Founder, Chairman & CEO, Believe (Believe SA)
THE TECH SHOW 13 - Denis LADEGAILLERIE Founder & CEO of BELIEVE - PART 2/3
PART 2/3
The Back Story Interview: A look back at Denis Ladegaillerie's career
His childhood, passions, and network
His law studies, first jobs, and beginnings as a lawyer
His discovery of the music industry at Vivendi and his experience in the US
The twist of fate that led him back to Europe and his transition period
His entrepreneurial spirit and the allure of digital
A look back at the creation of Believe
Choosing his partners and creating his company
Shifting from CFO mindset to multifaceted entrepreneur
Why launch this model and responding to market evolution
Adapting the model to the d...
About Denis Ladegaillerie
Denis Ladegaillerie, founder, chairman and CEO of Believe, presented the company to investors following its IPO on 30 September 2021. He described the music market as undergoing a "revolution" driven by the shift from CD sales to streaming, which he said is now primarily fueled by paid subscriptions. Ladegaillerie projected that by 2027 streaming would represent nearly 80% of the market. He also stated that by the end of the decade the Asia-Pacific region would become the world's largest music market, followed by Europe, with the United States dropping to third. Ladegaillerie discussed Believe's competitive position, saying the company has signed artists who were early in their development and later became top sellers, giving Believe "attractiveness" to sign artists who previously worked with major labels such as Universal, Sony, and Warner. He noted that these competitors have lost market share in recent years. Ladegaillerie also commented on the Paris investment ecosystem, saying it lacks the maturity of American or British markets regarding growth and technology companies, and that investor education about the artist market is still in its early stages. He reiterated that Believe's model is based on offering artists "the best quality of service, respect, equity, and transparency."
Transcript (26 segments)
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Interviewer0:00
Denis, so we're going to continue talking about Believe throughout this show, but we wanted to know a bit more about you, your childhood, your entrepreneurial journey, and also share your experience with all the future entrepreneurs watching. Let's go for the backstory interview. So you were born in Limoges and grew up in an even smaller village, Écaille Alix, near Yvetot in Normandy. Your father was an engineer and your mother was a guidance counselor. Did she guide your career?
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Denis Ladegaillerie0:45
Not at all. I was always free to make my own choices without pressure. In my early career, I wanted to go abroad, so becoming a lawyer allowed me to do that initially. Then circumstances led to Believe.
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Interviewer1:03
As a child, you were a good student and played the oboe. Was this passion for music already present in your childhood?
D
Denis Ladegaillerie1:09
I wouldn't say it was a passion, but I loved music. I started at the conservatory at age 7. I wanted to play piano, but it was too big, so I ended up playing oboe for a few years, which later allowed me to play piano for fun. We couldn't get an oboe, but we have a surprise for you later.
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Interviewer1:50
After high school, you worked as a construction worker every summer. That's unusual for someone who becomes a lawyer.
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Denis Ladegaillerie1:58
It was a fantastic experience. Working and earning money in a completely different environment from my family was enriching. I have very good memories. One real lesson was seeing that I was lucky to grow up in a privileged family that allowed me to study, while others didn't have the same opportunities. That stayed with me.
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Interviewer2:34
Then you went to the US, to Duke University in North Carolina, and in 1997 you passed the New York Bar. You were set for a great legal career. You first had the opportunity to join a large group, Vivendi, through MP3.com, and that's where you discovered the web and the music industry.
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Denis Ladegaillerie2:56
Yes, that's where I got my education. In 1999-2000, the most powerful digital groups were Microsoft with MSN, Yahoo, and Vivendi. Vivendi had bought MP3.com and invested heavily. It was an incredible experience that allowed me to see many business models in music, video games, early VOD. The great thing about Vivendi was being in that environment at the very beginning of web adoption, seeing which sectors digital transformation brought real value to consumers, and understanding what models could work.
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Interviewer4:00
You decided to leave law to join that, which was already a risk.
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Denis Ladegaillerie4:05
People often asked me that. It's a very French way of thinking. They said, 'You studied law, paid for your degree, you're an international lawyer, why not continue?' But I'm not a technician at heart. Being a lawyer is a technical job. For me, it was always a bridge to something else. Everything I learned as a lawyer and at Vivendi nourished me when I started my entrepreneurial adventure in 2004.
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Interviewer4:47
You hesitated between France and the US, but you had a kitesurfing accident. It must be a painful memory, but also a twist of fate that brought you back to France. Can you tell us about that episode?
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Denis Ladegaillerie5:05
I hesitated a lot. I was asking myself whether to live in the US or return to Europe. I wanted to return to Europe. As you said, I had a kitesurfing accident. It was brutal—I had a cervical hernia and almost became quadriplegic. So I decided to return to Europe for my recovery because California is far. I wanted to be closer to my friends and parents. That led me to look for opportunities in Europe, and I decided to stay rather than go back to the US or Switzerland.
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Interviewer5:46
So it wasn't during your recovery that you had the idea for Believe? I think it's great in these transition phases to be completely open. I advise everyone who is questioning themselves at some point to do that.
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Denis Ladegaillerie5:58
I returned to France and people asked me what I was doing. I said I didn't know, I was thinking. I had digital expertise and knew I wanted to be an entrepreneur because I had been in large groups. I knew what worked and what didn't. But in which sector? I didn't know. When you do that, you get a lot of opportunities. It's interesting because sometimes employees want to become entrepreneurs but wait for the perfect idea. What I'm saying is you can quit, give yourself six months to think, find the project that suits you best, and then launch. That's exactly it. I had a friend in New York who did that—he left Goldman Sachs with nothing, even had student debt. He said there were so many opportunities he would find something. I thought he was crazy to leave a well-paid job, but it's hard to find an idea when you're heads down in a big firm. When you're free and express that to the world, the world comes to you. It's a risk, but a real way to think carefully about what you want to do.
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Interviewer7:23
So you decided to partner with the former project manager of Sony Music France, Arnaud Tcheramonti, who knows music from the production side, and Nicolas Laclas, who handles the artistic side. Those times were difficult because you didn't even know how to create a company, so you had to learn on the job.
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Denis Ladegaillerie7:45
There are two things. First, when you create a company with two or three people, the enrichment is much stronger. In discussions with Arnaud, I knew all the digital models from Vivendi, but I had no idea how to develop an artist in the studio. He knew that but not digital. So we had complementary exchanges. He would say we need to use digital for this, and I would say that doesn't work. I would ask why not do this, and he would say I know nothing about artist development. That's how we built it. The other thing is that when you become an entrepreneur, you rediscover a trade. I had been an international lawyer and a strategic and financial director at Vivendi, so I thought starting a company would be easy—I'd write the articles of incorporation and open a bank account. But when I was a director, I had 15 people working for me; as a lawyer, I had assistants. I had never written articles or opened a bank account. So you discover everything. Then you think about hiring your first intern, where to post ads, how to do it. You have to do everything yourself, change the light bulbs.
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Interviewer9:56
Is that when you got the idea for Believe?
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Denis Ladegaillerie9:58
At the time, what gave me the idea was that I had bought early MP3 players, like Archos, before the iPod. I thought it was great to go from a CD player to that. I immediately saw that the improvement in consumer experience was fantastic, so it would develop and that's where the future was. Digital consumption was inevitable. At the time, the dominant philosophy was that music would become free because digital files cost nothing to distribute. But the reality is that what's expensive is producing the music itself and developing artists. My reasoning was that music would not be free because you need significant resources to develop artists. Piracy showed that people consume more music than ever, but they don't pay. That means there is a need, and eventually there will be monetization to pay artists and the creation process. So I believed the ecosystem would reconstitute itself.
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Interviewer12:08
Denis, for four years you financed yourself from your savings, and in 2009 Believe became profitable. Can you explain how you became profitable?
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Denis Ladegaillerie12:16
We started to scale up. Between 2004-2005 and 2007, we hadn't raised money, so we financed ourselves. When you finance yourself, you are extremely careful with costs. I invested the money I had earned as a lawyer and didn't take a salary for three years. As we grew, we raised money to accelerate. I had seen many web companies that grew fast by burning cash, and I never wanted that model. I wanted a model where the company generates cash because that's the condition for being master of your destiny. Twenty years later, people are realizing profitability is important. There are models where you have to be in loss for long periods, but you need to be certain of your fundamental economic equation. Sometimes you raise and invest but never become profitable because the equation is wrong. We always made money on each contract with artists, so we knew we had a fundamentally sound model. We had periods where we accelerated investment, but with a sound model behind.
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Interviewer14:33
In 2012, Believe was referenced by Apple in 53 countries. That's considerable. At that time, you weren't really taken seriously. Was it difficult?
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Denis Ladegaillerie14:42
What happened was quite amusing. Apple came to us in October 2012 and said they were opening 53 new countries and would reference three companies to accompany them because they didn't want to sign local artists. They asked if we could accompany them, to put people in those countries. We launched in December, so it was three crazy months of recruiting people in different countries. We recruited people who are now our regional heads, like Sylvain Delange for Asia and Victoria Sinnascaria for Eastern Europe. It was a real adventure.
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Interviewer15:36
Imagine in 2004 that in 2022 you would have 700 million in revenue and 1,800 employees. Could you have imagined that?
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Denis Ladegaillerie15:45
No, you really don't think like that. The important thing is to raise your ambitions at each stage. Now I ask our country managers, 'When will you be number one in your market?' Before I ask, they haven't necessarily thought in those terms. The business is doing well, but can I become number one? Then a light goes on: yes, I have the means to become market leader because I have the right people, expertise, and model.
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Interviewer16:49
In 2021, you reached a major milestone: you became a French unicorn (I think there are 26 in France) and you went public. Why was it important for you to go public?
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Denis Ladegaillerie17:00
Going public has several important interests. First, you move from a governance with funds to an independent governance. We took a lot of time to recruit a board of directors. I wanted a board with gender parity; before we had only men. Now we have more women than men on the board, with specific expertise in digital and media, like Cécile Fraude-Coutaz from YouTube and Orlike from Adeline. That changes your board dynamics because you have stronger support. Second, going public is a structuring accelerator. You are forced to ask deep questions about your model, and it accelerates all your processes. Find the rest of the show in part 3.