Millionaire CEO’s PR Disaster, Elon’s Visionary Skills, and the $28B Pop Mart Lesson From China

0:01Speaking of which, speaking of extreme, did you see the millionaire who stole the hat from the kid at the US Open? Yes, I was really irritated by that. Yeah, okay. So they say it was some European or something like that. Polish, Polish CEO. So here's the deal. This guy, I'm pulling it up. Okay, so he took this hat from this kid, okay? His name is Peter Skrznik. I can't really read the last Polish name, but it's a Polish paving company. So after this happened where he took a video or he took a hat from a video. So this tennis player, I think, was signing autographs, and then he flipped the hat over to give it to the kid, and then this guy swiped it away.

0:43See, you see that? Yeah. He swiped it away. By the way, this tennis player, afterwards, he saw the video. He's like, no, it was meant for the kid. He didn't realize it was taken away, right? And so what happened was everyone on the internet found this guy, and the internet didn't just find him. They found his company, and they're lighting up every review site they can find. And so imagine you're getting negative reviews everywhere. and this guy is actually doubling down. He wrote a response saying, hey, like my life model is like whoever gets there first, like gets it, right? It's like, dude, you took it from a kid and then his wife actually responded to say, yep, that's our life model.

1:14Like if you guys don't like it, you guys are losers or something like that. But my point is you probably shouldn't double down. You should probably have damage control. If you're paving, if you're just going to keep getting negative, and each time you respond negatively, it gets millions and millions of more impressions. So you should probably stop. Yeah, there goes a lot of his revenue. Yep. yeah no it's it's terrible that's what i like on some of the baseball games like some of these guys catch a baseball and the kids were also going for and after you know the adult catches it he gives it to the kid yep but then and then karma happened and the kid caught it and then gave the next ball did you see that he he got he got the ball back he got another ball yeah i saw that one yeah yeah so anyway there's one where a kid got a ball from an adult and it went viral he got the ball you know the dog gave it to him the kid turned around and gave it to a chick that he thought was hot oh yeah yeah i remember that one i was like all right dude so i i have one here and then you can pick the next one but i wanted to talk about how you can become a visionary communicator like elon musk and so if you look at 19 years ago he had a plan for tesla so the the first plan was to build a sports car okay then number two use that money to build an affordable car so the sports car was the um what do you call it the tesla the roadster okay the second one the affordable car is the model three okay um or sorry was the model s model s okay that was more that was affordable still expensive then number three use that money to build an even more affordable car so that's the model three then number four while doing the above also provides zero emission electric power generation options and then don't tell anybody he told everybody um but that all happened 19 years ago he called a shot then nine years ago he published part two part two create stunning solar roofs with seamlessly integrated battery storage solar city right and he bought it under tesla number two expand the electric vehicle product line to address all major segments cyber truck he's got the big truck as well uh develop number three develop a self-driving capability that's 10x safer than manual versus via massive fleet learning which is already happening with robotaxis everyone's talking about how it's so great um someone did like a four hour drive with robotaxis, no interventions and posted it.

3:23That's happening. And the last part here is enable your car to make money for you when you aren't using it, which is he's going to be done in the next 12 months or so. I bet you that's going to start getting a lot of people onto the app. Yep. And Elon afterwards was like, oh, like part three was too complex. He didn't want to explain it. But part four is coming. He's going to explain it. But he's if there's any one thing people can say, oh, like whatever, he's this type of person. But he's very clear with his communication and with his memos when i read the book must memos um his emails are very clear yes he is a great communicator one thing that's interesting with byd his competitor um the chinese alternative yeah they they generated more european sales uh than tesla i believe it was for the month of june they were seeing growth while tesla seeing a decline um byd published financials They're publicly traded and they're getting hit hard because their profit margins are sinking.

4:19And the Chinese model, at least what I've seen from an external... You're seeing Tesla sinking in China. No, the Chinese model, BYD stock was sinking. Okay. Okay. Because their profit margins are continually sinking. Because the Chinese business model is continually beat people on price. Correct me if I'm wrong, but that's what I've seen from an external... It's one of the ways, right? So when you are continually getting people lower and lower prices, eventually the business just makes less money. Their goal is probably to take over market share. But if you're selling more cars, but you're making a lot less per car, it's going to hurt you.

4:52It's just a question of when. And I don't think that is a long-term good approach to marketing in reducing your prices. And we see people constantly doing this. I know we're getting closer to holiday season, but people start doing sales and promotions with Halloween. Then you're going to start seeing a Black Friday. then you're gonna start seeing it with Christmas. I think it's, yes, you can run promotions. There's nothing wrong with it. But continually having the model of we need to be the lowest price for most businesses is gonna hurt them. If you're gonna create a business out of it like Walmart or Amazon, great.

5:25But for most businesses, I think it's a road to just folding up. Yeah, I'm with that. I guess on the flip side, because we're talking about China right now. So you know the little toys, Pop Mart? You know there's one at the mall. I don't think that's Chinese. I thought that was Japanese, no? No, it's Chinese. It's Chinese. Yeah. Yeah, the little boo-boo. Yeah. Yeah, my daughter has one. Your son doesn't have one? You don't want one? What would my daughter want? I thought it was for guys and girls. I thought it was for girls. Get this. And purses. He's now the 10th richest person in China. So worth$28 billion.

5:58And so you look at this. This is the, these things, right? Yeah, my daughter has a pink one. Yeah, yeah, yeah. So this guy, dude, this guy looks so young. Uh-huh. And so, so this guy over here, interesting things I learned about Popmart, the Chinese company behind Lububu and its founder, Wang Ning. So that's for sure Chinese. And so basically, Popmart started as a single variety mall store, like Spencer's Hot Topic. And then you had these big things and people line up for it, right? But man, that looks really nice, doesn't it? Yeah, that looks really nice. Yeah. So he started a company in 2010, a year out of college, and then completed an undergraduate degree in advertising in a short stint.

6:34Spent two years selling third-party stuff on margins. trying to scale with that, but hard to finance. 2014, he did his first, like, finds a repeatable format. So we talked about formats a little earlier. Blind boxes, you don't know what's in the box other than theme series. He figures out, after stocking Japanese, Sony Angel blind boxes. They kind of look like this, right? So point I'm trying to get to here, started in 2010, kept going, kept going, kept going. And in 2017, sales of Mali goes nuts. So this thing over here. So he just keeps developing new formats. They've got the box thing going on.

7:06So the latest one is the Labubu or Lababa or whatever it's called. Okay, so get this. 2017, sales was$22 million by end of year. And then sales in 2018 spiked to$73 million on the back of Mali. 2019, he begins selling Labubu. Blind boxes, again, you don't know what you're going to get. Which is cool because it's like when you buy Pokemon cards, for example, or Yu-Gi-Oh cards. You didn't play these games, but I did. Or like sports cards, sports cards, right? Yeah, I did sports cards. Basketball. Yeah, yeah, yeah. Baseball. Did you buy sports cards? Yeah, I had a lot of them. Okay. So what ends up happening?

7:36start to take off and then they raise 100 million on a 2.5 billion dollar valuation so now they really start to scale and a few months later ipos in hong kong stock ricks stock rips 80 percent on opening day ning's network doubles overnight 3.2 billion at open 6 billion at close pm has 12 point pop mart has 12.5 billion dollar market cap at close from ipo date to 2023 pop mart begins leaning into higher end collectibles and goes international snagging licensing deals so partnerships guys with brands like Disney, Universal, Warner Brothers, San Diego. Look at these. Boston Celtics and Lakers. I didn't even know they had these, right?

8:13Disney Princess. Oh, does your daughter have one of these? Bet she's going to want one of these. No, no. Not really? I'm not going to show her it. So it explodes. Check this out. Popmart is the top gainer on MSCI China index in the black, right? So that's the index for China in the red. And then that's the last price. So$484 versus$21. and now he's the 10th richest person in China and that's what it is. Yeah, it took me forever to get one. Really? There's one at the mall, right? I just went online. Okay, so explain. How did it work for you? I googled Labubu and I went to one of those e-commerce sites.

8:53I think it was Potmar's e-commerce site or something like that. Yeah. And I bought it. I don't know how much it was, but it was less than 100 bucks. Yeah. It was pink. That's the one she wanted. Yeah. Got it. She usually buys her own toys because we make her from her own money. Yeah. But she doesn't have a credit card, so I paid for it. Did you take$100 from her? No, I should, but I haven't yet. Not brutal enough. Brutal sometimes in business, not brutal enough with family. No. Just like the other day, she was sick. Uh-huh. And I know she likes American dolls, so I went to American Dolls store and got her outfits for her dolls.

9:26Dude, those things are creepy. Yeah, but not just creepy. They're expensive. It's like$80 for outfits. So I was like, that's even more expensive than baby clothes. Yeah, that's crazy. Okay, to continue on this China thing real quick, I know we can move on to the next thing. But you know, the phone maker Xiaomi. So Xiaomi makes these handsets, phone handsets. They're number three in the world for handsets. Now, what you don't know is the founder, he hasn't up to creating cars. He hadn't driven a car for like over 10 years because he has a driver. It does well for himself. What ends up happening at Xiaomi is he goes to he leaves a note on a bunch of people's car saying, hey, I'm the CEO.

10:01Can I borrow your car for a little bit? He wants to drive it, right? So he drives, customer development, he does customer development on 170 cars. And he asked these people, what do you like about it? What don't you like about it? Now, these Xiaomi cars are better than US cars because Xiaomi went out of their way. Remember Apple tried to do a car? They actually, they made handsets and now they're doing cars. But that just shows to me that you have to actually be there in the trenches doing customer development if you want to make an amazing product. Is it an electric car? I think electric, probably.

10:30I'm sure there's some hybrid version. How do you spell Xiaomi car? Xiaomi is X-I-A-O-M-I.

10:39I spelled it wrong, even though you X-I-A-O-M-I. It looks like your Porsche. Yeah, they just straight up rip it. It looks like your Porsche. It looks like a copycat of your Porsche. So they probably knew that was, because I do think the Porsche was... It literally looks like your Porsche, right? Whatever works, you know. If you've ever built a website, you know how tough it can be to keep a strong design while ensuring site performance is fast. That's where Framer comes in and it totally changes the game. Framer is the design first, no code website builder that lets anyone ship a production ready site in minutes.

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12:55Sign up for your$1 per month trial and start selling today at shopify.com slash marketing school. Go to shopify.com slash marketing school, shopify.com slash marketing school. Oh, so where I want to end on, I'd rather have the Porsche. Yeah, me too. See, I'm different. If someone copied a Porsche or a Tesla or whatever, if I wanted one, I'd rather get the original. Yeah, but you do well. Fair enough. Yeah. But even when I didn't do well, I didn't want the copycats. I wanted... Yeah, you probably just drive like a Honda Civic or Toyota, which are amazing. You know why? Because from a brand perspective, and I bet you a lot of consumers think this way, as a little kid, I rather drove a Honda or Toyota than a quote unquote, cheap replica because branding wise i thought it'll look bad like this guy is just stealing or whatever whatever you want to call it like it just makes you look to me it makes you look bad versus buying the original thing or buying a toyota no one judges you for driving a toyota or honda i drive a honda right now as my main driver it works out great yeah so look i think this all connects we just talked about pop mart we talked about byd we talked about xiaomi but what i find interesting is Chinese people study the U S a lot and they listen, they read all the books.

14:16They listen to all the podcasts. They watch all the videos. When's the last time you studied China? I haven't said you don't study China, right? But the thing is there's so much that we can live. And I'm not saying I studied China a lot, but they study us. We don't study them. You look at how they're growing like crazy on nuclear and solar power. They got the number three phone maker. Look at how quickly like the way they work nine, nine, six. I'm not saying everyone needs to work 996, but you look at how their cities are ran. And having said that, they do have some ghost cities as well. But I saw something the other day and imagine you're taking a train.

14:51So have you taken, when's the last time you took like a train, like the Amtrak or something like that? I don't know, like six months, a year. Have you been to Japan? No. Okay. So Japan, you take the Shinkansans, the trains, right? At each stop, usually you're just waiting and people are getting on. In China, at each stop, you can order food ahead of it, and then someone's going to come in and deliver you your food. Imagine if you ordered food. Yeah, train order food drop-offs. They have$10 ,000 electric vehicles from BYD. So I feel like there's so much we can learn from how they're running things, but they learn from us, we don't learn from them.

15:26And I think when you have a competitor, like we look at our competitors, we don't look at them all the time, but we still look at them. I look at my competitors all the time. Yeah. So why do you do that? Because they're bigger than me. I don't want to figure out why they're bigger, why they're struggling right now and what I can learn from to not struggle and how I can overtake them. So you look at the bigger ones. Do you look at any smaller ones for inspiration sometimes? I do because the smaller ones move faster. I recently was looking at this smaller agency. They've picked up some large enterprises.

15:59They do creative. And what they do is they constantly email people, like a company like X or Uber or whatever it may be. And they'll send them a new creative every single week that they could just use. Yeah, that they made custom to them. And that's how you get people to respond to your cold emails. It's not, can I do one for you? It's, I just did it for you. Here it is. Yes. Yeah. So we take all that because we believe that the larger players have really gobbled up most of the enterprise market. So we try to learn from them on how they went down that path and how they got there. the smaller players grow much faster and do more creative things so it's like how can we do what the smaller players are doing to grow faster and the larger players are doing to go more upstream so it's in essence the best of both worlds well my point is you look at the big ones you look at the small ones too because there's something to learn from everyone whereas china knows we're bigger as you the united states but we're we're not looking at them we should be looking at them because they are moving faster than us in my opinion right now and um you know it's it's when you're competing with someone that works 996 like that and all they think about is money because they don't have their don't again the only god chinese people have and i'm chinese is a money god we don't look at anything else so when you when that's a hell of a competitor actually the last time i researched china was a few weeks ago you did and it just came to me right now there's this girl i follow on instagram all right she's a rich uh chinese girl and her, what is it called?

17:29Her social handle is BeccaXBlue. Okay. All right. Her name is Rebecca. She lives in Atherton, California. Okay. All right. And she's just very transparent. She's not like I'm rich, you're poor, any of that. So I researched her to figure out how she came into money. Her parents created Camelot Systems, I believe it's called, which is a cloud hosting company in China. And a lot of the American companies were using them to host so that they can be in China. And then from there, her parents invested in real estate and then became billionaires from that. I believe Camelot got into a few hundred million a year in revenue.

18:10But then from there, I went down the real estate rabbit hole. Dude, in China, a lot of people have made a killing from real estate. It's really big from an investment viewpoint. And the government actually encourages people to buy homes and invest in real estate. And what I also saw is I don't think there's actually property tax in China. I don't know. So I could be wrong on this, but is there property tax in China? Or is it really cheap or something like that? There is no national reoccurring property taxes on residential homes in China. They're trying to undo property tax here. I think DeSantis has said it.

18:48Like, why would you keep getting paid, paying for your house after you paid for it? Right. I don't think it's going to go. Well, because they're making the money already. Why would you want that to stop? Right. Yeah. They're not going to want. But anyway, I think it's just, I think our key point here is it's worth starting your competitors, both bigger or smaller, um, because there's something always to learn. And I think, um, you know, China's studying us, so we should be studying them. And that is it for today. We'll see you tomorrow.