188. Meet the Genius Turning YouTuber's into Multi-Million Dollar Businesses

23:25Also, now you have a bunch of brand sponsors that hopefully have had a good experience with you that they're like, okay, we've done 10 coffee and like a show with creators. We're ready to sponsor like a big one where you guys can get 500 people to show up in New York City. That is so itch. I think I think the coffee meetup is very much in the future for us very soon, which will be exciting.

23:45Zack Honarvar:And I think people are craving it. Like you said, it's like, it's kind of, it's going even more niche. Like you can really do a smaller meetup to a very specific type of person. Maybe this is like another thing I think of. I was naive to earlier on in my journey as a creator or an entrepreneur working with creators was I thought that you could just be like, I want to start X business and I'm going to will it into existence at this moment if I work hard enough. And I think what I've realized is timing really matters. The things that are in the zeitgeist and the things that the market is in demand for, that really makes things easier and allows you to not have to swim upstream.

24:23Did you make a business that you thought wasn't like, was the idea at the time, but wasn't the right timing?

24:30Zack Honarvar:Good question. Good question. Thanks, guys. I really appreciate that. We're podcasting. Come on. I would say it would be things like, you know, with Eric, we made a sauce called PizzaFi. And that was like, and that was just like a fun product we wanted to make. But I think it was naive to like the social capital that we had built. We were like, this is a fun product. We'll move on from it. We had spent so much time and energy from it. In hindsight, we were reinventing a new category. And we should have just been like, what's a category that this audience already buys? and then sell them a better version of it or enhance a product or going to a space that was ripe for disruption.

25:09Instead, we wanted to just like be clever and fun and like go try to create a new condiment that everyone should add into their purchasing ability. And I think that was not smart. And it was like a lot of time and energy and sourcing and co-packing relationships, whatever, that had we just done a better for you protein bar or done a better for you frozen pizza, I think it would have been tremendously more successful. dude better for you frozen pizza now you're talking the biggest better for you frozen pizza that's what that could be his next video i tried the biggest better for you frozen pizza wait on it maybe something is okay there it is there it is dude okay with both of these with both these massive creator companies that you've been involved with right we got yesterday we got iraq i know there's many more when you came into them you weren't at the place that you were with them both right now right you came into those companies at a separate like at a different role right how would you say because i think a lot of people can get pigeonholed like when you let's say when i went to the lakers for example right i was a video producer not a ton of room for growth at that company when you go to these companies you started one place and then you showed your value you've done a ton of different things and you rosen you've made companies with these different people you've sold a company you guys have exited what's your advice for someone when they get in a place if they feel like they're kind of not stuck in a role if that makes sense You know what I'm trying to say?

26:26Like, how do you raise that rank and show kind of your value and go to a different place than you originally started at? Because I think a lot of the times I feel like when you get to a place or like even like your college friends, your high school, like however you met those people, you're like, that is you. Even though your skill level completely changes over these years and like, you're like, oh, I can provide so much more value. I'm really interested in this or like the things that you do outside of work. It's a really good question. I would say the number one thing that comes to mind for me is like, do the job before you get the promotion to do the job.

26:58Like if you want to take on a role within a company, start doing the roles and responsibilities of that job before anyone gives it to you. Obviously, like ask for permission, but you'd be surprised. People are begging for other people to take initiative and be proactive and take on responsibility. I think the thing that helped me within these creators is I wasn't waiting for them to tell me like, go do this thing or go do this thing. I saw opportunity and I was like, these things need to happen. Someone needs to do these things for you. It's really easy to do this with creators because they're so busy with making content.

27:29Every creator knows that there's a million things that they could be doing or should be doing and there's good ideas. But there's a lack of talented individuals that can do those things for them with high degrees of trust. That's the other thing is like once you can start to add a little bit of value and the trust battery increases, I think the only reason I've been able to do what I have with Yes Theory and ARAC and some of these other creators is because we have such a strong degree of trust together that I have access to their bank accounts. If I'm like, hey, I've read this contract and it's good, they don't need to do that.

28:02So there's so much trust there that allows us to move very quickly. And I've basically done that by finding things that I think need to get done for them and doing them. And then they see that work and they think it's done well. So then they become more and more okay with me taking initiative in broader areas. and over the course of time, that becomes very all-encompassing.

28:20Zack Honarvar:You brought a plateau not too long ago and I want to ask if you have any advice for creators who inevitably plateau because it feels as though it's just a matter of time. Like nobody's hot forever. Mr. Beast has been crushing it and like he seems like he's still growing but you look at some creators and you're like, they're hot for a moment. They have to take advantage of them being hot for either a few months or a few years, but eventually like content changes, new creators come around, old creators, they plateau or even see, you know, numbers dip. What advice do you have for somebody dealing with, hey, I was doing a certain amount, I had a certain amount of engagement and now I'm dealing with a little bit less?

29:05Yeah, I would say, I think every creator should spend an hour every single week doing absolutely nothing and having a blocked out calendar where they just sit in a room with no stimulation and just let time pass. And the reason I say that is because I think the number one mistake creators are making when they're dealing with plateau is trying to muscle through it and trying to sit down and put pressure on themselves of like, why am I not coming up with better ideas? Why are my videos not performing? And you end up with this close to the painting not being able to see anything. And we actually, I think we learned this lesson with Yes Theory from Will Smith.

29:42who I remember when we first started working with him where we did a collab back in like 2018.

29:46Zack Honarvar:Was that at the Grand Canyon? Yeah, so we did like the Will Smith's helicopter bungee jump out for his 50th birthday over the Grand Canyon. And he shared with us that like he goes through periods of like insane stillment where he's like, I do a movie and then I'll go somewhere and no one can reach me for a long period of time and I don't have my phone and I just like sit and I think. And that allows me to like let things settle and then to have a perspective around like new interests and new tastes and new like motivations and passions that arise rather than I think the issue for creators is you're on this hamster wheel and it feels like if you stop, everything stops and the money stops and whatever.

30:25Sometimes you don't have the fortune of a Will Smith financially to be able to just be like, well, I'm going to take the summer off. But I think finding those in increments is really nice. Like maybe you don't need to take like a whole six month like eat, pray, love. But if you can even find it from a weekly basis. So like, is there an hour that you can do nothing where you can let inputs come to you? And then also, can you do this on an annual basis? Also really good right now, we're at the end of a year, like even Eric does this every year. He'll spend a few days without his phone, without technology, without access to the outside world, sometimes in a cabin.

30:53And he'll just think and write and plan. And that debriefing is, I think, something creators can learn a lot from corporations who like, you know, clear their books and they, you know, like cancel all their unnecessary subscriptions. And that process, I think, is the best thing a creator can do when dealing with a plateau because it's a lot better than just trying to be like, I'm going to put all this pressure on myself and like sit in front of this laptop until I figure it out. That's probably the worst thing you could do.

31:19Zack Honarvar:Do you think we'll be able to move into a world where creators can take more breaks periodically? Or do you think in the game of being a content creator and we're all trying to get attention online, that if you're out of sight, you're out of mind? And do you think that if you do take a break, that when you come back, your content just has to be that much better? I think, yeah, it's actually more mental that we think we can't. And I do think you can. I think we're probably more out of sight, out of mind than we give ourselves like credit for. Like already there's so much saturation out there in the market that I do think that every right now the algorithms work such that every video has a chance by itself just based on like reaching an audience through their interests.

32:14and so I think taking time away if used productively can be very beneficial for coming back stronger. Actually the creator that I think has done this and like we'll see if it pans out for him. I don't know if you guys remember by Maximize on Instagram. He was like a creator that was making these like really cinematic IG reel videos with like stories. He's younger, right? He's younger. It was like a green background with a star and he was like making these like very motivational entrepreneurship videos. He's disappeared because he's in a hole thinking, what is my next chapter going to be? I made this thing.

32:47It was super successful. I don't really know what the next version of this is going to look like. Let me go take three months and just be in a hole and think about what the next thing is. And I think it will work when he comes back, even though it feels like he disappeared off the face of the planet, despite having insane amounts of momentum.

33:02Zack Honarvar:What systems need to be in place for a creator to be able to take, let's say, a three-month break if they wanted to? Because a lot of creators the way they make their money is either a brand deal or you know content as a lead generation system and so if you're not pumping out content that means either a you're not getting brand deals which means you're not making money or your funnel is in a way broken because you don't have the like the top of funnel set up or you either have short form or long form cranking out and so for a creator if they want to be able to take breaks periodically like what needs to be set up for them to be able to do that successfully.

33:42I think everyone's got to make sure they eat, you know, like whatever that means for you in terms of like whatever your financial situation is. Sometimes that means living with mom and your parents and like sucking up your ego. Or sometimes that means like, you know, just not spending on stupid frivolous shit that you could probably live without to give yourself the ability to not have money be a stress on your creativity. One of the worst things that creative can do is be financially dependent on their creative firepower. And it's like the best way to stunt your creativity. Yeah. I think the thing you could do is start thinking like a scientist, have theses about what you think is going to work, and then test against that thesis relentlessly.

34:24And I think a lot of and what I mean by that is like having the thesis of like, I think a format where I sit on a subway and ask people what their hot take is, is a format that's going to work. And then, you know, do five to 10 videos of that format and see what am I learning? What can I change? What can I iterate? Do I still think this format is going to work based on the belief system that I had at the beginning? Should I nix it or should I iterate it and double down? And if a creator can figure out like three to five formats, test against them, kill the losers, double down on the winners. I think that process is like really smart.

35:00Zack Honarvar:And what are specific things that they should be testing? Like how, when you say iterate or, you know, try a format and change a few things, what are those specific things that a creator should be changing video to video within a same format to be able to test different things? The hook is probably the number one thing, visual and audio hook, written hook on the screen is probably the number one thing. And then also So I would say the middle portion of the video is probably a lot less important to test than the beginning and the end. So really spending a disproportionate amount of time figuring out if the hook is different, does this change?

35:46And then also, what is the takeaway of this? And if I make the end stronger, then people will stay towards the through the middle to find this end value that I'm like dangling in front of them. And if you iterate on those, then I think it becomes really valuable. Why go into accounting? Why go into an accounting business? Why didn't you just leave it to QuickBooks? What made you think that this is actually a thing that I know creators need and this is a market that I think that we can actually dominate in? again thinking through like the total addressable market i think thinking through a business like one of the the smartest things you could look at is what is the total addressable market of this business how many people need this business um and for me looking at the creator economy every creator needs to do taxes like not a single creator you guys me mr beast all of us have to file taxes and you are always hearing hey do you know of a good cpa the reason you're you're dealing with that too is because like people need it like how are people going to file their taxes you need some help.

36:45So I just realized, whoa, every single creator I deal with has this thing. I was, you know, the first business we ran before running a management company was merch. Less and less frequently are creators wanting to do merch because there's all these other options available to them. So I would chat with a creator and I would say maybe one out of 20 times they were like, I want to do merch. If I was running a CPG business to help creators with CPG, it would be like one out of a hundred creators I would talk to would want to do CPG. One out of one creators that I talked to have the requirement of doing tax.

37:15So it felt like, okay, well, if this is a by and large, a universal need for end of humans, let alone creators, why is there no business that is doing this for specifically for content creator? I think the insight that I had into the space was doing creator taxes is much more nuanced than people think. It's one, not a W2 employee where your employer withholds your payroll taxes. And then also your income is very inconsistent because it's reliant on these like third party brands or the performance of your videos. So it makes it very hard to figure out how to budget and forecast and plan. And so it requires someone with a unique understanding of the creator business.

37:58Also how to optimize for like what is actually a business deduction? Because that looks very different than the traditional corporations of the past. So I think seeing that opportunity and having, you know, creators come to me all the time, be like, who does your taxes? Who does your business formation? Should I be an LLC? Should I be an S-Corp? Should I be a C-Corp? It just felt like someone had to solve this for the creator economy. To be honest, I didn't even want to do it. For the longest time, I was waiting for this to become a solution in the space so that we could hire them and that no one was doing it.

38:26And so we eventually found the right person and we're like, this has to become a thing. So you end up partnering with John, right? How do you decide how much of a company to give away if you did? Did you give equity? Okay. Was distribution the most important thing when you were thinking about how do we actually get this in the hands of so many folks? Is it like, you know what? There's a great podcast here. There's humongous people that are coming on. I'm assuming you love John, obviously a partner with him. How do you think through giving away a percentage of the company? And like, how does that work on the backend?

38:58It's a great question. The way that I approach it, one is like, it's a case by case dependent on what I think is going to make someone like John really excited. If I don't feel like John's going to get into it feeling like he has upside in the business and that he is like really excited to talk about the company all the time, then like I've done a really bad job at structuring that deal. And for some people that might mean 5 % of a business. For some people that might mean 50 % of a business. And that is just a conversation between me and John and his business partner, Amanda, to be like, what do you guys think is fair?

39:35Here's where the business is at. And sometimes some of these numbers for some people is more emotion than it is rationale. Like some people are like, oh, if I don't own 25 % of a business, at least, then I know I don't wake up thinking about it all the time. And so that is an emotional decision that someone has determined, but it's worth getting to. The way that I've structured the deal from a more tactical perspective with John is that there's a portion of the deal that is just time vesting just happens and we just get his credibility and his name and likeness. And we just know that he's coming on board as a co-founder.

40:06And there's a portion of the deal that is based on performance. And that's based on actual business growth that is attributable to his marketing and promotion. And I think the combination of those two things allows him to know, okay, I'm going to vest into some sort of equity no matter what based on time and then also allows me to know well okay i'm also going to give away a big chunk of the company based on like us actually growing because of his the result of his actions and the result of his of his marketing and so that's the way that we've structured it but ultimately it really comes down to a human to human conversation around like what's going to get someone excited when did you start the boring company uh boring stuff boring stuff sorry yeah boring stuff started uh when did you start the boring co man drilling tunnels yeah Yeah, yeah, yeah.

40:52Firefighter or flamethrowers? Boring stuff. Boring stuff was started almost a year ago. So January of 2025 was like the official start.

41:00Zack Honarvar:And is it fully taxes for creators or what is all included? Taxes and HR. Okay. So yeah, everything from like basic bookkeeping and taxes to like we actually help you hire, run your payroll, create culture, employee handbooks, and also get into some operation stuff. But yeah, those are the main responsibilities. When it comes to taxes for creators, I know that you're not a CPA yourself, but is there something that you've learned that creators can keep in mind when filing taxes that can maybe save them some money or a better way to keep their books or something along those lines? It's a good question.

41:39We're definitely in tax season. I sent out my 1099s too, if you're watching this and we work together. I would say the biggest thing for early stage creators is just like incorporating underneath an LLC or an S corp structure. There's a lot of like deductions that you can start to take. That's like the most basic form of advice is if you're still running your creator business through yourself and as a sole proprietor and your money is going into your personal bank account, I would stop that as quickly as you can. incorporate underneath an LLC structure and S-Corp so that you can start to take deductions on the things that you spend across your business.

42:14And then also look at where you film. If it's in your house, there's probably a home office deduction that you can take for the portion of your space that you use as a creator. Obviously, the room that we're in right now would qualify really well. So you take a percentage of the square footage from your total rent and you're able to deduct that and that's also across your uh renter's insurance your utilities your internet so like a portion of all of those also gets to be deducted so just looking at that because that helps you save a lot more money especially in states like california with insane tax rates oh it's super fun it's great yeah i love it honestly that's my favorite part about living here these taxes

42:51Zack Honarvar:well dude you know what they say just make more money is the problem they say come for the beach stay for the taxes baby yeah dude taxes suck but you know what on the on the topic of that man california rips to live in like it's the best it really is the only reason i've ever heard anyone not want to live in california is for money and for taxes and i think if you can make i have a friend that lives here and he always reminds me like you don't know you everyone leaves because they're like oh my quality of life or my um cost of living is going to decrease if i move to texas but you also don't really know what what top of funnel money opportunities you give away by not being able to go like brush shoulders with someone on an event that happens here or be able to have that coffee meeting that would otherwise be a zoom that would lead to like a less intimate like emotional connection um so i do think you spend a lot more money here and you give a lot of it more to the state but i do think you also open yourself to a ton of revenue generating opportunities that you otherwise wouldn't yeah me and brayden are just like i guess we just got to make more money you know i mean i've talked to my girl countless times she always keeps bringing it up she's from louisiana she's like maybe we look at florida maybe we look at nashville and i'm like oh i don't know i was on zillow scrolling last time like you can get some sick homes for two million dollars in franklin tennessee yeah yeah but do i want to live in fucking franklin tennessee i'm like i'm on chat gbt i'm like is it hot and humid and there are a lot of bugs in franklin tennessee it's like yes i can't do that i i think the uh i think this is why actually bookkeeping and taxes is so important yeah because if you commit to saying like california is going to be my home state you know the largest population of the country's millionaires live in this state so they've decided to be here they make disproportionately the most amount of money.

44:44It can be because they just make so much more. But I promise you, they are also teaming up with the best accountants and tax advisors and lawyers to structure themselves so that they can be the most optimized that they can be within the rules and the regulations. So I think if you want to choose a state like New York or California to live in, you have to spend a lot more time and investment into making sure you can be as optimized for the state's tax laws as possible. With the Bourne stuff, where did you go about sourcing these accountants from? Because you come up with this idea. You're like, this is great.

45:15I know that this will help creators. But then how do we go about actually making it and turning it into a company? How do you find other people to partner with that are super talented, that are bought in on this idea, that are behind the scenes? I think this is the biggest thing with any creator business. And I mean, this is like a creator's company, as well as like creator oriented businesses, is recruiting is the number one most valued skill. And the way that we've done that is we'll look at people who have already done the responsibility and role as closely to what we're expecting from them as possible and just try to hire those people and pay them well.

45:51And obviously, it sounds a little bit easier in theory, but in practice, it's a lot harder. So we'll go to established accounting firms in the USA and go after their top talent. And we'll just ask them if they want an opportunity to come and do something with slightly more fun companies with maybe slightly higher pay. And a lot of them are like, whoa, I'm also doing all this bookkeeping and accounting for these like boring corporations. I'm really interested in the creator economy. And then we have those conversations, but it's relentless sales. Recruiting is relentless sales and trying to find people who can match the responsibility that you're asking them to do as close as possible with like a previous back record of success.

46:31In the creator economy, I think a lot of people hire expecting someone to do a job they've never done before and to figure out how to do that well right away. And it's one of the most like losing mistakes that you can make. You mentioned recruiting. And I know that you've been really pushing Instagram a lot harder. We've talked about this, like how important personal brand is and how now that's kind of like your engine to get people to be maybe interested and be like, oh, I like this guy. I feel his vibe. I relate to him in a similar way. Has that been a really important push going into this new year of like, I need to put myself out there and I have to do this because it's a lever now for your brand?

47:10Yeah, absolutely. I think it's more and more a necessity rather than an option. And yeah, some of it has been for getting clients and getting creators. But actually, more than anything, I think it has also been for talent recruitment because a lot of my content is also not even always about the creator economy. Like I'll make content about life philosophy that I believe in or, you know, things like I think you should call your parents while they're still alive and just like this more philosophical stuff. And a lot of the people that I've attracted to come work at the companies that I run are actually drawn to those videos.

47:44It's not about like what I think about the creator economy. It's the fact that they see me as a more well-rounded individual that they think that they could like want to work with on a day to day basis. And I've also attracted people who have the same life values. They also care about spending time with their family. they also care about having uh work that fills them from a fulfillment perspective they're not just after money and so i think that's also what's allowed me to attract those types of individuals through sharing my own beliefs and my own uh stories through content so yeah i think it's almost helped there more than it's helped on a business development standpoint so if you have a brand it's you think 100 necessity to be creating content around said brand i don't think it's 100 necessity but i do think it's uh it's it's a huge help but you're leaving money on the table if you don't.

48:27You leave money on the table if you don't. You also, though, do sacrifice a lot by doing it. There's a lot of time spent. It's an insane amount of mental load that you need to dedicate towards making content that's going to work, that's going to stop you from being able to just have a certain amount of hours from an operational perspective. It's not something that I recommend everybody do. I think it's like a very, again, you just got to be very self-aware on if that's the role that you want to play. I think there's a lot of other people that would just be better off being just the operational person and or even just like maybe content doesn't even need to be video content can also be writing it could also be you know um it could also be like just having a podcast it doesn't always need to be video so uh i do think that uh it's an option but i've made the decision that one i enjoy it enough to like want to do it i think that's where it's stuck for me is if it was a drag and i didn't enjoy it i think i would have stopped um like i tried a podcast for a while and I didn't enjoy it.

49:25So I was like, okay, well, shit, I think it would have really helped in my niche because I'm more like, you know, about operations and business and getting into nuance, but because I didn't enjoy it, I didn't see myself being able to do it long enough to figure it out.

49:36Zack Honarvar:I also think there's a lot of benefit in you actually making content if you are working with creators, because like they see you doing the thing. So you, in a way, you get the game. Like you understand what it takes to make content, the time and energy that it takes. And so I feel like you're able to relate to creators more so on that level because like, you know what it takes to do it. I think that's true. Um, I was actually saying this to a creator that like, we've been talking about potentially working together. And, uh, she said, uh, she was like, I was telling her that. And she was like, actually, I don't actually give a shit.

50:13She was like she was like i don't she's like the reason i'm interested in working with you is not because you make these videos the reason i'm interested in working with you is because i've seen you do all these businesses and they've been super successful and i think that was also eye-opening for me is like yeah this is actually a lot more like maybe she wouldn't have known about me had it not been for that or like maybe she wouldn't have responded to my dm if i wasn't verified or had a certain amount of following like there's all that that you really don't know but ultimately the thing that's going to make people respect you is like have you done the thing um and do you and And like, do you have a track record of being able to like be successful at like operating a business?

50:45And so the challenge to I think maybe a hard thing for a lot of young entrepreneurs coming up right now is they feel like they need to make content before they can go do anything. And I think that that might lead to like a lot of skill development and storytelling in digital media with very little skill development and operating a business. That's interesting. And there's two very different skill sets. You need to be able to do both. What are these core things of operating a business that someone needs to know if they're like maybe they want to do something similar to what you do or maybe a creator is like i don't have the money yet to hire someone like you to come in and help me with this what are some of those core skills that you feel like they need to stack it's a good question i would say like product development whatever the product is is like a whole world that someone can obviously spend their entire lives that's early though right you're saying like come up with that first and then go build out the other things yeah it's like i mean uh in sense of what i brought to the table when I came into the creator economy as I worked within streetwear, I knew how to make streetwear garments.

51:44I knew how to source them. I knew where to print on them. I knew how to

51:48Zack Honarvar:embellish them. I knew what cuts are good. Were you like in high school and you're like, I want to make a clothing brand? Kind of. And I worked at and then I worked at Shopify and that Shopify, I worked with a lot of the streetwear brands. So like my knowledge was in the creation of garments and clothes. And that is a whole skill set that, you know, a creator that wants to launch a merch company just doesn't have. I think that same product development could be within an app. It could be media products are still products, right? So like I think obsessing over and even if you keep it into physical products, it's where do I source them?

52:22You know, how can I make this product the best that it can be? Like what is the design of it? What's the UX of it, et cetera? The other skills I would really focus on are hiring. Hiring is like arguably one of the most important skills that it takes a lifetime to master. I would say like when I look at myself, when I first got into the creator economy 10 years ago to myself now, I would say the biggest area that I'm like, holy crap, I would have never been able to do what I'm doing now at that time, even though I thought I was like capable, is that I just didn't know how to hire. I didn't know how to hire people more senior or knowledgeable than myself.

52:55I was just too green and young into the space. I thought that any like smart, scrappy person could do a job. And I would also try to be like, how low could I get the person? How little could I pay the person that I want to do this job, which was like completely the wrong mindset. And it wasn't until someone really told me like if you pay peanuts, you're going to get monkeys. And I always think that all the time. And now I just go like, OK, if you have someone that's doing a role in your company and you feel like they're overpaid, but they're doing a really good job. I now have grown to realize like that's probably a good thing.

53:27Like if you have that feeling, man, this person makes a lot of money and I pay them a lot of money, but they crush. like that's a good feeling and i and i think like being more proud of that than like feeling the other way where i'm like oh man i pay this person so little but their job you know their their results are not that strong that's something i think that we've had to deal with too i mean just because we hire a lot of editors and you can see the quality difference from someone that oh this is like a 750 thing or this is like a three thousand dollar thing or five thousand you can just tell it's like apple's it's just a completely different level of um like when i get the project file back, I'm like, this makes sense.

54:04It's just such a different level of organization and just how they think and how the timelines organize. The math, just math's here. And sometimes it's money-based. Sometimes it's like you pay and you get a different caliber person. Sometimes you might find that someone isn't also doing a bad job. A lot of people just settle for B players. So it's not bad enough where you need to obviously let the person go, but it's not good enough where you know you're getting the best that you can out of that position. And what most people do is they just leave that. because they don't want to have the uncomfortable conversation of letting someone go.

54:35Honestly, being a good hire is unfortunately also being a good fire. You need to be able to let people go and have that conversation. If you're too precious with not wanting to hurt someone's feelings, you end up letting someone also stunt their own career because now they're in a role that they're not progressing in or they're not fulfilled by. So I think people have to get really good at firing individuals. Have you changed anything with your onboarding process to make people's lives a lot smoother when they come into working with one of these various companies? Like, what does that look like?

55:04If I come work at your company and I'm a part of, let's use the accounting firm, okay? Yeah. What do I need to know? Or like, what's my first month look like with you guys? I would say it starts even before you onboarding and it's to like my first interview question, which like almost with every job I'm hiring for, I try to understand where's that person trying to go in their life and how do they see this as a stepping stone to get there? and I try to figure out like okay if this job you see this job as something that's going to get you to where you want to go then I know you're going to give it your all but if you're doing this job because it's just paying you money so that you can go do something else uh down the road then I know that this is just a means to an end and so that's like literally the first interview question I'll ask is like finding those trying to find that motivation what is your yeah what is your underlying motive for wanting to be in this and is it to be an entrepreneur like I'll ask like do you want to like go spin this your own business up that looks similar to this or people working with within our creators like sometimes they'll say I really want to know how the inside of a top creators business works I want to be a creator so eventually I'm going to leave and I'm going to start my own channel I'm trying to get to that answer and that's not a bad thing that's actually me being like okay I'm totally down if it takes you three years to figure out how we operate and out of those three years we get the best out of you then I'll be so happy to encourage you to go launch your own channel and like go do that.

56:26So I think it starts there. And I want another interview question that I think is really strong is asking someone if we're a year from now and we decide to work together and after a year from now you leave, why would that most likely been because of? And you start to get some of these like answers of what they foresee as their hesitations or what they think could go wrong here. And so you start to like weed out all these worst case scenarios, which allow you to also not, oh, you think it's because I'm not going to give you enough control or oh, you think it's because this job is not going to stimulate you enough.

56:58And so that also allows you to get so much out of the way that leads to less going wrong down the road. And you minimize your cases for like, oh shit, I never knew that they like had this desire that I had no idea about. Those two questions have done a lot of money saving for me. Did you learn that from anywhere? There's a book called Talent by Daniel Gross and I can't remember another. He's like an economist. Does he have pictures and stuff for him? Yeah, fun little graphs and the colors.

57:28Zack Honarvar:He tries to weed in that joke for every episode. Yeah, really good book. And it also talks about the differences in interviewing people virtually versus in person and the benefits of interviewing someone face-to-face versus interviewing them on a walk. The differences that you can glean in answers. Also, who should be asking, interviewing for different like skills. So for example, structuring an interview process is really important and knowing like if the three of us were going to go hire an editor, I don't have a lot of editing knowledge. If I was to interview that individual on their editing capabilities, we'd be losing because what the fuck do I know?

58:07But I would maybe interview them for culture. Maybe Braden, you would interview them for like their motivations and their fulfillment or like their desires, everyone knowing almost like what is the scorecard that we're getting from that individual based on also the interviewers capabilities is really strong versus like we go three, do the interview with the editor and ask the exact same questions and just get the exact same read on that individual is like also a very losing way to structure an

58:31Zack Honarvar:interview like process. That's a good point. Are you guys for your businesses spending money on ads at all to generate business? No. Everything's kind of referral based? Yeah. For our businesses like the agencies? Yeah. No, we've never done an ad. We've never done a partnership. Everything is referral based. Okay. And how does someone balance multiple things at the same time? I'm actually reading, I'm reading Elon Musk's book right now. I can't remember the author that did it, but it's really interesting because he's talking about how building SpaceX and Tesla, he felt like at one point it was like, you're given 20 % to, and it's really difficult for him to give 100 % to both these companies.

59:11And one of them was going under, felt like Tesla was going to go under, and SpaceX at the same time is dealing with not having enough money to make payroll. And he's like, I'm going to have to fund this myself with my own money. It was just like a very interesting tumultuous period for both of those companies when they were earlier on. And I even feel this too with like the pod and with my other company. It's hard sometimes to, like I end up staying up later or waking up earlier. Like today I woke up early and banged some stuff out before we came. how do you deal with balancing these other these multiple things that you're juggling such a good question and i wish i did a had a better answer i had a better process for myself because the truth be told like i i end up in situations all the time where i feel down on myself for not doing more within a particular business i've had to make peace with knowing that of course if i spent 100 of my time on boring stuff uh the business would do better but I've created the ecosystem and the network of companies so that by design I can optimize for my own lifestyle it's not about the success of the business it's about the businesses being structured in a way that optimize for my happiness and fulfillment and if I'm structuring my for my happiness and fulfillment I am the type of individual that needs a lot of toys to play with and I need the context switching that's just how I'm built and I thought that earlier on in my entrepreneurial journey, I thought that that was a flaw.

1:00:29I thought that I needed to be this like, everyone always tells me about the Duolingo founder. It's like went to university, graduated, started Duolingo, 15 years of Duolingo CEO, like entrepreneur. It's like, it's only the thing he's ever done. And he's like, I'm going to make this work. I am not that type of individual. I don't like doing that. I don't like being the one thing guy. I like being the network guy. And again, I always thought that that was a flaw, but I realized that there's a unique skillset within those types of individuals, Context switching for me energizes me. It doesn't really deplete me.

1:01:00And so I've had to make peace with knowing that, okay, there's nothing wrong with me, but I know that there's intentional sacrifices and trade-offs that I'm going to have to make in order to, again, to optimize for my happiness. I think a lot of people build their happiness around the business versus using the business to build around what makes them happy. Has there been a period - You got to job your love, dude. Yeah, job your love is the most important message of this pod. Has there been a period of time where you feel like you've gotten all of your happiness from the companies and you've had to like take a step back and figure out like what does bring you fulfillment?

1:01:33Honestly, no, because I think I've done if I've done anything well as an entrepreneur or the thing that I would like look back and be proud of is that I've I haven't done any of it at the sacrifice of the things that value the most in life, which are family, like my relationship with my wife, those two things, even the relationship I have with my friends, like being spiritual, feeling like I'm connected to like what's going on in the world and feeling like I'm doing things that are genuinely making the world a bigger place or a better place is to me holds more weight than what I'm doing professionally or how much money I make or if my businesses are successful.

1:02:07And that allows me to compartmentalize the business thing is like a stimulation that I'm doing to keep myself like engaged. And also, how do I make money and provide for this other part of my life? Has it always been that way? Because I think that's something that I have dealt with a lot is tie how I feel based on how my six, how successful I am. And like, if I get a win that week, I'll tell you what, I'll be a lot happier at the dinner table. And it's something that I think that I've had to battle with and figure out a workaround for because it's a very dangerous game to get into just like, oh, did we did we close deals this week?

1:02:44or did we close a big guest or did a guest say no to us or are we growing or whatever, like whatever the thing may be that week. And I think it's something a lot of entrepreneurs deal with. I think every entrepreneur deals with this. And I would say it's a balance because my advice for like, if I could go back to myself at 21, 22, 23, my advice to myself wouldn't be work-life balance. It'd be like, put your head in the fucking ground at work. A hundred percent. You have to. You can't have the level of success without portions of your life. But it has to be done. I know a lot of friends now that are like 33, 35, and they haven't given an ounce of energy to finding a partner.

1:03:22And they're freaking out. They have all this money. Yeah, they're flipping their shit. And honestly, and some of them have tens of millions of dollars. And now they're like, shit, I can't even find a partner that I think loves me because I just want my money. And their whole life is in flip.

1:03:39Zack Honarvar:That's such an interesting take because I think women have the internal clock of I need to get married and have kids by a certain age because that's just – Yeah, biologically. Yeah, biologically they need to. I think a lot of men feel like I need to have my shit figured out before I can settle down, get married, and have kids. but then if you make it big and you have tens of million dollars in the bank and then you're like okay i got my shit kind of figured out and then you're looking for a partner you're like well fuck does she actually love me or does she want me for my money it's so interesting almost all the creators celebrities whatever that i know that are at that phase that flips them out is like oh shit i never really know if anyone really likes me for me anymore or did this person just talk to me because they found out who I am is one of the biggest mind fucks.

1:04:31I also think probably, I don't even think this shit is a hot take, but it might be one of the spiciest takes we've taken thus far as like, I think that that mindset of like, I'm going to get my shit together and then I'm going to find a partner is probably one of the worst decisions even you can make for your business success. I think what has enabled me to become a successful entrepreneur is that I have a good relationship with my partner and she is supportive of what I do and gives me the freedom and space and just love to know that like, okay, I can go spend all this time working and I don't feel guilty or I don't feel like I'm, you know, like it empowers me to be a better entrepreneur.

1:05:05It's not a time suck. Also, like we all know, dating takes fucking time. Like you got to go. And money. And money.

1:05:10Zack Honarvar:Yeah, what do you think is more expensive? A girlfriend or dating? I don't know. It depends on how nice these days are going to be. It depends on what city you live in. Yeah, yeah. That's the other tax in California. True. your restaurant bill dude 20 tip kills you yeah and then you're competing against all the fucking the nfl guys the lakers the rams you're on like rye trying to yeah swipe against yeah you're going up against a running back but i think that i uh i do think like the best decision business decision you will ever make business decision you will ever make let alone life decision is who you partner with um because if you have a bad partner it's going to ruin your business life uh yeah those two things are a lot more correlated than i think people give them credit for yeah it's funny i was uh having a conversation with my girl last night actually i was like because we're talking about like what do we want to do for for new years and all this kind of stuff i'm like yo 26 is looking like it's gonna be a good year and she's like do you kind of just do you want to just like stay in and make vision boards she's like i don't know if i really have a desire to like go out and i was like that kind of sounds sick and then i go i just want you to know that like things are looking good but that takes me putting in like even more time and energy into this thing but I'm doing it for like the benefit of our of our relationship and like the family in the future and I think it's also like important to have those open and honest conversations of like I still obviously I'm going to make time for this relationship but like to take things to the next level, it takes time and energy and sacrifice.

1:06:53What are those sacrifices that you think creators have to make to be successful? Oh, good transition. I've done it a couple of times. Maybe one thing I'll also say on that point, I think anyone who's in a relationship, one tip I can give is do this thing that I think has saved me wonders of frustration is a monthly review. Every month, sit down with your partner. You bring the board review? Yeah, just like do a business, like business sit down. How are we increasing shareholder value? Yeah. And I've honestly done this with my now wife when she was a girl. I would make a presentation and I would say like, for example, there was this.

1:07:27Zach, that is fucking hilarious. Yeah, it works. That is awesome. It really works. That is amazing. I remember even one of them was like early on in our relationship, really dumb example, but I would yawn and she would do this thing where she would stick her finger in my mouth when I'd yawn and it would make me like, hey, stop it. That's annoying. And I brought it up. I don't appreciate when you do this thing. It's annoying. And, you know, it's like all of it's done with humor. But there are times where if you don't have a set moment to air out some grievances or annoyances or things that you're thinking about or that are uncomfortable, eventually you'll just continue to pile under the rug.

1:08:03And those things will never be brought up. This could be true for a romantic relationship. But to be honest, this is also something I think co-founders of businesses should do is just have a meeting once a month where you go, what's on your mind? What are you not happy with? What do you think you should we just should have a conversation about? Because if you don't, life will get in the way and then you'll keep sweeping things under the rug. And eventually you'll have a mountain underneath this rug that like will make the place really dirty. So I think that that I would suggest to everyone to do the monthly review.

1:08:31I like that. We got to get the whiteboard, dude. Yeah, we need to get the whiteboard and be like, hey, let's talk about the month. Ski trip went really well.

1:08:37Zack Honarvar:Should we bring both our girls? Do a joint review? Sit down. Let's have a combo. Yes. Key trip was good. You did six really good runs. A couple too many falls. Yeah. We're going to talk about that for the next run. You really embarrassed me out there. We weren't looking good as a unit. That is so funny. I like that idea, though. I think that like, yeah, I think I don't know if I'll make a full on, you know, 100 page slideshow. Could be fun, though. Yeah. Sometimes it's just cute. to to answer your question on like sacrifices creators have made i would say like there's a lot of people right now looking at the creator economy being like i'm going to become a creator so i can make some extra money and i would just say to to the to them it's a lot more than just making content you making content doesn't automatically just equal like money coming into your account yeah there's a whole other side of like operational responsibility that comes from the communication with brands, the sending revisions like back and forth, and also just planning and structure to a creator business that I think everybody doesn't understand how much time that takes.

1:09:42What trends do you see right now shaping the creator economy? Where do you think we're heading? Yeah, you brought up in real life events. Okay, there's one right there. I think that's a big one in the sense of like as things become more online, I think we're going to look for increasingly in-person and non-online things to do. And the intersection between those two worlds is getting a lot tighter. And you kind of see this from Netflix is also like even more traditional media companies are getting into throwing digital or in-person experiences. That's an interesting point with the Jake Paul. They're doing boxing live on Netflix.

1:10:19Even Stranger Things had pop-ups that would be like an in-person experience, like a physical experience where you go and you can interact with like you know scary rooms and things that like give you that sense of uh just entertainment it's like we want things to go do in person but the things that we're interested in are things that we heard about online so the translation of how do you take digital ip and bring it into the physical world i think is a huge trend um i would say the the other big trend and this isn't maybe like a hot take but it's it's definitely happening is there's no more big creators.

1:10:53Everything is fragmented into niches. The days of having a Mr. Beast that gets 50 or 100 million subscribers is dwindling away. And even people's attentions and the creators that people are looking up to are more refined and fragmented than ever. And that really means that everything is going into being a niche-dominant creator rather rather than being a broad industry, like entertainment-based creator. And so I think that that really changes the business models that are even available for creators to like be successful. And yeah, we haven't really had any breakout like YouTube creators or short form creators.

1:11:31It's been very fragmented. You're so right. I mean, yeah, the eras of like the Trahans or the ARAC. I think that was the last one on YouTube. It was like ARAC and Ryan Trahan were the last like monolithic creators. Wow. it's so interesting even on short form it was like we had the d 'amelios and we had addison ray and you know that crew and then that just zipped yeah now it's like yeah everyone is just fragmented across different niches you also notice too i feel like the the people that were just famous for being famous it's just not i mean it's just not a thing it's just not as much of a thing anymore i feel like there really is this trend of going like you're saying i'm really into plants right now so i keep bringing up this example but i'm fucking deep on plant talk and it's a very specific group of people, but they're micro famous.

1:12:16They have like 100 ,000 followers or 50 ,000 followers, but super engaged groups. And like you notice, I noticed in the comments, they're doing like courses and whatnot. And it's super interesting because you have a lot of people who are like, oh, I want to get into this, but I don't know what soil mix you. Oh, check out my ebook. I see it in the comments, like how their little models work. And it's very interesting because I think that a lot of people can make$100 ,000 or$80 ,000 online now and supplement their full-time income and quit their job and do it full time for themselves, which is really crazy and interesting.

1:12:45Yeah, I would say one of the highest degrees of social capital you could develop for yourself is having mastery in a particular topic. Because baseline knowledge through AI has become so available to everyone that all of us can know enough about plants to have like a general understanding in five minutes through talking to ChatGPT. Someone who's like, I fucking love plants and I know everything about plants and I'm like deep in the sauce, that person has so much higher levels of social capital and increasingly I think will become that case through AI. And that I think is true in every field, in every niche.

1:13:20And so I think one of the strongest things people can do is actually look at a niche that they're very interested in and like double down on it. So something that's really interesting I want to bring up, we were talking to Christian Guzman about this in Texas. He owns Alpha Leith Fitness Company, right? And he was saying how the influencers back in the day they would bring in so much more revenue than they bring in now. And his thesis on it was because it's more fragmented where you have a lot of people taking on multiple companies or they're just not as loyal to like, oh, I only support this brand and whatnot.

1:13:50And so they've really shaved off a lot of their creators that were working with the brand. Do you feel like if you were starting a company right now, are you trying to go after a bunch of different creators? Are you trying to go after like a few creators that are like, these people are just only going to talk about our stuff? Such a good question. I think one of the best strategies for a brand trying to work with creators or even just do marketing in general is a barbell strategy of one end of the barbell doing a scaled approach of micro creators and on the other end of the spectrum doing things that are like Super Bowl commercial, massive top of funnel generation.

1:14:25Obviously, not everyone can do a Super Bowl commercial, but the marriage of those two worlds is really powerful versus like playing in the middle of like things that are kind of top awareness and also converting are is kind of like where you died that in that middle ground um a brand that's done this really well uh recently is uh what's that juice company that or that pill company that kourtney kardashian did oh lemmy yeah lemmy so lemmy started with relationships with like we're at air one uh gifting yeah we're like doing like we're stocked at air one before anything else before they started an influencer program.

1:15:02They're stocked at Erwan. They do a collaborative drink with Erwan, obviously because she's a Kardashian, she gets access to this. But I think this was by design. When they're known as an Erwan brand, then they do a massive UGC creator thing. And now those creators are going, and that's available on TikTok shop now. Now TikTok shop is doing far better for them than Erwan ever did as like a sales channel. But it was because they like married this prestige play with the tactical conversion play of these TikTok creators that are now going, I bought this thing at Air One or here's me going to Air One to try Kourtney Kardashian's new Lemmy.

1:15:39And I think, again, they did a very scaled approach. I think the scaled approach is always more effective than the few creators that are larger. The challenge has always been in the tech that makes that possible. It's been very hard to get 5 ,000 creators or 50 ,000 creators to make videos about something, have those videos approved through legal, approved through creative, actually then the payment structure of how you pay out 50 ,000 creators, that logistical system was very, very hard to do. And now because so much money is pouring into the creator economy, that's one of the fastest growing spaces is what are the picks and shovels and the ecosystem and tools that allow television programmatic budgets to flow into the creator economy effectively so that a brand can actually spend 50 million dollars on creators which currently is impossible uh but it will become more and more possible um over the next few years and i think that's when we're going to see massive changes do those ai creators scare you at all like do you think with those we're going to be increasingly wanting like more real regular human creators because i keep seeing these things pop up on my feed where brands are doing collab posts with AI creators and it really freaks me out.

1:16:57I'm just curious like what kind of your thoughts are on that as someone who works primarily with creators. Such a good question. I've been wanting to make a video about this because I had this thought of like, should we actually be worried about these VTubers or AI influencers? And at first I was like, no. And then I like looked into it a little bit and few things. One, I think from the brand side, I'm personally more worried about brands being able to make content and make creators that they are almost employees of their business such that they don't need to work with third-party creators as much.

1:17:31And I think that happening and you see that now with brands becoming their own media companies and turning into their own shows. If that works and that pans out and that increase and that grows, then it will become less of a desire or a need for them to work with like a lot of third-party creators or a lot of that will be in service of their own content engine on the vtuber side like meaning like a virtual influencer that maybe doesn't what did you call it vtuber virtual youtuber okay virtual youtuber this is like a space really big in like anime where like people go on webcam and they act a certain way but then they're like an animated individual it's not them yeah it's like a dude and it looks like a girl yeah it looks like a girl or like it looks like anime character yeah i initially was like who's watching this it's never gonna grow and i started hearing about these like conventions that people would go to to like watch one of these anime characters as a holographic thing and i was like what's going on here and so i dove deeper into it what i learned is that in a world where we don't trust celebrity anymore and we have lifted the veil of mystery for the people that we look up to.

1:18:38More and more, we don't have role models anymore. We used to live in a time where it would be like, I'm going to go, I really idolize Will Smith and everything. Oh my God, everything this man touches is gold. And then eventually you learn enough about an individual and then certain things like a slap happen. And then all of a sudden you're like, oh, wow, this tarnishes this reputation. We live in a world where it's harder and harder to have a role model because we see so many of people's imperfections. vtubers are become a saving grace for that where we know they're not real it becomes like the way we looked at like goku or like these characters in cartoons that we idolize because they had these values and these uh things that we knew like they're not a real individual they're a written screen character but we start to hold a lot of weight and gravity towards them because they we still believe in the story i think vtubers are doing that for a lot of people and the amount of trust that people have, knowing that this individual is not real, but knowing that someone has written this person to have certain characteristics of integrity, et cetera, is actually going to be something I think our kids are going to like, I think they're going to love people that don't exist more than people that do exist because they have full belief that they'll never let them down.

1:19:49Do you worry that the creators that are coming up right now for them in this like weird new landscape with what you just talked about with these vtubers and stuff like what does that what does that mean for them like do you think that there's still always going to be like a want for this because like we were talking about this on a pod maybe with a guy we were in hong kong about how like i feel like you're going to crave the realness of the van nice stats of the world and i have no desire no same i'm the same way agreed agreed or listen a vtuber agreed completely but i mean are we the minority see that's what i'm saying like are we the minority in that standpoint because then you see some people's videos and i'm like this is bullshit but there's a shit ton of people watching it so it's not bullshit because you have the market deciding that it was interesting to watch and it was interesting to comment on i think uh it's probably going to be one of the things where ultimately we're going to get to our parents age and we're going to do the things that our parents did which are we're going to look back and be like, I can't believe our kid is doing this.

1:20:50This seems really stupid. I think, and it's also hard for me because I don't watch any VTubers. That's why it was such a mind fuck for me because I'm like looking at this. How the hell are they selling out these venues and all these people are going and they care? I think the younger generation

1:21:09is able to be emotionally connected to an individual that they don't know is real more than we give them credit or like that we think is possible because we care so much about someone being real. And that could be an AI chatbot that people get connected to or it could in the future be a robot that people love and they feel emotionally connected with. That's clean your house. Yeah, that cleans your house and that you love like a pet. So anyway, I think that that also caters towards the celebrities that people like as well. It's so interesting. We'll see. Yeah, we're going to see what happens. Okay, to wrap you out of here, what is your advice if you could go back and chat with someone who is trying to go on a very similar journey and be on the back-end business side of this creator economy?

1:21:58Like what would you say to that person who's in college right now, they're about to graduate? I would say find a creator or type of creator that you think has a real opportunity at doing something that they're not doing. and try to develop the skill set of helping them with that thing. So my example was like I understood merch and I understood apparel and I knew that creators needed to do this thing that they didn't know how to do. So the ability to go help creators do that became a lot easier for me and I can message a bunch of creators and say, hey, do you want help with this thing that I know how to do that I think you should be doing?

1:22:34And then offer to do that thing for free. Don't be afraid of doing free work. to prove your value. There's a lot of people messaging these creators and show value initially and do a lot to be able to get their attention. That might mean that you can't like spray and pray that message to 50 creators. But I would say like that's the best way to start is just start to build the skill in an area where creators need to move and then be the person that can help those creators bridge that gap there. I love it. This is, ladies and gentlemen, this has been episode 188 with Zach Hanavar. Got that right, baby?

1:23:10And we'll see you guys all next week. Peace.