The Chainsmokers Have Two Jobs

Three years have passed since their last full project, yet Alex Pall and Drew Taggart, the popular-electronic duo The Chainsmokers, are still the 56^th most streamed artists in the world on Spotify.

Aaron Sorkin, arguably one of the greatest contemporary screenwriters, is garnering praise from both the Academy and audiences in the second half of his life in the arts as a director. YouTube started as a dating platform, and Jimmy Carter was a peanut farmer¹. Those that would limit someone only to what they have done are blind without wisdom in the future, the house of what we become.

Alex and Drew started their career as musicians. “We were like, ‘let’s throw everything we got into this music thing and not hedge our bets at all,’” Alex joshed. Their first commercial success came with the release of their single Roses in 2015, which sits with upwards of 870 million streams on the Swedish streaming service alone. Their song Closer was certified platinum 14 times. The two have won awards from Billboard Music, iHeart Music, MTV, and the Grammys. Moreover, they’ve shaken audiences from New York City to Timbuk-three.

Now that they’ve built a successful brand, band, and one-on-one relationship with millions of fans, they’re leveraging their assets in the most run-and-gun sector in the circus that is American value creation: early-stage venture capital.

“We have been investing very actively since the minute we became not starving artists. It was Drew’s idea initially to start the fund, and I thought he was fucking crazy at the time because we had so much stuff going on already,” said Alex. “We love to work. We want to see how far we can take this and push ourselves, not just in music, but as multidimensional businesspeople. I feel like Batman these days. We’re like Bruce Wayne during the day doing deals and meeting amazing founders. And by night, we’re making music and playing crazy shows.”

The Chainsmoker’s VC firm, Mantis, focuses on early-stage tech companies and recently raised $35 million for its second fund, or round of investments.

Imagine if Hannah Montana spent her downtime as Miley Cyrus combing through pitches and signing million-dollar checks, propping up a team’s dream and hoping to God it sticks and pays taxes.

Even if their lifestyles resemble an HBO remix of the Disney television classic, it wasn’t always roses.

Creation Also Rises in Rest

The struggles of success aren’t easy to talk about. They seem pomp and velvet compared to the struggles of the rest, but whatever hole you find yourself in is a hole. Alex and Drew played somewhere between 180 and 200 shows a year for over five years. Hotels, planes, and a spinning sense of always being in flux is a sure recipe for disaster. It may be why the industry kills so many young musicians.

“It was through our 2019 “World War Joy” tour that it hit us; this is unsustainable physically and mentally and creatively. We’re so lucky to be in a position to even feel that way,” Alex admitted. “It began to feel like we were playing this game of catch up.” They were lucky to stop, to be able to stop.

In modern media, everyone’s on the end of dozens of one-way relationships. It’s by supposed natural law entirely take without give. Audiences are voracious consumers with blocked excretions. Fans can be probing and needy. Screens make stalkers of us all. The Chainsmokers get it like everyone at the top of the business gets it: in the business end and on Twitter. You don’t have to go far to find the evidence spray painted on the walls of our most public and pubescent forums.

“Making music is like our number one favorite thing to do. Making a great song can make you feel invincible. But when you’re stressed out doing it, it doesn’t feel so magical. We rediscovered what The Chainsmokers’ musical identity would be for our fourth album. And that was the most excited either of us had been working on music in probably half a decade,” Drew grinned. “And then the pandemic hit. We were planning to take a year off, 2020 off, anyway. If COVID-19 had not happened in respect to our career, we would’ve come back sooner. And I can tell you now that it did help. We did take two years to make the album as good as it needed to be.”

A study published in Harvard Business Review from authors Teresa Amabile, Constance Noonan Hadley, and Steven Kramer proved what is obvious to the over labored in this country: pressures kill creativity. A parallel experiment in Scientific American showed that rest is the smooth pavement to inventiveness and its fair cousin imagination. The Chainsmokers did something consumerism abhors which ironically opens, obviously, the right doors. They took a break. The duo said the rest not only polished their album, it brought out “amazing music videos,” “a nut” they felt they “hadn’t cracked yet.”

“That took a long, long time,” they told me. “There are a bunch of other surprises that are going to come along with this album.”

Industries Change, Skills Don’t

Some were undoubtedly surprised to hear that The Chainsmokers have ambitions in capital management and gardening. The commentators and silent masses who may scoff at their tech ambitions are just stockings for their climb, Alex and Drew say. Mantis was reared and institutionalized in the same state of quiet homeostasis that produced album number four during the pandemic.

They say that the chips on their shoulders are the perfect size and shape to fit enough ambition and drive to redefine the VC landscape. And they say that the knacks that have made them who they are in the world rising through the popular-sonics scene are exactly what will bring the VC world to follow them through web3².

“We were playing every big tech company’s party. The unicorn founder class that formed around 2015 were coming to a lot of our shows, and we were befriending them. And we realized we have so much in common with these guys, almost more so than we have with musicians,” Drew observed with a rare mix of humanity and a keen sense for commerce. “Founders like Brian Chesky of Airbnb and Drew Houston of Dropbox and Michael Seibel from YC and Justin Kan from Twitch are some of the first people that we met that gave us insight into not just tech investing, but what it was like to run a tech company. The parallels that we saw between building our music business and their companies were significant. We kind of instantly got the bug; this is a world that we want to get closer to.”

Mantis is their “second full-time job” now. They’re invested in consumer package goods, software as a service, real estate, machine learning, artificial intelligence, and dental back-office infrastructure firms amongst others including Slushy, what they describe as as “TikTok meets OnlyFans.” Some of their investments are laboring to lower the cost of international payments to vulnerable, reliant family members. Others are sewing code underpinning marquee driverless car prototypes³.

Chainsmokers fans are already able to dance with a little less self-observation thanks to JAJA Tequila, the duo’s spirit. Soon they’ll be able to watch one of the healthy handful of movies and TV series Alex and Drew sold to major studios out of their production house, Kick the Habit. Smart investors diversify.

“You’re like – ‘how the hell are The Chainsmokers going to be able to help a dental back-office infrastructure company?’” Drew aptly characterized my thoughts. “Fast forward to now, and if you ask them, we’ve been one of their most helpful investors. Alex, Mantis, and I helped them humanize the hiring process. We’ve hired close to 30 high level executives for them.”

Mantis doesn’t just offer proximity to people potential employees may admire. It’s embedded, by virtue of Alex and Drew and Drew and Alex alone in this respect, from the top down with the creativity of a sizeable portion of the top .00000001% of earning musicians, as a rough and accurate estimate.

“One hand kind of washes the other with our world. We’ll be in Vegas for a night, and we’ll get the opportunity to run a sales competition internally with a portfolio company. They’ll have a sales-someone that they rely on us to take care of and show a really good time. We kind of use everything and anything at our disposal to get the job done,” Alex framed. “Life is about balance, but we always say more so than ever it’s important to have a diverse cap table as far as the strengths you offer to these businesses – especially at an early stage. And we’re storytellers. We’ve built product. We’ve innovated on it. We’ve created community. And ultimately those are the same exact types of things that every company’s trying to do.”

Personality Hacks Growth

You don’t build a name as large as The Chainsmokers on four feet alone. “Roses took us like nine months. That’s probably our fans’ favorite record. But that song took me and Alex doing 200 shows a year and waking up every day in whatever bumfuck town we were in and going to three radio stations a day making friends,” said Drew. “These are people we’re still in touch with today. We don’t forget that they supported us, and we’ve understood the value of good partnerships.”

“It’s made our guest list policy tricky when they’re like, ‘remember, I’m the bartender from that bar in St. Louis when you played the dueling pianos in 2012’,” Alex jested in turn. Your strengths determine your troubles, and an overwhelming credit line of comradery is a burgeoning business’s best problem. It comes from the best of us, the friendship.

Much of the advantage that Alex and Drew have admitted to is personal in nature. Companies may be entities legally, but they are no more than a collection of people holding certain resources pulling each other in the same direction. The Chainsmoker’s and Mantis’s stories share in gains earned on the back of smiles and kinship, intelligence as well as labor.

“We basically growth hacked our first promotional platform by going on this website called Hype Machine, which was the first viral chart of the internet before Spotify or any of the streamers were making playlists. We would beg these indie artists to let us do free remixes for them,” Drew confessed. “Then Alex would go in the back end of Hype Machine and find every blog they pulled from. He’d find every college kid that wrote for that blog. We’d have a remix ready, so we would send 500 personalized emails. Gmail started blocking him because they thought he was a robot.”

Creatures of fortuitous habit, they followed the same blueprint with Mantis. “We spent all summer 2020 and still to this day meeting, reaching out to anybody that we were able to meet at any VC firm,” Drew avowed. “And we were lucky because of who we are and the founders we know. We got to meet some of the greatest investors at Benchmark and Sequoia and the staples of Andreessen⁴. We just wanted to meet everyone.”

One Mantis is in Motion

A mantis⁵ typically waits for its prey like a spider on a web. But The Chainsmoker’s Mantis isn’t waiting; it’s making wake.

“With our first fund, a big part of what we did was investing alongside the tier one funds that we developed great relationships with, to help and to learn from them, to understand their process,” Alex said. “Fund two and forward, the process is more about coming up with our own theses and ideas around where the world is heading and then becoming the feeder fund to those relationships later with the bigger funds.”

Alex undersold himself when he said they had theses to develop. They’re developed. The Chainsmokers invested in blockchain ticketing five years ago because when they saw a “good value proposition and entry point for the technology” in ticketing. For web3, they’re focused on the firms that will constitute a “base layer of technology that’s going to allow all sorts of other amazing businesses to be built on top of it” like Alchemy, a prominent firm in their portfolio they describe as Amazon Web Services for the next phase of the internet.

In the AI realm, they’re avoiding companies that “just have an automated process with humans still at the core.” For Drew, “it’s not about replacing people. It’s helping people automate tasks that they just don’t really need to waste their time doing.”

They’re invested in Pakistan and Latin America. They’re planning to make signifigant deposits in Africa next.

Decentralized organizations, nicknamed DAOs, are making headlines, and Alex and Drew are onboard, possibly even with their own minimization in the VC space. “There’s this idea that DAO communities might replace VCs, or all VCs will have to have active members in these communities because they’re building all the technology that they need,” Drew supposed. “It all feeds into the wave of crowdfunding mentality. It seems to be something that people really like for the future of investing in the web3 space.”

“In terms of companies making web3 technology products for the music industry, I think like the biggest hold up is that we need to figure out a way to onboard more people into web3. The population isn’t there to sustain all of the innovation that’s happening,” said Drew flatly.

They’re bearish on the music industry as an investment opportunity in general. “In order to be a good investor,” Alex said, “you have to have a level of optimism. And with music, we just know so much about it that it’s almost made us pessimistic. We voluntarily removed ourselves from investing in it just because we’re like, ‘well that’s not going to be possible cause Sony’s never going to let that happen or Universal won’t’ or whatever. We have a great relationship with our label, but that’s not the industry.”

It isn’t that they don’t see value in music colliding with these novel technologies. They told me that blockchain NFTs could “single handedly” remove the curse of scalpers and ticket markups. It’s that the old guard and its habits will crush any oxygen before the necessary components of change could begin breathing.

“Gaming’s a $500 billion dollar plus industry a year industry and music is around 25 billion. The culture and the impact that music has is undoubtedly so much bigger than gaming at this point in time,” Alex expounded. The reason? “You don’t see Riot Games kicking down the door of a Twitch streamer that’s streaming their game to their fans. But if you put say a Chainsmoker song on that video, you bet you’re ass that video is getting taken down. I think on some levels, music needs to recognize you got to take a step back to go two steps forward.”

Music’s grand unwillingness to let go pushed The Chainsmokers to different pastures, specifically tech and early tech.

“Investing in technology allows everyone to have a voice. We’re all just trying to take less money out of Facebook’s hands and Instagram’s hands and TikTok’s hands and put more money into the people actually creating the content for those channels. I don’t think any of those companies are evil or bad. I think they did tremendous things for the world. And so many people are in livings off of those platforms. And I enjoy using all of them and looking at them all day long and wasting my time on them,” Alex bantered. “The gist of web3 is empowering people to own more of the things that they create. I think anyone could get behind that thought.”

Whether or not the masses will get behind web3, The Chainsmokers, the millions they’ve raised, and the rest of the venture capital community will continue pushing web3 tech’s energy and innovation. The Chainsmokers fourth album is forthcoming.