1570: Just Selling My CD AND Trust, But Verify by Derek Sivers of Sivers.org on Self-Reliance and Innovation

[00:00:00] This is Optimal Work Daily. Just Selling My CD by Derek Sivers of Sivers, S-I-V-E dot R-S. This story begins in 1997. I was a professional musician, age 27. I was making a full-time living just playing music, playing lots of gigs around the U.S. and Europe, producing people's records, playing on people's records, and running a little recording studio. I was even the musician and MC for a circus. My bank account was always low but never empty.

[00:00:29] I made enough money to buy a house in Woodstock, New York. I was living a musician's dream. I made a CD of my music and sold 1,500 copies at my concerts. I wanted to sell it online but there were no businesses that would sell independent music online. Not one! I called up the big online record stores and they all told me the same thing. The only way I could get my CD into their online stores was through a major distributor.

[00:00:52] Music distribution was an awful racket. Getting a distribution deal was as hard as getting a record deal. Distributors were notorious for taking thousands of CDs and paying you a year later, if ever. Record labels with deep pockets would buy expensive promotional placement and the rest of us would just sit in the bin. If you didn't sell well in the first few months, you were kicked out of the system. It's not that distributors were evil. It was just an awful system and I wanted nothing to do with it. So when the big online record stores told me they couldn't sell my CD directly, I thought,

[00:01:22] Ah, screw it. I'll just set up my own online store. How hard could it be? But it was hard. In 1997, PayPal didn't exist so I had to get a credit card merchant account which cost $1,000 in setup fees and took three months of paperwork. The bank even had to send an inspector out to my location to make sure I was a valid business. Then I had to figure out how to build a shopping cart. I didn't know any programming, but I copied some examples from a programming book with lots of trial and error.

[00:01:49] Finally, though, I had a buy now button on my website. In 1997, this was a big deal. When I told my musician friends about my buy now button, one friend asked, Could you sell my CD too? I thought about it for a minute and said, Sure, no problem. I just did it as a favor. It took me a couple hours to get him added into my system, and I made a separate page for his CD on my band's website. Then two other friends asked if I could sell their CDs. Then I started getting calls from strangers saying, My friend Dave said you could sell my CD.

[00:02:17] The calls and emails kept coming, and I said yes to all of them. Two popular online music leaders announced it to their mailing lists, Brian Baker from Gajube and David Hooper. Thanks, guys. 50 more musicians signed up. This was meant to be just a favor I was doing for a few friends. Hmm. Trust but Verify by Derek Sivers of Sivers, S-I-V-E dot R-S.

[00:02:44] In 2005, CD Baby's main business was doing digital delivery of music to all the digital music retailers. iTunes, Amazon, Napster, Rhapsody, MSN, Yahoo, and 50 more. This role was life or death important to the company because it was the main reason most of our new clients signed up. And there were lots of competitors in this field, so it was crucial that we did everything well. I built a system that did most of the work, but it still required someone to run the outputs, connect hard drives, and ship them to the retailers.

[00:03:14] I hired a guy who seemed good. I sat side by side with him for a week, showing him the system, running it myself, and explaining how it all works. He got it. The key point was that we had to get every album delivered to every company every week, no matter what. The guy I hired signed a contract with me that said in huge letters, EVERY ALBUM TO EVERY COMPANY EVERY WEEK NO MATTER WHAT. And we talked a lot about how absolutely crucial that was. That it was really his only job requirement because it was that important.

[00:03:42] He signed and agreed. His first few weeks, I watched closely to make sure everything was going well. It was. So I turned my attention back to other things. A few months later, I started hearing a lot of complaints from musicians, saying that their music hadn't been sent to these companies. I logged into the system to see what was wrong. It turns out that we hadn't sent any music to Napster, Amazon, or some other companies in months. Months! I called the guy in charge of it and asked what was going on. He said, Yeah, I've been really backed up. It's been really busy.

[00:04:11] I said, What's rule number one? The sole mission of your job? He said, I know. Every album to every company, every week, no matter what. But I've been swamped. I just couldn't. I flew up to Portland and let him go. I've never fired someone so fast, but this was extreme. Our company's reputation was permanently hurt. This job was so crucial to the company's survival that I decided to do it myself for a while. Not just do it, but build a system that wouldn't let mistakes go unnoticed again.

[00:04:39] So for the next six months, I lived at the warehouse in Portland, and my sole job was digital deliveries. It took 15-hour days to catch up on months of backlog, but eventually we had a smooth system again. I learned a hard lesson in hindsight. Trust but verify. Remember it when delegating. You have to do both. You just listened to the posts titled, Just Selling My CDs and Trust but Verify, both by Derek Sivers of Sivers,

[00:05:08] S-I-V-E dot R-S. And thank you to Derek for letting us share his work here. He is a musician and programmer who created the popular website CD Baby, where independent musicians can sell their CDs online. Around 10 years later, owning the entire company, he sold it to Disc Makers for $22 million, putting most of it away into an organization that he created called the Independent Musicians Charitable Trust, which will fund music education after he passes away.

[00:05:37] Derek's a super unique guy. He's a TEDx speaker and popular writer with some great books out there, like anything you want. Definitely worth checking out. So come by his site, which is just his name with a dot in it. That's Sivers, spelled S-I-V-E dot R-S. And that should do it for today. I thank you so much for being here and for listening all the way through. And I'll be back with you tomorrow, where your optimal life awaits.