Thread by @JoePompliano

LeBron James turned Apple's $3 billion mistake into a $30 million paycheck.

Time for a thread 👇👇👇

1) Let's start in 2006 — Dr. Dre is approached by a major shoe brand looking to collaborate.

Dre, who worked with Interscope Records founder Jimmy Iovine for a decade, asked his friend for advice.

Iovine said, “F**k sneakers, let’s sell speakers!”

Why?

Apple...

2) Apple changed how we consumed music with the iPod & planned to release the iPhone in 2007.

The only problem?

"Apple was selling $400 iPods with $1 earbuds."

“It's one thing that people steal my music. It's another thing to destroy the feeling of what I've worked on.”

3) Pissed off that the music they worked so hard to create was reduced to $1 plastic earbuds, Dre & Jimmy Iovine set out to make their own headphones.

Determined to create a premium market for headphones—specifically for Hip-Hop—"Beats by Dre" was born.

Next up — testing.

4) For the next 2-yrs, Dr. Dre and Jimmy Iovine built headphones — having everyone that came through Interscope offices test them.

From Pharrell to Gwen Stefani & co-founder Will.i.am, "it was an incredible parade of the world's great artists."

And Lebron James...

5) Following a meeting with Maverick Carter—prior to the release of Beats in 2008—Jimmy Iovine sent LeBron James 15 pairs of headphones.

The result?

@KingJames gave them to the US Olympic team, and when they stepped off the plane in Beijing, a viral marketing moment was born.

6) After promising consumers they would "hear what the artist hears," Beats by Dre officially debuted in 2008.

Their growth strategy centered around celebrity partnerships — using their connections through Interscope as rocket fuel.

Sales exploded— reaching $1.5B in 6 years.

7) After seeing what Dre & Jimmy Lovine did with Beats, celebrities like 50 Cent & Jay-Z tried to build their own brands — but it didnt work.

Why?

Because Beats built from the top down, promising customers artist-level quality while creating a fashion statement in the process.

8) In 2016, Apple acquired Beats Electronics for $3 billion — including their newly launched Beats Music platform.

Dr. Dre & Jimmy Iovine each made ~$750M, while LeBron James took home $30M — which was more than his NBA salary at the time.

Not bad for a "silent investor."

9) In the years since, Apple Music has thrived while Beats has maintained their ~70% share of the premium headphone market.

How?

It's simple — their brand has become a cultural phenomenon, which allows them to maintain extreme pricing power similar to Apple.

10) As for @KingJames, he will go down as one of the greatest athlete investors of all-time.

From Beats & Liverpool to Blaze Pizza & Springhill, he understands the power of his platform better than anyone.

While everyone debates who the GOAT is — LeBron changed the game forever

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