Kelleher in Gold Rush Vinyl’s listening room

In the first days of 2025, when Caren Kelleher (MBA 2010) went from owning one small business to two, she entered an alternating reality. Mondays, Wednesdays, and Fridays, she’s still the founder and CEO of Gold Rush Vinyl; the days in between are Waterloo Records & Video time.

So on a Tuesday morning in February, Kelleher is in Waterloo mode. She scores a downtown parking space and walks over to Austin City Hall with the distinct sound of purpose that cowboy boots bestow. Her meeting is at 9:30—but first she’ll need coffee. She’s just back from a long weekend in Los Angeles for the Grammy Awards. The news that Kelleher and her business partner, Trey Watson, had acquired Waterloo was still fresh in the music community. “Everyone wanted to talk about Waterloo,” Kelleher says.

Austin’s iconic record store is also the topic of her meeting that morning with City Councilman Zo Qadri. Kelleher and Waterloo’s longtime owner, John T. Kunz, are appearing together to ask if the business qualifies for certain tax breaks and to float the idea of closing a section of North Lamar Boulevard for one morning. Forced to find a new home for the business when the building’s owner sold the property, the Waterloo team found a suitable replacement five blocks away. If Qadri can help with the permitting, they have dreams of a record-bin bucket brigade, where Waterloo’s customers line the route to move the inventory to its new home, hand by hand.

Kelleher wasn’t terribly worried about the meeting. Music is the rare issue that everyone can get behind, especially here in the “live music capital of the world.” Still, everyone relaxes when Councilman Qadri opens the meeting with a story about buying his first turntable at Waterloo. Like everyone else in town, Qadri is relieved that Kunz found a buyer who will retain the staff and appreciate its quirky charms. “Trust me, every morning we open the doors and look for ways to keep things quirky and weird,” Kunz offers as reassurance.

Kelleher is of no mind to change that. Waterloo has been a champion for artists and music lovers for 43 years. She does hope to make the business more of a “town square for music,” with more floor space for the free, all-ages shows for which Waterloo is famous, plus more parking, a café, a podcast studio, a lacquer cutting lathe, and a Dolby mixing studio. There’s also dedicated space for Gold Rush’s gold-record machine. Customers will be able to watch through a window as vinyl records go in, and gold and platinum records come out. Just like at Krispy Kreme, Kelleher says.

The massive machine will have to be moved from its home across town at Gold Rush Vinyl, the record-pressing plant that Kelleher opened in 2018. Back then, only a few plants were making records, and they mainly catered to major artists, leaving few options for the smaller, indie artists.

Looking back on it, Kelleher says she didn’t really know what she was getting into. Nonetheless she left San Francisco and a job at Google, where she’d launched Google Music and Google Play. She turned up next in Austin with a business plan, a set of pressing equipment, and a commitment to help indie artists earn a living from their work.

“Most of the finance people I talked to—even relatives of mine—told me that I would never get financing for this, since it’s not a 10X return kind of company,” she says. But thanks to the magic of a Google search, Kelleher discovered the Small Business Administration 7(a) program that allows for low-interest and long-term loans on equipment and real estate purchases. HBS senior lecturers DJ DiDonna and Christina Wallace wrote a case about her non-traditional fundraising journey; Kelleher returns to campus each year when it’s taught.

The funding put Gold Rush in business and instilled in Kelleher an entrepreneur’s sense of tenacity. “Even now, when someone tells me ‘no,’ I’ll look for another route. Like today, if City Council tells me that I can’t close Lamar, I’ll wonder if there might be a way around that,” Kelleher says.

Gold Rush was up and running just in time for a pandemic-fueled resurgence, when “anyone who didn’t discover sourdough discovered vinyl,” she says. Today’s global market for vinyl is estimated at $1.6 billion. It’s admittedly a far cry from streaming, which claims 84 percent of recorded-music revenues. Yet vinyl is still accelerating faster than any other format, at 17 percent, according to the Recording Industry Association of America. And records can play an outsized role in helping indie bands stay in business.

Kelleher came to appreciate this fact when, for a period of seven years—beginning when she was at HBS—she managed bands as a hobby. “That’s when I started understanding where the money was and was not coming from for these artists,” she says: For an average American band to make minimum wage, they can either sell a hundred vinyl records, garner a quarter-million streams, or achieve 2.2 million YouTube views each month. It’s a rare band that can get that much attention online, but selling records at a live show can keep their dreams alive and help pay the bills. “That’s where I saw the opportunity for vinyl,” she says.

Kelleher has found her footing here in the record aisle. “Music is a recession-proof industry. It’s never going away, but the way we monetize it will forever be changing,” she observes. “I realized that if I could find a path where I’m always focused on that goal—how musicians can earn money—and follow the opportunities as they come, then I could have a long career in it.”

On Queue
“My favorite case in school was about queue configurations, and how to make lines more efficient,” Kelleher admits. Operational efficiency is key at Gold Rush, where eight full-time staffers and three part-timers choreograph the pressing of up to 1,000 records a day, with all the attending labels, jackets, and sleeves. A staffer assembles Valentine’s Day flower bouquets out of damaged records and manufacturing scraps—part of Gold Rush’s upcycling/efficiency efforts.

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