From Lost Student to $100M Founder | Eric Wei

You're gonna enjoy this video with Eric Wei, the co-founder of Carrot. They are almost like a financial platform for creators. They worked with amazing creators such as Alexandra Botez, and they raised over $100 million. He talks about his life philosophies, being an Asian founder, and how the creator economy is working out right now, how everything's shaping out. It's a wide-ranging conversation. You're gonna enjoy it. Check it out. And without further ado, let's do it. You're very much an Asian parent's wet dream, right? So you got Harvard. Harvard, right? You got Blackstone, McKinsey, Instagram, all the things, right? Like those are like all the Infinity Stones. How do you think that's helped shape you into the person that you are today?

From a personal POV, I really needed those things because I had very little self-esteem. And I think it's a mix of, of course, the environment I was raised in where my parents coming from China, operating with a scarcity mindset, were so focused on ensuring I had a good life that they really drilled into me like, oh, you have to hit these, strong external validators of success, which is like, oh, like these prestigious brand names and like XYZ income. Because like when you grow up super poor, which we did, like that's what really matters. But I also think to be clear, you ultimately, you have to take responsibility for yourself. And sure, like while that was the environment I was raised in, at the end of the day, I internalized a lot of these. I think my personality too, I would use these metrics as a way to define what I should be focused on, how good to feel about myself. So I spent a huge portion of my life life really directing myself toward achieving XYZ things. But the secret is once you get them, the rest of your life just continues the same. So if you were only doing things because you were hoping to hit this one milestone, guess what? There's like that one brief moment where you hit it and you feel amazing, and then it's back to what you were doing, except like you've hit the milestone. There's a quote from the science fiction author Neil Gaiman where he says, the price of getting what you want Is having what you once wanted. Because if you have it, cool. That's what was powering you the whole time. And I think the secret to resolve this is you have to find things that you, at least to some meaningful way, enjoy for their own sake. So this way, when you hit the milestone, you're motivated to keep going. So to answer your question, I really needed to hit a lot of those different milestones. To help myself reach a level of personal security where I'm like, cool, now I can do things more aligned with what I actually want despite what other people think because I have all these credentials gathered up. As well as a big realization, a bucket of cold water that every time I hit one of those things, I'm not as happy as I thought I would be, which is a good impetus for why I need to rethink my entire school thought to start with. So sometimes I share these things and I've seen people comment and talk about like, well, screw you, man. You have them. Like, you have the luxury and privilege of stating these things. I'm like, yeah, that's super fair. I'm not saying, like, don't do them. I'm just saying, as someone who went through that, these are the realizations I've had now and what I'm trying to change.

But also, like, you had to earn your privilege too, right? So, that's what irks me about people that say that. What got you to listen to your parents? Because obviously my parents want me to be a doctor, go to Harvard and all that too. But I'm just like, oh, fuck you. I'm going to play EverQuest. I'm going to play World of Warcraft. I'm going to start websites, blah, blah, blah. Like, so, I just didn't listen. So, why did you listen?

I've been— no way. I actually find that way cooler. I find like 99% of people who I think are doing interesting things that we meet in our worlds, like, did not go to like the standard, like, oh, like Ivy League corporate route, whatever. Because people who go that route do just end up being doctors and lawyers and bankers. And there's nothing wrong with that. But to do interesting things, it is like, oh, you know, how did you become, I don't know, like, the next like Bill Gates of online multiplayer, massively multiplayer games. Well, I played EverQuest as a kid, right? So first of all, like, I love that. And I also played a lot of video games as a kid, which I think directly led toward interest in streaming, which directly led to my interest in working with creators. But to your point where she's like, yeah, like, well, I mean, I think that I was just really afraid and I would, as I got older, begin to rebel more and more, but it was so assumed this is the right way to live life that I wasn't even thinking, oh, should I do something otherwise? Because I wasn't even aware there was an otherwise to be done. So to give you an example, David Foster Wallace once gave this commencement speech where he talks about these 2 goldfish and they're having a casual chat. And goldfish number one is like, hey man, how's it going? And goldfish number 2 is like, yeah, it's pretty good. Like, how's the water? And goldfish number 1's like, what, what are you talking about? Because he's not even aware. He's like so immersed by the water, he's not even aware it's existing. And I think that was very similar for me. I just wasn't aware there were other things I could do. And it wasn't until I really like went to college. So I got into Harvard.

Yep.

And I'm there and I'm like, yeah, I'm like miserable and gave up so many things to hit this arbitrary milestone. But I'm like, oh, it's worth it. And you know, because I was meant for this and I had just assumed like everyone at Harvard's gonna be like me. And then I met, to be clear, definitely there were a lot of people like me there, but there are also a lot of people who like, nah, we're just like normal-ish human beings who just like got in because they were so passionate about what they did and they were really good at it and they weren't doing it to get into Harvard. It's like they were so amazing that Harvard just came as a byproduct.

Yeah.

And it's like, well, I've like been optimizing my whole life for the milestone. You've been optimizing your life to actually do the thing you want to do where the milestone sort of came incidentally. And like, you seem like way more fulfilled because now you got in, but that's almost like a so what? You're going to continue on trying to do what you want to do. Yeah, I got in and I'm like, why? I don't, I don't know anymore. I'm an empty shell of a human being because that, that was my purpose. So what did you do? Well, that's where I started to rebel more, right? Well, I mean, I got super depressed. I got to see—

You didn't drop off because your parents would kill you.

They probably would have. But like, I remember my sophomore, my freshman or sophomore year, I came home and I got a C- in my intro to computer science course because I just So depressed, I didn't turn in my final project on time. And as you know, all these courses, your final project is like 66% of your grade.

C minus still is pretty good.

Yeah. Like, see, I say, man, you know, it's like whales. Just be above sea level, right? If you need to breathe. But yeah, I just remember this. Colin Powell got C's in college. I remember this because I remember trying to bring that up to my parents. I was like, oh, like Secretary of State got C's. Like, like, C minus isn't really that bad. But I think that was such a great moment. I was like, oh gosh, like, I'm so miserable. And my parents hate this so much that if I continue down this current path, like, oh, things are gonna end really badly. And that's when I was like, you know what? Like, maybe I'm gonna just start to do things differently. And like, you know, heavenly, shockingly new surprise, try and take courses I actually wanted to go. I was literally taking the course my dad was telling me to do, which sounds like so stupid, but I just didn't know any better. And I was like, I'm gonna come back and I'm gonna be like, I'm gonna take my own courses. And he was like, again, I had the very fortunate privilege where my dad paid for college, but it became a weapon too, because he's like, if you don't take XYZ courses, I will stop paying.

Yep.

And, you know, I think a braver person than I was would've said, well, fuck you, I'm gonna do it anyways. And like, I'll pay for it myself. I wasn't that person. And it wasn't until much later, I was like, well, I'm gonna take things I wanna do. And it just sort of gradually became this, I'm gonna separate myself away from the environment I was raised in to give myself more of the emotional space to make my own choices. So today I don't talk to my parents much at all. I talk to my dad on the phone maybe once every year. And it's sad. I'm sad about it. I would love to have a closer relationship. And I see many of my friends do. And I'm like, well, look, I respect he is the way he is because this is what he needed to survive and he wants the best for me. And unfortunately it manifests in a way where I just can't deal with that. And so this is sort of the best for both of us.

For now.

Yeah, for now.

Maybe it could change. For sure. Where do they live?

So they're both in New Jersey.

Okay.

Yeah.

Got it. Yeah, your phone number was New Jersey.

Yeah, East Coast.

So do you think, okay, we're talking about our Asian American scars here. Do you think it's been helpful, like the upbringing, like it's just, you're never good enough, right? You gotta go to Harvard, this. It's like, look at this kid, look at this kid. There's not like, hey, look at this amazing thing you do. It's just like, no. Even if you did something good, it's like, you still kind of suck.

Well, you know, it's really hard to say. I had a conversation with a good friend of mine who's like a very high achiever. And I was asking him, 'cause he has a kid, I was like, oh, are you gonna be like a tiger dad? And he was like, yeah, kind of. And I was like, whoa, really? Because frankly, if I ever had a kid, which, you know, I probably wouldn't, which is a whole other topic. If I ever did have a kid, I'd just be like super chill. And he was like, well, look how I turned out. Like, yeah, I was like miserable, but I like accomplished all these things. And I was like, uh, and it sort of goes to your point. It's like, people are like, wow, like, yeah, you like went through all this misery, but like you seem to be doing well, don't you?

Yeah.

And it goes to this like broader existential question, which is just like, What's like the meaning of life? Like, I don't think in an existential philosophical point there is any inherent meaning. You get to choose. And if your meaning in life is like he or she who dies with the most toys wins, then like maybe, yeah, this is the way you want to raise yourself to be raised and raise others. But if your meaning is a little bit different, which for me it's more around I wanted to do the things that I want to do. which requires recognizing they might not be the things society wants me to do. Well, then, you know, the upbringing I went through clearly helped make me who I am today, but it's not the same behaviors and rules that I want to follow going forward.

Yeah. I feel like, I mean, I think I'm a little older than you. You're what, late 20s?

Actually, I'm 32 years old.

32.

Okay.

So I'm 37. Yeah. So I think I'm growing to appreciate—

We're both Asian. So we both, Look younger than we are.

Yeah, we do. We still— you look like you're definitely in your 20s. I get 28 sometimes.

Yeah, exactly.

But my point is, like, I used to resent my parents for, like, all the pressures, right? I just like, I don't want to do what I don't want to do, right? And like, the only reason I graduated from, like, UCSD is because, like, they wanted a diploma, right? But now I'm like, you know what, I think all that pain and suffering, like, you know, sure, it strained the relationships, but it's like, I think Net-net, it was a win. So, you know, maybe it was a good thing.

I think of it related to that. I think of it as, was it good or was it bad? I don't know, but it's the path I took to who I am today. And if the path were different, I don't know if my life would be better or worse, but I wouldn't be who I am today. And like on the whole, well, like sometimes I'm miserable and I'm always very stressed. I'm generally okay who I'm being today. So I think that to reconcile the classic question of like, was it worth it, basically comes down to like, how do you feel about your life overall? And if on the whole you're like, okay, like I'm here and I like being me, then I think it does become a sort of like, well, you know, that was a needed part for me to become who I am today. But, you know, I think there are a lot of people, and there are moments I felt like this too in my life, where I'm like, no, this feels terrible. Then I think that's where the resentment comes from more.

Got it. So I guess you mentioned, I just, I'm trying to understand your philosophies more. Like, I'm like, oh, this is interesting. So why no kids?

So, well, for the longest time growing up, I thought to myself, hey, like, I don't necessarily feel like resentment toward my parents anymore because I recognize they did the best they could and this is what they wanted for me. And like I said, it's because of them that I've turned out the way I am, right? But for a long time, I also was like, Okay, well, like, I can't say I'm like very happy, or rather was very happy during certain periods. I mean, during certain periods of my life, I was very depressed. I was like very, very unhappy, right? And like, sure, you know, quote unquote, it seems to be working out, we think, right? We're always looking at like—

Perception.

Yeah, a static dot in like the tableaus of our life, right? But like, certain times I was like, well, you know, I almost would have preferred like not to have been born at all. And not in like a like depressed, like, oh my God, like I don't want to exist anymore. way. More like a— I think when you have a kid, it's so hard to be a good parent. And I think everyone's trying their best. And I think there are ways to be a parent where your kid will have a life where they feel more free and secure, and ways where they won't. And I look at this from the POV of like, if you're not confident you can give your kid like a secure positive life, do you really want to have a kid? And, you know, my co-founder disagrees with me very much, very, very much. My co-founder absolutely wants to have kids. Like, he sees it as like part of his moral imperative to bring kids into this world, right? And there are many people in popular culture who've spoken similarly about this mission, right? Again, I'm an existentialist. I don't think there's inherent meaning in life. I don't think I have a mission to bring someone into this world. I think the meaning of life is exactly what I choose it to be. And I'm like, Well, I wouldn't want to have a kid if I don't think I could be the best, most amazing parent that I could be to that child. And for many years, I was like, no, I don't think I would do a good job, honestly, because I'm still trying to figure myself out. As I get older, that allows a little bit more like, oh, I think I'd probably be better. And like, sure, I'm more open to it, but I'm still not necessarily like, yeah, I'm confident I'd be a great dad. And so if like, I'm not confident I'd be a great dad, why would I ever want to have a kid? Why would I want to bring somebody into the Were you ever confident you'd be a good founder? No. And I'm still not sure. Yeah. And I'm still not sure I'm a good founder. But I think the difference is, and well, 2 points. One, that is definitely a big source of my stress because when it's just you and your co-founder and you're just fucking around, it's like, great. But at this point, we've raised over $100 million. We have investors, we have clients, we have team members. It sucks because if you fail, That means people lose their money, people lose their trust in you, people lose their service, people lose their jobs. And my co-founder and I, we take full responsibility for it. So it's very, very stressful. Now, I think, now think about having a kid. In some ways, it's a whole nother degree of that same, well, guess what? If you're not a good dad, cool. You've brought somebody into this world who you may have inflicted additional pain and misery. And I don't want that.

You know, I heard this. We did this entrepreneur's program in, I think it was at MIT. So, we finished up in Boston. It was like 3 years ago. We did for 3 years, sorry. And then I was with a group of parents. So, one guy's like 60 years old and then he has like 5 kids. And then another gal, she has like a 21-year-old. I was like, I don't have any kids, right?

Right.

But I'm like, look, if I were to have a kid, like I feel like my job is to like make, you know, help my kid be happy. And they're like, I, they're like, we used to think that too, but that's not true. Our only job now, what we realized after having kids is like, it's just to help them survive. Like give them the tools they need to survive. And then what, however happy they are, that's like their problem. And I was like, oh, that's interesting perspective.

It, it is an interesting POV because I think it really comes down to a scarcity versus abundance mindset and Maslow's pyramid, his hierarchy of needs where like, The hierarchy, the way it works, right? At the very bottom, it is just about survival. It's like, here's like food and water and shelter. And then like one level up is like, do you have friends? And like the eventual highest level is like self-fulfillment. For me, I think everyone has the right to choose like how they want to raise their kids. For me, I don't want to bring a kid into this world if the main goal I have for them is survival, because I'd rather not bring one into the world at all. If I'm going to bring a kid into this world, I want to help them reach self-fulfillment.

What does that look like?

Feeling that they have a really good sense of themselves and the internal self-esteem and freedom to pursue the things they care about, even though it might fail and it might not immediately or ever be conventionally successful, right? Like, there are so many great cases of some of the biggest innovations in the world, whether scientific or culturally, are when people weren't even appreciated during their life at all. And yet I'm so glad that they lived and they worked hard on these things that they got no external validation for, because clearly They were really, really valuable.

Got it. And so what is Karat and where do you want to take it in the next 10 years?

With my co-founder, Will, we're building an entire financial system for creators. So everyone today makes money through content, including yourself. And it's not just, oh, I'm a YouTuber, I make videos. There are a lot of business people who realize the way to do marketing is by creating your own videos. Now, the issue is the whole financial ecosystem doesn't understand this business model. So we have a lot of creators, YouTubers who are making millions of dollars. They walk into a bank, they can't even get a business bank account or a business credit card, or say that they do, but the limits are really low. We just talked a bit about Alexandra Botez, who's a top chess streamer and creator who makes over 7 figures. She was rejected for a business credit card multiple times because they just had literally no idea what she's doing. So our vision is we build an ecosystem with bank accounts, Credit payments, everything around incorporating your business, running it, getting access to credit and mortgages. We make it easy for you because we understand what a normal bank doesn't.

And you guys also, I mean, let's go with Alexandra Botez. So when she was getting rejected, did she have millions and millions of subs already? Was she making good money already?

Yeah, she already was doing really well financially. Another issue though, in the credit underwriting system today is you either have built up your FICO, your personal credit history, which doesn't actually care so much about how much money you're making or how much you've saved, or you have years of business history and the banks feel comfortable trusting you. If you don't have either one of those, which many creators and creative businesses don't have, you actually could be making 7 figures and still not getting access to very basic credit cards.

Got it. And so what are you, what are you hooking with? Because I remember reading about this, maybe it was like TechCrunch or maybe it was something else, but it's like, yeah, I, One, the credit scores are broken. How are you guys redefining it? And what are you guys integrating with?

The existing FICO credit scoring system, which by the way, started off in like the 1950s by these 2 dudes named Fair and Isaac. They made like the Fair and Isaac Corporation. That's what the acronym FICO actually came from initially. It's primarily based on how much debt have you taken up before and have you paid it back? Now, there's so many people who've never taken out debt. They've never taken credit out because they didn't know that they should. They were worried about it. If you're following Dave Ramsey, right? You're like, oh, I don't want to even touch that stuff.

Yeah.

When in reality, having a little bit of leverage can actually really help your business. So a much smarter way to underwrite is by looking at, well, how is your business doing? How much are you making? How much are you spending? How much do you have on hand? And there's been a few different companies in addition to ourselves that are looking more at essentially cash flow-based underwriting. And then what we do is we add a layer on top of that where we also look at what's the leading indicator to your cash flow as a social media business. It's your socials. So we do look at, hey, if you're a YouTuber, how many subscribers do you have? What's your engagement? How many videos are you putting out? And so forth.

Got it. And so I want to come back to the business, but there's some interesting things you guys are doing from like a distribution standpoint. So you guys have a Carrot Podcast where you're bringing creators on. Like, what is the strategy right now beyond the podcast? Like, what does the marketing stack look like?

So whenever you're building a fintech business, which essentially is the business of storing or moving money around for somebody, there's always 3 things you have to think about. The first one is acquisition. How are you getting your customers? The second is underwriting. How well are you pricing them? And the third is what's your cost of capital? How cheaply can you get the money needed to lend out or float payments? Now, a lot of people tend to focus on the cost of capital or the underwriting model, but people often forget acquisition is still by far the most important thing. And you might have noticed over the past couple of years there have been so many vertically focused financial technology plays. So for example, Brex and Ramp started with venture-backed startups, or Nova Credit started with immigrants. You also have Step started with teenagers.

Hmm.

The realization is if you vertically focus on a specific market, You not only might win, for example, in underwriting, because you understand that population better than anyone else, you win from an acquisition POV because you become the default choice for them to, hey, maybe get their first bank account or get their first credit card. And then you cross-sell them on all the other needs that they might have. Now, for ourselves, we're focused on creators. So we're in a unique spot where if we do a good job serving our clients, they should share us naturally because that's their job. So we don't do paid influencer activations. We focus on what are the things we can do that make your life so delightful that you want to share it. Now you've mentioned podcasts. That's one great example. We run a podcast where we talk to creators and have them highlight the personal sides of their journeys because business and personal go together. They want to reshare those clips because they're really good. We've featured creators on billboards, which they'll go fly out and take a photo of it because it highlights them as legitimate people and celebrities will go and send creators very custom cool cards because it again becomes something to flex and show off. So that's how we think about getting that organic marketing in place. Got it.

And what kind of outcomes have you seen from doing these, this podcast, for example?

I think the number one piece is trust, especially with helping build financial products for creators. We're not really focused on hey, are we the best card or bank account for you relative to a competitor? We're focused on, are you aware why you need to care about these things in the first place? We work with so many creators who don't even know why they should have a credit card or that they should even be paying taxes. Like, I've met creators, they have years of back taxes and they're like, oh yeah, like the IRS is like freezing my bank accounts. Like, is this an issue? Because they're so focused on the content side.

Yeah.

And so the main task there is actually just to bring them in the door and say, hey, from somebody you trust, you should care about this. So what's really good about the podcast is when you see me do a podcast, for example, with Graham Stephan, who not only is a client of ours, but also an angel investor, you see in this very tangible, visceral way, oh, like Graham cares enough to come onto this pod with Eric from Carrot. And if Graham cares, maybe I should care. And maybe that becomes the first stepping stone to, hey, maybe as a creator, I do need to care about my financials. And if I'm gonna care about them, maybe Kara is a good option.

Got it. And how, I mean, I think like, I feel like the flywheel has been building for a while and then, you know, these larger creators are telling these other ones, but how did you get like the first big creator? I think you DM'd somebody, right?

Oh, it was hard, man. It was really hard. So my background, everyone assumes I used to work at Instagram. I helped build Instagram Live. People think, oh, you used to work at Instagram. It must've been so easy for you to get on in your initial creator journey. because you must have known them already. They forget when you work at a corporation, we are all cogs in the machine. And even though I was a product manager, I was so many layers removed from actually talking to creators. That's one of the reasons why I quit. I was like, my job is to help creators and businesses. And if I want to just talk to one, I have to go to my product marketing manager, to my community person, to my research person, because everyone's so specialized. And I'm like, I just wanna go to VidCon directly and talk with them. One-on-one and I wasn't able to. So when we started Carrot, we said, okay, we want to help creators with their finances and business. And I didn't really have many contacts from my work at Instagram because it was so siloed out. So to your point, a lot of it was initially just cold DMing, cold messaging, cold hustling. For instance, one of our very first clients was ZHC, who is a top creator focused on art. And he has, I think, over 20 million subscribers. When he joined Carrot, there were actually three different avenues that I was in contact with him. So the first one, I had followed his content. I had been cold emailing him for a while, and the second was through a former colleague at McKinsey. She introduced me to an angel who introduced me to another angel who introduced me to a talent manager. This is like three layers removed that. 5 months from me meeting him, ended up becoming the talent manager for ZHC. So path number 1, I was cold emailing ZHC. Path number 2, I had gotten to know this talent manager that ZHC ended up signing with. And number 3, the CEO of the talent agency that the agent had just joined, that the creator had just signed with, I had met him at VidSummit. I didn't even have a badge. This was like in 2019. I just Walked in, nobody noticed, just found him, approached him cold, followed up and met him in Texas a few months later and just got to know him. And so through 3 different avenues, been emailing the creator, been emailing his agent, had been emailing the CEO of the agency, there's enough credibility where when he actually had the need because he didn't have high enough limits on his credit card just to support the working capital of his channel.

Mm-hmm.

Because everything he made from one video, he'd put into the next. And if you don't have high limits, it actually slows down the rate of your production. It was like, oh, Eric from Karat might be helpful. And I jumped on a call and I personally walked them through all of it and they were like, yeah, this makes sense. And they've been clients for years now.

Got it. It's almost like you're building this, I don't know what you guys would call yourself, but it seems like a financial ecosystem for creators.

Yeah. We want to be your first business credit card. We want to be the people who help you set up your bank account, to incorporate, to do your taxes. And to your previous question, it all starts initially just by being a human being who's going out and meeting them. And that's how you start the flywheel where then you work with them and naturally working with them produces content and referrals that bring in other people. Got it.

How many creators do you have on your cap table?

I think through the creators directly, or some of them have invested as part of the agencies they're in, like over 70.

Wow.

Okay. That's a lot. Yeah. And it's across every different type of creator, right? In the Twitch space, we have Ludwig, MoistCr1TiKaL, Alex Botez. In the finance space, we have Graham Stephan, Nate O'Brien, Charlie Chang. In the travel space, we have Sam Kolder. In the food space, we have Nick DiGiovanni. It's really kind of like a who's who of folks who we were very upfront with them in building a venture-backed business. It is extremely risky. Like, yes, there's the chance that we become a multi-billion dollar company, but it's low. And we bring in creators who are like, look, if you're at a state where for you the reward is more interesting than the risk and you're aware that this might not turn out well for you financially, but you still want to come along for the journey and support us, Brilliant. We'd love to have you come in with a very small check. Got it.

Love that. And small check, I'm assuming like anywhere from $25,000 to $250,000.

Ideally even less.

Okay.

Because from our perspective, the majority of the round has already been filled by venture capitalists who have funds of millions, billions of dollars that they're deploying from their LPs. When we're bringing in angels, the money isn't actually valuable. It's the expertise, the relationship. And then especially with creators, we want to keep the amount as small as possible because we know it's risky and we never want to imperil the relationship if it doesn't work out. So from my perspective, I'm trying to bring on people for the smallest check possible that still builds that relationship.

So, I mean, with your business, you have a ton of data. I guess I'm trying to figure out everything's pattern recognition, right? So what kind of patterns, what kind of interesting data can you share in terms of creator behavior?

Yeah, so first you're right, we're actually a data play. A lot of people don't realize that. They ask us, how do you make money? For example, on our credit card, we don't charge fees. And people are like, well, what's the catch? The catch is, number one, I'm getting your financial and social data and using that to build an underwriting model. And number two, with that data and underwriting model, I believe I'm going to be able to develop other financial products that I can cross-sell to you because you're already using my first product. So first, like, good insight. A lot of people don't actually realize that. Second, so So there's like a few, I'd say, for instance, the most trustworthy creators are the ones that are supported not by brand deals, which are very spiky, but by a direct connection to their community via things like Twitch, where there's like a monthly subscription, or Patreon, or like their own email list where they've set up their own paywalls. Those creators by far are the most stable and secure because you're not dependent on a platform, right? Like for AdSense, where the algorithm could, oh, I don't know, maybe it helps you, maybe it doesn't.

Mm-hmm.

dependent on, as I said, brand deals, which really some months you might be making like 6 figures and some months you might be making almost none. You have a, it's almost SaaS-like where you have a constant base of essentially clients who are paying you every month on a recurring basis. By far, those are the easiest and most secure creators to underwrite. I think the second thing that we've learned is you have to learn to underwrite creators who you actually aren't necessarily sure are good for it. Because think about building an underwriting model. If you only underwrite the people who you assume are amazing, you're simply hard coding your own assumptions. You're not learning. You have to underwrite the people you're not certain about to get an advantage and get those learnings before anybody else on, look, maybe people might not think they're good for it, but they actually are.

You know, right now you have everyone on Twitter is like, you got to create a newsletter. You got to create a newsletter. It's like what's old is new again, right? Are you seeing that? I mean, I think some creators are actually doing that now. Like what are you seeing?

Yeah, 100%. Every creator is thinking, how do I build deeper engagement with my community that can eventually turn to monetization? For example, short form, TikTok, YouTube Shorts, Instagram Reels have taken over a lot of creators' focus over these past couple of years. And they're so hard to monetize because you don't even form a connection to the creator. You just form a connection to like, here's this like very fungible 5-second clip of media that I'm gonna swipe through. And maybe if I see it 5,000 times, I'll start to like give a shit about the creator who's making it. But if you stay focused on that upper funnel, it's like from a business POV, that's just leads. You're not doing anything with it. If you're able to get a creator to sign up for your newsletter or for your course, that's like the nearest part of the That's the bottom part of the funnel where you can actually monetize and support yourself with it. And so yeah, we're seeing tons of people start newsletters. What's really hard, a lot of creators are realizing though that they've never really built the engagement they needed to do that. I talked with a creator the other day who routinely gets over 10, 20 million views per Short posted. And his business, he said every time he goes out for a brand deal, he doesn't feel like he has a business. He feels like he's playing the lottery.

Yeah.

Am I gonna find a brand who wants to come in? Are they gonna want to pay me enough? Are they gonna be happy with the creative I make? And here's the scary part. He wants to move away from that and figure out things more tied to him beyond the 15-second clips he's putting out. But if he experiments with anything new, it's gonna hurt his average view rate, which is gonna hurt him when he goes out to brands saying, sure, I'm gonna charge you this much, but look at what I historically get. And so you have to almost be willing as a creator, if you are trapped in this, oh, I'm just dependent on brand deals, You have to be willing to experiment with new formats that in the short term might actually hurt your metrics, but long term might build some of that deeper engagement so you can monetize from your followers more directly.

And what would be like an example of some of these new tests?

I think a really great instance, I went to a workshop hosted by Sam and Colby maybe 6, 7 months ago.

That wasn't the Vegas one, was it?

It was the Vegas one actually.

Oh yeah, that's why you're on the plane.

Oh, beautiful, yeah, when we were coming out from JSX. Yeah, and I remember one of the things they did. So for those of you who don't know Sam and Colby, they're an absolutely brilliant group. Creators, they produce primarily long-form horror documentaries. It's like over an hour. You go onto YouTube, they're extremely hot and have super deep engagement. A huge portion of their business is actually their merchandise, their apparel, because people care about them so much and they wear it. They started off as essentially pranksters on Vine. So the whole lifecycle I just described on starting off with people not caring about you, how did they evolve? They said they followed, I remember this 3-to-1 rule where when you're introducing new content, Ideally, if the type that builds a deeper connection, cuz it's more about you than just like, here's a prank. Initially, for every 3 pieces of old content you're putting out, introduce 1 new piece of new content because you have to make the shift really gradual because in the beginning that new content, it's going to do worse, but it's worth it because metrics only matter as imperfect measures of what you're trying to really move. If you're trying to move your audience value, even if it's getting fewer views, those views might be more engaged and more deeply connected. And over time, you shift that ratio from 3 old pieces to 1 new piece to 50/50 to eventually 1 to 3, 1 old, 3 new. And eventually you've shifted over to just entirely new content. And this can take years, but if you do it right, you'll see Sam and Colby, people don't even necessarily remember they started off as Vine pranksters because of how well they've done in making that transition to this very deeply engaged content.

Very strategic in how they did it. It's almost like a, Also like a tactical evolution over time. You didn't just rip the bandaid off.

No, because then people are going to be like, this is entirely different than I was following you for. You see a lot of TikTokers, they'll make the mistake. They'll have their TikTok clips and then they'll go and start YouTube and they're like, well, I get millions of views on my clips and I'm getting like 100 views on my podcast or my long-form video because it's so different. Damn.

Never occurred to me that that is what happened. Yeah. Okay. Who do you think's doing it really well in the creator space? And I was actually watching a little Emma Chamberlain piece with Colin and Samir. Yeah, she seems like she's really evolved, right? But yeah, it's because the reason I'm asking this is it seems like most creators fall flat when it comes to making money. They just, they not only do not pay taxes, they also don't really know how to monetize.

Yeah, I think there's actually 2, 3 interesting points when we dig into it. So I think number one, to what we just said around the evolution, Emma's a great example. Once upon a time, she was putting videos out like, gosh, every week for years. And it was the classic YouTube-y, like all capital letters, like somewhat clickbait. And over the past year or two, she drastically decreased the amount of videos she was putting out. I think this year so far she's put out like 3 or 4. And they started just to be really simple subjects and titles. It'd be like, Soup. Like that would be the whole title. And like, You tune in on her and she's just making soup. Because from the evolution POV, you need to adapt and you want to avoid burnout. Putting out the constant more clickbaity stuff, it wasn't fulfilling her anymore. And she had built up enough familiarity with the audience. She's able to do a much slower, more informal vibe, and it was totally okay. And this actually leads to another point. You mentioned a bit about a lot of creators aren't able to monetize.

Yeah.

And I think the way you monetize has to be really different depending on the type of creator you are. Emma, for example, has said in an interview to the New York Times, she considers herself the opposite of MrBeast because MrBeast, when he's on YouTube, he's thinking about how do I build a business? Whereas Emma described herself as, I'm thinking through YouTube as an artistic canvas. There are creators who are like her who view it very much as art. Maybe they want to go into Hollywood, maybe they purely want to express themselves. There are creators who are, very much in that VidSummit mold of, I'm putting out these videos, let's optimize the heck out of these thumbnails and retention because I need to make money. How you make money really varies depending on your mindset. Those VidSummit creators, they are very AdSense driven because they are so good at optimizing and just putting out content.

Mm-hmm.

They make so much money just from getting views. And yes, obviously like brand deals are a clear natural follow-on. But then you like go one further degree. It's like, oh, I guess like they could do merch, they could do their own courses. Like they should just focus on AdSense. You're so good at like putting this out. Like why try and stray? Just be really good at it. Someone like Emma, creators who wanna follow that path, like you, you can't be AdSense optimized because the whole point is you have this artistic impulse you want to follow that doesn't dictate, let me put out X videos per X days. You have to go really hard on building a super deep connection I can monetize through other ways. Like maybe it's brand deals, maybe it's launching your own things. And so I think a lot of creators, they're not thinking deeply through the ways I monetize have to be really different depending on the type of creator I am. And then whatever efforts they try, it doesn't work. Like I've seen TikTokers who try to launch merch lines and they can't sell anything because that's not a monetization format that's really conducive to how they've grown their following.

And what do you think's like an underrated monetization channel for creators right now?

Well, one, one thing I'm really excited about are when there's a blurring of lines between, are you a creator who's now monetizing through your own products and merch, or are you just a business that's advertising through content? So what I mean by that, I'll give you a couple examples. I'm good friends with this group that produces this drink called Nectar. It's like an Asian hard seltzer that competes with White Claw. And they also produce a podcast called Under the Influence that's hugely successful to the point where many people, they don't realize the podcast was started originally because the seltzer company couldn't run ads because it's alcoholic. And this is the content marketing they developed. People think the YouTube channel started first and like, I guess here's the seltzer that they promote in conjunction with it. The founder, Jeremy, Jeremy Kim is not only CEO, he's also talent on camera. And they are one of the fastest growing brands in the space right now. And they've parlayed their online presence and distribution to getting in-shelf distribution at all of these stores that normally would take years to decide whether to give this new seltzer brand space. And I think that's a great example of, well, like, are they a YouTube channel that promotes a seltzer? Are they a seltzer channel that like promotes content? Like it's all the same from the start. The new generation of entrepreneurs are going to be thinking about how can I build this in conjunction with content from day one? I think that's what I'm really, really excited about.

Yeah, I think it's this whole concept of business creators, right? I have some friends like $112 million company, $30 million EBITDA, Bootstrapped, right? And he's like, well, it's mainly driven from the top, from top of the funnel content, right?

I think another good example of this that I think more people will find new twists on it. So like Liquid Death is said to be filing for an IPO soon, right? In the hundreds of millions of dollars range. It's just water.

Yep.

It's just water, but they've branded it so darn well. And a lot of it's been through social media. A lot of it's been through traditional advertising, but like they, hey, if they IPO, like that's, that's a big win for the space. Like that's kind of what Nectar's doing, although very YouTube and digital native driven. I think that again, like As time goes on, the next wave of entrepreneurs, they're going to have grown up looking at TikTok since day one. They're just going to keep thinking about how do I build a brand using social media from the start?

Yeah, it's marketing constantly evolves, right? And this is the evolution, right?

Exactly.

Yeah. So this is like the new version of what was SEO, paid media back in the day. That's like evolving now.

Yeah.

How about like, what are you seeing like in terms of behaviors with the top performing creators that you're using Carrot versus like the low performing ones? Like, are there any trends where it's like, hey, This is what separates the wheat from the chaff.

Yeah. I think of it very much as, so there's, I'd say 2 different lenses through which to look at it. The first lens is, say you're like, say you're already a successful creator, which like the average creator on Carrot makes hundreds of thousands of dollars. We started with the upper segment. So say you like, you've already reached a modicum of success. What really helps differentiate you there? And then there's another lens, which is, say you're trying to get there. Right? Because I think the answer's a little bit different for each of them. I think in the first, it actually becomes a mental game more than anything. Similar to, I think, being a founder where it's about how do you avoid burnout? Because as a creator on that level, like you're already making money, right? And so it's very much about how do I ensure I keep making money when I know the algorithm could change any day? How do I start to make decisions where, you know what, like, Even though my following's not gonna grow, I have to try out this new format of content. Or, you know, I'm gonna make less money this year because I'm gonna go and get a COO. I'm gonna bring on somebody to help me manage and edit. The creators who already are making good money, the ones who really start to stand out are the ones who are willing to take on additional risk and have the mental fortitude to make scary decisions that might hurt them in the short term. Because long term, it's gonna— prevent them from burnout and help them take it to the next level. I think that answer's different though for the creators who are a little bit earlier stage, who are just trying to get there in the first place. With them, I see a lot of very early stage creators will be like, oh, you know, like I put out this content, like I'm shadowbanned. Like the algorithm doesn't like me. It's like, no, like the algorithm's not perfect, but it's not trying to shadowban you. You just haven't yet found your content market fit. And you need to focus on that more than anything before you worry about bringing on more people and trying different formats of monetization and everything else.

Can you define content market fit?

Where if you can consistently put out a video and know that a meaningful number of people are going to watch it, like that's content market fit. And why do I say meaningful? Meaningful doesn't mean 100, 1,000, 10,000, a million. It means the number of people where you can be bootstrapped, ramen profitable. Depending on your business model, maybe that's 100 views, maybe that's 1,000 views if you have a really good way of engaging and monetizing with them, or maybe you don't and you're very ad sense dependent, in which case you probably need like hundreds of thousands of views. It's to where you can literally support yourself. I just did this podcast with this chemistry YouTuber named NileRed who has over 5 million followers on his channel. He's wildly successful, makes 6, makes 7 figures easily. And, you know, I talked with him. For years, he made $12K a year. For like multiple, more than one year, he was paying himself like $12,000, which is like, like literally he's like living with his parents. Like that's, it was like literally just going to like—

How big was he again?

At the time he was small.

Okay.

And he had to spend years until like, it was only after 4 or 5 years of putting out videos, like high quality videos on a regular basis, he finally hit this one really successful video called Turning Jewelry into Gold Bars. And then his channel started to take off and now he's wildly successful and everyone knows who he is. He had to figure out how to hit ramen profitable, right? And whatever meaningful number of views you need to hit that, you just need to keep burn low and just keep trying different things until you hit there before you start to scale.

Who do you think's doing it really well as a creator right now, just overall across the board?

So I think a creator I really admire, and I've mentioned her before, but I'm gonna mention her again for a slightly different reason, Alexandra Botes. Why do I really like her? Because she encapsulates a lot of the different things we've talked so far. First of all, that grind when you're ramen profitable. She previously had done a Y Combinator-backed startup graduating from Stanford. Oh, I know that. Yeah. And it didn't work. They shut it down, which really sucked. And mentally as a founder, if something I try doesn't work, I'm going to feel depressed and really bad. And she Had so many people telling her, ah, you know, like, you should like go and join like Snapchat or Instagram or Meta, whatever. Like, you're a Stanford-educated former founder. And she's like, no. And she just went home and like every day for hours, for months, just sat and just played chess online. She just ground it out. Number one. Number two, when she finally hit that kind of market fit, she immediately started to think about how do I pivot and expand to what we were just talking about? Like, yeah, she is most well known for chess, but I mentioned to you she's really starting to invest a lot in poker, and you seemed familiar with that as well. She hasn't been afraid to think about, okay, maybe chess brought me here, but maybe some creators would be like, well, I guess I just have to do chess until the end of time. It's like, no, like, I'm gonna start to do other types of formats like poker, like variety streams, because she already knew, like, I have to expand. Number 3, she's very business savvy. She has a team helping her manage her accounting and finances. And like, that's one of the reasons she was one of our very first clients and one of our very first angels. Because even though I wasn't saying, hey, we're going to help your YouTube videos explode 10x, she recognized the value of, if I can get anything that helps me manage my business, like even a little bit better on the stuff that I don't want to waste my time figuring out, that's more time for her to focus on making money. Got it.

I love that. A lot of these creators, they tend to hang out with each other. I mean, Like Sam and Colby, that's one of the probably only creator events I went to. Usually I just go to like these business or founder retreat things, right?

Which you host yourself actually. Yeah.

But like, I just know they like to stick with each other and usually they're not talking about business really. And they're just talking about like how they can just really, really how to play the creator game better. Like you just mentioned, I think there's these creator houses, there's these creator agencies, there's like this whole world And it's pretty opaque to me. So could you shed some light on that world?

Yeah, I think there's 2 points I'll make here. The first is how I've gotten to know this world, not as a native creator myself. And the second is what I think is the big focus of everyone in that ecosystem right now, which has some overlap with what you do, right? You obviously run your own business, but you also do content. So starting with the first point, I'm a big believer that the most interesting opportunities in life come from the intersection of different spheres. Right. If you look at like the different spheres in life, right? There's like business and finance, there's tech, there's media, there's medicine, there's politics, there's science and academia. Like I listed 5 pretty different ones right there. And there are people who are so specialized in each, but it's when you have people talking to each other across those spheres, that's where cool ideas come out.

Mm-hmm.

Or if you yourself can find a way to play in multiple of those areas, You stand out, and so in getting to know this ecosystem in the very early days, I had nothing to offer from a content and entertainment POV whatsoever. But I had a lot to offer from the business, finance, and technology realms because I had previously worked in investment banking at Blackstone. I worked at McKinsey on the tech side. I worked at Instagram, and so when I'd meet with creators, there would be a certain portion who, even though like I couldn't help them on the content side or the YouTube piece whatsoever, they were interested. Interested in learning, oh, like, what was it like working with big Fortune 500 companies in consulting? Like, why would they even pay you? Like, what could you possibly help them with? Or like, cool, like at Instagram, how does Instagram think about creators? What are the things I can do to stand out? And there's almost this like equivalent value. It's like, hey, I can teach you about this if you teach me about YouTube. And over time, that became another sphere that I gained knowledge about. I would say now, I'm in the intersection of finance, technology, and the creator world. Like my co-founder and I, we spend a lot of time chatting with investors in the VC ecosystem and other founders. We spend a lot of time speaking with bankers and folks in the financial technology space, payments processors, and we spend a lot of time on the YouTube piece. And in each one of those areas, there are people who know way more than we do, but we know more than any banker about YouTube. We know more than any YouTuber about how the banking system works. And that's what really helps us stand out. That's the first thing I was going to say. Just how do you enter an ecosystem you might not be familiar with to start with? The second point, which is your question on, well, okay, cool. All that being said, this is kind of its own world. What's going on there? Always by far, people are caring about what content are you going to make and how much engagement, how many views are you getting from it? Everyone's following everyone to just try and learn The new meta. So for example, I'm pretty familiar with the podcasting meta at this point because, hey, you know, I'm on a podcast with you right now. You run a podcast, like I do a podcast, and you notice over time there are various different ways to do a podcast. Like for example, you have the like creator-focused interviews. Colin and Samir obviously are the best and well-known. There are many others beginning to do this as well. Like Sean Ushai has done an excellent job.

Yep.

Right. There's also like Hidden Hillier Smith does like an editing-focused version.

Yep.

Like that's a certain meta. Hey, I'm going to bring on a guest who's very successful and they're going to talk to me about what they've done. And every episode you're going to hear from a different guest. That's an entirely different podcast meta from— there's an entire portion of YouTubers, Under the Influence is a great example. The Nectar folks I mentioned, another one's called Suburb Talks. It's just a group of the same people generally. Week after week, they're just gathering together and they're just talking about relationships and they're getting hundreds of thousands of views per every single pod they put out. And there's no guest. It's just a different meta. It's just a bunch of people sitting around a table because you feel like you get to know them and you're almost just listening in to be like a fly on a wall and be like, oh, like here's my friends. And so like when I'm in podcast circles, I'm always thinking and studying and learning like, okay, how do people in this sphere, like, okay, if you're doing the model where you bring on a guest, like how do you bring on good guests?

Yeah.

Like, how do you host a really good interview? Play to every guest when they want to talk about something different versus, oh, the secondary, I'm like, hey, like you guys are just the same people every single month, like every single week. Like, what do you talk about to keep interest when you're not switching up the guests? Or like, oh, some people only post on YouTube and they're very video focused. Some people only post on podcast platforms. Like, how are your monetization models different? How are you thinking about things differently? And so I think it's always, no matter what sphere you're in, people are always thinking about like, how can I be better? How can I—

Yeah.

get more attention, engagement, and make more money.

By the way, like when you do the Carrot Podcast, because you have creators from all walks of life, you have like magicians, you have like gamers or whatever, right? How do you decide what to talk about? Or is it— I'm basically asking for the Eric way of like podcasting now.

So, I'm still figuring it out and it's really hard because the common point that holds together a podcast is 2 things. Number one, we bring on guests who have built a strong social following. And number 2, we talk through the emotional piece of their journey where we try and get into bigger questions like, why do you even do this in the first place? Like, what's your goal? And it's been hard because within those 2 points, there's so much variation where, for example, we've interviewed Leila Hormozi and Graham Stephan. That caters to like a very particular segment of people who enjoy watching that type of entrepreneur, that type of creator. But as you said, we're going to release like 3, 4 pods in a row on Twitch streamers. The people who follow Graham and Leila probably don't follow these streamers. It's a disparate audience. So what can we do to try and build that consistency? I think it really comes down to, as a host, how much of your own personality you can show. Like you have to obviously highlight the guest. Because like, you know, you're bringing them on, that's the format of the podcast, and find ways to share more about yourself almost while you're hosting and interviewing the guest creator.

With the questions that you ask.

Yeah, with the questions or sharing little bits of yourself. And it's like hard because sometimes I'll get comments from people who are like, man, can you just like shut the fuck up?

Stop talking about yourself.

Yeah, like I just wanna hear from the guest. I don't give a shit about you. And that's a great case where it's like, Sometimes you have to be willing to make very distinct choices because there are people who are only gonna watch for that one particular guest. And well, cool, so they'll watch for that one video and nothing else I do.

But also fuck those guys 'cause it's your conversations.

Yeah, but it's like, well, I am going to choose to cater toward the people who care not just about the guest but also about my perspective on it. So like, I am gonna keep talking.

Yep.

Because if you're only watching me for the guest, you're not gonna be a steady, consistent viewer.

Yep.

I'd ask, I mean, even for yourself, right? The podcast that you're hosting right now, how do you think about it? First of all, in the context of your broader business model, like why are you doing the podcast from a business POV? And then I'd ask on top of that, why are you doing it from a personal POV?

First, so I'll answer the business POV piece. It's very simple for me. So I have a services business, it's an ad agency and it's the Gary Vee model. My podcast co-host Neil Patel, he's got, we just do the same thing, right? It's just like, I like having— I love learning and teaching. And so this fulfills my desires for that personally, but then it feeds into leads for the agency. So a lot of our leads come through SEO, they come through other channels, but this works really well because a lot of people say, dude, you know, the questions that you ask, they're so business-oriented, blah, blah, blah. But I just love this shit. So. Very cool.

And how did the ad agency start?

So I took it over from Neil's cousin like 9 years ago. So it was a turnaround. And I think what I would also say too, to add on, like our business, it's a high LTV model, right? Like high customer lifetime value. And sometimes these can grow to like 6 or 7-figure, sometimes 8-figure deals too. Wow.

So for you, it actually, again, speaking on how you build models around content, if doing the podcast every week helps bring on a potential viewer who reaches out to you and ends up becoming a client, that's so meaningful for you.

Yeah. It's like cheating to me because it's like, I already enjoy this and it's like, oh, I'm going to make money doing this too?

I'll do it all day. I think that's the secret to life. It's finding the business models to support your personal interests. You're like your ikigai, right? Exactly. If you like to do it anyways. I'm so curious, you mentioned the ad agency. I'm only high-level familiar with that agency. I assume it's you have a business or client who comes to you. They say, hey, I want to promote something. Go buy me ads. How do you differentiate yourself as an ad agency? Like, what are you figuring out?

Great question. And so like, first, like I come from tech, by the way. So I used to poo-poo on agencies, right? It's like, oh, it's not scalable, blah, blah, blah.

Oh, I didn't know that.

It's like, it's such a crappy business. So people like, but what business is not people-oriented? Like you need good engineers, right? So it's like, so, but I didn't realize it. Like I kept looking at the grass on the other side. It's like, let's go do other stuff. But then I realized maybe a couple years ago that the grass is greener where you water it. And so like, if you have an agency that's doing like, let's say $20, $30 million in EBITDA, You're, you're basically, you're basically having to exit every year, assuming you're owning majority, you own 50%. And then if you want to sell, most people don't know this, but pre-2022, people, agencies were selling at multiples of 15 to 20x.

That's so high. Why is that so high?

Because private equity, right? So maybe now things, they've like shaped up a little bit, but still you can, you can sell for like at least 10x.

Okay. I would assume a services business usually trades— I mean, you had Cody Sanchez on recently, right? A much lower multiple, like 5x or lower. Why would you, again, knowing it's in a different age, why would you get 15x? Like, what's the scalability? Like, what's the moat there, right?

So I think private equity likes it because it's— there's a lot of recurring that's tied to it. And especially when you have people that are buying paid media, for example, Facebook ads or Google, it's recurring and usually it's pretty sticky because they don't want to move agencies and there's an RFP model, agency of record model, all that type of stuff.

So say I sell water bottles. I'm going to come to you and be like, look, my LTV from selling water bottles, I don't know, maybe subscription water bottles, it's pretty high. Just figure out ads for me. You go and handle search words on Google and SEO and Facebook ad buying because it's so complicated. Figure out the right creatives, figure out the right bids. Is that basically what you do?

It is. And to your point, I guess to answer your question on what differentiates you, so I think what we tell prospects or clients, it's our level of thinking, right? So the way we push our internal marketing, like we're doing a podcast right now, like Marketing School gets like 1.7 million downloads a month. We're looking to ramp it. We're always pressing new things. Like with SEO, we're doing programmatic SEO. So it's like whatever we do with our internal marketing, we're trying to translate it to our clients and our mission as a business.

Wow.

It's like, I used to think this is bullshit, a mission culture, right? But it's like the mission is to do innovative marketing that drives customers just straight up. If it's not innovative, it's not driving customers, we don't want to do it.

There's this really interesting, more philosophical point where say you find something you're really good at, which for you is buying and running ads. Do you double down on that, which is let me just run ads for more people, or do you diversify a little? Or for example, you could launch your own, I don't know, sneaker brand and you're so good at ad buying, why not launch your own business line? So how have you thought about that?

So that's what I did before and then I realized, so I got punched in the face a couple times. There's a period of time where we're doing all these acquisitions We had a SaaS company, education, all this shit, right? And it's like, but it's like, how naive can I be to think that I can outperform no matter how smart or good I am, that I can split my attention 10 different ways?

Wow.

So, like, if you just focus on care, no doubt you're gonna have a great outcome, right? But I think the problem with us is like, we, at least for me, like, we get ahead of our skis and we think we're better than we are. And then you get punched in the face and it's like, okay.

No, I kind of love that point because I think there's like, I mean, You find yourself really good at one thing, which you're like, well, I'm amazing at marketing. You're like, well, everything else should be obviously easy. And it's like, no, life is hard. Business is hard. I think actually a lot of creators run into that too, because in a way they're also really good at marketing distribution. Similarly, albeit through a different method, where sometimes you see a lot of creators who are like, oh, well, it's going to be so easy. Let me just spin out a business on the side because I have the distribution. And if they try and do it themselves, a lot of times they're like, Oh, this is so hard. And maybe I should just refocus on the distribution part.

And then it's like, oh, I'm just going to go hire an operator to run this and buy this business. It's like, dude, it ain't that easy, man. Come on.

So you went through that whole journey and you mentioned that before the ad agency, you had come from the tech world. So what motivated you? That's like a pretty big jump, right? Like 5, 6 years ago, I made a similar jump to leave Instagram and start Care/it. What motivated you to leave what you were doing and start the ad agency?

Yeah, so Chamath actually invested in this company. So it was an online education company.

That's a pretty good reason.

Yeah, so, no, no, sorry. The company I was at, the tech company. So it was Reid Hoffman, Chamath, it was like Kevin Rose, all these A-listers invested.

It was like the who's who of who was an angel investor.

And so, and then back then online education was like the thing, right? And we're, you know, it was a—

Was this like a MOOC? Like those? Yeah, it was a MOOC, yeah. Like Udemy, that sort of thing?

Something like that, yeah. And they're no longer in business. I actually tried to buy them like 2 years ago with my friend, but—

Oh, what happened?

They, um, let's see how much I can go into here. Okay. I'll just say this. I believe, and if he actually ends up watching this, like, I believe that the company was mismanaged because the CEO couldn't focus. And that, that is like another reinforcer of focus.

What you just said, you're like, I'm really good at running an ad agency. I should focus on this.

Yeah. But like, I didn't learn that until like, you know, call it 4 or 5 years ago. Right. Um, but I would just say, okay, so the reason I decided to switch was one, I was already working in tech, but then Neil, at the time, he's like, hey, you helped save this company. 'Cause basically we're about to go bankrupt and we were running out of money.

Yeah.

And I bet the entire company on YouTube ads and it worked out, raised our Series B. We continued on. And so then it was like, well, come help save this ad agency. I'm like, dude, I'm in tech, man. I'm too good for an agency. Like, and so, but then I reframed it. I was like, wait, if I can save this crappy company, I think I can do like a lot more than I think I can. So that was the play.

I kind of love that too because I think growing up, I always tried to be really well-rounded. Like, oh, I should work on my weaknesses. And the older I get, it's like, no, no, no, screw that. Just double down on your strengths. And for you, again, there's this clear spike you have in figuring out marketing and you're like, well, in some ways, if you're really good at marketing, running an ad agency is the purest distillation of that.

Yep. And then just getting really good at your own marketing to help the marketing agency.

And it's just like this loop. Oh wow, it makes so much sense. If you're good at marketing, you can market your own marketing agency and then use your flywheel to like—

It's not like I'm doing the work, you know what I mean? Right, right.

Wow. And so like, okay, you mentioned like you saved this company by like going really hard on YouTube ads. What do you mean by that? Like what did you figure out? Was it like, okay, like, hey, I'm gonna run this creative targeted for like these topics. Like what did you do differently?

Okay, this one was simple. This is, okay, so I was like 25 years old, right? And like a month into the job, the CEO said, hey, like if you don't hit numbers, we're gonna have to let you go next month. I was like, what the fuck? I've been here for like a month, dude. And then I was like, okay, you can fire me. They opened their Google Ads and then I was like, okay, what actually performed? And then I saw something. There's a campaign, a YouTube campaign that actually performed. The CPA numbers were good. And I was like, why didn't they just bet on this? And my predecessor, like, you know, he just turned it off. I was like, okay, all in. So like all the budget went to that. And then boom, we went to like 500 users a month to like 5,000, then 10,000 or whatever.

To 10, 100, that's insane.

And then like, you know, TechCrunch featured Good Morning USA, all this stuff was happening.

What I also love about that too is like, so people always ask like, how do you know if you're hiring someone who's good? And I always tell them very upfront, like, I still am learning and I'm not sure I am. But one of the things that really matters, this comes from my co-founder, you know, as CEO, my job is to tell you this is where the goal is. A really killer team can figure out how to get there. And I love how your CEO, Maybe one of the right things that he did was to bring you in and basically say like, hey man, I don't know how we're going to hit these numbers, but you need to hit these numbers.

Or else you're gone.

Yeah. And you being actually very good, it's like you just found a way that he would not have figured out himself. That's the perfect example of someone just crushing it versus, hey, let me just sit here and tell you, here's the XYZ things you need to do. I've hired people I'd be like, hey, your goal is to do X. And they're like, well, what should I do? How do I do that? I'm like, dude, I don't know. That's why I brought you on.

Have you heard of that concept of barrels and ammunition?

No, tell me more.

Okay, so this is, you know, Keith Rabois, right?

Yes.

So, if you Google it later, it's basically, he says, look, in an organization, you have barrels. These are like cannons where you shoot the cannonballs through. The rest of the company, usually they're ammunition or they're barrels, right? Because to push initiatives forward, you have to push it through a cannon.

Right.

Right? But most people just aren't that. They won't make things happen. They won't take initiative. They won't take accountability. And they need to be told what to do.

Yeah.

Right? And so, it's really hard to find the barrels. And you know what's interesting? I'll share one more story, then I have a bunch more questions for you.

Of course.

There's a book called Scaling People. And at one of my events, I gave away like 100 of them. And one of my friends, he has a holding company. He went to a conference and saw one of his executives. He's like, hey, here's the book. It's fucking thick, right? Really heavy too. So, she hated him for like a week because it was super heavy. And then like 2 weeks later, she's like, I read the entire thing. This is amazing. We're going to do all these things. Like that is what a barrel does. And the reason I'm bringing this up is because you're talking about like maybe there's some people problems or whatever, right? It's like, but everything's a people problem. And that book is like the new modern-day High Output Management from Andy Grove.

I need to learn that. biggest humblings is like, oh gosh, I really struggle at learning how to manage well. And I think people don't realize how big of a difference there is from doing it yourself to managing other people.

You know what's interesting? So, Neil, my podcast co-host, so he'll talk about this because we have 2 separate ad agencies. He has his, I have mine. He doesn't get to talk to people. So, he's like, and I'm not saying you're like this, but he's like, he knows he's really bad with people. And he also knows like, he makes people cry too, right? Sometimes, like, because he's just very direct. And so, he gets put into a box. It's just like, dude, You just go drive traffic and then like everything else falls under that.

That's another good example of like, know what you're good at and know what you're not. And it sounds like Neil's like, huh, maybe I'm not good at managing. Let me just go and bring awareness to what we're doing.

Yeah. The curse is if you're good at everything, which I feel like you're good at many things.

I'm working at it, man. I'm working. Appreciate it.

Yeah. When you were driving for like going to Harvard or Blackstone, McKinsey, Were you— so you can correct me if I'm wrong here, but it felt like you were optimizing for almost the— that was the destination, right? Like just getting the logo almost.

That's right.

What do you feel like you're optimizing for now? Hmm.

I think, well, I think there's 2 pieces here that somewhat conflict. The first is freedom for myself. I want to do the things that I want to do. And that's freedom not only from an external POV, which is like, oh, are people stopping you? Which, you know, the older you get, the less likely that is. The second is also like from a financial resources POV externally, but there's also an internal POV, right? Do you feel free to do what you want to do from an internal perspective? Maybe you feel anxiety or self-doubt, which I often feel. Sometimes the hardest thing is making a decision because you're so worried of what could go wrong or if you're making the right one. And I want freedom from all of those different types of constraints. The second thing, which isn't entirely aligned, Yeah, I feel tremendous responsibility to carry it, right, toward, as I mentioned, our investors, our clients, our customers, our team members succeeding. And I really, really hope that we make it work. And because we're a venture-backed startup, it might not, and that's going to super, super suck. And I think you see, like, there's a lot of, like, cultural tension, I think, over that point where you see some founders give up, right?

Mm-hmm.

And there's nothing wrong with that. In fact, there's been a lot of founders in recent years who just returned the money. They raised a lot of money and they're like, hey, you know what? I can't make this work. And they just return it because they're like, well, mentally, this is no longer worth my time, like the opportunity cost, right? And for my co-founder and myself, at least right now, we're like, well, hell no, we're not going to do that because we were given this money with a mission, with a purpose. There is a piece around we got to try harder and we're not yet at that burnout point where it's like, oh, I would ever consider just returning it and giving up. It is very much like, no, there's responsibility we've been entrusted for to try and hit it. And I think the tension with that comes With how do you balance that with mental health? Because there are a lot of founders who return the money because it's like, oh my God, like they're like, they just, they just do not see a path forward and this is just not going to work anymore.

How do you, how do you deal with stress? Because for me it's like, you know, poker helps a lot. I'll explain in a second, but you go first. Like, how do you deal with it?

Well, I think number one, poker is a very good analogy because in poker, right, here's the hand you've been dealt. Now you have to play it. And maybe your hand is better than other people's. Great. Let's not pat ourselves on the back too much or feel morally superior. It's not like you necessarily deserved that hand. It's just the privilege you were given. Maybe your hand is worse than other people's. Cool. There's also not much point to wasting emotional energy being jealous of other people's hands. Whatever. They have the hand. Your goal is just to play the hand that you have. And I think there is a point here in life around not only stress, but also your own privilege, right? We all come into this world with a certain set of cards to play, and sometimes they're good and sometimes they're bad, and it's just making the most of what you have. And so I think the point around stress is just like, okay, cool, I have all this stress. A lot of it comes from stuff that I chose myself to do. Some of it maybe not, some of it maybe I had less control over. Well, I still think there are interesting plays that I can make with this hand, and I want to go and play them out. That's like from a very philosophical POV. From like a much more tactical POV, like, yeah, it's hard. I'm still figuring it out. But like, I try and work out. That helps me a lot. Like, I try and like spend time with friends. I enjoy doing things like this where I get to know someone and also share more about myself to try and feel understood. So yeah, I think a mix of things. Yeah.

It seems like you're very philosophical. I'm sure you're a big learner, big reader. So I guess what's in your learning stack?

So I think the 2 different things I read, I mean, for long form, like actual books, I actually read primarily fiction. And I say that because I feel I've met so many people and feel like all the smart friends I have, all the long form books they read are nonfiction. They're like, well, like, why would I waste time reading fiction? And the context I add, okay, so like, first of all, I actually consume a ton of nonfiction every single day, but it's articles. It's like things I'm reading on the internet. Like, I read tons, like every single day. Like, I post on LinkedIn a lot and people are often like, oh, like what inspired you? Like, how do you find the things to write about? And the truth is I just do what I normally do, which is every day just like read obsessively about everything. And I just sit down, I'm like, what I think was interesting, just write it out. And it doesn't take that long because I've really like read a bunch of stuff. But for long form where there's a little bit more of an investment, I actually prefer more of an escape where I think that's where I guess the point in stress, some little bit of emotional relief that's not as like, here's the 10 lessons to learn life. The 10 lessons on how to do life, I'll read that during the day on my commute in Safari, but I won't read an actual book about it. But yeah, no, I think there are certain philosophical tenets that once I read them, they really stick with me, right? Like existentialism. I'll be like, oh, that's something I'm going to remember. Yeah.

Got it. Anything else that sticks out from the last 12 months?

I would say the last 12 months, but again, sometimes you learn something that's very formative. I remember too learning what does it mean to be free? I mentioned earlier that it's a personal mission of mine to try and feel free. And there's 2 different types of freedom. In fact, one of the big reasons why liberals and conservatives in this country argue so much is because they optimize both for freedom, but for different types of freedom. The first type of freedom is freedom from interference. That is freedom from other people getting in my way and telling me what to do. The second type of freedom is freedom to really be myself, and they're different. So here's an example. This is the classic example. It's from a thinker named Isaiah Berlin, I believe, if my memory serves me right. And the example he always gives is, say like your friend is going out to buy drugs because he or she, they're addicted to crack and it's like 1 in the morning and they're going out to get more crack and you're standing there and you have the keys to their car that they're gonna go drive to meet their crack dealer. Do you give them the keys or not? And your friend's like, give me the keys. Well, on the one hand, like, I should give them the keys because I'm restricting their freedom from interference if I'm not giving their keys. I'm interfering in their life. He's like, give me the keys. I'm like, no, I'm gonna willingly hold these keys from you. I am like actually interfering with your life.

Mm-hmm.

But the second perspective is, oh, I'm actually helping you be more free. Because when you are addicted to crack cocaine, are you really free? Are you your best self? Are you making the choices that you think you really want to be making? Or are you trapped in a desire that's not really representative of what you really want? In which case, if I can do anything to help you overcome that addiction, that's actually going to be what helps you become freer, even if it requires interference. And I've thought about that concept a lot. And I think when I was growing up, I subscribed a lot to that second school of freedom. Like, actually, freedom is Where people or you are trying to help others be freer, even if it requires more interference from you. And as I've gotten older, I've actually changed my mind. I subscribe much more to the former because—

Interference.

Yes. Freedom from interference is the truer form because in order for someone to believe that their interference is worth it and they're helping you reach a truer state of freedom, a more truer form of yourself, they have to have some judgment of what they think is right and good for you. And as I've gotten older, I think, yeah, like Actually, nobody knows what they're doing, and therefore most judgments and assumptions about your life are probably wrong, in which case the best thing you need to do is to trust yourself. And the freedom from interference actually is the more valuable form of freedom. That's always been a tenet that's always been in my mind. It's like, how do you feel free and how do you try and help others too?

Got it. I love that. I, you know what's interesting? I think younger, like, you know, in my 20s or whatever, it's like, no, you know, equality is the main thing. And then you realize though, like equality and freedom are diametrically opposed. And the main thing to be optimizing for is actually freedom.

Yeah, they are different, right? Because if you assume that we come into the world naturally, necessarily not equal, anything you do to try and make that more equal might involve interference. And that doesn't mean it's bad, but again, it depends on your definition of freedom. Like, how is that worth it and such?

Yep. All right, so a couple more things from my side here. It's not often I get to talk to an Asian founder. So, how has it been being an Asian founder? Do you just feel like it's like, you know, It is what it is.

Well, I think, I mean, even that thing you said, right? I feel sad when I hear that because there historically haven't been as many Asian founders. When I used to work in the corporate world, when I used to work at Blackstone or McKinsey, what I recall distinctly is the analysts, many of us were Asian. The middle managers, engagement managers was the term we called it at McKinsey, we were Asian as well. But I did not see many East Asian partners. And I was like, well, that sucks. There is that certain model minority myth, right? I think it's changing, but in the olden days, it's like, oh, Asian Americans, especially East Asian Americans, we're really good at doing things, but we're not good at figuring out what to do and leading and trying new things. And like, why did that stereotype develop in the first place? Well, yeah, because like our parents are all immigrants. Like they came over to this country, many of them actually very highly educated and qualified, not having the privilege to necessarily come into like white-collar halls of power and to start telling people what to do. They had to do what other people told them. And guess what? They were good at it. And that's sort of what perpetuated the myth. But that's why like we had generations where like we didn't see people necessarily being as aggressive that same way. And like, yeah, sure, maybe there's like a cultural POV in terms of what worked in these Asian countries is different than what works here. Like these learned behaviors right now, I think we're finally beginning to see a generation of founders and creators and business leaders who are East Asian, right? Like our generation, the younger generation, because we are finally beginning to reach places of more abundance mindsets and doing riskier things. Like I. I am beginning to see a lot of younger generations, a lot of East Asian Americans who are just like, yeah, of course I'm going to try this thing. And in some ways I hope that by us sharing our journey, that we can inspire that next generation to be like, okay, cool. They followed this path and maybe it was good, maybe it was bad. Is that the path that I want to follow?

One thing I hope to see more of, because I don't know if you've seen this, but I, you know, I was telling Brad this earlier. It's when you look at like, you know, if let's say we're both Mexican, for example, right?

Sure.

Someone comes after you, like, you're gonna help me, right? Same thing, like if we're both Black or whatever. But like Asians, there's like this weird crabs in a bucket mentality where sometimes we're just trying to like pull each other back into the bucket. I just like would like to see Asian founders support each other more. And I don't know if that's what you see.

Yeah, I think I'm reminded of this comment I saw recently from someone. I think he was, he or she was Asian. I don't quite remember, but they were like, hey, like you talk a lot about being like an Asian American founder. Like, don't do that. It hurts you. And I was like, well, if I'm being honest, I don't talk about being Asian American to hurt or help the business.

Right.

Like, it's not because like, oh, it's gonna like optimally help Care 50x times. I talk about it because it goes back to my point on freedom. I just want to be able to say the things and do the things that I think are true to myself. And like, I am Asian American.

Yeah.

Like, I wake up every morning and I see it in the mirror. It is an empirical fact of who I am. And so I will share my experience having lived that. I'm not going to like necessarily say that, you know, makes— I'm not trying to be prescriptive to others. I'm trying to just be reflective of my own experience. And I think to your point, I think a lot of times you mentioned like a crabs in a bucket mentality, right? I believe that whenever someone is attacking you, it is always because of some insecurity they hold themselves.

Mm-hmm.

Whenever somebody is angry at you or resentful or calls you out, they're not really mad at you. They're really mad or scared or sad about something themselves. And I think Even that, that you described, it is but a symptom of, yeah, as Asian Americans, like we have gone through these stereotypes of, yeah, we suck at leading and founding and we're just good at doing stuff. And all of us have had different reactions, how we internalize it and deal with it. And sometimes it comes out in ways where, you know, everyone has their own ways of doing it and sometimes it's not as productive. And I just try and recognize they too are coming from a place of hurt.

Yep. I think the best thing we can do for, for as Asian founders or any Asian founders really, or any founders really, it's just like do a really good job and set the example.

See, I like that, but it's also hard because then it puts on the classic amount of pressure where it's like, oh, okay. So if you're an Asian American, you have to do a good job. But it's like, well, I'd love to get to a world where I'm Asian American and I'm not saying we will, Yeah. But maybe I'm not, but I can still be valued the same way as someone who isn't, who just tries and fails. There's this classic description, they call it the glass cliff, I believe, where there's a saying where they'll bring in a minority CEO, like a woman CEO or like a minority CEO, and they'll usually bring one in right when the company's in crisis. Like something like the stock is falling off a cliff. They're going through like tons of issues. And that's when they bring them in. And then of course they like brought them in during a time of crisis, and a lot of times it still doesn't end up working out. And then like that person was brought in gets like all the hate. Like yeah, because they were in XYZ, that's why. And it's like, well, in a way, like they were brought in in the first place because things were so shitty. Maybe other people didn't want to take it on, and they're like, I'll take it on. And so there's sort of this like, you're right, like yeah, we just do a good job, it'll speak for ourselves. But it's also this weird responsibility and burden to be like, oh, because I'm a minority, like I have to do better.

Yeah, I think it's not even like— so I wasn't coming from a place of we have to do better. It's just like, hey, to your point, work hard, hopefully add some value to somebody and then set the example so we can keep the cycle going.

Yeah, no, I think you're right. I'm going to take it one step further in being like, just exist, just try, just be there. Just by doing the work and being a founder, a creator, an entrepreneur, As a minority, you're already helping.

I mean, like, I, uh, so we had one of these, like, my mom put one of these, like, Asian family dinners together like a month ago or so. And then one of my rich uncles, like, he comes up, he's like, you know, Eric, uh, most human beings are just useless. You don't need that many Steve Jobs and Elon Musks. And then my other, my cousin works for the IRS. He's like, he's like sitting there, he's like, yeah, you know, most of the people I work with are useless. I was like, damn. And so it's like, to your point, like, these things all actually align. It's like just Work hard, exist, and let the chips fall where they may.

Yeah, I think that's right. To take a different tangent from your point, there will always be someone out there who thinks what you're doing is useless and you are useless. It doesn't matter how big you are. And you can't let that stop you from just doing it anyways. And you never know.

Yep. All right. Well, Eric, this has been great. Is there anything else you'd like to add? Anything you'd like to leave the audience with?

Yeah. Well, Eric, I just wanna say it was a pleasure. Thanks so much for humoring me while I wanted to get to know you better too. I think your story is also really fascinating.

Appreciate it.

And for those of you who wanna learn more about myself or Carrot, you can find us on socials at @trycarrot on Instagram for the business or @erictway, E-R-I-C-T-W-A-Y, on socials for myself. So thanks so much for hosting, Eric. All right.

Thanks, man.

Yeah. Sweet. That was fun.