The real reason influencers are rich | #20

Transcription

Daniel: Mark Wahlberg is invested with us. James Corden's invested with us. Paris Hilton and Christina Aguilera. We're going to be the most valuable ad unit on the internet these days because linear television is declining. On Spotify, like, I just skip, skip through if it's on YouTube, I skip, skip through. Paris did it, so Chris Hemsworth did it. Chris Hemsworth did it, so Peter Jackson, director of Lord of the Rings, did it. Sophie Turner, George R.R. Martin. Matt: My favorite is the bullshit to get a photo with Griffin. They'd be like, well, my kids love you. Like, you don't even know that the kids love him. Like, there's just like this dad that wants a picture and you're like, just ask for a picture. It's fine. Like Griffin's happy to do it. Sandman's very handsome. He's not done yet. I know that you know that. Daniel: The way that people market themselves on LinkedIn still has a long way to go. Griffin was posting so much and ended up like on the front of NBC Sports for so many days in a row talking about the horse that he moved the odds of the horse by 60%. He screwed up the odds of the horse on all of social media. That might be the finest line out there is being promotional. Matt: Hundreds and hundreds of billions a year is spent globally on conservancy, but no animal has ever come off the endangered species list. That's a really contentious point that we will only talk about off air. This is a whole show here. Marshall, great to have you on the pod. Daniel: Thanks for having me. Daniel: Excited for this conversation. So your story is pretty unconventional. You know, you started off at Goldman, eventually moved over to Warner before deciding to start a VC fund with TikTok influencers. Tell us a little bit about that. How did that idea even come to your mind? Matt: It was, I think about this all the time and obviously it's a conversation that comes up with investors and friends. And it was like a confluence of events, right? Like at Warner Media, I was there for the AT&T acquisition. So it was Time Warner was becoming Warner Media in front of me. And the goal of that business, the goal of like what we were doing there was to write checks into businesses and then show like a way that we could integrate that business. If we invested in FanDuel, could we integrate FanDuel in with Bleacher Report if we invested in Whoop, which we invested in later at Animal Capital. Could I get, you know, a friend of mine, Matt James, who was the Bachelor at the time, to wear a Whoop on camera. And time and we invested in Crunchyroll, which is an anime only streaming service. Can we bring that to the OG HBO Max in its first iteration now, seven, eight years ago. And the answer just kept being no. We were writing great checks. I had this amazing team and, you know, folks that I was supporting and that were supporting me. And when it came time to go down to the business lines and like effect change, there was no one that was interested in affecting that change. Daniel: Like the folks at Bleacher Report are there to manage their own P&L. The folks at Warner Brothers that are producing our reality shows. I still say our, like it's. I think that like Goldman, we, that they teach you, like, you don't do anything. There's no eyes. It's we built this model. We did this presentation, but our team at Warner Media that I haven't been at for six years was amazing, but they, they each managed their own P&L and they had to worry about what their own bottom line was. And so when I quit, you know, I had other job offers and opportunities to go do what I was doing at the NFL and the WWE and at a couple of different family offices that had a bit more of a media spin. And like, I think if you'd told me my 22 year old self that those job opportunities were ever going to be presented to me, I would have been like, yep, done. Like that's my career now. But I think that ultimately like finding, realizing that the only way that this was going to work was if I did it myself was why I started the business. I got really, really lucky. I reached out to 3000 people. And ultimately a friend of mine encouraged, it's its own long story, but a friend of mine encouraged these TikTok boys to respond to my DMs. And yeah, I actually do see that message. And Griffin Johnson, who I know you guys know, you replied to me and got on, got on the phone with me. And we ended up on zoom together. Daniel: And within just a couple of months, we were, I helped him close, you know, his and the other guy's deal into Poppy, which was successful. And now it's funny because we've seen the whole cycle and they've made, like, we actually made money from that. We did Magic Spoons. Similarly, it's gone through the cycle and we don't do a lot of consumer now, but obviously the time like that was most of what influencers really stuck their noses into. And that model seemed to work. People were interested in writing a check because Griffin Johnson, because Noah Beck was interested in those businesses. And so I thought that there was a wider business model. We were probably working together for 90 days before I called a lawyer. His name is Vijay Lala, and he's at Manat, but we've worked with him every single day since. And he's like, kind of my work dad is my lawyer. And we put the documents together and literally as of the day we're recording this, I don't know when this is gonna come out, but it'll be next Friday will be five years to the day from when I signed the Animal Capital formation documents. So this is like the longest chapter of my career, the most important part of my career. And we've raised funds. We've deployed almost a quarter of a billion dollars into almost 100 businesses, and, you know, the paper value that's been really successful and we're starting to send money back to people, which I think in this market is somewhat unheard of. Daniel: So I'm really, really, really proud of what we built, but I always say that, like, it's about like the friction of your hard work creating like some fire that you're unaware of, like in some other place. Like, none of this was circuitous. Like, none of it exactly makes sense for like being in the right place at the right time, but if you just keep working hard and realizing what the problems are with what you do do, you'll find a business model that works. People have, you know, friction all the time that creates a relationship and even like a relationship like this that you don't you don't know what's going to come from it and you have to kind of open your eyes every day to that. Matt: Love that. I'm curious to ask you, Marshall, when a lot of people are doing advertising for businesses, like a Magic Spoon, they're doing Facebook advertising and you have this cost per click. But when you're getting Griffin Johnson to do a TikTok about Poppy, you can't track the, you know, when that person saw the Griffin Johnson TikTok and went to Target and bought the candy because of that TikTok or can you and how are you tracking these metrics? Daniel: It's a really good question. It's actually something that we talk about all the time because Inherently, Griffin's more expensive, right, than a Facebook ad or YouTube ad. And very famously, like my partner is in the golf creator space. Daniel: And we found that when we do get involved, we don't expect those immediate returns. Like, it's not like we get in and just start seeing results right away. It's over the long term. We're looking at that sixth, seventh impression. And Matt, you're in on this with me too. You know how it is like grasping what's real return versus just a vanity metric, right? Matt: Absolutely, Daniel. It really is about building a relationship with the audience, not just hooking them at the first sight. And I think what you're highlighting here is crucial. Especially in the consumer space, where the decisions are more emotionally driven and less transactional than in other markets. Daniel: Exactly, creating a brand presence and having that consistent messaging is what we found builds that credible consumer base. And it can be frustrating because it means staying patient and playing the long game rather than looking for quick wins. Matt: Underdogs, which is the real money gaming and fantasy business, trying to think there's a couple other Sundays for dogs is a spectacular dog food business. It's doing over a hundred million dollars revenue a year. When we write them a check, so I'll use Sundays as an example. We wrote a half a million dollar check to Sundays and they were doing $7 million of revenue about three years ago. This year they'll do over a hundred million dollars. We estimated that 40% of our dollars, so that's $200,000 out of $500,000 is just going to turn around and go to an agency. And of that, 90% of it's going to go to Meta or go to YouTube. And that sucks. And so how can we help our portfolio companies do something different? And so one thing that we've done for years, and I think it's what we've built our name brand on is access to celebrities that are just going to make it easy for you to activate. Like, not too many managers, you don't need to be on the phone with Griffin's mom, even though Griffin's mom is lovely. But just quickly, like, can we do something quickly where we're not having to track everything that you're doing and can we do it in high volume? And so we've even gone so far as to buy a couple of interesting Instagram pages and TikTok, YouTube, Snapchat, Twitter, so that we can own some of the audience and actually create that relationship. Daniel: So for us, it's going to continue to evolve because that ad unit, the, the, the, the GJU, the Griffin Johnson ad unit, that's going to be the most valuable ad unit on the internet these days because linear television is declining. And the way that we interact with our ad supported streaming services is also declining because on Spotify, like I just skip, skip through, if it's on YouTube, skip, skip through, or I'll spend the extra dollar when I won't watch it. So knowing that thoughtful integration is going to provide real value is the most important thing that we can provide, at least for our portfolio companies, is just thoughtfulness. Sorry, that's a long answer to your question. Matt: No, that makes sense. And I think that really shows the value you guys add too. Yeah, well, I just also wanted to say congrats on the five-year of Animal Capital. It's a big milestone. And just want to go back to that. You said 1,000 messages that you sent in the very beginning. I can't imagine what those early... Can you just sort of go back and tell us a little bit more about, like, you know, what was that experience like? Who were the people that you met along the way? And obviously, like, some of your business partners now, I'm assuming, you met during that journey. So we'd love to just hear more about that. Daniel: It was so crazy now, and it's the most awkward thing that happened, and it actually just happened again a couple of weeks ago. Daniel: I think a lot of people saw me do this, like, interview with Kate Max. Kate had just started to sort of get famous at that time. And so I had sent her a message. And then below that message, years later, she messaged me to have me on the show. And it was still in the DMs, like, right above. And I was like, oh my God, like, it's genuinely awkward. And so I've been really lucky to get the opportunity to meet many of the people that I sent messages to. I would say that my strategy was, can I reach out to someone for whom I'm going to be an interesting part of their day? If you're, I mean, we've had great people work. Like, Mark Wahlberg's invested with us. James Corden's invested with us. Paris Hilton, Christina Aguilera. We have wonderful, wonderful celebrity partners. But, like, I'm a relatively small part of their, like, investment pie and how they think about allocation. So could I reach out to someone for whom I might be slightly more structurally important, but also big enough that they might have an impact for me? So the goal was evolving TikTokers. So at the time, TikTok was brand new. It had just become, like, evolved from Musical.ly to becoming TikTok. So it was TikTokers that were heading towards a million followers. I think Noah was like the eighth person to reach a million followers on TikTok. So Noah was a perfect, Noah Beck was a perfect person. And then I reached out to a ton of Bravo celebrities. Matt: So the Carl Radkes of the world, the Ramona Singers of the world, Bethenny Frankel, and like people like people from Survivor, like Boston Rob, who like I like kind of like evolved past the shows that they were on. And it's been amazing and hilarious over the years to have, like, some of them actually follow me because they see what I do or we get a chance to work together and they still see those messages. And at first, I would go back and I would delete the message because now on Instagram, you could, like, highlight a specific message and delete it. I was like, it's too awkward. Like, I can't, I can't deal with it. And I don't do that anymore because I think it like shows who I was in that time and shows the level of hustle. And I think, like, even for some of them, demonstrates like how important that relationship really is to me because I've been looking to have them in my life for so long. Daniel: It's interesting if I just might follow up on that. You know, TikTok, like you said, was relatively newer at the time. I think these days, it's much more like brands, 100%. I think these days, brands are much more open to obviously working with TikTok influencers, things like that. So you were kind of early almost to that. You know, LinkedIn, Daniel and I spent probably too much time thinking and talking about it. Matt: It's also historically kind of been known as a kind of cringy platform to post on and Still is, although the direction we see it moving, hopefully one day, it'll, it'll reach the mainstream. But how did you, did you face any kind of like stigma or like, were people like skeptical because it's like, oh, you want to launch a VC fund? Daniel: Of course we did. I met, I met those guys and I, I don't even think it was, let me see, 10 minutes later. It was like two days later that they threw some party for one of their, their birthdays and had the mayor or the city of LA turned their power off and turned their water off. And it's like, you Google this, it's like all over the New York Post, like you can like find the articles of exactly what date this was. But I just met the guys. I'm like, oh, I might have a business. Like I, I've got these guys, like people are paying attention. They're on the cover of these different news publications. The next thing I know is their, their, their water and their electricity is getting turned off by the, like directly by the mayor. Um, and I was like, oh, okay. So like we're, we've got a bit of an uphill battle. And it was people, people turned us down. People turned them down and, and still do. And listen, like the, the, you know, it comes from both places. Like, I won't say that, you know, all the wonderful guys that I've worked with, like, it wasn't like their fault sometimes. Daniel: Like they were young and they were, had, you know, um, had exposure to, to money and people and fame in a way that is not always healthy for folks that are in their, you know, their late teens, but they rose to the occasion. And I think that people now view TikTok as an inevitable part of their advertising pie. And I think that, I think LinkedIn is along the same lines. I think the, the problem, the problem with LinkedIn today, and I don't think it's a problem for forever because I think they've added social features like stories and like all sorts of things, is the nice thing about TikTok is thoughtful brand integration. Like one of my favorite influencers, and I don't know him. It's just like a hilarious dance guy. His name's Jersey Joe. And he's like not getting canceled because I'm gonna pump him up here. But yeah, it's hilarious, and he's like pumping up some fried chicken restaurant. And like, he's clearly just promoting the fried chicken restaurant and dancing at the fried chicken restaurant and like throwing his hips around and being really silly. That's not going to work on LinkedIn. And so when people go on LinkedIn and they talk about, this is my new job, this is this big sale that we just closed, whatever, it's inherently promotional. Like it is, and not in a bad way. Like it's letting people know what you're doing and what you're up to and that that success might lead to future successes. And I think that's important. Matt: So it's, what does brand integration look like on LinkedIn that allows people to, it's organic. That it's, I am, I am promoting this thing, clearly I'm promoting this thing, but I genuinely believe in it. And I think that that hasn't made itself abundantly clear yet. If you were the CEO of LinkedIn, what would you do to try to change LinkedIn's strategy so that brand integration can be a better part of their strategy moving forward? Daniel: I think discovery is like one of the biggest problems on LinkedIn now. The way that your feed works, right, it's, it's mucked up with like people's long-form, like written posts. Like it, it's almost like a substack discovery more than it's closer to a traditional social site. And so, but I also don't think people have the patience for how it works today on other social platforms. So I don't think that there's the same, I'm not, today I'm going on LinkedIn with a purpose. And, you know, I think just because of the nature of my job, like I get a lot of LinkedIn requests every day. I go check it and similarly to this sort of like friction thing, like, you literally never know who's like totally real or not real. But sometimes amazing things come out of like, like accepting a cold LinkedIn request and then reading their message and saying, or summer and this summer, for the folks at home that definitely don't know, Daniel's brother was supposed to intern for me this summer. That's a really contentious point that we will only talk about off air. Matt: But my, my, our actual intern for this summer wrote me a really thoughtful LinkedIn message, like, like really well researched, not like AI gobbledygook, really knew what I was doing. And I, I didn't interview him. I said, Hey, I'm going to give you a project. If you do a good job on the project, you can have a job this summer and we, we pay all of our interns and he did a great job this summer and he'll probably come back next summer. So, um, it's, it, as a, a long tangent to say, people are on LinkedIn for a reason. Um, I think more people are going on, not for fun, but like to see what's out there in the world. But I, I think that there hasn't, I think that would be what I would tell the CEOs, like create a reason why people are coming on LinkedIn that's going to benefit a lot of them in some wide berth way that isn't hiring or, you know, human discovery, like, like kind of like a transient reason to be here, like a, a way to be modestly entertained, almost the same way that like, I don't, I'll shut up in a second, but like when I would get to Goldman in the morning when I was 22, I'd sit, sit down at my desk at maybe 6:15, 6:30 and I would open up the Wall Street Journal. I'd open up Business Insider. I think Business Insider is like kind of like trashier now, but like at the time it was like very much an important thing. Matt: Um, and I would click through like the most important articles, like see what's going on in the finance world, see what's going on in like geopolitical world. And just so I would be aware, so I was, as I was talking to my hedge fund clients, I just like knew what was going on. So that's news. Like I go on social media because I want to fully just entertain and like turn my brain off or like find a new product, like a new like outfit or something to wear, new golf putter, like it's usually what I'm doing on LinkedIn. So on Instagram, what is that thing on LinkedIn that's not just hiring or like seeing where someone works? Like what's, why am I looking at the, why am I looking at just the main home screen because I don't think people spend enough. Daniel: So is your main purpose hiring more than finding a new company that you might want to invest in? Matt: I have never discovered a company on LinkedIn that I want to invest in. That has, I'm, I think I've, we've invested in about a hundred businesses at Animal. I think I invested in 30 businesses before that, so 130. They've and they have come from all, all sorts of, I mean, I've had someone, true story, like actually stop me in the airport because I was wearing an animal capital sweatshirt and say, hey, like my kid was talking about you at dinner, like on their list, whatever. Like, I know this is so awkward. Can I just give him your email address? And it turned into a check from me. Like really, really, really impressive kid. Matt: And um, it's trickled into a bunch of other great relationships actually. But LinkedIn has not been it. And I think it's because the way that people market themselves on LinkedIn still has a long way to go. Um, it's almost like unhinged. I, I haven't been on a dating app in a long time, but like way back in the day, it was like a handful of photos and uh, and there, there wasn't even like a prompt. Like it would just say like, I'm six foot, I'm Jewish. I live in New York City. I live in this part, so I'm, I'm two miles from you and some photos. And then it became prompts. And then it became like voice notes that people send. So like that clearly worked, that kept that platform relevant. LinkedIn doesn't have an answer for that right now. Daniel: Yeah, it's uh, it's really interesting to see how LinkedIn has evolved, especially, I think it was last year, you know, when they started introducing video and they now have a video feed, but I've yet to meet anyone in my personal life who actually uses the, the video feed on LinkedIn. And, you know, we're seeing people that are testing more video content on LinkedIn, but at least from what Daniel and I are seeing, we're not really, it doesn't seem like there's a noticeable difference in engagement or that people are seeing like a significant amount of success using video. Matt: I don't think it's impossible, right? But again, even if someone puts something on there and they do have a good LinkedIn moment, I think it's the exact same way as an Instagram or Snapchat or YouTube years ago. But they get a couple thousand views, right, which I think we would all agree, like, that would be a, that would be a shit ton for someone on LinkedIn to get, right? Like that would almost be like a viral LinkedIn moment is to be in the four to five digits, not the um six to seven digits. They didn't come to LinkedIn for that. They did not open the website for that. And I think it's not, it's not just someone that there's almost like too much, maybe it's that there's too much going on. Like, because if I open LinkedIn on my phone, like, I don't use LinkedIn on my phone. It's not because I don't want to, like, I actually do want to, and There's, there's too much. Like I, like, I don't wanna read someone's long form posts. It's hard to click through and see what someone does that sent me a request with a message, like, and then some, I think some of like the premium paid features, I think also sort of turn people off because where those guardrails are and like where the paywall is, is pretty confusing to me. Daniel: Can you talk a little bit more about that? When you say where the guardrails are with the premium features is a little bit confusing, like, tell us a little bit more. Matt: Like when I started Animal Capital, it was probably like the last time I had, I paid for whatever it was, 35 bucks a month for premium LinkedIn because I was like, I got to find the family offices to invest in my fund or whatever. And I, I couldn't tell you, I'd have to go back and look and maybe I'll look before you guys post this, but I don't think I've ever cold gone from a LinkedIn relationship to an investor. Like I've certainly seen someone on LinkedIn, saw mutual, called the mutual, gotten them to connect us, and used LinkedIn in that way to be like, all right, well, there is some human connection here. We have six mutuals. Of those, two of them are close friends. Of the two, one is close to that person, and they're gonna put us on an email. Like that has worked, but, but you have to pay for premium to send messages. So you get like a handful of messages a month, I think for free. And as you guys know, I like to send a lot of messages, and I like to send a lot of personal messages. And there was no ChatGPT at the time. There was no like mail monkey, mail merge, LinkedIn thing to like mishmash together with ChatGPT to send out those messages. I wrote individual messages about people in their geographies and what I expected they might want to invest in. And my partner Dylan's done the same. And there's literally a number of messages you can send and then it cuts you off. Matt: And you can pay for more and it feels like, like a, if I'm playing um Like Candy Crush or something on my phone and you like run out of moves and they're like, for another dollar, you can, you can have five more moves. And I'm like, I'm definitely paying the dollar. Like, that's the same thing, but I don't, I haven't seen the ROI on it. And so I think that. They added years ago, they added uh skills, like endorse someone else for these skills, whatever. And like, I don't know, my, my best friend Natalie endorsed me for my Microsoft Excel skills, and I would tell you that my Microsoft Excel skills for an average person are excellent, for a banker, are very average. And like, that's not verified by anything. There's not a modeling test that exists. So I think that, like, There's all these like levels of qualification and verification that I think almost like muck it up. Like, just like, get rid of it. Like, just, like, just get rid of it, because people, we're invested in a platform that I would say is like definitively a LinkedIn competitor, and it's called Workweek, and it's specialized based on industry. And so they only cover a handful of industries. They're largely sort of like blue collar adjacent industries. So insurance, HVAC and commercial refrigeration, and they create these networks where it is an extremely high barrier to entry. Matt: It is a members only where they're, but they're reviewing thousands and thousands of applications monthly, and there's hundreds and hundreds of thousands of people that that use Workweek within their, their professional networks. People know when they open Workweek, and it's why the retention metrics on Workweek are so tremendous. I'm talking to people really in my industry that really get it. Like, as like a, I think you brought up a venture fund when you walked in, like, there's, there's a billion venture funds out there. I think there's something like 4,000 venture funds that have, that have successfully raised a, uh like a committed pool of capital over the last A handful of years, and we're gonna go raise our third fund. And so that puts me in a different distinction than other people. And like, not in some like, like sick way. Like it is. It is like a, it is a stepping stone towards no longer being an emerging manager. I don't necessarily like wanna talk to the guy that raised like a $3 million micro fund. But maybe I do wanna talk to the guy that raised a $3 million micro fund that before that was investing on behalf of like the Ron Burkle family office at, I think it's called Yucaipa. It's his family office. And it's like, there's just these distinctions that LinkedIn is trying to parse out that it's probably not even worth it for them to parse out. Matt: And I don't know how you escape that because you clearly do have an engaged audience and there are people that need LinkedIn. But that, that person isn't, there aren't enough of those to create a reason to be on there in more of like a social engagement setting. So I think we're working our way backwards towards like, like what an ad unit on LinkedIn might look like. And so like what a LinkedIn influencer might look like. And like, I feel like we gotta ask that. What's, what's your ideal LinkedIn influencer right now? Or how do you think someone can succeed right now on LinkedIn as a creator? Daniel: I think there's, there's apps out there, like venture-backed apps, like Intro that introduce folks to like a founder of some business like Alexis Ohanian backed it. So I think you can spend some money and talk to him. I don't know if I'm, I don't think I'm on there, but someone, someone at one point asked me, but I'm okay. You can just reach out to me on LinkedIn. And if you write a nice message, I'll probably respond. But there's stuff like that, that like, you sort of see what the, in state of what LinkedIn Influencer looks like. We talked before we started recording about a friend and a, and a portfolio company of ours, Platter, and Ben Sharp who like, it's very active. And I think that It's sort of like cuts both ways, right? Like I've been on Ben's ass and I don't mind saying this because I said it to him. Like, Ben, like I, I want some ROI from this time, whatever. Daniel: And Ben was able to show me sort of like, like I'm hosting, he's hosting consumer events at his house. It's intimate. There's 8 to 15 people that are sauning and cold plunging on Ben Sharp's roof. And he's converting customers. And as long as he keeps converting customers, I don't care how many, how many cold plunges he does during the day, but it What I think Ben is going for is interesting, right? It's aspirational. It's I, I'm a young, he's a young guy, good looking guy, you know, in good shape, but also actively working out. And he was like, I can do it all. I'm living this balanced lifestyle. I'm up at this time. And like this year's like big trend was that, um, that big like super jacked guy that was like, I'm awake at 3:45 AM, 3:47 AM. I'm already, I'm already in the gym. I'm upside down. Like now it's back to 3:44 AM. God, my time machine. I've gone back three minutes. I'm back in bed. Like there's, there's that aspirational thing of like how people like run their day. I'm like my, like my partner like does a lot of like what I eat in the day, whatever. Like that stuff's like a little, like probably the 1.0 of what a LinkedIn influencer needs to look like is It has to be aspirational. You come there because you see someone who's just ahead of you. Probably not Alexa Ohanian who founded Reddit and is way ahead of all of us, but someone who's maybe they're three steps ahead, not six, but they're also not one or two steps. Daniel: Like they're right in that place where it says, Okay, I can see, I can track a bit what they're doing and they're sharing with me what they're doing. But it's, uh, there was some statistic that someone just showed me that like brands are more willing to spend now with influencers, not on LinkedIn, but on Instagram and TikTok. Like 60% more likely to spend with people who have a full-time job, that aren't full-time creators because of the genuine nature of that. And so I think that's, that's the fine line people are gonna have to walk down is I'm aspirational. I'm showing you how I got to where I got to and then what I do during the day to be successful and what I do now to get to my next step to my next person, but I'm actually doing it. It's a pretty fine line, but there are enough people out there, right? Like, I, I don't know who would aspire to do what I do. I think what I do is, is fine. I enjoy it, but I don't know. It's like, I know there's other people that would, but let's say I like woke up and like showed people what I do during the day and like, I'll tell you exactly what I do during the day. Like I wake up at the crack ass of dawn at 6 AM because my partner's a creator and I want to help her make her videos. And so I'm, I'm up at 6, filming between 6:15 and 7:30. Filming is done. I'm in the gym at 7:45. I'm done. I'm done at 9. I've been working the entire time. Daniel: I've been emailing and catching up with people and also like doing a bit of like a value demonstration where I let people know, I'm awake, I'm working at 6:15. Like, what are you doing? And so everyone in the world will find out that I'm awake because I'll let them know. and then I have a, and then I have a regular workday that involves whatever the hell it involves. It involves a lot of flights. I'm on a hundred flights a year usually. I am Delta Diamond. I, I don't want people to treat me differently. because I'm at the highest tier, but I know it is diamond, but the interesting, it would be interesting to see if like, okay, great. Marshall, Marshall is 30 videos and showing what his day looks like, reality of getting to that place and what it looks like to be successful in that place. And I don't know how really successful, I'm doing okay. All right, we're invested in Commentier, so I'm gonna plug them. Commentier is a consumer coffee company. Is Commentier gonna come spend money with me now because it's like, well, Marshall's gonna post twice a week what he's doing all day. Let's see, let's have people try the coffee that he's drinking in the morning. And like, right this second, I have, there's like these like all these different new like pouches that like aren't nicotine, but are like melatonin and different stuff to calm me down, whatever. But I have a, right this second, I have a whip energy pouch in my mouth with 200 milligrams of caffeine in it. Matt: Like that guy was the CMO of Juul. His name is Richard Mumby, and he's awesome. But like, would whip spend money with me because like that's what I use for my afternoon pick-me-up. Would Lexus give me a car to go to the airport because like that's, you know. I think the Lexus mantra is the way you move. Lexus, the way you move. I don't know. We'll have to check after. But yeah, there's probably a market there, but that type of person is, it's just a lot more narrow. Like if you're, I'll stop there, but like, I don't know, like I, I think that that is, it will have to be shaped over some period of time. Daniel: And I think it is probably being shaped. That makes sense. And part of what we believe is that the platform will continue to grow. Maybe not to the extent TikTok did, but have similar big growth. What would be your hesitation to posting some content like you're describing? I mean, you've got, I don't know, maybe probably like 15,000 followers on LinkedIn before I check. Like that's 15,000 people who wanna know what you're doing every day. Matt: I, I prob, I probably get 50 ads a day and you like, like people adding me, but like, I don't, I post rarely. I'm not like a big poster and it's usually, no offense to anyone for whom I've done this work, it is usually because someone asked me to. And then every once in a while, I have like a, a real moment where I'm like, this is impactful. Daniel: Like at my five, our five year anniversary, I have been jotting some thoughts down about what's been important to me about considering making a video. Maybe I'll use all of y'all's equipment since it's all all sitting here. But my biggest hesitation is really the folks that like are icky. And we all know who those people are. Like it says, I'll use myself as an example. So I, because I'm only shitting myself. If my LinkedIn said Marshall Sandman, storyteller, podcaster, venture capitalist. And then you, and, and like, Dan, like, like, like Adam by Marshall Sandman on LinkedIn, you'd be like, like you puke on your computer. We all have so many people and some of them you like know. Some you went to high school with, some you worked with at some point in your life, you went to college with, you have some relationship with some of those people, and you're, you know immediately what that looks like. And they have some like long description about themselves and like what kind of entrepreneur they are. The, you know, I'm a senior marketer who's got a certification in scrum, blah, blah, blah. And you're like, I hate you. I've never met you. I don't know anything about you. It has nothing to do with your race or your religion or your sexuality, but I, I despise you. Like LinkedIn, I like, I'm like LinkedIn racist towards you and I hate it. Um, and so I think that that's, that's my hesitation is that that like, that is the finest on all of social media. Daniel: That might be the finest line out there is being promotional. And I, and I, again, brought it up three times. I'm like, I say this to my partner all the time. If you're out there and you're filming anyway, fucking do it. Like be crazy on camera. Enjoy it. Have fun with what you're doing because you're here. I don't think LinkedIn is the same. I don't think that that shamelessness that works really well on TikTok, Snapchat, and Instagram and YouTube will work on LinkedIn. I think it will backfire because like, I mean, my dad's on LinkedIn, like, and he is, he's, I love him. He's wonderful and a wonderful role model to me. But like he, people add him on LinkedIn because he's a real estate developer in Raleigh. And like sometimes his name's like, like, you know, Michael Sandman developing an apartment building, whatever. And people want to involve themselves in the project in some way and they'll add him. And like he just won't add anybody. But he's the meat of what's on LinkedIn. It's like, it's our, it's our dad. So I, I don't know. Do you know if your dad uses LinkedIn often or is he kind of? Matt: He'll use it to like try to vet someone. Like to try and figure out what they did. So really his only relationship to LinkedIn is, you know, Google's, you know, again, Google's Marshall Sandman, sees a couple of news articles, sees LinkedIn and is like, okay. Daniel: Three years at Goldman Sachs, you know, three, three, four years at Warner Media, four and a half years at Animal Capital, Cornell education from Raleigh. Like I, I've got nine mutuals with this person. I think they're real enough. I'm going to accept them. Or that's someone that. Email him cold. I'm going to respond, but that's, he won't then interact on LinkedIn. He then takes that interaction somewhere else, which by the way, I would think is like a huge problem for LinkedIn, is that they're actually a huge vetting tool for people, and then you take that interaction somewhere else. Probably my biggest use of LinkedIn, too, and I'm 30 plus years younger than my dad, and that is probably still my biggest use on LinkedIn, too. Matt: Yeah, that's so interesting. We were talking about this earlier, but LinkedIn lurkers is the term we've come up with for it. Like the person that, you know, if you checked their profile, you would think that they're not on LinkedIn that often. Maybe they haven't interacted with anyone. They haven't engaged in any posts, but, and I used to be like this when I was looking for a job in investment banking. They're on the platform. They're looking at people's profiles and they're using it mainly, like you said, as a vetting tool, but then they're not really engaging in any other way, which is just, it's fascinating. I feel like it's a problem that only LinkedIn has. Daniel: And maybe part of the reason is it's the most buttoned up platform and, you know, like you said, your dad's on that platform. Probably connected with some of your past bosses or your current bosses, people that you answer to. If my, it's the easiest way for me to picture it is picture my dad seeing a video of me or a long post of me going through my daily routine. And let's say that my dad was not my dad and he was just like a random real estate guy in Raleigh. And he was someone that was a prospective investor of my fund. Is that who I want to see me doing this? If I'm, even if I'm in, and again, maybe if I'm in marketing, like I'm in marketing at Anheuser-Busch, like, and by the way, like back in the day, like similarly to many of my stories, like I was desperate to work at ZX Ventures, which is Anheuser-Busch's venture capital fund. And they rejected me so many times and now like they love, we've had a really nice relationship now and I'm really glad they didn't give me a job because my whole life would be different. But like, maybe like that person who isn't worried about raising capital, like I don't think I could post something that isn't pretty serious, because if I'm, if I'm my dad and I don't know me, like, and I'm just like a separate potential investor, I can allocate my capital somewhere else. If I'm looking for, if I'm looking, if I'm a senior account manager at Eisnerampers, Eisnerampers are tax accounting services for annual capital. Matt: And they do a wonderful job. God, I wish they were paying me for this. That would be, or just a discount. Yeah. Um, but like if I'm, our person's name is Kayla Connivich. And if I'm Kayla, and I, she's really good at her job, and she's very senior at Eisnerampers, like a senior partner. She runs, she's like one of the people that runs the venture capital auditing practice. If I'm a few steps behind her, yeah, maybe I want to see what Kayla did to like differentiate herself with her clients within her firm and see how she runs her day or is also a mom while she does what she's doing. Maybe I do want to see that as a LinkedIn user, but if I'm at Andreessen Horowitz and I'm thinking about moving service providers and I'm looking at that, do I really want my senior tax account person doing that? Like using their time that way? And the answer is maybe. But if at best it's neutral today and it's almost certainly negative. Daniel: That makes total sense. And yeah, I can totally see it. And as you're gearing into this fund three, I'm curious why consumer is only, you know, 15 to 20%. Like you said of your business, you have this awesome asset and some TikTokers like Fortune 500 companies dream to work with. You know, on one hand, you don't want to have Griffin Johnson's feed be flooded with ads of animal capital companies, but how do you determine, like how many consumer companies you want versus not in that mix? There's so much talk about consumer as a sector, as a venture capital sector. Matt: And I think it's really because of what the in consumer relationship is to it. Like that is the only reason why is because your mom, your dad, your friend, your cousin, they all can, they all can get it. When Olipop gets whatever big investment from Pepsi for a bajillion dollars or Poppy sells or one of our investors founded Hugg Chocolate. And at the time that was the largest single asset CPG sale in history. And he was actually my client at Goldman when I was 22. And then he left Torbillon Capital to go start Hugg with his family. And then he exited and now he is an investor of ours. And great. His name is Jason Karp. We love him. He's spectacular. But it's because you, because you just get it. And so you say, damn, like if I really like that product, I should invest in it. But the reality is, is it's where this conversation started is you're in a marketing business. with really crappy margins. So unless you're- so Alice Chocolate just raised $8 million, and that's a product that I love. That is like it's like a sleepy time chocolate or like a morning focus energy chocolate, and I just love chocolate. So if you tell me like, you wake up, this chocolate's healthy, you're going to bed, this chocolate's healthy. I'm, I'm, it's like $30 for a little thing that I am, I'm your guy. Matt: But the reality is at a certain point, your shipping, your shipping costs suck, your marketing costs suck, your cost per click suck, and you need, you need a celebrity just to be in the game, is you need someone who's going to say, hey, I'm an equity investor, so I'm not taking your important cash off your balance sheet. I'm going to do a billion dollars worth of marketing. You need an animal capital who owns some of their own distribution to say, hey, your marketing budget for 2026 is $2 million. We're going to get you down to $1.2 million. We're going to be $800,000 of that, and we're not going to charge you anything. So that, that's where this starts. And so our consumer portfolio today in Fund 2 is almost entirely animal incubated businesses on the consumer side. So we started Trey Kennedy's wine business, which has fortunately been fairly successful. It's called Basic Sellers. It's great wine. We're going to have a very big Christmas season, but we founded the business. We found the celebrity. We picked the operator. We, we run the integrated marketing with the operators. We found the fulfillment. So you, you start with a disproportionate opportunity to success because our entry valuation was a million dollars. Your entry valuation to a business with Trey Kennedy's name on it any other time of the day, any other year ever, it's going to start at about $12 million. But my chance of success is just the same as the person at $12 million. Matt: So I just have to have a real venture-style exponential return curve on those assets. So we do one to two consumer deals a year where we own the entire process and everything else is software. But as you know, I mean, I think you spent some time with Noah, like we invested in Noah Beck's apparel business and it was okay for two years and we sold the business successfully. And they went on to do a significant financing. And it is five times as big as it was when we were iterating on it ourselves. But if we had, we invested at a $300,000 valuation. So we're up. We're, we're up, like we're up big in that. Again, no guarantee of what's going to eventually happen with that business. Daniel: But Oliver Dean at Sony again, who bought, who bought eFees last Christmas, so almost a year ago. He's taking the business. He's been very successful with it, but that's why we do it the way that we do it, because when we decide to do it, we are the chips from the middle of the table. We want it to be something that could potentially return the fund. So when you are investing in, you know, B2B or software for, you know, that 80%, are you then going to Griffin Johnson and Noah Beck and saying, let's make a TikTok about Workday or your- Matt: Yes, of course we are. Work week, not work day because Workday is another huge like workplace software automation tool. The answer is yes, all the time. Daniel: That is the best part of our business is that it doesn't matter that Mix Lab, which is a pet pharmacy, is not consumer-facing. So Mix, you, if your dog has, God, this is so dark. My first thought was leukemia. So I'm going to go with leukemia. If your dog has leukemia and is dying and needs drugs, you go to your vet. The vet prescribes you whatever, you know, dog cancer research drug that they're going to send you. Mix Lab fulfills it and it shows up at your house in a Mix Lab box. But you didn't choose for Mix Lab to send you the box. Mix Lab has a tremendously successful accuracy on fill rate, which means that what you expect for your dog to be getting, they're actually getting. Because your dog can't tell you that they still don't feel well after taking the Xanax or the dog Ambien or whatever. Extremely accurate fill rate. Business is doing really well. Where that business becomes really interesting is those vet clinics that choose to use Mix Lab. They are making a decision based on the private equity firm that owns vet clinics because vet clinics and private equity are so sexy right now. So who's going to go pitch the private equity firms but our sexy LPs. Paris Hilton, who has 10 dogs, Griffin Johnson, who has a couple of dogs. We have this group of people that care about their animals and they're happy to get on the phone with the private equity firm that owns the vet clinic that makes the decision about a service provider. Daniel: And that moves the needle in the millions and millions of dollars. And by the way, they never use their social media for it. And so that, that model for us has worked over and over again. And like Paris is, I mean, she's like, speaking of work moms and dads, Paris and her husband have been amazing supporters of our business. Paris got involved with Colossal Biosciences during their Series A. We had no animals. We had no viable embryos. And by the way, we had no money. That business has raised $550 million to date. It just raised it at $10.3 billion valuation. Paris put her name on that business and said, this is going to be the most important business to conservancy and biodiversity on planet earth. Ever. And it changed the nature of what our fundraiser is going to look like. Harrison did it, so Chris Hemsworth did it. Chris Hemsworth did it, so Peter Jackson, the director of Lord of the Rings, did it. And then, we went and got Sophie Turner, George R. R. Martin, which is part of the Animal Capital ecosystem. I can't take credit for George, but I can't take credit for Sophie. And so, these are not B2C businesses. These are B2B or B2B2C businesses, where their endorsement really, really matters. And they're happy to post about it on social media, but not promote it in the same way. Like, it's not a product or service. Matt: For the audience, and because I think Colossal Biosciences is a super fascinating company that you've invested in, can you just tell them a little bit more about what they do? Talk about this every single day, which I'm happy to. Daniel: Colossal Biosciences was founded by Ben Lamb and George Church. George Church is the father of modern genetics and synthetic biology. The idea was basically, again, about five years ago when we started our business, was we're going to bring back the woolly mammoth, and along the way, there's going to be a tremendous amount of successful science for life on Earth that matters. And so, as time has gone on, they have successfully reanimated and brought back the dire wolf. They've created, there's three of them. They're beautiful. They also had a litter of red wolf puppies, which is very important to me because red wolves are critically endangered from North Carolina where I grew up. So one of NC State's big research projects is actually to conserve the red wolf. But along the way, the business model, which is very, very clear, is hundreds and hundreds of billions and crossing a trillion dollars a year is spent globally on conservancy, but no animal has ever come off the endangered species list. So we presented a for-profit solution to a nonprofit problem, which is we are going to save the species that are still on Earth, still alive. These are critically endangered species. The northern white rhino, I think, is the most famous. Daniel: There are two of them left. They're both women. One of them is sterile, and they're both about to die. Colossal is the name partner. You can read a great National Geographic article about it, of the northern white rhino and conservancy there. So save the important animals that exist today. They're also, by the way, from a profit perspective, really important for tourism. The Arabian leopard, there's 60 of them left. Really important for tourism. The red wolf, there's 248 of them left. Really important for tourism. Let's spend some money with a for-profit business to solve a nonprofit problem that we have not been able to solve for 100 years. The sexy thing that people like to talk about is, when's the woolly mammoth coming back? It's coming. It's a few years away. It is five years closer than it was five years ago. We are on track for more animals soon. It's really exciting. Ben's done an amazing job. The CIA's venture arm invested. Jazz Ventures invested. Builders VC, which are both leading global biotech venture firms, invested. Draper Associates invested. But most importantly, we at Animal Capital invested. And so they're bringing back species from the dead, the woolly mammoth, the thylacine, the dodo bird, and the moa was the most recently announced. There will be other species, but those are, like, our keystone species that we're most focused on. And along the way, we will save species on Earth that are critically important to biodiversity. Daniel: And it's a really special business and one that we did. They're the equivalent of their pre-seed at, and it is now a decacorn mega company with a crazy new headquarters in Dallas. And if you ever get the chance to go see it, it's very special. How did you, I mean, we're talking about animals right now, but what was the original, you know, story behind the name Animal Capital? Were you always thinking that you were going to save the woolly mammoth and bring it back from extinction? Matt: I think I I don't think, the answer is no. No. Despite the fact that we're in Sundays for Dogs, which we've talked about, Mixlab, which is a pet pharmacy, which we've talked about, Colossal, which we've talked about. We're now talking with a very famous TV host who interacts with Discovery Channel, but another animal thing. But we are not largely focused on animals, despite the tilt toward it, the tilt that has occurred towards it. I think I have to give credit to my dad. Like, I remember during COVID being like, we got to come up with a name that's going to be awesome for 50 years and something that we can, like, go get the URL for that, like, will evolve with, like, the way that business has changed. And so our first fund was the Red Panda Fund because the red panda has been my favorite animal since I was a kid. The second fund, of course, after the early success of Colossal, is the Woolly Mammoth Fund. Daniel: We've not announced what our animal will be for our third fund, but I think it's, we pick the animals to adopt to the times. It has the dumbest thing that we spend our time at our office talking about is what animal we're going to put on our hats for the next three years. But I find it to be very impactful and important. Matt: Cool. So, love what you guys are doing at Animal Capital. And curious, as you look ahead into, say, the next four or five years, do you see more of these almost like influencer-led funds popping up as people realize how... Daniel: No. No. They popped up five years ago. Palm Tree Crew, Chantel Jeffries started a fund. The D'Amelios tried to start a fund that doesn't exist anymore. Mantis, I think the Chainsmokers guys, but like, that's not an influencer fund. The Palm Tree Crew thing turned into a very successful holding company. Logan and Jake, I think, talked a lot about it and then didn't do it. They hired someone that I know who ended up moving towards their like more product oriented. Matt: Because that's a Louisville, Kentucky. Daniel: There you go. And so I think the I think the answer is, why start a fund when you can join a great one? Like, I think that like the, the I'm sure people will do it, right? Like, this is not, I'm not the last influencer fund, and we are not an influencer fund. Like, we're just not. We have a spectacular investment team. We have a spectacular back office team. Daniel: We have celebrities that we talk to regularly about our portfolio companies, but they no shots at like Griffin or Noah or anyone else that works with us. But like, they don't make investment decisions. They, we just have a proprietary relationship and a financial relationship to encourage them to work with more of our companies. And if it's, you know, FanDuel versus DraftKings, but we're invested in FanDuel, then they'll probably pick FanDuel because they're working with us, whatever. And Underdog would be our sports betting equivalent. But I think that it's really, really, really hard to start a fund. And I think that people just like, don't see what actually happens or like the back office work that has to get done or the 90% of the time you're just talking to your investors and trying to keep them happy versus like out talking to new businesses, which is like what you want to be doing is helping your portfolio companies. So I think that celebrities have seen, I think it actually doesn't really start with venture. It starts with, if I'm a celebrity and I'm, I'll just use Griffin because I've used him as an example all day and you guys know Griffin. Let's say Griffin had $50 million in the bank. It doesn't start with his choice to be a part of a venture capital fund. It actually starts with his choice of a private wealth manager. Daniel: And so if he goes to a giant, super structured place like Goldman Sachs or JP Morgan, where they're extremely incentivized to keep his money on platform, then they're going to push him towards structured products at Goldman Sachs or Morgan Stanley or JP Morgan that are on platform to keep his AUM in the building. Would he maybe go to NKSFP, which is one of the most successful celebrity business management, you know, like a kind of private wealth adjacent business out there who actually find venture funds that fit their celebrities or are there great private wealth managers at Goldman Sachs, like a Justin Tuck or a Allie Carlino at Morgan Stanley and people that we love that have amazing celebrity clients to say, Hey, I know that our firm, our giant firm can't suit all the needs of these celebrities. Yes, but inherently there's a problem with private wealth of those large firms. And it's the reverse incentive to keep that money on platform rather than put folks with the right managers who are going to bring them the right level of success. Because just investing in another hedge fund or private equity firm isn't what the client wants. They want the diversity. They want something a bit more thoughtful. And so that's where that conversation really starts. And I think that that's getting more and more and more and more structured. I don't think it's going the other way. Daniel: So to answer the original question about influencer funds, like, yeah, there'll be some, but it won't be like it was over the last five years. There will be less and less. And I think that folks will be more incentivized to say, Hey, I'm not Say Alex or all, Alex girl, I want you to get involved with the venture fund. I'm just going to pick one that I really like. Like, I don't want the risk. Like maybe they'll give me a little carry in it. Like that's what I can bring to the table. That's a, that's a deal that it makes more sense for them too. Like it easier for like, they can spend a hundred hours on it and get three and a half percent or spend 20 hours and get two. Like it's, it's a better return on their time, I think. Matt: I think so too. One of the things I have to ask about before we end is the Derby horse, Sandman. It's been a long couple months. What was it like, you know, seeing a Derby horse in that rise to see your, your last name on the horse? And what's the story of it? Daniel: Sandman's a very handsome horse. He's very handsome. He's not done. He's not done yet. I know that you know that. I got really, I mean, it was a side quest that turned into a giant thing. Dear, dear friends of ours wanted to bring celebrities into their investment circle at West Point thoroughbreds. Daniel: It's a really thoughtful strategy, which was, I think the, I could be getting this part wrong, but I think the family, the Finley family provides like the vast majority of the money within the West Point thoroughbreds ecosystem. But then they syndicate out certain horses and we'll raise money against certain horses while they maintain the majority, but to enhance that investor group, they wanted to push social media. And so I'm doing the Finleys and we're doing for years and years. They contacted me. And next thing we do, we had a, you know, a horse that was going, we, he didn't win his, his premiere, his first race. He won a second, then he won the Arkansas Derby with He was a hundred derby points, so we ended up in the derby. As we weren't the odds on favorite, but then Griffin, who we did the horse thing together and Griffin led this thing and it's become his life, Griffin was posting so much and ended up like on the front of NBC Sports for so many days in a row, talking about the horse, that he moved the odds of the horse by 60%. Like, he screwed up the odds of the horse. Everyone's betting on our horses. There's no more value in betting on him and despite the fact that we loved him, we're happy to have people put money on him. Griffin's changing horse racing. I don't take any credit for it. Griffin gets 100% of the credit for it. I'm just happy that I've opened a couple doors and now it's something that we'll probably be a part of. I'll be a part of in some small way. Daniel: Griffin will be a part of in a huge way for the next 10, 15, 20 years. Griffin's already bought additional horses for the next couple of seasons, we'll be back at races. We're not even done with, we have the Breeder's Cup this year. We're not even done this year. So it's a fun side quest and it's, I think it's a place where, despite the fact that it's not an animal capital investment, even though there's a lot of animals involved, it does show the power of like what do you do. I think it's a really interesting example of this isn't because we wrote a check into a company. It's because we knew how to lend our name to something to create a star. And that thoughtfulness is something that's not going to be replaced soon. Oh yeah, I mean, when we were walking on the derby with Griffin, it wasn't just, you know, middle schoolers and high schoolers stopping him. It was moms. 6-year-old dads. Oh yeah, like we saw you at NBC Sports and they would do, my favorite is the bullshit, like, to get a photo with Griffin. They'd be like, well, my kids love you, but like, you don't even know that the kids love him. Like, there's just like this dad that wants a picture and you're like, just ask for a picture. It's fine. Like Griffin's happy to do it and he's the easiest, he's the easiest guy in the world. Matt: Yes, well, thank you so much for coming on, Marshall. And we hope to see you in Louisville with another Derby and hopefully this time a winner. We, we will be back. Daniel: We will be back in Louisville and we will win. Thanks for having me guys. Matt: Thanks. Awesome.