John Kunz partnered with Louis Karp to open Waterloo, and five years later he became the sole owner. Waterloo Records was originally located at 221 South Lamar, and sold vinyl records exclusively. After outgrowing the 1200 square-foot store, Waterloo moved 2/3 of a mile north to its current location at 600 N. Lamar. Though they have expanded into CD and DVD sales, they still pride themselves on having a large selection of both new and used vinyl.

The Waterloo staff, made up of primarily local musicians, is extremely helpful and knowledgeable about the expansive library, and if a record or CD is not readily available, it will be ordered on the spot. Waterloo has listening booths and stations where any item in the store, on any format, can be listened to- not just those artists who have paid top dollar to be preloaded into the listening station. Waterloo does away with genre categories, and mixes all acts together alphabetically so customers don't have to figure out whether their favorite group is listed under Rap, Rock or Punk. Not satisfied with a purchase? Waterloo takes back all music bought from the store within ten days, even if the customer decided they didn't like the record after all.

Waterloo Records is known nationwide as an iconic independent record store, much like Amoeba Music in California, or Vintage Vinyl in Missouri. Tourists don't just stop in for the great music available, but also for live in-store performances by national and local acts. Nirvana played a live performance at Waterloo the day their Nevermind record was released. Not only can one purchase tickets to live shows from Waterloo, but it's also the only venue from which to purchase a wristband to the South By Southwest music festival held in Austin every March, causing nationwide frenzy for out-of-towners to make a friend in Austin quickly before the coveted passes are sold out.

Since Waterloo Records is in the hub of the "Live Music Capitol of the World," John Kunz has kept his promise to local musicians by carrying any and all local acts that have a release to grace the shelves. Most would assume that a record store in Texas would carry predominantly Texas artists and would pander to traditionally popular genres in Texas, such as country-western, blues, and rock. But Waterloo has always been known for an exceptionally wide variety of mainstream and independent artists of every possible musical persuasion. From electronic dance music to Stevie Ray Vaughn's box set, Waterloo has it all (or they'll order it). 25 years after Waterloo Records opened for business, the store's slogan, "Where The Music Still Matters" actually means what it says.