The Most Popular Brand Isn't the Most Profitable (Beckham, Claude & a $1B Raise)

I was speaking at a conference in New York last week and one of the MCs, he's chairman of the board for I Am 8, the David Beckham brand. And I noticed he was wearing these really nice shoes and I was staring at his shoes before he went on to speak. And as I was staring at his shoes, he walked up to me. I told him where I was going. He's like, where are you going? I'm like, I'm going to Lake Como next week. He's like, oh my God. And he pointed at his shoes. He's like, this is where I got these shoes from, right? I never even asked him about the shoes. And he's like, yeah. These are these like super craftsman shoes. And these are shoes that typically you could probably buy them for like a grand or more. But he's selling them for like $100 to $150, right? There's this brand called Rolando in Lake Como. So anyway, I go to his store and then I buy from him. But then the hotel that I'm staying at is like a pretty decent hotel. And I noticed that there was this little— I don't know what to call it. It's like this little display of his shoes and like all the stuff that he makes. And every day I was walking by it. But then when you have like— I was just thinking about the hotel traffic. You have all these people that are doing pretty well in their lives to stay at that hotel, and they're just walking by that case every day, that display case, right? And then so I went back to the store and I asked him, I was like, how much are you paying for that advertisement per month right now? What do you think he's paying for that advertisement?

0% of sales instead?

No, he's paying— it's actually really good deals. I'm not going to reveal it, but he's basically paying like a couple thousand dollars a month, right? And if you think about it, if you're having, you know, pretty affluent people visit the store, like it pays for itself many times over. But not only that, Neil, he has a 4th generation store, which means, you know, his grandfather started the store, right? And then that hotel was also a 4th generation hotel too. So these connections go a long way. So it just kind of reinforces that. It's more about— sometimes it's about who you know, but also when you have a really good advertising budget, you blow it all on that ultimately, right? And then what ends up happening is— and, you know, there is— I was thinking about it, I was looking at the quality of the build, right? Like, sure, you can have private equity come in and then they can definitely charge 4 to 5x their price so they can definitely scale. But the other business lesson here is like, sometimes you don't need to scale. Like, I was doing the math on the business. I'm like, maybe he's making, you know, $4 or $5 million a year, maybe a little more than that. But if you're living in Lake Como, that's a beautiful lifestyle, right? You don't need it. You don't need much more than that. So some people might come in and say, okay, well, he could be charging a lot more. And that's true. But sometimes, you know, the trade-off from not scaling is you get to live a beautiful life and not have to deal with a lot of headaches. So those are just a couple lessons I learned on this trip so far.

I thought Lake Como was expensive. I didn't know that a few million bucks gets you a long way in Lake Como. I thought real estate was just absurd.

Real estate's crazy. No, real estate's like $50 million plus if you want waterfront, like $90 million plus for like— there was a George Clooney— we drove by like a George Clooney lake house. And that one, he bought it for $10 million about 20 years ago or so. So it's definitely appreciated. You're talking $20 million plus for lakeside property.

Wow. On a side note, did you watch the World Cup?

I did not watch the final. I just know— oh, let me— I have a few stories to share, but you go first.

Yeah, it was so A lot of people in North America, or specifically in the United States, um, a lot of people, as you know, don't watch soccer too often. The World Cup was extremely popular. Uh, Haaland was getting a ton of praises. I don't know if you've seen all the Instagram posts of Haaland. Like, someone will take a picture next to a cardboard cutout of him and he's like, if Haaland comments, I'm gonna lose 20 kilograms over the next 3 months or something like that. And then he'll comment like, starting now, you know. Um, and, uh, I would say he was a big winner of the World Cup from a marketing and brand standpoint. I think he's just very authentic. Um, the word— the way he used— the way he adapted to not only American culture, but, um, some of the funny stuff that he said, like with Dallas. I won't go into what he said, but you can assume what he said based on the name Dallas, or him just working out. And he was on like a bicycle, just pushing hard. He's just like, my body's tired. And I'm paraphrasing here, but he's like, my body's tired, but I know it's good for me. So I'm gonna do it. Why stop? You know? And people are like, oh, this is how he thinks. Yeah, he's human just like everyone else, but he just keeps pushing it forward. But interesting enough, I watched the World Cup and I watched it with quite a few different people over the series. And the constant thing— I was watching a lot of the England games. You would see David Beckham, of course, because he's a big supporter and he's English. Everyone's just like, yeah, he's one of the best soccer players, he's super popular. They're correct on super popular. He is a good soccer player. But when people are like, he's one of the best, he isn't. I don't even think he ranks in the top 50 best playing I mean, of all time. Of all time, yes. But because his brand is one of the biggest, people assume large brand equals big. And in marketing, we all strive for massive brands because we think massive brands create success. In Beckham's case, he has made a killing, but he made a killing due to his brand popularity, not necessarily being the best. And there are some cases where being the best or being the most popular makes you quite a bit of money. But in many cases in business and marketing, being well-known doesn't necessarily equate to financial success. I get Beckham did really well because of his stardom, and he had a deal in which by playing in the US for MLS league, He had a deal where he could open up his own MLS team for pennies on the dollar. I think it was like $15 or $20 million. And he eventually, you know, cashed in on that deal. And he made a lot through sponsorships. And he was really popular. And his wife is really popular. She's a Spice Girl. But in business in generally, some of the most unknown companies that we work with are some of the biggest and most profitable and financially fast-growing companies. And all I'm getting at is being the most well-known doesn't guarantee financial success. An example that I can use for everyone here is a lot of you marketers know about Anthropic and Claude, but if you go around the world anywhere, OpenAI, specifically ChatGPT, is much more popular of a brand than Claude or Anthropic by far, right? And if you look at a lot of data, like you can look at Google Trends, let's see, I'll actually pull it up right now. Let's do ChatGPT. Which one should I use, Eric? Claude or Anthropic? Let's go to—

You can type Claude. Claude is probably more popular. Do both.

Yeah. Anthropic. So to put it in perspective, if I just look at July's data, it looks like ChatGPT is a 77 on a popularity scale. Claude is a 19. Anthropic is at 3, yet Claude or Anthropic is crushing ChatGPT in revenue by far, right? And they're supposedly already profitable too. They may hit $100 million in— $100 billion, sorry, in revenue just alone this year, which is kind of ridiculous. So, you know, yeah, you can optimize to be super popular, but it's not everything.

Yeah. So I think, by the way, one of the things to call out too is when you— the issue that Anthropic/Cloud is having right now is that they didn't bet hard enough on data centers, right? Meaning they're compute constrained right now. So when you look at OpenAI's Solve 5.6 right now, they're not compute constrained. They can offer it to everybody and they're letting you go to town on it, right? Whereas when you looked at Cloud Anthropic a few weeks ago with Fable 5, they're like, oh, we're gonna, you know, let you use it for a little bit and then we're gonna move you to usage-based, right? They can't do that anymore because if they do that, they're gonna be at a competitive disadvantage if they don't allow their best frontier model available to the public. And so they just made Fable 5 available to everyone. But it just goes to show you, like, I think Dario from maybe a year or 2 years ago, he was just talking about how, you know, the problem with, you know, data center investing is that you don't know, like, you can actually end up like upside down, right? But the problem is they didn't do it. They didn't make the bet and look at where they are now. Now, I'm not saying that's an easy bet to make, but OpenAI did make those bets and now they have more compute, right? And so we'll see what ends up happening there. But Neil, I wanted to call out something else with the World Cup too. So one of our mutual friends, he was texting me because he was at the game, right? And he saw a group of my people, so Chinese people in front. It was like 4 daughters, right? And they're just all on their phone, right? They didn't care about the game. In fact, he kept taking pictures of the family and like they just disappeared. The 4 chairs disappeared. Then he saw a Chinese businessman right next to him. I'm assuming it's the father, and the father bet a million dollars on the Spain game, right? He bet he bet a million dollars on Spain winning, right? And then when it went to extra time, he bet another four hundred grand. So you have to assume this guy's probably a billionaire. And so all that to say is that our mutual friend was like, "Dude, this World Cup—it didn't seem like the the final—that there was actually a lot of people that were interested that were true fans of the game. These were people that just wanted to be there to be there. You know how typically like people just want to." you know, go to like the nice clubs or, or, or be at like a summer Europe location, right? So it's, it's like a place to be, a place to be seen. And it took away from the authenticity of the championship game. Real quick, if you want to acquire customers faster and more efficiently this year with the latest strategies and tactics, then check out singlegrain.com. That is my ad agency. Again, www.singlegrain.com. Check it out. And if it seems like a fit, we'll get in touch and help you with a free marketing plan.

I think that's actually with a lot of sporting events. So when I was at the Super Bowl, right, I did not care for the Super Bowl and I couldn't wait to go home.

You went to the Super Bowl? When'd you go to the Super Bowl?

Rams versus— was it— what is it called? Kansas City, I think it was. A few years ago. I think it was Kansas City. Was it Rams versus Kansas City? Rams won.

Uh, Rams ended up— I forgot who they played a few years ago, but yeah.

Yeah, but, but exactly. And I should know, being that I was at the Super Bowl and I bought 6 tickets and they were literally in the dead center, very close to the field, right? So I spent an arm and a leg But like, I look at that, I didn't want to end up being there. I was just like, man, I can't wait to go home.

So would you do it again? Like, did you get any value from being at the game?

No, I did that. I did the World Cup in Moscow. I think that was like 8 years ago or something like that. I took my dad, he wanted to go. And I started going to a lot of these finals because it was on my dad's bucket list. Like, he wanted to go. So same with Super Bowl, I ended up taking him and a few other people. But when I was doing that whole experience, I was like, man, this stuff isn't for me. It's a pain in the butt. We have a client, a really cool client called DHL. It's a shipping company that everyone knows. I was in Singapore, and when I was there for Singapore, F1 was going on, and DHL is one of the biggest sponsors of F1. And they're just like, hey, you should come and join us. We have amazing suite tickets, whatever you need. And I'm like, I'm good. This isn't for me. Like, you know, I appreciate the offer, but I've learned that a lot of the sporting events aren't for me. But every time I go to one of those finals and sporting events, no joke, most of the people I run into aren't there for the actual game.

Yeah, I think at least what you and I have learned in our— I guess we're crap in our 40s now, but even, even in our 30s too, I think it's, it's— you'd rather just be at home in the comfort of your home working because the working part is actually more exciting than being at the game versus being at the game to be seen is really not that interesting and frankly a waste of time. And I think a lot of people are like that. But by the way, no knock if you're a true fan of the game, but being there to be seen, I think it creates different incentives and it's just not your thing. And I think you have to think about what matters to you and be authentic to who you are. Anyway, one more thing to call out. So, Neil, You mentioned you don't have to be the most, like, the best player in the NBA. So do you know who Junior Bridgeman is?

No.

Okay. So Junior Bridgeman is a former NBA player. So he played 12 seasons and he was mostly like a 6th man or like a guy that was on the bench. Okay. He played mostly for the Milwaukee Bucks, a little bit for the Los Angeles Clippers. So he never made more than $350,000 in a single season during his playing career. So keep in mind, this is in the '70s and '80s. But Neil, he ended up just buying a bunch of Wendy's franchises, okay? And eventually he grew his portfolio of Wendy's franchises to 450 fast food locations. He has a bunch of Wendy's and Chili's.

Wow.

And, um, he basically ended up selling all his restaurant holdings to become a massive Coca-Cola bottler and distributor to a bunch of states. And then he ended up amassing a net worth of $1.4 billion, so making him one of the few 10-figure former NBA players. So you have Michael Jordan, obviously you have LeBron James, but then you have Junior Bridgeman, who actually passed away last year, so rest in peace. But he basically, like, he just kept compounding over time. So it's kind of similar to David Beckham, but David Beckham was, was always really popular, but he was just never quite the best, you know. So.

Yeah, and don't get me wrong, he's extremely talented in the field of soccer, uh, and he's done well in business. He's, you know, like I was watching the England game because I sent my dad there. So I was watching TV and my dad's like, "Watch me, maybe I'll go on TV." And I'm like, "Dad, no one's gonna end up showing you." But they're showing Beckham. And you're talking about it was extremely hot, and this guy's just wearing suits every time he's at any of the England games. And and I started Googling why the heck does he wear chadji? Why does he wear suits? And it was answering. He's very particular on his style and his image and how people perceive him. And he's well off. And I was like, man, I would never wear a suit just for image if it's hot. Like, what's the point? But hey, you know, he's where he is because he's David Beckham.

Well, let me tell you something. So here in Italy right now, whenever you go outside, it's hot, right? And it's humid, and they're wearing suits all the time.

Now, the thing is this, right?

Like, that it is a brand image thing. And it is like, I'm sure these people don't want to be wearing suits because these are people working there. But you do have businessmen kind of like riding their bikes around or driving in cars. And it's an image thing, right? I think it's just— again, it goes back to being authentic to yourself and deciding what's important to you. But going back to Beckham, like he was always popular but he wasn't always the best player necessarily, right? But that being said, if you think about what he's done so far, so you look at IM8, right? That's the fastest growing supplement brand right now. They just raised $1 billion. And in fact, one of the co-founders, Danny, he listens to this podcast. So shout out to Danny. But do you know how he got the billion? And I don't even know if it's okay for me to share this, but so I probably won't share it. You already shared it. Danny, if you're okay with me sharing it, I'll share it. I didn't share it yet though. Okay, so here's what I'll say. I'll say this, and maybe I'll get in trouble for saying this. So Danny, let me, like, sorry if this reveals anything, but basically, He was going to get half a billion dollars. Okay. So what ended up happening is like, he was like, why not a billion? So that's how he got the billion dollars. He's like, because a billion sounds a lot better than half a billion dollars, right? Or like $500 million. He's like, why not just a billion? So sometimes when you think about— yeah.

I'm confused. So he went to go raise money. Okay. Is he raising money to sell portion of the company or raising it to use to grow faster? Or both.

So they raised the billion dollars to grow faster because they're growing so fast right now, um, as the world's leading supplement brand, basically, or one of the leading supplement brands, one of the fastest growing, I should say.

What the heck do they need a billion dollars for?

That's for them, the growth capital. Let's just put it that way.

I wonder who they raised it from. Takes billion from General Catalyst. Wow. Custom Value Fund, the company announced today. See, it's just not me standing about offers. They didn't raise $1 billion, they took a loan for $1 billion.

Great. Well, let's just— they got some capital. Let's just put it that way. I do— I didn't even see the terms of the deal. Takes on $1 billion in funding from General Catalyst.

Is C VF fund, which is a customer value fund, and they don't make standard venture equity investments, but offers what are essentially loans with some non-traditional repayment terms so that way they can just use the cap money to just keep going. So startups funded by CFE repay the loan amount along with a fixed cap percentage of revenue they generate.

Yep. So my point of saying this all is that David Beckham is a very good businessman, right? He's partnered with amazing guys. And that he's not, by the way, he's not just used as a celebrity endorsement. He actually is involved with the business from what I read. Danny, feel free to correct me on any of this. And we're happy to talk more about this and reveal kind of the story more. But Junior Bridgeman, okay, wasn't necessarily the best, but became a great businessman. Like he kept compounding over time. Michael Jordan, he was the best. He kept compounding. LeBron James, one of the best. Kobe Bryant, one of the best. They kept compounding over time. Shaq, right? One of the best big men in the game, kept compounding. And so all that to say is that going back to Neil's point, you don't necessarily have to be the best in the game. You just need to continue to be interested and continue to compound. So that's all we're trying to say ultimately.

So IM8, did you know, is owned by his other company that's public, Prenetics? Yep. So yeah, I didn't know that. I thought it was a— it is another company, but it's owned by him, uh, and they may keep the revenue separate, but, uh, Prenetics has quarterly revenue of $35.95 billion.

Yeah, so Prenetics was the publicly traded company that Danny, uh, founded, um, that was a COVID testing company that became really big during COVID um, and they just kind of nested IM8 under it. So I don't know what's gonna happen Okay, well guys, that's it for today. Sorry for the technical issues. With that being said, we will catch you all later.