What Tech Entrepreneurs Could Learn from Chamillionaire

Posted on Oct 22, 2010 | 37 comments


On why you should be an entrepreneur,

“A lot of people do what they have to do.  You want to get yourself to a position where you can do what you want to do” (Chamillionaire)

Last night I co-hosted a dinner at Soho House in Los Angeles with some of the most senior people in the media industry with executives from Disney, Fox, Warner, media agencies and many promising tech & media startup CEO’s.  The topic was “the future of television & the digital living room.”

With all of the knowledge in the room the person who stole the night wasn’t even on a panel.  I had called on Chamillionaire from the audience and asked him to provide some views on how artists view social media, why they use it and where it’s heading.  He was riveting.

He stood up, grabbed the mic and gave a heartfelt overview of his experiences in experimenting with new technologies to build relationships with his audience, get feedback on his product quality and to market his music all the way to the top of iTunes.  To stay the crowed was “wowed” was an understatement. He received that only round of applause of the evening.

While many were floored by his insights, I wasn’t in the slightest.  I’ve known Chamillionaire for a couple of years and I’ve never been at a tech event where he HASN’T upstaged everybody with his marketing insights.

So it was my great pleasure to host Chamillionaire on This Week in VC this week talking marketing, entrepreneurship, old media and, of course, music.  We also talked about getting more young African Americans interested in entrepreneurship & technology.  I hope many of you can take the time to watch the interview – I promise he doesn’t disappoint.  You can click the image above or this link.

Here are some take away’s:

1. On failure, trial-and-error & confidence: He did a lot of experimenting early in his career.  As a teenager he experimented with writing & producing his own rap music and received a lot of feedback from elders that he had a talent with words.

He began producing and selling “mixtapes” of his music.  He studied the errors that other people had made and tried to improve on them.  He made many of his own mistakes.  But he was street smart and hustled.  He started selling the mixtapes out of his trunk and even gave away some of his music.  He wanted to create awareness for himself to generate marketing buzz and demand and then get the retail stores to pay wholesales prices for his cds.

“All the failures that people get so scared of is what I did.  It made me confident about what would work.  Confidence doesn’t come from being a ‘know-it-all,’ it’s because I’ve done this 10 times already.”

What things did he experiment in the early days when there was no Facebook, Twitter or even MySpace to promote oneself?  He used online services such as SHOUTcast, which was online radio that allowed him to play his own songs, interrupt a song, do a commercial break and connect with fans.  [It sort of reminds me of the new generation of innovation that is happening around user-controlled terrestrial & Internet station Jelli.]

2. Authenticity - I asked Chamillionaire why he thinks he connects so much with people at tech conferences.  How does he always wow a usually skeptical crowd?  He said that he finds that people here are often speaking in big words or jargon – and that doesn’t connect with a lot of people.  Cham studied early in his career how to hold the microphone, how to project his voice, how to watch the audience and pay attention to what interested them.

He said that he noticed a lot of tech entrepreneurs don’t speak into the mic, don’t project their voices with confidence and aren’t necessarily paying attention to the mood or energy of the audience.  I had written a blog post on exactly this – how to not suck at group presentations – and what he said reminded me a lot of this post.

3. Marketing Innovation - Too many entrepreneurs are great product or technology people and lack the knowledge, skills or even desire to figure out how to market their products or themselves cleverly.  Some other entrepreneurs who went down the MBA, consulting or banking routes without working at a startup are certainly book smart but haven’t always refined the street-smart skills needed to be an effective entrepreneur.

Chamillionaire has tried so many marketing angles that when new technologies emerge he has a strong sense on how to use them to best marketing himself and his business.  In his early career he realized the importance of email lists.  He would do anything he could to capture people’s email addresses because he knew that they served as a valuable tool for future marketing purposes.

His email list became his power.  He would occasionally give away free music in exchange for email addresses.  He created his own domain and gave out email address with the name@chamillionaire.com nomenclature.  This was in the 90’s.  It created viral buzz because other fans saw the email address and wanted to know how they got it.  He was trailblazing.

He would try initiatives like announcing that a new cd was going to drop at new year’s.  He had a website and put up a timer  / countdown for the new year’s release.  People would then call stores and ask if they had his album.  He would get a call from the stores asking about a new album coming out.  He created demand.  Sometimes he didn’t even have the product when he announced it but the hype would get him focused on what he had to produce.

There are many analogies here for software development.  I often tell teams that you need to create product deadlines that are semi-public (or maybe board commitments) that help you focus on shipping product.  You may have to cut scope but nothing gets you more focused and the creative juices flowing than a deadline staring you in the face.

Businesses like TopSpin Media now professionalize campaigns for musicians to capture email addresses, build social-media audiences and sell products directly to consumers (and many other artist-to-fan direct initiatives).  Cham learned this on his own because he had to – he didn’t have a label.  So when Twitter, Facebook, YouTube, Ustream and other social websites became popular he has ideas for how to use them to authentically build a relationship with his audience.

4. Customer Feedback - Chamillionaire regularly seeks public feedback from his fan base.  In the early days that was from releasing mixtapes.  More recently it has been by putting free early releases of songs for free on Twitter.  He said that the labels have a standard marketing plan that they say has worked in the past for other musicians.  Cham is very skeptical of the one-size-fits-all approach

He said he learned what his fans wanted through the trial and error process.

“Not everything works for everybody.  I tested so many things to see what works.  Labels just had a marketing plan for everybody.  but it didn’t work for everybody – it was just a plan …

What is good?  There are a million opinions about what is good.  I just wanted to know what people wanted to hear from ME.”

5. Raising Capital – The VC equivalent for musicians is getting signed by a major label.  I have always told entrepreneurs that to get VC interest you need scarcity value (in addition to a great product).  People want what they can’t have and VCs are no different.  The most potent entrepreneur is the one that doesn’t NEED your money.

So cheeky Chamillionaire went to Universal wearing the tags from every other label he had visited.  While this blunt approach wouldn’t work with VCs a more subtle version actually does.  What Cham said to Universal in his initial meeting was that he wasn’t wearing all of the other label tags just to rub them in Universal’s face, he wanted to make a statement:

“I just want you to know that I’m perfectly comfortable leaving here without a deal”

6. On JFDI (play on Just Do It) - Chamillionaire talked a lot about social media.  We talked initially about ustream.  The labels said he could do live streaming himself but they didn’t want him to stream any music or videos since ustream wasn’t paying them.  Reminds me of how the networks today announced they were blocking their video content from being shown on Google TV.  Universal tried to push him to another site that had cut a deal with the label.  He was frustrated because he wanted to be where the fans were:

“I was just trying to give the fans what they wanted and what they wanted was ustream.”

He did it anyways and didn’t ask for permission.  By putting up his music free on ustream he ended up driving his song to the number one spot on iTunes (which obviously generates money).

“It would be successful and after it was successful nobody would say anything.”

This was obviously music to my ears since my personal philosophy that I’ve written about is “it’s better to beg for forgiving than to ask for permission.

7. On What Next?

First, Chamillionaire is up front about the fact that he is trying to get out of the label contract he has with Universal and he’s holding back from producing music until he does.  He said that most artists “chase checks” and he actually wants to do what’s right for his audience.  He says that labels impede on your creativity, don’t allow experimentation and flexibility.  He’s holding back for now, but he’s clearly studying what’s going on in technology

“I look at Zynga and all the games they have and how addicting it is and I think “there’s got to be a way to connect.  A way to do music this way.”

We also spoke a lot about “free” as a metaphor to build future value.  He spoke about his Grammy-winning song Ridin’ (as in Ridin’ Dirty) and how the labels wanted to extend life of song by getting somebody famous to remix the song.  Cham had other ideas.  He got people to do bootlegged mixtapes in new york, france and new zealand.  He wanted to be bootlegged even more.  The song spread globally.

He was fine with the bootleg – it helped build and audience and helped him globalize.  It allowed him to do big shows down the line in places like Norway & Dubai.  Anyone who knows the industry knows that artists make way more money by performing and selling merchandise than off of their albums (where the studio prevails).  So it was almost like Chamillionaire already knew the Zynga model – give away the game and sell other things.  He actually did it before Zynga was huge.

I told you this guy was smart.

I can do so much more than rap with the rest of my life.  there’s so much more in this world. I know that young people who look up to me are watching a show like this and they’re paying attention.  I want to start feeding this stuff out so that the younger generation will start getting it and paying attention to this stuff ” [technology, marketing, business].

I’m learning so much, I’m so advanced – ahead of so many other people, I don’t know a better way to serve my music [than by mastering technology].  I study it every day.”

7. On African American Youth?

Chamillionaire would like to see more young, urban, african americans aspire to things other than basketball or rap.

“They’re trained to think that it’s “the only way out.”

It bothers him.  He wants people to know that it’s cool to be knowledgeable about business and technology.

“Technology is power. It’s so hard to do it in an over-saturated rap market. I just want to do the right thing and tell young people straight what they need to do.

They say the ‘game is to be sold and not to be told.’  Well I just ‘tell it.’  If you’re a young & up and coming rapper and you don’t know what tunecore is – you should know it.

The future of the world is in the palm of the tech community.”

  • http://www.madmagz.com Youssef Rahoui

    Great stuff, thanks!

  • Andrus

    Different than usual, but still a great show and Chamillionaire really surprised me, he surely gives a different(good) impression from all the MTV videos.

  • Dave W Baldwin

    This IS going to be a fun decade! When the techies found out at a conference back in '08 my degree being guitar, I was hired in on a recording project that cut over 3 million CD's for Central & South America (blah, blah), one brought up at lunch the courtroom stuff happening at that time.

    Looked at him and said, “Do you really think Clive Davis gives a shit about me? To him, musicians are a dime a dozen and he'll re-package the same lowered bar crap he can make millions off of……”

    With the communicative vehicles we have today, especially moving over the next 5 will enable guys/gals like Chamillionare to have a profound effect on the youth of today. As pioneers like himself push the fringe, the students (fans) will catch on and begin to collaborate/share…and that, pray tell, will deliver refreshing creativity and true originality.

    Ooops Clive….we may have raised the bar ;D

  • SA

    very impressive guy. I look forward to hearing the podcast later this morning.

    I do take exception to one throwaway point you make make – that mediaco's dont do anything without getting paid – a lot of this is driven by 2 facts of life in big media:

    (1) conflicting commercial deals (ie – I will not pay you if you give content away for free) and (2) by talent who gets the bulk of their financial reward on the “back end” (ie – if you don't charge a fair value for that content and give me a share of it, I will sue you for doing a sweetheart deal”)

  • http://twitter.com/warribros Tega Boy

    Yet another rapper who gets it.

  • http://bothsidesofthetable.com msuster

    and check out topspin.net – they are helping enable this

  • http://www.canvera.com Dhiraj Kacker

    Your content is killin' it. This was possibly the best TWIVC so far. New respect for Chamillionaire! What a personality. Thanks!

  • http://bothsidesofthetable.com msuster

    thanks for sharing that perspective. sure, it's easy to always demonize big companies but always helpful to know both sides of a story

  • http://bothsidesofthetable.com msuster

    for sure

  • http://bothsidesofthetable.com msuster

    thank you. appreciate it. yes, he is the master. when booking the right guest my job becomes easy from there!

  • http://twitter.com/wfjackson3 Willis F Jackson III

    Cham definitely gets it. I got to tune in for the last 10 minutes live. I am looking forward to watching the rest of it tonight. I am sure there are plenty of good nuggets for a young entrepreneur like myself.

  • Dave W Baldwin

    Thanks Mark- I'm on break from school and sending the link over to the Principal to filter to the teachers. One of the bigger designs of mine (trust me this all makes sense) is toward entrepreneurial education to the masses. If nothing else, simply because we have to 'grow the pie' in a big way to do what we can…and it is good.

  • turboboy

    Pretty smart guy!
    I Listen to his mix-tapes and it strikes me that he doesn't spew profanity like a lot of other rappers do.
    He is role model.

  • http://www.siatomiclabs.com/ RAuguste

    it's good see you having guests talk about urban youth and giving Tristan a shout out. great stuff.

  • Longwoodjohnson

    Wow! A 1 hour Master Class in modern day marketing, social media, biz dev and how to follow your passions. What an inspirational interview. I'm the guy that reads every book on this stuff, and this interview has more clearly explained, actionable meat to it, than all those books combined. I really appreciate the way you kept folding the lessons back to the entrepreneurial context, hi lighting the best practices in a way that makes them accessible and actionable to what entrepreneurs need to do.

  • navarrowwright

    Mark
    Let me first start by saying That your blog is a breath of fresh air in terms of how you break down the nuances of becoming a successful technology entrepreneur and I have encouraged many people to read the things you write. That being said i believe you have missed the mark here as it relates to the “African American Entrepreneurial situation” While I also appreciate Chamillionaire's passion about how the internet has changed his life and the parallels between his entrepreneurial experiences and those of a technology entrepreneur. I also believe that is a part of the problem. ( I also note my comments are not meant as a knock to chamillionaire). African Americans need to see that technology entrepreneurship success can be achieved without being in the music industry. They need to see that there are engineers at facebook, biz dev guys at foursqaure (@tristanwalker) , and other people who look like them who are succeeding . They also need to know investors are eager and willing to invest in their ideas. I have a unique perspective on this being an entrepreneur, having been venture funded, having created a start-up with a hip hop mogul and being African American. They need to be shown that barriers to entry in this space are lower and opportunities are bigger than they are for being a rapper or an athlete. I think we can agree that with the amount of activity in the online space these days that the lack of African American founders is an issue. I've spent the last year trying to draw attention to the issue. I asked Arrington to address it at disrupt and was ignored. By doing this show you have shown you recognize the issue and I hope you will continue to highlight so i can use your content as another example to minority youth that we want them to be a part of the next generation of technology entrepreneurs.

  • http://markgslater.wordpress.com/ markslater

    awesome stuff. if you ever read Umair Haque's “the new economics of music part 1 and 2″ and the “economics of free” this guys is acting out these grand hypotheses beautifully. (not trying to suggest that he did not come to his own conclusions independent of haques thinking mind). i bought in to the hypotheses and its great to see it working out there.

  • http://twitter.com/earsondeck Kahlil Lechelt

    Marc, thank you for this amazing interview. I have always appreciated his point of view. Artists have a lot to learn from him, not only tech entrepreneurs. Artists have to become entrepreneurs the major label is not the answer.

  • http://www.hypedsound.com jonathanjaeger

    What's great is that no matter what obstacles he has, he tries to combat the seemingly archaic structure of the music industry. Can't wait to see what his next venture is.

  • http://bothsidesofthetable.com msuster

    I love that, too. I think profanity is too easy, not clever enough

  • http://bothsidesofthetable.com msuster

    My goal, though, is to organize an event to create some awareness about the issue. Tristan is going to help. Love all the help I can get.

  • http://bothsidesofthetable.com msuster

    thanks. I wish I had 2 hours with him. He has so many more nuggets. I'll try to get more on film another day

  • http://bothsidesofthetable.com msuster

    I will have to disagree with your disagreement!

    * totally get we need to encourage entrepreneurship in the tech community: FB, twitter, foursquare, etc.
    * thus I want to tap into the people already there like Hamet Watt in LA, or the few African American VCs in LA (there are 3 I know)
    * BUT … that shouldn't come at the expense of the broader youth movement. Cham doesn't want to encourage them to get into music – he WANTS them to get into tech. His message is, “you're not a nerd if you get into tech, you're smart if you get into tech.”
    * he even said, “why do I have to be a rapper the rest of my life. I don't need to do that. I can be anything!” How much better of a message can you send than that!

  • http://www.justinherrick.com Justin Herrick

    A great post and Chamillionaire really seems to know what he is talking about. I hope to one day be at a conference when he decides to speak. I can't wait to watch the episode later this evening.

  • http://www.justinhong.com Justin Hong

    Mark, thank you for bringing this interview (and blog recap) to us. Wow, I am truly impressed with Chamillionaire — you can just tell that he has an intense drive to keep growing and getting better at everything that he does.

    His thoughts on authenticity and connecting with people were fantastic insights. Most people simply don't really know how to connect with people, and those who do know this special skill can really differentiate themselves.

    Thanks again, Mark!

    Justin

    P.S. If I heard you correctly, I believe you mentioned at the beginning of the interview that you listened to rap while you were in college. I'm curious… who are some of your favorite rappers? :)

  • Authority

    Looks like he is missing out on interacting with comment boards across the web (case in point).

  • navarrowwright

    Mark
    Thanks for the quick response. It's one the reasons i love your blog and your show. I think we actually agree more than we disagree.
    * Minority kids have a value proposition problem. They don't see enough examples of people like them who are entrepreneurs especially technology entrepreneurs to see an value in it for them. They actually believe it's easier to become a rapper or professionally athlete than it is to be an entrepreneur. Actually in a lot of ways being an entrepreneur never really crosses their radar. So the more we can show them that people like them are doing this things and achieving success the better.
    *They see themselves as consumers more than creators. They use facebook but never think about creating an app for it. They want to buy and Iphone but never look into how low the bar is to create an app and make money from it.
    * They are not knowledgeable about the process of entrepreneurship from the steps involved to be successful to all the different ways you can get a company going, not to mention all the nuances of getting funding. And It's not that they don't want to know but I also think they need to hear from people that they know are actually making things happen in the space. I've done talks at Howard University and I have to believe that if I were able to take you you there to share some of the things you share on your blog. You would see how hungry they are for that knowledge.
    * They have not experienced the creative environment that is a start-up. I've often said that If we took a group of inner city kids to tour places like facebook and Twitter and then told them that if they learned programming they could work in places and create companies like this that the local library's computer section would be emptied out that day.

    My point about your interview was more about pushing to show variety as much as we can to achieve the goal of changing the issues i listed above. I agree having people like Chamillionaire speak passionately about technology is a great draw and hope we get more people like that doing so. But i push to make sure that we show that is only one African American vantage point and not the only to make sure we don't perpetuate that “value proposition” problem. I've written about this on several occasions and would love your feedback on those posts (http://bit.ly/bL437h , http://bit.ly/b5AhDa , and http://bit.ly/bZpAmR ) Which is why I want to make sure we show people of color who are in the space and are active as well as people like Chamillionaire who can get the message to our youth. Again thanks for opening up dialogue on this topic and it's great to read here that you and Tristan are talking about this topic. I've had some good dialogue with him as well.

    @navarrowwright http://www.navarrowwright.com

  • JMan

    Let's not forget Chamillionaire let his house in Houston go into foreclosure because the note/payment was more than his house was worth.

  • Johnstephenson13

    I found this article to have as much intellectual value as a bubble of nitrogen would have an acceding diver.

  • ajankans

    Dear Mark,
    Great interview. From a guy who started his entrepreneurial career in Hip Hop, I was excited to see the post, and to hear that Hip Hop is getting it's recognition in other entrepreneurial circles. I am interested in your opinion regarding the street smarts vs. book smarts:

    “Some other entrepreneurs who went down the MBA, consulting or banking routes without working at a startup are certainly book smart but haven’t always refined the street-smart skills needed to be an effective entrepreneur.”

    What skill set would you rank most important for an entrepreneur? Street Smarts or Book Smarts? I've met very successful entrepreneurs with only a HS diploma and I've hired some very well educated people who couldn't complete basic tasks. I have also seen very well educated people who have also excelled quickly in business. What do you think ?

  • Michael Witham

    The paramount issue here is facilitating entrepreneurship in under-privileged populations…it's our giri, responsibility, and obligation to our society. I'm assuming that at the essence of what people like us have in common is the desire to change the world for the better…

    The greatest mean to achieving our shared goal is to share our tacit knowledge with the communities who lack the abundance of opportunity and recourses most of us had. Let's organize a cause to focus on the development of the untapped human capital in our urban communities.

    If you are interested, please contact me at mgwitham@asu.edu.

  • Dave W Baldwin

    You are correct Navarrow regarding the true intelligence we all possess. Just remember that it is not a snap of the finger solution. Politics and those trying to hang on to paycheck/tenure will do things that lead to mass confusion since there is no one size that fits all solution. In the case of Mark's interview, I hope to find some segments that would gain attention among the special needs up thru the average students…so that the point of message and the resulting push to raise the bar on grades can happen. Chamillionaire did point out his wanting to shed the rapper yoke…he will.

    If you move from Chamillionaire over to Steven Johnson, you have the perfect setup to catch and hold attention: http://www.youtube.com/watch?v=NugRZGDbPFU for example.

    I've explained Moore's Law and its obvious offshoot Law of Accelerating Returns…the 'ignorant' seem to already understand the market laws of doubling production/ halving retail price….just somehow we need to get them to understand that getting your grades up multiplies the number of higher ed choices, collaboration regarding a project leads to better contacts for future development.

    Hang in there and think about nuggets of thought you can pull out of thin air…they are listening.

    To clarify Mark- There is another design I had placed to the side as the economy fell that leads to a tool that can transform Education and not be caught up in the 'going nowhere' debate consuming valuable time regarding Education. It is a two step and the Mrs. will laugh over the first step.

    My work in school is from the perspective of identifying patterns and offer improvement via path of least resistance….you'll like it.

  • Jim Chiang

    Great article. I think the comment on street-smart marketing skills is right – on.

    Jim
    http://www.neocontext.com
    Blog at: http://blog.neocontext.com

  • Siu Ling

    Fantastic. Useful lessons for all, not just tech entrepreneurs.

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  • Patrick Skelley

    Incredible guest and an incredible interview! Thank you so much. I watched this twice. And re-watched from about minute 29:45 to about minute 34, where Chamillionaire talks about how artists are in debt to labels. I'm an entrepreneur and building a company that directly addresses what Chamillionaire sees as a void in music distribution – bridging the gap between the artist and the fans – cutting out the record label. What I’ve always wondered is how record labels manage hold artists hostage, while investing into the same artists that dilute the quality of music. Think of the way things were when fans decided what was popular instead of promotion companies; artists garnered attention through touring. As it is now, a record label will hear an artist’s music and decide if it will be a hit; this is only one company or one producer’s opinion, as opposed to the will of the masses! This is why music quality has gone down IMO. As a result it's sad to see too that music fans have become apathetic in deciding what they like, because they're opinion means less as the next hit will be rammed down their throat by the record labels. Hopefully this will change… This has been a curiosity of mine for some time and it's interesting and exciting to see that such a forward thinking blog and interviewee recognize this chasm in music.

    Keep up the amazing work!

    Patrick

  • Lawrence Charles

    @Mark, I'm impressed. Great interview. Please let me know when you set up the gathering regarding African American Entrepreneurs. I've followed you for a while and would be interested to be in attendance. I'm an African American Entrepreneur in the Los Angeles area. There aren't many obvious examples of success that didn't first come from entertainment or sports. It would be interesting to know what can be done to encourage this form of career out of the gate.