The creative genius behind Squatty Potty & Poo-Pourri reveals his marketing playbook

everybody who starts a business you have to find your glitch look for things for areas where you have attention from people that nobody else is paying attention to i feel like got rude to where i know i could be what i want to from at all in it like a days off on a road less travel here's why i'm excited about this i've never met you but i've been a fan of your work because you're kind of the creative genius behind the scenes of some of the coolest marketing campaigns that i remember i kinda grew up on on the internet i read your book back in the day oh you read poop to gold yeah pooped to gold on top of that you know now what you're doing now is fascinating i had never i'd honestly never heard of angel studios and here you are you've built maybe one of the top ten tv movies studios in the in the world you're doing almost five hundred million in revenue and i would guess that i'm not alone i would guess that ninety eight percent of our audience has also never heard about this and the cool thing is you did it with i mean pretty much no experience or background in the industry which i always was like i like somebody who you know doesn't kinda self limit around what can can't do based on their own track record and you went in and to did something really remarkable and so i wanna talk about all that but i think we should start with the marketing because that was my intro to you can you take us back to doctor bob and how you helped a dentist create one of one of the great marketing campaigns where were you well i what happen can you tell that story yeah i was in my last day of my last class at university and a guy named doctor bob came in and was asking the class he wanted them to tell him how to make his or a brush which was a tongue cleaner that scrape your tongue and cleans off bad breath how to make that thing actually sell because he had invented it he had got he had i don't know thousands of units of it just boxes and boxes of them at his house getting in his garage yeah i just said it was his garage was full of them and the group got up and just said you can't really sell these and nobody wants to buy these online like eight percent of people wanna buy them on the internet and you need to go do a partnership with pro and gamble or johnson and johnson or somebody and and i interrupted them and said eight percent of people is like thirty million people just in the united states why wouldn't you focus on them oh so the the the smart kid answer was ninety over ninety percent of people don't wanna buy this online and you said wait a minute if if eight percent said yes that's still millions that's what that's enough to clear out the garage that's right what happened is is i did think much of it until doctor bob came up to me after classes and said i liked your comments can i work with you the first thing i did is i bought i convinced doctor bob to spend five thousand dollars buying a web a facebook page called kisses there was just there's some guy somewhere in the country who had built this page called kisses i think it had one point three million followers and so we took it and we bought it and then i started spamming them with or brush because bad breath kissing that was the yeah you that was the connection you did get one thing right right like i think one of the easy mistakes most people make is they think about their product and they just wanna tell you all about their product versus the benefit you get if you were to use this product the the end that you seek and this product is just the tool that's gonna get you to that happy ending the better you and maybe that's the version view they can kiss without the shame of bad breath yeah see you did have that insight that's pretty good yeah and so we took the one point three million people we spanned them and then once we got or brush created as an entity i changed the name of kisses page to or brush right the brand followed by one point three million people yes and so we had one of the most followed brands on social media i think facebook changed their rules after that right and that failed miserably we didn't sell hardly anything we tried google ads they weren't working i think we're were spending like three to five dollars per dollar that we brought in in sales because it's just a little too or a brush and then i was watching on youtube late at night and i i watched a lot of youtube and there was a a youtuber called i she's probably still out there but she was in a really original vlogger right yeah original vlogger and in her video she would she would jump cut she just stood in front of a white background and then she would just cut cut cut cut to get rid of all of the u and whatever wasn't interesting that she said she would just cut it all out and i was like we could probably make something at that level and then i got another roommate named devin graham he was a film major and he while we were roommates every single night he would go out and work on film sets for free and then i got another roommate joel ackerman who was a screen writer and a comedian and i said will you take the script i wrote and punch it up and make it a good script and so i took all the knowledge i had about selling stuff from serving a mission for the church of jesus christ a latter saints sir mormons i served in ireland getting doors slammed in my face for two years so you you become a pretty good salesperson selling the gospel and learn how to take rejection so i took the skill set i knew from that when i was younger as a teenager i sold idaho potatoes door to door in utah to try to earn money and and i did pretty well with that so i took those two skill sets combined them and built a script that was how to tell if you had bad breath i've talked to hundreds of entrepreneurs on this podcast and i've got a bunch of takeaways but one of the big ones one of them that shocks a lot of the people out there who are product nerds which frankly i am myself is that oftentimes in order to turn something that's going kinda good into something that's absolutely amazing is to fix the marketing not the product and in particular fix how many people know about the product that's like the big thing it's called attention say it with me attention and so this team at starter story they put together a free guide they call it the one million dollar attention guide it's this pretty amazing thirty nine page document that's filled with fifteen tactics to get eyeballs on what you are building and so there's a even a thirty minute recording from pat who's the founder of starter story he has interviewed hundreds and hundreds of entrepreneurs so he's able to put this together through a bunch of research and experience and so if you're interested in getting more attention which frankly you should be everyone should be then you should click the link below in the description or scan the qr code right here and there was a a video on youtube called hal cast and one of their videos that had like four hundred thousand views was how to tell if you have bad breath and you just take a tongue a a spoon scrape the back of your tongue and then you smell what's on the spoon and then you can tell if you have bad breath because you actually can't tell if you have bad breath if you just blow like that right if you can tell if you have bad breath when you blow it is horrible breath but just normal bad breath you can't tell you need the spoon you need the spoon and so you scrape your tongue and that's because the tongue is the source of ninety percent of bad breath which i found in studies and so what happens is you're kind of like taking in all this raw data you're taking in the how cast video the i just video your roommate your other roommate who's a writer your your experience from the last five years of selling potatoes and the gospel and this tongue cleaner and understanding the tongue cleaner and then you're combining it all into a video that is now i think even today it's still considered one of the top twenty five campaigns of all time on youtube and and making a video that we spent five hundred dollars on which doctor bob complained about at the time that we are spending too much money but the and it was five or six hundred bucks and and we launched this video and then i got my brother neil and i asked him to code up a site for it so we could actually sell these tongue cleaners and and then i set it up to where you could get a free one if you just paid shipping and then we just charged as much for shipping as it cost to buy or version and and it worked partially like going back in time i found a glitch in the system and everybody who starts a business you have to find your glitch mh and our glitch was youtube launched its ad platform a few weeks before that or maybe a couple months that's where the idea came and we got on youtube and we started buying ads and those ads cost less than a penny per mh so it was like the early days of adsense and so we were able to spend a dollar and bring in two or three dollars now a dollar in total cost both the ads shipping and the brush itself and so that glitch of being the very first on youtube is what allowed us to find enough data to take action to be able to optimize and then become more efficient and then as the cost of advertising on youtube start to climb we were able to just get more and more efficient because we had the traffic coming in now to be able to make those changes and so the glitch allowed us to get what what one entrepreneur paul als who wrote the book now and skeleton he calls it your beach head mh so when you land on normandy the first group has to go up and establish a beach head where they have a foothold that they can just hold that spot they don't have to take the whole beach just that one little spot and then you can expand from that beach head so you go you put five hundred bucks into the making the the ad so the peak of brush you guys did what and like revenue or how many sold i don't remember the revenues but we sold i think the company sold for about ten million dollars ten million dollars yeah and so you you're and you know you're just sort of stitching this whole thing together now i love the framework of you gotta find your glitch the hard part i think if you're listening to that is well that's great youtube ads are not a penny anymore so that specific glitch is always changing right for for different people at different time different interest industries whatever it is mh do you think you could kinda generalize any of the principles or behaviors what to be looking for or what to do to increase your odds of finding the what to what to notice what to pay attention to what are the general principles that might apply to somebody who wants to do that first one is go after things that solve a problem for yourself doctor bob was just making a tongue cleaner because he was a this is funny he was a mission president in the philippines serving a mission for the l church the church that jesus christ saints and his missionaries had a horrible breath and so he was trying to figure out how to solve the problem of these missionaries having awful breath and but he learned that it came from jung and he remembered from his professional life that they would take these surgical scrub brushes and wash their hands off to get their hands so he took a surgical brush and put its tongue scraper on it and that was his prototype he had super glued together like a toothbrush handle a surgical brush and a scraper and that was his first prototype so he was solving a problem for himself and it happened to be something that many many other people wanted to solve there's a book called the user method by jeff sc and jeff sc goes through and explains that out of the top businesses the vast majority of them were made by founders who are just solving a problem for themselves the airbnb founders were just trying to pay rent in san francisco one of them was a graphic designer the graphic designer knew that there was a convention coming into town and they knew that it would be there were need to be rooms rented so they went to walmart bought some air mattresses blew up the air mattresses and sold their floor space and you end up with air mattress b b air airbnb and b and so they paid their rent and that was their thought is we're gonna make a business around people paying their rent and it becomes bigger than any hotel chain i would say that's the first thing is finding a product that can work would be a user method stick with the user method the second thing in a glitch in the marketplace so it can be like it becomes really obvious the guy who invented the mouse that worked with steve jobs i met him and he said things that when he invented the mouse as soon as they invented it everybody was like obviously the mouse makes sense right obvious in hindsight in hindsight it's always obvious and so you're kind of finding the glitch in and of itself just with your product then the next piece is like on a marketing front is look for things for areas where you have attention from people that nobody else is paying attention to a really good example i was searching for a product by using g not google not google and that's a very different thing i haven't used google for search in quite some time and then not just that if you do headless shopping or agent shopping i think is what they call it right now is if you go and just optimize for agent shopping where they don't have to leave their ai agent they just buy through the agent tons of people are using g bot to just go do their shopping for them like you can be driving home in your tesla right now and you just push a button turn on g bought and say can you get me groceries on the way home and if you're a business that has an agent shopping system where the ai bot doesn't have to go and scrape everything it just talks to your api then you can plug into this huge growing rapidly growing group of people that are wanting to shop through their bots right don't wanna shop themselves they don't wanna click on google anymore that's a huge opportunity in a potential glitch so product you said user method you know you wanna solve a problem that you you personally have and understand yep marketing you said pay attention to where other people are not paying attention or where the the traditional players who are already doing this are paying not paying as much attention yep maybe because in some some ways this there's a little bit of the innovator dilemma maybe they're doing well or they've built their business and their team and their skills all around one channel that has been working for ten years and they might put one percent of their attention or ten percent of their attention on this new but you could put a hundred you could change the whole experience to just work in that new channel to just be optimized for that new channel it's like just getting somebody to use quad design that work can be really hard and because of that we are out pacing the hollywood world because right now we're in the hollywood space by leaps and bounds and speed of innovation especially on a on a distribution level because we know how to use all these tools and they're not only scared the tools they're actively fighting the tools right yeah it's low brow to use the tools for that friend in hollywood right now yeah i wanna ask you about this so another find a glitch we're gonna jump ahead now so we're gonna jump ahead to angel i i guess this is a little bit of a deep so when i'm doing the research i was talking to ben and i was like you know what blows me away you did a project where you were tired of the way youtube worked or hollywood movies they were using sort of sex drugs and rock and roll you know vulgar language and so you created something that would you know almost like scrub that stuff out of an existing movie that was a product we wanted to to exist yeah it was a pro it was a problem you had a check you know thing number one and and yep by the way if you had asked me i would've have been like what do you mean that's not a problem well how many kids do you have i got three kids so now i would agree but that's and now when i go on youtube i'm like wow this is this is like yeah this is vietnam this is danger zone yeah it's vietnam and and not just that if you go back and look at what we were looking at game of thrones with was at peak when we started it was called vi angel yeah and it's at its peak and every single day when game of thrones would come out with a new episode there would be within twenty four hours on the torrance an a version of the episode uploaded without the sex nudity the rape scenes it was completely scrubbed and there would be millions of people worldwide download the version without those and so we're looking at that and saying not only do we want something like this for our kids but what about the millions of people who are just saying my teenager wants to watch this i want them to be able to participate in the cultural conversation but i don't want them to see rape scenes and i'm going to use this torrent version but that's completely illegal and so what we're saying is let's build a legal version of what millions of people are already asking for right and but you you're doing the thing again where i would say you're focused on that eight percent so the way that in your class everybody said well no i mean almost everybody would wanna go buy this at target and you said well as long as there's enough people that's the beach head we can get we can get this thing going so you know today when you say millions of people are download the torrance i guess million sounds like a big number it's a small but but it is a small number it's a very if you had talked to a hundred people you knew about game of thrones how many of those people would say yeah i watched the clean torrent version you know you almost would have gotten no hands in in any average sample that you were looking at that's right but you you do a good job it sounds like of paying attention those the signals especially when it lines up with your values or you know the product that you wanna see the way you want the world to be and even today when i looked at the i was researching your company you know you're public so you you have a you have your your data's is published and you know you guys are doing like ninety million a quarter right so we're talking about big number hundreds of millions in revenue yeah you only have about two two two million ish subscribers it's not that many people or is there that many humans compared to most things that it's the power of a small number of people paying you you know thirteen bucks a month that stuff adds up and so that doesn't sound like a elon musk business plan right doesn't sound like the the making of a huge business creating the version of like if you watch with your parents and they put ear mu on your ears for certain words and certainly an automatic remote control automatic remote control exactly but you had enough conviction or just almost mischievous ness to to go ahead and do it and then you found this glitch in the matrix where fast forward you find this short film that you're interested in and the thing i loved was to test it you guys realized that you could just upload the whole nineteen minute thing as a youtube ad exactly like a skip ad they could've have skipped it after whatever seven seconds or whatever it is yep but you just said let's just put it on there maybe it's entertaining enough that people will watch it and that'll give us the data at the signal and at the end of the nineteen minute ad it's like hey if you've been watching this whole thing crowd fund this and help us bring this to life that's exactly right i remember i remember somebody saying why would you upload a nineteen minute ad and i said even if only three percent of people make it to the end if they're the ones that wanted it to exist they're going to invest and we'll be able to make a tv series is that just your brain works differently or do you ask different questions or like do you have a rule about i i guess like i wanna get myself and my team to almost think in this kinda naughty way where you're you're not just playing a default game trying to knock on the same crowded front door that everybody's doing mh and then getting stuck and not making progress like where does that idea come from i had the opportunity when we were doing the ad agency so we did pup we did squat potty we did purple mattress lu deodorant and these billion dollar brands these are billion dollar brands that we built from four million like cooper when we got a hold of i think it was doing four million dollars here and purple mattress they were almost bankrupt like one of the founders of purple mattress called me two weeks after we launched the campaign and say wow you saved our business we were gonna go bankrupt in like three weeks and i was like oh we weren't gonna get paid if we were successful that's what went your my head he was thinking you saved us so i was like we probably wouldn't have been paid we dodged a bullet yeah yeah we dodged a bullet but the the point is is as as we did that youtube came out and talk to us and they said how can we get more people to do things like or brush and we and we came they sat i think for three or four days they sat with our team in pro utah and we came up with this idea of a skip add button where you could after five seconds you click skip if you're not interested in the ad and that concept the originally they were gonna make it like a fifteen second ad or a thirty second ad and i said no don't put a time limit on it if i can maintain your interest let me just keep them well that's so counterintuitive if you're the advertiser and you're telling the platform hey let them skip after five seconds right that was sound that sounds completely against your interest but it's the only way to get along that there's if i had said let me let me steal five minutes of their time for a poop commercial or a squat potty poop unicorn commercial they would have been like no we don't want you getting in front of the content give me five seconds and then i get five minutes they they're okay with that and i've earned it yes because i've earned i've earned the attention and so when we get to the chosen tv series and we have this pilot episode it was a short film i called it a pilot we renamed it a pilot we could just take the same concept that we built for these two three minute ads and just go twenty minutes let's just do twenty minutes and see what happens because it's entertainment and so they watch twenty minutes they're totally invested and then we pitch them come invest in this project and let's make a tv series like the game of thrones for the new testament that's basically what it was at that time and seventeen thousand people invested eleven million dollars into the chosen and how much ad spend do you think you needed to get to that eleven million eight hundred thousand dollars so it took about a little less than eight percent of the total raise went into advertising it and i explained to dow jenkins the director i said because he was actually pretty upset about that he was like i thought you just do viral ad campaigns and right you were just gonna raise the money and free through for free basically and i was like how do you think we built pup and squat potty we spent money and if you had gone to wall street and ask them to raise you money they would charge you twelve percent right they'd charge you eight to twelve percent so we're actually right in that world but we're just have to buy ads which is getting you awareness on your project hey let's take a quick break you know that feeling when strategy is done the brief is written everyone's aligned and you realize someone still has to sit down and actually create all the content that someone is usually you and it's due tomorrow well the breeze assistant from hubspot can help it works right inside hubspot you can draft campaign copy blog posts emails all in your brand voice all using your actual customer data so you don't create just content you create content that converts check out hubspot dot com the agent customer platform for growing businesses we used other things like we had a a friend named daryl eve he does he runs summit and he does the youtube formula that book mh and he do a lot about live streaming so he set up his little switch board and we've ran live streams this time to raise money at the end so like at the last twenty four hours or forty eight hours of the fundraising for the the the series dallas jenkins got on and did this marathon livestream stream saying and we and then i had my team get together and we made it to where every single time somebody invested we would pop up and say this person just invested a hundred dollars from idaho this person invested this much from and had social proof to showing up on the on the screen the whole time and like we we cracked the nut and we were able to get our first tv series built for angel which was the chosen and then the job was can gonzalez make a good enough series and he did he crushed it and the series ended up being i mean i think it's right now today it's a top five series in the world for for television it's got like two hundred million people watching it it's it's on the level yeah there's two hundred million people worldwide watching that show unbelievable i how how far it how many seasons is it in see they just finished filling season seven seven seasons and that's the final when jesus is resurrected and it's just the twelve apostles going through and they're gonna release the crucifixion at easter time this next year it's it's remarkable it's no longer an angel show but it's on amazon we did the first three seasons you you mentioned a couple of the other brand squat potty pup hooray what was the marketing genius moment for each one of those well the first thing was just i had to like the product so i'd give the team the squat potty we went and tried it tested it out we're like this is a pretty legit product and we sold it or the pup i when in the bathroom used pup it's a little spray you put i think almost every airbnb on the planet has pup you you put it in before you go to the restroom and traps the smell right that's the idea like it's prevent oils that trap the the smell underneath the water and who who created that that's kind of a genius invention susie bat i think it was her brother that thought of it and then she took it to market yeah and she she watched sent it to you cold email what happened she was messaging me over email i was finishing up or brush he flew out to hawaii the with her she was doing q ads and they were doing like four million dollars a year in this boot spray and then i used it and i came out and asked my wife going after me can you smell anything she's like it smells good in there that's new to do experience to do experience and then we created the the concept with her as i said i think we can build something so i brought back in joel the same guy who wrote on the other one and we sat there for three or four days and rode out the b ad and have the concept between us of we need to get a british girl we're gonna put her on a toilet we're gonna have all these j of positions where you've got this british girl this cute and she's sitting on toilet and she's talking about poop which is totally just out of blu filled right k can i ask you you go for three days and you come out with this incredible ad that transforms the trajectory of the business basically you make the brand the brand happens you know that was a fork in the road moment i think yeah the the director was going one way and then you shifted it yep and we all wanna do that i i've so many times have take the team we're gonna get away we're gonna figure this out we're gonna do we're gonna make some magic happen and sometimes you do it sometimes you don't but i'm always wing it when i go in there i i have no idea how i'm supposed to be doing this kind of three four day camp to find a breakthrough yep what do you do to to increase the odds of a breakthrough i'm assuming you know you pick the right people that's a big part of it but what what else what what do you do well i think getting up in a cabin and locking everybody in with the attorneys the business leaders the everybody who has to sign off every stakeholder is inside that room and they can't leave until we get a signed contract that says we can go put into production that helps because one is if they can be with the creative then the creative can pitch them and they know that they're on the same team because you're talking face to face you can go back and forth for months and ne to a script by email right or you could just get in a cabin for two or three days and come out with something everybody's happy with or excited about in the marketing world i learned very quickly when we were building the harmon and brothers ad agency that it's way easier to train a median to be a marketer than it is to train a marketer to be funny right and so we would build the structure of an ad and you have to have your problem your solution your your three elements and your credibility etcetera in your calls to action you have to have this formula which we lay out i think we laid it out pretty pretty well and poop to gold and then at the end of that process of getting the structure there then the comedian come in and they build out the humor and premise and so getting comedian is always like as a marketer i think if you if you wanna be a creative marketer comedian are critical to the infrastructure of a marketing company because they come out of left field they just have to have somebody who understands well enough the formula so an for example i would always tell comedian if your joke doesn't add to the message which is way harder to do and if it just comes out of left field you just have to kill it it either adds to the message or it doesn't work and so if you notice in squat potty poop purple mattress every joke brings you a little closer to understanding what that product is and why you want to use it and do you do you do you come in with a pretty solid idea or you just you start off with you know a bunch of sticky notes on the wall do you have a process that you learned how to kinda like facilitate the creative flow of a bunch of creative people yeah weeks weeks before the retreat we'll have three to four riders comedian that are trained we send them all the product and they get to use it and they get to play with it and then they show up to the retreat with their ideas they're they're rough scripts then each one of them on the first day where the first morning is basically doing a script read of what their vision is and then by the eve or the afternoon or evening of the first day you are picking the winner the bones of the ad out of those scripts and then for the next three days you're cannibal all the other scripts for their best elements and putting them into that lead script and then by the end you've got yourself an ad and do you think this is still the way you would do things now or was this kind of there was an era where these kind of funny scripted youtube ads of a certain length was a great way to sell product would you be doing that or would you be doing something completely different now we still do it to some extent if you go watch runner there's a campaign that i think got a hundred million views for angel runner has alan rich richardson owen wilson and we and our team built a campaign with comedian very similar process to harm and brothers where it's a couple this married couple to just keep coming back on angel and they're trying to figure out what to do for date night and they're driving in their minivan racing down the street to get to the movie and they got their kids at home at a babysitter center and they have their two movie tickets because angel model is if you're an angel member if you're a member of the angel guild there's through about three million members of the angel guild you're paying twenty bucks a month and you get two movie tickets to every movie the angel releases so your date nights covered almost every month right and so they're racing through the streets and there's like stuff blowing up around them because the wife's driving and and they're talking about the movie and the program and then they walk in to the movie and owen and wilson sitting in front of them this ad campaign i don't even think we made it at a public one it's just unlisted but i think it had a hundred million views somewhere around a hundred million views so so we still do that but then in support around that because these are totally different than nor brush brush we were just like five hundred dollars a day you hope to get a thousand and eventually built it up to millions and that over several year period we had a ten million dollar business when you're launching movies and theaters you're launching a ten million dollar business from scratch with a new movie every month and so these are ten to fifty million dollar businesses hundred million dollar businesses sometimes and and then you got a ninety day period where you launch and i mean the the hollywood world and the movie theater world is absolutely bonkers it's like taking an just think about this as an entrepreneur because your your your group is entrepreneurs yeah think about taking an and every single month launching a ten to fifty million dollar start up with with five to twenty million dollars in ads spend in ninety days and they're just running teams year round launching every four to six weeks that is the business that we're in now and it and it it's just bonkers but but those ad campaigns still work when we have something complex to share meaning the concept of two movie tickets to the angel system is it's it's somewhat more complex than just go watch this movie but then outside of that we're running like if you go to solo meal it came out in february of last year with kevin james it's a rom com to about twenty five million dollars in the box office solo meals set in in italy and there's a an art teacher named matt taylor and he teaches kids how to paint he teaches art and he gets engaged he's going to italy to get married and he's stood up at his wedding in italy and then it's just super funny how he's dealing with this because as kevin james kevin came up with this idea where he said why don't we just make matt taylor a person personality on instagram and tiktok and we're just i'm gonna be matt taylor i'm gonna go and i'm gonna teach art classes on i'm just gonna do instagram videos where you watch me paint something for a few minutes and then i'll talk in the background like a bob ross type character and he said what if we do that and i'll push the movie by being the character in real life first we said to kevin this is a great idea but it's gonna take an enormous amount of work can we have a team come live on long the island with you and that's all they do is produce this matt taylor character so we send out a team to long island and they're living with kevin essentially just cranking out social media posts and then we started warming up kevin james face so what a lot of people don't realize is what you type into a video is trying to give the algorithm some direction on where your video what me what your video is about but what really is matter what your video is about on social media these days is what images are in the video so right now if our video if our faces end up on social media it's going to recognize tiktok instagram youtube are gonna hash our faces is into the algorithm and say this face is now part of this video and if i have any other videos with my face it's gonna recognize me and say jeff harmon face jeff harmon face and then related videos it doesn't need to have my name in the video and so kevin went and warmed up his face by taking older things he had done and he was re repo them and doing some things to warm up kevin james his face so he was getting himself hot in the algorithm and and then he's trending and what we do is we took and said okay matt taylor launches fresh channel nothing on it but the tiktok algorithm and the instagram algorithm and the youtube algorithm recognized this is kevin james and this space is trending elsewhere on the system and so the moment we launched those they started going viral because people that were people who had been watching kevin james video started getting served matt taylor videos is this also somewhat of the mechanism for the tate and the streamers follicular and others where they pay these mass armies of clippers to chop up their live content so they're getting you know thousands and thousands of pieces of content they're paying like a million dollars a month to these kids to clip their videos and put them online are they kinda doing the same thing sort of warming up they're trying to warm up their faces yes and they're trying to find a viral clip you kinda like today one of the main strategies you can do is you're taking swings of bat for kevin james we probably cut thousands of videos to try to get a few of them to go off right right and so that's what that's what those guys are doing is they're just cutting they're just taking swings they're just taking tons of swings and doing everything they can to try to ride waves that already exist and if you if so for example if you go watch critical drinker you know critical drinker is he's a big youtube a review site so he is a scottish guy who always reviews movies and he sounds drunk and he just he's like i think he's the second biggest movie reviewer in the world but if you watch his reviews he is constantly showing little scenes and and businesses can't do this as much right but he's showing little scenes of all these different movies because he does movie reviews and he's basically hash all kinds of famous faces into his movie reviews so he's just clipping to all these famous movies and then getting served up in more places because he's hash his videos into the algorithm and so in the case with kevin kevin already is an a list celebrity he's huge gets millions of views so it's easy to hash our way into it and then it goes crazy and everybody picked it up everyone was saying is this art teacher kevin james or kevin james is do anchor is this really kevin and there's just arguments and i think that campaign got over a billion views and then at the end of the campaign on super bowl sunday which is the weekend before valentine's day he showed up at the super bowl and we bought twelve seats at the suit at the super bowl and we put kevin in the center of twelve empty seats and he was in a tu with his flowers in the exact costume he is in the movie his exact wardrobe and we didn't say anything but we did buy seats all over the super bowl area around him and put influential people around him that had instagram accounts and tiktok accounts and had them all posting is that kevin james what is going on yeah yes but the the concept here is is you take and you use the algorithm and this takes an enormous amount of creative juice it is not easy to have something break organically right and the funny thing about the super bowl is literally he got on the he got on the mega tron like he ended up on the mega tron and that campaign never talked about anything commercial is literally just kevin james with flowers and so people had to figure out what the heck it meant while it was getting hundreds of millions of views so a lot of times people at the podcast they'll reach out to me and they're wondering hey same sean how do you meet all these amazing entrepreneurs how do find all these stories well i have a hack you see i actually have a community called hampton it's a community for entrepreneurs doing at least three million revenue although we do on average something like twenty five million dollars in revenue we have the founders of door a fig of blue shoe all these amazing companies are part of hampton and what's interesting is because of the environment in hampton which frankly is very similar to my first million we have a very unique high trust environment when people applying and go through this vetting process they're putting groups of like eight or nine other entrepreneurs and they get real about everything that's going on in their life and in their business sorta of like when people listen to m they get inspired to come up with new solutions for business that's what happens in real life in hampton it's life changing and so if you're a founder of a startup up that is at least three million revenue and you just wanna go ahead and pull forward five or ten years worth of success then it out the url is join hampton dot com again the url join hampton dot com we should explain so angel you that the the short version of the story is you felt like there was a need for or desire you had a desire for a different type of content our content is the anti of nihilism nihilism is basically like you get to the end of game of thrones and everybody's a bad guy there are no redeeming characters everybody's bad even the one you thought was good she ends up just being about she just turns into hitler or whatever right and then and then you get to the end of almost any major hbo movie and at the end it's like oh there's no good people in this movie there's not a single good person it's all darkness it's all darkness that's nihilism nihilism is just there's no purpose to life everything's terrible it's all we're just gonna end in the cold heat death of the universe and there's nothing after that ours is values based values space is what disney used to be and a subset of that is the faith audience they're people who believe that want faith content that has faith in it and we do twice a year at easter and christmas we push faith content pretty hard okay then the rest of the year we're pushing just values based content western actually action movies like runner with alan rich richardson and and and owen wilson if you watch it it's packed full of action and explosions and everything but then when you actually think about you realize there's no sex in it there's no no strong language in it nobody ever commented on this like if you go read the reviews it's it's certified hot on rotten tomatoes ninety percent from the audience seventy six percent from critics not a single comment this says where did all the efforts go that used to be that are the i wish there was more more vulgar when it first came to us that movie we didn't make that movie it came to us it was our rated movie and then we said we'll take it if you can make it p thirteen and get it to pass what we call the angel guild so r three million members we actually don't call at the beginning you call them subscribers right don't call them subscribers we call them members because they participating and what they're doing is as a member of angel you get to vote on every movie that comes under angel that goes to theater so you get the chance if you want to you can go and you vote and if you veto if you if the audience veto a film we can't take it we can't send it to theaters we can't do anything so you get a vote on it you get two movie tickets to the movie so you're supporting filmmakers at every step you're supporting them in their rough cuts and giving them feedback and helping them improve them you're voting and turning them down if they're not working for the platform and you're showing up to the movies so you get a higher hit rate because you have you're not doing focus groups right these are people who are members of the community they're paying yep to be members of the community so presumably they're kind of like market participants more like a prediction market than it is a random you know a random poll on the internet yeah where people don't really have much skin in the game it's the user method at scale do you have a higher hit rate what's a normal hit rate for a studio and what's yours our average there there's one study that's it's almost a year old but we hit an average box office according to that study that's higher than any independent the multiples higher mh higher than a twenty fours is average higher than a twenty four has done really well this year so it'd be interesting to see if they catch us but basically every single independent angel hits the most theaters the most locations for theaters and the highest box offices of any independent studio and we're top ten in the us for the last three years we've been the top ten in the top ten studios is your business a batting average business or a slug percentage business meaning is it more important to just not have flops or are you really just looking like an investing for the one or two runaway successes i think we're a base hits business that gets home runs every once in a while so we had sound freedom was a home run to two hundred and fifty million dollars worldwide that was a fourteen million dollar movie can can you just explain the movie business i don't really know the movie so let's take one of these so you say fourteen million dollars that's what it cost all in that's the talent that's the production that's everything the right to the underlying content whatever includes marketing costs or doesn't include marketing costs no that doesn't include we spent forty million dollars marketing in that movie okay so you spend fourteen making it forty marketing it and then it generates you said two fifty and that's fifty million that's the box off and down that but but the theater takes how about assuming a big cut of that if you have a good distributor they'll take half if you don't have a good distributor they'll take more in our case we don't take part of the other half we take the bottom we only take profits so we split with the filmmaker the profits every other distributor is gonna take between twelve point five and thirty percent of the other half and do you and you but you send your member right so let's say a member's paying twenty bucks but you're sending them once a month to the movies so is that like do you is that what it cost you you know what i mean how does that business work i don't understand it's like movie where one thing is in a loss leader situation what's going on it's it's more like movie pass and that we rely on some breakage meaning the average person goes to three to four movies a year so we just assume our average member isn't gonna go to every single movie and so the balances out gotcha okay great and so you so you you you make that money now you said you don't fund all these movies you're not taking a bunch of balance sheet risk yeah this is something people don't understand about the movie business lions gate only acquire i think thirty five percent of their movie or they they only make thirty five percent of their movies and then most of their movies they acquire so every year there's a thousand movies around a thousand movies made by independent movie makers every single year most of those never find a home the vast majority like it's it's in an un crazy number but those are made mostly by very wealthy entrepreneurs i've never met a billionaire that doesn't wanna make movies and i know a lot of billionaires that they they they they don't they all wanna get in the movie business and this is i'm not a billionaire and i'm still trying to make a movie i wanna i think you're even under selling it from there yeah well we'll think about this so that that's where the thousand movies comes from is they they're they're very wealthy people that are just taking a swing they wanna leave a mark they wanna make a movie and they're not really as worried about making money on it at this point they just it's like art for them everybody has this in them they wanna tell stories everyone and so what the angel guild allows that you to do is join about three million other people who are all paying twelve to twenty bucks a month and make movies like billionaires do you're kind of like you've built this dislike almost kickstarter vertical mob right that's right people who who just like the idea of getting to have their say getting into to having an influence maybe getting to to put some money behind something that's right kind of like fantasy football but you're you're not doing what the billionaires are doing who actually own the teams but you're get to you get to play and and so far that that guild the angel guild those three million people have paid out three hundred million dollars to filmmakers that's like that's like their profit share basically even yeah the filmmakers get fifty percent of the profits of that guild and angel uses the other half to build up the guilt so what i didn't understand and maybe it's as simple as we're just spending a lot of money on marketing you guys are public you guys would did us back and i was looking at is like last year we lost fifty million bucks yeah you know minus fifty million in eb but you're not paying to produce these movies and then you have these members we're paying you you and you're just taking a profit here so it must just be a lot of member acquisition or where what are you spending all the money on or is it the marketing of the movies is that was marketing a big piece yeah yeah acquiring new members is not cheap is this a good business and what i mean by that is as i i that's a silly sounding question but here's what i mean you're an entrepreneur you've been in in the game i've been into the game for almost twenty years as an entrepreneur and i started all kinds of businesses and i could tell you like some of them are knife fights you know i would say d d brand felt more like a knife fights it's like terrible margins a restaurant felt very much worse on a knife fight i'm in the knife at i don't have a knife in the restaurant business and and then some businesses our beautiful businesses recurring revenue good margins once you figure one thing out you just keep you know kind of you get a a flywheel with that advantage how is the movie business the good story is and i won't i won't name the executive or where they worked but they they had retired and they had worked in both the las vegas area doing casinos you know the las vegas is kinda run by the mob and then they had worked in hollywood and when they retired they were asked do you miss it and they said my best friend in hollywood was worse than my worst enemy in las vegas it's a knife fight this is like i ask myself every single week do i really wanna be in this business i'm doing this because i mean we're doing this because our kids like we we want an alternative system for our kids we want our kids to be able to watch stuff that in instill our values and what we've the values we've had for generations that make society run we want those and instilled in our kids through good entertainment excellent entertainment i mean our strength is the fact that there are about three million other people right now joining them with us and saying let's do this let's just make this happen that is our strength and that's allowing us to just rewrite the rules and our job as a business is to fix what how what's broken in hollywood because hollywood hasn't been a good business it has a it's not that they don't have enough revenues they have plenty of right i mean there's more revenues coming into hollywood than ever and it historically has been america's biggest export is media as movies that's our number one export but this industry the hollywood industry has a cost problem not a revenue problem our job is just to do a better job on all fronts angel job is and i believe it will be an it is an excellent business and it's growing right now so while you're growing you're investing can you tell me what's going on like i guess again i'm a i'm a bit of an outsider i'm a business guy i'm a tech guy but i'm not so i'm not closely following hollywood but teach me a little bit about what's going on so what is a twenty four doing that you think is maybe smart or interesting or what their approach was why they seem to be having a different result i've seen also like thomas toll i feel like came into the industry as kind of an outsider and did some interesting things i guess tell me who you think has has done cool or interesting work get me inspired as get the business started me inspired into somebody who did something a twenty four is really interesting because they built a strong community you have the aaa membership where you can sign up and then they followed us and actually started giving tickets to people who are aaa members i think the most interesting group probably is crunchy role okay they're the anime yeah they have twenty million subscribers and they're just focused on their niche like we're focused on values audience they're focused on anime and which is a really really big niche like twenty million is a massive what is that in revenue a twenty month i don't know what the revenue is because i don't know what the membership cost is even if it's like you know what even if it's ten bucks a month they're about there they're i think it's kind of the top of the tier three streamers the crunchy role you have like mgm plus and you've got stars and you got these groups that are in the tier three tier four is like pure flick daily wire background of a world and then we've we've just recently moved into the tier three streamers and they have tier two which is your bigger streamers plus yeah and then you move in into tier one is netflix and disney plus and apple apple might still be on tier two but i think crunchy role super interesting i do know so i went i went on an interview with rick rubin the producer the music producer and i did a podcast with him really interesting podcast and he told me i've been watching this industry for a very very long time and he said i don't think i've honestly ever seen anything totally different until angel because so everybody else has some version of the previous stuff he's like you guys are different from top to bottom you're not doing anything the same i heard you have a a personal vibe coat is that right you have a you have a guy who just vibe for you is that true that's amazing that's it might be the item first scene i basically got to the point where i would vibe code products and then i would get stuck because i get pulled outside the meetings into fires and into different things as a an executive in the company right now but i love building out the prototypes of the products and i just asked i was like i need a person who just can take it from there and just go to the next step and then eventually once we get something like a little experiment that we've been thinking about to product market fit like an mvp minimum viable product then we we will turn it over to the product team right which can build something that will scale and get bigger i kinda think that every executive of a kind of medium to large companies should actually do this right like a i know it's it's normal to have an assistance chief of staff maybe you know maybe you have you know somebody that helps you out on the personal side but ai is so fast moving and can do so much but as the bottleneck is you it's not the technology your bandwidth your time your ability to keep the ball moving forward to to kind of work through any obstacles or keep playing with the latest and greatest i actually think that what you're doing having a personal kind of vibe code with you is the move i think that the that's absolutely i been computer helpful i've been able to get things prototype that i never would imagine tools because what i was doing before that is i was i would stay up late and i would get a plan made for claude build out a plan and then i tell claude like i get as far as i can and say run this all night and then we our team has built harness for every single person in the company so that so that there's a harness there's both a brand guide harness for angel that sits inside of our code systems so that you can take any any any model whether it's quad or gp or g or whatever and you hook it to the harness and then that harness goes through and does all the checks and make sure that you're not breaking the rules of the system and so what i do is i end up vibe coding until i break something and then the engineering team builds a new harness to fix what i broke but i at night i get to the end of the evening and i have plan and then i just launched the agents at that plan and just leave my computer running and then i find myself even like in the tesla just having self driving and then i'm over watching a code all while i'm driving because if i shut the laptop it will stop and so i have it hooked up to my hot spot on my phone and then i'm just like clicking continue continue while well that's the worst i set it up before i sleep i wake up ready to see it and it's like the very first thing is like could you allow a do you allow me to open a browser yeah so yeah exactly the browser what on that all night u so you just switch it on bypass everything the dangerous with it but the a couple things you learn is one is these are machines they're not humans like the the the the near of it feeling like a human wears off really quickly and you realize this is definitely a machine but number two is they kind of blow your mind all the time just to what they're capable of doing similar to any type of engineering feat you just go wow this is this is very impressive what's something you had it build that was cool i had it build a system where i can just test trailers and scenes of movies and run them like tour where you can just send out links to friends and family and ab b test like trailer a trailer b trailer c and if you send the link it will just randomly give them the trailer a different trailer and then you just gather data and then find out which ones are working oh that's pretty cool i like that yeah so that that's that's one that i think is interesting you can model out all of your your attrition rates and you can model out your lifetime values so much faster now just using ai as long as you have clean data i mean people say that they should be five that they firing people i don't i think they're just looking for excuses to fire people because economics work like this when you get something that's highly that makes everybody ten times more effective you're going to become so much more productive that you need more people you don't say i want less people that are ten times more effective you say i want more people that are ten times more effective right it's so stupid and you're all lying two numbers together why would you want want to be smaller the ones who are cutting off people if they're truly cutting it off because ai is is is coming into play though it's a short term play where you're just cutting costs like like you're you're almost like a company that's cutting costs right before an acquisition you're not building long term value the same way if you if your company is getting to a point where because of ai you need to hire more people that's when it's the right time to hire because this ai has made us so much more effective when we've broken down so many more walls that we need more people to service what we're doing and to build that's when it like that's what's gonna be happening all over i don't i don't believe for a second that we're gonna have a massive unemployment because of ai i just it doesn't make sense on an economics level if you were going back to talk to a room full of people like you so younger you what message would you be trying to get across well the first thing i'd say is like no matter what you do in the workplace nothing will compare with getting married and having kids and having kids sooner than you think you should and having more of them than you think you should mh like nothing in the professional workplace will even compare that's where my real success comes from is marriage and kids right and you can do both i think that that's critical i think that there's no idea that's so precious to good and huge fights over that an example would be where we added some really big campaigns at the agency where clients said i'm not paying you and you have all the success they owe you a significant amount of money and they don't wanna pay you for what you did and they and they're like threatening lot lawsuits and a amend mentor of mine steve os told me he said unless it's worth over five million dollars it's not even worth fighting the battle over because you're gonna end up fighting for eighteen months to three years you're gonna drain the life out of yourself and you may win probably win but then where did you get he's like but in that period of time somebody who's innovative is gonna make more value than that's worth mh and not just that it's just not a happy life right and so after listening to him i went back to my brother neil because we were thinking about whether or not we should sue for this this amount that was owed to us and it was significant to us because we didn't have any money and neil had been in the bible he flipped it open and it landed on the verse that says if a man sue you for your cloak give him your c also and so between my mentor saying that what he said and then my brother seeing that i was like okay let's just let it go and letting that go change the trajectory of my life just letting go what was worth probably a couple million a few million dollars letting that go and just going after new ideas and having an abundance mentality allowed me to focus on the things that that helped us build a big ad agency if you're the golden and goose you're gonna lay more eggs and you can be and so you just keep pushing and don't don't take the idea that oh this will be my only thing as soon as you switch gears and say there will be more things you're gonna get more things and you're gonna have more opportunities and you'll break through i love that jeff thank you for coming on thank you for sharing the wisdom thank you for sharing the stories i appreciate you yeah thank you i feel like i could rude where i know i could be what i want to from at all in it like a days off on a goal travel never looking back alright let's take a quick break i wanna tell you about marketing school it is a podcast that's part of the hubspot podcast network and it is run by neil patel and eric sue and these guys are both marketers who are running businesses and so if you want real world tactics from practitioners who are actually out there in the field doing it this is the podcast for you check it out wherever you get your podcast