INNOVATORS VS COVID 19
Serial Tech Entrepreneur Using COVID-19’s Lessons to Disrupt the Music Industry, and Help Get Money into Musicians’ Hands
We talked to Matej Harangozo of Digital Science Media on how the firm is disrupting the music industry during COVID-19.
First of all, how are you and your family doing in these COVID-19 times?
Matej Harangozo: We are doing well. I am fortunate that all my family is doing well — no one has caught the virus. In fact, my father lives in China, and my mother lives in Europe. Because of this, I get real insight from two different continents to see how things are. I don’t have to rely on the media to get a sense of how things really are in other parts of the world.
Tell us about you, your career, how you founded Digital Science Media.
Matej Harangozo: In 2012, I had my first townhouse, and this was right around the time when I moved out of my mom’s house. This was during the early days of our startup, greeNEWit. As greeNEWit scaled and enabled me to have more free time and more money, I spent a lot of money on my hobby, which is music production. That led to a lot of expensive studio equipment, so I decided to turn it into a company and came up with the name “Open Source Entertainment”. To this day, I remain a big fan of the open-source mentality when it comes to software development. At the time, I was also a part of the national building performance institute (BPI) home performance technical committee that worked to define how to collect energy efficiency data and process information between all stakeholders (i.e., power utilities, home lenders, building contractors, appliance companies, etc.). There was always the battle between using the open-source methodology or something private. The BPI homeperformance.org committee decided to go with a standard that was a quazi (open-source/third-party tech) solution due to the lobbying and pressure from some of the big companies involved.
Given my experience with the open-source concept, I thought it made sense for my new venture to use this methodology. Many of the big-name record labels did not practice solid and genuine business practices and created a similar pressure against the independent or DIY artist business model. They did not educate artists on how to maintain a brand that operates as a business, and therefore many artists were getting raked when it came to contracts. So, I figured there had to be a better way of running companies and to show artists how to truly benefit more from their art and actually create generational wealth from it on their own. So, I had this idea of an artist incubator/accelerator that would use open source methods to teach artists and their teams on how to be successful in the space… sort of my version of a modern ethical record label.
Where did your interest in music come from? What was the inspiration?
Matej Harangozo: In high school, as a side hustle, I started bootlegging CDs. I was the first person at my school to have the very first 1x CD burner. It was 1998, and it was the age of LimeWire and Napster… well before the iPod. The music industry didn’t know how to handle this new trend. In full transparency, a lot of my friends would sell weed on the side to make extra money. I was not a US citizen so my mom would always say “Matej you must stay out of trouble or else you will get deported. Don’t do stupid shit.” So, what my friends were doing was not an option for me, but I thought burning CDs was a smarter way to create a solid side hustle at the time. When I moved to America, I started listening to hip hop even before I spoke English. My dad was always pissed about curse words and gave me a hard time for it. So, I used my Sony HiFi stereo system (because it could re-loop one to five seconds of a song) and erased the bad words of all of my favorite songs. This allowed me to still listen to the music I wanted when he was around. He never knew.
I also figured out that when you put a high-quality headphone into a microphone jack, one of the earphone speakers becomes a microphone. I had some friends who were rappers. I would get some instrumentals, like looping Madonna instrumental breaks or other songs, and then have my friends rap over it. From that point on, I always wanted to have a record label. I was — and still am — a big fan of Tupac. He was very dedicated to educating his community and helping people be in business for themselves and was also trying to create his own label before he was killed. So I created my own label: Infamous Records. I added that logo to every CD I burned along with the words “Executive Producer Matej”. And of course, this was using all cash and bling bling fonts [haha]. Needless to say, I was the go-to guy if you wanted a mixtape. I would burn the new DMX CD, for example, for $5 a copy. But if you wanted a custom mixtape, that was an extra charge of $10 to $15 a copy. I also dabbled a bit with music software. I got DJ software my senior year and would create simple beats here and there. I ultimately put that on hold as I needed to think more seriously how I could support myself financially, but I always knew one day I would find a way to get into the music industry.
The time that was most instrumental in making the shift was from 2011 to 2012 when I was a co-founder of that booming energy startup. I had more money and free time, so that allowed me to invest and get into this venture more seriously. I initially spent about $15,000 in studio equipment and set up a recording room in my basement. My girlfriend at the time was a singer, and that helped push me into it as well. I taught myself to use pro tools, how to record vocals, how to create instrumentals and so on.
Now — fast forward to 2020 — through Open Source Entertainment and Digital Science Media, we are helping independent artists, producers, DJs, and influencers get noticed all while disrupting the music industry. We support breakout artists including Hello Sister, China Mac, the gospel record label Black Smoke Music, and many others under the hip hop industry legend Wendy Day to name a few.
How does Digital Science Media innovate?
Matej Harangozo: We innovate by interacting with each of our customers very closely and often, pretty much become a member of their teams. Additionally, I put out daily content to interact and educate our customer base. We’re getting a real pulse on a lot of the pain points that exist in the music industry or specifically for independent artists and the issues they face in scaling their business. We analyze the competition that scams a lot of our clients. One of the things we pride ourselves on at Digital Science Media is that a lot of our social media followers trust us and the information we are putting out. I get direct questions on a daily basis. “Have you heard of this service? What do you think of that?” We’re developing a real grassroots engagement in intel on the industry. This helps us innovate and keep our services one step ahead of the game.
From where I sit in the music industry, it’s easy for me to admit that we are geeks and nerds in what we do and that we love data. We’re not just a digital marketing company, but because of my background and experience in business, technology and data, we are able to collect so much information on the consumer and consumer behavior. From there, we consult artists on what to do and help them repackage that data. Because, sadly, from an artist perspective, the culture, especially in hip hop and modern genres doesn’t allow the artists to be the geeks in the room. So, we’re helping to bridge that gap and grow their business.
How the coronavirus pandemic affects your business(es), and how are you coping?
Matej Harangozo: Initially, in March and April, there was a definite scare because the larger clients paused or pulled out of the marketplace for our services. But, shortly after that, we very quickly scaled and have now become busier than ever. COVID has forced every business to figure out how to transition services to digital or make their product available online. Not just that, but it has forced nearly every company to figure out how to operate from home and in this new remote world. Many were forced to figure out how to look toward software and digital solutions to remain in business. That’s what both of my companies are specializing in (software/eCommerce/digital solutions). We are continuing to scale even though wave two of the virus is coming. So, we are fortunate to be scaling on two fronts.
Did you have to make difficult choices, and what are the lessons learned?
Matej Harangozo: We did. Initially, COVID forced us to make some decisions much faster than we normally would have. For Codaemon, the e-commerce solutions company I own, we reduced the amount of projects we took on and narrowed down our expertise and platforms. We had a few developers on the team that specialize in platforms that we did not want to offer to the market as a service. And so, because of COVID, it corrected itself.
In terms of the lessons learned, we had to adapt to running leaner with solid processes in place. You need to get your business to run more like a machine, that way you can adapt much quicker and shut down parts of the business that can stay idle and focus on just the core moving parts when required. The other lesson learned through all of this is just how personal this feels for everyone. People have let their guards down, so to speak. I’ve been on zoom after zoom with artists or people in the industry who’s babies or kids are in the background crying or running around. I think we’ve all learned that everyone is going through this together and finding some unity and peace in that has kept everyone a bit more grounded and tolerant of the complexity we are all having to navigate on a daily basis.
How do you deal with stress and anxiety?
Matej Harangozo: I exercise. I hired one of my really good friends as a personal trainer to kick my butt several days a week at 6 am. But because of that, it helps me go to sleep earlier. I have more energy in the morning, and it helps my mind to shut down sooner. I get more sleep, and I’m carving out time to meditate. I am thankful for where I’m at. I surround myself with positive people and am thankful every day for what I have. If you try hard enough, you can always find some positives in any situation. That mindset is key, and it did not come overnight. Building those healthy habits for personal use has kept my stress and anxiety at a manageable level amidst these uncertain times.
How do you project yourself and Digital Science Media in the future?
Matej Harangozo: A year from now, I see us tripling in size for Digital Science Media and dealing with major labels that are progressive enough to leverage and embrace the independent model. I think over time, they will shift their models to be in tune with independent artists. I also think we will have much larger clients.
Eventually, I’d like to expand Digital Science Media to additional and similar verticals. Take sports players, for example. I’m confident we can help them market their brands to the next level. Also, eCommerce clients or stores that deal in apparel. Pretty much anything that musicians would sell as merchandise, we want to start supporting those e-commerce businesses and help them grow their business online.
Who are your competitors? And how do you plan to stay in the game?
Matej Harangozo: Indepreneur, Burtismo, and Brandmansean on a smaller scale and Roc Nation or Vayner Media on a larger scale.
We beat our competitors because we are honest, transparent, and not only provide marketing but business consulting/growth through the data. Best at understanding consumer behavior and best at technology to get your brand/product in front of that audience. Experts at psychology and signs in digital marketing. Emerging those two ahead of everyone else.
Your final thoughts?
Matej Harangozo: If you can figure out how to have a pandemic-proof business and deliver a ton of value to your customer, nothing except bad health should stop you. Specifically, in music, we are honest, transparent, and a company willing to take its time to deliver value and not just in it for the money. I think that is a recipe for scale. Might sound counterintuitive in the music industry. Education, being passionate and doing it to truly deliver value. I started educating artists and growing their brands for free and even with my own money in the beginning, and I would still be doing this for free if I had to. I love it so much.
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