Transcript

Jimmy Iovine: Harness fear to drive innovation, part 2

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Okay. What's the password for Wi Fi? Anything.

Get my iPad. Hi listeners, this is Masters of Scale producer Chris McLeod, and we're getting set up in the studio with our guest host, Angela Arnst. to record the second and final installment of her series with Jimmy Ievine. Record producer, co-founder of Interscope Records and Beats Electronics, and former head of music at Apple. If you missed part one, you should go back and listen.

Take my jacket off. It's cold outside, warm in here. Okay, are we rolling?

Um Angela, before we get started. I want to ask you a question. No worries. When Reed asked you to fill in his host,

He asked who you thought would have the biggest impact on entrepreneurs. Why was Jimmy the right guest? Jimmy was one of the First people I thought of to have on the show. Because I love the way that he has always married.

His instincts with his passion. but he has this incredible courage that you just don't see in a lot of people. When he believes something. Амінгізлай а форс.

He just he is all in. And he almost can't help himself. It's just he he becomes one with whatever that mission is. To continue to change things and to shape things and to mold things and I've admired how he's always been on the cusp of culture as he's done that. I kinda stand back and it's like

How did he know that? How did he see that coming? He has this unique ability to look around corners. and then bring all the rest of us along with them. That's perfect. We'll we'll find a way to use that in the episode. Great.

Great. You ready to begin? Okay. Okay, whenever you're ready. I'm Angela Arns.

Former senior vice president of Apple and Burberry CEO. And today Your guest host. I believe. To innovate, you'd need to trust your instincts.

This will give you the courage to break down barriers. Even when they're terrifying. You gotta have incredible talent at every position. Huge push. There are fires burning when you're going out. Such an idiot. And then you go back to this is totally gonna be amazing. There are so many easy way. So I have no idea what to do. Sorry, we made a mistake. But you have to time it right.

Not ball ten years later and be like, well that's just how you do it. We haven't made it just how you do it. This. is masters of scale. I'm Angela Arns.

Former senior vice president of Apple, and before that. Burberry CEO. And today Your guest host. I believe.

To innovate, you need to trust your instincts. This will give you the courage to break down barriers. Even when they're terrifying. We're going to continue exploring this theory now in part two. Of our two part episode featuring Jimmy Ive.

Rec producer. Co-founder of Interscope Records and Beats Electronics, and former head of music at Apple. At the end of part one. We heard how Jimmy co founded Inter Scope Records.

The rise of file sharing and platforms like Napster and Kaza had put the music sales in free fall. The music industry was running scared, except for Jimmy. It didn't scare me. It pissed me off that these sort of what I called at the time nerdy guys Just didn't give a sh And they were just gonna do their thing and act like oh, you know, this is the future.

Well it's the future if it's done right. Jimmy suspected these nerdy guys were locked into their own silos. So certain of their new tech's ability to scale. That they had no interest in its huge negative impact on the artist. Jimmy also recognized that he knew nothing about the tech world.

So we set out to make the first attempt at breaking through the barrier between the tech. And music silos. I thought I better go learn about these guys, you know, these guys that are rip it, burn it, and all this other stuff, right? I went to Intel. I met with one of the founders and he said to me, You know, Jimmy, it's a fabulous story, but not every industry was made to last forever. I said, Wow, I never heard that before.

They said, OK, we're going to overcome this. Jimmy saw that a new approach was needed. One that would courageously break through the barriers that divided artists and technologists to find a new constructive way forward to elevate rather than decimate the music industry. Jimmy got wind of a technology company that had the same goal. Doug Mars, the head of Universal, said go up to

Cupertino, see Eddie Q and Steve Jobs. They're gonna show you a thing called iTunes. They want all license. Tell me what you think. This is, of course, Apple founder Steve Jobs. And Apple Senior Vice President of Services, Eddie Q. The iPod had just launched in 2001, and now Apple was working on a paid for music download service.

The iTunes Music Store So I go in there and I meet with Eddie and Steve. and I start hearing their vision for music. Then Steve starts talking, and he knows how to talk to me. So like I'm listening, I'm going, okay.

Wow. This guy understood the why of John Lennon. I spoke to him about it. He got it at its core. He just didn't like the music. He understood the person who made the music. So I left. And I just call it Doug Mars. I said, Doug

The party's at Steve's house. This guy still understands the crossing. of liberal arts and technology. No one else gets it.

We gotta aim our boat. in his direction. Interscope became one of the first record companies to fully embrace iTunes. Beginning the long journey that would eventually minimize the negative impact of file sharing and create a whole new tech powered ecosystem for record companies and artists. What really sold Jimmy

Wasn't the iTunes tech. It was Steve. And his masterful ability to understand both technology And music. I became of service Eddie Q and Stieve.

Needed help? With iTunes. So I say, Okay. I'm gonna do whatever I can. To help these guys get whatever they need in music.

That meeting with Steve helped Jimmy see the big picture. For the future of music. A future that was impossible to see. Without breaking free from the individual silos of the tech. And record industries.

I remember sitting at a restaurant with Steve Saying, Steve, I want to get in the headphone business. I thought maybe I'd do with Apple. And he said. You do it.

Capitalism wanna make headphones right now. You do it. I said, Okay, I'll I'll do it. The company Jimmy is talking about. is of course Beats Electronics. the headphone and later music streaming service that Jimmy would soon co-found.

Where do you think Beats came from? He had a shiny iPod? We had a shiny headphone. He made white earbuds, I made black. You know, I w I'm not original. I said okay, this guy's got it. I'm just gonna what is he missing? Ah, he's missing good headphones. Okay, I'm gonna make them, you know, and It sound simple? But it was simple. It was hard.

But it was simple. Now Jimmy's being a little flippant here. not just by downplaying how hard it was to build beats, but also about how innovative the driving idea behind beats was. Headphones. Oh like medical equipment.

They're sterile. Pieces of utility. They're commodities right now. I had two headphones. And I held him out.

And I said This one's Axl Rose. And this one's Tupac. I want people to feel that way about these headphones. I want to give them life.

And personality. And that's where Beach came from. I love how the idea of breaking down barriers Was baked into beats from the very beginning. Crossing the divide between fans of classic rock and hip hop.

With the product they both would love. Jimmy had the perfect co founder for Beats and Doctor Dre. Dre hated the sound of these earbuds. He's hearing his kids play sound on crappy computers which are made basically for voice at that time, and little earbuds that are given away for free. All he works on his whole life is defined by sound and the quality and the hours and hours and hours he puts in to make it exactly the way he w That's why he is the greatest

Producer. And audio, possibly that never lived. So One day he said something to me and I said, No, no, no, your audio You're not close. You're not any of that stuff that people your audio.

Let's go in the audio business. So in two thousand and six They co founded Beats Electronics. Another influential artist who was part of the beat's early beginnings was Will I Am. We won't tell his beat story on this episode.

But you can hear it on the Masters of Scale episode. with Well I am. Beach was far more than a line of branded headphones. It was a bold statement about breaking down silos between art. Fashion and commerce.

Artists and their fans. Regular consumers And audio files. People said our headphones were too bass heavy in the beginning, et cetera. That was all on purpose because we were playing to an audience that wasn't being satisfied with conventional headphones and the audiophile experience. So we gave them the bass that we knew they wanted. Beach was also a way for the music industry and its artists to break into new opportunities.

a mindset that didn't always come naturally for Jimmy. In my day, you weren't allowed to sell product. If you were Bruce Springsteen, Bob Dylan, Stevie Nicks, Anybody. You weren't allowed.

to do that. 'Cause then you were selling out or whatever it was called. But then all of a sudden I'm watching Puff Daddy. And the guy's a def jam.

And all these guys I'm saying. They're cool to me, huh? I'm gonna do that. Once again, Jimmy had been inspired by hip hop to break out of his own self-imposed silo that equated selling product.

With selling out. For example, when we started Beach, we started with music. Musicians, music videos. And then one day At Interscope we were making more than a game with LeBron James.

Jimmy was an executive producer on More Than a Game. The 2008 documentary following basketball legend LeBron James and four of his teammates. So he was spending a lot of time with LeBron and LeBron's business manager, Maverick Carter. And I knew that him and Maverick loved hip hop. They loved hip hop! They love Dr. Dre!

Maverick says to me in my office one day. Give me those two headphones for me and LeBron. I said, absolutely. They call me back and says LeBron wants fifteen. He's going to Beijing. For the Olympics. I want some for the whole team.

I said, great. I said, do me a favor. Ask them to wear them around their neck and stuff when they get off the plane. Suddenly, a whole new market and marketing strategy opened up. LeBron's using these things to get inspired to exercise. Okay.

We're gonna switch our marketing to athletes. You make it up as you go. If you look, there's commercials with dreads and LeBron lifting weights and all that stuff. I mean we'd do anything. And the thing exploded. The headphones were a huge success.

But the music industry was still struggling against illegal file sharing. On the legal front. Online stores like iTunes were growing and gaining acceptance. Meanwhile Improving internet speeds meant streaming services like Spotify.

We're beginning to take off. But Jimmy wanted to get ahead of the changes, and make sure the people who had always been most important to him The artist weren't siloed away from the new opportunities that were opening up. I'm watching all these big companies

Use music. And make Billions of dollars. Everyone else is using the IP. From MTV to whoever else

And they're making A fortune. I'm realizing Okay. I gotta morph my company.

Music had to be more. Then just selling songs. I gotta work with our artist and come up with Other ways. To build something incredible.

In two thousand and twelve Bates acquired the streaming service. M O G And created beats music. A subscription streaming service that in true Jimmy fashion.

Focused on putting artists first. So I saw making the records. Playing him back. On an instrument. Which was the headphones.

And I saw the distribution of music. I wanted them all In the same company. Beats broke down the barriers that have been keeping musicians trapped in an unfair business model. In the beginning, Beach was also a pay only service.

Allowing listeners. to also have a more engaging relationship with artists. With their twenty million song catalogue. Beats music offered higher royalties per stream. And gave artists access to valuable data about where their fans were located, their listening habits, and other invaluable insights.

Beats was a company of artists. For artists. Beats offered playlists curated by artists and DJs. Rather than by algorithms.

Jimmy also hired artists including nine inch nails frontman Trent Reznor as chief creative officer. And it was ahead of its time. You don't think you're ahead of the curve when you're trying to do something. People tell you you were ahead of the curve later. The Beatles, right? Which was ground zero for my generation, right? They weren't the only guys with those haircuts.

You know, when you're thinking of something A lot of people are thinking it. It's who can execute on it. Artists and their fans loved it. But there were others in the industry who feared this barrier breaking approach. Jimmy needed a partner who understood both tech

And music like he did. The only person that I ever met that understood it. Truly understood it was Steve Jobs. And that's why I was so attracted to him. 'Cause he was speaking a language that no one else in tech was speaking.

So we sold to Apple. In two taus and fourteen Jimmy and Dre sold Bits. To Apple. For three billion dollars. At the time, it was the most Apple had ever spent on an acquisition.

Soon after the deal. Jimmy left inner scope and became Apple's head of music. He was now at a place he instinctively knew could bridge both the worlds of arts and technology. That's how Jimmy and I ended up starting at Apple the same week in two thousand fourteen. We'll hear more about that meeting.

After the break. When you build substantial wealth through your business, it's often tied up in a single equity position. The upside is real, but so is the risk, and knowing when to act isn't always obvious. Creative planning works with business owners to build a strategy around concentrated equity. When to diversify, how to manage tax risk, and how to protect what you've spent years.

Building. Creative planning where wealth works together. Lear more at creative plating dot com slash masters of scale. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely for From Ford CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode.

I hope to see you there. Humans will never be more intelligent than AI. Those were great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana El Chayubi.

And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. We're back. With Jimmy Ivean.

If you want to watch my full interview with Jimmy. Head to the Masters of Scale YouTube channel. You'll be able to hear the stories and insights from Jim's career, including more on his early days as a producer. His time at Apple and his views on the intersection of fame. And talent. Okay, so I'm down to in two thousand and fifteen, right?

Actually, Angela, before we do that. This is producer Chris McCloud again. I was gonna ask you one more question. Oh, I love it. We're at the point of the story now.

where you and Jimmy finally meet at Apple. At the beginning you talked about The impact that he's had on you. Did you witness Jimmy breaking down barriers firsthand? Maybe start with the story of how you met Jimmy.

Yeah. Ha ha. Ready? Okay. at Burberry. We were very involved in music. We'd launched Burberry Acoustic online and used incredible music on the runway shows and this guy named Jimmy reached out out of the blue.

I didn't know who Jimmy was and They wanted to get together and kind of strategize on some things. That actually didn't happen. We kind of went back and forth on email and kind of missed each other. I remember my first day walking into Apple.

It's um It's a surreal experience. I was from such a different world. Like it was from a different planet. You know, fashion and London and

And all of a sudden I'm in this. Which is kind of like in the business world, Oz. And it's like, you know, why am I here? About a week in the job, I hear some, you know, conversations in some of the executive meetings about this potential acquisition and this guy's named Jimmy comes up again. It's like, oh wow, maybe I should've figured out a way to meet with him. And all of a sudden someone walks in and introduces me to Jimmy, and there was just a a mutual admiration and respect. You know, we were the outsiders.

We were just starting to envision the entire new in-store experience, to which music needed to play a huge part. Yeah, at Apple we had these things called mock stores. I'd say, hey Jimmy, you know, can I show you this? Would you pop over? And he always, he would just pop over if he was in town and and you know give us his two cents and you know, did you think about it this way, did you think about it that way, and coming in and working his magic. We always had geniuses that repaired phones. We actually created a new position called a creative pro. And a creative pro was to music or was to photography or video making.

What the genius was to repairing your phone. They were highly skilled. We had two or three Grammy winners in our New York stores that were employees that we didn't even know about. Джимі воз інструментал. In helping us decide exactly what that final in-store experience should be like.

Was kind of a kismet experience. And uh And that's kinda how it started. Amazing. Perfect.

Gotta keep going? Yeah, let's take it from 2015. In two thousand fifteen, Jimmy oversaw the launch of Apple subscription music streaming service. Jimmy also used his time at Apple.

To continue breaking down barriers. To create a more equitable streaming ecosystem for artists. They were incredible company. Boy, and I'm so glad because you know Apple getting into streaming really helped the record industry because it kinda validated the whole thing and everybody say, Okay, now Apple's in the game.

This is one of the most powerful things about breaking through barriers. You'll give others the courage to follow you. And once you've done so You'll have a much easier time helping him see the big picture. They'll embrace the startling new opportunities.

Partnerships and innovations that were impossible to comprehend. From back behind the barrier. It reminds me of a famous quote from Steve Jobs. You can't connect the dots looking forward. Only when you look back.

Does it all make sense? In two thousand and eighteen, Jimmy left Apple. And now had time to focus on another project. To hear how that began. We need to rewind in our story a bit.

To before Apple acquired beats. And Jimmy was trying to staff it. When I had beats. that I was trying to find employees that understood what we were trying to do between culture and technology. I can't find people that understand

Both languages. Or understand each other. They don't learn like that. They either come out of engineering. Sitting next to sixty other engineers,

Or design sitting next to sixty other designers. There's no collaborative innovation in school. These people are all siloed. And they're siloed because they learned in a siloed way. WAUT A DE PER UndESTANDING.

and respect the other disciplines. You don't get the connection that builds trust and enables you to break down barriers. And something I want to highlight here. Із хамі's entire career Build up to this insight.

Jimmy had time and time again seen the huge benefits of getting people to break out of their silos. Whether that was between two musicians in the recording studio. Or two entire industries grappling with the seismic changes in technology. Now he instinctively saw the mindset. Of keeping people siloed wasn't instinctive at all.

It was taught. So to change things. He would have to go into another siloed institution. Education. So I said

Oh. School needs to be not siloed. That's what hit me, you know? I I Like it was like a lightning bolt. I have no idea. It's the future of education. Silo learning. should be dead as a duck.

But listen to what Jimmy says next. Acknowledging that education was another strange new world to him. I have an instinct, but I don't know how to do a lot of things. First of all, I don't listen to people that speak about education. So I have no idea if somebody thought that before. Maybe they did. I most certainly never thought of it.

In beats and our school and me with hip hop. These are things that I didn't understand. Bob Seeger had a great line. He said

I wish I didn't know now what I didn't know then. That is so powerful. We didn't care what we couldn't do ever. And we went against convention every time. A little naivety goes a long way.

So me and Dre,'cause we're crazy. We went and we put up A lot of money. To start this school. In two thousand and thirteen, Jimmy and Doctor Dre donated seventy million dollars to USC.

to found the Jimmy I Bean and Andre Young Academy for Arts. Technology And the business of innovation. The academy is teaching a new generation of entrepreneurs, artists, and technologists. To break down barriers across disciplines.

It's a new approach to education that will engender more courage. More boldness. And more willingness. To follow creative instincts. We're really proud of the school and we're proud of having kids be able to go to places like Meta.

Apple, Google Netflix and bring These skills and these other disciplines To the party. But even now with five schools following the curriculum Jimmy and Dre started.

They still find it hard to break down the walls of siloed education. I can't believe it. I'm running into the same stuff. That I ran into in the record business. On every level of education. You're dealing with

You know, presidents and deans and boards and Locked in people That have been doing this for Thirty years. And

Some people are incredible. And very open. Some people are less open. You have to have a certain amount of humility. 'Cause you're running into people.

that you know have no idea what you're talking about. Think you're nuts. Think you are not educated enough to even talk on this subject. And You gotta keep pushing.

They keep pushing. In two thousand and twenty two, Dre and Jimmy expanded their curriculum to high schools. The Ivine and Young Center integrated design, technology, And entrepreneurship magnet in LA. Aims to redefine the high school experience.

The reproach is also starting to get picked up by other major education institutions. But scaling. is still challenging. MIT is starting a school now, I hear, like our school. But I do believe we're the best. We've been doing it for twelve years now, and we believe it. We're gonna scale this thing somehow.

It's essential that not just schools. But companies and business leaders recognize the value and need for cross silo learning. By emphasizing the connections between people of all backgrounds and expertise. We're placing humanity and human interaction. At the center of what we do.

I just believe after my experiences. In The arts In tech. That

You need to understand each other. And right now It's at an impasse. They don't understand, no matter what they don't like hearing it. They don't understand the why.

The leaders of the future, if they're Fluent in other disciplines. And understand the why of the other disciplines. It's gonna make for a better world. Breaking down these barriers and reaching beyond our silos brings the big picture into focus.

This is key to remember as we rocket towards an AI infused future. AI is all about the how. But it knows nothing about the why. The core passions and instincts that drive us all. Well you don't understand the why if somebody

Whether it's your Husband. Your wife, your kids, your best friend, your partner. You better understand the why. You know where it's called?

Empathy. The world goes round on You have to understand. Who you sitting across? Leaning into empathy.

Builds deeper trust. Unlocks creative thinking and emboldens us to keep on breaking down barriers. But whether you're an optimist or a pessimist when it comes to the impact of AI. One thing is clear. We all urgently.

Need to think more like Jimmy. I like working with people. I like a band. I like an infield. Okay. Mm.

Oi,s giving credit along the way. to everyone who helped me. Anybody who's ever done something for me I try to keep him my life. With Mr. Gaffin.

I sat next to him at the Lakers game the other day. When we started beats. As many minutes as I could get with Steve Jobs, I took. We set at a Greek restaurant. And there were these tablecloths that were paper and you have magic markers there.

And he just Route. І інтай ікосистем. Of hardware. And if we sit there for hours doing this.

There's a pattern here. Okay. V of service. To everyone from the artist to the product. Be of service and people will want you around.

And and help you become better. How can we amplify our human qualities? Empathy, trust, instincts, courage. To enable us to stay ahead. And ensure the future is human driven.

I'm Angela Arns. Thank you for listening. Hey there, it's Jill Slessenger. I'm launching a new show. It's called Mone Moves, and your money is going to move. We're gonna help you make better financial decisions. We're gonna call out the BS you're finding all over social media. We're gonna give you actionable guidance to make your financial life clearer, less stressful. We're gonna answer your financial questions and take the mystery out of your financial life.

Follow and listen to Money Moves with Jill Schlesinger wherever you get your podcast. Masters of Scale is a Wait What original. Our executive producers are June Cohen, Darren Triff, And Chris McCloud. Our chief content officer and interim president is Lori Hoffman.

Our producers are Chris Gautier, Masha Makutonina, Adam Skuse, Alex Morris, and Tucker Legerski. Our editor at large is Bob Safian. Our music director is Ryan Holiday. Original music and sound design by Eduardo Rivera, Ryan Holiday, and Nate Kinsella. Audio editing by Keith J. Nelson, Steven Davies, Steven Wells, Andrew Nult, and Liam Jenkins. Mixing and Mastering by Erin Bastonelli and Brian Pugh.

Special thanks to Reed Hoffman, Angela Arnst. Anne Ryan, Jadine Dorsay, Alfonso Bravo. Colin Howard. Tim Cronin, Kelsey Sizen. Sammy Oputa.

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