50 CENT ENTREPRENEUR OF THE YEAR SMS AUDIO REVENUE INCREASES

Brian Nohe spent years with some impressive titles at Fortune 500 companies but he admits that “not once” did he have an entourage. He does now, courtesy of his celebrity business partner, the rapper 50 Cent, who is typically escorted by two or three bodyguards.

Nohe and 50 Cent (who also goes by his birth name Curtis Jackson) are partners in the high-end headphone company SMS Audio, based in Delray Beach, Florida. Nohe owned the company under its previous incarnation, KonAudio, but 50 Cent wanted to get into the headphone business and he was looking for an existing company to acquire and rebrand to make it his own.

“Fifty was looking for a way to push forward with sales, marketing and production, and it was easier for him to work with an existing company,” Nohe told Upstart Business Journal. The two clinched a deal to go in on the business together last September with 50 Cent as the majority shareholder, under terms that Nohe would not further disclose.

The over-ear wireless headphones and ear buds that the company sells—the type that will likely be mandatory accessories for teens and tweens headed back to school this fall—are part of a fast-rising consumer niche product with an estimated $1 billion in sales and 78 million units sold in the United States last year. Those industry-wide revenues have been increasing by 25 percent to 30 percent every year, Nohe says.

He didn’t have year-to-year figures for SMS since the company just rebranded last fall, but said that it has seen revenue increases on par with the industry averages.

50 Cent has been involved in the design and quality of the headphones, and of course having a celebrity face behind the product definitely helps, as their rivals over at Beats by Dre, founded by Dr. Dre and now majority owned by HTC, can attest. It was Beats that turned headphones into a fashion item, says Nohe, adding that he admires the rival company and that the whole industry has gained as a result. Recently, country stars have gotten into the act with Tim McGraw launching a headphones line with JBL in May. California Headphone, funded through Kickstarter, plans to launch its line—for fans of country, rock and alternative music—next month, the San Francisco Chronicle reports.

SMS currently has distribution in 30 countries, with prices ranging from $119 for in-ear buds to $399.95 for the Sync by 50 over-ear headphones with Kleer wireless technology, and with its top market being the Nordic countries, followed by the United Kingdom, and then the United States at No. 3. Working with a rapper who sprang to fame with an album called Get Rich or Die Tryin’ nine years ago doesn’t sound much like the company Nohe kept in his days at Gillette Corp., or his followup business at a venture capitalist of his own firm in Boston—through which he bought KonAudio. But Nohe says his partner is dead serious about business.

“It’s been terrific,” says Nohe. “[50 Cent] is very focused in terms of his business ventures and he has many of them. He clearly sets direction in terms of the quality of the products that he wants, the style and design of the products that he wants.”

His direct involvement—they talk once a week and meet once or twice a month—set SMS apart from the growing number of headphones linked to celebrities who are doing licensing deals for headphones but are not truly involved in product development, as 50 Cent is, Nohe says.

In addition to SMS, 50 Cent has a slew of other entrepreneurial projects going on. He is partners in a film production company called Cheetah Vision, that he founded with Randall Emmett, which recently announced a re-up of a 10-film deal with Grindstone/Lionsgate. He also owns Street King energy drink and has his own record label, G-Unit. And oh yes, he is still a recording artist. His next album with Interscope Records drops on November 17. The headphones may be one of the items sold at concert venues when 50 Cent goes on tour.

The entrepreneurial bug is one reason Nohe hit it off with 50 Cent, and music is the other.

“I’ve been a half-assed musician all my life, always in garage bands,” Nohe said. He grew up listening and playing rock and Americana music but he knew of 50 Cent, and appreciates that he’s a “great artist” even if rap is not his top choice.

What a lot of people don’t know about 50 Cent—who was raised in a poor section of Queens where he sold crack in high school before getting into music—is that he is big on philanthropy, Nohe says. For every online headphone purchase from SMS, the company contributes 250 meals to Feeding America, a domestic hunger-relief charity.

Around the office people call him just “Fifs” or “50,” but at formal business meetings, the Fortune 500 style etiquette kicks in, and Nohe introduces him as you would expect a man who needs bodyguards to be introduced.

“It’s ‘this is Mr. Jackson” or “this is Curtis,” Nohe says.

Tags: 50, AUDIO, CENT, G, SK, SMS, UNIT

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