About a year ago, I met Mike Cannady, Chief Strategy Officer and CFO of Scratch Music Group, at an alumni volunteer event. Scratch Music Group is a company based in NYC with the mission to train and promote both aspiring and name brand DJs. Since its inception, Scratch Music Group has developed DJ'ing academies in New York, Miami, LA, abroad three cruise ships, and in four Caribbean locations. The company has also developed a suite of products and services related to its core business, developing a full service music consulting group.
I recently had the chance to ask Mike a few questions about Scratch Music Group and his own unique entrepreneurial path from investment banking into the music industry.
Christa - What inspired the creation of Scratch Music Group?
Mike - Scratch Music Group was started in 2002 by Jam Master Jay from Run DMC and our current CEO, Rob Principe. The mission of the company was actually two fold. The first goal was to establish the world's first DJ and music production school -- Scratch DJ Academy (www.Scratch.com). Our founders realized that turntables were actually outselling guitars in many urban areas, yet there was no curriculum for this art form. We established Scratch DJ Academy in New York to lower the barrier to entry to DJ'ing and it was successful from the start, allowing us to expand quickly.
Our second goal was to create a marquee brand in the highly fragmented DJ industry. The industry as a whole is a multi-billion dollar sector, yet there isn't a leading brand or consolidator in the space. We've taken our brand "Scratch" and launched many additional revenue streams including talent booking, trend research, software, and more.
Christa - What does success at Scratch Music Group look like to you?
Mike - In five years, I'd like Scratch to be known as the definitive brand in the DJ space. Similar to Tony Hawk and what he represents to extreme sports, I'd like to see Scratch "owning" many facets of DJ culture as well as broader media revenue streams.
I'd also like to develop a suite of successful products that make Scratch a household brand. From books to software to video games, I want Scratch to be a lifestyle brand that everyone knows about.
Christa - What's the most gratifying part about running Scratch Music Group?
Mike - I really enjoy the people I work with. We have a very eclectic group of DJs and office staff who are a lot of fun. I mean where else could I work with a guy named Grand Wizzard Theodore (inventor of the scratch technique)?
For many of us, this has also become more than a job. We have the opportunity to build something that's never been done before, and that's been exciting for our staff and DJs.
Christa - You spent some time after school as an investment banker and then joined Scratch Music Group at a very early stage in the company. How did you decide to make that jump? Did you have any fear in making that change and if so how did you overcome it?
Mike - People are generally shocked when they learn that about my background as both a investment banker and finance major from UVA. It's definitely been a bit of a non-traditional path, but I always wanted to try something entrepreneurial and banking served as a great training ground and first step.
When I was in banking, I learned so much about business strategy and finance. That being said, I was definitely keeping my eye out for an entrepreneurial move--especially if it could be within the music industry. I happened to meet the CEO of Scratch during its first six months of operations, and we just clicked. I had an interest in the DJ industry, and he needed someone with a finance background. He convinced me to take a big risk and join the company. It honestly didn't seem too daunting at the time because I was only 24 years old and I was just willing to try something new. I think it would be much harder to make such a leap now.
I will say that things got a lot harder after I actually joined the company. I realized just how difficult it is to build a business from the ground up. The first three years were difficult, and I had to learn how to work with a wide variety of personalities -- something that was new for me.
Christa - What advice do you have for people interested in starting their own businesses or joining a start-up, particularly in the current economy?
Mike - I think the current economy makes it a great time to start a business. Realistically, it takes most businesses several years to figure out who they are and where their opportunity lies. Now is the perfect time to go through those growing pains.
I would tell any entrepreneur to spend the next 1-2 years finding talented co-workers (there are a lot out there right now) and playing with their business models. Their business will then benefit when the economy starts growing again. There will also be a lot of funding opportunities for companies who survive in the down market.
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