Millionaire CEO’s PR Disaster, Elon’s Visionary Skills, and the $28B Pop Mart Lesson From China

Speaking of which, speaking of extreme, did you see the millionaire who stole the hat from the kid at the US Open?

Yes, I was really irritated by that.

Yeah.

Okay.

So this—

They said it was some European or something like that.

Polish CEO. So here's the deal. This guy, I'm pulling it up.

Okay.

So he took this hat from this kid.

Okay.

His name is Piotr Skrznicz. I can't really read the last Polish name, but it's a Polish paving company. So after this happened where he took a video or he took a hat from a video. So this, this tennis player, I think, was signing autographs and then he flipped the hat over to give it to the kid. And then this guy swiped it away. See, you see that?

Yeah.

Swiped it away. By the way, this tennis player afterwards, he saw the video. He's like, no, it was meant for the kid. He didn't realize it was taken away.

Right.

And so what happened was everyone on the internet found this guy and the internet didn't just find him. They found his company and they're lighting up every review site they can find. And so you imagine you're getting negative reviews everywhere and this This guy is actually doubling down. He wrote a response saying, hey, like my life motto is like whoever gets there first like gets it, right? It's like, dude, you took it from a kid. And then his wife actually responded to say that, yep, that's our life motto. Like if you guys don't like it, you guys are losers or something like that. But my point is you probably shouldn't double down. You should probably have damage control. If you're paving, if you're just going to keep getting negative and each time you respond negatively, it gets millions and millions of more impressions. So you should probably stop.

Yeah, there goes a lot of his revenue.

Yep.

Yeah, no, this— it's terrible. That's what I like on some of the baseball games. Like some of these guys catch a baseball and the kids were also going for it. And after, you know, the adult catches it, he gives it to the kid.

Yep. But then, and then karma happened and the kid caught it and then gave the next ball. Did you see that? He got the ball back. He got another ball.

Yeah, I saw that one. Yeah, yeah, yeah. So anyway, there's one where a kid Got a ball from an adult and it went viral. He got the ball, you know, the adult gave it to him. The kid turned around and gave it to a chick that he thought was hot.

Oh yeah, yeah, yeah. I remember that one. I remember that one.

I'm like, all right.

Dude, so I, I have one here and then you can pick the next one, but I wanted to talk about how you can become a visionary communicator like Elon Musk. And so if you look at 19 years ago, he had a plan for Tesla. So the, the first plan was to build a sports car. Okay. Then, then number 2, use that money to build an affordable car. So the sports car was the, what do you call it? The Tesla, The Roadster. Okay. The second one, the affordable car is the Model 3.

Okay.

Or sorry, was the Model S. Model S. Okay. That was more, that was affordable, still expensive. Then number 3, use that money to build an even more affordable car. So that's the Model 3. Then number 4, while doing the above, also provides zero emission electric power generation options. And then don't tell anybody. He told everybody, but that all happened.

Yeah.

19 years ago, he called his shot. Then 9 years ago, he, Published part 2. Part 2, create stunning solar roofs with seamlessly integrated battery storage. SolarCity, right?

Yeah.

And then he bought it under Tesla. Number 2, expand the electric vehicle product line to address all major segments. Cybertruck, he's got the big truck as well. Develop, number 3, develop a self-driving capability that's 10x safer than manual versus via massive fleet learning, which is already happening with robotaxis. Everyone's talking about how it's so great. Someone did like a 4-hour drive with robotaxis, no interventions, and posted it. That's happening. And the last part here is enable your car to make money for you when you aren't using it, which he said that's going to be done in the next 12 months or so.

I bet you that's going to start getting a lot of people onto the app.

Yep. And Elon afterwards was like, oh, like part 3 was too complex. He didn't want to explain it, but part 4 is coming. He's going to explain it. But he's— if there's any one thing people can say, oh, like whatever, he's this type of person, but he's very clear with his communication and with his memos. When I read the book Musk Memos, his emails are very clear.

Yes, he is a great communicator. One thing that's interesting with BYD, his competitor, the Chinese alternative, they generated more European sales than Tesla. I believe it was for the month of June. They were seeing growth while Tesla was seeing a decline. BYD published financials. They're publicly traded, and they're getting hit hard because their profit margins are sinking. And the Chinese model, At least what I've seen from an external, you know—

You're saying Tesla's sinking in China?

No, the Chinese model.

BYD.

BYD stock was sinking.

Okay.

Okay, because their profit margins are continually sinking. Because the Chinese business model is continually beat people on price. Correct me if I'm wrong, but that's what I've seen from an external—

It's one of the ways, right?

Yeah. So when you are continually getting people lower and lower prices, eventually the business just makes less money. Their goal is probably to take over market share, but if you're selling more cars but you're making a lot less per car, it's going to hurt you. It's just a question of when.

Yeah.

And I don't think that is a long-term good approach to marketing in reducing your prices. And we see people constantly doing this. I know we're getting closer to holiday season, but people start doing sales and promotions with Halloween. Then you're going to start seeing with Black Friday, then you're going to start seeing it with Christmas. I think it's, yes, you can run promotions, there's nothing wrong with it, but continually having the model of we need to be the lowest price, For most businesses is going to hurt them. If you're going to create a business out of it like Walmart or Amazon, great. But for most businesses, I think it's a road to just folding up.

All right. So I wanted to take a moment to tell you about my podcast co-host Neil's agency called NP Digital, and they work with a whole host of global companies or global organization. Also, Neil has SEO tools such as Ubersuggest and AnswerThePublic. All you have to do is go to npdigital.com to learn more, and we'll see you on the other side. I guess on the flip side, because we're talking about China right now, so you know the, the little toys, Pop Mart? You know there's one at the mall?

I don't think that's Chinese. I thought that was Japanese.

No? No, it's Chinese.

Oh, it's Chinese.

Yeah. So this little— Yeah, it's got Boo Boo. Yeah.

Yeah, my daughter has one.

Your son doesn't have one?

You don't want one? Only my daughter wanted one.

Oh, I thought it was for guys and girls, but—

I thought it was for girls.

Get the— get this.

Or purses.

He's now The 10th richest person in China, so worth $28 billion. And so you look at this, this is the— these things, right?

Yeah, my daughter has a pink one.

Yeah, yeah, yeah. So this guy, dude, this guy looks so young. And so this guy over here, interesting things I learned about Pop Mart, the Chinese company behind Labubu, and its founder, Wang Ning. So that's for sure Chinese. And so basically Pop Mart started as a single variety mall store like Spencer's. Hot Topic, and then you had these big things and people line up for it, right? But man, that looks really nice, doesn't it?

Yeah, that looks really nice. Yeah.

So he started the company in 2010, a year out of college, and then completed an undergraduate degree in advertising in a short stint. Spent 2 years selling third-party stuff on margins, trying to scale with debt, but hard to finance. 2014, he did his first, like, finds a repeatable format. So we talked about formats a little earlier. Blind boxes, you don't know what's in the box other than theme series. He figures out after stocking Japanese Sony Angel blind boxes. They kind of look like this, right? So point I'm trying to get to here, started in 2010, kept going, kept going, kept going. And in 2017, sales of Molly goes nuts. So this thing over here. So he just keeps developing new formats. They got the box thing going on.

So the latest one is the Labubu or whatever it's called.

Sales. Okay, so get this. 2017 sales was $22 million by end of year. And then sales in 2018 spiked to $73 million on the back of Molly. 2019, he begins selling Labubu. Blind boxes again, you don't know what you're going to get, which is cool because it's like when you buy Pokémon cards, for example, or Yu-Gi-Oh cards. You didn't play these games, but I did. Or sports cards.

Sports cards. Yeah, I did sports cards.

Basketball. Yeah, yeah, yeah, yeah.

Baseball.

You buy sports cards?

Yeah, I had a lot of them. Okay.

So what ends up happening, you start to take off and then they raise $100 million on a $2.5 billion valuation. So now they really start to scale. And a few months later, IPOs in Hong Kong, stock rips 80% on opening day. Ning's net worth doubles overnight, $3.2 billion at open, $6 billion at close. Has $12.5 billion market cap at close. From IPO date to 2023, Pop Mart begins leaning into higher-end collectibles and goes international, snagging licensing deals. So partnerships, guys, with brands like Disney, Universal, Warner Brothers, Sanrio. Look at these Boston Celtics and Lakers cards. Like, I didn't even know they had these, right? Disney Princess. Oh, does your daughter have one of these? But she's going to want one of these.

No, not really. Not going to show her it.

So it explodes. Check this out. Pop Mart is the top gainer on MSCI China Index. Wow. In the black, right? So that's the index for China in the red. And then that's the last price. So $4.84 versus $21. And now that he— now he's the 10th richest person in China. And that's what it is.

Yeah. Took me forever to get one.

Really?

And it was expensive.

There's one at the mall, right?

I just went online.

Okay, so explain, how did it work for you?

I Googled LaBubu and I went to one of those e-commerce sites. I think it was Potmart's e-commerce site or something like that. And I bought it. I don't know how much it was, but it was less than $100. It was pink. That's the one she wanted. Got it. She usually buys her own toys because we make her from her own money, but she doesn't have a credit card, so I paid for it.

Did you take $100 from her?

No, I should, but I haven't yet.

Not brutal enough. Brutal sometimes in business, not brutal enough with family. No.

Just like the other day, she was sick and I know she likes American Dolls, so I went to American Doll store and got her outfits for her dolls.

Dude, those things are creepy.

Yeah, but not just creepy, they're expensive. It was like $80 for outfits. I was like—

That's even more expensive than baby clothes.

Yeah.

That's crazy. Okay, to continue on this China thing real quick and then we can move on to the next thing, but you know the phone maker Xiaomi? So Xiaomi makes these handsets, phone handsets. They're number 3 in the world for handsets. What you don't know is the founder, he hasn't— up to creating cars, he hadn't driven a car for like over 10 years because he has a driver, does well for himself. What ends up happening at Xiaomi is he goes to— he leaves a note on a bunch of people's cars saying, hey, I'm the CEO, can I borrow your car for a little bit? He wants to drive it, right? So he drives— he customer development, he does customer development on 170 of these cars. And he asks these people, what do you like about it? What don't you like about it? Now these Xiaomi cars are better than US cars because Xiaomi went out of their way. Remember Apple tried to do a car? They actually, they made handsets and now they're doing cars. And but that just shows to me that you have to actually be there in the trenches doing customer development if you want to make an amazing product.

Is it electric car?

I think electric, probably. I'm sure there's some hybrid.

How do you spell Xiaomi car?

Xiaomi is X-I-A-O-M-I.

I spelled it wrong, even though you—

It's I-A-O-M-I.

It looks like your Porsche.

Yeah, they just straight up rip it.

It looks like your Porsche.

Yeah, yeah, yeah, yeah, yeah, yeah, yeah.

It looks like a copycat of your Porsche. Yeah.

So they probably knew that was, 'cause I do think the Porsche is—

Dude, it literally looks like your Porsche, right?

Hey, whatever works, you know?

Oh.

So where I want to end on this—

I'd rather have the Porsche.

Yeah, me too.

See, I'm different. If someone copied a Porsche or a Tesla or whatever, if I wanted one, I'd rather get the original.

Yeah, but you do well.

All right, fair enough.

Yeah, so if I—

But even when I didn't do well, I didn't want the copycats. I wanted—

Yeah, you probably just drive like a Honda Civic or Toyota, which are amazing.

You know why? Because from a brand perspective, and I bet you a lot of consumers think this way, as a little kid, I'd rather have drove a Honda or Toyota than a quote unquote cheap replica, because branding-wise, I thought it would look bad. Like this guy is just stealing or whatever, whatever you want to call it. Like it just makes you look— to me, it makes you look bad versus buying the original thing or buying a Toyota. No one judges you for driving a Toyota or Honda. I drive a Honda right now as my main driver. It works out great.

Yeah. So look, I think this all connects. We just talked about PopMart, we talked about BYD, we talked about Xiaomi. But what I find interesting is Chinese people study the US a lot and they listen, they read all the books, they listen to all the podcasts, they watch all the videos. When's the last time you studied China?

I haven't studied China.

You don't study China, right? But the thing is, there's so much that we can learn from— and I'm not saying I study China a lot, but they study us, we don't study them. You look at how they're growing like crazy on nuclear and solar power. They got the number 3 phone maker. Look at how quickly, like the way they work 996. I'm not saying everyone needs to work 996, but you look at how their cities are ran as well. And having said that, They do have some ghost cities as well. But I saw something the other day. And imagine you're taking a train. So have you taken— when's the last time you took like a train, like the Amtrak or something like that?

I don't know, like 6 months, a year.

Have you been to Japan?

No.

Okay. So Japan, you take the Shinkansen, the trains, right? At each stop, usually you're just waiting on people getting on. In China, at each stop, you can order food ahead of it, and then someone's going to come in and deliver you your food. Imagine if you ordered food. Yeah, train order food drop-offs. They have $10,000 electric vehicles from BYD. So there's just, I feel like there's so much we can learn from how they're running things, but they learn from us, we don't learn from them. And I think when you have a competitor, like we look at our competitors, we don't look at them all the time, but we still look at them.

I look at my competitors all the time.

Yeah. So why do you do that?

Because they're bigger than me and I want to figure out Why they're bigger, why they're struggling right now, and what I can learn from them to not struggle and how I can overtake them.

So you look at the bigger ones. Do you look at any smaller ones for inspiration sometimes?

I do, because the smaller ones move faster. Like I recently was looking at this smaller agency. They've picked up some large enterprises. They do creative. And what they do is they constantly email people like companies like X or Uber or whatever it may be, and they'll send them a new creative every single week that they could just use.

That they made custom to them. And that's how you get people to respond to your cold emails. It's not, can I do one for you? It's, I just did it for you, here it is.

Yes.

Yeah.

So we take all that because we believe that the larger players have really gobbled up most of enterprise market. So we try to learn from them on how they went down that path and how they got there. The smaller players grow much faster and do more creative things. So it's like, how can we do what the smaller players are doing to grow faster and the larger players are doing to go more upstream?

So it's in essence the best Yeah, but my point is, you look at the big ones, you look at the small ones too, because there's something to learn from everyone. Whereas China knows we're bigger as the United States, but we're not looking at them. We should be looking at them because they are moving faster than us, in my opinion, right now. And, you know, it's when you're competing with someone that works 996 like that and all they think about is money because they don't have— again, the only god Chinese people have, and I'm Chinese, is a money god. We don't look at anything else. So when you, when that's a hell of a competitor.

Actually, the last time I researched China was a few weeks ago. You did. And it just came to me right now. There's this girl I follow on Instagram. All right. She's a rich, uh, Chinese girl and her, her, what is it called? Her social handle is Becca X Blue. Okay. All right. Her name is Rebecca. She lives in Atherton, California.

Okay. All right.

And she's just very transparent. She's not like, I'm rich, you're poor, or any of that. So I researched her to figure out how she came into money. Her parents created Camelot Systems, I believe it's called, which is, you know, cloud compute, cloud hosting company in China.

Uh-huh.

And a lot of the American companies were using them to host so that they can be in China. And then from there, her parents invested in real estate and then became billionaires from that. I believe Camelot got into a few hundred million a year in revenue. But then from there, I went down the real estate rabbit hole. Dude, in China, a lot of people have made a killing from real estate. It's really big from an investment viewpoint. And the government actually encourages people to buy homes and invest in real estate. And what I also saw is I don't think there's actually property tax in China.

I don't know.

So I could be wrong on this, but is there property tax in China or is it really cheap or something like that? There is no national recurring property taxes on residential homes in China.

They're trying to undo property tax here. I think, I think DeSantis has said it's like, why would you keep getting paid, paying for your house after you paid for it?

Right. I don't think it's going to go in.

Well, because California, they're making the money already. Why would you want that to stop?

Right.

Yeah, they're not going to want it. But anyway, I think it's interesting. I think our key point here is it's worth studying your competitors, both bigger or smaller. Because there's something always to learn. And I think, you know, China's studying us, so we should be studying them. And that is it for today. We'll see you tomorrow.