Speaker 1Everybody who starts a business, you have to find your glitch. Look for things, for areas where you have attention from people that nobody else is paying attention to.
Speaker 2Here's why I'm excited about this. I've never met you, but I've been a fan of your work because you're kind of the creative genius behind the scenes of some of the coolest marketing campaigns that I remember. I kind of grew up on the internet. I read your book back in the day. Oh, you read Poop to Gold. Yeah, Poop to Gold. On top of that, what you're doing now is fascinating. I had honestly never heard of Angel Studios. And here you are, you've built maybe one of the top 10 TV movie studios in the world. You're doing almost 500 million in revenue. And I would guess that I'm not alone. I would guess that 98% of our audience has also never heard about this. And the cool thing is you did it with, I mean, pretty much no experience or background in the industry, which I always like. I like somebody who, you know, doesn't kind of self-limit around what they can and can't do based on their own track record. And you went in and you did something really remarkable. And so I want to talk about all that. But I think we should start with the marketing because that was my intro to you. Can you take us back to Dr. Bob and how you helped a dentist create one of the great marketing campaigns? Where were you? What happened? Can you tell that story?
Speaker 1Yeah, I was in my last day of my last class at university and a guy named Dr. Bob came in and was asking the class. He wanted them to tell him how to make his aura brush, which was a tongue cleaner that scrapes your tongue and cleans off bad breath, how to make that thing actually sell. Because he had invented it. He had got, he had, I don't know, thousands of units of it, just boxes and boxes. Just boxes of them at his house. Sitting in his garage. Yeah, just sitting, it was, his garage was full of them. And the group got up and just said, you can't really sell these. And nobody wants to buy these online. Like 8% of people want to buy them on the internet. And you need to go do a partnership with Procter and Gamble or Johnson and Johnson or somebody. And, and I interrupted them and said, 8% of people is like 30 million people just in the United States. Why wouldn't? You focus on them.
Speaker 2Oh, so the, the, the smart kid answer was 90, over 90% of people don't want to buy this online. And you said, wait a minute. If, if 8% said yes, that's still millions. That's what, that's enough to clear out the garage.
Speaker 1That's right. What happened is, is I did think much of it until Dr. Bob came up to me after class and said, I liked your comments. Can I work with you? The first thing I did is I bought, I convinced Dr. Bob to spend $5,000 buying a web, a Facebook page called Kisses. There was just some guy somewhere in the country who had built this page called Kisses. I think it had 1.3 million followers. And so we took it and we bought it. And then I started spamming them with Aura Brush.
Speaker 2Because bad breath, kissing, that was the connection. You did get one thing right, right? Like I think one of the easy mistakes most people make is they think about their product, and they just want to tell you all about their product versus the benefit you get if you were to use this product, the happy ending you seek. And this product is just a tool that's going to get you to that happy ending, the better you, and maybe the version of you that can kiss without the shame of bad breath. So you did have that insight. That's pretty good.
Speaker 1Yeah. And so we took the 1.3 million people, we spammed them. And then once we got Aura Brush created as an entity, I changed the name of Kisses page to Aura Brush. Right. The brand
Speaker 2followed by 1.3 million people.
Speaker 1Yes. And so we had one of the most followed brands on social media. I think Facebook changed their rules after that. Right. And that failed miserably. We didn't sell hardly anything. We tried Google Ads. They weren't working. I think we were spending like $3 to $5 per dollar that we brought in in sales. Because it's just a little Aura Brush. And then I was watching on YouTube late at night, and I watched a lot of, YouTube. And there was a YouTuber called iJustine. She's probably still out there, but she was an early YouTuber. Original vlogger, right? Yeah, original vlogger. And in her videos, she would jump cut. She just stood in front of a white background, and then she would just cut, cut, cut, cut, to get rid of all of the ums and whatever wasn't interesting that she said, she would just cut it all out. And I was like, we could probably make something at that level. And then I got another roommate named Evan Graham. He was a film major, and while we were roommates, every single night he would go out and work on film sets for free. And then I got another roommate, Joel Ackerman, who was a screenwriter and a comedian. And I said, will you take this script I wrote and punch it up and make it a good script? And so I took all the knowledge I had about selling stuff from serving a mission for the Church of Jesus Christ of Latter-day Saints or Mormons. I served in Ireland, getting doors slammed in my face for two years. So you, you become a pretty good salesperson selling the gospel and learn how to take rejection. So I took the skill set I knew from that. When I was younger, as a teenager, I sold Idaho potatoes door to door in Utah to try to earn money. And, and I did pretty well with that. So I took those two skill sets, combined them and built a script that was how to tell if you had bad breath.
Speaker 3I've talked to hundreds of entrepreneurs on this podcast and I've got a bunch of takeaways, but one of the big ones, one of them that shocks a lot of the people out there who are product nerds, which frankly I am myself, is that oftentimes in order to turn something that's going kind of good into something that's absolutely amazing is to fix the marketing, not the product. And in particular, fix how many people know about the product. That's like the big thing. It's called attention. Say it with me, attention. And so the team at Starter Story, they put together a free guide. They call it the $1 million attention guide. It's this pretty amazing 39 page document. That's filled with 15 tactics to get eyeballs on what you are building. And so there's a, even a 30 minute recording from Pat, who's the founder of Starter Story. He has interviewed hundreds and hundreds of entrepreneurs. So he's able to put this together, do a bunch of research and experience. And so if you're interested in getting more attention, which frankly you should be, everyone should be, then you should click the link below in the description or scan the QR code right here. -
Speaker 1And there was a video on YouTube called Howcast. And one of their videos that had like 400,000 views, was how to tell if you have bad breath. And you just take a tongue, a spoon, scrape the back of your tongue, and then you smell what's on the spoon. And then you can tell if you have bad breath. 'Cause you can actually can't tell if you have bad breath, if you just blow like that. If you can tell if you have bad breath when you blow, it is horrible breath. But just normal bad breath, you can't tell. - You need the spoon. And so you scrape your tongue and that's because the tongue is the source of 90% of bad breath. Which I found in studies. And so what happens is, you're kind of like taking in all this raw data. You're taking in the Howcast video, the iJustine video, your roommate, your other roommate who's a writer, your experience from the last five years of selling potatoes and the gospel, and this tongue cleaner and understanding the tongue cleaner. And then you're combining it all into a video that is, now, I think even today, it's still considered one of the top 25 campaigns of all time on YouTube. And making a video that we spent $500 on, which Dr. Bob complained about at the time that we were spending too much money. But the, and it was five or 600 bucks. And we launched this video and then I got my brother, Neil, and I asked him to code up a site for it so we could actually sell these tongue cleaners. And then I set it up to where you could get a free one if you just paid shipping. And then we just charged as much for shipping as it costs to buy the board version. And it worked. Partially, like going back in time, I found a glitch in the system. And everybody who starts a business, you have to find your glitch. And our glitch, was YouTube launched its ad platform a few weeks before that, or maybe a couple months. That's where the idea came. And we got on YouTube and we started buying ads. And those ads cost less than a penny per view. So it was like the early days of AdSense. And so we were able to spend a dollar and bring in two or three dollars now. A dollar in total costs, both the ads, the shipping, and the brush itself. And so that glitch of being the very first on YouTube is what allowed us to find enough data to take action to be able to optimize and then become more efficient. And then as the cost of advertising on YouTube started to climb, we were able to just get more and more efficient because we had the traffic coming in now to be able to make those changes. And so, The glitch allowed us And to get what one entrepreneur, Paul Ahlstrom, who wrote the book Nail and Skeleton, he calls it your beachhead. So when you land on Normandy, the first group has to go up and establish a beachhead where they have a foothold that they can just hold that spot. They don't have to take the whole beach, just that one little spot. And then you can expand from that beachhead.
Speaker 2So you go, you put 500 bucks into making the ad. So the peak of Aura Brush, you guys did what in revenue or how many did you sell?
Speaker 1I don't remember the revenues, but we sold, I think the company sold for about $10 million.
Speaker 2$10 million. And so you're just sort of stitching this whole thing together. Now, I love the framework of you got to find your glitch. The hard part, I think, if you're listening to that is, well, that's great. YouTube ads are not a penny anymore. So that specific glitch is always changing, right? For different people at different times, different industries. Whatever it is. Do you think you could kind of generalize any of the principles or behaviors, what to be looking for or what to do to increase your odds of finding the glitch or what to notice, what to pay attention to? What are the general principles that might apply to somebody who wants to do that?
Speaker 1First one is go after things that solve a problem for yourself. Dr. Bob was just making a tongue cleaner because he was a, this is funny, he was a mission president in the Philippines. Serving a mission for the LDS Church, the Church of Jesus Christ of Latter-day Saints. And his missionaries had a horrible breath. And so he was trying to figure out how to solve the problem of these missionaries having awful breath. But he learned that it came from tongue cleaning. And he remembered from his professional life that they would take these surgical scrub brushes and wash their hands off to get their hands clean. So he took a surgical brush and put a tongue scraper on it. And that was his prototype. He had super glued together like a tooth. Brush handle, a surgical brush, and a scraper. And that was his first prototype. So he was solving a problem for himself and it happened to be something that many, many other people wanted to solve. There's a book called The User Method by Jeff Schwarting. And Jeff Schwarting goes through and explains that out of the top businesses, the vast majority of them were made by founders who were just solving a problem for themselves. The Airbnb founders were. Were just trying to pay rent in San Francisco. One of them was a graphic designer. The graphic designer knew that there was a convention coming into town. And they knew that it would be. There would need to be rooms rented. So they went to Walmart, bought some air mattresses, blew up the air mattresses, and sold their floor space. And you end up with Air Mattress B&B. Airbnb. And so they paid their rent. And that was their thought is we're going to make a business around people paying their rent. And it becomes bigger than any hotel chain. So I would say that's the first thing is finding a product that can work would be user method. Stick with the user method. The second thing in a glitch in the marketplace. So it can be like it becomes really obvious. The guy who invented the mouse that worked with Steve Jobs. I met him and he said things that when he invented the mouse, as soon as they invented it, everybody was like, obviously. Obviously, the mouse makes sense. Right. Obvious in hindsight. In hindsight, it's always obvious. And so you're kind of finding a glitch in and of itself just with your product. Then the next piece is like on a marketing front is look for things, for areas where you have attention from people that nobody else is paying attention to. A really good example. I was searching for a product, but I was using Grok. Not Google. Not Google. And that's a very different. I haven't used Google for search in quite some time. And then not just that, if you do headless shopping or agentic shopping, I think is what they call it right now, is if you go and just optimize for agent shopping where they don't have to leave their AI agent, they just buy through the agent. Tons of people are using Grokbot to just go do their shopping for them. Like you can be driving home in your Tesla right now. And you just push a button, turn on Grokbot and say, can you get me groceries on the way home? And if you're a business that has an agentic shopping system where the AI bot doesn't have to go and scrape everything, it just talks to your API, then you can plug into this huge growing, rapidly growing group of people that are wanting to shop through their bots. Right. They don't want to shop themselves. They don't want to click on Google anymore. It's a huge opportunity and a potential glitch.
Speaker 2So product, you said, user method, you know, you want to solve a problem that you personally have and understand. Yep. Marketing, you said, pay attention to where other people are not paying attention or where the traditional players who are already doing this are not paying as much attention. Yep. Maybe because in some ways it's a little bit of the innovator's dilemma. Maybe they're doing well or they've built their business and their team and their skills all around one channel that has been working for 10 years. Yep. And they might put 1% of their attention or 10% of their attention on this new thing. But you could put 100. You could change the whole experience to just work in that new channel, to just be optimized for that new channel. It's like just getting
Speaker 1somebody to use quad design at work can be really hard. And because of that, we are outpacing the Hollywood world because right now we're in the Hollywood space by leaps and bounds in speed of innovation, especially on a distribution. Yeah, we're outpacing the Hollywood space by leaps and bounds in speed of innovation, especially on a distribution level. Because we know how to use all these tools and they're not only scared of the tools, they're actively fighting the tools.
Speaker 2Right. Yeah, it's lowbrow to use the tools for them in Hollywood right now. Yeah. I want to ask you about, so another find a glitch, we're going to jump ahead now. So we're going to jump ahead to Angel. And I guess this is a little bit of a deep cut. So when I'm doing the research, I was talking to Ben and I was like, you know what blows me away? You did a project. You did a project where you were tired of the way YouTube worked or Hollywood movies. They were using sort of sex, drugs, and rock and roll, you know, vulgar language. And so you created something that would almost like scrub that stuff out of an existing movie. That was a product we wanted to exist. Yeah. It was a problem you had. So check, you know, thing number one. And by the way, if you had asked me, I would have been like, what do you mean? That's not a problem. Well, how many kids do you have? I got three kids. So now I would agree. And now when I go on YouTube, I'm like, wow, this is, this is like, yeah, this is Vietnam. This is a danger zone.
Speaker 1Yeah. It's Vietnam. And not just that, if you go back and look at what we were looking at, Game of Thrones was at its peak when we started, it was called VidAngel. Yeah. And it's at its peak. And every single day when Game of Thrones would come out with a new episode, there would be within 24 hours on the torrents, a version of the episode uploaded without the sex, the nudity, the rape scenes. It was completely. It was completely scrubbed. And there would be millions of people worldwide download the version without those. And so we're looking at that and saying, not only do we want something like this for our kids, but what about the millions of people who are just saying, my teenager wants to watch this. I want them to be able to participate in the cultural conversation, but I don't want them to see rape scenes. And I'm going to use this torrent version, but that's completely illegal. And so what we're saying is let's build a legal version. We're going to build a legal version of what millions of people are already asking for.
Speaker 2Right. But you're doing the thing again, where I would say you're focused on that 8%. So the way that in your class, everybody said, well, no, I mean, almost everybody would want to go buy this at Target. And you said, well, as long as there's enough people, that's the beachhead. We can get, we can get this thing going. So, you know, today when you say millions of people are downloading the torrents, I guess million sounds like a big number. It's a small number. But it's a small number. It's a very small. If you had talked to a hundred people, you knew about Game of Thrones. How many of those people would say, yeah, I watched the clean torrent version. You know, you almost would have gotten no hands in any average sample that you were looking at. That's right. But you, you do a good job. It sounds like of paying attention to the signals, especially when it lines up with your values or, you know, the product that you want to see the way you want the world to be. And even today, when I looked at the, uh, I was researching your company and you, you know, your public, so you have a, you have your data's published and you guys are doing like 90 million a quarter, right? So we're talking about big numbers, hundreds of millions. And yet you only have about two, two, two million ish subscribers. It's not that many people, right? It's not that many humans compared to most things. And it's the power of a small number of people paying you, you know, 13 bucks a month, that stuff adds up. And so that doesn't sound like a Elon Musk business plan, right? It doesn't sound like the makings of a huge business, creating the version of like, if you watch with your parents and they put earmuffs on your ears for certain words and certain scenes. It's like an
Speaker 1automatic remote control.
Speaker 2Automatic remote control. Exactly. But you had enough conviction or just almost mischievousness to, to go ahead and do it. And then you found this glitch in the matrix where fast forward, you find this short film that you're interested in. And the thing I loved was to test it. You guys realized that you could just upload the whole 19 minute thing as a YouTube ad, like a skippable ad. They could have skipped it after whatever, seven seconds or whatever it is. But you just said, well, let's just put it on there. Maybe it's entertaining enough that people will watch it and that'll give us the data, signal. And at the end of the 19 minute ad, it's like, Hey, if you've been watching this whole thing, crowdfund this and help us bring this to life. That's exactly right.
Speaker 1I remember, I remember somebody saying, why would you upload a 19 minute ad? And I said, even if only 3% of people make it to the end, if they're the ones that want it to exist, they're going to invest and we'll be able to make a TV series.
Speaker 2Is that just your brain works differently or do you ask different questions or like, do you have a rule about, I guess like I want to get myself and my team to almost think in this kind of naughty way where you're not just playing a default game, trying to knock on the same crowded front door that everybody's doing and then getting stuck and not making progress. Like where does that idea come from?
Speaker 1I had the opportunity when we were doing the ad agency. So we did Poo-Pourri, we did Squatty Potty, we did Purple Mattress, Lumi Deodorant, these billion dollar brands. These are billion dollar brands that we built from four million, like Poo-Pourri when we got ahold of it, I think it was doing $4 million a year. And Purple Mattress, they were almost bankrupt. Like one of the founders of Purple Mattress called me two weeks after we launched the campaign and say, wow, you saved our business. We were going to go bankrupt in like three weeks. And I was like, oh, we weren't going to get paid if we were successful. That's what went through my head. He was thinking, you saved us. And I was like, we probably wouldn't have been paid. Right, we dodged a bullet. Yeah, we dodged a bullet. But the point is, is as we did that, YouTube came out and talked to us and said, how can we get more people to do things like Aura Brush? And we came, they sat, I think for three or four days, they sat with our team in Provo, Utah. And we came up with this idea of a skip ad button, where you could, after five seconds, you click skip if you're not interested in the ad. And that concept, originally they were going to make it like a 15 second ad or a 30 second ad. And I said, no, don't put a time limit on it. If I can maintain your interest, let me just keep them.
Speaker 2Well, that's so counterintuitive. You're the advertiser and you're telling the platform, hey, let them skip after five seconds, right? That would sound, that sounds completely against
Speaker 1your interest. But it's the only way to get along that. There's, if I had said, let me, let me steal five minutes of their time for a poopery commercial or a squatty potty pooping unicorn commercial, they would have been like, no, we don't want you getting in front of the content. Give me five seconds. And then I get five minutes. They, they're okay with that, but I've earned it. Yes. Cause I've earned the, I've earned the attention. And so when we get to the chosen TV series and we have this pilot episode, it was a short film. I called it a pilot. We renamed it a pilot. We could just take this same concept that we built for these two, three minute ads and just go 20 minutes. Let's just do 20 minutes and see what happens. Cause it's entertainment. And so they watched 20 minutes. They're totally invested. And then we pitch them, come in, invest in this project and let's make a TV series like the game of thrones for the new Testament. That's basically what it was at that time. And 17,000 people invested $11 million into the chosen. And how
Speaker 2much ad spend do you think you needed
Speaker 1to get to that 11 million? $800,000. So it took about a little less than 8% of the total raise went into advertising it. And I explained to Dallas Jenkins, the director, I said, cause he was actually pretty upset about that. He was like, I thought you just do viral ad campaigns and you were just going to raise the money for free basically. And I was like, well, how do you think we built Poopery and Squatty Potty? We spent money. And if you had gone to wall street and ask them to raise you money, they would charge you 12%. Right. They'd charge you 8% to 12%. So we're actually right in that world. But we're just having to buy ads, which is getting you awareness on your project. Hey, let's take a quick break.
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Speaker 1We used other things like we had a friend named Daryl Eves. He does, he runs VidSummit and he does the YouTube formula, that book. And he do a lot about live streaming. So he set up his little switchboard and we ran live streams this time to raise money at the end. So like at the last 24 hours or 48 hours of the fundraising for the, the, the series. Dallas Jenkins got on and did this marathon live stream saying, and we, and then I had my team get together and we made it to where every single time somebody invested, we would pop up and say, this person just invested a hundred dollars from Idaho. This person invested this much from, and had social proof just showing up on the, on the screen the whole time. And like we, we cracked the nut and we were able to get our first TV series built for Angel, which was The Chosen. And then the job was, can Dallas make a good enough series? And he did, he crushed it. And the series ended up being, I mean, I think it's right now today, it's a top five series in the world for, for television. It's got like 200 million people watching it. It's, it's on the level, yeah, there's 200 million people worldwide watching that show. Unbelievable. How, how far, how many seasons is it in? See, they just. Just finished filming season seven, seven seasons. And that's the final when Jesus is resurrected. And it's just the 12 apostles going through and they're gonna release The Crucifixion at Easter time this next year. It's. That's remarkable. It's no longer an Angel show, but it's on Amazon. We did the first three seasons.
Speaker 2You, um, you mentioned a couple of the other brands, Squatty Potty, Poo-Pourri. What was the marketing genius moment for each one of those?
Speaker 1Well, the first thing was just, I had to like the show. I had to like the show. Well, the first thing was just, I had to like the product. So I'd give the team the Squatty Potty. We went and tried it, tested it out. We're like, this is a pretty legit product. And we sold it. Or the Poo-Pourri, I went in the bathroom, used Poo-Pourri. It's a little spray you put on. I think almost every Airbnb on the planet has Poo-Pourri now.
Speaker 2You, you put it in before you go to the restroom and it traps the smell, right? That's the idea? Like, prevents it that way?
Speaker 1It's essential oils that trap the, the smell underneath the water. Who, who created that? That's kind of a genius. Genius invention. Susie Baptiste. I think it was her brother that thought of it and then she took it to market.
Speaker 2Yeah. And she, she what, sends it to you cold email?
Speaker 1What happened? Uh, she was messaging me over email. I was finishing up Orabrush. She flew us out to Hawaii to meet with her. She was doing, um, QVC ads and they were doing like $4 million a year in this poop spray. And then I used it and I came out and asked my wife, "Go in after me. Can you smell anything?" And she's like, "I smell poop." And I was like, "I smell poop." good in there. That's new. That's a new experience for us. Yeah, that's a new experience. And then we created the concept with her, as I said, I think we can build something. So I brought back in Joel, the same guy who wrote on the other one. And we sat there for three or four days and wrote out the poopery ad and had the concept between us of, we need to get a British girl. We're going to put her on a toilet. We're going to have all these juxtapositions where you've got this British girl, this cute, she's sitting on toilet and she's talking about pooping, which is totally just out of left field.
Speaker 2Right. Can I ask you, you go for three days and you come out with this incredible ad that transforms the trajectory of the business. Basically you make the brand, the brand happens, you know, that was a fork in the road moment. I think the trajectory was going one way and then you shifted it. Yep. And we all want to do that. I've so many times have take the team, we're going to get away, we're going to figure this out. We're going to do, we're going to make some magic happen. And sometimes you do, sometimes you don't, but I'm always winging it when I go in there. I have no idea how I'm supposed to be doing this kind of three, four day camp to find a breakthrough. Yep. What do you do to, to increase the odds of a breakthrough? I'm assuming, you know, you pick the right people. That's a big part of it, but what else, what do you do?
Speaker 1Well, I think getting up in a cabin and locking everybody in, with the attorneys, the business leaders, the, everybody who has to sign off, every stakeholder is inside that room and they can't leave until we get a signed contract that says we can go into production. That helps because one is if they can be with the creatives, then the creatives can pitch them and they know that they're on the same team because you're talking face to face. You can go back and forth for months and neuter a script by email. Right. Or you can just get in a cabin for two or three days and come out with something everybody's happy with or excited about. In the marketing world, I learned very quickly when we were building the Harmon Brothers ad agency that it's way easier to train a comedian to be a marketer than it is to train a marketer to be funny. Right. And so we would build the structure of an ad and you have to have your problem, your solution, your, your three elements and your credibility, et cetera, and your calls, your actions. You have to have this formula, which we lay out. I think we laid it out pretty, pretty well in poop to gold. And then at the end, end of that process of getting the structure there, then the comedians come in and they build out the humor and the premise. And so getting comedians is always, like as a marketer, I think if you want to be a creative marketer, comedians are critical to the infrastructure of a marketing company because they come out of left field. You just have to have somebody who understands well enough the formula. So for example, I would always tell comedians, if your joke doesn't add to the message, which is way harder to do, and if it just comes out of left field, you just have to kill it. It either adds to the message or it doesn't work. And so if you notice in Squatty Potty, Poopery, Purple Mattress, every joke brings you a little closer to understanding what that product is and why you want it. And you, do you, do you come in with a pretty solid
Speaker 2idea or you just, you start off with, you know, a bunch of sticky notes on the wall? Do you have a process that you learned how to kind of like facilitate the creative flow of a bunch of creative people?
Speaker 1Yeah. Weeks, weeks before the retreat, we'll have three to four writers, comedians that are trained. We send them all the product and they get to use it and they get to play with it. And then they show up to the retreat with their ideas. They're, they're rough scripts. Then each one of them on the first day or the first morning is basically doing a script read of what their vision is. And then by the evening or the afternoon or evening of the first day, you are picking the winner, the bones of the ad out of those scripts. And then for the next three days, you're cannibalizing all the other scripts for their best elements and putting them into that lead script. And then by the end, you've got yourself an ad. And do you think this is
Speaker 2still the way you would do things now? Or was this kind of, there was an era where these kind of funny scripted YouTube ads of a certain length was a great way to sell product? Would you still be doing that? Or would you be doing something completely different now?
Speaker 1We still do it to some extent. If you go watch Runner, there's a campaign that I think got a hundred million views for Angel. Runner has. It's Alan Richinson, Owen Wilson. And we, and our team built a campaign with comedians, very similar process to Harmon Brothers, where it's a couple, this married couple that just keep coming back on Angel. And they're trying to figure out what to do for date night. And they're driving in their minivan racing down the street to get to the movie. And they got their kids at home with a babysitter and they have their two movie tickets because Angel's model is if you're an Angel member, if you're a member of Angel, you're going to be a member of Angel. Yeah. Yeah. Yeah. Yeah. There's about 3 million members of the Angel Guild. You're paying 20 bucks a month and you get two movie tickets to every movie that Angel releases. So your date night's covered almost every month. Right. And so they're racing through the streets and there's like stuff blowing up around them because the wife's driving and, and they're talking about the movie and the program. And then they walk in to the movie and Owen Wilson's sitting in front of them. And this ad campaign, I don't even think we made it. made it a public one it's just unlisted but I think it had a hundred million views somewhere around a hundred million views so so we still do that but then in support around that because these are totally different than or brush or brush we were just like five hundred dollars a day you hope to get a thousand and eventually you built it up to millions and then over a several year period we had a 10 million dollar business when you're launching movies and theaters you're launching a 10 million dollar business from scratch with a new movie every month and so these are 10 to 50 million dollar businesses 100 million dollar businesses sometimes and and you got a 90 day period where you launch them I mean the Hollywood world and the movie theater world is absolutely bonkers it's like taking an on just think about this as an entrepreneur because your your group is entrepreneurs yeah think about taking and and every single month you're launching a 10 million dollar business from scratch with a new movie every month launching a 10 to 50 million dollar startup with with five to 20 million dollars in ads spend in 90 days and they're just running teams year-round launching every four to six weeks that is the business that we're in now and it and it's it's just bonkers but but those ad campaigns still work when we have something complex to share meaning the the concept of two movie tickets to the angel system is it's it's somewhat more complex than just go watch this movie but then outside of that we're running like if you go to solo meal it came out in February of last year with Kevin James it's a rom-com it's about 25 million dollars in the box office solo meals set in Italy and there's a art teacher named Matt Taylor and he teaches kids how to paint he teaches art and he gets engaged he's going to Italy to get married and he stood up at his wedding in Italy and then it's just super funny how he's dealing with this because it's Kevin James Kevin came up with this idea where he said why don't we just make Matt Taylor a personality on Instagram and TikTok and we're just I'm going to be Matt Taylor I'm going to go and I'm going to teach art classes on I'm just going to do Instagram. videos where you watch me paint something for a few minutes and then I'll talk in the background like a Bob Ross type character and he said what if we do that and I'll push the movie by being the character in real life first we said to Kevin this is a great idea but it's going to take an enormous amount of work can we have a team come live on Long Island with you and that's all they do is produce this Matt Taylor character so we send out a team to Long Island and they're living with Kevin essentially. they're just cranking out social media posts and then we started warming up um Kevin James's face so what a lot of people don't realize is what you type into a video is trying to give the algorithm some direction on where your video what meet what your video is about but what really is mattering what your video is about on social media these days is what images are in the video so right now if our video is in the video it's going to be in the video it's going to be in the video it's going our video if our faces end up on social media it's going to recognize TikTok, Instagram, YouTube are going to hash our faces into the algorithm and say this face is now part of this video and if I have any other videos with my face it's going to recognize me and say Jeff Harmon's face Jeff Harmon's face and then put related videos it doesn't need to have my name in the video and so Kevin went and warmed up his face by taking older things he had done and he was reposting them and doing some things to warm up Kevin James's face so he was getting himself hot in the algorithm and and then he's trending and what we do is we took and said okay Matt Taylor launches fresh channel nothing on it but the TikTok algorithm and the Instagram algorithm and the YouTube algorithm recognize this is Kevin James and this space is trending elsewhere on the system and so the moment we launched those they started going viral because people that were people who had been watching Kevin James videos started getting served Matt Taylor
Speaker 2videos is this also somewhat of the mechanism for the Andrew Tate's and the streamers clavicular and others where they pay these mass armies of clippers to chop up their live stream content so they're getting you know thousands and thousands of pieces of content they're paying like a million dollars a month to these kids to clip their videos and put them online are they kind of doing the same thing sort of warming up they're trying to
Speaker 1warm up their faces yes and they're trying to find a viral clip you kind of like today one of the main strategies you can do is you're taking swings at bat for Kevin James we probably cut thousands of videos to try to get a few of them to go off Right. Right? And so that's what those guys are doing is they're just cutting, they're just taking swings. They're just taking tons of swings and doing everything they can to try to ride waves that already exist. And if you, so for example, if you go watch Critical Drinker, you know who Critical Drinker is? He's a big YouTube review site. So he is a Scottish guy who always reviews movies and he sounds drunk. And he just, he's like, I think he's the second biggest movie reviewer in the world. But if you watch his reviews, he is constantly showing little scenes and businesses can't do this as much, right? But he's showing little scenes of all these different movies because he does movie reviews and he's basically hashing all kinds of famous faces. Into his movie reviews. So he's just clipping to all these famous movies and then getting served up in more places because he's hashing his videos into the algorithm. And so in the case with Kevin, Kevin already is an A-list celebrity. He's huge. It gets millions of views, so it's easy to hash our way into it. And then it goes crazy, and everybody picked it up. Everyone was saying, is this art teacher Kevin James? Or Kevin James is doppelganger? Is this really Kevin? And there's just arguments. And I think that campaign got over a billion views. And then at the end of the campaign, on Super Bowl Sunday, which is the weekend before Valentine's Day, he showed up at the Super Bowl, and we bought 12 seats at the Super Bowl. And we put Kevin in the center of 12 empty seats. And he was in a tux with his flowers in the exact costume he is in the movie, his exact wardrobe. And we didn't say anything, but we did buy seats all over the Super Bowl area around him and put influential people around him. That had Instagram accounts and TikTok accounts and had them all posting, is that Kevin James? What is going on? Yeah. Yes. But the concept here is you take and you use the algorithm, and this takes an enormous amount of creative juice. It is not easy to have something break out organically. Right. And the funny thing about the Super Bowl is literally he got on the Megatron. Like, he ended up on the Megatron. And that campaign never talked about anything commercial. It's literally just Kevin James with flowers. And so people had to figure out what the heck it meant while it was getting hundreds of millions of views.
Speaker 3So a lot of times people at the podcast, they'll reach out to me and they're wondering, hey, Sam and Sean, how do you meet all these amazing entrepreneurs? How do you find all these stories? Well, I have a hack. You see, I actually have a community called Hampton. It's a community for entrepreneurs doing at least $3 million in revenue, although we do on average something like $25 million a year in revenue. We have the founders of DoorDash, of Figure, of Bluetooth. All these amazing companies are part of Hampton. And what's interesting is because of the environment in Hampton, which frankly is very similar to My First Million, we have a very unique high trust environment. When people apply and go through this vetting process, they're put in groups of like eight or nine other entrepreneurs, and they get real about everything that's going on in their life and in their business. And sort of like when people listen to MFM, they get inspired to come up with new solutions for business. That's what happens. That's what happens. In real life in Hampton, it's life-changing. And so if you're a founder of a startup that does at least $3 million in revenue, and you just want to go ahead and pull forward five or 10 years worth of success, then check it out. The URL is joinhampton.com. Again, the URL, joinhampton.com.
Speaker 2We should explain. So Angel, the short version of the story is you felt like there was a need for or desire, you had a desire for a different type of content.
Speaker 1Our content is the. Antithesis of Nihilism. Nihilism is basically like you get to the end of Game of Thrones and everybody's a bad guy. There are no redeeming characters. Everybody's bad. Even the one you thought was good, she ends up just being a bad. She just turns into Hitler or whatever, right? And then you get to the end of almost any major HBO movie. And at the end, it's like, oh, there's no good people in this movie. There's not a single good person. It's all darkness. It's all darkness. That's nihilism. Nihilism is just there's no purpose to life. Everything's terrible. It's all. We're just going to end in the cold heat death of the universe and there's nothing after that. Ours is values-based. Values-based is what Disney used to be. And a subset of that is the faith audience. They're people who believe, that want faith content, that has faith in it. And we do twice a year at Easter and Christmas, we push faith content pretty hard. Okay. Then the rest of the year, we're pushing just values-based content. Westerns, action movies like Runner with Alan Richard. Hutchinson and Owen Wilson. If you watch it, it's packed full of action and explosions and everything. But then when you actually think about it, you realize there's no sex in it. There's no strong language in it. Nobody ever commented on this. Like, if you go read the reviews, it's certified hot on Rotten Tomatoes. 90% from the audience, 76% from critics. Not a single comment that says, where did all the F-words go that used to be, that are in Reacher? I wish there was more vulgarity. When it first came to us, that movie, we didn't make that movie. It came to us, it was R-rated movie, and then we said, we'll take it if you can make it PG-13 and get it to pass what we call the Angel Guild. So our three million members, we actually don't call, at the beginning, you call them subscribers. We don't call them subscribers, we call them members because they're participating. And what they're doing is, as a member of Angel, you get to vote on every movie that comes into Angel that goes to theater. So you get the chance, if you want to, you can go and you vote. And if you veto, if the audience vetoes a film, we can't take it. We can't send it to theaters. We can't do anything. So you get a vote on it. You get two movie tickets to the movie. So you're supporting filmmakers at every step. You're supporting them in their rough cuts and giving them feedback and helping them improve them. You're voting and turning them down if they're not working for the platform. And you're showing up to the movies.
Speaker 2So you get a higher hit rate because. And you're not doing focus groups, right? These are people who are members of the community. They're paying to be members of the community. So presumably, they're kind of like market participants, more like a prediction market than it is a random poll on the internet where people don't really have much skin in the game. It's the user method at scale. Do you have a higher hit rate? What's a normal hit rate for a studio and what's yours?
Speaker 1Our average, there's one study that's almost a year old. But we hit. We hit an average box office, according to that study, that's higher than any independent. The multiple's higher. Higher than A24's average. Higher than. A24's done really well this year. So it'll be interesting to see if they catch us. But basically, every single independent, Angel hits the most theaters, the most locations for theaters, and the highest box offices of any independent studio. And we're top 10 in the U.S. for the last. Three years, we've been the top 10 in the top 10 studios.
Speaker 2Is your business a batting average business or a slugging percentage business? Meaning, is it more important to just not have flops? Or are you really just looking like an investing for the one or two runaway successes?
Speaker 1I think we're a base hits business that gets home runs every once in a while. So we had Sound of Freedom was a home run, did $250 million worldwide. That was a $14 million movie.
Speaker 2Can you just explain the movie business? I don't really know the movie business. So let's take one of these. So. You say $14 million. That's what it costs all in. That's the talent. That's the production. That's everything. The rights to the underlying content, whatever. Includes marketing costs or doesn't include marketing costs? No, that doesn't include. We spent $40 million marketing that movie. Okay. So you spent 14 making it, 40 marketing it, and then it generates, you said, 250 and that's just. $250 million. That's the box office. Now, but the theater takes. I'm assuming a big cut of that.
Speaker 1If you have a good distributor, they'll take. If you don't have a good distributor, they'll take half. If you don't have a good distributor, they'll take more. In our case, we don't take part of the other half. We take the bottom. We only take profits. So we split with the filmmaker the profits. Every other distributor is going to take between 12.5% and 30% of the other half.
Speaker 2And do you. But you send your member, right? So let's say a member is paying $20, but you're sending them once a month to the movies. So is that like. Is that what it costs? You know what I mean? How does that business work? I don't understand. Is it like MoviePass? One thing. Is it a loss leader situation? What's going on?
Speaker 1It's more like MoviePass in that we rely on some breakage, meaning the average person goes to three to four movies a year. So we just assume our average member isn't going to go to every single movie. And so it balances out.
Speaker 2Gotcha. Okay, great. And so you make that money. Now, you said you don't fund all these movies. You're not taking a bunch of balance sheet risk.
Speaker 1Yeah, this is something people don't understand about the movie business. They only make 35% of their movies, and then most of their movies they acquire. So every year, there's 1,000 movies, around 1,000 movies made by independent movie makers. Every single year. Most of those never find a home. The vast majority. Like, it's an crazy number. But those are made mostly by very wealthy entrepreneurs. I've never met a billionaire that doesn't want to make movies, and I know a lot of billionaires. They don't, they all want to get in the movie business. And this isn't.
Speaker 2I'm not a billionaire, and I'm still trying to make a movie. So I don't want to, I don't think you're even underselling it from there. Yeah, well, we'll think about this.
Speaker 1So that's where the 1,000 movies comes from, is that they're very wealthy people that are just taking a swing. They want to leave a mark. They want to make a movie, and they're not really as worried about making money on it at this point. They just, it's like art for them. Everybody has this in them. They want to tell stories, everyone. And so what the Angel Guild allows you to do is join about 3 million other people who are all paying 12 to 20 bucks a month and make movies like billionaires do.
Speaker 2You're kind of like, you've built this like almost Kickstarter vertical mob, right? That's right. Of people who just like the idea of getting to have their say, getting to have an influence, maybe getting to put some money behind it. behind something. - That's right. - Kind of like fantasy football, You're not doing what the billionaires are doing who actually own the teams, but you get to play.
Speaker 1And so far, that guild, the Angel Guild, those three million people have paid out $300 million to filmmakers.
Speaker 2That's like their profit share, basically, you mean?
Speaker 1Yeah, the filmmakers get 50% of the profits of that guild, and Angel uses the other half to build up the guild.
Speaker 2So what I didn't understand, and maybe it's as simple as we're just spending a lot of money on marketing. You guys are public, you guys did a SPAC, and I was looking and it's like, last year we lost 50 million bucks, minus 50 million in EBITDA, but you're not paying to produce these movies, and then you have these members who are paying you, and you're just taking a profit share. So it must just be a lot of member acquisition, or what are you spending all the money on? Or is it the marketing of the movies? Is that what's going on?
Speaker 1Marketing's a big piece, yeah. Acquiring new members is not cheap.
Speaker 2Is this a good business? And what I mean by that is, that's a silly sounding question, but here's what I mean. You're an entrepreneur, you've been in the game. I've been in the game for almost 20 years as an entrepreneur, and I started all kinds of businesses. And I can tell you, some of them are knife fights. I would say a DDC brand felt more like a knife fight. It's like, ah, terrible margins. A restaurant felt very much worse than a knife fight. I'm in the knife fight, I don't have a knife in the restaurant business. And then some businesses are beautiful businesses. Recurring revenue, good margins. Once you figure one thing out, you just keep, you know, kind of, you get a flywheel with that advantage. How is the movie business?
Speaker 1The good story is, and I won't name the executive or where they worked, but they had retired and they had worked in both the Las Vegas area, doing casinos. You know, Las Vegas is kind of run by the mob. And then they had worked in Hollywood. And when they retired, they were asked. Do you miss it? And they said, my best friend in Hollywood was worse than my worst enemy in Las Vegas. It's a knife fight. This is like, I ask myself every single week, do I really want to be in this business? I'm doing this because, I mean, we're doing this because our kids, like, we want an alternative system for our kids. We want our kids to be able to watch stuff. That instills our values and what we've, the values we've had for generations that make society run. We want those instilled in our kids through good entertainment, excellent entertainment. I mean, our strength is the fact that there are about 3 million other people right now joining in with us and saying, let's do this. Let's just make this happen. That is our strength. And that's allowing us to just rewrite the rules. And. Our job as a business is to fix what's broken in Hollywood, because Hollywood hasn't been a good business. It has a, it's not that they don't have enough revenues. They have plenty of, I mean, there's more revenues coming into Hollywood than ever. And it historically has been America's biggest export is media. It's movies. That's our number one export, but this industry, the Hollywood industry has a cost problem, not a revenue problem. Our job is just to do a better job. Our job on all fronts, angel's job is, and I believe it will be an, it is an excellent business and it's growing right now. So while you're growing, you're investing.
Speaker 2Can you tell me what's going on? Like, uh, I guess again, I'm a, I'm a bit of an outsider. I'm a business guy. I'm a tech guy, but I'm not, so I'm not closely following Hollywood, but teach me a little bit about what's going on. So what is a 24 doing that you think is maybe smart or interesting or what their approach was, why they seem to be having a different result. I've seen also like Thomas toll. I feel like. Came into. The industry is kind of an outsider and did some interesting things. I guess, tell me who you think has, has done cool or interesting work. Get me inspired as get the business nerd in me and inspired into somebody who did something.
Speaker 1A 24 is really interesting because they've built a strong community. Yeah. The triple a membership where you can sign up and then they followed us and actually started giving tickets to people who are triple a members. I think the most interesting group probably is crunchy roll. Okay. There's the anime. Yeah. They have 20 million subscribers and. And they're just focused on their niche. Like we're focused on values, audience, they're focused on anime and, uh, which is a really, really big niche.
Speaker 2I mean, 20 million is a massive number. What is, what is that in revenue?
Speaker 120 million. I don't know what the revenue is. Cause I don't know what the membership cost is. Even if it's like 20,
Speaker 2you know, whatever, even if it's 10 bucks a month, I mean, we're talking about, they're, they're, I think
Speaker 1they're kind of the top of the tier three streamers, the crunchy roll. You have like MGM plus and you've got stars and you got these. Groups that are in the tier three, um, tier four is like pure flicks, daily wire, that kind of a world. And then we've, we've just recently moved into the tier three streamers and they have tier two, which is your bigger streamers plus type of thing. And then you move into tier one is Netflix and Disney plus and Apple, uh, Apple might still be in tier two, but I think crunchy roll is super interesting. Um, I do know. So I wouldn't, I wouldn't. I went on an interview with Rick Rubin, the producer, the music producer, and I did a podcast with him, really interesting podcast. And he told me I've been watching this industry for a very, very long time. And he said, I don't think I've honestly ever seen anything totally different until angel. So everybody else has some version of the previous stuff. He's like, you guys are different from top to bottom. You're not doing anything the same.
Speaker 2I heard you have a, uh, a personal vibe. Is that right? You have, you have a guy who just vibe codes for you.
Speaker 1Is that true?
Speaker 2That's amazing. That might be the best luxury item I've ever seen.
Speaker 1I basically got to the point where I would vibe code products and then I would get stuck because I'd get pulled outside to meetings and to fires and to different things as a executive in the company. Right. But I love building out the prototypes of the products. And I just asked, I was like, I need a person who just can take it from there and just go to the next step. And then eventually. Once we get something like a little experiment that we've been thinking about to product market fit, like an MVP, minimum viable product, then we, we will turn it over to the product team, um, which can build something that will scale and get bigger.
Speaker 2I kind of think that every executive, uh, of a kind of medium to large company should actually do this, right? Like, uh, you know, it's, it's normal to have an assistant chief of staff. Uh, maybe, you know, maybe you have, uh, you know, somebody that helps you out on the personal side, but AI is so fast moving and can do so much, but as the bottleneck is you, it's not the technology. It's your bandwidth, your time, your ability to keep the ball moving forward to, to kind of work through any obstacles or keep playing with the latest and greatest. I actually think that what you're doing, having a personal kind of vibe coder with you is the move. I think that's absolutely. It's been super helpful.
Speaker 1I've been able to get. Things prototyped that I never would imagine tools, because what I was doing before that is I was, I would stay up late and I would get a plan made for Claude, build out a plan. And then I tell Claude, like, I get as far as I can and say, run this all night. And then we, our team has built harnesses for every single person in the company so that, so that there's a harness, there's both a brand guide harness for Angel. That sits inside of our code systems so that you can take any, any, any model, whether it's Claude or GPT or GROK or whatever, and you hook it to the harness. And then that harness goes through and does all the checks and make sure that you're not breaking the rules of the system. And so what I do is I end up vibe coding until I break something. And then the engineering team builds a new harness to fix what I broke. But I, at night I get to the end of the evening. And I have a plan and then I just launch the agents at that plan and just leave my computer running. And then I find myself even like in the Tesla, just having it self-driving. And then I'm over watching it code while I'm driving. Because if I shut the laptop, it will stop. And so I have it hooked up to my hotspot on my phone. And then I'm just like clicking continue, continue while I drive. That's the worst.
Speaker 2I set it up before I sleep. I wake up ready to see it. And it's like, the very first thing is like, could you allow a, do you allow me to open a browser? It's like, yes, yes, open the browser. What, have you been stuck on that all night?
Speaker 1So you just switch it on, bypass everything and get dangerous with it. But a couple of things you learn is one is these are machines. They're not humans. Like the, the, the, the veneer of it feeling like a human wears off really quickly and you realize this is definitely a machine. But number two is. They kind of blow your mind all the time, just at what they're capable of doing. Similar to any type of engineering feat. You just go, wow, this is, this is very impressive. What's something you've had it build? That was cool. I had it build a system where I can just test trailers and scenes of movies and run them to like, to where you can just send out links to friends and family and AB tests. Like. Trailer a trailer B trailer C, and if you send the link, it will just randomly give them. the trailer a different trailer and then you just gather data and then find out which ones are working that's pretty cool i like that yeah so that that's that's one that i think is interesting you can model out all of your your attrition rates and you can model out your lifetime values so much faster now just using ai as long as you have clean data i mean people say that they should be fired that they are firing people i don't i think they're just looking for excuses to fire people because economics work like this when you get something that's highly that makes everybody 10 times more effective you're going to become so much more productive that you need more people you don't say i want less people that are 10 times more effective you say i want more people that are 10 times more effective right it's so stupid you're multiplying
Speaker 2two numbers together why would you want one to be
Speaker 1smaller the ones who are cutting off people if they're truly cutting it off , because ai is um is is coming into play that's a short-term play where you're just cutting costs like like you're you're almost like a company that's cutting costs right before an acquisition you're not building long-term value the same way if you if your company is getting to a point where because of ai you need to hire more people that's when it's the right time to hire because this ai has made us so much more effective when we've broken down so many more walls that we need more people to service what we're doing and to build that's when it like that's what's going to be happening all over i don't i don't believe for a second that we're going to have a massive unemployment because of ai i just it doesn't make sense on an economics level
Speaker 2if you were going back to talk to a room full of people like you so younger you what message would you be trying
Speaker 1to get across well the first thing i'd say is like no matter what you do in the workplace nothing will compare with getting married and having kids and having kids sooner than you think you should and having more of them than you think you should like nothing in the professional workplace will even compare that's where my real success comes from is marriage and kids right and you can do both i think that that's critical i think that there's no idea that's so precious to get in huge fights over an example would be where we had some really big campaigns at the agency where clients said i'm not paying you and you have all the success they owe you a significant amount of money and they don't want to pay you for what you did and they had and they're like threatening lawsuits and a mentor of mine steve oscui told me he said unless it's worth over five million dollars it's not even worth fighting the battle over because you're going to end up fighting for 18 months to three years you're going to drain the life out of yourself and you may win probably win but then where did you get he's like but in that period of time somebody who's innovative is going to make more value than that's worth and not just that it's just not a happy life right and so after listening to him i went back to my brother neil and because we were thinking about whether or not we should sue for this this amount that was owed to us and it was significant to us because we didn't have any money and neil had been in the bible he flipped it open and it landed on the verse that says if a man sues you for your cloak give him your coat also and so between my mentor saying what he said and then my brother seeing that i was like okay let's just let it go and letting that go changed the trajectory of my life just letting go what was worth probably a couple million a few million dollars letting that go and just going after new ideas and having an abundance mentality and then i was like okay let's just let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and let it go and if you're the golden goose you're gonna lay more eggs and you can be and so you just keep pushing and don't don't take the idea that oh this will be my only thing as soon as you switch gears and say there will be more things you're going to get more things and you're going to have more opportunities and you'll break through i love that jeff thank you for
Speaker 2coming on thank you for sharing the wisdom stories i appreciate you yeah thank you i feel like i can rule the world i know i could be what i want to i put my all in it like no days off on the road let's travel never looking back all right let's take a quick break i want to tell you about marketing school it is a podcast that is part of the hubspot podcast network and it is run by neil patel and eric sue and these guys are both marketers who are running businesses and so if you want real world tactics from practitioners who are actually out there in the field doing it this is the podcast for you Check it out wherever you get your podcasts.
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