In a profile in Fortune, Carter talks about Spotify’s relationship with its customers.
The music industry did a terrible job of building a relationship with consumers. Spotify was one of the first services that actually focuses on the consumer because they don’t have to spend hundreds of dollars a year on music.
And on his skillset:
The only two things that ever came naturally to me are music and investing.
In a panel on diversity at the Upfront Summit, Carter asks: What if we started treating computer science in the same way we treat athletics? Carter compares basketball’s feeder system to the hodge-podge landscape of tech recruiting. Despite the number of jobs available to skilled and talented programmers, there’s not a nationwide program to identify young talent, develop it, sponsor it with big names and scholarships, and lift kids out of unfortunate situations along the way.
In the NBA, there’s only room for 450 jobs. In tech, it’s exponential.
In an interview with Re/code, Carter talks about SMASHDLabs.
On the artist side, we made a significant investment in very young artists from the very beginning of their careers and helped them become global superstars. So, on the entrepreneurs’ side, the idea of the labs was to be able to create this ecosystem to help them from the very beginning, to see them through from development and hopefully until they become large companies.
He also says that the accelerator companies had access to entrepreneurial advice from Marc Cuban, who gave the welcoming address, Sophia Amoruso of retail site Nasty Gal, Jason Calacanis, Def Jam Records co-founder Russell Simmons, Linkin Park’s Mike Shinoda, Upfront Ventures’ Mark Suster and MediaREDEF Chief Executive Jason Hirschhorn.
We had a wide array of incredible entrepreneurs and investors that came in to speak to the group. The head of growth for Snapchat, he probably spent five days with our companies. That’s significant.
Carter is interviewed by Fast Company. He talks about how to get investor approval:
Do the work. That’s as basic as you can possibly get. You can’t dream your way out of a problem. You can’t just dream your way into the business. You’ve got to actually put rubber on the road and do the work. If your job is to sweep floors, the only way those floors are going to get swept is if you put the broom on the ground. If your job is to code, you need fingers on the keys. So whatever it is you do, you actually have to do the work. You can’t just talk about it. You can’t be philosophical about it. You have to get the physical work in.
Ebony interviews Carter on the status of Blacks in tech.
You know the Jay-Z saying, “men lie, women lie, numbers don’t (laughs)?” This is a key point of that. Numbers show that there are not that many brothers and sisters in this field, and it takes the brothers and sister that are in already to help open those doors. We need to have that real, honest conversation on why the numbers are so low…I can say I’ve never felt overtly discriminated against in tech, or that I’ve walked from a meeting saying that someone was undeniably racist. But when you have companies like Twitter where 25% or more of your users are African American, but your employee base is in the very low single digits, that speaks volumes of your hiring practices and your thoughts on our community. I don’t think it’s said that ‘we aren’t hiring Blacks,’ but people are known to hire in their networks. So if you didn’t go to Harvard, or weren’t in this social club, or aren’t a member of this fraternity or sorority, you won’t have the same access as someone who shares the same exact resume as you do. We just have to get plugged into the networks.
In an interview with Business Insider, Carter explained that his investing style is largely based around “feel.”
I’m a simple guy. I know a lot of investors use a lot of analytics in their diligence process, and for me it’s about feel. It’s how do I feel about the idea, how do I feel about the entrepreneur. It’s the same thing that gave me an advantage to being an artist manager. Because it’s all feel. You’re not operating with a lot of data, so you get to feel out people…I want to know your background; I want to know your dynamic; I want to know how long you guys have known each other. If you’re partners on the show, I want to know how long you guys have known each other. I want to know how you guys make decisions together — that tells me a lot about how the business is going to be run.
Carter is interviewed by Lane at TechCrunch Disrupt. He says that artists’ complaints about streaming revenues are flawed, because the only alternative to streaming services is piracy or having someone listen to the song on YouTube for free. He says artists to be patient, and said that streaming is a numbers game.
Once everyone is converted to services like Spotify, the economics will make a lot more sense.
However, he says that labels are not paying artists Spotify royalties.
Spotify came in and did a presentation for us, maybe about a couple of months ago, and our clients made a significant amount of income from Spotify. Well, let’s rephrase that: the labels made a significant amount of money off of Spotify that didn’t match up to the artist royalty statements that the artists received. So, Spotify is paying out a lot of money, it’s just not finding its way into the hands of the artists.
He also says that while Silicon Valley’s ecosystem eventually needs to open up:
If you don’t open up the opportunities to the people who understand the industry, and understand the space, Silicon Valley is going to miss out.
Carter is interviewed by Business Insider. On why he originally turned down Shark Tank:
Originally I passed on doing it and I went home and I talked to my wife about it, and I ended up coming back around…What we thought about is that you can’t be it if you can’t see it. There’s not a lot of black entrepreneurs and I can’t sit there and bitch about diversity in tech and all of those things about access and pipeline if I’m not out there doing something about that…I’m watching the riots in Baltimore, I’m watching Ferguson, I’m watching Blacklivesmatter, I’m watching Jesse Jackson berate Silicon Valley. There’s just all these conversations around race, diversity, and tech. That’s what kind of gave me this shift where I said “It’s time that I do something and lend my voice.”
On working on the show:
You know what, I’ve gained a tremendous amount of respect for the sharks. I don’t know how they do their day jobs and do what they do on Shark Tank. It was definitely competitive for sure, and you get into some really deep negotiations. Luckily once I realized, “Ok, this is what I do every day” I got into my comfort zone. The biggest surprise for me was the length of the negotiations. The producers and editors do a really good job of what can sometimes be an hour and a half-negotiation and edit it down to a seven-minute segment.
Carter talks about why he started SMASHD Labs to Billboard.
There’s definitely a huge amount of accelerators out there, but there was a void for one that focused on brand, and that’s a space we have a lot of experience at and that makes this unique. Selfishly, it works for the Atom Factory — by being able to put 25 of the smartest entrepreneurs from around the world in your office. We get a lot of value out of that as well…[I want] A diverse team — the crux of my personal mission is to open up entrepreneurship to everybody, so Silicon Valley doesn’t have a patent on innovation. We want to open up the process to people outside of that network — the team would be diverse, hard-working entrepreneurs with technical expertise that are looking to gain traction on their product.
On the importance of data:
There’s always going to be a place for artists — but when you look at what humans have actually done to devalue music, from a pure monetary valuation standpoint, this is the part where our industry needs a lot of help. SoundCloud is worth its $1.5 billion valuation, but there’s no way in the world that SoundCloud should be worth more than The Beatles’ catalog. From a value proposition, we have a huge opportunity to re-value our business… I think the music is undervalued. I think up to this point we’ve done a poor job of valuing our content.
Carter shares his story and advice with University of Southern California students. He talks about his lowest point:
It was a really tough one and a half years of my life… I feel, as a human being, you can only hit so many lows before you are at your breaking point. I remember this one point when I was driving my car… and I had to pull over, and I just broke down and cried my face out. And after I did that, I said “OK, it’s time. Let me get back to work”. It was just one of those moments when I had to pull it out of myself… I’m a firm believer you got to work your way out of these problems and you always got to do the right thing.
Carter and Moroder chat about music and technology at the DLD conference in Munich, Germany. Moroder talks about his upcoming album., digital recording, and recording Scarface. Moroder on digital:
I love digital. I think I was one of the first, if not the first one, to recorded a whole album only on digital. The album was called E=mc², which I recorded in Los Angeles, with a guy from Salt Lake City who invented the stereo digital, called Dr Stockham. I recorded the whole album in two days live. I have to wait for weeks for the computer to generate edits and cuts.
Carter is interviewed by Williams on The Influencer Economy. He talks about about hip-hop, entrepreneurship, life, failure, success and finding passion around your work.
In life in general, there are no guarantees. Failures are a part of life. As cliché as it may sound, the way I look at it is that there are no rewards without taking risks. We take a risk every time we step out the door, you know, every single day. Life is full of risks and failures, but at the same time life is full of triumphs and happiness.
I relate to entrepreneurs on a soulful level. I know what keeps them up at night. I know how those victories feel. .. And when you can’t make payroll, and you’ve got knots in your stomach, I know what that feels like too.
Carter is interviewed by at the Platform Summit 2103’s session on Failure: The Surprising Critical Ingredient of Success. (Meet the Risk Takers.)
For a startup , in order to win big you have to swing big.
Carter is interviewed by Shriver for NBC News.
I know how to pick really good people. From great artists to great partners. I call it my ‘West Philly Spidey Senses’.
I attract really strong women! My wife is CFO of the company and the CFO of the house…and mother of five. My COO is a woman. The president of my company is a woman. I surround myself with really, really strong women.
Carter gives some tips to Rennie about how to succeed in the music business as a manager:
One I would say is you gotta have a real passion for it. It’s not an easy business, so that when times get hard you really stick with it. The other thing is that I have a real personal relationship with all of the clients i work with. It’s more than just a transaction and it’s more than just business I’m actually in their fight, and they are people I love and people I really respect. And when you have those things you don’t mind taking the late night phone calls or sacrificing time away from the family, because it’s bigger than just a commission check.
Carter shares his insights on the effects technology has on business and what he looks for when investing in startup companies.
Technology has always affected business. Always some kind of disruption… (need to) have that ability to live around the corner. And pay attention to emerging technologies…We do more investing in entrepreneurs than we invest in startups. It always starts with “who are we investing in?”… and whether this entrepreneur has the wherewithal to go the distance.
Carter is interviewed by Fast Company. He talk about his split with Gaga:
I’m human. I went through every emotion. You go from fear to sadness…It’s like you wake up and you work with somebody every day, and then all of a sudden they’re not there anymore. I don’t think you’re ever prepared to sever that deep of a relationship.
Money doesn’t make me tick. This definition of success doesn’t make me tick. Managing some of the biggest stars in the world doesn’t make me tick. Making my family proud makes me tick…Will [Smith] was talking about how he still worries about being broke. And I laughed because I’m like, ‘Me too.’ It’s a thing from where we come from. A lot had to do with going broke as an adult too. So when you come from nothing and you work your way up and you make something of yourself, there’s always that sense that all of this could go away tomorrow
On investing with other artist managesr:
When you look at how technology companies are funded, it’s not a zero-sum game. It could be 20 investors in one company, and everybody has to work together for the benefit of that company. As we invested, we realized we need each other on these deals because my network is better when you’re in it.
Carter is interviewed in The Guardian. On the split with Gaga:
I’ve been in the music industry for 24 years and with God’s grace I’ll be in it until I take my last breath. And I don’t think a speed bump in the road will stop me from doing what I love.It’s not cancer. When you look at the big scheme of things, it’s not cancer.
On technology changes in the music industry he sees: albums released solely as apps; unprecedented data harvesting; more African Americans in Silicon Valley; concert holograms; massively bigger audiences; and the perpetually online, engaged digital star.
Everybody should be nervous. With the music industry we’ve always had technological change, whether it was disruption from eight-track to cassette, or cassette to CD, CD to download, download to streaming. The difference now is how fast it’s happening. We’re seeing new technology pop up every few months like this [snaps fingers]. I sit on the edge of my seat. I try to live around the corner just to get a sneak peak, to have some sense of what’s happening. The industry [needs] to be very aware, concerned and curious about everything on the way.
Gaga has done a phenomenal job building this huge digital fanbase – fans who became activists for her and will fight battles on her behalf. At the height of rock’n’roll it was about mailing lists. One of the early jobs I did was opening Will [Smith]’s fan mail. Now all that’s been replaced by tweets and social media. So you’ve always had that connection. But now you can reach people in real time…I’m very bullish about this new generation of artists. They’re digital natives. They’re starting their careers online.
Carter says he has a tiny digital footprint. For work he uses Path, which limits contacts to 150, and uses Facebook just for family. He doesn’t tweet.
Twitter is much more public and I don’t have that many clever things to say.
In an on-stage interview at the Techcrunch Disrupt conference, Carter says terrestrial radio is due for disruption:
I think the opening right now is really figuring out terrestrial radio, specifically in America..People still get in the car, for the most part, and they turn on the radio [to] the local station. I think it’s going to be interesting when you can get in your car, turn on the radio turn on the station and you’re listening to a 17 year-old kid in Russia or you’re listening to a 22 year-old kid in his dorm room in Germany. But I think radio’s going to be a real disruption.
He also says the music industry must adapt to change:
I don’t think tech has screwed the music industry, the music industry has to adjust to change. When people in remote villages throughout the world can access music, it’s a good thing.
Carter is interviewed by V magazine. On how he sees pop music evolving:
This is the best time to be in the music industry. As sub-Saharan Africa and China go completely mobile, you have people who’ve never had access to the music we offer all of a sudden able to access it. I think we can reach a lot more people now. You’re going to see a lot more friction points for independent artists disappear, but there will be more artists than ever. You’ll have to look at making money through a different lens. Artists are going to be giving away music in exchange for different things, like data or purchasing a ticket or a piece of merchandise. There will be new ways to monetize music, but it may not be the music itself.
His most memorable experience working with Gaga:
I think—and I can say this because it just happened recently—it was seeing her have a casual conversation with the President about gay rights issues. When you think back to six years ago, this girl from New York walking in with ripped-up stockings, and now she’s having conversations with the President about serious issues—it’s a bit surreal.
Carter is interviewed by The Financial Times. He talks about the launch of LittleMonsters.com and how data from the many South American fans led to the expansion of a tour there.
Our bet is on the future of micronetworks. Facebook wasn’t wired to build a relationship between fans and artists. It’s more about communicating with family and friends and old girlfriends or your classmates; 51m likes doesn’t mean we’re going to sell 51m albums or concert tickets. [It’s a] misconception when people talk about a direct relationship between artists and their fans or brands and consumers through social media. The reality is that these platforms own the relationship. So as much as you can talk directly to a customer or a fan, you still have this intermediary . . . that controls the data. And at any given time, if they turn it off or they change an algorithm, like Facebook did with its newsfeed algorithm last year, it changes the way you’re able to communicate with that fan or customer
About his abilities as an artist:
I stay away from the arts . . . writing songs, being creative – those are downloads from god. You can’t do data analytics on art.
The importance of hiring outsiders:
My COO didn’t come from the music industry, my vice-president of creative was actually a schoolteacher. It was important we had people who came from an outside perspective, who didn’t come from selling CDs.
At Wired 2012, Carter says that despite Little Monsters allowing Gaga to connect with her fans in an unprecedented way, the music industry doen’t care:
They’re not using the data. I can sit down with the guy from Spotify, and he shows me this spike on Fridays as people listen to Gaga before going to the clubs. When I go to South Africa I know to include this song in this set, because I know that’s a fan favourite, and also to take this song out. We’ve never had a direct relationship with an audience. When someone buys a CD we used to count them as a fan, but we never knew if they hated the CD and threw it out the window.
He says that Gaga used social media early because her music would not get played on the radio:
She didn’t look like a typical pop star, and the music was more four to the floor dance music, so radio wouldn’t play it. She’s at 30-something-million Twitter followers now because she had a headstart over everybody. The types of messages she sends are very authentic, so when she sends messages her fans engage. We started buying fan artworks, and including that in our actual merch line in the tour, because we found fans like art from other fans. They know what they want more than we know what they want.
However the media doesn’t define the message:
It’s like a download from God. We were in a meeting with Google, with Gaga and Larry Page, and Larry said to Gaga, ‘Do you ever a/b test your music?’ She replied, ‘Did Picasso ever a/b test painting?
The Economist talks with Carter about how new technology and social media was used to garner legions of fans for Lady Gaga.
It came out of basic necessity… We saw new technology as alternative to reach audiences, opposed to radio… Now, we would much rather build the fan base online and let it grow organically, and let people feel they discovered it before it goes wide to the mainstream…What’s important to me is that there are no intermediaries in that relationship… People think of Twitter as being able to have a direct relationship with their fans… but, it’s really not… because if Twitter goes out of business, or switches off the machine, that’s not your data, not your relationship. So, for us, it’s about really allowing Gaga, or any other artist, to really own that relationship with them and the fans.
Carter is profiled as one of Billboard’s 40 under 40.
The last four or five years have really been about watching the industry make drastic changes — a lot of it due to what was happening to technology and consumer behavior. We’re looking at companies that are gonna disrupt industries.
Carter gives the keynote interview at Music Matters 2012. He talks about how he has diversified into technology investing:
It’s been a little over a year that we started a fund at Atom Factory. It happened from us taking a risk in terms of marketing and working with young startups, and a even with some of the larger companies that we were working with. A lot of people started approach us about advising us about their companies, and us investing in their companies. We’ve invested in Drop box, Spotify, Socialcam, Voxxer, Uber. It’s maybe a little over 30 companies in our portfolio. We have somebody full time that works with founders and that analysis deals. It’s becoming a significant part of our business. Not just from a financial standpoint, but from an access standpoint — being able to get a real glimpse at the technology that’s on the horizon. Y’know a lot of these guys are going to be the next world leaders…It was done on purpose — prior to stating our fund we spent a year in Silicon Valley.
Carter and Michelsen are interviewed at DLD 12 about connecting with fans. Michelsen:
I’m known as being Troy’s arms dealer in The Valley. So when we use social media we look at these things as reaching the most amount of people, and the power behind it. If you look at Silicon Valley there are big [technology] weapons. Troy and Lady Gaga are the detonators. They have these platforms and the individuals become the network.
Carter on Gaga’s rise:
Our timing was great. Facebook had just opened up. Twitter was on the rise. MySpace built this platform that was specifically for artists. So we were alternative ways. It just so happened that Gag’s voice is so authentic that she used it as way to say really connected with the fans, she never used it as a place to sell, sell, sell.
Carter talks with The Economist’s Bishop at the DLD12 conference (video was not released until May 2012). Carter:
We’re learning that there aren’t any rules. Just when you think you know something a new piece of technology will pop up, or a new company will pop up. And right now with content you just really have to follow the consumer. I recently watched the movie The Artist, which shows the transition of silent films into talking pictures and at that time how disruptive that was, and it just reminds me of exactly what’s happening in the content industry today. We’ve been through several cycles of disruption and this one is nothing new. You just have to follow the consumer…When you have the luxury of having been able to live through cycles you fear them a lot less, and you embrace it,
Carter participates in a panel session on digital music Spotify’s Daniel Ek and Clear Channel’s Bob Pittman, moderated by Facebook’s Justin Osofsky. Carter says there is a trend of artists making their music widely available to listen to, rather than putting all the effort into making people buy it.
What we’re looking to do is not just about selling the CD or the digital file. It’s how many people can we get the music to. How many people can experience it? If it was up to me, I’d give away the next album and put it on every handset that I can put it on, to get that scale,. You can’t be scared to fail. Sometimes we’re going to get big results, and sometimes you learn a lesson, make an adjustment and move on.
On how an artist like Gaga would use data-crunching features on Facebook.
For us it’s how do we laser-focus on that, how do we make it less passive, how do we focus on the super-fan as opposed to somebody who just liked one single? The more layers on top of the community, the more sticky it is. For us it’s not about Lady Gaga talking to the community, but it’s about the community sharing with each other.
On mobile extending the concert experience:
People watch concerts like this now [holds up imaginary mobile phone]. For us, it’s how do we extend that experience? Right now it’s very simple: people are tweeting from the concert, they’re uploading their YouTube video…In the next year or so, something we’re working on internally is going to make it a much more interactive experience… not just how you share the experience on the outside of the concerts, when you go home, but how you share it on the inside of the concerts too.
Carter is interviewed by Slate magazine, as part of its Top Right project, which lists 25 Americans who “combine inventiveness and practicality: our best real-world problem-solvers”. He talks about Gaga’s entrepreneurial deals:
Our strategy is that business follows the creative. We’re not out there scouring the marketplace for opportunities. It just happens. If [Gaga] has an idea that works with a song or a project that she is working on, we go look for best-of-class partners to help us execute it. And a lot of businesses bring ideas to us.
About the upcoming release of Backplane:
The problem is: How meaningful is that social media imprint [on Facebook, Twitter, and her own site]? Just because you have 43 million likes on Facebook doesn’t necessarily translate into 42 million albums sold, 42 million concert tickets sold, 42 million pieces of merchandise sold. So this really builds on a concentrated audience, as opposed to making it bigger.
On his other entrepreneurial projects:
I love entrepreneurs. In the tech space, what I found is this incredible energy that reminded me of the early days of hip-hop. Back then, guys were all starting their own companies. It wasn’t about the money. It was about passion for a specific product or project. I’ve just been meeting a ton of smart kids who have a deep passion. I’ve become an advisor to some, an investor in some of these companies, and they’ve been helping me with some of my projects.
Carter is profiled in NYT’s Dealbook. He talks about the upcoming launch of Backplane and the convergence of music and technology.
Technology has long been the driver of growth in the music business from the invention of lacquers, eight-track players, vinyl, cassettes and CDs. In order to continue the growth we have to go back to embracing technology and the way that people choose to consume music.
Carter is interviewed in Ad Age magazine about Gaga’s marketing partnerships. At this time Gaga has 2.8 million Twitter followers, more than 5.2 million Facebook fans. Digital-single sales are over 20 million, album sales are eight million. Carter says their partnership is “95-5”:
The only thing I do is manage the vision. Ninety-five percent of the time I won’t comment on creative, and 95% of the time she lets me run the business. The other 5% is where we debate about things like, ‘Do you really want to bleed to death on stage at the [MTV] VMAs?’ She wins even when we do have those debates 5% of the time.
Carter says he doesn’t want Gaga to ever look like she’s endorsing a brand — hence why she’s created products for Universal’s Beats By Dre headphones line, Viva Glam and now Polaroid as its new creative director.
You won’t see her face plastered on any packaging or anything. We’re comparing it to when Tom Ford went to Gucci or Steve Jobs went into Apple and brought a different thought process and taste level in. We’re looking for her to do the same exact thing at Polaroid. It’s not about her putting her name on something — it’s reinvigorating a brand.