AJ Vaynerchuk: The Business Strategy Mind Behind VaynerMedia #TheOnePercent

Because I think nine times out of 10, the influencer is not capable of building empathy, wines or honest. They need somebody to come in. And what's tricky is, and why I think your business is scalable is that once you do it once or twice for somebody, right? Let's say you do it with, you know, influencer X and then influencer Y. I think the next influencer will be more willing to trust you if it's something that they face is there's a lot of people coming at them. And nine times out of 10, those people are either bad people or incapable.

It takes one free person to create change. This is the show for them. We are the creators of the free world. This is capitalism.com and we are the 1%.

Hey, capitalists. Before we jump into today's episode, I actually want to brag on myself for a second. I've got a podcast episode that I think got overlooked. I think is one of the best ones I ever did. For those of you who sell on Amazon or those of you who run e commerce businesses and it's called Only Invest in Multipliers, I would highly encourage you to go look that up if you haven't heard it before. In it, I argue why you should not fund your own inventory. Because if you're funding your own inventory, you are tying up all of your money into a place that you could be otherwise using for advertising and people and growth. And I explained how to use other people's money in that episode. What I wish I had back then was access to more resources for capital. Back then, when I recorded that episode, there were only a few sources that lended to Internet business owners. But one of my backroom members just launched a business that exists only to fund inventory orders for physical products brands, and it's called Sellers Funding. This is something that I wanted to do for a long time. In fact, when I used to cast my vision for capitalism.com, it included a lending source for physical product owners. But one of my backroom members beat me to the punch and he actually did it better than I could have ever done. So that business is called Sellers Funding and they loan to E commerce sellers to allow them to free up the rest of their capital to to invest in things like advertising so you can actually grow your business. I would highly encourage you to listen to that episode called Only Invest in Multipliers and then to look at other funding sources, especially Sellers Funding, because they're in my network and I know what they're up to and they're doing Cool things in the world. You can check them out@capitalism.com funding. And I think this is a game changer for your growth as a business. Hey, gang. This is Ryan Daniel Moran, and in.

This episode, you are going to listen.

In on a private conversation that I had with AJ Vaynerchuk. AJ was one of the keynotes at the Capitalism conference earlier in 2019, and I met with him for about 30 minutes when I flew up to VaynerMedia and had a podcast interview with his brother Gary.

And I pulled AJ aside.

I really, really wanted to catch up with aj because AJ is. I don't think he gets nearly enough credit for a lot of the success of the Vayner empire. And we talk a little bit about this and in this sit down, but I really wanted to get AJ's perspective on my best opportunity moving forward. So I kind of ran through my overall thesis on what I'm focusing on and some options and opportunities where the puck is moving in the Internet business game. And AJ was really insightful. This was. I think what you'll find out of this time with AJ is AJ comes in more with, like, the tactical, practical side of Gary. And Gary is usually really tactical, but in the sense of like, sending DMs and what. What advertising platforms to use. AJ was really good about basically setting the business strategy and specifically for me and for where we are in the cycle of entrepreneurship right now. So this is really interesting. I got just as much out of my time with AJ as I do with my time with Gary. And.

I think you will really enjoy his insights on starting businesses, scaling businesses, and where the best opportunities are right now. So enjoy this chat with AJ Vaynerchuk. Oh, one little side note. The audio on here, again, this is. This is just a private conversation between AJ and myself. So the audio's just okay, but I promise to make it worth it. So enjoy.

I wasn't sure if, if we had 15 minutes or two hours, 15 minutes for a high five or two hours together, if I was being totally selfish.

I reach out to you specifically to speak at the event this past year because I have this perception about you that you're the integrator.

I know Gary is a builder, but that.

You started Vayner, right? I mean, it started around you running.

The first few accounts.

And I was telling Gary yesterday that I feel like I'm the same age Gary was when he had his you're full of shit moment. I told him the last time I saw him that I kind of had mine and I'M right at the cusp of choosing my next adventure. I've built and sold a couple companies. I have projects, but there's like, there's something bigger brewing somewhere, and I'm.

If I'm not ready, I'm almost ready. I'm really close. And so I am kind of courting what the next chapter is and a much bigger chapter. And I know you don't know a whole lot about what I'm up to or what we're doing, but I just felt compelled to get your opinion on how you sank your teeth into the opportunity when it showed itself, because I know Gary didn't join full time for like, three years.

Yeah, about two.

And yet he talks about it like this is his baby, which, of course it is. But you were building it the first few years.

Yeah.

And listen, he was very involved, I'm sure.

Yeah. I don't mean to write him. I don't mean to write him off.

And so it was more like he was present, but he wasn't physically present on an everyday basis.

And.

But so you're asking when did we know and decide.

How did you know that this was the opportunity that you were.

Because you were. You were just out of college, right?

Yeah.

Starting VaynerMedia. How did I know that? Like, that's what I want. Like, I want to make sure I'm answering your question. Is it, how did I know that starting VaynerMedia right out of school was the move? Or how did I know that we should triple down two years in?

It's that because you had the one client, Gillette, right?

Yeah, yeah, that was the first. Yeah.

And.

And I'm sure that that came. That comes somewhat organically off of Gary's presence.

Yeah. It was through some Gary. It was somebody that Gary.

Okay.

Knew who had an agency, actually.

Okay.

Referred to the business our way because they asked about social media, and the guy's like, oh, I don't touch that.

Got it.

So.

So.

So where I'm at is there's like, there's several different ways that I could really sink my teeth into something.

Yeah.

And.

And I'm not sure how to identify which one, which one, and how deep. I mean, I've built a $10 million business. I've never built $100 million business. And so even $10 million businesses at this point don't really interest me. It doesn't grow me. So I'm curious how you knew that you were sitting on something special.

Yeah. So I think it's a complicated answer, and it's a series of factors, I think.

One, a huge aspect of where VaynerMedia ended up being today was based foundationally on Gary and I's belief that social media was the new frontier communication. Right. So before we knew that VaynerMedia was it, we had decided that things like Facebook and Twitter and whatever would come next.

Was it.

So you're betting on a sector, essentially.

Exactly. Right. So, yeah, I mean, I would say in 2006, 2007 is when we decided that there was a sector of the intersection of technology and media and that was the future. So that was years before VaynerMedia. You know, we were believers in YouTube and Twitter. We were early adopters. And so I think that was first and foremost is that we. We felt that we understood that this sector was going to explode. And so as far as understanding the business, which was then a layer of VaynerMedia, it was a bet on the sector. It was a bet on which I'm passionate about being ahead of the curve. Right. So another thing that really made us feel like that vaynermedia was it was we knew in 2011 that we had a head start and that was be really fucking hard to catch us. Our perspective was we were good enough, talented enough and smart enough that like, how are you gonna beat Usain Bolt in a race when he got to start three seconds earlier than like, you're fucked. Like, I don't care who you are, you're losing that race. So I think we love the sector and we were cognizant of the fact that we were super early and at the forefront and that was a huge advantage. Three, I think Gary and I are both naturally good at a service based business. I think we're just really good at customer service at the highest and lowest of levels, whether it's the individual customer as a retail consumer like Empathy Wine or the Macro Chase bank eight figure client. And so I think service based businesses was just something that naturally fit us. And you know, look at me, I left a service based business and started another service based business. So I think understanding our personality trait and where we would thrive and be successful, so I think those.

That's really helpful. Yeah, I appreciate that. So my service based business is brands, like physical brands stuff. And that's what I know. That's my world. And if I were to make a bet and this is one of kind.

Of the opportunities that I.

This is probably what I'm leaning toward right now is that the sector I'm betting on is that influencers are Gonna start launching their own brands.

Yeah, I believe that.

And it's only inevitable that. So one of my. I can't quite call him a mentor, but an acquaintance of mine is Brian Lee, the founder of the Honest Company. And what he did with Jessica Alba, I think it's only inevitable happens.

I don't disagree at all.

You would not disagree.

I'm agreeing with you. Like, I would not. Like I would not. Yeah, it's. It's coming. And Gary's kind of done it. Right. With empathy wine, like.

Yeah, exactly. Right. So. So it doesn't make sense to, like, launch the Capitalism Journal.

Right, right.

But as my platform, the more content that I put out serving those entrepreneurs, the more my brand builds around being that person. And what I'm. What I'm have been kicking around is what I think is what keeps coming back, is that I just need to start creating content for and with influencers to help them monetize their following so that I get the introduction to the person who has 2 million followers, and that becomes the case study that we build around, and that becomes a $10 million business. And you eventually have a portfolio of. So my vayner is the brands behind those influencers. I got you. That is my thesis at the moment is like the thing that I'm almost ready to sink my teeth into.

You're basically this infrastructure and operational partner to an influencer to help them launch a brand.

So are you familiar with the.

Not.

Firepower, the rocket fuel principle, Visionary and integrator? It's basically that most partnerships have a visionary, somebody who sets the vision, is the charismatic leader, and is emotional and crazy. And then you have the integrator, the calm present builder. I'm visionary.

Got it.

So I.

You're a visionary.

Yes, yes.

Who's the builder?

Talk about the brand, the influencers.

So my partner that I've been testing some projects with is named Clement.

Okay, so you have a business partner.

Yes.

Now is the idea that if I'm understanding it right, these influencer brands. You're a visionary. You're. You bring a builder with you, you find another visionary, which is. I'm assuming that most influencers are visionaries, not. So you're coming in, you're saying, hey, you're a visionary, I'm a visionary, but I've got a builder partner, and I've built before. Even though I'm a visionary, I'm also capable of being a builder. I've built a $10 million business. Let me come in and help you take an idea and bring it to life and help you maximize your audience, basically.

Yeah.

The only nuance to that is that we would probably hire a brand manager for each one of those accounts.

That makes sense as it.

Yeah. So they'd basically be the CEO, brand.

Manager or CEO report to you and your team.

They report.

Yeah, they report to my integrator.

Yeah.

But.

But our team.

So my thought is, and when I've talked to people with audiences, the last thing that they really want to do is learn business.

Yeah.

They just want to go run and be influencers. And if they don't have to be a part of the development and the marketing, they can do what they do and build a company around it. That's really exciting for you.

I agree with that. I think it's very similar to how a lot of musicians think, how a lot of athletes think. Like, I think that, you know, we look at the categories of musician and athlete, and there's these examples of musician, athletes building these big businesses. I think influencer is just a new category. I think they're on the same pedestal. Musician, athlete, and influencer. You know what I mean? So I agree. I think there's a business there. Absolutely.

Okay.

And I would agree with the fact that I think there's also a need because I think nine times out of 10, the influencer's not capable of building Empathy Wines or Honest. They need somebody to come in. And what's tricky is, and why I think your business is scalable is that once. You do it once or twice for somebody. Right. Let's say you do it with Influencer X and then Influencer Y. I think the next influencer will be more willing to trust you. It's something that they face is there's a lot of people coming at them. And nine times out of 10, those people are either bad people or incapable.

Yeah, perfect. So one of the things that Gary said yesterday, that was a real aha for me, was I told him, I think your strategy is going all in on your personal brand gives you the leverage to be able to launch in Empathy Wines. And he said no. He said, vayner is the leverage. It is both, of course, they play together. But he was making the point that if he only sold 19 bottles of wine to his personal brand, the personal brand isn't a failure. I'm exaggerating, but that the play was more on Vayner than it was on himself.

I think that's right. I think he's banking on, you know, to sell. I'll make up the number. A million bottles of wine. I don't think his personal brand could do that. I don't think there's a lot of personal brands that can.

Right.

And so with that level of great ambition, if you said, what's more likely to sell a million dollars bottle or million bottles of wine, his brand is influence or VaynerMedia's infrastructure and capabilities and IP, it's definitely VaynerMedia.

Right?

Because there's all these, you know, content creation, paid media, advertising. Influencer like Vayner could take any brand and make it run.

Got it.

Brand doesn't suck.

I mean, it's the same thing with Ryan Reynolds new whiskey company or George Clooney's whiskey company that sold for like $4 billion. Like he could move the needle a little by drinking it and showing a picture. But the product still has to be good and the business still has to stand on its own.

When you look at it, you know, Young Jeezy did tequila Avion, Clooney did this thing like when you look at it, it is not a direct parallel of the most famous person had the best exit.

Right.

There's been more famous individuals associated with an alcoholic beverage that like Diddy was a huge one. Right.

That worked.

There's been more famous people than Diddy that have failed alcohol. So it's not, there's not a one to one correlation. If I get the most famous person in the world, I will have the highest alcoholic beverage exit. That's not a correlation. There's the operational aspect that matters more.

Okay, so there's more.

There's more Gary Vaynerchuk's than there are vaynermedia.

You mean personality driven brands and their.

Art or just personality?

Yes.

Well, what he said about it that really warped my brain was I realized in that sense we all knew Vayner stands on its own, but the way that he put it was like, oh, Vayner, Vayner's the play. Vayner really stands on his own, which allow him liberates him to just give and give and give and give, which gives him more leverage, which has a lot more spiller effect. And that was like, ah, I'm still doing that thing where I'm trying to make my following part of the business and I need a way to sever that. And that was when I realized that I either need to have capitalism be its own business and infrastructure or I need the other thing. I need the other thing that stands on its own if I really want to be liberated to have that type of approach.

Yeah, Vaynermedia definitely went through a transition where it was at one point Gary's social media agency to its VaynerMedia. You know what I mean? It reached that level.

Really?

Yeah, absolutely. I mean maybe not to the public eye, not to Gary's following, but in the industry. Yeah. I mean like you know these corporate. If you're the CMO of a multi hundred million dollar brand or a billion dollar brand, you're smart enough to realize that Gary's a busy and b, just one man to be able to push your business forward.

Yeah.

You know what I mean? Like when any of these, of course they want to work with, but they like if we have 125 clients and Gary speaks 75 times a year and he's running Empathy Wines and He's helping with VaynerSports and he's writing books and he's doing TV, like there's no way that a brand that spends seven figures with VaynerMedia believes that Gary is spending 20 hours a week on their brand. So there was that transition, by the way. It used to be that way when we were first getting started. It's like we want Gary in the room for every meet. You know what I mean? That was what the first few years.

Were like, is the first few years.

Yeah, I would say. Yeah.

I mean I don't know why I find that encouraging.

Yeah, it's one of the things where it's, it's.

Gary's been building his following and personal brand for 13 years.

Yeah.

I think weather TV came out in 2006. Thirteen years later. That ain't 13 months.

Right.

VaynerMedia went from like eight employees to 25 employees to then 150 employees.

Took three years.

Which part took three years? The 25 or 125?

One hundred and fifty.

Yeah.

The 125 was year three of growth.

Okay.

By the end of year three, we had 150.

That's still pretty freaking fast.

But it's certainly not overnight and beyond that, we couldn't get to, you know, 2 to 150 without everything that Gary accomplished prior to VaynerMedia starting.

Right.

Like we, we don't get Gillette without Gary having been in the wine World for 10 years and one of his big customers, an agency guy that referred us business, we don't land the new. You know what I mean? Like if Gary hadn't been successful for the 10 years prior running a massive E commerce business, our agency wouldn't have been able to acquire customers at that quick of a Rate, So it's even what happened before we decided to start the company that enabled the company to have that trajectory.

I'm gonna attempt to go down a two minute selfish rabbit hole.

When you say that. My brain immediately goes to okay, capitalism.com rather than it being the Ryan show, which I've had a really hard time separating. I've had a really. It's been hard, try as I might, but we have systems and processes that are amazing in terms of podcast distribution, content repurposing and like bringing awareness to a message that connects.

Yeah.

And spin it out. That's exactly where my brain. You mean spin it out like as an agency?

Yeah, you should create an agency.

Yeah, I think more like, well, a media company. But I mean, same shit. Yeah, same thing. It's the same thing. It's spin it out 100%. And when you say spin it out, how does your. Would you explain that?

Meaning you should create a new business and call it something. Not call capitalism.com or your namesake. Right. Like you just create a new business and you rely on the fact that you have all these case studies and all these capabilities and that's what you leverage to go and get customers and then it stands alone.

And when you say a customer, are you thinking of an agency client, Are you thinking of an advertiser or both? They're the same.

Yeah. I mean I would say what you talked about in terms of like podcast distribution and all these other things, there's a lot of different customers that want that.

Interesting.

Go directly to a brand for pop. Maybe there's brand wants to do it himself. You can go to a personality, you can go to an agency that doesn't have that capability yet.

Like, that's interesting because the. I thought part of the value prop for something like that would be that it was part of a capitalism.com network.

I don't think so.

Really?

I don't think so.

Tell me why.

Same thing.

It's.

At the end of the day, it's your IP that's valuable, but not the.

Audience, the sharing of. I mean, because at that point it can be a network that the audiences.

New co and capitalism can have a deal together. Yeah.

Yeah. Okay.

That's just paper.

Okay.

That's left pocket, right pocket.

Okay.

I would fair. I would say it would be better to split the two and have new code. Just have a deal with capitalism.com for the network because I think it'll cause confusion. Like, what do you mean capitalism.com? like, I think the name capitalism.com when you just hear it for the first time. I would imagine it to be content about capitalism. Right. And so for it to also be a service provider. I don't know. Well, I'm sure it could.

Well, for example, if AJ wants to have the Nine Figure Agency podcast inside the inner workings of a Nine Figure agency and you're documenting it, we have all the systems and the distribution.

The agency that does that type of work. Before I would hire capitalism.com just from a. Just from a psychology perspective like this. Like this agency focuses on this deliverable and was started by the guy. You get the same equity. The guy who started capitalism.com started this agency. You've already taken the equity from capitalism.com and I think it reduces confusion around what capitalism.com does.

I was thinking about it more like if a. If a show gets picked up by Fox and distributed by Fox.

Yeah.

There's just more authority. People see Fox as the authority.

Helped. Who helped the show get picked up by Fox. End them all.

Not Fox.

There's another company. By the way, before show gets picked up by Fox, they're hiring Lionsgate or End the Mall or one of the other hundred others that I don't know.

Interesting.

There's a conduit. They don't hire Fox to get picked up by Fox. They hire Endemall to get picked up by Fox. That's how I see it.

Interesting.

Because Endemall was started by a guy who used to work at Lionsgate. You know what I mean? Who knows how it works? Like it's that.

Huh. I'm gonna have to sit on that one for a bit.

Yeah. And it's not like you have to make a decision on it tomorrow.

Right.

But I think optically, I think one, it'll help reduce your personal.

Like the.

Struggle, the crossover that I. Yeah, yeah, yeah.

Having. I think anybody, honestly, I think like part of the genius of Gary is like anybody that's a businessman or business woman that had a lot of success and there's a particular reason why they had success. I think spinning out a consult, a consulting practice or an agency from. That's brilliant.

Right.

Like, who wouldn't, you know, if somebody was the greatest email marketer of all time, who wouldn't want to hire that person's like private boutique agency that they started that all the employees came from that company and start. You know what I mean? Like.

Yeah.

Feels like a smart arbitrage. The only tricky thing is, do you want to run an agency?

Right.

Is not the most exciting thing of all time.

I had the Opportunity to start an Amazon agency. Because people saw me as that.

Yeah.

And it just sounded horrible, so I just sent it all somewhere else.

Yeah, I get it.

That's really the answer, by the way. Cause the consulting agency practice is a good business. It just could also be soul crushing.

Yeah, I can see that.

That's the trade off.

Yeah. Cool.

Well, I want to be respectful of your time.

What can we do for you?

I think an article on capitalism would be awesome.

You know, as you're thinking about, are you going to do the conference again next year?

We don't know if we're gonna do it in 2020. It might be early 2021.

Gotcha. Okay.

When you get to that road, if you wanna talk to like Zach, you know, awesome to bring somebody from Vayner's theaters or something like that.

Yeah.

Would you point him out so I can introduce myself?

Not on his desk.

Okay, I'll look for the guy. I'll look for the guy that looks like a Zach.

Hey, gang.

Thanks for listening to the show.

My big takeaway from my time with AJ Was really on my best opportunity in the direction where I wanna take things. First of all, it was really interesting to see how Gary and AJ run their businesses because they have one central person in charge of each major project and then they kind of stay in the owner seat in the empire seat. It was really cool to see and it showed me that I really need to work on empowering other people more if I want to run the type of empire that I want to run. But also, AJ edified my view and. And edified my opinion that the modern day influencer is kind of tomorrow's celebrity. And it's only a matter of time that they have their own lines of products, which is something that I have been kicking around and testing for the last several months. And hearing him Edify, that meant a lot to me. So coming off the back of my time with Gary and hearing him edify my growth as an entrepreneur and then hearing AJ Edify, kind of the direction of the tactics was really, really interesting. So some cool things happening in that world. Stay tuned. I'm going to be documenting the development of some new businesses that I have started over the next couple of months. If you enjoyed this chat, it would mean the world to me if you subscribed on Spotify or itunes or wherever you listen and you shot me a DM on Instagram. I'm ryandaniel Moran and just tell me that you listened to the show. As always, I appreciate you listening and I'LL talk to you in the next episode.

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