This is a nugget of the global music industry. Having raised $300 million, Believe, which is present in 55 countries, blows up the shelves with a turnover of 580 million euros. The French unicorn Believe, co-founded by Denis Ladegaillerie, Arnaud Chiaramonti and Nicolas Laklias, never ceases to amaze.
How did the idea of Believe come about in a world without Deezer, Spotify and streaming?
Denis Ladegaillerie: I worked from 1997 to 2000 for a major New York law firm as a business lawyer. I returned to France at the suggestion of Vivendi during the heyday of Jean-Marie Messier. From 2000 to 2004 I lived there for an unusual period, it was the very beginning of the Internet for the general public. It was a great learning experience, we did our first digital experiments there. Then there was a desire to launch myself, because in Vivendi, in France and in the USA, I knew a lot of box acquisitions, met with many entrepreneurs.
I had a romantic vision of entrepreneurship, I thought it was very cool. Then there was an idea. I had MP3.com in my wallet, we forgot it, but it was the third largest site after Yahoo and Microsoft! He was joined by independent artists, some of whom broke through, such as John Mayer. I said to myself: hey, the number is interesting because it allows democratization of market access for a new generation of artists. It is this idea that remains at the heart of Believe. After seeing so many business models, I finally understood what works and what doesn’t, coupled with the desire to control my destiny. I was one of the first MP3 buyers before the iPod, I thought it was brilliant and I was convinced that CDs would disappear. It was possible to switch to 100% digital music from the beginning to the end of the channel.
Did you start Believe with two partners, Arno Chiaramonti and Nicolas Laklias?
Yes, I returned to Paris after a kitesurfing accident in the United States, and there I met my friend’s husband at Sony Music, Arnaud Chiaramonti. We discussed digital music, telling ourselves that many artists don’t have access to the market, and we looked at the entire value chain.
I had a more financial vision, but I didn’t have Arno’s know-how in artist development. Complementing each other, we began to develop the project. Then I met Nicolas, Arnaud’s friend who was a real estate agent with a passion for music. He quickly offered to shut down his agency, which was doing very well, within six months. He joined us and helped set up the model, sign the first labels. Our first office was on rue Lafayette, in my living room, and that’s where we all started, step by step.
Have you changed worlds?
Vivendi offered me another job, but I wanted to start. In other words, after working for a firm of 700 lawyers and a large group of 20 people in finance who worked with me, it was a big cultural gap. All of a sudden you have to take care of the bylaws, bank account opening, job postings and don’t forget to take out the trash! We also understand that there are many things that we don’t really know how to do. It’s great in the sense that we’re rediscovering the world. As an employee of a big box, the level of interlocutors is homogeneous, all on the same “tank + 5” profile.
As an entrepreneur, I rediscovered the wealth and variety of contacts. Not to mention salary changes. For the first three years, I financed the company without taking a salary, which also changes my life a lot. For the first three years, we did not raise funds. We can compare this era to the image of a hamster in a wheel. He makes an incredible effort to start to set the wheel in motion, and then acceleration is included. Our first contract for the Fête de la Musique brought us 30 euros in June 2005 after six months of searching. Then, twelve months later, we earned 100,000 euros in turnover. And in three years, we think it will work, but the period of scaling, uncertainty and risk is very long. We always wonder if it will work. Such a rich and amazing experience!
Did the entire $300 million Euronext IPO turn you into a unicorn?
This is an important step on a path that took fifteen years to form and will be built for a very long time. It was a very good opportunity to finance development, not an exit for existing shareholders. This fundamentally changes three things. First, the IPO process is a structuring accelerator, it allows you to ask more questions about your model and therefore increase your efficiency.
Secondly, we are moving from managing investment funds to managing with independent directors. Believe has gone from a board of directors of 4 outstanding financial investors, 4 men, to a board of directors of 3 men and 4 women, independent directors from different sectors, able to bring a variety of perspectives to development through their experience. . Finally, the fact that we are positioning ourselves as a listed company opens up opportunities for acquisition discussions that we have not had before.
Moreover, there was no change in the prism. Our capitalization of 1.5 billion does not represent an opportunity for investors who want to get in and out. The vision of our investors is long-term. Even if our price is currently underpriced, we have the necessary cash to carry out the operations we wish to carry out.
What is your vision of the world of music in ten or twenty years?
It will be quite simple, I think we are moving towards more flow than today and more consumption. Streaming
vector of diversity and deconcentration of the market. So in France, the top 200 artists represent 1/3 of the streams, the next 5-6000 artists another big third, and new amateurs the last third. This is a fundamental change, before 200 artists received 70-80% of the cost. This will allow more people to earn money, more music genres to express themselves for structural change in the market.
How are you working at Believe today?
I don’t work remotely at all and today I’m very happy that I can travel again, but I do it differently. I returned after 15 days in Asia and 15 days in the US, less often and longer, otherwise I’m in the office in Paris. I leave two to three hours a day to work alone, and then everything happens in meetings with all the management teams or with certain clients to talk about artists, technology, relationships with Deezer, Spotify, etc.
What kind of manager are you? Is this a strength for you or rather difficult?
I was 35 when I founded Believe, now 52, and have been in management for the last 17 years. When I look back, I understand that this is an item that I discovered and continue to discover. I love it. We have a phrase: “Believe has two hearts: artists and employees.” Both must work and both must grow. I also appreciate this Tim Cook quote “What do I care about day in and day out? People, strategy and execution, in that order.”
Products and solutions don’t exist without the right people who create them. So my priority is to make sure we have the right person and the right culture so that we have the right behavior and the right way of thinking about strategy. For me, the main control. A company is, first of all, all the teams that bring innovations and services. In addition, we have very strong growth, and therefore large recruitment needs in all areas. Even if we are an attractive company, this remains a challenge.
Interview with Anna Florin