eMinutes Client Profile: Louis Posen
Please tell our readers about your business.
Founded in 1993, Hopeless Records is a Southern California independent record label home to the Used, Yellowcard, All Time Low, Silverstein, There For Tomorrow, Enter Shikari, The Wonder Years, Anarbor, The Dangerous Summer, and many more. Throughout the 18 year history of Hopeless Records the label has released over 100 albums and launched the careers of Avenged Sevenfold, Thrice, and Melee. In 1999, Hopeless Records formally started supporting non-profit organizations under the Sub City name with charitable albums, tours, and events. Now itself a registered 501c3 non-profit organization, Sub City continues this mission of raising funds and awareness for worthy causes and to date has raised over $2 million dollars for over 50 non-profit organizations.
Tell us about the project you’re currently working on.
This year we have a second Yellowcard release, new releases for well-known bands The Used and Silverstein, as well as continuing new releases and events surrounding our rising stars. We will be involved in the 2012 Warped Tour as well as our continuing work with Sub City and the Take Action Tour.
Why did you become an entrepreneur? Is starting a business something you always wanted to do?
In 1990, at age 19, Hopeless Records founder Louis Posen was diagnosed with Retinitis Pigmentosa (a genetic disease that leads to incurable blindness) while studying film at California State University Northridge. Less than three years later, after camera assisting on various films, commercials and music videos – and directing his first video for legendary punk’s NOFX – Posen started Hopeless out of a dare from Orange County punk favorites Guttermouth while he was filming a music video for the band. Posen went out and bought a book, “How to Run an Independent Record Label,” and launched Hopeless Records with $1,000, no distribution and no business plan (he wouldn’t advise anyone to launch a business without having long-term goals). “I learned early that you first have to have something compelling if you can’t turn water into wine and later, after lots of mistakes, learned that even compelling music can’t sustain itself without a vision, guiding principles, others’ help and good, old-fashioned hard work,” he says.
What is the number one thing you wish you could learn more about, and how will you learn about it?
Louis is actively involved in learning about mediation and alternative dispute resolution and has been certified through several extended learning courses as well as is a founding member of Mediators Beyond Borders. We deal with mediation and resolving complicated conflicts of interest in our field daily and in the spirit of expanding his circle of influence, he has tried to apply those skills to a wider scope, specifically in resolving conflicts between cultures and nations.
How has technology impacted your business?
This is a very pertinent question as one can quickly see in reading about the changes effecting media industry businesses of all types. Those of us who own rights to creative content are constantly challenged, and simultaneously grateful, for the expanding and more immediate access users have to that content. Monetizing this access has proven challenging, but as a small business we have been able to quickly adapt and change our processes to meet the new ways in which fans look to interact with musicians and the content they create. For us it has on the whole been a blessing and we have always embraced whatever means the fans are looking to find content.
How do you use social media in your business?
Constant updates either from us directly to fans of our brands or by making sure the artists we work with are also constantly updating fans through any and all means, from Facebook, Twitter, etc. to emails, website advertising, you name it.
Did you have a business plan when you started your business, and, if so, how much did you vary from it?
Louis has always lead Hopeless and Sub City to be as directly connected to fans as possible. Either through the social media mentioned above or by communicating directly to the outlets that serve our fans so that we know we are offering the best experience possible to those fans. The company was built on selling product direct to indie stores and marketing/promoting/connecting directly with fans via those outlets. As our business grew, and we needed to have international distribution, we still made sure to have the direct relationships with the sales and marketing people at even the largest chains (Best Buy, Wal-Mart, Target, iTunes) so we could still come up with the best way to feature content, not just whatever cookie cutter regular offerings their systems had.
On a larger level, the ‘plan’ or the result of this approach has been to focus first on the relationships needed to be developed more than the products or marketing plans. Knowing the key players that can bring you opportunities and having some level of personal relationship with these people can lead to more mid-level opportunities they will bring for your products/content/ideas that otherwise might be passed on. All of them will pay attention when you have a hit on your hands, but if you already have a good relationship, and you keep promises, under promise, and over deliver, your relationship will (hopefully mutually) reap more rewards in the aggregate than just the few no brainers you might bring them.
What was your biggest mistake and what did you learn from it?
Our philosophy has been best as a ‘first crawl, then walk, then run” approach. As such, we definitely have passed on larger opportunities to take on a larger artist, or partner with a distributor on a larger level where we could have had some larger successes, but before we were really ready to take on the risks and investment (possible debt) levels to see those rewards. Even though many other of our contemporaries and other labels of our size had done so, some successfully, some not so, we have probably been more conservative than others. Our largest mistakes have been when we got away from this philosophy and over spent on product manufacturing, marketing, etc. thinking that a particular release would be a home run when it really turned out to be a double. We have since held firmer to the approach mentioned above.
What advice would you offer to a first-time entrepreneur?
In addition to the relationship development mentioned above, there is a way to deal with the success you have once you have started up. Starting up is not really the main challenge if you can get some investment from trusted family or partners and you have a good basic business to get started. The challenge comes once you have some success and are looking to grow into new areas or larger opportunities that involve possible risks. We have found, in addition to the philosophy above, doing ‘tests’ of new ideas, even if the larger opportunity is missed at first, gives you a chance to taste these ideas before having to eat the whole meal.
Have you received funding from an outside source, and how has funding (or the lack of funding) impacted your ability to achieve your objectives?
No debt of any kind in our nearly 20 years and our initial investors have made back their investments many times over. This is not always available to everyone, even people that have great ideas, but if you spend the time developing the important relationships, find your mentors that have success in the field you are trying to grow in, and know the right time to ask for some investment, you will have more than the money, but a trusted circle that has a stake in your success, in a way the bank never will.
How do you spend your workday?
We are very focused on habits taught by leaders such as Steven Covey (7 Habits of Highly Effective People) and Jim Collins (Good to Great and Built to Last). Some of these include organizing and communicating weekly, monthly, and yearly goals with teammates and stakeholders regularly, stepping back to begin with the end in mind, blocking time for projects that are not necessarily urgent, but are important, such as relationship development and idea research, and many other ‘tasks’ that would not get attention if we only reacted to incoming email and putting out fires. So, while there are certainly plenty of those urgent matters, at least 50% of the week is spent on seeing the projects and companies at the 50,000-foot level as a planned habit instead of a less frequent occasional effort.
Who do you rely upon in your business most, and what does he or she do for you that is so invaluable?
We are very focused on the concept of putting people in the right ‘seats on the bus.’ Not everyone can be a driver or navigator, but it is important NOT to put someone in the driver seat that is just not best suited for that role. If we are clearly working within our company principles and are open and communicating about our challenges as well as our accomplishments, we will put the right hats on the right people. If we are not in agreement on the principles, then our bus is the wrong one for the person to be on, both for them and for us.
Do you believe that “luck” played any role in the success of your company?
We agree with the concept that we’d rather be lucky than good, but we also know that we have had a higher success rate than most labels. We have been profitable every year and have seemed to have a ‘hit’ or ‘breakout’ artist about 30% of the time. Some of it has to do with not signing every artist that is available and by really taking the time to develop relationships before asking for something, but we know some of it has been luck and good timing for sure.
If you had an extra $25,000 to spend on your business, what would you spend it on?
Ironically, and luckily, we are at times in a position to take opportunities that make sense for a developing artist based on the idea, though the price is not sensible for where they are at the time, so we face this kind of question fairly often, especially with our developing artists. However, the cost is not nearly as large a concern as is whether or not taking an opportunity really connects with the fans of that artist and vision of the project in a genuine and timely way. For example, we could spend that amount of money on a radio promotion, but if the other pieces are not in place (online presence, compelling content in the market, fans hungry for more content), the money would probably be wasted and also the ‘forced’ nature of the promotion might actually damage the artists’ credibility.
How neat or messy is your desk?
One of our company principles is keeping our workplace organized. But, we do find it is best to let individuals do this in a way that is effective for them, rather than having some kind of ‘rule’ about it, as long as the goal of being organized in some meaningful way is being achieved in our effectiveness at our work.
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