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As the CEO of Kit, Nathan Barry has a front row seat to what’s working in the most successful creator businesses.
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A book does not have to make money to make you money. Eric Jorgenson, writer and CEO of Scribe Media. You done all kinds of things. The Almanac of Naval Ravikant over years after publishing. And it's honestly, it keeps growing. How many copies has it sold now? Pretty well over a million. You found yourself now running a publishing company?
I believe authors should publish their book with full ownership and zero outside creative control. I talked to quite a few authors who have done their first book. Traditional. If a book sells for $20. If you get $0.85, in the same way that you can build your own house, you can publish your own book. If you are a self-published author, you get dollars per copy.
Wow. Their position is to use the author to market the book, and our position is to use the book to market the author. Eric, it's good to see you again. Good to see you, too. I can't get enough, Nathan. Yeah, exactly. We're just hanging out all week long. podcast episodes between the two of us. But actually, you were on my show a couple of years ago.
You done all kinds of things, with, the Almanac of Naval Ravikant and other projects from there. We talked a lot about leverage. If you wish to go back, listen to that for sure. I want to start out with, like, the big life and business change. since we talked. And that is, you found yourself, now running a publishing company.
You like, brought this upon yourself? You know, no good deed goes unpunished. So maybe take us back to, when, you know, you reached out to, two other good friends of mine, Sieva and Xavier, and said, like, hey, there's, there's an opportunity here. Yeah. So from where we are sitting today, what what amounts to have happened is like an accidental hostile takeover.
But that was not I cannot overemphasize how much I was making this up as I went along. going way, way back. Right. Tucker. Max founded this company called Scribe Media about ten years ago. And, we'd been reading each other's blogs. Just kind of, like, aware of each other on Twitter. And then I got this opportunity also through Twitter to compile the walls ideas and build what became the almanac in of all.
And it was doing a decent job of sort of building in public. And so at some point I tweeted like, hey, I have a manuscript. I think, I'm not entirely sure what a manuscript is, but I have a document that seems like it might be able to be turned into a book. And Tucker was like, I'm happy to chat and show you what I know about the publishing industry.
So we get on the phone and, he was super, super helpful to me, like personally and professionally and getting that book published. And I ended up using scribe to do everything that basically went from, hey, I've got a Google doc to I've got a published professional book out there in all these formats. It's one of my favorite books.
Tim Ferriss asked the question, what's the book you've given away? yeah. Life. And, the Almanac is the book that I've given away. Oh, my God, it's. Thank you. So it's it's that good? That's incredible. Thank you. It seems to have, like, a viral coefficient to it, like a positive one. Because, you know, we're years after publishing it.
It's honestly, it keeps growing like it because people gifted to each other and it seems so, which is widely. How many copies has it sold now? All languages, all formats is now like pretty well over a million. Wow. so that includes some pretty big numbers in like, China and India and stuff, which, like you could say is a different category, but yeah.
Yeah. And that's was published late 2020. So yeah, a couple of half years it's going to sell and it's one of those books that'll sell for a long time. Yeah. I just basically think of the episode we did with Tim Grahl where he's talking about that his whole, his whole mission is to write a book that sells more copies every single year.
yeah. Out. So I think you'd be on track for a book that hopes of selling 10 to 20, 30 years from now. And I tried to think about that, at least indirectly, in terms of making it like, timeless and very applicable to every like I believe anybody on earth can pick up that book and get some useful idea out of it.
and so, you know, those are some of the ingredients of these, like, perennial sellers, but that's part of what makes it shareable is like, I've given it to people like my father in law, and he's actually retired to this. My yeah, he's like, what are you reading? And I'm like, oh, this is a great book. Yeah. Like you're you, you, you know, you can have it.
Enjoy it. It's enough of a generalist book that anyone can get something out of it. But the ideas are so deep that you can, like, watch that rabbit hole and make it very applicable to, you know, exactly what you're trying to do. It's kind of a pretty comprehensive new worldview for people that haven't gotten any of the, Silicon Valley ethos, you know?
So it's a lot of like it. Look for areas of leverage, take personal accountability, win win partnerships, long term orientation. And then he combines it with these really deep reflections on happiness, which, you know, there's a lot of business books out there and there's a lot of happiness books out there. There's not a lot that actually take a hard look at the trade offs between the two.
so I think that speaks to a lot of people in the tension they feel between, you know, trying to figure out a have what they think they want and be happy along the way. Okay. So you published the book Become Friends with Tucker. yeah. And then where things go from there? Yeah. I had a great experience, publishing the book basically immediately started on another one with biology, because I had so much fun writing it.
And so I was partway through publishing that book with scribe a few years later, and I got an email from an author buddy of mine named Jimmy Soni who was like, hey, what's going on at scribe? I was like, nothing. I was there like two weeks ago visiting people. It's all good. he's like, no, no, something's I think I think they just shut down.
And I was like, no way. Like, that's no way. and so there was a lot of smoke and rumors started flying and like, all these crazy things started happening and, like, they had had this huge layoff, because the company basically had run out of cash. And that's all we knew at the moment. And I was like, I know people who buy companies, servers, if you're a friend of mine, like, I've been in front of rent shorts for a long time, and so I understand at least a little bit at that.
Like if a company is shut down or it needs investment, it's just had a huge layoff, like there's still value there. And it's not necessarily like all gone. so I called the CEO and was like, hey, what's going on? Say we're looking for new investors looking for new ownership. It's like, all right, let me make some calls.
And Xavier in particular has like worked in publishing before. So he kind of was excited about it, knew what they were going into. So they got on a plane and they flew to Austin and they were they kept me in the loop a little bit, as it were, like doing due diligence on this, this acquisition. And there's a lot of like, hey, good news, bad news, kind of phone calls.
What ended up happening, it seems, given what we know now, is basically like Tucker and Zach had started a great company. It had been cash flow positive. It had grown over the years. And then they both basically late 2022, sold their shares and went off to do their own things. Tucker is like a rancher. yeah.
Now he's like raising sheep outside Austin and Zach O'Brien joined like, the core team of the theory. so just like two one went hard, right? One, one hard left. And the guy who'd been CEO took over, like, bought their shares, brought on his own investors and took over the company. and through some combination of well-intentioned or non well-intentioned mistakes or missteps, of which there are some lawsuits about, the company basically imploded over the course of 18 months.
and there was this they hit bankruptcy. Absolutely. Like a brick wall. And it was a really, really painful, noisy thing because authors were left not getting work that they had paid for. The team got laid off with like, no severance. vendors went unpaid. And, you know, all of that is a little bit normal in a bankruptcy.
But it still was really painful, really surprising from this company that has amazing public image and had had such a track record of success for ten years. and there's a lot of like, value in that still. You know, there's like thousands of authors that had had a great experience. There's a ton of books that had got published.
you know, there's a lot of people that were like, you know, I took a personal loss in that bankruptcy, too, but I just made these calls to save. And save was like, I've had a great experience as a customer with this company. I believe that authors should have the a path to publish their book with full ownership and zero outside creative control, like they should have all the freedom to publish what they want and get 100% of their upside.
And scribe was not only the only way, but like opinionated Lee, the only way to get that thing done at a really professional level and the alternatives of traditional publishing was so different from then. The trade offs are so different. I felt really strongly that we were kind of entering this age where this is a really important thing for the industry and a counterbalance to traditional publishing.
so I really just wanted to save the company so I could keep using it as a customer, and I thought it was the right thing for the industry. So once you have say we're we're like, good news, we're going to buy this company. I'm so great. So glad to hear it. Job done. I can go back to writing.
Keep you posted on how it goes. Yeah, like my grandest hope was kind of to become like a minority investor because I'm a believer in it. And they called me, like a few weeks after the acquisition officially closed and were like, hey, we think you should run this company like we own it now. you've evangelized it.
You brought us the thing. You have an operating background. You taught us about the industry. Like we think you should run it. You guys realize I've never seen anything before, right? they're like, yeah, don't worry. It's like you're going to give me a CFO, right? Like, yeah, don't worry. We got we had CFO. It's like, okay, okay.
what I was talking to, to both of them, but particularly see over a lot through this process really. And, because I had never done something with scribe in particularly, but I knew both Zach and Tucker and then in a few communities that I'm part of, just in the publishing world, a lot of authors had worked with that, and some cave and I, for it was like on vacation to Europe as like this deal jobs.
He's like, I think we're going for it. Yeah, they're great dudes. and I, I give I mean, a was a real firefighter in that transition, you know, like, he, he took on a lot of operational and emotional challenges to slog through that. and Xavier was really the like, spiritual backbone of the whole thing. He's like, you know, this is important work.
It must be done. We will make it like everybody, everybody keep at it. which is great. So yeah, I'm very, like grateful to them for taking this on because they definitely didn't have to. And I think they're you know, the best people to do it. So they came to you and said run the thing. Yeah. It was I mean, it was a it's a few like late night conversations with my wife, because I was, you know, the I was already running a fund and writing other books and had a relatively full but lovely calendar.
and this is like a big undertaking that I knew was going to take a lot of time. And, require a lot, but is a really is a fascinating challenge, I thought, and a great opportunity and yeah, I've, I've been a seven months in or so as we record this. yeah. Enjoying the hell out of it, honestly.
Obviously his job was to like, stop the immediate bleeding. Yeah. And then your your job is to, like, rebuild this company from from the ashes or whatever, whatever analogy you want to use. What did it look like to build? I guess author confidence, consumer confidence in the company over time. And obviously you're you're playing this game for a very long time.
So it's still early, but like over the last seven months. Yeah. What does that look like. What worked what didn't I. The most immediate focus to me was create that place of safety and trust in the team and trust that if I did it for them, they would be able to do it for authors. I talked to a lot of authors directly.
but really like the thing that I most needed was to just settle the team's fears because they just went through this, like extremely traumatic, surprising, like rug pull, essentially, even though it's like we're a different company, we're different ownership or different leadership. you know, a lot of people were just like, mad at the logo, and you can't blame them for not being able to sort of understand corporation bankruptcy, asset sale process.
so you try to have all the conversations you can and, hear people out and hear their frustrations. But, you know, I just kind of kept coming back to like, as you said, like, this is a long game. Time is what builds trust. You can't shortcut it. We just have to do a great job with the work that's on our desk and show people that, you know, we are still excellent service professionals.
You know what we're doing. And, you know, let that flywheel of momentum build up again. It probably helped listeners to hear like kind of at a high level. What are the services that scribe provides? Yeah. So there's basically three sort of paths in working with us. One is sort of the path that I went down as an author, which is I've written a book and I would like help publishing it at a really professional level.
and for that we kind of go through some, some light editing, page layout, cover design, interior design, placing graphics, and then all of the like finalizing of the files and then publishing and distributing and all the places that you would want. And we just help everybody sort of do that in an extremely professional, well organized, like flawless way.
you know, I like to say like we do not miss deadlines, we do not miss, we do not ship mistakes like you can count on us to execute professionally. we've done this 2000 times, and, you can absolutely. You know, in the same way that you can build your own house, you can publish your own book if you are willing to spend a lot of time on YouTube.
And if you're tolerant of some mistakes along the way, and if you're okay with it just taking a little longer and saving a bunch of money, and we give away a bunch of the resources for people who want to sort of DIY. But if you just want us to project, manage you through it and nail it, that is like the service we provide.
if you would like to write a book and you want to be extremely confident that you know you're going to finish your book in, you know, 12 to 15 months and it's not going to suck, and you're going to get everything right, and you're going to nail all the points that you want to along the way. We have a guided author program, which is like private coaching for writers who really want to have their fingers on the keys.
And then the most popular product or service that we have is Scribe Professional, which is like, I'm really busy, I'm an expert. I'm either not a writer or don't want to spend 1000 hours at a keyboard. and for that we have we partner people with scribes who are these really expert interviewers and writers who will sort of extract this knowledge from you through a series of interviews, will position the book structure.
It makes sure that we are checking with samples to see that we're capturing your voice correctly, and then we'll expand that into a full book. So there's a lot of people out there, busy professionals and experts, especially who, you know, haven't literally written their book but have a creative partner like that who can help them extract and codify their their expertise and their advice and into a book format, which what's the price point on those three different, imagine there's packages within that.
But yeah, if you give someone a high level publishing, if you include it, I would include audio book in each of these, like publishing starts at 24. Got it. Authors 40, scribe professionals 54. Okay. assuming like a, you know, a sane, like, 50 K word count. And, you know, there's a bunch of little edge cases, but bunch of nuance in that.
Yeah, but yeah, it's wasn't there a publishing arm to scribe at one point or like an actual, publisher as well? I remember the name of it. They were starting one called Libra. I think it was, if that rings a bell, I think they were. They had a good idea. I'm going to follow a similar path. I think with, like, a small tweak, which actually I think is like right up your alley.
just like creators in general can basically now run if they partner with scribe, can run like a zero overhead publishing house. So if you know that you have distribution or you have the ability to sort of identify authors, or you can just help them by the rights to their book from the publisher, or get an old book that's out of print and acquire the rights to it, and front the, you know, the service fee for us to do the publishing house back of work, then you own the royalties, right?
Like publishing houses consists of like two things. There's like the financing arm and the actual work. And traditional publishers just combine them. But like we are, we are the service provider. And so I think of us as basically like a publishing house API. so anybody who wants can come to us and say, like, I have got his author, I've got a financial agreement with them, can you do all the back of house work to get this book out there in the world and get it published?
And then, you know, we'll just with the royalties. So, yeah. Cool. Absolutely. My concern with the scribe business model, I was going to say, if you want unsolicited feedback, you're on my podcast. So you're going to get unsolicited feedback like you're not, but that is I don't like that you don't have an ownership in of some kind in the book.
And it could be temporary. It could be something else. you know, or you're not making some amount of money per, book sold. And that's what I always wanted to see is, you know, have the publishing house arm to it. now, it might be the inverse of traditional publishing where, like, hey, we're selling a book for, you know, $15.
and the author gets one. It might be like, hey, you know, I sell the publishing house. We get $1, right? For doing all this work. Like knowing the power of books to sell for a very long time. Yeah. If I were running your business, I would want some. Even if it's very slight that you could build up that that library of, you know, most of the books, nine out of ten books are not going to sell that many copies.
Yeah, but some of those that keep selling for a long time, and then you get to the point where it's another 2 or 3000 books that you've published. But I don't know, like how do you think about something like that? And how do you balance it with like, being very, very author friendly and doing the opposite of traditional publishing?
Yeah. I think, I was going to ask you from which perspective you say that, and it sounds like you're kind of as a, like a, a friend, mentor investor hat of like, if I was picking the optimal business model, I would want you to own a percentage of royalties. Correct? Yeah. Yeah, I think that's exactly it.
And it can be a very small percentage. But I just look at, what makes this a business that can scale to, you know, 100 million in revenue? And I think there's some fairly small tweaks to what you have. Yeah. that could get it that way, but it has to have that long term view. Now, as a customer, I kind of also want it because I want to make sure that the business is very, very sound, long term, which I think that as a services business, especially knowing like yours and Kaya and Xavier's operating abilities, like it's going to be a very sound business, you know, like, but, you know, I want
that aspect. Like, I want to make sure that everyone that I'm doing business with has, like, a really solid business model. Yeah, it's going to last them for, for decades. So it's kind of those two hats. But but you're right that there's 80% wearing the like investor advisor hat. Yeah. it is an important distinction because I do have authors sometimes who say, hey, I want you guys to have skin in the game on my book.
and it's interesting, trade offs. I also, I have given myself the same advice and I think there's totally, like, a place for that. Right? Like we're a very simple services business right now. you know, the super long term stability or the multiple in services revenues, not massive. Not that we have any plans to sell ever.
But I have first hand experience the power of book royalties. Right. And like royalties as a revenue stream is incredible. It's incredible. And when you know it doesn't cost as you heard like doesn't cost that much to produce a book, if you went absolutely ham like, you could probably spend half $1 million before you really started like wasting money if you were like, I want a New York Times bestselling ghostwriter.
I want a cover. Designers like designed our award winning covers before and custom art, and I want to fire every marketing canon we possibly can. Like you still probably wouldn't spend more than 500 grand, and we have some people that do spend six figures with us, but the value of one of these books, like the books that sell perennially or become bestsellers, is well into the millions.
So if you know you're sort of buying that asset or even on an expected value basis, like you can do pretty well over time. so totally agree with you. I also want one of those, and I think there's a window where we can start to do it really credibly. so my like very simple go forward plan is like stabilize the core business based on the core services, build a world beating book marketing agency.
Step two, step three. Then offer sort of minority royalty share purchase where we know we have that kind of king making ability to not just produce a great book, but make it a hit in the first place. But the the secret is open secret. Like Tucker has been talking about it for ten years. Like at the heart of scribe is that a book does not have to sell a lot of copies to have an incredible impact on your life.
And you know, my version, just like a book, does not have to make money to make you money. There's a lot of people that publish a book for a lot of different reasons that are not necessarily optimizing for, for book sales. And so I never want to lose that piece of scribe because I think it's so important and so counterintuitive.
I think you're right that layering on the book marketing agency is the right place to go, because you're basically saying someone publishes the book and they're like, all right, now, what's next? It's like, well, you got to market the thing. And if at the best you can do is like, here's a list of referrals, people who are good at book marketing or here are the best podcasts that cover book marketing strategy.
Like that's not really supporting the author. And so having something to take them, you know, further down that process and you write like you can add a huge amount of, revenue and value to the author with that. And then downstream from that, you can say you'll have a bunch more information, much more cash flow, a deeper network.
And then you can say, all right, let's figure out what the like, what the equity version of it is. Yeah, I think that's the right. then I think we'll have a much more credible case to be like, hey, you're going to sell us x percent of the equity of this book, but we are going to five x the value of the equity of the total, like the total equity value of the book.
And I want to be able to make that case really strongly before before I ask authors to make that trade. because I think traditional publishing is just like out of, out of school in like what they, how they price for what the value that they deliver. in a, in a really like, you understand it from a path dependency perspective.
But you know, they really like their position is to use the author to market the book. And our position is to use the book to market the author. And for most authors, that's actually the optimal outcome. What are a couple stories that come to mind, or maybe just your favorite on a book changing an author's life? I think there's some really big ones that we might see, like a David Goggins or someone like that, but maybe a step down from that where someone publishes a book and then the amount of opportunity or even maybe it's an inverse of like they were chasing opportunities.
And now, because of the way they've packaged their ideas in a book, the opportunities are flowing to them. Yeah, I think these are like really interesting, very niche stories. Like it will not sound those are the best out like, yeah, there's there's some really interesting author niches that I talk to. Like, I talk to a guy, very recently who just signed a book deal with us, and he's like, I know exactly who my customers are.
There are like 3 to 5 of them in each major city in America. Like, he's a consultant to, personal injury law firms of a certain size. He's like, okay, there's a hundred of them in the country. I have a really high value, offering for them. Like, if this book makes me brings me two customers, it will have been worth the, you know, $60,000 investment.
but I really like what I need is to establish that credibility and to have them come to me and believe that I can deliver on the promises. And I think a book will help me sort of make that case and set me up to win those, you know, six, seven figure deals. And I was like, yeah, probably.
probably. Well, I think this is a great example. Like, you know, of a book, a book doesn't have to make money to make you money. Like, he's going to he's just spent $50,000 writing this book, you know, $1,000 printing and shipping them to his, you know, 200 customers in the US. And two of them will call and start paying him six figures a year.
like, that's an amazing outcome for him. Nobody else is ever going to hear about the book, and they don't have to. And it doesn't matter. you know, so there's a few of these, like, I've had somebody, whose target was, you know, fortune 500 cms, and he was like the expert at these. Like what label? CPG brand deals.
but there's a lot of people, you know, you'd be amazed, at the speaking careers that go through trajectories when they publish books, or just are able to the doors that unlock. It's like a bad signal to be like, have me on your podcast, put me on your stage, invite me to this thing. and so there's speakers who, you know, every two years they publish a new book and it's like the new model of a car and that, like, kicks off their their speaking tours and their podcast tours.
And it's an example of someone, I guess, I think a lot of people now, but who comes to mind for you, for someone that like follows that, that pattern of the book publishing and then they kind of run the same circuit again, but maybe they've optimized it or like gone up one level each time. Yeah. This is not my this is not my circuit.
I think I don't even know if he's a customer of scribes. offhand or recently at least. But Michael Simmons, I feel like he's been doing this for years. what's his to? He he writes. I remember seeing him in college. He was doing, like, a college tour. He, done some good, like Charlie Munger.
recap things like New York Stern Business School. Yeah, published a whole bunch of books. Look at that. Yeah, there's a bunch of people in this world that, you know, are constantly putting out interesting new ideas, and that is really what drives, you know, the publishing of the book is what drives are speaking career or something else. And they're getting the point where it's been getting paid five grand a speech, ten grand, 20, 25, you know, grand a speech to to continually spread ideas and and that has a nice flywheel, right.
The more they speak, the more books they sell, the more books they sell, the more they speak for. A lot of authors like the speaking is actually the main revenue driver. even, you know, they go to is in my speaking fees, 5000. But you got to buy a book for everybody at the conference, and you got to buy it from me.
And if if you're self-published author like through scribe, you know, your margin on a direct book sale is actually like 10 to $15 because you can buy it from the printer, direct. It cost traditionally published authors. You're still paying list price for the book because the publisher needs their majority cut, and so does the agent. I've seen there was a bunch of authors figures, these books that for every copy that someone reads, it has a, you know, it has a viral coefficient.
Yeah. Like what you're talking about. So Dean Martel, with his book Buy Back Your Time, he published it traditionally, I think, and he found after publishing the book that if you got it in the hands of readers, it's not just about getting the book out there, but like someone who's actually going to read it, and then it had a K factor.
It would get referred to more people, but he couldn't. So he would go to a speaking gig or something like, all right, I'm going to just going to buy books for everyone. Yeah. And you go to the publisher and say, all right, what's the what's the wholesale price? And they will quote him a wholesale price. He's like, I can buy it on Amazon for less than that, you know, like, well, maybe that's what you should do.
And so he buys books off of Amazon like hundreds at a time. And it powers an amazing flywheel for his business. Yeah. As he's got communities and and everything else like in the back end from that. But that's something that I'm thinking about from my own books of like, okay, wait a second, I'm going to write a great book that I think I want the opportunity to get it in someone's hands for less than, dude, $16.
Absolutely. I mean, and there's worse deals than that. Like, I talked to quite a few authors who have done their first book traditional and for some reason, you know, whether it's the realization of like, oh shit, I have to pay list price for my own book when all I wanted to do was give it away to bring in customers, or get a full get a higher margin when I'm the one driving the sales, because that's insane that I can't do that.
You know, some people just have something smaller, like, I hate my audiobook narrator, and I wanted them to change it, and they wouldn't. Or it's a woman who's publishing a book with us now who's like, my publisher put a cover, a photo of me on the cover of the book that I hated and would not take it off.
And she's like, I'm never I'm never doing that again. Like, you don't think when you're signing the publishing deal you don't like, imagine these massive creative differences or like that losing true final edit or creative control over your book is going to matter that much. But sometimes it really, really can. and you're powerless to change it. And, you know, this thing that you put years of your life into, you lose control over, or the ability to use it the way you want to it, that's painful.
So let's talk through some of the like the finances of it, because these deals are different. Like I was just talking to a, a fairly young creator who's getting going, has a good sized audience. He did a traditional deal, got an advance for 300 to 350,000, which that's the total quoted number. Typically divide that in four and it's going to be something like a quarter upfront, a quarter on manuscript delivery, a quarter on publishing, and then a quarter a year after it was published or something like that.
It's not like you just got a fat check. Yeah. You know, it's not a bad jack at all. Like, but it's not all of it, at once. And then you have to earn out that advance. People are like, well, I got this money and I make money, and book sales is like, no, no, no, I think you misunderstood the way like it, didn't it?
To be clear, it's not smoke and mirrors like it's in the word. It's a alone like. Yeah, yeah, it's a loan against, you know, your portion of book sales, but then you also don't have to pay anything out of pocket, though most authors I know end up having a fairly sizable budget themselves for marketing. You know, their funding that a lot of their book tours or all of their book tours, you know, there's a lot of costs that they're paying for and pretty common.
What I see is someone takes their advance, especially if it's someone that is successful as a creator or with their company, and they just set aside all the money from the advance. And they say that is purely added to the book marketing budget. And then the other thing is that fair to say, pro making $2 per copy for a traditional published, did traditional publish it depends a lot like they will say that this is a non-negotiable industry standard, but you'll also find authors not always it, right?
Yeah, you'll always find authors who got better deals. So like, I've never heard a split lower than 50% from any traditional publisher. But if you go in, the first offer will probably be in the 85%, 90% range, of of what they take. So you get 10% of people are going to hear that and they're like, oh, 90%.
To me it's like, no, no, no, sorry. Yeah, that's not right. And it's and it's 10% of the royalty, not 10% of list price of the book, which is the other thing. Right. So like if a book sells for $20, there's the printing, there's the distribution, there's the, the like all of the overhead has to come out for a bookseller had to make their money the books out.
Right. So the royalty maybe on a $20 book is $7, which if you're a self-published author, that's you get $7 per copy. If you are traditionally published author, maybe you get $1. If you're a traditional published author and your agent gets, you know, 15%, maybe you get $0.85. yeah. Again, after you've earned out your advance. So $0.85 per copy or a dollar per copy, let's just say, like they better sell more than 350,000 copies before you're going to see another dollar, so that that's one side of it.
And then also comes with some level of prestige, like this idea that someone picked me as an author. The inverse if we're self-publishing, like, let's run through some of those expenses. We're writing the book ourselves. But we need editors support, we need design, we need the publishing, all of that. So we're in like the 45, 50,000 range. Yeah.
Let's say I mean, just publishing with an audiobook is 25. Put another five in for some like editing extras, because that's usually money well spent unless you're. Yeah, like a really tight writer on your own. Then let's say you spend another 25 on on marketing if you want. so yeah, call it 50. You're saying you might be making seven, $7 per books old?
Yeah. I mean, to Kindle, let's say you sell for 9.99, which is the price Amazon really wants you to be at. And they give you 70% of e-book royalties. So you're in the $7 per Kindle neighborhood. And then you have control over your pricing to some extent like so. And I'm going to use Amazon as example, because like 80 plus percent, maybe 90% of books are sold on Amazon.
yeah. So print on demand paperback. You know, you can usually to 4 to $5 hardcover, maybe a little less actually. But you know what it cost to to print and ship the book. Know what you'll end up after like after Amazon's print ship marketplace fees like Amazon is going to make more money in your book than you are.
like per copy sold generally. Okay. because they take a marketplace fee, they take print on demand or, you know, those are those are levers. Like if you print more premium ebook, you can crank it up. If you want to just lower it, you can lower it. If you average five, 5 to 7 bucks a book. And then as we mentioned, if you're selling direct either through your website or in bulk, you know, those margins can get north of ten, maybe up to like $15 per book.
What's the advantage as you think of reviews on Amazon bestseller lists? You know, there's this idea of, if I sell just through my site, there's a lot of advantage to that. But then also there might be some of these less tangible things that I'm I'm giving up in rankings or bestseller lists or reviews. Yeah. I mean, as frustrating as Amazon can be, I would really not advise anybody to not sell their, just it's the place people go to buy books.
and reviews there tend to matter for sure. bestseller lists really depends on what you're optimizing for. you know, I've heard speakers say as soon as I hit a bestseller list, I could double my speaking fees. but I rarely hear authors say, except for, like, the really extreme cases that, you know, being on the list for a little while, help them sell a ton more books.
it's very credibility driven. And so, you know, of the different sort of personas that there are different authors driven by different things. Some people are driven towards credibility indicators and that that's the biggest value they can get out of writing a book. And so to them, being on a list could could count for a lot. If you're optimizing for book sales, like and not necessarily, I, you know, I am quite confident the almanac could have always outsold 99% of the books on the New York Times bestseller list and the Wall Street Journal bestseller lists, and has never been on any of them.
And I'm not, I stress about that. Zero. Like, I'm not even bothering to try to be like, hey, put me on there. What's the reason that it wouldn't go on, at least like the Wall Street Journal bestseller list? That's, I think, just based on pure numbers sold. I think they are all quite editorial. okay. And the publisher source, there's a couple that, like where you can get true book sales numbers.
Yeah. So long as they're reported in the industry. Yeah. And you have to go like pay for those, those data sources, and their specific calculations, they use over different time frames. So it may be just that I never spiked high enough, but I've like sold enough total copies. But but it was never like the most popular book of the week or anything like that.
so I don't know, people are usually pretty surprised when they hear, like, New York Times bestseller list is like notoriously editorial, like, so much though they've been like, sued many times, for not including books that should have been there that they just, like, didn't want to shine a spotlight on. And, so with that, Wall Street Journal's a little better.
Amazon is honestly, like, the most credible, probably just because, like, so much of the data is there and they literally just are like, nope. This book sold the most this day because it doesn't come with an A, like there's an implied endorsement the way The New York Times does it. Right. And Amazon, someone's like, that's a horrible book.
How can you listen? And they're like, to be clear, a whole bunch of people bought it. Don't blame us. It's like blame society. You know, we're just commenting on the fact I'm not saying they read it. We're just reporting the numbers, man. yeah, exactly. Don't shoot the messenger. Yeah. yeah. I mean, the more fun, like, the more exciting book marketing stuff to me is like, the more creative ones usually.
So when we when we find an author who's like, I have a business case for writing this book, and I really want it to affect X. and they're then they're willing to like, attack that in the book is just like, you know, the arrow that they're shooting. that's really fun to kind of play with. I'm thinking about my own book writing ventures.
So I've written three books, you know, very like niche, more technical books on iOS, app design, web app design. And they wrote a book called authority, which is about self-publishing. the advice that I gave it time was, if you're optimizing for income, self-publishing, if you're optimizing for reach, traditionally publish. And that was I felt like advice that, you know, maybe serve people well for like 2010 to 2020.
Now at this point, I have this I'm embarking in this next series of book publishing. Cool. With a ten year gap since I published anything, I now have five books that I've got lined up that, and I'm actively working on building a team around myself to be able to, you know, for the editing and, and, design and other things.
And so the books are the first ones about audience building, you know, basically like what I built my career around the last ten years. next book is on flywheels. The third one will probably be company culture for remote teams. The next one, the Ladders of Wealth creation of essay. Yeah. Turned into a full length book. Awesome. And then the final one will be the Billion Dollar creator.
Right. Basically, how do you build equity from an audience? Yeah. And so I'm like, all right, what do I put in place to do this? And I think I always assumed that my next book would be traditionally published. But I'm now at this point where I'm like, Will it be thinking about the pros and cons of that? Like, I definitely have the reach that so long as I didn't get editorialized off the list, I can sell enough books.
You know, I can sell the 20,000 copies in a week. Yeah, or, you know, whatever it's going to take, to hit the New York Times list, though chances are they'd find some reason to editorialize me off the list. I don't know, but then I get into things like being able to give the books away for free, and that has me really thinking about, okay, do I need to own way more of this?
and also because the advances no makes no meaningful difference for me at all. And you have I don't know what's the, like order of magnitude you would give your reach today direct to your audience? I mean, I have 55,000 paying customers of ConvertKit who are paying at least, you know, 40 to $50 a month, sometimes more.
And then the advantage is, I mean, someone was talking about this, like the number of bestselling authors that run their entire email list on ConvertKit. And, you know, as a result, I'm friends with them. Right. Like, so the extension, you have a larger cultural reach than the New York Times or Penguin. Like, I genuinely like we could we could actually try to do the math, but like, your ability to make a book popular, whether it's yours or not, is actually probably more reliable than than a publishing house.
and part of the thing here is a lot of I'm not accusing you of getting this causation backwards, but it's a common enough thing that I think it's worth saying is like, people think that to get into a bookstore, you need to have like that distribution access. And the truth is, like bookstores pick up whatever books they see selling online, like they're just trying to sell books.
bookstores will stock the things that will move, and they can see what books are selling. Online placement does not necessarily drive demand like the author drives demand awareness of the book recommendations, being on podcasts, being in email newsletters, being on social like those are what drives demand for books. Ultimately, I think, you know, it's a it's a recommendation game.
So creating a book that is great enough in the first place, and getting initial trial of enough people and being able to keep pushing on that flywheel with, you know, giveaways or stories or additional contributions or just keeping the concept in front of people long enough that that momentum builds and continues. And to me, like what I usually highlight for people is that the freedom to use your book in all the ways that you possibly can to keep that momentum going, and the feedback loop of knowing that if you spend $4 to generate an additional sale, you will still make three, and you individually can make the decision to keep reinvesting in that.
But if you're only making $1 per book and somebody else is getting the other six, like what's your marketing budget like zero when you think about that of the like the Holy Grail in a D&D funnel of some kind, is it itself liquidating? Yes. Right. And then that you can long term relationship can can mean more. And so yeah, that does give you $7 worth of ad spend to be able to make that sale.
And then if you I guess it has to be you have to make the sale in a format where you get contact info in some way to have the long term relationship, but then you could spend pretty aggressively to promote the book, get it in the hands of way more people so that, I agree with 90% of it.
I would say, Amazon is going to be almost every book's biggest channel. And among the many frustrations with Amazon is, of course, they don't give you, customer information. so what you need to do is offer something in your book or give them a path to go back to your online presence where you can get that information, you know, give something away.
That is, you know, zero marginal cost, but a value enough to them to share their email with you. And, you know, as you've been saying, like, what are some of the best things that you've seen there? Is that like an additional chapter, a guide to a specific thing, a worksheet, you know, maybe a really specific tactical thing or framework?
I think basically if what we're trying to do here is get an email, then the the bigger the better, like fewer smaller things is is maybe a little less compelling. I mean, there's an old school that, like Tim Ferriss did this. Well, like at the end of every chapter, he's like, hey, I have a special calculator for solving this problem.
Like, go to my website and get it. And then the website, it's not a wall for the email capture, but it exists there. and at least like gets the cookie and plants out there. you know, Taylor Pearson like, had a whole course that was paired with his book. So basically the last chapter of his book, I think was really it was about implementation, but it really ended with like, and here's this whole course that accompanies and like shows the implementation of all these things.
Or if you want the information, the information's in the book. If you want the outcome, like go buy the course, but you don't have to sell the course, you could give that away and just make it a digital experience where you get to get in touch with some of those people in. You're like coming from the opposite perspective.
Like, what's the best argument against, in my case, self-publishing for you in particular? I mean, you probably will get quite a fat advance. You don't need the money, but it's hard to turn it down for some people. there is prestige to, like being selected, I suppose. Like, at least that's the, like, what some authors have.
What I would point out is usually like that is like author to author prestige. That's like founders telling each other, like I read from Sequoia, I read from Kleiner Perkins. Like no customer actually gives a shit. Your customer, you just like, is the product. I used to be like, go, go ask your anybody the nearest person to you, like what's your favorite book?
And then ask them who published it. Like they're not going to know. So like it doesn't really matter or impact things in the in the large scale. That's what I'm always looking at. I'm like, wait, this author published book number one with this company, but book number two with that company. What's the story there? You know, in offense, the bigger the answer is, it's like, but I'm I'm like, I pay attention to that.
But no one does. Like that's, that's you and I and a handful of other like complete book is an agent running a process. there may be like, you know, access to some of those lists. you know, they have some centralized media, like connections. but I think the, the sort of internet ones are probably more authentic to your world.
like, I think traditional publishing should exist. I think there's a lot of benefits to it. I think the mechanism by which people who can't afford to write and publish their own book by themselves, like it's a miracle that they can just show up with a great manuscript and somebody will help them get it done, or pay them if they see glimmers of talent, pay them to to write that up front.
So it is both truth and a dangerous, conceit of traditional publishing that most books don't make money, their money back. and so I've talked to some people in the, in the industry and they're like, well, what do you do for the authors who don't make their money back in a week? They're entrepreneurs. Like they'll figure out how to do it or they won't, but they will win or die on their own.
We all get paid for taking risks. Yeah. And this is one of those things. Yeah. And what's interesting about Trisha Publishing is they're so like, well, we're going to place 20 bets and 19 of them are going to work out. And like if those 20 people bet on themselves, don't you think? Like maybe five or even ten would make it, like when you had a 90% majority passive partner with creative control?
Who knows. One of these 20 is going to make it, but they don't give a shit about the other 19. Like, do you want to captain that ship like I don't I want to know. I want to know that I can spend 25 grand or 50 grand and, like, get something that I then have the space to make successful.
so. But I over friends who have gone traditional publishing have had good experiences. I do think they are they have like tremendous creative talent there. So I think like they're covered designs are amazing. I think the print quality in general is amazing. I think that's like a well-oiled machine. I think, very, very talented editors work there.
and so I think they can make good books. Great. In many cases. You know, there's pretty well-worn paths of distribution around there that are probably good. Yeah. So I have, even very internet friends who are publishing books who are like, yo, I'm going to do my first book, traditional publish. Like, I want to get into Harvard, and then I'm going to drop out, like I'll probably do all the other ones after, but I'm going to have the I'm going to get the advance and I'm going to learn what I can from them.
Yeah. And then I'll play my own hand after that. you know, that's the beauty of it. I just, I just want everybody to have the options to do what they want to do. I like it. The crazy thing to me is the opportunity from the audience. The common wisdom is that, you know, the book will make money, but it's everything you do after that.
It's like, I actually know a lot of people where the book makes a lot of money. Yeah. And then you layer on so many more interesting things on top of it. From there, if you go in with the assumption that the book won't make money, like you won't make money, but if you try to make it, that's what we call a self-fulfilling prophecy.
there are cases where it's an obviously good loss leader or marketing, you know, sort of piece of collateral, and that's great. but if you, if you really do go in and say, how do I make this thing pay? Like, can I get can I make $1 million asset? out of a book? Like, I think a lot of people can actually, if you if you plan that way from the beginning and I think, I mean, I think you with your audience, with your expertise, with your demonstrated success, especially on those topics, like with the network that you have in the ability to, get the message out there.
So like the first break even point is like, if you can sell 5 to 10,000 copies, like it's probably smart to to go self-publish, like that's a breaking point of like, are you going to make money? Are you going to lose money? so if you have no dream of getting more than ten, then like maybe you want to de-risk or maybe you want to keep building your audience, or maybe you want to have another product line like you, Nathan, going out.
I can't imagine you're not going to smoke through that with every one of those books and have at least one, maybe two that are like surprise breakouts that hit 100 K or a million or more. When you're thinking about these different audiences that people have built, who's the one that's built? One of the most interesting like audience to wildly successful business.
And it could be like in the format that we talk about on the show of of of $1 billion creator, anything like that. I have two of these who I'm quite sort of close to personally, and I have watched emerge and I love, share whichever one you prefer. But Alden of Missouri Star Quilt Company. Oh, yeah, of else.
Great. Have you had him? I wrote about him in the original Billion Dollar Creator article where I wrote about Missouri Star. Okay. Before I, you know, I just knew surface level content. Yeah. And then I got to know out of this year and had him on the podcast. He's you should come visit us in Kansas City. Come to or Hamilton, Missouri.
Like the quilting capital of the world. It is very fun. This is like busses of six year old ladies coming in and like having slumber parties and quilting all weekend. The most quilt shops anywhere in the world. There's murals of quilts. There's a it is. He is absolutely taken over this small town and built an incredible vision. And it just started with, yeah, this is him.
Just like pointed camera at his mom and shoot YouTube tutorials. It's incredible. yeah. That's insane. All right, who's who's next person? Yeah. The others Kevin of Spirit two, of epic garden. Okay. I don't know Kevin story you you will love Kevin as a person and as a story. and he would make a great episode of this, this video.
He's actually doing a lot of, like, kind of sharing what he's learned. he's kind of that chapter of his growth. so Kevin and I met in, like, the nerdy corners of the mental model, like, forums in like 2011 internet. And so we've just kind of like, had these different parallel paths. Kevin actually was an early employee at scribe.
when he left, he left because, he's just an interesting dude. Paid his way through college playing professional poker, worked at scribe. he really loves gardening. So he started a garden blog and basically quit his job to go full time on his garden blog. As one does as one does at a as a 22 year old dude or whatever, you know, early 20s guy.
and he, he tells just an amazing story of like, you know, talked about leverage on our first podcast episode and he is a master class of like, growing the blog until it paid for itself, investing in tools and processes and help until it was profitable on its own. Use those profits to then go start a YouTube channel.
Grew the YouTube channel until it paid for itself, got the YouTube channels profits and sent them in. And so he just released systematically, sort of snowballed up this audience of gardeners across all the different platforms. I think now Epic Gardening is the biggest gardening media company in the world. and around, I don't know, let's say five years ago, I could be I could be off.
he shot a video with a raised garden bed in it, and he started getting all these comments or people that was like, hey, where'd you get that? Like, what is that? I like to look at that. he's like, oh, maybe, maybe it's time to sell some products. And so he bought a shipping container of these gardening brazed gardening guys, just corrugated metal.
And they're on the slow boat from China. And he puts up a Shopify page and, you know, puts it at the end of his next video and does a video about them. And they sell out immediately. He's like like, oh my God, I'm going to do I need another shipping container. And that was the beginning of his e-commerce.
And so he just sort of he has this feedback loop between his audience and his products. He's really thoughtful about what great gardening is. He has a like a Paradise in his. Like, you look him up on Instagram or YouTube. He does this all in his backyard. He's got this beautiful greenhouse in his backyard. He's it's like a normal lot in San Diego.
He's just growing all this incredible stuff, shooting videos in his backyard. 2 or 3 years ago, this got to the point. He now is completed, an acquisition of botanical interests, which is like the incumbent wholesale seed provider in the space. Like if you've ever gone to a gardening store and, like, bought a packet of seeds with, like, a pencil drawing on the front of it, he just bought that company, and made it part of Epic Gardening.
And so he's, he's acquired blogs, he's acquired like there's going to be like al with Missouri Star buying Jo-Ann fabrics or something like that. Truly like it is just it is an absolute both of them I love so much because like just smart dudes who started basically start with YouTube channel, but like grew the media, grew the audience and then were just such clever operators through like through all these different, you know, means whether it's growing or hiring or partnering or buying, I like outright buying, you know, vendors or partners or suppliers.
It's really, really there are both really interesting stories, and I think they are going to be cases where a creator actually ends up owning, like, the biggest company in this space. Yeah, I'm just looking at these, you know, on shopkeeper gardening.com, looking at the, the, the metal garden beds and they look super cool. You know, you can see how you drop in a bunch of them, put some gravel or wood chips around them and you know you're good to go and I so I know first.
Right. I have, a little homestead here. We have a half acre garden. We spend a huge amount of time and money, you know, on our garden and like, we would, would absolutely do this. I mean, after this call, I'm going to send this to my wife and say, hey, do we want to build more wooden garden beds or do you want to go for these metal ones?
You know? And who knows, we might place by five of these. That's $1,000 Shopify order. Yeah. Like you got a lot of advertising on your YouTube channel. I get a lot of views, you know, to equal to like I it's pretty straightforward to get someone to job 500 bucks or more on gardening stuff. And what I love about like, this is a great example.
Like what I love about his or what he think he demonstrates well about this model. And that al does too, is like the media isn't a great business always, but it does build an incredible amount of trust. And so if you can build a profitable media company and then you attach an e-commerce business to it, where people who already trust you are willing to pay for you, willing to transact with you.
And for an e-commerce business, the biggest cost is always customer acquisition. So if you have it, even a mediocre version of both of those businesses and you combine them correctly is a juggernaut, you're going to outcompete every media company because you got bigger budgets, you're going to outcompete every e-commerce competitor because you got lower acquisition cost, and you're going to know what products are going to sell better and faster, because you got people like, that's a really tight feedback loop between, you know, what you're putting on your channel and what you're selling people and what they're interested in buying.
Like if you think about the number of decisions that we make in business and how often we're right, less than half the time, I went back to a bunch of presentations that I've done for the, like the ConvertKit team over the years, just to look and see, like, okay, what did I think? you know, August 2018, what was I saying was going to come next?
And what would happen? Because these are effectively small predictions, you know, ongoing. I'm just continually wrong all the time. I like maybe two out of ten things that I like, talk about and strategy or all of that work the way that I think. And so if you think about any of these decisions or initiatives in business, in the e-commerce world, you have to put real money behind it for customer acquisition right away and for manufacturing and everything else.
And the timing of it is really rough. Like all my income friends, they care very deeply about their cash conversion cycle. Right? I'm putting out this money on ads and like how how long does it take me to get this money back? And so if you own the audience, then you can do something like, hey, I have this idea, you all want to buy it, and then you can pre-sell it and then you can realize, you know, exactly, like Kevin did that.
Oh, hey, you know, I, as I have this ship crossing the Pacific Ocean, turns out I'm going to need a couple more of ship right. Because this is starting to get out of hand before we've even delivered any products. Yeah. Oh, man. What do you think people get wrong in this, right? Someone could dive off and say, like, okay, now I have to build quickly, bolt on e-com to my audience or audience to my ecom.
And I could see that failing pretty spectacularly, even though the combination done right, you know, has superpowers. Yeah. I mean, I think I always look at, sort of how moats grew, like not just where they are now. And it's like, Kevin's been doing this since 2013. Maybe not just the craft of creating the media, but like the experience that some of these people have had of spending ten years watching him or even the newer people have been referred probably by somebody who spent ten years watching him in the, you know, you could look at where he is now and try to replicate, to try to build all of that at once and not just
fail spectacularly, but like, lose a lot of money. Do you take much more risk than he ever did at any step along the way? Because you're trying to compress 10 or 11 years into two years and you're you're making so many assumptions about what he learned along the way. You have the benefit of getting to watch some of the journey, but particularly the end date, like, oh, I want that.
But you could miss all the details of like, the nuance that he learned as you try to skip past. Yeah, yeah, I would say like struggle. So don't try to copy where he is, like try to make your own journey. That mirrors how he got there. so starting where you are, you know, I've had done a few interviews with him at different times on my podcast, and it's, it's always nice to sort of see the trajectory over time.
It's like, well, what are you thinking about right now? It's like, well, I thinking about how to integrate this acquisition that we just did, but I don't really know what's next until you talk to him two years later and he's like, what turned out to be next is like, well, it was actually adding this whole new like it was a short form video revolution.
And like we really focused on that. And so it ended up being like really audience growing two years. We didn't add a ton of new products or, or it was actually needed to hire somebody to operate, you know, this whole arm of the business. And as you say, like, you know, we're wrong about what the next best thing is.
Often, how many times has Entrepreneurial Journey just been a series of trying to make the best decision with literally what is just in front of you at the time, like, what's the most obvious next step? And iterate and reorient each time. When I think distilling it down like it's easy to look at the surface area things of the e-commerce company and the audience and all of that.
But you underestimate the level of connection and trust that he has with, you know, all of these long term fans that have watched him for ten years, have a lot of friends in the homestead space. I think of, like Justin Rhodes, who's, a really well known homesteader in North Carolina. He's got a million or more followers on YouTube.
And, you know, he puts out a vlog 5 or 6 days a week. and he has for five years now, he's built this amazing business for himself. Like, he and his family are making 1 to $3 million a year, homesteading, you know, just living their life and enjoying every bit of it. Yeah. but it's someone can't just say like, oh, I'm just going to copy that and have the same results.
It's actually like that long, long time investment. And the the connection that you build with the fans over time. The time arbitrage is usually like an underappreciated, piece of somebody's moat or of your own. It's interesting that the market that he chose, you know, like, I don't think that gardening was like the most competitive market on the internet.
You know, if you think about the level of technical talent required to build this site, which is there's a lot and it's hard to do in the production quality and everything else compared to like, I don't know, going to go work on something in the crypto world where you're up against, you know, the best that audience building and engineering and technology.
Yeah. And and all of that. And so like choosing the world that you want to play in I think is really important. And then also, if you can take skills that you learned in one arena, like a good friend of mine, his name's Trent and he built multiple ecommerce businesses. He knows video production and YouTube and all of that for marketing content.
Right. Like many of us, operated a show for a long time, and he decided to, like, leave all of that behind. And now he makes YouTube videos about flying. So he shows up in this like, pilot, you know, training niche. And he knows what he's doing. Yeah. You know, over the course he's almost exactly a year. And now he's got 30,000 subscribers on YouTube in a fairly small niche.
You know, these are people who want to drop 50 grand or more to become professional pilots and, like, learn all that. Yeah. And like, he's getting way more traction for this content in this niche than he ever got in the small business or e-commerce niche. But if someone's trying to replicate what he's doing, they would probably dismiss the fact that he spent five years or more learning content creation, and what camera use and the gear and how to write a hook for copywriting and how that plays over to video.
And yeah, so many things in there. And the expertise on the on the pilot side too, right. Like, right. it's been interesting to see in in real estate, like, I don't know if you know, Chris Powers. yeah. I've been on this podcast once. He's he's a great dude. but he's an amazing example of, like, just crushed in real estate operations for like, 15 years.
Learned all the lessons that you could possibly learn and then, like, figured out podcasting over the course of, I don't know, six months or 12 months. It's like continuously getting better. But the amount of depth of expertise he brought to a niche where, like anybody, who else who was doing real estate podcast was either kind of like, I don't know, cheesy or low budget or low expertise or whatever.
And he was just like, no, I have like, I'm going to go all in on this, and I have the depth of expertise to be extremely high credibility in the audience. It like with my audience, even if they are seasoned real estate professionals and the the amount of like talent and attention and capital that has come into him as a result of that is like unbelievable.
Like the power of an audience, especially in these professional niches, is absolutely next level. When you think about there's so many people, I mean, Nick, Uber is doing this to a ridiculous extent right now where he's currently working on a deal to acquire a company and he's raising the money for it on Twitter. And he's like, all right, in two and a half weeks that I put together $2 million in 2 million.
Sorry. I find it an order of magnitude there, you know, $20 million, that he's raised, you know, purely from the internet and purely off the power of his audience. Yeah. I think there's something, you know, there's definitely some of these business models have a much greater synergy with a media business like media and e-commerce, like we were talking about Kevin Aspire to and Alden, I think funds as in general, like capital and media also have this like quite strong synergy like package.
McCormick is like an amazing example. in the startup world, Chris Powers in real estate, Patrick O'Shaughnessy in, you see this over and over again. I think we're going to see even bigger versions. Like, we could also argue like Warren Buffett was an analog media genius. he throws like, one party and he writes one letter and is just like a massively high leverage.
But, you know, there's a lot of people running Holdco and there's a lot of great investors out there. Like Warren is the only one with the public image that he has. there's like an unbelievable, unquantifiable asset. I typically look at the public image that Warren has and think how much of it goes back to the really well written annual letters, how much of it is the outsized performance of, you know, Berkshire over many, many decades?
And how much of it is like the annual shareholder, you know, like if you rewind the clock on Berkshire and said like, oh, by the way, you're never you're not allowed to hold any shareholder in events like, no, no stadiums of, you know, Buffett and Munger fans like, you can't put your face on a stick like you can't else's candy everywhere.
And like, if it's in that world, you know, like, how much does matter? Obviously, I think he'd still be insanely successful. I think a fair amount. I mean, if you think about how much capital has come into Berkshire as a result of his reputation, like just on the capital side, like how much demand has been generated because of his persona for stability and trust and running a low leverage like utmost like unsinkable ship of of capitalism.
and then like, that's plenty. Like, that's a lot that drive share price that brings in new capital. Then on the other side, how many opportunities he got because he was Warren Buffett and because he got that those phone calls like Nebraska, and that goes all the way back to just being known in Omaha like Nebraska Furniture Mart, see's Candy.
then fast forward all the way to like, who does the government call to bail out the financial institutions, right? Like there is one person on earth who gets that call because he has a reputation that can stabilize these institutions and like his personal reputation, showing up just by showing up and speaking on behalf of them like, oh, okay, there was a we're okay before it.
Good. And then I guess real plotter money and tanked this whole industry. Yeah, I guess America will be fine if Warren Buffett is like still alive and investing in banking, right? Like those. But that only comes from the city execution. And like a lot of people say like, oh, I'm going to build my reputation over decades. And which is a great thing to do, but you have to be active in it.
You can't be like two and people are passive and like, you and I are friends, you know, I have a great reputation. And everybody Joe knows I have a great reputation. But like, as much as it sounds odd, you have to put things out there, like public work, you know? Yeah, that has leverage to be able to, like, so people can find it and learn about it at scale.
Yeah. And so the letters do that, the interviews, the live events, all of those things. It's interesting like talking through this because I think that makes a ton of sense. there's definitely like a variable in the equation where, you know, the value of your reputation. It has to. Yeah, it has a reach multiplier or like reach is a weighted variable in the equation.
And if you are extremely well known to ten people, that's fantastic. You're extremely well known to 100. That's fantastic. If you have that reputation and that depth of reputation with millions of people. it, as you're saying with Buffett, really changes what's available to you. And it's hard to I don't want to be famous. I know, like there's a lot of people who don't want to be famous, but who might want that credibility and that reach and the value that comes with a broadly acknowledged reputation for quality and stability and trust.
And, it's a really interesting outcome that he's been created. And I think more people are going to reverse engineer that and try to create some version of that themselves with I think we're seeing it with, like Jason Lumpkin in the SAS world. you brought up Patrick O'Shaughnessy, you know, very deliberately building a media business that I don't know what his, you know, fundraising looks like for his asset management firm, but I imagine there's a significant deal flow that comes from the media empire.
Andrew Wilkinson, you know, has done this very, like planting a flag and said, I am the modern Warren Buffett. Yeah. You know, like, I like I buy companies like Berkshire does. You know, I've built this reputation. If I will close a deal for a new company in four weeks, when someone else will take six months or more.
Yeah. Imagining where those might be in 50 years if those people all continue on the tracks in the trail with the like building that track record. I think Brant B Shaw is another great example, right? he kind of pioneered this private equity concept and then named his firm after the category that he created, which is a brilliant branding move.
Ten out of ten, no notes. yeah. Permanent equity. Permanent is the name. Yeah. And that came out of him. You know, him and Patrick sort of talking and figuring out. And it was, you know, just Brant really feeling his way through like what's something's broken in this private equity market. Like, what are all the things that everybody hates about the current state of private equity?
And how can I, you know, tweak knobs and change my model and find something that fits even better? And he did an incredible job and he started pioneering something. And you see new firms adopting his model all over the place. but he's he was thoughtful about writing books is all about writing letters. He's, you know, got media people on his team and those and he throws events in those, bring in deals and it brings in capital.
And, you know, for someone to invest millions of dollars with you, that takes trust and to build trust with any sort of scale over time. What better tool is there? The media. Right. Like this is why we try to be super open at Rolling Thunder Valley. We do podcasts every quarter with our new investments. We, you know, write letters reliably to our LPs.
And I've LPs already who are like, you're the only fund who sends me an actual note every quarter with what you did. So I'm moving my money to you. I don't even know what the returns are going to be for ten more years. I just know that I feel better knowing what the hell's going on. And you tell me what the hell's going on.
So here's some more money, like. All right. Great. Thank you. That'll work, I like it. Well, I think we'll see. You know, this creator capitalist trend, has definitely been growing. We'll see much more of it. And it'd be really fun to see, like this modern iteration. You know, who I think will be the next Howard Marx, Warren Buffett, etc..
carry forward for a long time. Yeah. okay. So if people enjoyed this conversation, they should definitely go check out part one where I was on your show. Where else do people go to follow you and check all that out, all the things you're doing? Yeah. Nathan gave a very tactical masterclass on flywheels on my podcasts, and I learned a lot.
You like, hear me learning in real time? I loved it. I'll be implementing those things in my company. all my personal stuff is e jorgensen.com. you find the newsletter in the fun and everything from there. scribe media.com is, where you go if you want to learn about writing a book or publishing a book that you've already written, getting coached, like, we would love to work with you.
and though I sounded like it, I'm not a zealot on any particular path. I have been helped by the for my author forefathers. And, I just get a kick out of helping people find their right path towards publishing a book. I think books are sacred and beautiful, and they changed my life. And I think they can change a lot of other people.
So I just like, I like being a shepherd and helping people through that, portal. I like it, and I think it's pretty special to have you leading a company where you have so much hands on experience. You know, you're not like, well, you know, I listen to these podcasts or being in the industry for the time I like, have this opinions like no going through it as an author multiple times and like, here's my lived experience and how it informs it.
And we have this like vast network and community of other authors. It's powerful to come into a company where I was a customer first. and it was founded by Tucker, who was a much more successful author than I will ever be, you know, 4 or 5 bestselling author, an incredible writer. so that's really like in the DNA of the company.
And yeah, I love helping authors. And I can feel in the conversation that authors or prospective authors just react to, like the sometimes it just need to be told something by somebody who's been down the path. And I'm sure you've had all this, like first thing you do when you decide you want might want to write a book is call your friend who's written a book and like, be like, how do I do this?
What's going to happen? Is it going to suck? Yeah. is it actually going to be that hard? yeah. Cool. Eric, always good to see you, too. Thank you. If you enjoyed this episode, go to the YouTube channel to search Billion Dollar Creator and go ahead and subscribe. Make sure to like the video and drop a comment.
I'd love to hear what some of your favorite parts of the video were, and also who else we have on the show know. Know.