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Took a $150,000 job to learn
The Pay Cut
Steve Stoute had been making a couple million dollars a year when he left the record business. At the Arnell Group, an agency, he was paid $150,000 plus 20 percent equity. He didn't understand the value of equity at all, and he knew $150,000 was far less than two million. What he was betting on was the education.
Why He Left
He had no family relying on him, he had already made a lot of money, and he was 29. If he didn't change industries then, he figured, he never would. The industry he was leaving sold one song for a lot of money and held a monopoly on CD distribution, radio, and MTV, and none of that looked permanent. When the unknown is a better option than the known, he ran toward it.
The Education Pays Off
The agency put him in front of clients like McDonald's and Reebok. Reebok held the NBA license, and he ran the marketing around throwback jerseys, which artists started wearing and which sold like crazy. He met Adam Silver, then the NBA's deputy commissioner, through that work. McDonald's became the first client of his own company, Translation, and is still a client today.
Why did the record business shrink after 1999?
Napster launched in June 1999 and let users trade individual songs for free, which broke apart the album as a unit. The Recording Industry Association of America's figures show US recorded music revenue peaking in 1999 at roughly $14.6 billion before years of decline. US revenue began growing again in 2016, according to the RIAA, as paid streaming expanded.
How did throwback jerseys go mainstream?
Mitchell & Ness, a Philadelphia sporting goods company founded in 1904, began making replica jerseys of past teams in the late 1980s. Rappers wore them in videos and on stage in the late 1990s and early 2000s, which carried the style beyond sports fans.
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