Creators, AI, and the Future of Content: A Conversation with Tim Holladay and Peter Hollens

Welcome to another episode of the Venture capital podcast. We are super pumped to have Tim and Peter joining us today for a lively discussion of everything to do with content creators, investments, startups, AI, how that's impacting everything. So excited to dive in.

So pumped to be here, guys. Thanks for joining us and set the standard. It's going to have to be lively. So Peter Holland's. You got to bring the heat, man.

Let's go, let's go.

He is a world class vocalist. So you do expect a little singing.

All right, well, well, first off, let's get more deeper into the. The intro. So both Peter and Tim, you guys invest together, right?

Yeah, that's right. You know, Space Station Investments, we were an angel group. Now we're actually raising a fund, as it turns out right now. But that invests in a lot of early stage consumer companies. And Peter Hollins, I'm trying to remember how we connected. Peter, maybe you remember. I should probably. But at the end of the day, Peter Hollins is one of our most prolific and great investors, partners, counselors. And so, yeah, we work together a lot.

Yeah. When I was preparing for this episode, I was asking ChatGPT who the top 10 people were. And 80% of the time Peter was listed. You have Jay Z and Peter Hollins. Jay Z, Peter Holland.

Right up in there.

The Chamberlain sisters. Peter Hollands.

Right, right, of course. Absolutely.

No, I'm serious. I got the screenshots. We can add in the show notes if people don't believe me.

I love that.

I'll take it. Let's go.

Okay, well, first let's talk about, let's talk about AI's impact on creators and influence and how is that changing the economy? Is it affecting what you guys are doing?

I think that's all Peter. So you guys should know, like, Peter Holland is a world class vocalist turned influencer creator because he, he posts incredible videos and music on the Internet for many years. But what's unique about Peter, that I'll say, because he won't, he may not brag as much or at least give the full story. Peter Hollins is one of the best, I think creator business minds out there. He just thinks like an investor, a founder and entrepreneur and happens to also be an incredible vocalist and puts that on YouTube. So you should kind of know. And what's crazy about Peter Hollands and I found this out, I kind of knew this. Like we were buddies, you know, But Peter is like, if you want to just get a hint of what AI is doing and has been doing, he Is the guy like you wouldn't think, you wouldn't probably put him in the box of like. Oh yeah. He's also like this AI maverick. He actually is. We have a conference that we own co own with derral Eves and Mr. Beast called FID summit. Every year Peter's hosted with us, he's moderated and he moderated a panel on AI and brought in some of the top AI kind of thought leaders on YouTube creators. So there's my intro. Peter Holland. He's definitely qualified to talk about AI and creators.

I will send you your check.

You know where to send it.

Very complimentary to go back to your question, John. I mean it's, it's a very in depth question that we could talk about for hours. I think in general it's imperative for all creators to be at the forefront of AI and I think they are in terms of the general population. I would say creators are always at the forefront of innovation and I would say innovation in AI is synonymous. Right now most creatives are utilizing AI to up their productivity and streamline in pre production and post production. In terms of the direction you'd want to head that question in, I'd be more than happy to get additional context in which where you were hoping to go.

I think Peter, I think wants to go down the voice cloning deepfake arena and how that's affecting creators.

No, but I am curious. So yeah, everybody's using it to speed up production, but doesn't that create just a ton more content noise, et cetera. And I'm wondering if, you know, established content creators like yourself probably, you know, you have an established audience, maybe AI is not as big of a challenge. Maybe it is, I don't know. But, but you also have a lot of new content creators popping up and my bet is that it's just really hard for them to start getting attention, building an audience. I think a lot about does attention become you know, exponentially more valuable over time as we just get flipped, flooded with more and more content coming our way? That's all AI generated. Right. So like those are some of the like topics I'm trying to think through and would love your perspective on what you're seeing. Kind of.

Sure. There were multiple sub subjects in there.

Sorry.

Yeah, yeah. First and first and foremost, the parasocial relationship that myself and my peers have established is infinitely more valuable as the entirety of the Internet gets saturated with non human content. I also think simultaneous to that, our ability to determine what is and isn't human is going to be harder and harder to associate with. And I do think the younger generation is going to get really used to it and be fine consuming just the majority of this content. Whereas people who have been conditioned to create this parasocial relationship with people like myself and others are going to stay focused on those that they've already pre determined are real humans and they will associate with. I myself have absolutely played around with every toy you can possibly think of when it comes to Udio and Suno 11 Labs. And not only on the music side, but also on creating iterations of my voice to do any number of things, even on the parent side, trying to help my young autistic child, help him with rules and, and learning things subconsciously because he does not like learning it consciously from his, his current class of neurospiciness. So I use it for everything. I get a kick out of staying at the forefront of it. So, depending upon which, which convo you want, I think, I think the, the value of the brands in which digital influencers have created will become extraordinarily valuable. I think anyone wanting to start a company now, if they don't start it with, I would say, a creator, you are doing yourself an incredible disservice. We are the lowest CAC you can possibly have and the highest return on investment. Whether or not you look at us as just somebody you put on your cap table and hope we talk about when we have inventory, or if you get somebody who is slightly more entrepreneurial minded and you have us as like a fractional cmo, there's extraordinary creators out there that are truly just entrepreneurs who have content be their first priority. So I'm, I'm excited to talk about any aspect of this, Peter. So you tell me which way you want to go because it's, you're like, you're like, here's, here's a, here's a T ball. I'm like, well, I could talk for two hours. So you should interject.

What were you thinking, Peter?

Well, I guess the first question, right.

Is.

With all the content that's coming out from like, powered by AI, what does that do to influencers over time, right? And content creators that exist today and have an audience and those that are, are building, right? Because there are some people that I talk to that are like, AI is basically going to disrupt all content creators and we'll just have a bunch of AI bots, you know, creating content, pushing it out there. And so, and then you've got other people that make the argument that are like, no like the content creators that are out there, that are established today, that are real, real human beings, they have real loyalty, real audience and they have people's attention and that attention is going to become more and more valuable over time. And, and frankly, like we're going to look towards people like yourself, Peter, that can speak with authenticity to whatever it is that they're, they're supporting and promoting versus an AI driven thing. So I'm just curious, like, which side of that debate you come out on and why? Maybe because I think that sets up the rest of the conversation for the podcast because the rest of it we want to spend on, you know, what are the best ways or how do you think about making investments? What are the best ways to engage with a content creator if you are a founder, et cetera, et cetera.

Well, I definitely don't see it as black and white. I think different segments of the population, like I tried to allude to earlier, will fall into different traps. And I think similarly to the way we've seen the music industry head, you'll have people that really head back towards vinyl and then you have people that will immediately just grab onto the thing that is the easiest and the fastest to get the dopamine hit. And I think we'll see that segmentation of the population and it'll be quintessential for each and every single entrepreneur to like really understand who their ICP is and then to dig deep into the answer of that question because I think it will be extraordinarily multifaceted. I, I, I will once again trump the extraordinarily biased concept that, that like our, our pre established parasocial relationships are going to be extraordinarily valuable. And yes, the market will be flooded, everything digital will be flooded with AI created content. But I don't necessarily think that's going to be a black and white set up like your question was, so. Sure, yeah.

All right, so TBD a little bit and a lot of gray area which is fair.

Are you guys seeing brands requesting to partner with digital creators instead of like, like a real creator like Peter?

Yeah, I mean, on our side, you know, here at the space station we have our investment group, but we also have an influencer marketing agency and we do a lot of work with brands, connecting them with great creators. And I mean there's been some hints of that, but I just don't think there's been enough like pure digital creators that are yet kind of enough in the forefront where they've got the value that a brand would Kind of attach to. I think to Peter's point, companies can and should be using and leveraging AI in so many different ways. And on the content creation side or partnering with creators today, it's still very much human creators. Will that change in the next two, three, four, five years? Absolutely. It's just, it's very challenging to know exactly how that, what that looks like.

Okay, how are you guys?

I was just going to say you're seeing an extraordinary acceleration and growth within AI content on short form content. And I think it will like over saturate that incredibly fast. Whereas long form content has a need to connect. And thus far I don't think we're anywhere near charisma being one of the things that artificial intelligence will be able to do better than humans. It will maybe happen just to get people ready for it. Which is one of the reasons why I really try to push the reframe of artificial intelligence truly being collective intelligence, being us in order to get creative buy in. Because everybody's so scared of it. So scared of it. I did a commencement speech last Saturday and I was asked to come and speak, speak about AI and I got booed off stage. And I was so purposeful in trying to do it in the most delicate way. I'm not joking. People standing up and being like, get the. The what? Where was this at that it was at a name to be not talked about Community college. And I've given a commencement speech at the University of Oregon and it was like really well received and this was a lived nightmare and I still actually truly have PTSD from it. And the one thing that I know this is a little bit of a to the side, but like the true chasm, the chasm between the people who are bought in and know where we're going and know the dystopian nature of this like segment we're going to have to get through to get to the era of abundance and utopia that I pray we get to the chasm between the people who aren't willing or aren't interested or aren't even wanting to talk about it. You can't even bridge that conversation. I lived through what happens if you try to just tell people that they have this super power power and that they should really try to start tinkering and playing with it because it'll yield such positive results. It was, it was a massacre. I was like, I lost them by about five minutes in and by like minute 19. Like, it was just like, I, I'm done. Like I'm keep security and leave now.

So I'm curious, was it just. Yeah. I mean, were you. Were you just kind of like, AI is the future and you need to embrace it? And they were like, absolutely not. This is terrifying.

I. I truly tried to utilize as many metaphors and analogies that were like, soft as possible, especially providing the initial context of, hey, you have this CEO saying this is just, you know, great Grammarly on steroids. And then this, and then this other CEO saying the exact opposite, that we might have 40% unemployment within the next 10 years. And so therefore no one truly knows where we're going, even the people creating this. So I really implore you to dig in because truthfully, the intellect between an ant and a human is now going to be the difference between the human and what we're about to create. And so I implore you to just start playing around with this. It's actually pretty fun if you get over your fear. I'm fearful, which is why I'm digging in and that's why I want you to as well. Did not go over well. Did not want to hear it. I tried so deeply to connect. I was very vulnerable and it was so scary. So scary.

It's crazy.

Petrifying. Anyway, I digress.

I think it is important, right? I mean, it's just such a huge impact on, yeah. So many aspects of life, particularly in anything digital.

And Peter pushes us, you know, on the, on the investment side and our investment team pushes us to really employ, you know, modern tools, these tools that he's been exploring and looking at well, well ahead of us in our kind of daily, you know, assessment of companies and figuring things out. And one example, as we kind of go back to this combo of like long form versus short form and other things, like, here we are on a podcast that will live on, you know, where podcasts are listen to, but also on YouTube. Right. I mean, this, we're seeing so much of this with the election. We saw long form podcasting being like such a key piece. We, we will take everything we get from a founder, basically like the whole data room, and we'll do like a recorded video call like this and we'll throw that into, you know, kind of into some AI tools and then say, spit out a 30 minute podcast about this company and ask intelligent questions from the invest from like an investor's perspective. And so then literally these two AI bots just start talking about a podcast that's a notebook lm. So it's an awesome, as you guys know. But what's interesting though, To Peter's point about charisma, like, I like that format. I enjoy that kind of a format. I like to consume things that way. But it's not 100% there. And I don't need it to be for what we're doing. I don't need it to be just super, you know, personal and engaging. It's pretty dang good though. But it doesn't have to be 100% there. It's just the, it's the format that works for me. And I think that, I don't know, I think that the human kind of connection, charisma experience will actually start to become a real premium in a world where we're flooded with AI content. And that's exciting to me. Like, the premium experience of, like, true human interaction will really start to shine for those that are world class, podcasters, creators, which is going to be great, I think, A great future.

It seems to me too, like there'll be a lot of value in curation.

Yeah.

Oh, yeah.

More than ever.

Correct. Yeah.

And it's like, I experienced this, not an AI experience this. And I can, like, share that with you, right?

Yeah, no, I love 10x on the content volume. If you're 10x the volume, 100x, the volume of content, curation will be the key. Sorry, Peter, go ahead.

Oh, I was just going to say I think curators will, will become creators and also the, the conversation that we could absolutely dive into regarding creators versus influencers. There's such a. A better nuanced reframe even. Like, I, I would like to call myself an artist now because I think there's so many negative connotations wrapped around. Yeah, well, especially influencers to me specifically. But, but even creators, I think at large are getting raked to the coals because of. It's just been around long enough to be like. Well, actually I'm, I'm an artist. Okay. I make music. I would like to reframe that even in my own subconscious so that, like, yeah, when I make my art, it's not just like, here's a container and I put my video inside it. But really the thing that's inside that is just the music. And that's the thing I'm really trying to make and put out into the world. And just because it's in a video doesn't mean that that's the only thing I am. And I think that's helpful anyway.

Yeah, super helpful. How are you guys choosing to engage with startups and founders? Are you looking at the product you're Looking at the founder, the space, I.

Mean for us like it's, it's always, you know, as you guys know, like in the VC world, it's kind of an art and science and I think the art side of it is for us, first and foremost, founder, founding team, there's just a, I don't know, some kind of real nuanced, interesting feel.

Of.

What a world class founder feels like. And now kind of fast forward. We've been investing for about five years. We're 112 companies in. We've been able to now work with a number of world class founders and we know what that looks like and feels like. That's like our top kind of first, top of the funnel. We just have to really feel like they are the type of founder who can build something great, who can take advice but can really set a direction and a course that. And by the way, personalities are all across the board. So it's not a personality thing. Although, yeah, I mean you want to work with and invest in founders that you get along with, but it's really kind of what's a world class founder look like? That's number one. Number two, the product itself. The product, the service, the setup, like, can we get excited and be proud of it? Do we like it, do we consume it, do we want to engage with it? And then third is just the progress is where are they at in their life cycle? You know, what, what's kind of current revenue, current kind of product margins, all these types of things. So you know, it's we, we just did an analysis and over the last 12 months we've looked at about 1200 companies. You know, so you're about 100amonth. And obviously we're not investing in 100amonth or even a fraction of that. And so it really is an important piece of what we do is to try to sift through and get, to get, to get the cream to rise to the top.

Is, is there a deal that you both are in that that maybe illustrates some of these points that we could talk about?

Man, Peter. Peter is one of our most prolific investors. I was just like actually trying to pull up a list of like all of your kind of deals. Peter. I'm trying to think through, I mean, stand out to you. Peter.

I feel like given the, you know, given the, the talk here, I mean I. Are we allowed to talk about.

I.

Mean, I mean there's like one specific creator that's always on everybody's mind and, and I, I wrote a, you know, probably My biggest check in quite a long time. Because I believe, I believe in, I believe in Jimmy and what he's been able to accomplish. And I've seen him firsthand do incredible things. And I, and I, I, I was like, I want to invest in this. Like, I, I believe in this guy. Every single child that walks in my house thinks this guy walks on air. And I think to our earlier conversations, I mean, what an incredible unique value proposition and moat that, that he truly has to build whatever he wants. And the fact that he absolutely within like a few short years created something that I think eventually could take out Hershey's. I'm like, uh, yeah, what, what else are we going to do? Like, yes, please, I will, I will buy into that. Jimmy etf. And, and, and so that's like one example I would bring up. And you know, maybe I'm, I'm biased because I consider him like, you know, in my sphere, in my ilk, but like the unique value proposition of, of what he's established will live on for decades in the minds of these children no matter what. Even if, even if all the socials ran to the side and just disappeared because of what, what, whatever cluster that might happen at some point later on, he could build just about anything he wants.

And they are, you know, beast. So yeah, we invest in a Beast Industries. Whenever this comes out, that's fine to say. And it's become now public. So we tried to keep it under wraps, but you know, the fact that he's raising some capital right now for Beast Industries is now a thing. And so we were able to kind of syndicate, put a check together. And as you look at that process that we just outlined, kind of founder, founding team, product progress, you look at Jimmy and you think what Peter just said, he really is kind of a maverick, kind of the tip of the spear for what we're calling this new creator economy, which is quite nebulous, very big, very exciting. I think most don't understand it. I think somebody like Peter understands it more than anybody. But, but Jimmy's kind of plowing the way forward. But when you go under the covers, you realize it's not just Jimmy. In fact, it can't be. This is a 400 person team now led by a very professional CEO, Jeff Housenbold, and building out a really sophisticated multi billion dollar enterprise that has grips in the YouTube Amazon Specialist Beast Games content side. They have a whole CPG portfolio, Feastables being the lead of that. Feastables can't show numbers. I mean is, I Can share numbers.

The numbers are they're raising 200 million out of 5 billion valuation.

Yeah, that's the ballpark. Yeah. But even just like Feastables itself, the power and the movement of that CPG company by itself is just quite fascinating. Lunchly. But then they have a whole portfolio, it's public that they own view Stats which is kind of like you know, YouTubers like go to software and a handful of other things that are in the mix. And that's a great use case of showing both, you know, founder, founding team, product. You know they actually are creating what I think are going to be, you know, some of the best products whether you're super pumped on the chocolate or not. The fact that they're, they actually have a mission to minimize and Olympic well in their case eliminate things like, you know, Jimmy's talked publicly about like you know, child labor in the U.S. chocolate supply chain was really what started Feastables. Like this is insanity. And so that, that type of like altruistic change, you know, kind of the status quo type thing, it's a great use case. And of course to Peter's early, early point, if you caught it, cac which is customer acquisition cost near zero, that is, that is the future is being able to.

He works in, he works in a pitch to Feastables in the most integrated way. Every video now. Okay so this last one, okay, yes, I'm an investor of Beast Industries but this last video of his I watched and I don't watch all of his videos, I don't have time. Right, but where he, he puts an individual in a gym and lets him stay there for like, I don't know, almost like six and a half months.

It was a year to lose a hundred pounds.

And I'm sitting there like getting super teary eyed and emotional. But like he worked in a pitch to Feastables even after the actual inventory integration of Shopify where I'm sure he got a really great check there.

Yeah.

But in such an honest way. Right. There was like a moment where he sits down and he eats his, his Feastable and he's all excited because it's like the one cheat he gets. And I'm like what a beautifully integrated way that doesn't feel like it's selling. It comes in an honest way. I'm just like, yes. What other ways can we work in more CPG here? Let's go.

Exactly. That's right. You know there's other examples.

Interesting. Talking about cac. So I recently did an analysis on Hailey Bieber's company that she just sold.

That's right.

And so she was, she was posting like 40% gross margins or not gross margins, profit margins on the business, which for that type of business typically is closer to like 15% at scale. Right?

Yeah.

And the point was like she was getting $400 million of earned media every single year.

That's it.

Which is nuts. Like, and that's what everybody else would have to spend.

That's right.

To keep it. And so that's why she had really good gross margin or really good profit margins, really fast growth.

Now you can add in those kind of scenarios, you can add 20 to 30 points of margin, which is insanity, simply because the CAC is near zero. Yeah, it's.

Well, yeah, yeah. I mean it Translated to like $85 million.

Yeah.

Of, of EBITDA, which, which, you know.

Maybe she, if she were to be doing a brand deal for a very similar company that wasn't hers, you know, maybe that she wouldn't be valued that high. But this comes into like true, this is like kind of Jimmy's style. Right. Which is like true integration, like actually deep integration with a brand that you own and build. Although we've seen a lot of these kind of creator influencer deals where they're kind of owning a brand and in reality they have a piece of it, but it's really not, they're not kind of core to it and they kind of walked into it. We see kind of a whole broad spectrum of minimal ownership. Talk about it quite a bit to actually sitting at the table, back of the napkin. I'm going to build something and own 100 of it. And you kind of, you get to benefit on the business side depending on how deep you go and how hard you're able to push.

So I have this philosophy or this theory that part of the reason why she was able to build that brand so big in such a short time period was because she, it was basically her company. Right. She probably owned like 2/3 of it, self funded it, so forth. And that, that was like a huge differentiator.

Do you agree?

Do you disagree? Do you think, you know somebody just, if she had just put her name on it, it also could have been as successful, you know. And, and what does that mean for our founders and entrepreneurs? Because I think there's a lot of founders that go to people like Peter and they're like, hey, you know, we'll do all the work. You put your face on it. Right. And, and how do you guys think about that versus, you know, Like Jimmy, like Jimmy's like, no, like this is, this is my company, this mine.

Yeah.

Hey, like I'm a hundred percent behind this thing. Right?

I think that's why it's so incredibly important to make sure you have not only, I guess the same way that we always talk about like founder fit, but, but creator fit. They, they need to authentically truly feel like this is something that they can get behind. That's like part of what they already have in like their life. And so it's, it's something that they, when they have time and they have the inventory, they will push themselves. They're like, well I don't have like some six figure deal to do this week so I'm just going to push this thing that I love that I have ownership in, you know, and I think that's important on a, on a per creator, per team base. Like do you, do you think that this person truly will have an authentic buy in or that cares deeply? Do they have, do they still have the entrepreneur spirit or are they in a different part of their life? Many, many creators are still focused on fame, money, sex. And I think you kind of have to try to find people who have bypassed this unfortunate subconscious thing that society pushes on people and they get to a second place in their life which is like why do I have consciousness? Why am I here? What do I want to be part of? What is my legacy? And I think that identification is extraordinarily important when you have founders who are looking to either co found with someone or bring someone in as a large equity partner. Also I think that there is lots of ways in which you can create beautiful, innovative hybrid deals where it's like my hope by bringing you in is to get X amount of distribution across this many platforms and if you could do that on this type of a, a quantity per quarter then I will give you this type of an earn out. I mean there's so many different ways in which we could have this conversation. I think we've definitely bypassed, I hope by now that just the transactional like one off of like you give me X amount of money and I'll give you this one post. I don't think that's good for anyone anymore. I, I think there needs to be either partnerships that are multiple year long or equity deals that I mostly like for creators. You can't like install like a cliff if you're doing distribution so it kind of needs to start right, right away. But there are beautiful companies being created out there like ohm, which is One of the ones on my portfolio that I actually brought to.

I was gonna mention them. Yep, you're right.

Yeah. That Jeffrey Frommer is, is kicking butt on that actually is like a Carta meets this type of a deal for creators where it's intricately woven into the concept of where we need to go. Because pretty soon, if everybody blinks a little bit too long, we're going to get to the point where all creators are going to be like, I'm not doing anything for you, I'm building my own companies. Because just like, obviously Jimmy knows by now, why would I do a deal with anyone else when I can do a deal with myself, Right? I mean, it's the same type of thing. You guys have a podcast, right? How often mean, are you guys pushing anything yourself yet? I mean, it kind of would behoove you to do so if you have a legitimate listener base, right? Like, do you have your own rolling fund? Do you have. I mean, like, like, let's be real. If you're an entrepreneur, I'm an entrepreneur. Let's like think about obviously where this is heading, especially as we talked about earlier, where distribution will be absolutely key as things become less and less human. So.

Yeah, yeah, agreed.

How are you, how are you looking at structuring these deals? So instead of just like the one off, what's the best way for creators and or VCs to, to partner?

Well, I mean, it's extraordinarily malleable as far as with VCs. I mean, you know, creator and residents are still a thing. I think they truly should be an actual creator. But you'd have to ask that a question a different way, I think.

Yeah, that's tough. I mean, you know, what we see right now is, you know, creators investing in these deals as investors. They put in real cash, they sit on the cap table like anyone else and they need to be excited about that setup as it is right now. By the way, this is like almost like Pre Ohm, right, where we talked about having a very straightforward, simple way to award equity to strategics for outputs. Pre Ohm, you know, that's, that's. We think that's the best way to structure in the short term, simply because being able to really figure out and negotiate kind of, to Peter's point, what does it mean to push and post and how much is that worth in equity? Those deals are challenging to do today and when it works, it works. And when it doesn't, it's ugly and weird. And so we've been in the Discipline of just invest like an investor and then we will work with the brand in a very bespoke way, a very custom way to make sure that there's some great value exchanged between this new investor creator and, and the, and the founder. That's how we get more concrete.

That sounds very ethereal.

Yeah, it is. I mean, you know, you've got a creator who, you know, Oura Ring, you know, cuts a 50k check into Oura Ring in a, you know, a growth round. So we, we, you know, they cut a check, literally wire invest with us through our syndicate. They're in the deal. In the case of Oura Ring, it was like six, eight months later, through our efforts in working with the company that they said, you know what? Yeah, yeah, we really should be working with some of these influencers creators, not just ours that we brought into the round, but just in general we needed to kind of turn that on. Now we happen to have an influencer agency here internally and so we engaged and said, all right, let's start working to find those who authentically connect with Oura Ring and who can really do some great work and really, you know, get excited about the brand. Most of which in fact all of which, at least in our case already were aura kind of users wearers. Right. And so they already had rings, they were already rocking them. And so then we just engage with these marketing heads and work out, really work out what end up being brand deals in a very authentic way, way more authentic because these are now investors, they actually have skin in the game, which is exciting. And because a creator has put in a check doesn't necessarily mean that they're going to do a ton of work for free. They shouldn't. This is their business, right? This is kind of how they operate. And so, but, but as an investor creator, you know, they're giving a lot better deal. More love, more help, more insight, more time, more effort. So that's what we see. And it could be that they end up earning that equity back or you know, the check that they cut in in kind of brand deal work which essentially now coming back to, we keep coming back to Ohm. That is what OHM does without having to have the investor check and then get the check back eight months later. OHM will just kind of do that all on the fly in real time. And so we effectively get to that. John, to your question, it just this, this case, it was like literally like a 12 month process for essentially creators to invest with their, with their influence.

Also John, to think about like how complicated this gets because the antiquated entertainment world doesn't necessarily reward agents and managers for doing direct deals with creators on equity. So it is extraordinarily cumbersome to do the thing that actually is innovative and leaned in forward because you have so many barriers to do so. But it is absolutely where we're heading, like without a doubt.

Yeah, yeah. And then you get into. You can start getting the blockchain and tokenizing things where you can really make it a way more straightforward on chain transaction. For someone with influence, a strategic of any kind. It could be a founder of another company, it could be, you know, it doesn't have to necessarily be somebody who has an audience but strategically adds value to a company where as a founder you can appropriately award equity above board. SEC thumbs up for influence, for strategic value and help. And then of course all of the tax implications and the preference stack and all that. So it is complex to merge VC with creators today. Cool tools are helping us get closer to it, we think.

Can we go through a math equation?

Bring on the math, man.

Hypothetically. So Peter Hollands, you've done investments through various avenues. Both of you have. Let's just say we've got a startup, B2C. It's doing a million in revenue right now.

Yeah.

Is that too early and. Or how would you look at structuring that deal? It sounds like you guys would invest cash first and then try to earn your cash back over the course of 12 months.

Yeah. Let's look actually at a really kind of concrete case that's along that same kind of math lines. Right. So Painterland sisters. We talked about this before as we're starting up Icelandic yogurt. Incredible brand of just great yogurt. These are two sisters in Pennsylvania on a fourth generation family farm who essentially went off to school, grew up on the farm, went off to school, came back to build a company to help save the farm really with these organic dairy cows. They built this incredible product. They. We came across panel and sisters when they were kind of in that, that revenue range. And so the way that we would look at this kind of a deal is obviously in revenue. Something's clicking. Right. Is a million, is it 100 grand? Is it 5 million? Like that's nuanced. We've invested in, you know, barely into six figures of revenue and well into seven figures or more, eight figures in this case. There's obviously some revenue there. So let's go through our checklist of. Are the founders the right people? Peter Harris was able to meet Them incredible ladies and truly sharp as they come. Very driven, capable. Got it. They checked that box. Product incredible. Go try it out. It's amazing.

Delicious. So good.

It's great. It's the best. And then. But the third is on the progress side. So what we would do, John, is we would look at it, we run our diligence, say, all right, they're in revenue, how would we value? This is the entry point, the right entry point for us. Right. And so we start to talk about valuation, we start to talk about like if they're doing a million in revenue, you know, a CPG company early stage like that, it's hard to peg a revenue against or a valuation against revenue. Of course, in those early stages, pre seed seed rounds, it's fuzzy math when it comes to pegging the valuation. So they're going to come with a, we hope pre or sub 20 million revenue in that case, or excuse me, I'm struggling here guys, $20 million valuation or less. And that was the case for us in this round of Painterland. You know, that's where you want to be in these kind of pre seed seed stage rounds. Seed stage, you start getting into like, all right, you know, they're generating 3,4 million. You put a 5 to 8x multiple on top line revenue to kind of get roughly in the ballpark of where they need to be on. And you try to peg it against kind of real time numbers versus 20, 21. It was like next year we're going to be doing 15 million in revenue. Let's put a 5x on that. It's like, okay, we're past that, we're back to hopefully some kind of normal valuations. We'll do that math and then if that box is checked on the valuation side, we feel pretty good about the entry point which by the way, we try not to be get too caught up. We just got to check the box. We're never going to be perfect on the entry point. We're just trying to get as early as we can and get as much capital in as early as possible. Then we negotiate like, yep, we'd like to join the round. We space station. We're very much considered strategic investors. So we're not leading the round, we're not filling the round. We're typically coming in at the very last, at the very kind of last check in where they're giving us an allocation and we work to fill that with our group of investors that join us and we try really hard to bring in great creator investors, people that have AUDIENCE Peter Pro athletes, Olympians, bloggers, bring them into this round. And in this case with Painterland, as we were talking before, they actually had a little bit of a hit list. We said, give us a hit list. Who would you like to have in this? And we were able to actually knock down a few on that list, which is exciting for them. It's awesome.

Super exciting, super beneficial. Now, Peter Harris, as you as UGF or other VCs are looking at deals, does not. Does having an influencer, player, creator play if it's not there? Is that a red flag?

I mean, it depends on the company, right? But if it's consumer oriented or like, there's a reason to have it, I think it's important. I will say though, that we've looked at a lot of deals over the years, as I'm sure Tim has, where there is an influencer or content creator, you know, whatever part of it, and that doesn't suddenly make it a, like, done deal, like, not even close. I mean, we passed a lot of deals like that.

It could be a red flag, honestly. Not the fact that they have some kind of creator attached, but who and why? To Peter Holland's earlier point, like the authentic connection, if it's not there, it is, it's actually worse.

And sometimes there's like, risk. I don't know if we want to talk about that. But, you know, you bring on one.

Scandal away from, from just, yeah, destruction.

They get in trouble and all of a sudden that, that what used to be a positive is suddenly a huge negative. Right. I think we've all seen examples of that, so that's valid. And conversely, you know, we're investors in one of our consumer products companies. Actually, several of our consumer products companies don't have any sort of influence or celebrity or whatever and have done very well. They still work with influencers and celebrities and, and content creators, but they're not tied to any single one. And they've done that very successfully. So specifically, I'm thinking of Kopari, which is a. I mean, they're, they're crushing it right now in the skincare and sunscreen market. And then on the other end of the spectrum, we were investors in a company called Preve Revo, which was Sunglasses that was started by a bunch of celebrities and did very well because they were able to get, I mean, they gave sunglasses out to all their friends. And so you'd see like JLo walking down the street and everyone's taking pictures of her, Ashton Kitcher, whoever it was at the Red Carpet. So I don't know, I think, I don't know if it's a slam dunk. I don't know if it's necessary. It always piques my interest to dig in more on how involved they are and how authentic the fit is, to Tim's point.

But I think one thing, you know, that Peter Hollins talks about often to us and helps us understand and that he has other projects kind of working on this. It's one thing to have someone with influence attached to your brand or some group or working with some agency and doing some influencer marketing work. That's great when it, when it's great. It's another thing to really kind of partner with creators and influencers to figure out how to talk to humans like to figure out. That's one thing creators do so well that I think that most business kind of founders and people just don't appreciate. They really don't. They don't understand the nuanced magic that these creators have learned in communicating to their specific audience. It is challenging to figure that out. They obsess about it, they know how to do it, they have metrics around it. They literally live in the DMs talking to their people. They know. And so if you can hire and work with the creator, whether it's a partnership, it's equity or not, where they can guide you into how to message your product, your brand again in the consumer space. I just think there's way more than just hey, talk to your audience and let's see if we can get some sales done. That's great, but I think there's more to it.

Peter Holland called in house creators.

It's true.

I mean everything from go to market to community management to like actual, you know, social media, pretty much most creators have the capacity and the understanding and the ability to do so. More so in a biased bias again than like any court person you're going to grab from an Amazon or a whatever. I'm like, I'm sorry. I built multiple seven figure companies out of scratch doing dorky acapella music and I established numerous different types of relationships and then monetize them across any number of things. The extraordinary like combination that creators have now, if they're truly able to still stay on their game of being able to be simultaneously the on screen talent and an analysis, you know somebody that does analysis, Anal junior analysis, senior analysis. What am I trying to say? Peter Hollands Analyst Analysis Analyst Analyst Hey, I got you. I really should have read more as a child.

You sang A lot, which is great.

Anyway, you know, we're extraordinarily multifaceted and you won't succeed unless you truly are. I mean you could have a one off like viral sensation, but you're going to fall off. Right. You won't truly be able to create a career or any type of real legitimate relationship with your audience.

Yeah, yeah. I love this idea because I think so many times founders and VCs, myself right, included look at these, these influencers, content creators and just say, oh well, we're going to leverage them for the audience and not realize like hey, you know, maybe we should take this individual who is clearly extremely successful at communicating with people and building businesses and have them help us with actual strategic decisions.

Yeah, I think it's really the interesting thing I'd want to also just put into your, the back of your mind is like now that we are truly entering in the second and third innings of the creator economy, you have people who have done the thing, right? We've done the thing, but it's like, well what are they going to do after? And they've established a wealth of, of of learnings. You have people that want to do something else. Right. Like I did the thing for 13 years. It's really a tiring profession. Right. And now what? And I, and I feel like that was one of the reasons why I created one of my companies and house creators to like fundamentally place my peers in positions to, to allow them to have that experience. And because there is an extraordinarily extraordinary, extraordinary need at all these companies to fundamentally solve innovators dilemma, which you could hypothetically almost change the wording and call it like the AI dilemma. Like what the are you going to do? Well, maybe you should bring in a creator who's been delivering living and breathing that exact thing for the past two decades. And yeah, it's not going to work for everyone. You might not want to go grab some 17 year old TikToker off the streets or something. But, but it's more than just what a lot of these companies go to is, is like, well I'm going to hire an intern out of college because they're young and of course they're like tinkering so they're going to be perfect for this. I'm like, well would you do that with your, with your cfo? Yeah, because I'm sorry, it's just that just as important now and you're not going to get it yet, but you're about to be God smacked.

Yep, yep. And to that Point, like, not all, you know, creators, creatives are created equal, of course. Right. And so it's like any other process with bringing someone onto your team. There has to be a genuine fit. It's a team member, you know, this is a team member that you're, that you're bringing on. They're going to have different strengths and excitements and weaknesses, and it's nuanced. You know, we certainly can't put creators and the creator economy in just like a very defined bucket. It truly is quite a broad spectrum type of a setup. And that's why Peter's kind of expertise in working with a ton of kind of his peers to figure out who might fit where is an important kind of asset to have. You got to have some help in getting the right people in the, in the right seats. And I'll give you fail, and you will.

Then I'll give you guys a cheat sheet for your, for your audience. Like, if you're looking for creators like this, if you go immediately to LinkedIn and that creator doesn't have their own LinkedIn, I would just immediately cross them out. I feel like once a creator starts putting time and energy into their LinkedIn, it's like they go, oh, oh, I kind of get it. I should be paying attention over here. There's extraordinarily outsized value outside of just ad revenue and brand deals and the same normal P and L BS that most creators just focus on. But if they're looking at their opportunity to monetize outside of that, they're definitely going to be on LinkedIn because you have just extraordinary opportunity on there. And if they are, then it's like one of those check, check boxes. But also, I mean, like, you could also take in. This is like, starts getting, like, people get, start getting mad when you do black and white things. But you'd probably want to go for people who are a little bit older because again, they fall into those early traps as a, as a, as a, as an early adult. Um, so anyway, maybe you weren't even looking for that type of a, A line of questioning, but I think that's a value add.

Yeah.

Nice. Great. That's great.

Where do you think we're headed? What's. What's happening in the next phase?

I think, Peter, what's, What's. Inning four and five and kind of career economy?

Could we call a phase? Like, hey, guess what the next phase is? It's just whenever OpenAI drops their new model, like phase, or we can't even talk truthfully, like when people like have these conversations, they're like, well, what do you think is going to happen in three years? I'm like, shut up. What about the next phase of. Phase of collective intelligence being presented towards you? And you're like, now you get to play with super intelligence. I'm like, yeah, that's the, the next phase. Like, wake up people.

I think the next phase that scares me the most is just how freaking fast everything is happening.

So wild.

It's just hard to keep up. Right?

That's the part that scares me.

We can't. We what? We will literally we will not be able to like we are going to fall behind. But you have to be comfortable in that and you have to be comfortable in that uneasiness. But you also simultaneously need to create space in your, in your schedule to start leaning in and learning. Because the, the more you do, the more you start creeping up the 5%, 4%, 3%, 2% and all of a sudden you're like in the 1% of the 1 percentile. You're like 0.05 of like where we're going. And if you have that, that arbitrage is real and that will allow you to build multi million dollar companies because you'll be like, wait a second, I can literally think of that idea. Bring my phone into the shower. Which you shouldn't do. But anyway you could. And you have your reflet out app out and you're like, and here's my concept. And then by the time your hair is dry, you now have your MVP and it's done right. Like we can build so many things, like non stop. And if you aren't literally like spending your time as an entrepreneur, whether it's with like the imovie version of it, like with lovable and creating something at least once a week instead of wasting your time with whatever TV show or whatever movie you're supposed to because you're unwinding because oh my gosh, I'm so tired. Like, just play around with is fun, it is scary, but just freaking do it. Like it's not even like a, a thing anymore. Like, get over yourself. And like, don't spend your time doing anything else. Like lean in. Sorry, I digress.

Agreed.

I mean, I'm excited for the next phase.

No booing him off the stage. Come on, guys.

Yeah. If the next phase has better Yeti and Sasquatch videos, I'm down for it.

That's it.

Hey, I don't know if you guys have seen this.

Oh my God, it's So fun.

Wild.

It is so fun. Like literally two weeks ago, three weeks ago, that was like the most. Okay, for instance, let's take that as an example because I think this is great synergy. Mr. John, well done. If you had a creator on your team, on your cap table where it's, whether it's a creator advisory board, like the type of things I put together for companies, they would have literally been like, stop what we're doing. Go to market. Shut up. What we're going to do actually is create our own iteration of the big bigfoot phenomena, talking about our product. And guess what? That CAC's going to be low as hell. And yes, you could spend like crazy on it because it, it is a viral sensation. But those type of moments are going to be happening over and over and over again. And if you had a creator, guess what they would have done and guess how much money you would have made. And yes, that is worth whatever options or whatever pay or whatever salary or whatever relationship that is on like a like 100x multiple. Like get over yourself. Do you think, you think some like old corporate person because of their resume or where they went to school is going to help you make money in the future? Like, shut up.

It's so, it actually is so true though. And I think it's like, it's not even just a matter of like who's going to get ahead in this new world. It's going to be, you know, how do you not get left behind? This is like 2010 and you're deciding like, I don't think we need a mobile app or it's. It's 2001 and I don't think I need a website for my company. It's like, but it's that times like a thousand. Right? And so I, I couldn't agree. I can't articulate with as much energy as Mr. Holland's.

But that's.

Sorry, I get really.

I love it. I love it in the consum space. Like consumers are going to consume in fact more now than ever. When your car can drive it, when your car can drive you around, when your systems can build companies for you while you're sleeping. What are we now doing with all this time? Right? And so to the extent that for our group, we think that consumer will be as strong as ever. But attaching and working with these creators, human or digital or AI, it's going to kind of blend. It's going to kind of blend. The reality is that Sasquatch is guided by and built by a Human. It's the tool is the AI, is the tool. You know, it's. And that is exciting to me. Like, that's exciting is being able to have a tool where a guy like me who can barely draw a stick figure appropriately can create a sasquatch video that can go viral and really have some fun with it, actually tell some stories. Take that, move that into education. Take that, move that into, you know, teaching people, you know, how to sing, how to invest, how to navigate relationships.

Like there's just wild how important VC is to your retirement.

That's exactly. So now you're, now you're talking. My book. Thank you. All of our books. All of our books.

Oh, by the way, while we were having this podcast, I went and I, I connected with both Mr. PH, I love your initials and Mr. John on the LinkedIn. Because, guys, I mean, come on, let's help each other out.

These guys are doing great work. Like, I, again, I love this format of the podcast. I came across the podcast. I mean, I've known both of you guys. You know, John and Peter happened to be sharing the same state with me here in Utah. I'm an Arizona boy, but moved up here and it's just been such a blast to kind of see you take the time and energy. And Peter, by the way, Peter Harris basically trained my right hand guy, Jackson Stewart, and in such an incredible way@ugf. Honestly, like, Jackson is absolute baller and clutch. Peter knows him all.

He's so impressive. I love that kid.

Peter brought him into the light, man, in many ways, which is exciting.

Well done, Harris.

Let's go one out of the other.

We'll take it, man. And so it's like what you guys are doing in this world of helping teach all of us. I listen and learn from the podcast and your guests. It's just great work. I sincerely appreciate what you guys do.

Well, we really appreciate having you guys on and sharing your perspective. And yeah, we're really excited about this new format that we're piloting, which is bring on some interesting Experts, some interesting VCs and go deep on a topic that's relevant in the world of venture and entrepreneurship. So. So, yeah, thank you guys for, for being some of the first and, and going deep and having a lively conversation with us.

Lively. That's right.

Anytime I can help anyone build anything. It's so fun. It's like very addictive.

Yeah. And Peter's great at it. Yeah, hit him up.

Well, thank you guys so much and make sure you go to www.vc.fm for this episode, and all of our socials will be there and we'll have links to Peter and Tim as well. So also, just for legal reasons, this was not investment advice. We're not here selling securities where they're just. Everyone's just talking about their investment.

That's it.

I will give you AI advice, though.

Do it.

Do it.

Appreciate you guys.

All right, thanks, Bye.