Content in Content: How we forgot to see the Flywheel of the ever-growing industry

My co-founder and I involve ourselves in a weekly chat around something outside work. One of the best and worst parts about living with your best friend and having them as a co-founder in COVID times is, we see each other a lot- on average, 14 hours a day for work, seven days a week. Every weekend we keep these separate hours to overthink things that interest us the most.

Of course, while talking, his eyes fell on my book collection, and he pointed at Good to Great by Jim Collins and asked what I think about it; unfortunately, that book was unused and kept in my shelf collecting dust for months.

He paused and asked about top companies I look up to; without a doubt, I said, “Tesla, Facebook, and Amazon.” He smiled and introduced me to one thing common in almost all of them- the Flywheel Concept.

The Flywheel effect is a concept developed in the book Good to Great. No matter how dramatic the end result, good-to-great transformations never happen in one fell swoop. In building a great company or social sector enterprise, there is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough, and beyond.

Let me use some generic companies we have heard of to explain the concept even further…

Unstoppable Growth of Amazon:-

Amazon reminds me of that ‘perfect’ girl from school. One who always smiled, dressed right, scored right marks, was available for everyone, and everyone loved her. if I had to breakdown Amazon’s anatomy into parts which makes it the biggest e-commerce giant, they would be:-

Source: Sam Seely

A typical amazon cycle starts from Providing a fantastic selection of things one desire- Providing a world-class customer experience which leads to crazy traffic which often leads to more sellers coming on the platform, which brings us back to a place where there is a wide selection being provided to the customer for a great experience.

With time, Amazon is moving to a low-cost structure as the cost of inventory, logistics, servicing, etc. is moving to sellers and they are rapidly joining the platform to get their sales moving, with so many sellers being listed, due to competition prices get slashed down which often leads to bringing more customers on board.

The above chains lead to creating a feedback loop, bigger, better, and faster with time. Amazon has slowly turned its cost structure into revenue structure via its investment into infrastructure, but I will keep that story for some other time.

Fantastic Fantasy World of Disney:-

While Amazon is very focused on creating your inside the box (home/office) life easy, Disney is far more focused on making your outside life easy, easy is not the right word, probably, exciting? Enticing? Worthwhile?

Not Boring by Packy McCormick — Substack

Disney played a smarter game; instead, they built a legend around every character they have and IPed (Own) it into an experience that words cannot explain.

Over the years they invested in creating a network of franchises and brand as they pleased, which help them in building theme parks, movies, flights, limited-edition collectables, etc., Not to forget to acquire almost everything that is a visual treat to people like Marvel or Star-wars or streaming services Sky, Hotstar, Hulu, or owning channels like ABC, Fox, Star, etc.

Source: Investopedia

Everything helped them have an oligopoly on what we see- they own people’s interest, which allows them to build a cycle of sequels and spin-offs, rinse, repeat, reboot.

By Cartoon Brew

Just as I was trying to grasp the knowledge of ‘Flywheel,’ my youtube channel played this video by Entertainment Tonight. My favourite Youtube, David Dobrik, mentioned earning barely 800$ from his Youtube videos. I started calculating, how can someone who makes barely 800$/ Video is sitting over 15 Million of net worth? That’s when it hit me, we all have our flywheel, and his content is his.

I spent the weekend binging on his video to understand how he is making money- his video is too small to run multiple ads on (4 min 20sec ), and he doesn’t bring random ads throughout the video. However, he has mentioned various sponsorships with companies like Seatgeek, NFS, Chipotle, Nerf guns, etc. throughout his 5-year career as a YouTuber.

David Dobrik’s Flywheel around how he built a one of a kind fan-base with a movie like budget videos shot for less than 5 minutes.

After doing some more digging, I came up with his flywheel. People sit at similar numbers as him on their social media channels, but no one is sitting in a money pool like he is. And honestly, his flywheel makes absolute sense.

When other YouTubers were busy creating a 40-minute video with 100 ads, David quickly understood he would be compromising on quality big time if he started stitching something like this together. He quickly moved to creating less than 5-minute video and turning those videos into a movie-like experience with similar budgets. He put all the money he made from video into the video to fuel a very loyal fanbase, creating other revenue channels.

These are overall views he has got in the last 5 years on an average 8,522,149,363 views.

David Dobrik charges somewhere between 100,000$ to 350,000$ per video and uses a part of that money to create an unexpected adrenaline rush that lasts for 4:20, but you keep going back to it again and again as drugs.

SeatGeek’s founder said this about him, “David was one of the people who focused on the emotions surrounding giving away tickets and building up how meaningful it’s going to be,” says Borthwick. “Now, when David mentions SeatGeek in a video, fans don’t skip through because they know that the minute he says our name, something amazing is going to happen.”

Which is a very different angle to look from when it comes to content producing. Now, coming back to how he makes money? He has other sources like his merchandise to make money from, not to forget his blinding social media fanbase, which sits at over 10% engagement rate, driving big brands to him time and again.

(David Dobrik’s Tiktok & Instagram along with average amount he earns out of it)

Now, That’s one 24 year old I will never tell my parents about. Listed similar influencers down below.

(Top left to Right) Nikki Tutorial 6 Mil$, Emma Chamberlain 8 Mil$, Bretmann 1.2 Mil$, James Charles 12 Mil$, Chalie D’Amelio 4 Mil$, Addison Rae 2 Mil$, Nikita Dragun 300,000$ Roxxsaurus 1 Mil$

I don’t think I can wrap any article without mentioning the Kardashian family as a primary example, so here it goes. They have their own Flywheel around their Social Media and how the hatred fueled their (now) Billion Dollar Networth.

How Kardashians built their billion-dollar net-worth around their viral trends and lifestyle on Social Media.
Companies Kardashian Family owns along with net worth (Excluding another 200 Million which is distributed among their Mom, Dad/Mom & Brother)

According to my understanding, their followers are their greatest strength; they start a trend, build a company around it, with themselves being influencers and having family members who too are in the same helps with free marketing, fuel more money to grow business until they (or one of the sisters) stars another trend again!

Pharell X Chanel, Yeezy by Kayne and Jordans are a primary example of how much people are willing to pay to own a limited edition experience.

With so many celebrities coming with their lines which are often on the high-end of industry rates, there are brands who are willing to back the distribution and production. Celebrities/ Content Creators are finding new ways of making money while engaging with their audience and not shying away from hefty price tags as people are willing to pay for good things or good experiences.

Your favourite celebrities along with their companies Top left to right (Ashton Kutcher — A-Grade investments, Beyonce — 22 Nutrition, Kate Hudson’s Fabletics, Flower by Drew Barrymore, Rare by Selena Gomez, Honest Company by Jessica Alba, Aviation Gin by Ryan Reynolds, Florence by Millie Bobbie Brown, Beats by Dr Dre, Laughing Man by Hugh Jackman, Casamigos by George Clooney and Goop by Gwyneth Paltrow
DPI income remaining after deduction of taxes and social security charges, available to be spent or saved as one wishes.

With the rise of disposable income over the years, people addressing their mental health, understanding retail therapy, and ROI they generate if they are limited edition, a new era of business is being fueled, which earlier would have sounded very impractical.

I think, as an individual content creator who has a base of over 200,000 followers and an entrepreneur, I believe it is crucial to understand what your core product is going to be because once you get that right- you will make money out of it eventually.