How Lucy Guo Is Building A Creator Empire with Shaq, Kygo & Olivia Dunne | Passes

0:00Well, Lucy, congratulations on moving to LA and this fabulous space. Thank you. I'm hoping you're enjoying the podcast studio. We actually just opened it up. I think this might be like the second or third podcast we filmed in here. So thanks for being here. We're breaking it in. You guys can't see this, but we're actually in a shipping container and it's massive. It's huge. This space is quite large. I don't know. It's got to be like 20 ,000 square feet. The space is around 20 ,000 square feet. Okay, easy. I'm pretty good at that. Okay, great. Well, okay, so what brought you to LA? You were just in Miami for quite some time, and you kind of made your name known in Miami.

0:40So why the shift to LA and building out this big studio space for creators? Yeah, so I mean, I think I very quickly realized that the creator economy is a very relationships-driven business. and obviously, you know, I want to give myself the best advantage possible when building this company. And there's just like LA is the hub for creators, right? I think it's very similar to like if you were building an AI company in SF versus New York, like New York might be number two. And I think Miami is number two in the creator economy, but it makes sense to be in a spot of like where you're going to have the most advantage possible.

1:15And I mean, like I want this company to be the next unicorn that I built. So I decided to pack up and move to LA. Honestly, spot on. I actually was at a dinner the other week. This is just what happens when you're in LA. You get invited to dinners and sometimes they're at celebrities' houses in the hills. Being in VC, some celebrities have their funds and it's kind of just a natural thing. So the other week I was actually at Carter Reams and Paris Hilton's house and they were hosting a dinner. I was supposed to be at that dinner you should oh yeah i got the invite but i didn't see it on whatsapp and i was like oh oops but he uh yeah well you should have came and we'll pick up the conversation from that here so ted livingston the former founder of kick actually led the conversation and he was talking about what the next evolution of consumer social would be we all went around the table it was full of creators it was full of founders investors some crypto people so we got a diverse set of opinions and i'm curious from your perspective being boots on the ground in the creator space what do you think consumer social is going to end up like are we going to be vr are we going to be in real life where do we go i mean i'm very biased but i think the future of consumer social is what we're building right now because uh right now creators are finding that um they don't like the algorithm because it's so unpredictable unpredictable um and that brand deals are just really disappearing.

2:43So creators are really trying to figure out a way to like make money full time. I think we saw this during the pandemic where creators realized that their income was more unstable than they had initially thought. And they had started seeking their fans to like essentially support them, which is when like Patreon really blew up, right? They raised a $4 billion valuation, OnlyFans blew up, etc. And I just saw an opening in the market for as like direct fan to creator interactions. So creators can make a living and like really be an entrepreneur. So here I am building passes and I hope we are the future of the creator economy.

3:18What are the main channels that most of your creators are building off of? Yeah, so I would say the main channels that creators are making money off of right now are subscription, DMs, live streaming, and our marketplace where they can sell both like physical and digital merchandise. So digital being anything from like a custom video request, very similar to Cameo, all the way to selling their own custom hoodies. Right. Another large story that's happening alongside this shift in the creator space is also big legacy media. So big legacy media is kind of crumbling pretty fast. Large outlets are being taken down.

3:56And some of these, let's say, like anchors and media people, they're going direct and they're decentralizing themselves and becoming their own platform. Do you see a world in which you take on some of these players? Do you think the impact of legacy media is going to be much more than we would ever assume of its crumbling? Where do you see the shift of legacy media to consumer coming? Yeah, I definitely think that a few things are happening. So journalists are realizing that they can make more on their own, which is why there's so many companies really that are popping off for these journalists to be able to exit the legacy media and essentially be their own reporter, right?

4:37I think that during COVID also, a lot of trust in legacy media really did disappear. I would say like half of Americans feel like the media spread a lot of misinformation on COVID. And it's very debatable if that's true or not. But that is the perception of America nowadays. You can even see this on Twitter, right? Where like people are saying, okay, like Twitter is the better source of truth versus legacy media. Again, very debatable. But because this is the perception nowadays, I think that legacy media is disappearing. and really it is the consumer that's trying to like get the real news. So like I would say like either crowdsource news or people that used to be at these legacy media companies are branching off to be able to like provide the real truth.

5:19Right. Yeah. And what do you think the biggest challenges will be for those individuals shifting over to being their own platform? Yeah. So I would say that for those that have an audience that trust them, the biggest issue will just be converting them. I actually don't think that's a very large issue. I would say for those who like worked for legacy media and like don't have an audience and that legacy media was one that like America doesn't trust. It's going to be very hard to gain the trust of Americans to want to subscribe to them. I think that like in general content and like actually putting out good news is how you gain trust and gain that subscriber fan base.

5:59So it will just take a little bit of time for those people to really be able to write on their own and write what they want to write. And eventually, the audience comes. That's in the top 1 % of the market, which typically is the percentage of the market that makes the most money. With Passes, you're helping out creators from all ends of the spectrum. So what does it take to make it to the 1 %? And how are you helping emerging creators get to that place? Yeah, so I think that content is king in this when it comes to making it to the top 1%, both on passes and on outside platforms. If you look at like the creators that are doing the best, they're typically posting every single day on passes, but also every single day on Instagram Reels and TikTok.

6:46I would say that Instagram Reels and TikTok are probably the best for discovery. So if you're posting one reel a day or one TikTok a day, you really only need like one hit, for example, to suddenly go viral. And then you gain a bunch of new followers, which a percentage will convert into super fans. And then you can monetize off them with passes. I would say like, we actually try to predict creator earnings based off of like how much they're putting out on Instagram reels and TikTok. And we weigh that more, because we know that they're constantly gaining new subscribers, which means that even if their old subscribers churn, it's not as big of a deal.

7:19And we see that the creators that are putting out daily content are actually making more month over month versus if you're not someone that posts content, like you might get a wave of subscribers at first, but, um, you know, they churn and then that sucks. Right. Yeah. Are you able to share how much some of your top creators are making? Yeah, we have creators make, um, close to half a mil a month. Wow. Half a mil a month. Okay. And what is the typical range? Um, I mean, like we have creators, I would say that creators that make$5 ,000 a month or more, um, we typically have like 100 retention on but the range really just depends on how much content they're putting out how many existing subscribers they have etc and we really help creators like we have a success team that helps them like organize photo shoots and we have an in-house photographer videographer to be able to just shoot creators whenever they want we have a green room inside the office so whenever creators want to get more content they can just come in here and do it which makes it super seamless, which is nice because a lot of times, like, you know, creators just don't shoot more content because of the logistics.

8:26But we also, our creator success team tells our creators, like, hey, these are like the trends happening right now. You guys should create Instagram reels and TikToks around these trends, which is, again, helpful because oftentimes a creator, like, especially a new creator, won't really know what the current trends are or like the trending songs that they should be adding onto their videos, et cetera. So we also help them grow other outside platforms so they end up doing better on passes would you say that other platforms give that much white glove service to their clients or customers or creators or is this kind of a novel idea where you know you are building out this huge facility here you have all these different rooms you even mentioned that you're going to add a music production studio so is this a novel novelty and like kind of like a perk for these new creators.

9:13How do you think about that and versus maybe more legacy agencies? Yeah, I would say that I do think it's a perk for creators. I don't really know any other creator economy companies that have their own creator space with a podcast room that creators can use at any point in time. I'm an in-house photographer, videographer, green room, music recording studio, et cetera. But there might exist out there and I just don't know about it. Yeah, well, you're considerably a next-gen talent agency. I do know that you have also received investment from Michael Ovis's Crossbeam Ventures. He's founder of CAA.

9:47So maybe you've seen more closely the differentiation between traditional talent agencies like we have in LA, we're just surrounded by it, versus something next gen, which you're building. It's much more close to the TikTok scene, the YouTubers, and more early talent. So what is the difference between the two and can they mutually exist? I do think they can mutually exist. I think that the more deals creators get, the better it is for the entire economy. I think a difference that has been in the past is that oftentimes talent agencies or talent managers would ask creators to sign exclusivity deals where they could really only work with them, which isn't great.

10:28Or they would sign deals where even if the creator found a brand deal on their own, they would still owe a percentage to the agency or to the manager. I do think that this is disappearing now that there's so many avenues for creators to make money and like find brand deals. We definitely have had an issue where creators didn't want to tell their managers or their agents how much they're earning on passes because they would have to pay 20 % to them even though they weren't even involved in passes. Wow. Yeah. Like we have had creators that have told us they were Photoshopping their earnings essentially or, you know, going into like inspect browser and like changing the numbers because they didn't want to.

11:04They didn't feel like they're like managers or agents deserve that 20%, which they don't. Like I think that like in the future, it's gonna be like whoever brings a deal might get a percentage. In terms of like how we're different, I think that like we are so pro creator. like we care about like the long term of them and building like passes as a business right and like helping these creators build generational wealth and I've seen like good managers that like really think this way about their creators too where they're like hey you should take an equity deal for example because even though it's less cash up front this is good for you even though the like manager agent isn't getting equity themselves versus we've seen like very cash hungry agents and managers because usually in contract traditionally, they get like 20%, let's say, of what the creator slash is being offered.

11:51And everyone really likes upfront capital in Hollywood. I guess going off of that and what these traditional agencies offer, what is your end goal? Is your end goal to be one of these very large agencies? What is the billion dollar passes look like to you? I mean, I think the billion dollar passes is that, well, to be quite like, if we're being very blunt, like, I think we will reach like a billion dollars doing nothing more except to getting new creators. But obviously, like we have bigger ambitions than that, right? So for us, it's like, how do we create generational wealth for these creators?

12:30Like, the most common question I get asked is how do I turn passes income into passes equity, which is very interesting, because we have created a lot of accredited investors. a lot of creators are making six figures a month. So you can imagine there's some pretty interesting things we can do there in terms of like fintech products. But then also we have more monetization data than like really any other platform. Like from other platforms, you can see like how many likes someone's getting, how many comments, et cetera. But you don't really see the like conversion rate in terms of like who is willing to buy something based off of your posts versus we get the direct conversion of creators like fans on Instagram to passes.

13:06We can see like what percentage converts. we can see like their spending power like um do these creators have fans that are willing to spend like five hundred dollars a month or is it closer to twenty dollars a month or is it closer to five thousand dollars a month like some creators um their most popular subscription tier is actually their most expensive subscription tier which is like five hundred a month um versus like other creators you know like most of their fans are just paying five dollars a month um but like this becomes like very interesting data we can see what they're buying what they're interested in and really figure out a product that makes sense that they can sell to their fans.

13:41Let's get into that because I remember when we were talking about it, you said that you guys aggregate the most amount of data for your creators. So what exactly does passes look like under the hood? What are the inner workings? What is the creator signing up for? What kind of dashboard do they get? Real-time analytics and that kind of thing in order to help navigate them through creating even better content or being ahead of the trend and that kind of thing. Yes, I would say our secret sauce is our CRM system. So when you send out mass DMs, for example, you can see the open rate, the conversion rate, know what content that fans are buying the most, essentially, what captions are converting the best, et cetera, and really optimize your future content to that, along with reusing your most popular pieces of content you can see how much each fan has spent um one day of like most recently spent um the like price points that they're willing to buy content at etc which is super interesting as well and then like we also offer like very similar data um in your like merchandise store so it's like okay cool like what pieces of clothing are converting to best what designs etc um and we are currently building in like i would call it smart pricing um so we can really tell you like how much you should be charging to be making the most money on your content.

14:59You've been able to get some really big names so far. So you have Olivia Dunn, Shaq, Kygo, Emma Norton. Do you have any dream people that you want under the Passes platform? Like what is the dream influencer creator? Yeah. So I would say the dream influencer creator for us is someone that has a super fan base. What we've actually noticed is that the creators that make the most money on passes are actually not ones with millions of followers. It's closer to like 100k to a million followers. And they're so random. Like one of our top creators is a dental hygienist. We have another that like lives on a farm and feeds farm animals for a living.

15:37And they're making six figures a month. It's crazy. If I were to go with like the most obvious celebrity, it'd probably be Taylor Swift, because everyone's absolutely obsessed with her. They're like stalking her every like move, right? Yeah. Like I would say creators with an internet paparazzi, essentially um so uh another obvious one in the influencing would probably be like pokemane and we know pokemane would do well just because cosplay is like one of our um is like larger niches um in terms of revenue and we have a lot of like lookalike creators that are pulling in some big numbers um that we think she would be able to match so it's not the typical tiktok early uh i like the tiktok girlies do make a lot too um though i think everyone has a way to monetize They just need to figure out like what content resonates the most with their fans.

16:27Given that you've been able to acquire a wide range of talent, like that's a really diverse set of people. How have you managed to build out your network through passes and get these different kinds of talent? What is what does the process look like? Is is there a process or is it just totally abstract? Yeah. So, I mean, I would say it's a mix of both. like it's a relationships-driven business, but also a data-driven business. So on the like data side to get our leads list, we basically scraped the internet everywhere, like Reddit, forums, et cetera, to find which creators had super fan communities.

17:04Because if you have a super fan community, they probably, you know, like made a Discord about you, a Telegram about you, a Reddit about you. Then we applied data science based off of like what we currently have with our creators. And we're constantly changing this model, like quite literally weekly to try to determine how much they can make. And then for everyone that makes about$5 ,000 a month, we assign them to our AEs because$5 ,000 a month seems to be the sweet spot where we have 100 % retention. So then they just go out and attempt to cold outreach them. Obviously, warm relationships do the best.

17:37So I've just been out and about in the creator community. I've made friends with a lot of creators. And sometimes I just ask for an intro. Usually you get the intro and then they have a manager. So you get bumped to the manager anyway. And then I also know a lot of managers and managers are typically friends with other managers. So it hasn't been too hard, like getting to the creator directly. But definitely I would say like scraping the internet is probably the best source for finding the qualified leads. So you are known for your parties and events. Passes has thrown some big things. You've had big activations.

18:12I just saw that you guys did an event at the Jake Paul fight with Better. How have you managed to strategize at least brand activations and getting creators together and creating this flywheel of hype and coolness? Yeah. So we try to not do big parties very often because then it loses its magic to it and the hype. But I've honestly given my marketing team like$0. So a lot of pretty much all our parties come out to break even or like net positive, which is nice. And we can just do this based off of parties that like I've thrown by myself. I remember like our first party that like we actually tried to get sponsors for.

18:54It was because I had thrown a birthday party that I paid for by myself. And we had insane guests, like insane musical performances, et cetera. And just based off of that, sponsors are willing to come in and do our next party. So every single party gets better because we have more money to put into it, which is awesome. And then, yeah, like we just invite our creator friends. Like usually you have special guest DJs and that is enough to bring people out. I think that because we don't throw a bad party or we haven't thrown a bad party, people are just willing to show up. Like they beg to show up.

19:28We've had people offer to pay like 10 grand for to come and they're not on the guest list. Would you say that the lines for your parties are very long? We try to not have lines in terms of like we want like efficient security. Right. A check-in process. But they like sometimes we mess up there on logistics. Right. And it becomes long. Like there was definitely in a party where a very, very famous person, I can't say, was stuck outside for 40 minutes and then ended up leaving. Oh, no. Yeah. Oh, my gosh. So besides that, I do know that you throw some serious activations for the creators and it's on a weekly basis, right?

20:09So how does that work and how do you manage helping them create a larger brand and make sure that they're doing things and are being engaged? What are those smaller activations look like and how do you keep up the cadence? Yeah, so for smaller activations, because it's a relationship-driven business, We want to make sure that like every single week we're at least taking care of like a subset of our creators. So, for example, this week happens to be the F1. So we're inviting a bunch of creators to the F1 with us. And again, it's really nice that they're creators because we're able to get them free hotels, free flights and free tickets, not on company dollar.

20:44But it's also like they don't have the relationships. Like a lot of these creators don't have the relationships to be able to do that on their own because they are like, you know, the creators with less than a million followers that might live in Alabama, for example. And they're just not plugged into the LA scene like we are. Right. Yeah. Right. And those kinds of events really elevate their brand and what they're associated with. So then, you know, you get more followers, you get more paid subscribers and that kind of thing. Exactly. And then other activations you try to do are always just like group dinner.

21:16So then they can get to know us better. We try to do collaborative photo shoots because the number one way to gain new followers is to collaborate with someone. because you guys just, you know, your followers intermingle and then they become fans of both of you guys. I think there's like a common misconception where like if a fan spends on one creator and it moves to another creator, they spend less on like the previous one, but we've seen that they just end up spending like double. So when Passes was originally created, it was a Web3 company. Since then you've shifted off of it, but crypto's back and it's booming.

21:51Do you have any regrets about that? why did you move away from web three and tell me about the like the delicate balance between that and like incentives of being on the platform yeah so i would say i'm still like very bullish on web three and i've always said this like even after we took away web three um to me it just makes sense like interoperability if um you have you're a super fan on passes like you should be able to go on ticket master connect your wallet see like the nft and get a discount right like that just kind of makes sense. But we noticed that creators have a huge distrust in Web3 and we were losing out on a lot of creators.

22:29They weren't willing to join passes because we were Web3. And ultimately, at the end of the day, creator acquisition is a number one priority for us. So we removed our Web3 components in order to continue to recruit creators. I don't have any regrets about it. Web3 is still not really popping off. And if it does, I think that I'd want to wait until it's like societally accepted and like actually accepted, not just like a phase, right? Before we reintegrate it back in, like we listen to our creators feedback. And until all our creators say like, we want Web3 on the platform, we're not going to prematurely do it.

23:03That being said, creators love making money. So we are looking into adding like crypto payments. So people that, you know like fans have more ways to be able to spend more money on creators because it's a win-win for everyone then and then we are thinking about crypto payouts as well just because a lot of creators like they want money instantly and right now we do have to charge an extra percentage if they want instant payouts because banks charge us an extra percentage if we do instant payouts versus it'd be much cheaper for the creator to get instant payouts via crypto so for creators that do want their money in crypto, we are looking at other solutions.

23:41This might be a change in the subject, but what are the biggest misconceptions that you faced while building out passes? Is there like a narrative that you've been fighting against? What have you been trying to hold accountable to and like really strengthen so people don't miss, like there's no misconception around the brand? Yeah, I think that the main misconception around a brand is people think that you have to be a hot girl or a hot guy to like make tons of money on passes or that like you're doing like nude content on passes to be able to make money but i mean like that's just the biggest misconception because we actually don't allow for any nudity um if you try to upload uh something it will get taken down and flagged and it's actually like the filters are maybe a little bit too strict for example um we had a lot of creators have issues because they were doing like cosplay outfits and body suits and then that would get taken down even though they were completely covered from head to toe.

24:35People of like all different niches are making money, right? Like it's not just hot guys, hot girls. So that's been a misconception that we have been fighting. A lot of our creators will make money literally just doing like a neck up selfies and they're still making like a hundred thousand a month. Like don't know what to tell everyone. But we are working with like podcasters, musicians, athletes, et cetera. Like we have universities signed to us and we're working with their NIL programs and developing our own NIL fund with the university. So there's so many different ways to make money on passes.

25:05And I think that the message out there is just like, we let you be you and you can make money the way you want to make money. And that's why passes is built with so much flexibility on the different feature sets we have. Some people are going to make money off of live streaming and other people are going to make money off of merchandise or one-on-one calls. But there's an abundance of ways to monetize and every creator is different. Are there any white spaces in the market that you think should be tapped into? Like you've seen it all, you're exposed to it all. Where do you think is like the most underrated part of the creator economy?

25:37Yeah. So I think like two white spaces that I'm interested in are obviously NIL. It's brand new. It's the first time that like college athletes are able to monetize off of NIL and the market is absolutely huge. Like the amount of money spent on college sports is insane. And I actually think that in the future, college sports will be bigger than professional leagues. So I'm super excited about that and like really figuring out how to crack the code. Other than that, maybe this is an LA thing. I spend a lot of money on astrologers and psychics. I don't even believe in astrology, but still out of curiosity and for fun, I do believe in psychics though.

26:15And I'm like, I think that our platform is like perfect for this sort of thing. Like we do have astrologers on the platform that make a lot of money and we do have psychics on the platform that make a lot of money. We just haven't really tapped into it yet. Oh, that's so interesting. You know, I also find myself guilty. I feel like I walk like across the street or by like psychic shops all the time or like Reiki. And I'm like, you know what? I think they're going to tell me something today. So my favorite thing is because I like walking into psychic shops because they don't have a chance to like Google me.

26:47They don't have my phone number. They don't have my name. So then anything they say needs to be like from their abilities and if it's like hyper accurate um where it's so specific to me and i've had things that are very very specific to me um to the point where it's like oh i see you just signed a bunch of contracts for a new business that you're starting um that was like like a psychic that i walked into told me that the day i like sent out um the term sheets are like the safes for like investors to wire i mean i was like that's crazy that's crazy yeah like highly intuitive yeah highly intuitive Yeah, that was something that was just like, it doesn't apply to everyone.