CD baby : Broke & struggling musician → Multi-millionaire

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Hey rebel solopreneurs 🦸‍♂️🦸‍♀️

Ever stare at your screen thinking "I need to learn more first" before launching that newsletter?

Or hear that voice saying "Who am I to think I can sell this course?"

Meet Derek Sivers - a struggling musician battling those exact same doubts who built CDBaby into a $22 million empire by ignoring the voice that said he wasn't qualified.

The rejections that followed would test everything Derek believed about his music...

🧘‍♂️ Just a regular kid with a guitar

Derek wasn't some business prodigy.

He was just a California kid who fell in love with music when he was seven.

Started with piano, viola, clarinet - you know, trying everything.

By thirteen, he'd grabbed a guitar and decided he wanted to make it as a musician.

Nothing special about his story so far, right?

In 1987, he enrolled at Berklee College of Music.

To pay for school?

He joined a circus as a ringleader and MC musician.

(Pretty normal path to entrepreneurial success, don't you think?)

Just goes to show - you don't need some perfect origin story to build something amazing.

The rejections that followed would test everything Derek believed about his music...

🧩 When everyone said "no"

After graduating in 1990, Derek tried the traditional route.

Got a job at Warner/Chappell Music.

Stayed two years, then quit to tour Japan as a guitarist.

Came back to New York in 1994 and played around with his bands.

Finally released his own album in 1998.

Time to get it into stores, right?

That's when the rejections started rolling in.

He called Amazon: "Thanks, but no thanks."

CDNow asked: "Who's your distributor?"

When Derek said he didn't have one?

Click. They hung up.

Every major online music store turned him down.

The distributors?

Even worse.

They wanted $20,000 just sitting in his bank account before they'd even consider working with him.

Can you imagine the thoughts running through his head?

"Maybe I'm not cut out for this..."

"Everyone else seems to have connections I don't..."

"Who am I kidding thinking I can make this work?"

Sound familiar?

What he did next would surprise everyone who said "no" to him...

🎪 The crazy $500 solution

Instead of giving up, Derek had a wild idea.

What if he just... sold his music himself online?

Small problem though.

He didn't know how to build a website.

He didn't know programming.

And he definitely didn't have thousands to throw at this.

So what'd he do?

He taught himself programming with $500.

$99 for Dreamweaver to build the site.

$20 for web hosting.

$375 for an SSL certificate.

That's it.

No fancy business plan.

No investor pitch decks.

No "proper" experience required.

Just a frustrated musician solving his own problem with whatever he had in his pocket.

(Sometimes the best solutions come from having no other choice, you know?)

And then something totally unexpected started happening...

🕵️‍♀️ Growing without a plan

Derek learned programming from scratch using books and online resources.

Built the entire site himself - every line of code.

When orders started coming in, he packed and shipped every CD personally from his bedroom.

As demand grew, he moved the operation to his garage.

Eventually hired one person to help with shipping while he focused on improving the website.

But then friends started asking: "Hey, can I sell my CD on your site too?"

First one friend, then another, then another...

Before he knew it, thousands of musicians were reaching out.

He started charging $25 per month for the service.

Customers happily paid because he was solving a real problem for them.

The first year?

Still just $15 a week.

But by year two, it hit $2,000 a month.

Year three: $5,000 a month.

Year four: $10,000 a month.

Slow and steady growth, but Derek was patient.

Nine months later, complete strangers were calling asking to sell their music.

That's when it clicked - his personal problem wasn't just his problem.

Every independent musician was dealing with the same frustration.

They all needed somewhere to sell their music online without jumping through hoops.

But could he actually make real money from this?

⛳️ Doing business his way

Everyone kept telling Derek to "think bigger."

Investors were calling non-stop.

People wanted to pay big money to advertise on his site.

Traditional business wisdom said he should take the money and scale fast.

But Derek had four "crazy" rules he wouldn't budge on:

Pay musicians every week (not every quarter like everyone else).

Give musicians their customer data (most stores kept this for themselves).

Never kick anyone out for low sales (even if they only sold one CD per year).

No paid placement - ever (no buying your way to the top).

You can imagine what niche veterans thought:

"That's not how business works, kid."

"You'll never compete with the big players that way."

"You need proper funding to survive."

Derek ignored them all.

He turned down millions in investment to stay true to his vision.

(Pretty stubborn for someone who "didn't know business," right?)

Then Apple showed up at his door...

🌈 When Steve Jobs called

Four years in, Derek got invited to a meeting at Apple about this new thing called iTunes.

He figured he'd meet with some marketing person.

Instead, Steve Jobs himself walked out.

"It's really important to us to get every piece of music ever recorded available in the iTunes Music Store."

Jobs wanted everything - even old albums that weren't worth pressing anymore.

This was revolutionary thinking at the time.

Traditional music retail was all about hits and limited shelf space.

"We've got 100 square feet, we need hits, baby!"

Jobs flipped that upside down: "Get everything up and sell. Why not?"

CDBaby became Apple's go-to partner for independent music.

Suddenly, Derek's "naive" vision wasn't so naive anymore.

His patient, inclusive approach wasn't just right - it was the future.

All those "experts" who told him he was doing it wrong?

Turns out they were the ones who didn't get it.

So how big did this thing actually get?

🎁 The $22 million exit

By year nine, CDBaby was pulling in $250,000 per month.

Derek had built a system that literally ran while he slept.

Musicians loved it.

Apple loved it.

The whole niche had shifted to embrace Derek's original vision.

But here's the plot twist - Derek felt... done.

He'd automated everything.

Fixed all the bugs.

Built exactly what he'd dreamed of from day one.

When it came time to sell, Amazon offered the most money.

But Derek chose Disc Makers for $22 million instead.

Why?

Because they'd take better care of his musicians.

Even at the exit, he put his mission over maximum profit.

A struggling musician with zero business background had just sold his company for $22 million.

No MBA. No fancy connections. No "proper" experience.

Just someone who solved his own problem and refused to compromise his values.

🥂 Your turn to light it up!

Derek started as a "nobody" with no business knowledge and zero connections.

His "disadvantage" became his strength - he understood musicians because he was one.

Your timing is perfect - just like Derek saw the gap between musicians and digital distribution before anyone else did.

I'm pretty sure you're gonna catch everyone off guard.

Keep rocking! 🚀🍦

Yours 'anti-stress-enjoy-life-while building a biz' vijay peduru 🦸‍♂️