Doug DeMuro

YouTube ad money spikes at Christmas, craters in January

Doug DeMuro made $20,000 from YouTube ads in December 2016 and thought he'd made it, then made only $8,000 the next month. Ad CPMs surge at Christmas when advertisers spend, so December revenue badly overstates a channel's run-rate.

“And in December of '16, I made $20,000. And I was like, oh my God, like, this is a thing. I did not, what I didn't know was Christmas, the ad revenue is way higher at Christmas time. And so in January, I made like $8,000.”

Steal thisNever judge an ad-supported business by its December numbers; benchmark against a slow month like January.

Embed your own videos in someone else's big audience to seed an algorithm

DeMuro wrote $25 articles for Jalopnik, the most popular car blog, and inserted his own YouTube videos into them. The articles funneled readers to his channel, which fed the YouTube algorithm and built his subscriber base for free.

“I started inserting my videos into those articles and that drove the articles, drove people to the videos, which then started to put me in the algorithm, which then started to get me subscribers. And Jalopnik was paying me, I swear to God, $25 an article, which was not real money, but like the value was in the number of people coming over to my YouTube.”

Steal thisTrade cheap writing for a big publisher's traffic, but route every reader to a channel you own.

Review other people's cars to kill your inventory risk

DeMuro's early videos used his own cars, which capped output and tied up his money. Switching to reviewing other people's cars let him show up, film, and leave with no financial risk and unlimited topics, which is when the channel took off.

“And what the big switch in '17 was, I switched to doing reviews of cars and suddenly it was a lot less work because I didn't have to buy cars and then take on that personal financial risk. I would just like show up at a dude's house, film his car, and then peace out. And that was a video. And there was like no, that didn't cost me anything except like the gas to get there.”

Steal thisBuild content around assets you don't have to own; let other people supply the inventory.

A creator income can vanish in months, so hoard the cash

DeMuro argues creator income lacks the job security of a doctor or lawyer: a competitor can appear and bump you down the search results within a couple of months. Because he never knew when the tap would shut off, he saved aggressively even while earning a lot.

“Number one is you never know when it's going to end. And so like, I, yeah, I was making a lot of money, but you never know when suddenly a competitor shows up and it can happen in a couple of months and suddenly you're now third, fourth, fifth in search and things are slowing down.”

Show up with an audience: the moat that sank every copycat auction site

Dozens of car-auction sites launched after Cars & Bids and almost all failed. DeMuro's read: a great product isn't enough in a marketplace; arriving with a built-in audience is the decisive advantage, which is why his creator following justified his majority equity stake.

“And we learned that like you can make a great product and that's important. And we did that, but like having an audience, showing up with an audience is so crucial for the success of this. And that's what caused all the other ones to fail.”

Steal thisBefore building a marketplace, build the audience that will be its first liquidity.

Pay the first sellers to solve a marketplace's cold start

To attract supply at launch, Cars & Bids paid $1,000 for each of the first 50 cars listed and $500 for the next 50. The roughly $75,000 spend flooded the site with submissions and was, in DeMuro's words, the best money they ever spent.

“we would offer $1,000 for the first 50 cars on the site and $500 for the next 50 cars on the site. It was a brilliant idea. It was, it was spending whatever that works out to be, $75 grand or whatever, but it was the greatest $75 grand we ever spent because we got so many submissions right away.”

Steal thisBuy your first units of supply outright; cold-start liquidity is worth paying cash for.

Cars & Bids charges buyers 4.5%, sellers nothing

Cars & Bids monetizes its auction marketplace with a 4.5% buyer's fee and charges sellers nothing, plus newer revenue from shipping and car inspections. Inspections measurably raised both bid counts and final sale prices.

“Sellers pay nothing. Buyers pay 4.5%. And now we've got a few other kind of drivers of revenue as well. There's a shipping component. We just launched inspections, which is really cool. Sellers can get their cars inspected, which we have already seen increases the number of bids and the number of the sale price and everything.”

Why DeMuro sold to a buyer who 'specializes in creator-led businesses'

DeMuro ignored most acquirer outreach until the Chernin Group came through a friend and told him they specialize in creator-led businesses. That was the lightbulb: his big fear was a PE firm forcing changes on his channel, and a buyer who already understood YouTube removed it.

“but they told me the most interesting thing. I wasn't familiar with the Chernin Group, but they told me that they specifically work with creator-led businesses. And that was a huge, like, lightbulb moment for me because my big fear of working with any PE or VC companies, they're going to come in and they're going to say, we got to change this, this, and this on your YouTube channel.”

Creators should start a business before the audience leaves

DeMuro tells every creator he knows to start a business now, because an audience can disappear at any time. He built Cars & Bids out of fear and anxiety about losing his following, not inspiration, and treats the audience as a perishable asset to be converted.

“I give this advice to everybody I know, everybody in this space, all of my car creator friends. I tell them like, start a business, start a business, start a business. You never know when your audience is going to go away. Please like take your audience right now and start a business, do something.”

Steal thisTreat your audience as a depreciating asset and convert it into an owned business now.

Whistlin Diesel: the MrBeast of destroying cars

DeMuro marvels at Whistlin Diesel, a kid from rural America who films himself destroying expensive vehicles, off-roading a Ferrari, dropping a G-Wagon into a house, putting 20-foot wagon wheels on a Tesla, and reinvests nearly all his ad and placement revenue back into more outrageous stunts, MrBeast-style.

“I assume, I assume he's doing the same thing that MrBeast is doing where he's taking basically all of the money that he's pulling in from revenue and from, you know, placement, ad placements, and just putting it right back into doing more dumb crap. Like he dropped the G-Wagon into a house when he was in the G-Wagon.”

Flip CPM: measure views needed to earn one dollar

DeMuro never found dollars-per-thousand-views intuitive, so he inverted it and tracked how many views it took to earn a single dollar. A good video for him needed fewer than 100 views per dollar, a number he hit often in December when ad rates were strong.

“So I started calculating the number of views I had to get to earn a dollar. And so good for me was a video that broke 100 with the 100 mark. So less than 100 views to earn a dollar. Um, and there were, there were a lot of videos, especially in December when ad rates were strong, that were, that were pulling in that.”

Steal thisReframe CPM as views-per-dollar to make your ad efficiency instantly intuitive.

Private jet costs $55k where first class costs $1k

DeMuro assumed flying private would cost a few grand more than a $1,000 first-class ticket. The real quote, San Diego to Nantucket direct, was $55,000, which is why he still drives cross-country with his dog instead.

“I bet I can fly private for like, you know, $3,000, $4,000. I bet that's what it costs. This was me of, of, of, uh, naive Doug thinking, hey, it's probably only a few grand more. You know what, how much more could it be? And the answer is, I looked it up, $55,000 direct from San Diego to Nantucket.”

The McLaren F1 that went from $800k to $40M: a lesson in regret

Jay Leno bought a McLaren F1 for around $600,000 and still owns it. A fellow LA owner who Leno met by ringing his doorbell sold his a year later for $800,000, thrilled to have netted $200k, while Leno held; the car is now worth $40 to $50 million.

“And he told me that the guy calls him a year later and says, Jay, you'll never believe it. I sold mine and I made, I got $800,000. I made 200 grand.”

Steal thisWith truly scarce appreciating assets, the regret of selling early dwarfs the early profit.

Insuring a $1M Porsche costs about $1,000 a month

Asked about the insurance on his roughly $1 million Carrera GT, DeMuro says it runs only about $1,000 a month, less than people assume for a seven-figure supercar.

“Not as much as you think. I think it's only $1,000 a month to insure that car.”

YouTubers launching niche marketplaces: Doug DeMuro's car auction

Sam highlights car reviewer Doug DeMuro (2-3M YouTube subscribers) launching CarsAndBids.com, an auction site for vintage and enthusiast cars. The thesis: pair a trusted influencer's audience with a niche marketplace for instant credibility and distribution.

“He launched this site, it looks amazing, and he's already populated the site with, uh, hundreds of like fancy cars for sale. So the whole point is that it's cars that are vintage or cars that enthusiasts love. So like a 2013 BMW M5. It's not like a particularly expensive car, but people who love BMWs love this model of car. It's amazing that this guy built this.”

Steal thisPair a trusted niche influencer with a vertical marketplace and put them on the cap table for credibility plus built-in distribution.