The Jesser Business Blueprint (feat. JesserCo President Zach Miller)

0:01Welcome to Crater Upload, your Crater Economy podcast. I am Lauren Schnipper. And I'm Joshua Cohen. Joshua, looks like you got a haircut and you know what that looks like, a Miami haircut. Tell us everything about Possible. But before we get to that, wait a minute, we have an amazing interview with Zach Miller coming up that he talks about all the things going on with Jesser and Bucket Squad. He's the president of Jesser Co. and it's going to be awesome. But OK, sorry, back to you, your haircut in Miami and that tan. Go on. I didn't get a haircut in Miami. I got a barber here in Rutherford, New Jersey, who I love.

0:29In any case, I was in Miami for Possible, which is a huge, basically started as an advertising technology convention. You have all these suppliers for the ad tech industry and MarTech industry there, and it's their big, huge event of the year. It has slowly evolved into more of just a general marketing conference, but it takes over the Fountain Blue in Miami, the Even Rock in Miami, multiple hotels, all the outside areas. there's like giveaways for days oh guys some good swag some decent swag yeah for sure uh by the way i did by that we should mention that last weekend i saw you in person and every time i see you our children hung out in new york city and um i you i sort of commented you were wearing the nelf boys happy dad like sweatshirt and hat and i was like is like 95 of your attire just like swag and free giveaways to which you answered yes definitively yes yes go on if you have a t-shirt or hoodie or anything i'll definitely wear it yeah um and so it's turned into this marketing conference as well where they had some big people there youtube's chief business officer mary ellen co was on stage with kamegra dion dar man spoke with katie feeney on a panel about youtube and integrating brands and sponsorships into the youtube ecosystem which they've been doing a lot of recently which is very interesting uh just what dar has been doing with brands yeah uh-huh and then isa ray was there love isa ray from famously one of the darlings of the web to mainstream entertainment trajectories uh she started with confessions of an awkward black girl on youtube back in the day had insecure that ran for several seasons on hbo and she was up on stage with the president of hooray productions Ian Schaefer.

2:21They talked a lot about branded entertainment in this ecosystem. It was really interesting to hear her story because she has this perspective on it from both being a creator, like an actual creator, capital C creator, through the lens of the creator economy. And then also she's a huge Hollywood celebrity. Here's what I thought was an interesting takeaway from her panel. So she recently inked this partnership with TikTok where she's going to be doing several micro dramas for the platform. Okay. Here are a couple of quotes that she said about that when asked up on stage. She said, I love to tell stories.

2:52Television and film projects are my bread and butter. They're never going anywhere for me, but micro dramas offer an opportunity to take risks, to have direct access to your audience in a way that TV and film don't really give you in the same way. And of course, to generate IP and ownership. She talked about how she was in this deal with HBO. She wasn't allowed to do kind of other things. Right. And now presumably she's out of that. And she's able to explore all these other creative opportunities. She saw these micro dramas getting really big on platforms in China and said, like, hey, I can do that here.

3:27And she's building really this premium, what she calls a premium micro series experience. And she said, quote, it's an opportunity to create content that prioritizes storytelling and prioritizes our audience in addition to building community. Everybody's on their phone at the end of the day and they're looking for great stories. This allows us to do that for free, which also differentiates this partnership from other platforms. Other platforms hook you and then you have to pay a dollar for an episode. End quote. She's referencing these other micro drama platforms. You have to like pay to get more and more and more and more.

3:56She's doing it on TikTok for free. Presumably there'll be some brand integrations. For free. For the viewer for free. But I think it's worth noting that I read that this is like the first major deal that TikTok is doing with anybody to develop original programming. on the platform. I don't think there's another one like this. That totally makes sense. And she's a great person to do it with because, again, she straddles these two worlds. They showed a preview of one of the micro dramas she's producing called Screen Time. Yeah, that's the one. It's fantastic. I'm sure. She's hilarious. It looks so good.

4:29She's great. And I think it's really interesting. We think about this, like, you want to meet the audience where they're at, so you want to be on all these different platforms. Right. It's interesting to think of that from, like, a screen POV and the phone because she has that context because she's been in film. She's done premium television before. And she's like, oh, but everyone's also staring at their phones. How can I be there too? And how can I create creative entertainment product that really meets people where they're at when they're staring at their screens? It's not necessarily novel distribution, Laura.

5:01I get it. Yeah. But it's just an interesting mindset that she's coming at it from. I think you're just I think it's more that somebody with her breadth of experience and having worked in, you know, with HBO is still like able to think that way. I think that is what is unique. Is that fair to say? Totally. I think that's super unique. And also someone with her kind of like pedigree now. Yeah. And her creative experience and her talent being like, yo, this is where I want to tell some stories. Yeah. It really legitimizes the medium, too. Well, it's just, you know, I think it's interesting. You know, I've been in many meetings at companies and spoken about how like a lot of folks try to do initiatives with a kind of traditional talent.

5:44There's been a lot of stops and starts. It's very difficult to do because there's expectations around everything from hair and makeup to crafty that just don't make sense from a financial standpoint when you're doing things on digital. And there's, you know, people always point to like Issa Rae, Kevin Hart. And they're like, but they can do it. I'm like, they are like unique, special snowflakes. You know what I mean? Totally. Just like, get it. Don't care. I mean, Kevin Hart, I cannot tell you like how many meetings I had. He would be coming to our activations when I was at Facebook and he'd just be like, what do you need?

6:10What do you want me to do? And most people would just be like, I'm not going to do that. Like, I'm not. Sorry. And like, there's a very famous comedian that literally was like, I don't need like Facebook. Like, true story. And Issa Rae also had a meeting with her when she was talking about doing a lot of the stuff back in the day. It was like still during Insecure. But she gets it. And I think it's really cool. And she's she's not there. She doesn't feel it seems that like, you know, anything that makes it legitimate or less than, you know, by by working on a digital first platform. So I think that's awesome.

6:41Yeah. Must just be such a fun project for them to both from a production POV and from this fact that like they get to create so many of them so they can see what sticks. And then, you know, I mean, I'm sure then people are going to be looking to make it bigger. And it's like a whole thing. Okay, Josh, I'm really excited. We have Zach Miller, an old friend, literally an old friend. I literally went to camp with him when I was 16. A summer program, really. But somebody who pivoted into this industry, not entertainment per se, but working with creators. And you and I were sort of there when he was sort of making that decision and figuring out what he wanted to do.

7:14And he ended up working with, I don't know, arguably one of the biggest creators out there right now, Jesser. And they've done some really interesting things, you know, kind of recently with restructuring and building out the business. And it was really fun talking to him about everything that they've got going on. Zach Miller, welcome to Creator Upload. Thank you for having me. Very excited. So you are president of Jesser Co., which is, of course, sort of the overall business with the YouTuber Jesse Rydell. But you recently did a bit of a reorg. Of course, Bucket Squad was how we knew the company.

7:47You did some big hires. Give us like a very high level 30 seconds of like what the reorg is. Well, the reorg, we basically changed the parent company from Bucket Squad to Jesser Co. So the hold co bears the name of our biggest brand, which is Jesser. The companies that sit, we sort of clarified the companies that sit underneath the parent co. So we have, you know, a longstanding YouTube, social media, and ultimately other forms of video content business under the Jesser brand. We have a soft goods, sportswear, streetwear, lifestyle apparel business called Bucket Squad. Yep. We have two other freestanding consumer companies that we're developing, one which will launch in probably Q3 of this year, one which will launch later in 2027.

8:41And all four of them will sit under Jesser Co. as the parent hold co. Okay. So many things to dive into. Can you tell us anything, just as you mentioned the Q3 and early, a little bit about those businesses that are going to be launching? Yeah, we're not saying too much about them yet because we don't want to scoop the announcement when we actually go live with those. We're happy to scoop here. We're thrilled to scoop. I know, if ever there were a place I would scoop. If ever there were a place, keep going. Like I was saying before, being on this show is like a pinch me moment. And we have to tell the public that we've known each other since we were 16 at some point.

9:15Six something, yes. I'll let you go into that when you want. I look exactly the same. I might have the Summer Discovery group photo in this some albums down below um love it yeah so uh sorry what was your question i don't even know i'm just thinking about i'm just thinking about summer camps um okay wait no let's get back so oh yeah the q3 the businesses that you're gonna oh the business yeah so so uh the business that we're you know launching is i think we've said a little bit about it it's it's you know related to uh outdoors sporting goods like action um you know activity products yeah so probably more in the hard goods space so we'll probably i mean i think the the way to think about our expansion is we have this media business we have a soft goods business we're probably going to launch a hard goods business we may launch a consumables business those are sort of four three categories they're challenging categories they're not necessarily like massive tam categories um i mean they can be but they're not you don't pick them because they're they're just huge markets with huge exits but for us they're three product categories that we thought were like really native to the content we make to the audience we have to what jesse is all about the values and so they felt like they were the most natural ways to get into businesses that natively incorporate into the content.

10:41So just zooming out a little bit. So obviously, this is a business that has what one might describe a bit of a key man risk, right? It's really around like one main sort of talent, if you will. You obviously are expanding and diversifying the business. You came into this company, I want to say like, what, a year and a half, two years ago now? Two and a half. Two and a half. Jesus, time flies. Yeah, time flies. I would argue, like, based on the work that you've done is diversification. Was that sort of the number one goal and bringing somebody like in? Because I think, you know, we were sort of talking before we started, like a lot of creators are thinking a lot about, like, when do I hire a president?

11:14When do I hire somebody coming in to, like, help me operate? And so what do you think was the tipping point for Jesse? And like, what was your main sort of, you know, kind of remit and goal coming into this business? Yeah. So, I mean, it's a good question. So I think for Jesse, the tipping point was he reached a certain scale of revenue and size of team that the administrative operations of the business, like literally like management, health care, finance, expense policies, HR, like a lot of the boring stuff that is like not the sexy stuff. I think that was really the impetus. I think there was probably also, I mean, Jesse is a really, really intuitively smart guy.

12:00And I think he probably also intuitively felt like this thing is getting bigger and like there are certain things that I know how to do and then other areas and opportunities that I don't. And so I think he probably the the pressing need that needed to be solved was like this administrative stuff. I mean, when I joined, the first thing I did was like put health care in place and we put management structure. I remember I remember you talking about it. You're like, this has been like the not sexy part of the job right now. Yeah. Yeah. Yeah. It was it was hard. It was a great education to just dive right into all of that.

12:37Yeah. And get get like the the the tracks laid. but then I think there was also when when I had was interviewing I was also talking about things like content syndication so it's like you make all of this content you monetize it on YouTube are you monetizing it through other channels that's a way of growing audience finding people where they are yeah we talked about direct-to-consumer monetization like a membership or something like that we did a bunch of research on that and there it turned out that the the data started to say, you know, this is not a great idea. So I think Jesse knew that there were other ways to make, you know, to grow, diversify revenue.

13:16But I don't think the plan was like, come in and diversify these businesses. In fact, when I joined, Bucket Squad was already a business. So it wasn't like I joined and it was like, hey, let's get into apparel. But the apparel business was pretty small. It was under a million dollars in revenue. And when I joined, one of the first things I did was sort of like, I joined in September, we were heading straight into Q4, into Holiday. And so one of the things that we really focused on was like, let's see how far we can push this business in the next four months. And let's get a signal. Is there something here, or is this just going to be a small thing?

13:54And Q4 was massive. And then all of a sudden, one of the big focuses, like, yes, a lot of the focus was like, get the administrative stuff in order and make sure the trains run on time and everything is well-structured. But the next focus became, okay, how do we pour fuel on the fire for this apparel business? And in the two whole years since then, really, we grew the apparel business from$1 million to over$10 million last year. That's amazing. Yeah. Getting it into Dick's Sporting Goods, which now it's in 75 Dick's Sporting Goods. It'll be in about 150 in the fall, hopefully more in 2027. But that really, I think, was one of the big unlocks in realizing that we could diversify businesses.

14:42It's like Bucket Squad became this sustainable business that was profitable and could grow and fund on its own money. And all of a sudden, I think we started thinking, okay, what other businesses could we do something similar with because we've proven that we can, you know, that we can make Bucket Squad a success. I don't think that there's a good answer to the key man risk problem, but I do think that there are kind of two ways that I see the market kind of responding to this. One is building a fully integrated platform where all of your revenue streams are diversifying each other. but you're sort of just acknowledging the fact that like key man risk is going to embed everything and so in some ways it's like the more new revenue streams you can pile on the more diversity the diversity of growth all of that um you know helps improve sort of uh probably the multiple because diversity and risk mitigation improves the multiple yes but your key man risk is sort of maybe diluted because you have so many businesses so it doesn't feel like it's as acute as it is in one you know video business right um but uh the other way is that you isolate the key man risk to the video business so for us we know that we can't escape the key man risk of jesser yeah but that key man risk is fundamental in the video business in the jesser business but when the apparel business is bucket squad and Jesse is not in every ad and his name is not the company, it's not impossible, especially now, to look at it and say, all right, this business could 10x again and then it will not be the Jesser business.

16:33It will be this bucket squad business that was founded by Jesser and then maybe it can exit in a way where it's not burdened by the key man risk. And so to some extent, our strategy right now is we have the Jesser video business heavily afflicted by key man risk, relatively slow growing business, relatively profitable business. We have the apparel business, which is not as profitable in early stages of growth, growing like crazy. And so there's diversity there. But that is an exitable business. The next two businesses we're looking at, maybe those end up being similarly exitable businesses. And that strategy works out.

17:09If it turns out, though, that the market starts to really respond to deeply integrated, you know, creator, founder centric platform businesses, we can always bring these different pieces together and put them under one banner and then go out to the market in that way. But the truth is, we're really not even looking to raise capital. So the question becomes like, why do you do one or the other to exit or to get a better valuation? What are you optimizing for? I think the big thing I want to just double click on that you said, too, was that something, and this is so critical, I think, for any creator that's listening, is that something that Jesse, when you in your early conversations, you were saying, it's basically like, I know what I know, and I know what I don't.

17:50I don't know what I don't know, but I know there's a lot that I don't know. And I think in my 100 years in this industry, what I have learned is this creators that have been able to grow and basically be on their own little channel, even if it gets busy, is the ones that delegate, the ones that are recognized that knowing that you don't know stuff is not a weakness. And that's actually your biggest strength because your biggest strength is bringing on folks such as yourself that can be a better operator and a better monetizer, whatever you want to call it, you know, in ways that you would never do.

18:20And then therefore you can, you know, do the things you know how to do really well instead of spending time doing things you don't know how to do or don't know how to do well. And I think that's so critical for when a creator is thinking about bringing somebody in. Are you at that point when you know there's a lot out there that you don't know how to do? You know? Yeah, yeah. I mean, I think, I think, by the way, it takes like, it takes a very mature person. A hundred percent. To do that. You've got to put your ego aside for that. Definitely. Well, and this funny, so two things I'll mention. So Jesse recently sent me a podcast on HR, which is like amazing to have like a creator partner who's like listening to podcasts on HR, right?

18:58Like just to get a sense of like who Jesse is. um but uh in it there was this incredible lesson that came out which is that the best criteria on which to hire people is low ego self-directed and eager to learn and like just a fundamental learner like people who if they don't know the thing like they are excited to learn it and get better um i love that that's like my favorite that's my favorite that like all those i love those three things genius and when i heard that i was like oh wow like that just makes so much sense to me um and so i do think that like fundamentally like the culture around that comes from the top and so yeah jesse is a guy who like knows what he knows he knows that he's like one of the experts in youtube in the world and he's done his 10 000 plus hours and you know knows in front of the camera knows the creative behind the camera has taste and has strong opinions about like the apparel business and the patterns we use but also when it comes to the administration of a company the administration of a media business media growth strategy opening new revenue streams he's like he has opinions but he also knows what he doesn't know and sort of like lets me do my thing or get out of the way uh on that stuff and similarly like that inspires me i mean i i'd like to think i'm smart enough to know that i shouldn't be involved in the youtube content development but you know uh because i you know i'm i'm not cool that's no not at all well just really quickly on that so how how in terms of this i want to get back to the bucket squad at all but just because we're talking about this um how diversified is that media business?

20:47Like how, I know YouTube, I would assume is, you know, where is that the majority of the revenue? Is it becoming from brand deals? How diversified and what are the plans around that? You mentioned that you're, you got signals from the market that like, it sounds like a paid subscription model isn't really what the market is asking for right now. So like, I mean, maybe eventually, but yeah. So for us, look, you know, our content business is really divided into long form and short form. We have leaders who run each of those, um, units. Um, the short form team is responsible for YouTube shorts, Instagram reels, TikTok, and then all of the social and short form brand deals that happen.

21:30The long form team is responsible for the long form content on YouTube. I would say between the two of them right now, for the first time, we're close to 50-50 between brand revenue and YouTube AdSense. Oh, wow. But both growing. And so we'll see how that shakes out. I mean, I think the interesting thing about YouTube AdSense is that, and this was part of my original thesis as to why I wanted to go and find opportunities in YouTube, is when I started looking at YouTube when I was working at Spotify, there were 1 billion people on the platform. By the time I was done doing that analysis, there were 2 billion.

22:06And that was like 18 months. So like the user base is scaling um the content consumption is migrating from computer and mobile phone to flat panel tv which means the watch times are getting much longer i tell you all the time is the fastest growing service on youtube that people don't realize or don't think about as much as they should and then the third variable there is cpms and all the user growth is coming from places like Indonesia, India, Brazil, markets where the CPMs are relatively low, but also markets where the disposable income is relatively low, and you're not going to have big subscription service markets in those places.

22:49And so the free over the air consumption is going to grow, and that means the CPMs are going to grow. And so if the number of users is growing, if the watch time of those users is growing, if the CPMs of those users is growing, The same consumption, the same amount of content is just going to make more money over time. Brand deals are subject to pricing and also subject to inventory availability. So there's a lot more work that goes into fulfilling brand deal obligations on, you know, host read YouTube content than there is on collecting YouTube ad sense. So, you know, be interesting to see how that evolves.

23:27Getting back to the bucket squad overall, you just made a really big hire. um eric wise who had been the former gm of global basketball at adidas i mean that's a very um legit big kind of hire you brought over i would imagine i'm not we're not talking to him but i would imagine he would only come over if he saw like an incredible opportunity to scale and grow so give me like the high level of like what is what his sort of remit is what's happening next um i'm saying you said expansion into kind of more stores but like i'm assuming more products are coming out like what are we what are we looking at yeah i mean you know we're going to continue doing what we were doing, but just under Eric's leadership.

24:03But I think you're right. I mean, Eric is a 20 year veteran of, uh, you know, the apparel industry, um, footwear industry. Um, he led, uh, Adidas originals. So there's a lifestyle experience there. He led Adidas basketball, which is obviously, um, uh, a great aspirational fit for us. He also has a lot of leadership experience on the retail side of things. He spent a number of years working at a company called Sneaker Villa. And so I think what we have now is, you know, we over the last two years, we built a nice operating foundation to scale the business from like 10x in two years. I think what we now have is a leader who has the merchandising vision, who has experience working with retailers and, you know, selling to and sort of managing the dynamics of a direct to consumer business and also scaling through retail.

25:08And I also think we've seen how businesses like Baseball Lifestyle 101 have grown from like seven figure businesses to nine figure businesses in, you know, three years through the evolution of the market kind of growing toward these more youth-oriented startup brands. And so I think, yeah, I think it's the combination of this creator-centric, creator-marketed, new, fresh brands that the kids are excited about together with an operating leader who really Everybody knows how to plan and plan assortment, develop a diversity of products, source from the right manufacturers, manage operations smoothly.

26:01I mean, the thing about an apparel business is that the margins are not great in apparel. And so you have to really be good at operating in order to squeeze out the margins that are necessary in order to fund growth at the rates that you want to grow. And I think one of the things that we ran into over the last year was we were operating okay. The margins were really thin. And then when we hit bumps in the road, we didn't have the excess margin to like fund our way through those problems. Yeah. Yeah. Now, I think with Eric leading, like I've already seen in the first two months that we've been working together, he is thinking like six steps ahead and he's making decisions in the present that buy us the flexibility to address the challenges when they come up.

26:46So it's it's been great. Honestly, it's like a dream. I'm super stoked to see what happens there. And if you can believe it, we're coming to the end of this. So I just want to ask quickly because you did rebrand sort of Jesser Co, which effectively is a hold co. So I come from like, you know, a lot of M &A in my background. And so I can't imagine that you're not thinking maybe there's some M &A in your futures or anything that you might want people to know that you could potentially be looking for if that were in your future. You know, we're always like open to I mean, you said before you said something when we were talking before about optionality.

27:19And I'm I'm big on optionality. It's like, I don't know exactly what the next thing is going to be. What I'll say is I don't think we're really looking to like acquire businesses. I think we're more entrepreneurial than we are like truly acquisitive. I think we think of ourselves a little bit more almost as like an incubator or as almost more like a venture. Like we're not a venture investor in the traditional sense where we have capital that we're looking to invest, but we have resources usually in the form of marketing and audience and distribution. And so where there are opportunities for us to bring those as resources to the table with partners who have other resources, maybe those partners have capital, maybe those partners have product development, manufacturing, distribution, and we can create new businesses that can contribute to the enterprise value of JesserCo or that can just be good enterprise value investments or opportunities to develop, we're definitely going to look for those.

28:19The thing is we have to be careful about doing too many and being too distracted and letting any of them fail. So like we'll only grow as fast as we feel like we have great leadership in place to operate these businesses successfully where we can then like let our attention start to look at like the next one or two or three things. So for the time being, we're going pretty slow. I mean, we've been going fast, but we're like, you know, slow but steady. Yeah, no, but I get it. I mean, you're focused, right? You're really, you're really like eye on the prize here man i get it we want to we're going to launch a new business in in the fall we want that to be hugely successful we probably won't even consider something else until that is like up and running and has good momentum yep um yeah you know and then you'll go from you know how it is you you start a million businesses oh sure all the time all right zach miller thank you so much for joining creator but what a treat what a treat for me only like 50 years in the making.

29:15I've honestly been waiting to be on this show since I was 16. I love it. All right. Everybody can find you on LinkedIn and then obviously go to all of Jester's channels to watch the content and go buy all your shoes in Bucket Squad. Thank you so much, Zach. It was awesome to have you on. I'm so glad we finally like, you know, check that off your bucket list and thrilled that it was on your bucket list. It's like a half bucket list because I wasn't part of the interview, Lauren, but yeah. Oh, you should. The text messages I was getting prior and he was just like, should we chat like beforehand?

29:43And I was like, no. And he's I was like, don't worry, it's just me. And he's like, Josh isn't going to be there. I know. People are so disappointed, like horrified. I'm sorry, Zach, but next time. So upset. Just I'm just there. I'm just one one half of just a duo that cannot be, you know. And the reason I wasn't there, Lauren, is because I was a possible and I was seeing people like Issa Rae. And I think at this particular moment when you were doing the interview with Zach, Mary Ellen Coe on stage. So, again, she's a chief business officer at YouTube. And I've witnessed a really interesting progression of the rhetoric from executives at Google and YouTube when they're on stage talking about their platform.