11/16/2013 05:02 pm ET Updated Jan 25, 2014

The Rhino Records Story Takes Shape Part 6: Business Advice From Rock Stars

In the mid-1970s, my business partner Richard Foos and I were two college graduates with little more than a passion for music and a record store on Westwood Boulevard in L.A. How did we get the knowhow to launch a record label, Rhino, and make it into a major entertainment company? There was no wise mentor peeking over our shoulders, and neither of us had been to business school. While we got advice from many people, some of the most important tips didn't come from business executives. They came from a less common source: rock stars and their producers.

For a time in the seventies, Mike Chapman was the hottest record producer, with hits by Blondie, the Knack, Exile and others. One evening when I visited him in the recording studio, he floated a concept that I had never considered before. During a lull, he postulated, "I could have been anything I wanted to be. I could have been a doctor or a lawyer, but I chose to be a record producer." I had never thought of myself in that way. If he could feel that way about himself, then I could, too. If I wanted to be the head of a record company, then I could. It wasn't as if I hadn't thought of that before. After I graduated from UCLA I attempted to get a job through the Brown Employment Agency. In filling out the questionnaire, there was a space that inquired what I thought my ideal job would be. I wrote in "Record Company President." It didn't stop the agency from sending me out on interviews to be a loan officer.

I looked for work at the major record companies but got nowhere. Then I got a job as a writer for one of the industry's trade publications but was fired after two weeks. As it was explained to me, "the articles are only to fill the space between the ads." My quest for quality had upset an advertiser. That's when I thought back to something I'd learned in an interview with Peter Asher, formerly a rock star and now a successful producer and manager. He told me it was common in the record business to be fired for no reason. Having experienced the truth of this first-hand, I now realized the only way to avoid being fired is to be the person in charge. I resolved to start my own company.

Good ideas can come from anyone. That was a tip I got from Marc Bolan of T. Rex (whose biggest hit was "Bang A Gong (Get it On)" in the U.S.). Bolan said that if a taxi driver happened to visit the recording studio and make a good suggestion, he would adopt it. Years later, when I was producing a movie about 1950s teen star Frankie Lymon and his group the Teenagers, a parking attendant at a New Jersey restaurant told me that "Out in the Cold Again" was a great song. Since it wasn't a hit, I hadn't considering including it in the soundtrack, but when I got home, I listened to it again. The parking lot attendant was right. I included the song. He was just a fan who grew up with the music, not an expert. When I, an expert, suggested music for Terry Gilliam to consider for the Rhino Film he was directing, Fear and Loathing in Las Vegas, he seemed uninterested. The film wasn't as good as it could have been and tanked.

Not all of the counsel I got over the years was solicited. Herman's Hermits' lead singer, Peter Noone, told me, "Marry a Jewish girl. She'll save you money in the long run." It may not have changed my dating patterns, but I did notice how Noone and his wife, Mireille, interacted with each another: how attentive he was to her, and how they enjoyed each other's company. It may not have been about business, but it was no less important.

In October 1984, Rhino released a 5-song EP by comedienne and singer Julie Brown. Right away, radio broadcaster Dr. Demento jumped on one of her songs, "The Homecoming Queen's Got a Gun," and then KROQ and other stations followed suit. By February, we had gotten enough airplay and sales to make the Billboard album chart. Warner Brothers Pictures even signed Brown to develop another of the songs, "Earth Girls Are Easy," into a feature film.

Rhino was promoting these songs heavily--with 57,000 copies sold, it was our biggest-selling record to date--but Brown feared it would overexpose other songs on the record, rendering them old by the time they were featured in the film. We didn't want to stand in the way of Brown's career moves, so we cooperated and let Warner Brothers buy us out of our deal with her. After that, though, the momentum we'd helped create for Brown's record totally dissipated. Warner Brothers wound up passing on the movie and transferring the project to another company. Late in 1987, Warner affiliate Sire Records released Julie's album, Trapped in the Body of a White Girl, to disappointing sales. The Earth Girls Are Easy movie, which debuted in theaters in May 1989, also bombed.

It reminded me of what record producer Mickie Most told me in an interview I'd done years earlier for Rolling Stone. "Artists are crazy--when you're winning, you keep going." he said. "When you're winning, you don't stop."

And that's one of the most important rules of all. He said that you can never guarantee that the next thing you do will be successful, so when you have a shot at a hit--in music or in anything else--you should do all you can to make it happen. Never put the brakes on success.

Harold Bronson's book THE RHINO RECORDS STORY was published October 22nd.