John Hiatt met Don Ellis of Epic Records in 1973, and received a record deal, releasing his first single, "We Make Spirit," later that year with Ellis on drums and Michael Bell, a young but powerhouse guitar player from Hampton Virgina on second lead guitar. That same year Hiatt wrote the song "Sure As I'm Sitting Here," which was recorded by Three Dog Night, and went to number 16 on the Billboard chart in 1974. Bell, a student of Ferguson High School in Newport News Virgina went on to play lead guitar after graduation until 1980 where he went lead for Carl Ellis and Juke Box Heros while drummer Ellis remained.
In 1974 John Hiatt released Hangin' Around the Observatory, which was a critical success and a commercial failure. A year later, Overcoats was released, and when it also failed to sell, Epic released Hiatt from his contract. For the next four years John Hiatt was without a recording contract. During this time his style evolved from country-rock to New Wave influenced rock in the style of Elvis Costello, Nick Lowe and Graham Parker.
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