13 min read
Adam Neumann: The Spectacular Rise, Fall, And Rise, of a Unicorn
In The Blink of An Eye, Adam Neumann’s WeWork went from one of the most highly valued startups in history to losing three-quarters of its value.
I recently watched a YouTube video that reminded me of a movie scene from the 2006 comedy, Idiocracy.
For those who haven't seen it, Idiocracy is a quirky social-satire comedy portraying the life of an ‘average intelligence’ American called Joe, who takes part in a military experiment gone awry. Long story short, Joe is anesthetized and wakes up 500 years later where he is now the smartest person on the planet, by far.
Owing to centuries of mass commercialism and social media obsession fueled by short attention spans, everyone in this new world is now moronically stupid. This is a future where only low-intelligence people can procreate, resulting in a post-apocalyptic society full of gormless dumbassery of the highest magnitude.
The movie portrayed a low-IQ society in which the streets are piled high with garbage, simply because everyone was without sufficient intelligence to qualify as a refuse collector. The president of the free world was a porn superstar and Ultimate Smackdown wrestling champion. Gatorade flowed out of faucets instead of water. The only food available was McDonald's and KFC, and in this world, people flocked to the cinema in droves to watch the highest-grossing film of all time, a movie called Ass.
Ass was 90 minutes of nothing but a fixed single shot of a naked and quite chubby male posterior, breaking wind repeatedly. With each release of trumpet-like gas, the cinema would erupt in laughter as tears streamed down the collective faces of the easily amused patrons. One person even died of laughter.
At the time, of course, the movie was supposed to be a light-hearted satirical poke at how easily entertained we are becoming. With the benefit of hindsight, however, I fear the movie was in some way prophetic. I am not suggesting we now live in a world full of morons, of course, (far from it) but parallels can be drawn at the very least.
One of those parallels exists in the YouTube video I have just watched, created and released by Jimmy Donaldson AKA MrBeast, in which our protagonist films himself counting to 100,000.
That's all that happens. He simply stares into the camera, then gradually starts counting up to 100,000, number by excruciating number. Nothing else transpires. This is simply a guy on camera, sitting in a chair, looking quite bored, and slowly counting.
At first, I was reminded of the fictional Ass movie, seeing the endeavor as an incredible waste of time and questioning why anyone would draw entertainment from it. I noticed the view count, and gasped; people are so easily amused these days, I pondered. But then something strange happened; the idea started to grow on me as I rooted for him and found the whole thing quite funny. I was genuinely amused. So, it seems, were 26 million others.
One, two, three. Five hundred and sixty-seven. Fourteen thousand, nine hundred and twenty-two. Seventy-seven thousand and… Well, you get the idea. When he hits the magic number of 100,000 after 55 hours of soul-draining counting, the video simply ends and MrBeast presumably goes to bed. Again, I will repeat, the video has 26 million views.
The only mildly suspense-filled moments arrive when MrBeast almost forgets which number he is at. With his face suddenly gripped in panic at the prospect of starting over, his eyes dart around the room as he mentally grasps for the next number, before breathing a sigh of relief as he calls it correctly, and continues counting. Forty-two thousand, five hundred and sixty-three. Forty-two thousand, five hundred and sixty-four.
Bizzare, isn't it? But aside from being completely genius in its simplicity and also oddly entertaining, the counting video serves a very good point about content creation which can be applied to all facets of content and even business in general. That point, I believe, is this:
Thinking outside of the box is a default mindset for anyone in business and not especially unique. We all do it, or at least, we all should be doing it. Instead, (drumroll) imagine there is no box, to begin with.
Creators are constantly striving to adjust, tweak, enhance, and improve existing content narratives by thinking outside of the box, and with good reason: the creator economy is booming, with a market size of over $100 billion (as of 2021) and over 20 million people worldwide earning income from digital content creation. Gold rush might be the operative word, in an industry now on par with the gig economy.
But in such a competitive creative space, the result of this tweaking, adjusting, and outside-the-box thinking, is just similar content production but with a slightly different delivery and approach. The trick, as MrBeast frequently demonstrates, is to rip up the content creation rule book and replace it with your own.
His unorthodox approach was not limited to the now-famous counting video, however. A one-hit wonder he most certainly isn't. This young North Carolinian has amassed 31 billion views with a subscriber count of 123 million on his main channel, as of December 2022, making him the fourth most subscribed creator on the platform since launching his YouTube career in 2012.
The videos are mostly centered around stunts, games, and giveaways. Anonymous hitherto before 2017, the counting video was a jumping-off point for enhanced creativity and formula. Latching on to a new style of goofery, he began producing content aimed at high engagement through interesting, oddball events.
He followed the counting video with a similar stunt centered around laborious attrition: reading every word in the dictionary in one sitting. Another video had him saying “pewdiepie” 100,000 times. Viewer numbers began to increase and with it, so did MrBeasts creativity and production.
With YouTube revenue now hitting his bank account, he had funding to take his videos outside of his rather glub bedroom and create a spectacle, in one form or another.
In one video, he visited the same fast food drive-thru consecutively, 1000 times. In another, he filled his friend's backyard with 1 million Orbeez balls. Further productions show him building the tallest Lego tower ever built, or being buried alive in a coffin for 48 hours. All of these videos have astonishing viewer numbers. After grinding away for a few years without success, MrBeast had arrived. Viewers couldn't get enough of this oddball creator.
So how does he do it? Well, YouTube pays MrBeast quite handsomely for the staggering view numbers he acquires, and in turn, he puts a vast chunk of this revenue back into creating the next video. The cycle continues, and probably will ad infinitum because people simply adore this guy, who seems to have struck gold with his unique content approach.
For the unaware, YouTube is actually quite generous in terms of revenue share. In short, advertisers pay the streaming giant for ad placements, usually at the start of a video and quite often two or three times during it. A very healthy 55% of ad revenue is shared with the creator of the video. Through one single five-minute video, the revenue is obviously small - just a few cents, at most - but if your view count is in the millions, the dollar numbers are huge.
The combined cost of video production and prize giveaways are usually upwards of seven figures but despite this, there is sufficient margin through YouTube revenue and sponsorship deals to leave an extremely healthy profit, also in the seven-figure range.
And there you have it. The MrBeast business model: unique content, engagement, revenue, reinvestment, margin.
46% of Creators who have been building an audience for 4+ years earn over $20k annually across their monetized channels.
Jimmy's fame isn't limited to YouTube, with a steadily growing presence through various forms of digital and print media, having been plastered over numerous magazine covers like Rolling Stone, with regular appearances on prime TV shows like Jimmy Kimmel.
His business model also isn't focused entirely on profits, with a huge facet of the MrBeast brand appeal driven by philanthropy. To date, he has raised over $50 million for charitable projects and has given away over $10 million in prizes to participants of his various YouTube 'game show' episodes including a real-life Squid Game with a $500,000 winners prize. He once gave away a private island he had purchased, while a $300,000 Lamborghini might be considered one of his lower-value prizes.
What's interesting though is that success didn't happen overnight. After years of grinding away on YouTube trying out different content styles and reaping underwhelming viewing numbers, it was the counting video, of all things, that sent him stratospheric. In this ‘Evolution of MrBeast’ YouTube video, you can watch his steady evolution from initial humble beginnings, through to current star status.
Jimmy hasn't merely become a star of YouTube. He is YouTube, regularly making an appearance in the top five most searched terms worldwide.
Are there any lessons we can draw from MrBeast's formula for success? Maybe a few, and we should take a look. But first, who exactly is this guy, anyway?
Jimmy Donaldson, a native of Greenville, North Carolina, started his YouTube journey in 2012 while in middle school. Hailing from a typically average American family, he originally experimented with several video-making genres to figure out YouTube's algorithm.
Source: Screenshot of MrBeast, taken from Leon Lush's Youtube video
In addition to posting videos of himself playing games like Call of Duty, he created montage compilations of various funny videos (funny in the subjective sense, of course) and live-streamed his reactions to viral videos, among other ad-hoc, spontaneous ideas.
As a self-proclaimed introvert by nature, YouTube was only ever an interesting pastime. No grand plans existed for becoming the Elon Musk of YouTube (that specific ambition would come later). The whole thing was just a bit of fun, and nothing more.
Seeds of future stardom were sown and ambition thoroughly spawned when MrBeast uploaded a gaming cheat video that amassed big viewing numbers (relatively speaking). Surprised and inspired in equal measure, he began trying out different types of content to grow a channel and possibly make a living out of YouTube.
It was a slog, and he should be applauded for sticking with it over five years because, in truth, not much happened. Subscriber numbers constantly remained low, but he was regular with his uploads and posted almost daily with the belief that he would crack the algorithm and find a niche, sooner or later.
Eventually, he succeeded in hitting huge subscriber numbers, largely by inventing a new format that has since been replicated on a lesser level by copycat creators: stunt giveaways.
He would hand over thousands of dollars to random, everyday people in return for random, everyday exchanges, such as paying a $10,000 tip for a $20 Uber ride. 'Hands on a car' involved a group of randomly selected applicants standing around a Lamborghini with at least one hand on the vehicle at all times: the last person to take their hand off would win the car. This kind of thing makes for surprisingly intense viewing, but not without constant laughs, horseplay, and banter.
The premise is simple, isn't it? Success porn has become a highly engaging topic over the last few years, with viewers drawn into a world showing everyday people attaining staggering wealth, lured by the trappings of success that these creators are so willing to show off. MrBeast has ripped up the rule book and devised a new form of success porn in which regular people are a part of this success. The theme is less about his own wealth, and more about everyday people suddenly attaining it through various stunts.
With his main channel MrBeast cemented as a YouTube pillar from 2017 onwards, further channels have evolved in the subsequent years, each with a huge global following:
Subscriber Count (as of January 2023)
With a combined total of over 97 million subscribers on these auxiliary channels alone and an additional 50 million from his non-English speaking channels (such as MrBeast Espanol), MrBeast has over 250 million subscribers in total.
Think about that number for a moment. It wasn't a typo. One-quarter of a billion subscribers. There are entire TV networks, established for decades, that don't come close to this volume of viewership. Even the networks with big numbers can not boast the same loyalty that MrBeast enjoys from his viewership.
Networks have to work hard to keep their audience loyal. MrBeast just needs to build a Lego tower. Not for the first time in this case study, I will say again: the whole thing is almost quite bizarre.
MrBeast has grown from a quirky creator to a credible entrepreneur while retaining his man of the people appeal. He seems to have found that sweet spot of remaining loyal to his creative goofball image while verging into a broader range of businesses, driven by revenue and philanthropy. More on that, later.
With a full-time staff of upwards of 50, close to a quarter of a billion subscribers, and revenue pouring in from different sources, there are lessons we can draw from MrBeasts' success. We have already touched on one of them: innovation and the whole don't just think outside of the box, there is no box observation. MrBeast demonstrates this by constantly innovating, taking a leftfield approach to everything he does. He probably has no idea what a metaphorical box even is.
But what else can we observe?
Fifty years ago, Herbert Simon published a paper in American Scientist with a theory relating to expertise. His theory pointed to the game of chess:
“There are no instant experts in chess—certainly no instant masters or grandmasters. There appears not to be on record where a person reached grandmaster level with less than about a decade's intense preoccupation with the game. We would estimate, very roughly, that a master has spent perhaps 10,000 to 50,000 hours staring at chess positions”
Since then, a whole field of research has evolved relating to the simple observation that it takes, on average, 10,000 hours of dedication, practice, and study, to develop the skill set required to become an expert in something. Or rather, to give yourself a far better chance of succeeding with your enterprise, through efficient and diligent practice.
MrBeast struggled during his first five years as a YouTuber, between 2012 and 2017, trying out different content styles and strategies. He used this time wisely, figuring out the algorithm, analyzing viewer responses, and practicing, grinding, and persevering. Eventually, he would master the algorithm and find a winning formula, but it wasn't without five years of dedication to the cause.
The new brand enhancement strategy. Philanthropy is, of course, a noble endeavor, and plays a significant part in making the world a better place for those less fortunate. Charitable organizations are applauded for the good they contribute, and rightly so: the world needs honest, empathetic people who strive to make the world a better place through charity.
But let's be honest - philanthropy can also be used to enhance your brand and provide a unique angle in which you can contribute to the world, and serve your brand at the same time. If that sounds cold and slightly insincere, does it matter? It would be nice to live in a world where everything is done for the right reasons, but the fact is, we don't. Using philanthropy for brand enhancement and cementing a wholesome image is probably forgivable when the fact is, people are benefiting in some way.
MrBeast's audience is a loyal one. Rarely does celebrity come with so much broad appeal, and while his creativity and entertaining stunts play a huge part in that, his philanthropy has helped brand beast chug along seemingly without critique or negative appraisal.
Entrepreneurs can tap into this, and employ it as part of a business model that will help create loyalty and brand image by contributing a little good to the world at the same time. Win-win is a term that gets used too easily, but in this case, the phrase is quite appropriate.
“Philanthropy can often be the most cost-effective way for a company to improve its competitive context, enabling companies to leverage the efforts and infrastructure of nonprofits and other institutions.”
Source: Harvard Business Review
MrBeast has remained steadfast to a very simple growth strategy conceived soon after his famous counting video attracted big viewer numbers and the subsequent ad revenue that came with it. Given his young years, (he was still in his late teens when the counting video took hold), you would be forgiven for assuming he embarked on an extravagant, decadent lifestyle, considering the money that was flowing inwards.
But we must give credit where it is due. MrBeast decided very early on to use all of the YouTube revenue to reinvest back into the next video. If he made a few thousand dollars, he would spend the same on this next video. If he made $30,000, he would spend not a single dime less on the next production. This strategy continued until the figures reached seven figures, reinvesting everything back into the various videos along the way.
The strategy paid off. As the videos became more outlandish (courtesy of a huge production budget), more eyeballs would land on his channel, and he continued to grow. He did reach a point, of course, where he started to take profits, and these days, the balance is quite evenly split with around half of his revenue going back into the business, and half recorded as profit.
Currently, MrBeast spends around $8 million each month on video production, staff salaries, everyday business expenses, philanthropy, and various other projects.
A common failure among startups and even established companies is a lack of innovation. Blockbuster video, for example, had a colossal empire spanning hundreds of countries and billions in revenue. The product (VHS video rental) became antiquated as the world discovered digital streaming.
With a gigantic customer base to target, the digital revolution was Blockbuster's cue to innovate and enter a new market. Netflix’s innovation was Blockbuster's demise, and the empire subsequently crumbled.
Innovation is critical. We all know that, of course, but it is surprisingly easy to neglect innovation when protocols are established and business is good. Always strive to innovate, create, and expand. Be a pioneer, as frequently as you are able.
MrBeast demonstrates innovation by constantly experimenting and testing out new formats, content strategies, and approaches. Planting 20 million trees in the name of charity is not only a highly extraordinary feat but also a solid creative move in terms of viewer appeal. How can you not engage with such an ambitious, worthwhile endeavor?
MrBeast suffered failure for many years as he tried to crack the algorithm and attract viewers, but through failure came innovation, as he tested different strategies and tried new things. Failure is fine, almost an accepted part of any entrepreneur's journey. The key, however, is to fail forward. Learn from mistakes and failures, and use them to adjust your business blueprint.
A huge aspect of MrBeast's success owes to his international reach, stemming from a thorough, comprehensive global strategy that has never been previously aspired to, by any other successful YouTuber.
During the first six months of 2022, his total view count in English-speaking countries was somewhere in the region of 120 million. Conversely, over the same period, his view count with non-English speaking channels in various other countries amassed over 150 million views. This is a market completely untapped among YouTubers and with that, MrBeast again demonstrates innovation.
MrBeast goes beyond adding subtitles to videos, however. He created a team that deals specifically with voice-over dubbing and polished lip-syncing. Videos are often tweaked, modified, and refashioned to cater to the subtle cultural differences of each country he targets.
Global targeting is a powerful strategy for growth, tapping into international markets and producing additional revenue streams you likely never previously considered. There has never been an easier time for international business and while it might be a cliched term, the world really is a small place these days.
With a net worth estimated at $100 million, MrBeast is now seeking $150 million of investor money in return for a 10% equity, through a valuation of $1.5 billion. While that probably seems ambitious, it might be worth remembering that VCs regularly invest in billion-dollar businesses at the growth stage that are not recording profits.
MrBeast, conversely, reeled in over $50 million of profit in 2021 alone. He might be worth backing. After finding an audience and growing, YouTube creators rarely drop off the radar and MrBeast is no exception. He is more than simply a creator du jour, and I expect he will expand on this new zeitgeist he has created, applying the same creative philosophy to a host of other more tangible, non-video, profit-focused ventures outside of YouTube.
He already has, actually. Last year, MrBeast surprised his audience by announcing a new burger chain - predictably called MrBeast Burger - with 300 locations springing up out of nowhere, pretty much overnight. The premise is simple and born out of a franchise model; he supplies the recipe, branding, and customers (app-based ordering), while partner restaurant kitchens produce the burger. Like the counting video that spawned his incredible success, the idea is so simple, it hurts.
What sets MrBeast apart from most other YouTube success stories is that he wants to evolve beyond the platform, venturing into more tangible business projects. In a Twitter post earlier this year, he mentioned that he “wants to be like Elon Musk one day”, citing the Tesla and SpaceX mogul as a dream collaborator.
To attain status as a business mogul himself, MrBeast has been hard at work venturing into various other enterprises, in addition to the burger chain. Using his brand as leverage, he has recently launched Beast Games, a company focused on creating mobile games.
He is also dabbling in the confectionery business with Feastables, a chocolate snack company with a very definite Willy Wonka & the Chocolate Factory vibe about it. Last year he created Backbone One, a tech hardware company manufacturing and retailing cell phone game controllers, with early reports suggesting that the company is doing very well indeed.
With a strong grasp of how to best monetize a rather loyal audience, his merch store alone would put many established high-street clothing retailers to shame, with thousands of shirts, caps, and hoodies sold each month.
MrBeast may have set a precedent with his unique approach, as copycat creators spring out of nowhere and video production is taken more seriously. Profits are being reinvested in a wide range of videos by a broad range of creators and for the viewer, that's a good thing.
Rather annoyingly, there has been an emergence in shamefully voyeuristic philanthropy on social media, with low-subscriber-count creators making a huge show of donating $100 to random homeless people. Of course, that is a good thing, but there is a hollowness about how they do so, without the charm or good spirit of MrBeast's charitable efforts.
Who knows what the future holds? He has already hinted at emulating Elon Musk but that is a remarkably ambitious feat. Musk is a tough act to follow with absolute genius baked into his DNA; arguably, It is quite unlikely that anyone on this planet could ever emulate him. There are far worse role models to aspire to, however, and we applaud MrBeast for showing such enterprising passion.
Either way, this is a very capable, competent young man who is very likely going to create something even bigger. He can count to 100,000, we know that much. He can build a mean Lego tower. He can say Pewdiepie over and over. Entertaining horseplay, but a fragile jumping-off point if your end goal is to build a rocket ship or similar.
Stranger things have happened, however, and these are strange times we live in. Fun, exciting, and very promising times, but strange, nevertheless.
I just wasted a whole hour watching a guy counting to 100,000 after all - and so did 26 million others. Strange indeed.
13 min read
In The Blink of An Eye, Adam Neumann’s WeWork went from one of the most highly valued startups in history to losing three-quarters of its value.
10 min read
Please don't misunderstand my following point. If I were launching a new business and you offered me bundles of fat funding, it would be a cold day...
9 min read
If your childhood was anything like mine, you probably went through a collecting phase. Personally, I had an obsession with Star Wars figures and...