JD Power

JD Power's racket: sell the award to the company being rated

Sam breaks down how a ratings agency monetizes: car companies pay membership fees, and only members are eligible for awards. He frames it as a billion-dollar 'trust as a service' model that works as long as the rater stays a benevolent dictator.

“the way that they make money is the car companies are members of the organization. So if you're like If you only want the money, you don't give a fuck about being ethical, you could be like, "Hey, Ford, our new membership costs this much money. Are you guys in or out? And just so you know, if you're out, we can't give you any awards."”

Steal thisCreate a credential or award, then charge the people who want it; the stamp is the product.

JD Power sold for $400M in 2005, then north of $1B in 2019

Sam cites JD Power's sale to McGraw-Hill for $400 million in 2005 and a later sale around 2019 for north of a billion dollars, illustrating the value of a ratings/credentialing business.

“JD Power was sold to McGraw-Hill in 2005 for $400 million, and then it was sold again recently in 2019, I think, for north of a billion.”