NextGen Leaders with Milana Rabkin Lewis

Hi everyone, happy Friday. It's a Friday in April and I'm so excited to have Milana Lewis join me today, the co-founder and CEO of STEM. Hi Milana, welcome. Hi Michelle, thanks for having me on Cloudflare TV. I'm so happy you're here and I'm super excited about our topic today because we're going to talk both about the company you're building but actually also zoom out and talk about the business of turning people into businesses, which I think is kind of a meta and you're one of the, well I think, world experts, so I'm super excited to have you here. So thanks for joining us. Thank you. I wouldn't call myself a world expert, it's just like we were saying earlier, something I think a lot about and spend a lot of my time sort of observing and paying attention to, but I think that there's probably anthropologists and sociologists that I would consider better experts at this than me. Okay, that's good, that's a fair point. Good. All right, well let's start. You started a company called STEM about six years ago and you're the co-founder and CEO of that company, so maybe you can start by telling the audience what does STEM do? Yeah, thank you. So STEM is a vertical SaaS platform that enables primarily not just the musicians but everyone that they work with, so the business unit around the artist, which oftentimes includes the people who help the artist create the music, which is the songwriter, the producer, the A&R, as well as the people in charge of servicing the music. So think about the marketing team, the operating team behind the artist, so managers, lawyers, business managers, etc. all get paid. And we really brought this platform to market because the whole entire streaming universe has completely democratized and changed the power structures of the recorded music industry. And it used to be that you needed a record label to get your music out into stores and to help develop it, produce, or promote it. But the biggest shift today in the emergence of the new media landscape is that any artist can get their music out there on their own and engage with their fans, but the pain points are around how do you efficiently distribute to the hundreds of services that exist. And on top of that, once the music is distributed and monetized, now one person gets paid, but there's never one person that's a lot that is responsible for the song. There's usually a collaboration of people who each have a share of the recorded revenue that need to get paid, and it's completely inefficient. And before STEM, all of that was either not done at all or done manually. And so the first pain point we solve is we enable clients to self -distribute their music to Spotify, Apple, Amazon. We collect the revenue from all those services, and then we automate the payouts to all the shareholders. And the new thing that we brought to market last year was our scale product, which is now that these people are getting paid, they have this ability into their income, they're getting paid reliably, how do they continue to access capital to be able to reinvest in themselves so that they could grow not only their business, but also their personal lives? So what's been interesting is enabling our clients to not only get paid consistently, but then access capital to be able to reinvest in marketing their content or drawing funds to be able to buy properties, pay for their kids to go to school. And in the times of COVID, when touring wasn't possible, there was lots of lost income, so they relied on the scale advances to just live. So that's sort of the beginning of where we're going. And really, the vision is to build a fully vertically integrated financial solution that meets the needs of our clients throughout the life cycle of their business careers and personal lives. That's amazing. And there's so many things you said in there where I'm like, oh my goodness, like you're enabling the next generation of the artists and the creators to do what they love, but then also build a business around it and making that seamless. That's amazing. How did you come up with this idea? Did you just wake up one morning saying, how did you come up with the idea? Thank you. I spent the majority of my career working inside of talent agencies, and I was trained as an assistant to work with independent filmmakers. And the independent movie industry is really interesting because it's one where people really get paid on the back end. So a lot of actors, directors, the service providers will forgo getting paid up front in exchange for getting a piece of the project's revenue and success if it gets picked up by a studio, gets distributed, or ends up on Netflix and being a huge hit. And in that model, you make a movie once every five years. So to manage the P &L of a movie is okay because the cadence of it happens every couple years. It's like running a business. You can do it manually. And it's big budgets and the collaboration team is usually with the project for that long duration of time. And I actually ended up falling less in love with filmmaking and more obsessed with independent creation. So naturally, I gravitated towards digital media. And I was hired on in 2010 as one of the early digital media agents at United Talent Agency, which is one of the premier talent agencies in the world that represents the biggest stars across film, TV, comedy, acting, digital, video games, and it's evolved to sports and other verticals as well. And the mandate when I joined the agency from the leadership team to me was that they knew that the whole entire entertainment landscape was going to be completely democratized by technology. And the challenge was no one's going to replace the job of an agent because we're the strategist. We connect the dots. We help our clients make the right decisions for their careers to grow and build their businesses. And traditionally, that's meant going and working with a major label, a major film studio, a major TV network. But this was right at the emergence of Netflix and Hulu. And this is even before they started really developing original content. But the leadership team saw that there was going to be a complete power shift and more independence was going to be relying on the artist having the infrastructure to create on their own and leverage these other tools and platforms for distribution and monetization and fan engagement. And so they tasked me with figuring out what the right tools and technologies would be in a world where the majority of the clients decided to be independent. So it's really focused on direct-to-consumer strategies for people like Rob Thomas, who was the creator of Veronica Mars, the really popular TV series on Warner, through Warner Brothers. And he wanted to make the movie version of it, but the studio didn't want to support that idea back then. So it was my job to say, OK, if the studio is not going to fund it, how do we crowdfund this? And that's when I would introduce him to Kickstart and figure out the right strategy for the fans showing the network and the TV studios that there was an appetite for Veronica Mars, the movie, that they were willing to back it. And then how do we build a strategy to actually enable that to come to life, which it did. So it was things like that to our comedian clients saying, hey, I don't want to sell my comedy special to HBO or Comedy Central. I want to self -distribute it to my fans and be able to tweet out a link and get them to buy it directly. How do I do that? At which point back then, it was like, how do you use platforms like Gumroad or VFX or others that were emerging? And we didn't really have a big music business practice at UTA, but I ended up working with a lot of clients that were emerging on the Internet and using YouTube and SoundCloud as their music platforms, who would say, how do I then monetize this? How do I get my music to Apple and Spotify? And what I realized high level was that as the ecosystem was evolving, there were way more distribution channels evolving every single day. Social media platforms became content distribution platforms that were monetizing content. And so if you're a creator, you had multiple ways to get your music out there and monetize it, or not just music, but video content, any kind of content. And yet there was no easy way to aggregate the revenue from all these places and then enable automatic payouts to all the people that you needed to pay. Because when you're a creator as a business, you're an individual who relies on a network of other people to grow and to manage your business. That's amazing. You're like the, I love the story. And there's so many just alter paths in my life where it feels like the Shopify story is somewhat similar. Like Toby started by wanting to build snowboards online, and he was like, oh my God, it's so hard to sell snowboards online. And then he realized, actually, it's not about selling snowboards online, it's about building the platform so any person can sell anything online, whether it's snowboards or sneakers. And Shopify has been this, you know, built a hundred billion dollar plus market cap company in less than 10 years with this extraordinary growth, which is amazing. And so I love that you kind of were tasked at your day job and you're like, whoa, wait, it's not about just this, it's not Veronica Mars, but how do we enable Veronica Mars today and all the other ideas that are out there? I think that's amazing. Good for you. And speaking of Shopify, you know, I worked with Harley Finkelstein really early on, which was Toby's co-founder, because we had a lot of clients like Gwen Stefani, who wanted to take her brick and mortar retail fashion brands and bring them online. And back then it was either Magento or Shopify. And Magento didn't make sense for someone like Gwen, who doesn't have a tech team in -house, who can't build the infrastructure. She needed a system to plug into where her design team and creative team could leverage it to build up the storefront that resembles her brand, but didn't want to manage the guts of it that you would need to if you were using, you know, any of the legacy systems. So it really is a great analogy because, you know, it was, that was exactly the timeline that all of this was coming together in my head was as platforms like Shopify, like Square, like PayPal, buying Braintree and Stripe and merging, you know, sort of seeing how small businesses across the world were being able to leverage technology to become more streamlined and more efficient. And yet my businesses that I was touching with creators had none of that available to them. Right. And that is the most beautiful entrepreneurship story. You're like, I can build it. No one else is going to do it. Why not me? So that's great. And so last question about salmon, then I want to actually go talk about that, this, this trend of people becoming businesses, because there might be a creator listening to me like, Oh my God, I want to be that. And so I want to get to that. But before we do, I'm just curious at STEM, like, so you, it's super interesting. You have the technology that you have to build. You have a business model of rethinking a whole business model. You're really inventing the future. It's not a lot of playbooks to play it to go follow. You got to figure it out yourself. And then you're also working with the, the, the creators, the artists, whether it's music or film. So in your role as CEO and co-founder of this company, how much time do you like, how much time are you spending with the artists, the creative talent? How much time are you spending on the business model? How much time are you spending on the technology? Just give the audience a sense. Oh, that's such a good question. You know, it's changed a lot over time in the beginning. I was, you know, first of all, we always have to be customer obsessed, right? Like I, even today, if I look at my day, I spent the morning with my executive team looking at, you know, diving into financials, diving into BI. And then this afternoon, right after this call, I'm sitting with the product team and we have the follow-up on our design review. And then right after that, I I'm spending time with, we have a new product we're rolling out in beta and I've been in every single beta rollout. We're doing these like group demos online and I'm in every single session because I'm obsessed with hearing their feedback, getting a sense of how they're reacting to it. So I'd like to say that I split my time evenly between those three areas, but what's really nice is that I have one owner in every one of those pieces of business, right? So Kristen is my partner who spends a hundred percent of her time on the client facing side. And she runs that part of the business. Brendan's my chief product officer, and he's been sort of straddling between product and operations. But him and his team have been exclusively focused on, you know, the product and design elements of what we're building. And obviously like the board that we spend a lot of our time observing the business at an elevated level. So it also depends on, you know, am I in build mode? Am I in fundraise mode? Am I in company development modes? Or obviously like I have to juggle between those three areas, but where I get the most pleasure out of doing the work, it definitely comes to connecting the business client needs with what our product can facilitate to make their life easier. That's great. Delivering value for your customers or your clients. There's something very empowering and satisfying about that, which sounds like a great team. So I love that. Okay, well, let's switch gears and maybe zoom out a little bit. So it's amazing what you're building at STEM and everyone's super excited, including me. I can't wait to see everything that you continue to do with your team. But if we zoom out and we take kind of this trend of an individual becoming a business, and maybe we can start there. I know it's something you kind of, we've touched on a little bit and that you've thought about before. Maybe let's start with kind of what's your point of view about this trend of people becoming businesses? Yeah, it kind of comes to me from a couple of different angles, right? Like what drives me to build STEM isn't just my experience at UTA and working with artists. It goes much further back than that. I grew up in a family of musicians. My dad, my grandfather, music was really integral to their life. And yet, they couldn't even make that a career. It was a hobby. And myself, when I told my parents that I wanted to move to California and go to UCLA to attend film school to pursue a career in creation, they were like, that's a great hobby, but not a viable career. So for me, it's like very visceral to change that perception that the creator is a starving artist. And I think that we've kind of proven that you can build a career with creation because we've seen the creative class grow. But the next frontier, I think of the next evolution is actually proving that the creator is a business. And when I think back to like, what does that actually look like? It comes into two different sort of things I've observed. One is that if you ask your kids today, what do they want to be when they grow up? You hear less the doctor or lawyer or firefighter. And you hear more of the, I want to be a musician. I want to be a YouTube star. I want to be famous, right? And what does fame actually mean? And it's something that kind of scares me, but also excites me. And when I sort of think about it from a socio -anthropological perspective, to say it sort of very frothy, in a frothy way, I was the first generation or of the first generation to be a true digital native, where like my socialization, my self -actualization was in line with the growth of social platforms and new communication mediums. And the kids that are being born not only today, but from like 2000 and on, their socialization and self-actualization happens online through social media. And they're actually the first breed of humans that are born with a brand identity. And I think that's crazy and really scary, right? Like you have your physical self and yourself in the real world, but then you also have to develop a persona online that's abstracted, that's your digital representation of who you want other people to believe that you are. And so the skill sets of understanding, how do you manage a brand for an individual is something that like most other people didn't grow up with. And that's like innate and something you have to have in order to survive today. And so how does that evolve and what do you do with that? And how does society change and the norms and all the trends, not the trends, but like the infrastructure to support humans around them need to exist in order to facilitate some level of stability? Oh my God, there's so many questions as you're, there's so many things that you're saying that I find resonating in my own world that I've never really heard anyone articulate, especially not as well as you just did. So it does, that opens up, I mean, that's both exciting and terrifying at the same time. I mean, I, I mean, there's just, is it, is it really about the person? Is it too much focus on myself? And, and is it bad to have a in -person and an online persona? Can those be different or are you not genuine if they're different? Or maybe in some cases it's okay, if it's different, as long as you're purposeful. I mean, I'm curious to you, what is this exciting to you or terrifying to you or a bit of both? Both. I'll tell you what's exciting. I'll tell you what terrifies me. So all these platforms are meant to provide forms of communication and media, right? We communicate through media. And to me, the spoken word is just an abstraction. And then it evolved into the written word, which became, you know, early on sort of like holographics and then iconography, and then it became the written word in the print and et cetera. It's evolved. And so today it's kind of evolved too, right? Like we communicate with emojis, we communicate with memes, with GIFs. And historically the purpose of creators back then were to help connect human, humanity through storytelling, right? It's pass along tradition. It's the way we pass along beliefs and, you know, religion is so music-based in so many different cultures. And it's the way that we communicate the human experience. And so we looked at humans, which are also like muses and geniuses of some form to articulate things that we cannot do ourselves as mortals. And I think of like humans as either mortal or creator. Cause to me, a creator has like some level of human genius and their ability to project and create that is quite frankly, like beyond mortal body. Yeah. There's like some creative spirit that embodies them, that enables them to do this. And Elizabeth Gilbert writes a lot about this and she's one of my favorite authors in the, in her book, Big Magic really explores this concept and I believe in it. And so what's interesting is that now everyone has the channels to project and the channels to create and to tell a story. And we're seeing how that's changing people's psyches and it's becoming a business for some who are really prolific at it, but also are able to say something at the right time in the right way that other people feel, but cannot express themselves, which is how they're engaging with that content. And we're seeing the way that music specifically has evolved depending on like the medium and the environment, right? So it used to be that you used to sing songs to connect with people, to pass time, to tell stories. And now we're getting into a phase of like music is your soundtrack to your life, right? Cause it, you listen to music when you're on the Peloton, you listen to music when you're in the car, you create your personal playlist to help guide your narrative experience, depending on how you're feeling and what you're doing, what you're cooking, where you're going, if you're traveling, if you're by the beach, if you're in the mountains, like your mood's going to change to your music. And now with like TikTok and Instagram, music's taken this really interesting medium of people personalizing it. So people take abstractions of songs and use that to communicate how they're feeling and what they're thinking. And so it's just exploded pretty astronomically, not only the type of music that's being created and the volume at which is being created, but how it's being consumed. And that's what excites me, but also scares me. And what scares me about it is that like, we're kind of living in the cult of the amateur where anyone can create. And now there's all this content, all of this stuff, all of these messages that are out there, some of which are great ideas that need to be shared, need to be expressed. There's also a lot of subconscious messages that are embedded around identity, around people's perception of what's real and what's not, around ideology. And there's not really a filter for it. And that's a discovery. Right. Yeah. That's interesting, not to cut you off with the amateur piece. And so I wonder if that leads to the question is, will the amateurs become professionals? Will this become like a professional, like a professional kind of like, could this become a profession going forward? I hope so. Right. I think the middle class is growing. There's no denial of that. The big stars, I think, are becoming less big. And what I hope happens is that there's less of a monoculture, that like some of the gatekeepers who determine what's popular and what's not, are not as powerful as what they used to be. But quite frankly, like, we're not quite there yet. You know, like radio used to be the determinant of who gets shed light on whether or not they're popular. And today it's now the playlist. And some of it's algorithmic, but quite frankly, it's the same humans that used to be the gatekeepers of the radio stations are now gatekeepers of the playlists. And so some of it's evolving, but some of it's really cyclical. And honestly, like, I do think there needs to be some level of a filter. I do think that there needs to be some level of curation. What's interesting is that there's more types of editors and curators than there ever were before. But what I think is missing is the ability for someone to, if this is the thing they're committed to doing their whole lives, how are they able to pick up on the right signals to be able to determine how they grow? And that's the piece that's missing, at least in the music ecosystem, is that it's an industry that's been wildly opaque. So the sheer notion of an artist even having an understanding of what music that they create is sticky, not just based on like popularity metrics, but like, where's the money coming from? You know, that's a question that still isn't perfectly clear for most artists that are not independent. When they're working with institutions, they don't have the availability of data to be able to analyze that. So then how can they actually find the leverage of their business to find growth or even just like stability? And that's the part that we want to solve. It's just like- I was going to say, STEM seems like a perfect solution for that. I mean, it feels like you're so well-suited. You're like, I can help show you the parts that work and where the money is coming from so that you can then say, okay, well, how can I use this input to go create the next whatever piece of my chapter? I love that. Or if you're not quite there yet, then like you want that feedback quickly so you can iterate and find artist market fit or what we in the tech industry called product market fit. And right now they're just not getting that feedback quick enough to be able to iterate and work through that. That's good. Okay. So I'm like so fascinated, and this is an area that I don't know a lot about, but I'm like, my head is spinning and I just talked to someone who's so creative. I do feel like a mere mortal in presence of a creator, but maybe you can give us and me and the audience one or two examples of somebody who's maybe doing this really well that if people want to go follow and just kind of learn from. Do you have anybody that comes to mind? So one of my favorite artists who I think is like the poster child of independence is Brent Fayez, who is an artist that does really cool R&B. He's really getting to commercial success right now where you'll see him on billboards. If you drive through cities, you'll see, you may have heard his song in a gap commercial this year. But what's really unique about him is that he has a couple of business identities, meaning that he has Brent Fayez, the identity as an artist. He has another artist project called Sonder. He has a manager by the name of Ty who helps him manage these entities. And together they're creating a lot of content independently, but what's enabling them to grow so quickly is that they're using STEM to enable back-end participation of revenue for everyone they work with, whether it's the producer or the radio promoter or the sound mixing engineer, anyone who's in his universe is getting a piece of the upside. So they're all invested and it's drastically changed that dynamic of him and his community that he's working with where they're really a team and they're incentivized in the same way that a startup is because you're working for definitely like the short-term success, but you're really invested in the long-term. So the way that you think when you're incentivized that way changes and it takes a village to launch something. And that's something that he's getting the benefit of right now because the community is really invested in his growth because they get the long-term payoff of being a part of his early success. And this is the definition of an individual not being, I mean like you said, moving past being you know just a being but more into a business because we all participate in the upside and you start to make better decisions of okay how do we have better outcomes over long term because I'm invested in the success. Oh my goodness, this is literally a business around a person. Yeah and it's very different to how it used to operate when an artist would go to a major label like let's think about the incentive structure there. I'm an artist, I go to a major label, it's the one-stop shop that does all the work for me, but I no longer am the business, they own my IP, the business. I'm an employee of my craft, right. And this is the thing that Kanye was really complaining about this past year when he went on his tweet storm is the realization that like he doesn't own any of that stuff. The major label doesn't. Taylor is another great example of someone complaining about it. Taylor Swift, for those who are following along Taylor Swift. They create this IP which should be the assets of their business but they sell them right away and they're an employee in service of that. So what's their incentive once they sell it off to actually help push it forward and the other people that are involved in the economic arrangement, the majority of the value is being sucked out by one big entity and the people who are working on the project, very few of them actually get back-end participation. They're all getting a paid piece up front. So they're working on that project then moving on to the next and the artist is like well how do I manage and grow my business when the people who I've employed are short-term incentivized to support me. So I think this is one of the most exciting things that's going to hopefully change and define the way the industry works. It's like when you change the economic arrangements and the value exchange becomes truly more representative of a relationship and the input and the output of what people are working on, it should change the trajectory of a project. It should. I mean incentives matter. Actually I went to business school and that's where I started working on my company at business school and there is a professor Bill Solomon. He's very well known and I just remember he's like it's all about incentive structures at the end of the day. What behaviors are you extinguishing and so I think changing that, turning the economic model, the business model on the head, changing the incentives and like I said common goal together to grow this together. It's like the same reason why a lot of companies give, a lot of tech companies give equity to their team because it's like okay it's worth something today but together we're going to create products and projects and work with customers and clients to grow everything and we all share on the upside and so it's really interesting that the same thing is happening on the creative side. I love, I've learned so much today. So one, we have about a minute and a half and so before we wrap up the one question I ask everyone who comes on the show is as a woman in technology, where has industry lived up to your expectations and where has it fallen short? You know it's interesting I've been kind of maybe somewhat sheltered from a lot of the other experiences that other women have and part of it's because I've been super conscious around who I take money from so most of my board and most of my lead investors are women. I'm lucky to have two really strong women both Cara Norman and Jen Fonstan on my board and being the lead investors in the business who really empowered me and sort of the gender dynamics aren't quite there in the way that I think many other women have to deal with but I will say that as a female running a business one of the things I'm super conscious of is like when do I lean into my feminine, like my feminine side versus my masculine side and it's something that's a constant struggle. I love that. Cara was on the show a couple weeks ago and she was phenomenal and actually recommended you come on the show and you were phenomenal so I'm so glad she did. We have about 30 seconds and I'm going to ask you at the end like if you have one piece of advice for the audience who want to who want to go in and become a creator beyond mortal, what's your advice for them? Keep your head down and relentlessly create and unless someone's done it too like don't take too much feedback like listen to the inner voice that's telling you to tell the story that you want to tell and like minimize input from other people other than like direct feedback from your fans. Amazing. Or if they want to receive the message. Amazing. Milana, thank you so much. Thanks for tuning into Yes We Can. You were amazing. I can't wait to have you back in a couple years in here and check in on how everything is going. Thanks everyone for tuning in to this week's Yes We Can. We'll be back again next week. Thanks Milana. Thanks Michelle.