Episode 37: MrBeast a Billionaire? Facebook's Insta Purchase Just Keeps Getting Better. And which Hollywood Celeb snubbed Adir at a Super Bowl Party?
The guys discuss the rise and rise of MrBeast, take a deeper look at Facebook's now legendary purchase of Instagram and guess which Hollywood Celeb snubbed Adir at a Super Bowl Party?
Hard work > natural talent
It may or may not surprise you that Adir only went to two-thirds of his high school classes (and still studied medicine, though he didn’t “waltz” into it), while Adam didn’t miss a day of school. Their contrarian views of attendance led to a plaudit party on hard work versus natural talent.
Adir recalls a story about Des Hasler, coach of the Gold Coast Titans in the NRL who spent most of his playing career with Manly. After one premiership win, he was the only guy back on the practice ground the very next morning, running laps to get ready for the next season.
The idea of “hiring for attitude” is bandied about (although Adir doesn’t think you should hire a brain surgeon based on attitude), but one thing that can never be discounted is the desire to work hard.
Three Dr. Shiffman quotes you can write in your commonplace book:
On hiring CEOs: “The most important starting point for me in hiring a CEO is: do I think that a significant amount of their own sense of self-worth will be tied to the performance of this business?”
On being a bad loser (in a good way): “The champions, in my experience, are bad losers. And they get angry and they cry and they smash locker rooms.”
On where to draw the line with competitiveness: “There is some balance between having to have the fire in your belly and social acceptability.”
A whirlwind of brilliant discussion
The guys jokingly say in this episode that the newsletter is better than the podcast, but what ensues in the first 45 minutes of episode #37 is a brilliant whirlwind of intelligence and not something that can be easily captured in written form. So here are some bullet points to help guide the journey.
ICYMI, a Greens senator threatened Woolworths CEO, Brad Banducci, with six months in prison for contempt of Senate.
Why Rupert Murdoch is a dying breed of business leader and the challenges Elon Musk faces in doing whatever he wants.
Adir: “For elected leaders in a democracy, I think there are three Ps they should have in mind: principles, policy, politics. You decide what your core principles are -that's what you believe in. You use good policies to try and strengthen or enact those principles. And you only use politics to get and hold on to the power to do those things.”
Why ASX 100 business leaders are no longer voting liberal.
Whether Adir could get two publicly listed companies to appoint Adam as a director within the next month.
Adir’s 15 minutes with 2024 US presidential candidate, Robert F. Kennedy Jr: “He was the most charismatic human being I've ever come across, maybe the best looking human being at the time I ever came across.”
The problems with COVID vaccines for younger people.
The concept of the 130% GDP cliff: when your debt is more than 130% of GDP, in almost every instance (Japan is somehow the exception) your economy is stuffed.
Future major wars and what the US versus China translates to in chess terms.
On the US: “I think you can't be a superpower and believe in isolationism, or big wars start without you and then you have to join them late.”
The rise and rise of Jimmy Donaldson
You might’ve heard of Jimmy Donaldson. He goes by MrBeast and he took over as the most successful YouTube creator from PewDiePie in 2022. He’s 25 years old, has over 550M social media followers, brings in over $700M in revenue each year, and his videos generally get over 100M views, which leads to several millions in revenue through ad revenue and sponsorships. He also launched his own chocolates range, Feastables (as well as a bunch of other products), which sold 1M bars within the first 24 hours. Most of his videos could be categorised as do-good-for-views, so everyone must love him, right?
Adir: “I hate everything about what MrBeast does. Everything on like ideological and moral grounds… you look at that and you say, yeah, that seems like a really charitable thing to do. And I look at that and I say, it's total exploitation.”
On the contrary (hence the name), Adam respects the fact he’s built an incredible business. “From a purely business perspective, I respect the fact that his success has come on the fact of being able to understand the YouTube algorithm better than anyone else, really. I don't think his content is amazingm but that's fine. I think where his skill is in marketing.”
Adir thinks there needs to be a line that says it’s not okay to get people to do stuff by offering them lots of money, film it, and then make even more money out of it (“one of my most hated things is when people pretend they're doing things for altruistic reasons when it's solely for overwhelming self-interest”), but Adam hates Lamborghini and the fact people spend a million dollars on cars, so if there’s symbolism or art in smashing one for views, what’s the problem?
So, which celebrity dissed Adir?
Side story: Adir was at the 2013 Super Bowl in New Orleans as a guest of the NFL. He attends an after party hosted by Mark Cuban and is cheering for Justin Timberlake performing on stage when he gets shoved by his wife, Jessica Biel, from behind.
How did this even come up?
Jessica Alba, founder of the Honest Company, (whose “journey resembles the trajectory of jumping off a cliff”), had a stake worth over $100m at IPO, but now the company is worth much less. She left her executive role in the business and the company is no longer allowed to use her name and likeness, which further impacted the valuation, which demonstrates the risk of having a celebrity heavily involved in a brand.
[Picture me drawing a mind map of discussion topics as I transcribe this podcast each week 😅]
Facebook's Instagram purchase just keeps getting better
For the first time, Meta released a breakdown of their revenue and what surprised a lot of people is how well Instagram is doing. The brand’s revenue went from 11B in 2018, to 22B in 2020, to 32B in 2021. So if you calculate Instagram to be around 30% of Meta’s total revenue (or 40% of its total valuation, given its growing faster than the rest of the business), that means Meta’s valuation of 1.3T has Instagram worth around 500B - or 500x what it was purchased for.
Meta shares are also up 5x since November 22. At the time, Adam was bullish on WhatsApp, bullish on Instagram, bearish on Facebook, and believes “that's one of the great acquisitions of our lifetime. And one of the great business stories as well - the Instagram story and this growth, as much as we sort of love to hate Facebook in many ways.”
Five other stories worth following:
Tesla slashed prices for its Model Y, Model S, Model X, and Model 3 cars in China by ~$2k following similar US cuts. It also shaved $4k off its Full Self-Driving software in the US, and had to recall all Cybertrucks due to faulty accelerator pedals.
“The Tortured Poets Department” by Taylor Swift (who Adir may or may not pay to see if given the opportunity), had 300M+ streams on Spotify on Friday, making it the first album to hit — and then exceed — 200M streams on the platform in a single day.
The US took a big step towards banning TikTok from American phones as the House passed a bill requiring a forced sale or ban of TikTok within a year. The bill is expected to get through the Senate as soon as this week and will almost certainly be signed into law by President Biden.
After the public bashing of the new Humane AI pin, a new wearable computer was announced at a TED Conference last week. The Iyo One features two large earbuds, custom-fit for the wearer. It can augment sounds from the real world, while responding quickly to voice queries.
Profit margins at Woolworths could be pushed lower as the country’s largest supermarket retailer lowers prices to catch its smaller rival, Coles. Both Coles and Woolworths will provide third quarter sales updates next week.