Rodney was still working full time for Procter & Gamble when he got a term sheet from investors for his new business, a technology that transmits mobile data over audio signals. After raising $850,000 in capital he was finally ready to quit his day job. He grew up with entrepreneurial parents that ran small businesses and from an early age he knew he wanted to build a big company one day that would impact millions. Today, LISNR counts NBC, Sony Music, Ticketmaster, and many other recognizable brands as clients with new partnerships that is getting their technology in the hands of millions of people.
In part one of our interview with Rodney Williams we uncover how he navigated his career early on to position himself to become an innovator. He accumulated four degrees specifically designed to give him the knowledge, skill set, and awareness to be able to see a big opportunity when it came along. We find out how he ended up at a highly visible and cross-functional role at P&G and how after getting into a startup competition called Startup Bus he was able to bring on a major music record label as a client and raise close to one million dollars within six months.
Next week in part two of our conversation we learn how the business pivoted into various verticals and markets closing massive enterprise deals in the process, and how the team eventually landed partnerships with some of the biggest companies in the world to change the way we pay with our phones forever.
3:30 Sergei – Rodney, one thing we always wonder about is when someone first thinks of themselves as a possible leader or entrepreneur. When did that happen for you?
3:40 Rodney – For me it was a few things. One, is my mom had a beauty shop, and I had decided to lease magazines to people who would go there. That worked out pretty well.
4:00 The other part is I played sports, football mostly, but I wasn’t very good. So I made up for it by getting better at the intangible stuff, and working out. Because I was very disciplined in my approach, people followed me.
People tend to follow those who are disciplined in their approach.
4:45 Sergei – Was it something about your upbringing that gave you the confidence to try something that might not exist in the first place?
5:03 Rodney – I grew up in a Caribbean family of entrepreneurs. My mom had her beauty shop but she was also a registered nurse, and did catering on the side. My dad had multiple jobs as well. So I was used to that type of behavior.
5:30 My parents also always let me keep all the money I made, and wouldn’t influence those decisions. So I had a sense of autonomy from a young age.
5:49 There was definitely a moment where I realized, there’s small business and there’s big business entrepreneurs. And I didn’t want to be a small business entrepreneur.
6:10 I didn’t want to copy other business ideas. That’s what catapulted me to technology.
6:20 Vadim – So your parents obviously gave you an opportunity to express yourself entrepreneurially, and Sergei and I believe that everyone is born an entrepreneur, we just get the creativity and exploration beat out of us.
7:00 But you started off with a more traditional path. You got 4 degrees, and then you worked for Lockheed Martin, and that led you to a huge company, Procter & Gamble. Why didn’t you go pursue entrepreneurship sooner, say in college?
7:19 Rodney – I always had a side hustle. I went from magazines to selling penny candy at school. I was throwing parties, selling t-shirts etc. So for me, I just didn’t find my thing until later.
7:53 My first attempt at a disruptive business was offering my friend’s dad, who had a grocery store, to do home delivery. I had a similar business plan for cars.
8:10 But I realized, a kid from Baltimore doesn’t have the means to build something big. So for me my education was about building my network. Which is why I went to school in a different place.
9:00 All my education was specifically designed to see opportunities and have what it takes to build it. I did a Bachelors in Business and Finance, BA in Economics, Integrated Marketing degree, and MBA In Supply Chain. I wanted to understand supply, finance, and markets.
9:50 That’s how I pitched myself to Procter & Gamble. I said I can see what other people can’t, can talk about ideas intelligently, and have a high enough risk profile to make a decision.
10:10 Really good entrepreneurs assess environments better than others. Understand risk, know how to build a team, and know when to be a jerk.
11:00 Sergei – So you were doing well at P&G, and you probably had a lot of opportunities in front of you. How did you hone in on this particular opportunity as the one to go all in on?
11:14 Rodney – I have another rule. I tell people all my ideas. If it’s good enough, people usually pay attention and ask questions about it.
11:30 So for the 5 years at P&G I continued to generate ideas, many of which made that company a lot of money. So I’m writing patents, growing the brand, people get bonuses…and at the end of the day, you pretty much just get a plaque.
12:32 During that time I had the idea for LISNR and I started telling people about it. I told one of my entrepreneur friends the idea, and within 2 days he realized it could be huge. And when you talk about your ideas, you brainstorm in the process. And some of those people became my co-founders.
13:00 Then I went on a startup competition called Startup Bus, and after that had some investor interest. And I gave myself 3 months. If I wasn’t going to hit XYZ milestones in 3 months I was out.
13:10 Sergei – What were the milestones you decided on?
13:12 Rodney – The theme in my life is that I learned to ask questions, take feedback and try things. One investor told me if I focused on the music vertical and got a music partnership, as well as a patent, then they’d give me $50K. And if I got someone else to put in $50K, they’d give me $150K more.
14:00 So I showed up 3 months later with a music partnership and the necessary IP. So we got the $50k and a week later we got the rest of the money.
14:30 This happened because we got feedback from an investor before we even had anything. I believe in talking to investors from day 1.
14:49 Vadim – how did you secure the music partnership so quickly? Did you have any connections there
12:06 Rodney – I didn’t have any concrete contacts. I had a friend who was trying to get into the music industry in LA. So I took a bit of a risk. I flew out to LA for a week with just one meeting scheduled with this guy.
15:45 At the end of the meeting, I showed him a demo and asked if there’s anyone else he thinks I should talk to. That turned into a meeting with Warner Brothers, then Atlantic Records, and finally Atom Factory through which we met Nas. And he became our first partner in music.
16:00 Sergei – Just so our listeners know, the tech is basically a way to send data using sound. But since you were only somewhat technical, how did you even think of the concept, and what was the indication that the music vertical would work? Was it just that investor’s advice?
16:32 Rodney – so there was some indication from other companies trying to do things with sound. One company that was a good size was Shopkick. A couponing tech using ultrasonic audio. I knew about it because I was in retail. That made me wonder what else you could do with ultrasonic technology.
17:36 So I thought about tracking music using ultrasonic tags, because this tech created a unique ID for anything you wanted to track. You can trigger things based on these tags. This is more powerful than fingerprinting and watermarking which is what Shazam does.
17:45 We knew the tech could be even bigger than this but investors told us…you have to focus on one thing.
18:00 You gotta figure out your focus and do one thing well enough to get to the next place
18:15 So for us it was a mobile app that offered engagement and analytics platform for music.
18:50 So by the time I went to LA for that meeting, we had a rough MVP that didn’t really do much, but if you played a song all the phones would light up. And when we mentioned ultrasonic technology, people became interested.
16:10 Vadim – clearly you were able to show partners and investors along the way that you could deliver on what you said you would do. Now, you started this while you were still at P&G. When did you quit?
19:40 Rodney – I quit my job when I got the first term sheet. The startup competition was around March, and we got our first term sheet at the beginning of August.
20:00 Sergei – it sounds like you were able to get your first partner by building a great MVP that impressed them. How did you know what to build and how did you assemble the team to do it?
20:16 Rodney – discretionary budgets for marketing and fan engagement wasn’t there because the music industry was suffering with the transition to steaming. So we decided to sell to brands instead. And who better to do that than a former brand manager.
21:05 i looked at my skills and network and asked myself what I could sell
We launched with a lot of artists. Labels would give us artists and music, we would tag it, and based on engagement we would sell brands the inventory. This was enough to get us $1M in revenue in the first year, because these were premium custom campaign buys.
22:00 And we sourced the traffic and it was easy because we had content that no one else had.
22:37 The content came from the labels. First Nas, then Jason Darulo, Warner Brothers, Rock Music etc. And at the time I knew brands weren’t very digitally savvy. They threw a lot of money at campaigns that provided a more intimate experience. …
23:00 Vadim – so things seemed to be going pretty well at this point, but I know there’s another part of the story. There was a funding gap around this time where you had to fund payroll out of pocket. Talk about that story and what gave you the confidence that things were going to work out.
24:09 Rodney – Even when we started with music, I didn’t believe in music being the primary application for us. It was very seasonal, campaign driven. There was too many unpredictable intangibles and it wasn’t what I ultimately wanted to do anyway.
24:52 For me it was about making the ultrasonic tech better so it could stand up on its own. At that point it was wrapped up in an application and no one else could use it.