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Welcome back to the game. This is a guest spot on Eric Ways podcast. He's the founder of Carrot, which is a very large company

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That helps creators get credit cards kind of interesting business model

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But this is a super super business podcast. So I would say this is probably on the more advanced side

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But we talk about obviously a little bit on the creator side of how they can build big businesses

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What I look at when I invest in companies and my philosophy around content has our competitive advantage in the private equity space

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Enjoy if I had that size audience I'd already put up or shut up when I'm at e3 years ago

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You had just started on your career journey since then millions of followers the reason people followed me was because the

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Systems were good and so because the systems were good. They didn't need me for the systems to work when I look at creation

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Space who've successfully executed on this. It's actually very minimal. I actually think creators are

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Perendously bad at picking product your constraint is not that you're a 97 out of 100 on content

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It's that you're a zero out of a hundred on monetization. That's a powerful concept right there

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I think that when people promote anything they get backlash because anything that you give me that is not free

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You die. You're saying that people have followers within an influence the point of short form is one thing

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Which is to drive them to work. Would you invest in content creators?

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Alex Formosi might be the first creator billionaire and he's built his business really differently from other

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YouTube recently I follow like mr. Beast today Alex shares my most creators aren't a broken business model

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The five ways to make money from content and how to turn your social media into a real business

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If you're a creator wanting to grow listen to this pod for 21 secrets from Formosi on how he did it

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When I'm at e3 years ago you had just started on your career journey

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Yeah, since then millions of followers of the 250 million arrived for portfolio companies

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Is this where you want it to be? I don't consider myself a traditional creator like I had businesses and have businesses outside of this that

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aren't my face and anything but I saw where just the the monster amount of impressions that social media is getting

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And giving away for free and I was like this is the most insane thing I've ever seen and to this day

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I still think it's crazy that like we can get a hundred million a billion impressions a quarter for free

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I think about creators and two buckets. Yeah, I think there are the words guys

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And then there are the video guys and then the crossover's audio that I'm a little bit above

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I started making YouTube videos and I wrote a book basically about the same time

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Yeah, and then the book kind of took on its own, you know

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Growth path. Yeah, and then the videos also did too the nature of how I've done things is that I'm all about

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Business processing system. Yeah, the reason people followed me was because the systems were good

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And so because the systems were good

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They didn't need me for the systems to work

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Whereas many businesses

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Don't have that and a lot of people follow the creator for other reasons that are not that that are less duplicable

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It's fascinating too because what you've built

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It's a private equity firm in a way

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But most private equity firms add value by cutting and slashing operations

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In a way, you're adding value because one here's the business processes to run

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The influence you've been about now built about talking about facial systems

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Now you've been able to bring in your face to increase it

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So yeah, and I think what you said at the very beginning

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Which is that like entrepreneurs are realizing just the amount of attention that's here

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And this is just a way to advertise your business

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I mean, that was the that was the entire thesis one that was just not calm was I'm a big fan of something old and something new

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So like something old private equity with something new social media

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And like how do we how do we bridge that how do we how do we merge that now because there's been old school

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I mean more buffets an influencer for sure. He's just legacy media

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Ray Daly is an influencer. Yeah, he's starting you know, he's making his TikToks and things like that

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Neville is an influencer

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Of course these guys get deal flow because they're out there, you know, they're they're talking about business

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And so they get it

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I just

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Took what they were doing and just like

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Did a lot more right what type of companies we look for

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The process overall

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Those things have changed a lot from when we spoke three years ago

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um

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Just three years ago I was looking at

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Basically running the gym launch playbook that we did taking a company that has basically

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Digital media driven that is vertically integrated education around a specific sector. Yeah, and then

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Wrap-in business services and then be able to package that because you ever have any retention and then sell it, right

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And transition from a face driven business to a kind of consulting business. That's that's in one niche, right?

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It's a difficult operational

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challenge for

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For for face driven businesses to remove the face and I think that makes sense like Taylor Swift isn't looking for somebody

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To like step in and sing for her. There's a tension in what you said

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You became the face

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For faceless systems. Mm-hmm. Your premise was I had these processes that work 100 million offers 100 million leads

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You don't need Alex Formozzi to literally be doing this and get value from it. Exactly. It's to empower you to do it as you said

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The business model of the creators very different consume you're talking about how there's an inverted pyramid where the creator is almost the

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Chocolat the gate point for everything because you need Taylor Swift to be there. Yeah, now you are an influencer

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And so it's funny because you're like well, I'm gonna help you do a system where you don't need me

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But now people follow you for that. I think once upon a time there's a conception of a creator as like the KC nights that I'll turn

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Like oh hey, I make money to make content where I've started is on YouTube and the advertising the brand deals is what supports me

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I think now you're seeing creators becoming entrepreneurs and

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Connist is becoming how they market themselves in some ways like the reputation of the creator

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Yeah, it was branded if you will like in a figurative sense like branded by

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the early creators

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Which is not reflective of how you advertise a business today? Yes for creators who want to fall in your footsteps

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Do you think you'd advise them to double down on the creative distribution side of what they do or to try and get better at the

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Building business piece of what you do really interesting question

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um

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I think it depends on your goal

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So if your goal is to make money than learn the money game

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If your goal is to make content then get you know, just keep making content

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I had a conversation with other uber creators not that long ago and we operate at echoes and not come off the theory of constraints

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And so the positive theory constraints is that any system will grow until it's constrained and they will grow no further

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And so um

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You know these these gentlemen had like subcribed to that and they said hey Alex

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I think we understand what our constraint is you know, we have our our content our media and our content creation machine

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The the constraint of it is like we need better editors for whatever so we can get even more leverage on our time

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And I said what's the goal and they said uh, we want to make money and

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I remember kind of like smiling about this and I was like your constraint is not that you're a 97 out of 100 on content

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It's that you're a zero out of a hundred on monetization

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If you don't care really about making money and your passion is making videos about whatever it is that you make videos about

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Then like congrats you won congratulations. You're making videos you're about

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Yeah, yeah, this was yeah, you were like if I could just put my job and make videos about Dungeons and Dragons then like I would do it

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Then it's like awesome you won like so now we're two from here

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But there are creators that I've talked to who I'm like hey, so what do you want to like dude?

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I just want to make money and if that's the case then you got to learn the game in

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2024 you started working with school. Yeah

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And so I think it's an interesting question using yourself as a case study number one the product that you're

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associating with it's not one that you like built it all nuts and bolts yourself

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No, it was very much here's an existing company

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But I can grow it and so it come kind of comes down for creators to question of

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Hey, like do you really want to lean into being an entrepreneur and do it yourself or do you just want to do a brand deal?

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This is gonna be really interesting

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So because I've given it a huge amount of out of this so I

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I'll see if I can get the number right but the creator paths exist on a spectrum

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basically five paths amount of monetization for a creator

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so and they exist on an axis of control

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And so at the lowest amount of control you have sponsorships, right? Like people just pay you money

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You give basically you're an advertiser and so you promote their stuff you read and add whatever

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That's that

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One degree next to that you have being an affiliate

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Which is just like you know getting sponsors except your paying performance because what we do when you do an affiliate deal

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Or a performance based deal you're saying I would like a larger percentage of the upside if I can prove that I can generate it

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And so what you're essentially doing is shifting the risk from them to you

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And the more risk you're willing to take on the greater percentage of the upside

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And so winners always work on performance

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No one should be able to as accurately as to mean how much you can drive

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No, it's always better than you do

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You're the seller so like in M&A terms

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The seller of a business the person who knows the business you're selling it to somebody else

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Always has an information advantage because they always know more about the business than the person

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Right, and so you are the seller of attention

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So you should always know the value of your attention better than someone else

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Now if you know that your attention shit

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And doesn't actually convert it all then maybe you should just do the sponsorship

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It's the brand value

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Yeah, we're just it's overall the impression

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Now you've got me on board

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Yeah, yeah, it's gonna change everything

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So you've got you've got

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Sponsorship here you've got kind of affiliate and performance deals here

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Then you've got kind of the next

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Path which is what I what I did with school which is

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You promote

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And so I put capital in the deal too, so it wasn't just

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I also invest too

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Yeah, yeah, I was yeah, yeah, it was a big deal

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And so

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We invested capital in the company and we invested resources and we invested brand

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So it's we did all so I think about them in terms of like what are the buckets that create investment

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So there's work and for me there's brands and people don't have that but like there's work

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There's brand and then there's capital and so we put all three into the business

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I think there's a really nice sweet spot there

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Because what you can do is rather than try and go through all the iterations

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I say hey, let's do a deal. I think there's a really nice sweet spot there

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Because what you can do is rather than try and go through all the iterations

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I say hey, let's do a deal

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It has to be significant enough for me to like make it worth

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Using what I would consider a brand bullet on and let's let's get carried into

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Every business in the US not just creators

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And then if like if that's compelling then then you get to just do what you're good at as a creator

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This is me talking to creators and let the business

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Do what they've already proven and this is the key point that they've already proven they're good at

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And so this is where a little bit of business acumen comes it comes into play

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This is where like understanding what revenue retention is looking at churn looking at user acquisition

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Looking at engagement rates looks at activation points

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That you want to look at a business to understand. Okay. Is this actually is the product good?

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Because what you want as a creator like the perfect nirvana situation is unbelievable product

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Compounding on its own from word of mouth for

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12 to 24 months

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In a market that's like very similar to your audience and that you know that you can 10 x in a year

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That's where the magic happens for both parties. Yeah, they have an amazing product that could grow without you

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But with you it just grows that much faster and so fundamentally all you're doing is pulling the future forward by like four years

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You're cutting the compounding curve and just basically step stepwise increasing in a straight line up

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And then saying okay, we're just going to pull your four forward and now we're going to compound starting next month at your four

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To five rather than your two to three right and that's fundamentally what I was doing with school

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And I mean think about the amount of deals that we look at school was the only deal that I've done since that time period

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It was because it hit all of those things

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Now next on so that's like third stop on our creator world here

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The next is that you can white label

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So you can drop ship stuff which is pretty common

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That I see as the simplest way of this is like you don't manufacture t-shirts

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You find a t-shirt manufacturer. You swipe your logo on it and you ship it pretty straightforward

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And then the final version final boss of this is that you create a product from scratch from scratch or service from scratch

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And you market and sell it

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And

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Those are degrees of control that exist on that spectrum. There is a right path for everyone

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And you just have to have some level of awareness to know which path is yours

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Now which of these can create the most enterprise value

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The further on the right you are the more enterprise value you have

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If you are doing sponsorships or affiliate deals, which is the first two categories that I talked about

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Those two can create enterprise value unit of themselves if you consider yourself a media business

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Which is so funny. I was talking to a Mondo creator

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So like 20 million plus subscribers and it's so funny

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It was like do what we're doing like no one's ever done this before like

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Have a business around like making videos and I was like

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So you know media is existed for a long time right and I was like now

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And when I when I told was like dude me like you should just look at existing media businesses

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And it was like this big life Bob was like all we're doing is taking an old business model

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And just doing it in a new media like that's all it is right the difference though

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Is that if you look at like a great media business of the new age is like bar still sports right and

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Deportino is

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Sort of now a creator

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I would say he is a creator now

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But it wasn't started that way he just saw the arbitrage that existed for all these cheap impressions properties

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Yeah, exactly and he built a network and so that he could sell impressions across a specific demo

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To advertisers and if that's the business

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I just have yet to see I think why image your mom's house for comedy

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I think they have a handful of productions so they're kind of becoming a media

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Just just is trying to do the student. Yeah, you have to talk to Zach. Yeah, it's tough though

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Especially if you were the primary like breadwinner kind of for the media business

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I would say it's it's almost simpler to be like hey, I know a ton of advertisers, right?

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Let me sell your ad space and I think you could far more easily acquire

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A big network from that perspective, which is basically important. I did interesting

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So for your POV if you've successfully built the media side of your business like that's a win

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But the upside a crowding to your degrees of control

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It's very limited and as you mentioned

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I was trying to think of people who I think have built these successful media empires

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So there have been many who failed like Buzzfeed

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That's a great example many many have failed

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We're going to reinvent the game. It's like well. You're just doing newspapers state. I'll be on a new medium

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There are some creators who have succeeded in building. Yeah

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It's right. Yeah, it's a daily mail and there are some creators who've gone

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They've taken steps in this direction where they've almost scaled their content

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So one that comes to mind Linus tech tips is a very good example

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Where Linus tech tips drive with just Linus and over the time he's brought in other creators

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To be honest channel instead of himself

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And then you also have creators like I think MKBHD is a great example too MKBHD

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I still think of his primarily as a media business. He doesn't do that much with products

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And well, he actually tried one a wallpaper app that got a lot of backlash which I you know

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If I were MKBHD, I feel like I would be like yeah, I know you know what

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I'll just stay and do content over here because whenever I swear to go over there people get mad at me

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No now it sounds like you're saying though from your POV. This is also can we hit on this real quick before we we switch

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um

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So I want to say this mostly to the the creators of people who have started from organic and link built-in audience and whatnot

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There there's two types of angry

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So there are there's angry because you have done something that you said you wouldn't do or that is against your brand or purported values

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Right

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Then there is people who think that everything in the world should be free

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And I find that YouTube or really across all platforms these people exist and you can buy in large ignore them

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And so I think that when people promote anything

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They get backlash because anything that you give me that is not free

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Fuck you die. Yep. I think on some level you just got to be like okay

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Anything worth doing is going to get lash back and

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There's like show me one

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Ultra-famous person because this is all we're talking about creators and influence and audiences who doesn't have haters

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Right, and so if you're going to get hate regardless

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You might as well also accomplish your objectives

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So let's just mind you sense something now betraying the brand that you have no, I think that's dumb

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So like if you have for example a naturopathic brand of weight loss don't push us on pick

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That's probably a bad idea at the same time if you said hey

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I've got these supplements that help you do that or I have this you know

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Nutrous program that I'm you know you do a retreat with me three times a year

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Whatever of course, I'm thinking of liver king because the whole premise was his gains came from his diet

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Not other things 100% you've been honest. I think it would have been fine. I think yeah

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It would have been interesting for sure

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Yeah, fine, maybe not fine. It would have been interesting. Oh, yeah, I you know good nuts

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But I also inject trend

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Like people were like so is it the good not so where is it trend? Well, it's actually but you're actually between the two

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That's what the matter

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Yeah, so I that's that's yeah, but here actually I think he's

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It's it's it's a worthwhile example to pull that up because so obviously there was a moment where in time where he went super viral

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And then it peaked and then just Derek as a call back to earlier

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Ended up being the one who outed he exposed him. Yeah, he exposed it. Here's the thing

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liver king stomachs content

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And I would imagine that he probably still makes good money. Yep, and so I would see what happened to liver king as close to a

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quote brand suicide moment as you can get

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And yet she keeps going and so here's the here's the real real

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I don't think you can get canceled and so a lot of people have this fear of making a mistake that's going to end their career and

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No mistake ends your career unless you choose to end it

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And so you can always get back up and keep going the only way that you can actually get canceled is if you get prevented from

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Distribution right so if all platforms de-platform you if every platform did that then yeah, you are canceled

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Right like our Kelly is in jail

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And he can't make content. He cannot make content

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So like he has been he has been effectively canceled

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On the flip side how many times the chappelle been canceled? I put that in quotes here. Right. He's not canceled

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He just keeps going right

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And so in the same light to to further hopefully put it to stake through this thing your assumption that you have killed your career

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Assumes that everyone in the world knows who you are

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And the vast majority of the world doesn't even know you exist

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nor did they really care

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Subtext and so like let's say you have a million person audience. Okay, you mess up

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Just go get another million you're not dead and if anything you start having learned a lesson and you just keep going

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It's interesting because like I think the poster chalets for this is some ways are like Jake and Logan Paul do

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The suicide forest thing. Yeah, like

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Here he is on WWE or whatever whatever they're doing now. I don't follow as as tightly as I probably should to be you know in this world, but

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He's still around. Yeah, and he's bigger than ever. Yeah, yeah, and so like there's he also Jake Paul also is a VC fund now

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Yeah, well, there you go. Yeah, there are so many examples of quote career ending moves that didn't actually end the career

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Well, you have to be able to deal with and this is the real hard part is that you have to be you have to be able to handle hate for a week

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Because the news cycle is about a week and so you have to be able to just be hated

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And it's very against our human wiring to receive that much hatred and continue onwards especially online

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It's amplified. It's impossible to fathom a million people telling you that you suck. Have you gone through that yourself?

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I mean, I've had my moments of people hating on stuff that I that I put out

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Usually it's just stuff that I put out that just triggers people in general right now

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I would say that part of it is intended to do that like because I have relatively extreme views

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on life and death and things like that and

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I make those because those are the views that help me free myself

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Yeah, and made life a lot more palatable for me

293
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I've always been like and if it helps you use it and if it doesn't don't worry about it use whatever I do

294
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This is not me trying to process me sharing what's work for me

295
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But of course people see it and they're triggered because this conflicts with their won't you my content is a documentary not a sermon

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When you think about the different axes of control the different miles you've said what's interesting is

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I've seen a lot of creators standing medium-per-side. I've seen a good number of creators make money via their own products

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Like obviously there's festival's the middle area what you've done. It's actually very very rare

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That's the advantage of if you understand the business game you can do nasty things because I remember it so there's I can't wait for this to get the call back

300
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Um, but one of my very first podcasts I ever did was on ice coffee hour

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Um with Gramps Deffen. Yeah, and on the show

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uh, I said

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If I had your size audience I would already be a billionaire

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I'm excited for when we cross that because I think it'll be pretty close

305
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You have the audience now Alex. So is this a put up or shut up? Yeah, I mean we've grown a ton

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I'll just leave it at that. I'll say this for anybody who's who's listening to this

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So the problem with me claiming something I would like to have a third party substantiate

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Um, and so like I could say well if if you do know what our revenue is right and you put any kind of EBITDA on that

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That would be reasonable especially in a business that has low-cap

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Uh, you would probably imagine that it would be decent

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And you put any kind of multiple on that it would be a pretty large number

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Yeah, and so we have things that are going for us and we've had

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Conversations with companies that said we would value in this in this range

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But those are things that I

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Wouldn't if I claim it. I want to be rock solid. Yeah, absolutely. Right. And so that's why I have it

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But that being said um, obviously we've grown a lot in that period of time and uh, I

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I'm excited for whenever that callback comes because he still has more YouTube people

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So I'm using that as mine as my you're saying we haven't quite reached your audience. Yeah on YouTube

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Yeah, I'm still still still behind his audience on YouTube

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It's actually another good point though. You said multiple right the multiple that you would get on what you've built

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It's gonna be higher than say a pure youtuber. Yeah

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Here's your question when you look at say like what Jimmy mr. Beast has built

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Yeah, I'm perfect. I was gonna come back to that. Yes. Okay. Is that a business you'd want to invest in yourself

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So I think I'd probably take to math's angle, which is like you just you're basically betting on Jimmy

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And I think um, yeah, I would take that bet right

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So I think Jimmy will just die or home in yep, and that's kind of he's obsessed and you just want to find people like that

327
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When your distribution basis the world uh, it's hard to lose. Yeah, I'll just I'll leave it at that

328
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But what you brought up though like prime for example. Yeah, so

329
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Prime is actually the identical to a school deal

330
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Because he didn't build the product is Congo brands is another company that previously worked with other creators to do other drinks as well

331
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Yeah, and so they promoted it right, but they put I don't know if they put cash in

332
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I don't think that but I'm assuming they put some money in because they have the capital

333
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Why not to get more leverage on on the ultimate dealer or joint venture was Logan going to learn the drink business and get

334
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Then get brick and mortar district like maybe but it's also the question is how much is your time worth and I don't mean like

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Dollars per hour anything like that

336
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You absolutely can't do it and when I say time is like how much is the next five years worth to you right

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Because if you can pull five years of knowledge forward and then grow for five years rather than learn for five years

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Then begin growing because you're if you have an audience of their size your constraint is going to be delivery

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It's not distribute like

340
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Yeah, it's not it's not media distribution. It's a product distribution of prime. Yeah, it's gonna be product distribution

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And so to to build out the kind of infrastructure and knowledge base

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uh

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To satisfy the demand

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Internationally not just nationally internet because they're in the UK too

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um

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You need you need deep expertise and

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Large existing infrastructure and so conga already had that and so it made sense right and so I would probably lean more towards that type of model

348
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I'm curious like there's me there's sir hand jimmy

349
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I think with festivals is the only person who is building things truly from scratch as hired his own team and yeah

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And I don't know if if you were to ask jimmy again today

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Uh, if he could go back in time if he would have

352
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Yeah, just if he would have done the same way for how stressful it is

353
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Yeah, I'm gonna ask him your price and we can and we can already say uh, he launched lunchly

354
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right and

355
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Well, what did you do with lunch?

356
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Lee did you do with festivals he didn't build it from scratch right and so I think part of that is

357
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There's a desire that I totally understand as a creator slash entrepreneur to control everything

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and

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If you look at the people who are the wealthiest in the world

360
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Almost none of them own a hundred percent of the companies that they have made their wall phone

361
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So you look at Jensen Huang from the video owns 4% you look at Elon he owns whatever it is

362
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Whatever small percentage of Tesla that he owns um and

363
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With SpaceX he's not the majority owner now. He might have voting rights. Whatever. That's a different different question

364
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Basis owns 9% of of Amazon like I go down the list warm buffet

365
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I think it doesn't own more than 40% of Berkshire halfway and we could keep going and so the idea is to build something really really big

366
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In my opinion need multiple lifetimes

367
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And you can either live all of those lifetimes

368
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Uh in sequence chronologically yourself and then take a lifetime to finally learn how to do everything or you can get three people

369
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Those lifetimes you all start together you divvy up the pie and then you can build something way bigger way faster

370
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The longer I've been doing business the more I value time and speed because also

371
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We have the assumption that these things will not change in 10 years

372
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So maybe it does take you 10 years to learn everything is the moment still there

373
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So that makes me think of two things the first thing is for yourself

374
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What are the elements of business that you're most willing like sure?

375
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I could learn this but do I want to spend time with yes, so I approach

376
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All new things with the same

377
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Perspective which you can you probably share with me which is kind of the consultants perspective

378
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And so I start as management consultant

379
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Which we share as background and the way that I was taught is if you want to rapidly learn something in space and to give context on this

380
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Imagine this back in time. I'm 22 years old. I go through my security clearance. No beard by the way

381
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Yeah, no beard. I have uh, so I have to get a top secret security clearance

382
00:25:31.560 --> 00:25:35.160
So I get I pass that. Thank God, you know, I'm sweating. Well, it's like oh, what did I do in my frat days?

383
00:25:35.400 --> 00:25:41.960
You know, like I'm thinking this is like a huge you don't deal with national security with so I pass that and then I can't say which which

384
00:25:42.040 --> 00:25:49.320
Armed Forces, but we go and do work for the defense department and I was focused on space cyber intelligence

385
00:25:50.120 --> 00:25:53.960
And you know some of the projects I can say this that we worked on was like basically

386
00:25:54.600 --> 00:25:58.040
mix of assets to kill the most bad guys the most efficiently

387
00:25:58.520 --> 00:26:05.240
Right and the thing is is that there's overlap between different armed forces for similar style of let's just say killing people or

388
00:26:05.960 --> 00:26:07.960
Gathering intel on

389
00:26:08.280 --> 00:26:09.240
You know

390
00:26:09.320 --> 00:26:18.200
Bad guys. How do you at 20 years 22 years old go and say something that's impressive right and worth four million dollars for a project that you're on

391
00:26:18.680 --> 00:26:23.720
Um, in four months, right? So it's like you start now four months from now you have to give a presentation to

392
00:26:24.680 --> 00:26:30.120
Two two stars and a four star general who have been doing this for their entire careers and then somehow manage to say something intelligent

393
00:26:30.200 --> 00:26:36.600
So the way that they approach that problem is so the person who does a record, you know puts the records out for the project

394
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We say who are the smartest people you know in around this problem. Yeah, and they give you five people

395
00:26:42.680 --> 00:26:47.800
So you go to those five people and you interview all of them and then you say who do you know five people who are the smartest people around this

396
00:26:47.960 --> 00:26:50.280
And you do that for over and over and over again until eventually

397
00:26:50.840 --> 00:26:54.040
The same names keep popping up and they're like already talked to John already talked to Steve

398
00:26:54.840 --> 00:26:58.440
And basically you have you kind of like mapped the the neural network of expertise

399
00:26:58.520 --> 00:27:01.000
And then you consolidate those notes into those buckets

400
00:27:01.000 --> 00:27:05.080
So you like recode them and then you distill them down and then you make a pretty slideshow

401
00:27:05.640 --> 00:27:08.680
That's like the very teal the art. Yeah, but the consultant that is what consultant yeah

402
00:27:08.840 --> 00:27:09.800
Uh

403
00:27:09.800 --> 00:27:13.160
And if you were the 22 year old you were the one doing all of the notes and all the

404
00:27:13.800 --> 00:27:16.920
You're doing the calls you're consolidating is 100% and so

405
00:27:17.560 --> 00:27:23.400
So I learned a very valuable skill set there and so I have approached every new endeavor using the same thing to answer the question um

406
00:27:23.960 --> 00:27:29.480
What are the things that I would say I will learn more about this or I won't I think it depends on my first

407
00:27:30.040 --> 00:27:34.920
My first pass yeah, so if I get into because there's some industries where I look at it and I'm like this isn't that hard

408
00:27:35.080 --> 00:27:38.520
Like some businesses I'm like this isn't as bad as I thought it was going to be other ones

409
00:27:38.520 --> 00:27:44.520
I'm like this is way worse than I thought it was going to be and it's also like what problems come up and how equipped am I to solve them?

410
00:27:44.920 --> 00:27:48.040
So like I'll use an emphasis like like insurance for example, right

411
00:27:48.200 --> 00:27:53.080
I think insurance is really interesting largely because one of the biggest problems with insurance is cost of acquisition

412
00:27:53.720 --> 00:27:59.320
It's like it's a demand constrained business insurance is not hard to get capital for like there's tons of insurance companies that was always all this is say

413
00:27:59.960 --> 00:28:02.200
It's there, but that was like oh that's more interesting

414
00:28:02.200 --> 00:28:07.080
And so when I have that like of the not now or later like I put insurance in one of those buckets as something that like

415
00:28:07.560 --> 00:28:10.600
Is also regulated, but I'd say lesser than banks

416
00:28:11.400 --> 00:28:17.480
Um, and there's pretty amazing tax advantages that exist within insurance. Yeah, you're you're picking these products that have

417
00:28:17.800 --> 00:28:23.480
To your earlier point extremely high retention. Yeah people need it. It's just people don't historically like it

418
00:28:23.960 --> 00:28:27.800
And acquisitions really hard and you're coming in and saying well, I could help with acquisition side

419
00:28:28.120 --> 00:28:34.040
Oh, but people still don't really like it and there's like limitations in my ability to prevent right now because some of these things are

420
00:28:34.040 --> 00:28:35.640
Regulating where the magical happen is

421
00:28:36.280 --> 00:28:42.040
I'll find some nugget in there and this will just take time that I'm like we can win on this. Yeah

422
00:28:42.120 --> 00:28:46.120
Three ways to build a business you can just look at what's already working and just do that for yourself

423
00:28:46.200 --> 00:28:49.160
And I think that's totally fine. I think it's a wildly underestimated path

424
00:28:49.800 --> 00:28:54.920
Like you know, what business do I start? I'm like look around pick one like you can just start and then you'll learn and then you'll

425
00:28:55.000 --> 00:28:57.480
You know learn from there the second is you have

426
00:28:58.120 --> 00:29:01.560
Uh, a strong advantage in one of either that you can acquire customers cheaper

427
00:29:02.040 --> 00:29:06.120
Or you can deliver in a better way right you got some advantage in one of those two

428
00:29:06.280 --> 00:29:10.440
And if you have an advantage in one of those two you don't really need much of an advantage in the other

429
00:29:10.600 --> 00:29:16.120
The third is that you need such a strong advantage that you can overcome a deficit in the other so like

430
00:29:16.680 --> 00:29:22.760
If you have it what I would consider a true product driven business you could not be really ever good at acquiring customers

431
00:29:22.840 --> 00:29:27.640
And by solving products so well it becomes viral and then you do solve

432
00:29:28.440 --> 00:29:31.160
Your acquisition problem vis-a-vis a better product

433
00:29:32.440 --> 00:29:38.440
Real quick guys. I have a special special gift for you for being loyal listeners of the podcast

434
00:29:39.080 --> 00:29:44.440
Layla and I spent probably an entire quarter putting together our scaling roadmap

435
00:29:44.520 --> 00:29:50.120
It's breaking scaling into 10 stages and across all eight functions of the business

436
00:29:50.200 --> 00:29:53.960
You've got marketing you've got sales you've got product you got customer success you've got IT

437
00:29:54.200 --> 00:29:59.000
You've got recruiting you've got HR you've got finance and we show the problems that emerged at every level of scale

438
00:29:59.240 --> 00:30:04.120
And how to graduate to the next level it's all free and you can get it personalized to you

439
00:30:04.200 --> 00:30:07.800
So it's about 30-ish pages for each of the stages once you answer the questions

440
00:30:07.800 --> 00:30:11.800
It will tell you exactly where you're at and what you need to do to grow

441
00:30:11.800 --> 00:30:14.680
It's about 14 hours of stuff, but it's narrowed down

442
00:30:14.760 --> 00:30:18.040
So that you only have to watch the part that's relevant to you which will probably be about 90 minutes

443
00:30:18.680 --> 00:30:25.080
Um, and so if that's at all interesting you can go to acquisition.com forward slash road map r-o-a-d map road map

444
00:30:27.480 --> 00:30:30.680
Now on the flip side it's like can you do the same thing by just having

445
00:30:31.080 --> 00:30:33.560
Unbelievable distribution. I don't think the answer is yes

446
00:30:33.640 --> 00:30:37.960
You mentioned that is something like 20 30% of the businesses coming to you. They make content in some way

447
00:30:38.120 --> 00:30:40.600
No, do you think that those businesses?

448
00:30:41.560 --> 00:30:47.480
Because a lot of people talk about creator creator kind of are they better than those that don't grow and have con as part of their workflow

449
00:30:47.480 --> 00:30:51.320
Really interesting question. Um, I think it's a it's a double-edged sword

450
00:30:52.040 --> 00:30:54.040
So what makes them great also makes them risky

451
00:30:54.680 --> 00:31:00.360
So they will typically have very low cost to acquire customers because it's organic and so it's just channels

452
00:31:00.440 --> 00:31:07.640
Some yeah, it's some star or whatever. I'll call it a star right um is good on camera good in whatever format they they advertise in

453
00:31:08.360 --> 00:31:10.200
So they acquire customers cheaply

454
00:31:10.280 --> 00:31:13.800
The other pro is that typically if someone starts with an organic audience

455
00:31:14.360 --> 00:31:19.160
They really care about product because being a creator like your media is a product in a way

456
00:31:19.320 --> 00:31:24.360
And so they have the right perspective on like this has to be really good or I'm going to lose my reputation because the whole

457
00:31:24.840 --> 00:31:26.360
And organic brain is built on reputation

458
00:31:26.520 --> 00:31:32.680
And so I think they're more obsessive about products. I think that's a huge plus the the downsides for the business

459
00:31:32.680 --> 00:31:37.160
Obviously is that they have massive keen men risk. So now I think where you where you get really smart about it is

460
00:31:38.280 --> 00:31:41.880
If you can gain enough influence where you can develop an affiliate network

461
00:31:42.520 --> 00:31:47.320
Of businesses like somebody who's done really well is um Derek from uh Derek more plates more dates

462
00:31:47.800 --> 00:31:49.800
Uh fitness guy um

463
00:31:49.880 --> 00:31:54.680
He has I think an affiliate base of four or five thousand affiliates that promote his

464
00:31:54.760 --> 00:31:55.640
Venice products

465
00:31:55.640 --> 00:31:58.680
And so he's become such an authority that people are willing to say well

466
00:31:58.680 --> 00:32:02.920
I don't want to remake what he's made. I'll just promote his stuff and I think he has a good you know good program there

467
00:32:02.920 --> 00:32:06.440
And so he's he's paying down his keen man risk by getting

468
00:32:07.000 --> 00:32:12.440
Larger and larger percentage of the business and so I think that the way to really scale and organic

469
00:32:13.080 --> 00:32:16.680
Creator business is you launch it with the personal brand

470
00:32:17.480 --> 00:32:22.760
And then over time you backfill with other faces that you have to approve and that's the key part

471
00:32:22.760 --> 00:32:28.200
You have to approve that are on brand with your values and your message and are authentic to the product that you have

472
00:32:28.200 --> 00:32:33.480
And are attracting the audiences that you want to go after and then they over time become bigger than you

473
00:32:33.560 --> 00:32:38.360
And you kind of like Homer Simpson into the into the bushes. Yeah, you receive yeah exactly

474
00:32:38.440 --> 00:32:40.840
Yeah, exactly and you were seated in the bushes until eventually people

475
00:32:41.400 --> 00:32:44.040
associate you with the brand but the brand out grows you

476
00:32:44.120 --> 00:32:46.920
It's fascinating because well two questions immediately come to mind

477
00:32:46.920 --> 00:32:51.160
The first is on key manners. This is what you and Leila have are you thinking about me and a roster

478
00:32:51.160 --> 00:32:56.120
Folks just slowly took for the faces of even the con inside of your business. So two answers

479
00:32:56.760 --> 00:33:01.800
First we're not playing on selling acquisition and on any time price and that's useful

480
00:33:02.280 --> 00:33:07.560
Um, and so I like I see Elon as key men to SpaceX and Tesla. Yeah

481
00:33:07.720 --> 00:33:13.640
And so what if you have the desired exotive business then key men risk to problem if you want to go public or you want to hold

482
00:33:14.440 --> 00:33:17.400
It's really who cares and so it's kind of a who cares issue

483
00:33:18.360 --> 00:33:21.240
That being said the second answer is yes

484
00:33:21.480 --> 00:33:24.360
Because I do like having fewer single points of failure in general

485
00:33:24.680 --> 00:33:26.920
So despite the fact that I don't think we necessarily would need it

486
00:33:27.000 --> 00:33:31.720
I still like to build businesses that way in general and we have plans for what we're gonna do over the next probably 12

487
00:33:31.800 --> 00:33:34.760
24 months and beyond to build out ACQ's brand makes sense

488
00:33:34.760 --> 00:33:39.640
Yeah, the second question they had related to that was when I look at creation space who successfully ex-execute on this

489
00:33:40.120 --> 00:33:44.440
It's actually very minimal. Yeah, I can tell you one who I look at who Dave Ramsey

490
00:33:45.240 --> 00:33:48.360
So it's right he's brought in George. He's brought in other people under him. He's got Rachel

491
00:33:48.360 --> 00:33:53.320
Who's his daughter, but like he's got Rachel um, he's got John um, he's got

492
00:33:54.200 --> 00:33:56.200
Drew yeah, he's got nine

493
00:33:56.360 --> 00:34:00.840
I think channels for example just on YouTube that are associated with the primary

494
00:34:01.240 --> 00:34:03.800
And what's interesting is that they basically run the same playbook

495
00:34:05.160 --> 00:34:09.480
It's daily calling show and clips and full episodes

496
00:34:10.200 --> 00:34:16.200
Basically are are the channel and so they clip each episode into like four or five ten minute clips

497
00:34:16.920 --> 00:34:22.520
And they put each of those out so that's like that gives them tons of good like mid length clips

498
00:34:22.920 --> 00:34:27.960
They get the one full episodes and then short clips get taken and become shorts. I study Ramsey a lot

499
00:34:28.520 --> 00:34:29.480
um

500
00:34:29.480 --> 00:34:31.800
One because I like Dave, but secondly because

501
00:34:32.600 --> 00:34:36.040
The amount of creators that get quote creator burnout is

502
00:34:36.920 --> 00:34:43.800
Really high. Yeah, um or we're talking like Shelby church rights. You just kind of shifted to I would say a sustainable

503
00:34:44.600 --> 00:34:51.800
Content model, right, but it's it doesn't really acquire new viewership anymore like you only care about a vlog if you care about the person

504
00:34:51.800 --> 00:34:56.520
Yeah, it's your maintaining or something. Yeah, we're ojane you to nade shift to podcast right yeah

505
00:34:56.520 --> 00:34:59.160
And it's because it's a quote easier form of doesn't really grow the audience

506
00:34:59.320 --> 00:35:03.240
It just kind of like maintains the audience that you have and again to be clear nothing wrong with that totally

507
00:35:03.240 --> 00:35:05.640
But I look at somebody like Dave and I think

508
00:35:06.200 --> 00:35:08.200
He's been making content for 40 years

509
00:35:08.920 --> 00:35:10.920
Like there's something to be learned from that

510
00:35:11.400 --> 00:35:16.040
And I think the nature of why his content has been so interesting is because

511
00:35:16.680 --> 00:35:21.800
You have he has two types of variety or three really and that I think have to be present

512
00:35:22.120 --> 00:35:26.280
So what are what are the types of shows that have already say shows that have existed for a long time

513
00:35:26.360 --> 00:35:31.640
Look at the daily show right you look at the night the nightly host shows like those can go for 20 years

514
00:35:31.960 --> 00:35:34.360
Right, what makes that unique in my opinion

515
00:35:35.160 --> 00:35:37.160
You have you have three variables

516
00:35:37.400 --> 00:35:39.400
You have the people who are on the show

517
00:35:40.680 --> 00:35:43.880
You have the subject matter and you have actually it's just that

518
00:35:44.760 --> 00:35:48.760
Two yeah, I was thinking because you also have the interviewer right um format as well

519
00:35:48.760 --> 00:35:52.680
Yeah, so I'll I'll still say the third, which is the interviewer comma earth

520
00:35:53.640 --> 00:35:54.680
So like

521
00:35:54.680 --> 00:35:56.680
There are some shows where they will rotate

522
00:35:57.880 --> 00:36:05.560
Ten people through three seats who are doing the interviewing of other people about dynamic topics

523
00:36:06.200 --> 00:36:08.760
And so you need some level of novelty

524
00:36:08.760 --> 00:36:12.680
I think to consistently one engage your existing audience but also to bring in new people

525
00:36:12.760 --> 00:36:14.760
And I think that a lot of creator

526
00:36:15.320 --> 00:36:17.480
Content on a long enough time horizon becomes the news

527
00:36:17.640 --> 00:36:23.800
Like they say all the things they wanted to say about right personal finance or how to build a house or like and then at some point

528
00:36:23.800 --> 00:36:25.320
They're like I don't know what else to talk about

529
00:36:26.040 --> 00:36:28.040
And then they're like

530
00:36:28.040 --> 00:36:31.000
The news and I don't necessarily think that's a bad thing

531
00:36:31.080 --> 00:36:36.040
It just like I just it's just a pattern that I've seen over and over again because if you have single person

532
00:36:36.840 --> 00:36:42.360
They only have topic as their variety and so once you've exhausted many of the I would call it

533
00:36:42.840 --> 00:36:47.080
Standard directing camera topics then the novelty comes from news, which is literally novelty right?

534
00:36:47.080 --> 00:36:53.240
What is new right and so that's where they allow the environment to create their content or other topics going back to Ramsey

535
00:36:53.320 --> 00:36:55.320
He has guests on

536
00:36:56.040 --> 00:37:00.920
He has the call ins which create endless variety and so those are kind of like the two formats

537
00:37:01.160 --> 00:37:06.600
And he doesn't have to prepare really a head of time and so he is for if he does three hours of content a day

538
00:37:06.840 --> 00:37:11.480
He's generating three hours of content whereas I would say many creators will spend 20 hours

539
00:37:12.200 --> 00:37:17.080
On generating one hour of content and so he is pretty decent leverage on his time in terms of

540
00:37:17.960 --> 00:37:20.840
Output per unit of time spent on content itself

541
00:37:20.840 --> 00:37:22.360
And if you want to grow a business around it

542
00:37:22.360 --> 00:37:26.680
You can't just do content because then you have like when do you when you grow the business?

543
00:37:26.680 --> 00:37:30.040
It's a really interesting point because you mentioned that a lot of career started one thing

544
00:37:30.040 --> 00:37:34.280
Then they eventually burn out and build a scalability like Graham Stephens a good mutual friend of ours

545
00:37:34.760 --> 00:37:38.440
And Graham has openly talked about how he is getting really tired

546
00:37:38.920 --> 00:37:40.920
On his main channel like three years ago

547
00:37:40.920 --> 00:37:43.400
Yeah, I've noticed Graham every year

548
00:37:44.040 --> 00:37:46.040
Talks about and even when I met him

549
00:37:46.040 --> 00:37:50.680
You're doing like three videos a week and you just run out of topics and two point you just become a news reactor

550
00:37:50.680 --> 00:37:53.400
Yeah, and that's not something he enjoys as much as doing and yeah

551
00:37:53.400 --> 00:37:57.640
The way he's found a lot of success now is podcast channel for a while like he spent up a coffee business

552
00:37:57.960 --> 00:38:01.560
Yeah, and he's also talked about how the coffee business didn't work

553
00:38:02.520 --> 00:38:05.960
And so I think it's interesting because on the one hand everybody's like well

554
00:38:05.960 --> 00:38:09.640
Acquisitions one the most important things to a business if you're a creator you're gonna succeed

555
00:38:09.640 --> 00:38:12.760
On the other hand a gram to the coffee business didn't necessarily work

556
00:38:12.920 --> 00:38:16.600
And the Chamberlain's talked about how Chamberlain coffee line also doesn't apparently make money

557
00:38:16.920 --> 00:38:22.680
There are many creators who go to the business path and it seems like well, maybe that was not the right play

558
00:38:22.760 --> 00:38:24.760
So two really interesting things about this

559
00:38:25.400 --> 00:38:28.360
Well Graham specifically and then also in general so

560
00:38:29.400 --> 00:38:31.240
I think we need to be very careful about what

561
00:38:31.800 --> 00:38:38.040
Audience we want to gather and so Graham's audience has been predominantly people who don't want to spend money

562
00:38:38.840 --> 00:38:40.840
Yes, for a while and so

563
00:38:40.840 --> 00:38:43.800
He gathered everybody together who don't want to spend money

564
00:38:44.600 --> 00:38:46.600
And then was like hey spend some money

565
00:38:46.600 --> 00:38:49.160
And so I think that I think it in some ways it's hard

566
00:38:49.160 --> 00:38:52.200
It's almost harder for him to sell something that almost anybody else right

567
00:38:52.840 --> 00:38:55.080
Because of the nature of his brand specifically

568
00:38:55.480 --> 00:38:58.920
That's why I think like for him it's like doing media stuff in some ways is probably an easer

569
00:38:58.920 --> 00:39:02.200
He can sell to advertisers and you can they can have the the good luck

570
00:39:02.280 --> 00:39:06.280
You know yet, but I think for him like something that would have been on brand would have been like honey

571
00:39:06.680 --> 00:39:10.280
Right before the the before the scandal right but pre scandal honey

572
00:39:10.280 --> 00:39:12.520
I think would have been very on brand for him to offer you money

573
00:39:12.520 --> 00:39:17.160
Yeah, and he could have made a lot of money on that and so I think all discount related things or discount related financial services

574
00:39:17.160 --> 00:39:18.760
Probably would have been good angles for him

575
00:39:18.760 --> 00:39:23.080
So that's the thing one thing too is so I guess that I started I was getting into thing too, which is picking the right product

576
00:39:23.640 --> 00:39:25.080
So you have right audience right product

577
00:39:25.080 --> 00:39:28.280
And so I think that having the saving money audience you can make money from it

578
00:39:28.280 --> 00:39:30.440
But getting them to buy something that would be considered frivolous

579
00:39:30.440 --> 00:39:33.560
Which is just like coffee now you can try and position it is like okay, it's not Starbucks fine

580
00:39:33.800 --> 00:39:39.160
But now you're literally doing with commodity like it's trade like coffee beans are traded as a commodity like very hard to be

581
00:39:39.800 --> 00:39:45.240
To have alpha from a brand perspective when the whole brand has been built on don't buy like this stuff comes off

582
00:39:45.240 --> 00:39:49.800
The same factory floor is this stuff and they just put a markup on it right and so from a product perspective

583
00:39:49.800 --> 00:39:51.640
I actually think creators are

584
00:39:51.640 --> 00:39:54.040
horrendously bad at picking products

585
00:39:54.600 --> 00:39:58.520
Like the amount of conversations I've had with creators who are like hey, I'm thinking about launching an X

586
00:39:59.160 --> 00:40:01.000
And I'm like what?

587
00:40:01.000 --> 00:40:03.400
So on one hand like these are real conversations

588
00:40:03.400 --> 00:40:08.280
I've had where they're like yeah, you know, I read Peter feels zero to one and I think I have to create like a totally new category

589
00:40:08.760 --> 00:40:12.840
monopolize yeah, and I'm like dude you already your your monopoly is the attention

590
00:40:13.320 --> 00:40:17.640
You can sell a commodity and as long as it's on brand, you know like with with with you

591
00:40:17.800 --> 00:40:21.880
You'll probably be able to do really well. The follow-up question is will you do as well as you could have otherwise done

592
00:40:21.880 --> 00:40:28.040
If you picked a better product which then goes into kind of like circling all the back to acquisition.com in terms of what we do is

593
00:40:28.600 --> 00:40:31.080
We I only really solve for revenue retention

594
00:40:31.720 --> 00:40:37.080
It's like really the only thing I care about because then a long enough time horizon anything that retains customers becomes huge

595
00:40:38.360 --> 00:40:42.760
If you know how to advertise at all, which if you're greater you do and if you can keep the customers

596
00:40:43.080 --> 00:40:46.360
Then on a long enough time resin you become you you build a massive company

597
00:40:46.440 --> 00:40:51.960
It's probably just a retention set of growth actually well at baseline like level one like keep customers level two

598
00:40:52.040 --> 00:40:54.520
Grow those customers too and get them to bring more but yes

599
00:40:55.240 --> 00:40:57.080
And so from a product perspective though

600
00:40:57.320 --> 00:41:01.640
I don't think enough of them are thinking about reoccurring and recurring revenue and

601
00:41:02.360 --> 00:41:06.440
My two cents for anybody who's a creator who's listening to this do not try and solve

602
00:41:07.640 --> 00:41:09.400
churn

603
00:41:09.560 --> 00:41:13.720
Try and find products that people already don't turn out of and then make it your own

604
00:41:13.880 --> 00:41:16.760
I spent a huge amount of my career banging my head against the wall

605
00:41:17.240 --> 00:41:20.040
Trying to figure out how to make something that people inherently leave

606
00:41:20.680 --> 00:41:22.360
Like a gym membership

607
00:41:22.440 --> 00:41:28.360
Something that's sticky and I learned a ton and so there's lots of what I would consider like blocking and tackling tactics

608
00:41:28.360 --> 00:41:30.920
That I have learned that will that will that will improve churn

609
00:41:31.640 --> 00:41:35.480
But to conquer churn like how many of you have turned out of your internet lately

610
00:41:36.040 --> 00:41:40.120
How many of you have turned out of your cell phone bill how many of you have turned out of your insurance account for that matter

611
00:41:40.280 --> 00:41:43.880
Yeah, exactly I mean you're still with of course and so you think about these products

612
00:41:43.880 --> 00:41:50.680
And so I would rather find products that people already don't leave and have no affinity for and then try and just shift them over

613
00:41:50.680 --> 00:41:56.280
They're like wait how can well aren't they technically turning out of them? Yeah, but I'm being laser targeted and how like

614
00:41:57.080 --> 00:42:03.240
Yes, that's the point. That's the advantage that you have the creators that you can bring those people over from what is otherwise a commoditized product that they don't care much about

615
00:42:03.240 --> 00:42:07.480
But still pay for rather than trying getting people to care about your product in order to buy it

616
00:42:07.480 --> 00:42:11.240
You might remember 2021 everyone is really excited about the creator economy

617
00:42:11.240 --> 00:42:15.080
Everyone that was going to be the biggest thing in the world won because COVID everyone's at home. They're watching online videos

618
00:42:15.400 --> 00:42:19.320
And too because TikTok from short forms growing on the scene everyone's getting millions of followers

619
00:42:19.640 --> 00:42:25.880
And then 2022 2023 there actually was a bust where a lot of people were like oh creator economy is not going to be a thing

620
00:42:26.280 --> 00:42:30.280
And it's because people weren't able to monetize they have all these short form followers. They don't really see you have a really strong

621
00:42:30.280 --> 00:42:36.920
News on this oh, yeah, what are you thinking? So I think it's because the people who are allocating money didn't understand media

622
00:42:37.640 --> 00:42:43.080
At this level like I would I would wager that you and I probably understand the creator world and media

623
00:42:43.720 --> 00:42:46.760
Better than most and I think that

624
00:42:47.000 --> 00:42:54.120
Fortunately, unfortunately, I think short form content does not build tremendous influence. Right. I think you bring awareness

625
00:42:55.080 --> 00:43:00.760
But if we think about influence in terms of like what percentage of likelihood can we get the audience of this person to

626
00:43:01.480 --> 00:43:03.480
purchase something

627
00:43:04.280 --> 00:43:06.280
You just need

628
00:43:06.280 --> 00:43:08.280
Okay, so

629
00:43:08.280 --> 00:43:10.280
For elements for influence

630
00:43:10.840 --> 00:43:12.840
So you've got likeness

631
00:43:12.920 --> 00:43:18.760
So it does this person look the way that I look so because of that I will trust them more and be more likely to follow their directions

632
00:43:19.400 --> 00:43:26.440
The second is credibility which is say do correspondence which is basically does this person have evidence or proof that what they say is true

633
00:43:29.000 --> 00:43:31.000
Third is you have power

634
00:43:31.960 --> 00:43:36.760
And power comes from someone doing some directive that you have stated

635
00:43:37.720 --> 00:43:41.240
And then yielding a positive consequence from it and so I'll give an example of this

636
00:43:41.240 --> 00:43:42.120
So

637
00:43:42.120 --> 00:43:49.240
Superman made a short about if you have hiccups how to stop having hiccups right and I'm watching it me like well

638
00:43:49.240 --> 00:43:52.760
I don't have the hiccups right now, but I'll try to remember this when I think about a month later

639
00:43:53.400 --> 00:43:57.400
You followed it. There's power. Yeah, and then I did the thing and the hiccup stopped

640
00:43:58.200 --> 00:44:00.040
And so in that moment

641
00:44:00.040 --> 00:44:05.640
Huberman gain influence over me. I am more likely to follow a directive in the future

642
00:44:06.440 --> 00:44:12.680
And so status is the is the fourth thing that gives you influence which is relative control over over reinforcers meaning

643
00:44:13.480 --> 00:44:19.160
Uh, if I am a bartender and I control a scarce resource which is alcohol I have status in this setting

644
00:44:20.360 --> 00:44:23.480
Because I control the things that reinforce. It doesn't matter how rich or powerful you are

645
00:44:23.480 --> 00:44:26.840
I'm the bartender in this setting. I control what scares right and so

646
00:44:27.480 --> 00:44:31.320
If you were a billionaire you control money and so you gain status just from that

647
00:44:31.400 --> 00:44:37.800
Presidents and politicians also have status because they control resources of the government right but they still control resources and so

648
00:44:38.840 --> 00:44:42.520
Women have status because they control a scarce resource for men

649
00:44:43.400 --> 00:44:45.960
Great real. Yeah, and so they can influence behavior

650
00:44:47.000 --> 00:44:49.000
And so all of those things

651
00:44:49.320 --> 00:44:53.320
Increased likely that you get adherence from or or compliance from a request

652
00:44:53.880 --> 00:44:58.280
And so if you have all four then you are incredibly influential right and

653
00:44:59.000 --> 00:45:01.000
Big picture our goal

654
00:45:01.800 --> 00:45:07.000
As creators is to gain actual influence so that we can influence

655
00:45:07.800 --> 00:45:12.360
The behavior of a large group of people right and the way to do that

656
00:45:13.160 --> 00:45:18.520
Most powerfully is to give them something some sort of directive that they follow and their life gets better

657
00:45:19.000 --> 00:45:22.360
And then they're more likely to adhere to a follow follow and request that makes sense

658
00:45:22.360 --> 00:45:24.360
So if that's the case

659
00:45:24.680 --> 00:45:28.280
It's very difficult for you to do that

660
00:45:29.080 --> 00:45:33.640
Well with very short content and so to put this in context

661
00:45:33.720 --> 00:45:41.000
Let's say that somebody has consumed 20 YouTube videos of money and let's say that that those videos on average for 30 minutes

662
00:45:41.240 --> 00:45:46.280
All right, so that's 10 hours of of content that they've consumed for me. Okay, right? Let's do the math here

663
00:45:46.280 --> 00:45:52.520
If the average short that I put out is let's say 20 seconds. Okay, so if we have 20 seconds for a short

664
00:45:52.520 --> 00:45:54.520
That means it's three shorts per minute

665
00:45:55.160 --> 00:46:02.600
So 10 hours time 60 was you have 600 minutes is what my lungs were yeah, and we'd have to triple that so they would have to consume 1800

666
00:46:02.600 --> 00:46:04.600
Shorts of mine. God

667
00:46:04.760 --> 00:46:05.960
right

668
00:46:05.960 --> 00:46:07.960
And so I think that what's happened is that

669
00:46:08.760 --> 00:46:11.240
people have wildly over leveraged

670
00:46:11.240 --> 00:46:14.440
Followership in views for influence

671
00:46:15.240 --> 00:46:19.320
What's interesting is that like small businesses? I remember Michael showed me this actually

672
00:46:19.560 --> 00:46:25.160
He saw this little q-cardie took a picture of it from like a card detailing business or something and they said

673
00:46:26.760 --> 00:46:27.800
for

674
00:46:27.800 --> 00:46:29.800
400,000 views on TikTok

675
00:46:30.600 --> 00:46:31.640
or

676
00:46:31.640 --> 00:46:33.640
10,000 views on YouTube

677
00:46:33.880 --> 00:46:38.280
$500 so any creator who wants to make something about their card detailing organically

678
00:46:38.360 --> 00:46:43.080
They'll pay them $500 if they get 10,000 views on YouTube or 400,000 views on TikTok

679
00:46:43.480 --> 00:46:48.200
So they had they had already basically appropriate that is 40x is the equivalent

680
00:46:48.760 --> 00:46:54.600
Uh, amount of influence and if it were me, I still would probably rather have the 10,000 views on YouTube if we're looking at this

681
00:46:55.400 --> 00:46:57.400
What's her name the dancing girl Charlie?

682
00:46:57.880 --> 00:47:02.680
Demillion, right? So I think she's had a couple of things that didn't work as well that like right and

683
00:47:03.160 --> 00:47:06.840
Again, it's if I make a brand built around slapping

684
00:47:07.480 --> 00:47:09.960
Strangers in public right as a as a complete extreme

685
00:47:10.680 --> 00:47:15.800
And then I launch a credit card. Does that really carry? There's no say-do correspondence

686
00:47:16.120 --> 00:47:20.520
I have no proof right so that I've no proof that she actually did partner with a credit card company by the way

687
00:47:20.600 --> 00:47:24.360
Right, and I think she had a popcorn and to be clear. I'm I'm there's no shade here

688
00:47:24.360 --> 00:47:28.600
That's not why I'm a point here my point is to help creators monetize

689
00:47:29.320 --> 00:47:33.400
And so I see the point of short form as one thing

690
00:47:33.960 --> 00:47:37.400
Which is to drive them to long form or if you can obviously deliver some sort of value

691
00:47:37.400 --> 00:47:39.560
Like I got from Huberman enough in that short clip

692
00:47:39.640 --> 00:47:42.440
But the thing is is that the likely that that occurs is really really low

693
00:47:42.520 --> 00:47:49.240
I have a pretty decent memory and I remembered a short from a month earlier and then actually did it and got a result

694
00:47:49.960 --> 00:47:51.640
super unlikely

695
00:47:51.720 --> 00:47:54.760
Now if you listen to Huberman on a daily basis for example

696
00:47:55.080 --> 00:47:57.080
He probably gives any directives

697
00:47:57.640 --> 00:48:04.760
Over his every podcast and all all you have to do if you're long form listener is listen to one of them over a month

698
00:48:05.080 --> 00:48:07.080
And your life gets better and he gains influence

699
00:48:07.560 --> 00:48:09.640
And so when he then makes a product recommendations

700
00:48:09.640 --> 00:48:12.280
I'll bet you that the Huberman collabs have probably crushed

701
00:48:12.840 --> 00:48:16.200
Athletic greens. Yeah, and he's got broke. He's got the sunglasses thing

702
00:48:16.840 --> 00:48:21.320
I think he's promoting David bars, which is actually how I protein. Yeah, so like

703
00:48:22.200 --> 00:48:26.200
And those collabs I think have probably done pretty well, right and Rogan also to the same degree

704
00:48:26.200 --> 00:48:31.720
Like when he makes when he makes recommendations like a huge amount of people like included presidential recommendations

705
00:48:31.960 --> 00:48:35.240
A huge amount of people follow and this is where it gets really fucking interesting

706
00:48:35.560 --> 00:48:38.120
So again, it's all of those elements

707
00:48:38.200 --> 00:48:42.760
So if you have a let's say somebody who's a long form host doesn't talk about politics at all

708
00:48:43.000 --> 00:48:46.360
shows no knowledge of the stuff has a big audience brings

709
00:48:47.000 --> 00:48:49.320
Bring somebody on their endorsement

710
00:48:50.280 --> 00:48:54.120
Probably matters little if their audience pays attention to a political candidate

711
00:48:54.520 --> 00:48:59.480
Then that's basically just functions as an ad and the political candidate is doing the influencing on their behalf

712
00:49:00.120 --> 00:49:03.240
But for their endorsement to matter not just the distribution

713
00:49:03.720 --> 00:49:09.080
They have to have demonstrated some credibility around the topic so that people say this guy is in form

714
00:49:09.240 --> 00:49:12.120
The value to be other than you've reached a million people or whatever right right

715
00:49:12.280 --> 00:49:14.120
Joe has done a ton of political stuff

716
00:49:14.200 --> 00:49:20.600
And like it don't like it whatever he's demonstrated that he's at least spent a lot of time trying to research the topics with the intention

717
00:49:20.600 --> 00:49:22.680
Of just trying to find truth from an independent perspective

718
00:49:22.680 --> 00:49:26.920
I'm not getting into like the the weeds on either side here, but just that that has been the intention

719
00:49:27.480 --> 00:49:32.600
And so he is tremendous influence because most people think at least I think most consumers think this way

720
00:49:33.240 --> 00:49:35.240
Uh, I don't want to do all that work

721
00:49:35.240 --> 00:49:40.040
I'll just trust him see was fascinating you described the primary function of short form to drive to long form

722
00:49:40.120 --> 00:49:41.400
Because you go to a broader point

723
00:49:41.480 --> 00:49:44.360
You're saying that people had followers, but they didn't have influence

724
00:49:44.600 --> 00:49:48.760
Because influence comes from the four things you just described like this credibility power status

725
00:49:49.080 --> 00:49:51.720
Initially what was going through my mind was yes

726
00:49:52.120 --> 00:49:56.600
2022-2023 saw bust because a lot of investors confused influence with followers

727
00:49:57.240 --> 00:50:01.160
Because there were more followers brownie because it's in views yes totally but nothing else

728
00:50:01.800 --> 00:50:04.360
The initial premise I was operating was in 2025

729
00:50:04.840 --> 00:50:10.440
Which now I'm rethinking was oh, but now people have figured out how to use short form to upsell

730
00:50:10.920 --> 00:50:15.400
To products and services whether on school or yeah, or

731
00:50:16.280 --> 00:50:23.160
Yeah, or these other 15 different monetization methods where the short form units are just becoming really marketing

732
00:50:23.160 --> 00:50:25.720
We're school the best one. No, I mean it is the best one

733
00:50:26.680 --> 00:50:28.680
Well said well said

734
00:50:28.680 --> 00:50:34.280
The premise for me was oh now short form. It's actually just marketing like they're just like commercials. Yeah

735
00:50:34.440 --> 00:50:39.400
And so the monetization is coming back the short form is not really successful in growing your influence

736
00:50:39.880 --> 00:50:44.520
But it is successful with just from a distribution POV think of it as like awareness ads. Yep

737
00:50:45.160 --> 00:50:49.880
And so what happens is the objective in my opinion so like the ones you just like school for example

738
00:50:49.960 --> 00:50:53.720
If you're a short form person, it's like how can I just get them to take the tiniest amount of action?

739
00:50:54.200 --> 00:51:00.280
Which is to go into a community where I can get way more interactions with them on a much faster feedback loop

740
00:51:00.440 --> 00:51:04.200
So that I can gain the other three or four more like right harder, right?

741
00:51:04.680 --> 00:51:05.880
Um

742
00:51:05.880 --> 00:51:10.120
But what's interesting is like the people who I think we're doing really well monetization right now for tiktok are doing

743
00:51:10.520 --> 00:51:12.520
tiktok shot plus lives

744
00:51:12.680 --> 00:51:14.680
And what's alive? Well

745
00:51:15.560 --> 00:51:21.000
I think there were some creators that were still wildly undervalued yeah, and many that were wildly overvalued

746
00:51:21.720 --> 00:51:22.680
and

747
00:51:22.680 --> 00:51:27.480
This is the you know the classic story of like I had two people that I paid a hundred thousand you know

748
00:51:27.480 --> 00:51:29.000
So I had a hundred thousand

749
00:51:29.000 --> 00:51:30.520
followers on

750
00:51:30.520 --> 00:51:34.600
Instagram and I had both of them do a shout out for my thing and one guy drove

751
00:51:35.160 --> 00:51:37.160
10,000 customers and one guy drove zero

752
00:51:37.640 --> 00:51:43.960
How is now assuming it's not bots, but like there's definitely legitimate creator accounts that have a hundred thousand followers that have zero influence

753
00:51:44.760 --> 00:51:51.640
Do you think more businesses should be trying to follow content creator led models like we've talked a lot about

754
00:51:51.880 --> 00:51:56.440
Hey, there's five different ways these businesses make money here are some of the challenges they have should the other you know

755
00:51:56.520 --> 00:52:01.160
60% of entrepreneurs come to you be thinking about oh, I should be incorporating kind more into what I do I have

756
00:52:01.960 --> 00:52:04.040
Super strong reservations with the word should in general

757
00:52:04.680 --> 00:52:05.560
um

758
00:52:05.560 --> 00:52:09.400
I would say really just depends on what the trade of the businesses and so like let's say you have an outbound

759
00:52:09.880 --> 00:52:14.440
Channel that you have cool colors and cold emailers that you know generate B2B customers for you

760
00:52:15.080 --> 00:52:16.200
Do you

761
00:52:16.200 --> 00:52:18.200
Need to start making content?

762
00:52:18.760 --> 00:52:25.080
Probably not and given the resources required are there is there something else in the business that would generate more enterprise value

763
00:52:25.160 --> 00:52:32.120
Yeah, if so then you should do that right big picture more attention in general tends to grow businesses provided

764
00:52:32.120 --> 00:52:33.800
They are not supply-constrained

765
00:52:34.040 --> 00:52:38.040
But that's a big asterisk many businesses are supply-constrained. There's a lot of plumbers who

766
00:52:38.680 --> 00:52:41.160
The phones ringing on the hook and they're like I just need more plumbers, dude like I

767
00:52:41.880 --> 00:52:46.920
Yeah, of course like I could we can like I don't have a problem getting people if you have a cleaning business

768
00:52:46.920 --> 00:52:50.760
The problem is not getting people to want cleaning the problem is finding cleaners. Yeah, right? So like

769
00:52:51.240 --> 00:52:56.440
It depends on what the problem the businesses now if that were the issue do you make content around like what it's like to be a cleaner

770
00:52:56.600 --> 00:52:58.920
So do you attract cleaners people who want to clean?

771
00:52:59.160 --> 00:53:03.480
It's like hey you already clean your house all the time want to do it for money and we have better working conditions

772
00:53:03.480 --> 00:53:10.520
Well, like fundamentally uh, I guess reframing the question as should the other 60% of businesses add another advertising channel

773
00:53:11.720 --> 00:53:13.720
No, unless it's the constraint of the business

774
00:53:13.880 --> 00:53:17.800
When you think about what you're investing for acquisition.com or now for acq ventures

775
00:53:18.280 --> 00:53:21.960
It sounds like traditionally it started from let me bring you better business processes

776
00:53:22.360 --> 00:53:27.480
With school it actually shifted a bit to I can just bring you tremendous distribution via my own content

777
00:53:28.120 --> 00:53:29.640
What types of companies?

778
00:53:29.640 --> 00:53:34.440
Were you leaning more toward investing once they help with the processes or ones where you think the content distribution actually is

779
00:53:34.440 --> 00:53:40.120
What matters because I'll say that it's both right um and I still use those three kind of legs of the stool

780
00:53:40.440 --> 00:53:43.800
So I got money we've got time or work and then we've got

781
00:53:44.440 --> 00:53:46.440
brand reputation distribution, etc

782
00:53:47.080 --> 00:53:49.480
Um, I prefer to do as many as I can of the first two

783
00:53:50.120 --> 00:53:54.440
Because in a lot of ways brand is so much more limited not limited in its power

784
00:53:54.440 --> 00:53:57.000
But limited in how many and maybe this could be a limiting belief for me

785
00:53:57.000 --> 00:54:01.720
But I don't think it is I think it's it's very so brand is built on associations and pairings

786
00:54:02.440 --> 00:54:04.600
and if you

787
00:54:04.600 --> 00:54:08.440
Parry stuff with too many things it the brand starts to lose its

788
00:54:09.160 --> 00:54:12.440
potency because you have associated with too many disparate things now

789
00:54:12.920 --> 00:54:15.560
If you made many associations with things in the similar buckets

790
00:54:15.560 --> 00:54:19.160
I think you can get more bullets more shots on goal if you will but no

791
00:54:19.880 --> 00:54:24.840
I try to basically do the more scalable things which money is actually you know pretty scalable

792
00:54:24.920 --> 00:54:29.560
We've developed a pretty pretty exceptional team at the holding company for acquisition.com

793
00:54:31.000 --> 00:54:34.360
Because I I basically take I marry a lot of old school in new school

794
00:54:34.440 --> 00:54:36.840
So we have a lot of young

795
00:54:37.480 --> 00:54:40.200
Called five and ten year McKinsey, you know

796
00:54:41.000 --> 00:54:47.640
Bane consultants that will pull who are like I hate feeling like a cog in a machine and just doing global hours

797
00:54:48.360 --> 00:54:50.920
But are otherwise incredibly hardworking incredibly bright

798
00:54:51.640 --> 00:54:55.880
And also see the problem with a lot of antiquated businesses and want to work with more

799
00:54:56.680 --> 00:55:02.840
New more cutting-edge stuff and also really like and a lot of them came from you know my content my world

800
00:55:03.800 --> 00:55:08.920
And want to marry I would say big business strategy with small business tactics

801
00:55:09.880 --> 00:55:15.080
And then kind of like bridge those two gaps together and that's a lot of what we do at at ACQ anyways

802
00:55:15.400 --> 00:55:18.760
And so I think they really enjoy it because they learn a ton

803
00:55:19.560 --> 00:55:21.960
From the frameworks that we have for growing companies

804
00:55:22.200 --> 00:55:28.280
It adds nuance and texture to their existing knowledge set from what they learned at the kind of like big consulting firms

805
00:55:28.360 --> 00:55:30.360
And just to put context to this like

806
00:55:30.600 --> 00:55:32.600
If you're looking at like supply chain

807
00:55:33.400 --> 00:55:37.800
For Walmart Brazil right or something you know Walmart Latam

808
00:55:38.440 --> 00:55:42.040
Because you need to do some you know analysis for that superheadie

809
00:55:42.920 --> 00:55:44.920
Really complex lots of moving parts

810
00:55:45.640 --> 00:55:47.880
And not useful to a small business

811
00:55:48.760 --> 00:55:51.800
Like really valuable to a big business, which is why they pay the money for it

812
00:55:52.680 --> 00:55:54.280
Not useful at all to a small business

813
00:55:54.360 --> 00:55:58.120
But the thinking process and the reason I like taking people from that world one is because I came from it

814
00:55:58.120 --> 00:55:59.880
But also because I think at the end of the day

815
00:55:59.880 --> 00:56:02.680
Consul and so on like engineers in that you just have to solve problems

816
00:56:03.080 --> 00:56:05.960
And being able to have a really good problem thinking mind

817
00:56:06.600 --> 00:56:08.360
Is I think what makes a good

818
00:56:08.360 --> 00:56:12.200
The good consultant in general and so that feeds really well into the advisory practice

819
00:56:12.200 --> 00:56:14.440
Would you invest in content creators?

820
00:56:14.440 --> 00:56:17.560
I would if I like okay

821
00:56:19.240 --> 00:56:21.960
I'll only clarify the qualify the answer so are you saying

822
00:56:22.920 --> 00:56:26.280
Invest in them like if I could buy a stock in a person or like

823
00:56:26.840 --> 00:56:31.640
If hey, I want to start I want to start this umbrella company. I see initially the second

824
00:56:31.640 --> 00:56:33.800
I probably wouldn't for a denovo idea

825
00:56:34.760 --> 00:56:35.960
um

826
00:56:35.960 --> 00:56:39.480
For a couple reasons one is like I don't I don't really like

827
00:56:40.360 --> 00:56:45.880
Seed stuff like idea stuff right also because creators are typically like big idea people

828
00:56:45.880 --> 00:56:48.200
That's not the constraint the constraint for them is execution

829
00:56:48.760 --> 00:56:53.640
um and business acumen and for a deal structure like that to like in a traditional structure

830
00:56:53.640 --> 00:56:56.440
I probably wouldn't have majority controller ownership and so

831
00:56:57.000 --> 00:56:58.760
That would be really high risk

832
00:56:58.760 --> 00:56:59.800
I think

833
00:56:59.800 --> 00:57:03.400
Inside probably wouldn't like that deal if it was a deal that was kind of like the opposite were like

834
00:57:04.040 --> 00:57:08.840
Maybe they owned like 20% and we owned 80 and we fronted the capital and we like put all the stuff together

835
00:57:08.840 --> 00:57:14.520
Comes you're incubating them. Yeah, maybe yeah, but even then it's like I also have to look at supply demand of like my own

836
00:57:14.760 --> 00:57:18.440
Deal flow right and to do that it would have to prove that that

837
00:57:19.880 --> 00:57:25.080
Deal structure provides more alpha than the existing thing which I would have a hard time

838
00:57:25.720 --> 00:57:29.320
What about a later stage creator company like the primes of the world?

839
00:57:29.400 --> 00:57:34.040
Yeah, so like a Logan Paul or like a whatever Jake Paul or something who's not him, but somebody else right

840
00:57:34.040 --> 00:57:35.720
It would be tough

841
00:57:35.720 --> 00:57:42.680
And the main reason is investing in someone like that isn't really investing. It's a joint venture

842
00:57:43.480 --> 00:57:46.120
And then it's really like so I'm starting another business

843
00:57:47.000 --> 00:57:51.080
And that's really what it would be and so it would have to be a business that I felt

844
00:57:52.680 --> 00:57:58.200
The existing resources and assets that we had we already had a huge percentage of the core competencies required

845
00:57:58.840 --> 00:58:03.080
Not just in knowledge, but like in manpower. Yeah to do it makes sense because for you you're either

846
00:58:03.480 --> 00:58:07.480
Obviously you bring capital money, right, but you're also either bringing your invention likeness

847
00:58:07.480 --> 00:58:10.440
Which is distribution or we're bringing the operational expertise, right?

848
00:58:10.440 --> 00:58:14.680
You're working with these businesses that are less savvy on the distribution side clearly something in value

849
00:58:15.160 --> 00:58:17.800
You're working with these creators. Well, you have

850
00:58:18.200 --> 00:58:20.600
Distributions you don't necessarily need theirs

851
00:58:20.920 --> 00:58:24.360
And they don't have the operation side which means you have to spend tons of time building tons

852
00:58:24.440 --> 00:58:27.960
They like they don't have any right and so we'd have to build we'd have to build a company

853
00:58:28.360 --> 00:58:33.480
And so that's where I see that is like like translating the ultimate question to like would you build a company for a creator?

854
00:58:33.960 --> 00:58:39.160
If that's what it if that's what I translated into then the answer is probably not right

855
00:58:39.720 --> 00:58:44.280
Just given the the construct like how much it would take when I was chatting with Michael earlier today

856
00:58:44.280 --> 00:58:49.240
He did say you've been shifting more to investing. Mm-hmm, and we really inventors is all capital

857
00:58:49.240 --> 00:58:54.840
Yeah, AC adventures and for my understanding that's much earlier stage. What prompted that actually honestly just we had so much deal flow for it

858
00:58:55.240 --> 00:58:59.160
So a lot of people were coming in and saying hey, I would say it's it is largely tech

859
00:58:59.320 --> 00:59:06.520
So is it's venture you need to have really really potential big acts? Yeah, yeah, they're just the economic like the economic is lend themselves to tech

860
00:59:06.600 --> 00:59:08.120
But we had a lot of

861
00:59:08.120 --> 00:59:11.320
People were coming towards us in I would say like a couple buckets

862
00:59:11.320 --> 00:59:15.560
So bucket one is somebody who's already raised some round. Yeah consumes all my stuff

863
00:59:16.760 --> 00:59:21.560
It helped them grow and they're like I would just rather have you on our cap table than somebody else

864
00:59:21.960 --> 00:59:25.160
And that's like perfect scenario right like they already they like the stuff

865
00:59:25.160 --> 00:59:27.160
They're used they kind of like subscribe to our ideology

866
00:59:27.160 --> 00:59:30.680
We can provide capital help them grow because we believe in the thesis so like that's great

867
00:59:30.920 --> 00:59:36.040
And those and the thing is is that the existing model that we had prior to that required us to have a significantly larger equity position

868
00:59:36.520 --> 00:59:38.520
To justify

869
00:59:38.920 --> 00:59:41.640
The return right, but because some of these companies can have

870
00:59:42.280 --> 00:59:46.680
save me larger exits and because they don't require more work, right? We can take smaller slugs and do

871
00:59:48.200 --> 00:59:54.360
And just do money only essentially so that's so that was that was kind of bucket one bucket two people who don't have a cap table at all

872
00:59:55.640 --> 00:59:57.160
There may be bootstrapped

873
00:59:57.160 --> 01:00:01.560
But they still want to take on some clear opportunity that we can help fund

874
01:00:02.040 --> 01:00:03.800
Um, and those also

875
01:00:04.680 --> 01:00:09.320
You know as long as the the deal structure makes sense like those can make a lot of sense the nice thing with that is that they require

876
01:00:10.360 --> 01:00:12.360
Almost no work and expertise

877
01:00:12.680 --> 01:00:16.680
Uh, and so it's really just like these entrepreneurs like I'm not trying to exit

878
01:00:16.760 --> 01:00:18.680
I'm not trying to have a growth partner

879
01:00:18.680 --> 01:00:22.600
I need capital and I prefer your capital to somebody else's and we basically had so much of that

880
01:00:22.680 --> 01:00:27.880
They were like we should probably just just spin this up and the check sizes are not that big and so

881
01:00:28.680 --> 01:00:33.320
I don't even really need to raise a fund to do like I like I can just do it on my own. Yeah, exactly

882
01:00:33.400 --> 01:00:35.880
So um, that's worked out really well. We've already done like

883
01:00:37.000 --> 01:00:41.640
I want to say like six or eight deals. Oh wow. Yeah. Yeah. I know just in the last like two months

884
01:00:41.640 --> 01:00:43.800
So like it's it's heating up really pretty quickly

885
01:00:44.440 --> 01:00:47.480
Which is great or I'll just lose my ass and we'll find out but like

886
01:00:48.760 --> 01:00:52.120
Yeah, I've deployed a lot of money like congratulations

887
01:00:52.200 --> 01:00:55.080
You know because it's funny because in the investing world for these don't don't know this

888
01:00:55.720 --> 01:00:58.920
Uh, in a fund structure you basically are incentivized to deploy capital. Yeah

889
01:00:59.560 --> 01:01:04.200
Uh, so you don't have to put out money. Yeah, so it's kind of interesting because like the traditional like clapping of hands

890
01:01:04.600 --> 01:01:09.880
That happens when it's all your money. Yeah, it's actually like well, I took a lot of swings. We'll see

891
01:01:10.280 --> 01:01:15.960
You really have LPs your LPs yourself. That that's why it's a cool. I've spent all my money. Yeah

892
01:01:17.000 --> 01:01:19.000
Amazing

893
01:01:19.000 --> 01:01:22.760
Yeah, I mean fundamentally we operate a hundred percent like a private equity group and obviously the fund

894
01:01:23.240 --> 01:01:27.800
The the ACQ ventures operates like a VC right like we have a

895
01:01:28.600 --> 01:01:31.480
Basically a general partner who just basically runs that

896
01:01:32.040 --> 01:01:34.920
Came from the white combinator world like has really a deal flown his own

897
01:01:35.320 --> 01:01:38.600
Yeah, he sources a bunch of deals on his own outside of when it were two which I

898
01:01:39.160 --> 01:01:46.200
You'll probably notice the common theme is like I want stuff that already works and that I can put gasoline on yeah rather than

899
01:01:47.480 --> 01:01:52.200
It can only work because of me schools in exceptional product and

900
01:01:52.840 --> 01:01:56.680
Was compounding month of a month and zero advertising on its own

901
01:01:58.280 --> 01:02:04.920
Then we added gas if it only if it requires me in order to work then it requires me to work until I die

902
01:02:05.400 --> 01:02:09.480
That's not fun and so just as like a side note for the creators like everything that I again

903
01:02:09.720 --> 01:02:12.360
I've this keeps coming back to this point but like I saw for revenue retention

904
01:02:12.840 --> 01:02:17.480
Because if if you go on vacation in the company dies you just bought yourself a higher leverage income

905
01:02:17.960 --> 01:02:21.160
But you did not buy yourself a business right and it's not an asset

906
01:02:21.560 --> 01:02:27.800
It's literally only valuable to you and not valuable to everyone else and the valuable to everyone else part is why you where you get

907
01:02:28.520 --> 01:02:32.760
Significant outsize returns in terms of wealth creation when you started to make content

908
01:02:33.720 --> 01:02:37.720
Before your previous businesses you hadn't really gone hard on condo marketing

909
01:02:38.200 --> 01:02:43.160
And so it was the motivation because you saw this as good lead generation for acquisition calm or was it more

910
01:02:43.400 --> 01:02:50.360
Hey, it's time for me to share what I've learned. I would say one there was multiple motivations. Yeah, and I was actually pretty

911
01:02:51.560 --> 01:02:55.320
Reluctant to do this and I I don't even know if I will do it forever

912
01:02:55.400 --> 01:02:57.800
I think some people were like I'm gonna do this like I don't know if I will do it

913
01:02:57.880 --> 01:03:00.920
I came in with a very clear purpose of why I was going to do this

914
01:03:01.000 --> 01:03:04.600
I saw I'll say the the stories that just got me to decide to do it and then

915
01:03:05.480 --> 01:03:07.480
Why so

916
01:03:07.640 --> 01:03:09.640
In very short order

917
01:03:09.720 --> 01:03:16.440
The rock head term on a for multiple billions huda beauty did a minority deal, you know, value can be over 600 million

918
01:03:17.000 --> 01:03:22.280
Conor McGregor same thing 600 iron at least 600 million for proper 12 his whiskey company

919
01:03:22.840 --> 01:03:27.880
So those were like some celebrity examples then I had I remember hearing this podcast of this guy named

920
01:03:28.520 --> 01:03:31.640
He did nomad capitalist. He's like a youtuber and he talks about

921
01:03:32.120 --> 01:03:35.080
Ex-pay trading and like how to have tax savings and things like that

922
01:03:35.160 --> 01:03:38.920
I had seen his channel and I listened to a podcast and he said

923
01:03:39.320 --> 01:03:43.480
I get 3,000 applications a month and I went to go look at the application and it was like

924
01:03:44.120 --> 01:03:46.120
It was an application. It was like

925
01:03:46.600 --> 01:03:49.800
30 something questions and they weren't like multiple choice. They were like

926
01:03:50.920 --> 01:03:56.120
Very in-depth questions for financials and like all like you had to upload documents and like there's a lot of stuff involved

927
01:03:56.200 --> 01:04:02.280
And I thought to myself if I had 3,000 applications a month for any business that was high-end B2B

928
01:04:02.920 --> 01:04:05.160
My god, I would just print money

929
01:04:05.720 --> 01:04:10.520
And so I thought about that and I was like okay, so these these were like I'm getting warmer and warmer to this idea

930
01:04:11.080 --> 01:04:15.880
And then Kylie Jenner gets on the cover of Forbes as a billionaire at age 20 which they ended up just pretty later

931
01:04:15.880 --> 01:04:18.120
But like doesn't matter. I think she has a billionaire now

932
01:04:19.080 --> 01:04:21.720
But she was 20 I was 27. I thought I was hot shit

933
01:04:21.720 --> 01:04:24.760
She's seven years younger and she's a chick and she's richer and I was like I suck

934
01:04:24.760 --> 01:04:28.360
I'm a big believer in like if somebody's making more money than you there's something you can learn from

935
01:04:28.920 --> 01:04:33.080
In the game of business totally and it might just be like you need to be luck here

936
01:04:34.040 --> 01:04:36.760
But like sometimes it's like you need to be the right right right place the right time

937
01:04:36.760 --> 01:04:38.520
So it's like okay, well, what do I do about that? It's like okay

938
01:04:38.520 --> 01:04:40.520
Well, I tried to increase my surface area of luck

939
01:04:40.600 --> 01:04:45.480
Then I decided I was going to do it and so when acquisition.com for sure was what I was going to do

940
01:04:46.040 --> 01:04:48.440
The brand part wasn't something I was for sure going to do

941
01:04:48.440 --> 01:04:52.520
But when I thought okay, how can I decrease the likelihood of failure as much as possible

942
01:04:52.840 --> 01:04:58.280
Like one of the tennis would be like well if you had investment firm and you had unlimited deal flow of people who only wanted to do business with you

943
01:04:58.680 --> 01:05:00.440
It would make it very hard to fail

944
01:05:00.440 --> 01:05:05.080
And so I wouldn't have to be the best negotiator. I wouldn't we have to be the best picker of companies

945
01:05:05.560 --> 01:05:08.360
I could just have unlimited shots on goal and so I was like okay

946
01:05:08.360 --> 01:05:10.200
So if I were to solve for that, what would I do?

947
01:05:10.200 --> 01:05:11.400
And I said well if I could build the biggest

948
01:05:12.040 --> 01:05:19.880
Business brand then that would basically shrink into a relevance or make sorry shrink all of my problems or make them irrelevant by consequence

949
01:05:20.120 --> 01:05:24.200
That was fundamentally why I decided to do it. You mentioned in the beginning you weren't sure you wanted to do it

950
01:05:24.440 --> 01:05:28.760
Do you enjoy having over a million followers now in that piece? Yeah, I'm accomplished

951
01:05:29.480 --> 01:05:33.320
There are pros and there are cons and right now there are more pros than cons

952
01:05:33.400 --> 01:05:36.440
And if there's a day where I feel like there are more cons than pros, I will stop

953
01:05:36.680 --> 01:05:37.880
right

954
01:05:37.880 --> 01:05:41.080
I think there are some people who really love attention and

955
01:05:42.440 --> 01:05:43.480
Love

956
01:05:43.480 --> 01:05:48.920
Fame and things like that. I don't think I am that person and I feel like I have evidence to support that

957
01:05:49.560 --> 01:05:53.000
Because I didn't do it for a long time when I think I had the opportunity to right now

958
01:05:54.280 --> 01:05:56.600
My content feeds thousands of families

959
01:05:57.480 --> 01:06:01.560
First from obviously what we do at equity not come with the holding company, but then also all of the

960
01:06:02.040 --> 01:06:05.560
You know obviously school like there's there's you know from a distributed

961
01:06:06.280 --> 01:06:07.480
Perspective

962
01:06:07.480 --> 01:06:09.480
If I were to quit in the future

963
01:06:09.480 --> 01:06:15.720
I would try to make sure that I had backfilled my responsibility to those families to make sure that that vacuum

964
01:06:15.960 --> 01:06:20.520
You know didn't that that it was filled the pros of this are you have recruiting talent becomes

965
01:06:21.320 --> 01:06:24.760
Infinite easier the best people in the world at whatever they do

966
01:06:25.240 --> 01:06:30.920
Which is such a such an underrated lever like I just can't I can't overstate this who is is lever number one number

967
01:06:31.160 --> 01:06:36.280
Number two is you have the obvious thing is that you have lots of deal flow or customer flow to hang on whatever

968
01:06:36.280 --> 01:06:40.360
You know whatever you whatever you sell those are really the big pros you have some answering pros like

969
01:06:40.360 --> 01:06:44.360
You know if I go to a gym and drop in like they usually know how I am and they'll give me some nicer treatment

970
01:06:44.360 --> 01:06:47.560
And if I go to a restaurant, they probably know how I am and they'll they'll you know be nice about it

971
01:06:47.880 --> 01:06:54.120
Um those don't or super right some people like that the downsides are that what you sell is privacy

972
01:06:54.280 --> 01:06:59.400
And so that's the that's the price that you give them is privacy is the price and so

973
01:06:59.880 --> 01:07:06.120
Um and one of the really tough parts and why I spent so much time thinking about this was that um it's your it's it's kind of uh

974
01:07:06.280 --> 01:07:09.160
It's a one-way door. Yeah, it's uh you can't undo it

975
01:07:09.880 --> 01:07:13.080
There's no control Z Alex thanks so much for making time that's your ad a percent