2019.02.25 - Upfront Ventures - Interview with Duff at Upfront Summit

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Milana Lewis: So, I spent most of my career working with artists in the capacity of either a talent agent or manager and for the last four years I’ve been building a company as an entrepreneur, that’s building tools and software for artists with Stem. And as I sort of sit between these two worlds of music and tech, I can’t help but make the analogies. And so, when I sit here with you, I see you as a serial entrepreneur. And you’ve been in a number of bands before this unicorn that we know as Guns N’ Roses took off. So what was that like? What were some of the bands that worked and didn’t work, and how did you know Guns N’ Roses was gonna be this big thing?

Duff: The one?

Milana Lewis: The one.

Duff: So I came up in the punk rock scene of Seattle, sometime around ’78. There was a real – I saw The Clash in ’79, a band that was so exotic to me. I saw Zeppelin in ’77 play the Kingdome, it was enormous, and the band was so small, it was so far away. And I saw some other big bands, I saw Kiss and whatnot. And the punk rock thing hit, and the Clash were playing right in front of me, and after the show, like, they came out into the crowd, and Strummer said something on the stage that always left an indentation on me, which was, “there’s no difference between us and you, we’re all the same, we’re in it together”. And that was born like a DIY punk rock scene in Seattle, and we did everything ourselves, making flyers, booking shows, carting gear, booking VFW halls, like, Union halls, lying to the police that it was, like, whatever, a team dance, but we were having punk rock shows. Learning how to do the commerce of that and whatnot, how to finagle the job you had, that you had to get to pay for a rehearsal place and for an apartment eventually, and for flyers, and for gear - you know, you would trade for gear. And I started really learning the value of things. I was really driven, music was gonna be my thing. Was I gonna make a living at it? That was kind of a joke. It was just my passion. And if I was broke doing my passion, so be it. I had to do it. And I played in a bunch of bands in Seattle. One of them got signed to Jello Biafra’s, Dead Kennedys singer’s label. We’d got no money for it, but we put a mark on the American map of punk rock. I was working at a restaurant in Seattle, saving my money to move to L.A. And the thing I was gonna tell you, which I didn’t tell you on the phone, was that there was a guy, Bruce Pavitt. He was another cook at the restaurant and he was writing a column for a local newspaper called “Sub Pop” – that was the name of the column. And as I left for L.A. from Seattle, he said “I’m gonna put my first single out”, a 7-inch single. And that became Sub Pop Records. And I moved to L.A. chasing my dream, and the first people I met was Slash and Steven through an ad in a newspaper, in The Recycler, if you know that. We met down at Canter’s and there was these long-haired guys. I had short, like, punk rock hair. We stared at each other, but found that we had a lot of the same musical influences. I’m not bringing up money and any of this, right? It was just meeting the right people. A couple of weeks later, Izzy moved across the street from me, when I finally moved out of my car into an apartment. I got a job in Northridge, which I thought was in L.A. Driving all the way from Seattle, “Oh, I’m in L.A.!” I wasn’t in L.A. The cook, after my first shift said - I asked him where’s Hollywood, and he goes, “Hollywood? That’s, like, 25 miles away.” So, anyhow, Izzy moved across the street and he was starting a band with Axl, his friend. And we met, and the forces of the five of us. I didn’t move to L.A. to be in some sort of – there was always a missing piece in the tons of bands I was in Seattle. I toured, I did punk rock tours. I knew how to book a tour, I knew how to make flyers. I knew a lot of things, but if you’re missing a piece in your band – like, there was always a weak link. When the five of us got in a room for the first time at Silverlake, at a rehearsal place, it was on. You could tell immediately. It was pretty ferocious and just got that feeling.

Milana Lewis: And so, we talked a lot about building the right team, right? And we used the analogy of getting the band together. So, you guys get the band together. So how do you go from day one to what felt like number one single overnight?

Duff: Yeah... Okay, so my daughter has a band now, and the advice I have for her, and what drove us, is just writing the right songs, believing in yourself. Commerce was not a part of any of it at the beginning. You’ve got to really believe in your idea. I’ve seen some ideas here, you know, and people that believe in it. A band, a rock band, is no different. We wrote the songs, we took from our own experiences, melded it together and wrote what became the “Appetite for Destruction” record. Then we started realizing that we had to draw people to clubs, and that was the next step. Our first gig was to three people. Our second gig was to four. We knew that all three and four people came to our shows. Slash came up with this idea of a newsletter. “Let’s collect everybody’s…” Street hustle and stuff, you know? “Let’s get everybody’s address, and for our next gig, we’ll get the flyer, we’ll fold it up, tape it, put their address on, put a stamp, and send it to their house”. And we started this mailing list, and it grew to 50, and it grew to 100, and it grew to 200. It grew to a point where Slash was making calls out of this – he worked at the Centerfold, the magazine stand on Fairfax. So he got fired because he was using the phone too much. But that was our phone, you know? “You can’t get fired, man, that’s our phone.” But, I mean, we had so many on the mailing list, like, “How are we gonna afford the stamps to send our flyers out?” But that newsletter, really – the mailing list, it wasn’t a newsletter, we just sent the flyers. But it really worked. We hustled and we started to bring in 50 people, and 100 people, and kept writing those songs. And then somehow the songs identified with our generation. They weren’t pretty, there wasn’t sweet - they weren’t love songs. It was about drugs, it was about the darker side of what we were seeing. You know, we all lived through that recession, that early 80s recession. There was no jobs. I moved to Hollywood here right after the Olympics, so the cops just left Hollywood and it was Wild West as far as drugs, and crime, and whatnot. So this is what we were seeing. We were seeing heroin, we were seeing crack, we were seeing everything, and we wrote about it because it was what we knew. But we started selling out these clubs and we started learning about the commerce of that, too. You know, like, our crowds would drink the most. We broke the drinking records at the Troubadour. “What does that mean for us?” Could we get a piece of that? “No, you don’t get a piece of that.” Alright, okay. “In the future, let’s see if we can get a piece of that.”

Milana Lewis: Did you guys ever negotiate your fees? Maybe lower up front but a higher rough share, to get a piece of...?

Duff: We started to do that. I mean, you’ve got to remember, at the beginning we had to pay to play. You have to pay for the lights, you have to pay for the sound guy... And we didn’t have the money to pay to play. We did have an angel in Marc Canter, who was Slash’s best friend. He would loan us the money up front and we’d pay him when we got paid after the show.

Milana Lewis: That’s amazing.

Duff: Yeah. So, we graduated out of the pay-to-play to actually getting paid to play. Which wasn’t much. We all had jobs. We had this shitty little room behind Guitar Center on Sunset with no bathroom, where we rehearsed and often lived. But we believed in ourselves, believed in our thing. And the labels started to show up to our shows, and that was the next step for us.

Milana Lewis: So there is this great story that you told me about you guys getting signed, and you make – I think at this point you’re on tour with Aerosmith, and you guys made the video for Welcome to the Jungle. And, even though you guys were starting to draw on these amazing crowds of people to your shows, MTV would still not play this video. Right?

Duff: Well, we weren’t really drawing people. So we got signed, we made Appetite for Destruction. It was not an instant success. With our, like, core crowd of people like us, we had an initial run of, like, 30,000 to 50,000 records worldwide. Which sold. That’s a lot of people listening to your record.

Milana Lewis: A lot still.

Duff: That’s a lot of people. We’d go out, we opened for The Cult, we came across Canada. There would be seven people out there for us, you know? (laughs). And then The Cult would come on and the place was full. We came down the West Coast, L.A. was great for us. And then we went back into the South. We opened up for Alice Cooper and Megadeth in theaters, so we had to set up in front of Alice Cooper’s stuff and Megadeth’s stuff. So we had no room in the front of the stage except for the drum kit which was right there and gets to the lip of the stage. We were getting traction though in the U.K. and in Japan, where we would go there, and suddenly we play theaters and they’re sold out. So there was… we went to Japan and we played Budokan. You know, that’s a jump-up, big time. So we knew there was something there. We made a video for Welcome to the Jungle. MTV refused to play it, because it was, I guess, the subject matter of whatever.

Milana Lewis: Because you guys were talking about the stuff that no one else was, right?

Duff: It wasn’t pop. It just wasn’t pop. It wasn’t popular, that kind of viewpoint, I guess, and style of music. So, we had an A&R guy at Geffen, who championed us, and he went out to the limp and called David Geffen to make a call to MTV to just play our video once. “Just play the video once, give the guys a chance.” And they played it at 3:00 a.m. on, like, a Wednesday. And there was some record-breaking amount of - it’s on the internet somewhere. What happened next was, a bunch of people called in and kept calling to play the video again. And that’s when the groundswell really started for us.

Milana Lewis: And that’s a big traction, right?

Duff: Huh.

Milana Lewis: I mean that’s some real traction at that point.

Duff: Yeah. We started to move up. We made a video for Sweet Child. You know, we didn’t have a lot of money. We had a budget for the record and we had some – you know, you got to pay that all back, by the way, which we found out then. We thought it was free money, you know?

Milana Lewis: Can you talk – actually, could we pause for a second? I think it’d be great to talk a little bit about, sort of, the way that the money flows in the business, and a little bit about... What most people don’t understand, especially artists, is, they get this massive advance from a label and a lot of them don’t understand how the recoupment works.

Duff: Right.

Milana Lewis: And some of them are angry, and you hear them complaining about, well, “I don’t know where my money is,” “When am I gonna see something?” (?)

Duff: Right. The pipeline, they call that.

Milana Lewis: Right.

Duff: “It’s in the pipeline”. So we had to, basically, take a crash course. There was – still is – this Donald Passman book on the music industry. We would read this thing. We didn’t, really… Publishing is a thing, and young musicians don’t know anything about it, because it means nothing to you. But we were getting offered money for our publishing. So, one guy offered us at Denny’s a $10,000 traveler’s check for the publishing of Welcome to the Jungle. That was a lot of money for us, 10,000 bucks. But we just thought, if it’s worth something to him, it must be worth something to us. Later on, when we got signed, we were offered a couple of hundred grand for a big cut of our publishing. “Well, if it’s worth 200 grand to them, it must be worth 200 grand to us. And besides, it’s not their fuckin’ songs. We wrote them.” You know, it was really kind of a street mentality. The money that we got from the label, we did understand it was a loan. And we started to figure out the little, kind of, bylines in the contract, the breakage and whatnot, which is spoilage and breakage, that you’re just under no control of us. You know, that we would end up paying for or that we wouldn’t get paid for those records, one way or the other. We took a crash course in all of that, how to… We got tour support. We weren’t making enough money to pay for a tour bus. We were borrowing money from our roadies to eat, you know? We knew… When we started selling records with Sweet Child O’ Mine - we made the video above a bank downtown L.A. It was very cheap. If you see that video, it’s just us in a room, it’s black and white, there’s a couple – you know, the little camera dollies on the floor, and that’s about it. There was a dog, one of our dogs was in it, and I think our girlfriends were in it. But it was super cheap. But they released that single and that video, and that really took off. By that point, we were on tour with Aerosmith, and those seven people that showed up early turned into 30 the next night. And the next night it was 300, and the next night it was 800. And by the end of, like, a couple of weeks, all 17,000 people that were there before to see Aerosmith, were showing up for us. And we started selling a lot of records. The album started moving up the charts, the single went to number one, then the album went to number one, and things changed there. So we were selling millions of records and we were still borrowing money from our roadies for a sandwich. And then, you know, at that point, they said, “Well, there’s money coming, it’s in the pipeline”. “Okay, fine, when is this pipeline due to us?” And we did get paid. You know, we got paid this total next level to that – auditing, later on, and whatnot. But then the question becomes, you know, my first check I got. I’ll just be frank, it was the first check. So I went from poverty level person to getting a check for 80,000 bucks in 1988. $80,000 might as well have been a billion dollars. I didn’t know what to do with $80,000. So, you began asking questions about money. I didn’t know what a stock was, what a bond was. If somebody said “risk” to me, you know, I’d start swinging. So I think it’s very important, if there’s any musicians or if your kids are musicians, there’s nothing wrong with asking questions and saying, “I don’t know what that means.” And I was afraid to do that for the next ten years.

Milana Lewis: Yeah. I mean, what you’re talking about is something that I think that a lot of musicians can relate to, which is, 1) you don’t know when your money’s coming, 2) when it finally comes, you don’t know where it comes from and 3) you don’t know what to do with it when you earn it. And one of the misnomers, I think, in the business, is that people assume that musicians are just good at music. And at Stem, we believe that musicians are just business people, and if you give them the data and the visibility into that, they can make really smart business decisions.

Duff: Yeah.

Milana Lewis: And you went to study finance, as well.

Duff: I did. Well, I looked into what you’re doing, and it’s really quite amazing. I told you my daughter has a band. I’m gonna turn them on to what you’re doing, because it’s brilliant. Yeah, I went to study. My twenties were tumultuous, at best (laughs). I think that’s what they say. But, yeah, I woke up in an ICU at 30, and there was a kind of line drawn down the sand whether I want to live or die. And it was that pretty basic – I decided to take the first one, to live. I had a big family, I had a lot to live for. And, so, the decision, like, the thought came to my head. Like, I’d made money in my twenties, “Now I’ve made a good amount of money, I don’t know how much, I don’t know who has taken from me, how much they have, if they have” – which they did. But it was time for me to, sort of, arrest this portion of my life and gain some knowledge. So I got myself, eventually, through going to Community Colleges and courses. I wanted to go to Seattle U, to Albert School of Business. I thought I could go in and write a check, and just go to school. I got a GED and I couldn’t just go in and write a check, they’d let me know. So I had to go through a Community College at Seattle Central, and get A’s in these classes, and write admittance essay, which - one of the guys in the Presidents of the U.S.A., the band, he went to Brown and he was an English major. I’m like, “What do I do, how do I write?” I’d forget how to write a fuckin’ essay. So I go, “What do I say?” and he goes, “Tell them everything. Tell them your pancreas blew up, tell them how much you drank, how much cocaine you snorted. Tell them everything, and tell them you have a wife now, and you have a little baby, and that you want to go to this school.” So, I did that. I wrote this letter and I got in. And, I mean, just the Accounting classes at the beginning alone were so valuable to me. I could read my financial statements that we were getting, for the band and my own personal financial statements. And there was questions that arose from me being able to finally read these things, and some nervous people on Ventura Boulevard (laughs). I ended up moving accounting firms and matriculated through school, to the point – my wife who’s here, Susan, we have two beautiful daughters at 18 and 21 now. We decided to – I was going to try this thing with Slash and Matt, and we got Scott Weiland, and we formed this band called Velvet Revolver.

[Cheering]

Duff: Thank you. Bonus points.

Milana Lewis: There’s some fans in here, I think.

Duff: Yeah. So, at that point I knew what I was talking about, you know, just to a certain extent. Never assume you’re the smartest guy in the room, but I think they were assuming I was the smartest guy in the room, which is just fine. So we had our record deal, and we did our deal with agents, with a manager, with merch companies. I was there at every turn. We had learned a lot from the Guns N’ Roses experience: managers commissioning off the gross. Meaning, we went out and toured, and we get, say, $1 million guarantee. In the early ‘90s it’s a ton of money. The manager would take his commission off the top of that. We’d pay for all production. Production ran at about 50%, if not more, back then. At the end of a gig, we might end up owing money. Sometimes we didn’t go on on time in the early ‘90s (laughs). So you gotta pay all the over… you’re paying for cops, you’re paying for union workers, you’re paying for trains to stay open. So we’d be in a hole a lot of times. Meanwhile, the manager... (laughs).

Milana Lewis: Takes 10%? 15%? 20% off the top?

Duff: Yeah. He moved outside of L.A., so you couldn’t see where he lived. And finally, one time, I went there and, like, he’s got horses and he lives on the golf course, and (?)-

Milana Lewis: Oh my God.

Duff: And I’m like, “Jesus, horses! Fuck!” (laughs). “I’ve got a two-bedroom in the Valley, man”. But you learn. You live, you learn. And serial entrepreneur, indeed. I’ve got that from punk rock.

Milana Lewis: Doing it all yourself in the beginning…
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Duff: Doing it yourself. And even go back to school and learning the stuff. It was a very – that was punk rock. You know, I really owe it all to that. Being, you know, a husband to my wife and father to the girls, I do it in a very punk rock way. Which is meaning just be truthful, and be fuckin’ vigorous and honest, and do that thing. And, I think, if you do that in whatever your venture is, you’ll be okay. Believe in what you do, be punk rock, be vigorous, be honest, be truthful. And learn. Don’t be afraid to ask questions and don’t be afraid to say, “I don’t know what that means. Please tell me.” It’s all I got.

Milana Lewis: Well, I have one last question.

Duff: You made me follow Gwyneth Paltrow, Adam Schiff, Ron… You didn’t, no.

Milana Lewis: That’s not my fault. But I’m happy to be part of it.

Duff: Yeah, cool.

Milana Lewis: So, one last question. What’s the next venture?

Duff: Next venture...

Milana Lewis: Or adventure.

Duff: There’s a lot. I mean, there’s a lot. My next venture is being, like, the hype man for my wife’s novel that comes out in April. I’m so proud of her. I’m happy to be her hype man. You know, there’s more touring coming up, there’s more recording...

Milana Lewis: With which bands?

Duff: Huh?

Milana Lewis: As a solo artist? With a band?

Duff: Sure. All of that.

Milana Lewis: All of that?

Duff: Yeah.

Milana Lewis: Amazing. I only got to see you ten times during the last Guns N’ Roses tour, so I think I need more stage time.

Duff: Say it again.

Milana Lewis: We only got to see you, like, ten times on your last tour.

Duff: Oh yeah, you gotta see us twenty times in the next… yeah. Just ten?

Milana Lewis: Just ten.

Duff: Yeah. So we’ve just done with a tour of 2-1/2 years, around the world about four times. So, I’m gonna rest for a couple of weeks and then be my wife’s hype man. And there’s some stuff coming up, yeah.

Milana Lewis: Exciting. Well, thank you for being here and for sharing that with us, and your story.

Duff: Alright. Thanks guys!

I added the rest of the transcript.
Duff is vague about the future, but I think it's an interesting interview about the business side of things in the past (that's why I decided to transcribe it although it's new).

I assume this is about Goldstein, who were skimming their money and could live a life with horses? Or could it have been Niven?

Soulmonster wrote:I assume this is about Goldstein, who were skimming their money and could live a life with horses? Or could it have been Niven?

So we had our record deal, and we did our deal with agents, with a manager, with merch companies. I was there at every turn. We had learned a lot from the Guns N’ Roses experience: managers commissioning off the gross. Meaning, we went out and toured, and we get, say, $1 million guarantee. In the early ‘90s it’s a ton of money. The manager would take his commission off the top of that. We’d pay for all production. Production ran at about 50%, if not more, back then. At the end of a gig, we might end up owing money. Sometimes we didn’t go on on time in the early ‘90s (laughs). So you gotta pay all the over… you’re paying for cops, you’re paying for union workers, you’re paying for trains to stay open. So we’d be in a hole a lot of times. Meanwhile, the manager... (laughs). [...] He moved outside of L.A., so you couldn’t see where he lived. And finally, one time, I went there and, like, he’s got horses and he lives on the golf course, and (?)- [...] And I’m like, “Jesus, horses! Fuck!” (laughs). “I’ve got a two-bedroom in the Valley, man”.

Upfront Ventures, February 25, 2019

I think definitely Goldstein.