Influencers with Andy Serwer: Phil Hutcheon & Tony Fadell

In this episode of Influencers, Andy is joined by DICE Founder & CEO Phil Hutcheon along with Tony Fadell, Future Shape Principal, Nest Founder, and iPod inventor, as they discuss the rapid growth of their live events platform, how the pandemic has affected the music business, and what Tony learned from Steve Jobs during his time at Apple Inc.

Video Transcript

[MUSIC PLAYING]

- In this episode of "Influencers," DICE founder and CEO Phil Hutcheon, along with Tony Fadell, DICE board member, Nest founder, and inventor of the iPod.

PHIL HUTCHEON: Humans need to be around other people. I mean, it's one of the things that make us human. And seeing an amazing performer-- and it's one of the things that you remember for the rest of your lives.

TONY FADELL: There's always unintended consequences in everything, and I-- technology is neutral. It's what we choose to do with and how we regulate and what we socially accept. I think we got a lot of fish to fry, and we are frying ourselves. So I think we need to spend more time on fixing the climate than we need to worry about getting into the Metaverse.

[MUSIC PLAYING]

ANDY SERWER: Hello, everyone, and welcome to "Influencers." I'm Andy Serwer. And welcome to our guests, Phil Hutcheon, the founder and CEO of DICE, also Tony Fadell, a board member at DICE-- Tony, as you may know, former Apple executive, iPod inventor, iPhone co-inventor, also Nest founder, and a principal at Future Shape, which is an investment and advisory firm working with engineers and scientists, developing deep-- well, foundational deep technology, I should say. Got all that.

OK, we want to talk about DICE. And, Phil, why don't you start us off by telling us what DICE is all about and what you guys are doing?

PHIL HUTCHEON: Yeah, no problem. Nice to see you, Andy. Well, first of all, Andy, have you ever bought a Ticket

ANDY SERWER: Yes, I have.

PHIL HUTCHEON: And how was that?

ANDY SERWER: Not so good, Phil.

PHIL HUTCHEON: The-- and so I think that every time I kind of ask someone if they bought a ticket, that no one has never come back to me with this, like, Oh, my God, it was amazing. It was always like, I bought a ticket. I thought it was one price, and it was another price. Or I couldn't buy a ticket. It was thousands of dollars, or whatever it was. Or you know, I missed out on the show, whatever it is. And so there's lots of problems around it and the opaque nature of the industry.

So DICE is a super simple way to find out what shows are going on. Two taps and you've bought the ticket. And it's killed scalping. And if you can't turn up to the show, you tap a button, and you get a refund. And it's just making all these things traditionally associated with going to a live experience-- they're gone. And now it's just very easy.

ANDY SERWER: I have a million more follow up questions, and we'll get to them. But, Tony, I got to ask you, you joined the board of DICE in September. What made you a believer? And why join at a time when the live music industry is still getting back on its feet with COVID?

TONY FADELL: Sure, Andy. As well, it's great to see you. So for me, music's in my blood, given my past. And I'm from Detroit, right? So when I was in Detroit-- exactly-- you know, Ticketmaster first came out. And it was like a revolution. I could go walk down to the local store and get a printed ticket. You didn't have to go to the box office. And so that was an incredible innovation for me.

But since that part, they haven't innovated a lot. It's still like OK, what can we do to extract more money from the fans, really is what it is. And it hasn't been about more convenience, about more access, making it easy. You know, you can say what you want about airline ticketing or other travel ticketing. At least you can exchange tickets, upgrade them, change the dates, everything.

You don't have any of those conveniences at all in the ticketing-- in the entertainment ticketing world or sports ticketing world. Well, that's what DICE is trying to solve. And because I'm such a music fanatic and have been suffering with these things for years-- I met Phil. And I didn't just get involved with DICE this year. I've been involved with Phil and DICE-- I don't know, five, six years now.

So this was literally when they were like 10, 12, 15 people. So we've been working together with them and just been-- because of the experience that they really want to bring-- fans first. It's all about the fans. Even the artists, the venues, everyone understands that-- more fans.

And especially today, when bands are not making any money except for merchandise and for event-- and entertainment events. Other than that, they're not making any money on streaming. We see that. Unless you're the top 100 artists, they don't make any money. So where are they going to make their money, and how are they going to make sure the fan has a great experience? That's what DICE is all about.

ANDY SERWER: Phil, I got to ask you about the competitive set. I mean, Tony mentioned Ticketmaster. They're still around. StubHub, Eventbrite-- what sets you guys apart from those companies, and how are you going to build your brand?

PHIL HUTCHEON: Right. So the-- I think [AUDIO OUT] kind of touched on it, like our only customer is the fans. And that was something that we established on day one. So everything that we built is for that fan experience. When we're building things with partners or venues or artists or anything else, we always ask the question, is it good for the fan?

And I think that the second thing is that DICE is just software. So if you're looking at Live Nation, they do huge productions. They do all these things. Ticketmaster is part of it. We're just like using software to bring fans and artists closer together, like helping them decide which cities there are, and how much they should be charging, all these things to make it super efficient.

And I think that the third is that we're able to scale much quicker around the globe. So we started off in London, but now we're in the US, in France, Spain, Italy, India, Australia, moving into Southeast Asia. So it's kind of-- there's a global network effect that happens, as well, because you're giving that data to artists to help them plan global strategies themselves. So it's just really-- when we're talking about empowering artists, it's helping them control the cash, that they own the cash. They can pay people and do things, instead of waiting for someone to pay them.

ANDY SERWER: How do you mitigate against scalpers? You mentioned that. Can you drill down a little bit more there?

PHIL HUTCHEON: Yeah, yeah, cool. So this is-- I mean, it's like one of things where in hindsight it's so simple, but there's nothing to sell. When you buy a ticket on DICE, there's no ticket. And so there's nothing. There's nothing to screenshot. There's nothing to pass on to somebody else, or anything else.

Just moments before the show, there's like you an animated QR code that goes around, which is there. But it's a very elegant, simple solution. But it's a way that-- if you've got nothing to sell, then it's impossible for scalpers to put it on any platform, because they don't have anything.

ANDY SERWER: And how much of the business, Phil, is reliant upon the return of live music to pre-pandemic levels, and what is your prediction about when that'll happen?

PHIL HUTCHEON: So we've spent 18 months, give or take, sort of stuck in our homes, been entirely digital. And you're thinking about-- one of the things that I didn't appreciate at the beginning of DICE and really kicked in just before the pandemic is that we saw some data on terms of loneliness for people aged between 17 and 21. And a third of them expressed that they had intense periods of loneliness, even before the pandemic.

You put the pandemic on, everyone kind of living digitally-- the return to life since summer, it's been insane. I mean, every record has been broken at DICE in the last five months. When we're looking at the data, still now, shows are completely packed. The venues are packed, everything else.

You read in the newspapers that you know people have become hesitant about stuff. And then you go to live concerts, and they're absolutely full. And I think it's kind of going back into what I was talking about with learners, that humans need to be around other people. I mean, it's one of the things that make us human. And seeing an amazing performer-- and it's one of the things that you remember for the rest of your life. So live experiences-- I think that people are actually appreciating them even more as a result of the pandemic.

ANDY SERWER: Yeah, all those Bob Seger concerts, right, Tony?

TONY FADELL: Bob Seger at Pine Knob, Michigan. Yes, absolutely.

ANDY SERWER: Exactly. Exactly. Hey, Tony, you're known for your engineering and design acumen. And to my understanding, DICE is set up as part a traditional ticket sales platform, and part social media platform. You can follow your friends. How does the company make sure the platforms perform well at both, rather than just sort of being mediocre at either one?

TONY FADELL: Well, I think-- well, first of all, in fact, I'm not-- they're doing such a great job of design. I'm actually not really a part of the design of the app itself. We're more about the business models and how we go in scale and all those-- how we do operations and build the teams and stuff like that. So that's what I've been really, really immersed in.

But when I-- when we look at that social aspect, we've always been saying, OK, we need to have the right discovery mechanisms. And we need to have the right sharing mechanisms. So once you say you want to go to a show, you can then, also, then communicate that to your friends. And so it's very interesting.

So when you're like in the app itself, and you say you're interested, and you bought a ticket, anybody in your network that you're connected with will actually get that. Phil's going to shows all the time. I'm getting, Phil's going to this show. Phil's going to that show. I'm like, oh, I want to go with him. He's in London. I would like to go with him more.

But those are the kind of really key features that you have in there. And that also combines with the social-- with your preferences for music, because it connects to all these music services. So it understands your catalog, what you like to listen to, to find those events that you might share with other people.

So to me, we don't have anything-- we being the rest of the world-- the competition doesn't have anything like this. And it just it makes it so engaging to go to a show, because you know your friends are going, too, or you get them to go with you. And that-- entertainment's all about group experience. And you want to go with your tribe. And Phil and team have made it really easy to do so.

ANDY SERWER: And, Tony, what about privacy concerns, and how are you feeling about that, in terms of collecting user data? And can users decline the collection of data on these platforms? How does that work?

TONY FADELL: Well, look, the data-- there is the data for the individual. And that's-- we don't sell the data. We're not selling ads. We're not-- we are going directly to the venues and to the artists. And they get anonymized data. So they don't know exactly who's going on the show. They have to know if they're buying merchandise, or something like that. But other than that, they don't know who's going to show.

But what they want is they want the data to say how are the shows performing, how are they selling before the performance day, so they can change the metrics. Remember, today, the scalpers, they get all the lift on the tickets. There's one, one or a couple of ticket prices, tiered ticket prices, then the scalpers get all the stuff on top of it.

That's not the way it should be done. The artist needs to get that. And us, as fans-- if you want a better seat, you don't-- I'd much rather pay $1,500 to the band, who I appreciate, not $200 for the ticket and then $1,300 to a scalper. And so these kinds of things-- I, as a fan, would love that. And I do not mind that they give an anonymized data to the venue and to the-- more importantly, to the band.

Do you know that the bands don't get any information today? It's amazing to me that they don't get anything. How can you run a business like that. Today, at least they understand something about their music streaming, a little bit about streaming, a little bit about sales. They get nothing on the thing-- about the number one thing that they make revenue at, that keeps the band alive. And so this is empowering for both, I think, the band, as well as for the fans, because they can go in and support those bands that they really love.

ANDY SERWER: Phil, it sounds like what Tony is describing when he says, I want to buy a $1,500 ticket to be in the front row to see INXS tribute band, OK, because I know that's where he-- that's what he does.

TONY FADELL: Yeah, I'm old. See?

ANDY SERWER: I know, right? [LAUGHTER] So there is this company out there called StubHub, where I can get that front row seat, right? But I think that money goes to StubHub and not to the band. I think that's what he's talking about. What does your company do-- does it work with StubHub? Is it disrupting StubHub? Talk to me about that.

PHIL HUTCHEON: Yeah, so we're stopping the supply tickets on StubHub on DICE. So the-- you know, if you buy a ticket on DICE, you can't sell it on Viagogo, StubHub, or any of these other platforms. And the thing is that one thing that was a surprise to us at the beginning was that, when the show was sold out, only about 80% of people are showing up. So the thing is that you've got people speculating on these tickets and selling something at the high price. But then they're not actually filling up the venues.

So with DICE, what we have is that, if someone can't go to the show, they get a refund. They get their money back. Someone else picks up the ticket. And what that does is it increases the venue turn-out for a sold out show to 100%. And you can imagine that 20%, times beer, chips, whatever it is that get added on-- it's looking at how do you make money and margin better by just giving a better fan experience.

And there's one thing that-- it's a quote that I really like, is that ethics change laws. Laws don't change ethics. And I think that from day one, we've always felt that fairness was really important. And that's why more artists are using DICE, because they know that the tickets are protected, that the fans are getting about at the right price.

How many meetings I've been in with artists' managers, really discussing how to get that price at the point where the majority of the fans can actually go and attend the show. And then for someone to go out-- and there's not many people who can spend $1,500 bucks on seeing that ticket. They'll pick those things up. But like making sure that real fans are that's to see the experience.

And actually, the other thing by-- with us having this technology within DICE, we've done multiple, multiple add-on dates as a result of the demand, because we have the waitlist amount. So the artist turns up. They sell out the show. And then you've got tens of thousands of people in the waitlist, so they keep on doing multiple shows. So again, better intelligence for artists to see more fans.

ANDY SERWER: If-- Phil, I've been giving Tony grief about musical preferences. So I'm going to hit you a little bit. I don't know if it's Adele or Coldplay-- you know, I'm doing the UK thing with you. So do you work with the artists, or do you work with the venues? So in other words, here in New York City, MSG, Madison Square Garden-- are you selling tickets for them, or are you selling tickets for Adele?

PHIL HUTCHEON: So we do it for both, but the focus is largely on venues, because many artists play venues. But we have an artist development team. And that's part of the idea of the global network, is that DICE has-- venues are all around the world. And then artists want to play those venues. And we help them, connect them with those venues, like the agents or the bookers or whatever else.

And then part of that is-- so I've got an example. So it's an artist in London, called Bicep. They started off with us from the very first show, 200 people. And we made the deal with them-- cool, sell exclusively through DICE, and let's like build up this live story. And then from that, you're not allowed to spend any money on social media advertising. You've got to trust into your audience. Let them get the story right.

Now they can sell 50,000 tickets in London. And it's kind of like taking them at each of those steps, all the way through. And throughout the whole time, Bicep understood their audience. They knew what they wanted, where they wanted to play. They had control over their live strategy. And this is what we're doing at scale now.

ANDY SERWER: Right. And so do you cover all the venues in the world, or do you have to-- are there some venues that are not a part of your ecosystem yet?

PHIL HUTCHEON: Yeah, so we wish we had-- well, we have all the best ones, or most of the best ones. So there's some holdouts, but-- as in, there's other people who have the ticketing rights for those venues. But we have 3,600 venues around the world, which is increasing day by day.

And we also work largely in major cities. So in New York, over a million people used DICE last month. And so it's quite a big spread of venues in New York. And for that-- it's the same in Paris and Barcelona all these things, because there's lots of events happening there. So the discovery engine is really kicking off.

And our thing is that, if you want to see a show once a month, then let's get you to one-- a show once a week. How do we reduce the friction for you to actually get there? So our competition is people staying at home watching Netflix. It's like, OK, well, how do we make it as easy and compelling to get out and see something?

And look, I don't think anyone's been to a great show and said, well, not doing that again. So it's the exact opposite.

ANDY SERWER: Tony, while I have you here, I got to ask you a few questions about Apple and the iPhone and Silicon Valley.

TONY FADELL: Oh, God.

ANDY SERWER: So you were on the cutting edge in designing the iPhone, but it's been around for a while. What do you think is kind of the next big thing, in terms of consumer tech? Thoughts on the Metaverse? Those are two big questions happening right now.

TONY FADELL: Well, the big things on the horizon for consumer electronics-- we're hearing more about augmented reality, these kinds of things. We're hearing about the Metaverse. Frankly, I think we got a lot of fish to fry, and we are frying ourselves.

So I think we need to spend more time on fixing the climate than we need to worry about getting into the Metaverse. So let's make sure we have an environment we live in before we find another environment that keeps us in refrigerated chambers and-- so that we can breathe and eat. So that's how I feel about the Metaverse.

But on consumer electronics, I think a lot of this stuff-- people think that this is going to be the next big thing, like augmented reality. I think it will be for certain very niche verticals, but not necessarily the consumer thing that you need, because we saw this before. You got to need the technology. And then you have to understand that the consumers want it, right, and they want to live in that, live with these things on it.

And it's social acceptance, not just accepting it, but the people around you accepting it. And that-- I've learned all the time is the technology might be right, but it's the social timing right? Is there a social acceptance? And are you truly delivering a pain killer because there's a clear need, there's a clear pain?

The iPhone solved our-- it solved a need. It was on the go internet, email, media, these kinds of things. We don't see the need yet for the Metaverse. And then to have the Metaverse wherever you go on you-- we already tried that with Google Glass. I think it's going to take a little while.

ANDY SERWER: Yeah, and speaking of Google, you invented-- helped create the iPhone, the iPod, Nest, which was bought by Google. And these products are networks now in a huge way. What is your take on both the upside and the downside of this massive amount of networking that some people say leads to dystopian possibilities, but also tremendous upside?

TONY FADELL: Well, look, there's always unintended consequences in everything, and technology is neutral. It's what we choose to do with it and how we regulate and what we socially accept. So we have to do things that promote social bonding, like what Phil's doing with DICE, right-- not letting the ticket bots in there, not letting the scalpers in there, doing all the things necessary.

And that's why I love what Phil and DICE is doing, is they're trying to bring all the best things to connect the artists to the fans and getting rid of all of those middlemen who are just stealing along the way. So that's what we want to do. And so I love the network. It can have better shows, have the artists make more things for their fans, so that the fans have a better and better experience.

And maybe, through that, we can create even more social movement to fix some more of these problems. But it's about bringing people together, and not about a network of intermediaries stealing along the way.

ANDY SERWER: All right, one more way back machine question.

TONY FADELL: OK.

ANDY SERWER: OK? And that's-- you worked with Steve Jobs. Apple built a music business when you were there. What did you learn from Steve, and what do you think he'd be thinking about the world today and the technology that we're using?

TONY FADELL: Well, I think, for me, what it was all about in the music store and the iPod, it was always about what do the customers really want? What is going to give them that social or-- excuse me-- that emotional experience that they crave that they want, and a rational part of that, making it simple and all those other things. And that's like DICE.

So when you see something like this, you're like, wow. I think that, if Steve was here today, he would go, we need to get artists more money. I think if he looked at the streaming services out there-- I know how much he loved musicians, bands, and wanted to support them. I remember way back when he was looking at buying certain media companies, that kind of stuff, because he really wanted to revolutionize that. And so as far as I'm concerned, if he woke up today and saw the streaming services the way they are today and where the artists are not getting fairly paid, he would fix that, absolutely.

ANDY SERWER: I remember, Tony and Phil, when he came by and demoed the iPad at Time Inc, when I worked there. And he played music, and he played "Friend of the Devil." And I said, oh, the Grateful Dead. And he goes, I love the Grateful Dead. You can see he really meant it, right?

TONY FADELL: Oh, yes.

ANDY SERWER: He was really passionate about that. All right, switching back to DICE a little bit, and some personal stuff-- Phil, you come from a musical background, a music industry background, I should say. But geez, what made you decide to get into ticketing?

[LAUGHTER]

PHIL HUTCHEON: Yeah, I mean, I was in tech before going into the music, and not knowing anything about the music industry, so very naive but very lucky in the music industry that-- found some artists who were getting bigger and bigger, and actually didn't care about ticketing, didn't understand it, because you spend so much time working with the artists and making an amazing album, to make amazing artwork, looking at their live show, and didn't think about the ticketing until the artists are getting bigger in North America.

And that was when I suddenly was like, hang on a minute. We did a deal for 40 bucks, and now the ticket's $65? Where's the $25 going? It sold out. And it's been sold for hundreds of thousands of dollars. And all the fans are angry at the artists. Why isn't anyone fixing this? And so then I went back into sort of old world, new world together, and just analyzed all the ticket companies, and tried them all out, didn't want-- just trying to see if there was a solution. And that was the thing. Well, if no one else is going to fix it, I guess that we have to do it.

And just touching onto the last question, as well, I think that it would take a lot of inspiration from what Tony created, really thinking about the small things, the experience when someone sees it, small little animations within the app, the ticket, the imagery. You were talking about brand before. People wear DICE t-shirts and have the bags and everything else-- all these things, things which we really care about, because you need to make know a revolution. And all this stuff like pays off, because-- eventually, because of all these things being put together, artists make more money and in the right way.

ANDY SERWER: I didn't really ask you about the business model, your P&L. How are you doing? How's the company doing? Can you dive into that a little bit quickly?

PHIL HUTCHEON: Sure. As I mentioned before, it was the pandemic, and then coming out of it was like-- it's a shock. We went from no one going out to everyone going out, and from zero people in New York going out to a million people going out. So we have-- it's over a million in New York in the last month, a million in London, half million in Paris, all these people sort of coming together.

How we make money is that we charge the venues or the artist for using DICE as their partner to sell the tickets. So it's like-- we're very pro-privacy. And so again, just protecting the fans from this, but also everyone knows how we make money. We make money from selling the ticket. There's no advertising, nothing else that's on the there. And in terms of the volume, it's accelerating, as Tony knows, every week.

TONY FADELL: Well, let me be clear. We're writing-- we're happily writing checks, and we're backing these guys. And even in the darkest of times, we see the light, and we see the growth. And we see the fans, and they're coming back, right? It's sticky. People love it. They're telling their friends about it. We do very little advertising.

I meet a ton of people who go-- I go, yeah, I'm an investor at DICE. It's like, oh, I'm a user. There's so many people-- if you actually ask people in the regions where we operate, there's a lot of people using it. We just don't sit there and market it. And it's self-marketed, because the fans love it. And so that's why we keep investing, because we know this is the future. And it already is here today.

ANDY SERWER: Word of mouth seems to be working. So are you guys venture-backed, Phil? IPO in the future, perhaps?

PHIL HUTCHEON: Yeah, we're venture-backed and public listing in the future, for sure. Yeah.

ANDY SERWER: Great. And, Tony, how did you guys meet?

TONY FADELL: So interestingly enough, I had friends in London and have-- and they said, oh, you have to meet Phil. You guys would get along. You love music. He's doing something really cool. And Phil and I just were at a hotel. I think it was the Ham Yard. And we just had-- we had a drink, and we just started talking.

And we talked all about music. And then we started talking about books and started sharing titles and just getting into psychology of the fan, and what does it mean, and why do we love shows, and really just hit it off. And it was just there. I was like, OK, that's it. And DICE was tiny. It was just a vision. And so it was really about a team and a mission and Phil, as a entrepreneur and visionary.

ANDY SERWER: And, Phil, where do you see the company five years, 10 years from now? I mean, doesn't it have to become part of one of the-- well, they used to call it fangs. I guess they're mangs now-- part of an ecosystem. Everything's got to be part of an ecosystem. Or can it be a standalone, do you think, going forward?

PHIL HUTCHEON: Yeah, I think it will definitely be a standalone. I think that live entertainment, how people look at the time, the market right now, I think it's undercooked. I think that it's huge. I think that if you've got 90% of the population of the world liking music, maybe half the population loving music, and 30% of people love music so much that they pay to go see it, then that's a massive market.

And I think that what we're seeing is growing this around the world. I mean, for example, we're just starting off in India. That market could be as big as the US within 10 years.

ANDY SERWER: Right. I love the TAM thing. You know, that is a truly small set, people who hate music. [LAUGHTER] I hate music, right? You don't have to worry about that. That's a pretty small group of people, right? It's pretty funny.

TONY FADELL: It was the same TAM for the iPod. It was the same TAM for the iPod.

ANDY SERWER: Right. Yeah, that's about right. That's about right-- just everybody.

TONY FADELL: Everybody.

ANDY SERWER: And final couple last questions here-- Phil, what do you think that you want to be your legacy?

PHIL HUTCHEON: Wow. I have to think-- I have to think about that one. The-- OK, you know what? It's the idea. One of the things I love the most is the idea that we're in Mumbai, and there's a scene happening in Mumbai. And this is new music that's happening in Mumbai. And through the connections of DICE, that artist goes straight into the US and Asia and through Europe and blows up. And we do that time and time again-- that the idea of bringing cultures around the world. That would be awesome.

ANDY SERWER: And, Tony, same question over to you. You've got all these things you've accomplished, working here with DICE, and I'm sure you've got all kinds of other things percolating in your brain. What do you hope to accomplish over the following years?

TONY FADELL: Yeah, for me, it's really about mentoring and investing my time with the entrepreneurs who are truly changing the world for the better, whether that's environmentally, socially, or for health. Those are the three big things, and DICE is doing that for the social experience all around the world. It's amazing. And that's what I hope Phil is able to fulfill and bring this mission. And I think he's well along the way to deliver it.

ANDY SERWER: Well, it'll be great to watch the company grow, as we hope we emerge from COVID, and live comes back, and people get interested in your business. So I want to thank Phil Hutcheon, founder and CEO of DICE, and Tony Fadell, board member there and entrepreneur and executive extraordinaire. Thank you guys very much for your time.

PHIL HUTCHEON: Thank you so much, Andy.

TONY FADELL: Thanks, Andy. Great to see you.

ANDY SERWER: You've been watching "Influencers." I'm Andy Serwer. We'll see you next time.

[MUSIC PLAYING]