After Buying From Tom and Gisele, Dr. Dre Lists For $35 Million in LA

beats cyber monday and Jimmy needed to understand why it wasn't a speaker world anymore. They had no idea why people wouldn't want to buy speakers. [They've] got big speakers, and always had them in the studio. Why substitute headphones for speakers?Monster took the rap duo's vague audio aspirations and pointed them in one very lucrative direction: high-end headphones. Bose was something your dad bought. Everything else was either crap or too obscure and complex for consumers to pick out. "Let's build headphones together," Noel decreed. Love fest or no, this was never going to be a Steve and Woz moment of geek kinship. This was business from the start—and while Noel knows it now (Jimmy wanted to "own both ends," he says), Monster didn't show much acumen when it mattered. Monster wanted to jumpstart its headphone business. Badly. In the turmoil of the mid-00s, Dre and Jimmy needed to find something other than records to monetize. Badly. But the money arrangement was destined to be dominated by Iovine, a man who'd gone head to head with Steve Jobs, and ran a music empire—not some small deluxe cable firm.

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. beats by dre black friday sale 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."Six months pass.

Steve Burman, calls. Team Dre had tried to go with SLS Audio, a better-established firm with a track record in speakers, and it hadn't worked. Burman wondered, was Monster still interested in making headphones with a rapper? They sure were!But a lot had happened in that half a year. The term "Beats by Dre" was already coined through the failed collaboration, and SLS had come up with a rough prototype headphone that would shape the entire lineup though the present day: giant ear cups, a thick, streamlined headband, and enough gloss for a Formula 1 car. But it was way too big, Kevin Lee says—it even looked giant on Dr. Dre's enormous frame. "Put it on your head. Look in the mirror. You don't look good."Back to the kitchen. Monster went through "40 or 50 prototypes," and saddled itself with some extraordinary risk. Kevin admits his father "wasn't as gung-ho as [he] was" about the partnership. So he went behind his back and spent millions of dollars of Monster's money without anyone's permission. "We announced the [CES 2008] press conference, and I had already spent a million and a half dollars on engineering and marketing before we even had a signed contract."Kevin was completely over his head, forging the future of his father's company without oversight, and really, without a sturdy clue: "At the time, we didn't really know what we were going to make, at what price points, [and] at what cost."

Kevin Lee was building an entire electronics product line in secret before he had the business partnership to actually do anything with it. He was making beats by dre cyber monday 2014 before Dre said he was allowed. And he was panicking. "It was beyond insubordination," says Kevin. "[I was going to] lose the trust of my father. I already had millions of dollars of inventory. He would have killed me."Young Lee faced financial and familial self-destruction if he couldn't seal the deal. So he sealed whatever he could—what he says was "the most complicated contract [Interscope] had ever seen." And he faced it by himself, with his BA, against a phalanx of corporate lawyers who wake each day to do nothing but negotiate contracts that favor Interscope. There can't be two winners. Monster solidified an agreement that got Beats Electronics alive and shipping headphones, but not without gigantic forfeit: Jimmy and Dre's side of Beats would retain permanent ownership of everything that Monster developed. Every headphone, every headband, every cup, every driver, every remote control—if there was a piece of metal or plastic associated with Beats By Dre, Noel and Kevin Lee surrendered it to Jimmy and Dre. Monster would also be entirely responsible for manufacturing the products—a hugely expensive corner of the deal—as well as distributing them.

The heavy lifting. "I was a little intimidated by Dr. Dre," Kevin Lee admits over a child-sized portion of chicken noodle soup. Noel sits beside him without a word.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.Kevin Lee wanted to line up a fleet of musicians to do promotional education—trying to de-jargonize the upward-nosed world of the audiophile and make it something mall-compatible. Think Nelly Furtado explaining the importance and dangers of distortion, Robin Thicke whispering in your ear about the value of treble. That wasn't going to happen.The Dr. Dre task force took Monster's audio gear and pimped it, tirelessly, as a gadget status symbol without rival. That was the plan—period. Marketing, Iovine told Kevin Lee, would take too long. Education would take too long. Instead, the strategy was to enchant the public: Beats would be "the hottest product to have, and sound will be a Trojan horse. And that's what we did. Beats was in every single music video," says Kevin. Iovine made sure Beats had prominent placement across Interscope's sterling roster, infiltrating the money and product lust-addled brains of video-watching America.It worked. Disposable income was disposed of in the hundreds upon hundreds of millions. "Kids did go into a Best Buy and bought beats the headphones not because it sounded cool, but because it made them look cool," admits Kevin.