The Inside Story of One Terrible Company Fucking Over Another Terrible Company

Gizmodo’s Sam Biddle has a fantastically interesting story on Monster, a company known for ripping customers off for over-priced HDMI cables, getting screwed over by Dr. Dre and Jimmy Iovine’s quest to sell over-priced headphones.

The Monsters knew that if they could harness Dre’s “entertainment and sports” contacts they could launch their company into the mainstream. They were right, but they were also woefully underprepared for the path to success; in the process, they blew almost every business decision possible.

When Kevin Lee went to LA to negotiate, he had nothing but a bachelors degree, and no business experience outside of working for his father. Kevin Lee flew solo against a legal, financial, and corporate monolith that dwarfed him. And that was clear from the start—as soon as the two firms tried to ink a deal, they bumped up against the negotiating might of Interscope. Monster had audio engineering chops, but so did plenty of other companies. “[Jimmy Iovine and Interscope Marketing President Steve Burman] wanted a certain set of numbers, that we, as a small wire company that had just lost $50 million trying to make speakers, couldn’t afford,” says the younger Lee. Monster was offered a money split it couldn’t live off of. The music titans were lowballing. Discussions came to a standstill. Radio silence. Iovine walked, taking Dre and the entertainment industry with him. They ended it with a call: “We hate to do this to you, but we’re going to do the deal with someone else.”

Monster was alone.

This is by far my favorite part: “Dre put the headphones on, played In Da Club, and said ‘That’s the shit’ That’s all anyone needed. Beats By Dre was greenlit.”

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