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

Shaan Puri (@ShaanVP) and Sam Parr (@TheSamParr) discuss: - Who is Reed Duchscher - How does managing a YouTuber work - Who is MrBeast and how he got so big - Creating empires with celebrities and influencers - What is a "Personal Media Company" - How much did MrBeast Burgers make? - What're the biggest opportunities in management right now? - Why you get into the management business (the access) - What should MrBeast be doing right nowInfluencers in unorthodox spaces - Influencers ran banks - Faceless creators are booming - Shaan thinks Influencers should get into the sleep business Thank you to our sponsor this episode, Flatfile! Spend less time on Excel and more time building your business by easily importing data using Flatfile. Check them out at flatfile.io/hustle. Have you joined our private FB group yet? It's a page where people share each others million dollar ideas or what they're already working on: https://www.facebook.com/groups/ourfirstmillion. Editing thanks to Jonathan Gallegos (@jjonthan) See acast.com/privacy for privacy and opt-out information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:23Shaan Puri?

  What's up everybody, we got a special guest in the house. Reed Duckshur and Reed, this room is baller. Is this your office or is this your bedroom?

• 0:31Speaker 01

  Yeah, this is our office in Dallas, Texas. I wish this was my bedroom. Maybe I need to rethink what my bedroom looks like and add a bunch of toys and stuff.

• 0:38Shaan Puri?

  And I see you got the painting on the wall. I feel like I get retargeted for that ad constantly for that painting. If I see it right, I don't know, it's a little bit blurry. You got the fancy blurry camera, so I'm not sure if I'm seeing it right.

• 0:48Speaker 01

  Yeah, it's the Ari Golds. I've had this thing for like seven years. It's when Ari Gold like bought, this is from Entourage for people that don't know, it's an HBO series. When he went in and he bought like a rival agency and he went in with a paintball gun and basically fired people. It's like an iconic episode.

• 1:04Shaan Puri?

  He goes Lloyd!

• 1:05Speaker 01

  Yeah.

• 1:05Shaan Puri?

  I will find you!

• 1:09Shaan Puri?

  Dude, that was a pretty good Ari impression. I like that.

• 1:12Sam Parr?

  I too grew up watching that. Ari was one of my heroes for a while as well.

• 1:16Speaker 01

  Yeah, it was weird. Like, I loved the show and I thought everything they did with the show was so fascinating, but I was always 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.

• 1:32Shaan Puri?

  I'm glad you said not him specifically because he was boring as fuck.

• 1:35Speaker 01

  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 his manager, you're kind of 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.

• 2:02Shaan Puri?

  And so that's a pretty good segue. So why don't you tell people what you do?

• 2:05Speaker 01

  Yeah, so I run a company called Night Media. I formed it in 2015, was an 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 it within a sports agency and I met a YouTube group named Dude Perfect in 2015. And that really started my, my career as a digital talent manager. And now fast forward to where we are in 2021, we currently manage people like Mr. Beast, uh, who I'm sure if you're logged into YouTube, you probably see his videos on trending and we work with ZHC and a few others. And what we specialize in is we say gaming, lifestyle, technology and entertainment is really where we like to focus at Night Media.

• 2:44Sam Parr?

  So how does the economics of that work? I mean, do you have employees or as a manager, just you're a one man show? What's that look like?

• 2:50Speaker 01

  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 think about talent management a little differently than most people do. And I think about it in 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, uh, more of like an incubation studio for owned and operated companies like Mr. Beast 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.

• 3:34Speaker 01

  And so to me, that's kind of like the three pillars that like a new age talent management firm or digital talent management firm should have.

• 3:40Sam Parr?

  And are you used to invest? Are you using your own cash flows or are you using your clients' money?

• 3:45Speaker 01

  A little bit of both. It started out as like us investing off the balance sheet of like, yeah, we think this company's cool. We think this studio is awesome. We'd, uh, pull some clients in. We, the most recent one we did or announced was Backbone. We did it 18 months ago. For those of you 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, uh, Mr. Beast invested personally, pressed in, like a bunch of our clients invested personally. And it's just kind of got us thinking of like, okay, maybe we should actually operationalize this and, and have LPs come into a specific fund within Night Media. And so that's now how we operate it.

• 4:16Sam Parr?

  Are you the sole owner of this business?

• 4:18Speaker 01

  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 quite a ride. I was the sole owner up until 2018.

• 4:29Shaan Puri?

  When you're a football agent and you sound like you have 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 Perfect. You like Dude Perfect?

• 4:41Speaker 01

  I love Dude Perfect. Of course, I know what they are.

• 4:43Shaan Puri?

  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 the guy's names are, but Dude Perfect dudes on YouTube. I'm gonna like take this leap of faith. What was the like, kind of reaction? Were people like, oh, yeah, that makes sense? Or was it like, what the hell are you thinking?

• 5:00Speaker 01

  Uh, 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 know, I'd watched Jerry Maguire probably thirty seven times as a kid growing up. And, you know, 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, yo, 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 was just,

• 5:43Speaker 01

  it was all so new in 2015. And it seems weird to say that because YouTube was founded in two thousand seven, or two thousand nine, some of the two. Also, there's a lot of YouTubers at that time that were actually doing incredibly well. It just wasn't known. And so in 2015, when I made that jump to start working with Dude Perfect, like, people just thought I lost my mind.

• 6:00Sam Parr?

  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 about 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 it make money?

• 6:16Shaan Puri?

  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 I've seen from the outside. And you say, yeah, you kind of 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 going to do as your manager. I'm going to 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 want to give you a bunch of money to do this shout out.

• 7:00Shaan Puri?

  Okay. They act as kind of the agency where they're like, all right, pick a number out of thin air type of thing. I get 10% because I'm your manager. So like, I think a cut is like 10%, 15%, 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 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 Mr. Beast Burger and you get a bunch of other stuff. But let's just talk the typical and not your case, because I just wanted to explain to people the typical talent manager first. Was that right or wrong?

• 7:35Speaker 01

  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's really like, you know, someone starts going, you know, from say a thousand views to 100K 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? Cause 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 undersaturated. 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.

• 8:19Speaker 01

  There's 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 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 ad or like a dollar. Our Shave Club ad. You saw some of that with Mr. Beast Burger. We'll announce a few more products coming up mid this year with a few other creators that we think fit.

• 9:03Speaker 01

  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 Viacom would build? Or like, if we were to think about SpongeBob, what are SpongeBob's other like tentacles as an IP and where are 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?

• 9:41Speaker 01

  Those are like all things that kind of 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 actresses 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.

• 10:05Sam Parr?

  And then how many clients do you have?

• 10:06Speaker 01

  Currently, I believe we have seventeen.

• 10:08Sam Parr?

  And do they pay you a flat fee? I mean, because you're describing so many different things, how do you track what fee is yours and what isn't? I imagine you just get some type of percentage. If, let's say, Dollar Shave Club comes to you and you say, all right, well, these four people might fit for you. Hey, four people, you guys want to do this? All right, 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?

• 10:34Speaker 01

  Yeah, it's, I mean, we've operationalized 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 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 this, 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 Knight Media is built right now. And yeah, the managers, like, same with the agents, they they receive a percentage of income.

• 11:00Shaan Puri?

  One question real quick. So our audience may not know Mr. Beast in the same way that like, kind of the general population knows Mr. Beast because he's pretty popular. But the TLDR, I would say is he

• 11:12Shaan Puri?

  He got famous by giving away stuff and kind of filming the reaction. He would do these stunts where he'd be like, oh, I'd go to a restaurant and I'll leave a $4,000 tip on a $9 like bill. And then he would film the reaction of the person kind of from afar, like secret camera type of thing. And those videos were awesome to watch. And then he would do things like, you know, he'd 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 dumbing it down too much?

• 11:44Speaker 01

  Yeah, you hit on some of our most popular videos. I think what Jimmy focuses on is like virality is how do I get as many people to click on this video as possible on YouTube? And thus like YouTube works in two senses. It's like get high click through rate, get high average iteration, video does well. And so those are the things he's focused on 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, let's go like do the survivor series to give it away. Those are the things that we're trying to figure out.

• 12:16Shaan Puri?

  Early on, before he's Mr. Beast with 50 million subscribers or whatever, how did he bootstrap this? So, you know, where did the $1,000 tip come from? And how did he jump from the $1,000 tip to the $10,000 to the $50,000? So I know he had like, I forgot, Quid or whatever, whatever it was that 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?

• 12:39Speaker 01

  Yeah, so I met him around, I think he had like 1.9 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 It's Everyday Bro for 24 hours, et cetera. 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 want to give like $10,000 to a homeless person. And the conversation was basically like, give us $10,000, we're going to give it all away. The video's going to do well and then the ad sense is just all upside for me. And so that's really how the company was bootstrapped in the beginning is like, we're making all this sponsorship money. We're giving it all away to create bigger and bigger videos.

• 13:24Speaker 01

  And then the next video was Honey. After a few Quid videos and such, like Honey came in and they gave us money to donate to Ninja's Twitch stream. So Ninja was doing a St. Jude's Twitch stream and this was right as Ninja was like taking off. And he did this St. Jude's stream on Twitch and we filmed a video around donating, I think it was $40,000 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 videos just now have gotten to the point where we're giving away an island.

• 13:58Sam Parr?

  Sean, have you heard of Ithaca Holdings? It's Scooter Braun's thing?

• 14:01Shaan Puri?

  I know about Scooter Braun. I never heard that name though, Ithaca.

• 14:03Sam Parr?

  It's pretty interesting. Basically, the crux of it is 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?

• 14:11Speaker 01

  Oh, how he built Ithaca? Yeah. I think, you know, Knight 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 with Justin Bieber and Ariana Grande and, and we're just kind of playing it in the digital creator landscape.

• 14:27Sam Parr?

  So basically Sean, he, um, I don't, I mean, I only read, read articles about it, but it's Ithaca Holdings was like the holding company for the agency that Justin Bieber, I guess was the cash cow, but then he got Ariana Grande. Then eventually he started making some Lyft and Uber investments. Then eventually he raised some money from Carlyle and he bought Taylor Swift's catalog. It's like a miniature conglomerate, which is exactly what it sounds like Rejord trying to do. And it's, and it sounds fun.

• 14:54Shaan Puri?

  Same model Troy Carter did with Lady Gaga and then.

• 14:58Speaker 01

  Yeah, Adam Factory.

• 14:59Shaan Puri?

  Adam Factory, exactly.

• 15:00Speaker 01

  Yep. I, I've, I know about all these. I've taken a lot of inspiration from each one and I just thought it was, it was a matter of time before someone built this around the creator community.

• 15:08Sam Parr?

  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?

• 15:14Speaker 01

  Yeah, completely different from day to day.

• 15:16Sam Parr?

  But what is like the cash cow? What's like the one stream that keeps us all alive? Just the boring, normal management?

• 15:22Speaker 01

  Yeah. And it's the same with Ithaca. 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 kind of 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.

• 15:48Shaan Puri?

  Well, if you need help raising your rolling fund, I got you. I feel like this is the new model. I was looking at this for, I forgot, I was talking to somebody who, Bology, he has this phrase that he calls his personal media companies, PMCs, and he's like, PMCs are going to replace or, you know, just sort of swarm traditional media companies because you can have the Joe Rogans, and you can have the Tim Ferriss's, and you can have the Mr. Beast's, 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,

• 16:33Shaan Puri?

  I can get into investments that other people can't get into because I have this unique media front that a traditional, 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 kind of like Lady Gaga's check, and, you know, these other three people. So he's going to get into all those deals, all the VCs want to be his buddy, because that's their way to be like, oh yeah, I know Lady Gaga's manager. So he's going to 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 how the old wave, like, didn't monetize it fully, right? I'll give you an example. Tim Ferriss, he's a buddy of yours, Sam, right? And he was like, big

• 17:17Shaan Puri?

  Bree Twitter, right? Like, so he didn't, he built this 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 going to translate this into money is basically like, books. And he wrote a bunch of books, and he sold a bunch of books, but 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 moneymaker, and books became like the footnote. And then, because he was Tim Ferriss, 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 10 of the things that the guys who are doing it now do. Like, he did no courses. Like, imagine if he had done the four hour work week course, how much, you would have been making millions and millions of dollars, way more than he

• 18:01Shaan Puri?

  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 a few angel investments, and that was kind of it. I just feel like there's a lot more and guys like Reed and Mr. Beast are kind of like showing what the fully evolved business looks like for a personal media company.

• 18:18Speaker 01

  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 kind of how we think about it. And virtual dining is a new one for us, like launching Mr. Beast Burger. It's like, we really didn't know how it was going to go. Like, there's still some unknowns, but I mean, just the sheer volume of sales and just how many people have loved the brand 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, yo, what's your virtual dining? Like, what are you doing for virtual dining? Well, we'll see.

• 18:53Sam Parr?

  Can you reveal what the sales were?

• 18:55Speaker 01

  We'll probably come out with the full sales numbers at the end of 2021, just to let people know.

• 18:59Shaan Puri?

  Here's what I want to know. I put out a Twitter thread 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, not 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 300 cities overnight, you know, surprise, surprise. And cool, a bunch of people who go and they order because they want to 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, uh, you know, six months from now, am I really going to open up the app and order Mr. Beast Burger? Or am I going to order like McDonald's or this, you know, some established thing that like I know about? I've been eating for years and like, have you guys seen the sales dip basically after that first week of hype?

• 19:40Sam Parr?

  Look at his smile. He's got a kind of a shit eating grin right now.

• 19:44Shaan Puri?

  He won't tell me that the sales have crashed, but I'm trying to ask him if the sales crashed after that.

• 19:48Speaker 01

  Just go on Twitter. I mean, 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 is 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 of 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 going to be.

• 20:31Sam Parr?

  What's that goal?

• 20:32Speaker 01

  We want to be around 2,500, 2,000 to 2,500 virtual locations. We want to have a few interesting brick and mortar locations. I mean, for us, it's like, are we going to be able to compete with five guys? Right? That's kind of like where we're looking at right now.

• 20:46Shaan Puri?

  Yeah, he said he wants to own In-N-Out when this is all said and done. That's what he's, that's what he's trying to say.

• 20:51Speaker 01

  Ooh, I like In-N-Out too much to want to own that business. They just need to keep doing what they're doing.

• 20:55Sam Parr?

  You said earlier that in 2015, you left sports to do this and people were kind of laughing at you and being like, what are you crazy? What is around 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?

• 21:14Speaker 01

  I sent out a tweet yesterday about this, and I think this is something to keep an eye on as the NCAA actually lets student athletes, and I was a student athlete, and we couldn't make money off our likeness because of amateurism. And the NAIA has now lifted that. And we've seen student athletes in the NAIA start posting on TikTok, start making money off YouTube. I think it's just a matter of time before the floodgates open and like call it like Division One college football players that like Florida State are going to 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 going to have like these girls that play like basketball or volleyball or whatever.

• 21:57Speaker 01

  Now they have an OnlyFans and they have a TikTok and there's like, I think the interesting thing to look out for in the next two to three years is this becomes, and I don't know where the NCAA is at with it. I do know that like athletes, student athletes are going to start taking advantage of this image and likeness situation. And they're going to start benefiting, finally benefiting off it. And I think it's going to be a lot of content houses. I think it's going to be a lot of like.

• 22:20Sam Parr?

  Well, it's like they're already living together.

• 22:21Speaker 01

  I lived with five football players and it probably wouldn't have been great content. At least like it would probably have been more Nelk 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 going to become so big. The question's going to 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 going to be the interesting stuff that we're going to see in the next few years. It's like football or content creation or basketball or content creation.

• 22:53Shaan Puri?

  I had a friend who's a VC, basically like scheduled 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 going to inevitably roll into other states. This was pre-COVID, so it was like, at this time, it seemed like sports were going to keep happening in a normal way. And he's like, somebody's going to have to build. So this is on the software side. So I think what you're talking about is like, from an athlete's perspective, making a content house. From a maybe talent management perspective, this is where you could jump in early on a stock that's going to 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.

• 23:37Shaan Puri?

  So basically building the software stack that's going to 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 is going to happen because there are going to be rules where you're going to have to report. You know, the local car dealer paid you X dollars to do this thing. That's how they're going to avoid like kind of bribery to come to the school. You're going to 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 a pretty interesting idea.

• 24:09Speaker 01

  Do you think that, I mean, say someone has a Patreon, right? And they're playing college basketball. Do you think they're going to have to report those Patreon numbers and subscribers to the administration?

• 24:19Shaan Puri?

  Yeah, they're going to have to figure it out. There's going to be a bunch of like, it's sort of like with sports betting. It's like, wait, how do you make the players not just throw, you know, a random preseason game because of whatever? And so I think that there's going to have to be kind of like a, a very clear set of rules that you're probably going to 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 going to be able to control it.

• 24:45Sam Parr?

  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, they all want to start different types of agencies. And then a lot of people who have agencies. They say, oh shit, I freaking hate agencies. I hate client services. And then also like on the software side, they're like, oh my gosh, this is 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 type of side because like, are you wishing that you had more recurring revenue? Or do you like the setup that you have? I mean, I want to know like what your sentiment is towards the agency business.

• 25:27Speaker 01

  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. With Jimmy, like, I think if you're, I mean, Gary Vee's talks about this a lot, too, is like, VaynerMedia is a service business. He's like, I wouldn't tell anyone to build this business, like of service, like 250 employees, like break even business. He's like, the reason I built Vayner 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.

• 26:08Speaker 01

  I wouldn't want to 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 his, one of his mentors put a million dollars into Team Trees. It's like that kind of stuff is like, why you want to be in this business, right? Like, if you're just building an agency and seeing it as a service business, like you just need to understand it's going to be a grind and weeks are going to 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 great, but when you have enough money to pay your bills and, and everything's fine, like, it's all about enjoying life, right? Enjoying what you do for a living. And so that's kind of how I look at it.

• 26:53Speaker 01

  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.

• 27:00Sam Parr?

  What's been the greatest, the greatest perk and the greatest thing that has ever happened? One, one time, like, here's a small one. One time Lance 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?

• 27:14Speaker 01

  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 want to 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 want to play with typical gamer. They want to like be on Mr. Beast's YouTube channel. So it all kind of 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 been one of the most rewarding things. It's like seeing it kind of come back around where people are calling me crazy for leaving that job in traditional sports.

• 27:59Speaker 01

  To now seeing a lot of what people are doing in traditional sports kind of come over into this digital media sector and all these athletes wanting to play video games with our clients.

• 28:08Shaan Puri?

  You said you listened to a few episodes of the pod and you came with a few Zany 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. Cause for us, it's cool because we're just nerd now want to 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 would be, I think we should shift into ideas and see here 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 riff off those if you have any handy.

• 28:41Speaker 01

  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 consumer products. And so you guys have probably seen a lot of consumer products with different creators. And it's a good thing. I wanted to 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 first, second month, gone tomorrow. Right? And so it's one thing I kind of want to 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?

• 29:21Shaan Puri?

  I got two ideas there. So, and by the way, Sam, what was the name of the rap snacks? Uh, we, we had a funny ass episode.

• 29:27Sam Parr?

  Ree, do you know rap snacks?

• 29:28Speaker 01

  I haven't. Now I need to look rap snacks.

• 29:30Shaan Puri?

  Sam, tell them about rap snacks. It's hilarious.

• 29:32Sam Parr?

  I think Little Romeo came out with it. It's like Little Romeo flavored Cheetos, or it's Soulja Boy Crisp, or Master P this, or Flavor Flavus.

• 29:42Shaan Puri?

  They just took all the famous chips, like a Cheeto, a Dorito, a whatever. And they just re, you know, have their, their, their rebranded version of it. Uh, and then they have like, you know, Cardi B, whatever. I don't know who they actually have, but they kind of have all the stars.

• 29:54Sam Parr?

  Yeah, like the Cardi B one's the best. It's like a, a Cardi B red hot cheddar potato chip.

• 29:59Shaan Puri?

  And so Sam's like this funny, kind of like country ghetto kid somehow. And so he like, in somehow in, in Missouri was eating rap snacks or something like that. So I thought this was this 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, um, 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 10 million a year in revenue. Growth has kind of slowed. They kind of don't know where to go. The operator has been doing this for five to seven years and they're kind of tired.

• 30:43Shaan Puri?

  And they've done all the hard work of like, the product is now like made and has had like 10 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 is this guy, 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 shatters that when he's like, what are you talking about? There's just like tons of, if you're a good operator or 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.

• 31:25Shaan Puri?

  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 business model that everybody's used to, which is just like, kind of 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 buy like, we've joked about Tootsie Roll, but like, I don't know, like Red Hot's candy. I'd go buy some old candy brand. So I would go get private equity money. I'd, I'd buy a candy brand. I would own, you know, 60, 70% of it. Let the investors put up the money on the other 30%. And then I would go get, you know, a great operator from another candy brand and be like, you're going to run this, but now we're the distribution.

• 32:08Shaan Puri?

  We are going to basically refresh this brand and bring it to the mainstream, make it, bring it mainstream again. And we're going to 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 amongst the, amongst consumers. And so I would say that would be my first change is I would just go be taking majority stakes in brands, maybe even old brands that have kind of lost their luster and rebranding them, kind of with the, with the fame that creators have.

• 32:47Sam Parr?

  Where's that land with you, Reid?

• 32:49Speaker 01

  What is it? Yeah. I mean, trust me, we've 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'd you say? Tootsie Roll was, was the one you gave?

• 33:03Shaan Puri?

  Yeah, Tootsie Roll or Red Hot's, you know, like, what is it?

• 33:05Sam Parr?

  Tootsie Roll is interesting. It's family owned and the CEO is like 98, this 98 year old woman.

• 33:10Shaan Puri?

  She died. Remember when we looked it up, she actually is.

• 33:12Sam Parr?

  Oh, yeah. Did she just die?

• 33:13Shaan Puri?

  But the other one was Warheads, like go buy Warheads or like, you know,

• 33:17Sam Parr?

  Or Pong.

• 33:17Shaan Puri?

  Pong, yeah, Pogs or, you know, like whatever, like go buy some brand that like. Has that nostalgia factor for some people and will get new, get a bunch of earned media for doing it. But you're going to be able to get it for pennies on the dollar because it's kind of lost its way. And leverage your distribution and leverage your fame to like bring it back to the mainstream.

• 33:34Speaker 01

  Yeah, it's frustrating to us that 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 50 years. Uh, we've spoken to 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, uh, there's a massive win. And so it's like, someone needs to come into this space and understand that. And I just haven't seen it from the candy companies yet.

• 34:10Shaan Puri?

  So here's the other thing I would do. So, uh, and I'm just thinking of this off the top of my head. So feel free to be like, yeah, that's a dipshit 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? Uh, 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 10 of the largest YouTube creators in the world. And, uh, we create, you know, our own fund that way.

• 34:55Shaan Puri?

  Another is like, we create our own version of Robin Hood 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 a Gen Z and millennial person who wants to invest their money or acorns or whatever, right? So I would try to figure out who's got the money and then how do we be them? I thought about this for, um, 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 and 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 1% of creators are getting X percent of the audience. I won't give the exact percent, but it's like a very significant percentage of the audience.

• 35:40Shaan Puri?

  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 broken to 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, 100X what even the top creator makes. This is kind of like a union thing, but like if the creators actually were able to get together and they were actually able to spin off 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 kind of did 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.

• 36:25Shaan Puri?

  And it's a smaller number than you'd think. It's enough people that you can get together in one room, one hotel ballroom, and kind of walk everybody through how this would work if we 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 repeat purchase, right? And I would just try to figure out how to go own the companies that do those.

• 36:52Sam Parr?

  One good example is, Reid, have you seen, do you know who Doug DeMoro is?

• 36:57Shaan Puri?

  I don't.

• 36:57Sam Parr?

  A YouTuber, he's got 2 million subs, maybe. He's like legitimately a nerd and they make fun of him for it 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 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 what I'm talking about?

• 37:20Shaan Puri?

  Yeah, I'm looking at it right now. A marketplace for cars is a very valuable business if it works, right?

• 37:24Sam Parr?

  If it works, yeah. And I forget what the category is called, but I know how to describe it. It's like cool cars that car enthusiasts love from the 80s, 90s and recent. Like some people love station wagons or a Woody Jeep or something like that. It's sick and I've seen the traffic grow like crazy.

• 37:39Shaan Puri?

  Here's two other examples that are in that vein. So you have a bunch of like kind of toys slash collectibles slash cool novelty items behind you right now. There is a race in the tech world to build the platform that's going to be like, kind of take the the the collectibles part of eBay and like unbundle it, like just do it as a focused app. Sort of the way that StockX and GOAT 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, uh, I think you would want to be in that business because I think the audience 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.

• 38:24Shaan Puri?

  You're owning 1% or less of the company. 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 is you don't have infinite time.

• 38:43Speaker 01

  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 a like the banking neo bank like chimes of the world. We've seen like what a bank is valued at with like one to 2 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 18, like a little bit higher spending power, it becomes incredibly valuable to those banks. It's also 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 kind of past failure. They're going to work. It's just what are they going to exit for?

• 39:26Speaker 01

  Do you bet on one that's like probably raised 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?

• 39:42Sam Parr?

  We got pitched something like that, Sean, didn't we? Like a creator's credit card?

• 39:45Shaan Puri?

  Yeah, there's a creator credit card version of this, but the bank one, he's right, is better. Banks, you're absolutely right. There was one I saw recently, had about 2 million accounts with deposits in it. And I think they were selling. I think the deal's gone through, so I can probably talk about it now, but it was selling for basically like eight to 10 million dollars.

• 40:02Sam Parr?

  Wait, eight to 10 billion or million?

• 40:05Shaan Puri?

  Million. That's low because that's the fire sale.

• 40:07Sam Parr?

  Wait, wait, wait, wait, wait. You said a bank with a million users sold for eight million dollars?

• 40:11Shaan Puri?

  Exactly, because 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 sorry, their, their B round of investment. They built all the technology and they had a million accounts, but they weren't going to get to like five million, 10 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,

• 40:35Sam Parr?

  Which bank is this?

• 40:36Shaan Puri?

  I can't say the name, but basically I'd never actually heard of them before this. And it's like, oh, this is a challenger bank in the US? Like, I'd never heard of this even. When they were trying to pitch their price, they were 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 going to 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 in ads to get one customer and then I'm, I have their savings account, which is not that lucrative. You have to then build all these other financial services on top.

• 41:21Shaan Puri?

  And so if you had a way to get a bunch of free distribution, which businesses could you go buy that are kind of stuck somewhere? That would be, I think, a really interesting exercise. Unfortunately, what gets you here 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 go operate them. And so that's the big challenge is can you do both?

• 41:53Speaker 01

  Yeah, and finding the the team or the hiring the management team to then go operate that business that you bought, right? That's kind of like a

• 42:00Sam Parr?

  How are you guys doing that? How are you finding your people for this most recent the burger thing and your other? How are you finding your managers?

• 42:08Speaker 01

  Yeah, so each of them is a little different. So for the burger situation, we partnered with Earl 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 back office operations that understands this world. In other situations, we actually have a team internally that's just interviewing potential executives like it depends on the business that we're launching. And Ezra, our president Ezra Cooperstein does a lot of that like vetting. He was the he founded Maker Studios and then he was one of the or co founded Maker Studios and co founded Full Screen. So he's been in the space quite a while. And so he he helps us do a lot of the vetting of who we're hiring, but it's a challenge.

• 42:50Speaker 01

  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 always going to have to like, give a percentage of equity 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 does become challenging when you kind of pivot from just being a management company to getting into some of these other businesses. But that's also what's exciting is we kind of get to play in all these spaces. But yeah, 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

• 43:34Speaker 01

  valuations with a couple million users. And so for us, it's like, where are we making that bet? Like, who are we going to bet on that we think is? And 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 a large amount of equity, we have to make sure that we swing and we hit the ball. Like, the last thing you want to 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's the play? Small equity, investing, owned and operated. It's the question I have to ask every day.

• 44:15Sam Parr?

  What are some, a few answers to that or other ideas that interest you?

• 44:19Speaker 01

  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 faceless creators now have become so prominent on YouTube and Twitch. And it started with like these 2D avatars. So I think Corpse is a good example of someone that's done really well.

• 44:38Sam Parr?

  What's that? I don't know what that is.

• 44:39Speaker 01

  Corpse is a creator, but he doesn't show his face. Like, what I mean by faceless creator is like, he's a YouTube creator, he has a channel, but he never shows his true identity. It's just a voice, right?

• 44:52Sam Parr?

  That sounds like the greatest thing ever.

• 44:53Speaker 01

  Right, and it is.

• 44:54Sam Parr?

  For him.

• 44:55Speaker 01

  You know, for him, for Dream is another one. He's one of the biggest, he's the biggest Minecraft YouTuber currently. He had a climb from zero to 10 million subscribers in under a year, and nobody knows who this kid is. It's a complete like gas and mystery. It's like what Marshmello was for music and like, nobody really knowing who he was. Now we've seen this kind of transition into the gaming space with all these faceless creators that film videos. And another good example is Technoblade is a YouTuber that also plays Minecraft, and he had like 175,000 concurrent viewers a couple of days ago. And there's no face cam. It's just him playing the game, talking, right? Nobody knows what he looks like. And so for us, like, we've been doing a lot of research on like this faceless creator ecosystem. And like, if

• 45:40Speaker 01

  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? And it's like, you do something bad when you're 12, it comes back to bite you when you're 20. If you're a faceless 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 kind of start over? Wait, that was the, that was the controversy is that he'll use like a cheat code? Uh, no, no, not a cheat code. So he basically beat the speedrun record in Minecraft. And people put out videos that he allegedly cheated to beat that speedrun.

• 46:25Speaker 01

  And it became this whole big thing and it's still ongoing. But when there's no person associated with it, 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.

• 46:36Shaan Puri?

  What do you think of like even one step further, the virtual influencers like Lil Mikayla and stuff like that? Where it's not even faceless, it's like a CGI, it's like a, you know, it's a virtual influencer.

• 46:47Speaker 01

  I think it depends on what the strategy is. I think with her, it's, it's really hard to turn that into a bigger business. Like, how are you actually going to 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, 10, 20, 30 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've figured it out with Lil Mikayla 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 livestream strategy?

• 47:27Shaan Puri?

  Interesting. Why is that? That's because Instagram doesn't monetize as well. If you're just posting photos, it's just you're limited in some way or what? The fans don't love you in the same way or what, what happens?

• 47:35Speaker 01

  Yeah, I mean, it really doesn't monetize at all unless you sell direct sponsorships to certain posts. And even then, the Instagram market is so oversaturated that to get a sponsorship deal on Instagram is a lot more difficult with a million followers than it was a couple of years ago. Now a million followers on Instagram is like, okay, that's like cool. But like all these people have 10 million now.

• 47:54Shaan Puri?

  That's cute.

• 47:55Speaker 01

  And engagements are much higher, right?

• 47:56Shaan Puri?

  That's crazy.

• 47:57Speaker 01

  And it's also like the argument to YouTube creators, but I feel like at least from my, from where I sit, all brands have started spending considerably 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 description. And Instagram just doesn't offer that yet.

• 48:19Shaan Puri?

  Oh, by the way, I have the simplest business idea for you. You're welcome. This is going to be at least $10 million a year in your bank account. I'll send you some paperwork.

• 48:28Sam Parr?

  Is this a sporting recruiting thing?

• 48:30Shaan Puri?

  No, I'll send you some paperwork to get my cut.

• 48:33Speaker 01

  I can't, I can't get involved in the sporting world or the recruiting sports kids world.

• 48:36Shaan Puri?

  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 the habit of every night before you go to sleep, you basically listen to 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 going to struggle to acquire users. And I think this is somewhere where if an influential person said, hey,

• 49:18Shaan Puri?

  dude, sleep is super important for all of us. And like, when I have a good night's sleep, I'm less anxious the next day. And I just feel better, have more energy. This is what I use. And you could even do some fun, kind of viral, like Mr. Beast 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 send you five that are good and you guys could print money with this one.

• 49:43Speaker 01

  I'm all about it. I use Calm almost every morning. So to meditate.

• 49:46Sam Parr?

  I like Brain FM. That would be one of my categories for Mr. Beast. Brain FM, they're quite small. It's only two guys. They create music so you can focus and then music to sleep. I like Sam Harris is a good example of someone who's done this well.

• 50:00Shaan Puri?

  Really easy, really easy category to go into broadly applicable to everybody, super easy to monetize. And the bottleneck is distribution. So I think that's the, that's the hallmark of what you want.

• 50:10Speaker 01

  I'm into it. Jimmy's going to hear this podcast and be like, where are we at with that project?

• 50:14Sam Parr?

  It's a good one, man. I bet you Sam Harris's waking up app does 12 million a year in recurring revenue. That's what I would bet.

• 50:20Speaker 01

  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 2. 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 Creator Games was rock, paper, scissors? Like, how do we make a, the biggest rock, paper, scissors tournament of all time through a mobile phone?

• 50:46Shaan Puri?

  All right, here, here's another easy one. Have you ever heard of Ketchup Games?

• 50:49Speaker 01

  Ketchup game? Yeah, it sold to Ubisoft, correct?

• 50:51Shaan Puri?

  Yeah. Did you ever play any of their games?

• 50:53Speaker 01

  Oh, yeah. And I play a lot of voodoo.io as well. So I'm, I'm so into like the casual gaming space.

• 50:58Shaan Puri?

  Hyper casual, yeah. Exactly. That's, that's a great space to go into. And again, tons of talent, little indie dev shops that like make games that will never see, never just reach, you know, 10,000 users because they don't know how to like market it and they, it would just be too prohibitively expensive to do so. But you could build a Ketchup Games if you have the kind of like brand that Mr. Beast has. I think that's a easy one. Uh, there's a company called AppLovin' that my, my co-founder had previously co-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 that like do actually pretty well in terms of engagement and monetization. But like they'll just never get mass distribution to compete with Zynga and compete with all these guys who spent so much money on our ad network.

• 51:41Shaan Puri?

  So why don't we just take like 5% 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 they just pump it through their own ad network with the cheap, uh, 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.

• 52:06Sam Parr?

  Sean, I think you need to just ask Reid for an internship.

• 52:08Shaan Puri?

  I'll get your coffee, man. I'll, I'll work for you for free over here. I'm doing it already. This is my interview.

• 52:14Speaker 01

  Yeah, if someone's sitting over here taking notes as you're talking, there's like, okay, we need to talk to that company.

• 52:19Shaan Puri?

  I'm just telling you all the things I'm looking at buying. And then when 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, 40 million YouTube subscribers who love me and would listen to me. This would be way easier to like, you know, 10x the value of each one of these things. So, uh, yeah, you can hit me up afterwards. I'll send you some links and then go from there.

• 52:38Speaker 01

  Yeah, 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. I think Vudu now is doing like a game every three weeks. It's gotten a little crazy. Uh, 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. Um, and most just get like 10 to 15 million downloads and they run them through it.

• 52:59Shaan Puri?

  Yeah, it's crazy. Such a good, it's such a good dumb business. I love it.

• 53:03Speaker 01

  Yeah. I, I had someone pitch me on, um, acquiring old mobile games that like didn't catch steam. Uh, you go in and you basically act as a publisher. You go in and like acquire 50 to 60% 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 called, but I thought it was a really sound like operation of what they were trying to do. We just didn't really. I mean, for us, like, we were just kind of at the point where 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.

• 53:44Speaker 01

  And so a lot of, um, myself and Ezra and a lot of the executives at Knight Media, like we have like our plan for 2021 and we're so focused. That like, a lot of this is just, um, 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. Uh, you just have to be like, we're the ones that we know we're going to 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.

• 54:11Shaan Puri?

  Story of a life.

• 54:12Speaker 01

  Yeah. Well, I think, uh, we usually try to keep these at right about an hour. Sean, what do you think?

• 54:18Shaan Puri?

  Yeah, I think this was, uh, very cool. And, uh, where should people find more about you? You have your own podcast with Blake, right? Or you're just a guest on that one?

• 54:25Speaker 01

  No, I do. It's called Creator Economics. You know, for us, it was about educating the creator economy and like pushing it along. I think, you know, if I can do anything and when I leave this business, who knows when that is 10, 15, 20 years down the road. Like, hopefully, I left it more educated and hopefully that we pushed 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 just came out with a new video today about the top five or the five YouTube channels we think will break through in 2021. Probably five channels nobody's ever heard of and one that only had like 60,000 subs as we were filming the video and now I think is up to 100. Yeah, that's the kind of stuff we want to 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.

• 55:10Sam Parr?

  And do you use Twitter?

• 55:11Speaker 01

  I use Twitter a little bit. Reid JD, same on Instagram, Reid JD. I use Instagram a little more than I use Twitter. Blake is Blake Robbins at Ludlow Ventures. He's getting me more into the Twitter swing, but it wasn't something that I really had used up until about six months ago.

• 55:25Sam Parr?

  Cool. Well, thank you, man. We really appreciate this. This is fun.

• 55:27Speaker 01

  I appreciate it, guys. Thanks for having me on.

• 55:29Sam Parr?

  Thank you.