How to Build a £100m Business | Jordan Schwarzenberger

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0:12Jordan Schwarzenberger: The beauty of the world we're in now is it's media with a face, right? It's personality led publishing, especially in the world of AI slop and content fatigue. How can we find new and exciting ways for fans to connect with creators? The person with 10 ,000 followers can get more reach than the person with a million followers. That never used to be the case. thinking like a creator is the big thing that I believe in. I think if everyone does that, whatever it is that they might want to do, you have an outsized opportunity to win today than you did before. Welcome back to High Performance and a very special episode brought to you by Stripe.

0:44Now, for those of you that don't know, Stripe builds financial infrastructure tools to grow forward-looking businesses faster, which is exactly why they set us up today with the most incredible guest, a man that I've actually known for a long time, and someone who, like Stripe, knows about what it takes to grow a business. Today, I welcome to the show Jordan Schwarzenberger. He's the co-founder of Arcade, the entertainment company behind some of Europe's biggest creator-led brands, including the Sidemen and Generation Football. As part of the team behind Sidemen, Jordan's helped transform them into Europe's biggest YouTube group.

1:17They're now a global business phenomenon worth in the hundreds of millions. And this was such an interesting conversation. Honestly, you're going to learn so much right now about the creator economy, the direction it's taking, the fact that businesses need to completely change the way that they create content going forwards. And of course, as always, what are the biggest risks that all of us in business need to be looking out for? Because you never know what's around the corner. And actually, not knowing what's around the corner is where Stripe has you covered. Stripe is built to help you handle your business, whatever lies around the corner.

1:49So see how Stripe can power what's next for your business at stripe.com. But right now, let's welcome to the show, Jordan Schwarzenberger.

2:01Jordan, welcome. Thank you for having me. There was a stat that leapt out to me, so much so that I just need to double-check that this is correct, okay? Obviously, you work with Sidemen, we will talk about that. Arcade, which I've already mentioned, is so exciting. But I read that 50 % of all Gen Z and 70 % of all Gen Z males in the UK subscribe to Sidemen.

2:22Jordan Schwarzenberger: Correct. Correct. We ran the numbers. What? If you look at the proportional Gen Z demographic in the UK, you place it down to males and females, and then you see the number of Sidemen subscribers who are unique in the UK. You get to the number of 70 % of Gen Z men and 50 % of all Gen Z, so one in every two. And interestingly, when I was at Lab Bible back in the day, I feel like an old man now, but back in 2016, 50 % of all 18 to 30-year-olds subscribe or follow, sorry, Ladbible on Facebook at the time. So it's interesting that there's always this, the kind of upstart media entity that carries a decent proportion of young people in the UK.

2:58Jordan Schwarzenberger: But yeah, 50%, 70 % of men. I think the challenge, right, because there was definitely a time where everyone spoke about Ladbible. For people of my age, it was definitely a time where everybody read Heat Magazine. And you go through these phases where something is super current and super popular. I think the challenge, which we can talk about, which I think is really interesting for content creators because we're now at the heart of like this is kind of the moment for content creators if you like the challenge is what does sustainability look like yeah i like how you said we well you're a content creator now well it's great i think that i sometimes feel like am i a content creator because i'm not 21 years old right and it definitely feels like there's this message that it's a young person's world but i'm also a big advocate for banging the drum that even at 47 with a career in let's call it legacy media as a you know linear tv host on kids telly and sport that even someone like me with that background which sometimes handcuffs you to that world even i can take the step across to creating a brand like high performance of course and i mean would you call me a content creator i would say you're a creator i say you're a creator and i think that is the freedom of this world we're in now where you don't you're not beholden to broadcasters and institutions, you have the means to distribute yourself.

4:11Jordan Schwarzenberger: And that's ultimately the power that YouTube of all the platforms has given. And to your point of sustainability, I think going back a little bit, the difference between the faceless publishers, if you will, which have existed for a very long time, the channels that are going through this existential crisis is that you scrub under the surface, no one really cares. No one really has an affinity and a love for a heat magazine, maybe a nostalgic looking back love. But they don't really have a love and a care for those brands. They're faceless entities. The beauty of the world we're in now is it's media with a face, right?

4:40Jordan Schwarzenberger: It's personality led publishing. And that's a totally different world because the care and the love that people have for you or people have for the Sidemen means that, or for any creator, right? It means that there is a longevity to that relationship. There's a feeling of parasocial love that they have for the person that they spend so much time with every single week. You think about the Sidemen, 15 pieces of content every single week going out. You think about a creator like Friends from Work or Max Forch or any of the people we'll get into from our new kind of lineup, if you will, at Arcade, they're producing content constantly.

5:08So they are always in people's lives. And so that depth of relationship is personal, or it feels personal,

5:13Jordan Schwarzenberger: versus being informal and at a distance, which is how it's been previously. So that's why it's very difficult for these older institutions, the Channel 4s, the BBCs, etc, who, you know, a lot of love for some of the things that they do, but they will struggle because under the surface, do people really have that depth of relationship? Really? It's difficult. So I think sustainability is a lot easier as a creator than it is for a publication or an institution. And there was a period where if you did the thing, I guess I can use myself as an example, if you're on traditional television and then you leave to do this kind of thing, the first thing is like the confusion from people.

5:48The next thing is a little bit of ridicule, maybe not to your face, but certainly away from you. And then finally they go, oh, now I see what you've done. I think what's really interesting is we've actually reached the point where the traditional broadcasters and the OTT providers, the Netflix, the Amazons, they're coming to the content creators. Do you think that is something that's going to work? Because it's the personal connections you've spoken about that people love. They love going to the Sidemen's channel or speaking directly to high performance. Does it still work if you're on an Amazon or on a Netflix or on a Channel 4 or BBC?

6:21Or does it change the rules of engagement a bit?

6:23Jordan Schwarzenberger: I think it's about the intention of why you go onto a platform, right? So you go onto Netflix for formats, for documentaries, for maybe live, you go onto Amazon for a comedy show, whatever it might be. You go to these platforms with an intention. You go to YouTube to watch your favorite creators. You go to YouTube to watch the channels that you don't get anywhere else, right? So there's a difference in the way that you have a relationship with a creator and the platform that you consume them on. Consume them on is a bit of a weird way of saying it, but consume them on. For example, the Sidemen and obviously the incredible team now that's there, Victor, I know you've spoken to him, obviously the CEO of Cybermen Entertainment, Adam, who runs Cybermen Productions.

6:56Like they're building shows, formats,

6:58Jordan Schwarzenberger: worlds around inside now, which sits on Netflix, outside, which actually came out today. So you've got shows that can live and breathe on their own. I think that's the only way it can really work. I don't think that renting a creator's parasocial relationship, pulling them onto a platform like a Netflix or another, will have longevity beyond maybe a short-term spike. Because ultimately for random people, and there are many people who don't know who the Cybermen are, surprisingly still, but that is the case, or any creator, It needs to live and breathe, I think, on those platforms with format, with show, with IP that has to sit outside of the creator itself.

7:29So I think it depends on the platform. Social, YouTube, it has to be that connection. Netflix and Amazon, it might be the hook, but it's not going to be enough, I think, to sustain long term. Very briefly then, let's talk about this idea of protecting people at the same time as creating amazing content, right? Because there is this danger that content creators play the algorithm game because they have to get the big numbers. And the algorithm rewards a reaction from the audience, whether it's massively negative or hugely positive. So how do you and how do your creators tread this fine line of, yeah, of course we want numbers, we want impact, we want scale.

8:05But we also don't want to sit with those people at the extremities of content creation.

8:10Jordan Schwarzenberger: I think the best creators know the audience has to come first and it's an intentional platform of discovery. You have to make the choice to go into a video, but you need to back it up with amazing substance and with a depth of material, but also your personality has to come through and be there. So I think it's balancing those two. There's no escaping. When you're appealing to human psychology, you have to appeal to what is sensational, what will get people to come in. But I think it's balancing that with real substance. And I think it's also different in the world of entertainment, maybe versus news and politics.

8:33And that's why personally, I don't actually have an, you know, I said about, you know, maybe government trying to regulate.

8:38Jordan Schwarzenberger: I don't have a problem with the prominence conversation around news, actually. I think news and kids, I buy the argument that if YouTube, for example, can find a way to template the national broadcaster in each country to have a prominent section, I don't think that's any different to Google News. I mean, YouTube is a search engine, right? I know we're talking about YouTube predominantly versus social, but YouTube is a search engine. In the same way that Google ranks the Guardian and the Times and these more established institutions higher up than others, I don't see an issue with that for YouTube necessarily.

9:05But I think it's about making sure that you don't take away people's choice in the process and get into the realm of, I think, too stringently fact-checking or coming at it from a bit of a Big Brother centerpiece. I think that goes against the nature of the platform. So yeah, I think ultimately you have to appeal to psychology and that means you might have to be sensational, but you also have to back it up with great substance underneath. Well, let's talk then about the great substance and what great substance looks like because you've just relaunched Arcade, your business. You've taken a seven-figure investment.

9:31We have, yes. I've seen valuations banded around of 100 million plus for your business already. I'm always like you. I'm like, really? Someone has to pay for it, do you know what I mean?

9:40Jordan Schwarzenberger: A business is worth what someone will pay for it. And I actually think that your worth shouldn't be measured in dollars or in pounds. I think your worth is in the creators that you work with. So what does managing a creator day-to-day look like for you? Yeah, well, I think it's interesting because I think we're trying to move away from even that term of management because I think that works for the old world of talent necessarily where, I mean, you've had managers through the years, you know, where you have more of a structure around you which is trying to get opportunities from third parties, right?

10:10Jordan Schwarzenberger: That's like the principal nature of management. You're speaking to a BBC or a Channel 4 and you're hosting a gig here or whatever it might be. But I think that's changing now. And actually, I would make a delineation between the talent and the media brand that they now have. Because every creator actually has two parts of their world. They have the quote unquote talent side, and then they have the media brand that they have if they have an audience of scale. So our focus is on the media brand. It's on the media business that hopefully that creator can now scale out independently. And it's working with them to obviously drive revenue at a much higher level because we can access bigger brand partnerships and bigger agencies.

10:43and we can leapfrog ideally that world of influencer marketing which is more on the talent side to go to the media buyers and those that are spending you know with the likes of a channel 4 or sky our vision is to take the creators we work with and we all see as that top table all the top one percent and what they do and to elevate them into being seen by the market as essentially the creative media class the top one percent who can be bought in the same way that you buy sky or you buy channel 4 or you buy tv that's never happened in the space before And it's a similar journey to what happened at Vice actually back in the day where I was in and also Labbible, two businesses that managed to get to huge scale by convincing the market, rightfully backing it up with substance and execution that the reach that they had on Vice's website and on their social channels and Labbible's Facebook page could be bought in a way that could be trusted and that could have scale to it in terms of budget, but also had delivery and a team of client service managers and insight, data, strategy, all those things, which creators, I mean, most creators just have a producer and an editor, right?

11:39They don't have any of that commercial infrastructure. So our goal is to help all the media brands that we're now building and working on to have that infrastructure, to access the much higher levels of budget and a more TV star, if you will, and TV scale. But then also to build new IP, whether that shows, consumer products, live events, all these things that I think have an amazing opportunity today, especially in the world of AI slop and content fatigue. How can we find new and exciting ways for fans to connect with creators and to help them to build these, you know, these creator media companies into real scale businesses like the Sidemen who, when we started with them, had one employee, now have 75 people, finance controllers, HR, you know, we've got six companies together.

12:17So how do you go from that to that? That's the aim. And how do we help the next sort of top 1 % tier, if you will, of creator to do the exact same thing? And I think the biggest job for you is what does it look like next? Because this is a world moving so fast. You know, let's take podcasting, for example. It was only 2019, we started recording this show with two microphones, zero cameras very little editing like the cost of entry was virtually zero and it allowed anyone to come in now look where we are sitting in a purpose studio 45 staff working across all the shows we produce here but it's to all intents and purposes this is like a TV studio from the last 10-15 years right so it's moved on I think one of the challenges as your world moves on is if I'm if I'm looking to invest in let's take Max Vosch as a good example right I would only invest in something where there isn't like a key man or key woman issue here.

13:12Like what are you more than just you? Because if it's just you and you don't want to work anymore or you can't work anymore, then where does my investment go? I think that's a really interesting place for you to investigate. And I'm sure you've thought about it.

13:25Jordan Schwarzenberger: Totally agree. And this is the big problem actually in creative media right now is how investable are individuals when their whole brand, Mr. Beast is a good example, 5 billion valuation tons of money flown in or drawn into the business but is anyone going to buy it with the risk that what happens if let's say he has an injury and I can talk to you about this as a sort of host in the content creator space if someone came and bought me and I was Mr. Beast and I spent hours and hours coming up with these amazing videos but it was my business my reward my company as soon as it's owned by a venture capitalist firm who are telling me to make more videos and work harder and longer is the love still there And if the love's not there, is the content good enough?

14:05Jordan Schwarzenberger: So you become a literal slave to the P &L and to hitting targets. And you're judged in a very different way when you have hundreds of millions of dollars against your business. And what if it's not growing at the same rate? Because growth as creators are not linear. Because this is all about love. It's all about love. And it's all about relationship with the audience and ritual. And those things aren't going to be the same forever. And to your point, platforms change. You might have times when your bigger numbers are at the top level better, but your revenue is lower and vice versa. You might have a community that's really strong over here, but actually that might be not translating into revenue but maybe a new platform comes up in a couple of years and it's always ebbing and flowing.

14:38Jordan Schwarzenberger: So I don't believe actually that the creators and the kind of creator entities are investable in the same way. I don't personally buy that thesis. What I think is, is the platform and the distribution that the creators hold for new IP, new creativity and new assets that can spin outside of them. Sidemen, Inside or Sides or any of the brands that live and breathe without them even being there. Singapore, good example, Sides, the restaurant opened up there. Had like thousands of people in the restaurant chain, fried chicken yeah yeah Sidemen have created called Sides called Sides they had a thousand people in the queue Sidemen weren't there right so there's a love and an energy around the brand there was no promise that they would be there in Singapore anyway they were very busy but there's a love and energy around that brand for example that means that it can spring up in these places without any involvement from the Sidemen and there's a depth of connection there and people love the food and they come back similarly with what Victor and the team are doing at Sidemen Productions now with Inside and all these shows like these shows have a life of their own in theory Inside could spin out for the next 20 years across various territories with Netflix.

15:34And that then has a longevity outside of them. So I think it has to be that they have the connection and that core, right? That's the media entity that is the centerpiece of it all. The YouTube channels are the centerpiece of that ritual. From there, you can build new IP and new formats and new touch points for the audience that can have a life outside of them. And that's where I think the investable value really sits. So we talk often on high performance about doing a pre-mortem. So post-mortem is once something's died, how did it die? A pre-mortem, what can kill us? is the answer for that question when it comes to the creator economy, this idea that it's all on one person or other risks that you see on the horizon where you're saying to your team at Arcade, keep your eye on that because that changes everything in a heartbeat.

16:15Jordan Schwarzenberger: It's a great question. I think a few things. One is the short-term transactional revenue from influencer marketing, I think will start to fade. I don't think that model works. I think it's broken substantially and it's a matter of time before it collapses. There's just a lot of people who are holding it up because there's a lot of money still flowing into it. Reason being, you've seen it since 2020, a shift from community led algorithms on social to personalization algorithms. So you've gone from being having feeds, which have allowed by one another being able to share content, and it guarantees a high degree of reach, they have a following and naturally that following should see that content doesn't happen anymore.

16:50The way that the graphs, the follower graphs, the algorithm graphs have changed on the platforms like Instagram, obviously, TikTok is the ultimate version of this is it's based on personalization around taste and around where you spend your time. If I watch something for a couple seconds, it will then say, well, you'll like this video or this video or this post and you won't follow any of them. So what that does is it kills the necessity for followers. You don't need followers anymore to see content. You don't even need to follow. I don't even need to follow you to see your content because if I watch a video, I'll get served it again and again and again.

17:16Yeah, because I'm forever getting DMs from people saying, I love that video. It moved me to tears or it was really helpful. And then they don't even follow me. And then I'm like, well, that's weird. Why would you? But they don't need to.

17:27Jordan Schwarzenberger: You don't need to. but then what does that do to the influencer marketing business? Because everyone goes, how many followers have they got before we do a deal with them? Or you are worth more because you have more followers but what if actually now the person with 10 ,000 followers can get more reach than the person with a million followers which can happen, that never used to be the case before you'd have a million followers, you'd probably reach a good proportion maybe 15 to 20 % you would expect a certain amount of likes and engagement you've probably found this through the years, you've been on the platforms for a long time that's totally shifted, you could probably put a post up and it maybe does nothing.

17:59It might get 100 likes versus back in the day, it would get 10 ,000. You might put another post up and it might get 10 ,000 likes instead of 100. It's so volatile and unpredictable because it's based around the content itself reaching an audience based on the interest of that video and the way it's delivered, retention, watch time and how it appeals to non-followers. So that totally kills that influencer marketing economy that's been based entirely on followers being the determinant of value. That's how the market is set. So what does it do? Well, it means that now brands are going, hang on a minute, this doesn't work anymore.

18:27The second thing, hashtag ad, regulated any effectiveness from advertising out of the business, as we know, people's filters are up. And it means that unless the content is so good that it can cut through, the numbers typically fail. If you look at meta, what do they want? They want people to put more money into paid. That is a constant challenge that we have as publishers or as creators, where you can see anything branded, you can see it struggles in the algorithm. That's also change has gotten worse as the time's gone on, because you compound that with the the follower curve problem that we just talked about.

18:57Those are two big things because what does that do? It means that ultimately that whole model is going to break down because there's a substantial problem. Brands can't reach the audiences they're paying for, so they're going to get frustrated. Now, what brands will then do is, I believe, become creators themselves because they'll look at this and go, hang on a minute. Why am I overpaying for rented reach that's not reaching the audience I'm paying for? Or even worse, why am I paying a publisher or a creator loads of money and they're just putting some of that budget into paid when I could just do that myself for a fraction of the cost, which is also what's happening.

19:25So you have big publishers who, you know, 90 % of their campaigns are now paid but they're charging organic rates. Organic meaning the views that they would just get from the audience that are earned or free. So you're going, hang on, if I'm a brand, why am I paying for someone to do a paid campaign on this content with 90 % of the reach coming from paid? That makes no sense. So it's a bit technical. So you're seeing this breakdown of some of these fundamentals which have governed the business for a while which is why I think the only real, truly reliable platform is YouTube because YouTube is a platform that has number one, a direct revenue system for creators to make money through AdSense from ads being sold around the content, but also to create integrations within the content and to have a relative guarantee that they will hit the audience that they are reliably serving if they are doing it with enough consistency over time.

20:11So that's a big thing. It's like, how do you build a ritual with an audience over enough time to create a sense of guarantee? Because for a brand, they need that. So the commercials in this space will be a mess until that's fixed. And that's a real recent problem that I see coming, which means creators have to be really ahead of it. And that's why I think try and build on YouTube and build with that consistency and the ritual that guarantees a certain level of performance with every video that you make. Is the short-term answer though that brands should be saying, what's your reach, not what's your follower number?

20:36Jordan Schwarzenberger: Yes, but the influencer business doesn't work like that because how do you then, if you have a creator who's worth, in theory, more because they have a million followers, but they have a lower reach, the whole business has to go towards average reach. That's very, very hard to quantify and to scale because that's always changing. So the whole thing's a mess because you go, okay, well, all of my research is based around creators having a certain amount of following and the following, yes, translating into reach, but it's all based on following still. That's the primary... Is there no way that just tells a brand, if this person puts up a post, this is the reach rather than these are their followers?

21:08You can see average views, but again, the influencer agencies that control this space, that's very hard to skip because again, that's always changing. And then you have creators going, I was getting paid this before, now I'm getting paid this. If you're a creator with 2000 followers and you're getting a much bigger reach. Are you worth more? Well, yes, but ultimately that then breaks some of those relationships and some of those, it's just a mess. So that whole industry for me is, and I was speaking to a CMO of a massive brand the other day, she was saying, yeah, all the hashtag ad stuff, like those transactions, it doesn't work for us.

21:33And it's just been a slide down like this. But they're one of the biggest spenders. That's the reality, right? But then you look at news reports, like Unilever putting 50 % of their budget into creators and you go, guys, like 10 years ago, fine, but like that's the wrong use of money. The use of money which would be most effective is taking that money and putting it into owned organic assets. So you're saying that brands are about to do what talent have done. Correct. So talent used to be employed. Yes. And then they created their own brands. Yeah. A big business that used to employ people will just create their own content.

22:04Great. Okay. We're going to take a quick break. Yes. We're going to come back and talk some more. Okay, so we're just taking this really quick break to introduce you a bit more to our partner today, Stripe. So Stripe is ready for wherever your business goes next. And as a business owner myself, I can confirm that that is the case because, you know, I first co-founded Whisper, which I guess is my first step in business way back in 2010. High Performance was a business that we created quite a few years later. 2019 was when we started recording. 2020 is when we started really running it like a proper business.

22:38And when you first start, you don't have board meetings, you don't have chairman, you don't have non-executive directors. you don't have groups of creative people, you don't have overheads and pressure. And sometimes, I think when you first start out in business, it can feel like everything's an opportunity and nothing is a problem. When you start getting going, you realize actually there are small areas where if you don't make sure that you fully commit to looking after those small things, they can cause real problems. So like looking after your cash flow and your overheads and getting your budgeting and your numbers right is the single most important thing.

23:14And it's important because you cannot predict what's coming. I think it's so important that you get your hands on a partner that can adapt alongside you. And both my businesses are totally different from the ones I founded. And this is where Stripe comes in because they help protect your business against evolving fraud. To Stripe Billing, which can support almost any business model that you've got, Stripe will give you the tools to keep growing wherever your business goes next. And I know from personal experience where your business goes is often not where you expect and that's why it's so important that you can constantly adapt and evolve stripe help you with that right that's the conversation with jordan well as we just heard jordan today's conversation um is brought to people by uh stripe who you work with and i think sometimes you can talk about what a business can do for you or what stripe can do for people but actually a real testament from you of how you've used it and what you've done.

24:10Is there one area that you'd like people to understand?

24:12Jordan Schwarzenberger: Yeah, so I think Stripe is genuinely one of the best tools in the space because it provides a dashboard and a financial system to enable you to get paid and to distribute your funds. But it collects it all in a way that is quick, easy, has very low fees. I'm genuinely a big Stripe fan. I've used it for, for example, my Substack community service. Substack actually links to Stripe and then when you get paid, it pulls it all into obviously the dashboard. It can do all your reporting, your taxes, everything within Stripe. and then you pay out into your bank account. So it's actually the payment processor I use for all of my digital products.

24:44Jordan Schwarzenberger: I've used it for a membership I had before for Think Like Your Creator, and now for community service, the Substack. And I've used it for other stuff as well. But it's just very easy, brilliant dashboard. The UX is great. But the main thing for me is how quickly you can pay out. You can get your money paid into it digitally and then out into your bank account within sometimes hours, which is amazing. So yeah, big fan of Stripe, genuinely. And I think it's kind of like the hidden engine room, if you will, of the creator economy, because so many creators I know are running digital products, running memberships, doing e-books, all those things.

25:12Jordan Schwarzenberger: And all of that is collected via Stripe. So yeah, love it. This actually takes us nicely onto the conversation about the sexy stuff on the surface and the important stuff underneath. And I actually thought that this would be a conversation for people that want to be in the creator economy as individuals. But actually, I think this is a really valuable conversation for brands about how they can become, and I never even thought about this, how they can be the next generation of creators in the creator economy. But I'd love to talk about your business and, you know, Stripe are there to support people, to build businesses, to grow businesses.

25:48Did you realize how hard building, growing, scaling and sustaining a business was going to be before you did it?

25:54Jordan Schwarzenberger: No, I think that businesses are ultimately people and they are, you know, situational and they are different for everybody, right? So there's no two businesses are the same. No two industries are the same. I think for us, in a way, we've been very fortunate because we're building in this incredibly exciting world where there's a lot of attention, a lot of demand, a lot of noise, right? Like you're the popular kids in the room in a way because ultimately you are where the ball's moving. And my personal belief is you always want to be where on a macro level. And again, it's hard to quantify, but you want to be where the ball is going always when you're starting a business.

26:23Jordan Schwarzenberger: You don't want to be in a receding industry or somewhere which is, you know, the ball's already left because I just think that's an uphill battle. And that's where building a business can be really, really difficult if you're trying to make it work in a world that, you know, it's kind of old, actually, and it's dying. And thankfully, our space is the opposite. We're fortunate as well, because we started at a time where it was it was relatively early. I mean, early in the sense that yes, the creative economy had been going for 15 years, whatever, it started to become more professionalized. But even the biggest, the Sidemen at the time had 10 million subscribers, you know, that was as big as it was, wasn't really much more than that.

26:56But they walked down any street and get absolutely mobbed. And I think because of the relationship that Sam, And my co-founder has had with them over the last 15 years as their business manager and their accountant. He's seen sort of under the surface, if you will, a lot of the energy, the noise, the potential that people outside just wouldn't have been able to see around the space. They look after his accountancy firm that he, you know, that he founded 300 creators, all of whom are the biggest in the space. So he's always seen actually the money and the opportunity and the flow of demand that was sort of a groundswell from fans first, that then became a groundswell from, as we experience now, from brands in the mainstream.

27:30but that's only starting that's been going under the surface for a very very long time um so i think look we building a business has been difficult in some ways but i wouldn't you know what i wouldn't even say it's been difficult i think it's been challenging at times of course but not hard in a sort of you know a downbeaten way and i think it could be in other industries i think we've had a really fun time we've had to be honest the best time it's been a lot of fun

27:50Jordan Schwarzenberger: we've done so many things the cyber have been the best partners ever um to work with over the last five and this is now year six and they've sort of proven that it can be done right that you can get from one to 75 full-time employees and have all these businesses and have a leadership team and be scaled and have board meetings and be established and do all these things. And that's ultimately them, right? Like that's their incredible audience in the scale. We've hopefully built some of the infrastructure that supported that, but it shows it can be done. Like it's been the dream job. So like in my mind, like it's been difficult and challenging at times.

28:20Yes, but that's all part of what it means to make a business. Like it'd be boring if it was all easy. And I don't think you'd be pushing enough if there wasn't friction because you wouldn't be really trying to move things forward so yeah thankfully we've hopefully played a little role in doing that and it feels like now going into RK 2.0 that we can do that for others as well um which is exciting so yeah it's been great I've loved every minute of it and has in some ways the sidemen sort of insulated you from a lot of the challenges that young businesses face because I know from building whisper but also from building high performance like you can have a successful business that is a profit making business and your cash flow is such a challenge that you have conversations with people in your team about whether you can pay bills next month for sure i think i think yes um but also the way

29:04Jordan Schwarzenberger: that we structured it right like we were ultimately a one client management company in our first version of arcade which didn't have any employees that were ours like we were building for their team and we were all in on them right because they didn't have an infrastructure they didn't have offices or a company really so the whole focus was how do we build their initial team and the initial structure and setup that then could become its own thing right so we didn't have overheads really is arcade so arcade is a company me sam and aaron stayed me sam and aaron until about a year and a half ago two years ago um up until that point it was right we are effectively helping the cyber to invest their money into team structure office all the things that sam as their accountant was doing anyway but now more formally and in a more leading role doing from a business management perspective so um in a way it was the dream business and it still is right because at that in that structure you can obviously be you know you're sort of orchestrating for creatives who are able to do the bit that they do really well, but taking off some of those business challenges.

30:01Now, where we've gone into V2 of Arcade is saying, okay, all well and good. 75 people full-time or 50 at that time, you know, doing very well. Everything's scaled, it's structured. But for that, for the Sidemen, for their group of businesses, and we share in the business we've created together. But that's theirs. Ultimately, we need to now focus on Arcade's business. And that means building something which has more intentional structure for us and that's ours and that can become an asset in its own right. So that's where we started hiring people. we brought in commercial director Joe Lamb who's now the managing director of all our commercial business chairman Pete Corey 17 years at Google to come in and be our chair and structured out a team and then that all coincided just prior to that with an investment from Lumina who are amazing partners run by Thomas Bensky who was the founder of Pulse Films one of the biggest production companies sort of startup production companies that did incredibly well back in the day they actually sold to Vice in 2020 I believe so he created a media investment vehicle and it was a real providential thing where it all kind of came together between Matt Ellick, who's now our CEO, who I used to work, he was the CEO at Vice when I was there as an 18 year old, Thomas, who he introduced me to, we all kind of came together.

31:03And then there was a moment that came when they said, look, we want to make a move in the space. We know you're not looking for investment necessarily, but would you be interested in partnering in some way? And we were sort of thinking about it. And I said, you know, actually, this all comes in line with our thinking around being more intentional for Arcade and building something. And so we said, yeah, let's talk about it. That then led to eight months of the investment taking place. And then that gave us more than anything, more than the cash, which supports, yes, a bit of a cushion for the growth.

31:28More than anything, it's having the intention of like, right, we've got board meetings, we've got structure, we've got governance, we are building a team now. And that team has, you know, a real sort of sense of rigor around it and discipline and all those things. It's more the mental, I think, with them, because they're not investors in a traditional sense, not VC, they're like a real strategic investment partner that been genuinely the most transformative thing for us. And that then set us on a journey of, okay, what is the strategy? How are we building this out? How are we now creating more of a template through the model we've made for the other top 1 % of creators?

31:55And that's now led until really a couple of weeks ago, when we announced the sort of relaunch of the business and the second stage. And Matt, who's our new CEO, who was the chief commercial officer at Lumina, came over to run it because he was so excited about it, which is also a nice sort of testament, if you will, for what we're doing. So yeah, now I think it's in this point where it's like, okay, we have the opportunity from all these years of building and learning all these different models and the scale and hopefully the success that the Sidemen have had, how can we help other creators to do the same?

32:21And it's all set up to do it now, which is great. And I think the message here for people is whether it's Blumen or investing in your business or whether it's you being on this show and talking about the important work that Stripe can do to support businesses, I think what's really important here is don't get distracted by the sexy content creation side and the numbers and the followers and the growth. Underneath all of that, the things that you're talking about that are so important, And, you know, creating a board for the sidemen was probably the most important thing that ever happened because it turned them from a bunch of people making content to a business.

32:53You going and hiring a chair to lead your business. You getting someone to come in and be the CEO so the co-founders are not the CEO of the business. All of these really intentional things, I think we don't talk often enough when we talk about building businesses. We talk about growth and turnover and profit and all the exciting stuff. But actually, it's the structure. It's discipline.

33:15Jordan Schwarzenberger: yes totally and it's also you know i think this is obviously what stripe does right that you need tools you need resources to help you to build your business because you can't do it on your own i think it's really important and now again thanks to stripe and other tools you have a slate of opportunities and products right that can help you um but also that comes with people too and you need to fill your gaps you might be brilliantly creative terrible at admin you might be great at admin but don't know how to strategize and think big so i think finding the right people the right tools, the right systems to support you is absolutely key.

33:44For me, very fortunate,

33:46Jordan Schwarzenberger: started the business with Sam and Aaron, who are both accountants, right? So like, that's my gap. I don't care about, I should, I don't care that much about the accountancy side. In comparison to the creative side, I'm much more around big vision strategy and all those things. But all of that means nothing if it's not backed up with great structure, rigor, discipline, and a great business course. You need both sides. You need a head and a heart, so to speak. And I think if you don't have that all yourself there are some people that can do both and they're brilliant unicorn characters who often go on to build incredible businesses I am definitely not that type of character I know what I'm good at I know what I'm bad at and I think that's really important both in terms of people but also in terms of the tools that you use to help you I would say if you don't have a heart in your business then your business doesn't grow if you don't have a head in your business then there is no business to grow facts 100 % I want to talk to as well about overwhelm because it's easy again to sit here and just be like i'm building a business i'm growing it you know i was hired by amazing businesses at a young age and i'm mates with the side men and we've taken investment but you also have five children under six you also have to go to work and you also have to lead in that space in a place where you will still be hugely ambitious for what the future looks like and i can feel that ambition like bubbling over when you talk so where's the space for jordan to look after himself in all this yes good question i mean i I think, look, I wouldn't say that I'm ambitious in a crude sense.

35:08Like it's not something for me around money or around scale or anything else.

35:13Jordan Schwarzenberger: I like being in a space that's growing and being a small part of that growth, whatever that is. That's kind of, I guess, been the thread of my career is trying to be where the ball's going and championing that future in one way, shape or form. So I think for me, it's a matter of being something that's exciting, knowing that we don't have any control over the outcomes really, right? You can just do the best you can do every day. Being very focused on right now and on the day and not looking ahead, not worrying about the future at all and trying to overcome that sense of anxiety that everyone obviously deals with, especially nowadays in a very busy, noisy world.

35:47Jordan Schwarzenberger: So I think it's trying to get over that and doing so in a way that allows you to focus but be content with what happens and saying, well, it is what it is, right? You can only do so much. And in terms of myself, I mean, look, yeah, five kids and my wife Millie, like that's the real job. I think what's great about that, I say this for a lot of people and when they ask, and I don't know, it does sometimes people are like, what are you talking about? But I found like kids actually has been the biggest productivity hack, not the life's about being productive, but the biggest productivity hack for business actually that I've ever experienced because you're forced to be efficient.

36:19Jordan Schwarzenberger: You're forced to say no to things that don't really matter. It kind of puts a laser focus on what matters and what doesn't. And also you have a, again, a sort of deeper reason to work and to do what you do every day, but you come home to something that's totally different and it means that work doesn't consume you in the same way that it once did because you've got something far more important right at home. So I think in that sense, it alleviates a lot of the weight that comes with business and that feeling of this is everything to me and this is my personality and my identity and all that's wrapped up in something as menial as YouTube.

36:46Jordan Schwarzenberger: I love YouTube, I love content, but it's ultimately, you know, it is what it is, right? It's entertainment. There's a lightness to that. And yes, you could say there's some value, of course, and importance to creators. Don't get me wrong, of course, I believe that. But at the same time, you know, it's not your whole life by any means. And it shouldn't be. And I think in business, it's incredibly important to not make work your identity and not get so wrapped up in it that it becomes you. Because any change that happens, any, you know, any loss, anything that goes against you, then becomes a personal hit.

37:14Jordan Schwarzenberger: And that then drastically shapes the way you run your business, but also the way you sleep at night. Because you don't sleep peacefully if, you know, you're waking up to something that feels like your own identity being challenged or criticized or humiliated publicly, as can happen in business too. You need to detach. I think that sense of detachment from yourself and your business is fundamental. And if you don't do that, it can be very dangerous, I think. And you see a lot of founders who, their ego, their pride, their being is wrapped up in what they do for work. And I think that's kind of sad, to be honest.

37:42Jordan Schwarzenberger: And you can see that people often then end up, when anything doesn't go their way, a lot of times in depression and despair, because it's an extension of them. And when you combine all of those things, and then I ask you as the final question, what is high performance? Is that like an easy or a difficult question for you to answer? Well, I think that high performance for me probably means something different. I think high performance is, am I growing in virtue? Am I living a sacramental Catholic life? Am I being charitable and virtuous? And am I growing in the love of God and the love of neighbor for the sake of God?

38:14Jordan Schwarzenberger: Like that's my whole life, right? So that is the end room for it all. High performance means doing that. It means staying away from vice, staying away from sin, staying away from evil inclinations and concupiscence and selfishness ultimately and being as loving and charitable as possible and doing my job every day, my vocation, which is primarily as a husband and father, not as an entrepreneur, although those two things are intrinsically linked, but also making sure those things are ordered properly. When everything's ordered, there's peace and you can get up and do this every day. That's very easy.

38:41I love the way you see the world.

38:43Jordan Schwarzenberger: Thanks, man. I've really enjoyed this conversation. As someone who has built businesses, as talking to someone who's also built businesses and building more businesses. I think the message is that neither of us came from families where like business was part of the conversation. You know, we haven't got entrepreneurial parents and millionaire mums and dads, right? We've gone and done it. And I tell people all the time, there's more opportunities now than ever before. And I think of the hundreds of people we've spoken to on this podcast, the optimism is the key for them going and trying these things.

39:15How important do you think optimism is for people if they're thinking of starting out in business?

39:21Jordan Schwarzenberger: I think optimism is absolutely everything. And I totally agree with you. I think that we are in a culture and in a climate which is difficult. It's hard to start a business. It's not easy, but it's so rewarding and it's so worth it. And I think now the benefit actually, even though yes, it's very difficult from whether it's tax or regulation, all these things, on the flip side, the entry is so much easier. More people can get in. You have more tools like Stripe to support you. It's a world actually now that allows anybody to start and make a success of whatever it is that they want to do in a world that definitely didn't exist 10, 15, 20 years ago.

39:54Jordan Schwarzenberger: So I'd say, yes, on one hand, it's harder. There are some roadblocks and some red tape that you have to get through. On the other hand, you can do it now in a way that you maybe couldn't do 20 years ago. So swings and roundabouts, I think it's the time just to get on and do it now. And as a creator, thinking like a creator is the big thing that I believe in. I think if everyone does that, whatever it is that they might want to do, you have an outsized opportunity to win today than you did before. Well, there you go. So look, I honestly can't thank Jordan enough for that amazing conversation. I sort of thought that I looked at modern media in a different way to how I used to because of all my work with high performance.

40:26But the way that Jordan sees it is like 10 steps further on from me. I mean, I don't know about you, but I feel that that was a real lesson for me. I learned so much in that conversation. And in so many ways, that's why I was delighted to bring you that chat. Thank you so much to Stripe for making it happen. Because Stripe are there for where your business is right now. They help you build a financial infrastructure. that helps forward-looking companies like mine and maybe like yours move even faster. And we're talking about businesses that are hours old to some of the world's largest and most complex organizations.

40:58Together, these companies are growing the GDP of the internet and accelerating new waves of progress. They should be celebrated, but they should also be supported. So whatever comes next for your business, Stripe is there, built to support it. Its tools can power virtually any business model, from program billing to rapidly scaling AI companies to fraud detection informed by Stripe's vast global network of transactions. It can also help businesses operate internationally from day one. So whether you're taking your first steps or managing growth across multiple markets, Stripe provides the infrastructure to help your business keep moving forward.

41:34Thanks for joining us. And just like Jordan, stay humble, curious, and empathetic. See you next time.

42:01Thank you so much for enjoying today's episode of High Performance. Just a reminder, you can also sign up for our ad-free service at Apple, Spotify, or on the High Performance website.