The value is in the details
When Lady Gaga, the singer and social media star – with over 31m Twitter followers, more than anyone else, and over 51m Facebook likes – finished watching a screening of The Social Network, she called her manager Troy Carter. “She said she’d like to build a social network for her fans” – she calls them her little monsters – “and build a community where they could congregate and have conversations,” he says. “So I called some of my friends in the Valley.”
One of those friends was Joe Lonsdale, co-founder of the Palo Alto-based data management company Palintir. “He said, ‘Send me all the data you have.’ So, we sent him everything and he said it was the worst data he had ever seen in his life.” The problem wasn’t the amount of data – they had lots of it, from Ticketmaster, Ladygaga.com and merchandise sales – but the quality. Existing social media platforms weren’t much better. “When you deal with Facebook, the information you get is geographical – what city people are logging in from, what time of day – but you don’t get the behavioural information to help you build a better experience.”
So, with the help of Mr Lonsdale and backing from Google Ventures among others, Mr Carter created Backplane, a new social media platform on which sits Littlemonsters.com. The site is designed to cater to the “hardcore 1m” Lady Gaga fans because their behaviour is more valuable than trying to decipher what happens to a mass audience.
“Our bet is on the future of micronetworks,” he says. “Facebook wasn’t wired to build a relationship between fans and artists. It’s more about communicating with family and friends and old girlfriends or your classmates; 51m likes doesn’t mean we’re going to sell 51m albums or concert tickets.”
It is not just about deeper insight. It is also about getting rid of the middleman. It is a “misconception when people talk about a direct relationship between artists and their fans or brands and consumers through social media. The reality is that these platforms own the relationship. So as much as you can talk directly to a customer or a fan, you still have this intermediary . . . that controls the data. And at any given time, if they turn it off or they change an algorithm, like Facebook did with its newsfeed algorithm last year, it changes the way you’re able to communicate with that fan or customer.”
Listening to the sharp-suited 40-year-old at the FT Innovate conference calmly skewer the shortcomings of a technology company he claims is a friend – he is at pains to say that his efforts are complementary rather than competitive, and spoke to Facebook and others before launching – it is hard not to see him as a disrupter taking on the social media elite.
It is one reason he is here. His use of social media, particularly with Lady Gaga, has made him a much sought-after voice among the corporates drowning in the sea of big data.
Given his increasingly high profile, it is sometimes difficult to imagine the entrepreneur’s childhood in inner-city Philadelphia. His single-parent mother worked at a hospital for 30 years, cleaning surgical instruments, while raising him and his brothers. She often worked long shifts, starting at 5:30 in the morning, so “the streets were raising us at the same time”.
For an African-American boy growing up in that world, there were not a lot of options. “You got a couple of choices: drug dealers were the role models – you didn’t have doctors and hedge fund managers that looked like you,” he says. Or music. “At that time, hip hop culture was exploding . . . and coming from the family I came from, drugs was not an option.”
While that may sound like a scene from The Wire, Mr Carter says being an outsider has been key to his success. “Being born in the adolescent years of hip hop helped us learn about flux. And when you’re in an industry that is constantly growing, changing, maturing . . . you get a chance to try different things out and a chance to fail.”
In high school, he got to know fellow Philadelphians DJ Jazzy Jeff and the Fresh Prince – the actor Will Smith – and became an assistant carrying the hip hop duo’s records from gig to gig, before setting out on his own as a music promoter. It was during this time that he met rapper and producer Sean Combs, now known as P Diddy, who gave him a job at his Bad Boy Records.
Mr Carter says this is where he learnt about the record business and P Diddy’s example taught him “that you can be a young black entrepreneur with no college degree or any sort of experience and people will give you a shot in this business”.
He later set up a boutique talent management company, which he sold to the Sanctuary Group, then part of Universal Music. He quickly discovered that being in a big company was not for him. “Instead of me being able to be creative with the artists, I was sitting in finance meetings a couple of times a week. It killed my spirit as an entrepreneur.”
But he also understood the value of getting the organisational culture right. When he launched Atom Factory, hiring other outsiders was essential. “My COO didn’t come from the music industry, my vice-president of creative was actually a schoolteacher,” he says. “It was important we had people who came from an outside perspective, who didn’t come from selling CDs.”
As well as Lady Gaga, the group represents John Legend and Bollywood star Priyanka Chopra as she launches a music career outside India.
Alongside Atom Factory sit AF Square, an angel investment fund with stakes in a number of mostly tech start-ups, including news app Summly, the taxi-hailing app Uber and music streaming site Spotify, and A/Idea, an ideas lab. Mr Carter has announced plans to launch a drink called Pop Water.
He declines to disclose profit figures but says the group has grown 60-70 per cent year on year for the past four years and he is sole shareholder.
Mr Carter is still best known as the manager of Lady Gaga, partly because of how he used technology to circumvent mainstream radio when she struggled to get her music played on it.
Once again, via Littlemonsters.com, she is a beta test with a view to understanding how Backplane could be employed by other companies to build communities. He is working with a shoe brand on tapping into “sneaker culture”, for example.
“Right now, we’re planting the seeds of an oak tree. What we are planting today, we may not see the full benefit for five to 10 years,” he says, pointing to the fact that many of the core tenets of the music business, such as digital rights arrangements, could change.
Still, the data being collected is already informing commercial decisions. For example, until Littlemonsters.com went live six months ago, Lady Gaga had never toured or been promoted in South America, a region that is not a big music market in terms of album sales and downloads. But “once we launched the website, we were able to get a lot of info about fans and specifically the numbers of them in South America”, leading to the decision to add a number of dates there to the singer’s Born This Way Ball tour.
But however excited one gets about data, Mr Carter offers a word of advice for anyone thinking about using it to tinker with the creative side of the business: don’t. “I stay away from the arts . . . writing songs, being creative – those are downloads from god. You can’t do data analytics on art.”