WORTH WATCHING:
If They Will Not Buy It, They Will Not Sell It
The Advantage · Mike Wystrach × Scott Van den Berg · ~37 min
This week's Worth Watching is my conversation with Scott Van den Berg, founder of HotStart VC. Scott invests in companies started by celebrities and creators, including brands from Selena Gomez, DJ Khaled, and Jake Paul.
He is Dutch and had no network in the US, let alone Hollywood. So he started writing about celebrity brands on LinkedIn, and now the managers call him.
WHAT I LOVED ABOUT IT:
Scott's test for a celebrity partner is simple. Were they a customer first? Kim Kardashian drank Update for a year and emailed the founders notes on marketing and product before she ever came on as a co-founder. That is the deal you want.
The danger is not a celebrity who is too small. The danger is a big one talking to the wrong audience. Scott sees startups get starstruck, give away 20% of the company, and watch two or three posts convert almost nobody.
At Cutting Horse, an influencer can be a plus or a minus. A big platform makes your first several thousand customers a lot easier. It does not get you the second, third, and fourth purchase. The product does that. Even if you are The Rock, at some point you exhaust your platform.
THE LINE THAT STUCK
"If they don't buy it with their money, they're not gonna sell it with their influence."
Scott's whole diligence process in one sentence. Watch him explain it →
MY 20-SECOND RECAP
if you do not have the full 37 minutes
→Date before you get married. A celebrity partner is a co-founder relationship. Find out what they actually want from it, because someone already rich joins a company for different reasons than you did.
→Vest on deliverables, not just time. Tie their equity to what they do, and to revenue milestones where you can.
→Send the product, not the deck. Get it in their hands with no ask attached. Scott says that sells ten times better than a pitch deck.
→Supported by, never dependent on. Scott calls it key celebrity risk. Yeezy ended overnight over things Kanye said online. If their name is on the label, you cannot take it off.
PRO MOVE
Before you offer anyone equity for their audience, ask whether they have ever paid for your product. If the answer is no, send it and wait.
