E42: Erik Torenberg on the Evolution of Media

Hey everyone, this is Natalie. I'm a producer over at Turpentine. Today on Upstream, we're excited to share a recent episode of Greg Eisenberg's podcast, Where It Happens. In this episode, he interviewed none other than our own Erik Torenberg. Erik goes into what we're building at Turpentine, how we view the future of B2B creators, and his predictions for the future of monetizing media. I think you'll enjoy it. Without further ado, here's Erik and Greg. There's this big opportunity to build like audience in a box business. If you're big on any individual and any platform, you'll probably be big on other platforms as well. You just haven't gotten around to it yet. So if you have a big YouTube channel like Colin and Samir do, or a podcast, why wouldn't you also have a big newsletter? And if you can have support doing that, it's kind of a no-brainer to go to any creator who's big on any platform and say, hey, we'll help you get big on this other platform and give you half of it. There's so many people who wanna expand their audiences across platforms. A service that did this could charge quite a bit of money or even co-incubate or co-own some of these media properties.

Hey everybody, it's Erik Torenberg.

Dude, I'm honored. The roles are reversed.

Exactly. So for those of you who don't know, Erik, that's how Erik Torenberg, Mr. Podcast Man himself, Network of Podcasts, introduces— and it starts every show. So I had to put that in before you put it in.

Hey, I appreciate the tribute. Normally I have the pleasure of interviewing you on one of my shows, but excited to come to yours today. Big fan.

I appreciate it, man. All right, we got a lot to discuss. You brought some heat, as expected. I want to start with the trends first, and then we'll dig into some of your startup ideas. So let's talk a little bit about— let's start with the rise of the B2B creator and what you're doing with Terpentine and why you think that's a trend worth, you know, betting your career on.

Yeah. So a few years ago during the pandemic, I started to watch what you were doing, uh, on, on Twitter, and I was like, huh, this is really interesting. And I tweeted out something like, there should be a, a Greg Eisenberg for, for, for X, where, where, uh, like people should study your playbook, go deep on a specific, uh, domain or sector, uh, write or podcast about the space. And at the time you were, you know, obviously you remain Going deep on consumer, on community, on audience building, on sort of, you know, the rise of creators. Go deep on a space, write or, you know, create media about the space, whether it's writing or podcasting, and then building, you know, products or tools that sell to people who engage with your content and/or investing, right? And so you were early to this trend and people who were doing this in parallel with you were people like Lenny Rachitsky, right? right, for product managers. Audience here obviously extremely familiar, or Packy McCormick or Harry Stebbings. These people, including you, you know, Julian, people come on your show, blew up the last few years. And so I saw that trend and said, hey, this is just the beginning. This, this, there's going to be a lot more people like this. What Lenny is doing for product managers, that will exist for every position, for finance people, for engineering, for sales, marketing, et cetera. And they will also exist for every sector. And so I wanted to create, make a big bet on the emergence or the continued growth of niche creators, specific verticals, business verticals, and create media for those people. And instead of create the next TechCrunch for everything, create the next TechCrunch for a specific category. So I started Turpentine as a podcast network. that basically, you know, today we are 13 podcasts, but instead of saying, hey, we're going to create the next Lex Fridman or Joe Rogan or, you know, hit show, it's hard to create hit shows from scratch today, but we're going to create the best show for CFOs or the best show for people in HR or the best show for people in AI. And we've niched down and we think that these niches are only going to get bigger, that the audiences are super valuable. And that these will be— this will be not only a valuable media business, but also just a valuable audience for me to incubate other products or invest in businesses that sell to those niche audiences. So that's what I'm up to with Turpentine is Greg Isenberg for X, Lenny for X, starting with podcasts, but then expanding to other formats as well.

And why would you start with podcasts? Like, to me, That seems painful given that I run a podcast and I know how hard it is to grow one. Why do you think it's worth investing as a podcast first? Like, what am I missing there?

So podcasts are underrated for a few reasons. One is because they're the only media that you can create that allows you to create every other form of media from a podcast. So you create a podcast, you could turn that into a newsletter, you could turn that into a video, you could turn that into a community, right? Because you have all these guests who come on and you boom, after 20 episodes of having chief people officers, now you have this incredibly valuable chief people officer community or a conference. So it's not that much hard work to get a podcast off the ground in a niche area and establish yourself. Because there aren't like, how many CFO podcasts are there? Not that many. How many chief people officer podcasts are there that are good? Not that many. We've created, you know, just in the last few months, I think we have like a top 3 CFO podcast or chief people officer podcast. They don't have a ton of listeners. So, you know, under 1,000 per episode, but they monetize really well because People want to sell to that audience. And if you pair them with newsletters and you could build newsletters on top of the podcast, you could then monetize even better. But yeah, the punchline is they're the medium where you could build every other medium on top of. And if you go niche, it's, you can create, you know, pretty strong, you know, ranking right out the gate.

So the other thing that people aren't talking about is that social networks are becoming more video-oriented. So if you could own the search terms for CFO or how I, you know, how to create a balance sheet, and then people consume those videos and then they're like, okay, let me subscribe to this person or let me go buy his or her product. Like that's the other, that's the other bet I think that you're making. 'Cause you're not really doing, when people, when people hear podcasts, they think audio, but it's really video-first podcasts, right? Yes.

Yes. Yes. And there's just a special relationship. You know this as someone who hosts a podcast that you get from running a podcast that you don't get in the same way from other mediums because there's audio, because there's video. And just to put some numbers on it, we're doing about 350,000 downloads a month across 13 shows, which is not huge. Like some shows, you know, My First Million is bigger than all of our shows put together probably.

Yeah.

But we're at about $2 million run rate, probably, because the show's monetized pretty well. Like each show, you know, we were talking earlier, like $30K a month or something like that. Like no show is huge, but it's kind of like the 80/20 where it's just, it's really hard to build a mainstream podcast today from a standing start, but to get it to a show of $30K, $40K a month, you know, in a strong niche, it's not that hard. And so if you can get a critical mass of them, you could start to build a real business and then And of course, you could build all the other mediums on top of them. And one thing that people don't realize as much is that when you look at media businesses over the last 15 years, one of the most valuable media businesses is this business called Industry Dive, which sold for $500 million to Informa. Today, it'd probably be worth a lot more. And it was just a collection of trade publications like HR Dive, CFO Dive, basically what I'm trying to do with podcasts. And if you go to HR Dive or CFO Dive, it looks like it was made in 2012 because it was made in 2012. Like they haven't really innovated on the format. And so I've also been inspired by Workweek, which is a media business that's also trying to create the modern-day industry dive. And they have more of a newsletter-first approach. And that's also why I wanted to differentiate. But the value, you know, there's been a lot of money poured into media businesses over the last 15 years. A lot of it has been poured into consumer. media, 'cause that's where the attention is. That's where the splashiness is. But business media, these are just great customer acquisition channels. And so in a world where distribution is more and more important, acquisition is more important, it's easier and easier to build things, owning those distribution channels, those acquisition channels is just going to be increasingly more valuable. So that's why we're focused on what we're focused on.

So how do you think about choosing a new B2B niche? 'Cause I think some people are gonna be listening to this and being, and be like, wow, like I wanna do this, but I'm not sure if this niche actually is worth going after.

Yeah, so my first business out of college, which you'll remember, was a rap music business. It's called Wrapped FM and it was like chat roulette for rap battles. So I was, you know, really interested in rap and still am. And I, that was a niche I wanted to focus on and there wasn't a ton of money there. You know, there probably is much more today than there was back then because niches are just bigger and bigger. But I mean, today in terms of how we pick our niche, we really focus on like, who are enterprise buyers? Like, who do startups try to sell to, right? They try to sell to, you know, finance people. They try to sell to salespeople. They try to sell to, you know, CTOs. Like, who are these just buyers at companies? HR leaders, right? And having invested in a lot of companies, I kind of get a sense for who startups are asking me to target. So part of it is enterprise buyers. Another part of it is just sectors that are important and that are hot and that aren't too crowded. Like crypto is extremely crowded or Web3 is extremely crowded. There's a very mature media ecosystem. And so we're not going in there at the moment. Whereas AI obviously is getting crowded there. You know, our friend Ben Tossel created Ben's Bytes and other newsletters. But it's still really early. Like, there isn't a sort of, you know, the equivalent of a Blockworks or a CoinDesk or a Cointelegraph, these kind of mature media companies for AI just yet. There are just a few newsletters that are taking off. And so we're actually deciding in Q1 to go much deeper on AI across platforms. So it's going to be our first newsletter. We're going to get into some news coverage as well and really kind of going on that vertical. But Historically, we've been looking at it, hey, who are just customers that are really valuable? Are you enterprise buyers or what are spaces that are really valuable? And then what are spaces that don't seem too crowded where we think we could have a top 5 property within just a few months?

Have you thought about acquiring some creators in some creative way or acquiring a business that has a creator attached to it? Like for example, now I don't know if he's selling or would sell, but like Ben Tossell, you mentioned Ben Tossell, like his newsletter, Ben's Bytes. Like what if you could acquire that business and then strap on the podcast as a part of it?

I haven't considered it seriously because we're in the business of ownership at the moment. The challenge of podcasts when you don't own the feed is that the host can just leave you. And so if— so we only want to be in business at the moment in places where we own the feed, because otherwise it's almost like investing in a startup. But once the startup gets to, you know, gets a ton of traction, you don't own equity in it anymore. They just don't want to partner with you. And so we want to be, you know, co-owners for life. Otherwise the incentives get misaligned and you have sort of this Taylor Swift or, you know, Scooter Braun-like situation. And then in terms of, so in order for us to acquire majority ownership, it just either would require a bunch of cash, which we're not immune to. We did put a bunch of cash to seed this business personally, but I just haven't seen the specific thing that I, that we should go buy. But I'd love to hear your, your take. If you were me, how should I be thinking about acquisitions as a possible strategy?

Well, I think the interesting thing about owning something like Ben's Bites, let's say, let's use that as the example, is, you know, you mentioned My First Million earlier. You know, My First Million wouldn't be where it is today, in my opinion, if it wasn't for its partnership with The Hustle.

Yeah.

And the way it worked was Sam and Sean came up with a brilliant idea for a podcast, executed on it brilliantly, and they were consistent. They did it every single week. And then they used the pipes, the media pipes of The Hustle to help promote some of those episodes and still do that to this day, actually. Like the HubSpot Network helps promote My First Million. Now you could say, well, Turpentine has all these shows, we'll just cross-promote. And that's true. But if you wanted to go faster, and, you know, one way would be to acquire media, and then find, you know, either new talent or the founders like a Ben to create a show. Yeah.

One thing we've been doing is trying to partner with the biggest hosts we can find. So basically, in our network, we have Packy McCormick, we have Noah Smith, and Burn Hobart, a few other kind of pretty big newsletter writers for their specific niches who have a few hundred thousand subscribers. And we say, hey, you don't have a podcast today. Let's create one for you. All you have to do is show up and talk about the things that you've been writing about regardless. And we'll give you 50% of everything in exchange for just, you know, an hour or so a week. And in exchange, they promote it in the newsletters too. So we are interested in partnering with people who already have distribution to borrow it. And if there's an opportunity to acquire something where it makes sense, I'm really intrigued. I just worry about people's loss of motivation when they don't own it in the same way. Or I wonder if there's a way to get kind of the benefits of ongoing distribution by sort of co-creating with people who already have it in different formats and then using those already existing user bases or distribution sets to You know, bring them to the podcast and the collection of podcasts. We'll continue our interview in a moment after a word from our sponsors. Real quick, what's the easiest choice you can make? Taking the window instead of the middle seat, outsourcing business tasks that you absolutely hate. What about selling with Shopify? Shopify is the global commerce platform that helps you sell at every stage of your business. Shopify powers 10% of all e-commerce in the US. And Shopify is the global force behind Allbirds, Rothy's, and Brooklinen, and millions of other entrepreneurs of every size across 175 countries. Whether you're selling security systems or marketing memory modules, Shopify helps you sell everywhere, from their all-in-one e-commerce platform to their in-person POS system. Wherever and whatever you're selling, Shopify's got you covered. I've used it in the past at the companies I've founded, and when we launch merch here at Turpentine, Shopify will be our go-to. Shopify helps turn browsers into buyers with the internet's best-converting checkout, up to 36% better compared to other leading commerce platforms. And Shopify helps you sell more with less effort thanks to Shopify Magic, your AI-powered all-star. With Shopify Magic, whip up captivating content that converts, from blog posts to product descriptions. Generate instant FAQ answers. Pick the perfect email send time. Plus, Shopify Magic is free for every Shopify seller. Businesses that grow, grow with Shopify. Sign up for a $1 per month trial period at shopify.com/torenberg. Go to shopify.com/torenberg now to grow your business, no matter what stage you're in. That's shopify.com/torenberg.

Do you know the story? The, the company behind Colin Tamir's newsletter? Have you heard about this?

Smooth Media? I think it is the team from Morning Brew. That's very talented, that created a couple stars at Morning Brew and is now trying to do that for other creators as well. Like pretty similar to what I'm doing.

Yes. Well, similar but different, you know. So Colin Samir have this newsletter. It's called the Published Press Newsletter. And it's a newsletter just for creators. Makes sense. Colin and Tamir, YouTuber, YouTubers who discuss creator stuff, create a newsletter. They want to get off the YouTube treadmill. So they have this newsletter. It now has like more than 100,000, 150,000 subs. Awesome. So I started digging into it and I realized that it's a company called Smooth Media that's behind it. So basically they partner with, um, they partner with creators and then they do email newsletters. For them and they write them, et cetera. So it seems like, it seems like a lot of people are scratching the surface on this B2B thing. I like your angle for podcasts first because I think it's just harder. And sometimes when you do things that are harder, like there's more of a moat there.

Yeah.

So I like, I like what you're doing. There's another note that you have here on this list that says media businesses are undermonetized. What do you mean by that?

First, let me just say, I think there's this big opportunity to build like audience in a box business. Like if you're big on any individual and any platform, you'll probably be big on other platforms as well. You just haven't gotten around to it yet. So if you have a big, you know, YouTube channel like Colin and Samir do, or podcast, Like, yeah, why wouldn't the same, you know, why wouldn't you also have a big newsletter? And if you can have support doing that, it's kind of a no-brainer to go to any creator who's big on any platform and say, hey, we'll help you get big on this other platform and, you know, give you half of it, but we'll keep half of it, right? And so there's so many people who wanna expand their audiences across platforms. This, a service that did this could charge quite a bit of money or even co-incubate or co-own some of these media properties. Is there something like this that exists yet?

I mean, people are trying, right? Like, so Smooth is trying, you're trying, we're trying, you know, we're all kind of, we all have our own angle. And I think what you're seeing is that 2023, there was just like scratching the surface. 2024, I think we're gonna see like, oh, turns out that podcasting was the right angle or community was the right angle or email newsletter was the right angle. So that's my prediction. By the end of 2024, I think we'll have a pretty good understanding of like how creators, and then specifically B2B creators, cuz I agree with you, B2B creators are, you know, are probably worth 100 times more. Like, you know, if you have, if you have 100,000 YouTube subscribers, you know, and as a B2B creator, that's like you're basically the MrBeast of your world.

Yeah.

So that's my take on that.

Yeah. And so let me get back to how media is undermonetized. Well, it's interesting, right? We saw people like Harry Stebbings, Packy McCormick, you know, built these large tech audiences and then raise funds on top of those audiences, right? Hundreds of millions of dollars in the case of Harry. What people say, a16z, you know, it's like $50 billion or whatever AUM. They say it's a media company that monetizes via venture capital, right? So Clearly investing is a compelling opportunity for people who are selling to business creators, at least in certain categories, right? But if you own this relationship with the customer, there's also additional things that you could be doing. Like maybe the next Harry Stebbings doesn't only do a venture capital sort of a fund, but maybe he also sells services to other venture capital firms. He has an agency, you know, that does fund management, right? Maybe he builds underlying platform or builds by builds. I mean, he's like an audience co-founder where someone trying to build the next Carta or AngelList or whatever you know platform that sells to his customer set, where he has the sort of widest set of customers and the most trust with it with them. Just to name Harry as an example, and VC as a as one example position. But maybe they give him some percentage of the company for ongoing evangelism. So I think there those are two ways in which it's directly under monetized. But there's another way, which is. There's a lot of data that media companies get as exhaust that they don't monetize. So I'll give one very specific example that was inspired by this business I saw called Tegus. Tegus is an expert marketplace. If you listen to Invest Like the Best, Patrick O'Shaughnessy, you've heard them advertise there. And so their expert marketplace, like a Gerson Lerman Group, a GLG, which is sort of one of the early OG expert marketplaces, if you're looking to Let's say you're at a hedge fund and you're looking to make a biotech investment and you're looking to talk to some customers or some people who used to work at this company or people who have expertise on this space. You'll ask GLG to set you up for a few calls. You'll pay some money for those calls. You as the expert will get paid to do those calls. It's kind of an established category. So what TIGAS does is they go into this established category and they say, hey, we're going to record the calls. These calls are already happening. We're now going to record them. In exchange for recording them, we're going to take less of the sort of margin. So it's going to be cheaper. So it's a superior— so it's cheaper for the person paying in order to use TGIS. As a result, these calls get recorded. They then build a database of these calls, a dataset of these calls. And now if you're looking to learn, let's say, about biotech, instead of having to place an individual call, you can now read the transcripts of dozens of calls in the same amount of time. And so they've created a moat there just by using the exhaust from these calls that were already happening. Now, what do reporters or people in media do often is they get insights. They talk to people all the time, right? And so this insight came to me when I was reading this report on Stability AI that came out. It was on Forbes. It was a bit of a negative piece or exposé. And this journalist talked to 30 reporters— sorry, sorry, talked to 30 sources, early employees, executives, investors. And then I looked at TIGAS. I was like, oh, wow, this reporter talked to 30 people. I looked at TIGAS and they just had a handful of people on Stability AI. So I was like, wow, this journalist is maybe sitting on the best dataset in the world, the qualitative dataset in the world on Stability AI. Who else in the world knows what early employees, investors, you know, whatever, et cetera, think about Stability? And the only revenue they're making is just the ad revenue off that Forbes piece. Whereas people on TIGAS pay $25,000 per seat in order to access those calls. And the irony of those calls is if those calls were released to the broader public, they wouldn't be that popular. Like, it's these— this information is extremely valuable to an extremely small set of people. And so people in the media businesses and media creators often don't price discriminate. And especially if you're in business media, if you can attract information that's extremely valuable to a very small subset of people, you should be charging a ton. And so media, especially journalists, they often have this broad sense of informing the public and they kind of think the public is equal. But if you're reporting on business, maybe your customer shouldn't be the person outside of tech who's just trying to understand what's happening, but maybe you should be informing an investor on, or your dataset should be informing an investor on, hey, should I invest in Stability AI? Should I join Stability AI? And so Most, yeah, most people who create media don't think, who is the most valuable customer I should sell this to? And what is the actual job to be done here or value prop that I could sell them that I could thus charge a lot more perhaps? So that's a way in which we think media is undermonetized and in which we are going to try to do ourselves. So we are going to create media that helps people do better at their job and identify, you know, which companies are doing well, et cetera. We're gonna get in the list game, right? Top companies, top people per sector, get— you use these— this media to get all this insights, all this data on people and companies and products, and then try to sell that, that data, uh, you know, in a transparent way. People know, you know, what they're signing up for. There's anonymity, etc., but to the most valuable, uh, you know, the, the, the sort of customer that values it the most. So that was an input on why I think media is under— undermonetized, because they're not just providing eyeballs, also providing data insights and sometimes even determining reputation. And that is very valuable.

It's almost like the eyeballs are like the least interesting part.

Yes, exactly. Exactly. That's well said. Like if you owned the information just as a, or Forbes or something, and we're not constrained by sort of the idea of being a journalist, which also interestingly today, people aren't constrained, right? The Lennys, the Youse, the Packys, the— you guys could invest in the businesses that you cover, you could incubate businesses, and you're not— people don't trust you any less for it. Um, so that's an interesting development. But let's say you, again, ran the information. What other businesses could you create on top of that, right? They used to do org charts, right? It's almost like Craigslist, right? Like, remember the same Craigslist graph where you looked at every sort of feature on Craigslist and saw, oh, that's Airbnb, that's this kind of business, that's another business. Similarly, like if we go in the information, I see they have org charts. Oh wait, there's a company called The Org that is specialized in that. They have like a different professional network. I'm like, oh wait, okay, there's LinkedIn. Like you can imagine building a professional network off of that. There's, you know, oh, all these data companies. There's Crunchbase that just kind of, you know, Crunchbase emerged from TechCrunch, right? So there's Glassdoor, you could imagine like media companies and there are other things that are like this too. Recruiters, what do they do all day? They get all this data on people. One business I want to build is reference checks as a service, right? We do all these reference checks and yet no one ever compiles them or organizes them. And so anytime there's a sort of a thing that is done all the time that's not recorded, that could have data as exhaust, I'm interested in, hey, could you create something that structures that data that has like a give-to-get model where people are incentivized to give data in order to see the data? And building these kind of like information marketplaces and using media as the wedge.

So what you're saying is similar to how there was the unbundling of Craigslist, and I've talked about the unbundling of Reddit.

Yes.

Basically taking a subreddit, a niche, a subreddit niche, and then people building products for that niche. There's gonna, there's this new B2B media unbundling that's happening. And you have the ability to build social networks, you have the ability to build marketplaces, you have the ability to build agencies, you have the ability to build SaaS tools. And the media is just the— is almost like the ticket to the ride.

Yeah, exactly. I mean, and I've watched you and the businesses you've been able to build, the different agencies, the different communities, the different products, and a lot of it stemmed from your Twitter. And then your newsletter and the other stuff you've built. And I think I've realized, hey, like, I enjoy creating, but I don't think I'm the world's best creator. I don't think I'm as good as you are. But I think what I could do is find the Greg Isenberg for X and help produce them or help incubate them. And some people listening to this have that creator drive or that potential. And some say, hey, maybe they're more of a producer or maybe they're more of a partner to these. to these creators. I think one thing that's underexplored also, there's this massive creator, I don't wanna burst a spot in case it's confidential, but at the level of someone like yourself who has a chief of staff who gets 25% of everything he does. And I think that's a really interesting model for someone who realizes, hey, I'm not the creator, I'm the producer. I'm the person who's gonna let the creator just be themselves and I'm gonna take care of everything else. Go up to someone you really admire and say, hey, I'll do literally take everything off your plate that you don't like doing. That's really important. I'm gonna get you to the next level. Give me some percentage of what you make, 10%, 20%, 25%, whatever it is. I feel like that's an opportunity for people. So, and that's what we're doing at Turbotime. We get 50%. And so, yeah, that's how we think about it.

Yeah, I think first of all, I really like the producer versus creator bit. I'm gonna use that. I'll credit you. On that. Not everyone needs to be a creator.

Yeah.

Not everyone needs to be a creator. Back when, like, being an entrepreneur was really cool and everyone wanted to be an entrepreneur, people used to, you know, some people that I really respect would say, not everyone needs to be an entrepreneur. And now 2024, it's like, no, not everyone needs to be a creator. In fact, I wouldn't be surprised if the producers actually do way better than the creators. In the end. Wouldn't be surprised just because they're more diversified, they can produce multiple projects. They learn, like, you're gonna learn so much about, you know, what's working, what's not working across your portfolio. We see that ourselves. Like, we have a portfolio and we, like, we're doing an offsite in Miami next week with all the different leads of all the different businesses. And they're gonna all share what's working and what's not working.

Yeah.

And as you know, the producer, you can look at that and be like, okay, maybe we shouldn't have incubated that AI business, but let's go incubate something like this.

Totally. Yeah. And it's interesting, like if you, you know what I'm, we're doing for podcasts now, what Smooth Media is doing for newsletters, some people are doing for YouTube. If, if you own a medium, you get really good at any specific medium, you can then go to people. Of course, you can do it for service and, you know, get paid. But if you're good enough, you can co-incubate. You can go to someone who doesn't have one of these channels and say, hey, it's what Smooth Media is doing. Say, hey, we'll create this for you. We'll run the whole thing. We own 50% and want to be long-term partners or whatever we own and are long-term partners. And I think that's just a different in mindset. It requires taking a bit more upfront risk. But if they're already big on a different medium, you know, you've kind of diversified it. And one example I'll give, and this guy's been immensely successful, so I don't mean to take anything from him, but Dave Perell, you know, he did his writing courses. I think another business he could have done, now he's not as passionate about it. So, you know, he should do what he's passionate about. He's been very successful, but he could have, instead of teaching people how to write, he could have gone to people who either are big on other platforms or just have really valuable service businesses like financial wealth managers or accountants or lawyers or whatever and said, hey, I'm going to make you the biggest lawyer on Twitter or the biggest accountant on Twitter, the biggest whatever, and in exchange, make me a 25% partner in your business. And he could have done that with like 5 or 10 accounts or more and really just been in kind of the equity game. And it's a shift in mindset from teach someone how to do something To kind of do it for them in exchange for a big chunk. Now, if you do that, you can work with— there are trade-offs, of course. You can only work with the, you know, there's much limited number of people you can work with because it takes much more time. Whereas of course you can, you know, serve sort of, you know, infinite people in theory in terms of however, if it's asynchronous, at least in terms of how many people watch it. But you then get in the ownership game and I'm very excited about the ownership game.

How much have you studied music, the music business?

A little bit. Wrapped FM was in the music business. I mean, labels were amazing at sort of these 360, at owning their artists. And I have a friend who worked at this company called United Masters, which tried to reinvent record contracts to look more like venture deals, to look more like situations where the entrepreneurs owned most of the company instead of the VC or instead of the record label in the case of music. And one finding he had was, although I don't know how widespread this is still today, is that most artists, or at least rappers, actually preferred the deals that the record labels gave them because they got more money upfront. And they were able to do anything they wanted with that money. And I think that's a little bit different between record labels and VC. Like, if you get a few million dollars from a VC, it's, I think it's less expected that you're able to just like pay yourself that. I think in fact, they encourage you to not pay yourself much. I know people who raise $5 million in VC paying themselves $50K salary. I'm like, what are you doing? You know, they pay themselves, you know, hundreds of thousands or millions of dollars. Why don't you pay yourself anything? But I guess artists just were more comfortable paying themselves a lot of their advance. And so they preferred the $1 million upfront and giving up 90% of everything they ever make than ever. I mean, of course, many of them regret it later on, Anyways, I'm rambling a bit. That's my familiarity with the industry.

So VC and music and the music business have a lot in common. Essentially, they put up, both put up money and they're producers. Put another way, they're producers in your words, and they get some upside. You know, a lot of people, including Kanye West, say some things about music labels that, you know, they You know, they're too— they own their artists. And so I think that's not great.

Which is why I want to be in co-ownership. I want to be like, hey, let's be partners.

I don't— yeah, I think it needs to be partners, right? In the truest sense. And to defend the music labels a little bit, like, I'm sure not all of their deals are like that, you know. But yeah, you know, I think what you're trying to do is— feels to me very much like a music label, co-ownership partnership style, where you're essentially approaching a B2B creator and you're saying, hey, like, let me go accelerate this for you. And then let's go, you know, put 1+ 1= 3 here. And, you know, there might be some, you know, advance of some sort. I'll get you advertisers. I'll do this, I'll do that. I'll help build. And I think the takeaway for the listener, one of the takeaways is like, don't be afraid to approach creators and be like, hey, I want to produce. And in fact, the opportunity in 2024 is the approaching and the producing in a lot of ways.

Totally. And it's interesting because, yeah, any creator who has an audience on one platform probably wishes that they could have an audience on another platform. And if you're good at that other platform, they've already de-risked it a little bit by having an audience and showing product market fit on one platform. So going to them and saying, hey, let's create this on this other platform. You know, Packy has a big newsletter. I go to Packy, hey, let's reach the same audience via podcast. He says, yes, no-brainer. But here's an interesting thing. Like we did that in AI, for example, with an AI creator. And now we wanna create an AI newsletter and we actually don't need the creator anymore. Because we can, we co-own the podcast. We're gonna create, he could create a newsletter too. He can create, meaning he can leverage the work we did on the podcast to help him in any other thing he wants to do in the future. But similarly, I guess what I'm saying is we're borrowing, we're using the creator for their distribution, but of course providing a ton of value, giving them more distribution, more revenue, something they wouldn't have had otherwise. But now because we've sort of established one format, we can go in another format. And then create our own owned sort of audience and say, hey, we're gonna do it 100% ourselves. We're gonna— and this is how we're building our brand. We're building the brand off great partnerships with creators that we then go into other platforms and say, hey, now this is the Turpentine AI newsletter. And yeah, we'll feature, we'll promote the podcast. So he's happy to and promote his stuff, et cetera. But the— if you're a producer, and you, you know, or even a creator and don't have an audience, partnering with a creator in one format to help you get out there, right? We have this friend Safwan who's an up-and-comer who partnered with Michael Karnsch to create a podcast. And he, I think the value exchange was that he did a lot of the work for it. They get seen as co-hosts that grows Safwan's audience. Now Safwan can use that for other things. But yeah, being able to add value to other creators helps you build your audience that you could use for other things.

I like it, man. I like it. So is there room for all of us?

I think so. I mean, you identified early on that these niches are getting bigger and bigger and bigger. And it's interesting, right? Like, because venture capitalists have raised more and more money, the expectations of what they need for returns are much higher, right? So it used to be like $1 billion business that was like venture scale. Then it's like $10 billion business. You know, at some point it's gonna be $100 billion business, right? And so a lifestyle business is just a business that's not appropriate for venture. And so as the venture expectations have gotten bigger, 'cause all this money flooded the ecosystem, these, the, what people call lifestyle business is much bigger. Like if it can only, you know, know, make $100 million in revenue, maybe it's a lifestyle business for some VCs, right? But that's massively life-changing, you know? And so these niches are getting bigger. And also these areas where VCs aren't touching, you know, as much are getting wider, which means there's less competition perhaps. And yeah, there's, I mean, you called it a few years ago, you know, any subreddit where there's just a growing community, there's probably a big business waiting to be built there. And if you see a creator in one format, perhaps you can help that creator get to the next format, maybe become the creator yourself or become the entity that produces a bunch of creators. But it still feels very early innings, particularly in business creators. We're looking to talk to You know, anyone who's creating something for a certain sector or for a certain valuable business audience. And yeah, feels like it's just the beginning.

The short answer is yes, there's room for not just only us, but really like there's thousands, literally thousands of business ideas, tens of thousands of business ideas for creators out there. B2B is interesting. You know, we're also really focused there. There are some opportunities in B2C, but my take on this is, and I'll tell you a little story, I haven't shared this publicly, but we, my take is basically that the top 50 creators in B2C are uninteresting to collaborate with.

Hmm.

And we had a creator, top YouTube creator, And when I say top, I mean top 10, top 12 YouTube creator come to us. We had his trust, wanted to collaborate and wanted to co-incubate something. And we walked away from it and we walked away from it because, you know, that particular— I'm trying not to give it away, but basically like it was funny type videos and there wasn't a niche there. There wasn't a strong niche. It was just like I would watch, people would watch it. When they just wanted time to pass. They weren't really, really connected to that particular creator. So I think those creators are not that interesting, but there are consumer creators who have a niche that the audience has disposable income that you could produce with.

Yeah, totally. Um, but one thing I just find so interesting as an aside, Greg, is like, you're not someone who came up as a 22-year-old thinking about kind of this new greenfield of niche ideas. You're someone who kind of did it the old way and built a lot of cred in the old world, so to speak, of, you know, raising a ton of venture money, having worked for a venture, you know, backed company, or the biggest one in WeWork. And there were so many incentives to just keep going down that path in some ways. And there's a lot to walk away from in terms of, I'm sure some people up to you and were like, hey, what are you doing? Like, you know, that feels weird. Like, it's the golden era of raising VC and you're saying, hey, don't raise VC. And so it's so much harder when you have stuff to walk away from. And that's why I used to say things like, it was easier to get into crypto if like you came up in it or something, because you didn't have all these people saying, oh, that's weird. But you did. And I think that's inspiration for people who are already down a path, who've either, you know, raised a bunch of money or Are in a space that doesn't feel that that that exciting, or it doesn't feel like you're on the sort of you know what what's going to happen if if you're listening to this, you kind of have a vibe for for where things are going and what types of people are going to have more and more career capital. And it's the it's the use, it's the Sahil Blooms, it's the you know Sean Purrys, etc. And so I just hope that is inspiration for people listening that you can take that that different path even if you're already. down a path. And if, you know, if people are thinking that, hey, the path is weird, maybe you're doing something right. Or, you know, maybe you're onto something because you're exploring something that is on the upswing that people haven't figured out yet. And so that's both an opportunity for people who haven't, who are just up-and-comers and getting their start to explore something that's underexplored. But on the up and coming, but also people who've been in the game for a while.

Well, first of all, I appreciate you saying that. Um, thank you. The reason I had this come-to-Jesus moment was because I saw how the sausage was made. And once I saw how the sausage was made, I realized that this not only— it just wasn't for me. It just was not for me. Um, you know, you talked earlier about How sometimes founders don't pay themselves after even raising millions of dollars. And that's really true and not really spoken about. When I was running Islands, I paid myself a $75,000 salary in San Francisco, which like goes nowhere.

Nothing.

And in the last 12 months, I didn't even feel like I deserved a salary because I wanted to extend the runway. So I stopped taking a salary. So there's so many examples of venture-backed startups and where that can go. And I just, I'm happy that more and more people are sharing it. And that's one of the reasons why I like the podcast is it gives me an opportunity to share these stories. And yeah, like I could have gone, I was at WeWork close with the SoftBank folks. Like I could have just gone and been a partner or whatever at SoftBank for the rest of my life and sold money to people. But no, and I honestly, like, I find this path to be, for me at least, way more interesting. I don't know about you. Like, how are you? You also have a background in venture, raised a lot of money.

Yeah.

What, how do you feel about this new kind of rogue path that we're on?

It's been an adjustment. So, Yeah, raised a lot of money in the past from, from a lot of the big names. And when you raise money from big names, you get invited to fancy parties. And people come up to you and just give you all this validation all the time. And people, you know, venture capital firms became so good at marketing, where they convinced founders to take a lot of their money, more money than they ever needed, right? I remember at Product Hunt, we raised a seed round.

Yeah.

We had like $2 million or something, maybe $1.5 or $2 million in the seed round. And then a few weeks later, we got a term sheet, a Series A term sheet from Andreessen Horowitz. And we didn't even know how to spend the $2 million, let alone the $8 to $10 that came after it. But it was, and I love Andreessen, I'm a big, you know, I'm friends with that firm, but that money was just so enticing. And, you know, did we need the money? Not really, right? Was that the right thing for the business? Unclear. But, um, the firm and just VC in general is so good at being a signal to the market that our company is one to be taken seriously and people should want to join our company. People should want to trust, uh, you know, customers should want to trust that. And so it's incumbent on startups and startup ecosystem to have other versions. This is why I'm excited about media too. Other versions of that signal, other versions of that blessing that don't come with major dilution, Overly capitalized businesses and expectations that are way ahead of where the business is going. And there needs to be other entities that can bless these companies with that signal that don't come with the same sort of constraints. So you ask me how it's going. It's been an adjustment because I haven't been invited to all the same fancy parties, or I haven't had the same level of validation. People say, oh, what are you up to? I say, oh, you know, I'm working on this media company. Oh, that's cute. You know, but when are you gonna go for something really big? And I'm like, oh no, wait, this is like the infrastructure. One, this is big, but two, this is the infrastructure. And I didn't raise any venture for it. And people just think you're going small, right? But people don't realize like the MailChimps and Zapier, there's a lot of businesses, or there's at least enough businesses that have gotten massive, massive scale that barely raised any venture money or didn't raise any at all. And venture capitalists would've loved to put money in the same way that there's, you know, lifestyle business is kind of this like euphemism. There should be a similar euphemism for a business that's like too good to raise venture money, right? Like the MailChamps or Zapier is like venture capitalists would die to put money into it, but it's too good of a business. It doesn't need this upfront, like, you know, massive capital and dilution and expectations and bosses. As you've been, you know, writing about how we investors, you've got bosses. It's easier to get businesses off the ground. It's easier to get distribution. And if you don't need capital for it, Why raise it? So it's a it's a bit of adjustment, but I think what you and I and other people are doing are showing examples of success, like businesses that achieve real success that didn't need to raise money, that were in fact sort of advantaged for for for for not raising money. And I have it's increasingly in the same way that a lot of our friends want to do personal holding companies, which we will get to in a minute. But a bunch of our friends who've raised hundreds of millions or even more in capital say, hey, I don't wanna do that again. I don't wanna do that anymore. I wanna raise zero. And now it's like we need to turn it from a, you know, something, a sign that you couldn't raise money to a sign that you're too good to raise money. Like, you know, the costs of it and you don't need it anymore.

Well, let's just change the name of—

Exactly.

Of unicorns, unicorn founders, and unicorn companies to like a unicorn company isn't something that gets to a billion-dollar valuation. It's something that gets to a billion-dollar value, you know, if you can get— it's something that gets to like $10 million in cash flow. That to me is a unicorn company.

Yeah.

And a unicorn founder is someone who could do that. It's like your buddy.

Yeah, no, totally. It's crazy. I'm making my goals for 2024. And when I look back at my goals for previous years, it was like, okay, get this, you know, my company to $20 million in revenue and to this growth percentage. But Like those were the wrong metrics. Like those metrics were based on what investors wanted, right? They wanted to see a graph up and to the right of revenue, but that didn't take costs into account, right? Or growth, but that didn't take retention into account, right? And so now I'm thinking about, hey, these are goals just for me. And it's like, wait, what exactly should the goals be? It's just like a totally different way of thinking about business building when you're your own boss as opposed to your investors.

Yeah.

And your investors just have a different level of risk reward given they're, you know, extremely diversified and, you know, playing lottery tickets.

So can you talk a little bit more about what your goals are for 2024?

Yeah, I'm also going to keep reinvesting into the, into the business. I have a distribution goal as well. I want us to hit a million monthly podcast listens. We're at 350 right now. I also have a news, a newsletter goals while I'm still figuring out what was the right number. We're at zero today, but I want us to go big on newsletters. But there are a couple other things I want us to get into as well. I want us to get into the reputation game. I think lists are very powerful if done well, and I wanna really establish ourself in the list game. And then I also want to start this expert network, and I wanna create this flywheel between this sort of the reporting that the media company does And, um, that data entering this, this sort of expert network or the transcripts, each call should be a transcript that enters this, this, this database that is compounding. Um, I also have a few other reputation products I, I, I've just launched. One is a VC rating system. One is a, uh, service provider rating system. One is a SaaS tool rating system or a review site. One is a company review site. I'm going to have individual metrics for like a Glassdoor. Competitor individual metrics for, for those. And those are going to be part of this Bookface competitor that I'm launching, this sort of social network for, for founders. So high-level intention for 2024, it's, it's build the infrastructure, the infrastructure that is going to help me, uh, create more businesses and, you know, have more kind of cap— uh, ability to invest or like get into deals that I'm excited about, um, by just having more leverage. Like I saw how Product Hunt and On Deck just gave me so much leverage because people wanted me in their network or on the cap table because I can get them distribution and I can get them talent. And I want to create those same sort of bulwarks in the broader empire I'm building on the distribution side. And part of distribution is also reputation, but then also on the talent side. And so there's going to be a tangible sort of distribution, audience size and profit numbers related to that, but also this broader sense of, hey, am I building the infrastructure that makes it easier for me to incubate more businesses on top of that? So that's how I'm thinking about 2024.

I like it. I like it. Big year. We only got a few minutes left. I want you to give folks a few free startup ideas or things they should be thinking about. What do you got?

Yeah. Okay. So I've mentioned that I'm really excited about reputation. Uh, one idea I have is a, is Quora for people, basically a search engine for X, you know, who's the X for Y. I'm in, um, you know, uh, who's the best dentist in Miami or who's the best fintech investor, or I'm going to New York, who should I meet? We see these questions on Twitter all the time or Facebook. They have tons of engagement. And then they're never stored. And so I'm really interested in the intersection of engagement and kind of like state, you know, stored state. And so you could go on Twitter and scrape all these questions, or, you know, you use LLMs to somehow find a lot of these questions, organize them, structure them, create your own social network just for these, just for these questions. And then find, you know, who to sell them to. Because similarly to what I said earlier, it's not like, like some of this information is really valuable to a small subset of people. So that's a space I'm curious to explore. Speaking of things that are really valuable to a small subset of people, the dating space, I think people are going around it the wrong way. They're not price discriminating. I think if we were to ask single people, how much would you pay of your— what percentage of your net worth would you pay to find your partner in the next year or 2? Especially people in their 30s, right? Um, I, I think it's fair to say though, a bunch of people would say something like 10%, 20%, maybe even more. And so I think there is a big, uh, uh, opportunity to build sort of a high-end combination coaching plus matchmaking business, almost of like what an executive recruiter does. So we paid, you know, $100K plus to get a COO or to get a CFO, and that recruiting firm Not just didn't just source for us; they took us through the whole process and made sure we found one. It's like yeah, you could find a CFO on your own, but if you pay 100k, you're definitely going to get one, and they're going to stay with you until you get one. And I think something similar on the on the matchmaking front, and I've only seen solutions that do either matchmaking or do coaching, but not like personal trainer style, like just make you make sure it's. You know, do it for you almost, like be in the dating apps for you. And I think in general— yeah, exactly. I think in general it's a big trend of like shifting from like teach you how to do something to like press button and it's done, like do it for you. And this sort of like going from coaching to personal— like personal trainer doesn't just tell you what to do, he also like, or she watches you until you do it. Um, and I, you know, I like solutions that that do that, um, for people. Because there's all this education and it's great, but it's rare to have, you know, someone who will take the, the whole end. And I think there's something at the, at the intersection of like— and you've thought about this too in different ways— but coaching, accountability, um, sort of, you know, executive assistant, um, that just kind of is there with you, a personal trainer for life, basically. What, what are the areas in which you want to grow? Like, I, I looked at my 2024 goals and And one thing I'm doing, and I'm lucky enough to have some people helping me, but hey, EAs are cheap. You use Athena and get a, you know, pay, you know, a few bucks an hour, $6 an hour for an assistant. And you can get someone to help you out too. And I'm putting that assistant next to those goals. Like, imagine having someone whose job it is to achieve your goals for you. Like the level of not just accountability, but support, that you will get from that is, is, is, is really powerful. So I'd love a service that takes that to the next level. Maybe that just is Athena, but you can imagine it applied to different spaces like, like relationships as an example.

Yeah. And I don't think it's Athena. Like, I don't think it, you know, cuz it's, it needs to be purpose-built for this use case.

Yeah, exactly. Yeah, exactly.

All right, man. Idea Machine. I like it. I also like that the underlying theme of this whole conversation has been price discrimination.

Yeah.

And it's like, how do you sell the most expensive thing to a small group of people? Yeah. And start there. It doesn't mean you can't democratize it and build something for everyone.

Tiers. Yeah.

Tiers. But so I like that. I like that. Where could people get to know you more?

Twitter. Check out, I'm Erik Torenberg on Twitter. I have Substack, turpentine.co if you wanna check out we're doing. If you loved any of the ideas that I'm working on, I see myself as wanting to build a studio and incubator. So do reach out if you're inspired to take on any of the ideas and just want support or want a potential partner on it.

You gotta come back on again, man.

Amazing. Yeah, it's been an honor to be here, Greg. Always love chatting with you and brainstorming. We gotta do our next Pura Vida.

Yes, absolutely. You left Miami. I can't believe you left Miami.

I know it was hard, but I'll come back and visit.

Was it because there was just Torenberg, Eisenberg, you were getting mixed up? You know, you couldn't—

Yeah, I didn't know there was enough Bergs. Yeah, no, forget it. No, it was a good run, but there was a moment where I just needed more professional and personal serendipity in my life. And so I came back.

So end with this, San Francisco, how is it versus like our San Francisco, 2012? 2019.

Wasn't the same, you know, but it's, it's, it's, it's not the same, but it's back. It's, it's, you know, people have left. There's a whole new— a lot of people, like, we came up with Ryan Hoover, like, he's gone. Like, David Spinks, he's gone. Like, a bunch of people, right? A bunch of people are friends, they're gone. But there's a whole new crop, a whole new, you know, set of young people who came in. And, and one thing that's different that I— is there's a sort of consciousness to San Francisco about sort of making San Francisco great, which is like making it a safe place, like getting— there are people who are now like running for office who were previously doing tech companies. And that's exciting to me because one of the things that I sort of miss about Miami or didn't like about San Francisco was it felt that everything was just about tech and there wasn't really enough diversity. And now I'm seeing all this kind of like community activism energy. And it's just giving a new flair, a new excitement. And it makes me feel like part of something, part of something bigger than just myself or just my company. It's like, no, it's actually like, make this city great.

If you're in your 20s and you want to start a Turpentine or a Late Checkout type business, do you do San Francisco, New York, or somewhere else?

I think the answer used to be you had to be in San Francisco if you were trying to build a tech company. Now, I think you can probably be anywhere. But, you know, I still think on the margins, probably San Francisco or New York, or just wherever there's a concentration of, you know, amazing people, like wherever you can find your tribe, that's where you should go. Like, in San Francisco, when I first moved here, I couldn't find my tribe for a couple years. So it wasn't a great place for me. So I'd almost like find them online. Like, see where people you want to meet, where do they live? And people you can, you can meet too. And then just go there. Like, if you're able to get into the Austin scene with Dave Perell and Justin Maris and all these people, like, go to Austin, right? Like, so, or so that's how I would think about it. It's like, where, where can you find your tribe and look online first?

Or if you want to come hang out with me and Ryan Hoover in Miami, exactly. Come, come do that. So I won't take it personally. And appreciate the time. Later.

Yeah, appreciate it, bud. Upstream with Erik Torenberg is a show from Turpentine, the podcast network behind Moment of Zen and Cognitive Revolution. If you like the episode, please leave a review in the Apple Store. Turpentine is a network of podcasts, newsletters, and more covering tech, business, and culture, all from the perspective of industry insiders and experts. We're the network behind the show you're listening to right now. At Turpentine, we're building the first media outlet for tech people by tech people. We have a slate of hit shows across a range of topics and industries, from AI with Cognitive Revolution to Econ 102 with Noah Smith. Our other shows drive the conversation in tech with the most interesting thinkers, founders, and investors, like Moment of Zen, And my show Upstream. We're looking for industry-leading hosts and shows along with sponsors. If you think that might be you or your company, email me at erik@turpentine.co. That's erik@turpentine.co.