Darryl Hillock 0:00

I think when you have product market fit with a product and then it fails, you've already accomplished a big step, which is proving that the idea works. So where most people fail is they have an idea that they think will work and either they can never prove it or they try to prove it and it and it doesn't work, right? So in my case, I had proved that the product worked.

Angela Robertson 0:19

Welcome back, everyone, to the Stormy Stories show. I am your host, Angela Robertson, CEO of Ace Tech. We are a non-for-profit membership society for tech founders and CEOs so that they don't have to do the hard stuff on their own and they can thrive along with their businesses. I'm so delighted to share our guest today, who is Daryl Hillock, founder and CEO of Beatify Group. He spent more than 30 years building products across music technology, creator platforms, digital commerce, and identity systems. He pioneered one of the earliest blockchain-powered music streaming platforms and is now focused on helping creators own their identity, audience, and revenue through next generation digital infrastructure. Welcome to the Stormy Stories show, Daryl.

Darryl Hillock 1:12

Hi, Angela. Thanks for having me.

Angela Robertson 1:14

So I am so curious about this topic because clearly you are driven by music. Look at all the instruments you've got going on behind you. So I love that. You built one of the earliest blockchain-powered music streaming platforms. What inspired that vision long before Web3 became mainstream?

Darryl Hillock 1:32

Yeah. So uh in 2019, I owned a music school. So the music school, I had about 400 kids a week going through that music school. Wow. And I sold it in 2019. And I sold it about uh eight months before COVID hit. So it was two years in brokerage, that business that I sold. And I was managing a talented young artist at the time who was performing at Scotiabank Arena for Marley's games. She was doing like Best Buy commercials, so I was booking her into Best Buy commercials. And when COVID hit, it shut down everything. So it was hard to find live gigs and do that type of thing. And we had done a uh major recording with her with uh Mike Turner from Our Lady Peace. And uh yeah, so we had produced this cool album and it was on Spotify, but it was not making a bunch of money, and I had put about ten thousand dollars into that product, and I was looking to like recover a little bit of money, you know. So I thought to myself, you know what? Selling CDs, selling this from the shows, selling merch is making me more money than Spotify is making money, right? For me and this artist because we were co-writing, and maybe we should just sell this from her website, but I'm also lazy sometimes, and I didn't want to manage the database and the books and stuff like that around it, right? And I didn't really know how to build it at the time. So I found blockchain. So that's kind of when I discovered Bitcoin and and discovered what Bitcoin can do for me. And then I hired a development team offshore, and we started building a new streaming service on uh Polygon Matic. So it was basically like Spotify, but the back end remunerated artists using blockchain. So it was fast, it was efficient, it was transparent, it was immutable, it was all those wonderful things that blockchain uh brings to the table with regards to like being able to monetize a product. So I did that, and people loved it. So we had product market fit in about six months, and I onboarded 10,000 people, and the product was doing great up until the FTX and crypto collapse.

Angela Robertson 3:37

Which is a challenge, right? That many of us face, no matter what industry you're in, is that you just don't know what tomorrow is going to bring and for the technology that you're using, how it's going to live on beyond. So, what was going through your mind during that period when the crypto market collapsed?

Darryl Hillock 3:53

Yeah, to be honest, that was one of the hardest times of my life, right? You know, when people trust you and they invest in you and they invest in a token economy, they believe in the person, they believe in the product, right? The problem is that a lot of these economies are tied together. So when one crypto goes down, they all go down, right? And we saw that during FTX. So what started to happen was I started getting dragged publicly through the mud, which was really, really hard. So, like on Twitter, people are like, oh, what's going on with my token price? Or what's wrong with, you know, what's wrong with the product, or how come the tokens are are not doing as good as they should be, right? And the idea behind version one was that people would buy tokens and invest to support fair trade music so that these artists could get paid more. And I'm actually very proud of that product because it did pay musicians more and it had product market fit. And it actually proved the idea that we can use blockchain services in order to do better business online than the legacy um music publishing, you know, services that are exist currently. So in that way it did good, but I definitely got dragged publicly. I got dragged uh, you know, that way. And then what happens is the product, I have to unroll the product then, right? Because what I don't want is for more people to get hurt in a product like that, right? So I started to have to unroll the product and bring it all down. So then what happens is, you know, musicians are going, well, what happened to my music? Or you know, where's this going on? It's like it became very hard for me, right? Um I'm very lucky that I had a close network of uh C-level executives that understood what I was building and shareholders and stakeholders that were understanding and kind of surrounded me and uh kind of lifted me up and elevated me a little bit so that I could, you know, keep moving forward.

Angela Robertson 5:34

How did you build that network?

Darryl Hillock 5:36

Yeah, great question. So, you know, being as old as I am, I had I'd been in this business a long time, right? So you build relationships just by being good to people, you know. You gotta really try and be good to people, you have to listen to people, and you have to all honestly like provide something for those people. So my network is a group of people that love me because I'm there for them. They can always call me, right? They they lean on me in hard times. We talk about our family problems, we talk about our business problems, you know. We lean on each other when we're going through different things. So that's kind of how I built that network. And people just stayed around for years and they just happen to be, you know, high functioning and high-level executive type of people.

Angela Robertson 6:14

Well, because everyone needs a network like that. It doesn't matter at what level you're operating, right? But especially when you are an entrepreneur and you feel like the world is out to get you, that's it's easy to feel isolated. And so it's really important to reach out to those people who are supporting you along the way.

Darryl Hillock 6:33

Yeah, 100%. And some some might you are isolated, right? Like I definitely, you know, had to go through a lot of that by myself. I definitely lost a lot of people around me because of it. But it also brought the right people around, right? So people who understood and understand my heart and understand like what I'm trying to do. It really brought those people around, right? Which it which was great for me because it ended up bringing uh some some heavy hitters from the business around. So that was good.

Angela Robertson 6:59

Oh, that's huge. And then was that what can take convinced you to keep building instead of walking away? Was this support network or was it a combination of things?

Darryl Hillock 7:08

You know, I think when you have product market fit with a product and then it fails, you've already accomplished a big step, which is proving that the idea works. So, you know, where most people fail is they have an idea that they think will work and either they can never prove it, or they try to prove it and it and it doesn't work, right? So in my case, I had proved that the product worked. I saw that there was a need in the market for musicians. I mean, I was a music, you know, I've been a musician myself my whole life. I knew that there was a need for that product. I myself had struggled with publishing. I myself had struggled with, you know, co-writers who had arguments around uh royalties and things like that. So I knew that there had to be a better way, that there had to be a more transparent and immutable way, and blockchain was perfect for that. You know, part of the problem that I ran into was I'm an entrepreneur and I was a solo entrepreneur. So I'm doing most of it myself. All the expectation on me uh was myself. You know, my cost association for infrastructure at that time was more than $20,000 a month. It was probably closer to $26,000 a month. And for one person to have a startup where that's happening at that cost is very, very expensive. You know, I am competing against Spotify, uh, I am competing against Apple Music, I am competing against Deezer. So uh, you know, being able to manage the cost association as well as um the failure of the product, right? It's not that the product failed, the market kind of failed. So on top of that, it was really uh it really highlighted to me where I needed to fix and it actually gave me the resolve and the vision to go and fix those things, right? So not only was I able to fix, you know, the pro the problems in the product itself, but I was able to fix you know many, many more things around the product itself, right? It's for me, it's mainly about the product, to be honest with you. So, you know, when I started building certified, which is the next incarnation, I was able to take every mistake that I had made and roll it into a new product. So for me, the the experience of failure like that was massive because you can't really put a price on failure. I mean, I could probably put a price on it. It's about a quarter million dollars. That's what the price of failure was for me, right? So um so but I think that this new product that I have is by far the strongest product that I that I have built, and I also think that it's the strongest product on the market of its kind.

Angela Robertson 9:29

So let's talk about that a little bit more. So certified the premise, as I understand it, is to help creators own their audience and identity. Why is digital ownership becoming such an important issue? And why do you feel that this is the most important product that you've put out to date?

Darryl Hillock 9:46

Yeah, great question. So, you know, through the the original streaming service that was on the blockchain that I had, I realized that, you know, everything came down to me at the end of the day. So I was the guy dealing with the token economy, I was the guy dealing with uh, you know, exchanges where people were doing business. I was the guy who was dealing with the infrastructure costs, I was the guy that that it all came down to. And honestly, like I learned that the less I can be in it, the better. That's what I learned. Like the bet the less I'm in a product, the better it is. And I quite frankly, I think that goes for every owner. I think real owners who truly have gone through it, they understand that you know, if they can get out of their own way, it is the best thing for everybody. And that that's what he did, quite frankly. So, this new product, what it allows you to do is it allows you to prove all your social accounts, right? Including your Spotify and your Apple and your YouTube. And then it allows you to aggregate your metadata around it, including all your uh UPC or ISRC codes. If you're an author, your ISBN codes, like all that stuff. And it allows you to pull your metadata in and prove it with cryptography. And it also allows you to publish content into the network using cryptography, which allows you to get paid instantly again. So this version does exactly the same thing uh the original version did, but more and better, and it's self-hosted and it's peer-to-peer and it's truly sovereign. So I got myself out of out of that as best I could, basically. You know, the the question around identity is that um when you are uploading your content to somebody else's server, you don't own that content anymore. So if they want to take that content down, if they want to uh mothball that content. In fact, it just happened on PlayStation Network, where people had bought movies, right? And now they're removing those movies from their library, you know?

unknown 11:35

Right.

Darryl Hillock 11:36

So it's like, okay, well, what happens when Sony decides that those movies aren't allowed in the library anymore because their licenses have expired, for example, right? So now people can't get access to the things that they bought, right? So that can happen in centralized services. And when you start to own yourself and you start to own your own identity, what you start to see is that people take responsibility for themselves and then they start to truly uh be accountable to their fans, right? So that's really what we're talking about is like taking accountability for yourself. You know, there's a real like anarchy, there's a bit of anarchy around it, right? So it's like anarchy is not just, you know, people who are have no rules, right? They're people who are self-governed, right? So the idea is being self-governed, like how do I self-govern myself? How do I do it in a way that I don't hurt people? How do I do it in a way where I don't have custodians? I mean, Angela, the real idea is to remove custodians from your life so that you don't have people on top of you telling you what you're worth. So for example, on Spotify, you know, I was worth zero three cents. That's what a stream was worth, right? On certified, I'm worth what I want to be worth, right? I ask what I can what I can get, you know, and if people pay it, that's great. And if they don't pay it, well, I can lower the price then, right? So that's kind of the the idea behind uh behind certified, is that you can truly own yourself. You're using your own infrastructure, your own computer. You have your own key that's authenticating all your cryptography and proving who you are on the web. And it sits with you on your desk. So when I'm producing a song, I can produce a song using logic audio, I can mix and master it, let's say. And then when I'm ready to publish it, I can publish it to Spotify and Apple and all those wonderful places. But I can also publish it into certified, which means I can get paid with Bitcoin and Lightning directly. And it means I can prove my Spotify or my Apple or whatever. So when you come to visit my profile, you see there I am, there's you know, Daryl Hillock, he's got his Spotify and his Apple and his YouTube. And I know that those are his in case somebody's trying to spoof me, right? And also I can see content. And if I am into Bitcoin, right, or Lightning, then I can use Bitcoin or Lightning to go and purchase directly from him, like truly P2P.

Angela Robertson 13:42

Wow. And so are you finding that artists are really resonating with this? Because I can appreciate that, you know, when you create something, especially as personal as a song is, and you put it out there, that sense of ownership is so important. Are you finding that the market is you you mentioned that you'd already proven product market fit before, but I think now in telling this story, there's even this greater sense of preserving identity and ownership, not just over the song, but over, you know, the whole music experience.

Darryl Hillock 14:13

That's right, across the whole ecosystem. So what I'm finding is it's actually the bigger artists that are interested in this. Right. So those people actually have more to lose, right? Those are the people that get spoofed. Those like so I'll give you an example. So one of my friends is Siggy Jackson, and Siggy is part of the Jackson family. So the Jackson family, you know, they share stories with me about how they get spoofed all the time, right? It's like people are trying to, you know, they create fake accounts, they create like fake link trees, they create all this, these fake accounts in order to extract money from Jackson fans, right? Well, you know, people like that need a place where they can prove who they are, people can trust that when they go there, that's exactly who they're dealing with, right? And we do that through public key cryptography, and it allows people like that to do that. So I have a few other people I don't want to mention too much, but they've come to me and they're they have you know money in their pockets, and they're very interested in this because it allows them to monetize their entire fan base and their entire ecosystem. It also allows them to maintain their legacy publishing, which is great, right? Because nobody wants to dump Spotify for a new product. What you want to do is you want to be able to tap into Spotify, pull your metadata out, prove it with cryptography, and then show it to your fans and say, hey, listen, this is exactly who I am. This is you get what you buy. And if you want to try, you know, the publishing that I'm doing somewhere else, like certified, for example, then here it is too, and it's safe for you. So those are the people that I'm really getting right now, and I've really dialed into is a kind of a higher order of uh musician and creator who truly struggles with being spoofed.

Angela Robertson 15:53

Yeah. That's so meaningful. And it must be such a relief for them to find something like this that exists out there because I imagine there's not many. There's a lot might that might look and feel like that, but uh not not many that can really promise the true protection ownership that you're talking about.

Darryl Hillock 16:09

Yeah, you know what's funny about it is that you know, over the years, even when I had the blockchain streaming service, I would still get a lot of musicians who are saying, I love this, this is a great way to publish, but what about my old stuff? What about my old catalog? I have old, like I'm I'm locked into a contract with a publisher, they've got, you know, they're selling it on Spotify. How do I how do I bring that into my fold and bring that under my identity, right? So it it's a real problem in in uh the music business with people who have large popular catalogs.

Angela Robertson 16:40

Quite frankly, you know, when we have archive and we have, you know, contracts that you know outlast what we expect, you know, we don't really realize the ramifications of that going forward. So it's a good lesson. Yeah, absolutely.

Darryl Hillock 16:54

You know, it's funny, I get a lot of uh so I talk to recruiters a lot, right? Because they're looking to place people. And recruiters, it's one area that they're very interested in the product, which I had never considered as a use case. But because they get a lot of deep fakes and they get a lot of fake resumes and they get a lot of things like that, they're like, wow, this could also be used, for example, in recruitment. So yeah, you're to your point, it it it there's a lot of verticals where this makes sense.

Angela Robertson 17:16

Completely. When you look back on your journey through music, technology, web three, entrepreneurship, and now in data and data certification, what lesson do you wish every founder really understood before they got started?

Darryl Hillock 17:32

You know, I think founders are born. I truly think that they're born, right? There might be some founders that come out of necessity and seeing a problem and and the willingness to solve a problem. But I think most founders who go through what I've gone through and stick with it, I think that they have something in them already. I think that they just are probably stubborn people, a little bit like I am. I think that they are a little bit obsessed obsessive compulsive, a little bit like I am, right? Where you just I really like I work on this all the time because I really, really love it and I believe in it, right? So I think for any founder coming out, I think my advice would be to make sure you love it. Like make sure that you want to put in 16-hour days and that you're willing to do it for 10 years if you have to. And I think when I say that, there's gonna be some people that just go, I'm not really a founder, that's not me, right? And I think that there's some people that go, Wow, I'm exactly that guy too. I'm a little bit stubborn, I'm a little OCD, and I really like to be able to like focus and dial in on a problem and find a solution to it and also manifest that in the real world, right? So keep going. That's why that's my thing for founders. Just keep going, guys. It's like you'll get you'll get it. You'll get it.

Angela Robertson 18:46

Have the tenacity, right? That's right. Yeah, it's not an overnight success. It never really is. Even the ones that look, you know, from far away like that. It's right, it takes iteration, right? That's right, yeah, yeah. Yeah. You know. Well, I've I actually have never been a founder, but I am in awe and inspired by founders. I've been a tech CEO. And I think, like you said, I do think there's this innate sense of like it's something that's driving you from within to pull you through that founder journey, right? Because you you you know that this needs to exist. So who better to do it than you? So that's incredibly inspiring. And I hope all of our listeners uh have taken that away and have the confidence to know that it's also about the people that you surround yourself with that help you get through those tough times.

Darryl Hillock 19:35

That's right. You know, it's interesting. So I talked to other founders in this space, and you know, everybody let me qualify this. So some people are still going through it and they're still making the mistakes that I've made, right? So, you know, sometimes I'll share with them and sometimes I'll just let them make mistakes because I don't like I don't I don't want to tell people other people's business, but I'll tell you one thing. There's a group of people that share a vision, that's for sure. And I like to use this example. So, you know, when the light bulb was being invented, there were many people that were creating light bulb technology, right? So we happen to end up on this particular uh Edison light bulb. But the reality is that there were lots of different people making the light bulb, right? And without those people, Edison also wouldn't have come to his model of the light bulb, right? So when I'm talking to people and other founders and we're kind of, you know, bashing heads around you know what we're building or what we're doing, it really inspires each of us to be able to talk to the other person and share our stories and share our troubles and you know, share where things are breaking down or inspire other people with you know what we were building, which is actually why I appreciate a podcast like this, because it allows founders to be able to go and like listen to it and understand that there's other people going through the same struggles that they're going through, right? And through that, we're gonna come out with better products for people, right? Better services for people so that you know we are improving lives. Like I think every founder is really just doing this to try and improve lives. Like my whole goal is to just make getting paid easier for musicians so they don't have to jump through as many hoops and it comes, you know, directly into a wallet for them on their phone, so they don't have to, you know, with our new product, like because it's running on Lightning and Bitcoin, you don't even really need a bank account. You know what I mean? You just need a a digital crypto wallet that can accept Bitcoin and Lightning. And if you have that, then you can publish your stuff and away you go, you know.

Angela Robertson 21:28

It's amazing. We're so grateful, Darryl, that you're making this sacrifice and you know, taking the hard time to bring bring this to reality. And thank you so much for joining us on the podcast today and hope we get a chance to chat again soon.

Darryl Hillock 21:44

Yeah, I appreciate it, Angela. Thank you very much.

Angela Robertson 21:47

At Ace Tech, we believe one of the most valuable resources a leader can access is another leader's experience. That's why I created the Stormy Stories show to bring you honest conversations about the moments that test us, shape us, and ultimately make us better CEOs and founders. Thanks for listening, and I'll see you next time.