Radio One: Cathy Hughes (2017)

We're hard at work planning our upcoming live show, so we bring you this favorite from the last year: Radio One. As a kid, Cathy Hughes practiced her DJ routine while her siblings banged on the bathroom door. As an adult, she founded Radio One—now Urban One—the country's largest African-American owned broadcasting company. PLUS in our postscript "How You Built That," we check back with Mike Butera, whose digital Instrument One raised a million dollars on Kickstarter. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

  Hey, everyone. We've been really, really busy this summer on the road with some live shows. We've got one more happening in Seattle in mid-September. And right now, it is officially sold out. But please keep checking Twitter and nprpresents.org, because we may have a few more tickets for you by early September. And because we've been pretty busy with all this live stuff, we're going to play a show from our archives this week. It's one of our favorites, an amazing story about how a single mom built a media empire. So here it is.

• 0:36Speaker 01

  You have to be so very careful about who you discuss your hard times with, because those who love you and care for you the most, like your mother, like your best friend, they'll give you the worst damn advice in the world. You need to get a job. You shouldn't be sleeping on the floor in a sleeping bag.

• 1:01Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 1:14Guy Raz?

  I'm Guy Raz, and on today's show, why Cathy Hughes refuses to take no for an answer, and how that helped her build one of the biggest African-American-owned businesses in the country.

• 1:33Guy Raz?

  So it's possible you've never heard of Cathy Hughes before, but the company she started, Radio One, it became the largest African-American-owned broadcaster in the US. It's now called Urban One, and it has more than 50 radio stations and media outlets all over the country. Now, Kathy didn't exactly stumble into this line of work. She grew up in the 1950s in Omaha, Nebraska. And even when she was little, she couldn't stop talking about what it was she wanted to do.

• 2:04Speaker 01

  I wanted to be the first African American to have a syndicated radio show. I've had that desire since I was eight, nine, 10 years old.

• 2:14Guy Raz?

  Wow, but this is what you wanted to do from an early age?

• 2:16Speaker 01

  From childhood. It's so interesting, when I go back to the high school that I graduated from, that every single solitary week, send a note home to my mother saying she talks too much. I'm like, I'm practicing for my future career. And I grew up in a household where there were six of us, one bathroom. And I did my radio show every morning in the mirror with a toothbrush. And no matter how many blows my brothers and sister would heap upon my head when I finally opened the bathroom door so they could get ready for school. I never came out of that bathroom every morning until I finished my radio show.

• 3:00Speaker 01

  Everyone thought at that time there was something wrong with me. I mean, there are no black people in radio, particularly no black women. Because again, remember, we're isolated in the middle of the United States.

• 3:10Guy Raz?

  In the 1950s.

• 3:11Speaker 01

  In the 1950s, exactly. And so they thought I had a pipe dream. My nuns at my school described it as delusions of grandeur. Okay. Told my mother that she perhaps should seek counseling for me. Because I had this vision of being on the radio and people hearing me from coast to coast.

• 3:31Guy Raz?

  Yeah.

• 3:36Guy Raz?

  Okay, so you have this dream, and a lot of people think you're crazy, but you still want to pursue it. But then, as a teenager, I guess you're 16, you get pregnant.

• 3:46Speaker 01

  First sexual experience, I'm in the doctor's office. He tells me I'm pregnant. I said, I couldn't be, I've only had sex one time. He said, I hate to surprise you, Kathy, but it only takes one time. God arranged it that way.

• 3:57Guy Raz?

  Were you shocked when you found out?

• 3:59Speaker 01

  Arrested development, no question about it. I went into a state of shock. But I realized that I had an admission, I had an obligation to someone greater than myself. And I was determined that he wouldn't be a black statistic. I was determined that he and I would not grow up in the public housing that I had grown up in. I was determined that he was going to have an opportunity, which meant that I had to be very serious of purpose while I was still a young teenager, a child myself.

• 4:31Guy Raz?

  But it's still pretty hard to, you know, to try to support yourself and your, and your child.

• 4:35Speaker 01

  Yes, but I'm a third generation entrepreneur. So I grew up having to work in a family business. A hundred and ten years ago, my grandfather started a school after being the first black to get his EDD comparable to a PhD. And then my father was the first African American to graduate from Creighton University with a degree in accounting. He opened up a tax service and I was in charge of the Prentice Hall ledgers, which were all the tax regulations that changed every week. I was typing at 10 years old. I was taking shorthand by the time I was 12 and having to be proficient at it because I was a staff person. My family kept imposing upon me to come to work. Okay.

• 5:19Speaker 01

  So even though, you know, pregnant at 16, a mother at 17, sounds like, how did you do it financially? Well, I was already working and I was very blessed. And I say this to young mothers, it's easy to be a teenage mama when the baby's still in infancy because all they do is eat, go to the bathroom and sleep. That's all they do and cry a little in between. And so I could take him to class with me.

• 5:47Guy Raz?

  So you actually, you, when you enrolled, you enrolled at university?

• 5:50Speaker 01

  Mm-hmm. And I took him along to University of Nebraska at Omaha.

• 5:54Guy Raz?

  And you would take him to class with you?

• 5:55Speaker 01

  Yeah, I put him, he'd be right in a carriage on the floor and, but it became a problem once he got up and start walking.

• 6:01Guy Raz?

  And, and did you, did you work at like the college radio station?

• 6:03Speaker 01

  Yes, I volunteered at that radio station. It provided a voice for us in Omaha, in a city that was severely segregated.

• 6:11Guy Raz?

  Yeah. I read that while you were there, you met someone who, at the university, who basically changed the course of your life.

• 6:21Speaker 01

  Yes, Tony Brown, an African-American host of Tony Brown's Journal, comes to town

• 6:27Guy Raz?

  Yeah.

• 6:27Speaker 01

  and said to me, "You're wasting your talents in Omaha, Nebraska. You need to be where you can really have an opportunity to do what you want to do," which he knew was radio.

• 6:39Guy Raz?

  Yeah.

• 6:39Speaker 01

  And years later, he was offered the opportunity to establish the Howard University School of Communications. He became the first dean. And he asked me if I was interested in coming to Washington, DC.

• 6:53Guy Raz?

  So you move halfway across the country with your, I guess, four or five-year-old son at that point. And you find an apartment and you start working in the city that you did not know.

• 7:04Speaker 01

  And got lost. I can't tell you how many times I would go out New York Avenue and get lost, or I'd go out a street that its name changed. I'd end up in Virginia some mornings trying to get to Howard.

• 7:16Guy Raz?

  What did Washington feel like to you? I mean, you come from Omaha, Nebraska, which was...

• 7:20Speaker 01

  I want to tell you about a letter I wrote my mother.

• 7:22Guy Raz?

  Yeah.

• 7:22Speaker 01

  And in it, I told her that my eyes actually were tired at the end of the day staring at the greatness of black people.

• 7:29Guy Raz?

  Wow.

• 7:29Speaker 01

  I had never seen so many wonderful people of color

• 7:32Guy Raz?

  Yeah.

• 7:33Speaker 01

  doing so many wonderful things. I actually put in a letter to my mother that my eyes were tired at the end of the day of just staring. It was, I was in awe, still am, to be very honest with you. I mean, there's no city like Washington, DC, in the whole wide world.

• 7:49Guy Raz?

  I mean, you had come to the city in the 70s from a predominantly white city to a city that was run by...

• 7:55Speaker 01

  Thank you. Thank you, with black people in charge.

• 7:57Guy Raz?

  In charge, yeah.

• 7:58Speaker 01

  I mean, and wait, during my whole duration in the nation's capital, it's only gotten better. I've gone from watching a black mayor get elected to watching a black president get elected.

• 8:14Guy Raz?

  Okay, so you're, you get to Howard and DC and you're working at the radio station there, right?

• 8:20Speaker 01

  I was the sales manager.

• 8:22Guy Raz?

  Yeah, at the station. And what was the station like? What kind of, would it play music at that time? Like, what was it doing?

• 8:27Speaker 01

  It played jazz.

• 8:31Speaker 01

  One night, they did an 18-minute-long piece of Pharoah Saunders. And I think he held the note the entire time. Okay? All right? 18-minute jazz song. All you heard was this one. And I was like, I can't sell this.

• 8:48Guy Raz?

  So your job was to find advertisers to advertise on the Howard station?

• 8:52Speaker 01

  Yes, but also to help define how the radio station should be structured.

• 8:56Guy Raz?

  And the station at the time, just a mess?

• 8:58Speaker 01

  Oh, my God.

• 8:59Guy Raz?

  It was a total mess. So it was, it sounds like it was a kind of place that because it was a mess, a young person like you in your 20s-

• 9:06Speaker 01

  An opportunity.

• 9:07Guy Raz?

  -in your 20s-

• 9:08Speaker 01

  Absolutely.

• 9:09Guy Raz?

  -could take it over.

• 9:10Speaker 01

  Absolutely. And the fact that the then dean was a big fan of my work ethic. He said, "You need to see, can you teach these kids how to work like you folks from Nebraska work?" I always believed that rising at 4:00 a.m. and then getting dressed and leaving by 5:15, 5:30 for the office, that was just my lifestyle. And staying late. I had been reared to believe, which, again, so critical for entrepreneurs, that you don't stop based on what the clock says, you stop based on the accomplishment of the task.

• 9:44Guy Raz?

  You, so you're in DC with your son. By the way, how are you doing all of this as a single mom?

• 9:51Speaker 01

  Well, you know, oftentimes, people ask me if I had anything to do over what would it be, it would be to have more children. It was easy with him. Remember, I told you, I started off taking him to college with me. So he had his first little tuxedo before he was out of grade school, because he was my date. I took him everywhere. I had a sleeping bag in my office. We'd have dinner together. We would do his homework. Then I put him in the sleeping bag until it was time for me to take him home. I didn't know anybody. I didn't have anyone to leave him with.

• 10:22Guy Raz?

  So what were you able to do at the station at that time? I mean, you get there in the early 70s.

• 10:27Speaker 01

  So many things, so many things. The first thing was to create structure. So I realized that the first thing they needed was an understanding of the entrepreneurial opportunity given them.

• 10:38Guy Raz?

  So how were you able to grow it?

• 10:40Speaker 01

  The Quiet Storm.

• 10:41Guy Raz?

  Tell me about The Quiet Storm. What is it?

• 10:43Speaker 01

  Well, it was simply recognition of the fact that the city had a sizable population of single, unattached human beings who still wanted to feel good about a Friday night or a Saturday night. All they were missing was, you know, the entertainment. So I structured a format called The Quiet Storm.

• 11:07Speaker 01

  That basically was a five-hour presentation of entertaining you at home by yourself.

• 11:14Guy Raz?

  And how did you do that?

• 11:17Speaker 01

  With the selection of music. Before hip hop, if you were going to be successful in the world of black music, you had to tell a story with your music. And so all I did was weave those stories together.

• 11:30Guy Raz?

  What were you playing?

• 11:31Speaker 01

  Oh, Sam Cooke.

• 11:38Speaker 01

  Carmen McCray, The Ballad Tears, basically.

• 11:46Guy Raz?

  How did that show take off? How did it become popular?

• 11:49Speaker 01

  Well, I hit the right target demo.

• 11:52Guy Raz?

  And I guess we should mention that the audience was predominantly African-American.

• 11:56Speaker 01

  Interestingly enough, my first audience was gay, predominantly gay. I put the first openly gay air personality on the air at Howard and almost lost the top of my head because of it. So the gay community absolutely loved The Quiet Storm. And then the black community migrated to it.

• 12:14Guy Raz?

  So people just started tuning in?

• 12:15Speaker 01

  Oh, yes, absolutely. It was strictly word of mouth. And it went from like number 36 in the ratings to like top five. And then when I left, we were number three.

• 12:26Guy Raz?

  So you have this incredibly successful career at WHUR.

• 12:29Speaker 01

  Yes.

• 12:30Guy Raz?

  And you decide You know, I think I can do this on my own. Like, what's the story?

• 12:34Speaker 01

  No, not at all. There was a group of investors called the Washington Broadcasters. And 32 board members and investors. They included some of the most distinguished black and white Washingtonians that had tried for well over a decade to get a signal that was dark back on the air. They had gone through millions of dollars and they could not get this signal on the air.

• 13:02Guy Raz?

  They wanted to revive a radio station.

• 13:04Speaker 01

  Yes, they wanted this dark signal. They had, okay, but they had spent all, they had spent their money in all the wrong places. They approached me and offered me double what Howard University was paying me, but more importantly, they offered me the opportunity to build a station from the ground up.

• 13:22Guy Raz?

  So these owners, they bought this station and they hired you to run it?

• 13:26Speaker 01

  Yes. They hired me to get it on the air.

• 13:29Guy Raz?

  Okay.

• 13:30Speaker 01

  Then they hired me to run it. Then they ran out of money.

• 13:32Guy Raz?

  Okay.

• 13:33Speaker 01

  So they told me to shop a package for financing. And I said to them that that's not the responsibility of a general manager, that I will do that if you give me an equity position in your company. And one of the members said to me, if you think that you're smart enough to own a radio station, you should do it for yourself. We're not giving you any equity in our station. He was being facetious, but I took it verbatim, seriously. I was like, oh, my goodness. He was right. I should do it for myself. Guy, I'm not exaggerating. It was like a charge went through me. I said, oh, my goodness, this person who's a multimillionaire, who I've admired, who's

• 14:15Speaker 01

  now probably in their 70s, is saying to me, here I'm, you know, barely 30, that I'm smart enough to do this for them, and he's challenging me if I think I should own part of their station, do it for myself. I say, thank you, Lord, I hear you, I hear you.

• 14:31Guy Raz?

  Wow.

• 14:32Speaker 01

  I literally, literally put all my papers in my case and skipped, not walked, skipped down the hallway from the board meeting. And they're like, what just happened? Did she have a nervous breakdown or something? I knew what I was destined to do.

• 14:52Guy Raz?

  Cathy Hughes, founder of Radio One. Coming up, the story of how she did end up buying her first radio station, the first of dozens, and how, in those early days, she lived, literally lived, in that station. You're listening to How I Built This from NPR.

• 15:17Guy Raz?

  It's How I Built This from NPR. I'm Guy Raz. So it's the late 1970s, and Cathy Hughes has just walked away from her job managing a radio station to start her own. And she's looking for stations that are up for sale. And she happens to find one, a black AM station in Washington, DC, that had fallen on hard times. So she decides to buy it. What were they asking for it?

• 15:43Speaker 01

  $1 million.

• 15:44Guy Raz?

  Wow. And this is like 1980?

• 15:47Speaker 01

  No, this is 1978. We didn't get it till 1980.

• 15:50Guy Raz?

  So 1978, to buy the license for this station, you had to come up with $1 million. How much money did you have in your bank account at the time?

• 15:57Speaker 01

  $10,000.

• 15:58Guy Raz?

  $10,000.

• 15:59Speaker 01

  It was $10,000.

• 16:00Guy Raz?

  So that's what you had, more or less?

• 16:01Speaker 01

  Yeah, that's what I had.

• 16:02Guy Raz?

  Was anyone else bidding for the station?

• 16:04Speaker 01

  There was everyone. At that time, Senator Edward Brooke had just left the United States Senate, the first time since, you know, Reconstruction days.

• 16:12Guy Raz?

  He was a black senator from Massachusetts.

• 16:13Speaker 01

  That's right. He was a bidder. Muhammad Ali was bidding for it. Everybody wanted it. It was the nation's capital.

• 16:19Guy Raz?

  Wow. Well, you were bidding for this station against a former senator and Muhammad Ali?

• 16:23Speaker 01

  Yes.

• 16:25Guy Raz?

  So how did you get it?

• 16:26Speaker 01

  I had an angel. Dewey Hughes and I were married at that time, and he had worked at the station. So when Dewey went to the owner and said, "My wife and I would like to buy this station," he said, "Where in the world are you going to get the money?"

• 16:41Guy Raz?

  Yeah. So where did you get the money? Like, did you go to banks and like, ask for loans?

• 16:46Speaker 01

  Yes. 32 of them.

• 16:47Guy Raz?

  32 banks?

• 16:49Speaker 01

  No. 32 lending institutions.

• 16:51Guy Raz?

  And all of them said, "No. We're not going to give you the $1 million." And you showed them a business plan?

• 16:55Speaker 01

  Because none of them had.

• 16:56Guy Raz?

  You showed them like, exactly how you were going to make money?

• 16:58Speaker 01

  Absolutely.

• 16:59Guy Raz?

  And all of them said, "No. We're not going to give you the $1 million."

• 17:01Speaker 01

  They asked me questions like, "Did I plan to have any more children?"

• 17:05Guy Raz?

  Wow.

• 17:06Speaker 01

  They asked me if, "Didn't I think that I was too young to be doing this, taking on that level of responsibility?" They asked me questions that had nothing to do, more often than not.

• 17:18Guy Raz?

  How did you go to 32 banks, get rejected, rejection after rejection?

• 17:23Speaker 01

  Remember I told you that my father was a CPA? I knew the law of averages. I knew that if I kept asking, a yes had to come up.

• 17:32Guy Raz?

  So how did you get the yes?

• 17:34Speaker 01

  A female banker, first week on the job, Lydia Cologne, Chemical Bank of New York, said that she thought that her first loan, her first week, would be to a Puerto Rican, and she probably guessed that it would be a male, because she was Puerto Rican. She said yes, and I just kept... By now, my presentation should have been taught in colleges, because it was flawless. I mean, after 32 times of perfecting it, okay, I mean, I was... I should have gotten an Academy Award, I was so good at it. I kept convincing her. And she said something to me that I teach all my salespeople. She said, "Please, don't sell past the clothes." And I never forgot that, because that was another one of those slap in the faces. I was like, "Wow, she's absolutely correct.

• 18:19Speaker 01

  She said yes." I couldn't believe she had said yes.

• 18:21Guy Raz?

  When she said yes, you kept selling her on it?

• 18:22Speaker 01

  Yeah, I kept convincing her, right. Exactly. That's correct. I kept trying to convince her.

• 18:32Guy Raz?

  So you get the money, and you buy this station. And where was it, by the way, in DC? What part of the city was it?

• 18:38Speaker 01

  1680 Wisconsin Avenue.

• 18:40Guy Raz?

  And you walk in there the...

• 18:41Speaker 01

  In the heart of Georgetown, in the highest rent district of the city. So that's why I moved into it.

• 18:46Guy Raz?

  Wait, sorry.

• 18:47Speaker 01

  I moved into the radio...

• 18:48Guy Raz?

  You moved in...

• 18:49Speaker 01

  I lived in the radio station.

• 18:50Guy Raz?

  You moved in to live there?

• 18:52Speaker 01

  I lived there. Because I had to pay rent in Georgetown, and 1680 Wisconsin was then and still is a beautiful, valuable, diagonally set-on-the-corner piece of property. Made it real convenient to go to work in the morning. I walked down the hall.

• 19:08Guy Raz?

  Wait, so you moved in there with your son and husband?

• 19:10Speaker 01

  No, I moved in there with my son. By then, my husband was like, "Enough. I don't want to do this."

• 19:15Guy Raz?

  So your marriage fell apart?

• 19:17Speaker 01

  Absolutely. The station broke us up. The debt was just overwhelming for him. He had never been an entrepreneur, never having been in business before even. So it was just me and the kid.

• 19:29Guy Raz?

  How many years did you guys, you and your son, live there?

• 19:32Speaker 01

  Almost three.

• 19:33Guy Raz?

  Wow. That must have been hard.

• 19:35Speaker 01

  No. Number one, again, remember the part of the story I told you that I was just in awe of Washington DC? I'm in Georgetown, I haven't been able to move back there yet, okay? During my struggling days, I had a prime corner. You would see the president having dinner at one of the restaurants.

• 19:52Guy Raz?

  But I mean, you must have been under a lot of financial pressure, right? So how did you deal with that?

• 19:57Speaker 01

  When you have overwhelming financial obligations, the first natural human impulse is to hide.

• 20:04Guy Raz?

  Yeah.

• 20:04Speaker 01

  To recoil.

• 20:05Guy Raz?

  Yeah.

• 20:05Speaker 01

  Not return the call. Well, what I had been trained to do is play offense, not defense. So I would call my lenders and I would say, I know I owe you $10,000 this month. All I have is $1,250. I'm sending it to you as a token of good faith that I will repay you every cent that I owe you. But right now, this is all I have. And most of them said that they had never, ever interacted with anyone who let them know upfront that they could not make their payment. I think that it's the reason I've never been foreclosed on. I've never had to file for bankruptcy. And thank God, I have never had a paycheck bounce. I've never had a business check.

• 20:49Guy Raz?

  Wow.

• 20:50Speaker 01

  Nor a personal check bounce. Because I try to stay ahead of the issue of not being able to pay the debt.

• 20:58Guy Raz?

  But I mean, you had people like who were depending on you for salaries, right?

• 21:03Speaker 01

  I was running a 24-hour, seven-day-a-week broadcasting facility with 14 full and part-time employees. Total, 14 of us.

• 21:12Guy Raz?

  And you were one of the people who went on the air?

• 21:14Speaker 01

  The only thing I don't know how to do is fire up the transmitter.

• 21:17Guy Raz?

  You had to go on the air?

• 21:18Speaker 01

  I had to.

• 21:19Guy Raz?

  Because you didn't have enough people you could pay?

• 21:20Speaker 01

  Correct.

• 21:21Guy Raz?

  And what did you do? You just opened up the mics and started talking?

• 21:24Speaker 01

  Well, it started off because we did what they call a format search. And we found out that what was missing in Washington DC was news talk from a black perspective.

• 21:34Guy Raz?

  Huh.

• 21:35Speaker 01

  What that research did not tell us, as you well know here at NPR, it's the most expensive format that you can do.

• 21:41Guy Raz?

  Yes, it is.

• 21:42Speaker 01

  All right, music is, one person can play the music, read the news, do everything. It's a one-person show in music.

• 21:51Guy Raz?

  Yeah.

• 21:51Speaker 01

  When you talk about news and our talk and information. Research is critical because there's always someone in your listening audience who knows more than you and just waiting there in the cut to catch you. Okay, oh, no, that's not correct. Okay. You can't do it by yourself in this format.

• 22:10Guy Raz?

  How are you able to run the station, administer the station, deal with the stress of all that debt and raise a kid and have a show? How many hours of the show, by the way?

• 22:21Speaker 01

  Four hours.

• 22:22Guy Raz?

  Four-hour show every day?

• 22:24Speaker 01

  Six to 10 a.m.

• 22:25Guy Raz?

  How are you able to do all of that?

• 22:27Speaker 01

  Because it was exciting.

• 22:29Guy Raz?

  But that's how?

• 22:31Speaker 01

  And when you said the stress of the debt, it wasn't stress. I had no doubt that I was going to pay them.

• 22:36Guy Raz?

  You knew you were.

• 22:36Speaker 01

  I used to brag. I used to brag to my lead investor syndicated communications. I used to say, I will be the most profitable company in your portfolio one day. And they were like, yeah, Kathy, okay, good. Okay, great. Keep that dream alive, Kathy. I used to tell them, you will make more money off me and my company than you've made off anyone. And now, this is when I'm also telling them, now, I can't make my payment this month. If you think, oh, it's overwhelming, I've got all this debt, I can't sell anything, I'm working 18, 20 hours a day, then it's too hard. You can't do it. But when you know that the day is going to arrive, when you're going to have enough

• 23:19Speaker 01

  money to pay everyone, that's what you have to see in your mind's eye. That's what you have to believe. And I saw that.

• 23:26Guy Raz?

  Yeah.

• 23:27Speaker 01

  I knew it. I could feel it. And that's when I was in the sleeping bag, cooking on a hot plate and washing up in the public bathroom in the radio station at 1680 Wisconsin. I felt it. I knew it.

• 23:39Guy Raz?

  Wow.

• 23:39Speaker 01

  I just knew I had to hold on. And when you're starting off in business, you have to be so very careful about who you discuss your hard times with because those who love you and care for you the most, like your mother, like your best friend, they'll give you the worst damn advice in the world. You need to get a job. You shouldn't be sleeping on the floor in a sleeping bag. What type of environment is that for a child?

• 24:13Guy Raz?

  Kathy, was the station profitable pretty quickly?

• 24:17Speaker 01

  Seven years.

• 24:18Guy Raz?

  So what was it that made you guys profitable? How did you get to profitability?

• 24:23Speaker 01

  That's what Dr. Martin Luther King said. You just keep sweeping the floor every day to the best of your ability. And one day, the world is going to say, nobody sweeps the floor better than her.

• 24:35Guy Raz?

  So is that when you started to expand?

• 24:38Speaker 01

  Yes, I realized that I could not survive with just a little 1,000 watt AM. That I had to grow. I either had to grow or I had to go.

• 24:49Guy Raz?

  And which meant buying more stations?

• 24:51Speaker 01

  Yes, because our specialty is we're turnaround artists.

• 24:55Guy Raz?

  So you were taking over distressed stations?

• 24:57Speaker 01

  You got it. We took distressed properties and turned them around because we could afford them.

• 25:01Guy Raz?

  How did you get the money to buy them?

• 25:03Speaker 01

  Again, if your lenders know that their money is good with you, they give you more. All right? Lenders don't invest in ideas. Everybody's got ideas. They invest in you. People loan money to the person, not to the business, not to the idea. They have to feel good about you.

• 25:23Guy Raz?

  How many stations did you eventually buy?

• 25:27Speaker 01

  Think that we were up to, think 35.

• 25:30Guy Raz?

  So what was the point where you said, let's go public? Let's make this into, you have 35 plus stations?

• 25:37Speaker 01

  I didn't. My son went to Wharton and got his MBA. And walking across the campus of UPenn, my son says to me, do you still believe that we have to grow or go? And I said, of course, I believe we got to grow or go. He said, then we have to go public because we've got to take a leap. And with the deregulation, 11% of all radio stations in the United States of America were owned by one company. Well, it's kind of hard to compete when you're over here with two or three. I mean, they would come into a market, they'd have five powerhouse radio stations with one format, eliminated all the competition. So we knew that we had to grow into scale. We had to get much larger.

• 26:20Guy Raz?

  So you had to go public?

• 26:21Speaker 01

  And so, yes, we had to go public. We had no choice. A lot of people told us that they didn't think that that would be a wise decision for us, tried to discourage us. We had a couple of false starts. But it was the best thing that could have happened. And the other thing that we have done in our company is we stay in our lane. We're not trying to open a restaurant. We're not trying to go into concert promotion. We stay in the telecommunications industry.

• 26:55Guy Raz?

  So at the height of Radio 1, how many stations did you guys actually have?

• 27:00Speaker 01

  Seventy-five stations, which was the height when we bought a package of stations from Clear Channel. Seventy-five. That had never been done in urban broadcasting before.

• 27:09Guy Raz?

  Were you able to retain a significant share of the ownership after you went public?

• 27:14Speaker 01

  Yes. Not just owned, but also the voting stock, which has, again, been a blessing. The same syndicated communications, 37 years ago, who sat down and showed me how to write my first business plan, they're still in business with me.

• 27:31Guy Raz?

  Wow. You know, one of the things that you haven't really talked about is discrimination because, I mean, you must have faced a lot of it, not only as a woman, but as an African-American woman in this business.

• 27:43Speaker 01

  Yes. One of the issues that has always faced entrepreneurs of color is the lack of available capital for them to go into business or to maintain their business. I remember there was a bank in DC, Riggs, and I had a big contract, but the payment was coming in slow. And it was so interesting because a black banker of that bank said to me, "You would loan her $15,000 to buy a car, but you won't loan her $10,000 to make her payroll." And yet she has the contracts showing that the money will be coming in.

• 28:28Speaker 01

  So often, it's been easier for an entrepreneur to buy a new flashy car than it's been for them to meet payroll, which is a tragedy of us not having as many lending institutions in our community as we need and want.

• 28:43Guy Raz?

  You know, here's the thing that I was just like, I still, I'm still trying to wrap my head around, which is you faced all of these challenges and you kept going. Like, what was it that kept you going?

• 28:55Speaker 01

  A belief in God. Because when you really believe in God, you can believe in yourself. As I said, that day, I quit my job, not knowing where the next piece of money was going to come from, where the next check was going to come from. I knew that I would be sitting here today talking to you. I believed it because I believed in the power of the Creator. And I used to never, ever give a speech or accept an award where I didn't first thank God. And I still do. But back then, when I first started, they said to me, "Ain't nobody's interested in all that religion." I said, "That's not religion. That's spirituality. There's a big difference," in my book,

• 29:39Speaker 01

  "between being loyal and understanding yourself in relationship to creation."

• 29:45Guy Raz?

  I have one last question for you. This energy, this glow, this joy, this passion, this intensity that you have, and this unshakable belief that it will work out, is it something that you have that is specific to you? Or do you think it's something people can actually learn?

• 30:06Speaker 01

  Oh, definitely an acquired skill. If you allow yourself to be bogged down and lose your enthusiasm, then you're dead in the water. But if you remain optimistic, cheerful, and committed to your goal, there's nothing that can stop you.

• 30:35Guy Raz?

  Cathy Hughes, founder of Radio One, company is now called Urban One. By the way, Kathy's son Alfred, that little kid in the baby tuxedo, he is now the CEO of the company.

• 31:05Guy Raz?

  And please stick around because in just a moment, we're going to hear from you about the things you're building.

• 31:13Guy Raz?

  Hey, thanks for sticking around because it's time now for how you built that. And we're going to update a story that we first ran way back in January. It's from Nashville, Tennessee.

• 31:24Speaker 02

  My name is Dr. Mike Butera. I'm the founder and CEO of Artifon.

• 31:30Guy Raz?

  Artifon makes musical instruments, which was a natural move for Mike because he plays like a few dozen instruments himself. Anyway, around six years ago, Mike was at a dinner party with a bunch of musician friends.

• 31:42Speaker 02

  And after dinner, we wanted to play music together, but we didn't have any instruments. We just had the phones in our pockets.

• 31:50Guy Raz?

  So they hooked up their phones to computer speakers, launched some music-making apps, and they started to jam.

• 31:57Speaker 02

  But we were just staring at our screens. And we really wanted to interact with each other or get lost in the music, close our eyes.

• 32:05Guy Raz?

  You know, like Mick Jagger, Keith Richards. They wanted to feel the music. And then Mike had an idea.

• 32:12Speaker 02

  I thought, what if this speaker had a guitar neck? What if this speaker had keys on it? What if it had a little drum pad? I just wanted this speaker to become a musical instrument.

• 32:24Guy Raz?

  So Mike called up some of his engineer friends, and he asked them to help him build one.

• 32:31Guy Raz?

  And this is what they made, a digital instrument that looks kind of like the neck of a guitar, but sounds like, well, like almost every instrument you can imagine.

• 32:45Guy Raz?

  It has a fingerboard and a row of buttons that can be strummed or tapped.

• 32:51Speaker 02

  You can hold it like a guitar. You can hold it upright, like an upright bass.

• 33:00Speaker 02

  But you can also set it down on the table or your lap and play it like a piano or a drum pad.

• 33:08Guy Raz?

  And when you put it on the violin setting?

• 33:10Speaker 02

  You can actually hold your iPhone out and move your iPhone around in the air.

• 33:18Speaker 02

  And that will act like a bow.

• 33:23Guy Raz?

  Mike says it took them about six years to get the instrument just the way they wanted it.

• 33:27Speaker 02

  Which isn't necessarily a Silicon Valley-style way to do it. It was more, in our case, a Nashville way, which is go into studios with musicians and see what works and go back and refine it and really look at the craft of building this.

• 33:45Guy Raz?

  Since we last spoke with Mike, he's raised over $1 million on Kickstarter, and he's been selling his device, which is called Instrument One, on Amazon and Urban Outfitters. And last month, Mike packed up some of the instruments, and he took them to a big music retailers convention. And, well, it was kind of daunting.

• 34:04Speaker 02

  We were totally up against the big players in the industry. Fender and Gibson and Yamaha and Korg and Roland. And, yeah, and we're in this little booth next to the wall.

• 34:15Guy Raz?

  But a lot of people stopped at the booth and tried out the instrument. And then?

• 34:20Speaker 02

  We got Best in Show, which was great, especially because we looked very different than most of the instruments.

• 34:28Guy Raz?

  But because Instrument One is so different, it's been kind of hard for Mike to attract investors.

• 34:35Speaker 02

  We talked with a lot of VCs around the country, and they say, "Hardware's not quite as hot as it used to be. We're more into software now. Figure that out. Get profitable as a hardware startup. Then we'd be interested in helping you scale as a software startup."

• 34:51Guy Raz?

  So Mike is still trying to work out how to make the Instrument One profitable. Since he launched it two years ago, he sold about 5,000 of them. And now he even has a small team of people working with him.

• 35:03Speaker 02

  We've had a great time getting out there, seeing the music people are making. Even just this morning, someone posted a brand-new video of this one-man band jammed next to a river. I mean, just amazing stuff every day.

• 35:19Guy Raz?

  That's Mike Butera of Nashville. His company is called Artifon, and his product is called The Instrument One. And you can read more about Artifon on our Facebook page. Just search How I Built This on Facebook. And of course, if you want to tell us your story, go to build.npr.org. We love hearing what you're up to. And thanks for listening to the show this week. If you want to find out more or hear previous episodes, you can go to howibuiltthis.npr.org. You can also write us. That's H-I-B-T at npr.org. And if you want to send us a tweet, it's at How I Built This. Our show this week was produced by Rund Abdelfatah, with original music composed by Ramtin Arablouei.

• 36:02Guy Raz?

  Thanks also to Neva Grant, Sanaz Meshkhanpour, Claire Breen, and Jeff Rogers. Our intern is Lawrence Wu. I'm Guy Raz, and you're listening to How I Built This from NPR.