Creator-Founders Actually Built Many of The Brands You Know Best Today
Creators have a massive unfair advantage in building highly profitable consumer products and brands. It's time to shine the spotlight.
In his early 20s, Will decided to skip the 'traditional job' path to create content instead. But after three years of the grind, he decided to bite the bullet and work for someone else.
A year later, Will was able to secure a deal with a past client to sell his products on his behalf. This new deal had enough money attached to enable Will to start a new company and stop working for someone else. This time he convinced his brother, Rick, to join his new startup as a co-founder.
Will's product?
Content.
And did I mention that Will's story takes place in the early 1920s?
By 1928, Will and Rick's startup was doing well. That big deal with Will's old client? It proved to be quite profitable.
That is until the client unexpectedly changed ownership.
The client's new owner (let's call him Dick) decided to squeeze the brothers for much lower fees.
Sound familiar?
The brothers didn't fold. Instead, they fought back and threatened to stop providing their content to Dick's company. But Dick ultimately had the upper hand. His new company had been granted exclusive rights to distribute the startup’s primary content in the contract Will had signed previously.
On the brink of failure (for a second time), Will came up with an idea for a new type of content outside the scope of Dick's dick-ish contract.
This new content was a massive hit with audiences almost instantaneously. And before long, this new kind of content far eclipsed the revenue from the old content.
Within a year, Will and Rick’s startup had thousands of raving fans. Over the next three years, their startup grew tremendously. So did their audience. Because of the sizable fanbase, the brand became super valuable.
In 1931, Will and Rick decided to scale their revenue using brand deals, effectively renting access to their audience and brand. And within three years, the brand deals far outpaced content revenue.
By 1955, Will decided to spin off a separate company. The spin-off company, while related, was going to compete in an entirely different product category — something tangible.
Will had learned much about their fans — what they wanted and, most importantly, what they didn't like. Will was willing to bet he could enter multiple markets successfully if he served the same fanbase (spoiler alert: he was right).
Financing the spin-off company was going to be a considerable challenge. Because they were content-based, Will's first two companies required little startup capital. But this new company would require a lot of money to launch.
So, Will used brand deal profits to fund his spin-off company. It took a couple of years of building and testing before it was ready to launch. Luckily for Will, the new spin-off company was popular with consumers immediately.
For decades afterwards, the startup used the same model repeatedly — taking brand deals and content profits to create owned products and services — to scale their company immensely.
Eventually, the startup would become an empire.
It would go on to create more divisions than can be quickly listed here.
It would even go on to acquire one of the very platforms (aka gatekeepers) the brothers used to plead with to air their content.
Fast forward to today.
The original startup from 1923 still exists.
Over 220,000 people work for this company today.
As of July 2023, the "startup" is worth almost $160 billion.
It is one of the world's most valuable companies by market cap.
Some sites peg this company's NPS score at an astonishingly high 73.
You probably know this company well.
And so do your parents, grandparents, cousins, nieces, nephews, and kids.
Any guesses?
You've probably guessed by now.
That's right… it's Disney.
"Will" is Walt Disney, and "Rick" is Roy Disney.
The "product" that was legally stolen by Dick?
Oswald, the lucky rabbit. Yup, I'd never heard of it either.
The new content that saved Disney after the Dick fiasco?
The brand deals that brought in more revenue than the content profits?
Licensing Disney characters to other companies to put on all kinds of merchandise.
The new company that was spun out in 1955?
The platform the brothers had to plead with to distribute their content?
TV network ABC, which they eventually purchased in the second biggest M&A deal in American history (at the time).
What did their audience-first mindset enable?
Millions of delighted kids and families. Generational wealth. A legacy.
How did they do it?
By using the content flywheel effect.
First, create content that attracts an audience. Then, your content, over time, turns that audience into fans. Fans then drive profitable owned brands and products. These products, in turn, also create new audiences for the content. This flywheel continues to spin indefinitely.
Amazon (and many other crazy successful companies you’ve never heard of) rely on this same flywheel effect every day.
So why spend all this time telling this story?
Walt Disney was simply a creator like many today.
He didn't have an MBA.
He struggled financially at times.
He had a passion for creating content.
He, too, relied on brand deals and collaborations for most of his early revenue, experiencing both the same highs and lows: relatively easy and quick money but also a lack of control and medium-term security.
Today, many creators — like Disney back in the day — are generating more individual wealth (and financial security) through owned products and services than through brand deals, collaborations, and ads combined.
Members of the Kardashian family didn't become billionaires through content, brand deals, collaborations, or ads; they became billionaires by creating owned products such as Skims.
Rhianna didn't become a billionaire through her music; she became a billionaire through Fenty Beauty, Savage X Fenty, and Fenty Skin.
There's a reason, Mr. Beast, the top-earning YouTuber, is focused on creating an owned products empire. Mr. Beast Burger. Feastables. And many more to come, I'm sure.
To be clear, it's not just the world's biggest creators making the owned pivot either.
Cassie Ho of Blogilates Fame has two companies, each generating at least eight figures in revenue.
Doug DeMuro, the car review guy on YouTube, sold his stake in the online car auction Cars & Bids (which launched in 2020) for a reported $37 million earlier this year.
Dani Austin started Divi in 2021, and the company is already reportedly doing eight figures in revenue.
Nor do you need millions of followers, either.
Plastic surgeon Dr. Amir Karam (around 400k Instagram followers) reportedly does six figures in sales weekly of his skincare line only through his Instagram audience (which would be annual revenue of at least $4.5 million).
So, just how are creators today building some of the best new consumer products and brands (and the most capital-efficient ones by far)?
Creators have two key advantages that no MBA or tech entrepreneur can compete with.
I call this the creator's unfair advantage. Creators have:
An audience to co-create products with (which results in products people actually want and a brand they love).
A ready and willing customer base to sell to for $0 dollars.
I've been working with tech startups for almost eight years. And 90% of Silicon Valley startups fail.
Most of the time, these Silicon Valley startup failures come down to either folks making a product not enough people want to buy (this is way more common than you think!) or crazy high marketing costs that drive them out of business.
To put it in other words, many Silicon Valley-esque consumer product companies fail because they lack creators' competitive advantages.
And yet, those traditional “founder” advantages? They can be gained much easier than your unfair advantage.
Enough MBA like-knowledge can be acquired without getting an MBA.
Product development expertise can be sought, and your audience is the key to successful products anyway.
Operational talent and partners who have top-tier experience in manufacturing, eCommerce, etc., can be found and brought on.
But building an audience?
That's the real challenge to creating highly profitable consumer brands today.
And it’s the asset that only creators have!
Remember, the Disney brothers were really just content creators too.
Their content built an audience.
Their audience built a strong brand.
Their popular brand made them more revenue.
Their owned products and services built the empire.
…
Editor’s Note: While I tried to base the story of Disney on facts (their Wikipedia page was very helpful), I’m sure I took a few liberties here and there.