James Watt built BrewDog.. Now he's coming for the Creator Economy

0:00Ian Shepherd:James Watt broke all of the rules of marketing to build BrewDog. Now he's rewriting them for a new generation of creators. Social Tip is my brand new business that I launched 14 weeks ago and we are on a mission to democratize influence. We help companies turn their customers into their influencers. James is already working with massive brands like Marks & Spencer and HelloFresh, but I was also interested in how he's working with smaller companies. So my favourite business that is on Social Tip is Coffee Apothecary. Coffee Apothecary is a gorgeous, tiny little independent coffee shop in the village that I live in in Scotland.

0:35So they started with£200 in their Social Tip account and they've had amazing people within the local community posts about them. I also wanted to understand how he went from craft beer to content creators. I just love building businesses. I am obsessed with building businesses. I love seeing opportunities. I love doing things differently.

0:52Ian Shepherd:This is the business of creators, where we talk to the creators, founders and innovators shaping the future of the creator economy.

1:05Ian Shepherd:So, James, everyone listening, what exactly is Social Tip? So, Social Tip is my brand new business that I launched 14 weeks ago. And we are on a mission to democratize influence. And if you take a step back and look at advertising, the kind of basic premise behind advertising hasn't changed in over a century. Yeah, advertising is like a one-to-many model where fans spend huge amounts of money to get exposure, hundreds of thousands of eyeballs in the hope that something sticks. Now, that maybe made sense 10, 20 years ago, but now we see 4 ,000 to 10 ,000 adverts a day. And we're seeing that many ads.

1:41I think it's just lost so much of its impact. And the more ads we see, the more numb we become to advertising. And so I think one-to-many as a model no longer works. And if you look at all types of online advertising, it's just becoming more and more expensive. So with Social Tip, I wanted to kind of get back to peer-to-peer, to word of mouth, which I think is the most powerful thing in all of marketing. So it goes from one-to-many, which I think is outdated, to peer-to-peer. Because at the end of the day, people trust people they know way more than they trust adverts, way more than they trust influencers like my lovely wife.

2:11And that peer-to-peer is just magic when it comes to brand building. So we help companies turn their customers into their influencers. Only been live for 14 weeks. We've got 50 ,000 users and some amazing returns on the platform so far. So it's been a fun start.

2:26Ian Shepherd:I'm excited to get into the detail. Can you explain how does it work sort of step by step for a creator? Yeah, exactly. So when I had the idea for Social Tip, I actually wasn't that excited about the idea because it was so simple. And I thought, hey, surely someone has done this. Surely someone has built this before. And the more research that I did, the more excited I got when I realized nobody's actually done this. nobody's actually built this so how this works is incredibly simple one of our 50 000 members makes a purchase and at the moment we're working with amazing brands like marks and spencers waitrose hello fresh perfect ted my protein so one of our members makes a purchase and that purchase step is so so important because that is what ensures this is genuine advocacy the social tip user has spent their own hard-earned money on that product on that service they bought the thing So they bought the product, they post about it on social media, on Instagram or TikTok.

3:17We've built a patent-pended AI-based algorithm that works out the value of that post based on reach, likes, engagement and post quality. There they then paid that value as cash into their social type of account. So the average reward is about£5.60 and it just enables anyone to earn money when they post about the things they love online. And also get fantastic UGC that they can use across their business. They get hundreds of thousands of authentic views of content from their users. And it works out so much cheaper than any other form of advertising as well. So we are seeing CPMs of about£5. Traditionally, influencer CPMs are£40 or£50.

3:58In advertising, CPMs are kind of£10 plus. So massively cost effective. And you're putting money into your customer's pocket. So you're shortening the bond between you and your customers. And your customers feel so amazing the fact that users have downloaded or give them five pounds or 10 pounds that they can buy a coffee, a cocktail, a beer, whatever with. So it's good to kind of build that bond and build that relationship as well. So we've got 350 amazing brands on the platform. At the moment, the results have been amazing. Millions of views of UGC, hundreds of pieces of UGC that they can use across their business, great data and insight, also driving a significant amount of new customers as well.

4:34So we're just at the very early stage of our journey and built other businesses before. It's always difficult building something, especially something that's difficult and disruptive. I'm sure we've got loads of challenges ahead, but we're really happy with how it's gone so far.

4:47Ian Shepherd:That's very exciting. And what sort of content are the people on the platform posting? Are they pretending to be creators and influencers or is it just their personal recommendations or reviews? I mean, for me, the authenticity is so, so key. And like, if you've got 200 followers and a private account, you can use Instagram. And I think what you post needs to be an authentic content to your account. So if somebody with 200 followers starts posting something that looks like influencer content, that's not authentic to them. That's not authentic to their followers. And we've got users with 200 followers and users with kind of 250 ,000 followers.

5:21So the type of content, it depends on the user. And the key thing is that it's authentic. But we're seeing lots of video content, lots of nice trails. We're seeing about 70 % of our content on Instagram, 30 % of our content on TikTok. and we also built an AI content coach so the AI content coach helps and encourages our users to create the best content they possibly can and one of the things that's been so encouraging about business so far has been like how high the quality of the content has been.

5:50Ian Shepherd:Now the brand side what does that look like how does a brand get set up on the platform? Yeah so we are delighted to only be 14 weeks in and have companies like Unilever signed up, HelloFresh, Fip, MyProtein, Perfect but TED, Dash, Tala, Marks & Spencer. We've just signed up ASDA. We're launching Iceland. On the Beach holidays are live. So they can get in touch with us. So I'm just james at socialtip.io. They can get in touch with us via socials. But brands can also onboard themselves. You can set up your social tip account. It takes less than 10 minutes. It's as quick and easy as setting up an Instagram account or any other type of social media account.

6:27So they can get in touch. We'd love to talk them through it. We'd love to give them more details. or they can just go to socialtip.io, set up their account and they're good to go.

6:35Ian Shepherd:And you're looking to launch in the US. How do you see the US market being different from the UK? Yeah, I was really excited about the US. And for us with Social Tip, the goal is to hopefully build something that is UK, US and then expands beyond that as well. US, a huge market for anything consumer, home of markets with kind of huge budgets and lots of advertising. But I mean, that is all changing. So we want to be part of that change. We want to be part of this wave that we see this as the new way to advertise. We see this as a way to advertise far more cost-effectively and authentically for the world that we live in today and build community.

7:10And community is always so key to consumers. So our U.S. beta started yesterday. We've got 10 businesses and about 500 users in the U.S. It's very early days, but we're excited to be going and having some fantastic conversations with some fantastic U.S. fans. And a lot of the businesses that we work with in the UK also operate in the US and they're excited to partner with Social Tip in the US as well.

7:33Ian Shepherd:Nice. And are there particular verticals like fashion or food or beauty or any others that work particularly well with the platform so far? I mean, one of the really exciting things about Social Tip so far is it's almost agnostic as to vertical, but also kind of agnostic as to the size of the business as well. So my favourite business that is on Social Tip is Coffee Apocatory. coffee apocryphory is a gorgeous tiny little independent coffee shop in the village that i live in in scotland so they started with 200 pounds in their social tip account and they've had amazing people within the local community posts about them which is fantastic but i mean what that means is social tip could obviously work for the biggest consumer brands on the planet like some marks and spencers but it could also work for any independent coffee shop bar pub tell air salon any of these things for me the vision is to kind of turn social tip into a hygiene factor for any of them so if you look at instagram 10 years ago if you had instagram that was a competitive advantage because a lot of your competition didn't have instagram now every consumer facing business has got instagram and how you use it as a competitive advantage hopefully we can build something where every consumer brand has social tip to reward their customers to build community and how they use it becomes a competitive advantage.

8:45That's what we'd love to do. And yeah, let's see if we can do it.

8:48Ian Shepherd:But there's no minimum size for a brand to be using the platform? No, absolutely not. I mean, tiny independent coffee shop and they've had fantastic content, fantastic results. I can create a return on investment so it can work for tiny little startup businesses. And we're also in conversation with some of the biggest consumer goods businesses on the planet. I love that ambition. The obvious question, you've had so much success with BrewDog. Why did you decide that the next big move would be in the creator economy? Well, I just love building businesses. I am obsessed with building businesses. I love seeing opportunities.

9:17I love doing things differently. And I obviously love the business that I've built with Free Dog. We make and sell a million cans of beer a day, which is fantastic. And I co-founded that business and ran it as a CEO for 17 years. And for me, I always wanted to build multiple businesses over the course of my career. And all my heroes are business people who've built more than one fantastic business. I wanted to do something completely different so something it didn't involve canning lines and bottling lines and stainless steel tanks and and bars and pubs and hotels as much as I love that I just wanted to kind of do something different and so passionate about building brands so passionate about marketing so passionate about kind of the customer community and where the future of marketing goes and I think with social tip I saw an opportunity to kind of demonstrate what I hope is the future of marketing which was just a really exciting opportunity to put all of my time and effort and energy behind also quite ironic so my wife was a influencer so I've launched a business which if successful might just put my wife out of a job which is a fun conversation

10:19Ian Shepherd:around the dinner table and Brewdog became so famous from like stunts and that bold marketing do you have similar plans with social tip I think social tip is is so so different it's a question I get asked a lot and I think Brewdog was of a time and of a place and it was and it was a movement And I think that playbook was phenomenally successful for us. And I drove a tank through the streets of London. I threw taxidermy cats out of a helicopter over the Bank of England. We made a beer at the bottom of the ocean. We projected ourselves naked on the House of Parliament. And all of that was amazing.

10:48But Social Tip is a very, very different business. And how I speak about it to the team is like, Social Tip is not the hero in any Social Tip story. The hero is the fantastic partner of Dan and the user that we have. So the hero is, yeah, let's say it's, it's, it's strip or it's delicious like Ella or it's, it's perfect Ted. And then it's the user who's kind of straight in that content who's posting. So social tip exists to facilitate that. So by, by default, if we're not one of the heroes in the story, we can't be as loud. We can't be as in your face. We can't be as aggressive and we have to kind of build that amazing marketplace and facilitate that.

11:23So with social tip, all the innovation in, in market and in brand building comes with what we do with what the offering is. and then we just look to kind of create the platform for the fantastic users that we have and the fantastic partner of fans that we have to kind of really shine. So we are the supporting act as opposed to the main act in this one.

11:39Ian Shepherd:Makes absolute sense. And what does the next 12 months look like with the business? Well, I mean, it's a startup, so lots of challenges, lots of firefight, and hopefully lots of opportunity, lots and lots of hard work. And for us, we're just excited about what we've done so far. We've put£150 ,000 into people's pockets for trading content, which is really good. We've delivered exceptional return on investment in terms of views and reach and engagement. So we just want to continue and kind of see how far we can take this. So we've got the US launch coming up. We've got some amazing new brands launching on the platform soon.

12:13So we just want to kind of spread the message and get more and more people excited about social tip and get more and more partner brands who want to turn community, customer engagement and brand love into a competitive advantage.

12:23Ian Shepherd:How do you think about sort of regulation and how that might sort of evolve in the influencer marketing space? Yeah, I mean, it's a really, really interesting question. And we're seeing some changes. It doesn't just impact influencer, but the kind of HFSS regulations, the kind of high fat, salt and sugar, which come in place in the first giant, which is going to lead to the biggest seismic shift we've ever seen for snacks and candies and sodas and kind of all these businesses. I think the social tip, what we're doing is kind of so different and so new. It's kind of tough to find kind of where we sit within the regulations.

12:55and we use ad on on all of our posts so we're kind of completely compliant with everything and i think any regulations that changes i'm sure we'll find a way to comply with that and work for that and with businesses i always think it's it's the kind of key things to focus on what you can control so things like regulation we can control so anything that happens we'll deal with that and i'm sure we'll deal with it well and we'll just kind of continue focusing on things which we can control which is the tech the technology and how we engage our fantastic community.

13:24Ian Shepherd:Well, it's been great chatting with you and learning about it. One final question. Have you got any sort of advice for entrepreneurs that are thinking about building their business? Yeah, I just think there's never been a better time to build a business. And that might seem quite counterintuitive because the UK is going through a tough time economically. The UK has got some challenges, but I just think things are changing so quickly with technology, with AI, like what AI enables anyone building a business to do now is absolutely phenomenal. Like someone can do something in an afternoon that would have taken two months and a team of five people.

13:57And I think that speed of change is only going to accelerate. So I just think it's a phenomenal time to be building. If you're building, if you're launching anything, you have to be an expert in AI. You have to be an expert in all the AI technology that's coming out. You have to be able to leverage that to your advantage. Now, that's not just going to throw your faith behind it blindly. obviously you've got to kind of question it and stuff but it's just so powerful can give you so much impact can make you go faster and kind of help you build something better so even though the uk i think it's challenged at the moment i think it's just an exciting time to be building something and if you're setting out in a journey and building something you've just got to realize from day one i mean it's going to be difficult you're going to get kicks and knockbacks and setbacks but that is just part of the journey and it's always the difficult thing that adds value so you should kind of wear those kind of battle scars as a badge of honor and know that the fact that you've kind of done those difficult things means it's going to be difficult for your competition to do them.

14:47And it's like those difficult things that build something amazing and adds a value.

14:51Ian Shepherd:Excellent. Well, very wise words there. Thank you for joining us. And I'm really excited to follow the journey of social tip. Cool. Thanks so much for your time today, Ian. Fantastic to chat. And I will speak to you soon. Thanks for listening to the Business of Creators. I've got some big guests coming, so be sure to subscribe so you never miss an episode. Now, if this is your first time listening, I'm Ian Shepard, co-founder and co-CEO of Electrify video partners. We invest in large established creator businesses to accelerate their growth. For creators, that means three things. First, the chance to take money off the table today.

15:23Ian Shepherd:Second, the expertise and a team to scale your business faster. And third, a creative transition plan, enabling you to step back or exit the business altogether. We've raised over$100 million and made 10 investments, including YouTube channels Veritasium, Fern and Fireship. If you're a creator thinking about the next stage, please get in touch to find out more.