Getting to grips with global piracy
Andy Chatterley is CEO of MUSO – a data company that provides a complete and trusted view of global piracy and unlicensed media consumption. In 2022, Puma Private Equity made a £3.2 million investment into MUSO to help with its expansion. Andy talks to us about why he founded MUSO, and what drives him and his team to reach for the stars.
Andy, you’ve been in business for a long time now. Tell us a little about what you did before you created MUSO and why you built the business.
Prior to starting MUSO I was a record producer. I loved music, and when I was 17 or 18, I started my own Indie record company with my friend Richard, who later co-founded Feelunique. It was the early days of house music and we didn’t really have any idea what we were doing. It was very DIY. We’d take a month to make a record, then we’d manufacture it and sell it to distributors or directly to record shops. Literally we were learning the music business and music production from the ground up.
It was a real baptism of fire. But it gave us the best possible experience of how to run a business – particularly a creative one. Being creative and making money don’t often go together and it’s hard to make them work together at times. Over the years I have co-owned various other labels and worked with thousands of artists as a musician, re-mixer, producer and songwriter. These include Blondie, Kylie Minogue, the Pussycat Dolls and Kanye West. I even managed to get Grammy nominated in 2007.
My wife Nerina is a Brit and Ivor Novello nominated recording artist, and we’ve worked together on lots of projects over the years. It was what happened with her third album that really started MUSO.
What happened to trigger your development of MUSO?
Her third album leaked before its official release date. She’d gone through this entire process of making the record. It’s quite intensive making an album – you’re writing, mixing, recording strings, doing credits, photoshoots and making a video. It was a huge investment. Back then chart positions were really important, and her previous singles had charted well. She was getting good national radio play and things were looking good. Then suddenly a fan of hers announced that they could find her music on a piracy website. This was about ten days before its release.
I went to the music industry to try and do something to stop it. But I found the experience terrible – really terrible. There was just nothing that could help us deal with the problem of piracy. And it was incredibly frustrating – it felt like being burgled.
Music was my passion, but I’d always had a side business. I’d set up an internet clothing e-commerce store in 1997, and I created something called Freedom Card – which was a little like Klarna – in 1999. But it was too early to unlock partners like GE or Nova Capital, so it didn’t really take off. Both businesses were a little ahead of the curve and at the time a distraction to me making music. A year or so before my wife’s album leaked, and alongside my other co-founders at MUSO – James and Chris – we developed algorithms to identify emerging trends on sites like MySpace and YouTube. So when this issue with my wife’s album happened, we realised we could direct our technology to search for piracy. We found pretty quickly what we’d built was really effective in finding piracy online. We then spent nine months developing the code and the product before we were ready to go to market. And then that was it. MUSO was born.
We bootstrapped it, building the team slowly, and we grew the customer base and then expanded out of music into all media sectors, as all industries suffered the same problems with piracy. After about six years of providing content protection technology, we realised we were sitting on some incredibly valuable data. This is when I decided to join the business on a full-time basis as CEO. It was quite a tricky decision, as I’d spent most of my adult life in recording studios.
So I had a bit of a turning point in my life, and pivoted in my career. It came at a point in my life when I wanted to commit to something different. I’d learnt so much from running businesses and making records and commercial deals, and it was the right time for me to apply these skills to scaling up a company, and trying to create a positive outcome from digital piracy for the entertainment industry, by using our data to create revenue opportunities and better protect their valuable content.
Was it a difficult decision to launch a business? It sounds like from an early age you were entrepreneurial – was it a foregone conclusion that you’d work for yourself?
That entrepreneurial spirit has always been in my blood, so it wasn’t anything I thought too hard about. When I was 13 or 14 I started my own car washing business. I’d noticed a lot of nice cars where I lived in Jersey, so I went to people’s houses and businesses and found some customers, then enlisted five school friends to help. They’d come to my house on their bikes, and I’d send them out on jobs, and then I’d go and collect the money. I guess I never really wanted a boss.
I speak to people a lot who have really great ideas. I ask them why they don’t launch their own business, and what I’ve realised is what holds a lot of people back is fear: the fear of failure and the idea that they will be on their own. And it’s this fear that always seems to stop people from even trying. I was so young when I did it, there was no fear. So if I could give any advice to a younger person who wanted to try to do something, I’d say just do it. Nike nailed it with their slogan. You’ve got to do it because you just never know. You’re not going to succeed the first time or even the second time, but if you continue to do it and you can take the risk and you’re smart enough, you will succeed.
Did you have any doubts along the way, or is it just if something’s failed, you’ve got back on it and tried again?
I don’t believe that you should give yourself a safety net. I think it’s good to have a plan and undertake risk assessments and those sorts of things. Clearly that’s all important. But when you look at the bigger picture, if you don’t take a gamble and go all in, you won’t succeed. You shouldn’t approach it thinking you can just try something for a few months and then go back to your day job.
Sounds like perseverance is important. How much of someone’s success is luck and how much down to sheer hard work?
I think the answer to that often depends on the industry. Perseverance in the music industry is absolutely key, because you learn very early on about rejection. Music is a pretty unforgiving place, and I think it teaches people a lot of resilience. If they have the persistence to stick with it, I think they’ll see it through. It’s certainly the one characteristic that I’ve noticed among the people that I’ve met.
To be successful you have to have a positive mindset. I know two founders who had the same outcome from the same event: one of them spun it like it was the best outcome they could have ever possibly hoped for, and it was amazing. And the other one immediately afterwards was really down about the same outcome. I thought that was quite interesting. How you spin things and where you get your positivity from is really important.
Covid affected different industries in different ways. Did it have a big impact on you and what did you learn out of that period?
Weirdly no, it didn’t really impact us much – and any impact it did have was kind of positive. I’m a bit of a news junkie, so I’d been watching the news in January 2020 and social media videos about a new virus. I realised something was going on, so I started to wear a mask and I stopped commuting to London. I just started working remotely, so by the time it all happened, I’d been getting ready for weeks.
At MUSO some of our team are based in Romania, so we were used to working remotely. While everyone else was getting to grips with flipping their operational models, we just carried on as we always had done. We did have concerns about customer cancellations, but that quickly faded. During the whole pandemic we didn’t lose a single customer.
We also put in some really robust KPIs around staff productivity with everyone working from home, and it’s been incredibly important to us and our staff productivity. It has resulted in a more flexible approach to work-life.
Will you be able to continue to work like this as you scale? As you get bigger, does it remain easy to manage that kind of work-life balance for staff, or does it get more challenging?
I think it has to be departmentally led. What we’re finding with our coders and engineers is that they can be easily distracted by office environments. So those teams only come in for team meetings or social events. You can continue to build the culture, but when it comes to day-to-day working, they all work better in their own environment.
For the sales team though, having more regular touchpoints together in the office is really important because they generate a lot of energy being around each other. And they need to be spending more time on the phones talking to customers than anything else. And that can often mean being somewhere quiet. So you might come in to prepare for a meeting, but then go home and have the meeting. I think it’s a balance: it’s team-dependent and it depends on the functions of the roles.
One of the other big things that we found after the pandemic is that previously we thought we’d have to head to America to open an office because we need to be there because that’s where our customers are. Then the pandemic happened and now they want to do everything by Zoom. So I think the ability for a company to be in Europe and the UK and do business in the US without massive expense is hugely beneficial.
Was growing the business with private equity investment a difficult decision, or one you knew you were going to have to make at some point?
It wasn’t a difficult decision to make. For us, getting investment has always been about when is the right time for the business to get an injection of capital. Our products had quickly attracted some really big customers, and we realized that we had something that no one else had. That was incredibly valuable. But the risk for us as a business was that if we didn’t scale quickly, we might lose momentum. We needed to be able to invest in marketing and PR and in additional salespeople to fully capture the opportunity that we’ve got. So it wasn’t an emotional decision or difficult one; in that sense, it was very much a strategic decision about speed: getting where we wanted to get to and getting capital to help us do that.
From the time we’d made the decision, it was pretty quick. Money is fuel really, so you can drive to where you want to get to. It gives you the ability to get somewhere faster than you might have otherwise done. You just have to figure out if as an owner, you are happy with the equity dilution. But a good investment is one that goes beyond just the money. You want private equity investment from people who resonate with you.
I think there tends to be a perception that outside investment is a necessary evil, where they are adversaries that you are going to fight with and have real issues with. And I think it’s completely the wrong way to view private equity. Actually, they should be your partners, ones that bring a lot to the table. If you’ve got a bad feeling from someone, you shouldn’t take the investment. If you can’t imagine getting on a transatlantic flight with someone for ten hours, then you shouldn’t be doing any long-term business with them.
People are so important. Are there types of people you look for to add to your business?
It’s essential that you think carefully about how you build your culture. I probably shouldn’t get as involved in recruitment as I do. But I am very protective of our culture, and I won’t let anyone join our business unless I have seen them. We’ve got it wrong in the past and I blame myself, as it’s usually when I haven’t met someone before they have started. You have to make sure that you have a clear idea of the kind of culture you want to build and stick to it.
Are there any companies that you think do things really well? Are there certain brands that you admire?
I think I’d probably have to say Spotify if I was going to say anyone. They have just revolutionized their market and completely changed the way that people consume music. If I look at this through the lens of my son – he’s 12. And he’s making and producing some really good music. That’s because he uses Spotify so much. He’s gone on this journey of discovery with music. He’ll find a hip-hop artist that he loves, and then he’ll discover that they sampled an obscure sort of jazz French post-Serge Gainsbourg piece from the mid-70s, and he’ll go on that journey. When I look at companies that have done incredible things and had that level of positive disruption on an industry, it’s just something to admire. Spotify does something really positive for the music consumer. It’s phenomenal. You could say the same for YouTube and the other platforms. But in terms of doing it well, I think Spotify would be my choice.