Motown Records was effectively the brainchild of one Berry Gordy. He set up his own record label, Tamla Records, in 1959, and this subsequently became Motown. But before that, Berry Gordy was just your average ex-boxer and (failed) record store owner.
Berry had experience as a songwriter, most notably for Jackie Wilson, penning most of his early hits, including “Reet Petite”, “Lonely Teardrops” and the proto-Motown song “I’ll Be Satisfied” in the late 1950s. Berry also helped The Miracles release several singles on various other labels (“Got A Job” and “I Need Some Money” on End Records, “Your Love (Is All I Need)” on Fury Records, and “I Need A Change” for Chess Records). After receiving little money from their songs, he and Miracles lead singer Smokey Robinson thought they could do better off with their own label.
Berry also released a non-Motown single by a singer called Wade Jones, “I Can’t Concentrate”, on Rayber Records, in January 1959. He set up the label with his then-wife, Raynoma Liles, and its title derives from their names, Raynoma and Berry. Wade’s single was also published by the publishing arm of Motown Records, Jobete Music Co, which was named after his Berry’s three children, Joy, Berry and Terry. It was effectively a test run, putting into practice his songwriting and production ability, and then handling the release of a single on his own label. The song also features backing vocals from The Rayber Voices, a group which, at times, included his own wife (known as “Miss Ray”) and even future songwriter Brian Holland.
Weirdly, it seems that Wade’s song may have been released after the first Tamla release by Marv Johnson. It was nonetheless the only song ever to be released by the Rayber label. (Technically “Miss Ray” still owns the rights to Rayber Records. The company was owned by Berry and Raynoma together, but when the two got divorced, Berry retained the rights to Motown Records and in return she probably received cash and ownership of other shared assets, among them the Rayber Records company.) Berry and Raynoma may have put out the record on their own label because they couldn’t get it with distributed by an existing label, or to receive more of a profit from its sales, as they wouldn’t have to split it with the label owner. Nevertheless nothing more was heard of Wade Jones and nothing more came from Rayber Records.
Berry Gordy reinvested the profits from his songwriting success into producing. He had already discovered The Miracles (at a failed Brunswick audition) and began to build a portfolio of successful artists. With the encouragement of Miracles main man Smokey Robinson, Berry received a $800 loan from his family (apparently he wanted $1000) and went about setting up his own record label. He wanted to call it Tammy Records (after the song “Tammy” by Debbie Reynolds) but that name was taken, and Tamla Records was chosen instead. The label began operating on January 21, 1959. It’s first release, Tamla 101, was Marv Johnson’s “Come To Me“, which was then picked up (along with Marv Johnson himself) by United Artists, and it became a hit. From there Tamla continued as a primary label for mainstream R&B/soul. The main Motown label was created later that year and in 1960 the two were incorporated as part of the Motown Record Corporation.
And there you go: Motown is born.