02:30:26 · Jordi Hays, Tucker Brown, John Coogan
[02:30:26] S0: How do you think about stages in a creator's life cycle? There's people that are gonna be incredibly talented from a just pure talent standpoint. Right? There's people out there that are like, not even good at making videos, but have incredibly engaging content because they're so good. And then usually they graduate into having, you know, better and better teams and eventually maybe they get into products. But like, how do you look at the different stages? What's what's too early? Yeah. When are you seeing a an individual who's, like, showing all the potential but is too early for maybe a transaction? [02:31:03] S6: Yeah. We don't like to be hyper prescriptive with with how we look at it. I mean, are certain things we do look for to assess whether it's the right stage for us to get involved. If it's an individual without a business, it's tough for us. Mean, there's a lot of work [02:31:15] S1: Sure. [02:31:15] S6: To do probably to pull it together and make it transactable. So we look for it to be an actual business that's been built and scaled to some capacity. Right now [02:31:24] S0: Is that like multiple revenue lines, not dependent entirely on platform revenue? Yeah. Like those kind of [02:31:30] S1: Maybe an operator [02:31:31] S6: and a To verify to some extent. Maybe an operator, not essential. Mean, I was no operator do perfect when we did that deal. [02:31:36] S1: Wow. Wait. They do everything themselves? [02:31:38] S6: I mean, there was, I think, 20 employees. The oldest outside of them was 24.
02:31:38 · Tucker Brown, John Coogan, Ben Thompson, Jordi Hays
[02:31:38] S6: I mean, there was, I think, 20 employees. The oldest outside of them was 24. [02:31:42] S1: Yeah. But they didn't have, like, a business guy who would be, like, [02:31:44] S6: the aggled business guy. [02:31:46] S1: I love that. That's awesome. Yeah. It's a it's a different business. [02:31:51] S6: Yeah. It's Yeah. 80 employees now. Yeah. Yeah. Of course. So you look for some sense of a business, achieve diversification in some it doesn't need to be massive, but yeah Yeah. Some off platform monetization is, you know, is attractive. And then, yeah, scale of revenue, profitability. We really only like businesses that are profitable and that's it's not I don't want say it's not hard to do, but in in this category it is. You're used to seeing margins that are not common in traditional media. [02:32:17] S1: Yeah. [02:32:17] S6: Right? 50% plus margins [02:32:19] S8: Sure. [02:32:19] S6: For a creator business is actually relatively, it's relatively standard. [02:32:23] S0: So Sure. [02:32:24] S6: Yeah, look for for profitability growth and again, the categories that we think are positioned scale Yeah. And where we can be valuable and add additional value. [02:32:32] S1: So Yeah. [02:32:33] S6: You know, bring service.
02:32:33 · Tucker Brown, Jordi Hays
[02:32:33] S6: You know, bring service. [02:32:34] S0: When you're when you're underwriting a deal, are like, how do you think about it? Like, how do you how do you think about a business where you know there's a ceiling? Like and and I imagine there's certain situations where you're totally because, like, there's certain creators, I would say that, we've always said that if you if you asked us to make content for a 100,000,000 people, we would just wouldn't enjoy doing it because we'd be covering topics that are not interesting, right, to to us at least. Sure. And there's, I think, a lot of creator businesses where there's sort of like some TAM on from a from an audience standpoint in the category. Million dollar business today. I think that you can get to 40 and and that's gonna be enough for it to be a home run for you and us. Like, is that a conversation that you have or is it always like Yeah. I need to see the path to super stardom and, you know, 9 figures of revenue?
02:33:46 · Tucker Brown
[02:33:46] S6: I think, listen, there's a difference between how we might underwrite the deal and think about where there's a ceiling and then how you communicate that to a creator. If you're trying to justify, you know, value, maybe that's part of the conversation, but really they you know, the best creators won't really cap their potential. Yeah. So, you know, even if it's a $10,000,000 business today, they probably think this is a billion dollar business if we do it right. Yeah. If we sort of serve the audience in the way that we can. Yeah. And so honestly, any of the businesses we look to transact with now probably we ourselves believe could be billion dollar plus businesses. And if we don't believe that, we're probably not betting in the right categories with the right creators. It's early to maybe make that kind of call, you know, in this space, but to the earlier comment about public markets, you know, potential, I think we'll see many of these businesses scale to that billion plus dollar mark potentially go public. And, yeah, it's it's just there's a lot I think that's left to
02:34:43 · Jordi Hays, John Coogan, Rodrigo Liang, Tucker Brown
[02:34:43] S0: Would it end up is is a more likely or or one of the more likely paths where you end up with effectively an index of a bunch of top creators? Because to me, like, creator business is like, I don't know that many creators even like look at the most sophisticated operations like a MrBeast. Right? You have these like 9 figure Amazon deals. You have these consumer packaged goods businesses. You have, you know, royalty streams effectively. But him running him running his business being like, I gotta make sure that next quarter's good, otherwise, we're gonna nuke. Like, that feels challenging, whereas if you took a basket of of, you know, 200 top creators that that were were were trading, you could see that being, like, stable and growing, you know, [02:35:29] S1: just You're looking for sort of, like, a manosphere ETF for you. [02:35:31] S4: So you [02:35:32] S1: can have exposure to world [02:35:33] S0: Vabicular entertain in one ticker. [02:35:39] S6: I do listen. That's that's partially what we're trying to do. Right? I saw the difficulty from institutional capital partners to transact with single creator business or single assets. Yeah. They're all eager to get into the category. They want money to work. They talk about it all the time. You bring them a deal that's attractive and they're like, ah, we can't we can't do this. There's too much risk. If you bring a basket though, right, I think it's a lot more attractive.
02:35:39 · Tucker Brown, John Coogan, Jordi Hays
[02:35:39] S6: I do listen. That's that's partially what we're trying to do. Right? I saw the difficulty from institutional capital partners to transact with single creator business or single assets. Yeah. They're all eager to get into the category. They want money to work. They talk about it all the time. You bring them a deal that's attractive and they're like, ah, we can't we can't do this. There's too much risk. If you bring a basket though, right, I think it's a lot more attractive. [02:36:02] S1: And in some ways, dude, perfect is a little bit of a basket. There's a number of on camera talent. It's not single person, single name, and same thing with with Midas Touch. They have a number of of products in their portfolio and number of hosts and whatnot. [02:36:17] S6: Yeah. The more the more layers to diversification you can achieve [02:36:20] S1: Of course. More traffic probably easier. [02:36:21] S6: Right? So the business itself [02:36:22] S1: Yeah. [02:36:23] S6: The talent maybe that's involved Yep. Even for us, the portfolio that we build. [02:36:26] S0: Yep. How are you how are you building out your pipeline of opportunities? Are you going I'm at, you know, you're in Cannes, you're meeting a bunch of creators, but I imagine you're like probably I'd like the beauty of creator businesses is they're out in the open. Yeah. Like an invisible creator business is not one. Like some of the best deals and, you know, traditional private equity are like, you would have to like live in the town and know that you know, a certain business was was printing.