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Romeen Sheth

1 Mar, 16 tweets, 3 min read

0/ Ryan Kaji might be the most incredible 9 year old in the world.

In 2020, Ryan made more than the CEOs of Salesforce, Goldman Sachs, Paypal, Cisco, HP, Starbucks, Target, UPS and Pfizer.....COMBINED.

His story is amazing. Let's dig in.

1/ Ryan Kaji was born in 2011.

Ryan started out as an average kid - he spent his days watching cartoons and singing nursery rhymes.

The difference was he did it on YouTube.

And on YouTube, he accidentally stumbled across an odd, but trending genre: "unboxing videos."

2/ "Unboxing videos" are exactly what they sound like.

Someone takes an object - any object - and "unboxes" it.

Ryan was completely caught up in this thread - at 3, he asked his mom: "How come I'm not on YouTube?"

Little did he know, his life was about to change forever.

3/ Ryan's mom took him to Target and bought a Lego set to be "unboxed."

They came home and shot him unboxing the toy on an iPhone.

Ryan had a blast and they shared it with their family in Asia.

“YouTube was a great platform for us to broadcast Ryan’s growth,” his mom said.

4/ One day the Kajis noticed a new trend in unboxing - instead of unboxing one toy at a time, kids started "cracking" open a giant egg that had multiple toys in it.

Ryan taped his version - "GIANT Lightning McQueen Egg Surprise with 100+ Disney Car Toys."

It got 1B+ views!

5/ Fast forward 4 months and Ryan was one of the most popular kid creators on YouTube.

Views started doubling every month and the Kajis realized they were onto something.

Ryan's parents left their jobs to work on the Youtube channel full time.

6/ Ryan grew FAST.

By 2016, Ryan ToysReview became the most popular YouTube channel in the US and second largest in the world.

For context, it got more viewership than Buzzfeed, The Tonight Show and WWE.

The viewership equated to $1M+ / month in advertising revenue alone.

7/ In 2016, he was the 8th highest paid YouTuber in the world and generated $11M in revenue.

And YouTube helped facilitate it.

YouTube makes more money when people watch videos longer.

With Ryan’s videos, kids were going end-to-end on 12-13 min videos.

This was unheard of

8/ In other words -

⬆️engagement = ⬆️attractive ad real estate = ⬆️monetization potential.

Before YouTube, to generate real $, you needed a major broadcasting network for distribution.

Now you can commercialize for free and reach hundreds of millions of viewers.

9/ Ryan used his success in reviewing toys and expanded his repertoire. Today he has ~40M subscribers across 9 channels.

Some of his more popular, emerging channels include:

- Ryan's Family Review: 5.9M
- The Studio Space: 1.9M
- Combo Panda: 1.5M
- VTubers: 1.5M

10/ He's also redirected his audience beyond YouTube to:

- Magazines
- Books
- TV Series
- Branded Toys
- Branded Clothing
- Video Games
- And even FRUIT (shoutout to Mandarin Oranges - Wonderful Halos!)

11/ In 2020, Ryan made $200M+ across his projects.

Ryan's influence among preschoolers is so big that ViacomCBS came to him to stop the outflow of their child viewers.

Result? Ryan got his own special on Nickelodeon.

Not to be outdone, Amazon Kids Plus signed him as well.

12/ So what are the lessons here? Let’s go macro first.

MACRO: We’re in the first innings of the creator economy. To capture value you need to create OR empower.

Empowering is underrated - it's the perfect “pick and shovel” business (they take a “slice of human creativity”).

13/ On a micro level, Ryan ran the creator playbook as best as you possibly could. He:

-Capitalized on a trend
-Found a unique angle
-Built on the relevant platform
-Optimized to capture max attention
-Translated attention into audience
-Built products for his audience

14/ Earlier this year, I predicted that by 2030 we’ll see the first crypto trillionaire. It’s hard to understate how quickly it will move from here.

Today Ryan has 2% of all subscribers on YouTube and he makes $200M+ a year.

2%.

As in, 98% more to go.

Let that sink in 🤯

15/ It’s going to be fascinating to watch Ryan over the next decade.

Not to be outdone, Ryan’s twin sisters just started their channel as well (!!)

The Creator Decade is here.

Buckle up. This ride is about to be wild 🚀🚀🚀

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More from @RomeenSheth

Romeen Sheth

@RomeenSheth

24 Feb

0/ The Domino’s pizza turnaround is one for the ages:

1960: Founded
2004: IPO
2008: Hits record low $2.83/share
2020: Current stock at $367/share (130,000% gain)

The 100x+ growth story is filled with a bunch of lessons for startups today.

Let's dig in.

1/ Domino’s was started by 23 year old Tom Monaghan in 1960.

Tom was maniacally focused on fast delivery and great service from Day 1. He spent the early days taking every action required to:

- Reduce delivery time
- Reduce cooking time
- Increase distribution

2/ Tom's emphasis on speed and service led to groundbreaking moves that competitors found difficult to compete with:

A catchy slogan with some skin in the game (“A Half Hour or Half Dollar Off”) escalated to a full blown guarantee:

“30 Minutes or It’s Free”

Read 18 tweets

Romeen Sheth

@RomeenSheth

21 Feb

[THREAD] Something that most people in tech don't realize is McKinsey is a mega🦄 hiding in plain sight.

I worked there for 3 years and saw 10 acquisitions that put McKinsey on pace to shatter $100M+ ARR.

Here's how they did it 👇👇👇

Over the last century, McKinsey has been the iconic brand in management consulting. Engaged by the C-Suite for top tier strategy work, McKinsey has built a behemoth of a business. A few highlights:

- $10B+ in revenue
- 80%+ of the F500 as clients
- <1% of applicants get hired

But like every company, McKinsey isn’t impervious to disruption.

"Pure strategy" work is now only ~10% of McKinsey's portfolio (down 7x over the last 30 years) and clients are pushing for more value based billing.

Implication: Clients want tangible, measurable results.

Read 14 tweets

Romeen Sheth

@RomeenSheth

18 Feb

0/ The Dippin’ Dots ice cream turnaround was wild:

1988: Founded
2011: Bankrupt
2012: An oil tycoon buys it for $12M
2019: $330M+ in revenue

The kicker? The next decade will be driven by its plant-based meat and cryogenics storage businesses. Not ice cream.

Let's dig in.

1/ Dippin' Dots was started by Curt Jones, a microbiologist with a background in cryogenics.

Curt started with feed for farm animals, but quickly moved to ice cream. He started the business in 1988 and grew it to 170 retail locations and 10,000+ small customers.

2/ Dippin' Dots grew successfully to a $40M business by 2007 but got wrecked by the financial crisis.

Customers were no longer willing to pay a premium for "ice cream of the future."

The business was saddled with debt and fell into default when Regions Bank called the loan.

Read 16 tweets

Romeen Sheth

@RomeenSheth

10 Feb

Over the last 10 years, I’ve made tons of mistakes, had some lucky breaks and a few big wins.

When you're starting out there's so much stuff that nobody tells you. Here are the top 20 lessons I learned the hard way that I would've loved to know when kicking off my career:

1/ Everything boils down to AMA

A: Ability - do you have the skills to pull it off?
M: Motivation - do you have the desire to pull it off?
A: Attitude - do you have the headspace to pull it off?

Strive for situations where each of these 3 are firing on all cylinders.

2/ People don’t have short attention spans, they have short consideration spans

If you want to meet someone, work with them and/or get their help, you need to figure out "the hook." Busy people get thousands of inbound emails, DMs and phone calls.

Focus on standing out.

Read 22 tweets

Romeen Sheth

@RomeenSheth

8 Feb

@nba_topshot

The demand for @nba_topshot is insane.

In the past 30 days, they’ve generated $30M of sales and are on pace to be the fastest growing marketplace ever.

We're witnessing the first inning of digital collectibles (DC).

Here's the 101 on DC and why it'll break the internet:

1/ To understand digital collectibles and why they’re so powerful, we need to break down 2 questions: (1) “what is something worth” and (2) “what is a store of value”

2/ What is something worth?

Valuing something is more art than science.

There are all sorts of quant methods you can use (e.g. discounted cash flow, comparables, precedent transactions) but "worth" always boils down to a simple question:

What is someone willing to pay?

Read 16 tweets

Romeen Sheth

@RomeenSheth

5 Feb

I went deep with Jonathan Hsu, Co-Founder of Tribe Capital this week. He debunked a lot of the conventional thinking in startups and we talked about developing edge:

10 Lessons on data science, venture capital, startups and investing:

[THREAD]

1/ Units of time are the new currency

While businesses were valued for the dividends they paid out, the “impenetrable” moats that let companies spit off excess cash are dwindling.

A moat today is a buffer that helps a company get ahead of the next innovation cycle.

2/ To create a defensible business today, your product needs to be a utility.

You have to build something that solves a user pain, and then scale until it’s so fundamental that it becomes a feature of other products.

This is even more true for apps with 100M+ users.

Read 11 tweets

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