Editing Lookout Records (section)

===Departure of David Hayes===
Livermore and Hayes began to become estranged from one another, and the label's projects began to be bifurcated between the two principals — "Larry's bands" and "David's bands," with the eclectic Hayes next turning to releases by [[post punk]] band [[Plaid Retina]] and country punks [[Sewer Trout]].<ref>Prested, ''Punk USA,'' pp. 18-20.</ref> In addition to differences in musical taste which became more apparent over time, the pair were temperamentally ill-suited, with Hayes understated and reserved and Livermore boisterous and gregarious.<ref>Prested, ''Punk USA,'' pg. 20.</ref>

In addition, Hayes and Livermore differed greatly with respect to commercial motivation. In a 2015 memoir, Livermore recalled that

{{blockquote|Even when it came to music we both liked, we found things to disagree about. [David Hayes] didn't want to hear me speculate about bands becoming popular even on an underground — let alone a mainstream — level. It almost felt as if he thought it was our job to stop that from happening, or at least delay it as much as possible...

This confused me. I saw no logical reason why some of our bands shouldn't sell hundreds of thousands, even millions of records. I was convinced, after all, that they were just as good as, if not better than, most bands who did. But the moment I said anything like that, i risked incurring the wrath of ''MRR,'' 'the punks,' and, most of all, my partner.<ref>Larry Livermore, ''How to Ru(i)n a Record Label.'' Don Giovanni Records,  2015; pg. 49.</ref>}}

Although the winds of change had begun to blow even in 1988, David Hayes would remain very active with Lookout through the summer of 1989, albeit with dissatisfaction regarding the label's direction growing, and  his expressed desires of departure becoming more frequent.<ref name=LLRuin81>Livermore, ''How to Ru(i)n a Record Label,'' pg. 81.</ref> Hayes had gradually come to find working with Livermore to be insufferable and sought peace and artistic freedom through formation of his own record label.<ref name=LLRuin81 />

Believing that Hayes's participation in the Lookout project as bookkeeper and skilled mitigator of the demands of demanding bands was essential, the 16-year old Appelgren clearly not being ready for the role, Livermore tried a last-ditch effort to retain Hayes with the label, offering to take over all mundane operational tasks while leaving Hayes with "half the profits" as financial coordinator and public face of the organization.<ref>Livermore, ''How to Ru(i)n a Record Label,'' pp.  81-82.</ref> The anti-commercial Hayes flatly rejected this proposal with the declaration that "there's too much golden light around Lookout right now," adding that work on his label of love had come to feel "too much like a job."<ref>Livermore, ''How to Ru(i)n a Record Label,'' pg. 82.</ref>

With a quiet determination, Hayes declared that his departure would take effect on January 1, 1990, adding "I don't want anything more to do with Lookout, and I don't want anything more from Lookout."<ref>Livermore, ''How to Ru(i)n a Record Label,'' pp. 82-83.</ref> The speechless Livermore was left with full ownership and control of the label on the very eve of its commercial success. David Hayes would go on to start his own label, [[Very Small Records]], releasing dozens of records over the coming decade that ran the gamut of punk styles, maintaining fidelity to his artistic and ethical vision — while the label that he exited would go on to become a multimillion-dollar commercial enterprise.