#145 with Reed Duchscher - MrBeast's Manager Joins the Brainstorm

u yeah i feel like i could rule where i know i could be what i want to put at all in it like a days off on a go less travel never look back what's up everybody we got a special guest in the house reid duck and read this room is baller is this your office or is this your bedroom yeah this is this is our office in in dallas texas i wish this was my bedroom maybe i need to rethink what my bedroom looks like in a bunch of employees and i see you got the painting on the wall i feel like i get targeted for that ad constantly for that painting if i i see it right don't know a little bit blurry you got the fancy blurry camera so i'm not sure if i'm seeing it right yeah it's the r gold i've had this thing for like seven years it's when ari gold like bought it's is from entourage for people that don't know it's a hbo series when he went in and he bought like a rival agency and he went in with a paint ball got and basically fired people it's like an iconic episode he floyd yeah i will find you dude that's a pretty good ari impression i like that i too grew up watching that ari was one of my heroes for a while as well yeah it was weird like i loved the show and i thought everything they did with the show is so fascinating but i was always i into the character e not specifically like him as a as his specific character but what he did like his manager like the manager role that he played i'm glad you said not him specifically because he was boring as fuck yeah yeah boring character but his job like i was like his job seems to be so interesting because it's like management isn't about like necessarily just about managing a client it's about access and the access that comes along with managing a client like vincent chase where it's like when you're as manager you're kinda open to all this stuff that exists right whether it's talking to different actors actresses musicians like deals that come through like so that's what fascinated me about it and so that's pretty good segue way so why don't you tell people what you do yeah so i run a company called night media i formed it in twenty fifteen wasn't nfl sports agent working with some cool guys that people probably know like barry sanders marcus allen tim brown and i did client services for them and within a sports agency and i met a youtube group named dude perfect in twenty fifteen and that really started my my career as a digital talent manager and now fast forward to where we are in twenty twenty one we currently manage people like mister beast who i'm sure if you're logged on to youtube you probably see his videos on trending and we work with z and a few others and what we specialize in is we say gaming lifestyle technology and entertainment is really where we we'd like to focus at night media so how does the economics of that work i mean do you have employees or is the manager just you're a woman man show what what's that look like it used to be a one man show it's got a little bit more complicated as the years have went on so we have quite a few people internally at night media and we also you know i i think about talent management a little differently than most people do and i i think about it and like what's a new age talent management company look like and how do you service creators and so for us like the management bucket is one that becomes important and so we have a lot of internal talent managers that work with clients we also have a an organization more of like an incubation studio for owned and operated companies like mister bees burger that people have saw in the news recently and a few other companies that will launch with creators so we also play the business partner role and then we also have a have like a venture side of this business where we invest in emerging software and and studios and companies that we find interesting and so to me that's kind like the three pillars that like a new h talent management firm or digital talent management firm should have and are you used to invest are using your own cash flows or using your client's money a little bit of both it started out as like us investing off the balance sheet like yeah we think this company is cool we think this studio is awesome we'd pull some clients in we the most recent one we did or announced was backbone we did it eighteen months ago for those of you who don't know it's like a mobile controller but it also has a lot of software to basically turn your phone into a switch and so mister beast invested personally preston like a bunch for our clients invested personally and it's just kinda got us thinking of like okay maybe we should actually operationalize this and and have lps come into a specific fund within media and so that's now how we operate it are you the sole owner of this business no there's multiple owners we obviously have you know people that have equity and we've had investors along the way and so it's been a quite a ride i was the sole owner up until twenty twenty eighteen when you're a football agent and you sound sound like a pretty legit football player clients and then you're like oh this youtube group dude perfect and like sam i feel like you're the target demo for dude you like dude perfect i love dude perfect of course i know what they are of course and so you you're like oh you know what it's not about barry sanders anymore it's about you know i don't know what the hell you guy's names are but dude perfect dudes on youtube i'm gonna like take the leap of faith what was the like kind of reaction were people like yeah that makes sense or was it like what the hell are you thinking it was what the hell are you thinking a hundred percent i had worked so hard to get into the sports agency world and you i'd watched jerry maguire probably thirty seven times as a kid growing up and and i wanted to be a sports agent i played college football i had friends that are now playing in the nfl and it was like just the easy segue of like y i should represent them when when they turn pro and so everything i did for like three to four years was like how do i get in with a bigger sports agency and so i remember having the conversation when i wanted to leave the sports agency and i was gonna go you know help this youtube group that at the time had probably two and a half million subscribers people thought i was nuts they're like this isn't a legitimate business how are they gonna make money how do youtubers make money like it it was just it was also new in twenty fifteen and it seems weird to say that because youtube was founded in till seven or ti and nine someone of the two also there's a lot of youtubers at that time that we're actually doing incredibly well it just wasn't known and so in twenty fifteen when i made that jump to start working with dude purpose like people just thought i lost my mind can you actually go through and answer that question for us i mean i don't know anything about show i know close to nothing about show business i know a lot technology a lot about software a lot about media but when it comes to managing youtubers how does that business model work i mean i'm one of those people that would say how does a big money let's do it this way i'm gonna throw out a straw man i'm gonna explain what i think how i think it works because of what what i've seen from the outside and you say yeah you kinda got it but these parts were wrong right okay so here's what i've seen and this is more in the twitch streamer world than youtubers so guy you know sits at his desk every day makes videos starts to get famous at some point they're like buddy slash girlfriend slash you know boyfriend whoever is like oh okay i'm your manager now and that's like manager one that they have and then that person's like okay here's what i'm gonna do as your manager i'm gonna read your email and like i'll actually respond to some of these and it's almost all inbound initially and they basically read the inbox they reply to stuff and then like oh these guys wanna give you a bunch of money to do the shout out okay they act as kind the agency where they're like alright pick a number out of thin air type of thing i get ten percent because i'm your manager so like i think a cut is like ten percent fifteen percent something like that you tell me if i'm wrong and then the talent does the thing and like the client is like you know somewhat happy because they like half read the brief and then you move on to the next one and then like some guys like you that are from pretty forward thinking start to realize holy shit we can do a lot more with this influence and that's where you get the venture arm and that's where you get mister bi and you get a bunch other stuff but let's just talk the typical and not your case because i i wanna explain to people the typical talent manager first was i right or wrong it's a good point mine's completely different and i think what you just explained is what currently happens still to this day i see a lot of it moms best friends uncles and it it's really like you know someone starts going you know from say a thousand views to a hundred k views the question is like what's next like i'm getting attention there's people reaching out like how much do i charge for this do i sell merchandise because all these companies are reaching out and it's just someone to help them navigate that and i still think that even the talent management space for digital creators is really under saturated there's not a lot of management companies that i think and not necessarily think about it like us but are just like there to service creators and like have their best intentions in mind they're still not a lot and so because of that like it falls on friends and parents and you know like i said uncles and it's not a bad thing it's just as the space matures like that's just you know progression what's the difference then between what sean described and how you guys are doing it now so we really view creators more like entrepreneurs and media businesses i think the brand deal thing the filming creators is all or filming videos is all create great but we see a much bigger opportunity with creators actually owning and operating their own sustainable businesses outside of just the normal filming youtube videos and maybe sell a honey or like a dollar shave club ad you saw some of that with mister bees we'll announce a few more products coming up mid this year with a few other creators that we think fit and so to me like when you think about these businesses it's less of like hey this is just a single youtube channel it's more of like what are the pillars that you know a typical media company like via com would build or like if we were to think about sponge bob what are sponge bob's other like tentacles as an ip and where they all making money like that's how creators should start thinking about these businesses for us like we we kind of view ourselves as more of like an outsourced coo we're less of like a manager because we play the manager hat but there's so many other things that we have to do now to service digital creators like operational plans how much money should you be spending is it time to hire seven employees this month those are like all things that kinda hit our desk as management companies evolve these are the things they're gonna have to think about is like how do we service this like new age digital creator because we've been doing actors and actions for a long time and we understand that but like these people need help they need to hire people they need to scale businesses they need to build out consumer products and so we just think about it a little bit differently than most people are and then how many clients do you have currently i believe we have seventeen and do they pay you a flat fee i mean because if you're describing so many different things how do you track what fee is yours and what is it i imagine you just get some type of percentage if let's say dollar shave club comes to you and you say alright well these four people might fit for you hey four people you guys wanna do alright they do you get your little cut or your big cut who knows what it is but then you're talking about all these other deals figuring out who is owed what seems a little challenging and like that split seems hard right yeah it's i mean we've operationalize it pretty well and yes we receive a cut on everything our clients do but we also start businesses with them so it's like what what are those joint ventures like what are we doing in these joint ventures are we hiring the the management team so there's like there's two different sides of right like there's the management side and then there's like this owned and operated side we're playing both that's kind of how media is built right now and yeah the managers like same with the agents they they receive a percentage of income one question real quick so our audience may not know mister beast in the same way that like kinda the general population knows mister beast because he's he's pretty popular but the tl i would say is he he got famous by giving away stuff and kinda filming the reaction did we do these where he'd be like oh i go to a restaurant and i'll leave a four thousand dollar tip on a nine dollar like bill and he would film the reaction of the person kinda from a four like secret camera type of thing and those videos were awesome to watch and then he would do things like you know buy a lamborghini and then invite four friends over and be like put your hand on this lamborghini and then the last person with their hand on this lamborghini gets to keep it and then he would film like a two part series of that or whatever so first is that a fair characterization or am i like dumb it down too much you hit on some of our most popular videos i think what jimmy focuses on is like viral reality is how do i get as many people to click on this video as possible on youtube and and thus like youtube works in in two senses it's like get high click through rate get high average generation video does well and so those are the things he's focused on and and like crazy ideas that nobody could probably think about like we did a two part series three part series about giving away an island you know like how do you buy an island okay now that we acquired the island go like do the survivor series to give it away those are the things that we're we're trying to figure out early on before he's mister beast with fifty million subscribers or whatever how did he bootstrap this so you know where did the thousand dollar tip come from and how did he jump from the thousand like to the ten thousand to the fifty thousand so i know he had like i forgot quit or whatever whatever it was i was sponsoring him were they just footing the whole bill and he had enough views to offset it or like can you just talk through that bootstrapping phase of how he got there yeah so i met him around i think he had like one point nine million subscribers when i met him and at the time he wasn't really making any money he was focusing on doing these like weird challenges watching its everyday bro for twenty four hours etcetera and so quid which is i think it's still around it's like a sticker digital sticker app right where you collect stickers they basically were trying to sponsor jimmy and he had this idea about giving money to a homeless person it was like i wanna give like ten thousand dollars to a homeless person and then the conversation was basically like give us ten thousand dollars we're gonna give it all the way the video is gonna do well and then the adsense is just all upside for me and so that's really how the company was bootstrap in the beginning is like we're making all this sponsorship money we're giving it all away to create bigger and bigger videos and then the next video was honey after a few quid videos and and such like honey came in and they gave us money to donate to ninja twitch stream so ninja was doing a saint jude twitch stream and this was right as ninja was like taking off i need this saint jude stream on twitch and we filmed a video around donating i think it was forty thousand dollars to ninja and that video exploded and we basically gave away all the money the sponsorship money for that video and then we just kept as the videos continue to get better the sponsorships continue to become more and more and more and the video just now i've gotten to the point where we're giving way an island sean have you heard of it holdings it's scooter bronze thing i know about scooter lebron i i never heard that name though it it's pretty interesting basically the crux of it it's like the same thing i mean would you say that you guys are inspired by how he's building how he has built his business oh how he built it yeah i think a you know night media acts as like a holding company for a lot of other subsidiaries and businesses that we do i think from a business structure standpoint very similar he did it in music which justin bieber an ariana on a grande and and we're just kinda of playing it in the digital creator landscape so basically sean he i don't i mean i only read read articles clothes about it but it's ethical holdings was like the holding company for the agency with that justin bieber i guess was the cash cow but then he got ariana grande then eventually he started making some lift in uber investments then eventually he raises some money from carl and he bought taylor swift catalog it's like a miniature conglomerate which is exactly what it sounds like reader trying to do and it's and it sounds fun same model troy carter did with lady gaga and then yeah factory factory exactly yep i i've i've i know about all these have taken a lot of inspiration from each one and i just thought it was a was a matter of time before someone built this around the creator community it seems interesting from the outside because you're able to have your hands in a lot of different projects and your day is different all the time is that right yeah completely different from day to day but what is like the cash it cow what's like the one stream that keeps us all alive just the boring normal management yeah and it's the same with it i think it's the same with what adam factory was like the management company is the core of the business that keeps the lights on and everything else is just kinda upside it's like you're playing upside in in different businesses and different venture investments and things like that and so that's how our our business is built but we also understand the management company is what keeps the lights on and so for us like it is one of our core focuses and will be for the foreseeable future well if you need help raising your roi fund there we go you i feel like this is the new model i was looking at this for i forgot i was talking to somebody who bothered he he has this phrase at least he calls his personal media companies pm c's and he's like pm c's are gonna replace or you know just sort of swarm traditional media companies because you can have the joe rogan and you can have the tim ferris and you can have the mister bees and you can have all these different people just be personal media companies where they generate content content goes viral gets them audience audience you know becomes loyal and then you layer on top of that like either like money from sponsors and audience and then you basically say cool now that i'm like a a unique property i can now do partnerships other people can't do i can launch businesses i can get into investments that other people who can't get into because i have this unique media front than attrition let's say let's just say you're trying to invest in startups there's a reason troy carter can get into lyft or uber or both or whichever one he invested in early on because he's like oh yeah you know you should take my check because like my check is kinda like lady gaga guys check and you know these other three people so he's gonna get into all those deals all the vcs wanna be his buddy because that's their way to be like oh yeah i know lady gaga manager so he's gonna get to like you know skim the top and so the same thing happens with athletes and others but i feel like not everybody has caught on to like how big that can be and and how the old wave like didn't monetize it fully right i'll give you an example tim ferris he's buddy or sam right and he was like big brief twitter right like so he so he didn't he built his audience kind of on the blog when blogging was like the big way to build your audience and he built this huge audience and then he was like alright the way i'm gonna translate this into money is basically like books and he wrote a bunch books and he sold a bunch of books with books are like a slow and pretty crappy way to make money and then he's like okay what about this podcasting thing and then the podcast became the money maker and books became like the footnote and then because he was ferris he got into the uber like kind of seed round and then that was the way to make all the money and like podcast was just like a cost of doing business just another way to build your name and i feel like he didn't even touch ten of the things that the guys who were doing it now do like he did no courses like imagine if he had done the foil work week course how much have you could have been making millions of millions of dollars way more than he made off his books whether it's courses or merch or actually raising a fund because he just kind of you know wrote his own personal money into into a few angel investments and that was kinda it i just feel like there's a lot more and guys like read and and mister beast are kinda like showing what the fully evolved business looks like for a personal media company yeah i mean hopefully down the road like five years from now people will look at like what jimmy has built and be like that's the blueprint for what a creator business should look like all those pieces of that company right and so that's kinda how we think about it in virtual dining is a new one for us like launching mister it's like we really didn't know how it was gonna go like there's still some unknowns but i just the sheer volume of sales and just how many people have have loved the brand and and the launch like that might become a pillar for creators five years from now instead of like merchandise and hoodies they might be like y know what's your virtual dining like what what are you doing for virtual dining well we'll see can you reveal what the sales were we'll probably come out with the full sales numbers at the end of twenty twenty one just to let people know here's what i wanna know i put out a twitter tread with with some guesses i don't know if you saw that but i put out some guesses but the big kind of like i don't know my criticism or critique but the big like open question is like cool you it's definitely a dope marketing stunt right because it's like boom i have my own restaurant chain in three hundred cities overnight you know surprise surprise and cool bunch of people who go and they order because they wanna try it out there's like a novelty and so the question is like even if it was just a marketing stunt that'd be awesome but you know six months from now am i really gonna open up the app and order mister bi or am i gonna order like mcdonald's or this you know some established thing that like i know about it i've been eating for years and like have you guys seen the sales dip basically after that first week of hype look at his smile he's got a kind of a shit eating ridden right now he won't tell me that the sales of crashed but i'm trying to ask him if the sales crashed after that just go on twitter i mean use every day i get tagged in hundreds of tweets of people still ordering and i can see all the numbers and it definitely has not slowed down i think over the next few months you'll see like we have a lot planned with this brand we have a lot of collaborations with this brand like it'll be you know we think of this as like a sustainable virtual concept whether we do brick and mortar in the future as a conversation we're talking about but we would have never launched the business had we just thought it was like a marketing stunt that would work for a couple weeks like there's a lot of conversations about sustainability of brand new menu items quality control like all these things are continually talked about every day and we're actually hiring people within that company so in two years we have goals for where we think this is gonna be what's that goal we wanna be around twenty five hundred two thousand to twenty five hundred virtual locations we wanna have a few interesting brick and mortar locations i mean for us it's like are we gonna be able to compete with five guys right that's kinda like where we're looking at right now yeah he you said he wants to own in and out when this is all said and done that's what he's that's what trying to say oh i like in and out too much take it out of business want own that business they just need to keep doing what they're doing you said earlier that in two thousand fifteen you left sports to do this and people were kinda laughing at you and being like what are you crazy what is around in in your industry now that you're thinking this is kind of interesting it seems a little nutty right now but i think this might have legs is there anything that stands out that is that maybe not a lot of other people see i sent out a tweet yesterday about this and i think this is something to keep an eye on as the nc actually let's student athletes and i was a student athlete and we couldn't make money off our likeness because of amateur and the na has now lifted that and we've seen student athletes in the na start posting on tiktok start making money off youtube i think it's just a matter of time before the flood gates open and like call it like division one college football players at like florida state are gonna make this content house they're playing on national tv every saturday now they have this content house that they're like playing video games in they're posting on tiktok i think the crazy thing is like you're gonna have like these girls that play like basketball or volleyball or whatever and now they have an only fans and they have a tiktok and there's like con like i think the interesting thing to to look out for in the next two to three years as this becomes and i i don't know where the nc lays out with it i do know that like athletes student athletes are gonna start taking advantage of this image and likeness situation and they're gonna start benefiting finally benefiting off it and i think it's gonna be a lot of content houses i think it's gonna be a lot of like well was like they're already living together i lived with five football players and it probably wouldn't have been great content at least like it probably even more nell than anything but i do think that they'll grow interesting businesses around like gaming like hey we all play video games like let's just have a gaming channel and like let's make money off it and that's gonna become so big the question is gonna be hey do we continue playing football or do we go all in on this content thing because it's actually a big business that's gonna be the interesting stuff that we're gonna see in the next few years it's like football or content creation or basketball or content creation i had a friend who's a a vc basically like schedule a call he was like hey i have an idea i'll fund you if you quit your job right now and you go do this and he was telling me about this exact same thing he was like well the ruling has just changed california now says that athletes can monetize their their name and likeness that's gonna inevitably roll into other states this was pre covid so it was like at this time it seemed like sports were gonna keep happening in a normal way and he's like somebody's gonna have to build so this is on the software side so i think what you're talking about is like from an athlete perspective making a content house from a maybe talent management perspective this is where you could jump in early on a stock that's gonna rise and build your name in that category but then the other one is basically building the angel list for college athletes to monetize on this so basically building a software stack that's gonna say okay here's a bunch of athletes here's a bunch of brands and here's a bunch of universities and those three all need to talk about all this like monetization that's gonna happen because there are gonna be rules where you're gonna have to report you know either the local caller or dealer page you x dollars to do this thing that's how they're gonna avoid like kind of bribery to come to the school you're gonna have to do it all above board and he's like all that paperwork and all that like documentation and all that sort of like record keeping somebody can build the platform that does that for college athletes because this is now inevitable and i thought that was pretty interesting idea do you think that i mean say someone as a patreon right and they're playing college basketball i do you think they're gonna have to report those patreon numbers and subscribers to the administration yep they're gonna have to figure it out there's gonna be a bunch of like is sort of like with sports betting as i wait how do you make the players not just throw you know a random pre game because of whatever and so i think that there's gonna have to be kind of like a very clear set of rules that you're probably gonna see a few people get slapped on the wrist for for not for not following because this opens up like the whole you know booster thing to a whole new level and i don't think they're gonna be able to control we have a lot of people on here who have mostly internet companies so software or mobile games ad networks all types of strange stuff you have an agency which a lot of people in our audience sale wanna start different types of agencies and then a lot of people who have agencies they say oh shit i freaking hate agencies i i hate client services and then also like on the software side they're like oh my gosh it's just taking forever to grow and like it's hard to pay myself a lot of money unless i sell the company where do you fall in that that that scale and and that grass is always greener or type aside because like are you wishing that you had more recurring revenue or do you like the setup that you have i mean i wanna know like what your sentiment is towards the agency business yeah towards any service business i mean it's always a grind right like recurring revenue is tough i think for me like i never saw building an agency like that though i saw it as an access point to everything else whether we're investing in software or doing this like mobile app what jimmy like i think if you're i mean gary v talks about this a lot too is like va media is a service business he's like i wouldn't tell anyone to build this business like of service like two hundred and fifty employees like breakeven business he's like the reason i bill va is like the access to everything else and the access to these brands and being able to do different things with personalities and who we work with that's the same thing that i'm doing is it's it's an access point i wouldn't wanna do it any other way because i get access to everything whether that's investments other you know people like elon invested in team trees with jimmy like that was an amazing day for him to have like hit one of his mentors put a million dollars into team trees it's like that kind of stuff is like why you wanna be in this business right like if you're just building an agency and agency it as a service business like you just need to understand it's gonna be a grind and weeks are gonna be incredibly stressful it's just i don't look at the business like that and i enjoy what i do every single day i love youtube i'm obsessed with it i'm on it every single day to me like money's is great but when you have enough money to pay your bills and and everything's fine like all about enjoying life right and enjoying what you do for a living and so that's kinda how i look at it it's like jimmy and i take advantage of a lot of things that come with this business but we enjoy every minute of it it's been the greatest the greatest perk and the greatest thing that has ever happened one time like here's a small one one time lance arm armstrong came on our podcast i'm a huge lance armstrong fan and it's like one of the very few times i would ever have had the ability to hang out with him what about you there's a lot i think there's so many creators that i've looked up to before i started this business that i've got to meet and speak with about their content strategy and about their business i don't wanna like name any specific ones but i've gotten to speak with a lot of youtubers and now a lot of athletes reach out to me because they wanna play with typical gamer they wanna like be on mister beast youtube channel so it all kinda came full circle of like people thinking i was dumb for leaving the sports agency world because being in traditional sports is like the pinnacle and now it's like all these athletes are like wait what all these youtubers and content creators are doing is awesome how do we get involved in that and so it's for me that's probably even one of the most rewarding things is like seeing it kinda come back around where people are calling me crazy for leaving that job in traditional sports to now seeing a lot of what people are doing in traditional sports kinda come over into this digital media sector and all these athletes wanting to play video games with our clients said you listen to a few episodes pod and you came with a fu ideas at least i say we jump into it i think when we release this what we should do is we should move the ideas to the front because for us it's cool because we're just nerd not wanna get to know you and it's much easier to have a brainstorm when you like have known the person for more than five seconds but i think it it'd be i think we should shift into ideas and here we're kind of what's interesting to you what are some half baked ideas that you've had or opportunities you see in the market and then we can rip off those if you have any handy i really wanted to talk to you guys about and let's just start with one so this is one thing that i think is interesting and i wanted to stay in the creator space for this one is is consumer products and so you guys have probably seen a lot of consumer products with different creators and it it's a good thing i wanted ask you guys about is like what do you think like creators are doing wrong in this space because we've seen a lot of them launch consumer products and i think that they think that just because i have an audience this is going to be successful i think we've seen a lot of consumer products go great for second month gone tomorrow right and so it's one thing i kinda wanna talk about with you guys is like what do you think creators are specifically missing about running a consumer packaged goods business aside from just like i need to grow an audience i got two ideas there so and by the way sam what was the name of the wrap snacks we we had a funny ass episode do you know wrap snacks i haven't now need to look wrap snacks say i'm tell about wrap snacks it's hilarious i think lo romeo came out with it it's like little romeo flavor cheetos or it's so boy chris or master this or flavor flavors they just they just took all the famous chips like a c a do dorado or whatever and they just read you know we have their their their rebranded version of it and then they have like you know cardi b whatever i know who they actually have but they kinda have all the smaller like the cardi b one's the best it's like a a cardi b red hot cheddar potato chips and so sam's like this funny kinda like country ghetto kids somehow and so he like in somehow in in missouri was eating rap snacks or something like that so i thought this was just a a hilarious brand but i'll give you i'll give you two things i think they're doing wrong creators are doing wrong if i was day media and i was trying to work with some creators and help them grow their business here's what i would do on the consumer product side i think the first change would be on the business model i would be acquiring and not partnering or licensing brands so there are a ton of companies that are out there that have hit some mid level of success they're doing five million a year in revenue they're doing ten million a year in revenue growth has kind slowed they kinda don't know where to go the operator has been doing this for five to seven years and they're kind of tired and they've done all the hard work of like the product is now like made and has had like ten iterations the supply chain works they even have some distribution the website is built all that good stuff and i think you know one of our buddies who comes on the pod a bunch of sky andrew wilkinson and he's basically built like a you know like a billion dollar empire just buying businesses rather than starting them and so like i think in silicon valley we have this huge bias to start it oh you gotta be the hero who comes up with the genius idea i think andrew really shatter that when he's like what are you talking about there's just like tons of if you're a good operator you're a great operator like just go buy a good business at a fair price and just own it and grow it over time you don't need to like keep thinking of genius ideas from scratch because that's hard and it's low probability of success so i think on silicon valley we worship starting from scratch too much and i think in the kind of like celebrity world there's a a business model that everybody's used to which is just like kinda like license your ip license your your face and your name and your likeness do a partnership get a rev share get a profit share maybe get an equity stake in the company but not a majority stake and i think it's much easier to go buy these brands i would go by like we've joked about toot role but like i know like red hot candy and go buy some old candy brand so i would go get private equity money i i'd buy a candy brand i would own you know sixty seventy percent of it let the investors put up the money on the other thirty percent and then i would go get you know a great operator from another candy brand and it'd be like you're gonna run this but now we're the distribution we are gonna basically refresh this brand and bring it to the main street and make bring it mainstream again and we're gonna own these assets and i would basically go into all the categories that print money so it's like soda bottled water candy chips like you know like all these product categories that ideally fit with your brand but really like it's just a category with super high margins high repeat purchase and like high like you know like stickiness us amongst the amongst consumers and so i would say that that'll be my first changes i would just go be taking majority stakes in brands maybe even old brands that have kind of lost their lust and rebranding them kinda kind of with the with the fame that creators have where does that land with your read what yeah i mean it trust you looked at all kinds of stuff i think you know for us like it'll be interesting to see like what the mix is over the next few years of like owned and operated versus like just acquiring a like what you say toot role was what was the the one you gave yeah toot role red hot you know like what is toot role is interesting it's family owned and the ceo like ninety eight this ninety eight year enrollment she died remember when we looked up she actually has died oh yes she's just die but the other one is warhead heads like go buy warhead or like you know or pong pong yeah po or you know like whatever like go buy some brand that like has that nostalgia factor for some people and we'll get new we get a bunch of earned media for doing it you're gonna be able to get it for pennies on the dollar because it's kinda lost its way and leverage your distribution and leverage your fame to like bring it back to the mainstream yeah it's frustrating to us that it especially the candy companies they just will not lean in to this space i don't know if it's just because they're a little too old school they've made money doing the same thing for fifty years we've spoken almost all of them and they're just not open to doing like anything outside of the box with any of our creators that's i think the point that they're missing is like if you figure out how to leverage this creator community in a way that's authentic and not super cringey and coming off as overly branded there's a massive win and so it's like someone needs to come into the space and understand that and i just haven't seen it from the candy companies yet so here's the other thing i would do so and i'm just thinking this top my head so feel free to be like yeah that's a dips idea because of because i've actually thought this through but the first exercise i would go through is i would sit down and i would write who's got all the money who the fuck has all the money and all the money basically if you look at where is where is money made money is made in like a few types of business models and a few industries so for example a lot of money is made in investing or financial management right and i would think about like okay is there a world where either you know like what are all the different variations of that okay we have our own vc fund that's one way to do it the other is that we could create kind of like a multi gp system where we get ten of the largest youtube creators in the world and we create you our own fund that way another is like we create our own version of robinhood and we use our distribution to like we basically sponsor our own videos because we see how much money is made if you were the default app for gen z and millennial person who wants to invest their money or acorns or whatever right so i would trying to figure out who's got the money and then how do we be them i thought about this for for for platforms like youtube and twitch if you look at let's take twitch for example and i won't give away any inside data this is what i was thinking before we got acquired by them i was looking at it i was like well a lot of these networks that look really big and have a lot of users are very very top heavy the top kind of one percent of creators are getting x percent of the audience i won't give the exact person but it's like a very significant percentage of the audience the platforms are worth billions of dollars and the top creators are worth let's call it single digit millions maybe now double you know like now they've broke into eight figures like one or two creators will break into eight figures and so isn't that weird that the creators which is who the audience shows up for don't have any equity stake in the platforms youtube or twitch the platform is worth you know a hundred x what even the top creator makes this is kinda like a union thing but like if the creators actually were able to get together and they were actually able to spin off and and build their own platform it would be extremely risky but it would have extremely high rewards if they were able to do it and i kinda did the the envelope math of how many creators you would need to buy in in order for this to hit a tipping point where it would actually work and it's a smaller number than you'd think it's enough people that you can get together in one room one one hotel ballroom and kind of walk everybody through how this would work if you all agree so i think there's some big plays like that if you just looked at what are the like most valuable businesses to own it's marketplaces platforms it's financial services and it's like let's say consumer packaged goods that have high margins like soda and high repurchase right and i would just trying to figure out how to go own the companies that do those one of a good example is reid have you seen do you know who doug tomorrow is i don't a youtuber he's got two million subs maybe he's like legitimately a nerd and they make fun of them for it in a in a funny way and he just started a car marketplace called cars and bids and i've been following this since he launched maybe eight months ago and it the traffic is crazy and he owns it i don't know how many employees if any but he's been had been building it for months and months do you see i'm talking about yeah looking at that right now marketplace for cars is a very valuable business if it works right if it works yeah and i forget what the categories called but i not to describe it it's like cool cars that car enthusiasts loves from the eighties nineties and and recent like some people love wagon or woody jeep or something like that it's sick and i've seen the traffic grow like crazy here's two other examples that are in that vein so you have a bunch of like kind of toys slash collectible slash cool novelty audit items behind you right now there is a race in the tech world to build the platform that's gonna be like kind of take the the the collectible part of ebay and like un bundle it like just do it as a a focused app sort of the way that stock x and go did it with sneakers everybody's trying to do it now with pokemon cards and sports cards right and they probably approach you as like be an investor or you know like that sort of thing but that's the kind of business that is i think you would wanna be in that business because i think the audience would i would resonate with the audience you could do basically like free customer acquisition through through a bunch of partners and instead of taking a like let's say you would become a seed investor in these companies you're owning one percent or less of the company business i think you could build the you know why let whatnot or rally road or otis or these these different platforms why let them win i would basically be in that business i think if i was if i was highly ambitious and had infinite time which is of course that's one of the constraints you don't have infinite time yeah one space that we've been looking at a lot is like the neo bank space which i think is incredibly interesting because creators with the like the banking neo bank like chimes the world we've seen like what a bank is valued at with like one to two million users and it's incredibly high so it's like if you can get creators that have that specific audience like probably a little like over eighteen like a little bit higher spending power it becomes incredibly valuable to those banks it's all but it's i mean we've been looking at this for months it's also incredibly daunting to build your own bank that's like the give or take is like small percentage of equity in a bank that is probably past failure and i think a few of them now are kinda of path failure they're gonna work it's just what are they gonna exit for do you bet on one that's like probably raises a small seed where you can get more of an upside but it's not past that failure threshold yet so it's like kind of flipping a coin or do you do it yourself and potentially take the biggest risk and have to like actually put up some money we got hitch something like that sean didn't we like a creators credit card yeah there's the credit credit card version of this but the bank one he's right is better banks you're you're absolutely right there was one i saw recently he had about two million accounts with deposits in it and i think they were selling i think the deal gone through so i can probably talk about it now but it was selling for basically like eight to ten million dollars and wait eight to ten billion or million million that's low because that's the fire wait wait wait you said a bank with a million users sold for eight million dollars exactly is this is the fire sale price so they basically realized look we can't win this neo bank game like they couldn't get their follow on b round investing and or or sorry their their b round of investment they built all the technology and they had a million accounts but they weren't gonna get to like five million ten million they weren't keeping pace with chime and some of the others that were out there and so you know their problem their bottleneck had become growth and distribution and so you know what bank is this i can't say the name but basically i never actually heard of them before this and it's like oh this is a challenger bank in the us like i've never heard of this even when they were trying to pitch their price they're like look this is a fraction of what this is really worth like if you go look at the valuations of these this is the dollar per savings account that most challenger banks or most neo banks should be valued at and so i just thought man at this fire sale price somebody should buy this but even at the time i was thinking well you're just gonna end up in the same problem they are where it's really hard to grow it's really expensive to do paid acquisition for this and that's why for you guys it would be a totally different game because you wouldn't be doing paid acquisition through facebook and instagram ads as the like you know i'm paying a hundred fifty dollars and ads to get one customer and then i have their savings account which is not that lucrative you have to then build all these other financial services on top and so if you had a way to get a bunch of free distribution which businesses could you go by that are kinda stuck somewhere that would be i think a really interesting exercise unfortunately what gets you hear won't get you there meaning the things you have to be great at to be a great content creator and that really knows their audience and goes viral and can and is great with the community and is great with brands like that doesn't necessarily make you a great like you know private equity person who knows how to go assess businesses and buy them out and restructure them and and we go operate them and so that's the big challenges can you do both yeah and finding the the team or the hiring the management team to then go operate that business that you bought right that's kinda like a how are you guys doing that how how are you finding your people for this most recent the the burger thing and and your other how you finding your managers yeah so each of them is a little different so for the burger situation we partnered with early enterprises it's the company behind the hard rock casino and the planet hollywood and so an old school restaurant ownership company and so that was one special case where we were like let's go find someone to handle the the back office operations that understands this world in other situations we actually have a team internally that's just interviewing potential executives like but it did depends on the business that we're launching and ezra our president ezra cooper team does does a lot of that like vetting he was the he founded maker studios and then he is one of the or c founded maker studios than c founded full screen she's been in the space quite a while and so he he helps us do a lot of the vetting of of who we're hiring but it's a challenge i mean it's like one of our bottlenecks is like as you launch these businesses like how do you operationalize them and how do you how do you hire a good management team that actually has upside in the business like you're you're always gonna have to like give a percentage of equity or or something you know to that management team especially if you're bringing on high level executives and so these are all like things we've had to think about over the past year and so it it does become challenging when you kinda pivot from just being a management company to getting into some of these other businesses but that's also what's exciting is we kinda get to to play in all these spaces be back to banking i don't have a good answer we've looked at all the banks we know like what the valuations are we know which ones have just raised large amounts of money at multi billion dollar valuations with a couple million users and so for us it's like where are we making that bet like who are we gonna bet on that we think is and and they we have to hit i don't think it's a space where we can miss right i think like we have to hit whether we hit on a small amount of equity or large amount of equity we have to make sure that we swing and we hit the ball the last thing you wanna do is like in this banking space is like swing and miss over the next two to three years and then you look back on it and you're like well that was x amount of millions of dollars that we missed out on because we made the wrong decision that's with everything it's not just banking i mean there's a lot of spaces we're continually looking at it's like what what's the play small equity investing owned and operated it's the question i'd ask every day what are some a few answers or to that or other ideas that that interest you well i think outside of the banking space i think one thing that we found really interesting in just the content space and you guys have seen this too is like face list creators now have become so prominent on youtube and twitch and and it started with like these abbott like two d avatars so i think corpse is a good example of someone that's done really well what what's that don't know what if that is corpse is a it's a creator but he doesn't show his face like what i mean by face list creator is like it's a he's a youtube creator he has a channel but he never shows his true identity it's just a voice right and that sounds like the greatest thing ever right and it it is for him you know for him for dream is another one he's one of the biggest he's the biggest minecraft youtuber currently yet had a a climb from zero to ten million subscribers in under a year and and nobody knows who this kid is it's a complete like gas and mystery it's it's like what marshmallow was for music and like nobody really knowing who he was now we've seen this kind of transition the gaming space with all these face list creators that film videos and and another good example techno blade is a youtuber that also plays minecraft and you had like a hundred and seventy five thousand concurrent viewers a couple days ago and there's no face cam it's just him playing the game talking right nobody knows what what he looks like and so for for us like we've been doing a lot of research on like this face list creator ecosystem and like if we see value in it and also the other thing it's like there's cancel culture has become very prominent in this industry right it's like you you do something bad when you're twelve it comes back to bite you and you're twenty if you're a face list creator and you're just a voice it'll be interesting to see if like there is a world where like something bad happens to one of these guys we had a situation with dream where he was you know allegedly caught cheating within minecraft you don't really know the true identity of that person can they just disappear and start another identity and another channel and just kinda start of wait that was the that was the controversy that he'll use like a cheat code oh no no not a cheat code so he basically beat the speed record in minecraft and people put out videos that he allegedly cheated to beat that speedrun and it became this whole big thing and it's still ongoing but when there's no person associated with this it's like a different conversation like you're you're yelling at like someone who you actually don't know who that person actually is what do you think of like even one step further the virtual influencers like little michael mckay and stuff like that it's not even face it's like a cgi it's like a you know it's a virtual influencer i think it depends on what the strategy is i think with hertz it's it's really hard to turn that into a bigger business like how are you actually gonna make money if it's just like an instagram picture and things like that i think that's how it started i think where you start actually seeing a considerably bigger business is when you actually get into long form content and you can figure out how you get you know ten twenty thirty minute videos out there where you start building on this personality and then you can sell merchandise and you can license videos i think that's where this becomes really interesting i don't think they figured it out with michele yet i think they do a little bit of video but it's like five second video not a ton you can do there i think you have to figure out like what's the youtube strategy or what's the twitch live strategy interesting why is that that's because instagram doesn't monetize as well if you're just posting photos you it's just you're limited in some way or what the fans don't love you in the same way or what would happen yeah i mean it really doesn't monetize at all unless you sell direct sponsorships to certain posts and even then the instagram market so over saturated that to get a sponsorship deal on instagram is a lot more difficult with a million followers than it was a couple years ago now a million followers on instagram is like okay that's like cool but like all these people have ten million that that's engagements are much higher right crazy and that's also like the argument to youtube creators but i feel like at least from my from where i sit a brands have started spending considerably but it'd be more money on youtube than they are on instagram because it's like long form video you can drive people to a link you can pull residual views for years and years and years and people will just continue to see that ad and click on that link in the subscription and instagram just doesn't offer that yet by the way i have the simplest business idea for you you're welcome this is gonna be at least ten million dollars a year in your bank account i'll send you some paperwork is this the sporting recruiting thing no i'll send you some paperwork to get my cut i can't i can't get involved in the sporting where other the recruiting sports kits were this is different this is very simple sleep apps so calm and others are really big and there's just there's a ton of these apps that basically just help you fall asleep these apps do really really well they have very high retention because you build a habit of every night before you go to sleep you basically listen to an a a a bedtime story for adults or just sounds and you're able to monetize them through in app subscriptions low price but people are willing to pay to have you know different variety more sounds and whatnot and you know you have calm on one side that's already like broken out become a billion dollar company you have a whole bunch of smaller apps that built all the same functionality but they're just gonna struggle to acquire users and i think this is somewhere where if the influential person said hey dude sleep is super important for all of us and like when i a good night sleep i'm less anxious the next day i just feel better i have more energy this is what i use and you can even do some fun kind of viral like mister peace could read the bedtime story for one of them or you could get some some friends to do it some celebrities to do some of the other bedtime stories having your own branded sleep app i think you could just buy one of these off the market i can show send you five that are good and you guys could print money with this one i'm all about i use call them almost every morning so to meditate i like b brain fm that would be one of my categories for mister beast brain and fm they're quite small only two guys they create music so you can focus and the music to sleep i like sam harris is is a good example of someone who's done easy really easy category to go into broadly applicable to everybody super easy to monetize and the the bottleneck is distribution so i think that's the that's the hallmark of what you want i'm into it jimmy is gonna hear this podcast and be like where are we at with that project it's a good one man i bet you sam harris is waking up at does twelve million a year in recurring revenue that's what i would bet i think looking at acquiring we haven't dug into as much as we should did you guys see finger on the app what jimmy put out so we're in the process of doing finger on the app too and for him like our our mobile strategy is like how do we create you know what he does on his youtube channel how do we bring that to the masses right like how do we like create games is rock paper scissors like how do we make a the biggest rock paper scissors tournament of all time through a mobile phone alright here here's another easy one have you ever heard of catch app games catch game yeah sold ubisoft correct yeah that did you ever play any of other games oh yeah and i play a lot of voodoo dot io as well so i'm so i'm so into like the casual gaming space hyper cast casual yeah exactly that's that's a great space to go into and again tons of talent little indie dev shops that like baked games that will never see never just reach you know ten thousand users because they don't know how to like market it and they it would just be too prohibitive expensive to do so but you could build a catch app games if you have the kind of like brand that mister beast has i think that's a easy one there's a company called app love and that my my c founder had previously c founded it's a huge ad network like a multi billion dollar ad mobile ad network and then they just launched they realized this they're like oh look there's a bunch of these hyper casual games the like do actually pretty well in terms of engagement monetization but like they'll just never get mass distribution to compete with z and compete with all these guys who spend so much money on our ad network so why don't we just take like five percent of our in house ad inventory that we just have lying around it's not super expensive we don't make a ton of money off of it but it's just in house it's just house inventory they bought this this little dev shop and they call it lion studios and they just published their own mobile games and there's pump it through their own ad network with the cheap house ad slots and that's become like a multi hundred million dollar business unit within their ad ad network now and i think that's just like amazing sean i think you need to just ask reid for an internship i'll get your coffee man i i'll work for you for free over here i'm doing it already this is my interview yeah i have someone sitting over here taking notes as you're talking and there's like okay and we need talk to that company i'm just telling you all the things i'm looking at buying and then when i'm i'm looking at buying because i think it's a good business and then i'm just like well if i had you know forty million youtube subscribers who love me and would listen to me this would be way easier like you know ten x the value of each one of these things so yeah you can give me up afterwards i'll send you some links and then go from there yeah i i'm all about the hyper casual space it's like you get people in the funnel and you just keep coming out with really unique games every think voodoo now is doing like a game every three weeks it's gotten a little crazy and they just keep people in that funnel of games and they just continually come out and some of them go off for a hundred million downloads and most just get like ten to fifteen million downloads and they run them through it yeah it's crazy such a good it's such a good dumb business i love yeah i i had someone pitch me on acquiring old mobile games that like didn't catch steam you go in and you basically act as a publisher you go in and like acquire fifty to sixty percent of the revenue for these games and then you'd bring along this whole influencer network that would like basically post and push people to these games i can't remember what the company was but i thought it was a really sound like operation of of what they were trying to do we just didn't really i mean for us like we were just kinda point where we're like if we wanted to do it we could probably just build it we would just need someone that was just living on the mobile app store finding games the hard part now is like there's a lot of noise it's like hard to stay focused on like what you know you can execute on and so a lot of myself and ezra and a lot of the executives at media like we have like our plan for twenty twenty one we're so focused that like a lot of this is just like all the pitches that we get and stuff like that it's really hard to pay attention to everything because there's so many opportunities you just have to be like where are the ones that we know we're gonna win on and let's make sure we execute on that and not miss the one in front of us because there's nine over here that we're paying attention to story of a life yeah well i think we usually try to keep these at right about an hour sean what you think yeah i think this was very cool and and where should people find more about you you have your own podcast with blake right were you just a guest on that one no i do it's called creator economics you know for us it was about educating the the creator economy and like pushing it along i think you know if if i can do anything and when i leave this business who knows when that is ten fifteen twenty years down the road like hopefully i left it more educated and hopefully that we push the ball a little further and people understanding what creators are capable of that's really why we did the podcast it's something that blake and i love we've just came off a new video today about the top five or the five youtube channels we think will break through in twenty twenty one probably five channels nobody's ever heard of and one that only had like sixty thousand subs as we were filming the video and now i think is up to a hundred yeah that that's the kind of stuff we wanna do and so if anyone wants to watch it it's called creator economics on youtube or any of the podcast networks spotify and apple itunes and do you use twitter and i use twitter a little bit reg j same on instagram reg jd i use instagram a little more than i use twitter blake is blake is blake robbins at love he's getting me more into the twitter swing it wasn't something that i really had used up until about six months ago cool well thank you man we really appreciate this this is fun i appreciate you guys thanks for thank you