015: How a Billionaire Decides to Take Risks

Billionaires worry about money too. I don't think there's really any point, no matter how much money you have, that you stop worrying about money and about having enough of it. That was very interesting in the book. She talked a lot about like her stress about money, managing her money well, running out of money. And I'm like, you're a billionaire. You can't be stressing about the same things regular people stress about. Million Dollar Creator is a show teaching creators how to capture attention and turn it into real wealth. We will deep dive into brands, celebrities, and entrepreneurs who have done it before and show you how you can apply it to your business as an everyday creator. Welcome back to the Billion Dollar Creator Podcast. I'm excited to talk about the first Black female billionaire, which if you had to guess, I'd say Oprah. Exactly. That's what everyone would say, right?

But it's not. It's, but no, it's not Oprah.

It's not Oprah. Oprah became a billionaire, I believe, in 2003, which was 2 years after the first Black female billionaire, which is Sheila Johnson.

Okay.

Sheila Johnson and her husband Robert Johnson started BET, the Black Entertainment Television Network, back in the '70s. I think like '73 is when they started it. And they— neither one of them came from money. They just saw a gap in the marketplace. That there was no television specifically catering to Black audiences, that there were not a lot of shows on TV that showcased Black actors or people.

Mm-hmm.

And so they decided to try their hand. He was in broadcasting in government and he knew some folks that he could get to become investors. He has the gift of gab, you know, and is very personable and, you know, it's easy for him to connect with people and to negotiate. And so it was easy for him to gain his first investor, which I think was like maybe $50 grand, right? Not a huge sum of money. And with that amount of money, they set up their office and they started this business. She had actually been in the entertainment space. She was a professional violinist. She was leading orchestras and putting on plays and things like that. So she understood entertainment in ways that he didn't necessarily. And so they started with like no real experience, nothing, just seeing a gap in the marketplace and deciding to do it. Not really having any money other than investors that they were able— one investor, I believe, that they were able to put in. And so they built this business from scratch, and she sort of always played the behind the scenes. He was the founder, CEO, like front-facing. She was a co-founder, but he was always the front-facing person. Anyway, so they built this business, and over 2 or 3 decades, it becomes a billion-dollar company. And they get divorced, and, you know, that's always fun. So they get divorced, and the reason they get divorced is because he's been cheating her the entire time, like for all 3 decades of building the business. He's cheating on her, and he's not just cheating on her like with, you know, Sally down the street, right? He's cheating on her with the woman in the office. Okay, so several of them. So like various different women who worked for the company, and these were not secretaries, they were like executives, people in leadership. He made various of them his girlfriend. And so she would show up to the office every day at work, and I think she was kind of naive or just ignoring it and just sort of ignoring the signs. And then eventually he gets sued by one of these women that he's been sleeping with for literal years while she's in the— literally in the office down the hall. And he gets sued by them, and she gets served with the papers as one of the owners of the company, and that's how she finds out. That he's been cheating on her all this time.

Wow, that is not a great way to find— I mean, not that there's ever a good way to find out, but that is like especially rough.

Oh my God. So yes, because in that she found out she was being sued because of her husband's philandering. And not only that, but her husband has been cheating on her. And not only that, because of all the different people quoted in the papers, clearly everybody at the office knew.

You found out about this from reading her book. Did she talk about it in the book that like everybody knew but her?

Yes, she goes into a lot of detail about their relationship and how they got together. And she actually was an entrepreneur before him. She had her own small business as a professional violinist, so she would train students, and then she put together the first, like, diverse orchestra. Okay, so she got students from all different walks of life and trained them and put together this beautiful orchestra, and they literally traveled around the world and like performed in various countries. And it was pretty amazing what she had built as a Black female entrepreneur in the '70s, you know. And this was her side hustle. She had a full-time job. So anyway, she finds out, and that's when shit hits the fan, and she finally is ready to face facts that he's been cheating on her all this time and never treated her very well. And so now she's ready to Well, actually, she didn't even get divorced then. I think it took a couple other things to happen because I think that they recovered from their relationship after that. But then she found out he put this other woman— he made her the CEO of the company. He was ready to step down as CEO and basically be a board member. And so he promotes this woman. He passes over his number 2 that's been his number 2 for years. And all these different leaders that have been in the company building BET for years He passes over all of them to promote a woman who was the, like, in-house counsel for the company. So she was the lawyer, not necessarily qualified to be CEO. He promotes her because he's now carrying on a long-term relationship with her. I cannot make this shit up. And so I think that was the final straw. And then she finally decided that she was gonna get divorced, but she was You know, they're from a different time, right? Sheila Johnson is in her 70s now. So this was a different time when women just, I guess, tolerated a whole lot of BS. So anyway, they finally part ways and the company gets bought, like, I think it was like a year or two after they got divorced. She's still a co-founder of the company. The company gets bought by Viacom for $3 billion in 2001. And she, he doesn't try to cheat her out of her share, which, you know what, kudos to him for that one.

There you go.

After all the crap he's put her through, at least he didn't try to stop her from getting her share of the company. And so she became a billionaire. The company was valued at billions, so technically she was already a billionaire, but now she was—

it became liquid.

It's liquid now. Yes, exactly. Now she's a liquid billionaire, and this is in 2001. And so she's sort of healing herself from this very long-term relationship that she had with him and all this like sort of emotional abuse that she has dealt with— not sort of, definitely emotional abuse that she's dealt with. And she moves to Middleburg, Virginia, which is this random small town that is like basically dying. It is in decline. And it's like got a lot of history because it's outside of DC. It's where a lot of, you know, different like meetings took place. It's known for like, it's horse country and it's got some like vineyards in the area, but everything is on decline. Its downtown is like shuttered. Basically it's going downhill. And she decides to move there because her daughter loves to ride horses. And so she decides to buy, like take some of her money and buy a farm in Middleburg, Virginia. And then she finds out about this like 300+ acre piece of land that's for sale in Middleburg. And she gets an idea that she wants to buy this piece of land and turn it into a hotel. Now, she doesn't know crap about hotels. She's never been in that business. And she would be betting a huge chunk of this massive amount of cash. Like, she could just be done, right? Like, and just live a great life and not work. But instead, she decides— I think she was like definitely in her 50s, maybe in her 60s at that point. She's late 50s, maybe early 60s, and she decides to bet a huge portion of all this huge amount of money that she worked her whole life for on building a resort. And so she has to fight the town because the town's like, they're very into their history. They don't want somebody new coming in building something that's going to ruin the town. There's going to be traffic, blah, blah, blah. So anyway, long story short, she fights them for like probably a 5 to 10 year period. And then finally builds Salamander Resorts, which is a fabulous resort that I vacation at. Okay. And I've actually seen Sheila Johnson and waved hi to her many times when I was there. She's always there. She's always greeting guests and she's very personable, very approachable. And hopefully we'll get her on this podcast sometime soon. That'd be amazing. Yes. But they just celebrated their 10-year anniversary, so it officially opened in 2013. During the 2008 recession is when they were like halfway through construction. And this is the part that I learned that I thought was interesting. Billionaires worry about money too. So I don't think there's really any point, no matter how much money you have, that you stop worrying about money and about having enough of it. That was very interesting in the book. She talked a lot about like her stress about money, managing her money well, running out of money. And I'm like, you're a billionaire. You can't be stressing about the same things regular people stress about.

Do you think that was because she's pushing the limits of her finances. Like, this is something that I wonder about as you take these bigger and bigger swings, you know, like you might be taking a swing with proportionally the same amount of money, right? And it's close to the edge and you might not have the same safety nets. Like Elon Musk did that famously with Tesla and Tesla SolarCity and SpaceX, where he's like taking these swings all at the same time and like almost goes bankrupt because of it. And I think he did it again with X or Twitter. And which that I think is like a pathological issue where he only functions, you know, if he feels like his back is up against the wall or something. But I've heard these stories of billionaires like pushing the limits. Is that because just as an entrepreneur, you're always like, this is the resources I have and so I'm going to deploy a huge percentage of them? Or I don't know, do most people like sit back and be like, cool, I'm going to keep this $500 million and never touch it, and that's really safe. And this other $500 million, I'm going to like actively deploy and invest and, and actually put into risky things.

Yeah, I don't know. I mean, maybe entrepreneurs are just wired in a way where we— I think it's easy to become addicted to risk and wanting to just make— we're very attracted to making big bets.

Do you approach things that way? Like, do you have— obviously you've got your FIRE goals and all of that, like, do you feel like you're putting quite a bit at risk as you build your company? Or is it more that you're, I don't know, like continually building up that stockpile and you're like, look, that I'm not going to touch that, but here's my liquid side that I'll risk. So even if this goes terribly wrong, I'm entirely fine.

Yeah. You know, I've done both. I've taken big risks. I've had huge failures where I lost 7 figures, which I'm going to save that story for my next book. Actually, the reason why it didn't work is because I took two big risks at the same time. So exactly what you're saying that Elon did, that's what I did. So taking two different types of risk, like one in the real estate space, one related to Hello7 at the same time. And so then things felt very tight for a little while. So yes, that can definitely happen, and I've done that. Now I think I'm a lot more conservative because I've lost large sums of money. And maybe, I don't know, some people have to just learn the hard way and I'm one of them. And once you have that experience, then it's like, oh no, we're not playing those games anymore. I think there are people like Sam Parr talked about this when he was on the podcast that are so fearful that they're scared to spend money and they're very conservative and then they miss out on a lot of opportunities. So it's always about finding that balance, right? It's a dance. And I think some years feel riskier and some years, you know, you just buckle down and be conservative.

Yeah. Well, and I think realizing that if you have multiple businesses, on the one hand, that's well diversified and that's fantastic, but there might be market pressures that come and affect all of them at the same time, right? A big downturn might actually have you spread thin between a few businesses that you need to shovel cash into to keep them going, or your real estate portfolio might be down or something else. Because it's easy for me to think about like, oh, if something happened to ConvertKit, then this other business is doing really well. And so see, they'll balance each other out, which I bet half the time is probably true, three-quarters of the time. But you could easily end up in a situation where, you know, every major business that you own is hurting for cash simultaneously, and it actually just bleeds you dry faster because you are so well diversified.

Exactly. That's kind of why One of my favorite metrics is revenue per employee. Isn't it the best? So I feel like it's one of those things that helps you to not go crazy, right? And do too much or take too much risk. It's a sobering statistic that helps you to recognize like, oh, let me actually stop adding people and let me make sure that I'm actually utilizing the resources to the level that I should and extracting the value from all of the resources that I already have available to me. And it's funny because I tell new entrepreneurs this all the time when they're like, oh, I have no money to invest. And I'm like, thank God, because you would just squander it on nonsense. So it's better that you have no money, right? Like, use the resources you have. You have talent, you have time, use that. You have the internet, right? You have all of these resources available to you. Use that rather than actual capital that you don't even know how to appropriately deploy usually as a brand new entrepreneur, right? You're gonna make more obvious mistakes.

Yeah. I love revenue per employee for 3 different reasons. The first one is like you were talking about, helps you stay conservative because everyone's always saying, hey, let's add more people. And if you see this growth trajectory, you're like, look, we got to hire ahead of growth, all these things that people say. And you can get yourself into a position where you're responsible for all these salaries, right? Like Spotify just laid off 1,500 people today. I think it's some huge number of employees. Right, and as a founder, you're responsible for all of those salaries. And so if you keep track of revenue per employee, you're going to hire more conservatively and you're not nearly at the risk of a layoff. The second reason is you get to pay a lot. Like if you are gradually driving revenue per employee up over time, that means you're going to be able to pay higher and higher salaries. And I like to pay people a lot of money. That's just one of those things that brings me joy.

Exactly. And it also makes your company competitive. It makes people not want to leave because it's hard to replace that salary somewhere else in a similar position. So those are all great business reasons to pay people well. And that's the thing, it's like, I want all my team to have buy-in on the fact that we wanna keep expenses down. You know, it serves everybody so everyone can play a role in keeping expenses down in whatever, you know, departments that they run. For example.

Yep, absolutely. And that's really the third reason that I love revenue per employee is it forces people to think about optimization. You know, what can we automate? What can we eliminate? And not just say, hey, how do we throw more people at this? So it makes us very methodically add team members. And everyone's really like at ConvertKit, everyone has exhausted the other opportunities of, you know, automating steps or outsourcing or other things by the time we add an in-house team member. So yeah, revenue per employee is my favorite metric.

So good. So good. Everyone should be tracking this. The moment you hire your first employee, just start tracking it just so that you can see how adding this person has increased revenue, what has it done for you, and then it'll make the case for how you're gonna continue to add to your team, but in a strategic way. And yes, systematizing, right? 'Cause there's so many times where like a process, a policy, or like, why are we even doing this? Like there are emails that we answer that I'm like, why are we answering that email? That's not from a customer. It's not from a potential customer, and it's a waste of of our time. Just don't even respond. Just literally delete it. You know what I mean?

Yeah. With what you're saying about tracking it, a lot of people would track it over time by doing a random calculation sporadically. I would really encourage you to graph it and actually have that on a monthly or quarterly basis of being able to see, you know, just headcount and employees. I can share a graph of ConvertKit. If anyone's watching the video on YouTube, I'll make sure that we get the graphic of ConvertKit's revenue per employee. Graphed over the last 5 years because it's something that I closely watch.

Yes.

And you'll notice different trends when that happens.

Interesting. I do track it monthly, but I don't graph it, so I'm going to start doing that because that sounds fun. I want to see that graphed and see how it shifts over time and just the trends of it, you know, what's the pattern.

Yeah.

Yeah.

So anything else on Sheila Johnson?

How did we get on revenue per employee?

I don't remember.

Well, anyway, one of the things that I loved about her is that she took a huge bet. She took her capital and bet it on a declining town. And with this premise that I feel like was really risky. So like what she did with BET is say, okay, there's lots of television out there, but there's no television that is specific to this particular audience, to a Black audience. And there's all these reasons why you would think you're gonna build a billion-dollar company on 12%. Of the population, right? Like, that sounds risky and like almost a bad idea in some ways, and they just followed that inclination and bet on it and won big. And I feel like she did the same thing with Salamander. So this is a very small white town, right? Like, not a lot of diversity at all, actually zero diversity. And she came into that town and built a resort that has a hugely diverse audience. So that is one of the things that always stands out to me when I go to Salamandra. That's why I go every year. It's like one of my fun fall trips that we do. And what I always notice is that there's people of every different age group, of every different ethnic background, lots of Black people, but lots of other people as well. And like, you don't see Black people riding horses very often. You know, they have stables at the resort, or like doing archery, which is another activity you can do, or all the different things that they have. She made this bet that like, I have this mission or this idea that this is a space that I'd like to see be more diverse. And so I'm gonna build something for everyone in this place. And that's scary, right? But I think people don't bet on these kinds of niches enough. I think where you just see a gap, you see a group of people, or there's a segment of the market that's just not being served well. That you can come in and serve them. And it's scary because you're saying no to half the market, 80% of the market, 98% of the market, but you're betting on this 2% that's gonna buy from you. And she's done that twice and won big. So they just celebrated their 10-year anniversary. I don't know exactly how much money the company's making, but from what I understand, they have over 1,000 employees. They have 7 different resorts now. So that was the first one. Now she has bought various other locations. She's building one in DC. She has the Aspen Institute. She just bought that resort. She's partnering with the Aspen Institute, and she has resorts in the Caribbean, Florida, et cetera. So anyway, that's awesome. I think she's dope. Oh, one of the things that I was going to say too, that I was talking about is the 2008 recession. So she was halfway through building Salamander in the 2008 recession, and because of the recession, right, like her wealth was down. And she closed the doors and just stopped the construction for over a year until the recession was over. So rather than push it, because the cost of building supplies went up, the cost of labor was up, everything was up, and so rather than push it, she went the conservative route and was just like, just shuttered the doors and said, I'm gonna have to wait a year or two before we start to build again when conditions are better. I just thought that was so disciplined And I was surprised, especially from a billionaire who could take more. She has more space to take more risk and she didn't. So it's just one of those things when you have a mission and you believe in something, it's gonna take time and being willing to be conservative when it's the appropriate action and also willing to just play the long game, be in it for the long haul and understand it's gonna take a long time before you see the payoff. I think a lot of people don't have that ability, but the more you can build that ability to wait and increase your patience and your consistency, I think that's where the big payoffs are. So anyway, Sheila Johnson, hopefully we'll get her on the podcast and she'll tell her story firsthand.

I love it. Okay, so into another segment, which is Chess, Not Checkers, which by the way, a bunch of people when we were in person said that when they heard us talking about this, they thought we said chestnut checkers, as in like chestnuts roasting over an open fire. Uh, but we are in fact saying playing chess not checkers, which is an example of someone thinking ahead in an innovative way and doing something where you realize, oh, they're playing an entirely different game than we are. So you had this written down, which I'm fascinated by it as well, but I'll let you kick it off, of the Michelin Tire Company, specifically the Michelin stars, and that the tire company is the same, which when you think of fine dining, and tires. That is not normally what comes together. So why don't you dive into this, and then I've got some stuff that I want to add.

Yeah, I love this example so much. I came across a write-up on it on Facebook, and I love it because it's— a Michelin tire company is not something that you would connect with fine dining. And that's one of the things that we talk about in building a billion-dollar creator brand. You don't necessarily have to do the obvious play, right? Like, one of the billion-dollar creators that we've talked about on Instagram. Her Instagram name is Supacent, and she built a makeup company, but she was just an influencer who was talking about pop culture and whatever else was going on, right, on Instagram on a regular basis. And she would do her makeup while she was talking about this stuff. So her audience wasn't following her for makeup advice or makeup tutorials, but she just happened to be doing that. It was like this tangential part of her brand. And she realized, okay, I have all of these women following me who buy makeup, and why not buy it from me? So she created a makeup brand and has made millions of dollars from this makeup brand. And I feel like this is a similar idea. So Michelin Tire Company was trying to find a way to get people to wear out their tires. Basically, they want people to replace their tires more often. And in order to do so, people have to actually leave their homes. So they wanted to encourage people to not just go to work or go to school, but also go other places, right? And so they decided to start reviewing restaurants and creating this list of restaurants that are Michelin-starred restaurants, which means restaurants that you wanna go to, that you wanna visit. And the whole idea behind it is just for people to drive more, wear down their tires, have to replace their tires more. It has absolutely like fine dining. What did this tire company know about quality dining? Right? Nothing. But they decided to create this list, right, of Michelin-starred restaurants. And now where do we all want to go? Where do we want to eat for like the best meals? Michelin-starred restaurants. That's where the origin came from. So they were playing chess, not checkers, and said, what is a way that we can get our folks out of the house? What's a resource we can provide to them that's going to urge them to get out of the house? And that's what they did. So brilliant.

There's so many things in that first. Well, no, I'll save it for later. And in just a little bit, I'll tell a story about a time that we tried to do something similar at ConvertKit and failed. So I definitely sunk some money into creating my own equivalent of that. But one thing that I love about it is often when new technology comes about, it is a solution in search of a problem, or at least people don't know how to use it yet. So on one hand, this seems ridiculous, right? We invent the automobile. That is an amazing thing. We can drive, you know, even 25 miles really quickly, right? Like the amount of time that a normal human can cover or the amount of distance a normal human can cover in a day just increases substantially. But they have such a problem that like people don't do that. How would you know? How would you think about what is possible now that you have a car? And so they're actually like, you should do a road trip. But that is a concept that does not exist. You know, it's like this leisure travel in that way by, by car, you know, it existed for some by train, but by car is something that they have to convince people to do with their travel guide. So I think about things like, like technology, like virtual reality, where, you know, right now you put on the headset and Who knows what, right? You can play games. It's basically a solution in search of a problem where it's not widely used, but I wouldn't be surprised if 10 years from now or 20 years from now we look back on it in the same way that we look at like the car and say, oh, it's obvious now that it's used for these things. But it takes someone to actually demonstrate the use and then convince the general public that it has that value. Okay, you want the example of when I tried to do this and screwed it up?

Yes. I definitely want to hear that.

So a couple years ago, late 2019, we were looking through the types of customers that we had for ConvertKit, maybe 2018, somewhere in there. And we noticed that we had a lot of digital marketers, you know, both the best digital marketers, the people who I love their content, they're out there serving their customers and creators or subscribers really well. And then also we had some of like the direct response marketers that they're great at copywriting. They're kind of sleazy. This is the type of person that like really dominated Infusionsoft and Maropost and some of these other email tools where they just see their audience as a piggy bank and you can just, or an ATM, you can just send an offer, cash in. And I was noticing these two worlds of like creators that we deeply care about and who care about their audiences. And, you know, these somewhat sleazy marketers. And it was interesting watching the business. I knew it could get pulled into this, like, direct response marketer world if we weren't careful, because those people understood the value of email. They were very happy to pay for the product, right? And they would tell all of their friends. And we had great deliverability and everything else. So we saw that segment growing. And one thing that I realized is you couldn't just avoid going down a certain path. You had to deliberately go somewhere else. We couldn't just say, we're not going to actively get those people, but had to say, here's who we are for instead. And so we really started to double down on the creator positioning. And one thing that made me realize is we need to go beyond creator just as YouTuber or, you know, social media influencer or blogger or podcaster, but also to include artists and musicians. And so we started to really focus on music as a industry. We already had Tim McGraw as a customer, and we had a handful of others. And so we started to make this deliberate push into music. And then when the pandemic started in 2020, we had our whole events budget, and we didn't know what we were going to do, right? Because all our events were canceled, and we're like, what are we doing? So Haley, who was running all the events at the time— she's produced all the Billion Dollar Creator events now— but what she did is kind of on the fly, she made this thing called Creator Sessions. And it started out, the very first one was working with a food creator who like did a live broadcast and in her kitchen and like taught a whole recipe and answered questions. And it was scrappy and really interesting. And then the next one, we did a couple, but the one that hit off really well was with a musician named Drew Holcomb, where when everyone was not under lockdown, we shipped him a a case of video gear. We mostly use iPhones as cameras because they have the 4K cameras and they're easy to set up. So we shipped him this Pelican case, and then he recorded a creator session just in his living room, basically singing these songs, telling the stories behind them. And it was pure magic. Like, we saw that and realized like, oh, this is something special. And so we ended up doing a ton of these creator sessions, and we did them with like Lennon Stella, who stars on the TV show Nashville, Mandy Moore, like a ton of great creators and musicians. And part of our theory was like, why, why is ConvertKit, a software company, out here doing things with musicians? And part of our theory was that we could grow ConvertKit Creator Sessions into like the next NPR Tiny Desk or this next thing that every artist would want to be a part of and use our audience So the short version of the story is we produced a ton of these. We absolutely loved it and spent a bunch of money doing it. And we ended up not really ever being able to get traction. Like we'd get a decent amount of views, but two things really killed us. One, spending the money long-term to be able to build the audience. We did it for about two years where we ran these, I think every other week.

That's what I was going to ask. Like how long was the test case and what was the metric that you were judging Like, what would make it a win?

Yeah. So we were judging it based on 3 things primarily. First is, can we get people to watch this? Right. And can we grow the audience for it? Oh man, there's so many we did. We did one with this National Geographic photographer named Amy Vitale. So she's like telling stories of how she got all these incredible shots and everything. So yeah, first getting audience. Can we get people to pay attention and enjoy the show? Second was, can we get customers from this? Right? Primarily the people that we're doing these partnerships with, will they sign up and become customers long term? And then third, if they are customers, will they value the service? And that was a sign that we're looking for, like we were expecting, like a flywheel, we're expecting it to take a very long time to get meaningful traction. And we ended up shutting it down for a couple of reasons. First, we just struggled to build an audience for it, right? We were able to get a decent amount of viewership, but what we could not get it to compound and to grow continuously.

Interesting. One question I have for you is some of the people that you got, were they like— I'm assuming you were doing this on YouTube. Yeah, is where the videos were. Where did you have any of the people that you featured? Were they big YouTubers?

They were not like They were more traditionally famous than YouTube famous, which I think is the learning.

Okay. Okay. Just curious. Okay. Keep going.

Yeah. And so the other thing is that in the music space, despite email driving pretty much all ticket sales for tours, all these other things and being the best channel, generally the artists themselves didn't really care about it or the management teams. They were all in on social. Even despite the metrics that you would show them where it's like, look, your segmented email that went out to your fans is what actually drove sales for the tour, right? That's what tipped it over all the conversions. But there just wasn't this hyper-interest in email and people would focus on social instead. So we'd get people all set up and then often their teams wouldn't keep running with it.

Yeah, it makes sense. Like they want a visible audience. That's what it is. They're valuing the visible audience versus the audience that actually buys things.

And there were a bunch of musicians that really focused on this and did a great job, right? But we were just finding that it was this uphill battle. But then the last thing that really killed us that we didn't expect was music licensing, where every artist— we would pay the artist to come on and do the production and all of that. And we understood that we needed to pay them, we needed to pay the other rights holders. What we didn't realize going in is that all of those licenses would expire. And so we could get licenses for them to use their own song in this performance, but for a set period of time, it'd be for 1 year, 3 years, et cetera. And so it got to the point that we just spent way too much time negotiating music rights and paying licensing fees and then sometimes, you know, 2 years in or 3 years in, the video would come up and we'd have to decide, do we want to pay for the rights again or do we want to take down the video? And we like looked at it compounding over time and realized, oh, we can't do this. But I used the Michelin tire example a bunch of times because I thought, hey, if we stick with this for 5 years or 10 years, we could be that example in music where people are like, why do I go to the software company's studio to record my album? Right. Or to like do this live show and the manager's like, yeah, it's weird, but that's what you have to do. Cause that gets all of this traction and attention. I still think we could have pulled it off if it wasn't for the licensing issues. Yeah.

It's almost like you'd have to build a new department and like have a licensing attorney on your team, you know, negotiating those licenses or whatever. Yeah. That's a challenging piece of it. It's a great idea though. I like it as an idea. But it also, it seems like that's the thing. It's like this is the end of the year, right? And it's always that time where you're like, okay, let me look back at what we've done and look at the metrics and say, was this actually worth the time? How could I better deploy those resources? Or is there a better play to be made? And one of the plays that I would think that would solve that is if you just went to all of the like music industry events, like are there music industry events or conferences where there's teaching happening, where you can actually get up there and speak and sort of make the case for why they're looking at the wrong thing that will actually help them to become a paid musician, right? A well-paid musician versus just, they sort of, I think in the artist world, it's like they expect to work for free for a very long time. And then eventually they expect to make a huge sum of money once they get discovered. And now we have like emerging artists that are like making a name for themselves on TikTok or whatever, where they're actually able to get paid. Separate from getting a publishing deal, you know. So it's interesting.

Yeah, I think it's just looking at where you're fighting an uphill battle. All of entrepreneurship is an uphill battle, to be clear, but it's where are you getting that momentum. And I think 2 years in, we were really proud of what we'd created, but we were still not getting that momentum. And, you know, going to the rules of flywheel— which, by the way, we should do a flywheels episode soon because we talk about it all the time in the masterminds that we're hosting. But the rules of the flywheel is that it gets easier with each rotation, and it was not really getting easier. Even 2 years in, it was still this grind. So that was a tough decision to shut it down.

But yeah, are you still pursuing the music space at ConvertKit?

Yeah, so we— I'd say we're pursuing it equal to the rest of the creator niches. We bought a company in the space called FanBridge, which was a great acquisition opportunity, and that brought like Who else? Leon Bridges and a whole ton of other— I think Grateful Dead came over as part of that, right? Just like another 1,000 artists or so came over. So we're really well represented in music now, but I think we're pursuing it equal to our other ventures rather than an explicit focus.

Yeah. And that's such an example of that, right? Like the creator sessions, while it's very sexy, it's sexy, it's fun, right? It's cool. It's like, All those things that makes entrepreneurs say, let's do that. But then the better play was actually just buying the company that already had all of those accounts. You know what I mean? It's like so much easier.

That is a very good point. Oh man.

I think we have to be careful as entrepreneurs, like question the sexy because that was like, for me, that was two sexy plays, right? I wanted physical spaces. For my clients, right, for gathering. And then I also wanted to do this conference and trying to do both of those at the same time, two big seven-figure bets at the same time. One of them was successful, one of them was a fail. So yeah, like maybe one at a time, right? Or also, what's the conservative version of this? Or what's the, like, the minimum viable version of this that I can just get out the door, test it, test and invest? Instead of, you know, going all in the way we do because we just fall in love with an idea. And I mean, I don't know, there's so much money that is about to be lost when entrepreneurs fall in love with an idea.

Yes. Oh man, that's for sure. Now, okay, I want to tell you about an idea that I did fall in love with this last weekend. I went to this mastermind out in Charleston, South Carolina. I keep wanting to say— I can't remember where I kept telling you it was someone else. Someone was like, no, you're in Charleston. Now I was like, all right, never mind.

What did you keep saying?

Charlotte? Charlotte? Yes.

Which is in North Carolina.

Look, I'm from the other side of the country. This is all new to me.

We didn't know where Boise was until you started talking about Boise, so don't worry.

Look at these worlds colliding. We're bridging the entire nation right here. Okay, so I went out to Charleston, which is an amazing city.

Everyone's like, yeah, oh my God, I love Charleston. Such good food. Talk about Michelin-starred restaurants. There's many in Charleston. It's a great place.

Yeah. So it was fantastic. But Stu and his wife, Stu McLaren and his wife hosted this mastermind, which was 25 people. It was legitimately like the best of the online creator world. I was really impressed. So like Michael Hyatt, Nanny Porterfield, Patrice Washington, Marshawn Evans Daniels, Who else was there? Dan Martell, Bonnie Christine, like just 25 people totally packed out in this room. And what I loved about it is they basically did 2 days of a mastermind, which was pretty standard. You get a bunch of great people together in a room, do breakouts, do some talk sessions, some discussions, plenty of good meals. But then the part that was really cool is they hosted a livestream which was ultimately a fundraiser for their charity, which is called Village Impact, and they build schools in Kenya. And so they did it at this studio in Charleston, which has been used by like Tony Robbins and a whole bunch of other creators. So it was one of those studios that has the, like when you're standing in it, you're looking at like 12 TVs full of Zoom faces and there's like an 80-inch TV on each side that has the chat. And then behind you is this full video wall that can change to everything.

Yeah, like the LED wall. Love it.

Yeah, I'd never been in a studio like that before, and I was like, this, this is legit. So what they did is they had this call, they called it like predictions for 2024 or something like that. And they basically, all these creators that were there for the mastermind, they hosted them in panels for 20 minutes at a time and then sold access to it. So it was this Friday night livestream. It went from 7:00 PM to 10:00 PM Eastern and they sold access to it. And I, I think there was like 1,000 people that tuned in to watch live and paid for that. And then during it, people would donate more towards building the schools and the panelists would donate towards building the schools. Amazing. So it ended up raising $380,000 for this charity, which is not a big charity. So I think it probably was like a quarter of their annual budget or something.

Yeah. That's a nice chunk of change.

Yeah. And it was tons of fun, right? People were on there going like, hey, if anyone, you know, the highest bidder within this time period gets to have— I think like Amy Porterfield and Jenna Kutcher were saying like, if you bid up to this amount, like you'll get an hour call with the two of us, you know.

And awesome.

So anyway, that was really fun and just reminded me of like putting together these conversations. If you have these relationships behind the scenes, even not even on that level, like just at any level in business, that pulling people together for a period of time to meet and share ideas is so, so powerful. It's been instrumental for me. And I loved just someone else doing the work and just getting to show up.

Yes.

And then also, when you do it from like focus on a charity, then a lot of people's like, oh, is this worth my time? Or like, what am I getting out of it kind of goes out the window and it's just like, oh yeah, we're all pulling together. Like, it'll help grow my business because I'll meet people and get great advice, but also we're pulling together for this bigger goal of like building schools in Kenya. And so anyway, I loved it.

This is a great idea and I think I might steal it for the Hello7 Foundation.

You should.

Because we've tried different fundraising ideas and, you know, I did something similar. I did a dinner at my house when I had my ranch. And that was the first year we raised, like, I wanna say it's like $150,000 and I just sold $10,000 seats. So like every seat at the dinner was 10 grand and it was just a dinner with me and like all the entrepreneurs in the space were dope and some clients of mine and we had entertainment and my chef at the time, Chef Bia, made an amazing meal and we had amazing discussion and they got a tour of my ranch, which people wanted, you know, and, and they got to stay at the ranch for one night and that was it. Like, And that was $10 grand. And so that allowed us to raise a lot of money that was able to provide a lot of doulas to women who were about to give birth and, and needed that support. So it's crazy. Like, that's the thing. It's like once you realize all of these resources that you have available to you, you can deploy them in so many different ways to have social impact for yourself, like in so many ways. But I love masterminding. I love the idea of Creating a mastermind, but then also having it, it's a win-win for the entrepreneur, right? They're not gonna say no 'cause they get to mastermind like you said, but they also get to do this thing that makes them feel good and give back, which I think any entrepreneur that's making a lot of money probably wants to do. Just feels like, you know, when you have a lot, you want to give a lot and be generous. I actually have a mastermind coming up next week and doesn't have a name, but basically one of the entrepreneurs is, it's all Black women who have made 8 figures or more. In their businesses. And so there's one entrepreneur just like Stu who, you know, lots of people know, but I'm not gonna say her name, but she is decided to host this at her house. So she's brought in all of these different women who are very accomplished, all have 8-figure businesses. And I think there's like maybe 8 of us and we're gonna spend like 3 days together just talking about how we can support each other, how we can share resources with each other and like what are each of our goals and how we can, you know, help each other make it happen. And you know, like present bottlenecks that are in our businesses or in our flywheels and get ideas. As you know, you just have this brilliant brain trust. So, and I have to leave my house for 4 days, which is a big ask. I am in my holiday season, okay? I don't want to leave. I'm enjoying like winding down, but I'm gonna go to this because I know I'm gonna get so much out of it. And that's how it is. Like, masterminding is such an essential part of entrepreneurship. And I feel like there's a lot of negative talk about masterminds, but it's necessary. And I noticed you spend a lot of time on the road to mastermind and go to events and be with other entrepreneurs. So yeah, it's worth it.

It's so much more valuable to me than conferences because it basically cuts through to just the speakers or just so many of the top people that would be at a conference and dedicates a lot of time. So you're not trying to catch them for, 15 minutes in the green room. You're trying— like, you have multiple days, like, to catch up with them. Like Jenna Kutcher, for example. I knew her— I've known her over the years. We'd never met in person before, but we've exchanged emails, and she's been an affiliate for ConvertKit. But like, we didn't actually connect that much. And the entire first day, I was like, oh, I need to like say hi to Jenna. And I didn't really get a chance to do that. And it's like, that's okay, there's the entire next day. You know, and at whatever, 10 PM, as the live thing is wrapping up and we're all hanging out, we're both like, we need to go to bed because we have flights way too early in the morning. But you still get all of this great time to hang out and connect. And she's someone that I think years from now, like, we'll be really good friends because we were able to spend so much time, like so much condensed time at the mastermind that wouldn't happen otherwise.

Available time, right? Because in our day-to-day, our capacity to spend time with people or have long conversations with friends— like, we could— there's a lot of people that you or I could call and have a conversation with any day, right? But having the time where you're free and the other person is free at the same time, and you're not rushed, and you're not rushing to another thing, and your mind is not on the meeting you had before that, right? Like, that's the rare thing. So I think getting in the room, it's amazing how much faster relationships grow when you just— even if it's a couple of hours that you spend in a room with someone else. You just get to know them and they're gonna share things that they're never gonna share online. You know what I mean? It's only gonna happen when you're in that space together. So yes, I love masterminds. Hello7 is actually growing our masterminds next year in a big way because I feel like that's the bet that we are making for next year. Okay. I wanted to talk about this other thing too. So owned media versus earned media, which do you think is better? And let me give you an example. I've been thinking a lot about this because again, I'm at the end of the year, I'm being very reflective. I'm looking at all of the data in my company for the year, and I'm asking myself, like, there's a lot of PR appearances that I do each year, right? Where I was on the Tamron Hall Show in the years past, I've been on like a Drew Barrymore Show, or I've been interviewed for the New York Times, or— and there's some, there's ones that are big hits that are like, okay, that's probably worth it because it was big enough, right? But then there's other ones that you're like, was that worth my time? What was the real get from that? What did— how did this benefit the company for me to use my resources in this way? And so that's the question I'm asking myself. Is it better to— I think a lot of us want that, like I was saying earlier, the stuff that's dreamy, right? We want to be featured in the New York Times, or we want to be featured on the Kelly Clarkson Show, or, you know, on the big podcast. But my question is, is that better than spending all of your time building your own owned media, right? Is it better to build your own YouTube channel than to run around trying to get press? Is it better to do 2 podcast episodes a day instead of doing your own podcast and then also guesting on a bunch of other podcasts? Right? So it's like, it's all time at the end of the day and what is worth it. I'm always evaluating this because I wanna be as efficient as possible. I'm always looking to refine how I'm spending my time, make sure I'm capturing the lessons from how I spent my time this year and getting even more efficient for next year. So what are your thoughts on that?

I'm torn on this. So first, I've not done a lot of earned media in the sense of PR, right? When we acquired FanBridge, that was covered by Billboard. We've done a handful of things, but I don't have like, oh yeah, when I was, you know, on the COVID of the New York Times Style section, it'll come, just wait. But like, here's the number of books that it drove or something else I haven't done. That much of it. What was interesting is this has been a topic of conversation with a handful of authors that I've been with, both this last mastermind and at previous events, where people are talking about like, is traditional press worth it? And sometimes you get these spikes that are just absolutely huge. Like, I remember when I was talking to the team from Khan Academy, the like online education, and they got coverage I can't remember what it was, on like 60 Minutes or one of these programs that just had crazy viewership. And they're like, they were showing their Google Analytics and they had like 20,000 people on their website at the exact same time, you know, and it's just crazy numbers. Now, there's lots of other times that people talk about going on a show or getting covered in the New York Times and not really seeing any meaningful boost, but then being able to leverage that social proof to then go on, you know, a podcast or something that has diehard listeners that then results in a lot of book sales. And so I think you can't— you have to chase both. I'm gonna go all three parts here. You have to chase both the social proof and what's going to drive actual sales, and they're not always the same. And some podcasts, you know, aren't going to move the needle a lot. I was talking to an author and he said that actually Ed Mylett's podcast, which I'm not very familiar with, was the one that when he was going on a bunch of podcasts, that was the one that shot him way up the rankings in Amazon. I thought that was interesting. But then the other thing is you have to have a way to capture that audience. If you're just jumping from someone else's audience all the way along, right, people can't follow you and like really become a fan of your stuff. So I think about with this show, the approach that I've taken is one episode a week, of Billion Dollar Creator and then 1 to 3 episodes a week guesting on other people's shows. I don't think it'd be worth that level of guest appearance if we didn't also have this show to drive everyone back to. Because I think about that, like, I don't want to keep borrowing other people's audiences, right? I can go on My First Million or a bunch of these other podcasts because I'm friends with the hosts, or, you know, in many cases people are ConvertKit customers or something else. But I don't want, like, if I have something to promote, I don't want to have to borrow someone else's audience. I want to be able to have our own audience. And so I think you find the balance and it's all about the mix of credibility and social proof, borrowing someone else's audience, and then ultimately going after the audience that you own and investing in that.

Yeah. Yeah. It'd be interesting to dig into the data and see, like, for the podcasts that have, that go to 2 episodes a week. For example, from one, do they see a massive shoot up of like additional audience that comes from that because they're just creating twice the content versus, you know, and twice the content is out there being shared, presumably, et cetera, versus appearing on someone else's podcast. They have a big following. You promote the Billion Dollar Creator Podcast there. Then some of that audience comes over here and listens. I'm just curious, like, and I, I agree, there's no necessarily right answer, But, and also too, it's like, do we still need social proof at this point in our careers? And what kind of social proof do we actually need? I will say like the things that during my book launch, things that really moved the needle and drove a lot of sales was Good Morning America. That appearance was huge. Not only that, but so Good Morning America drove a ton of sales that week, but in addition to that, it was basically a commercial for Hello7. Like it featured a whole bunch of my clients. That had amazing results. They talked about their financial results on that segment. And so we took that exact Good Morning America video and ran it as an ad for like 2 years, you know. And it was one of our most successful ads, and we were probably going to bring it back up and run it again. And I recently had— I was on the Tamron Hall Show in September, I want to say, and I think we've run that video as an ad as well because it's like a very familiar setting, so it's like a trusted source, so it feels vetted, right? And it's like showcasing this, and it just grabs people's attention and cuts through the noise so that people can see what we do, right? And see proof of what we do, which is amazing. So like, that's an interesting play. The biggest podcast that I— I was on a lot of big podcasts, but the one that drove the most traffic my way was Lewis Howes' podcast.

Nice.

That was really big and still driving traffic. Like, I still have people messaging me saying, I saw you on Lewis Howes. That's the benefit of it, right? You're on the podcast and on YouTube, and it just drives traffic for a long period of time. And then another, the media, like the press that I think was really big in terms of printed press, was Women's Health magazine, which I have never read.

I bet the distribution is just absolutely huge on that.

It must be, it must be, because that's not one that was like on my wish list, but it drove so many people. So many people came to me and were like, I saw your article in Women's Health. And that's why, you know, they started following me on Instagram and then joined my program or joined my mailing list, et cetera. So anyway, I just think it's, I think it's important that we always, no matter if you are an 8-figure entrepreneur or if you're just starting out and have a side hustle, like we gotta evaluate how is our time being used? 'Cause that's our really finite resource and say, what are the bets that I wanna make? Where do I actually wanna focus? What are the results I'm really looking for? And then how can I use my resource, my time to drive that instead of being pulled in a thousand directions, seeing what my neighbor's doing, and then I feel like I got to go do it, or doing the ego hits, right? Like, oh, I was featured in the New York Times, right? It did nothing for my business, but it made me feel good.

Well, I think once you get those things that are either social proof or, you know, boost your ego, make sure you make the most of them. It's like the, the billboard in Times Square. Right, that you can buy that just rotates through, you know, to be your thing for like a minute. But the point of that is the photo. And then to say, oh, this was featured on Times Square, or even if you're buying billboards in real life, or any of these things, it's about how do you take something— the— any magazine appearances, same thing, that photo, that appearance in a magazine. If you then market that a whole bunch online, and you have— you take that much further, that's where you're going to get the results. And so it's not that the credibility or something is worth so much in itself. Even the clips, right? A bunch of really well-edited clips from Good Morning America, from Tamron Hall, all of these other shows that like, you're going to be able to promote that probably way better than the show itself might, at least to your correct audience. And so it's really, that's just the way that you create the content. And then what you do with that content is where it really matters.

Yeah, I agree. And that's the thing. I think it's just like starting a podcast, publishing a book, having press appearances. With all of those things, you have to say, what is the play? How am I gonna take this piece of content and get the max value out of it instead of just putting it out there and hoping for the best, right? You gotta be strategic about it. So yeah, just an interesting conversation that I thought was worth having.

I love it. All right, let's leave it there for the episode today. We have the YouTube channel out, so you should go search Billion Dollar Creator on YouTube. and then if you don't already follow us in all the other places, we're big fans of reviews for the show. So please do that.

Yes.

And you can find all the links at billiondollarcreator.com. And I think next week we'll probably dive into creator flywheels, which is a fun topic.

Yes.

And then we'll also have a few guest appearances as we invite our friends on the show to riff on different ideas, break down their flywheels and everything else. So thanks for hanging out with us today.

Thanks guys. Thank you for tuning into this episode of Billion Dollar Creator. If you enjoyed this episode, please like and subscribe, share it with your friends, and leave us a review. We read every single one. If there is a company you want us to profile on Billion Dollar Creator, send us a message on social media and we will consider it. Thank you, and we will see you next time.