Vice Media Raised $1.6B But Went Bankrupt Because of This

0:00Neil, did you know that Vice Media raised, I think,$1.6 or$1.9 billion in financing? and the last couple of rounds were debt financing. And this is the company that we talked about in the past that went bankrupt. Do you know that? And this is why the headline came again, but I'm just, I didn't know that they raised close to$2 billion. You know, they raised a lot of money from Disney, right? Yeah. And then, you know, they started taking on private equity money and, you know, offered crazy deals after that, right? Yeah. And you know who controlled their distribution? Disney. There you go. Yeah. That kind of screwed up a large part of the company.

0:33So look, in the last episode, So we talk about discovery platforms versus relationship platforms. I think Vice was very much a discovery platform in some cases because people were running ads through them, but they didn't really go deep on the relationships and the way they were monetizing. I always like to say, like, if you have a big audience, you probably don't want to monetize through ads because when you look at the Logan Pauls or Mr. Beast, they've gone the product route because you're going to get better margins at the end of the day and you can control the experience more. And so we're just seeing this again, like, sure, you got the attention, but you picked the wrong monetization vehicle, which can still cause you to bankrupt.

1:06Because last year, I think they still did$232 million in revenue, but they were still like way reversed on their balance sheet, right? So it didn't work out. Yeah, dude, the big problem that Vice had is they bit the hand that was feeding them. That was a big issue that they had as a company. But on top of that, running a media company isn't that hard. You can acquire a lot of traffic, especially if you're willing to run ads or invest a lot of money. The issue with media companies is poor monetization. I believe anyone who is a business, you should have a media arm and create a massive top of funnel like Vice did.

1:42It won't be at that scale and that's okay. But don't monetize like Vice did. Monetizing through ads is like one of the worst formats. Yes, it works well for Google and it works well for Facebook, but they have such massive reach that it's a different game. Even Twitter doesn't have their kind of reach. It's like there's Google, there's Facebook, and then it drops off drastically. Snap, Twitter, Pinterest, none of them are anywhere near comparable to the size and they don't monetize as well. The best acquirer for Twitter or X now would have actually been Google or Facebook because they would have been able to monetize it much better due to their platform and ecosystem.

2:16But you want to know why they don't do that? Because they would have had antitrust and monopoly issues so they can't buy these companies. Or else I believe that they would have made a run for it a very long time ago. Nonetheless, when you look at what Vice is doing, create your own media company, it'll get you a great top of funnel, but monetize through your products and services and build relationships. Yeah, I think we've talked about this in the past where media is basically one of the biggest forms or the best forms of leverage you can have. It's a moat. And it's something that you can continue to compound.

2:47I mean, Neil, you've built your stuff for what, like 20 plus years, right? Longer. I don't know how long I've been doing it. Not 20 years. I've been an entrepreneur for over 20 years. You've been an entrepreneur for 24 years, I think, or 23 years. I've been an entrepreneur for 23 years. Yes, that's correct. And then I probably built the audience for maybe 18, 19, 20 on the high end, conservatively 18. Yeah. So look, my point is, it takes time to compound this stuff. And we always say it takes three years to build like this podcast we've been doing for seven years. My first podcast, been doing it for 10 years now.

3:19and YouTube still continue to compound, like things just continue to stack up over time. And there's going to be times when things go up, things go down, but anybody can build their own media company now. You don't necessarily need thousands of true fans. You might only need a hundred true fans or so that are paying you like$83 ,000 a year or something like that. And you have a great business. And so that's what I would say. I think you also have to look at your unit economics too, because to Neil's point, again, Facebook or like a Google, their reach is multiples over a Twitter and the monthly active users on like a Twitter or sorry, X is like 400 or 500 million, probably less now.

3:56And then, so how many monthly active users are in there on, on Instagram? Is it like at least a billion, if not more? I don't know, but the easier way to look at it is probably what Twitter has in a month, maybe someone like Facebook and they're from their whole ecosystem or Google probably have in a day. Yeah. I think that's fair. So look, build your own media moat. It's going to take you time. If you can't build it, maybe you can go buy something. I think there's going to be some good stuff available for the next year or two. And that's what it is. I think, by the way, as a side note, I think it's still 50-50 if it's hard landing or soft landing.

4:29Have you changed your forecast? I don't know if the economy is going to be a hard landing or soft landing. I'm not an economist, but either way, I know the economy is not as good, especially in the marketing arena, but we're slowly starting to see things turn around percentage you know on what i say 50 50 still i have no idea dude if i say a number it's a guess dude but mine's not even an educated guess i'm not educated either i sure i'll go with 50 50 then okay there you go i have no idea all right toss the coin up all right that's it for today please don't forget to rate review subscribe five stars please on your favorite platform and also hit us on youtube goodbye