In this week’s cover story entitled “Power Trio,” Billboard looks at three of music industry’s most successful music and tech entrepreneurs: Guy Oseary, Scooter Braun and Troy Carter. In addition to managing three of the biggest musicians ever in Madonna, Bieber and Lady Gaga (respectively), the trio are actively investing in tech companies like Spotify, Uber and SoundCloud. The piece features exclusive insights into all three men’s businesses, including Oseary’s first major interview since 1997.
In this excerpt, we get an inside look at how Scooter Braun runs his SB Projects and how he helped close a Series C round of funding for Stamped from one of the most important rooms in his house.
Also in this issue: Roc Nation goes Universal; Fall Out Boy’s full-force comeback; RED President Red Morelli’s Questions Answered; Does music discovery matter?; our incomparable charts, and much more.
To fully understand the power and speed of Scooter Braun’s network in action, one need only spend a few minutes at his home in the Hollywood Hills, just off the Sunset Strip.
Braun is 31, and has a Zen-like dedication to his many ventures. Although a viral video of Bieber smoking pot at a party has widely circulated less than a week before Billboard’s visit, and there are likely 15 projects demanding his attention at this moment, Braun just wants to talk about business, eat some sushi and maybe catch up on the Lakers game, which is on mute on a giant TV that frames his spacious living room.
Joined by SB Projects chief marketing officer Brad Haugen and COO Scott Manson, Braun is sharing the story of how he helped close a Series C round of funding in 2012 for Stamped, a user-recommendation app already backed by himself, Bieber, the New York Times Co., Bain Capital Ventures and Google Ventures. To help him tell the story, he calls up Robby Stein and Bart Stein, the (unrelated) co-founders of Stamped, to see if they can tell the tale of how Braun was a little . . . preoccupied, to say the least, during the funding process.
Reached within minutes, Bart Stein recalls, “I was at Scooter’s house, and he was saying he was going to get these influential and cool people to invest, and then he just disappeared. I asked Brad, ‘What happened to Scooter?’ Suddenly my phone starts buzzing and I got an email from Mark Cuban being like, ‘Send me the deck, please.’ And in the next 20 minutes I get emails from Cuban, Ryan Seacrest, Ellen DeGeneres and [an A-list actor and a major pop star who didn’t end up getting involved], and Scooter’s still not in the room. Then I go back to Brad and say, ‘Is Scooter in the bathroom?’ and he says, ‘Yeah, it happens all the time. He’s most productive in the bathroom.’”
Now, both Steins and Stamped are in the middle of Yahoo’s transition to more of a startup mentality under new CEO Marissa Mayer, with Braun, Bieber and DeGeneres among the early investors who exited handsomely during the company’s sale for $10 million. Artist equity is often a smaller part of many conversations at Troy Carter’s management/investment firm Atom Factory (Gaga has a sizable stake in social network Backplane) and Oseary’s ventures (Madonna is an investor in YouTube channel DanceOn, but has otherwise used a handful of A-Grade products for promotional purposes).
But equity is almost always on the table at SB Projects when it comes to the business of Bieber. “Sometimes it’s equity, sometimes it’s investment-only. It depends on what the ask is from the companies, too,” Braun says.
Haugen adds, “And sometimes it’s ‘We want your talent to tweet about it, and we want you to run marketing for us.’ We either say ‘no,’ but that’s a different discussion when it becomes ‘Can you put money in?’”
“Don’t put your talent into deals unless they’re passionate — I learned that the hard way,” Braun says. “Then it’s easy and you overdeliver. If it’s not easy and you don’t deliver, then it hurts your reputation. That I don’t like. When it comes to tech products and our clients, not only do I want them to look at things and give me advice, I want them to lead me. I want them to be pushing me and saying, ‘This is cool!’ I’ve had that experience with Justin a lot of times.”
Braun is an investor in more than a dozen companies through his SB Projects and his incubator, Silent Labs — Songza, Sojo Studios, Viddy, Tinychat, Spotify, Uber, GifBoom and Pinterest among them. There are others, too, but, he chides, “You’ll know about those when you see the [Securities and Exchange Commission] filings.”
He was also recently appointed by Universal Music Group chairman/CEO Lucian Grainge as UMG’s entrepreneur in residence, a role that has seen him setting up key meetings with the company and his investments like Spotify and Songza, as well as bringing other music and tech-related opportunities to him first. “The key to success in any business is having access to communication,” Braun says. “By being an entrepreneur in residence, I basically connected people with the big-dog record label so they could have a real, open, honest dialogue. That is the only way we’re going to get the answers we need, by actually speaking to each other. Otherwise you have a lawyer calling six months later.”
This is an excerpt from this week’s Billboard Magazine cover story entitled “Power Trio.” To read the rest of this story, purchase this week’s copy of Billboard right here.