Shaan Puri talking with Sam Parr on the My First Million Podcast:
You know, the beautiful thing about these creator businesses, right? — we’ve talked about MrBeast, we’ve talked about Logan Paul, with Prime, MrBeast with Feastables — you know, the mass creators.
What they do is, they take a mass-market product like Gatorade, or chocolate, and they’re like, ‘Cool, we’ll sell this commodity product using our branding, and we’ll use our branding to get into retail.’
Well, for, like, the medium— like, the mid-tier creators like this guy or, you know, like us, for example, you have to actually create a niche product that’s gonna be higher-ticket, higher-value, and you’re gonna use your audience to do it.
And, so, what’s cool about this is, you create something that’s called negative CAC. So, what does negative CAC mean? Every business otherwise has a sales market—
Sam:
Talk dirty to me baby! I love negative CAC! Keep goin’!
Shaan:
So, CAC (which is, Customer Acquisition Cost) is the amount of money you have to spend in marketing or sales to get a customer.
And, for most businesses this is, maybe, 20%, 30%, 40%, 50%— for some companies, it’s 80% of the revenues are just how much it costs to go market— to acquire a customer.
With a media business like this, what ends up happening is you get negative CAC, meaning, he gets paid 1 to $2 million a year for his YouTube stuff— for his content — for his blog and his YouTube stuff.
He’s making money on that and that’s his customer acquisition channel. So, it’s, like, kind of an unfair advantage.
This is what the Chernin guys are really smart about doing (shoutout to Mike Kerns over at Chernin), where they recognize— they identify that, ‘Hey, some of these creators have,
- high trust, they have
- high authority in a niche, and they actually have
- a business model where, instead of spending 30 or 40% of your revenue on acquiring customers, you actually have negative CAC.’
It’s actually not only zero, it’s better than zero — you actually have a profitable media company that is being used to acquire these customers. That’s the beauty of it.
And so, then, he jumped— and he was— went from making, you know, well, let’s say a million bucks a year to $7 million, $7 million to $20 million, and then, now, he’s over $30 million a year and— in revenue, and the other cool thing is, he’s bolted on some acquisitions.
Your name doesn’t have to be Emma, Ali, Rhett, or Link.
I believe 8- and 9-figure brands owned by lesser-known individual creators will be yawningly common in the not-too-distant future — and not just for the Jimmy’s and Logans of the world.
Until then, a rather strong advantage is sitting in your lap.
If you’re a creator reading this in early-to-mid 2024, you have what might be a significant advantage over the majority of other creators in your category — most of whom won’t figure out this exponential earning power they have for another 18 to 24 months.
Get your owned platform built out and active now. Start curating product offer ideas you might want to develop for your audience.
Open your hotel before the gold rush begins.
— Tang
Shaan Puri’s owned platforms include: My First Million, Shepherd, and ShaanPuri.com.
Sam Parr’s owned platforms are Hampton, The Anti-MBA, SamParr.com, and My First Million.
