1425: The Day Steve Jobs Dissed Me in a Keynote by Derek Sivers of on Business Ownership & Entrepreneur

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[00:00:30] [SPEAKER_00]: Steve Jobs Dissed Me in a Keynote by Derek Sivers of Sivers, S-I-V-E dot R-S.

[00:00:36] [SPEAKER_00]: In May 2003, Apple invited me to their headquarters to discuss getting CD Baby's catalog into the iTunes Music Store.

[00:00:44] [SPEAKER_00]: iTunes had just launched two weeks before with only some music from the major labels.

[00:00:48] [SPEAKER_00]: Many of us in the music biz were not sure this idea was going to work,

[00:00:52] [SPEAKER_00]: especially those who had seen companies like e-music do this exact same model for years without big success.

[00:00:58] [SPEAKER_00]: I flew to Cupertino thinking I'd be meeting with one of their marketing or tech people.

[00:01:03] [SPEAKER_00]: When I arrived, I found out that about 100 people from small record labels and distributors had also been invited.

[00:01:09] [SPEAKER_00]: We all went into a little presentation room not knowing what to expect.

[00:01:13] [SPEAKER_00]: Then, out comes Steve Jobs.

[00:01:15] [SPEAKER_00]: Whoa, rockstar!

[00:01:17] [SPEAKER_00]: He was in full persuasive presentation mode,

[00:01:19] [SPEAKER_00]: trying to convince all of us to give Apple our entire catalog of music,

[00:01:23] [SPEAKER_00]: talking about iTunes' success so far and all the reasons we should work with Apple.

[00:01:27] [SPEAKER_00]: He made a point of saying,

[00:01:29] [SPEAKER_00]: we want the iTunes Music Store to have every piece of music ever recorded.

[00:01:33] [SPEAKER_00]: Even if it's discontinued or not selling much, we want it all.

[00:01:37] [SPEAKER_00]: This was huge because until 2003, independent musicians were always denied access to the big outlets.

[00:01:44] [SPEAKER_00]: For Apple to sell all music,

[00:01:46] [SPEAKER_00]: not just music from artists who had signed their rights away to a corporation,

[00:01:49] [SPEAKER_00]: this was amazing.

[00:01:51] [SPEAKER_00]: Then they showed us the software we'd all have to use to send them each album.

[00:01:54] [SPEAKER_00]: The software required us to put the audio CD into a Mac CD-ROM drive,

[00:01:59] [SPEAKER_00]: type in all of the album info, song titles and bio,

[00:02:02] [SPEAKER_00]: then click encode for it to rip and upload when done.

[00:02:06] [SPEAKER_00]: I raised my hand and asked if it was required that we use their software.

[00:02:10] [SPEAKER_00]: They said yes.

[00:02:11] [SPEAKER_00]: I asked again saying we had over 100,000 albums already ripped as lossless wave files

[00:02:16] [SPEAKER_00]: with all of the info carefully entered by the artists themselves

[00:02:19] [SPEAKER_00]: ready to send to their servers with their exact specifications.

[00:02:23] [SPEAKER_00]: The Apple guys said,

[00:02:24] [SPEAKER_00]: sorry you need to use this software if there's no other way.

[00:02:27] [SPEAKER_00]: Ugh, that means we have to pull each one of those CDs off the shelf again,

[00:02:32] [SPEAKER_00]: stick it in a Mac, then cut and paste every song title into that Mac software.

[00:02:36] [SPEAKER_00]: But so be it, if that's what Apple needs, okay.

[00:02:39] [SPEAKER_00]: They said they'd be ready for us to start uploading in the next couple weeks.

[00:02:43] [SPEAKER_00]: I flew home that night posting my meeting notes on my website,

[00:02:46] [SPEAKER_00]: emailed all of my clients to announce the news and went to sleep.

[00:02:49] [SPEAKER_00]: When I woke, I had furious emails and voice mails from my contact at Apple.

[00:02:54] [SPEAKER_00]: What the hell are you doing? That meeting was confidential.

[00:02:56] [SPEAKER_00]: Take those notes off your site immediately.

[00:02:58] [SPEAKER_00]: Our legal department is furious.

[00:03:01] [SPEAKER_00]: There was no mention of confidentiality at the meeting and no agreement to sign,

[00:03:04] [SPEAKER_00]: but I removed my notes from the site immediately to be nice.

[00:03:08] [SPEAKER_00]: Always well, or so I thought.

[00:03:10] [SPEAKER_00]: Apple emailed us the iTunes Music Store contract.

[00:03:13] [SPEAKER_00]: We immediately signed it and returned it the next day.

[00:03:15] [SPEAKER_00]: I started building the system to deliver everyone's music to iTunes.

[00:03:20] [SPEAKER_00]: I decided we'd have to charge $40 for this service to cover our bandwidth

[00:03:23] [SPEAKER_00]: and payroll costs of pulling each CD out of the warehouse,

[00:03:27] [SPEAKER_00]: entering all the info, digitizing, uploading, and putting it back in the warehouse.

[00:03:31] [SPEAKER_00]: 5,000 musicians signed up in advance, each paying $40.

[00:03:35] [SPEAKER_00]: That $200,000 helped pay for the extra equipment and people needed to make this happen.

[00:03:40] [SPEAKER_00]: Within two weeks, we got contacted by Rhapsody, Yahoo Music, Napster, eMusic, and more.

[00:03:45] [SPEAKER_00]: Each saying they wanted our entire catalog.

[00:03:48] [SPEAKER_00]: Yes, awesome!

[00:03:50] [SPEAKER_00]: Maybe you can't appreciate this now, but the summer of 2003 was the biggest turning point

[00:03:54] [SPEAKER_00]: that independent music has ever had.

[00:03:56] [SPEAKER_00]: Until that point, almost no big business would sell independent music.

[00:04:00] [SPEAKER_00]: By iTunes saying they wanted everything, then their competitors needing to keep up.

[00:04:05] [SPEAKER_00]: We were in.

[00:04:06] [SPEAKER_00]: Since the summer of 2003, all musicians everywhere can sell all their music

[00:04:10] [SPEAKER_00]: in almost every outlet online.

[00:04:12] [SPEAKER_00]: Do you realize how amazing that is?

[00:04:14] [SPEAKER_00]: But there was one problem.

[00:04:17] [SPEAKER_00]: iTunes wasn't getting back to us.

[00:04:19] [SPEAKER_00]: Yahoo, Rhapsody, Napster, and the rest were all up and running,

[00:04:22] [SPEAKER_00]: but iTunes wasn't returning our signed contract.

[00:04:25] [SPEAKER_00]: Was it because I posted my meeting notes?

[00:04:27] [SPEAKER_00]: Had I stuffed Steve Jobs?

[00:04:29] [SPEAKER_00]: Nobody at Apple would say anything.

[00:04:31] [SPEAKER_00]: It had been months.

[00:04:33] [SPEAKER_00]: My musicians were getting impatient and angry.

[00:04:35] [SPEAKER_00]: I gave optimistic apologies, but I was starting to get worried too.

[00:04:38] [SPEAKER_00]: A month later, Steve Jobs did a special worldwide simulcast keynote speech about iTunes.

[00:04:44] [SPEAKER_00]: People had been criticizing iTunes for having less music than the competition.

[00:04:48] [SPEAKER_00]: They had 400,000 songs while Rhapsody and Napster had over 2 million songs.

[00:04:53] [SPEAKER_00]: Over 500,000 of those were from CD Baby.

[00:04:56] [SPEAKER_00]: Four minutes in, he said something that made my pounding heart sink to my burning stomach.

[00:05:00] [SPEAKER_00]: Quote,

[00:05:01] [SPEAKER_00]: This number could have easily been much higher if we wanted to let in every song,

[00:05:05] [SPEAKER_00]: but we realized that record companies do a great service.

[00:05:08] [SPEAKER_00]: They edit.

[00:05:09] [SPEAKER_00]: Did you know that if you and I record a song for $40,

[00:05:12] [SPEAKER_00]: we can pay a few of the services to get it on their site through some intermediaries?

[00:05:16] [SPEAKER_00]: We can be on Rhapsody and all these other guys for $40.

[00:05:20] [SPEAKER_00]: Well, we don't want to let that stuff on our site, so we've had to edit it,

[00:05:24] [SPEAKER_00]: and these are 400,000 quality songs.

[00:05:27] [SPEAKER_00]: End quote.

[00:05:28] [SPEAKER_00]: Whoa, wow, Steve Jobs just dissed me hard.

[00:05:32] [SPEAKER_00]: I'm the only one charging $40.

[00:05:33] [SPEAKER_00]: That was me he's referring to.

[00:05:35] Shit.

[00:05:36] [SPEAKER_00]: Okay, that's that.

[00:05:37] [SPEAKER_00]: Steve changed his mind.

[00:05:39] [SPEAKER_00]: No independence on iTunes.

[00:05:41] [SPEAKER_00]: You heard the man.

[00:05:42] [SPEAKER_00]: I hated the position this put me in.

[00:05:44] [SPEAKER_00]: Ever since I started my company in 1998,

[00:05:47] [SPEAKER_00]: I had been offering an excellent service.

[00:05:49] [SPEAKER_00]: I could make promises and keep them because I was in full control.

[00:05:52] [SPEAKER_00]: Now for the first time,

[00:05:54] [SPEAKER_00]: I had promised something that was out of my control.

[00:05:56] [SPEAKER_00]: So it was time to do the right thing, no matter how much it hurt.

[00:06:00] [SPEAKER_00]: I decided to refund everybody's $40 with my deepest apologies.

[00:06:03] [SPEAKER_00]: With 5,000 musicians signed up,

[00:06:06] [SPEAKER_00]: that meant I was refunding $200,000.

[00:06:09] [SPEAKER_00]: Since we couldn't promise anything,

[00:06:10] [SPEAKER_00]: I couldn't charge money in good conscience.

[00:06:13] [SPEAKER_00]: I removed all mention of iTunes from my site.

[00:06:15] [SPEAKER_00]: I removed the $40 cost.

[00:06:17] [SPEAKER_00]: I changed the language to say we can't promise anything.

[00:06:20] [SPEAKER_00]: I emailed everyone to let them know what had happened.

[00:06:23] [SPEAKER_00]: And I decided to make it a free service from that point on.

[00:06:26] [SPEAKER_00]: The very next day,

[00:06:28] [SPEAKER_00]: we got our signed contract back from Apple along with upload instructions.

[00:06:32] [SPEAKER_00]: Unbelievable.

[00:06:32] [SPEAKER_00]: We asked why now, but got no answer.

[00:06:36] [SPEAKER_00]: Whatever.

[00:06:37] [SPEAKER_00]: Apple.

[00:06:39] [SPEAKER_00]: We started encoding and uploading immediately.

[00:06:41] [SPEAKER_00]: I quietly added iTunes back to the list of companies on our site.

[00:06:45] [SPEAKER_00]: But I never again promised a customer that I could do something beyond my full control.

[00:06:53] [SPEAKER_00]: You just listened to the post titled

[00:06:55] [SPEAKER_00]: The Day Steve Jobs Dissed Me in a Keynote

[00:06:58] [SPEAKER_00]: by Derek Sivers of Sivers.

[00:07:00] [SPEAKER_00]: That's S-I-V-E dot R-S.

[00:07:03] [SPEAKER_00]: This show is sponsored by BetterHelp.

[00:07:05] [SPEAKER_00]: We're all marveled at how quickly kids learn

[00:07:08] [SPEAKER_00]: and that sense of wonder meant they have while doing it.

[00:07:11] [SPEAKER_00]: But as adults, sometimes we lose that curiosity.

[00:07:14] [SPEAKER_00]: Well, if there's something you've been wanting to learn,

[00:07:17] [SPEAKER_00]: know that therapy can help you reconnect with your sense of wonder

[00:07:19] [SPEAKER_00]: because your back to school era can come at any age.

[00:07:23] [SPEAKER_00]: And make no mistake, therapy is for everyone.

[00:07:26] [SPEAKER_00]: Whether or not you've been through significant trauma,

[00:07:29] [SPEAKER_00]: therapy can be a great tool for setting boundaries,

[00:07:31] [SPEAKER_00]: learning new skills,

[00:07:32] [SPEAKER_00]: and ultimately becoming the best version of yourself.

[00:07:35] [SPEAKER_00]: If you're thinking of starting therapy, give BetterHelp a try.

[00:07:38] [SPEAKER_00]: It's entirely online, designed to be convenient, flexible,

[00:07:42] [SPEAKER_00]: and suited to your schedule.

[00:07:44] [SPEAKER_00]: Just fill out a brief questionnaire to get matched with a licensed therapist

[00:07:47] [SPEAKER_00]: and switch therapists any time for no additional charge.

[00:07:51] [SPEAKER_00]: Rediscover your curiosity with BetterHelp.

[00:07:54] [SPEAKER_00]: Visit betterhelp.com slash workdaily today

[00:07:57] [SPEAKER_00]: to get 10% off your first month.

[00:07:58] [SPEAKER_00]: That's BetterHelp, H-E-L-P, dot com slash workdaily.

[00:08:04] [SPEAKER_00]: And a big thank you to Derek for letting us share his work.

[00:08:07] [SPEAKER_00]: And let me tell you a bit about Derek.

[00:08:09] [SPEAKER_00]: He's a musician and programmer who created the popular website

[00:08:12] [SPEAKER_00]: mentioned in this post called CD Baby,

[00:08:15] [SPEAKER_00]: where independent musicians can sell their CDs online.

[00:08:18] [SPEAKER_00]: Now, this was back in the 90s when CDs were how we all listened to music.

[00:08:23] [SPEAKER_00]: Around 10 years later owning the entire company,

[00:08:25] [SPEAKER_00]: he sold it to disc makers for $22 million,

[00:08:28] [SPEAKER_00]: putting most of it away into an organization he created

[00:08:31] [SPEAKER_00]: called the Independent Musicians Charitable Trust,

[00:08:34] [SPEAKER_00]: which will fund music education after he passes away.

[00:08:37] [SPEAKER_00]: And Derek is a super unique guy.

[00:08:39] [SPEAKER_00]: He's a TEDx speaker and popular writer

[00:08:42] [SPEAKER_00]: who's got some great books like Anything You Want.

[00:08:44] [SPEAKER_00]: Definitely worth checking out.

[00:08:46] [SPEAKER_00]: So come by his site, which is just his last name with a dot in it.

[00:08:50] [SPEAKER_00]: That's Sivers spelled S-I-V-E dot R-S.

[00:08:54] [SPEAKER_00]: Alright, I think that does it for today.

[00:08:56] [SPEAKER_00]: Hope you're having a happy Sunday and thanks for being a subscriber to our show.

[00:09:00] [SPEAKER_00]: Hope your week gets off to a great start

[00:09:01] [SPEAKER_00]: and I'll be right back here with you tomorrow

[00:09:03] [SPEAKER_00]: where your optimal life awaits.