How to Survive Creator Burnout and Still Scale (Karat Reshare) | Ep 888

Summary

Podcast Summary: The Game with Alex Hormozi - Episode 888

Title: How to Survive Creator Burnout and Still Scale (Karat Reshare)

Release Date: May 19, 2025

Hosts: Alex Hormozi and Eric Way

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Introduction

In this episode of The Game with Alex Hormozi, host Alex Hormozi engages in a deep conversation with Eric Way, the founder of Carrot—a prominent company that assists creators in obtaining credit cards. The discussion delves into the intricacies of building scalable businesses for content creators, investment philosophies in the private equity space, and strategies to mitigate creator burnout while maintaining growth.

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Understanding the Creator Business Model

Key Discussion Points:

• Systematizing Content Creation:

  • Alex emphasizes that the foundation of his following lies in robust systems rather than his personal brand. “[00:36] The reason people followed me was because the systems were good. And so because the systems were good, they didn't need me for the systems to work.”

• Challenges in Monetization:

  • Alex critiques creators for often excelling in content creation but faltering in monetization. “[00:47] I actually think creators are horrendously bad at picking product. Your constraint is not that you're a 97 out of 100 on content, it's that you're a 0 out of 100 on monetization.”

• Content as a Competitive Advantage:

  • He discusses how solid business processes and systems provide a sustainable competitive edge, contrasting with creators who rely solely on their personal influence.

Notable Quote:

“[00:47] I actually think creators are horrendously bad at picking product. Your constraint is not that you're a 97 out of 100 on content, it's that you're a 0 out of 100 on monetization.”
— Alex Hormozi

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Influenсe vs. Followers

Key Discussion Points:

• Defining True Influence:

  • Alex elaborates on the concept of influence, distinguishing it from mere follower counts. He outlines four pillars of influence: likeness, credibility, power, and status.

• Short-Form Content Limitations:

  • He argues that short-form content is primarily effective for awareness rather than building substantial influence. “[42:57] … the likelihood that occurs is really, really low.”

• Influential Examples:

  • Huberman and Joe Rogan are cited as examples where long-form content builds significant influence, leading to successful product endorsements.

Notable Quote:

“[04:08] And so I just took what they were doing and just like did a lot more.”
— Alex Hormozi

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Investment Strategies with Acquisition.com and Acq Ventures

Key Discussion Points:

• Blending Old and New Models:

  • Alex explains how Acquisition.com merges traditional private equity with modern social media strategies. “…something old private equity with something new social media.”

• Investment Criteria:

  • Emphasis is placed on businesses with strong revenue retention and effective user acquisition, citing Gym Launch as a foundational model.

• Acq Ventures Evolution:

  • Transitioning to Acq Ventures, Alex highlights a focus on early-stage tech investments, leveraging his brand to attract startups seeking capital without relinquishing control.

Notable Quote:

“[12:55] … if you understand media at this level. Like I would. I would wager that you and I probably understand the creator world and media better than most.”
— Alex Hormozi

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Dealing with Creator Burnout

Key Discussion Points:

• Sustainable Content Models:

  • Alex discusses how creators like Shelby Church shift to sustainable formats like podcasts to mitigate burnout. “…she's kind of shifted to I would say a sustainable content model.”

• Variety and Format Longevity:

  • Drawing parallels with long-running shows like The Daily Show, Alex emphasizes the importance of variety in content formats to sustain engagement and prevent burnout.

• Key Man Risk:

  • The conversation touches on the key man risk in creator-led businesses and strategies to diversify leadership to ensure business continuity without over-reliance on a single individual.

Notable Quote:

“[31:40] Yeah. And so where you get really smart about it is if you can gain enough influence where you can develop an affiliate network of businesses.”
— Alex Hormozi

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Choosing the Right Monetization Path

Key Discussion Points:

• Monetization Spectrum:

  • Alex outlines a spectrum of monetization strategies for creators, ranging from sponsorships and affiliate deals to white labeling and creating original products/services.

• Control vs. Monetization:

  • He stresses that creators need to align their monetization strategy with their ultimate business goals, whether it's maximizing control or revenue.

• Enterprise Value Consideration:

  • The further a creator moves to the right on the monetization spectrum (towards creating original products/services), the higher the potential enterprise value.

Notable Quote:

“[09:26] We put all the stuff together. And it has to be significant enough for me to, like, make it worth using what I would consider a brand bullet on.”
— Alex Hormozi

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Impact of Content-Driven Distribution

Key Discussion Points:

• Leveraging Content for Distribution:

  • Alex discusses how content can serve as a powerful distribution channel, driving awareness and customer acquisition without the need for substantial advertising spend.

• Challenges with Short-Form Content:

  • Despite its distribution benefits, short-form content rarely translates to substantial influence or long-term customer loyalty, limiting its effectiveness for monetization.

• Successful Models:

  • Acquisition.com’s School is highlighted as a successful model where content distribution directly fuels business growth through effective monetization strategies.

Notable Quote:

“[51:15] … you have right audience. Right product. And so I think that having the saving money audience, you can make money from it, but getting them to buy something that would be considered frivolous, which is just like coffee …”
— Alex Hormozi

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Examples of Successful and Failed Creator Businesses

Key Discussion Points:

• Successful Examples:

  • Linus Tech Tips and MKBHD are cited as creators who have successfully scaled their content into sustainable businesses by diversifying their offerings and maintaining high product quality.

• Failed Ventures:

  • Graham Stephan’s and Emma Chamberlain’s attempts to launch product lines like coffee businesses are discussed as examples where product selection and brand alignment were misaligned, leading to underperformance.

• Celebrity Ventures:

  • The case of Liver King is discussed, illustrating how even highly viral personalities can sustain their careers despite significant backlash, emphasizing the resilience and adaptability required in the creator economy.

Notable Quote:

“[33:41] … or we're talking like Shelby Church. Right. She's kind of shifted to I would say a sustainable content model.”
— Alex Hormozi

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Strategies to Enhance Business Longevity

Key Discussion Points:

• Building Multi-Faceted Brands:

  • Alex advocates for building brands that can stand independently of the creator, reducing key man risk and ensuring business sustainability.

• Collaborative Leadership:

  • Emphasizes the importance of backfilling leadership roles with trusted individuals who align with the brand’s values to maintain continuity.

• Focusing on Revenue Retention:

  • Alex stresses the importance of revenue retention over aggressive growth, highlighting that businesses with high retention rates are more likely to scale successfully.

Notable Quote:

“[39:52] … Think of this as like awareness ads.”
— Alex Hormozi

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Final Insights and Conclusions

Key Takeaways:

1. System Over Personal Brand: Building robust business systems is more sustainable than relying solely on a personal brand.

2. Monetization is Key: Successful creators must prioritize monetization strategies that align with their business goals and offer high enterprise value.

3. Influence vs Followers: True influence is built through authenticity, credibility, and delivering value, not just accumulating followers.

4. Diversify Leadership: Mitigating key man risk through diversified leadership ensures business continuity and scalability.

5. Strategic Investments: Combining traditional private equity models with modern content-driven strategies can yield substantial growth and sustainability.

6. Addressing Burnout: Sustainable content models and diversified content formats help prevent creator burnout while maintaining audience engagement.

Final Quote:

“[61:34] There are some people who really love attention and love fame and things like that. I don't think I am that person.”
— Alex Hormozi

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Conclusion

In this enlightening episode, Alex Hormozi provides a comprehensive blueprint for content creators aiming to scale their businesses without succumbing to burnout. By emphasizing the importance of robust systems, strategic monetization, and authentic influence, Hormozi offers actionable insights for creators to transform their passion into sustainable and scalable enterprises. Additionally, his investment perspectives with Acquisition.com and Acq Ventures shed light on blending traditional business models with modern content strategies to maximize growth and enterprise value.

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For Those Who Haven't Listened:

This episode is a must-listen for content creators, entrepreneurs, and investors seeking to understand the delicate balance between content creation and business scalability. Alex Hormozi's expertise provides valuable guidance on navigating the creator economy's challenges while capitalizing on its opportunities.

Transcript

[A]

Welcome back to the game. This is a guest spot on Eric Way's podcast. He's the founder of Carrot, which is a very large company that helps creators get credit cards. Kind of interesting business model, but this is a super, super business podcast. So I would say this is probably on the more advanced side, but we talk about obviously a little bit on the creator side of how they can build big businesses. What I look at when I invest in companies and my philosophy around content as our competitive advantage in the private equity space. Enjoy. If I had that size audience, I.

[B]

Would already be playing whatever. Shut up. When I met maybe three years ago, you had just started on your creative journey. Since then, millions of followers.

[A]

The reason people followed me was because the systems were good. And so because the systems were good, they didn't need me for the systems to work.

[B]

When I look at creators in space who've successfully executed on this, it's actually very minimal.

[A]

I actually think creators are horrendously bad at picking product. Your constraint is not that you're a 97 out of 100 on content, it's that you're a 0 out of 100 on monetization.

[B]

That's a powerful concept right there.

[A]

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

[B]

You're saying that people had followers, but they didn't have influence.

[A]

The point of short form is one thing, which is to drive them to long form.

[B]

Would you invest in content creators? Alex Hormozi might be the first creator billionaire, and he's built his business really differently from other YouTubers you might follow. Like Mr. Beast. Today, Alex shares why most creators aren't a broken business model. The five ways to make money from content, and how to turn your social media into a real business. If you're a creator wanting to grow, listen to this pod for 21 Secrets from Hormozi on how he did it. When I met you three years ago, you had just started on your creator journey. Since then, millions of followers, over 250 million arriving for portfolio companies. Is this where you wanted to be?

[A]

I don't consider myself a traditional creator. Like I, I had businesses and have businesses outside of this that aren't my face and anything but I saw where just the. The monster amount of impressions that social media is getting and giving away for free. And I was like, this is the most insane thing I've ever seen. And to this day I still think it's crazy that, like, we can get a hundred million, a billion Impressions a quarter for free. I think about creators in two buckets.

[B]

Yeah.

[A]

I think there are the words guys and then there are the video guys and then the crossovers audio. Then I'm a little bit of both. I started making YouTube videos and I wrote a book basically about the same time.

[B]

Yeah.

[A]

And then the book kind of took on its own, you know, growth path.

[B]

Yeah.

[A]

And then the videos also did too. The nature of how I've done things is that I'm all about business process and system.

[B]

Yeah.

[A]

The reason people followed me was because the systems were good. And so because the systems were good, they didn't need me for the systems to work. Whereas many businesses don't have that. And a lot of people follow the creator for other reasons that are not that. That are less duplicable.

[B]

It's fascinating too, because what you've built, it's a private equity firm in a way. But most private equity firms add value by cutting and slashing operations. In a way you're adding value because one, here's the business processes to run. The influence you've now built, talking about faceless systems, now you've been able to bring in your face to increase it.

[A]

So. Yeah, and I think what you said at the very beginning, which is that like entrepreneurs are realizing just the amount of attention that's here and this is just a way to advertise your business. I mean that was the, that was the entire thesis behind acquisition.com was I'm a big fan of something old and something new. So like something old private equity with something new social media. And like how do we, how do we bridge that? How do we, how do we merge that now? Cause there's been old school. I mean Warren Buffett's an influencer for sure. He's just legacy media. Ray Dalio is an influencer now. He's starting, you know, he's making his TikToks and things like that. Naval's an influencer. Of course these guys get deal flow because they're out there, you know, they're talking about business and so they get it. I just took what they were doing and just like did a lot more. What types of companies we look for the process overall, those things have changed a lot from when we probably spoke three years ago. Because three years ago I was looking at basically running the gym launch playbook that we did. Taking a company that has basically digital media driven, that is vertically integrated education around a specific sector.

[B]

Yeah.

[A]

And then wrap in business services and then be able to package that because you have revenue retention and then sell it. Right. And transition it from a face driven business to a kind of consulting business that's, that's in one niche. Right. It's a difficult operational challenge for, for, for face driven businesses to remove the face. And I think that makes sense. Like Taylor Swift isn't looking for somebody to like step in and sing for her.

[B]

There's a tension in what you said. You became the face for Faceless Systems. Your premise was, I have these processes that work. A hundred million offers, a hundred million leads. You don't need Alex Hormozi to literally be doing this and get value from it. Exactly. It's to empower you to do it. As you said, the business model for creators, very different. Colin Samir talked about how there's an inverted pyramid where the creator is almost the chokehold, the gate point for everything because you need Taylor Swift to be there.

[A]

Yeah.

[B]

Now you are an influencer. And so it's funny because you're like, well, I'm going to help you do a system where you don't need me. But now people follow you for that. I think once upon a time there's a conception of a creator as like the Casey Knights that alter right. 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. I think now you're seeing creators becoming entrepreneurs and content's just becoming how they.

[A]

Market themselves in some ways. Like the reputation of the creator was branded, if you will. Like in a figurative sense, like branded by the early creators. Which is not reflective of how you advertise a business today.

[B]

Yes. For creators who want to follow in your footsteps, 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 biz building business piece of what you do.

[A]

Really interesting question. I think it depends on your goal. So if your goal is to make money, then learn the money game. If your goal is to make content, then get, you know, just keep making content. I had a conversation with other Uber creators not that long ago and we [e-mail] off the theory of constraints. And so the positive, the theory constraints is that any system will grow until it's constrained and they'll grow no further. And so you know, these, these gentlemen had like subscribed to that and they said, hey Alex, I think we understand what our constraint is. You know, we have our, our, our media and our content creation machine. The, the constraint of it is like, we need better editors for whatever so we can get even more leverage on our time. And I said, what's the goal? And they said, we want to make money. And I remember kind of like smiling about this. And I was like, your constraint is not that you're a 97 out of a hundred on content, it's that you're a 0 out of 100 on monetization. If you don't care really about making money and your passion is making videos about whatever it is that you make videos about, then like, congratulations, you won. Congratulations, you're making videos. You're about. This was, yeah, you were like, if I could just quit my job and make videos about Dungeons and Dragons, then like, I would do it. And it's like, awesome, you won. Like, so now where to from here? But there are creators that I've talked to who I'm like, hey, so what do you want? They're like, dude, I just want to make money. And if that's the case, then you got to learn the game.

[B]

In 2024, you started working with school.

[A]

Yeah.

[B]

And so I think it's an interesting question using yourself as a case study, number one, the product that you're associating with, it's not one that you like, built it all nuts and bolts yourself. It was very much, here's an existing company, but I can grow it. And, and so it kind of comes down for creators to question of, 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?

[A]

This is going to be really interesting. So, because I've given a huge amount of thought to this, so I, I, I'll see if I can get the number right. But the creator paths exist on a spectrum, basically five paths of mon monetization for a creator. So, and they exist on an axis of control. And so at the lowest amount of control, you have sponsorships, right. Like people just pay you money, you give, basically you're an advertiser and so you promote their stuff. You read an ad, whatever, that's that one degree next to that you have being an affiliate, which is just like, you know, getting sponsors, except your pay on performance. Because what we do, when you do an affiliate deal 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. And so what you're essentially doing is shifting the risk from them to you. And the more risk you're willing to take on, the greater percentage of the upside. And so winners always work on performance. No one should be able to as accurately estimate how much you can drive.

[B]

No one knows better than you do.

[A]

Right. You're the seller. So, like in M and A terms, the seller of a business, the person who owns the business you're selling to somebody else always has an information advantage because they always know more about the business than the person buying. Right. And so you are the seller of attention. So you should always know the value of your attention better than someone else. Now, if you know that your attention shit and doesn't actually convert at all, then maybe you should just do the sponsorship.

[B]

Brand reads. It's the brand value.

[A]

Yeah, yeah, yeah, yeah. We're just. It's.

[B]

It's overall the impression now you've got me on board.

[A]

Yeah, right. Yeah. It's gonna change everything. So, yeah, anyway, so you've got. You've got sponsorships here, you've got kind of affiliates and performance deals here. Then you've got kind of the. The next path, which is what I. What I did with school, which is you promote and you. So I put capital in the deal too. So it wasn't just.

[B]

You also invested.

[A]

Oh, I wrote too. Yeah, yeah, yeah. It was a big deal.

[B]

Yeah.

[A]

And so we invested capital in the company and we invested resources and we invested brand. So it's. We did all. So I think about them in terms of, like, what are the buckets that create investment? So there's work, and for me, there's brand. Some people don't have that, but, like, there's work, there's brand, and then there's capital. And so we put all three into the business. I think there's a really nice sweet spot there because what you can do is rather than try and go through all the iterations, I say, hey, let's do a deal. I think there's a really nice sweet spot there. Because what you can do is rather than try and go through all the iterations, I say, hey, let's do a deal. It has to be significant enough for me to, like, make it worth using what I would consider a brand bullet on. And let's. Let's get carrot into every business in the U.S. not just creators. And then if, like, if that's compelling, then. Then you get to just do what you're good as a creator. This is me talking to creators and let the business do what they've already proven. And this is the key point that they've already proven they're good at. And so this is where a Little bit of business acumen comes, it comes into play. This is where like understanding what revenue retention is, looking at Churn, looking at user acquisition, looking at engagement rates, looks at activation points, whatever that you want to look at a business to understand. Okay, is this actually is the product good? Because what you want as a creator, like the perfect nirvana situation is unbelievable. Product compounding on its own from word of mouth for 12 to 24 months in a market that's like very similar to your audience and that you know that you can 10x in a year. That's where the magic happens for both parties. Yeah, they have an amazing product that could grow without you, 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. You're cutting the compounding curve and just basically step, step wise, increasing in a straight lineup and then saying, okay, we're just gonna pull year four forward and now we're gonna compound starting next month at year four to five rather than year two to three. Right. And that's fundamentally what I was doing with school. 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. It was because it hit all of those things. Now next on. So that's like third stop on our creator world here. The next is that you can white label so you can drop ship stuff, which is pretty common that I see as the simplest way of this is like you don't manufacture T shirts. You find a T shirt manufacturer, you slap your logo on it and you ship it. Pretty straightforward. And then the final version, final boss of this is that you create a product from scratch or service from scratch, and you market and sell it. And those are degrees of control that exist on that spectrum. There is a right path for everyone. And you just have to have some level of awareness to know which path is yours. Now, which of these can create the most enterprise value? The further on the right you are, the more enterprise value you have. If you are doing sponsorships or affiliate deals, which is the first two categories that I talked about, those two can create enterprise value in and of themselves. If you consider yourself a media business, which is so funny, I was talking to a Mondo creator, so like 20 million plus subscribers, and it was so funny. He was like, do what we're doing. Like, no one's ever done this before. Like have a business around, like making videos. And I was like, so, you know, media has existed for a long time, right? And I'm like. And when I. When I told him, I was like, dude, like, you should just look at existing media businesses. And it was like this big light bulb was like, all we're doing is taking an old business model and just doing it in a new media. Like, that's all it is. Right. The difference though is if you look at like a great media business of the new age is like barstool sports. Right, Right. And Dave Portnoy is sort of now a creator. I would say he is a creator now, but it wasn't started that way. He just saw the arbitrage that existed.

[B]

For all these cheap impressions properties.

[A]

Yeah, exactly. And he built a network and so that he could sell impressions across a specific demo to advertisers. And if that's the business I just have yet to see, I think ymh, your mom's house for comedy. I think they have a handful of productions, so they're kind of becoming a media.

[B]

Zach justice is trying to do this too.

[A]

Anyway, you have to talk to Zach. It's tough, though, especially if you are the primary, like, breadwinner, kind of. For the media business, I would say it's. It's almost simpler to be like, hey, I know a ton of advertisers.

[B]

Right.

[A]

Let me sell your ad space. And I think you could far more easily acquire a big network from that perspective, which is basically what Portnoy did.

[B]

Interesting. So for your pov, if you've successfully built the media side of your business, like, that's a win. But the upside, according to your degrees of control, it's very limited. And as you mentioned, I was trying to think of people who I think have built these successful media empires. So there have been many who failed, like buzzfeed. It's a great example.

[A]

Many have failed. Yeah.

[B]

Many. Many have failed. We're going to reinvent the game. It's like, well, you're just doing Newspaper State. I'll be on a new medium. There are some creators who have succeeded.

[A]

Or tablets.

[B]

Yeah, exactly, yeah. Daily Mail. And there are some creators who've gone. They've taken steps in this direction where they've almost scaled their content. So one that comes to mind, Linus Tech Tips, is a very good example. Where Linus Tech Tips started with just Linus, and over the time he's brought in other creators to be on his channel instead of himself. And then you also have creators like. I think MKBHD is a great example too. Mkbhd, I still think of as. Primarily as a media business. He doesn't do that much with products. And. Well, he actually tried one, a wallpaper app that got a lot of backlash, which I, you know, if I were mkbg, I feel like I would be like, yeah, I know. You know what? I'll just stay and do content over here. Because whenever I sort of go over there, people get mad at me.

[A]

Yeah.

[B]

Now it sounds like you're saying, though, from your pov, this is.

[A]

Can I hit on this real quick before we switch? So I want to say this mostly to the creators or people who have started from organic and, like, built an audience and whatnot. There's two types of angry. So there's angry because you have done something that you said you wouldn't do or that is against your brand or purported values.

[B]

Right.

[A]

Then there is people who think that everything in the world should be free. And I find that YouTube or really across all platforms, these people exist and you can by and large ignore them. And so I think that when people promote anything, they get backlash because anything that you give me that is not free, Fuck you, die.

[B]

Yep.

[A]

I think on some level you just got to be like, okay, anything worth doing is going to get lashed back. And there's like, show me one ultra famous person. Because this is all we're talking about. Creators and influence and audiences. Who doesn't have haters?

[B]

Right.

[A]

And so if you're going to get hate regardless, you might as well also accomplish your objectives. So that's just my 2 cents on now betraying the brand that you have. No, I think that's dumb. So, like, if you have, for example, a naturopathic brand of weight loss, don't push Ozempic, that's probably a bad idea. At the same time, if you said, hey, I've got these supplements that help you do that, or I have this, you know, nutrition program that I'm, you know, you do a retreat with me three times a year.

[B]

Seems very whatever. Of course I'm thinking of Liver King, because the whole premise was his gains came from his diet, not from other things. 100%, if you've been honest. I think it would have been fine.

[A]

I think, yeah, it would have been interesting for sure.

[B]

Yeah, fine. Maybe not fine. It would have been interesting.

[A]

Oh, yeah, I, I, you know, goat nuts. But I also inject Tren. Like, people were like, so is it the goat nuts or is it trend?

[B]

Well, it's actually both. It's the interaction between the two.

[A]

That's what the magic happens. Right? Like, yeah. So I, that's, that's yeah. But here, actually, I think he's, 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 and then it peaked. And then Derek, as a callback to earlier, ended up being the one who outed him.

[B]

He exposed him.

[A]

I remember he exposed it. Here's the thing. Liver King still makes content. And I would imagine that he probably still makes good money.

[B]

Yep.

[A]

And so I would see what happened to Liver King. As close to a quote, brand suicide moment as you can get, and yet he keeps going. And so here's the real, real. 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 no mistake ends your career unless you choose to end it. 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 distribution. So if all platforms deplatform you, if every platform did that, then yeah, you are canceled. Right. Like R. Kelly is in jail and he cannot make content. So like he has been. He has been effectively canceled.

[B]

Right.

[A]

On the flip side, how many times has Chappelle been canceled? I'll put that in quotes here.

[B]

Right.

[A]

He's not canceled. He just keeps going. Right. And so in the same light, to further, hopefully put at stake through this thing, your assumption that you have killed your career assumes that everyone in the world knows who you are. And the vast majority of the world doesn't even know you exist, nor do they really care. Subtext. And so like, let's say you have a million person audience. Okay. You mess up, just go get another million. You're not dead. And if anything, you start having learned a lesson and you just keep going.

[B]

It's interesting because like, I think the poster childs for this in some ways are like Jake and Logan Paul do.

[A]

The suicide forest thing.

[B]

Yeah.

[A]

Like here he is on WWE or whatever, whatever they're doing now. I don't follow as tightly as I probably should to be, you know, in this world. But he's still around.

[B]

Yep.

[A]

And he's bigger than Amber.

[B]

Yeah.

[A]

Yeah. And so like there's he also.

[B]

Jake Paul also has a VC fund now.

[A]

Yeah. Well, there you go. There are so many examples of, quote, career ending moves that didn't actually end the career. What 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. Mm. Because the news cycle's about a week. And so you have to be able to just be hated. And it's very against our human wiring to receive that much hatred and continue onwards.

[B]

Especially online, it's amplified.

[A]

It's impossible to fathom a million people telling you that you suck.

[B]

Have you gone through that yourself?

[A]

I mean, I've had my moments of people hating on stuff that I. That I put out. Usually it's just stuff that I put out that just triggers people in general. And I would say that part of it is intended to do that. Like, because I have relatively extreme views on life and death and things like that. And I make those because those are the views that helped me free myself and made life a lot more palatable for me. I've always been like, and if it helps you, use it, and if it doesn't, don't worry about it. Use whatever you're doing.

[B]

This is not me trying to proselytize. This is me sharing what's worked for me. But of course, people see it and they're triggered because this conflicts with their worldview.

[A]

My content is a documentary, not a sermon.

[B]

When you think about the different axes of control, the different models you've said, what's interesting is I've seen a lot of creators stay on the media empire side. I've seen a good number of creators make money via their own products. Like, obviously, there's Feast of alls, the middle area. What you've done is actually very, very rare.

[A]

That's the advantage of. If you understand the business game, you can do nasty things. Because I remember. So there's. I can't wait for this to get the callback. But one of my very first podcasts I ever did was on Iced Coffee Hour with Graham Stephan.

[B]

Yeah.

[A]

And on the show, I said, if I had your size audience, I would already be a billionaire. I'm excited for when we cross that. Cause I think it'll be pretty close.

[B]

You have the audience now, Alex. I think we're. Does he say put up or shut up?

[A]

Yeah. I mean, we've grown a ton. I'll just leave it at that. I'll say this for anybody who's listening to this. So the problem with me claiming something, I would like to have a third party substantiate. And so I could say, well, if you know what our revenue is, right. And you put any kind of EBITDA on that, that would be reasonable. Especially in a business that has low cac, you would probably imagine that it would be decent. And you put any kind of multiple on that, it would be a pretty large number. And so we have things that are going for us and we've had conversations with companies that said we would value in this range, but those are things that I wouldn't. If I claim it, I want to be rock solid.

[B]

Absolutely right.

[A]

And so that's why I have it. But that being said, obviously, we've grown a lot in that period of time, and I. I'm excited for whenever that callback comes because he still has more YouTube people, so I'm using that as mine, as my.

[B]

You're saying we haven't quite reached your audience.

[A]

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

[B]

It's actually another good point, though. You said multiple. Right. The multiple that you would get on what you've built is going to be higher than, say, a pure YouTuber.

[A]

Yeah.

[B]

Here's your question. When you look at, say, like what Jimmy, Mr. Beast has built.

[A]

Yeah. Oh, and perfect. I was going to come back to that. Yes. Okay.

[B]

Is that a business you'd want to invest in yourself?

[A]

So I think I'd probably take Chamath angle, which is like you just. You're basically betting on Jimmy. And I think. Yeah, I would take that bet.

[B]

Right.

[A]

Because I think Jimmy will just die or he'll win.

[B]

Yep.

[A]

And that's kind of.

[B]

He's obsessed.

[A]

And you just want to find people like that. When your distribution base is the world, it's hard to lose. Yeah. I'll just. I'll. I'll leave it at that. But what you brought up, though, like prime, for example.

[B]

Yeah.

[A]

So prime is actually the identical to a school deal because he didn't build the product.

[B]

Right. His Congo Brands is another company that previously had worked with other creators to do other drinks as well.

[A]

Yeah. And so they promoted it.

[B]

It. Right.

[A]

Right. But they put. I don't know if they put cash in. I don't know if they did. But I'm assuming they put some money in because they have the capital. Why not to get more leverage on the ultimate deal or joint venture. Was Logan going to learn the drink business and get the. And get brick and mortar? Like, maybe. But it's also the question is how much is your time worth? And I don't mean like dollars per hour or anything like that. You absolutely can do it. And when I say time is like, how much is the next five years worth to you? Because if you can pull five years of knowledge Forward and then grow for five years, rather than learn for five years, then begin growing. Because if you have an audience of their size, your constraint is going to be delivery. It's not distribute. Like. Yeah, it's not, it's not media distribution.

[B]

There's shortage. Product distribution of Prime. Yes.

[A]

Yeah, it's going to be product distribution. And so to build out the kind of infrastructure and knowledge base to satisfy the demand internationally, not just nationally, Internet, because they're in the UK too. You need, you need deep expertise and large existing infrastructure. And so Cong already had that. And so it made sense.

[B]

Right.

[A]

And so I would probably lean more towards that type of model. I'm curious, like, there's me, there's Sirhant. Jimmy, I think with Feastables, is the only person who's building things truly from.

[B]

Scratch, has hired his own team and everything.

[A]

Yeah. And I don't know if, if you were to ask Jimmy again today if he could go back in time, if he would have. Yeah, just if he would have done it the same way.

[B]

Let's talk about how stressful it is.

[A]

And we can, and we can already say he launched Lunchly. Right. And, well, what did he do with Lunch Lee, that he didn't do with Feastables? He didn't build it from scratch.

[B]

Right.

[A]

And so I think part of that is there's a desire that I totally understand as a creator slash entrepreneur, to control everything. And if you look at the people who are the wealthiest in the world, almost none of them own 100% of the companies that they have made their wealth on. So you look at Jensen Huang from Nvidia, owns 4%. You look at Elon, he owns whatever it is, whatever small percentage of Tesla that he owns. And with SpaceX, he's not the majority owner. Now, he might have voting rights, whatever. That's a different question. Bezos owns 9% of Amazon. I go down the list. Warren Buffett, I think, doesn't own more than 40% of Berkshire Hathaway. And we could keep going. And so the idea is to build something really, really big, in my opinion, need multiple lifetimes. And you can either live all of those lifetimes in sequence chronologically yourself and then take a lifetime to finally learn how to do everything, or you can get three people's lifetimes. You all start together, you divvy up the pie, and then you can build something way bigger, way faster. The longer I've been doing business, the more I value time and speed. Because also we have the assumption that these things will not change. In 10 years. So maybe it does take you 10 years to learn everything. Is the moment still there?

[B]

So that makes me think of two things. The first thing is for yourself, what are the elements of business that you're most willing like, sure, I could learn this, but do I want to spend time with this?

[A]

So I approach all new things with the same perspective, which you can, you probably share with me, which is kind of the consultant's perspective. And so I started as a management consultant, which we share his background. And the way that I was taught is if you want to rapidly learn something in a space and to give context on this, imagine this back in time. I'm 22 years old. I go through my security clearance.

[B]

No beard, by the way.

[A]

Yeah, no beard. I have. So I have to get a top secret security clearance. So I get. I passed that. Thank God. You know, I'm sweating bullets. Like, oh, what did I do in my frat days? You know, like, I'm thinking this is like a huge, you know, deal to national security. Anyways, so I passed that. And then I can't say which, which armed forces, but we go and do work for the Defense Department. And I was focused on space, cyber and intelligence. And you know, some of the projects, I can say this, that we worked on was like basically mix of assets to kill the most bad guys the most efficiently. 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 gathering intel on, you know, bad guys. How do you, at 20 years, 22 years old, go and say something that's impressive, right? And worth $4 million for a project that you're on in four months, right? So it's like you start now, four months from now, you have to give a presentation to two, two, two stars and a four star general who have been doing this for their entire careers and then somehow managed to say something intelligent. So the way that they approach that problem is so the person who does a record, you know, puts the requisite out for the project, we say, who are the smartest people you know, in around this problem?

[B]

Yeah.

[A]

And they give you five people. 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? And you do that for over and over and over again until eventually the same names keep popping up. And then you're like, I already talked to John, already talked to Steve, and basically you have, you kind of like map the neural Network of expertise. And then you consolidate those notes into those buckets. So you like recode them and then you distill them down and then you make a pretty slideshow. That's like the very tldr job of consulting. That is what consulting is.

[B]

Yeah.

[A]

Uh, and if you were the 22 year old, you were the one doing all of the notes and all of.

[B]

The consulting, you're doing the calls, you're consolidating. Yep, a hundred percent.

[A]

And so, so I learned a very valuable skill set there. And so I've approached every new endeavor using the same thing. To answer the question, 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. My first pass.

[B]

Yeah.

[A]

So if I get into. Because there's some industries where I look at it, I'm like, this isn't that hard. Like some businesses I'm like this isn't as bad as I thought it was going to be. Other ones, I'm like this is way worse than I thought it was going to be. And it' also like what problems come up and how equipped am I to solve them. So like I'll use an invis like, like insurance for example.

[B]

Right.

[A]

I think insurance is really interesting largely because one of the biggest problems with insurance is cost of acquisition. 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 will anyways all that to say it's there. But that was like, huh, that's more interesting. 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 is also regulated, but I would say less so than banks. And there's pretty amazing tax advantages that exist within insurance.

[B]

You're picking these products that have to your earlier point, extremely high retention. People need it. It's just people don't historically like it. And acquisition's really hard. And you're coming in and saying, well I could help with the acquisition side. Oh, but people still don't really like it. And there's like limitations in my ability to prove that right now because some of these things are regulated.

[A]

Where the magic will happen is I'll find some nugget in there and this will just take time that I'm like, we can win on this.

[B]

Yeah.

[A]

Three ways to build a business. You can just look at what's already working and just do that for yourself. And I think that's totally Fine. I think it's a wildly underestimated path. 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, you know, learn from there. The second is you have a strong advantage in one of either that you can acquire customers cheaper or you can deliver in a better way. Right. You've got some advantage in one of those two. And if you have an advantage in one of those two, you don't really need much of an advantage in the other. The third is that you need such a strong advantage that you can overcome a deficit in the other. So like if you have a, what I would consider a true product driven business, you could not be really ever good at acquiring customers. And by solving products so well, it becomes viral and then you do solve your acquisition problem vis a vis a better product. Now on the flip side, it's like can you do the same thing by just having unbelievable distribution? I don't think the answer is yes.

[B]

You mentioned that is something like 20, 30% of the businesses coming to you, they make content in some way.

[A]

Yeah.

[B]

Do you think that those businesses, because a lot of people talk about creator, creator economy, are they better than those that don't grow and have con as part of their workflow?

[A]

Really interesting question. I think it's a, it's a double edged sword. So what makes them great also makes them risky. So they will typically have very low cost to acquire customers because it's organic and so it's just channels some. Yeah, it's some star or whatever I'll call it a star. Right. Is good on camera or good in whatever format they, they advertise in. So they acquire customers cheaply. The other pro is that typically if someone starts with an organic audience, they really care about product because being a creator like your media is a product in a way and so they have the right perspective on like has to be really good or I'm going to lose my reputation. Because the whole an organic brand is built on reputation. And so I think they're more obsessive about product. I think that's a huge plus. The downsides for the business obviously is that they have massive key man risk. Now I think where you get really smart about it is if you can gain enough influence where you can develop an affiliate network of businesses. Like somebody who's unrealist really. Well is Derek from Derek More Plates, More Dates, the fitness guy, he has I think an affiliate base of 4 or 5,000 affiliates that promote his fitness products. And so he's become such an authority that people are willing to say, well, 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, a good program there. And so he is, he's paying down his key man risk by getting larger and larger percentage of the business. And so I think that the way to really scale an organic creator business is you launch it with the personal brand and then over time you backfill with other faces that you have to approve. And that's the key part. You have to approve that are on brand with your values and your message and are authentic to the product that you have and are attracting the audiences that you want to go after. And then they over time become bigger than you and you kind of like Homer Simpson into the, into the bushes.

[B]

Oh yeah, you receive.

[A]

Yeah, yeah, exactly. Yeah, exactly. And you recede into the bushes until eventually people associate you with the brand, but the brand outgrows you.

[B]

It's fascinating because. Well, two questions immediately come to mind. The first is on Keyman Risk. This is what you and Layla have. Are you thinking about bringing a roster of folks to slowly took for the faces of even the condensate of your business?

[A]

So, two answers. First, we're not planning on selling acquisition on any time price and that's useful. And so I like, I see Elon as keyman to SpaceX and Tesla.

[B]

Yeah.

[A]

And so what if you have the desired exit of business, then Keyman risk becomes a problem. If you want to go public or you want to hold, it's really who cares? And so it's kind of a who cares issue. That being said, the second answer is yes, because I do like having fewer single points of failure in general. So despite the fact that I don't think we necessarily would need it, I still like to build businesses that way in general. And we have plans for what we're going to do over the next probably 12, 24 months and beyond to build out ACQ's brand.

[B]

Makes sense. Yeah. The second question I had related to that was when I look at creation space, you've successfully executed on this, it's actually very minimal.

[A]

Yeah. I can tell you one who I look at who? Dave Ramsey. That's right.

[B]

He's brought in George, he's brought in other people under him.

[A]

He's got Rachel, who's his daughter, but like he's got Rachel, he's got John, he's got George Tammer Group. Yeah, he's got nine, I think channels for example, just on YouTube that are associated with the primary. And what's interesting is that they basically run the same playbook. It's daily call in show and clips and full episodes basically are. Are the channel. And so they clip each episode into like 4 or 510 minute clips and they put each of those out. So that's like. That gives them tons of good like mid length clips. They get the one full episodes and then short clips get taken and become shorts. I study Ramsey a lot. One because I like Dave. But secondly because the amount of creators that get quote creator burnout is really high.

[B]

Yeah.

[A]

Or we're talking like Shelby Church. Right. She's kind of shifted to I would say a sustainable 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.

[B]

Yeah. It's. You're maintaining or some creators.

[A]

Yeah.

[B]

Who are OG on YouTube now they shift to a podcast.

[A]

Right?

[B]

Yeah.

[A]

And it's because it's a quote easier format but it doesn't really grow the audience. It just kind of like maintains the audience that you have. And again to be clear, nothing wrong with that.

[B]

Totally.

[A]

But I look at somebody like Dave and I think he's been making content for 40 years. Like there's something to be learned from that. And I think the nature of why his content has been so interesting is because you have. He has two types of variety or three really. And that I think have to be present. So what are, what are the types of shows that have. And I already say shows that have existed for a long time. You look at the Daily Show. Right. You look at the, the night. The nightly host shows like those can go for 20 years evergreen. Right. What makes that unique? In my opinion, you have, you have three variables. You have the people who are on the show, you have the subject matter and you have. Actually it's just that two. Yeah. I was thinking because you also have the interviewer.

[B]

Right. Format as well.

[A]

Yeah. So I'll. I'll still say the third, which is the interviewer comma ers. So like there are some shows where they will rotate 10 people through three seats who are doing the interviewing of other people about dynamic topics. And so you need some level of novelty I think to consistently one engage your existing audience, but also to bring in new people. And I think that a lot of creator content on a long enough time horizon becomes the news. Like they say all the things they wanted to say about Personal finance or how to build a house. And then at some point they're like, I don't know what else to talk about. About. And then they're like the news. And I don't necessarily think that's a bad thing. It just like I just, it's just a pattern that I've seen over and over again. Because if you have single person, they only have topic as their variety. And so once you've exhausted many of the, I would call it standard direct to camera topics, then the novelty comes from news, which is literally novelty. Right. What is new.

[B]

Right.

[A]

And so that's where they allow the environment to create their content or other topics. Going back to Ramsey, he has guests on, he has the call ins which create endless variety. And so those are kind of like the two formats. And he doesn't have to prepare really ahead of time. And so he is for. If he does three hours of content a day, he's generating three hours of content. Whereas I would say many creators will spend 20 hours on generating one hour of content. And so he has pretty decent leverage on his time in terms of output per unit of time spent on content itself. And if you want to grow a business around it, you can't just do content because then you have like, when do you. When you grow the business.

[B]

It's a really interesting point because you mentioned that a lot of creators start with one thing, then they eventually burn out and then you build a scalability. Like Graham Stephan's a good mutual friend of ours and Graham has openly talked about how he is getting really tired on his main channel.

[A]

He said that like three years ago.

[B]

Yeah, I've noticed Graham every year talks about and even when I met him, he was doing like three videos a week and you just run out of topics and you just become a news reactor. And that's not something he enjoys as much as doing. And in a way, he's found a lot of success now with his podcast channel. But for a while, like he spun up a coffee business.

[A]

Yeah.

[B]

And he's also talked about how the coffee business didn't work.

[A]

Yeah.

[B]

And so I think it's interesting because on the one hand everybody's like, well, acquisition is one of the most important things to a business. If you're a creator, you're going to succeed. On the other hand, hey, Graham, did the coffee business didn't necessarily work. Emma Chamberlain's talked about how Chamberlain Coffee Line also doesn't apparently make money. There are many creators who go to the business path and it seems like, well, Maybe that was not the right play.

[A]

So two really interesting things about this. Well, Graham specifically and then also in general. So I think we need to be very careful about what audience we want to gather. And so Graham's audience has been predominantly people who don't want to spend money. Yes.

[B]

Frugal.

[A]

And so he gathered everybody together who don't want to spend money and then was like, hey, spend some money. And so I think there's. I think in some ways it's hard, it's almost harder for him to sell something than almost anybody else.

[B]

Right.

[A]

Because of the nature of his brand specifically. That's why I think, like, for him it's like doing media stuff in some ways is probably an easier. He can sell to advertisers and they can have the good luck, you know. But I think for him, like something that would have been on brand would have been like, honey, Right. Before the Lord. Yeah. Before the scandal. Right. But pre scandal, honey, I think would have been very on brand for him.

[B]

To offer you money.

[A]

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 probably would have been good angles for him. So that's thing one. Thing two is so I guess that. Sorry, I was getting into thing two, which is picking the right product.

[B]

Right.

[A]

So you have right audience. Right product. And so I think that having the saving money audience, you can make money from it, but getting them to buy something that would be considered frivolous, which is just like coffee. Now you can try and position it. It's like, okay, it's not Starbucks. Fine. But now you're literally dealing with a commodity. Like it's tra. Like coffee beans are traded as a commodity. Like very hard to be. To have alpha from a brand perspective when the whole brand has been built on. Don't buy like this stuff comes off the same factory floor as this stuff and they just put a markup on it. Right. And so from a product perspective, I actually think creators are horrendously bad at picking products. Like the amount of conversations I've had with creators who are like, hey, I'm thinking about launching an X. And I'm like, what? So on one hand I like, these are real conversations I've had where they're like, yeah, you know, I read Peter Thiel 0 to 1. And I think I have to create like a totally new category.

[B]

Yeah, Monopolize.

[A]

Yeah. And I'm like, dude, you already. Your, your monopoly is the attention. You can sell a commodity and as long as it's on brand, you know, like with, with, with you, 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 if you picked a better product? Which then goes into kind of like circling all the way back to acquisition.com in terms of what we do is we. I only really solve for revenue retention. It's like really the only thing I care about. Because on a long enough time horizon, anything that retains customers becomes huge. If you know how to advertise at all, which if you're a creator, you do. And if you can keep the customers, then on a long enough time horizon, you become you, you build a massive company.

[B]

Right. It surprised me you said retention instead of growth. Actually.

[A]

Well, at baseline, like level one, like keep customers, level two, grow those customers too and get them to bring more. But yes. And so from a product perspective, though, I don't think enough of them are thinking about reoccurring and recurring revenue. And my two cents for anybody who's a creator who's listening to this, do not try and solve Churn. Try and find products that people already don't churn out of and then make it your own. I spent a huge amount of my career banging my head against the wall trying to figure out how to make something that people inherently leave, like a gym membership, something that's sticky. And I've learned a ton. And so there's lots of what I would consider like blocking and tackling tactics that I have learned that will, that will, that will improve churn. But to conquer churn, like, how many of you have turned out of your Internet lately? How many of you turned out of your cell phone bill? How many of you have turned out.

[B]

Of your insurance account for that matter?

[A]

Yeah, exactly.

[B]

And you're still with them, of course.

[A]

And so you think about these products. 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. Now you're like, wait, how can. Well, aren't they technically churning out of them? Yeah, but I'm being laser targeted in how, like, yes, that's the point. That's the advantage that you have as a creator is that you can bring those people over from what is otherwise a commoditized product that they don't care much about, but still pay for, rather than trying getting people to care about your product in order to buy it.

[B]

You might remember 2021, everyone is really excited about the creator economy. Everyone thought it's gonna be the biggest thing in the world. One, because Covid everyone's at home, they're watching online videos. And two, because TikTok short forms going on the scene, everyone's getting millions of followers. 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. And it's because people weren't able to monetize. They have all these short form followers. They didn't really see how much.

[A]

I had really strong views on this.

[B]

Oh yeah, what are you thinking?

[A]

So I think it's because the people who are allocating money didn't understand media at this level. Like I would. I would wager that you and I probably understand the creator world and media better than most. And I think that fortunately, unfortunately, I think short form content does not build tremendous influence, right? I think it brings awareness. But if we think about influence in terms of like, what percentage of likelihood can we get the audience of this person to purchase something? You just need, okay, so four elements for influence. So you've got likeness, so 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. The second is credibility, which is sedu correspondence, which is basically, does this person have evidence or proof that what they say is true? Third is you have power. And power comes from someone doing some directive that you have stated and then yielding a positive consequence from it. And so I'll give you an example of this. So Huberman made a short about if you have hiccups, how to stop having hiccups, right? And I remember watching it and being like, well, I don't have the hiccups right now, but I'll try to remember this when I have hiccups. And about a month later, I had.

[B]

The hiccups and you saw it. There's power in what you said.

[A]

And then I did the thing and the hiccups stopped. And so in that moment, Huberman gained influence over me. I'm more likely to follow a directive in the future. And so status is the, is the fourth thing that gives you influence, which is relative control over over reinforcers. Meaning if I am a bartender and I control a scarce resource, which is alcohol, I have status in this setting because I control the things that reinforce.

[B]

Does it matter how rich or powerful you are?

[A]

I'm the bartender in this setting. I control what's scarce, right? And so if you were a billionaire, you control money. And so you gain status just from that. Presidents and politicians also have status because they control resources of the government. Right. But they still control resources. And so women have status because they control a scarce resource. For men, it's being real. And so they can influence behavior. And so all of those things increase likelihood that you get adherence from or compliance from a request. And so if you have all four, then you are incredibly influential.

[B]

Right.

[A]

And big picture, our goal as creators is to gain actual influence so that we can influence the behavior of a large group of people. Right. And the way to do that most powerfully is to give them something, some sort of directive that they follow and their life gets better. And then they're more likely to adhere to a, you know, follow on request. That makes sense. So if that's the case, it's very difficult for you to do that. Well, with very short content. And so to put this in context, let's say that somebody has consumed 20 YouTube videos of mine. And let's say that, that those videos on average were 30 minutes. All right, so that's 10 hours of, of content that they've consumed for me. Okay, Right. Let's do the math here. If the average short that I put out is, let's say 20 seconds. Okay. So if we have 20 seconds for a short, that means it's three shorts per minute. So 10 hours times 60, we have 600 minutes is what my longs were.

[B]

Yep.

[A]

And we'd have to triple that. So they would have to consume 1800 shorts of mine.

[B]

God.

[A]

Right. And so I think that what's happened is that people have wildly over leveraged followership and views for influence. What's interesting is that, like, small businesses. I remember Michael showed me this, actually. He saw this little cue card. He took a picture of it from like a car detailing business or something. And they said for 400,000 views on TikTok or 10,000 views on YouTube, 500. So any creator who wants to make something about their car detailing organically, they'll pay them 500 if they get 10,000 views on YouTube or 400,000 views on TikTok. So they had already basically appropriated that as 40x is the equivalent 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, what's her name, the dancing girl, Charlie demilia. Right. So I think she's had a couple of things that didn't work as well that like, and again, it's. If I make a brand built around slapping strangers in Public. Right. Just as a complete extreme. And then I launch a credit card. Does that really carry? There's no sedu correspondence. I have no proof. Right. So I have no proof that he.

[B]

Actually did partner with a credit card company, by the way.

[A]

Right. And I think she had a popcorn. And to be clear, I'm, I've. I'm. There's no shade here. That's not my point here. My point is to help creators monetize. And so I see the point of short form as one thing, which is to drive them to long form or if you can obviously deliver some sort of value like I got from Huberman in that, in that short clip. But the thing is, is that the likelihood that that occurs is really, really low. I have a pretty decent memory and I remembered a short from a month earlier and then actually did it and got a result. Super unlikely. Now, if you listen to Huberman on a daily basis, for example, he probably gives 80 directives over his every podcast. And all you have to do if you're a long form listener is listen to one of them over a month and your life gets better and he gains influence. And so when he then makes a product recommendation, because I'll bet you that the Huberman collabs have probably crushed athletic greens. And he's got rogue, he's got the sunglasses thing. Um, I think he's promoting David Bars, which is actually how I.

[B]

Protein.

[A]

Yeah. So like. And those collabs I think have probably gone pretty well. Right. And Rogan also, to the same degree, like when he makes, when he makes recommendations, like a huge amount of people, like including presidential recommendations, a huge amount of people follow. And this is where it gets really fucking interesting. So again, it's all of those elements. So if you have a, let's say somebody who's a long form host, doesn't talk about politics at all, shows no knowledge of the stuff, has a big audience, brings, brings somebody on their endorsement probably matters little. If their audience pays attention to a political candidate, then that's basically just functions as an ad and the political candidate is doing the influencing on their behalf. But for their endorsement to matter, not just their distribution, they have to have demonstrated some credibility around the topic so that people say this guy is informed.

[B]

The value to be other than you've reached a million people or whatever.

[A]

Right, Right. Joe has done a ton of political stuff 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 of Just trying to find truth from an independent perspective. I'm not getting into like the. The weeds on either side here, but just that that has been the intention. And so he is tremendous influence because most people think, at least, I think most consumers think this way. I don't want to do all that work. Right. I'll just trust him.

[B]

See, what's fascinating, you describe the primary function as short form to drive to long form. Because you go to a broader point, you're saying that people had followers, but they didn't have influence. Because influence comes from the four things you just described. Likeness, credibility, power, status. Initially, what was going through my mind was, yes, 2022, 2023, saw a bust because a lot of investors confused influence with followers.

[A]

Yes.

[B]

Because there were more followers brought in the ecosystem and views, but nothing else. The initial premise I was operating was in 2025, which now I'm rethinking was, oh, but now people have figured out how to use short form to upsell to products and services, whether on school or.

[A]

Yeah.

[B]

Or. Or these other 15 different monetization methods where these short form units are just becoming really marketing and where school is the best one. Yeah, I mean, it is the best one. Well said. Well said. The premise for me was, oh, now short form, it's actually just marketing. Like they're just like commercials.

[A]

Yes.

[B]

And so the monetization is coming back. The short form is not really successful in growing your influence, but it is successful just from a distribution pov.

[A]

Think of it as like awareness ads.

[B]

Yep.

[A]

And so what happens is the objective, in my opinion. So like the ones you like, School, for example, if you're a short form person, it's like, how can I just get them to take the tiniest amount of action, which is to go into a community where I can get way more interactions with them on a much faster feedback loop so that I can gain the other three or four more like harder. Right. But what's interesting is, like, the people who. I think we're doing really well monetization right now for TikTok are doing TikTok shop plus lives and what's alive long. I think there were some creators that were still wildly undervalued.

[B]

Yeah.

[A]

And many that were wildly overvalued. And this is the, you know, the classic story of like, I had two people that I paid 100,000, you know, so at 100,000, 000 followers on Instagram and I had both of them do a shout out for my thing and one guy drove 10,000 customers and one guy drove zero. 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.

[B]

Do you think more businesses should be trying to follow content creator led models like we've talked a lot about? Hey, there's five different ways these businesses make money. Here are some of the challenges they have. Should the other, you know, 60% of entrepreneurs come to you be thinking about, oh, I should be incorporating content more into what I do.

[A]

I have super strong reservations with the word should in general, I would say really just depends on what the constraint of the business is. And so like let's say you have an outbound channel that you have cold callers and cold emailers that you know, generate B2B customers for you. Do you need to start making content? Probably not. And given the resources required, are there, is there something else in the business that would generate more enterprise value? Yeah, if so, then you should do that. That right. Big picture, more attention in general tends to grow businesses provided they are not supply constrained. But that's a big asterisk because many businesses are supply constrained. There's a lot of plumbers who, the phone's ringing on the hook and they're like, I just need more plumbers, dude. Like I, yeah, of course. Like I could, we can, like, I don't have a problem getting people. If you have a cleaning business, the problem is not getting people to want cleaning. The problem is finding cleaners.

[B]

Yeah, right.

[A]

So like it depends on what the problem the business is. Now if that were the issue, do you make content around like what it's like to be a cleaner so that you attract cleaners, people who want to clean. It's like, hey, you already clean your house all the time, want to do it for money and we have better working conditions, blah, blah, blah. Like fundamentally, I guess reframing the question as should the other 60% of businesses add another advertising channel? No. Unless it's the constraint of the business.

[B]

When you think about what you're investing for acquisition.com or now for Acq Ventures, it sounds like traditionally it started from let me bring you better business processes. With school, it actually shifted a bit to I can just bring you tremendous distribution via my own content. What types of companies are you leaning more toward investing once they help with the processes or ones where you think the content distribution actually is what matters?

[A]

So I'll say that it's both.

[B]

Right.

[A]

And I still use those three kind of legs of the stool. So I got money. We've got time or work and then we've got brand reputation, distribution, et cetera. I prefer to do as many as I can of the first two because in a lot of ways brand is so much more limited. Not limited in its power, but limited in how many and maybe this could be a limiting belief for me, but I don't think it is. I think it's, it's very. So brand is built on associations and pairings and if you pair yourself with too many things it, the brand starts to lose its potency because you have associated with too many disparate things. Now if you made many associations with things in the similar buckets, I think you could get more bullets. That's more, okay, more shots on goal if you will. But no, I, I, I try to basically do the, the more scalable things which money is actually, you know, pretty scalable. We've developed a pretty, pretty exceptional team at the holding company for acquisition.com because I, I basically take, I marry a lot of old school and new school. So we have a lot of young, call it 5 and 10 year McKinsey, you know, Bain consultants that will pull who are like I hate feeling like a cog in a machine and just doing billable hours but are otherwise incredibly hardworking, incredibly bright and also see the problem with a lot of antiquated businesses and want to work with more new, more cutting edge stuff and also really like and a lot of them came from, you know, my content, my world and want to marry I would say big business strategy with small business tactics and then kind of like bridge those two gaps together. And that's a lot of what we do at ACQ anyways. And so I think they really enjoy it because they learn a ton from the frameworks that we have for growing companies. It adds nuance and texture to their existing knowledge set from what they learned at the kind of like big consulting firms. And just to put context to this, like if you're looking at like supply chain for Walmart Brazil, right. Or something, you know, Walmart Latam because you need to do some, you know, analysis for that. Super heady, really complex, lots of moving parts and not useful to a small business. Like really valuable to a big business which is why they pay the money for it. Not useful at all to a small business. But the thinking process and the reason I like taking people from that world one is because I came from it but also because I think at the end of the day consultants are a lot like engineers in that you just have to solve problems and Being able to have a really good problem thinking mind is I think what makes a good, a good consultant in general. And so that feeds really well into the advisory practice.

[B]

Would you invest in content creators?

[A]

I would if I like. Okay, let me clarify. Qualify the answer. So are you saying invest in them? Like if I could buy a stock in a person or like if, hey, I want to start, I want to start this umbrella company.

[B]

I was thinking initially, the second, I.

[A]

Probably wouldn't for a de novo idea for a couple reasons. One is like, I don't, I don't really like seed stuff, like idea stuff.

[B]

Right.

[A]

Also because creators are typically like big idea people. That's not the constraint. The constraint for them is execution and business acumen. And for a deal structure like that, like in a traditional structure, I probably wouldn't have majority controller ownership. And so that would be really high risk, I think. And so I probably wouldn't like that deal if it was a deal that was kind of like the opposite where like maybe they owned like 20% and we owned 80 and we fronted the capital and we like put all the stuff together.

[B]

Sometimes you're incubating them.

[A]

Yeah, maybe. But even then it's like I also have to look at supply demand of like my own deal flow.

[B]

Right.

[A]

And to do that, it would have to prove that that deal structure provides more alpha than the existing thing, which I would have a hard time believing.

[B]

What about a later stage creator company? Like the primes of the world.

[A]

Yeah. So like a Logan Paul or like whatever, Jake Paul or something who's not him, but somebody else.

[B]

Right.

[A]

It would be tough. And the main reason is investing in someone like that isn't really investing, it's a joint venture. And then it's really like, so I'm starting another business. And that's really what it would be. And so it has to be a business that I felt the existing resources and assets that we had, we already had a huge percentage of the core competencies required, not just in knowledge, but like in manpower.

[B]

Yeah. To do it makes sense because for you, you're either obviously you bring capital money.

[A]

Right.

[B]

But you're also either bringing your image and likeness, which is distribution, or you're bringing the operational expertise.

[A]

Right.

[B]

You're working with these businesses that are less savvy on the distribution side. Clearly something of value.

[A]

Easy.

[B]

You're working with these creators. Well, you have distributions, you don't necessarily need theirs. And they don't have the operations side, which means you have to spend tons.

[A]

Of time building tons. They don't have any.

[B]

Right.

[A]

And so we'd have to build. We'd have to build a company. And so that's where I see that as like, like translating the ultimate question to like, would you build a company for a creator? If that's what it. If that's what I translated into, then the answer is probably not right. Just given the constraint, like how much it would take.

[B]

When I was chatting with Michael earlier today, he did say you've been shifting more into investing. And we.

[A]

ACQ Ventures is all capital.

[B]

Yeah, ACQ Ventures. And from my understanding, that's much earlier stage. What prompted that actually?

[A]

Honestly, just we had so much deal flow for it. So a lot of people were coming in and saying, hey, I would say it is largely tech.

[B]

So because it's venture, you need to have really, really potential big accident outcomes.

[A]

Yeah, they're just the economic, like the economics lend themselves to tech. But we had a lot of people were coming towards us in, in, I would say like a couple buckets. So bucket one is somebody who's already raised some round.

[B]

Yeah.

[A]

Consumes all my stuff. It helped them grow. And they're like, I would just rather have you on our cap table than somebody else. And that's like a perfect scenario. Right? Like they already, they, they like the stuff they're using. They kind of like subscribe to our ideology. We can provide capital to help them grow because we believe in the thesis. So like, that's great. 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.

[B]

Right.

[A]

To justify the return. Right. But because some of these tech companies can have significantly larger exits and because they don't require more work, we can take smaller slugs and do. And just do money only, essentially. So that's. So that was, that was kind of bucket one. Bucket two is people who don't have a cap table at all. They're maybe bootstrapped, but they still want to take on some clear opportunity that we can help fund. And those also, you know, as long as the deal structure makes sense, like those can make a lot of sense. The nice thing with that is that they require almost no work and expertise. And so it's really just like these entrepreneurs are like, I'm not trying to exit, I'm not trying to have a growth partner. I need capital and I prefer your capital to somebody else's. And we basically had so much of that. They were like, we should probably just spin this up. And the check sizes are not that big. And so 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. So that's worked out really well. We've already done, like, I want to say, like six or eight deals.

[B]

Oh, wow, that's fast.

[A]

Yeah, I know. Just in the last, like two months. So, like, it's, it's heating up really pretty quickly, which is great. Or I'll just lose my ass and we'll find out. But, like, I've deployed a lot of money, like, congratulations. You know, because it's funny because in the investing worlds, for these who don't know this, in a fund structure, you basically are incentivized to deploy capital.

[B]

Yeah. To put out money.

[A]

Yeah. So it's kind of interesting because, like the traditional, like, clapping of hands that happens when it's all your money.

[B]

Yeah.

[A]

It's actually like, well, I took a lot of swings. We'll see.

[B]

You don't really have LPs, your LPs yourself. That's why it's cool. I've spent all my money.

[A]

Yeah. Right.

[B]

Amazing.

[A]

Yeah. Yeah. I mean, fundamentally, we operate 100% like a private equity group. And obviously the fund, the ACQ Ventures, operates like a vc. Like, we have basically a general partner who just basically runs that came from the Y Combinator world. Like has really good deal flow on his own. Yeah. He sources a bunch of deals on his own outside of our network too, which you'll probably notice, this is a common theme is like, I want stuff that already works and that I can put gasoline on rather than it can only work because of me. School is an exceptional product and was compounding month over month, zero advertising on its own. Then we added gas. If it. Only if it requires me in order to work, then it requires me to work until I die. That's not fun. And so just as like a side note for the creators, like, everything that, again, this keeps coming back to this point, but like, I solve for revenue retention because if you go on vacation and the company dies, you just bought yourself a higher leverage income, but you did not buy yourself a business.

[B]

Right.

[A]

And it's not an asset. It's literally only valuable to you and not valuable to everyone else. And the valuable to everyone else part is where. Where you get significant outsized returns in terms of wealth creation.

[B]

When you started to make content before in your previous businesses, you hadn't really gone hard on content marketing, and so was the motivation, because you saw this as good lead Generation for acquisition.com. or was it more? Hey, it's time for me to share what I've learned.

[A]

I would say one, there was multiple motivations.

[B]

Yeah.

[A]

And I was actually pretty reluctant to do this and I, I don't even know if I will do it forever. I think some people were like, I'm gonna do this. Like, I don't know if I'll do it forever. I came in with a very clear purpose of why I was going to do this. So I'll tell you the, the, the stories that got me to decide to do it and then why. So in very short order, the Rockhead Teremana for multiple billions, Huda Beauty did a minority deal valuing the company over 600 million. Conor McGregor, same thing, ironically, 600 million for Proper 12, his whiskey company. So those are some celebrity examples. Then I remember hearing this podcast of this guy named, he did Nomad capitalist, he's a YouTuber and he talks about expay trading and how to have tax savings and things like that. I had seen his channel and I listened to a podcast and he said, I get 3,000 applications a month. And I went to go look at the application and it was like, it was an application. It was like 30 something questions. And they weren't like multiple choice. They were like very in depth questions for financials and like all. And like you had to upload documents and like there was a lot of stuff involved. And I thought to myself, if I had 3,000 applications a month for any business that was high end B2B, my God, I would just print money. And so I thought about that and I was like, okay, so these, these are like, I'm getting warmer and warmer to this idea. And then Kylie Jenner gets on the COVID of Forbes as a billionaire at age 20, which they ended up disproving later. But like, it doesn't matter.

[B]

Right.

[A]

I think she is a billionaire now. But she was 20, I was 27. I thought I was hot shit. She's seven years younger and she's a chick and she's richer. And I was like, I suck. I'm a big believer in like, if somebody's making more money than you, there's something you can learn from them in the game of business.

[B]

Totally.

[A]

And, and it might just be like, you need to be luckier, but like sometimes it's like you need to be the right, right, right place, the right time. So it's like, okay, well what do I do about that? It's like, okay, well I try to increase my surface area of luck. Then I decided I was going to do it. And so when acquisition.com for sure was what I was going to do. Yeah, the brand part wasn't something I was for sure going to do. But when I thought, okay, how can I decrease the likelihood of failure as much as possible, like one of the tenants would be like, well, if you had an investment firm and you had unlimited deal flow of people who only wanted to do business with you, it would make it very hard to fail. And so I wouldn't have to be the best negotiator. I wouldn't have to be the best picker of companies. I could just have unlimited shots on goal. And so I was like, okay, so if I were to solve for that, what would I do? And I was like, well, if I could build the biggest business brand, then that would basically shrink into irrelevance or make. Sorry, shrink all of my problems or make them irrelevant by consequence. That was fundamentally why I decided to do it.

[B]

You mentioned in the initial beginning you weren't even sure you wanted to do it. Do you enjoy having over a million followers now and that piece of accomplished.

[A]

There are pros and there are cons and right now there are more pros than cons. And if there's a day where I feel like there are more cons than pros, I will stop right. I, I think there are some people who really love attention and love fame and things like that. I don't think I am that person. And I feel like I have evidence to support that because I didn't do it for a long time when I think I had the opportunity to. Right now, my content feeds thousands of families. First, from obviously what we [e-mail] the holding company, but then also all of the, you know, school. There's, there's, you know, from a distributed perspective, if I were to quit in the future, I would try to make sure that I had backfilled my responsibility to those families to make sure that that, that vacuum, you know, didn't. That. That it was filled. The pros of this are you have recruiting talent. Becomes infinitely easier. The best people in the world at whatever they do, which is such a, such an underrated lever. Like I just can't, I can't overstate. This was. Is lever number one. Number number two is you have. The obvious thing is that you have lots of deal flow or customer flow, depending on whatever, you know, whatever, whatever you sell. Those are really the big pros. You have some ancillary pros. Like, 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. And if I go to a restaurant, they probably know who I am, and they'll, they'll, you know, be nice about it. Those don't aren't super. Some people like that. The downsides are that what you sell is privacy. And so that's the, that's the price that you give them is privacy is the price. And so, and one of the really tough parts and why I spent so much time thinking about this was that it's, it's, it's kind of a, it's a one way door.

[B]

Yeah.

[A]

It's. You can't undo it. There's no control.

[B]

C. Alex, thanks so much for making time. That's a wrap.