What we can learn from the growing biz empire that Mr Beast (#1 Youtuber in the world) started?
140m Youtube subscribers, MrBeast Burgers with 1700+ locations, Feastables chocolates in 40k+ stores... all at 24 yrs old.
Some folks know that I love Mr. Beast. About a half year ago I hadn't even really heard of him. But my son started watching him on Youtube and all of a sudden we were watching him for like 20 minutes before bed every night.
I really started to like his stuff.. I mean some of it is a bit dumb but its entertaining in a way that crosses generations. Something that definitely cannot be said when I watch my son's Pokemon Go Youtube shows...
Sitting down for more than a few minutes and listening to some teen talk as he plays Pokemon Go feels almost as bad as pulling teeth. hahaha.
Mr. Beast recently turned down an offer to purchase his empire for $1 billion
So this was on the news late last year that MrBeast had received an offer for $1bn for his business.. and it doesn't surprise me that someone would want to buy such a dynamic, fast-growing business.
But what surprised me was the fact that he didn't even consider it a serious offer. In his mind a price of $10bn would have gotten him to at least consider.. but $1 billion is like a joke.
And then I was watching this video (below) by Patrick Bet David (who manages and invests in a lot of creator brands) where he talked about the potential for MrBeast, and why he agreed that a billion dollars was very very low.
Patrick goes on to say... "could a guy like this (MrBeast) in some years be worth half a trillion dollars? It could very easily happen to a guy like Mr. Beast."
So how is this business that MrBeast, a guy with no legit prior business experience, growing in value faster than perhaps any other business out there?
A brief recap on MrBeast's businesses
There are three main components to the MrBeast empire:
1.MrBeast Social Media channels
On Youtube he's got at least 6 channels with 136m subscribed to the main channel alone.
Other channels like MrBeast Gaming (31m subscribers) and MrBeast Reacts (22m subscribers) put out more frequent, lower budget, content.
But now he also has one of the biggest Tiktok followings out there with 80m followers and over 100m views on some of the posts.
All in all, he puts together daily views on a level that would compete with a Superbowl ad slot. Think about it.. this guy is essentially putting out a free Superbowl ad daily.
2.The "Feastables" chocolates business
The Feastables chocolate brand was launched in January 2022 and retails both online and offline in places like Walmart.
Just recently I heard him say that they expect Feastables chocolates to be available in 40-50k locations by end of 2023. And that there is so much demand from retail locations.. that the bottleneck is only on their ability to make the stuff.
3. The "MrBeast Burgers" chain
This is the burger chain that was launched in partnership with Virtual Dining Concepts LLC back in early 2020. They already have more than 1700 locations.
What lessons can be reaped from MrBeast?
Lesson 1: Having a large & strong community makes brand building easy
D2C (Direct to Consumer) brands have a tough time acquiring customers because online marketing is expensive and hard. It's the reason why so many Amazon brands struggle to sell on Shopify and make the economics work.
The approach of MrBeast alleviates this problem because you have a captive audience that you can tap essentially for free.
Lesson 2: Promoting your own brands on your social media allows you to get creative and highly effective
This is a video of MrBeast doing a blind taste test against competitor chocolates like Hershey's inside of a Walmart.
He makes it funny and fun to watch while still getting the message across.
I mean.. imagine being a D2C brand that not only can put out your own powerful ads to hundreds of millions of people for FREE.. but you even get PAID by Youtube for doing it (ie. they pay ad money).
How do you compete with that? It is like a 'wet dream' business model.
Lesson 3: Keep complexity to a minimum
I don't understand why brand aggregators wanna deal with so much complexity. I've seen the inside of a couple aggregators and it is a ton of work. Why?
Well you're constantly acquiring new brands & products, ingesting their people, aligning their processes, etc.
And so like any M&A it takes a lot of effort and time. Especially the people element.
Plus the products you're purchasing are of course not going to always be tightly aligned to each other. I mean just ask the simple question...
If MrBeast creates 100 different products himself in 2023, will they likely be more synergistic and aligned to one another than an aggregator that acquires 5 different companies to get these 100 products?
Of course they will be... it's a no brainer.
Lesson 4: The biggest value in D2C brands is the community of customers, not the product itself.
I am a bit familiar with Amazon brands. And i would say that the biggest value that many of them have is the SEO, ie. the fact that they rank highly for some key search terms on Amazon.
But do customers actually value the brand? Do they have a strong community of users who follow the brand? Very rarely.
And so if you acquire a company like this.., you've essentially purchased some high ranking product listings. Which you quickly learn the hard way when you try to promote the brand on Shopify and realize that LTV-CAC doesn't come close to working for you.
So... what can we learn from MrBeast's empire? I'd say a hell of a lot. And his playbook is only gonna get more interesting over time.
Check out the video version!
I think the product alignment aspect is an interesting one. Like you said, many folks build a portfolio of unrelated assets, but building one that's related probably keeps overhead (physical and mental) lower and allows for better cross promotion.