20VC: How a Angel City Makes $31M per Season | How Sports Teams Can and Should Be Better Businesses | Why Every Sports Team Will Look Like a Media Agency and Founding The Most Valuable Women's Sports Team with Alexis Ohanian

22:45Now, the way that multiplies is then, And if San Diego gets a great brand deal and it's this information gets pretty well shared within the league, like intentionally to say, it's weird, it's like a subtle flex, but it's also really helpful because then our revenue team goes to market and now knows, okay, well this market or this team that we think we're worth more than is getting this much money, so you have to pay us more. Like it's actually, you have to have a positive mindset and actually see that with a great, that just means. We want other teams to charge more because then we get to charge more.

23:15And so at the end of the day, and this is reported. So we, you know, I think last year the team did like 31 mil in revenue. And that's just in brand deals with a little bit of merch and everything else. Ooh, and port, port, port. 31 million in revenue from brand deals. Yeah, largely. Where does that 31 million come from? I'm just so blown away by that. The bulk of it's in brand deals, sponsorships, you never remember now. These things get renegotiated every few years. But there are lots of spots around the facility. This is actually a good lesson from esports where I was always enamored with like hundred thieves did such a good job building a brand around their players face clan also did to where people would watch them playing uno you have to always work backwards so why why best question ever why do people care people care because they fall in love with these players they want to see them all the time not just on the pitch but also just in their lives and what they're doing and so part of the job of a club is to then tell the story of our players every minute they're not on the pitch.

24:14Because one, that's some of those are brand -able opportunities, right? I can go to a sponsor and believe me, the difference going to Canline now, this is where every brand in the world comes to basically get drunk and then convince themselves where they're going to spend their money for the next year. And so I go in my capacity with Reddit for years and years and years trying to convince these brands, hey, please spend money on Reddit. This is the year like we're rebuilding, returning around. It was a must attend event to try to convince them now in the world of sports Those conversations are so much easier because there's nothing more brand safe for these advertisers than sports and specifically women sports It's been night and day and so we have these conversations now and we can say okay here.

24:55We have these athletes Let's put together a package where we're creating content around them talking about their routine training And maybe that's something we can co -sell to some brand that now becomes an advertiser for our team and now makes money for our athletes and it supports the bottom line as well. For male athletes, one, it's just much harder because men are less good at creating content. And part of that is biological, like men or women drive social media, content creation, content consumption. But also, female athletes have never been handed anything. I mean, tennis is the one exception where you can get paid tremendously well to be an athlete as a woman, maybe golf too.

25:35And so for all these other sports, you got to imagine when Alex Morgan was starting out, she decided I'm going to do this sport in spite of the fact that it'll be very, very, very hard for me to make a professional living out of it. And so there's so much more sophisticated about storytelling, about content creation. And so when you give them the opportunity, they are outperforming the men. It almost looks more like an agency model built in to the team, right? we think about things like how do we create facilities to make it easier for them to create content? How do we build this storytelling into the nature of what they do and how we do it?

26:07And it's the same way, it's the same we're building Athlos, it's the same way we're thinking through a lot of this. But yeah, it's brand dollars want to show up for women sports and four years ago, few people believed it. What age do you most want to capture fans? Ah, yes, the youth. The youth. 7, 8, 9, 10 as kids are really starting to form opinions about their favorite players and their favorite sports. That's when we want them to start dreaming of our players and either idolizing them putting their poster on the wall And it's starting now even Natalie has this great thing she said her son has a poster of messy and a poster of Alex Morgan on her wall I think we're entering an era now where it'll be just as easy for them to idolize male athletes as female athletes And I think that's a great thing and it's just starting to turn the corner here and it'll be a wild new generation With that idolization comes purchasing of merch You bet.

26:57Much is massive for you, for the team. Yeah. How much revenue is from much? It is still a fraction on the order of single digit millions, which is good, but relative to brand deals is still small. This is another fun one. NWCLE was kind of a mess back in 2019. It's getting more professionalized, and with that, you're getting more and more infrastructure created to support all the teams, which basically means the teams can be less sort of cowboy renegade. We have the exact same thing in Tigers, TGL, where we got to start doing exactly what we wanted the way we wanted. You can see all those thank you videos with merch, with partnerships with dope brands, but at some point the deal with fanatics happens and when that deal with fanatics happens, that merch now goes and lives at fanatics.

27:40And so it's double edged. It is good that we're professionalizing because you have great partners. That's more revenue for the league. That's more revenue for the teams. It's simplifying life for a lot of other team owners that don't want to handle that stuff. But then there's us. They're the folks who really want to lean in, get our hands dirty with those things, even something like merch. Because we have expertise. My first, I'll never forget, the first fight I had with Steve at Reddit was like six months in. And it was a blow -up fight because I desperately wanted to sell merch on the website.

28:15And Steve was like, absolutely not that stupid, no one's gonna want our merch. But I was a COC into the day I won. And I put up, I mean, this is before, it's just 2005. So it was like a janky like PayPal integration. I don't the Shopify didn't exist or I didn't know about it. And so I built this shitty thing, got it online, bought I don't know, a hundred, 200 shirts from a local printer, had them literally in my bedroom, sold out overnight. And you better believe and I packed every one of those envelopes. I wrote a thank you note, signed it myself, like a weird Santa Claus had two garbage bags, full of shirts that I brought to the post office.

28:48And I was so smug when I left the apartment that morning when I was like, we fucking sold out 200 shirts. But that was the first time I'd ever made merch and realized the power of someone willing to put their logo on Your on their torso like that is a huge I sincerely meant those thank you notes because it was insane That someone do that for our crappy little startup in an apartment in 05 so take that now today Where it is totally normal for sports fans to tattoo the logo on their body So merch is I think it is still and under invested in opportunity and And here's a cheat code for most of sports, and I almost feel guilty telling you, but I'm going to share with the world fun.

29:24All of sports has been told, by and large, through the male lens of sports media. Which has been great. I've loved it. Man hits ball, gets to second base. It's very, it's just the facts, right? It's what happened in the story. We are starting to realize how powerful it is to tell the story of sports through a female lens. Well, what do I mean by that? But even if you look at some of the docuseries that have made great traction of the last few years, you're like a driver's survive or now there's a great NFL one called quarterback and receiver, you're getting the humanity of these athletes and men, I love them too.

29:58But women especially love this part of the storytelling, right? I believe especially for drivers who drive the amount of American women that I love F1 is insane. It is nuts and the liberty media that has been the deal of the century. And it's been a brilliant execution around storytelling through a different lens. And again, it's, I think it is, it is first principles thinking around sports. Why do people love these athletes? Like, yes, it's because they hit the ball well. And because there's something about them as people that we connect with in this new world, you're going to see so many more.

30:31And it won't just be women sports because you do have to tell the stories around women sports differently. But it'll also be applied to male sports, like we see in drapes of five and elsewhere. And it is going to be a gold mine. It's the reason it's the owners not go on the talent though, which is that it is their responsibility to tell their story to open up to Show a side of themselves that they maybe hadn't needed to before to take the camera behind the scenes at training to that diet Most women athletes are already doing some version of this. This is yes at the end of the day You can't for you don't want to force anyone to do anything But you're already seeing women athletes predisposition to doing this male athletes right the first driver's survive was you couldn't get They had to go with whoever they could get because no one really wanted to do it and even that it was kind of like pulling teeth But then they saw the value women athletes are far more predisposed What's crazy?

31:16So I funded a reality show called the offseason which was 11 national team and professional women soccer players in a house For three weeks for an offseason in Miami. They trained together They party together. They live together cameras rolling the whole time. We how much did it cost to fund? Let's say four five million dollars. Did it make money? Well, it gets even better We got box to box, who obviously made drivers survive, and then 32 flavors, which is they make Vanderpump rules. But what no one understood in what Mids really had to engineer was that if you have professional athletes living in a house together, you don't need to manufacture drama as if it's housewives living in a house together.

31:56You can actually let the cameras roll, but make sure you still have their trust that they're being authentic. They're not going to get portrayed, like they're not going to make up drama, like you're actually just gonna be honest with your editing, which is a level of trust that's not usually there in the reality TV show world. And for the sports side, that they never really experienced. If you're in driver's survive, if you're doing a traditional sports stock, and someone doesn't like an interview, they just get up and they're like, okay, we're done. But if you're putting cameras in the house, you can't escape them.

32:24And so it was this very different format. We ended up actually going with X to stream it. And it's gonna, first episode is gonna drop towards end of the season, probably like October. but we launched the trailer tens of millions of views. And what's intriguing is as people saw it, then we started to get inbound. And now we're talking to some obvious, let's say basketball folks about this. Here is a format that again, it's telling the story of sports through this lens that for whatever reason has never been told before. I'm the kind of person who doesn't really enjoy reality TV shows, but if my wife is watching one, I'll sheepishly pay attention while I'm on my laptop.

33:01And by like episode three, I'm like all in. Why would you do it if you're a top 1 % if you are say a you can name anyone in top 1 % of any sport No, they probably don't need the money They probably don't need the extra exposure and it's like my offseason is my offseason I don't fucking reality TV show the sad state of women's sports is it's just not that even the top top top are still like They're doing well, but they're not doing anywhere near what a like a male footballer's making like when you're talking How much does it make up women's in a salary a couple million dollars a year? and then in taxes and then maybe a few million dollars in brand deals.

33:37But I mean, we're talking like, you know, a top male footballer's making what? $50, $60, $70 million a year. I'm a hundred and third. I mean, it's a whole nother, right? It's a whole nother stratosphere. And also because again, the cameras are rolling. The drama's not like, oh, who some petty thing. It's the tension between a player in the house who's now making a record high salary and a player who's a veteran who's been around the league for 10 years and entered, who has a Stanford engineering degree. and is making much less. I love your business media center in mindset, and I think it's what traditional sports owners lack and miss really as every club becomes a content house.

34:13But what I worry about is two things here, culture. It could cause risks in the team with superstar cultures being created and not everyone rises at the same time or speed and performance on the pitch. What a lot would say is the only thing that matters. How do you think about those two and is it detrimental doing all the media activity for those two? When it comes to teams specifically, there's always going to be that gap between the star player and the role player at the end of the bench, but teams find a way to navigate it. I do think in this new era, you're actually going to find more opportunities for those role players because you're going to see, you're going to see folks who have fans that don't just have fans for their work on the court or on the pitch or on the track.

34:55they have fans because they're just beloved and I'm not an F1 expert but I feel like Danny Riccardo punches way above his weight because he has such a strong fan base now thanks to that show. And I think there's a version of that that then extends to other teams and these are things for coaches to handle but it's not the worst thing in the world for them to have. Okay, so we have like say five million year in March we've got 31 million year responses which is amazing. The challenges there there's also this tension you know you have have 22 ,000 capacity stadium. Which is, we average 20, oh yeah, thank you.

35:28We average about 20 ,000 attendees. So sell out about half the games. Ticket prices. There's always this tension. We have something that's still pretty accessible to fans. And one of the things I remember hearing from the very start were plenty of fans saying, please do your best to keep this being something accessible for us, because as you get more valuable ticket prices or naturally a thing that goes up, because it also lets us play players more, et cetera. But it's something that we haven't had yet. I also think the big trend is going in the other direction. Stadium is a new buildouts are getting smaller, and that tracks, even though we're craving more and more this...

36:06Why are they getting smaller? Because the rest of the year, you have to fill a 90 ,000 person arena, and there's not that many Taylor Swift shows that can fill it. So like if you have, let's say I can pick it up. And it's more about the most interesting thing we see doing the show. It's like experiential side of events is the monetization gold mine that everyone wants to do which is like we're going to be there before we want you that after drinking, having food, and you can have more room for that and great events if you don't have all the seating capacity. Exactly. And then you also get a chance to create different types of experiences for fans.

36:44So I am very long in this age of AI on sports obviously because that's the one pillar of entertainment that is not going to be upended. Like, we will never want to see robots playing football. We'll see it because of a human, right? The emotions that come from seeing humans be great is unique and it actually becomes more interesting in a world where every screen is giving us AI filtered perfection all the time. So we've got, say, I'm making up numbers here, but like say 40 million all in Raffanese from all the above. No, no, sorry. Okay. The top line is 31 for the whole team. The vast majority of it is brand deals.

37:16So total 31 and then deduct a few million from merch and tickets annual annuals 31. How much is cost? It varies from the actual team standpoint that salary kept What was the salary cap? I think for the league right now. It's three or four. It should be a lot more three to four That's a creatures for how many yeah? 22 2 .75 per team. There's a contender. There's gonna be players who are on a hundred thousand those here. Yeah, dude But in LA is that the salary when I came into the league the median salary was like 40 maybe 30 thousand dollars Can you sorry? I'm absolutely I do not mean to be a VC out of touch with society But on 30 thousand dollars here.

37:56Can you even live in LA as a primary job? Even at let's say a hundred yes You can but it's hard and the way it gets supplemented is usually women athletes end up doing a lot of brand deals This is part of the reason they're so formidable on social is they're doing their own brand deals on the side that helps supplement. Unbelievable. The tension we have right now is, so - So 2 .7 million for the whole team. Yeah, again, it was 1 .3 a year ago. So we've been pushing it up, not every owner necessarily wants it to go up, but all of the new generation we obviously do because we need, we know this helps as a rising tide.

38:31This is another issue, like the same opportunity that I saw in How Under invested in women's soccer was in 19 is what I saw on women's track and in track broadly last year. The top prize for the diamond league was $30 ,000 like the championship and that's a solo sport So you have to pay everything out of pocket the team pays for things right if you're a team athlete How can you expect to be a professional athlete if the very biggest prize you could win all year is 30 grand Like you can't and so that's why I came out the gate and said okay We're gonna have a record breaking purse like $60 ,000 is the top prize for our event It's a one -day event and we're redefining this sport simply because there's missed opportunity here.

39:11We know if the incentives are aligned and you can do what's right by athletes, you're gonna compound in big, big ways. You can find a way to make a lot of money. Why won't get into a conversation today? Why is that 60 ,000 such smart marketing? Go back to the ripple effects. Breaking City? Yeah, exactly. It's like every once from that. Yeah, that lights up Haney and doubles, puss. Fuck, that's a great article. You know what it came from was simply talking to all of these athletes and to their credit, like they responded to my DMs. I probably a year ago started reaching out and just saying, am really interested about learning more about track.

39:45Do you think Salary Cap's a good? Well, it's okay. So track doesn't have this. There's no sort of collective bargaining because it's a bunch of independent players. Football, most team sports have a version of this. It goes completely against Adam Smith's invisible hand. I know. But here's the steelman argument for a Salary Cap is smaller clubs in smaller markets have a better chance of competing. So it's not just the New York teams, the LA teams, et cetera. So I think on the one hand, you want a league to have, and this is what I think keeps commissioners up at night. You want to have a league where anyone can win or no.

40:18You want to have a league where you where enough fans believe anyone can win, and you still have epic, epic dynasty type teams. Because, and this is that tension, right? You want the league to grow overall. You know the way someone says, hey, dude, come to this match with me, is not, hey dude, come to this match with me. You never know who's gonna win. It's, hey dude, come to this match with me. We're gonna go see blah and they are awesome. They are so good. And that's how you get your friend to come with you to the match. That's how you grow the game. And so you have to be willing to tolerate a certain amount of disparity.

40:54And at the same time, still give fans. Again, I was one of these fans in Washington. I may never see the Washington commanders win a Super Bowl again. They won a Super Bowl in 1991 when I was eight years old and I thought this is great. I'm gonna be able to go see them in Super Bowls for all time. Then Dance Nighter bought the team and I resigned myself to the fact that, I mean, there's a new owner now and I - How much did he buy the team for? Ooh, maybe 500 million. And how much did he sell at four? Six billion. Yeah. And again, one of the worst owners of all time. What's crazy about that is I still want to watch.

41:27I stopped watching. It went my daughter was born because I didn't want to indoctrinate her with that. I was like, it's a blank slate. like I don't want to give her that burden. Like if there was a coffee company that had a CEO that was that bad, I would switch coffees, right? I can't bring myself to switch teams because that feels blasphemous, but I'll stop supporting them. So anyway, I got back, I'm a supporter now, but I've also resigned myself to the fact that I, I don't know, I could never see them in a Super Bowl, but I still want to watch, because there's always a chance. And so that's the tension that everyone needs to create.

41:54And I think I don't know if salary caps are the best way to do it. I would love to see a better one, but that's the kind of brute force solution. What are the other massive cost basis then? I'm just looking at this as a business person. Over, I mean it's humans. It's overhead on the team side. Now that's... Gosh, that's 31 million. We've got 2 .7 million out of players. Another 2 million for personal. No, that's that's, and well that's that's also one of the big, so I told you I wasn't charged with the board. One of the tricky parts here was trying to draw a line around what does building a modern sports team look like.

42:27And I come from a world of software. Somebody that things that we do are done better cheaper fast -reasing software. We built things into our teams, like even the merchandising around that thank you video app. Like there are so many easy ways to level up using software and most sports teams are devoid of it. When we started the TGL team LA Golf Club, I had learned a lot of lessons and I realized, okay, one, I'm going to make sure I own and control this thing. And two, we're going to build this with all of the effectiveness and software that any tech startup would have. And so we can do so much more with so many fewer people that now I've seen the Matrix and I'm like, there's no going back.

43:06And so again, I've learned with every one of these, the challenge with sports, it's a gift and a curse. Because of the industry, people get very seduced by sports. You walk into, even on the best day, walking to the Reddit office, you're like, yeah, cool, Reddit. But you walk into an arena with 22 ,000 people. It's nothing else. It's a drug, right? And unfortunately, that drug can bring out the best in people, but also the worst. And so I think the most offended, and as I've got to know more and more owners, the most effective operators in sports have an immunity to that drug. And it's this drug of like, it's sort of like fame proximity.

43:45It's a, I watch people get really loopy in front of my wife. And it's just so, it's very amusing to me and very entertaining and endearing. But it's like, how do they get loopy with sports about salaries, deductions, browns, everything? Something that you would not tolerate, this is also what manifested in so many of those teams that have been owned just as like a vanity project for generations. If you're not relentless every day as an athlete, trying to improve yourself, trying to get better, you're gonna be left behind. The teams around and that are supporting these athletes need to have that same mindset and need to be able to have a culture that supports it, a culture that lives its values, and it's like any other type of business.

44:26Can I ask the question then of like the sale, like acquisition, that have reported $250 million? So that was an investment, but yes. So we were basically a year and a half ago, I came to the conclusion, the best outcome was, we find someone who can come in, who can be the source of capital and control, and would also be able to get board control. And so we mutually agreed, listen, let's find someone who can come in, give them both of those things. I'll give up control of the team and no longer be the source of capital. They'll give up control of the board and finally align these two things that should have never been out of alignment in the first place.

45:05And it was great. We couldn't be happier than having Bob Eiger and Will Obey and making this investment they did at this stage and this valuation is exciting. Also, someone who understands storytelling better than anyone. Definitely. So then you sold out yours in secondary? No. Why does the selling meme come from? Did you read this? The selling? Yeah. All the headlines were around here, so the acquisition. That's so funny. Yeah, that's not true. So it didn't sell anything. It didn't sell anything? No. Always a holder? Forever. I mean, the reason I saw this opportunity in 2019, who I thought we could build a billion dollar franchise.

45:45So talk to me after that. What is the number we do pre -mortems for investment members? What's the number one reason why this would not be a billion dollar company from here? Oh, that's funny. So we call it a steel man. What's the reason why this company won't be successful? Yeah. Assuming everyone kind of does the right thing. Maybe the biggest threat would be a meta threat about the NWSL and other leagues. Could Europe get its act together and have competitive league with the NWSL. There are some great teams here obviously in England, but that leagues catching up, but it's still not at the level of the NWSL.

46:18How do you think about the private equitization of sport? We've seen private actually coming and buying teams on mass, and now we've seen CBC and other large providers come and invest in leagues, but investing large parts in everything from the UBLICES and rugby, but also La Liga. I think it's a good thing to have more dollars and more sophisticated managers involved. There is this tension of what are their incentives long term. Always going to be some balance, but there's only so many billionaires and as some of these teams and leagues become more than worth so much money, I think you have to have private money come and do it.

46:57Is there an awesome top to team value? You know, we've seen teams doing value to 8, 10 billion in some cases. Yeah, what's an awesome top? Like a ceiling. Oh. Are we in a bubble for sports team enterprise value? Some teams, sure. There are definitely some leagues that I think are overpriced. I'd say the MLS is one. That's overpriced. The messy effect has been phenomenal. What they've built there is like real. Do you think that is sustaining? Can the whole league sustain? No. I think it's very hard to justify in a world where the best footballers don't consider the MLS even what a top two league.

47:33Top three, yeah, so exactly. See the face you're making. Top three, top six. So, okay, so all of the European leagues are superior to it. 100%. Okay, so that like, that tells you can that change in the next 10 years? I don't think so. And unless that changes, you're not gonna get the values to really match up. That's why I think the NWSO will be bigger than the MLS in 10 years. Because we can tell a story of excellence in women's football in America using the NWSO, but not the MLS. But do I think it's the ceiling? No, I still look at most of these teams and I think of them as traditional organizations.

48:09In the same way that I think venture capital should be run like a tech company I think sports teams should have they should be building software They should be software companies when you see under the hood I give you a specific example in sports were in the media rights business at at the core, right? That's the traditional business model, but it also plays out in modern ways So, score play, another investment, they have thrived now because they're taking all these assets to come in, live game footage, photos from the sidelines, etc. using AI and able to generate reports, social content, all this stuff so much faster more efficiently.

48:42So instead of having multiple humans go through a bunch of photos to find the one photo of a particular star in victory pose with the brand's logo 99 % visible, it happens instantly. And these seem like really small things, but when you realize how many human beings are doing this work just to put a deck together for a brand that they deliver after a match, you're shocked. You're like, how is this 2024? But that assumes a high level of customer education within the current sports, ownership and management teams. Yeah. And I think the thing that has astounded me is the lack of education, technological awareness.

49:17Everyone's fan engagement, but has no freaking clue what fan engagement actually is. that they do not have any clue. But I'm so shocked by how poorly sports teams have managed. Yeah, well, look, you said it. So I agree. I also know nothing speaks louder than revenue and success. And what I've found, I mean, I'm speaking at Arctosis, I don't know if I'm allowed to say that, whatever. I'm speaking at Arctosis event next week to 50 team presidents and owners from that whole Arctosis investment group, right? And these are all the owners, all the presidents of all the teams who are, I think, doing some of the best work.

49:57And the fact that they even want to hear from me, it's going to be a full tear down on the ways we're using technology between Agile City, L .A. Golf Club and Athlos. Like, that to me is a good sign that someone like me is invited there to basically talk about how I'm building and how we're building. Give it five more years and folks will level up quickly because you'll see all you need is one example in a league. One team to be doing it really well and everyone will fast follow. But it takes so much to get that one. It's just then the dominance fall quickly. But there is a ton of friction because it's the way we've always done stuff.

50:30It's multi -year contracts that the league made that you can't get out of. It's all the inertia. To what extent do you think enterprise value and sports teams will follow the same distributions as they normally do of 80 -20, 80 % of the value of a cruise to 20 % of the players? Oh really? He was very interesting. Like will that be a few NWSL teams that are very, very valuable and very famous? Oh, yes, yeah, power law. I think it will be a power law, but even in the big four in America, I think you'll see a power law where maybe it's 90, 10 even, where so much of the value is going to vary a few of the teams because we know that's what the software does.

51:05And right now, if it's 80, 20, devoid of software, simply because the Warriors know how to run a good basketball team. When you layer in technology, it shifts. Now obviously everyone can have access to that, but I do think there's a first mover. I think there's, it's little stuff. This is, it's going to sound so silly, but like the Clippers installing USB ports at every seat of there. So there's a brand new. So the Clippers have always been the second rate team in LA. Sorry, Clippers fans. Cause of the Lakers, the more team. Balmer, obviously very successful, invested a ton in this team and they've built a brand new arena.

51:39And one of the things that went viral recently was they showed off the USB C charging ports at every seat. It's such a dumb, I want to hit like technologically, this is moot, this is so stupid, anyone could have done this, but making sure everyone can charge their phone means making sure everyone can be on their phone posting content. Now, if they can just be, I don't know how good the Wi -Fi is going to be in stadium, but I would make damn sure, like throw star links on every roof, every section of the roof, like make sure people have fully charged phones and make sure they've got great internet because that is a huge army of people who should be broadcasting as much of this thing as possible to their fans.

52:18And it's stupid little things like that that show me that things are starting to change because they're realizing this is important. I went to Taylor Swift with my brother at Wembley because of I don't know, no phone signal worked. No. No, no, no. This often happens in the UK. I don't know if you have it in the US. It's like stadiums have this blanket against any mobile data. And so you won't have any post on it. Let's see, it is the biggest problem. And I get, but see this, and this is... And then it says like, EE, which is a mobile phone carrier, a bandit everywhere. And I'm like, you're literally saying, we're the reason why you have no signal.

52:54That's tough. And I bet there's some legacy television rule law thing, maybe that they don't want to compete with, I assume. They don't want people pretending with the Broadcabee official broadcast. That is such a perfect example of, this will be a brick wall. This is why so few historically so few tech companies have tried to get into sports and do sports tech and it's finally starting to crack through Just because I mean there's a lot of this tech should have happened a decade ago 15 years ago Right none of the best entrepreneurs we all I certainly talk them out of doing it Because I was like you're never gonna be able to sell your way in these are not early adopters They have all that like they're they're picking software for the wrong reasons not because it's like the best product stuff like this is protecting traditional, you know, revenue streams.

53:37But at some point, the new revenue stream becomes so big and unmissable that the thing falls over. Probably on the order the next five to 10 years, it's time to see them just. Don't we think about the attention economy in sports as content creation houses and taking up more and more consumer mindsets in time? The question I ask then is, what foods out of the attention economy is it reality TV, is it documentaries, is it movies, or slips? Let's go back to that Peretto 80 -20 action. I think 80 % of movie television, that kind of scripted, created, even non -scripted, that sort of entertainment slips.

54:15Especially Imagine AI is going to trivialize, or it's going to expedite so much in the way of production and concentration. You're still going to go to Taylor Swift because it's a religious experience. I know I'm taking my daughter this year. I went with my brother. We went massive Taylor Swift fans. We came out. I bet. Oh my god. My boat 50 quid T -shirts. I'm listening every day. That is a religious experience. But imagine maybe even 90 % of music that's created is so either derivative or pop or one hit wonder. Like it's just that that's the stuff that's going to be the biggest loser. And whatever that version of like television entertainment content, also the biggest loser, the stakes will be so much higher.

54:55Basically, we'll be able to have this every screen is going to be so good at delivering us what we want, when we want it, how we want it, it's this sort of like opiate. I think a lot of it's gonna be user generated, pretty low friction, just dumb, easy to consume stuff. And so what breaks through has to be impactful. It really has to be exceptional. And then you have sports, which can even be, the match doesn't have to be exceptional, but the fact that it's your favorite team, competing with so -and -so, like that's gonna make it stand out, that's why I'm so bullish on it. But I really feel for a lot of the really meaty, You don't want to be mediocre in this world on the content side.

55:31There needs to be a powerful why. Why am I going to pay attention to you for a few minutes? My team will laugh at this, but I'm not easy to work with, but I always say like this was never meant to be fun. And if you wanted fun, and we have very high expectations, I will push you to do the best luck of your career and you learn a lot, but do not expect an easy fucking right. Yeah. That's real. I want one more question for you to quit. Fine. It's just you invested in Mr. to be kind of aligned in terms of media and that generation of us came. And you first outside of Master and Mr. Beast Feastables.

56:02Yes, pre -launch. And I just, So it just told me how did that come about? You know, I'd been chasing Jimmy for a while. So I seeded Patreon in 14. And over the years, this Patreon started growing and defining this idea of membership in the creator economy. I'd introduced them to folks, creators all the time. And they always said the one that they really want to get is Jimmy. And the thing that I learned was for Mr. Beast, it was never even on the table. Simply because one, he was so relentless, he focused on just creating these great videos. And two, he was already tracking so well that he didn't want any outsider to own the thing.

56:42He wanted to just have it all be under this empire. And he didn't quite know how he was going to do it. But then as soon as this idea popped up, I was like literally, I don't need to know anything about what this business is. As long as you're making something and you believe in it, it's going to do well. And there were definitely some false starts and learned a lot making candy bars. But seeing the growth has been phenomenal. I don't know if I'm gonna lie. Some of this stuff's probably, he's probably talked a little bit, but it has prime and feastables, or the two examples that's Logan Paul, his drink.

57:12Those are the two examples of what I think is, it's unprecedented in terms of, we're now seeing what Apex creators, like the Apex predators of the creator economy, are able to do to move product. So you invest in the Feastables company. It's a separate company. Yeah, now it's beef. Can I be blunt? How much do you put in at what price? About 10 % at 40 mil. At a 40 mil price. Yeah, it's pre -launch. And at the time, I mean, it's funny. It's one of those things where you put it in the beef. That sounds actually really well priced. If you look at his audience base, you're gonna be guaranteed at least 20 mil on the first year revenues.

57:47Remember this was 20 20. Yeah, it was just 2020. So it was also a Zerpy time and so I was thrilled. I was like, oh my God, 40 mil like in this pre -launch pre -everything, but I was like, this is a no -brainer and plenty of other firms tried to win that deal too But it was a funny one in the LP updates because we definitely had a few LPs that were like really like a chocolate CPG like a chocolate company like how is this venture backable? And I was like listen guys like this is why you pay me to do this job. Just trust me I think the, you know, yes, you're pointing out an accurate thing. If you just look at his subscriber base, but also their intent, like if he truly co -signs a thing, which is I was like, look, as long as Jimmy's happy, as long as you're making something you truly stand behind, I'm long on it all day.

58:34Even if it's a fucking commodity, you can break through with something that is solved in terms of making it. Liquid death. I mean, fantastic example. Poff of the cat, I was going to be branding. Yes. And I'm sure there were plenty of LPs that reached out early in the phone. Yeah, it is a case study. And what Jimmy's realized is, and now having also invested in the hold co, this is, I have told them, I'm like, you drive internet culture. In a way that's similar, reminds me of Reddit, except you actually create the culture, and you actually have influence over your audience. Like, you can actually tell your audience, hey, here's the thing I'm making, and they go buy it.

59:15We can't do that in Reddit. You actually have a thing that's incredibly brand safe that brands desperately want to be aligned with. We can't really do that. What did he do well with Feastables that he didn't do well with the Buggy Company? Oh, he actually controlled it. There's layers to that one too, but that Feastables was a direct result of the Burger Company and the learnings from that. And here's the good news, he's a smart dude, but he's also been very, very quick to iterate and learn from wins and losses. And so Feastables was a great lesson, but even now, I mean, he launched a basically YouTube stats software.

59:52It's a SaaS business. And he took all of his learnings from building his channel and productized it and basically said, okay, there are all these shitty tools that they sell to YouTubers to like improve blah, blah, blah, but who is gonna be the best at it, but Jimmy? It's crazy how much YouTube leans on him for insights. Oh yes, this is to compete with vidIQ. Yeah, it's Feastats, okay, good job Alexis. Fee's Dats. And what's wild is, now I've got him on the drug, he's got a taste for a high margin software business. And now it's like, Jimmy, you don't have to worry about cocoa bean prices. You can just make this thing and it keeps growing and people keep loving it and it keeps growing.

1:00:27And this is a business, I mean, it's going to have revenue competitive with Reddit's revenue before our IPO in the not too distant future. The old co. No, no, sorry, the old co, beast industries. And when you start talking about what level is that? I mean, that's public. So for a day, a day, a day, a day, a hundred million last year. Is Mr. Beast worth five billion? For sure. What do you think it's worth? At least that. I mean, even on a fairly conservative around a multiple, yeah. What is the biggest opportunity that Mr. Beast could do that he hasn't done? You know, he has a deal that was a record setting deal with Amazon Prime Video for a show that he's doing.

1:01:03And that's public. He's getting a great payday for producing a show on Prime Video, which is basically gonna be a version of he's doing such high production qualities, investing millions and millions into the show, he's putting on YouTube. Oh my God. When Amazon Prime Video sees the traffic that he will drive to Prime Video, you better believe the next deal is not going to be the same as the first because we're still all under valuing the power of distribution from someone like him until you see those numbers and you're like, oh holy shit. It is a different math. If Prime Video, I love the boys.

1:01:37Great show, right? You have this original content you're producing. It is very costly. It's wonderful. I'm not saying stop it. Please don't stop it But when you can hand money to a guy like mr. Beast and Produce something that's not only gonna get tremendous engagement, but bring in new subscribers That's what they want they want new that's the gold. I say what new user new subscriber acquisition So the why behind Jimmy is the same why behind sports now And this is the downside is for fans. We're gonna have to hunt more places to watch our matches over the next 10 years But it means for new creators so like trying to create a new track event like Athlos I have a very receptive audience of folks who want to get new people who have to see mushy Programming and sports live events is is so useful for that How is feastables a billion dollar business and is that a try to sell to let malls?

1:02:28Look at its rate of growth. Hershey's I know But Europeans are going to be appalled by the state of American chocolate. Although we are now, I think Facebook is now in the UK. Do you like it? Absolutely. Love it. You do. The newest version, I'm trying to see too much of it. Did you try the new one? I'm going to be totally honest. I think you Americans just don't understand you. Oh, okay. Well, if you ever tried Ladder Act with my friend, go to Switzerland. No. I'll send you and Jimmy some Ladder Act. Okay, but you can compare European chocolate to American chocolate. But Hershey, look at how much money Hershey's makes.

1:03:00that is the apex predator of American chocolate, right? We have a very different taste in America. It's lower quality for short compared to European. But in fact, you want like a $1 Wal -Mart cap or like a lower peonet cap. I don't want a lower peonet cap, please. Much nicer. The lower peonet is a brand. Yeah. The one that's the David Sax one that everyone makes fun of. I'm not sure, but it's a very nice round. I think I want to, I can talk to you all day. I want to do a quick fire. Sure. Okay, what has been the single best investment you've ever made? It was the token self -worthiness. So the pretty much the same.

1:03:34How much did you make? 17 .1 million How much did you get it today's prices? Two ten thousand dollars. No, yeah, you put in ten thousand dollars and it went to 17 points But so that's been the biggest one. What's the second? I can't shit from I don't know what I can scroll over Wow, what's the start up in second one? I was 10 grand in goat. So I put 10 grand, it was called grub with us back then, 2011. And so that 10 grand is worth $7 .4 million. Wow. But you know what I'm telling you, the good sell? I definitely sold some Ethereum. I actually, the bigger mistake was I had a bunch of Bitcoin that I sold to pay for.

1:04:20I mean, it wasn't that bad. I sold it for like, you know, a wedding and an engagement ring and all that stuff. So it was a good investment. The goat one, that one we actually warehouseed into initialize. That's actually a part of fund one, but that'll go at some point. What did you not sell that you wish you had sold? For example. Oh, Zenefits, we could have returned the fund once over whenever the fidelity markdown was, like literally putting an SPV together to sell Zenefits and then the fidelity markdown happened and it killed the SPV. Oh. That was one. That was the one that hurt the most. So, so this is what I wish I had sold.

1:04:56Oh, Clubhouse. That's when I should have sold. I had the series A and I remember when that multi -billion dollar round came up, I actually put more money in because I'm an idiot. Oh, but no, no, you're not an idiot because at the time it was like the unbundling of audio and the future Facebook video. Did I remember when I was like in a genuine playful, are we going to see the unbundling of Clubhouse into like sports radio? Yeah, totally. I remember that completely. What is your biggest last and all observation from seeing Serena in terms of the training, the dedication, the consistency? The weirdest dynamic that we have is I genuinely love every bit of what I do.

1:05:35My worst days, I really, like, like we were saying before that I know how like I am to do something I love this much all the time. I could do it all the time. I literally could and I love my family, but I could do this all the time. She did not love the process all the time. And she'd be the first to admit, like I am doing this thing because I want to win. I do it for the trophy. I do it for the outcome. And obviously, but being a professional athlete at that level is much harder than the work that we do. So I get that, like, it's just harder work as well. But the fact that she put in that commitment so consistently since she was a kid is awe -inspiring.

1:06:14And so then it just makes me even more motivated, even more incentivized, but it is a weird dynamic. And I think she's been pretty outspoken about this. Like this is, this was not something that she, it was, it was a labor of love, but not in the way that we think about it. It was, it was a love for the outcome. And you just knew the process was the thing you just had to do. And it was the only way to get to that outcome, but you didn't like whistle on your way to work type of thing. And there are some days where I'm, I'm not whistling, but I'm like rocking out on the way to work because I'm like fired up.

1:06:42I'm excited. But again, we have much easier jobs. And we don't have to do it in front of millions and millions and millions of people live. What tech company, penultimate one, what tech company, we mentioned earlier, the big deal, what tech company is not in sports branding, it should be. The two big industries are beauty and fashion, which spend a ton of money on brand marketing, but don't spend it on sports yet, because men don't really drive that value. So then my mind goes to like what big tech companies. we actually spend also Christmas time Valentine's Day, but there's presents. We didn't know my sense to have Sephora.

1:07:18Blokes are pretty basic, all set. Like if they see Sephora and Shurs, my wife likes jewelry. Sephora. Yeah. This will change massively and you can already see it coming out of the WNBA has always done a good job, but now people are really paying attention to like the fits, the walk -ups, the clothing that they're wearing. It will seem crazy that for years we watched what LeBron was wearing going into an NBA but no one was paying attention. No one was broadcasting what the women were wearing. If we were describing to an alien, this idea of fashion, the importance of storytelling fashion and we have six foot plus athletic women walking in very fashionable clothing, we could be talking about a runway at Paris Fashion Week or we could be talking about the WNBA.

1:08:04Like it will seem preposterous that we cared what a guy was wearing on a walk up to a match. But Glossier started investing skims has a big part of the MBA like they're smart They're moving and and for pure tech any one that's trying to reach I mean coin bases made some smart investments Around the NBA because they know this is a way to tap into the culture especially youth culture So any brand that wants to get there in Texas. I think fucking nailed it Expansify being on f1 cars the exposure that they get from that f1 car deal and a good implication of speed is unbelievable. Yeah. On anything but F1 Browning, it's for hours.

1:08:40You see the hell, but you see the F -F -F -F -F -F -F -F -F -F. You're going in that over an advert. That's a good one. Unbelievable. That's a very good one. Final one for you, my friend. What you do, tons of shows, you're always on panels. What question you never asked that you should be asked. I've been running lately from interviews and stuff, but I was in London and I was like, I got to see Harry. But I don't know. All the questions you asked me are the ones that I wish I had I got one which I think is great, which is like what skill you slightly almost a little bit of shame Dove that's also contributed to your success.

1:09:13I was gonna say relentless for better for worse when it comes to Things that I believe are right when it comes to things that I think aren't good enough when it comes to just doing the things And I think I have a lot of trouble when I'm getting better at it But like I have a lot of trouble interfacing with folks who aren't oriented similarly like I always had a strong sense of mortality I feel like even as a kid, I had no lives remaining because it was like a video game thing. And I noticed, I had it on my wall, and I noticed it was, that was when I played the best in a video game, because I didn't have any more lives left.

1:09:46And you always played best when it said no lives, remaining or zero lives remaining. And then for whatever reason I had that on the wall, it was a little weird golf kid. But then my mom gets sick, terminal cancer, all of that. And it really crystallized at like 21, how crucial it was to maximize the time that I have and do it in the right way. I don't know your mom's got health issues too. Like it, I think it's a tremendous blessing that you can get in the wake of a lot of sadness and tragedy to have that perspective. And then it sometimes makes you a hard person to be around because I really don't want to squander time.

1:10:21Even in my leisure time, my best friends are still the guys that know it since I was like six. And so when we're together, we are together. But I might go silent in the group chat for two weeks and they'll always fuck with me and be like, you know, you're live. But it's because I'm really trying to show up when I'm on call as a dad and a husband I really try to show up and do the best. I don't always but I really try. When I'm working I really try to show up do my best and I have a very low tolerance for folks who aren't oriented that way and that is fine. And maybe this is the ashamed part. I think for probably the first 15, 20 years of my career I was less comfortable in that.

1:11:00And so I tolerated more and four years ago that shifted and that was when I does when I resigned from the board of reddit that was when I started 7776 split up initialized and it has been like a wind at my back since and I feel so grateful for that and at the same time I'm like damn why didn't I do that sooner and I think it's because some part of me wasn't comfortable being that comfortable with this part of my personality so there's some good advice for or anyone listening is to spend that time working on yourself, understanding what really is important and then not compromising on those things that really mattered to you.

1:11:34Did thank you so much for coming. I know it's a Sunday morning on a trip to London for you. You'd like me, my girls are still asleep. So I crept out of the house this morning. They're still jogged. They were up way too late last night. So they're asleep. I'm gonna go take my daughter out either to T or an escape room after this. So we're good. But I so appreciate it. And this has been absolutely fantastic. Always good, senior. You're a great interviewer, a master of the craft, and you have a good cup of coffee. So, now I want to say huge thank you to Alexis for being such an incredible guest there.

1:12:05That show was recorded early on a Sunday morning when his family were in town, really taking the time out there. You can watch it on YouTube by searching for 20VC. That's 20VC. But before we leave you today, HMC or Harvard Management Company, they're constantly Seeking out the next generation of truly great investors and entrepreneurs, HMC has managed Harvard University's endowment for nearly 50 years and was one of the first institutional investors in venture capital. Their experience and long -term investment horizon make them ideal partners to get world -changing ideas on a path to viability and success, they work as a true partner, providing insightful perspectives to help managers succeed.

1:12:44I personally have had the pleasure of working with the HMC team and can say that they are truly exceptional partners and just great great people to work with. Whether you're launching your first fund or your fifth, HMC welcomes the opportunity to partner with both developing and established managers. Have an idea you want to share with the team? Just send it to ventureathmc .harvard .edu. As always I so appreciate all your support and stay tuned for an incredible episode coming this Friday with thanks to Silver CEO at LightSpeed.