MrBeast & Mark Rober Break Down Their Billion Dollar Empires

22:51Oh, interesting. I'd be very interested to see that. So we'll break that down. But for people who don't know, what is Crunch Labs? What are kind of the product offerings that you guys have now? So Crunch Labs actually came from... Jimmy Kimmel and I did this live stream for my son who has autism in early 2021. And after the live stream, I was like staying at his house and he's like, you need to make a product. And I was like, ah, this is an easy, like people tell me all the time, you need to do a podcast. You need to write a book. You need to go on tour. And ultimately when I say why, why, I trace the thread down.

23:29It's always so you can make more money. And I'm like, oh, well, great news, Jimmy. I have enough money. I don't need 28 jet skis. So it's like, I have enough money. I'm good. And then Jimmy was like, yeah, but like, ultimately, if you love teaching science, getting kids stoked about that, like, you'll be able to do that better. They can go deeper into the trenches if they actually have something that they're like integrating and working with. And I was like, ugh. So I like slept on it. And the next morning, I was like, he's totally right. And so like, that was the genesis of it. So then I did this creative engineering class through the brand monthly, or I think it's called Studio Now.

24:09And that did really well. And so I had a proof point that there was some appetite here for learning engineering via my videos, right? Which I think is such an important point for creators, which is like, if you're doing a sponsorship for another brand, and you're driving like significant click through revenue, whatever data they show you, maybe that's a business that if it's aligned with your audience, you should be like... Well, I knew we really had something because when we told Max, he's the CEO of that, we're like, hey, I'm thinking about launching this. Do you think this is a good idea? I wanted advice.

24:43And he's pretty entrepreneurial. He's like, I will pay you$50 million right now if you let me own the whole concept. And I do it. And that immediately told me, first of all, I was like, hell no. But also, I knew, okay, I've got something on my hands. because he had all the data to back this up. Like he was like, I will literally get$50 million and I will give it to you right now if you create this Crunch Labs thing and then I own 100 % of it. Pre-launch. Pre-launch. Pre any product being made. Nothing, yeah. Wow. So I was like, all that did was embolden me. I was like, oh, well, then definitely not because I'm not going to like become some indentured servant and this is my thing, right?

25:26so we launched and i think we'd made 30 000 boxes like we could take 30 000 annual subscriptions and then we we sold those in less than a week and so then we were sold out so we launched that in june of 2022 and then by the time the holidays came around we had we had a restock and so we hit it again at the holidays. So it was a great launch, and it was just really exciting to build, you know, basically embodying everything we have in the YouTube videos. And the stories we've heard from that have just been so hard. We hear this all the time. Take me through the products that you now have for Crunch Labs.

26:11This one's called Buildbox. It's what we started with. It's kind of like 8 to 12 years old. It's your core. Really fun toys. But most of them are either, you know, no batteries required or like simple battery on-off. The next thing we released was right here. This is Hack Pack. So this is like what you graduate into. And this actually uses, you know, a microcontroller. So an Arduino effectively. Yeah. No program required. You have this cool, you know, the first one's like this desktop turret that moves around, shoots cool darts. So that's the idea with Hack Pack. And we have people who have never coded before to like very, very powerful builders and coders who do this and just do crazy stuff.

26:50So it's like its own community, which is really awesome. So these tackle the engineering, but we never had anything to tackle the creative part. And so now we just launched this. It's called Creative Kit. And basically we worked with Professor Adam Green and studied like what it means to be creative. We actually like ran brain scans on people's brains as they played with different things. And the idea here is you have this really fun toy. You build out a town and every month there's a new part of the town. And there's guide rails, but then there's prompts on how to put your own spin on how to be creative.

27:24And we kind of teach the principles of creativity. So the idea is like this teaches you how to build. This helps you come up with what to build. So this is the trilogy. Like this is it. We're not going to do anything else. This is like the life cycle from six years old to 106. the other part of creative kit is it's a little bit of if i'm showing my cards a little bit a trojan horse to get more um you know females and girls into stem right our hope is that through this it can be a little bit more girls basically in working building a little bit and then it's a more natural transition because like we're in an all brains on deck situation worldwide and so to say that like, you know, boys do this and girls do this.

28:10It's like an incredible waste of potential. It's like we need more incredibly, you know, intelligent, creative, passionate, dedicated female brains solving some of the big problems as well. And just obviously there's a lot of systemic and historic reasons why that isn't the case. So this is our attempt to like see if we can affect that balance. How many boxes have you guys shipped out? Because when people get these, they get them once a month, right? Yeah, yeah. I mean, we've shipped millions of boxes, pluralist. Wow. Yeah. Millions of boxes in four years. Yeah. That's wild. Mark, just talking about that connection between like you having this massive audience to promote your products, I thought it'd be interesting to look at your past 20 videos and analyze which ones were just promoting Crunch Labs.

28:54Interesting. Versus which ones were promoting other brands. Fascinating. Like T-Mobile, Disney +, Roblox, Google. how do you think about like which videos are just exclusively for crunch labs versus having another brand on it ultimately what it comes down to is if i make a video for for t-mobile and they sell a hundred dollars with the phones and they give me a hundred dollars like they like i just made a hundred dollars for that and i helped build their brand right but if i do it for myself and i'm able to sell a hundred dollars with my own product i didn't just make a hundred dollars but i just increased the value of my brand right i'm building this brand this brand awareness And a general rule of thumb for evaluation for a company would be like 5x times gross revenue or something.

29:38So in some ways, you made five times that amount if you made it for your own product. Interesting. Right? So generally, and it's just better, like I believe in Crunch Labs. Yeah. Like I think it's such a great alignment for what means a lot to me, for what the videos are. So it's like I'd rather be talking about that and promoting that than like, you know, some VPN company or something, right? Fair enough. This video is sponsored by NordVPN, by the way. It's not sponsored by a VPN. That would be hilarious, though. Have you found yourself saying no to more brand deals now that you have Crunch Labs?

30:16For sure. So the threshold on what it takes to do a brand sponsorship is just, it's a higher threshold to clear, right? Yeah. And what we've also found is shorts have been a way to integrate a brand where it's like, okay, it doesn't make sense for a main channel video, but we can do shorts and stuff, which has been really helpful and valuable. Yeah. Can you tell me a bit about how you make shorts versus long form? Because when we were with you inside Disney, I was amazed that it was you, your creative director, two smartphones, and you're ripping through a short trying to measure how wet people get on a ride.

30:52Like, is that typical that you guys are more run and gun with shorts or like average budget, like amount of people that work on it? Like, it's just fascinating to see that those videos get tens of millions of views, but the behind the scenes was so run and gun. Yeah, I think it depends. And that's the beauty of shorts. Like, at first, I was really annoyed when shorts came out because I'm like, oh, it's one more piece of thing I need to like think about and content create. But then pretty soon, I realized it's like an incredible opportunity. There's so many things that wouldn't make it into a main channel video that would make for a great short.

31:22I think you and I were talking, right? Then we were talking about the barber thing. Yes, wait, what was that? Oh, yeah, you had an idea where, just out of your own curiosity, you asked your barber to do something? Yeah, I think I paid my barber like$100. I said, for the next month, I want you to keep track of every tip you get. And I had a column of like, here are all the things I want you to, how old are they? Are they male and female? What color hair do they have? What kind of haircut did they get? What time of day was it? I wanted to see if I could find some correlation of like who tipped and how much and why.

31:56No, I wasn't planning on making a video about that. That's not big enough for a main channel video. I was just really curious. And I'm like, that's a banger short, right? Oh, you thought of that idea back in the era where shorts may not have been as much of a thing. They didn't exist. And there might have been pressure to turn that into a long form video where you're like, I don't know. But now you have an outlet. Yeah. Or like when we were there, like, which seat do you get, you know, the most drenched in the front or the back on a log ride? Yeah. It's a great, simple question that's not big enough for a main channel video, but it's just, it's punchy for sure.

32:27Yeah. Can I ask Mark, you said your costs are like, like above six figures, like what a brand deal today looks like for like an external brand, not Crunch Labs. Yeah. I mean, it depends, but like the Google and T-Mobile one, you know, we needed like, you know,$5 million to make that video. So, you know, we're talking multi-million dollars worth of brand deals obviously they're getting a lot of content from that you know the pixel went up to space right we talked about t-mobile space i did a bunch of content for them yeah so there's a lot that it's not just like a 60 second ad read yep but you know it's not crazy to have a brand deal that's in the seven figures wow but that's also not just like oh now we make that money like there's a lot of costs that of course of course how many people work for you now We have about like 50 on the YouTube side, give or take, and 50 on the Crunch Lab side.

33:18Wow. Yeah. And how do you think about like having both? I'll be honest. We just launched an accounting company for creators. Oh, nice. And it's called Boring Stuff. Oh, cool. That's a great name. Yeah. We're like doing bookkeeping, accounting for creators. But honestly, I'm trying to navigate this new terrain of having my own brand and having sponsors that pay us. But I've seen you navigate this really well where it's like, okay, Roblox gets a spot, but then you still talk about Crunch Labs. Yeah. Is that just something that you negotiate, you talk about? Have you always been upfront that there'll always be a Crunch Lab spot?

33:48Yeah, you kind of just tell them upfront. And in those videos, the Crunch Lab spot, sometimes it's like a little less, it's not as big. You know what I mean? So it's just a negotiation you have with them. But they understand that it's just going to somehow sneak it into every video. Yeah. Tell me about streaming because you made headlines with your new Netflix show. I think this is the first time you're talking about your Netflix show publicly. It's true. Tell me about it, Mark. Where do you get the scoop? Two things. One, we also gave them our back catalog, or some portion of it, which they paid for.

34:20And Samsung Plus is also on here, like a fast channel. Yep. But our philosophy is like, there's a lot of parents who don't let their kids watch YouTube because it just feeds them wherever, where Netflix is just like walled guard and it's curated. Yeah. So it doesn't feel like there's a cannibalization there. Interesting. And you've seen other channels, you know, Miss Rachel, Coco Melon, do really well on something like a Netflix. You know, for 2026, towards the end, there's going to be a family competition show that's like a banger idea. It's so cool. I'm so excited about it. I can't wait to do that.

34:51It just stands for, it just encapsulates everything that I care about, that I stand for. Has to do with like schools, education, teachers. It's going to be insane. But we're also doing like a Christmas special, Sesame Street. All the characters came to Crunch Labs. Elmo and Mark Rober's Merry Giftmas. So, and in that, I sing a song called Failure is Awesome with Elmo. That is cool. Heavily, heavily autotuned. I was going to say, I didn't know you had a compelling show. I know you've been lifting, man. I didn't know. You being a singer is just not fair. It's too much. Yeah, it's too much. Okay, good.

35:28Autotune. All right, all right. There's hope for the rest of us. Yeah. Anything else you could tell us about the show? Yeah. Like budget, competition, scale. I know like Jimmy doing B-Skin is kind of the next level of his YouTube videos. How are you thinking about leveling this up? It's definitely like one of the deals was like, I want to be able to promote Crunch Labs in the main brand. So there will be an element of, it will all feel connected. When you're seeing the sets on the show, it will feel very similar in design style to like a Crunch Lab build box, right? Or to like what you see on the channel.

35:59So it's kind of this whole ecosystem. Like if it was just this in a vacuum, wouldn't really make sense for me. It wouldn't be interesting. But the idea that it can kind of get new eyeballs on what we're all about and what we're trying to do is kind of the exciting opportunity here. That's so cool. So the products can be promoted through your streaming show. Yeah. Because I know YouTube, you have a lot of control. But it's interesting that a platform like Netflix or Samsung will allow you to have this revenue stream as well. Yeah, that's right. And we are missing one product here, which is we are teaming up with Moose Toys, who who happens to also be who Jimmy and Mr.

36:36Beast teamed up with. And we are making some retail toys that are like really, really cool that teach engineering. And so, yeah, in the Netflix show, there'll be portions where we'll have giant versions of these toys in the Netflix show, right? Wow. So it's like, oh, you can own the small thing. And like that crazy experiment you saw on the screen, like you could recreate and relive that and have that same visceral experience on your own at home. Have that same aha moment, right? connect those synapses. That is so cool. The way that all works together is fascinating. Take me through in-person physical experiences.

37:12We do have our eye on potentially something. Something we're very good at is saying no. I'm just single-mindedly focused. The exception is the really juicy pitches that are just coming down that you know is a grand slam. We swing at those, but that's it. But anything else, we don't. So that means that you pretty much just say no to everything. Every opportunity, but the ones that you're just like, you know this is just like a no-brainer are what you got, like low-hanging fruit. So there are some ideas. You know, Dude Perfect, you know, they made headlines with some experience. We have like some ideas there that could be something in the future, but right now we're more laser-focused on what's in front of us.

37:52We always have a pretty steady flow of Make-A-Wish kids coming to Crunch Labs. We have the platinum tickets. Those go in the boxes. that's an opportunity to come to Crunch Labs. And Crunch Labs itself is almost a character. It's a location. It's like Willy Wonka engineering factory. So the kids, you know, people really want to come there. We've offered up a few of these platinum tickets in like local school fundraisers when someone asks. And the going rate, and this happened three times, they go for about$180 ,000 per platinum ticket. What? Wait, wait, wait. The platinum ticket that you put in the Crunch Lab boxes that anyone could order, You auctioning off a standalone has went for how much?

38:31$180 ,000. That's happened three times. So yeah, the point is we give away one every month. And if yours has it, it means you're coming to Crunch Lab. So you have to win it. The only time you could buy with money is if it's a charitable thing. Very, very rarely we do that. But it's given us the going rate of what the value is of making a character. That has been really valuable to have a location that people want to come to and like experience and feel the wow of like, whoa, this is like engineering come to life. This is where like, if you dream it up, you can build it and make it happen. Infinite slinky staircases, you know, the fireman's piston, the American gladiators, you know, tennis ball cannon, foam pits, like museum from all the builds.

39:15This is a rock, paper, scissor robot you can't beat. It's like all these whimsical things. And it was like, and you're an engineer and you want to, if you can dream it up, then generally you can build it. And so we do. I remember seeing this with Willy Wonka's Chocolate Factory as a kid. And I guess I knew it was a movie set, and I could tell it wasn't necessarily real, but I really, really wanted to go there. The cool thing about Crunch Labs is this isn't a fictional movie. This is real life. So it's like we are building cool stuff that actually exists, and you can actually go to this place. So it's like that same idea of that affinity towards this location and almost like a character, but it's real and you can go there.

39:59And that's why the platinum ticket is such this valuable thing. Yeah. When we were inside Disneyland, I was really impressed with how much of a process you had to take kids through the Crunch Labs experience, even though we weren't at Crunch Labs. I remember we were doing the egg drop and it seems like you had these stations. Can you talk about how you think about people visiting Crunch Labs and the experience you bring them through? Because now they've been telling us, Make-A-Wish that creators are being requested more than 2x over the past few years and you're one of the most requested from Make-A-Wish kids like how do you think about like what experience you give them or the people that come in by getting the platinum ticket?

40:36Yeah I mean you just try and make it an experience they'll never forget right and so you know I have a team that helps me and we kind of do have a process of what we go through a lot of time egg drops are a great part of that process then they get to also work with the other toy engineers so yeah. It's really well done and you also said this thing to me uh when we were in line at uh tiana's uh bayou ride formerly splash mountain where you're like oh disney is almost like a set now for a lot of creators and you were there filming a short is there any other thoughts you have about working with like brands like disney or going to disneyland to make content because now they're doing things like the creator lab where they you know spotlight emerging creators or the creator celebration days where they bring in big creators for like an invitation only type of experience like we did do you think about like oh, I want to go to this place to make content.

41:23You know, Disney, the storied brand, there's an argument for them to be really protective and really prescriptive. But they were pretty cool about, like, opening up. And, like, that always works great for brands. Yeah. Like, it's really hard. You kind of got to take a deep breath and unclench. But if you do, like, great things can come from that. And I think Disney is actually leading the way now in sort of teaming up with creators and letting us tell their story in an organic way without them being super over prescriptive. Yeah. And then take me through. So we talked about YouTube and streaming, the experience and the product.

41:56Tell me about schools and the curriculum. Like what is Class Crunch Labs? Because I feel like this is something that a lot of people don't know about. Well, they don't because we haven't really announced it yet. Like I'm going to officially announce it big with like a TED Talk in next April. Okay, wow. We've put out the pilot episode. Basically like two years ago, maybe two and a half by COO Jim Lee. I asked his daughter, like, what are you learning in school in science? And she's like, oh, we just watched a Bill Nye video. And I was like, really? And then she showed me the worksheet that came with it that asked questions about the video.

42:28It'd been copied like a thousand times, you can just tell, right? And I'm like, that's wild they're still watching that because like that wasn't made for this generation. Like I have had to learn like a lot. You know, we have had to learn a lot on how you hide the vegetables, how you get their attention and then sneak in the science, right? And so like, we're really good at doing this. And like 40 % of teachers already show my videos in the classroom and they have nothing to do with the lesson. They're just showing the YouTube videos on the channel. Yeah, right. Wow. So then the idea is like, well, what if we took the national standards that you have to teach to, made a full science curriculum, third to eighth grade, where we just teach everything in a super engaging way.

43:10And our toy engineers come up with like really cheap, simple, hands-on demos that could be used. and we have lesson plans for the teachers and teacher support materials. And if we just really went for this and made it fully comprehensive, we realized it would cost us about$55 million to make and three years to pull off. So it's like, all right, well, let's do it because then we make it free for all teachers forever. That's the punchline. Wait, wait, wait. My mind is blown. Why does curriculum cost$55 million to make? Because these are like big videos, right? Like in the next video, I'm like jumping 100 feet onto a crane to show like what gravity is like on Mars.

43:53And we just rendered like the world's biggest magnet. I just did one where I was like standing in front of an MRI machine holding like a 10-pound hammer and there's a watermelon inside. And then we turn on the MRI machine. And by the power of Thor, this hammer just rips out of my hand through this watermelon. And that is how we introduced the lesson on electromagnetic fields. Because it's like, I can't teach you if I don't have your attention. So instead of a boring old worksheet, we get their attention, just like with the YouTube videos. And now we've made that connection. And now we can talk about these invisible fields around us.

44:31So... Wow. And like this, there's no way... So when you lay this all out, it seems like this master plan. And when I was like, we have to do this. this is like the right thing to do, then, you know, responsible people like Jim, my COO, is like, well, how do we make money off this? I was like, we don't. Like, there's no way, we don't make any money off this. Like, we're not sneaking in, you know, we're not doing like, it's not ad supported with Crunch Lab stuff. We're just doing this and we're putting it out there. And I'm like, I tell my team and like, I feel like this is the most important thing I'll do in my whole life.

45:07Wow. Yeah. And we've fully finished the first pilot episode. There'll be like 40 units total to cover all the standards. We're now filming tomorrow three of those 40. And then we're like scaling up the team. So we're getting funds raised for this. So we've already raised a portion towards the$55 million. And if we have to contribute our own money, we will. Mario, I'm so speechless. I don't know if it's because the creator side of me, the new dad in me, this is... Wait, wait. So just so I'm getting straight, the$55 million is a lot of this going towards making better content for students to watch in school.

45:47Not just watch. It's like a full curriculum. There's like lesson plans. There's booklets. You know, it has the assessment. It's a full science curriculum. Wow. And so this is like interactive in the same way that like I'll get homework. I'll get like a worksheet maybe as I'm watching it. Like I'm trying to think back in my like elementary days. Or even better, like think as AI comes along, you know, we're teaching a lesson and the teacher's like, all right, break into groups at your tables. And if it's a school that has an iPad, for example, there can be like, I can be at the table on the iPad.

46:17And I'm like, all right, guys, let's brainstorm. What's our catapult going to look like? Right. So they draw it and they show it to me because it's multimodal. I'm like, oh, that's good. But like, you know, this is AI Mark Rober. But like, where's the energy source? And they're like, oh, shoot, good point. And they're like, and they draw it and they show it. I was like, oh, perfect. That looks amazing. raise your hand and tell your teacher you're ready. And then she's like, all right, when Mark Rober says it looks good, raise your hand and we're good. Wow, because that AI could have pattern recognition.

46:43Yeah. You can know even if you're not there. That technology exists now today. That part's not hard. Wow. Damn, I'm so sweet. It's going to be a mess. And not only that, then when we launch it, there's never been anything like this in history because we're not just going to quietly put it out there. In my YouTube channel, I'll be like, if you're watching anything else in school, It's like mutiny against your teacher. Because the content that's out there is not... I have to be careful. There's a lot of stuff out there that people charge these poor teachers.

47:18Who like are already, like they don't have a lot of money.

47:24Sorry, this is like something I'm super passionate about. And they're paying for this content that's like not good. And so we're gonna make something that's just like way, way better. And then we're gonna make it free. Like they need help. Like teachers are quitting at huge rates. Like this is... Sorry.

47:50Yeah, so I mean, this is what our approach is gonna be. And then we're just gonna make it free. And then when we launch it on the channel, we'll be like, we'll have a map and like, okay, here are the places, you know, where this isn't being used in schools. And so we have like, it's a grassroots effort where it's like, oh, Des Moines, Iowa, we need some ambassadors there. Right. And so it's like, it's bottoms up, but then it'll be top down. We'll also go through the, you know, the senators and the school programs. And by the way, we're testing all this, right? So we're getting West Ed and these really accredited people who actually test the efficacy for these things.

48:24Cause I don't want to waste my time or my money or anyone else's money in time if this isn't way better than what already exists. So as we do this, we're like, here's a control classroom. Here's a class that had class crunch labs. We'll show that it's way better. So we actually have the data to back it. And if it needs to be tweaked, we'll tweak it. That's why we're doing the pilots, right? So we're just like, make the most kick-ass curriculum for science that's ever existed and then free forever. Wow. Wow. Is there a teacher you've spoken to or like a story that comes to mind? Yeah, well, I went, I spoke at NSCA, which is like the National Science Teacher Association.

49:00And I basically said this was the plan last year. Actually, this was like a year and a half ago. And we got like three standing ovations. I was crying. They were crying. It was a whole thing. So it's like the teachers are hungry for this. Like they really want it because it's, you know, the kids care. When we make science on the channel, like the kids get into it. And so it's like the teachers want that because they're in the same boat. Like they can't teach the kids if they don't have their attention. We know how to get their attention. And we know how to teach really effectively and hide those vegetables.

49:30So we're not replacing the teachers at all. Like we're making the teachers the hero of the classroom. So it's like I'm working with them. And, you know, I work with the teachers in all this. The teachers have a role. I have a role. We have a role in the videos. And then the combination of those is like, it's going to be sick. I'm honestly at a loss of words. Yeah, no, I'm really, really, really, really excited about this. I think, like, everything we've done so far is, like, helps to make this the thing. I'm kind of glad it's in the center, in the middle, and on top on this diagram. We really also try and grow as slow as possible.

50:07Like, we probably could have taken a bunch of outside money. We haven't taken any. And, you know, have a team of 500 and really, like... But it's, like, we really want to maximize for area under the curve, right? It's like very long-term. Meaning like you could spike and just juice the business and try and get some high valuation. And then you're going to have, if you calculate the area under that curve, because it's going to inevitably, I would say crash. It's a smaller area than if you just have slow, sustained growth, right? Over time. Plus that's more fun. Like that's why in Zelda and video games, you start with like a wooden sword and a wooden shield and three heart containers.

50:48You don't start with everything. Like you get, you maximize the dopamine to your brain if you just get little incremental level ups. And they've done studies that show this. If you get a huge raise, then you're flat for 10 years. You're way less happy than if you creep up on that amount and get like a 5 % raise every year. So like philosophically speaking, we're kind of the same with the channel. I think at some point you always need to be growing a little bit. Otherwise, you're sort of dying. That's just like a principle of life. That's just a fact. So we just try and do it like as slow as possible.

51:22Yeah, thank you, Mark, for walking us through this. I appreciate that. Thank you, Oprah, for making me cry. Not cool, John. Not cool. Peace. If you haven't already, go to ythackpack.com to get our free YouTube hack pack with all our best tools, tips, and templates to grow on YouTube today. From our intro and thumbnail templates to our 100 viral ideas for any niche, we constantly update it as we interview more creators so you get the latest and greatest for free. And yes, that means you'll also get the maps that we made for Jimmy and Mark in this video so you can map out your creator business too.

51:53All right, thanks for watching.