MrBeast: From YouTube Star to Business Mogul
In the world of YouTube, fame and fortune often go hand in hand. One of the most famous YouTubers today is a young man named Jimmy Donaldson, better known by his online alias, MrBeast. Despite his somewhat awkward demeanor, MrBeast has managed to amass a massive following and rake in millions of dollars from advertising revenue on the platform. Now, he is determined to transform his virtual fame into a thriving business. However, this transition is not without its challenges.
The Rise of MrBeast
If you are not familiar with YouTube culture, the success of MrBeast might come as a surprise. His videos, reminiscent of MTV’s Jackass, feature a lot of screaming and elaborate stunts. From crushing sports cars to hurling trains into brick walls, MrBeast’s content is undeniably attention-grabbing. In recent years, he has also incorporated philanthropic endeavors into his work, with video titles like “1,000 deaf people hear for the first time” garnering millions of views.
What makes MrBeast’s rise to fame even more intriguing is that he doesn’t possess the typical attributes associated with stardom. Despite gaining confidence over the years, he still often appears uncomfortable in front of the camera. While his videos follow YouTube’s casual style of quick cuts and shots of friends laughing, he rarely exudes a sense of relaxation. However, his comments section is filled with admiration and respect from fans who appreciate his unique content. One viewer commented on a video of him counting to 10,000, praising his “handiwork and dedication at its finest” and marveling at his patience and mental toughness.
The Dilemma of Online Stardom
For MrBeast and other online stars like him, the question that looms overhead is what comes next. Despite their immense popularity, content creators are still subject to the whims of algorithms, moderators, and the uncertainties of digital advertising on social media platforms. The rules are set by whoever owns the platform, as exemplified by YouTube’s recent efforts to encourage creators to upload short videos in direct competition with TikTok. These platforms can also face bans or restrictions, causing frustration among creators who crave autonomy.
Another challenge for online stars is the constant demand for new content. Viewers expect a continuous stream of videos, which can be exhausting for creators. This relentless pressure to produce can also serve as an incentive for them to venture into offline businesses. MrBeast himself has managed to diversify his revenue streams beyond YouTube’s partner program. He now owns a ghost kitchen called Mr Beast Burger, a candy bar company called Feastables, and has made investments in fellow creators through a fintech platform called Creative Juice.
MrBeast’s entrepreneurial ambitions have been evident through his tweets about potentially selling parts of his business for billions of dollars and even considering an initial public offering. Rumors have circulated about the valuation of his business empire reaching $1.5 billion. In the tech world, this would make him a unicorn—a term used to describe startups valued at over $1 billion.
The Tradition of Celebrity-Run Businesses
While it may seem unusual for online stars to delve into business ventures, the concept of celebrities running their own businesses is not new. David Bowie, the iconic musician, issued asset-backed securities based on revenue from his albums in the late 1990s. George Clooney famously sold his tequila brand, and Rihanna built a successful makeup line. These celebrity-run businesses leverage the star power and personal brand of the celebrities to attract consumers.
However, for online stars, the path to business success is still a work in progress. Unlike traditional celebrities, their names may hold little significance to older audiences who are not familiar with YouTube culture. This can hinder their ability to build a brand beyond the realm of social media and attract a broader demographic.
The Case of FaZe Clan
As the online landscape continues to evolve, we see examples like FaZe Clan—a media company consisting of 93 content creators and esports competitors—that entered the markets through a merger with a special purpose acquisition company (SPAC). The FaZe Clan has cultivated a combined following of over 500 million across various platforms such as YouTube, TikTok, and Twitch.
Revenue for the FaZe Clan is derived from sources such as video ads and brand offerings. They even have their own distinctive product, the “creepy Orange Chicken Pizza Roll.” However, despite the significant following and revenue streams, market interest in FaZe Holdings, the entity created through the merger, has not translated into a favorable stock performance. As of now, FaZe Holdings is trading at less than 30 cents per share, well below its initial value of $10 per share.
The Challenges Ahead for MrBeast
Considering the uncertainties surrounding online fame and the complex dynamics of the digital landscape, it is understandable that MrBeast’s enthusiasm for an initial public offering may have waned. Recent legal disputes involving MrBeast’s business ventures, such as the lawsuit against Virtual Dining Concepts—company behind Beast Burger—add further complications to his entrepreneurial journey. Nevertheless, MrBeast continues to churn out videos, as leaving the confines of YouTube poses a significant challenge.
Summary
MrBeast, the famous YouTuber with over 178 million subscribers, has managed to turn his online fame into a burgeoning business empire. Despite his somewhat awkward demeanor, he has captivated audiences with his attention-grabbing and sometimes philanthropic content. Like many online stars, MrBeast faces the uncertainties of platform ownership and the never-ending demand for new videos. He has diversified his revenue streams beyond YouTube and aspires to take his business to new heights.
While celebrity-run businesses are not uncommon, the landscape for online stars is still developing. Traditional celebrities often have an established brand that resonates with a broader audience, while online stars rely heavily on their niche followings. The case of FaZe Clan, a media company with a massive online presence but struggling stock performance, serves as a reminder of the complexities of this realm.
As MrBeast navigates the challenges ahead, his resilience and ability to adapt will play a crucial role in shaping his entrepreneurial journey. Despite the obstacles, he remains a prominent figure in the world of YouTube, captivating millions with his unique content and entrepreneurial endeavors.
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One of the most famous YouTubers in the world is a tall and somewhat awkward 25-year-old from North Carolina called Jimmy Donaldson, better known to his fans as MrBeast. He has more online followers than Elon Musk, makes millions of dollars from advertising revenue, and wants to turn his devoted subscriber base into a business. But trading virtual fame for real-world fame is tricky.
If you didn’t spend your teenage years glued to YouTube, Donaldson’s success might come as a surprise. The videos he makes are reminiscent of MTV’s Jackass: there are a lot of screaming and elaborate stunts. Escapades include crushing a sports car in a hydraulic press and hurling a train into a brick wall. Recently, much of his work has had a philanthropic bent. Video titles sell with big, catchy numbers: “1,000 deaf people hear for the first time,” for example.
Donaldson doesn’t have the attributes you might associate with stardom. He has gained confidence, but can still look uncomfortable in front of the camera. Though his videos follow YouTube’s faux-casual style of quick cuts and shots of friends laughing, he rarely looks relaxed. Yet his comments section glows with respect. Below a video of him sitting in a chair and counting to 10,000, one viewer wrote: “This is handiwork and dedication at its finest! his patience and mental toughness go beyond i don’t know how or where you find the motivation.
The question for Donaldson and other online stars like him is what comes next. Even the most successful content creator lives at the mercy of the algorithms, moderators and digital advertising vicissitudes of social media companies. Whoever owns the platform sets the rules. YouTube, owned by Google’s parent company Alphabet, is currently trying to get more creators to upload short videos to compete with TikTok. TikTok has been threatened with a ban in the US. As creators get more followers, the lack of control can start to irritate. Autonomy becomes a precious asset.
Creating content is also exhausting work, as audiences demand a constant stream of new videos – another incentive to create offline businesses. He may be young, but it took Donaldson a while to reach his 178 million subscribers. He started posting on YouTube when he was 11. Talking to the podcaster Joe Rogan a year ago he described himself as “hyper-obsessed” with the platform. He investigated ways to make videos go viral, for example by looking at how bright the thumbnail images of the videos were. His images are cartoonish and hyper-realistic.
MrBeast’s videos are one such model: not too long and open with helpful explanations for viewers with faltering attention spans. He also likes to involve other famous YouTubers. Recently, Felix Kjellberg aka PewDiePie (111 million YouTube subscribers) joined him on a roller coaster ride in Japan.
As its audience grows, so does the number of businesses. In addition to the 55% of video ad revenue he gets through YouTube’s partner program, his businesses include a ghost kitchen called Mr Beast Burger and a candy bar company called Feastables, as well as investments in other creators via a fintech called Creative Juice.
Earlier this year, Donaldson tweeted about the idea of selling parts of his business “for billions of dollars.” He had previously hinted at the idea of an initial public offering. Last year, news website Axios reported that it was considering external funding that would value its business empire at about $1.5 billion. In tech parlance, that would make him a unicorn.
Celebrity-run businesses are nothing new. In the late 1990s, David Bowie issued asset-backed titles based on revenue from his albums. George Clooney sold tequila. Rihanna has a makeup line.
For online stars trading opinions, however, the ratings are still a work in progress. Even YouTube megastars may find that their names mean little to older audiences, hampering their chances of building a brand outside of social media.
In 2022, an online media company made up of 93 content creators and esports competitors entered the markets via a merger with a special purpose acquisition company. The FaZe Clan, as they call themselves, has claimed a combined following of over 500 million across multiple platforms like YouTube, TikTok, and Twitch. Revenue comes from sources including video ads and brand offerings that include the creepy Orange Chicken Pizza Roll. But market interest in FaZe Holdings does not bode well for Donaldson. Spacs tend to open at $10 a share. FaZe Holdings is now trading at less than 30 cents a share.
Donaldson’s enthusiasm for an IPO appears to have faded. He sued Virtual Dining Concepts, the company behind Beast Burger, following customer complaints, and was counter-sued in response. Meanwhile, the videos keep coming. Leaving the confines of YouTube will be difficult.
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