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11 Jul

Ep. 49 – Budi Voogt – CEO & Co-Founder of Heroic Recordings

Budi Voogt – CEO & Co-Founder of Heroic Recordings; Disrupting the Music Industry; Artists Owning their Own Distribution; Validating Your Work; Building an Online Marketing Academy 

Segment 1: (Length :05:00) – General Updates; Introduction to Budi Voogt and his journey as an entrepreneur thus far; Co-Founding Heroic Recordings; Solving a major problem within the music industry; Growth hacking the music industry.

Budi’s finer points:

“Everything began for me when I started studying business administration at University. I had this point where I came out of high school and I was trying to figure out what I wanted to do and I was inclined towards business.”

I was going to workshops, 1 or 2 per week, trying to figure out what to do, getting a taste of it (business), doing some networking, being kind of awkward, doing those first interactions.”

“At some point, my best friends were hanging out at my mother’s place and they picked up fruity loops, which is production software, to make electronic music. They made something so great and put it up on SoundCloud, which back then was complete infancy.”

“So, they had zero followers and they put this track up and organically it got 10 to 20,000 followers without them actually pushing it or having a fan base. And the music was dope so something sort of clicked for me.”

“I saw an opportunity. They saw an opportunity and we’re like, ‘Hey, why don’t you start an act, I’ll start managing you and we’ll wait. We’ll see what happens.’ So that’s where everything started and I quickly learned that I really love doing it because it meant I got to work with my friends doing something that I love and learn business in the process.”

We started signing more acts. I found a partner. He was 10 years older than me. We started a management agency. He was more ‘old-school’ industry, but so wise so that taught me a lot and I was much more digitally savvy.”

Originally the music industry, especially the bigger companies, would only invest in artists because breaking artists back in the day was very expensive so it meant that threshold before working with that act had to be major validation, a publishing deal, other big artists saying the unsigned artist is dope.”

“Why don’t we flip things around. Why don’t we take this one thing that really was a point of entry, SoundCloud, into the market, where we were able to without investment, just do digital marketing and sort of growth hack the system and then get the numbers there cause what’s more validation then getting 100,000 or 1M plays on a record and then take that to get a deal.”

“When we realized this one thing worked, we thought, let’s go deeper on this. That’s where it started.”

Segment 2: (Length :10:00) – Talking with Budi Voogt; The power of digital marketing; Owning your own distribution channels as an artist; Validating your music; Engaging with your audience.

Budi’s finer points:

“You can do all the academics, but if you’re not putting it into practice, it’s never going to click and resonate as it would otherwise.”

Three and a half years ago when we decided we were going to launch this label, it’s what you were saying. We were trying different things to figure out what works. More than anything, we started just winging it and seeking feedback and testing.”

“We found our point of entry so we need to go really deep on this one thing that we can control to a degree, which is, how do we present ourselves online. What do we do in terms of marketing. How can we figure out how to growth hack these assets and use a platform like SoundCloud and then go really deep.”

“From a cashflow perspective, the music industry was really hard to make a living from. One of the things we realized as we started the label is okay, we need to switch this around.”

“In the past three and a half years with the label, we tried controlling the distribution channel so now we go directly to a store like Spotify for example but what we were able to do in the process is account back to our artists on a monthly basis. We give the a 50/50 split. So, traditionally a label would take 80% of the royalties and pay 20% back to the artist twice a year, which is not that well.”

“How can we accelerate these artists? It began with the management agency, then we added the label. Essentially, similar to what a startup incubator does, is the label allows us to volumous thru puts to be able to put out music consistently and test what works and what doesn’t work to develop these artists.”

“And when they get traction, we’re able to pick them up and put them into the management agency and start developing careers.”

“In Sept. 2014,  we signed an artist called San Holo. We put out his first ep (4 tracks) in a genre called future base (melodic, base, hip hop inspired dance music). That really started his growth trajectory. At that time he had 2,000 followers on SoundCloud and I think we’re approaching 300,000 followers now.”

“The day we had this thing click as well where part of this chain that comes from testing the waters and taking these guys further is also the educational aspect because there are so many artists trying to make music and trying to get heard.”

“We teach music marketing on my website and my partner Tim, teaches mixing and mastering on his website. It’s like the early stages within that trajectory and we’re trying to empower artists all the way through.”

“We’re super empowered to leverage audiences. One of the reasons I started writing about music marketing is because on one hand we went through this whole trajectory of getting to this point of knowing digital marketing because that’s where we have leverage . . . Sharing that is so that others don’t have to go through that inertia.”

Segment 3: (Length :10:00) – Having both a personal brand and a business brand; Having educational products via music marketing academy; honesty and transparency in marketing; growing your fanbase from scratch.

Budi’s finer points:

“With the label scaling and the team growing, what it (personal brands) has allowed for us to do, and I’ll be very frank about that, is that the educational products have a much higher margin than what we make in the industry (music). It takes a lot of work to get the artist to tour – from flights to hotels, management fees, booking fees and so forth.”

“So for example, a book is much more scalable from a revenue perspective, but I wouldn’t want to just have a personal brand because if I were to do that than on the one hand I would feel it was kind of vain and then on the other hand I wouldn’t have anything to talk about if I wasn’t doing it in practice.”

“The educational business really fuels the record label.”

“Fan Funnel – A thousand true fans – It’s all about capturing people’s attention. People are looking at their phones. So what you want to do is make sure your presence and you’re interesting on the platforms that are applicable. But just having a social media presence isn’t enough because a like on Facebook is still a like on Facebook and not something you can control. So, email is really big for that.”

“So what you want to do with people is build relationships that transcend not just one type of social media platform but instead get really engaged with what you have to offer. Whether that’s you as a person, an artist, author, brand or whatever.”

“And the way we use this fan funnel is for artists is that the top of the funnel is for social media platforms (or growth engines) to acquire people that like what you’re doing . . . Once you have quality content and branding, there’s this window where you can get people via permission marketing (Seth Godin).”

“You want to have a personal relationship. That’s better than anything.”

“From there, it’s all about how do you get people to do what you want them to do. And I mean that in the best sense because you can only do that if you give them value.”

“Downloads are a fleeting thing.”

“I’m surprised sometimes though, that the ‘cash cow’ in the market, is usually not on the front end.”

Segment 4: (Length :07:00) – Selling; his book SoundCloud Bible; Managing and Marketing an online course; Getting your first sales.

Budi’s finer points:

“Selling – One of the things I found very intimidating was that I was very hesitant to go hard on the sell even though I knew the book was solid and now the book I’m writing is the 3rd edition.”

“What I have found by getting to the uncomfortable aspect of selling is that people are totally fine with you selling to them as long as you can deliver what you’re promising. They don’t mind. They’re cool with it.

“The most underrated thing is compounding interest and I think that is so true. It is the hardest to get the initial followers or sale.”

“Selling your knowledge, that many people don’t realize that what they have is valuable, is only that once you start generating revenue, or making sales or having some success, is that there’s a lot of money out there. And there’s also a lot of people out there with a lot of money who don’t favor their money more than they do their time, logically, right because that’s what money buys is freedom.”

“So, if you were able to create something that for yourself seems easy because you’re more advanced to it than someone else, then you can simplify that for someone else and remove that inertia; quicken that learning trajectory, than that is worth something.

Segment 5: (Length :03:00) – Hustler Thought of the Day:

“To be in the music industry, to be in any kind of entertainment industry, you really, really have to be passionate about it and love it and persevere, because if that passion isn’t there, it’s easy to give up. If you really want it, the ambition is there, it’ll come. It’s definitely harder work than some people think”

– Alexandra Chando

GENERAL NOTES:

Budi Voogt – CEO & Co-Founder of Heroic Recordings

  • Budi is the CEO and co-founder of Heroic Recordings, a record label group and management company focused on electronic music.
  • Budi also writes about the music industry on his blog, has published a book about SoundCloud and runs an online music marketing school.
  • Heroic operates on the intersection of digital and the music industry, offering a full range of services (management, publishing, audio engineering) to our roster to build sustainable careers for them.
  • Budi’s also created the Music Marketing Academy where he teaches people how to organically grow their fanbase and enhance their SoundCloud presence.
  • In the past few years, Heroic has grown to over 40,000 followers on SoundCloud and their biggest managed client, San Holo, to over 200,000 followers.
  • Budi’s the author of the SoundCloud Bible and also manages San Holo, WRLD & Ark Patrol.

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Matt Gottesman

Matt Gottesman is a global digital strategist and technology advisor, creator and editor-in-chief of Hustle & Deal Flow™ - an online magazine dedicated to the world's entrepreneurs, creators and makers, a Social Media Influencer and a consultant on New Media and go-to-market strategies for investments in digital marketing, technology, websites, mobile applications, eCommerce, social media and content.