Friday, September 14, 2012

Derek Sivers - The Man Who Led The CDBABY Revolution

Derek Sivers would spend most of his formative years and his early adult life as a professional musician (and circus clown) before stumbling on an idea that would launch a revolution in the music industry. In 1998, Derek's search for a solution to getting his self-produced CDs properly distributed without a record label would lead to the creation of CDBaby. This little 'accident' would go on to become the largest seller of independent music on the internet, with over $100 million in sales for over 150,000 musicians.

But his contributions to the world didn't stop there. In 2008, Derek sold CDBaby to Disc Makers for $22 million and set up a charitable trust for music education that accepted all the proceeds of the sale on his behalf. In 2011, his book "Anything You Want" was published by Seth Godin's The Domino Project and rose to #1 on all of Amazon's lists. His unique perspective and highly sought after advice has made him a frequent speaker at the inspirational TED Conference. After knowing Derek for a few years, I was extremely lucky to access the thoughts of the man Esquire magazine described as 'one of the last music-business folk heroes.'

RL: What does the term 'independent' mean to you?

DS: Free to do what you want. Run your business how you want, make the music you want. Having no higher authority than yourself, when it comes to your work.

This was the big eye-opening experience for me, when I was 20 years old and worked at Warner Music in New York City. I realized that all of these famous rock stars get to act cool and rebellious, but really they've signed their rights away to a record label that has the ultimate control over what they're allowed to do. I spoke with many musicians who wanted to record or promote a certain song for their album, but their label wouldn't let them. To me, that horrible lack of freedom is not worth any amount of money.

That's when I changed my goal from "getting signed" to "being independently successful". And I did it! Even in business/entrepreneurship, a lot of entrepreneurs are out there trying to "get signed" by an investment firm. I don't want that, either. I really want to be the sole person in charge of my destiny.

RL: How have you changed over the years - in terms of creativity? How about personally?

DS: Music is not my creative outlet anymore. Now, programming and writing are my tools, and the Internet is my media.

Personally, about 3 years ago I decided to accept the responsibility of being a public figure. Before that, I was really shying away from it. I seriously considered changing my name, and moving somewhere where nobody knew me - to just live a nice anonymous life. But then I realized I could manage what I've been given and keep it at a level I liked, instead of avoiding it completely. That's when I started blogging, speaking at TED, and being more public. I'm glad I did. It's got a lot of upsides and very few downsides.

RL: What slivers of the world have impacted you the most? Musical or otherwise?

DS: Not any one sliver, but realizing that there are so many out there! Reign, I know you've had a very multi-cultural life, but I really just grew up in America. I was born in California, and spent almost all of my first 40 years of life in America. I was interested in other places and cultures, but just as a quick visit, never really immersive. I always felt that my California culture was the best - all others inferior.

But now I'm fully the opposite. I've banished myself from living in the U.S. again. (I can visit, yes, but not live there.) It's a big world, and I really want to really understand it from many different points of view.

That kind of thinking has permeated everything for me, now. I can't help but look at everything from different points of view, knowing that no one way is right or wrong.

RL: Were you or have you been surprised by the lasting impact CD Baby has had on the music industry?

DS: Yeah. You never see it while in it. While I was there, it was just dealing with daily problems, just focusing on the week at hand. But you do that for 10 years, and I guess it adds up to something special.

RL: What made you walk away from CD Baby? You created the ultimate company with a personalized touch. Did you have any concerns about handing it over to as big an organization as Disc Makers?

DS: I challenge myself to stay out of my comfort zone. It was tempting to stay with CD Baby forever, but I realized the bigger challenge for myself was not to stick with it, but to give it up - freeing myself to go on to something completely new.

I knew Disc Makers would be a good company to run it, because I'd been working with them for 5 years and saw how they had made thousands of my musician clients happy. They were really focused on customer service, and that personal touch.

True, they're not as quirky as me, but oh well...

RL: How did you come to the decision to transfer the ownership of CD Baby to a charitable trust for music education?

DS: I didn't want the $22 million. That feels like too much money for any one person to have. $1 million? Sure! But not much more. When I mentioned this to my lawyer, he told me about the charitable trust, and how it could pay me out a bit each year for life. It seemed perfect for what I wanted.

Plus, it felt really good to know that this money came from musicians and will go back to musicians.

RL: Where do you see the future of music heading?

DS: I never think like that. I don't try to predict.

Nobody knows the future.

That's a hard but crucial lesson to learn.

If even ultimate government insiders don't know the future, then neither does your stockbroker, music industry expert, nor you.

We have a human need for certainty that desperately yearns to believe that someone can turn our future from unknown to known.

Even if we logically understand that it's impossible, we're emotionally sucked back in and fooled again when someone important tells us with such conviction what the future will hold.

But nobody knows the future.

Some people predict so many things, so when the random future lands on their number they can say, "See! I told you!" But how many times did they say so, and it didn't come true? (Like the joke, "He correctly predicted 12 of the last 3 recessions.")

Our pleasure-seeking brains remember the times in our past when we were right, and forget when we were wrong. So it's easy to think we're smarter than we are.

Every time I speak on a panel, the moderator has to ask, "What's the future of the music business?"

My first thought is always, "Nobody knows. Anyone who pretends to know is not to be trusted." (Even the ultimate insiders, the heads of every major record label, got it wrong.)

But then my thoughts turn to whoever is asking the question.

Why should it matter what anyone says?

Realistically, what would you change about what you're doing, day-to-day?

And so it comes back to fundamentals.

Just like we know there will be gravity, and water will still be wet, there are laws that don't depend on predicting the future.

You know that people love a memorable melody. You can't know what instrumentation or production-values will be in vogue.

You know that people prefer people who make an emotional connection with them. You can't know what technology will carry that communication.

You know that writing lots of songs increases your chances of writing a hit. You can't know which song will be a hit.

So the best thing to do instead of predicting the future is to focus on the fundamentals that never fluctuate.

If you're a songwriter, write at least a song a week, always aiming for a memorable melody and words that make an emotional connection.

If you're a performer, make weekly improvements on your ability to captivate an audience, and make a goal of really connecting with 10 new people every week.

The details are unique to you, and will change constantly. But the real point will never change.

RL: Do you think that being a musician and being an entrepreneur are interchangeable these days? What do you feel are the benefits and drawbacks of that?

DS: I held an online poll where I asked everyone, "What's the opposite of music?"

All kinds of wonderful answers: noise, silence, Celine Dion.

But the best answer by far was this: business.

It's a totally different mindset, focusing on music - the craft, practicing, performing, affecting people's emotions.

That said, of course the business of promoting your music is like being an entrepreneur, absolutely. But let's not confuse that with what it really means to be a musician.

RL: Is music about business or passion?

DS: Music is about nothing but music. Music itself is just music. Whatever meaning you're projecting onto it is your choice, but it's not inherent.

If music, to you, means business, you're very likely going to be disappointed. Your rewards will have to come from outside.

If music, to you, is pure passion, you're very likely going to be happy. Your rewards are internal, in the music itself, no matter what the world thinks.

RL: I know you were looking for a place to settle down for a long time. What made you decide on Singapore?

DS: Great central location. Truly multi-cultural. A little Chinese, a little Malay, a little Indian, a little British - all mixed together.

There are other multi-cultural cities like New York, London, Paris, Amsterdam, but they're always filtered through a country - they are inside America, England, France, etc.

Singapore is not a city in a country - it's a city in the world.

Plus, it's incredibly well-run, constantly improving not declining, and a place I felt I could confidently invest my time and money long-term.

RL: What is your impression (if any) of music outside of the US and it's ability to garner attention on a world stage?

DS: Sorry, I'm completely biased on this, so I have no idea. I only know what I like. I have no idea what the marketplace likes. Two of my all-time favorite artists are Fela Kuti (Nigeria) and Nusrat Fateh Ali Khan (Pakistan). Attention on a world stage? Who knows?

I do know it's a lot more interesting when people flaunt their unique offerings, instead of trying to copy someone else's. So it's really disappointing to hear a band from Cambodia or Kenya sounding exactly like regular American Top40 pop.

RL: There are a lot of opportunities for unsigned artists in today's new version of the music business. But what are some of the mistakes you see a lot of indie artists making?

DS: Well... I wrote a free PDF ebook about exactly that, so instead of trying to rehash it all here, please go to and download it free.

RL: How do you define success?

DS: Ha! Probably the same as your "independent" question! Doing what you want. Setting out to achieve something and doing it. Freedom.

RL: What is next for you as an avid student of life?

DS: Building and launching a few new business ideas. Learning new programming languages. Exploring, then living, in different parts of the world.

Derek Sivers continues to be an avid student of life. Check his blog regularly for interesting insights on life, love, business and everything in between - they are usually entertaining and always thought-provoking. His book, "Anything You Want" is a must-read for anyone seeking an alternate viewpoint to entrepreneurship in the modern world.

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