How to Survive Creator Burnout and Still Scale (Karat Reshare) | Ep 888

28:53Like you can just start and then you'll learn and then you'll, you know, learn from there. The second is you have a strong advantage in one of either that you can acquire customers cheaper or you can deliver in a better way, right? You've got some advantage in one of those two. And if you have an advantage in one of those two, you don't really need much of an advantage in the other. The third is that you need such a strong advantage that you can overcome a deficit in the other. So like if you have what I would consider a true product driven business, you could not be really ever good at acquiring customers.

29:23And by solving products so well, it becomes viral. And then you do solve your acquisition problem vis-a-vis a better product. Real quick, guys, I have a special, special gift for you for being loyal listeners of the podcast. Leila and I spent probably an entire quarter putting together our Scaling Roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. So you've got marketing, you've got sales, you've got product, you've got customer success, you've got IT, you've got recruiting, you've got HR, you've got finance. And we show the problems that emerge at every level of scale and how to graduate to the next level.

30:00It's all free and you can get it personalized to you. So it's about 30-ish pages for each of the stages. Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com forward slash roadmap, R-O-A-D map, roadmap. Now on the flip side, it's like, can you do the same thing by just having unbelievable distribution? I don't think the answer is yes.

30:33You mentioned that it's something like 20, 30 % of the businesses coming to you. They make content in some way. Yeah. Do you think that those businesses, because a lot of people talk about creator, creator economy, are they better than those that don't grow and have Khan as part of their workflow? Really interesting question. I think it's a double-edged sword. So what makes them great also makes them risky. So they will typically have very low cost to acquire customers because it's organic. And so it's just some, yeah, it's some star or whatever. I'll call it a star, right? Who's good on camera, good in whatever format they advertise in.

31:08So they acquire customers cheaply. The other pro is that typically if someone starts with an organic audience, they really care about product because being a creator, like your media is a product in a way. And so they have the right perspective on like this has to be really good or I'm going to lose my reputation because the whole, an organic brand is built on reputation. And so I think they're more obsessive about product. So I think that's a huge plus. The downsides for the business obviously is that they have massive keyman risk. So now I think where you get really smart about it is if you can gain enough influence where you can develop an affiliate network of businesses like somebody who's done really well is um derek from uh derek more plates more dates uh the fitness guy um he has i think an affiliate base of four or five thousand affiliates that promote his fitness products and so he's become such an authority that people are willing to say well i don't want to remake what he's made i'll just promote his stuff and i think he has a good you know good program there and so he is he's paying down his key man risk by getting larger and larger percentage of the business.

32:08And so I think that the way to really scale an organic creator business is you launch it with the personal brand. And then over time, you backfill with other faces that you have to approve. And that's the key part. You have to approve that are on brand with your values and your message and are authentic to the product that you have and are attracting the audiences that you want to go after. And then they over time become bigger than you. And you of like Homer Simpson into the bushes. Oh, yeah, you recede. Yeah, yeah, exactly. Yeah, exactly. And you recede into the bushes until eventually people associate you with the brand, but the brand outgrows you.

32:44It's fascinating because, well, two questions immediately come to mind. The first is, on Key Manners, this is what you and Layla have. Are you thinking about where in a roster folks just fully took for the faces of even the common side of your business? So two answers. First, we're not planning on selling acquisition on any time price, and that's useful. And so I like I see Elon as keyman to SpaceX and Tesla. Yeah. And so what? If you have the desired exit of business, then keyman risk becomes a problem. If you want to go public or you want to hold, it's really who cares. And so it's kind of a who cares issue.

33:18That being said, the second answer is yes, because I do like having fewer single points of failure in general. So despite the fact that I don't think we necessarily would need it, I still like to build businesses that way in general. And we have plans for what we're going to do over the next probably 12, 24 months and beyond to build out ACQ's brand. Makes sense. Yeah. The second question I had related to that was when I look at creation space who've successfully executed on this, it's actually very minimal. Oh, yeah. I can tell you one who I look at. Who? Dave Ramsey. That's right. He's brought in George.

33:46He's brought in other people under him. He's got Rachel, who's his daughter. But like he's got Rachel. He's got John. He's got George Cameron. Yeah. He's got nine, I think, channels, for example, just on YouTube that are associated with the primary. And what's interesting is that they basically run the same playbook. It's daily calling show and clips and full episodes basically are the channel. And so they clip each episode into like four or five, 10 minute clips. And they put each of those out. So that's like that gives them tons of good like mid length clips. they get the one full episodes and then short clips get taken and become shorts i study ramsay a lot um one because i like dave but secondly because the amount of creators that get quote creator burnout is really high yeah um or we're talking like shelby church right she's kind of shifted to i would say a sustainable uh content model right but it's it doesn't really acquire new viewership anymore like you only care about a vlog if you care about the person yeah it's You're maintaining or some creators grow OG on YouTube.

34:54Now they shift to a podcast. Right. Yeah. And it's because it's a quote easier form of doesn't really grow the audience. It just kind of like maintains the audience that you have. And again, to be clear, nothing wrong with that. Totally. But I look at somebody like Dave and I think he's been making content for 40 years. Like there's something to be learned from that. And I think the nature of why his content has been so interesting is because you have, he has two types of variety or three really. And that I think have to be present. So what are the types of shows that have, and I already say shows, that have existed for a long time?

35:26You look at the Daily Show, right? You look at the nightly host shows. Like those can go for 20 years. Evergreen. Right? What makes that unique? In my opinion, you have three variables. You have the people who are on the show. You have the subject matter. And you have, actually, it's just that. Two. Yeah. I was thinking because you also have the interviewer. Right. Format as well. Yeah. So I'll still say the third, which is the interviewer, comma, errs. So like there are some shows where they will rotate 10 people through three seats who are doing the interviewing of other people about dynamic topics.

36:05And so you need some level of novelty, I think, to consistently, one, engage your existing audience, but also to bring in new people. And I think that a lot of creator content on a long enough time horizon becomes the news. like they say all the things they wanted to say about right personal finance or how to build a house or like and then at some point they're like i don't know what else to talk about and then they're like the news and i don't necessarily think that's a bad thing it just like i just it's just a pattern that i've seen over and over again because if you have single person they only have topic as their variety and so once you've exhausted many of the i would call it standard direct-to-camera topics then the novelty comes from news which is literally novelty right what is new right and so that's where they allow the environment to create their content or other topics going back to ramsey he has guests on he has the collins which create endless variety and so those are kind of like the two formats and he doesn't have to prepare really ahead of time and so he is for if he does three hours of content a day he's generating three hours of content whereas i would say many creators will spend 20 hours on generating one hour of content and so he has pretty decent leverage on his time in terms of output per unit of time spent on content itself.

37:20And if you want to grow a business around it, you can't just do content because then you have, like, when do you grow the business? It's a really interesting point because you mentioned that a lot of creators start with one thing, then they eventually burn out and build a scalability. Like Graham Stephan's a good mutual friend of ours. And Graham has openly talked about how he is getting really tired on his main channel. He said that like three years ago. Yeah, I've noticed Graham every year talks about, and even when I met him, he was doing like three videos a week and you just run out of topics.

37:49And to your point, you just become a news reactor. And that's not something he enjoys as much as doing. And in a way, he's found a lot of success now with his podcast channel. But for a while, he's spun up a coffee business. And he's also talked about how the coffee business didn't work. And so I think it's interesting because on the one hand, everybody's like, well, acquisition is one of the most important things to a business. If you're a creator, you're going to succeed. On the other hand, hey, Graham did the coffee business, didn't necessarily work. Emma Chamberlain's talked about how Chamberlain coffee line also doesn't apparently make money.

38:16There are many creators who go to the business path and it seems like, well, maybe that was not the right play. So two really interesting things about this. Well, Graham specifically, and then also in general. So I think we need to be very careful about what audience we want to gather. And so Graham's audience has been predominantly people who don't want to spend money. Yes, frugal. And so he gathered everybody together who don't want to spend money and then was like, hey, spend some money. And so I think in some ways it's hard. It's almost harder for him to sell something than almost anybody else.

38:52Right. Because of the nature of his brand specifically. That's why I think like for him, it's like doing media stuff in some ways is probably an easier. He can sell to advertisers and they can have the good luck, you know. But I think for him, like something that would have been on brand would have been like honey. Right. Before the scandal. Yeah, before the scandal. Right. Pre-scandal honey, I think, would have been very on brand for him to offer. Saves you money. Yeah, and he could have made a lot of money on that. And so I think all discount-related things or discount-related financial services probably would have been good angles for him.

39:18So that's thing one. Thing two is, so I guess that, sorry, I was getting into thing two, which is picking the right product. Right. So you have right audience, right product. And so I think that having the saving money audience, you can make money from it, but getting them to buy something that would be considered frivolous, which is just like coffee. Now you can try and position it as like, okay, it's not Starbucks, fine. But now you're literally dealing with a commodity. Like coffee beans are traded as a commodity. like very hard to be to have alpha from a brand perspective when the whole brand has been built on don't buy like this stuff comes off the same factory floor as this stuff and they just put a markup on it right and so from a product perspective i actually think creators are horrendously bad at picking products like the amount of conversations i've had with creators who are like hey i'm thinking about launching an x and i'm like what so on one hand i like these are real conversations i've had where they're like yeah you know i read peter thiel's zero to one and i think i have to create like a totally new category yeah monopolize yeah and i'm like dude you already your your monopoly is the attention you can sell a commodity and as long as it's on brand you know like with with with you you'll probably be able to do really well the follow-up question is will you do as well as you could have otherwise done if you picked a better product which then goes into kind of like circling all the way back to acquisition.com in terms of what we do is we i only really solve for revenue retention it's like really the only thing i care about because on a long enough time horizon, anything that retains customers becomes huge.

40:38If you know how to advertise at all, which if you're a creator, you do. And if you can keep the customers, then on a long enough time horizon, you become, you build a massive company. Right. It surprised me you said retention instead of growth, actually. Well, like level one, like keep customers. Level two, grow those customers too and get them to bring more. But yes. And so from a product perspective, though, I don't think enough of them are thinking about reoccurring and recurring revenue. And my two cents for anybody who's a creator who's listening to this do not try and solve churn try and find products that people already don't turn out of and then make it your own i spent a huge amount of my career banging my head against the wall trying to figure out how to make something that people inherently leave like a gym membership uh something that's sticky and i've learned a ton and so there's lots of what i would consider like blocking and tackling tactics that i have learned that will improve churn.

41:31But to conquer churn, like how many of you have turned out of your internet lately? How many of you have turned out of your cell phone bill? How many of you have turned out of your insurance? Your bank account for that matter. Yeah, exactly. You hate them and you're still with them. Of course. And so you think about these products and so I would rather find products that people already don't leave and have no affinity for and then try and just shift them over. Now you're like, wait, how can, well, aren't they technically churning out of them? Yeah, but I'm being laser targeted and how like, yes, that's the point.

41:57That's the advantage that you have. the creators that you can bring those people over from what is otherwise a commoditized product that they don't care much about but still pay for rather than trying getting people to care about your product in order to buy it you might remember 2021 everyone is really excited about the creator economy everyone knows it's going to be the biggest thing in the world one because covid everyone's at home they're watching online videos and two because tiktok short forms going on the scene everyone's getting millions of followers and then 2022 2023 there actually was a bust where a lot of people were like oh creator economy is not going to be a thing and it's because people weren't able to monetize.

42:28They have all these short form followers. They didn't really see what to do. I have really strong views on this. Oh. Yeah. What are you thinking? So I think it's because the people who are allocating money didn't understand media at this level. Like I would, I would wager that you and I probably understand the creator world and media better than most. And I, I think that fortunately, unfortunately, I think short form content does not build tremendous influence. Right. I think it brings awareness. Uh, but if we think about influence in terms of like what percentage likelihood can we get the audience of this person to purchase something um you just need okay so four elements for influence so you've got likeness so does this person look the way that i look so because of that i will trust them more and be more likely to follow their directions the second is credibility which is say do correspondence which is basically does this person have evidence or proof that what they say is true uh third is you have uh power uh and power comes from someone doing some directive that you have stated uh and then yielding a positive consequence from it and so i'll give an example of this so uh huberman made a short about if you have hiccups how to stop having hiccups right and i remember watching it and being like well i don't have hiccups right now but i'll try to remember this when i think about a month later i think you followed it there's power yeah and then i did the thing and the hiccup stopped.

43:57And so in that moment, Huberman gained influence over me. I'm more likely to follow a directive in the future. And so status is the fourth thing that gives you influence, which is relative control over reinforcers. Meaning if I am a bartender and I control a scarce resource, which is alcohol, I have status in this setting because I control the things that reinforce. Does it matter how rich or powerful you are? I'm the bartender. In this setting, I control what's scarce, right? And so if you were a billionaire, you control money. And so you gain status just from that. Presidents and politicians also have status because they control resources of the government, right?

44:36But they still control resources. And so women have status because they control a scarce resource for men. just being real. And so they can influence behavior. And so all of those things increase the likelihood that you get adherence from or compliance from a request. And so if you have all four, then you are incredibly influential. Right. And big picture, our goal as creators is to gain actual influence so that we can influence the behavior of a large group of people. Right. And the way to do that most powerfully is to give them something, some sort of directive that they follow and their life gets better.

45:18And then they're more likely to adhere to a follow-on request. That makes sense. So if that's the case, it's very difficult for you to do that well with very short content. And so to put this in context, let's say that somebody has consumed 20 YouTube videos of mine. and let's say that those videos on average were 30 minutes. All right. So that's 10 hours of content that they've consumed from me. Okay. Right. Let's do the math here. If the average short that I put out is, let's say 20 seconds. Okay. So if we have 20 seconds for a short, that means it's three shorts per minute. So 10 hours times 60, we have 600 minutes is what my longs were.

45:59And we'd have to triple that. So they would have to consume 1800 shorts of mine. God. Right. And so I think that what's happened is that people have wildly over leveraged followership and views for influence. What's interesting is that like small businesses, I remember Michael showed me this actually, he saw this little cue card, he took a picture of it from like a car detailing business or something. And they said, for 400 ,000 views on TikTok, or 10 ,000 views on YouTube,$500. So any creator who wants to make something about their card detailing organically, they'll pay them$500 if they get 10 ,000 views on YouTube or 400 ,000 views on TikTok.

46:43So they had already basically appropriated that as 40X is the equivalent amount of influence. And if it were me, I still would probably rather have the 10 ,000 views on YouTube. If we're looking at this, what's her name? The dancing girl, Charli D 'Amelio, right? So I think she's had a couple of things that didn't work as well. And again, if I make a brand built around slapping strangers in public as a complete extreme, and then I launch a credit card, does that really carry? There's no say-do correspondence. I have no proof. So I have no proof that - She actually did partner with a credit card company, by the way.

47:20Right. And I think she had a popcorn. And to be clear, there's no shade here. That's not my point here. My point is to help creators monetize. And so I see the point of short form as one thing, which is to drive them to long form. Or if you can, obviously deliver some sort of value like I got from Huberman in that short clip. But the thing is, is that the likelihood that that occurs is really, really low. I have a pretty decent memory and I remembered a short from a month earlier and then actually did it and got a result. Super unlikely. Now, if you listen to Huberman on a daily basis, for example he probably gives 80 directives over his every podcast and all all you have to do if you're a long-form listener is listen to one of them over a month and your life gets better and he gains influence and so when he then makes a product recommendation because i'll bet you that the huberman collabs have probably crushed athletic greens yeah and he's got broke he's got the sunglasses thing um i think he's promoting david bars uh which is actually how i protein yeah so So like, and those collabs, I think, have probably done pretty well, right?

48:24And Rogan also, to the same degree, like when he makes recommendations, like a huge amount of people, like including presidential recommendations, a huge amount of people follow. And this is where it gets really fucking interesting. So again, it's all of those elements. So if you have a, let's say somebody who's a long-form host, doesn't talk about politics at all, shows no knowledge of the stuff, has a big audience, brings somebody on, their endorsement probably matters little. If their audience pays attention to a political candidate, then that's basically just functions as an ad and the political candidate is doing the influencing on their behalf.

48:59But for their endorsement to matter, not just the distribution, they have to have demonstrated some credibility around the topic so that people say this guy is informed. The value to be other than you've reached a million people or whatever. Right. Right. Joe has done a ton of political stuff and like it, don't like it, whatever. He's demonstrated that he's at least spent a lot of time trying to research the topics with the intention of just trying to find truth from an independent perspective. I'm not getting into like the weeds on either side here, but just that that has been the intention. And so he is tremendous influence because most people think, at least I think most consumers think this way, I don't want to do all that work.

49:35I'll just trust him. See, what's fascinating, you describe the primary function of short form to drive to long form, because you go to a broader point, you're saying that people had followers, but they didn't have influence. Because influence comes from the four things you just described. Likeness, credibility, power, status. Initially, what was going through my mind was, yes, 2020, 2023 saw a bust because a lot of investors confused influence with followers. Yes. Because there were more followers brought to you because it's in short form. Yes, totally. But nothing else. The initial premise I was operating with in 2025, which now I'm rethinking was, oh, but now people have figured out how to use short form to upsell to products and services, whether on school or these other 15 different monetization methods where these short form units are just becoming really marketing creatives.

50:23And where school is the best one. I mean, it is the best one. Well said. It is objective. Well said. The premise for me was, oh, now short form, it's actually just marketing. They're just like commercials. And so the monetization is coming back. The short form is not really successful in growing your influence, but it is successful just from a distribution POV. Think of it as like awareness ads. Yep. And so what happens is the objective, in my opinion, so like the ones you, it's like school, for example, if you're a short form person, it's like, how can I just get them to take the tiniest amount of action, which is to go into a community where I can get way more interactions with them on a much faster feedback loop so that I can gain the other three or four more, like harder, right?

51:05But what's interesting is like the people who I think we're doing really well monetization right now for tiktok are doing tiktok shop plus lives and what's alive well i think there were some creators that were still wildly undervalued yeah and many that were wildly overvalued and this is the uh you know the classic story of like i had two people that i paid a hundred thousand you know so i had a hundred thousand uh followers on instagram and i had both of them do a shout out for my thing and one guy drove 10 000 customers and one guy drove zero How is now, assuming it's not bots, but like there's definitely legitimate creator accounts that have 100 ,000 followers that have zero influence.

51:44Do you think more businesses should be trying to follow content creator-led models? Like we've talked a lot about, hey, there's five different ways these businesses make money. Here's some of the challenges they have. Should the other, you know, 60 % of entrepreneurs come to you be thinking about, oh, I should be incorporating content more into what I do? I have super strong reservations with the word should in general. I would say it really just depends and what the constraint of the business is. And so like, let's say you have an outbound channel that you have cold callers and cold emailers that, you know, generate B2B customers for you.

52:14Do you need to start making content? Probably not. And given the resources required, is there something else in the business that would generate more enterprise value? If so, then you should do that, right? Big picture, more attention in general tends to grow businesses provided they are not supply constrained. But that's a big asterisk. because many businesses are supply constrained. There's a lot of plumbers who, the phone's ringing on the hook and they're like, I just need more plumbers, dude. Like, yeah, of course. Like I could, we can, like, I don't have a problem getting people. If you have a cleaning business, the problem is not getting people to want cleaning.

52:48The problem is finding cleaners. Yeah. Right. So like, it depends on what the problem of the business is. Now, if that were the issue, do you make content around like what it's like to be a cleaner? So that you attract cleaners, people who want to clean. It's like, hey, you already clean your house all the time. Want to do it for money? And we have better working conditions, blah, blah, blah. Like fundamentally, I guess reframing the question as should the other 60 % of businesses add another advertising channel? No, unless it's the constraint of the business. When you think about what you're investing for acquisition.com or now for ACQ Ventures, it sounds like traditionally it started from let me bring you better business processes.

53:22With school, it actually shifted a bit to I can just bring you tremendous distribution via my own content. What types of companies were you leaning more toward investing? Once you help with the processes or ones where you think the content distribution actually is what matters? So I'll say that it's both. Right. And I still use those three kind of legs of the stool. So I got money. We've got timer work. And then we've got brand reputation, distribution, et cetera. I prefer to do as many as I can of the first two. Because in a lot of ways, brand is so much more limited. Not limited in its power, but limited in how many.

53:55And maybe this could be a limiting belief for me, but I don't think it is. I think it's, it's very, so brand is built on associations and pairings. And if you pair yourself with too many things, it, the brand starts to lose its potency because you have associated with too many disparate things. Now, if you made many associations with things in the similar buckets, I think you could get more bullets. It's more, okay. More shots on goal, if you will. But no, I, I, I try to basically do the more scalable things, which money is actually, you know, pretty scalable. We've developed a pretty, pretty exceptional team at the holding company for acquisition.com.

54:30Because I basically take, I marry a lot of old school and new school. So we have a lot of young, called five and 10 year McKinsey, you know, Bain consultants that will pull who are like, I hate feeling like a cog in a machine and just doing billable hours, but are otherwise incredibly hardworking, incredibly bright. and also see the problem with a lot of antiquated businesses and want to work with more new, more cutting edge stuff. And also really like, and a lot of them came from, you know, my content, my world, and want to marry, I would say, big business strategy with small business tactics and then kind of like bridge those two gaps together.

55:12And that's a lot of what we do at ACQ anyways. And so I think they really enjoy it because they learn a ton from the frameworks that we have for growing companies. It adds nuance and texture to their existing knowledge set from what they learned at the kind of like big consulting firms. And just to put context to this, like if you're looking at like supply chain for Walmart Brazil, right, or something, you know, Walmart LATAM, because you need to do some analysis for that. super heady, really complex, lots of moving parts, and not useful to a small business. Like really valuable to a big business, which is why they pay the money for it.

55:52Not useful at all to a small business. But the thinking process, and the reason I like taking people from that world, one is because I came from it, but also because I think at the end of the day, consultants are a lot like engineers in that you just have to solve problems. And being able to have a really good problem thinking mind is I think what makes a good consultant in general. and so that feeds really well into the advisory practice would you invest in content creators i would if i like okay let me clarify it will qualify the answer so are you saying invest in them like if i could buy a stock in a person or like if hey i want to start it i want to start this umbrella company i've seen initially the second i probably wouldn't for a de novo idea for a couple reasons.

56:36One is like I don't really like seed stuff, like idea stuff. Right. Also because creators are typically like big idea people. That's not the constraint. The constraint for them is execution and business acumen. And for a deal structure like that, like in a traditional structure, I probably wouldn't have majority controller ownership. And so that would be really high risk, I think. And so I probably wouldn't like that deal. If it was a deal that was kind of like the opposite, where like maybe they owned like 20 % and we owned 80 and we fronted the capital and we like put all the stuff together.

57:09Sometimes you're incubating them. Yeah, maybe. Yeah. But even then it's like, I also have to look at supply demand of like my own deal flow. Right. And to do that, it would have to prove that that deal structure provides more alpha than the existing thing, which I would have a hard time believing. What about a later stage creator company, like the primes of the world yeah so like a logan paul or like whatever jake paul or something who's not him but somebody else right it would be tough and the main reason is investing in someone like that isn't really investing it's a joint venture and then it's really like so i'm starting another business and that's really what it would be and so it'd have to be a business that i felt the existing resources and assets that we had we already had a huge percentage of the core competencies required not just in knowledge but like in manpower yeah to do it makes sense because for you you're either obviously you bring capital money right but you're also either bringing your image and likeness which is distribution right or you're bringing the operational expertise right you're working with these businesses that are less savvy on the distribution side clearly something of value easy you're working with these creators well you have distributions you don't necessarily need theirs and they don't have the operation side which means you have to spend tons of time building tons like they don't have any right and so we'd have to build we'd have to build a company and so that's where i see that as like like translating the ultimate question to like would you build a company for a creator if that's what it if that's what i translate it into then the answer is probably not right uh just given the the construct like how much it would take when i was chatting with michael earlier today he did say you've been shifting more to investing and we recently ventures is all capital yeah acq ventures and from my understanding that's much earlier stage what prompted that actually honestly just we had so much deal flow for it so a lot of people were coming in and saying hey i would say it's it is largely tech so because it's venture you need to have really really potential big exit outcomes yeah they're just the economic like the economics lend themselves to tech but we had a lot of uh people were coming towards us in in i would say like a couple buckets so bucket one is somebody who's already raised some round yeah consumes all my stuff it helped them grow and they're like i would just rather have you on our cap table than somebody else.

59:21And that's like perfect scenario, right? Like they already, they, they like the stuff they're using. They kind of like subscribed our ideology. We can provide capital to help them grow because we believe in the thesis. So like, that's great. And those, and the thing is, is that the existing model that we had prior to that required us to have a significantly larger equity position to justify the return, right? But because some of these tech companies can have a significantly larger exits and because they don't require more work right uh we can take smaller slugs and do um and just do money only essentially so that's so that was that was kind of bucket one bucket two is people who don't have a cap table at all um there may be bootstrapped but they still want to take on some clear opportunity that we can help fund um and those also uh you know as long as the deal structure makes sense like those can make a lot of sense the nice thing with that is that they require almost no work and expertise.

1:00:12And so it's really just like these entrepreneurs are like, I'm not trying to exit. I'm not trying to have a growth partner. I need capital and I prefer your capital to somebody else's. And we basically had so much of that. They were like, we should probably just spin this up. And the check sizes are not that big. And so I don't even really need to raise a fund to do. Like I can just do it on my own. Yeah, exactly. So that's worked out really well. We've already done like, I want to say like six or eight deals. Oh, wow. yeah i know just in the last like two months so like it's it's heating up really pretty quickly which is great or i'll just lose my ass and we'll find out but like yeah yeah i've deployed a lot of money like congratulations you know because it's funny because in the investing worlds for those that don't know this uh in a fund structure you basically are incentivized to deploy capital yeah uh and so to put out money yeah so it's kind of interesting because like the traditional like clapping of hands that happens when it's all your money yeah it's actually like well i i took a lot of swings we'll see you don't really have lps your lps yourself that that's why it's a cool i've spent all my money yeah right amazing yeah um yeah i mean fundamentally we operate 100 like a private equity group and obviously the fund uh the the acq uh ventures operates like a vc right like we have a uh basically a general partner who just basically runs that uh came from the y combinator world like has really good deal flow on his own yeah he sources a bunch of deals on his own outside of our network too which i you'll probably notice this is a common theme is like i want stuff that already works and that i can put gasoline on yeah rather than it can only work because of me school is an exceptional product and was compounding month over month zero advertising on its own then we added gas if it only if it requires me in order to work then it requires me to work until i die, that's not fun.

1:02:06And so just as like a side note for the creators, like everything that I, again, I've, I, this keeps coming back to this point, but like I solve for revenue retention because if, if you go on vacation and the company dies, you just bought yourself a higher leverage income, but you did not buy yourself a business. Right. And it's not an asset. It's literally only valuable to you and not valuable to everyone else. And the valuable to everyone else part is where, where you get significant outsized returns in terms of wealth creation. When you started to make content before your previous businesses, you hadn't really gone hard on content marketing.

1:02:38And so was the motivation because you saw this as good lead generation for acquisition.com or was it more, Hey, it's time for me to share what I've learned. I would say one, there was multiple motivations and I was actually pretty reluctant to do this. And I don't even know if I will do it forever. I think some people were like, I'm going to do this. Like, I don't know if I will do it forever. I came in with a very clear purpose of why I was going to do this. So I'll tell you the stories that got me to decide to do it and then why. So in very short order, the Rock had Taramana for multiple billions.

1:03:12Huda Beauty did a minority deal, you know, valuing the company over$600 million. Conor McGregor, same thing, ironically,$600 million for Proper 12, his whiskey company. So those were like some celebrity examples. then i had i remember hearing this podcast of this guy named um he did nomad capitalist he's like a youtuber and he talks about expatriating and like how to have tax savings and things like that i had seen his channel and i listened to a podcast and he said i get 3 000 applications a month and i went to go look at the application and it was like it was an application it was like 30 something questions and they weren't like multiple choice they were like very in-depth questions for financials and like all and like you had to upload documents and like there was a lot of stuff involved and i thought to myself if i had 3 000 applications a month for any business that was high-end b2b my god i would just print money and so i thought about that and i was like okay so these these were like i'm getting warmer and warmer to this idea and then kylie jenner gets on the cover of forbes as a billionaire at age 20 which they ended up disproving later, but like, it doesn't matter.

1:04:16Right. I think she is a billionaire now. Uh, but she was 20. I was 27. I thought I was hot shit. She's seven years younger and she's a chick and she's richer. And I was like, I suck. I'm a big believer in like, if somebody is making more money than you, there's something you can learn from them, uh, in the game of business. Totally. And, and it might just be like, you need to be luckier. Uh, but like, sometimes it's like, you need to be the right, right place at the right time. So it's like, okay, well, what do I do about that? It's like, okay, well, I tried to increase my surface area of luck.

1:04:40Then I decided I was going to do it. And so when acquisition.com for sure was what I was going to do. The brand part wasn't something I was for sure going to do. But when I thought, okay, how can I decrease the likelihood of failure as much as possible? Like one of the tenants would be like, well, if you had an investment firm and you had unlimited deal flow of people who only wanted to do business with you, it would make it very hard to fail. And so I wouldn't have to be the best negotiator. I wouldn't have to be the best picker of companies. I could just have unlimited shots on goal. And so I was like, okay, so if I were to solve for that, what would I do?

1:05:10I was like, well, if I could build the biggest business brand, then that would basically shrink into irrelevance or make, sorry, shrink all of my problems or make them irrelevant by consequence. That was fundamentally why I decided to do it. You mentioned in the beginning, you weren't even sure you wanted to do it. Do you enjoy having over a million followers now in that piece of accomplishment? There are pros and there are cons. And right now there are more pros than cons. And if there's a day where I feel like there are more cons than pros, I will stop. Right. I think there are some people who really love attention and love fame and things like that I don't think I am that person and I feel like I have evidence to support that uh because I didn't do it for a long time when I think I had the opportunity to right now my content feeds thousands of families first from obviously what we do at acquisition.com the holding company but then also all of the, you know, school, like there's, there's, you know, from a distributed perspective, if I were to quit in the future, I would try to make sure that I had backfilled my responsibility to those families to make sure that, that, that vacuum, you know, didn't, that, that it was filled.

1:06:17The pros of this are you have recruiting talent becomes infinitely easier. The best people in the world at whatever they do, which is such a, such an underrated lever. Like I just can't, I can't overstate this. Who is lever number one? Number two is you have the obvious thing is that you have lots of deal flow or customer flow depending on whatever, you know, whatever you sell. Those are really the big pros. You have some ancillary pros, like, you know, if I go to a gym and drop in, like they usually know who I am and they'll give me some nicer treatment. And if I go to a restaurant, they probably know who I am and they'll, you know, be nice about it.

1:06:49Those aren't super, some people like that. The downsides are that what you sell is privacy. And so that's the price that you give them. It makes sense. Is privacy is the price. And so, and one of the really tough parts and why I spent so much time thinking about this was that it's kind of a, it's a one-way door. Yeah. It's, you can't undo it. There's no control Z. Alex, thanks so much for making time. That's a wrap. 100%.