09/20/2010 06:41 pm ET Updated Jul 28, 2011

Daron Hollowell, Black Iris: Bringing Underground Music To The Outside World

When Daron Hollowell was 16, he met his musical hero: Ian MacKaye of the punk band Fugazi. "I interviewed him for a fanzine, and that conversation influenced the direction of my life," Hollowell, now 36, recalls. "I went right home from that interview and started my label and booking shows."

What did he learn from the experience? "Have a vision for your artistic life and take control on your own terms, and if you want do something, just do it."

As co-founder of Black Iris -- a collective of independent musicians, composers, and producers that creates music for advertising, TV, film and video games -- Hollowell has the freedom and control he always wanted. Members of the group have recorded and produced digital shorts for Saturday Night Live (Dick in a Box, Natalie Portman) and ads for clients like Geico and Discover. With studios in Richmond, Va., Los Angeles and New York, Black Iris purposely cultivates anonymity surrounding the creators of its commercial work. This approach, which helps keep artistic egos at bay, is a carryover from the communal, DIY ethos of the founders' punk rock roots.

Hollowell and Black Iris co-founder Dave Jackson struck up a friendship as seventh graders in Tucson, Ariz. They met Justin Bailey, their third partner in the indie rock music house, in Virginia. When Daron and Dave were 19 and touring in a hardcore band together, their van broke down in Richmond. Over the week that their carburetor was being rebuilt, they got to know the town and people, loved it and decided to make it home. "It's cheap and centrally located on the East Coast, so it's easy to tour from, and it's a great community, especially for artists," says Hollowell, who moved to Los Angeles in 2008, and is currently transitioning to New York to build a more substantial Black Iris presence there.

Black Iris' commercial work helps to fund their recently launched 7-inch record label, White Iris Records. "We can take artistic risks with it because it doesn't have to generate revenue," Hollowell says. "It started with a track we did for Cadillac called 'Fire Hydrant Floods.' Our deal allowed us to record a longer version of the music we did for the commercial and sell it online as a single. It got a lot of downloads and love, and that was the start of the record label."

As it turns out, it's become a pretty good business model.

How did Black Iris get off the ground?

Around 2004, we noticed a trend in advertising. Agencies were licensing tracks from independent bands that most people didn't know, but we recognized them. So we decided to pool our resources with other bands and craft music specifically for advertising. Our first investment was a really basic Pro Tools setup in my Richmond bedroom, where we could record just eight tracks at a time. Then the band that Justin and I were playing in broke up, and I decided to move to New York. I realized this niche -- bringing underground music to the commercial world -- hadn't been done, and I could run with it.

How do you book a gig, so to speak?

A brand hires an ad agency, and the agency hires vendors like us. It's a competitive business. An agency might demo three to four music houses. If we win the job, we can get an award fee anywhere from a couple thousand to about $30,000. But more and more, we're being offered single biddings. We work with a sales rep who helps promote and sell us to agencies, then we collaborate with a creative director, their team and the client.

Word of mouth is important -- making sure the advertising community knows specifically what we do. Black Iris has always been able to do that naturally because [of our] roots. We didn't have to try to brand ourselves as independent musicians. It's just a matter of helping people understand who we are as a company, by throwing shows and [through] the record label.

How has the advertising landscape changed over the past few years?

People have less money to spend, but we're doing five to 10 projects a month. On average, with the exception of 2009, our growth rate is 40 percent a year. Also, people aren't forced to watch advertising anymore. They can skip over it, and that's put pressure on the industry. Now it's much more about creating work that can stand alone and nontraditional ways of creating buzz.

What prepared you for starting Black Iris?

I always had a streak of wanting to do my own thing. I was the "band mom." I organized tours and handled the money. Running a band is a lot like running a small business. People think of the band lifestyle as all sex, drugs and rock 'n roll, but there's a lot of work that goes on, especially for bands that manage themselves. Someone has to be in charge. In high school, I had an independent record label pressing 7-inches out of my bedroom, and it's amazing how close Black Iris is to what I was doing then -- but now we have more money and resources to play with.

What's most gratifying about what you do?

I'm most proud of employing musicians and helping them to make a living. Major labels are in the final death throes. Artists have to figure out how to survive. Sure, you can tour and sell merchandise, but at home, it's hard to make it. This is a useful new business model, and it allows us as musicians to follow our passions. And now that we're doing a record label, we can license our artists' work to TV and film.

When I was younger, it was more about my own ego. Now I like to see others achieve their potential.

What are some of the most interesting projects you've worked on?

Recently we did a piece for Nike's Jordan brand featuring the French street artist WK Interact. It's a good example of how we can stretch out with online work, since it's longer, not just 30, 60, 90 seconds. Creatively, it's probably been the highest point for us. It melds the music with his visual work, but it's still music-driven.

We also did a video for Toyota's "Swagger Wagon." They have a minivan campaign with two characters, and we wrote a hip-hop rap song for them. They shot a black-and-white video that's very Jay-Z, and it got 5 million hits on YouTube. It was the number-one video on there for a while, and it's also on rotation at MTV, which is pretty crazy. We did all the vocals and wrote the lyrics in conjunction with the advertising agency.

Another big project we did was a soundtrack for a live-action Web-only TV series called Bright Falls. That involved writing original songs and vocals and doing sound design. We licensed a track by the band Best Coast for one of the scenes and released the soundtrack for the series on vinyl. It's the first time we've ever done that for an advertising project. The whole process was really amazing, creatively rewarding and fulfilling.

What's most exciting about your 7-inch record venture?

Best Coast's full-length album sold over 10,000 copies in the first week -- better than we all imagined. Last fall, we recorded a few songs with them and released a 7-inch single on our label. That went so well that they asked us to record their whole album. When they came in, it was the first time they had ever worked in a studio or with a producer, but they had a lot going for them in terms of songwriting. Lewis [Pesacov], one of our producers and composers [who also plays in Fool's Gold and Foreign Born], had a big impact on their arrangements and sound and their careers in general.

Because of our success with Best Coast and Fool's Gold, bands have started to approach us and ask us to record them. So now we're scouting out talent in order to develop and produce bands. Having all these facilities and tools at our fingertips allows us to record bands at a really low cost and be able to take a risk. It has taken on a life of its own. We just signed a huge deal with RED, a distribution company owned by Sony. They handle releases for independent record labels [with bands including Radiohead and Phoenix].

So what's a typical day for you?

I'm in the studio mostly, working with musicians. A good part of my day is also spent maintaining and building relationships with people at agencies. I do a lot of sales dinners, and we set up live events where our bands play. I also promote our record label.

What do each of your three locations -- Richmond, Los Angeles and New York -- offer?

Richmond is about low overhead and being rooted in the creative community there. With L.A., it was a matter of establishing a nucleus around a creative scene that was already happening. We were able to tap into a musical movement and give people a place to work on their stuff. I'm hoping to do a similar thing in New York, though maybe higher energy. And the strength of the advertising community in New York gives us an opportunity to break through and gain more visibility. We'll just get our feet wet, and hopefully, in six to eight months, we'll have a studio in New York. It's amazing how it all evolves. We thought this would be a side thing to our bands, and then it took off. Sometimes inspiration and the ability to have longevity as a musician come from very unexpected places.

Entrepreneur Spotlight

Name: Daron Hollowell
Age: 36
Company: Black Iris
Location: NYC, LA, Richmond, Va.
Founded: 2004
Employees: 8
2010 Projected Revenue: Undisclosed

The original version of this article appeared on AOL Small Business on 9/20/10.