The creative genius behind Squatty Potty & Poo-Pourri reveals his marketing playbook

Everybody who starts a business, you have to find your glitch. Look for things, for areas where you have attention from people that nobody else is paying attention to.

I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel.

Here's why I'm excited about this. I've never met you, but I've been a fan of your work because you're kind of the creative genius behind the scenes of some of the coolest marketing campaigns that I remember, I kind of grew up on, on the internet. I read your book back in the day.

Oh, you read Poop to Gold?

Yeah, Poop to Gold. On top of that, you know, now what you're doing now is fascinating. I had never, I'd honestly never heard of Angel Studios. And here you are, you've built maybe one of the top 10 TV movie studios in the world. You're doing almost $500 million in revenue. And I would guess that I'm not alone. I would guess that 98% of our audience has also never heard about this. And the cool thing is you did it with, I mean, pretty much no experience or background in the industry, which I always like. I like somebody who, you know, doesn't kind of self-limit around what they can and can't do based on their own track record. And you went in and you did something really remarkable. And so I wanna talk about all that, but I think we should start with the marketing because that was my intro to you. Can you take us back to Dr. Bob and how you helped a dentist create one of, one of the great marketing campaigns? Where were you? What, what happened? Can you tell that story? Yeah.

Yeah, I was in my last day of my last class at university, and a guy named Dr. Bob came in and was asking the class. He wanted them to tell him how to make his OraBrush, which was a tongue cleaner that scrapes your tongue and cleans off bad breath, how to make that thing actually sell. 'Cause he had invented it, he had got, he had, I don't know, patents. thousands of units of it, just boxes and boxes of them at his house.

Sitting in his garage.

Oh, so the smart kid answer was 90, over 90% of people don't wanna buy this online. And you said, wait a minute, if 8% said yes, that's still millions. That's enough to clear out the garage.

That's right. What happened is I didn't think much of it until Dr. Bob came up to me after class and said, I liked your comments. Can I work with you? The first thing I did is I bought— I convinced Dr. Bob to spend $5,000 buying a web— a Facebook page called Kisses. There was just some guy somewhere in the country who had built this page called Kisses. I think it had 1.3 million followers. And so we took it and we bought it. And then I started spamming them with OraBrush.

Because bad breath, kissing, that was the— Yeah, that was the connection. You did get one thing right, right? Like, I think one of the easy mistakes most people make is they think about their product and they just wanna tell you all about their product versus the benefit you get if you were to use this product, the happy ending you seek. And this product is just a tool that's gonna get you to that happy ending, the better you, and maybe the version of you that can kiss without the shame of bad breath. So you did have that insight. That's pretty good.

Yeah, and so we took the 1.3 million people, we spanned them, And then once we got Aura Brush created as an entity, I changed the name of Kiss's page to Aura Brush.

Right, the brand followed by 1.3 million people.

Yes, and so we had one of the most followed brands on social media. I think Facebook changed their rules after that. And that failed miserably. We didn't sell hardly anything. We tried Google Ads. They weren't working. I think we were spending like $3 to $5 per dollar that we brought in in sales because it's just a little toothbrush. And then I was watching on YouTube late at night, and I watched a lot of YouTube. And there was a YouTuber called iJustine. She's probably still out there, but she was an early YouTuber.

Original vlogger, right?

Yeah, original vlogger. And in her videos, she would jump cut. She just stood in front of a white background, and then she would just cut, cut, cut, cut to get rid of all of the ums and whatever wasn't interesting that she said, she'd just cut it all out. And I was like, we could probably make something at that level. And then I got another roommate named Evan Graham. He was a film major, and he— while we were roommates, every single night, he would go out and work on film sets for free. And then I got another roommate, Joel Ackerman, who was a screenwriter and a comedian. And I said, will you take this script I wrote and punch it up and make it a good script? And so I took all the knowledge I had about selling stuff from serving a mission for the Church of Jesus Christ of Latter-day Saints, or Mormons. I served in Ireland getting doors slammed in my face for 2 years. So you, you become a pretty good salesperson selling the gospel and learn how to take rejection. So I took the skill set I knew from that. When I was younger, as a teenager, I sold Idaho potatoes door to door in Utah. to try to earn money. And I did pretty well with that. So I took those 2 skill sets, combined them, and built a script that was how to tell if you have bad breath.

I've talked to hundreds of entrepreneurs on this podcast, and I've got a bunch of takeaways, but one of the big ones, one of 'em that shocks a lot of the people out there who are product nerds, which frankly I am myself, is that oftentimes in order to turn something that's going kind of good into something that's absolutely amazing is to fix the marketing. not the product, and in particular fix how many people know about the product. That's like the big thing. It's called attention. Say it with me. Attention. And so this team at Starter Story, they put together a free guide. They call it the $1 Million Attention Guide. It's this pretty amazing 39-page document that's filled with 15 tactics to get eyeballs on what you are building. And so there's even a 30-minute recording from Pat, who's the founder of Starter Story. He has interviewed hundreds and hundreds of entrepreneurs, so he's able to put this together through a bunch of research and experience. And so, if you're interested in getting more attention, which frankly you should be, everyone should be, then you should click the link below in the description or scan the QR code right here.

And there was a video on YouTube called Howcast. And one of their videos that had like 400,000 views was how to tell if you have bad breath. And you just take a tongue— a spoon, scrape the back of your tongue, and then you smell what's on the spoon. And then you can tell if you have bad breath, because you actually can't tell if you have bad breath if you just blow. Like that. If you can tell if you have bad breath when you blow, it is horrible breath. But just normal bad breath, you can't tell.

You need the spoon.

You need the spoon. And so you scrape your tongue, and that's because the tongue is the source of 90% of bad breath, which I found in studies. And so what happens is you're kind of like taking in all this raw data. You're taking in the Howcast video, the iJustine video, your roommate, your other roommate who's a writer, your experience from the last 5 years of selling potatoes and the gospel, and this tongue cleaner and understanding the tongue cleaner. And then you're combining it all into a video that is— now, I think even today, it's still considered one of the top 25 campaigns of all time on YouTube. And, and making a video that we spent $500 on, which Dr. Bob complained about at the time that we were spending too much money. But the— and it was $500 or $600. And, and we launched this video. And then I got my brother Neil, and I asked him to code up a site for it so we could actually sell these tongue cleaners. And, and then I set it up to where you could get a free one if you just paid shipping. And then we just charged as much for shipping as it costs to buy the board version. And it worked partially, like going back in time, I found a glitch in the system. And everybody who starts a business, you have to find your glitch.

Hmm.

And our glitch was, YouTube launched its ad platform a few weeks before that, or maybe a couple months. That's where the idea came. And we got on YouTube and we started buying ads. And those ads cost less than a penny per view.

Hmm.

So you go, you put $500 into making the ad. So the peak of OraBrush, you guys did what in like revenue or how many companies you sold?

I think we sold, I don't remember the revenues, but we sold, I think the company sold for about $10 million.

$10 million. Yeah. And so you're, and you know, you're just sort of stitching this whole thing together. Now I love the framework of you gotta find your glitch. The hard part, I think, if you're listening to that is, Well, that's great. YouTube ads are not a penny anymore. So that specific glitch is always changing, right? For different people at different times, different industries, whatever it is. Do you think you could kind of generalize any of the principles or behaviors, what to be looking for or what to do to increase your odds of finding the glitch or what to notice, what to pay attention to? What are the general principles that might apply to somebody who wants to do that?

Right. Obvious in hindsight.

In hindsight, it's always obvious. And so you're kind of finding a glitch in and of itself just with your product. Then the next piece is like, on a marketing front is look for things, for areas where you have attention from people that nobody else is paying attention to. A really good example, I was searching for a product, but I was using Grok.

Not Google?

So product, you said user method, you know, you want to solve a problem that you, you personally have and understand.

Yep.

Marketing, you said, pay attention to where other people are not paying attention or where the traditional players who are already doing this are paying— not paying as much attention.

Yep.

Maybe because in some ways it's a little bit of the innovator's dilemma. Maybe they're doing well or they've built their business and their team and their skills all around one channel that has been working for 10 years. And they might put 1% of their attention or 10% of their attention on this new thing. Exactly. But you could put 100. You could change the whole experience. To just work in that new channel, to just be optimized for that new channel.

It's like just getting somebody to use Claude Design at work can be really hard. And because of that, we are outpacing the Hollywood world because right now we're in the Hollywood space by leaps and bounds in speed of innovation, especially on a, on a distribution level, because we know how to use all these tools and they're not only scared of the tools, they're actively fighting the tools.

Right. Yeah, it's lowbrow to use the tools for them in Hollywood right now. I wanna ask you about, so another find a glitch, we're gonna jump ahead now. So we're gonna jump ahead to Angel. And I guess this is a little bit of a deep cut. So when I'm doing the research, I was talking to Ben and I was like, you know what blows me away? You did a project where You were tired of the way YouTube worked or Hollywood movies. They were using sort of sex, drugs, and rock and roll, you know, vulgar language. And so you created something that would, you know, almost like scrub that stuff out of an existing movie.

That was a product we wanted to exist. Yeah.

It was a problem you had. So check, you know, thing number one. And by the way, if you had asked me, I would've been like, what do you mean? That's not a problem.

Well, how many kids do you have?

I got 3 kids, so now I would agree. But that's it. And now when I go on YouTube, I'm like, wow, this is, uh, this is like, yeah, this is Vietnam. This is a danger zone.

Yeah, it's Vietnam. And, and not just that, if you go back and look at what we were looking at, Game of Thrones was at its peak when we started. It was called VidAngel.

And it's at its peak. And every single day when Game of Thrones would come out with a new episode, there would be within 24 hours on the torrents, a version of the episode uploaded without the sex, the nudity, the rape scenes. It was completely scrubbed. And there would be millions of people worldwide download the version without those. And so, we're looking at that and saying, not only do we want something like this for our kids, but what about the millions of people who are just saying, my teenager wants to watch this. I want them to be able to participate in the cultural conversation, but I don't want them to see rape scenes. And I'm going to use this torrent version. But that's completely illegal. And so what we're saying is, let's build a legal version of what millions of people are already asking for.

Right, but you're doing the thing again where I would say you're focused on that 8%. So the way that in your class, everybody said, well, no, I mean, almost everybody would wanna go buy this at Target. And you said, well, as long as there's enough people, that's the beachhead. We can get this thing going. So, you know, today when you say millions of people have downloaded the torrents, I guess millions sounds like a big number.

It's a small number.

But it's a small number. It's a very small— if you had talked to 100 people you knew about Game of Thrones, how many of those people would say, yeah, I watched the clean torrent version? You know, you almost would've gotten no hands in any average sample that you were looking at.

That's right.

But you do a good job, it sounds like, of paying attention to those signals, especially when it lines up with your values or, you know, the product that you wanna see, the way you want the world to be. And even today, when I looked at the— I was researching your company and, you know, you're public, so you have a— you have your data's published and, you know, you guys are, doing like $90 million a quarter, right? So we're talking about big numbers, hundreds of millions in revenue, yet you only have about 2 million-ish subscribers. It's not that many people, right? It's not that many humans compared to most things. And it's the power of a small number of people paying you, you know, $13 a month, that stuff adds up. And so that doesn't sound like an Elon Musk business plan, right? It doesn't sound like the makings of a huge business creating the version of like, if you watch with your parents and they put earmuffs on your ears for certain words and certain scenes.

Just like an automatic remote control.

Automatic remote control. Exactly. But you had enough conviction or just almost mischievousness to, to go ahead and do it. And then you found this glitch in the matrix where fast forward, you find this short film that you're interested in. And the thing I loved was to test it, you guys realized that you could just upload the whole 19-minute thing as a YouTube ad.

Exactly.

Like a skippable ad. They could have skipped it after whatever, 7 seconds or whatever it is.

Yep.

But you just said, well, let's just put it on there. Maybe it's entertaining enough that people will watch it and that'll give us the data, the signal. And at the end of the 19-minute ad, it's like, hey, if you've been watching this whole thing, crowdfund this and help us bring this to life.

That's exactly right. I remember, I remember somebody saying, why would you upload a 19-minute ad? And I said, even if only 3% of people make it to the end, if they're the ones that want it to exist, they're going to invest and we'll be able to make a TV series.

Is that just your brain works differently, or do you ask different questions, or like, do you have a rule about— I guess like, I want to get myself and my team to almost think in this kind of naughty way where you're not just playing a default game, trying to knock on the same crowded front door that everybody's doing and then getting stuck and not making progress. Like, where does that idea come from?

I had the opportunity when we were doing the ad agency. So we did Poo-Pourri, we did Squatty Potty, we did Purple Mattress, Lume deodorant, these billion-dollar brands. These are billion-dollar brands that we built from $4 million. Like Poo-Pourri, when we got ahold of it, I think it was doing $4 million a year. And Purple Mattress, they were almost bankrupt. Like one of the founders of Purple Mattress called me 2 weeks after we launched the campaign and say, wow, you saved our business. We were going to go bankrupt in like 3 weeks. And I was like, oh, we weren't going to get paid if we were successful. That's what went through my head. He was thinking, you saved us. And I was like, we probably wouldn't have been paid.

Right. We dodged a bullet.

Well, that's so counterintuitive. You're the advertiser and you're telling the platform, hey, let them skip after 5 seconds, right? That would sound— that sounds completely against your interests.

But it's the only way to get a long ad. There's, if I had said, Let me steal 5 minutes of their time for a Poo-Pourri commercial or a Squatty Potty pooping unicorn commercial, they would've been like, no, we don't want you getting in front of the content. Give me 5 seconds, and then I get 5 minutes. They're okay with that.

But I've earned it.

And how much ad spend do you think you needed to get to that $11 million?

$800,000. So it took about a little less than 8% of the total raise went into advertising it. And I explained to Dallas Jenkins, the director, I said, 'cause he was actually pretty upset about that. He was like, I thought you just do viral ad campaigns and you were just gonna raise the money and—

True, for free, basically. And I was like, well, how do you think we built Poo-Pourri and Squatty Potty? We spent money. And if you had gone to Wall Street and asked them to raise you money, they would charge you 12%, right? They'd charge you 8 to 12%. So we're actually right in that world, but we're just having to buy ads, which is getting you awareness on your project.

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We used other things like we had a friend named Derral Eves. He does— he runs VidSummit and he does The YouTube Formula, that book.

Mm-hmm.

And he knew a lot about livestreaming, so he set up his little switchboard, and we ran livestreams this time to raise money at the end. So, like, at the last 24 hours or 48 hours of the fundraising for the series, Dallas Jenkins got on and did this marathon livestream saying— and we— and then I had my team get together, and we made it to where Every single time somebody invested, we would pop up and say, this person just invested $100 from Idaho. This person invested this much from— and had social proof just showing up on the screen the whole time. And, like, we cracked the nut, and we were able to get our first TV series built for Angel, which was The Chosen. And then the job was, can Dallas make a good enough series? And he did. He crushed it. And that's— the series ended up being. I mean, I think it's right now today, it's a top 5 series in the world for television. It's got like 200 million people watching it. It's on the level.

What?

Yeah, there's 200 million people worldwide watching that show.

Unbelievable. I mean, how far in, how many seasons is it in?

They just finished filming season 7, 7 seasons. And that's the final when Jesus is resurrected. And it's just the 12 apostles going through, and they're gonna release the crucifixion at Easter time this next year. That's remarkable. It's no longer an Angel show, but it's on Amazon. We did the first 3 seasons.

You mentioned a couple of the other brands, Squatty Potty, Poo-Pourri. What was the marketing genius moment for each one of those?

Well, the first thing was just I had to like the product. So I'd give the team, The Squatty Potty, we went and tried it, tested it out. We're like, this is a pretty legit product. And we sold it. Or the Poo-Pourri. I went in the bathroom, used Poo-Pourri. It's a little spray you put on. I think almost every Airbnb on the planet has Poo-Pourri now.

You put it in before you go to the restroom and it traps the smell, right? That's the idea? Like, it prevents it that way?

It's essential oils that trap the smell underneath the water.

Who created that? That's kind of a genius invention.

Suzy Baptiste. I think it was her brother that thought of it, and then she took it to market. Yeah.

And she, she what, sends it to you? Cold email? What happened?

She was messaging me over email. I was finishing up OraBrush. She flew us out to Hawaii to meet with her. She was doing QVC ads, and they were doing like $4 million a year in this poop spray. And then I used it, and I came out and asked my wife, go in after me. Can you smell anything? And she's like, it smells good in there.

That's new. That's a new experience for us. Yeah,

that's a new experience. And then we created the concept with her. As I said, I think we can build something. So I brought back in Joel, the same guy who wrote on the other one, and we sat there for 3 or 4 days and wrote out the Poo-Pourri ad and had the concept between us of, we need to get a British girl, we're going to put her on a toilet, we're going to have all these juxtapositions where you've got this British girl, this cute— she's sitting on toilet and she's talking about pooping, which is totally just out of left field.

Right. Hey, can I ask you, you go for 3 days and you come out with this incredible ad that transforms the trajectory of the business. Basically, you make the brand, the brand happens. You know, that was a fork in the road moment. I think the trajectory was going one way and then you shifted it.

Yep.

And we all wanna do that. I, I've so many times have take the team, we're gonna get away, we're gonna figure this out, we're gonna do, we're gonna make some magic happen. And sometimes you do and sometimes you don't, but I'm always winging it when I go in there. I have, I have no idea how I'm supposed to be doing this kind of 3, 4-day camp to find a breakthrough.

Yep.

What do you do to, to increase the odds of a breakthrough? Uh, I'm assuming, you know, you pick the right people. That's a big part of it. But what, what else? What, what do you do?

Well, I think getting up in a cabin and locking everybody in with the attorneys, the business leaders, the— everybody who has to sign off, every stakeholder is inside that room, and they can't leave until we get a signed contract that says we can go into production. That helps because one is if they can be with the creatives, then the creatives can pitch them, and they know that they're on the same team because you're talking face-to-face. You can go back and forth for months and neuter a script by email.

Right.

Right.

And so we would build the structure of an ad, and you have to have your problem, your solution, your 3 elements and your credibility, et cetera, and your calls to action. this formula, which we lay out. I think we laid it out pretty well in Poop to Gold. And then, at the end of that process of getting the structure there, then the comedians come in, and they build out the humor and the premise. And so, getting comedians is always Like, as a marketer, I think if you want to be a creative marketer, comedians are critical to the infrastructure of a marketing company because they come out of left field. You just have to have somebody who understands well enough the formula. So, for example, I would always tell comedians, if your joke doesn't add to the message, which is way harder to do, and if it just comes out of left field, you just have to kill it. It either adds to the message or it doesn't work. And so if you notice in Squatty Potty, Poo-Pourri, Purple Mattress, every joke brings you a little closer to understanding what that product is and why you want to use it.

And you, do you, do you come in with a pretty solid idea or you just start off with, you know, a bunch of sticky notes on the wall? Do you have a process that you learned how to kind of like facilitate the creative flow of a bunch of creative people?

And do you think this is still the way you would do things now? Or was this kind of— there was an era where these kind of funny scripted YouTube ads of a certain length was a great way to sell product. Would you still be doing that, or would you be doing something completely different now?

We still do it to some extent. If you go watch Runner, there's a campaign that I think got 100 million views for Angel. Runner has Alan Ritchson, Owen Wilson, and we— and our team built a campaign with comedians, very similar process to Harmon Brothers, where It's a couple, this married couple that just keep coming back on Angel, and they're trying to figure out what to do for date night. And they're driving in their minivan, racing down the street to get to the movie. And they got their kids at home with a babysitter, and they have their 2 movie tickets. 'Cause Angel's model is, if you're an Angel member, if you're a member of the Angel Guild, there's about 3 million members of the Angel Guild, you're paying $20 a month, and you get 2 movie tickets to every movie that Angel releases. So your date night's covered almost every month.

Right.

And so they're racing through the streets, and there's, like, stuff blowing up around them 'cause the wife's driving, and they're talking about the movie and the program. And then they walk into the movie, and Owen Wilson's sitting in front of them. This ad campaign, I don't even think we made it a public one. It's just unlisted. But I think it had 100 million views. Somewhere around 100 million views. So, so we still do that. But then in support around that, because these are totally different than Ouroboros. Ouroboros, we were just like $500 a day. You hope to get $1,000 and eventually you built it up to millions. And then over a several-year period, we had a $10 million business. When you're launching movies in theaters, you're launching a $10 million business from scratch with a new movie every month. And so these are $10 to $50 million businesses, $100 million businesses sometimes. And you got a 90-day period where you launch them. I mean, the Hollywood world and the movie theater world is absolutely bonkers. It's like taking an entrepreneur— just think about this as an entrepreneur because your group is entrepreneurs.

Think about taking and every single month launching a $10 to $50 million startup. with $5 to $20 million in ad spend in 90 days, and then just running teams year-round, launching every 4 to 6 weeks. That is the business that we're in now. And it's just bonkers. But those ad campaigns still work when we have something complex to share. Meaning the concept of 2 movie tickets, to the Angel system is— it's somewhat more complex than just, go watch this movie. But then outside of that, we're running— like, if you go to Solo Meal, it came out in February of last year with Kevin James. It's a rom-com. It did about $25 million in the box office. Solo Meal is set in Italy, and there's an art teacher named Matt Taylor, and he teaches kids how to paint. He teaches art. And he gets engaged. He's going to Italy to get married, and he stood up at his wedding in Italy. And then it's just super funny how he's dealing with this, 'cause it's Kevin James. Kevin came up with this idea where he said, why don't we just make Matt Taylor a personality on Instagram and TikTok? And we're just— I'm gonna be Matt Taylor. I'm gonna go, and I'm gonna teach art classes. Oh, my God. I'm just gonna do Instagram videos where you watch me paint something for a few minutes, and then I'll talk in the background, like a Bob Ross-type character. And he said, what if we do that, and I'll push the movie by being the character in real life? First, we said to Kevin, this is a great idea, but it's gonna take an enormous amount of work. Can we have a team come live on Long Island with you, and that's all they do is produce this Matt Taylor character? Wow. So, we send out a team to Long Island, and they're living with Kevin, essentially, just cranking out social media posts. And then we started warming up Kevin James's face. So what a lot of people don't realize is what you type into a video is trying to give the algorithm some direction on where your video— what your video is about. But what really is mattering what your video is about on social media these days is what images are in the video. So right now, if our video— if our faces end up on social media, it's going to recognize TikTok, Instagram, YouTube are going to hash our faces into the algorithm and say, this face is now part of this video. And if I have any other videos with my face, it's going to recognize me and say, Jeff Harmon's face, Jeff Harmon's face, and then put related videos. It doesn't need to have my name in the video. And so Kevin went and warmed up his face by taking older things he had done, and he was reposting them and doing some things to warm up Kevin James's face. So he was getting himself hot in the algorithm. Hmm. And, and then he's trending. And what we do is we took and said, okay, Matt Taylor launches fresh channel. Nothing on it. But the TikTok algorithm and the Instagram algorithm and the YouTube algorithm recognized this is Kevin James, and this face is trending elsewhere on the system. And so the moment we launched those, they started going viral because people that were— people who had been watching Kevin James videos started getting served Matt Taylor videos.

Is this also somewhat of the mechanism for the Andrew Tates and the streamers, Clavicular and others, where they pay these mass armies of clippers to chop up their livestream content? So they're getting, you know, thousands and thousands of pieces of content. They're paying like $1 million a month to these kids to clip their videos and put them online. Are they kind of doing the same thing, sort of warming up?

They're trying to warm up their faces, yes. And they're trying to find a viral clip. You kind of like today, one of the main strategies you can do is you're taking swings at bat. For Kevin James, we probably cut thousands of videos to try to get a few of them to go off.

Right.

What is going on? Yeah.

Yes. But the concept here is, is you take and you use the algorithm, and this takes an enormous amount of creative juice. It is not easy to have something break out organically.

Right.

And the funny thing about the Super Bowl is literally he got on the, he got on the Megatron, like he ended up on the Megatron. And that campaign never talked about anything commercial. It's literally just Kevin James with flowers. And so people had to figure out what the heck it meant while it was getting hundreds of millions of views.

So a lot of times people after the podcast, they'll reach out to me and they're wondering, hey, Same with Sean. How do you meet all these amazing entrepreneurs? How do you find all these stories? Well, I have a hack. You see, I actually have a community called Hampton. It's a community for entrepreneurs doing at least $3 million in revenue, although we do on average something like $25 million a year in revenue. We have the founders of DoorDash, of Figure, of Bluechew. All these amazing companies are part of Hampton. And what's interesting is because of the environment in Hampton, which frankly is very similar to My First Million, we have a very unique, high-trust environment. When people apply and go through this vetting process, they're put in groups of like eight or nine other entrepreneurs, and they get real about everything that's going on in their life and in their business. And sort of like when people listen to MFM, they get inspired to come up with new solutions for business. That's what happens in real life in Hampton. It's life-changing. And so if you're a founder of a startup that does at least three million in revenue, and you just want to go ahead and pull forward five or ten years worth of success, then check it out. The URL is joinhampton. Again, the URL joinhampton.com.

We should explain. So Angel, you— the, the short version of the story is you felt like there was a need for, or desire— you had a desire for a different type of content.

Our content is the antithesis of nihilism. Nihilism is basically like you get to the end of Game of Thrones and everybody's a bad guy. There are no redeeming characters. Everybody's bad. Even the one you thought was good, she ends up just being a bad— she just turns into Hitler or whatever, right? And then you get to the end of almost any major HBO movie, and at the end, it's like, oh, there's no good people in this movie. There's not a single good person.

It's all darkness.

It's all darkness. That's nihilism. Nihilism is just, there's no purpose to life. Everything's terrible. It's all— we're just gonna end in the cold heat death of the universe, and there's nothing after that. Ours is values-based. Values-based is what Disney used to be. And a subset of that is the faith audience. There are people who believe that want faith content that has faith in it. And we do twice a year at Easter and Christmas, we push faith content pretty hard.

Okay.

Then the rest of the year, we're pushing just values-based content, Westerns, action movies like Runner with Alan Ritchson and Owen Wilson. If you watch it, it's packed full of action and explosions and everything. But then when you actually think about it, you realize there's no sex in it. There's no strong language in it. Nobody ever commented on this. Like, if you go read the reviews, it's certified hot on Rotten Tomatoes, 90% from the audience, 76% from critics. Not a single comment that says, where did all the F-words go that used to be— that are richer?

I wish there was more vulgarity.

So you get a higher hit rate. Because you have— you're not doing focus groups, right? These are people who are members of the community. They're paying to be members of the community. So presumably they're kind of like market participants, more like a prediction market than it is a random, you know, a random poll on the internet where people don't really have much skin in the game.

It's the user method at scale.

Do you have a higher hit rate? What's a normal hit rate for a studio and what's yours?

Our average— there's one study that said It's almost a year old, but we hit an average box office, according to that study, that's higher than any independent. The multiple's higher. Mm-hmm. Higher than A24's average, higher than— A24's done really well this year, so it'll be interesting to see if they catch us. But basically, every single independent, Angel hits the most theaters, the most locations for theaters, and the highest box offices of any independent studio. And we're top 10 in the US. For the last 3 years, we've been the top 10, in the top 10 studios.

Is your business a batting average business or a slugging percentage business? Meaning, is it more important to just not have flops, or are you really just looking like in investing for the 1 or 2 runaway successes?

Can you just explain the movie business? I don't really know the movie business. So let's take one of these. So you say $14 million, that's what it cost all in. That's the talent, that's the production, that's everything, the rights to the underlying content, whatever. Includes marketing costs or doesn't include marketing costs?

No, that doesn't include— we spent $40 million marketing that movie.

Okay, so you spent $14 million making it, $40 million marketing it, and then it generates, you said, $250 million.

$250 million.

That's the box office now. But, but the theater takes, I'm assuming, a big cut of that.

If you have a good distributor, they'll take half. If you don't have a good distributor, they'll take more. In our case, we don't take part of the other half. We take the bottom. We only take profits. So we split with the filmmaker the profits. Every other distributor is going to take between 12.5% and 30% of the other half.

And do you, um, and you, but you send your member, right? So let's say a member's paying $20, but you're sending them once a month to the movies. So is that like, do you, is that what it costs you? You know what I mean? How does that business work? I don't understand. Is it like MoviePass where you, one thing, is it a loss leader situation? What's going on?

It's, it's more like MoviePass in that we rely on some breakage, meaning the average person goes to 3 to 4 movies a year. So we just assume, Our average member isn't gonna go to every single movie, and so it balances out.

Gotcha. Okay, great. And so you make that money. Now you said you don't fund all these movies. You're not taking a bunch of balance sheet risk.

Yeah, this is something people don't understand about the movie business. Lionsgate only acquires, I think, 35% of their movie, or they only make 35% of their movies, and then most of their movies they acquire. So, every year, there's 1,000 movies, around 1,000 movies made by independent moviemakers. Every single year. Most of those never find a home. The vast majority. Like, it's an un— crazy number. But those are made mostly by very wealthy entrepreneurs. I've never met a billionaire that doesn't want to make movies. And I know a lot of billionaires. They don't— they all want to get in the movie business. And this isn't—

I'm not a billionaire, and I don't want I'm still trying to make a movie. So I don't think you're even underselling it from there.

Yeah, well, think about this. So that's where the 1,000 movies comes from, is that they're very wealthy people that are just taking a swing. They want to leave a mark, they want to make a movie, and they're not really as worried about making money on it at this point. They just— it's like art for them. Everybody has this in them. They want to tell stories, everyone. And so what the Angel Guild allows you to do is join about 3 million other people who are all paying $12 to $20 a month and make movies like billionaires do.

You're kind of like— you've built this, like, almost Kickstarter vertical mob, right? That's right. Of people who, who just like the idea of getting to have their say, getting to have an influence, maybe getting to, to put some money behind something. That's right. Kind of like fantasy football, but you're not doing what the billionaires are doing who actually own the teams, but you get to You get to play.

And so far, that guild, the Angel Guild, those 3 million people have paid out $300 million to filmmakers.

That's like their profit share, basically, you mean?

Yeah. The filmmakers get 50% of the profits of that guild, and Angel uses the other half to build up the guild.

So what I didn't understand, and maybe it's as simple as we're just spending a lot of money on marketing, you guys are public, you guys did a SPAC, And I was looking, it's like last year we lost $50 million, you know, minus $50 million in EBITDA, but you're not paying to produce these movies. And then you have these members who are paying you and you're just taking a profit share. So it must just be a lot of member acquisition or what are you spending all the money on? Or is it the marketing of the movies? Is that what's going on?

Marketing's a big piece, yeah. Yeah. Acquiring new members is not cheap.

Is this a good business? And what I mean by that is, that's a silly sounding question, but here's what I mean. Uh, you're an entrepreneur, you've been in, in the game. I've been in the game for almost 20 years as an entrepreneur, and I started all kinds of businesses. And I could tell you, like, some of them are knife fights, you know? I would say a DTC brand felt more like a knife fight. It's like, ah, terrible margins. A restaurant felt very much worse than a knife fight. I'm in the knife fight, I don't have a knife in the restaurant business. And, uh, and then some businesses are beautiful businesses, recurring revenue, good margins. Once you figure one thing out, you just keep, you know, you get a flywheel with that advantage. How is the movie business?

Can you tell me what's going on? Like, I guess, again, I'm a bit of an outsider. I'm a business guy, I'm a tech guy, but I'm not— so I'm not closely following Hollywood, but teach me a little bit about what's going on. So what is A24 doing that you think is maybe smart or interesting, or what their approach was, why they seem to be having a different result? I've seen also like Thomas Tull, I feel like came into the industry as kind of an outsider and did some interesting things. I guess tell me who you think has done cool or interesting work. Get me inspired, get the business nerd in me inspired into somebody who did something.

A24 is really interesting 'cause they've built a strong community. Yeah, the AAA membership where you can sign up and then they followed us and actually started giving tickets to people who are AAA members. I think the most interesting group probably is Crunchyroll.

Okay.

That's the anime subscription? Yeah, they have 20 million subscribers and they're just focused on their niche. Like we're focused on values audience, they're focused on anime, which is a really, really big niche.

I mean, 20 million is a massive number. What is that in revenue? 20 million?

I don't know what the revenue is because I don't know what the membership cost is.

Even if it's like, you know, whatever, even if it's $10 a month, I mean, we're talking about—

I think they're kind of the top of the tier 3 streamers. The Crunchyroll, you have like MGM Plus and you've got Starz and you got these groups that are in the tier 3. Tier 4 is like Pure Flix, Daily Wire, That kind of a world. And then we've, we've just recently moved into the tier 3 streamers and they have tier 2, which is your bigger streamers.

Like Paramount Plus type of thing.

Yeah. And then you move into tier 1 is Netflix and Disney Plus and Apple. Apple might still be in tier 2, but I think Crunchyroll is super interesting. Um, I do know, so I went, I went on an interview with Rick Rubin, the producer, the music producer. And I did a podcast with him, really interesting podcast. And he told me, I've been watching this industry for a very, very long time. And he said, I don't think I've honestly ever seen anything totally different until Angel. He's like, everybody else is some version of the previous stuff. He's like, you guys are different from top to bottom. You're not doing anything the same.

I heard you have a personal vibe coder. Is that right? You have a guy who just vibe codes for you? Is that true? That's amazing. That might be the best plug item I've ever seen.

I basically got to the point where I would vibe code products, and then I would get stuck because I'd get pulled outside to meetings and to fires and to different things as an executive in the company. But I love building out the prototypes of the products. And I just asked, I was like, I need a person who just can take it from there and just go to the next step. And then eventually, once we get something like a little experiment that we've been thinking about to product market fit, like an MVP, minimum viable product, then we will turn it over to the product team, which can build something that will scale and get bigger. I

It's been super helpful. I've been able to get things prototyped that I never would imagine, tools. Because what I was doing before that is I was— I would stay up late, and I would get a plan made for Claude, build out a plan. And then I tell Claude, like, I get as far as I can and say, run this all night. And then— Right. We— our team has built harnesses for every single person in the company so that there's a harness There's both a brand guide harness for Angel that sits inside of our code systems so that you can take any, any, any model, whether it's Claude or GPT or Grok or whatever, and you hook it to the harness, and then that harness goes through and does all the checks and makes sure that you're not breaking the rules of the system. And so what I do is I end up vibe coding till I break something, and then the engineering team builds a new harness. to fix what I broke. But I, at night, I get to the end of the evening and I have a plan and then I just launch the agents at that plan and just leave my computer running. And then I find myself even like in the Tesla, just having it self-driving and then I'm overwatching it code while I'm driving. 'Cause if I shut the laptop, it will stop. And so I have it hooked up to my hotspot on my phone and then I'm just like clicking continue, continue. Well, that's the worst.

I set it up before I sleep. I wake up ready to see it. And it's like the very first thing is like, could you allow a— do you allow me to open a browser?

It's like, yes, yes, open the browser.

What? You've been stuck on that all night?

So you just switch it on bypass everything and get dangerous with it. But a couple of things you learn is one is these are machines. They're not humans. Like the veneer of it feeling like a human wears off really quickly. And you realize this is definitely a machine. But number 2 is they kind of blow your mind all the time, just of what they're capable of doing, similar to any type of engineering feat. You just go, wow, this is, this is very impressive.

What's something you've had it build that was cool?

I had it build a system where I can just test trailers and scenes of movies. And run them like to where you can just send out links to friends and family and A/B tests like trailer A, trailer B, trailer C. And if you send the link, it will just randomly give them the trailer, a different trailer, and then you just gather data and then find out which ones are working.

That's pretty cool. I like that.

Yeah, you're multiplying 2 numbers together. Why would you want one to be smaller?

The ones who are cutting off people, if they're truly cutting it off because AI is coming into play, that's a short-term play where you're just cutting costs. Like, you're almost like a company that's cutting costs right before an acquisition. You're not building long-term value the same way. If you, if your company is getting to a point where because of AI, you need to hire more people, that's when it's the right time to hire because this AI has made us so much more effective when we've broken down so many more walls that we need more people to service what we're doing and to build. That's when it, like, that's what's going to be happening all over. I don't, I don't believe for a second that we're going to have a massive— Layoff. unemployment because of AI. I just, it doesn't make sense on an economics level.

If you were going back to talk to a room full of people like you, so younger you, what message would you be trying to get across?

Right.

Right.

And so after listening to him, I went back to my brother Neil, because we were thinking about whether or not we should sue for this this amount that was owed to us. And it was significant to us because we didn't have any money. And Neil had been in the Bible, he flipped it open, and it landed on the verse that says, if a man sues you for your cloak, give him your coat also. And so between my mentor saying what he said, and then my brother seeing that, I was like, okay, let's just let it go. And letting that go, changed the trajectory of my life. Just letting go what was worth probably a couple million, a few million dollars, letting that go and just going after new ideas and having an abundance mentality allowed me to focus on the things that helped us build a big ad agency. If you're the golden goose, you're gonna lay more eggs. And you can be— and so you just keep pushing and don't, don't take the idea that, oh, this will be my only thing. As soon as you switch gears and say there will be more things, you're gonna get more things and you're gonna have more opportunities and you'll break through.

I love that. Jeff, thank you for coming on. Thank you for sharing the wisdom. Thank you for sharing the stories. I appreciate you.

Yeah, thank you.

I put my all in it like no days off. On the road, let's travel, never looking back.

All right, let's take a quick break. I want to tell you about Marketing School. It is a podcast that is part of the HubSpot Podcast Network, and it is run by Neil Patel and Eric Siu. And these guys are both marketers who are running businesses. And so if you want real-world tactics from practitioners who are actually out there in the field doing it, this is the podcast for you. Check it out wherever you get your podcasts.