like reading the book they turned into the movie Goodfellas.

Really?

That’s what it feels like when you read it.

What was the name of the book that they turned into Goodfellas, the movie?

I don’t remember.

But Jay-Z’s point was, like, “I just read the book, and I’m like, ‘I’m going to avoid those wise guys.’” Okay. So I read Jay-Z’s book, and I’m like, “I’m going to avoid doing that.” And then he came into the game independently. I think he was the founder of Roc-A-Fella. So he got it, and he got it back in, what, ’96? How the hell are you still telling the story in 200?

Oh, wait. What’s that?

You know, Jay got it because he was turned down. Record companies wouldn’t sign him.

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, because there are different versions of this. There are different versions of guys figuring it out.

There’s a version of figuring it out where you’re like, “I own the whole fucking thing. It’s mine, you’re my partner, and I pay you a percentage.” Then there’s a version of it like, “Look, I’m not going to allow one contract to hold everybody,” which was Wu-Tang’s thing.

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, when he was Prince Rakeem, an artist.

What was the difference?

All those artists could be allowed to sign. Wu-Tang was signed in one place, but the artists had the right to sign in different places. They weren’t stuck under one agreement.

If I signed a group, and anybody in that group ever went solo, they also had to be with me. That’s what record company deals looked like at the time. If I signed you in a group and you decided to break off from the group, you were with me first.

When he did the deal immediately with Wu-Tang, none of them had to sign with the record company—originally BMG and RCA—which originally gave them the deal. That was a breakthrough. The guys got hot off the Wu-Tang album and were signing deals in other places. People had never seen that before.

And then, when you see Master P and No Limit, this was independent and putting out number-one, top-five records every week, talking about how much money they were making and selling records out of the trunk. It was like, “What are they doing down in New Orleans?” These guys were finding ways, in resourceful manners, to make a ton of fucking money.

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

This idea—the power of emerging subculture—they were building something on the way up. Remember, if you get 200,000 people who love you, the amount of money in that is tremendous. And they grow with you.

They didn’t need MTV and radio at the time. They may have had a local radio station. They were down in New Orleans, and they had a community of people who bought into this idea. They were building No Limit Records, and that contagion and growth kept going throughout the South.

At some point, MTV had to play it. You couldn’t be left out, right? So it wasn’t about needing it at some point because it was so popular, versus needing it to break.

Okay. So this is the difference between the top-down record companies at the time. They were like, “We have these relationships with national radio and MTV. We’re going to make you a star. We’re going to push it from the top down.”

Master P and these other guys did it from the bottom up. I remember hearing Sean Parker in an interview one time, and he said this unnamed record company executive was just like, “Give me anybody in the world, even if they’re not talented, and with enough push behind them, I can make them a popular musician.” Basically saying they controlled the system.

They did control the system. They controlled radio. Is this related to what you were saying earlier, how mediocrity was, like—you know, and I’ll use references. Like I said, I like Kenny G, who’s a great musician, or Michael Bolton. Sometimes I just say these things because I know it brings shock value, but just to make the point: I shouldn’t know the Britney Spears song “Oops!... I Did It Again.” There are a lot of *NSYNC songs I shouldn’t know, but they were pounded into your brain. You couldn’t avoid it because MTV and radio—local radio—had a monopoly on it.

All of a sudden, you started listening to this music. By the way, I grew up my whole life thinking Hall & Oates was Black, because you would listen to these songs. There was a time in the ’70s when there were no music videos, so you’d hear the voices, and a lot of these artists were trying to sound African American or like R&B artists. You would hear it and be like, “I guess they are Black,” and then you’d find out, obviously, they were not.

But when they controlled the system, they could push something on you, and the power of repetition would force you to have some recall whether you liked it or not. Now, that’s a whole other story, but the awareness is already there. If I’ve got a 50/50 shot because you already heard it, I love those odds versus the shot that you never heard it at all.

Repetition is persuasive. Again, I think we both have a love of studying the advertising industry. I’ll go back to the early 1900s, when copywriters were the best advertisers. But even if you think about the ’50s and ’60s, when they were building all the massive global advertising firms on Madison Avenue, they talked about this for 100 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, you can’t buy a single ad on any of my podcasts. You’re doing at least a year, and in many cases, many, many years. 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 or through UnitedMasters, but the artists maintain ownership.

Yeah.

So you’re taking the parts where you guys can market better than we can. You have control. I’ve watched all your interviews. I love Russ, the rapper, Russ.

Love him.

You’ve done a bunch. And I’ve taken so many ideas from the way he markets his music to the way I run my podcast. It’s the exact same thing. I don’t see any barriers here. Whether you’re a filmmaker, you mentioned a writer earlier, a rapper, a podcaster, or a founder, it’s all the same thing.

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

100%.

He is. Yes. First of all, he is an entrepreneur.

Full stop. A good one.

A really good one.

We should tell people who don't know him: he's the first person in history—a single person—to write, record, engineer, produce, mix, and master an album that got 1 billion streams. A single person. I don't know all of the stats around him as an artist, as a businessperson, and the way he explains it—how prolific he is at explaining his business, and the number of songs he puts out, knowing that if you don't like this song, I may put out 12 songs, and then you like the 13th song, and then all of a sudden you like song number 1 and then this whole catalog.

When he was explaining that at the beginning of my entering his journey, I was just blown away by how prolific he was as a business guy to explain it. And then Chance the Rapper—there were a lot of guys that took independence in the whole digital era and turned it on its head, and they were proud about it: “I don't want a record deal. Are you fucking crazy? You can't give me $200 million. You can't buy me out of this shit.”

That was the next step. When I just talked about LeBron James saying, “I wouldn't take the $10 million,” that's Russ saying, “I wouldn't sell my publishing for $200 million.” Right? You start to realize the power of ownership.

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

Russ, Tobe Nwigwe, BigXthaPlug, Larry June, Brent Faiyaz—there are so many artists that your audience may not even know by name. They're making so much money because they're independent. And now you're watching the artists that were signed for many, many years. Usher is an independent artist now. Usher's independent. Usher was the first independent artist to play the Super Bowl. Then Bad Bunny—Bad Bunny is an independent act.

Are you serious?

Yes. He signed to Rimas. Bad Bunny is an independent artist. 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 have the power of that.

Fuck, 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 going into the advertising business—this guy left a rap career, whether he left the career or the career left him. He went into the podcast business very early, and he's done an amazing job.

Then he turned down Spotify and went to Patreon because he wanted to work directly with fans. He said, “I don't want an obfuscated version of money. I want to know exactly what I'm going to get paid, exactly what I deserve, because I have the audience who pays me directly,” and he uses Patreon. These are great things that are breakthroughs 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 writers on Substack. They're the new SMBs.

And I don't think industries have caught up to that idea yet. I don't think the insurance companies understand it. A lot of the new fintech companies understand that, but there are so many incumbent industries that don't see that yet. So they're still looking at the old version of SMBs, and they're so locked in with that.

You know who gets it? It's the founder companies. Just like you had that observation when you were 29 years old: “I'm in this industry that's maybe dying, or this can't be sustained. It's being attacked by technology. You're not going to sell these high-margin CDs anymore when Napster exists.” Same thing that Jimmy realized—you realized as well.

And so, even look at some of our big partners. I'm a huge partner with this company called Ramp. It's a founder-like company. They think like founders, and they placed a huge, huge, multiyear bet on me. They didn't ask for any numbers. You talk about being intuitive: they didn't even know how big the audience was. All they said was, “Us and all of our founder friends, the most elite people, are listening to you. Let's figure out how to work together.”

100%.

And that's what every founder says. He's like, “I don't care if State Farm hasn't come to podcasting.” They have now, but all the money that's flowing from TV and radio is going into podcasts.

I've seen this with Cash App. Cash App was in very, very early. It was a marketing guy at Cash App—so fucking good—seeing it early and placing bets on emerging subcultures on their path to mainstream culture.

So placing the bets on the right guys who are driving this emerging subculture, whether it be podcasts 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.

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. They see what I'm doing; they get it completely. They understand the power of this, especially when you have a very wealthy audience and 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—and you and Jimmy sort of got into this—and I'm a big believer in this: we're at odds with fame and talent. Fame and talent historically always had this relationship where they knew how to coexist. In fact, fame was an accelerator that would fan the flames so that talent could get bigger. So they had a great partnership.

I would say in the last 20 years, maybe longer, but 20 years has become very profound, that those 2 things are at odds. In fact, fame believes it doesn't need talent at all. And I've come to the real realization that talent believes that.

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.

Yeah. It's not a world I want to live in.

It's the world that we do live in. And I don't know what the long-term unintended effects are of this, but I've seen this affect many different industries, including politics, where fame is more important than talent—in corporations, in politics, in popular culture, whether it be films or podcasts. You name it: fame is the driver, not the talent itself.

Now, you find the rare cross-section of talent, and you do all the work, and you have a great following, but that's rare.

I think this also plays into what you're saying: why independence and retaining ownership are so important. Russ may not have, obviously, the audience that Taylor Swift does, but Russ makes a phenomenal living. I think he's got 10 or 15 million listeners, so it's not a small audience, but it's not 100 million monthly listeners. But if you own it and retain control, his unborn grandkids are already rich.

And if you really owned it, he would have the CRM intelligence around the people who loved him. And that's the next step of the music business. That's where these industries have to go next, because the creators are going to demand that. They're one step removed from demanding that: “I need to know exactly who listens to this podcast. I don't give a fuck, or you're not going to get the podcast.”

Whoever the distributor is or whoever the platform is, you know what? The next evolution of this, in the next 3 years, I have to be able to go direct, and I have to be able to collect that fan data. I want to send out the newsletter. I want to send out the fan correspondence. It's the platform you own. I now want to be able to have my direct relationship with the fan.

And somebody's going to build the next platform that's going to become the one that drives consumption, the one that allows that to happen fluidly. That's for certain. Book it. That's what Jimmy is talking about, what he wants to do with his company. That's exactly what we're doing. That's why you're seeing these shifts right now in the marketplace.

There's a company called EVEN. ElevenLabs is different. All right, EVEN—

We use ElevenLabs for our transcripts. Shout-out to ElevenLabs.

ElevenLabs is an Andreessen Horowitz company. They're fucking awesome. They invest in and believe in founders. They believe in CEOs. They bet on good CEOs. They have great CEOs in their portfolio.

What does the company EVEN do?

It allows artists to sell directly to their fans. They're selling merch and vinyl, and vinyl is now considered merchandise. A lot of the independent artists have used them for a while, and now artists on labels have used them, and they have found success using their platform to sell directly. Now UMG is moving in that direction.

They just signed a deal with them. So I guess the good news out of all of this, since we started UnitedMasters, is that the independent music space—and there are a lot of us—has outgrown the major labels on the front line.

If you talk about new-release market share, the independents have obviously outgrown them. The major record companies make a lot more money, but they have catalogs and all these other things. Because of that trend line, what the major labels are doing now is borrowing tactics from the independents, including buying the independents.

UMG just completed its purchase of Downtown Records, which has a lot of independent music assets—all independent music assets. Sony has an independent company. The fastest-growing part of its business is a company called The Orchard, which is all about independents. That’s where Bad Bunny, for example, is signed, through his company Rimas.

The majors are now following the independents. Watch and see what happens.

Pay attention to what Ryan Coogler has just done with Sinners. Ryan Coogler is a top-three, if not the best, director. He did Fruitvale Station and, obviously, Black Panther, and now Sinners, which got nominated for the most Oscars—probably ever. I think 16 is the most ever.

The rights to that movie revert back to him. When he negotiated his deal with Warner to put out Sinners, which he wrote and directed, he would only put it with a studio that would allow him to get the rights back within a certain period of time. So they put up the money, and he gets that back. That is unprecedented in the film industry.

What we just talked about is happening in the music business with Russ, but it does not happen in the film industry. We’re talking about hundreds of millions of dollars as the initial bet. He says, “Son, you’re not getting the movie. You’re not getting my intellectual property unless you allow me to have this movie 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 and probably ever, with 16 Oscar nominations. What do you think every other director and film producer is thinking right now? Once you break that ice, the door is now open. “I want Ryan Coogler’s deal. I want to get that. I want ownership.” That’s where this is going.

Ben Horowitz said to me—we were sitting there one day years ago—he talked about the evolution of the workforce. It went from the indentured servant to the slave to the employee to the owner.

We’re at the owner. People want ownership, whether it’s stock in the company, ownership of a print, or ownership in the art business. One of the big things with artists is that an artist sells work, the gallery finds the artist, the gallery markets the artist, and the gallery sells to you. You buy it for $100,000. The artist is so happy. David owns his work, and David sells that work that he paid $100,000 for for $10 million.

The artist doesn’t get any of the lift from $100,000 to $10 million. The artist feels like, “Why don’t I get a carry on all of this? It’s my name. It’s my intellectual property. How come I don’t get a piece of this?” You’re going to start to see that take place. When an artist sells work, they’ll get a carry every time that work is sold.

The galleries, which are at this point necessary middlemen because the galleries are like, “You wouldn’t have an audience if it wasn’t for me,” are going to start to lose relevance because the artists are going to start finding audiences directly, without needing a gallery to authenticate the fact that they are great artists. This is where the world is going.

Yeah. The common theme through everything we’re talking about is just the constant elimination of middlemen.

So we’ve been talking a lot about ownership, going your own path, and making your own independent decisions. We had dinner at our mutual friend Rick Gerson’s house several months ago, and you told me this amazing story.

Rick Gerson just got paid. [laughter]

He’s coming. He’s coming on the show.

We’ll let Dad out. [laughter]

No, no, that’s staying in. [clears throat] He definitely did an incredible deal just now, which we’re going to talk about on the podcast.

But something you told me that night was very fascinating. I really admired the fact that you bet on yourself, just like you talked about LeBron betting on yourself. The people you respect the most—you built a phenomenally successful company. Not only was Translation influential, but it was making a ton of money, and you took another unusual decision to roll that into UnitedMasters.

Yeah.

Can you talk about that?

Yeah. I believe strongly that music and marketing, at least the segment that I focused on with Translation, are the same customer. If I’m going to make marketing ideas that focus primarily on Gen Z and understand that culture is what drives decision-making, and 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 the idea in my heart of hearts. Building a company today, if you want to disrupt and do something 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 is talking about. These things must work as one. When Jimmy was talking about his school at USC, he talked about how software people don’t make hardware because they don’t respect design. These worlds must collaborate.

The emotion that brings these things together is obviously curiosity, but the emotion that drives it is empathy. You have to have empathy for things that you actually don’t understand and know that the power of these things working together is going to create something phenomenal.

Bono said something to me one time that is so profound and that we should all take with us: You can get anything done in this world if you’re willing to not take credit. This idea that you’re going to put the idea of doing that thing first, and you’re not going to let the politics of who gets the credit for it affect everyone’s incentive for doing that thing.

If you can actually remove that feeling of needing to be self-applauded for doing that, you can get anything done. I believe that, in building a company that’s disruptive, 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.

That’s the company I’m building, and that’s the company I want to be a part of. The only thing I want to do is be a part of things like that—things that bring worlds together. I did that in the music business. I was always working on how we tell stories that are going to bring this and that together.

Whether it be basketball and music, or Eve and Gwen Stefani, the things I was working on were always about how, if you could put 2 worlds together, you were going to find a synergy that would compound each of those worlds as individual worlds.

You’re kind of a habitual line-stepper. You don’t really respect boundaries between anything because you don’t think there should be boundaries. Even your decision to sign Kobe—

Exactly.

It’s obvious to me, studying your career for so long, but even your decision to sign Kobe—

Yeah.

To rap.

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

Let’s talk about Kobe, because you had a relationship with him.

God bless that man and his family. When Kobe came out as a rookie, I found out that he was part of a group when he was in high school, and they were recording.

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

So when I went to Kobe, I already knew he wanted to do better than Shaq. He wanted a record deal, and my bet was that he was going to really do his thing because he wanted to outdo Shaq. Kobe Bryant—I signed the group. Three months later, he got rid of the group, and now he’s a solo act.

I had a chance to get to know him really well. He spent a month at my house in New Jersey at the time, working on recording the album. I watched his routine, which was phenomenal.

I remember watching a 19-year-old. I had to book a local gym and watch him shoot 1,000 shots. Then he had these tapes of Michael Jordan going right, Michael Jordan going left, Michael Jordan guarding people going right, and Michael Jordan guarding people going left.

And you realize that he didn’t come to America until he was 14 or 15 years old. He had all this footage that I guess the team had made for him—these cut-ups. Watching him go through that taught me a lot about discipline, and he had that early.

I mean, he obviously—I’m not saying anything that’s not obvious to everybody at this point in time—but his recording career, we made the first song. It didn’t go over well, but he met his wife. He met Vanessa on the set.

So it went over very well.

Yeah.

He met his soulmate on the set.

But the experience of working with him was amazing. He worked really hard.

Even on rapping.

Man, he immersed himself in it, man. He was around Nas all the time. And, you know, obviously Nas and Foxy Brown, and he came to New York. He lived with me. I mean, he was in it. He was in it, man.

I love the idea that the way you do one thing is the way you do everything.

Everything. That’s the one thing I learned in life. Whoever said that coined it perfectly: how you do anything is how you do everything.

That guy was hardworking. You ask athletes, whether it be Tom Brady or LeBron—you go to these guys’ lockers, and it’s perfect. It’s how they play on the court and how they make sure that their locker looks. It’s pristine. All the great athletes—it’s not sloppy. It’s not sloppy because somebody comes and does it for them. They don’t leave it sloppy; they are very pristine.

If you just look at a player’s locker, it will tell you a lot about how that player plays. That’s everything about what I was just saying about Kobe. Everything he did, he went all the way.

Then he came to New York, and I have great stories. He was training to play against Allen Iverson, and he wanted 10 New York City point guards with handles. I had a guy go get them for me—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.

Back then, I said, “Look, Kobe wants to go against Iverson. He wants 10 New York City point guards with handles. Can you find them?” This guy finds them. They go to Chelsea Piers.

Kobe and these guys are lined up at half court, 10 of them with basketballs. Kobe’s at half court, and they’re at the foul line. They start coming through, full one by one, with a head of steam. They have to get by him and go to the basket.

He’s stripping the ball and blocking the ball, and as soon as he gets that one, the next one comes. He does not play defense like an assembly line. I was like, “This is after a thousand shots and this and that. Who am I dealing with?” And he’s 18 or 19.

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

Beyoncé. She’s at the top. I mean, from everything I’ve seen, her work ethic is incredible. I know Michael Jordan obviously has a strong work ethic, but I don’t know that firsthand. Beyoncé, Kobe, Ed Reed, Ray Lewis, and Ed Reed.

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

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

Okay. I wanted to ask you about Jay-Z. I didn’t expect you to answer that with him. I heard you tell this hilarious story years ago on a podcast that Jay-Z rolled up on you with his crew at the office. I think this was before you guys were close. He rolled up on you at Sony. You’re like, “This is the first time”—and you were barefoot.

Yeah.

I remember I was like, “Why are you barefoot at Sony?”

You know, hold on. I don’t know if it’s because I’m from the West Indies and from Trinidad, but I love being barefoot. I would be barefoot right now. I don’t know why I’m not barefoot.

Well, next time—

I don’t know why I’m not barefoot.

Next time we do the podcast together, we’ll both—

Always. I love being barefoot. I feel comfortable being barefoot. My son and my daughter take off their shoes all the time. I have a lot of stories about being barefoot.

Well, this is the first time I heard about you. This is like ’99, and I think this was a remix of a Mýa song or something.

That was a result of it.

So, tell us the whole story, man.

That was before that. That led to that. Obviously, I had known of Jay, and in New York there was this thing: after there was Biggie and Nas, Jay was the guy coming up behind them in the New York rap scene.

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

Before, but people were judging it just by rap skills. It was almost like sales, notoriety, and skills, and it was just like, Biggie was the best or Nas was the best. Jay was coming up to be in that conversation.

He says that on the record: “People on the streets is watching who’s the best rapper: Biggie, Jay, or Nas.” He talks about that because that was a thing.

He inserted himself in that conversation. It was really smart.

It was very smart because the conversation really was Biggie or Nas.

Anyhow, there was something going on with an artist that they were supposed to sign, and they had never signed him. Let’s say you and I are doing a deal, and then you don’t sign the deal for 6 months, but the paperwork is there. You’re basically holding an option without even holding it because you don’t sign the deal.

After 6 months go 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 he’s going to do a deal over here.” Then Jay and his team were like, “No, you have to keep your word. He has to keep his word.”

I’m like, “Bro, it’s been 6 months. His word is expired. I mean, it’s been 6 months.” They did not like my response, so it’s 9 o’clock in the office and they roll into the office—him and 4 or 5 other guys.

This is Jay-Z.

Jay-Z. Uh-uh. Tata.

Had you met Jay before in person, or—

No, I’d seen him before, but we didn’t know each other like that. I didn’t give a shit, and neither did he.

He comes to the office. I’m at Sony at the time, and they’re like—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.”

They come upstairs, and I’m sure—I didn’t even know this at the time—they thought, “Oh, we’re going upstairs, and he’s probably going to have some guys, and this is going to be some face-off or some version of that.” I guess they came upstairs. The front desk let them up, and I let them upstairs.

They come upstairs, and I’m by myself, barefoot. I’m like, “Listen, I don’t want to have an argument about anything that doesn’t involve big houses.” They just start laughing. I’m like, “Big houses are involved. This is a stupid conversation.”

Wait, wait, wait. What do you mean, “I don’t want to be involved in anything big houses”? You’re saying it’s a small deal.

Yeah. If we’re not talking about a lot of fucking money, what are we talking about? My analogy to that was just big houses. I’m like, “Are we talking about big houses?”

They loved that shit. They started laughing, and then Jay and I became friends and started playing Madden all the time. Then we realized—not realized, but my cousin was his cousin. My father’s brother married a woman who happened to be connected to his side of the family. They were cousins, so my cousin was his cousin. We were second cousins.

And how soon after did you guys start doing business together? Because you did—

Immediately.

Okay. So, you did his shoe deal.

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. Jimmy—

I love that you’re in podcast mode, like “Jimmy.” The audience doesn’t know that. Jimmy Iovine, who was on the last episode, in case you were going to listen to that again.

Dr. Dre comes in with the album 2001, which is a fucking amazing album.

Classic.

Right? And he plays it for Jimmy, and Jimmy goes, “Are you sure that’s it?”

Dre’s like, “Yeah, this is the shit.”

So Jimmy’s like, “What does Eminem think?” because Eminem’s hot at the time.

Dre’s like, “What the fuck you mean, what does Eminem think?”

I’m sitting in the meeting, and Jimmy’s so good at reading the room. He bets on his nose more than any other sense—fuck his eyes, fuck his ears, his nose. Does Dre’s confidence tell me that this is the shit, or is there any fucking crack in the door that he can go further?

Whatever line of questioning he asked led to, “Let’s try to make one more.”

Jimmy’s always one more.

One more.

One more.

So Dre plays a bunch of beats for the one more, and I pick 5 beats. They cut me a CD with 5 beats to make the one more, and Steve’s going to go help get the record made.

Man, I'm honored. I can't believe I'm getting on a plane with Dr. Dre's beats and flying to New York with them. There's nothing I could be more responsible for than having a CD with this guy's beats on it when I go to New York.

There's a beat I like, but I don't say anything. I played a beat for Timbaland. He's like, “You got Dr. Dre beats?” I'm like, “Hell yeah.” I played it for Timbaland, and Timbaland's like, “That shit right there is crazy. Call Jay.”

So I called Jay. “Yo, Jay, listen to this shit.” Jay heard it and picked the exact same beat. The same beat I liked, 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 wrote “Still D.R.E.”

And he doesn't actually write, right? Is this at the point in his career where he stopped writing? He still did?

Yeah. He still did. But he raps like a West Coast artist. Listen to “Still D.R.E.” Every line Snoop says in the hook is what Jay-Z 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—talking about the 405, talking about khakis with the cuff in the crease—he understood that thing. They did it word for word. It ended up becoming the first single.

You just brought something to my mind, because I've been reading a lot about Bob Dylan. I'm always interested in who influences the influencers. Some of the greatest living musicians, like Bruce Springsteen, say, “I just followed Bob Dylan.”

When you study Bob Dylan's early career, he was so good at mimicking. He could sit in Café Wha? in Greenwich Village, listen to you play, and then be able to recreate your sound exactly as if he were you. Kobe could mimic, too. We're talking about people like Bob Dylan—great, right?—who could mimic people. Kobe could mimic. I mean, look at his game. He could mimic Michael Jordan.

Now you're saying the exact same thing: Jay-Z is not from the West Coast, yet he could rap as if he grew up there.

It's not even a problem. It wasn't even an issue. Jay-Z can write R&B songs. What people need to know is that I am not taking anything away from the great writers—Maya Angelou, Shakespeare, you name the writers. Nothing. Nas and Jay-Z are in that conversation. They're that good.

The way they can paint pictures that you would never imagine with words, like you're watching a film, is a phenomenal gift. Because of the art form being rap, it gets overlooked because of the beats, the clothing, and the media surrounding it. But the words that they paint, the feeling that they can give you—if you listen to those songs, this is why you love it. You could actually put yourself in an environment that you didn't grow up in and live through those lyrics. They painted the pictures more vividly than anybody else.

One of the greatest things that I've ever done—if people give me a lot of credit for doing many things—the greatest thing I've ever done was being able to manage Nas, one of the greatest writers of all time.

You went into the hood, Queensbridge Projects, to find this young prodigy. Can you tell that story real quick? How the hell did you even hear about Nas, and what lengths did you go to manage him?

Yeah. So, let me back up, too. This is why we shout out to our mutual friend Jared Kushner for putting us together—the way I met you. I'll tell the story real quick, right?

So, listen: Queensbridge Projects, Nas, Jared Kushner. That's what you just did.

Yes, exactly. But we're going to go back. I was a little sad the first time I met you, because obviously Jared's a close friend of both you and me. He's like, “We're having this private birthday party at this private restaurant in Miami.” You get in that room, and there's not a lot of people. There's 8 or 10 people, and they're just fucking killers.

I heard “Steve Stoute,” and I was like, “Oh, shit.” I'm sitting across from you, and you're like, “Who is this big-headed fucking dude who's lighting me up with questions all night?”

I couldn't believe that you knew. No, you know what it was? We never talked about this. I was shocked by the specificity and the nuance of what you knew. It was alarming to me. It was almost like, “Wow,” but it was “Wow” in a scary way, because I didn't know what you did.

Because if you knew that level of information and you didn't do this—

That would be psychotic.

Yeah.

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

I'm not a fucking journalist. But that's why I told Jared—

Okay, what the fuck? You're more than a podcaster.

Yeah, but that's why I was like, “Jared, I need you to give me another shot with Stoute,” because it felt that way. I was like, “Dude, I need another shot with Stoute.”

When they told me what you did, then I got it. But when you started coming at me with these hip-hop Jeopardy insights, I'm like, “Fuck off.”

We tried to eat a dinner. It's this guy's birthday, and you're fucking attacking me.

Anyhow, let's go back.

Jared Kushner definitely played a role in this, big time. I'm at home. I live with my parents, and I decided that I wanted to be in the music business. I didn't know what I was going to be. I didn't know how it was going to turn out. All I knew was that it was my calling at that time.

What nailed it for me was sitting in my car in my driveway, listening to Nas's “It Ain't Hard to Tell.”

Before Illmatic came out, or no?

Yes. There were 2 singles.

Okay.

“Halftime” and then “It Ain't Hard to Tell.”

Is “Halftime” the one he did with Large Professor?

Yes.

“Street's disciple, my raps are trifle. I shoot slugs from my brain just like a rifle.” That's one of my favorites.

That's “Live at the Barbeque.”

Okay.

“Live at the Barbeque” was him as part of a group with 4 other rappers on that thing. “Halftime” came out, and then “It Ain't Hard to Tell.” This is a Michael Jackson sample, and I heard “It Ain't Hard to Tell.” I was in my driveway, and I was like, “I need to know this guy.”

Prodigy.

I couldn't believe what this person was saying.

That he wrote, but he was like 16.

17. I can't even believe it. It was so fucking genius.

So anyhow, I was on my journey. 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? Queensbridge Projects. Go to Queensbridge Projects. There was no other way to find this guy, not that I knew of at that time.

When I went to Queensbridge Projects, I make this joke—but it's not even a joke—that the projects don't have a front door. It's a bunch of buildings. There's no clear front door. So you're basically walking to a building, trying to find somebody who I could ask, “Yo, where does Nas live or hang out or whatever?”

That person immediately goes to get a gun because I looked like one of the guys that they had beef with. Then somebody tells him, “Wait a minute, wait a minute, wait a minute. I think that guy works with these producers and shit.” The second guy who said that happened to give the first guy reasonable doubt to go further with the question. It happened to be Nas's brother, Jungle, who I asked.

So I did ask the right person immediately, randomly—or the wrong person, depending on how that thing ended.

And, yeah, knowing Jungle, he's going to have a gun.

He never leaves home without it. That led to me meeting Nas. When I met him, I realized that as brilliant as he was and as successful as Illmatic was, the infrastructure around him did not give him the opportunity to be everything he could be.

As much as I credit myself for having the guts to do that, I was 1 of 50 people who tried to see that he was an undervalued asset. It wasn't a unique idea. He chose me, and he put his career in my hands at 25 years old, and I had not done it before. Why he chose me, I'll never understand.

I do know that 30 years later—31 years later—that's my brother. We're really good friends. 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, whatever it may be, he and I started our careers together, and not 1 thing has ever interfered in our relationship or in us being brothers.

I love him. He's one of the greatest things that ever happened in my life and in my family's life.

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