How do you sell a creator business twice?

You built a company where you exited for a hundred million dollar and then basically did it again and spun out and sold it again. >> Creators wanted to be entrepreneurial. They wanted to start their own businesses, SaaS, AI, and obviously those command much higher valuations, more capital. >> What should people be worried about? When they see this acceleration in the creator economy? >> I think there's definitely a threat to traditional media companies and I actually think there's uh another shift. >> How did you come to the conclusion that selling was the right path? >> often like saying this, but it really felt like Everyone, welcome back to 100 million dollar exits. Today, I'm excited to have Dan Rosenberg, a true 100 million dollar exits. Uh Dan, I'm very excited to have you on. You built a company called represent.com and scaled to the point where you exited for a 100 million dollar exit to CustomInk. And then basically did it again and uh spun out and sold it again to Cameo for a sizable amount. Dan, I'm excited to have you come on and talk about kind of the impact you've had in the creator economy and just your insights on what's going on in the creator economy and let's go ahead and uh dive in. Welcome to the show. Thanks for having me. Great to be here. So, you and I, you know, chat quite often. Uh you're quite involved with Thunder and you know, talk about um kind of your influence in the creator economy. But before we kind of get into what's happening today, I want to people understand kind of what you achieved with Represent. If you can give everyone just a little bit of color as to what represent.com was and how it was relatively pioneering for its category uh in the early days. Sure. So, Represent was a platform for celebrities and creators and effectively anyone to create and sell their own merchandise risk-free in terms of not having to put down any money for inventory. So, uh about 15 years ago from a kind of production standpoint, things were moving from less in terms of uh mass production, more to on demand, which meant you could print smaller runs and potentially wait for sales to come in. So, we really rode off the back of that and applied that to uh the entertainment and creator economy industries. Um at the time, there had been some kind of merchandise going on, specifically and mainly in the music entertainment space. Obviously, everyone's been to a concert, bought t-shirts there. Uh similar kind of online experience as well, but from a traditional celebrity standpoint, whether that be TV or film actors, they had really never kind of leveraged their audiences uh in terms of consumer products. Um and then over time with the rise of platforms like YouTube and Twitch, et cetera, um more so from the kind of creator standpoint as well. So, we we really service those two verticals. And I say this is relatively, you know, it was a pioneering effort. Like this is now commonplace. There are countless platforms that allow uh these influencers to kind of get off the ground with a monetization model that would have taken like a huge inventory budget, you know, build out all this type of stuff and maybe you sell out, maybe you don't sell out. Um but you guys were able to kind of come in and give these influencers a way to monetize with basically print on demand or you know, produce on demand with their own custom brand. Um >> >> what was it like kind of getting those uh those early day influencers the and like what are some of the names that you kind of remember that were pretty impactful to Represent? Yeah, so I think it's important to state that first of all, Represent kind of spun out of a prior venture called Prizeo, which was in the entertainment space. So, we had forged a lot of relationships from 2012 through to 2014 when we founded Represent. So, in terms of management companies, talent agencies, and talent direct, we already had a lot of credibility. We had run uh some incredibly successful charitable fundraising campaigns at Prizeo with uh talent like Lady Gaga, Justin Bieber, One Direction, Sir Paul McCartney, Kobe Bryant. The list goes on. So, we'd really kind of forged a name for ourselves within the entertainment space and our ability to monetize audiences on their behalf. Um as that kind of transcended and pivoted into Represent late 2014, uh it was a mix of of various verticals. We worked with a number of athletes um like I mentioned before, kind of traditional TV and film actors. Uh one of our best campaigns in the early days was with Arnold Schwarzenegger where uh he did some amazing content. We kind of built a brand around the slogan um come with me if you want to lift. He traveled to a number of army bases and just was incredible in terms of the content he generated for that and ultimately that then kind of translated into phenomenal sales. Um and then over time uh it became more of a YouTube Twitch streamer focus because uh they're always online. Their audiences want to support them um and it was kind of perfect for them to offer products without really having to do any of the heavy lifting. And so, that's got to be fun. Like were you were you in the weeds talking to those like Arnold Schwarzenegger? Were you talking and playing strategy or did you have like account managers or you know, kind of people Yeah, so we had kind of business development and sales. Uh that wasn't my my role. So, uh I didn't get to meet and schmooze the celebrities as much as maybe I would have liked to. I got to do all the fun stuff behind the scenes, contracts, commercial time. >> Extra fun stuff. Exactly. And then uh all of the kind of production um that all sat under me as well. So, more operational. And what was like the unlock of growth? It's one thing to have the celebrities, but you I imagine and you can correct me if I'm wrong is >> >> you know, when you think about building a business and like there's a supply side, demand side. So, in this case you have these relationships with celebrities and they're essentially bringing the demand to buy the products. Were you mostly growing off of their input like their influence uh communities? Is that predominantly what drive growth is just enabling them to have the products? Yeah, so Represent was never really a consumer-facing brand. That being said, um at least in the first couple years, all of the URLs that talent were directing their fan fans to was represent.com {slash} their name. So, we definitely built some brand credibility in the merchandise space, but the reality like you said is people were coming to buy from the specific talent they supported. They weren't kind of shopping for a more general or broader entertainment product range. What was it like walking me back in those days of like a moment where things you just felt that something was working and it was like clicking and things were kind of like and then what was the stress that that caused to the business? So, the the early days of the business, it was kind of two-sided. So, we'd built the technology and the platform uh effectively day one set up for scale so anyone could create and sell their own merch. So, actually a lot of the kind of initial revenue came from internet and affiliate marketers that were very smart around uh early Facebook algorithms being able to hyper-target different niches. So, they would spin up multiple designs at once, target various groups on Facebook, sell some t-shirts or other merchandise products and then kind of move on to the next niche. So, that kind of gave us a baseline. Um and then we were working with talent. Obviously, that's not as scalable. It's more of a kind of agency service where we were providing everything from actual designs, samples, strategy, marketing plans, et cetera, more of a full suite of services. Whereas for the the long tail, it was really a platform play where we provided customer support uh but beyond that, it was very much like here's the platform, you can go and use it. I'd say one of the kind of initial moments where I think things switched for us as a company, um early days, uh it was very much kind of normal business and then as we started going up to kind of what we would call uh tier A talent, there were often needs for minimum guarantees or advances and as a startup, that was obviously quite risky for us to explore, but equally we had some very good data around audience size and engagement metrics, whether that be comments or likes. So, we had a good system of knowing this is how much we think someone's going to sell conservatively. Um one of our first kind of advance deals was with Floyd Mayweather and uh I had a relationship with the manager. This was really my main BD play at Represent. Um and Floyd was entering uh a fight and it he he thought it was a really good opportunity to promote some merchandise. Um but I remember very clearly and and we really didn't know how to navigate this at the time. Um but the manager said, "Look, I know this is a little bit odd, but instead of wiring us the advance, we kind of need to give it to him in cash and ultimately, when we give him the cash, he will promote on social literally that moment." So, it was all geared around the fight weekend. It was in Vegas. We'd wired the manager the funds so he could withdraw the cash and uh and truth be told, he gave Floyd the money, the post went out, and I think we sold 20,000 shirts within a few hours. Um so, that was quite a good old story. I just love these like celebrity stories of cash. I've I've heard this a couple times where like certain celebrities like, "No, I need a I need a pile of cash." Like, what the What do you want to do with the cash? He was in Vegas, so you never know. Fair enough. It was probably things we don't want to hear about. How much is that a curiosity? How much cash was that deal? Like, what did it take to kind of get someone like him to do an advance? That was uh tens of thousands of dollars. Oh, okay. So, nothing crazy, and then over time that started to ramp up. So, we started doing advances or MGs for multiple drop deals, potentially evergreen store for a period of time. Um and then we also uh did some license deals. This was actually really unique to Represent, and I still don't think anyone else has really done this in the space. So, we would uh take a license from Marvel or Warner Brothers as an example, and then we would pair that IP and the license with the talent that featured within those properties. So, for example, um we ran the first direct-to-consumer campaign ever with the Friends cast. They had never promoted product direct to that audience. Um it would have been very difficult for them to do so without um the Warner Brothers approvals. So, like I said, we did a license deal with Warner Brothers. We did a separate deal with the talent, but it enabled us to use their name, image, likeness as their characters within physical products. So, uh that was definitely a standout moment as well looking back. So, >> >> there's two points I want to follow up on. First, I want to go back to this You kind of just loosely mentioned that you had this baseline of affiliate kind of niche marketers that were leveraging kind of like a effectively a drop ship model that were spending money and creating an arbitrage play to like making up money to where it's justified. Maybe following trends and whatnot, but like the business was built around this more complex kind of influencer celebrity strategy, but then you had this what appears to be kind of like this cash cow or system that was working with relatively low lift. Like, speak to me of like how do you make that decision? How do you kind of support both? Cuz like so I hear so many founders struggle with this of like they go out to do A, B works, not sexy. Like, it's not You're not excited to probably enable the affiliate marketers, but like that's real cash. You know, that's a real business. Like, how did you go about kind of supporting the business? Cuz those are essentially two wildly different solutions and products and you know, businesses. What kind of had you guys not go all in on the affiliate side and stick with kind of the harder but sexier uh path and you know, be able to kind of support both in that situation? Yeah. So, the early days, it was very much kind of chase the revenue and do what was needed to secure that revenue on both sides. Over time, that became increasingly more challenging. So, for example, the internet marketers and affiliates uh leveraging Facebook increasingly needed more tech tools, reporting, analytics, split payouts, etc. So, we were building quite heavily on the tech side to service them, when in reality a lot of that uh resource was not needed for what we were doing with the the talent side. Um and then actually what kind of happened is more and more platforms were emerging that was servicing the long tail. That became more competitive, and quite quickly it became a a bit of a race to the bottom. We, in terms of our manufacturing relationships before the CustomInk acquisition, was kind of very premium quality and higher end product. So, on a price perspective, it was hard for us to compete um with some of the other platforms, and we made a business decision that that was not the game we wanted to be in. We wanted people to work with Represent because they understood the value we offered beyond just the product range and the the payout economics, etc. And then I'd say the other kind of side was that our real USP, both through Prizeo and Represent, was the relationships we'd built in the entertainment space. So, as things were kind of heating up in the space, it made a lot more sense for us to focus on on where we had um that USP and that stranglehold versus the platform play where whilst there was quite a lot that went into the technology, people were spinning up similar platforms, and then it wasn't too long until uh Shopify came about and obviously raised lots of money, had hundreds if not thousands of engineers. So, even though our our team was super talented, it became kind of a feature race at that point. The other aspect was that over time the affiliates and the internet marketers wanted to own their customer data, and as a platform, it was quite difficult to enable that, especially how the payments were done in terms of consumers paying us, etc. Um so, there were kind of a few factors all going on at once that led us to over time become more focused on the celebrity creator side. We We always maintained the platform, and we had some revenue from the long tail, but that kind of went down year over year, and we let competition sweep that up. We then kind of doubled down on the celebrity and creator angle, and and really became the market leader in that space. Which also made you far more attractive from an acquisition play, cuz CustomInk, who in theory could be a competitor, they do on-demand printing and all that kind of stuff. They were probably in the race to the bottom with a bunch of other players, and here you are getting a premium you know, price, premium product, premium customers, and therefore they pay a premium to acquire you. So, walk us through kind of that experience of you you're getting narrowed down and focused on your business. It's working. It's growing. You're becoming the market leader. When do you start entertaining like, do you raise more capital? Do you profitable? Like, are you you know, pursuing an exit? Like, how how did you kind of come to the conclusion that CustomInk was the right path and selling was the right path? Yeah. So, it's actually very interesting. It was not a strategic decision at the time. What ended up happening, um we were running Prizeo and Represent simultaneously for about 6 months, uh which was challenging for obvious reasons. And actually what was happening is we were kind of competing against ourselves. So, we would go in and pitch an agent at WME and said, "Hey, we've got this charitable um offering we could run with your talent on Prizeo, or we could do something more merch-focused on Represent." And whenever they wanted to do something on Prizeo, we were a bit upset and wish we had kind of only pitched the Represent offering. So, uh it was early 2015 that we started to look for a acquirer for Prizeo. Uh that ended up happening quite quickly, and we closed a deal to sell Prizeo to a company called Chideo in 2015. And that was kind of a group of charitable businesses, so it had a soft landing, and they still maintain that business today, which is lovely to see. That enabled us to kind of focus all our resources and efforts on Represent, and we used the sale proceeds from Prizeo to to keep growing the team on the Represent side. And then once we kind of hit the million dollars a month uh in revenue, which happened within the first 6 months of Represent, we actually went out to do a a fund raise. And it was via one of the funds we were talking to that we got introduced to CustomInk. And then fast forward 9 months, and and the acquisition uh was completed. So, it wasn't actually uh a decision by the founders or management team at the time to sell. It was actually very, very early on in the business's life cycle. Um but once we started speaking to CustomInk, um it felt like they would be a very strategic home for us. They had um a really sophisticated supply chain production network, which we didn't have. That was not our core expertise, even though we scrapped to figure it out, and it was working fine. Um partnering with CustomInk via the acquisition kind of gave us access to new products, new print capabilities, lower COGS, higher margins. So, um it really made sense from that perspective. And we just really liked uh the CustomInk team as people. They had grown their business over 15 years, um and we just felt like they were really good partner that would help us uh get to the next stage. And so, you didn't entertain a process. You Did you not raise money in that case? Correct. We never ended up raising for Represent independently. So, you effectively went down the process of raising money and got into bed with CustomInk through a referral, but then was like, "Okay, this this looks good. Payday out to everyone." Like, walk us through like the architecture of the deal to what you can um in terms of like those negotiations, knowing that it was not competitive and it was a very much a synergistic, you know, kind of all good faith type sale. Yeah. So, it was it was a good deal, I think, on both sides. Uh we were very happy with the outcome in terms of cash off the table at the exit, but also, and more importantly from the CustomInk side, the kind of incentive we had to continue growing the business. So, >> >> that was both via an earn out and via um options that were vesting over time and performance related. So, it was kind of very good for the founders. It was good for early investors. They made a good return. Some of the later investors made a return, but probably not as much as they would have liked, but I think that speaks to the kind of exit being so early in the company's life cycle. And then we had these kind of longer-term incentives. Real quick, if you're a founder doing over 5 million in revenue and want to know what the best $100 million plus founders are doing to fuel their growth, then make sure to subscribe to our $100 million exits newsletter. Get the playbooks that are proven on how to fund, grow, and sell your business. I'll even give you a curated list of investors that want to invest in your business. It's totally free. All you have to do is click that link down below, subscribe. Do it now. I promise it's worth it. You won't regret it. You got nothing to lose. Go ahead, subscribe now. Back to the show. And so, you ended up going to CustomInk, getting acquired. Walk us through kind of that experience of now it's no longer your company. You're no longer the owner. And walk us through that experience all the way to the point where you decided that it was time to spin it out. I actually think it might be good to go back one stage first because I think one of our biggest learning experiences was that 9-month process from hey, we like each other, there's interest here to deal closing. And like I said, 9 months felt quite long for the stage of of business we were at at the time. Lot of diligence. And the reality is that myself and one of the other co-founders, we were very much distracted from the day-to-day throughout that 9-month period. And there were times where revenue was going down and we had to really kind of bump heads to make sure that that didn't happen consistently. So, that was obviously relying on the team to step up as trying to navigate both doing the deal and ensuring the business was still growing. Fortunately, it all ended up okay. But in terms of how I kind of speak to founders navigating that now, it's really, really important that it can't distract or doesn't distract too much from the the day-to-day because there's a risk that things don't go as they need to and then the deal doesn't happen and you're left with something that is shrinking and not a not the valuation that you were hoping for. So, yeah, that is uh it's a stressful experience to balance. And >> some sleepless nights for sure. >> >> Yeah, it's I I I love how you bring that. I'm glad you brought that up cuz I feel like so many times and then we sold. And I'm like, oh, there's probably a lot of blood, sweat, and tears going into that experience, especially as you try to keep keep appearances at such a long process. Um So, I guess walk us through the the spinout experience. Yeah, so I think it was actually very it was quite sophisticated in the sense that CustomInk made a couple of acquisitions prior. So, they had a good kind of structure and thought process as to how to integrate a different company, a different culture, a different revenue line, etc. And actually through through the diligence, we were connecting with people on the CustomInk side that were going to be responsible for post-deal go-forward. So, we kind of had a plan as we were as we were concluding the deal, which meant that day one it wasn't like, hey, now what do we do? It was, okay, we've got a good idea who's going to sit where, which teams are we integrating, where do we we stay autonomous? And actually one of the other things which was really appealing to us about the deal, not just the kind of financial aspect, was the fact that they could really help us on the production, operations, supply chain, shipping, fulfillment side. But actually on the talent relationships, growth side, we were really left to our own devices. There wasn't much value CustomInk could add. That was our our strength. That was our USP. So, it really felt like a great deal in the sense of we weren't just completely absorbed. We effectively were a standalone unit within CustomInk where we could leverage what we needed to from production, operations, HR, finance, legal. But in terms of the stuff that really was attractive to CustomInk, we we would just carry on as normal. So, there was there was integration, but it wasn't like a complete, hey, we're plugged in and and Represent as a culture and and as an entity has disappeared. Oh. >> >> I would say from that experience, what would you kind of pass on to founders knowing what you kind of see on the other side? Yeah, so it's an interesting one cuz speaking to and knowing a lot of founders that have sold their companies, I'd say more often than not post-acquisition does not go to plan. So, I think the warning would be that yes, exits are great. Uh liquidity and making money is great, but if the intent is to stick around and often that's a key part of the deal that the buyer wants the founders or management team to stay and keep growing the business, you really need to to do your diligence the other way as well. As a seller, you need to understand what's the buyer's culture like? Are we going to fit into that seamlessly? From a business perspective, what are their strengths and weaknesses? Are we okay with that? Cuz unless you kind of walk with with whatever the exit proceeds are, if you're still responsible for taking it forward, you need to get on with people. You need to mesh in terms of personalities. You need to have kind of consistent goals and targets. You're working towards the same thing. Fortunately, we had that with CustomInk. But I think that's definitely a watch out for for founders looking to sell their company. And so, when it came to the Cameo's transaction, walk the audience through the process of like taking you know, the company you sold to CustomInk, taking it out of CustomInk, and then selling it again to to Cameo's like I'm sorry, Cameo. Sorry. Cameo. For some reason I get those always mixed up. Cameo. Um walk us through kind of how that played out. Yeah, so it was around early 2021. So, we'd just come off kind of heavy COVID year. Um from a business perspective, we were very concerned early 2020. We made some internal changes, optimizations effectively to protect the business in case revenue declined. What actually happened was it it was a it was a tailwind for us, similar to Cameo, in that talent were not kind of recording music or featuring in movies like they were pre-COVID and fans weren't spending money on kind of out-of-home experiential stuff. So, those two things combined actually led to 2020 being our biggest year from a revenue and profit perspective. And then as we kind of got into 2021, we had hit certain parts of of the deal in terms of the earn out. I think we had kind of vested the the four years since the deal took place. And ultimately, myself and the other co-founders and management team felt that there may be a more strategic home for a business like ours. For example, one that sits within the entertainment space or creator economy. And there might be an opportunity for us to add more value than we were to CustomInk, which was effectively a a net new revenue stream. One of my partners at Represent was good friends with the founders of Cameo and they had experienced similar growth in 2020. Again, kind of COVID tailwinds. They had raised a lot of VC money and were looking at various ways to grow their revenue and offer new kind of products to their 30,000 plus creator and celebrity base. And once we start started talking to them, which I think was literally January, February 2021, it really felt like an obvious deal, very synergistic. There were various elements to it that were incremental value to both sides. The core thesis was ultimately that create Cameo had tens of thousands of talent doing their core video shoutout product. And Represent had this platform for the long tail, even though we had not been using it as much in recent years. And ultimately, the thinking was, well, if we plug the Represent platform into Cameo's ecosystem, what would it look like if 10 or 20% of Cameo's creator base started selling merch? What if they sold 10 products a month, 50 products a month, etc.? And it was not much of a stretch to think it could double, triple kind of the overall revenue base quite quickly. There were some other aspects as well in terms of some of the license deals we had would be a value. Some of the A-list celebrity relationships we had would be a value. So, I don't often like saying this, but it really felt like a one plus one equals three. There were lots of synergies and we felt like we could build a multi-billion dollar company in the creator economy together. So, we went to the CEO of Custom Ink and kind of high-level said, "Would you be open to parting ways if we found something of value to you and to us?" And Mark had always been an amazing partner and leader and was very open to what made sense all round. So, effectively that was the start of of that conversation and and then we kind of put everyone together in a room and and worked that deal out quite quickly, which ended up closing October of 2021. That was awesome. And what was that post experience like? So, you had that vision, you had that billion dollar path. What came to fruition and what didn't? Yeah. So, I'd say one of the biggest differences between the two, like I said, Custom Ink had been around for 15 years. There was a level of maturity in terms of how they operated the business day-to-day. They had experience with M&A. With Cameo, they were effectively a younger company than Represent. So, even though they were bigger in terms of gross revenue and headcount, Represent actually had been kind of conducting business for longer. And I think that was an initial challenge in terms of integrating. I think the other aspect which was really difficult was as Cameo was still fairly young and had a lot of venture money behind it, there was a lot of pressure externally to to grow and quickly. And that didn't necessarily align with the stage Represent was at in terms of a more mature company where we weren't looking to double or triple every year. 20-30% growth and more profit margin was really healthy for for where Represent was at. Um All that being said, we did some light tech integration very early. We kind of uh integrated the BD and sales teams together cuz effectively we were all trying to speak to the same people. So, again, it was a similar dynamic to when we were running Prizeo and Represent that there was a mixture of, "Hey, Cameo can offer this. Represent can offer this." With the intent of of over time making it more of a Cameo merchandise branded solution. Um but some of those early tests didn't set the world alight. Um and given our kind of limited resource in terms of headcount, we kind of needed to remain very focused on working with the clients that we were working with at the time and really trying to kind of move volume uh versus kind of revert revert back to that long tail approach. And I'd say the last challenge was when we had when we had success with the long tail in the early days of Represent, it was very much with those internet marketers I was talking to before. When we were effectively replicating that with Cameo, we're still dealing with creators and celebrities and ultimately they want and need a level of service. So, what did it end up What ended up happening was we were effectively in a position where it was a decision we needed to make, right? Do we spend our team's time and resource on an Arnold type campaign that could drive 50,000 units or do we spend our time on servicing some of the Cameo talent that might be hundreds of units? And obviously from a time and cost to to revenue, it was an an obvious decision. So, that that kind of made things difficult. If we grew the team, we would have been able to to service that more and and probably at scale. But what we were thinking at the time was kind of how do we automate some of these needs and asks? But ultimately that piece never came to fruition. Wow. Uh it's always fascinating here these kind of like uh what led to the deal, like the opportunity abound and then like the reality settling in and it's something that at the end of the day it's probably still in the best interest to do the transaction, but you know, navigating the expectations and the realities opposed to exit and transitions is always interesting. So, basically you you finished up that transaction with Cameo. What was kind of the the decision for you to get out and then ultimately do what you're doing today with Material Group in the creator economy? So, part of it for me personally was um time zone challenges with a young family. So, whilst I'd lived in LA for a couple of years during peak Represent time, my wife and I moved back to start a family. Um and as Represent got to a kind of team size of 40, I was on calls till horrible hours. The London to California time difference is is not a convenient one. And ultimately kind of 12 months into the Cameo deal, I was just a very tired person and felt like I wasn't giving my best to either Cameo, Represent or my family. So, that was kind of the main driver for me stepping aside. Combined with that, I'd been kind of within that group of companies and entities for 13-14 years. So, I also felt like it was maybe time to to start something else. I'd I'd been a career entrepreneur and whilst the the journey from Prizeo to Represent to acquisition one and acquisition two was phenomenal and the best kind of professional experience I've had to date, I kind of wanted to get my hands dirty and and build from zero again. And then I'd say the third factor was really what what we were kind of seeing in the creator economy more generally and that was a shift and a move from sponsorship to ownership. And I don't say that in terms of sponsorship not being important to creators, but given the value and the power of their audiences, it was clear where the pack was going that creators wanted to be entrepreneurial. They wanted to start their own businesses or the businesses that they were traditionally promoting for cash or rev share, they wanted to do for equity and a share in the upside. So, that ultimately kind of was the the groundwork for Material Venture Studio, which was the the next business I set up. And talk us about like you have some interesting deals that you're working on. And I think I want to transition this conversation from you know, your success with with Represent and creator economy you know, and transition to kind of where the creator economy is today, how you're envisioning the shift towards ownership as opposed to like sponsored cash deals. So, kind of walk the audience through what cuz you live and breathe this. You've worked with all the big celebrities. You've worked with big influencers. Like what trends are you seeing that you think founders need to know um going into the creator economy? So, there's a lot. I think one of the one of the big things is up until now creator celebrity brand success has traditionally been CPG or apparel. And whilst I still think there's loads of room for challenger creator owned brands in that space, there is definitely a shift more technology based products, SaaS, AI. And obviously those command much higher valuations, more capital, etc. Um on that note, there has also been a shift I'd say within the last kind of three to five years, but really accelerated in the last one to two of institutional money entering the space. Um there are a lot of VC funds that focus in this area. There are consumer funds that very active within creator led brands. Um but I think for the first time we're really now seeing private equity strategic capital enter the space. And I think all of that comes down to the value of the inbuilt distribution by the audiences that these creators have. And as as we all know, costs of marketing on Facebook and all of the other social platforms has skyrocketed over years, often leaving it unaffordable for certain companies based on their CAC and LTV. Um but when you're talking about creators with either hundreds of thousands and it's a niche, but a very tight community or tens of millions, um that's really the the shift that's happening. And it's about how can you sell product to audiences before you really need to start spending capital. And that's the philosophy we we apply to a lot of the brands we're launching under under Material. So, like when you see these influencers and celebrities that have they built these communities, like what's the best way to partner with them? Like cuz I'm in your camp, too. I I think that and I that big on the creator economy. I build content. I have a podcast. Like I just feel like without a person behind a brand, it's hard to care or trust or believe brands these days. And I feel like especially in consumer, you really need distribution. You could It's easy to build a product today. There's so many things like Represent, like easy to get products to market. But getting distribution is what really matters. How does you know, founders and companies get access and convince that these influencers should work with them and help them sell their products? So, that that that really isn't easy and I think a lot of it is relationship driven and reputation. Do you have a track record? Have you worked with creators in the past? Do I know names of the people you've worked with? >> >> That being said, it's of course not impossible to incentivize creators to work with you if you haven't done anything like that before. Um ultimately, I'd say whether it's the the talent themselves or their representation, they're viewing deals in the same way they are any other commercial opportunity. Is the juice worth the squeeze? Is the time commitment worth the potential upside? Is there any guaranteed element within the deal? What's the risk? What if what's the type of product? For example, if it's um if it's cosmetics, okay, I need to really understand what the ingredients are going into this before I I agree to participate or promote. Um so, yeah, there's a lot of factors that go into it. I think creators and and talent are increasingly looking at opportunities like this as well. So, whilst it's not easier what whilst it's not easy, I think it's happening more and more than it ever has. And for example, there's um one of the um Cameo team uh left and started a really interesting business called Agento, which recently raised tens of millions of dollars to really kind of streamline the brand partnership process on YouTube. So, there's just so much going on in this space right now in terms of individual brands, platforms to enable access to creators at scale in a more optimized way. Uh so, it's just a very interesting time to to be in this space. So, what should people be worried about? Like when they see this acceleration in the creator economy, who are the people that should be concerned and reflecting on how they're currently doing business? I think there's definitely a threat to kind of traditional media companies. And I actually think there's another shift where talent management companies are pivoting into media hold cos. So, it's not just about talent representation, let me source you deals and take a cut of the revenue I generate for you. It is about building together, um getting equity in various opportunities and sharing in that upside. Um for example, Night Media recently raised $70 million really for M&A. It's almost a kind of PE play within within that space. And they've acquired a podcast network and experiential company. Um but their bread and butter is talent management. But I think that goes to show how they're kind of viewing this world now where okay, it's not it's not just I represent a creator. I want to get them a brand deal and I want to get my 20%. It's it's a lot more holistic than that. And um similar to what we're building at Material, it's all about kind of the co-ownership and the the shared upside. Um that really is our thesis and that makes it very exciting. The the risk obviously is if you're launching a brand with a single creator, anything can happen. Ultimately, they're a human being. They could cross the street and get run over by a bus. They could do something controversial. And anything that impacts that individual person impacts the the business. So, we are very very thorough and strategic with the opportunities we take on. And again, that's why I think it really comes down to trust. Whilst we kind of work closely with talent agencies and they bring us opportunities and recommend talent, and I'm not saying we won't do deals like that. So far, all of the the JVs and brands we have have been with celebrities or creators that we've worked with or known in some capacity previously. And I think that goes a long way to at some point, things are going to go wrong and we need to trust each other that if it's something we're responsible for, you know we're going to sort it out. Likewise, if it's on the talent side, we trust you're going to navigate that professionally. Dan, it's been really interesting having you on, having your perspective of the creator economy and kind of what what you see happening and and what's going on. Like for founders that want to kind of learn more uh about the creator economy, what kind of resources would you suggest they take a look at? Yeah, I mean there's there's actually so much these days. Um I'd say LinkedIn is a great place to start. A lot of the lot of the content I see is from managers, agents, businesses there. Um Forbes has a lot. Um there's a number of funds like Hotstart VC, which invest specifically in creator-led brands um that have newsletters. So, I I actually don't think it's very hard at all to find good content these days. Kind of what creators are good at. Uh and uh if anyone wants to learn more about you or what you're doing at Material or Thunder, what's the best way for them to get in touch with you? Yeah, so uh the Material website is materialgroup.co. Um or you can find me on LinkedIn, uh Daniel Rosenberg. Perfect. Well, Dan, uh if anyone's interested, please uh reach down in the comments down below. Let me know if you'd like an intro to Dan. I'll be happy to do that up for you. And uh Dan, I just really appreciate you coming on. Strange story, we've been planning this for probably like two or three months now, getting you on the pod. So, glad we finally made it happen. And uh yeah, look forward to having you on maybe in future episodes and kind of unpacking what's happening in the creator economy, what transactions are getting done, what celebrities are doing what. Uh cuz I think the audience would be keen to keep a pulse on it. Definitely. Yeah, there's there's lots going on. So, uh I imagine in in a few months, there'll probably be a different spin to to talk through. Sounds good. Well, thanks for coming on, Dan. Cheers. Thanks for having me. Cheers, Jason. If you were inspired by today's episode, then go ahead, watch this next episode. Promise it's worth it. And if you really enjoyed this last episode and you want to connect with the guest I had on today, make sure to leave a comment down below telling me why you would like an intro to this guest and I'll make it happen.