Jimmy Iovine, cofounder of Beats by Dre and founder of Interscope Records, delivered the keynote speech at the University of Southern California’s Global Conversation on Wednesday. There, he told the story of how he convinced Dr. Dre to start the headphone company.
As excitement around CDs was starting to wane — and Apple’s iPod was surging in popularity — Iovine said he was frustrated.
He mentioned approaching Doug Morris, then the CEO of Universal Music Group, about his desire to move onto something hardware-related. He was fascinated that Apple’s Steve Jobs was “making hardware and selling it through software.”
“I went to him and I said, ‘Doug, I can’t sell CDs anymore, I’m not going to be the guy who sold the last CD, I’m just not that guy.'”
Morris, who wanted Iovine to stay within the industry, eventually negotiated a new contract for Iovine, so that he could pursue new ideas.
“Doug got them to give me my new contract where I could actually innovate and start a business within the company,” Iovine said. “It was an incredible thing, it was a very bold thing, and then I went on a mission.”
Iovine then set out to find a new project, constantly reminded of Steve Jobs and his success with the pocket-sized music player that could hold 1,000 songs.
“That thing that Steve Jobs was doing with these shiny white objects was always in my mind, and how he was using our stuff to push it out,” Iovine said. “And everyone is saying ‘Wow this is the coolest thing in the world.’ I said, ‘Yeah, but part of what’s making it cool is what we’re doing for him at Apple with iTunes.'”
A short time later, Iovine, who was already friends with Dr. Dre, bumped into him by chance and the idea for Beats began.
“I was walking down the beach one day and I ran into Andre Young, Dr. Dre,” Iovine said. “I was exercising, and I said ‘How’re you doing?’ And Dre is very soft-spoken, doesn’t talk much, he just said to me, ‘Yo, my lawyer, he wants me to sell sneakers, what do you think?'”
“I said, ‘Dre, nobody in the world cares about how you dress or will care about your sneakers, what you should sell is speakers.’ At that moment, he said to me, ‘We can do that?’ And I said, ‘F— yeah.'”
For Iovine, it was exactly the opportunity he had been searching for.
“It all hit me at once: Steve Jobs, the record business, the iPod, Dre, ‘cool’ … it all hit me at once and I said let’s do this.”
The two then had to figure out a name for the business.
“[Dre] said, ‘You know I use this word ‘beats.’ You know, I make beats, right, so ‘Beats by Dr. Dre.'”
“I said, ‘Ok, headphones…beats…by Dr. Dre — headphones and speakers.'”
“He said, ‘I’m in,’ and that was the beginning of the company, and that’s exactly how it happened.”