Sweet dreams are made of building a media empire in sunny LA

Former Eurythmic Dave Stewart still plays guitar but his new book proves that he's also in tune with business. Richard Northedge meets him

When Dave Stewart was 12, he decided honking round a bag of newspapers like other paperboys looked too much like hard work. He persuaded the wholesaler to drop a pile of Sunday papers at the bus shelter on Kayll Road in his native Sunderland and sold them to passers-by.

"I was trying to drag the bag around, but then I thought I could employ paperboys to deliver them," he explains. He strummed his guitar at the bus stop to supplement his profits.

That was 45 years ago and Stewart let the newspapers go, concentrating on the guitar and teaming up with Annie Lennox to form the 1980s chart-topping act the Eurythmics. He still plays, but the entrepreneurial spirit of the bus shelter has never gone away. Stewart runs a Los Angeles business empire that includes media, music, marketing and much more. He is a consultant to the Nokia phone company and works for corporations such as Visa and Sony. Now he is sharing his thoughts on management in a book, published this week by Financial Times Prentice Hall. "Having read all the typical business books," says Stewart, "and being inside businesses, all those books are incorrect. I prefer to read the less conventional ones, which I think are spot on."

Compared with the other management tomes, The Business Playground is certainly unconventional. Its colour pages include cartoons, Dylan lyrics and boardgames. There are plenty of quotes from established gurus such as Jack Welch – perhaps gleaned by co-author and branding expert Mark Simmons – interspersed with anecdotes from Stewart's career. Old favours have been called in, with Richard Branson writing the foreword and Mick Jagger explaining his own business acumen.

Stewart's business style is laid back, as you might expect from an LA-based music man who starts work at 11am. He talks of "death by committee", worthless brainstorming and researching subjects to death. He divides people into drains and radiators. But his theme is to encourage creative juices to flow and his catchphrase is the "pyramid of the powerless" – a hierarchy where a middle tier of naysayers prevents ideas rising from the shopfloor to the boardroom. "Everyone can think creatively," he declares. "In today's marketplace you cannot survive unless you think differently because of the internet and technology. It's happening at lightning speed among all the noise: to get yourself heard you have to be original."

But surely firms need doers as well as thinkers. "Every business needs administrators and needs people to be able to execute ideas and deliver on time," he says. "But with a lot of businesses, the only time they come into contact with creativity is when they have an advertising agency."

Despite working with big companies, the freewheeling Stewart's style runs counter to big business. "A lot of companies were built in a different time, but everything else has changed," he says. "Some are stuck in a 1970s way of working. They need to be able to spin on a dime."

Stewart's own businesses remain centred on the creative. He directed Ringo Starr's film Liverpool 8 and Honest, a comedy starring the girl group All Saints, as well as producing two comic books for Virgin. He helped to set up a Covent Garden club with Microsoft co-founder Paul Allen and is a partner in Coco de Mer, the erotic boutique established by Anita Roddick's daughters. He has also collected pictures and sculpture by British and American artists, but says: "I do not tend to invest in stocks and shares and other huge companies – more in my own projects."

His main company is Weapons of Mass Entertainment. "That's my ideas factory," he explains. "We make a prototype of an idea in film, video, a miniscript or a PDF presentation of a business project, then we partner with the biggest possible partners." Current intellectual properties include making a country music television show, producing records, arranging artists, and more films. "I'm writing three musicals," he adds, saying his stage version of Ghost, the Patrick Swayze film, will open in London next year.

He is vague on Weapons of Mass Entertainment's numbers, however. "It brings in millions," he says. "But a lot of things take two or three years to make, so it comes in staggered events. We've a staff of 16."

He has been working for a decade on his biggest potential project, though. First Artists Bank would collect royalties internationally, sell tickets and exploit musicians' spins-offs from ringtones to fashion ranges. He claims it is finally coming to fruition, saying: "The thing I'm creating is a rights management search engine."

The former pop star still resents the delays of two years or more artists can wait to be paid. "First Artists Bank is a solution to the old problem of artists and their wares being taken for free," he says. "There's an incredible amount of paper in the trail of revenues." And Stewart is not only thinking of his own back catalogue: he still occasionally performs publicly. He has two concerts in Greece coming up and a charity event with a 30-piece orchestra in LA in July.

He rises at 7.30 and swims 20 lengths in his pool before his late start at the office. "I work until 7.30pm, then I have a vodka martini to unscramble the brain," he adds. "A glass of wine does not slap you on the back like a vodka martini." He and his Swedish wife Anoushka, a photographer, have two young daughters, and two sons aged 19 and 22 – from his marriage to Siobhan Fahey of Bananarama – still live with them. "My house is a total wreck when I come home," he says. "All the kids play instruments: I've been doing soundtracks all day and I come home and they're all playing and singing."

His book says adult creativity is highest for 30 to 40-year-olds, but claims there can be a peak in the sixties. Stewart, 58 this year, is ready. "In England people describe you as a polymath and say you should concentrate on playing the guitar, but going into business was a wise move. It keeps you on your toes and keeps the brand fresh. And I still like playing the guitar."