The Reality of Building a Music Tech Business

Jakob

Matt, I've been looking forward to having you on the podcast. Welcome.

Matt

Thank you. I'm happy to be here. Thanks for having me.

Jakob

Matt, you have an very interesting company called Atis Growth that's been around for a small while and have made a significant amount of sorry, I'll just do that again. Normally we just do clean runs, but I'll just do again. Matt, you've built a great company called Artist Growth. And over the last 14 years, you've built something quite amazing with a lot of customers, a lot of traction. And when I went into your website and looked at your product and tried to understand it, it was one of the most brilliantly designed and explained products in a long while. So this is 14 years of company we're talking about in your journey. But let's sort of set the scene, Matt. Who are you and what do you do and what does Artist Growth do?

Matt

Yeah. So yeah, my name's Matt. I live in Nashville, Tennessee. I've lived here most of my life, in terms of, you know, my family I was born in New York City, to two people from the northeast and we moved here in the early eighties, when I was small. And so I grew up in Nashville around the music world and so I got into music early and I started Artist Growth yeah, about fourteen, fifteen years ago now. And what we do is it's a s it's software that is built specifically for utilization inside the music industry to help artists and then all of their and then organizations that support artists like a record label or artist management or talent agency bring our tools into their organization to help streamline the collaboration around the daily work that goes on. In order to support the artist career. So that's everything from touring to marketing timelines to project management, to you know, pitching and sharing things with media. And we try to focus in on tools that are going to help organizations be more efficient as they as they run the business.

Jakob

And we'll get into your journey as sort of as a songwriter and creator and before you went into the entrepreneurship path, but You know, starting such a company in 2011, 15 years ago, is very different from starting something now. So when you see a problem in 2011 and say, I want to solve something, that's a pretty big step. Like today you could build a MVP product fairly easily, you don't be technical, but it's a big bet to do. So what is it that prompted you to take such risk back in the days to build a product servicing this problem?

Matt

You know, I think primarily it was becoming a father. You know, so I yeah. I spent you know, I guess from the time I was eighteen, and then like through university and then for the ten years after. And I dropped out once for a couple of years and then I ended up going back and finishing. But I was just my entire life ambition was to just write songs. And

Jakob

Yeah.

Matt

A lot of my friends' parents were in the music industry here in Nashville and were pushing me very hard to, you know, pursue a path as a studio guitarist, like a session guitarist, and or become a songwriter with a publishing deal and just try to write hits for country stars and things like that. And I had no interest in that. I wanted to be in a band, or and I also wanted to do my own thing and write songs and just tour and travel and see the world and write poetry and make art. That was all I wanted to do. I had no commercial ambitions whatsoever. I didn't give a shit about making money. The entire decade in my twenties was literally like, I just want to be traveling and I just want to be making art. And then when I was 29, my first son was born. And that was a moment where I you know sort of the lifestyle that I had been planning to live, because we w it wasn't like a hey, let's have a child together. And his mother was also she was the front woman in another band and she had her own touring career and her own things happening. And so it's like, okay, well I've got to we have to get healthcare for this child, you know, 'cause in the in the States you gotta pay for it, and it's really expensive and you know, we gotta I gotta be there. You know, I gotta parent this child. And so being on the road a hundred and fifty days a year or more was wasn't gonna work.

Jakob

Mm.

Matt

So in order to get healthcare, I had to take a job somewhere and I ended up working in the healthcare field because it was a place I could get good health insurance. And I started working for clinical trials, first in vaccine research and in virology and then in cancer research. And I found my way onto a team of data analysts and when I got expo that was the first exposure I had to s to building software and looking at data. And it was the data for these multi-year clinical trials. And right about that time the first iPhone was coming out and the app store was this new thing. And so I started thinking I could do this for artists. We could build an app that helps artists better manage all of the business side of touring.

Jakob

Okay.

Matt

Which is all things I struggled with when I was on the road and performing and my friends struggled with it. And so a friend and I just decided he had just had a child as well and so he had come off the road and so we decided let's build an app for artists since we can't tour. Let's make an app that helps artists tour and keep you know, and we thought, we'll do it for a couple of years, our kids will grow up and we'll go back out on the road. But I stuck with it. I was having so much fun that I stuck with it. But it was hard then. It was different it was different then. It required more money. It required a much larger upfront investment than it would today in terms of time and capital. Which did present all kinds of challenges and you know, a lot of mistakes were made early on. It was my first time doing it, so obviously when first time doing anything, you make a lot of stupid mistakes. But yeah, it was a very different time. And I just have always been one of those people that's super optimistic. And so I believe that like if you can dream it, you can do it. And if it's gonna be fun, even if you fail, it'll be worth the learning experience. And so we just went for it.

Jakob

It's quite interesting because if I, you know, hear you talk about yourself and your career and I look at sort of your CV, what I can find on the internet, you weren't exactly qualified necessarily to build a company other than you understood the pain point. Like what was it that made you think that you could take this upon yourself and actually build something?

Matt

Yeah, just a desire of like, I'll figure it out. You know, I was really terrified of ha of ending up in a career position where I felt stuck, where I felt you know, my kid was getting older, I was getting older and I was in a job that I hated, you know, like the typical sort of nine to five corporate gig that was gonna stifle my spirit. And so this to me was an opportunity to build something that would allow me to retain control of my calendar, not have, you know, a corporate boss yelling down at me and give me a lot of freedom and also help me potentially, you know, build value for my family and build equity and wealth. And so I just decided to take the risk and just jump in. Knowing that I was in over my head and I was gonna be on a steep learning curve.

Jakob

Hmm. And so how did you go about this? Because your partner was he a technical partner or like did he need it to find other people? Like how did he go about this? It doesn't sound like that was that easy.

Matt

So

Matt

Yeah. Well, so it was the co-founder was he's a also a songwriter. And so n neither of us had technical backgrounds. I had a background a couple of years under my belt of like doing data analysis across large data sets as part of a team. And then there was a team adjacent to us of software engineers. And so we were building we were designing the software systems that were deployed to all of the sites and clinical trials around the country that were running these trials. And then the software guys would build it and then it would get deployed and people would start running the trial and filling in the database. And then we would pull the data out and clean it before it got submitted to the FDA. And even though I was only there for a couple of years, so none of the trials that I worked on actually completed their cycle because they're multi-year clinical trials. I got exposed to how software gets made. And so I felt I had sufficiently seen. The process enough where I was like, I can figure this out. You know, and so what I did, the hardest part for me was actually learning how to build a business plan. You know, so my father was a very successful executive in the healthcare world. He started off his career after he got his master's degree at NYU Medical Center. And then and then he was offered a job at Vanderbilt medical center in Nashville, which is why we moved here when I was a child. And, you know, I always used to tell myself I never want to have a job l like that, like a corporate gig. But he was somebody that gave me a great deal of wisdom when I started pursuing this path. And he obviously knew other people in the in the business community. And so he introduced me to someone that he worked for at Vanderbilt who was also an entrepreneur and had been successful. And so he said to me, you know, here's the keys to my office. You can come in here on the weekends and use my whiteboards and work and b build me a business plan for your idea. And so I did a draft and you know, this is probably two thousand nine. And I brought it back to him and he shredded it and said, This is a good try, do it again. And he would he would

Matt

Give me some advice. And so I probably my co founder and I probably went through twenty different iterations on a business plan. And until he said, Okay, this is this is a good stopping point. Let's stop right there. Now go build me a pro forma. And you know, it was like great, no problem. And then I went home and like Googled like what is a pro forma. And

Jakob

Mm-hmm.

Matt

You know, and then so I so I made one and of course he tore that apart and then we made another one and another one and another one and another one. And then once I he I had, you know, probably a year of going through that kind of a process and mentorship and then he said, Okay, you're ready and he called some of his friends who were also successful entrepreneurs and threw me in a room with them and said, Pitch your idea You know, and of course everyone in the room passed we w we were saying we were gonna you know, I had sort of asked this person like how much money should we raise and he well let's raise a million dollars. Which looking back on was a huge mistake. I would never advise an entrepreneur now to do this. But he put me in front of some investors and over time we ended up raising some capital over a year, year and a half period and we raised a million dollars before I even had a prototype. I just had a slide deck and a pro forma that I made in Excel. And it was all angel investors here in Nashville. But that enabled me, that gave me the money to quit my job. And then we found through one of the investors had a colleague in Austin, Texas, who ran a software agency. And so he hooked us up with them, and it was that agency that we hired to build like the first the first V one of our app. And then we launched it in 2012.

Jakob

Hm. So what was the first version?

Matt

It was it was a mo it was an iOS app. And it's really wild to look back on it. I still have all of the all like the UI screenshots f from that. But it but it basically, you know, the home screen had a circle on it, and in the middle of the circle was a logo and then there was different buttons. And so one of them was like called AG T V and that was when you opened that up you went in and there was a video library of interviews we did with successful producers and songwriters and tour managers and it was all about how to do those jobs professionally. So it was like a it was like a little like YouTube for indie artists who wanted to figure out how to run a music business. And then we had a calendar and a schedule and we had a section for managing your finances and a section for managing merch and a section for managing travel. And then we had a database that we licensed to look up radio stations and press outlets and I think it was called the Indie Bible. I think it might even still be around. But we embedded the indie bible into the app and so the idea was you can run your little emerging music business from your iPhone. And

Jakob

So that's pretty interesting, you know. Obviously then and now very different. Like one of the things that I try to advise founders not to do is build businesses that's where the main business model is like small assets, small creators, because it typically is a customer group that doesn't have a whole lot of money to s to spend. So i would could you make anything financially from this app? Like did that have any traction or financial success?

Matt

No. So we so we had a free version and then we had a four hundred ninety nine a month subscription. And I think within the first two or three months we had like fifteen thousand people sign up for the free version. We landed an integration deal with BMI and we felt like we were off to the races. And then by six months we had

Jakob

Yeah.

Matt

Zero conversions to the paid app, even though the free app was still continuing to grow. And so I called a meeting with my investors or the board that had formed of these this group of angel investors, and I said, I said, listen, guys, we have to pivot up market immediately. Because we're not gonna make any money and we're gonna burn through this cash and we're gonna be out of business. And it was a very uncomfortable conversation. But they ulti they ultimately understood. And luckily when I went to have that conversation, I had just recently found out through a network here in Nashville that a management company, a very big one, one of the biggest in Nashville, was looking for a new system to run their roster management on. They were using FileMaker Pro and they were looking for something more modern that had a mobile component. And so I was able to convince them, okay, if I work with you to flush out a scope of work on this, will you subscribe to it? And after you know a couple weeks of back and forth, they agreed, yeah, okay, if you if you can build us this and you deliver according to this spec, we'll pay you. And so when I went to the board and I said we have to pivot up market, I had that signed LOI from them and I said, look, but this these guys, these guys have signed on and I really think If we pivot up market and we start building for established businesses, we can get the company profitable, we can, we can grow the business, and then one day we can circle back around and with an with an offering for artists and come back to this portion of the of the market. But right now we have to go up market. And they agreed and then started the excruciating process of Pivoting a company up market and trying to build tools for management companies and record labels, which I've been doing ever since. That was probably 2013 when we did that. And we killed, we I immediately canceled my relationship with the agency, hired a technical partner who's still my CTO to this day. And we started over. And instead of building mobile, we built on the web.

Jakob

Mm.

Jakob

Mm.

Matt

We launched six months later, we launched our MVP and have been iterating on the platform ever since.

Jakob

Mm-hmm. It's so interesting and I have a lot of discussions with founders about this because when you read the sort of the headlines in music, industry media, you see these acquisitions and these successful direct to artist companies. But the reality is that a lot of these are, let's say if they acquired more for strategic reasons or for sort of ecosystem reasons or tooling within a you know, broad range of tools and the standalone success of a company based directly on direct to consumer or autist.

Matt

Mm.

Jakob

Is really, really difficult to get up and running. So now today we'll go back to the story, but you do have a sort of product that caters to both businesses and NATIS. Would you say that the income from ATIST are a significant proportion of the revenue or is it symbolic compared to everything else?

Matt

Yeah, and I would also say it's definitely the right now, ninety-nine percent of my revenue is coming from businesses. Not big enterprises. We are primarily so when we did the pivot up market, you know, and it became very clear to me, it was sort of this aha like duh moment for me, not an aha moment, but just like a yeah duh. In that being an artist and being a DIY indie artist who was working very hard for many years on the road.

Jakob

Yeah.

Matt

Playing lots of shows, making merch, selling merch, making records, doing all of it myself. That of course, of course they don't have money to pay for a subscription for a tool that helps them be more organized. You know, first of all, like organization and business organization aren't high on the priority list of most artists that I know. They certainly, in the 10 years I was on tour, it wasn't high on my priority list. It wasn't even on my priority list. But even if it is. You gotta you gotta buy you know, at that time you have to press CDs or press vinyl, you have to make merch, you have to pay for hotels and gear and studio time and all the things you have to do just to get a record in the world and then take it out on the road, that's where all the money from your day job goes. You know, not to mention your bar tabs and all the fun you're having. And so the it was like, yeah, of course they're not gonna pay for this. Like n they don't give a shit about being organized. They want to be on the road and make records and have fun and change the world and get discovered. You know, so yeah, I think I think that was bound to happen. But then I think just more broadly, consumer facing or artist facing products, it really matters, at least in my experience, where you sit in that services layer. So, like, you know, distribution companies, a lot of people started chasing that. Around the time that I started artist growth, you know, there was like DistroKid didn't even exist. CD Baby was out there, TuneCore was out there. And CD Baby at the time wasn't even digital. They were like, send us your CDs and we'll host them in a warehouse and mail them to your, to your it was like it was like fulfillment. It was a fulfillment company, right? And then TuneCore did dis digital distribution and then CD Baby built that. And there was in grooves and there were others out there that but it became this race to who could get the indie market distribution. And that was because as the DSPs emerged, you couldn't get on them without a distributor, right? So it wasn't a it wasn't a nice to have for an independent artist. It was a you must have it or you're not in the market. And so my business, artist growth was a very much like barely qualified even on the nice to have list.

Matt

You know, it was more on the like, do I really need that list? It was it wasn't, you know, so f so it was doomed, I think, in that market initially. But I would tell entrepreneurs who are looking to serve artists, because I do think artists need to be served directly by technology companies, but you have to ask yourself and be very honest with yourself, w where are you layering in your services of the problem you're trying to solve in this in the list of priorities of

Jakob

Mm.

Matt

The must haves, the nice to haves, and the and the do I really need it haves. You know, because as soon as I pivoted up market to a management company that say maybe has fifty artists on their roster, we moved up into the must have category. And once you're in that category, then you have then you have a business you can build.

Jakob

Mm, yeah.

Jakob

How what how what was that for you emotionally? Because you know, I don't know how you were in particular as an assist, but oftentimes assists have this very passionate about other assists and maybe they're a tiny bit removed from the industry or like it sort of seems like that's a less per pursuit of art even though it's necessary? Like did it feel like a compromise that you needed to go away from the people you wanted to serve, which was in the thousands, to someone who maybe what wasn't as in the millions, really, okay. Did that found feel like a big compromise emotionally or what was that process like?

Matt

Millions in the millions.

Matt

It did. It was a very hard time. You know, I look back on that time with a lot of empathy for everyone involved, including myself. You know, you ha if you had me and my co founder who were both first time founders, we were both artists, and so we had zero business background, so we were learning even what it means to run a business. And we had raised money, so there was pressure on us from day one to execute and deliver revenue, which didn't come natural to us. And so there was a ton of pressure r right from the beginning. And then pivoting to the business side, you know, I would go so far as to say when I was touring, not only was I not interested in the music industry as a business, but I actually had a bit of disdain for it. I did not I did not like the idea of merging art and commerce.

Jakob

Yeah.

Matt

And actually one of the decisions that I made personally, when I made the decision to start artist growth, I sort of had my own moment at the crossroads where I had to I asked myself, what can I not live without? Is it is it making records and being in the studio and writing and creating and recording, or is it getting on stage and performing? Or is it both? Do I have to have both? And ultimately I decided I could I could absolutely live The full creative life that I wanted to live without getting on stage and performing and just being in the studio and making albums. So that was a decision that became easy for me to make, but I only wanted to serve artists. But so in a sense, it was a hard choice to make. But I was also in this sort of catch 22 where I knew that artist growth was the ticket to not having to be in a job I hated, and I had to make it work, I had to make it work. For my son at the time, who was a who was a very small baby. And so I was driven, I was driven by this, like I am gonna find a way to make this happen. And nothing's gonna stop me. And if I have to go sell software to the big corporate music industry people, then that's what I'm gonna do. But I talked myself into this narrative of if I can do that with the industry, then I can bring a tool and position it in such a way to the ultimate benefit of artists.

Jakob

Mm.

Matt

And w and make it part of the mission and encode it into the mission of the company as we grow to come back to artists. And everything we do is still in service of art and filling the world with art. Because I believe that without a world filled with art, that humanity just falls prey to its worst, darkest impulses. And it's really it's really art that pushes our consciousness forward. And we so we must have a world full of thriving artists to s to thrive as a society. And so even though we went up market, the culture here that I crafted with my team was the people who labels and managers that they're all working for are artists. And if we can provide value there enough to build a business to help them serve their artists, then we will have a platform to then turn back to the wider artist community and say, here, now you can use this. So that was sort of the way I justified it in my mind and convinced myself that we were still on a virtuous path, so to speak, from a business point of view. But it was a hard time. It was a hard time. I you know, my right when we made that pivot up market is when my co-founder left the company. And that was a that was a tremendously difficult phase in my life. That I can empathize with any founder who's in those early stages of like the

Jakob

Makes sense.

Matt

The rough waters of trying to figure out w the destiny of their business and learning how to have those kinds of hard conversations and it's not for the faint of heart.

Jakob

No like I've been a co-founder of Break Myself three years ago and that always broke me. Like and it is so incredibly difficult because you know, you pour your heart and life into something and it you're so entangled with the business financially, emotionally, all the time, all the relationships. So but Why did you continue? Like, you know, it could have been easier just to say, Okay, I'll just run with these millions of users, I'll try to find a model that can work and like why was it so necessary for you to just look it in the eyes and say it's not gonna work, I need to do something different and why were you motivated to continue when maybe your co founder wasn't?

Matt

I believed in my gut, 'cause we I thought about it. I thought well maybe, you know, like I said, DistroKid didn't exist. It's like w what if we just start a digital distribution company and we make it cheaper than everybody else. You know, and we make that be the main hook and then we layer in all these business tools. And, you know, at the time it was like, Yeah, but that's gonna go to zero. Like I saw that as a I actually thought it would happen a lot sooner than it's happened, but I saw that as a business model that was gonna go away. You know, like digital distribution was not something to bank my future on. And I and I believe firmly that where the business was headed, what technology was gonna bring to the market, there had to be a platform that could help integrate all these systems and help give operators, whether it's an artist, a solo artist, or a whole record label, a way to collaborate and manage the all the information that is churning around a tour or around a release cycle. And nobody else was doing it. You know, everybody was either chasing distribution or they were chasing you know mm streaming analytics stuff, you know, like back then like there were like next big sound and then or D2C stuff. So you had like Pledge Music at the time, who was like one of the early D2C companies. You had Topspin You know, that Ian Rogers was running his early D to C company and I was like, I d I don't wanna chase that. And it there's a lot of people doing that, but nobody is doing this. It was an infrastructure play. I always saw it as an infrastructure play, and to me, i as I couldn't see the future, but as I looked at the horizon It just made so much sense to me that the world was going to become more digitized and everything was going to be based on technology and software, and that the at the end of the day, the infrastructure utility was going to end up being worth it was gonna be a major asset if we could if we could build it. And so even though even though back then most of the people in the industry in the music business in inside these organizations still didn't know what an API was. I had I used to have to go explain to people what an API was.

Jakob

Mm. Yeah.

Matt

Now I'm having to explain to everybody what an MCP is. They th and they would look at me like I was crazy, but I saw it. I saw, well, if we could move data from the talent agency to the manager to the label and the label to the talent agency and we could help people collaborate across these ecosystem through integration, and we have that we have the security that will allow them to do it s safely and feel good that their data is secure. And

Jakob

Mm.

Matt

And people can only see where they're supposed to see. That didn't exist. And every so everyone was doing it in email and spreadsheets and Microsoft Access and FileMaker Pro. And that to me was a real opportunity because that workflow was never going to go anywhere. It was only going to become more digital and faster and more data. And so I even though it was like, okay, the market hasn't caught on to what we're doing yet, if we can hang if we can make it work and we can hang in long enough eventually we're gonna be sitting in a position of strength. And that was the that was the bet that we made.

Jakob

I think it's really key hang in long enough and especially when you're faux first movers like yourself. Like usually being a first move in entrepreneurship is not necessarily a good thing. It means you're taking the blunt of the hit of the wave or the non-a adaptation of what you're building. But sticking in is really what can help you become a first mover to become something that actually scales through time. But

Matt

Agree.

Jakob

Speak a bit about the first mover aspect. Like, people didn't understand what we're talking about. Like, how do you actually go about selling something that people didn't understand?

Matt

I think honestly, and this is an assumption, but I think one of the reasons people kept me around and kept the company around, and just for context for everybody, like I don't have a sales team at Artist Growth. I'm the only salesperson here. There we don't have a marketing team, we don't have a sales team. Everyone who works at the company is either in product, engineering or customer success. And or like central services like finance, HR kind of stuff. We have no marketing team, we have no sales team. And so it was just me going around to these organizations and knocking on people's doors and getting introduced to people. And I think the reason people were intrigued is because w we were a company founded by an artist building tools for the industry and The industry at that time was still sort of feeling the burn of what people who are building tools for music out of Silicon Valley were doing. So people who were actually just technologists and had no background in music had actually, you know, a lot of the operators looked at that group as like they're hurting us. Like they're taking control and leverage out of the industry and trying to pull music as a commodity into the tech industry. And there was resistance to that psychologically. And I think there still is. And so what we were seen as is as a music company building technology from within the industry. And so we were seen as friendly. And there was this sense that I got from executives. In some organizations, you know, global CEOs that I met with, who kind of had this like, Okay, I like your optimistic view and I like that you're trying to make a healthier world. I'll give you a little bit of money and let's see if you can deliver.

Jakob

Mm.

Matt

You know, and so little by little we kind of got fed by some of these organizations and revenue where we would start on like a fifteen thousand dollar a year pilot, you know, and it would grow to thirty the next year and eventually turn into hundreds of thousands of dollars. And so it was just this blend of like altruism around the music industry and wanting to help from inside and then the ability to deliver really good software on time.

Jakob

Mm.

Matt

And it worked, you know, and so people would say, cool, okay, well, yeah, here. You know, let's do another let's go deeper. And it took a long time and it wasn't easy. You know, and I've been through some bloodbath funding rounds as a result of how long it took and how hard it was. Where, you know, the that side of the business, managing that side of the business as an entrepreneur, was extremely painful. And you know, just

Jakob

Mm.

Matt

Part of the of the growing pains and really and the a result of the times in which we lived in, you know, like you said at the onset, like now is a completely different thing. Like you can have a production MVP ready in three or four days, to take to market if you really if you really want to and you have a sense of what the product is in your mind, and be earning revenue in two weeks. You know, it took us a year to build the MVP for artist growth almost. And then more years to build any kind of meaningful revenue. And you know, that just so we had to raise money and that created all kinds of challenges. But luckily we've been able to navigate it and find people who believe in it.

Jakob

But let's talk about raising capital in a moment. I just have a interesting question. So while I was doing my homework, you know, I understood that you released an album in two thousand seventeen, so in the middle of your journey here. It also got to national recognition. So I think that did that solidify even more the friendly the friendly person that's going around, or like did that play a big part that you were actually releasing music as an artist and you had this sort of authenticity behind what you said?

Matt

Maybe. Yeah, I think maybe. I def I definitely noticed and still do notice a warming of conversations when people realize that I'm an artist or I get I get introduced to someone as an artist, you know, and there's a couple there's always the type of people in the industry that sort of r roll their eyes and shrug it off as like, yeah, an indie artist who couldn't make it, you know, so you started building an app. And then there are the ones who are actually listening and paying attention and when and want to talk to you about your story and ask questions and those are the ones who realize like, there is real intention behind why this company was started to help music and to help artists. It's really not just purely an opportunistic business play. Or like a data grab, you know, for some other purpose. Like you see now with a lot of you know with a lot of like distributor acquisitions and catalog acquisitions by people who have nothing to do with music where it's just data they're just buying data sets to train to sell to the AI companies and for training and things like that. And so yeah, I do think that to some degree, with some people, it bought a little bit of credibility and it and it bought a little bit of goodwill to sit and hear the story at least. And you know, and then and then I can't really say why people initially bought except that it really was a problem. You know, when you go into a multi billion dollar company that's operating globally and they're using Google Docs to manage things, you know, like that's a problem. And that there's a lot of real problems associated with that. And when I would start speaking to that, you know, they would they're nodding their head going, Yeah, and you have a solution. And so there wasn't the funny thing is there was never no, that's not a problem for us. Never once did somebody say that to me. The

Jakob

Yeah.

Jakob

Mm.

Jakob

Mm.

Matt

Sticking point was always, can we get people to adopt this? Can we change their behavior? You know, and that was I think the biggest uphill battle and still is for us is like what we were proposing, was in order for it to work, human beings at these organizations had to change their behavior. And there's a lot of organizations that have leadership that do not like, you know, culturally just sort of don't like giving mandates and telling people how to do their job. They just say, as long as it gets done

Jakob

Yeah.

Matt

Care how you do it. But and that introduces a real challenge, right? Because then you can have a you can have a junior staffer at a company who just crosses their arms and says, I won't use this. I'm gonna I'm only gonna use my Google Doc or whatever and management isn't pushing back against that. And so effectively you have a twenty four year old junior staffer setting data strategy for a multi billion dollar company, which is just insanity.

Jakob

Mm.

Matt

But that's the that's the byproduct. And so it you know, it's been a it's been a real puzzle to solve, the adoption question. But you know, that comes down to UI and UX and success and onboarding and white gloving people and all of those things that you do to try to solve that problem.

Jakob

Mm-hmm.

Jakob

Because there is a lot of problems and sort of let's go a tiny bit back to fundraising and just to set the scene for anyone listening, like raising capital in music has never been easy. It probably never will be or not for many, many years. But here you're talking about a product where you have this I wouldn't call it slow growth, but compared to, you know, VC investors or you know, you need something that goes a bit fast where you've taken a while. And raising capital from like early stage investors, angels that maybe understand the problem inherently and they're from Nashville, they might be involved in the music industry to some degree, so they can feel it on their own body. And then raising capital later stage is two very different things. Like you can't really just sell a vision on a pain point. You need to actually sell a company that can produce something significant. So what was the journey? Was that bigger investors? What did they need? Like

Matt

Yeah, I mean i for me so for the first many years of the business, I only took money from angel investors. So these were successful entrepreneurs or recently retired music industry executives who had done very well for themselves over the years and so they had they had money and they were the one thing that was common across all of them, even though you know some of them were doctors and some of them were ex-label CEOs or whatever. The one thing they sort of had in common was wanting to give back to younger entrepreneurs who were at the start of the journey. And there's a lot of reasons for that, right? Like one, you just you want to pay it forward. Some people want to stay close to the heat of the action, and so they're sort of vicariously living through a young entrepreneur because they're sort of at the end of their career, and so they get to kind of relive that rush of starting a company through an entrepreneur that they're mentoring. So it was a mix of all these things and that's a I think that's a friendlier kind of investment capital than VC or institutional capital, where they just it's they expect a certain level of sophistication and scale and speed and so that was one way we did it. But it was that's not to say it wasn't painful and difficult. And I raised money, like I said, I raised a million dollars. Before we had a prototype. And that was a huge mistake. And I did that on the blind advice of one of those initial investors. And I would never as in my life, if I was talking to an a young entrepreneur, I would never advise them to take on capital before they have a product in the marketplace. Especially now. But even then. Keep your day job, find a way to get a product, find a technical co-founder, like do the really hard part up front, put the sweat in, bring a product to market, do one transaction for a hundred dollars, whatever it is, like have something real before you raise money. 'Cause you'll learn so much in the process that it will save you years worth of pain. And I know that's easier said than done, 'cause at the time I was so desperate to get out of my day job and I was so on fire for the prospect of the business and I

Matt

I didn't want to be patient. But it was a mistake to raise that money early before we had a product. And I wish someone had pulled me aside and said, This is a huge mistake, don't do it. You know, so we raised some money and then we had to raise more money and then we had to raise more money and then we had to raise more money over the years, and it was never it was never these giant rounds. You know, it was never like we raised ten million dollars or twenty million dollars. I see people raise this money, like they announce a fifty million dollar round and then they're like a year and a half later they're firing everybody and going out of business. You know, and I'm just like it blows my mind. It's like, how did you spend fifty million dollars in eighteen months? Like, what the fuck? And 'cause I've never had that kind of money. For me, it was like a hundred thousand dollars or you know, we raised the first million and then another million, but then after that, like I actually went through a period of two years.

Jakob

Yeah.

Matt

Where my investors would only fund payroll to payroll. And if we if we did if we showed progress on our sales pipeline and our product roadmap, they would fund the next two week payroll. And then they would fund the next two week payroll. And it was it was so painful. It was so painful. I mean it almost killed me actually. And that was the result of

Jakob

Well. Let's think.

Matt

Where it did get to the point where revenue wasn't materializing as fast as we thought, and it was much harder to convince people to change their behavior than we thought. And a lot of the early investors said, like, I'm out, like this business is gonna fail. And then there were two or three who stuck around and got very tight with their money and would just give us a enough to keep us alive. And then as we started closing bigger deals, you know, we eventually were able to bring on a couple of institutional investors. But even then, they were like, We're only doing this investment. So we have a seat at the table. If this thing ever does scale, we'll be able to have an inside line on that and we can put up a big check. But it was still, you know, nobody was writing huge multi million dollar checks. So for me, it was a very painful process of drip funding. Essentially, until we actually got our feet under us. You know, and now I'm not raising money at all. Like we're just we're just growing off our revenue. And I empathize with founders that are going through this journey and trying to figure it out. And I would definitely advise anyone listening who's a first time founder is like do not over raise. Take less or take nothing. And try to bootstrap, try to bootstrap your company. As much as you can. And obviously you do get to a point where you have to bring in capital to really launch and grow, I think, unless you get lucky in the bootstrap phase and it just takes off, like more power to you. But don't go out and raise a ton of money on a dream without any real sense of how you're gonna deliver it in the practical world. You know, doing a sales cycle, getting turned down, running real marketing campaigns with a working product and seeing adoption, seeing churn. And really starting to understand what that looks like even at the smallest minute level, like ten, twenty, thirty customers sign up and then cancel and you know like live those cycles before you go out and raise money is if you can, or before you raise a lot of money.

Jakob

That sort of speaks into one of the questions I asked you before we started. And that is about building a successful business in this niche space. It's not niche in music, but in, you know, the big global world of tech startups, it's sort of a niche pursuit. And The thing about raising capital is you spend more money. And no matter what, that's sort of that's lost money. So you need to build a business based on that. And the exercise of the discipline of not spending money and really keeping it tight is probably the reason why you're here. Even though that was painful and definitely not something you would do again, I assume the reason why you could be growing on your own, being successful on your own, it's also because you went through the exercise of not spending. Am I correct or like

Matt

Yeah, I think that's right. We went through the exercise of not only not being able to spend, but you know, having to fight for our existence in a very real way every day. And that and that was stressful. And I remember early on I was impatient, you know, after we raised our second million, like several months after that, and I had a lawyer saying to me, Well, why don't you just go out and raise ten million dollars? Like all like all startups do in the tech space. Like

Jakob

Yeah.

Matt

Go raise $10 million so you can really attack this and like go after it. And I went to the one of the lead in investors of my angel network who was on the board and I put this question to him like, come on, let's just raise, let's go do a big round. Let's raise 10 or 20 million dollars and chase that. You know, because you're reading these headlines of these companies that do that. And I'll never forget it. He looked at me and very gently, very, you know, calmly, look looked at me and smiled and he You'll fall flat on your face. We're not doing it. And you know, he said, you'll burn through the money in a year and then this thing will be over. And I won't allow it. And I that was that was wisdom. And I appreciated him forcing me away from that way of thinking and seeing the world. And you know, it's just a hard thing. The I think the exciting thing about now is like you can bootstrap a company, you can build, you can build an application. Like that's not the hard part anymore. In two thousand eleven that was the hard part, you know, like handwriting, hand authoring line by line of code, to get things done. And now it's just it's tremendous what you can do, in such a short period of time. You know, and I and I think I have very you know, specific thoughts about like the f like the future but the value of software and how that may change as a result of

Jakob

Mm.

Jakob

Mm.

Matt

LLM coding and all of the these new sort of innovative approaches to writing software code are happening. I think it's going to change the very nature of the value of software in terms of its value proposition and equation and what buyers the buyer psychology and all of that, but it is tremendous for the for the buyer. And you know, I would never advise an entrepreneur to go. I mean, to me that would just seem insane.

Jakob

Yeah, a hundred percent. And I think that's the really interesting point where we are now that if you may maybe this is wrong to say, but I'll say it anyways. Like if you have a founder that's supposed to make it these days, like If you cannot build a product yourself, if you don't have the technical capacity or the co founder can do it, you're just not gonna make it full stop. Like it that is what it takes now. So even the premise of you needing to raise capital in order to get a team to build it is sort of like wrong. Like Not really. Like that is that is not really a question. You need to have that and if you don't have that, forget about it. Now it's more about like, okay, do you need compute? Okay, maybe you can't get some tokens, maybe you can't get enough of it. Maybe you need to go raise some money. Or i there's certain aspects where you still need to raise some money, token costs or whatever. But there's very few arguments when it comes to you as a founder being able to not go build a product, sell a product, and have revenue before it raise capital. So and it changes so much about how you are an entrepreneur. It really goes to that execution mode and what you did at the beginning probably won't happen again unless it's incredibly novel or you know happen like happens to happen but it's not gonna be the norm at all. If you were to do this again, how would you go about it in twenty six?

Matt

Yeah.

Matt

Bootstrap, bootstrap it all the way. I mean, I'm the kind of person, so number one, and people joke about it all the time who know me and are close to me, but I am an optimist's optimist. You know, like you cannot dampen my spirits with reality. Like I am I if I decide to do something, I'll be dead in a ditch trying to do it before I give up and quit.

Jakob

Okay.

Matt

If I decide that it's worth it, if it's really worth it. And I so I'm an optimist. I will really go after something. I'm also obsessed. One of my big obsessions is the idea of getting as close to achieving my potential as I can, as a human as a human being, not just as an entrepreneur, but on every level and dimension of what it means to be human. You know, and I th the idea of us being in this dynamic field, like if you if you think about physics and the and the cosmology of the universe that we live in and the way it works and what we understand about it through you know physics and Having consciousness that allows you to work within that dynamic field to try to achieve something, whether it be building a business or whether it be spiritual growth or athletic growth or whatever it is, certain like health markers, like the fact that we have this creative capacity to like kind of push our way through the universe and create just opens up a tremendous amount of fascination in me, in my imagination. And so I became obsessed with this idea. How close can I get to what I'm actually capable of doing? And so I would, if I was starting artist growth now, I would relentlessly utilize all the tools at my disposal to build my vision and get as far as far into my vision as I could without any outside funding or any outside influence other than talking to the customers that and the people.

Jakob

Mm.

Matt

In the communities that I aim to serve with my service. I would I would go talk to them and obsess about them and I would block out all noise. And I wouldn't talk to investors. I wouldn't talk to outside observers. I would block myself out for them and like signal to noise like 99.9 to point one signal to noise ratio of like speak to my community and build, build. And then that point one may you know would be Who you would go talk to that was like better at technology than me when I had questions. And I would block everything else out. And until the community I am to serve right before my eyes was becoming excited with what I built and wanting to use it. You know, and then I would think, Okay, now it's making money, now it's in the world, like it's working. W what do we need to do to expand it and make the community larger? That's how I would that's how I would approach it now.

Jakob

Yeah.

Matt

Man, how fun would that be?

Jakob

Yeah, and I have the privilege of so running a venture studio, we get to real time sort of experiment with technology and a few things and I always have a lot of ideas and some I sort of work in my spare time, which is sort of also work time. And right now I'm launching a product that's basically something for myself and the business. And that's something I've built on the side for five months. And just like okay, I'm the only one building it. I have a dev team. I have a p no one is touching this. This is just me. And I have just full focus on the side. And now like okay, this is a problem I believe in. And okay, I'll create a list of five hundred enterprises I believe will get this. We go and reach out to them, three hundred reach back. I'm like, sure, okay, we'll take it. Meeting. That is an immense feeling where okay, I didn't need any investors, I didn't need to use company capital, I didn't need to use my company's team. I just understand a problem here that is addressed to me. I'm pretty sure no one is addressing this because it's so incredibly unique of a problem, but I know that it's for big enterprise companies. I'll go build it for myself and then I'll ask people do you want to use it? And that approach is just so different than what you could do a few years ago, but now it's actually possible. But

Matt

Mm.

Jakob

But really the appreciator is fully understanding a problem and how to build it and how to speak with these people. So that's where we spend most of the time now. So now I have a team involved. They don't touch anything other than they reach out, have meetings, help understand their problems, and then we say to those, don't worry about it, we'll customize it for you. Because it's that's not the issue anymore. Now it's just about understanding how do you want to use this. And that's a totally new different way of building businesses. But I guess you can also apply that now for your business, right? Because like as a you have integrated MCP into your platform, which is very trendy, I guess, but also being able to query your data and able to sustain your workflows with your a lens encoding environment and still work with your platform. So you are adapting that way still as a business.

Matt

A hundred percent. And it's thrilling to be able to do. You know, I think I think MCPs are yeah, they do seem trendy. Everybody's coming out with them, but there's a reason everybody's launching their MCP servers, right? I mean it is part of what is gonna what the paradigm of software development is gonna be a part of that moving forward. These tools to write code are not going anywhere. And they're only gonna get better software engineers

Jakob

Yeah.

Matt

Senior software engineers are able to leverage them in ways that are just unbelievable and so exciting. And so not only is our MCP for querying data, but also writing data to our system. You know, so we're launching write MCPs and you know I mentioned that we have a pretty strong point of view on where we think software development's headed. And so we actually have an announcement coming at the end of this month. That is sort of the next step beyond MCPs that I'm actually really it involves a another MCP server, but I'm really excited about it. And I and I think that something that's important to consider when building a software business today is the space between front end and back end is growing. And so if you know it's very, very easy to

Jakob

Mm-hmm.

Matt

To whip up a UI UX front end in whatever, React or Python or you know, JavaScript. Y you can build these interfaces and you can attach them. You can you can pull up Superbase or you can pull up a something else and you can quickly you know whip up a database and store data and you have a working product. But that's very different thing than having an enterprise grade hardened product that has a security posture. That you can go into an a global enterprise with a straight face and say, Yeah, go ahead and do diligence on my system and do a pen test and we're ready for the real deal on the back end. That's very, very different. And so I think entrepreneurs should be thinking about that and they should be thinking about where they make their investment. And I certainly think that when it comes to data and security, and not and

Jakob

Yeah.

Matt

I don't just mean security from a point of view of like leveraging all the tools in AWS to, you know, encrypt your tool and like have virtual private clouds and all that type of stuff. Like that's all great and that's all important and you know, you gotta be SOC2 type two and GDPR and all of this stuff and that's all great. But then you have these things called users and not all users are equal when it comes to the relationship to the data. It's actually a pretty in any industry I would imagine, certainly in music. It's very complicated matrix. And so one of the things that as far back as 2013, as a byproduct of pivoting up market and dealing with management companies and talent agencies and labels, was the diff the different way all of these people related to the same set of data. And they all had different rights to it. It originated in different places, but they were all sending it around and sharing bits and pieces of it with each other to coordinate.

Jakob

Mm.

Matt

And so we had to make huge investments in our ability to facilitate people to customize access to their data at the field level, as opposed to just having like three or four generic positions of like, you know, admin and guest and user. It's like, no, you could have a hundred different roles in your system, all with in your artist growth account with all different configurations of access to the data. Because of the nature of who that role is to the artist and where they sit in the in the orbit of their business. And that to me is not something that's just you can't vibecode your way into that. That requires real architectural expertise, data modeling expertise, and you have to know how to build the APIs right and actually build those permissions into the APIs. And so it's it that is a real area. Where people can really differentiate themselves from a lot of the stuff that will be coming to market. That is, they cut corners just to get to market and they don't think through the back end and the investment. I mean I think a companies that don't do that are gonna find themselves struggling in the world of AI where front end can be built in seconds by an eight-year-old with who's given access to cloud code, can build themselves an app that works, but if you want to bring a service to a business and operate globally, then your back end better be legit. And you can't do that unless you have people on the team with the wherewithal and the expertise to model that out correctly. And that's gonna be an interesting thing over the next couple of years, I think.

Jakob

Hundred percent. And but that also difficult in music, right? In music tech because a lot of the people who have that knowledge try to maybe get opportunities elsewhere. So but that's a whole different talk and I'm happy that you guys have taken pursuit and I and I totally agree. Even though I run a company I spend most of my time practically as the CTO and I build Just accept with back end and database. I usually just use a front end in order to get an API code if I ever use it. But like that's where everything is heading. If you were to sort of the roundup question of this interview, like y you have investors. And but you also have the opportunity now to grow the company organically. But still there's some pressure to deliver a return investment to whoever expects that. What is the what is the path for Arts' growth when it comes to building something that will reward the owners over time?

Matt

Yeah, that's a good question. I mean, it's a it's a one that any entrepreneur has to deal with, or really any executive who's running a business that has shareholders, or members if it's an L C I think the number one thing that you have to think about as an operator is profitability. And you have to build a business. Ultimately, y you have to have a pathway to running as a real business and if you're gonna create value for people, like real equity enterprise value. Like you have to have a real business. Unless your goal and your bet is we're just gonna build this for growth because These 10 companies, one of them is gonna buy us for strategic reasons. And that's your path. It's like an exit to a larger organization. And you're making a very specific bet to chase that without any plans for profitability. But otherwise, then yeah, you could you could sell it one day to someone in order to create a return for your investors. You could make it so profitable that you can start paying dividends. On a quarterly basis to your investors, and then it becomes an annuity for them. You could take it public at some point. Depending on the nature of your business and the size of the market and what you think that you can achieve, even in adjacent verticals to maybe a niche. You know, there's nothing stopping artist growth from continuing to drive a ton of profitability in the music and entertainment space, which we still have a massive growth opportunity. But then there's nothing stopping us at some point to starting to talk to organizations that work in the sports world or that work in other adjacent industries that have a lot of the same problems, who we think we have a better solution for than some of the existing players in those spaces, right? There's all kinds of licensing deals you can do with other industries as well, based on core technology. So I think there's a lot of ways you can start to explore return on investment.

Matt

Once you have an asset that's actually like profitably you know, returning results for the business itself and showing that you can have long term customers with low churn, and that your service is actually geared towards being around for the long term, you know, and that's what I liked back to the idea of an infrastructure play. I think when you're building infrastructure, it's a long game. It's not an easy road. And you spend most of your time under the city with a hard hat on with a little light on the top of it, like you know, digging in the muck. But if you do it right and you're able to stay alive down there, then you can build an incredibly valuable asset because it ends up becoming an underpinning of technology that a lot of businesses rely on, the same way you rely on the electrical grid. And so And so I think that for artist growth specifically, like continuing to invest in places where we see the need for the industry itself to have technology in order to keep the lights on, as it were, as we move deeper and deeper into this fast moving digital sphere. That's our focus. And I think if we do that and we continue to add a r a ton of value, we're gonna continue to see growth. And then opportunities will present themselves to enable us to share a healthy financial return to the people that back the company and to the team, you know. I have a lot of my three my three big stakeholders that I am super committed to are my customers, the shareholders and the team. And that and that's sort of my North Star is making sure that all the choices that I make

Jakob

Yeah.

Matt

Are run through that filter of like, is this good for my customers, is it good for my shareholders, and is it good for the team to take this on and is this how we wanna invest our talent and our money? And you know, and then I just try to surround myself with people that are smarter than me, who can tell me when my ideas are shit and who can tell me when I have a good idea. And then we go chase it down.

Jakob

Amazing. Matt, it's been a pleasure. I've learned a lot from this conversation and it's beautiful to hear the story of the struggling artist in the end, well, in the journey as well, building something quite incredible in it. I love the stories about things taking a long time because I think we're fed with stories about things not taking a long time, but it just really always does. And that's what I hope to do with this podcast is to tell the real story. Matt, it's been pleasure. I love this conversation. And thank you so much for being on.

Matt

Thanks for having me. It's really fun to relive some of these things and hopefully people who listen or watch are able to get some value. Stay in touch. I really appreciate it.

Jakob

Well, yeah. Perfect.

Matt

All right.