The Nathan Barry Show

Rachel: Billionaires worry about money too. I don't think there's really any point, no matter how much money you have, that you stop worrying about money and about having enough of it. Because that was very interesting in the book. She talked a lot about like her stress about money, managing her money well, running out of money. I'm like you're a billionaire. You can't be stressing about the same things regular people stress about.

Billion Dollar Creator is a show teaching creators how to capture attention and turn it into real wealth. We will deep dive into brands, celebrities, and entrepreneurs who have done it before and show you how you can apply it to your business as an everyday creator.

Rachel: Welcome back to the Billion Dollar Creator Podcast. I'm excited to talk about the first Black female billionaire, which if you had to guess.

Nathan: I'd say Oprah.

Rachel: Exactly. That's what everyone would say. Right?

Nathan: But it's not.

Rachel: But no.

Nathan: It’s not Oprah.

Rachel: It's not Oprah. Oprah became a billionaire, I believe in 2003, which was two years after the first Black female billionaire, which is Sheila Johnson. Sheila Johnson and her husband, Robert Johnson, started BET, the Black Entertainment Television Network, back in the 70s. I think like ‘73 is when they started it.

Neither one of them came from money. They just saw a gap in the marketplace that there was no television specifically catering to Black audiences. That there were not a lot of shows on TV that showcased Black actors or people. So they decided to try their hand. He was in broadcasting in government.

He knew some folks that he could get to become investors. He was kind of like he has the gift of gab and is very personable. It's easy for him to connect with people and to negotiate. So it was easy for him to gain his first investor, which I think was like maybe 50 grand, right? Not a huge sum of money. With that amount of money, they set up their office. They started this business.

She had actually been in the entertainment space. She was a professional violinist. She was leading orchestras and putting on plays and things like that. So she understood entertainment in ways that he didn't necessarily. So they started with like no real experience, nothing. Just seeing a gap in the marketplace and deciding to do it.

Not really having any money other than investors that they were able, one investor, I believe, that they were able to put in. So they built this business from scratch. She sort of always played the behind the scenes. He was the founder, CEO. She was a cofounder, but he was always the front facing person.

Anyway, so they built this business. Over two or three decades, it becomes a billion dollar company, and they get divorced. That's always fun. So, they get divorced. The reason they get divorced is because he's been cheating on her the entire time, like for all three decades of building the business. He's cheating on her.

He's not just cheating on her like with Sally down the street, right? He's cheating on her with the woman in office. Okay, so several of them. So like various different women who worked for the company. These were not secretaries. They were like executives, people in leadership. He made various of them his girlfriend.

So she would show up to the office every day and work. I think she was kind of naive or just ignoring it and just sort of ignoring the signs. Then eventually he gets sued by one of these women that he's been sleeping with for literal years, while she's literally in the office down the hall. He gets sued by them. She gets served with the papers as one of the owners of the company. That's how she finds out that he's been cheating her on her all this time.

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

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

Nathan: Wait so you found out about this from reading her book. Did she talk about it in the book that like everybody knew but her?

Rachel: Yes, yes. She goes into a lot of detail about their relationship and how they got together. She actually was an entrepreneur before him. She had her own small business as a professional violinist. So she would train students. Then she put together the first like diverse orchestra.

So she got students from all different walks of life and trained them and put together this beautiful orchestra. They literally traveled around the world and performed in various countries. It was pretty amazing what she had built as a Black female entrepreneur in the 70s, and this was her side hustle. She had a full time job.

So anyway, she finds out, and that's when shit hits the fan. She finally is ready to face facts that he's been cheating on her all this time and never treated her very well. So now she's ready to well, actually, she didn't even get divorced then. I think it took a couple other things to happen. Because I think that they recovered from their relationship after that.

But then she found out he put this other woman, he made her the CEO of the company. He was ready to step down as CEO and basically be a board member. So he promotes this woman. He passes over his number two, that's been his number two for years and all these different leaders that have been in the company building BET for years.

He passes over all of them to promote a woman who was the like the counsel, like in-house counsel for the company. So she was the lawyer. Not necessarily qualified to be CEO. He promotes her because he's now carrying on a long term relationship with her. I cannot make this shit up.

So I think that was the final straw. Then she finally decided that she was going to get divorced. But they're from a different time, right? Sheila Johnson is in her 70s now. So this was a different time when women just, I guess, tolerated a whole lot of BS. So anyway, they finally part ways. The company gets bought, like I think it was like a year or two after they got divorced.

She's still a cofounder of the company. The company gets bought by Viacom for $3 billion in 2001. He doesn't try to cheat her out of her share, which you know what? Kudos to him for that one. After all the crap he's put her through, at least he didn't try to stop her from getting her share of the company. So she became a billionaire. The company was valued at billions. So technically, she was already a billionaire. But now she was.

Nathan: It became liquid.

Rachel: It's liquid now. Yes, exactly. Now, she's a liquid billionaire. This is in 2001. So she's sort of healing herself from this very long term relationship that she had with him and all this like sort of emotional abuse that she has dealt with. Not sort of. Definitely emotional abuse that she's dealt with.

She moves to Middleburg, Virginia, which is this random small town that is like basically dying. It is in decline. It's like got a lot of history because it's outside of DC. It's where a lot of different like meetings took place. It's known for like its horse country, and it's got some like vineyards in the area. But everything is on decline. Its downtown is like shuttered. Basically, it's going downhill.

She decides to move there because her daughter loves to ride horses. So she decides like take some of her money and buy a farm in Middleburg, Virginia. Then she finds out about this like 300 plus acre piece of land that's for sale in Middleburg. She gets an idea that she wants to buy this piece of land and turn it into a hotel.

Now, she doesn't know crap about hotels. She's never been in that business. She would be betting a huge chunk of this massive amount of cash. Like she could just be done. Right? Just live a great life and not work. But instead, she decides, I think she was like definitely in her 50s. Maybe in her 60s at that point. But she's late 50s, maybe early 60s, and she decides to bet a huge portion of all this huge amount of money that she worked her whole life or on building a resort.

So she has to fight the town because the town's like, they're very into their history. They don't want somebody new coming in building something that's going to ruin the town. There's going to be traffic blah, blah, blah. So anyway, long story short, she fights them for like probably a five to 10 year period. Then finally builds Salamander Resorts, which is a fabulous resort that I vacation at. I've actually seen Sheila Johnson and waved hi to her many times when I was there. She's always there. She's always greeting guests. She's very personable, very approachable. HOPEFULLY, we'll get her on this podcast sometime soon.

Nathan: That'd be amazing.

Rachel: Yes, but they just celebrated their 10 year anniversary. So it officially opened in 2013. During the 2008 recession is when they were like halfway through construction. This is the part that I learned that I thought was interesting. Billionaires worry about money too.

I don't think there's really any point, no matter how much money you have, that you stop worrying about money and about having enough of it. Because that was very interesting. In the book, she talked a lot about like her stress about money, managing her money well, running out of money. I'm like you're a billionaire. You can’t be stressing about the same things regular people stress about.

Nathan: Do you think that was because she's pushing the limits of her finances? Like this is something that I wonder about is you take these bigger and bigger swings. Like you might be taking a swing with proportionally the same amount of money, and it's close to the edge. You might not have the same safety nets.

Like Elon Musk did that famously with Tesla and Tesla SolarCity and SpaceX where he's like taking these swings all at the same time and like almost goes bankrupt because of it. I think he did it again with X or Twitter. Which that, I think, is like a pathological issue, where he only functions if he feels like his back is up against the wall or something.

But I've heard the stories of billionaires like pushing the limit. Is that because just as an entrepreneur you're always like okay, this is the resources I have. So I'm going to deploy a huge percentage of them? Or, I don't know. Do most people like sit back and be like cool, I'm going to keep this 500 million and never touch it. That's really safe. This other 500 million, I'm going to like actively deploy and invest and actually put into risky things.

Rachel: Yes, yeah. I don't know. I mean, maybe entrepreneurs are just wired in a way where we, I think it's easy to become addicted to risk. We're very attracted to making big bets.

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

Rachel: Yeah. Yeah I've done both. I've taken big risks. I've had huge failures where I lost seven figures, which I'm going to save that story for my next book. Then I've also, I think, because of that risk. Actually, the reason why it didn't work is because I took two big risks at the same time. So exactly what you're saying that Elon did. That's what I did. So taking two different types of risk, like one in the real estate space, one related to Hello Seven at the same time. So then things felt very tight for a little while.

So yes, that can definitely happen. I've done that. Now, I think I'm a lot more conservative because I've lost large sums of money. Maybe I don't know. Some people have to just learn the hard way, and I'm one of them. Once you have that experience then it's like oh no. We're not playing those games anymore.

But I don't want to be so, I think there are people, like Sam Parr talked about this when he was on the podcast, that are so fearful that they're scared to spend money. They're very conservative. Then they miss out on a lot of opportunities. So it's always about finding that balance, right? It's a dance. I think some years feel riskier and some years you just buckle down and be conservative.

Nathan: Yeah. I think realizing that if you have multiple businesses, on one hand, that's well diversified. That's fantastic. But there might be market pressures that come and affect all of them at the same time, right? A big downturn might actually have you spread thin between a few businesses that you need to shovel cash into to keep them going, or your real estate portfolio might be down or something else.

Because it's easy for me to think about like oh if something happened to ConvertKit then this other business is doing really well. So they'll balance each other out, which I bet half the time is probably true, three quarters of the time. But you could easily end up in a situation where every major business that you own is hurting for cash simultaneously. It actually just bleed you dry faster because you were so well diversified.

Rachel: Exactly. Which that's kind of why one of my favorite metrics is revenue per employee. I think just yes, isn't it the best? So I feel like it's one of those things that helps you to not go crazy and do too much or take too much risk. It's a sobering statistic that helps you to recognize like oh, let me actually stop adding people. Let me make sure that I'm actually utilizing the resources to the level that I should and extracting the value from all of the resources that I already have available to me.

It's funny because I tell new entrepreneurs this all the time. When they're like oh, I have no money to invest, and I'm like thank God because you would just squander it on nonsense. It's better that you have no money, right? Like use the resources. You have talent. You have time. Use that. You have the internet, right? You have all of these resources available to you. Use that rather than actual capital that you don't even know how to appropriately deploy usually as a brand new entrepreneur, right. You're going to make more obvious mistakes.

Nathan: Yeah, I love revenue per employee for three different reasons. The first one is, like you're talking about, helps you stay conservative. Because everyone's always saying hey, let's add more people. If you see this growth trajectory, you're like look. We've got to hire ahead of growth, all these things that people say. You can get yourself into a position where you're responsible for all these salaries, right?

Like Spotify just laid off 1,500 people today. I think it's some huge number of employees. As a founder, you're responsible for all of those salaries. So if you keep track of revenue per employee, you're going to hire more conservatively, and you're not nearly at the risk of a layoff.

The second reason is you get to pay a lot. Like if you are gradually driving revenue per employee up over time, that means you're going to be able to pay higher and higher salaries. I like to pay people a lot of money. That's just one of those things that brings me joy.

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

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

Rachel: So good. Everyone should be tracking this. The moment you hire your first employee, just start tracking it just so that you can see how adding this person has increased revenue. What has it done for you? Then it'll make the case for how you're going to continue to add to your team but in a strategic way. Yes, systematizing, right?

Because there's so many times where like a process, a policy, or like why are we even doing this? Like there are emails that we answer that I'm like why are we answering that email? That's not from a customer. It's not from a potential customer. It’s a waste of our time. Just don't even respond. Just literally delete it. You know what I mean?

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

Rachel: Yes.

Nathan: You'll notice different trends when that happens.

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

Nathan: Yeah.

Rachel: Yeah. So.

Nathan: Anything else on Sheila Johnson?

Rachel: How did we get on revenue per employee?

Nathan: I don’t remember.

Rachel: Well, anyway, one of the things that I loved about her is that she took a huge bet, right? She took her capital and bet it on a declining tow with this premise that I feel like was really risky. So like what she did with BET is say okay, there's a lots of television out there, but there's no television that is specific to this particular audience to a Black audience.

There's all these reasons why you would think well, you're going to build a billion dollar company on 12% of the population, right? Like that sounds risky and like almost a bad idea in some ways. They just follow that inclination and bet on it and won big. I feel like she did the same thing with Salamander.

So this is a very small white town. Not a lot of diversity at all. Actually, zero diversity. She came into that town and built a resort that has a hugely diverse audience. So that is one of the things that always stands out to me when I go to Salamander. That's why I go every year. It's like one of my fun fall trips that we do.

What I always noticed is that there's people of every different age group, of every different ethnic background, lots of Black people, but lots of other people as well. Like you don't see Black people riding horses very often. They have stables at the resort. Or like doing archery, which is another activity you can do, or all the different things that they have. So it's just, she made this bet that like I have this mission or this idea that this is a space that I'd like to see be more diverse. So I'm going to build something for everyone in this place.

That's scary, right? But I think people don't bet on these kinds of niches enough, I think. Where you just see a gap, you see a group of people, or there's a segment of the market that's just not being served well that you can come in and serve them. It's scary because you're saying no to half the market, 80% of the market, 98% of the market, but you're betting on this 2% that's going to buy from you. She's done that twice and won big.

So they just celebrated their 10 year anniversary. I don't know exactly how much money the company is making, but from what I understand they have over 1,000 employees. They have seven different resorts now. So that was the first one. Now she has bought various other locations. She’s building one in DC. She has the Aspen Institute. She just bought that resort, or she's partnering with the Aspen Institute. She has resorts in the Caribbean, Florida, etc. So anyway.

Nathan: That's awesome.

Rachel: I think she's dope. Oh, one of the things that I was going to say too that I was talking about is the 2008 recession. So she was halfway through building salamander in the 2008 recession. Because of the recession like her wealth was down, and she closed the doors and just stopped the construction for over a year until the recession was over.

So rather than push it because the cost of building supplies went up, the cost of labor was up, everything was up. So rather than push it, she went the conservative route and was just like just shuttered the doors and said I'm going to have to wait a year or two before we start to build again when conditions are better. I just thought that was so disciplined. I was surprised, especially from a billionaire who could take more, she has more space to take more risks, and she didn't.

So it's just one of those things. When you have a mission and you believe in something, it's going to take time and being willing to be conservative when it's the appropriate action and also willing to just play the long game, be in it for the long haul, and understand it's going to take a long time before you see the payoff. I think a lot of people don't have that ability. But the more you can build that ability to wait and increase your patience and your consistency, I think that's where the big payoffs are. So anyway, Sheila Johnson. Hopefully, we'll get her on the podcast, and she'll tell her story firsthand.

Nathan: I love it. Into another segment, which is chess, not checkers. Which by the way, a bunch of people when we're in person said that when they heard us talking about this they thought we said chestnut checkers, as in like chestnuts roasting over an open fire. But we are in fact saying playing chess, not checkers, which is an example of someone thinking ahead in an innovative way and doing something where you realize oh, they're playing an entirely different game than we are.

So you had this written down, which I'm fascinated by it as well but I'll let you kick it off, of the Michelin Tire Company, specifically the Michelin stars and that the tire company is the same. Which when you think of fine dining and tires, that is not normally what comes together. So why don’t you dive into this, and then I've got some stuff that I want to add.

Rachel: Yeah, I love this example so much. I came across a write up on it on Facebook. I love it because Michelin Tire Company is not something that you would connect with fine dining. That's one of the things that we talk about in building a billion dollar creator brand. You don't necessarily have to do the obvious play, right?

Like one of the billion dollar creators that we've talked about on Instagram, her Instagram name is Supa Cent, and she built a makeup company. But she was just an influencer who was talking about pop culture and whatever else was going on, on Instagram on a regular basis. She would do her makeup while she was talking about this stuff.

So her audience wasn't following her for makeup advice or makeup tutorials, but she just happened to be doing that. It was like this tangential part of her brand. She realized okay, I have all of these women following me who buy makeup, and why not buy it from me? So she created a makeup brand and had a million dollar day and has made millions of dollars from this makeup brand. I feel like this is a similar idea.

So Michelin Tire Company was trying to find a way to get people to wear out their tires basically. They want people to replace their tires more often. In order to do so, people have to actually leave their homes. So they wanted to encourage people to not just go to work or go to school but also go other places. So they decided to start reviewing restaurants and creating this list of restaurants that are Michelin starred restaurants, which means restaurants that you want to go to, that you want to visit.

The whole idea behind it is just for people to drive more, wear down their tires, have to replace their tires more. It has absolutely, like fine dining. What did this tire company know about quality dining? Nothing. But they decided to create this list of Michelin starred restaurants. Now where do we all want to go? Where do we want to eat for like the best meals? Michelin starred restaurants. That's where the origin came from.

So they were playing chess, not checkers, and said what is a way that we can get our folks out of the house? What's a resource we can provide to them that's going to encourage them to get out of the house. That's what they did. So brilliant.

Nathan: There's so many things in that. First, no, I'll save it for later. In just a little bit, I'll tell a story about a time that we tried to do something similar at ConvertKit and failed. So I've definitely sunk some money into creating my own equivalent of that.

But one thing that I love about it is often when new technology comes about, it is a solution in search of a problem, or at least people don't know how to use it yet. So on one hand, this seems ridiculous, right? We invent the automobile. That is an amazing thing. We can drive even 25 miles really quickly, right? Like the amount of time that a normal human can cover or the amount of distance a normal human can cover in a day just increases substantially.

But they have such a problem that like people don't do that. How would you know? How would you think about what is possible now that you have a car? So they're actually like you should do a road trip. But that is a concept that does not exist. It's like this leisure travel in that way by car. It existed for some by train, but by car is something that they have to convince people to do with their travel guide.

So I think about things like technology like virtual reality where right now you put on the headset, and who knows what, right? You can play games. It's basically a solution in search of a problem where it's not widely used, but I wouldn't be surprised if 10 years from now or 20 years from now we look back on it in the same way that we look at like the car and say oh, it's obvious now that it's used for these things.

But it takes someone to actually demonstrate the use and then convince the general public that it has that value. Okay, you want the example of when I tried to do this and screwed it up?

Rachel: Yes, I definitely want to hear that.

Nathan: So a couple years ago, late 2019, we were looking through the types of customers that we had for ConvertKit. Maybe 2018, somewhere in there. We noticed that we had a lot of digital marketers both the best digital marketers, the people who I love their content. They're out there serving their customers and creators really well.

Then also we had some of like the direct response marketers that they're great at copywriting. They're kind of sleazy. This is the type of person that like really dominated Infusionsoft and Maropost and some of these other email tools where they just see their audience as a piggy bank or an ATM. You can just send an offer, cash in.

I was noticing these two worlds of like creators that we deeply care about and who care about their audiences and these somewhat sleazy marketers. It was interesting watching the business. I knew it could get pulled into this like direct response marketer world if we weren't careful because those people understood the value of email. They were very happy to pay for the product, right? They would tell all of their friends. We had great deliverability and everything else. So we saw that segment growing.

One thing that I realized is you couldn't just avoid going down a certain path. You had to deliberately go somewhere else. We couldn't just say we're not going to actively get those people, but we had to say here's who we are for instead. So we really started to double down on the creator positioning.

One thing that I didn't realize is we need to go beyond creator just as YouTuber or social media influencer or Blogger or podcaster, but also to include artists and musicians. So we started to really focus on music as an industry. We already had Tim McGraw as a customer, and we had a handful of others. So we started to make this deliberate push into music.

Then when the pandemic started in 2020, we had our whole events budget, and we didn't know what we were going to do because all our events were canceled. We're like what do we do? So Haley, who was running all the events at the time, she's produced all the Billion Dollar Creator events now.

But what she did is kind of on the fly, she made this thing called Creator Sessions. It started out, the very first one was working with a food creator who like did a live broadcast in her kitchen and like taught a whole recipe and answered questions. It was scrappy and really interesting. Then the next one, we did a couple.

But the one that hit off really well was with a musician named Drew Holcomb where when everyone was under lockdown, we shipped him a case of video gear. Basically, like we mostly used iPhones as cameras because they have the 4K cameras, and they're easy to set up. So we shipped him this Pelican case. Then he recorded a Creator Session just in his living room. Basically singing these songs, telling the stories behind them, and it was pure magic. Like we saw that and realized like oh, this is something special.

So we ended up doing a ton of these Creator Sessions. We did them with like Lennon Stella who stars on the TV show Nashville, Mandy Moore, like a ton of great creators and musicians. Part of our theory was like why is ConvertKit, a software company, out here doing things with musicians? Part of our theory was that we could grow ConvertKit Creator Sessions into like the next NPR Tiny Desk, or this next thing that every artist would want to be a part of and use our audience.

So the short version of the story is we produced a ton of these. We absolutely loved it and spent a bunch of money doing it. We ended up not really ever being able to get traction. Like we get a decent amount of views. But two things really killed us. One, spending the money long term to be able to build the audience. We did it for about two years where we ran these I think every other week.

Rachel: That's what I was going to ask like how long was the test case? What was the metric that you were judging? What would make it a win?

Nathan: Yeah, so we were judging it based on three things primarily. First, is can we get people to watch this? Right? Can we grow the audience for it? I mean there's so many we did. We did one with his National Geographic photographer named Amy Vitale. So she's like telling us stories of how she got all these incredible shots and everything.

So yeah, first getting audience. Can we get people to pay attention and enjoy the show? The second was can we get customers from this? Primarily the people that we're doing these partnerships with. Will they sign up and become customers long term? Then third, if they are customers, will they value the service?

That was a sign that we're looking for. Like we're expecting like a flywheel. We're expecting it to take a very long time to get meaningful traction. We ended up shutting it down for a couple of reasons. First, we just struggled to build an audience for it. We were able to get a decent amount of viewership, but we could not get it to compound and to grow continuously.

Rachel: Interesting. One question I have for you is some of the people that you got, were they like, I'm assuming you were doing this on YouTube is where the videos were.

Nathan: Yeah, primarily YouTube.

Rachel: Did you have any other people that you featured? Were they big YouTubers?

Nathan: They were not. Like they were more traditionally famous than YouTube famous, which I think is a limit.

Rachel: Okay. Just curious. Okay. Keep going.

Nathan: Yeah. So the other thing is that in the music space, despite email driving pretty much all ticket sales for tours, all these other things, and being the best channel. Generally, the artists themselves didn't really care about it or the management teams. They were all in on social.

Even despite the metrics that you would show them where it's like look. Your segmented email that went out to your fans is what actually drove sales for the tour. Right? That's what tipped over all the conversions. But there just wasn't this hyper interest in email, and people would focus on social instead. So we’d get people all set up and then often their teams wouldn't keep running with it.

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

Nathan: There were a bunch of musicians that really focused on this and did a great job, but we're just finding that it was this uphill battle. But then the last thing that really killed us that we didn't expect was music licensing where every artist. We would pay the artist to come on and do the production and all that.

We understood that we needed to pay them. We needed to pay the other rights holders. What we didn't realize going in is that all of those licenses would expire. So we could get licenses for them to use their own song in this performance but for a set period of time. It'd be for one year, one year, three years, etc.

So it got to the point that we just spent way too much time negotiating music rights and paying licensing fees. Then sometimes two years in or three years in the video would come up, and we'd have to decide do we want to pay for the rights again or do we want to take down the video? We like looked at it compounding over time and realized oh, we can't do this.

But I used the Michelin tire example a bunch of times because I thought hey, if we still stick with this for five years or 10 years, we could be that example in music where people are like why do I go to this software company’s studio to record my album or to like do this live show? The manager is like yeah it's weird, but that's what you have to do because that gets all of this traction and attention. I still think we could have pulled it off if it wasn't for the licensing issues.

Rachel: Yeah, it's almost like you'd have to build a new department and like have a licensing attorney on your team negotiating those licenses or whatever. Yeah, that's a challenging piece of it. It's a great idea though. I like it as an idea.

But also, it seems like that's the thing. It's like this is the end of the year, right? It's always that time where you're like okay, let me look back at what we've done and look at the metrics and say was this actually worth the time? How can I better deploy those resources? Or is there a better play to be made?

One of the plays that I would think that would solve that is if you just went to all of the like music industry events. Like are there music industry events or conferences where there's teaching happening where you can actually get up there and speak and sort of make the case for why they're looking at the wrong thing that will actually help them to become a paid musician. A well-paid musician versus just.

I think in the artists world, it's like they expect to work for free for a very long time. Then eventually, they expect to make a huge sum of money once they get discovered. Now we have like emerging artists that are like making a name for themselves on Tik Tok or whatever where they're actually able to get paid separate from getting a publishing deal. So it's interesting.

Nathan: I think it's just looking at where you're fighting an uphill battle. All of entrepreneurship is an uphill battle, to be clear. But where are you getting that momentum? I think two years in, we we're really proud of what we created, but we were still not getting that momentum.

Going to the rules of flywheel, which by the way, we should do a flywheels episode soon because we talked about it all the time in the masterminds that we're hosting. But the rules of flywheel is that it gets easier with each rotation. It was not really getting easier, even two years in. It was still this grind. So that was a tough decision to shut it down.

Rachel: Yeah, are you still pursuing the music space at ConvertKit?

Nathan: Yeah, so I'd say we're pursuing it equal to the rest of the creator niches. We bought a company in the space called Fanbridge, which is a great acquisition opportunity. That brought like, who else, Leon Bridges and a whole ton of other, I think Grateful Dead came over as part of that. Just like another thousand artists or so came over. So we're really well represented in music now. But I think we're pursuing it equal to our other ventures rather than an explicit focus.

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

Nathan: That is a very good point.

Rachel: I think we have to be careful as entrepreneurs like question the sexy. Because that was like, for me, that was two sexy plays, right? I wanted physical spaces for my clients for gathering and then I also wanted to do this conference. Trying to do both of those at the same time, two big seven figure bets at the same time. One of them was successful, one of them was a fail.

So yeah, like maybe one at a time, right? Or also what's the conservative version of this? Or what's the like the minimum viable version of this that I can just get out the door, test it. Test and invest instead of going all in the way we do because we just fall in love with an idea. I mean, I don't know. There's so much money that is about to be lost when entrepreneurs fall in love with an idea.

Nathan: Yes. Oh, man, that's for sure. Now, okay. I'm going to tell you about an idea that I did fall in love with this last weekend. I went to this mastermind out in Charleston, South Carolina. I keep wanting to say I kept telling someone else. It was like no, you're Charleston. I was like oh right, never mind.

Rachel: Did you keep saying Charlotte?

Nathan: I kept saying Charlotte. Yes.

Rachel: Which is in North Carolina.

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

Rachel: We didn't know where Boise was until you started talking about Boise. So don’t worry.

Nathan: That’s all right. Look at these worlds colliding. We're bridging the entire nation right here. So I went out to Charleston, which is an amazing city. Everyone's like.

Rachel: I love Charleston. Such good food. Talk about Michelin starred restaurants. There's many in Charleston. It's a great place.

Nathan: Yeah. So it was fantastic. But Stu and his wife, Stu McLaren and his wife hosted this mastermind, which was 25 people. It was legitimately like the best of the online creator world. I was really impressed. So like Michael Hyatt and Amy Porterfield, Patrice Washington, Marshawn Evans Daniels. Who else was there? Dan Martell, Bonnie Christine. Like just 25 people totally packed out in this room.

What I loved about it is they basically did two days of a mastermind, which is pretty standard. You get a bunch of great people together in a room, do breakouts, do some taught sessions, some discussions, plenty of good meals. But then the part that was really cool is they hosted a live stream, which was ultimately a fundraiser for their charity, which is called Village Impact. They build schools in Kenya.

So they did it at the studio in Charleston, which has been used by like Tony Robbins and a whole bunch of other creators. So it's one of those studios that has like when you're standing in it, you're looking at like 12 TVs full of Zoom faces. There's like an 80 inch TV on each side that has the chat. Then behind you is this full video wall that can change to everything.

Rachel: Yeah, like the LED wall. Love it.

Nathan: Yeah, I’d never been in a studio like that before. I was like this is legit. So what they did is they had this call. They called it like Predictions for 2024 or something like that. They basically, all these creators that were there for the mastermind, they hosted them in panels for 20 minutes at a time and then sold access to it. So is this Friday night live stream. It went from 7:00 p.m. to 10:00 p.m. Eastern. They sold access to it.

I think there was like a thousand people that tuned in to watch live and paid for that. Then during it, people would donate more towards building the schools. The panelists would donate towards building schools.

Rachel: Amazing.

Nathan: So it ended up raising $380,000 for this charity, which is not a big charity. So I think it probably was like a quarter of their annual budget or something.

Rachel: Yeah, that's a nice chunk of change.

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

Rachel: Awesome.

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

Rachel: Yes.

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

Rachel: This is a great idea. I think I might steal it for the Hello Seven Foundation. Because we've tried different fundraising ideas. I did something similar. I did a dinner at my house when I had my ranch. That was the first year we raised, like I want to say it's like $150,000. I just sold $10,000 seats. So like every seat at the dinner was 10 grand. It was just a dinner with me. Like all the entrepreneurs in the space were dope and some clients of mine.

We had entertainment. My chef at the time, Chef Bea, made an amazing meal. We had amazing discussion. They got a tour of my ranch, which people wanted. They got to stay at the ranch for one night. That was it. That was 10 grand. So that allowed us to raise a lot of money that was able to provide a lot of doulas to women who were about to give birth and needed that support.

So it's crazy. Like that's the thing. It's like once you realize all of these resources that you have available to you, you can deploy them in so many different ways to have social impact for yourself like in so many ways. But I love masterminding. I love the idea of creating a mastermind, but then also having it. It's a win for the entrepreneur, right?

They're not going to say no because they get to mastermind, like you said, but they also get to do this thing that makes them feel good and give back, which I think any entrepreneur that's making a lot of money probably wants to do. It just feels like when you have a lot, you want to give a lot and be generous.

I actually have a mastermind coming up next week, and it doesn't have a name. But basically one of the entrepreneurs is, it's all Black women who have made eight figures or more in their businesses. So there's one entrepreneur, just like Stu, who lots of people know, but I'm not going to say her name. But she has decided to host this at her house. So she's brought in all of these different women who are very accomplished, all have eight figure businesses.

I think there's like maybe eight of us, and we're going to spend like three days together just talking about how we can support each other, how we can share resources with each other, and like what are each of our goals and how we can help each other make it happen. Like present bottlenecks that are in our businesses or in our flywheels and get ideas. You just have this brilliant brain trust.

So I have to leave my house for four days, which is a big ask. I am in my holiday season, okay. I don't want to leave. I'm enjoying like winding down. But I'm going to go to this because I know I'm going to get so much out of it. That's how it is. Like masterminding is such an essential part of entrepreneurship. I feel like there's a lot of negative talk about masterminds, but it's unnecessary. I noticed you spend a lot of time on the road to mastermind and go to events and be with other entrepreneurs. So yeah, it's worth it.

Nathan: It's so much more valuable to me than conferences because it basically cuts through to just the speakers or just so many of the top people that would be at a conference and dedicates a lot of time. So you're not trying to catch them for 15 minutes in the greenroom. Like you have multiple days to catch up with them. Like Jenna Kutcher, for example. I knew her, I've known her over the years. We'd never met in person before, but we've exchanged emails. She's been an affiliate for ConvertKit.

But like we didn't actually connect that much. The entire first day I was like oh, I need to like say hi to Jenna. I didn't really get a chance to do that. It's like that's okay, there's the entire next day. At, whatever, 10:00 p.m. as the live thing is wrapping up, and we're all hanging out.

We're both like we need to go to bed because we have flights way too early in the morning, but you still get all this great time to hang out and connect. She’s someone that I think years from now like will be really good friends because we're able to spend so much time, like so much condensed time at the mastermind that wouldn't happen otherwise.

Rachel: Available time, right? Because in our day to day, our capacity to spend time with people or have long conversations with friends. Like there's a lot of people that you or I could call and have a conversation with any day, right? But having the time where you're free and the other person is free at the same time, and you're not rushed, and you're not rushing to another thing, and your mind does not on the meeting you had before that right? Like that's the rare thing.

So I think getting in the room. It's amazing how much faster relationships grow when you just, even if it's a couple of hours that you spend in a room with someone else. You just get to know them, and they're going to share things that they're never going to share online.

You know what I mean? That you're just, it's only going to happen when you're in that space together. So yes, I love masterminds. Hello Seven is actually growing our masterminds next year in a big way because I feel like that's the bet that we're making for next year.

Okay, I wanted to talk about this other thing, too. So owned media versus earned media, which do you think is better? Let me give you an example. I've been thinking a lot about this because, again, I'm at the end of the year. I'm being very reflective. I'm looking at all of the data in my company for the year.

I'm asking myself like there's a lot of PR appearances that I do each year. Where I was on the Tamron Hall Show in the years past. I've been on like a Drew Barrymore Show, or I've been interviewed for the New York Times. There's ones that are big hits that are like okay, that's probably worth it because it was big enough, right?

But then there's other ones that you're like was that worth my time? What was the real get from that? Like how did this benefit the company for me to use my resources in this way? So that's the question I'm asking myself. Is it better to, I think a lot of us want that, like I was saying earlier. The stuff that's dreamy, right? We want to be featured in The New York Times, or we want to be featured on the Kelly Clarkson Show, or on the big podcast. Is that better than spending all of your time building your own owned media? Right?

Is it better to build your own YouTube channel than to run around trying to get press? Is it better to do two podcasts episodes a day instead of doing your own podcast and then also guesting on a bunch of other podcasts? Right?

So it's like it's all time at the end of the day, and what is worth it? I think you just, I'm always evaluating this because I want to be as efficient as possible. I'm always looking to refine how I'm spending my time, make sure I'm capturing the lessons from how I spent my time this year, and getting even more efficient for next year. So what are your thoughts on that?

Nathan: I'm torn on this, too. First, I've not done a lot of earned media in the sense of PR. Right? When we acquired Fanbridge, that was covered by Billboard. We've done a handful of things, but I don't have like oh yeah, when I was on the cover of The New York Times Style section. Like here's the number of books that I drove or something else. I haven't done that much of it.

What was interesting is this has been a topic of conversation with a handful of authors that I've been with, both this last mastermind and at previous events, where people were talking about like is traditional press worth it? Sometimes you get these spikes that are just absolutely huge.

I remember when I was talking to the team from Khan Academy, the like online education. They got coverage, I can't remember what it was, on like 60 minutes or one of these programs that just had crazy viewership. They're like, they were showing their Google Analytics, and they had like 20,000 people on their website at the exact same time, and it's just crazy numbers.

Now, there's lots of other times that people talk about going on a show or getting covered in New York Times, and not really seeing any meaningful boost. But then being able to leverage that social proof to then go on a podcast or something that has diehard listeners that then results in a lot of book sales. So I think you have to chase both. I'm going to go all three parts here.

You have to chase both the social proof and what's going to drive actual sales. They're not always the same. Some podcasts aren't going to move the needle. A lot, I was talking to an author. He said that actually Ed Mylett’s podcast, which I'm not very familiar with, was the one that when he was going on a bunch of podcasts, that was the one that shot him way up the rankings in Amazon. I thought that was interesting.

But then the other thing is you have to have a way to capture that audience. If you're just jumping from someone else's audience all the way along, people can't follow you and like really become a fan of your stuff. So I think about with this show, the approach that I've taken is one episode a week of Billion Dollar Creator and then one to three episodes a week guesting on other people's shows. I don't think it'd be worth that level of guest appearance if we didn't also have this show to drive everyone back to.

The way I think about that I'm like I don't want to keep borrowing other people's audiences. Right? I can go on My First Million or a bunch of these other podcasts because I'm friends with the hosts, or, in many cases, people are ConvertKit customers or something else.

But like if I have something to promote, I don't want to have to borrow someone else's audience, I want to be able to have our own audience. So I think you find the balance, and it’s all about the mix of credibility and social proof, borrowing someone else's audience, and then ultimately going after the audience that you own and investing in that.

Rachel: Yeah, it'd be interesting to dig into the data and see like for the podcasts that go to two episodes a week, for example, from one. Do they see a massive shoot up of like additional audience that comes from that because they're just creating twice the content? Twice the content is out there, being shared, presumably, etc. Versus appearing on someone else's podcast. They have a big following. You promote the Billion Dollar Creator Podcast there then some of that audience comes over here and listens.

I'm just curious. I agree. There's no necessarily right answer, but also too it's like do we still need social proof at this point in our careers? What kind of social proof do we actually need? I will say, like the things that during my book launch, things that really moved the needle and drove a lot of sales was Good Morning America. That appearance was huge.

Not only that, but so Good Morning America drove a ton of sales that week. But in addition to that, it was basically a commercial for Hello Seven. It featured a whole bunch of my clients that had amazing results. They talked about their financial results on that segment. So we took that exact Good Morning America video and ran it as an ad for like two years. It was one of our most successful ads. We’re probably going to bring it back up and run it again.

I recently had, I was on the Tamron Hall Show in September, I want to say, and I think we've run that video as an ad as well because it's like a very familiar setting. So it's like a trusted source. So it feels vetted, right, and it’s like showcasing this. It just grabs people's attention and cuts through the noise so that people can see what we do and see proof of what we do, which is amazing. So like that's an interesting play. The biggest podcast. I was on a lot of big podcasts, but the one that drove the most traffic my way was Lewis Howes podcast.

Nathan: Nice.

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

Nathan: I bet the distribution is just absolutely huge on that.

Rachel: It must be because that's not one that was like on my wish list, but it drove. So many people came to me and were like I saw your article in Women's Health. That's why they started following me on Instagram and then joined my program or join my mailing list, etc.

So, anyway, I just think it's important that we always, no matter if you are an eight figure entrepreneur, or if you're just starting out and have a side hustle. We've got to evaluate how is our time being used because that's our really finite resource and say what are the bets that I want to make? Where do I actually want to focus? What are the results I'm really looking for?

Then how can I use my resource, my time, to drive that instead of being pulled in a thousand directions, seeing what my neighbor is doing. Then I feel like I've got to go do it. Or doing the ego hits, right? Like oh, I was featured in The New York Times, right? It did nothing for my business, but it made me feel good.

Nathan: Well, and I think once you get those things that are either social proof or boost your ego, make sure you make the most of them.

Rachel: Yes.

Nathan: It's like the billboard in Times Square that you can buy that just rotates through. It will be your thing for like a minute. But the point of that is the photo. Then to say oh, this was featured on the Time Square, or even if you're buying billboards in real life, or any of these things. It's about how you take something, the any magazine appearances, same thing. That photo, that appearance in a magazine. If you then market that a whole bunch online, and you have, you take it that much further. That's where you're going to get the results.

So it's not that the credibility or something is worth so much in itself. Even the clips, right? A bunch of really well edited clips from Good Morning America, from Tamron Hall, all of these other shows, like you're going to be able to promote that probably way better than the show itself might, at least to the your correct audience. So it's really, that's just the way that you create the content. Then what you do with that content is worth a billion dollars.

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

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

I think next week, we'll probably dive into creator flywheels, which is a fun topic. Then we’ll also have a few guest appearances. We invite our friends on the show to riff on different ideas, break down their flywheels, and everything else. So thanks for hanging out with us today.

Rachel: Thanks guys.

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