01:40:20 · John Coogan, D.A. Wallach, Jordi Hays, Rahul Sonwalkar
[01:40:20] S1: Okay. [01:40:20] S0: But you guys are waging a capitalist revolution here in Hollywood. I just feel very [01:40:24] S1: lucky to be here in [01:40:25] S2: the midst. A capitalist revolution. Yes. No one talks about capitalist... Underdog now. [01:40:30] S1: So... Are. [01:40:31] S2: You guys are crushed. You gotta rise up. Rise up. Congratulations on it. [01:40:35] S1: We're stronghold. [01:40:35] S6: I'm gonna I'm gonna fight [01:40:36] S2: back by setting up a street food stand with just steaks. Caviar. [01:40:44] S1: Or or a private credit stand that's unpermitted and and outside of Dodger Stadium. Yeah. And when someone stumbles out, they can get a hard money loan against their property or something like that. [01:40:55] S2: Or there's... Finance data center.... Revenue. [01:40:57] S1: Yeah. Whatever they need to do. Whatever they need to do. Loans. Loans. Loans. Yeah. Finance. Yeah. [01:41:03] S2: Love it. Love it. [01:41:05] S0: It's actually finance. [01:41:06] S1: Finance. I think you guys [01:41:07] S2: know that. Heard you guys earlier. We try to say it Yeah. Properly. [01:41:10] S1: The fortress of finance. Yes. Yeah. Introduce yourself for the viewers. [01:41:14] S0: Well, I'm D. A. Wallach. I'm a big fan of TBPN. Okay. And that's my primary identity. Sure. Sure. But in terms of my First and foremost [01:41:23] S1: Yes. [01:41:24] S0: I've had two careers. Yeah. I was a I was a rock musician. [01:41:27] S1: Yeah. [01:41:27] S0: That's what brought me to LA. Yeah. And then over the past fifteen years, I've become a professional investor.
01:41:27 · D.A. Wallach, John Coogan, Jordi Hays, Keller Cliffton
[01:41:27] S0: That's what brought me to LA. Yeah. And then over the past fifteen years, I've become a professional investor. [01:41:33] S1: Yeah. [01:41:34] S0: I run a biotech and healthcare focused firm. [01:41:38] S1: Yeah. [01:41:38] S0: And then I I love finance. [01:41:40] S1: Yeah. [01:41:40] S0: So we can we can talk [01:41:42] S1: Do everything. [01:41:43] S0: Anything. Whatever you guys wanna take... [01:41:44] S1: Maybe give a little brief overview of the investing milestones, the career. Like, at what point did you know, okay, it's working. [01:41:51] S2: Also, yeah. How did you how did how did how did you just stumble into... Like, what... At what point did you decide, you know, I'm I'm ready to become an allocator first... [01:42:01] S0: I'll you some deep history. [01:42:03] S1: Please. [01:42:03] S2: Yeah. [01:42:03] S0: So... And I'm gonna tie this into a recent guest here, Jimmy Iovine. Yeah? Yeah. So I was a college student. [01:42:09] S1: Yeah. [01:42:09] S0: I got a call on my cell phone from Kanye West. [01:42:12] S1: Okay. [01:42:12] S0: And he said, come out to LA this weekend. Okay. And I landed here and we we were... We spent the weekend not far from this studio, the Ultra Dome at the record plant. I you guys work out near this. Yeah. That's right. Right across from the record plant, there was a glory hole facility called The Zone. [01:42:28] S1: Okay. [01:42:28] S2: Didn't go there. I didn't [01:42:29] S1: go there. [01:42:29] S2: I went [01:42:30] S1: to the [01:42:30] S3: record plant. Okay. Good good and
01:42:30 · Keller Cliffton, D.A. Wallach, Jordi Hays, Max Siegelman, John Coogan, Praveer Melwani
[01:42:30] S3: record plant. Okay. Good good and [01:42:32] S0: then we ultimately got signed by Jimmy Mhmm. To Interscope Records... [01:42:38] S2: Was Kanye, like, just told... [01:42:41] S0: We we ended up in a bidding war. Mhmm. My first experience of real finance. Here we go. Yeah. A bidding war between Kanye and Pharrell. And Pharrell had a partnership with Jimmy Iovine... [01:42:52] S2: You were [01:42:52] S0: a college kid at [01:42:53] S5: this point? I was a [01:42:53] S0: college kid. Was I was senior. [01:42:54] S2: You hadn't technically dropped out yet? [01:42:56] S0: No. I never dropped out. Wow. And we got so lucky with the timing because... [01:42:59] S2: Scott's fired it. [01:43:00] S1: Were you studying music, bio, No. [01:43:03] S0: My my degrees are in African American studies. Okay. And I have a minor in Kikuyu Okay. Which is a language spoke in in Central Kenya. [01:43:12] S1: Okay. [01:43:13] S0: It's a Bantu language. [01:43:14] S1: Okay. [01:43:14] S0: It's not not too distant from Swahili. [01:43:16] S1: Got it. Okay. [01:43:17] S2: And... Do you still know how to say one beer, please? [01:43:21] S0: I don't know how to say that. Can say, [01:43:22] S1: you know, Okay. Okay. [01:43:25] S0: Okay. These are [01:43:26] S1: some Yeah. [01:43:27] S2: The things I These say [01:43:28] S0: if I met a woman in in a strange place. [01:43:30] S1: Got it. [01:43:30] S0: So I'm out here. Mhmm. We get this record deal. [01:43:34] S4: Mhmm. [01:43:34] S0: And as a as a young artist...
01:43:34 · D.A. Wallach, Jordi Hays, John Coogan
[01:43:34] S0: And as a as a young artist... [01:43:36] S2: What does the first record deal look like when you're a college kid and you're in a bidding war? [01:43:41] S0: Yeah. For Allah. First off, you got to lawyer up. [01:43:43] S1: Mhmm. [01:43:43] S0: Yeah. First rule of business. Right? [01:43:45] S1: Yeah. Course. [01:43:45] S0: So we lawyered up. [01:43:46] S1: Mhmm. We had a [01:43:47] S0: great lawyer called Owen Sloan, Frank Zappa's old lawyer. Oh. Elton John's old lawyer. Wow. [01:43:51] S2: There you go. [01:43:52] S0: And we said, Owen, we need you to talk to these guys. Need you to get... [01:43:54] S2: Kind of sound like an industry plan. [01:43:55] S1: Yeah. Just rolled [01:43:56] S2: it out. Got the top lawyer. I'm getting a car. [01:44:01] S0: It was a soft landing. And what does the deal look like? Well, the record industry was in a transitional moment at that time. What what people had realized was you were decreasingly making money off of the music itself. Mhmm. All the income was coming from touring, merchandise, endorsement deals, that kind of thing. Mhmm. And so what the record label started to do was so called three sixty [01:44:26] S1: Three sixty deals. I remember these. [01:44:27] S0: We got one of the last non the whole fight with the label was to sign a non three deal [01:44:35] S1: Got it. [01:44:35] S0: At the moment that they were trying to default everyone into that. Yep. So we signed this deal. [01:44:39] S2: And and Yeah. The the complaint around the $3.60 deal is that an artist effectively ends up as like an indentured servant.
01:44:39 · Jordi Hays, D.A. Wallach, John Coogan, Praveer Melwani
[01:44:39] S2: And and Yeah. The the complaint around the $3.60 deal is that an artist effectively ends up as like an indentured servant. [01:44:48] S0: You're just giving the man more of what you make. Right?... [01:44:52] S1: The album but then you go and do a movie and they take a look at that or something. [01:44:56] S2: And like there's literally no way to make money without the big man getting... [01:45:00] S1: Getting his cut. [01:45:02] S0: At that point. Yeah. Yeah. Because it's $3.60. [01:45:04] S1: I mean, [01:45:04] S0: they slice get of everything. [01:45:06] S1: Yep. [01:45:06] S0: So anyways, it's not unlike being a little company with a big venture fund in you. As an artist, you get signed to one of these big conglomerate record labels, and now you're one of a 100 artists. Yep. And you're vying for their attention [01:45:20] S4: Yep. [01:45:20] S0: Their investment, their promotional muscle. And so one of the only sources of leverage I had with Jimmy was I said, I can introduce you to Zuckerberg. Mhmm. Because I had gone to school with him. So I was like user two thousand and five Woah. On Facebook. I mean, I was literally on Facebook the night it came out. Yeah. My first investment lesson was failing to invest in Facebook. [01:45:42] S2: Of And, [01:45:43] S0: you know, I mean, in retrospect, I was so stupid. I was going and having burritos with Mark [01:45:47] S1: Yeah. [01:45:48] S0: And all I cared about was getting his permission to spam people to promote my band. You know, [01:45:53] S1: much... Instead of some Yeah. Yeah.
01:45:53 · John Coogan, D.A. Wallach, Keller Cliffton, Jordi Hays, Praveer Melwani
[01:45:53] S1: much... Instead of some Yeah. Yeah. [01:45:57] S0: So so anyways, I bring him up to Silicon Valley to meet with Zuckerberg. Mhmm. And in that meeting, I learn about Spotify. Wow. One of Mark's right hand guys at the time, Dave Morin [01:46:11] S1: Yeah. [01:46:12] S0: Also a Silicon Valley... [01:46:13] S1: Been on the show. [01:46:14] S0: Dave Morin tells me about Spotify and he says, I can get you an account. And at the time, it was only available in Sweden because it hadn't been legalized in the other markets. [01:46:22] S1: Yep. [01:46:23] S0: And I started using this product and I was just like, this... I know enough about the music industry, this is gonna work. [01:46:30] S1: Yeah. [01:46:30] S0: Yeah. And so that was my first investment. Mhmm. And then I became the artist in residence at Spotify. Wow. [01:46:36] S3: I very... Investment is crazy. You're like [01:46:40] S2: I should have invested in I should have invested in Facebook. [01:46:43] S1: Missed it. [01:46:44] S2: Said I was focused on spamming, but I got Spotify. [01:46:47] S4: It... It's [01:46:47] S0: really good. You know, Better Lucky than Smart. [01:46:49] S2: Yeah. [01:46:50] S0: And and then I thought, wow, investing's really easy. Mhmm. Because it's just like, you know, I'd read a Peter Lynch book. [01:46:57] S1: Yeah. One Up on Wall Street or something. Yeah. [01:46:59] S0: Yeah. You know, it's just... He talks about it in that book. You just go into the grocery store and you see Legg's hosiery is sold out. You buy it. If the container's empty, this thing must be working.