Beats by Dre—Make Your $3Bn Business
“I created a monster!” That’s a line from an Eminem song—one of Dre’s most famous protégés. And a monster is exactly what legendary hip-hop artiste, producer and entrepreneur, Dr. Dre, created with his iconic headphone brand, Beats by Dre.
In May 2014, Apple Inc. purchased Beats Electronics for a ground-breaking $3B; the largest acquisition of its kind. Dre’s 25% stake left him with a ‘get-ready-to-gasp’ $500 million windfall and a ‘holy-Forbes’ net worth of $700 million.
What’s stopping you doing the same? It’s possible because there’s precedence. Dre’s done it. Jay-Z is doing it. Why can’t you?
If you have an idea or a newly formed business, make it reach the dizzying heights of Dre’s dollars:
The Idea
You need that eureka moment! It’s when the ‘million dollar idea’ comes to you with compliments from the cosmos. You begin to see this new business idea as your destiny. You’ve heard all those success stories before–“Mr. Rich Man made his millions from his bedroom” or “Entrepreneur stumbled upon an idea after falling into a ditch and thinking of awesomeness on his way down.”
If you’ve waited long enough for that idea to come to you, then perhaps force the issue. Just a little.
Look carefully at your current business. Are there certain areas that don’t run as smoothly as you would like? Maybe you have a solution, something that hasn’t been conceived yet? After all, great inventions are solutions to problems we may not have realised existed.
Once you have your idea, work on it. Run with it. That’s how Beats was born.
During a business brainstorming session, Dre’s lawyer recommended that he sell sneakers. Dre’s business partner and iconic record producer, Jimmy Iovine, allegedly suggested otherwise; “F*** sneakers, let’s make speakers.”
However, Dre was apprehensive thinking headphones wouldn’t work. Competitors such as Apple had huge success with cheaper headphones. Dre didn’t believe people would want to spend a significant amount of money on a much more expensive set. But then fate intervened:
One fine afternoon, when observing his children listening to some of his own beats, Dre said, “It was crazy to see my kids listening to my music on these headphones. I was like, ‘This is not how it’s supposed to sound. This is not what I spent all this time in the studio for.’ We decided we had to do something about it.”
He ran with the idea. And a billion dollars later, it turned out to be a good one.
The A Team
When your business idea begins to flourish, be sure to organise a team of ‘A’ players. The best possible recruits for your business in its infancy will enable a solid foundation upon which to build a successful future.
In May 2014, Beats hired Matthew Costello, the new Chief Operating Officer. Formerly of IKEA and HTC, he arrived with a pedigree that matched the company’ vision. However, hiring somebody that has a high level of demonstrable experience may not be the easiest thing to achieve for a small business, especially a start-up. So, setting up a precise interview test or trial run may be the best option in order to find the candidates with the best ability.
Marketing Your Monster
On a scale of 1 to 10, marketing ranks 11 for importance. Market your product effectively and you’ll earn yourself a customer.
The 2014 television campaign of Beats managed to create a frenzy with cameos of famous celebrities including, Serena Williams, Nicki Minaj, Kylie and Kendall Jenner.
You’re most likely at the stage where you can’t afford the big campaigns that major blue chip companies so lavishly execute. And that’s fine. But just be sure to budget enough money to go as ‘all out’ as you can in order to draw the world’s attention to your company.
The ‘A’ team counts here too by the way! If need be, hire the best marketing company to help you launch your service in a creative and effective manner.
Aim for More
As an entrepreneur, you should be unaccustomed to ‘resting on your laurels.’ Always think one step ahead of your next move and ask yourself how you can exploit your latest success.
If you’ve successfully been selling a particular service for a very long time, think of ways in which you can exploit and expand on that. Perhaps consider add-ons to a certain product or running free ‘taster’ trials for your next launch. Whatever it may be, you must not stagnate. Keep those profit lines rising.
Beats Music, a subscription-based online music streaming service, was launched in January 2014 with an intention to provide a different type of streaming experience to what was already available. Ian Rogers, chief executive of Beats at the time, said, “We wanted to build a music service that combined the freedom of an on-demand subscription service—unlimited, uninterrupted streaming and downloads of tens of millions of songs – but layer on top features that would give you that feeling only music that moves you can give.” This was all possible due to the success of Beats by Dre; further expanding the brand. “Ex-branding” if you will.
Now take your business idea and aim for the $3B dollar mark. If you aim low, you’ll never be big.
Or perhaps go one step better … and beat Beats?
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