Luck favors the heroin addict that refuses to give up! Just ask Disney.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is… Well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
[Colair Cooling & Heating Ad]
Dave Young:
Vice Media. So we’ve all seen Facebook articles and things that are shared from vice.com.
Stephen Semple:
Right. Yeah.
Dave Young:
And I’m assuming that this is a bigger thing than just that.
Stephen Semple:
It is. It is. Today they do over a billion dollars in sales, is what’s estimated. They’re a private company, so it’s hard to know exactly. And they have 3,000 employees and 35 offices around the world. So they’re a big deal. And they remain privately-owned. They’re owned by Shane Smith, one of the founders. Disney, A&E, George Sorrows, James Murdoch, and TPG Capital. Disney is a surprising one, especially when you look at the type of content.
And wait till you hear the story behind this. It’s crazy. This one is crazy. So it was founded by Suroosh Alvi, Shane Smith and Gavin McInnes in 1994, right? This is when it started. This is sort of right at the beginning days of a lot of the online things going on. And today they’re considered the largest independent youth media company in the world, is kind of how they build themselves. But as I said, it’s a crazy story, especially when you consider this media company started in 1994, and when we think from 1994 today, how many media companies have died? The big growth in that time has been YouTube. YouTube went from nothing to… YouTube has 2.6 billion active users and there’s 500 hours of video uploaded to YouTube every minute. This is the backdrop. So with this backdrop, it’s amazing that they were able to create this media company. And as I said, story’s nuts.
And there’s a Canadian tie-in. So I kind of like it. Suroosh, who’s the main driver behind it, was born in Toronto and his parents were from Pakistan, and they’re academics. But they moved around a fair bit and he did his high school in the United States. And growing up with Pakistani parents, to be respected in the community, you needed to do medicine or engineering. So he was very much the black sheep, because what he ended up doing when he went to school was a BA. He was the outlier there. And he went to University of Montreal and he got a degree in philosophy, McGill University of Montreal. And when he finished, not only did he finish with a degree, but he also finished as a full-blown heroin addict. He blamed the city. He said this has to do with the influence of Montreal and university and whatnot, so he moved around. And finally what he decided to do is, he went to Eastern Europe and he moved into this little tiny town in the middle of nowhere because he said, “If I go there, I can beat the heroin addiction.” And basically what he discovered-
Dave Young:
Wow.
Stephen Semple:
… was even in a little small town in the middle of Eastern Europe, you can still get strung out. You can still find it.
Dave Young:
You can still find it.
Stephen Semple:
So he returns to Toronto, he goes into grad school, takes psychology, drops out. Back to Montreal and he decides to do rehab. And at this time, he’s living a double life. No one knew his problem. His family was this very conservative Muslim family. And when he finally shared with them about his addiction, it was really bad. It really hurt the family. And his mental state was not good. He went to rehab twice. In early ’94, he’s on a waiting list to get into another treatment center and life’s not great. And he continues to relapse. But he comes out of this treatment center, and this time he’s really worried about relapses. So he goes to addiction meetings twice a day. Basically he’s spending his life going to these meetings and he’s on welfare, going to meeting after meeting.
And he has no idea how this came about, but he decided he wanted to work for a magazine. So I want to work for a magazine. No idea of doing what, but wanted to be with a magazine. He wanted to go underground and cover things that were not being covered. But he had no experience, no training, no nothing. And one day he’s in a meeting, someone came up to him really random and said, “Do you have a sponsor?” This guy became his sponsor, said he would sponsor him and said, “What are you doing?” He literally said to him, “Have you ever thought of writing?” So this random sponsor who came up to him said to him, “Have you ever thought of writing?” while he had it in his mind, he wanted to work for a magazine. And his sponsor said to him, “I know a place. I’ll take you there.” And it was a magazine. It was-
Dave Young:
Of course it was.
Stephen Semple:
… an English magazine in Montreal. And his sponsor introduced him to this magazine, didn’t know him, and said, “I’ll vouch for him. I’ll vouch for this guy. You should hire him. You should hire Suroosh here for your magazine. I’ll vouch for him.” And they were like, “All right. We’ll hire him then.” So you just think about this-
Dave Young:
Oh, wow.
Stephen Semple:
… crazy, lucky happenstance. He’s sitting there thinking to himself, “I’d like to work for a magazine.” And then somebody comes up to him and says, “Hey. Do you need a sponsor? I’ll sponsor you. What are you thinking about? You should write. Let me introduce you to some people.” And it’s a magazine. Sorry. And I said something incorrect at the beginning. This company was a French magazine, but what they wanted to do was start an English magazine. So he was going to start the English magazine for them. And they came up with a name called The Voice of Montreal. And he started to recruit. So he was walking with his friends and he started to freak out. “I have no idea what I’m doing.” And his friend said to him, “Well, what have you got to lose? Maybe it’ll be great, maybe you’ll do one issue and then they’ll fire you. But even if you do one issue, you’ve now got an issue you can carry around and show people because you did a job in publishing a magazine. What have you got to lose?”
Dave Young:
Honestly, you don’t get a bachelor of arts and philosophy at McGill University without doing a little bit of writing.
Stephen Semple:
Yeah. Yeah. Exactly
Dave Young:
Right. So he can’t say, “Well, I can’t write.” No. You can write. You’ve been writing. We all write. Even if we just are speaking our thoughts, we’re we’re putting words together, we’re putting thoughts together. I’ve always thought everybody’s a writer, you’re typing the words.
Stephen Semple:
Yeah. Exactly. Yeah. So basically, they start the 16-page newsprint magazine and they’re kind of laughingstock, and really economically it didn’t make sense because there was already two French magazines and two English magazines and it was really hard to stand out. But they were covering the alternative scene in Montreal. And one night Shane is in a bar out trying to distribute magazines and he meets Gavin. He sees him as this great salesperson. So he hires him as the ad sales guy. But things at the magazine are not working out because they’re not getting paid, right? It’s just not working out. They’re not getting paid. So they decide to leave.
Now The Village Voice has the trademark on the word voice and was going to sue them if they took the name because they were just going to take the name and run the name. And so, what they decided to do is change from voice to vice, completely made up, right? So that’s how Vice Media came about. And they basically started this new magazine and they each borrowed five grand, and it’s the mid ’90s, and they became Vice.
And what they wanted to be is, they wanted to be really authentic, get as close to the source as possible. If you were doing an article on prostitutions, have a prostitute write it. Go out with the pimps, ride around with them, interview. It was very raw, very, very shocking. And they were anti-censorship. They said, “When you buy an ad, do whatever you want. If you want to have a nude porn star in your ad, do it. We don’t care. You can run whatever you want in the ads. We stand against censorship.” And what they found was, these magazines were going everywhere. Everywhere. So they were still bootstrapping. It was punk rock capitalism, raw, aggressive. They had no debt. But what they knew is, they needed help. They needed help. And they identified this guy, Richard Sliwinski in Montreal, who had sold a company for tons of money and was buying up media companies. And they wanted Richard to invest in their company. So Shane and Suroosh are being interviewed by a big paper in Montreal, La Presse. It’s one of the biggest papers in Montreal.
Dave Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Empire Builders Ad]
Dave Young:
Let’s pick up our story where we left off. And trust me, you haven’t missed a thing.
Stephen Semple:
They share with LA Presse that Richard Sliwinski was interested in buying them. They shared it in the press. They had never talked to him. They’re just like, “Hey. We think this guy should invest in our company. So what we’re going to tell the press is that he’s interested.” They made the whole thing up. But then when Richard read it, he called them. He said, “Tell me about your company.” They met and did a deal. They met in a restaurant, did this deal really quickly, no due diligence, nothing along that lines. The end of the meeting, he says to them that he wants to buy, “Come back and tell me how much.” They made up a value. And basically he invested. And at the time they were like, “You know what? If we’re going to really make this go, we got to go to New York. New York is the center of the world. We got to go there.” And Richard wanted them to go there too because he had this vision where he wanted to build this multi-channel with all these brands and tie things back to e-commerce and make it go public.
So they built fashion and TV and films, and they had brick and mortar, and they even started a fashion label with four stores. But very quickly, Sliwinski ran out of money and retreated to his place in Nantucket. They weren’t able to get ahold of Richard, found out he was there, drove out [inaudible 00:12:10]. And basically he said to them, “At this point it’s over, can’t put in any more money.” So they moved back to Brooklyn. They bought the company back really cheaply from Richard. They borrowed money from the family. But they went back to their core and they said, “You know what? Let’s get rid of this debt.” They negotiated down debt, they worked their way out of the debt. They went back to rebuilding things on this little shoestring budget. And they said, “This is a second chance to do things the way we really wanted to do it. We were doing this punk rock capitalism, and then it got away from us where we’re building this brand and fashion, this, that and the other thing. Let’s get back to that.” And also what they wanted do was get back to doing things that were risky and controversial. They saw themselves as a cultural magazine that occasionally did journalism, and if they did, it was raw.
So 2006, they picked up video cameras and basically just recorded stuff. They ended up taking a meeting with MTV and MTV said to them, “If we gave you money, what would you do?” And they said, “We would do a DVD kind of like…” But it would be some sort of Jack Ass meet 60 minutes, would be what they would do. And one of their big breakthroughs was, they traveled to Pakistan, they visited arms markets in Pakistan and filmed all this, and told this story really, really visually. And that eventually ended up becoming a segment on the homepage of CNN. And their whole thing is, they just refuse to die. They just would keep going and doing these things, and growing and growing, and things eventually got traction. But what they felt was, it was really important to have a point of view and to be raw. And then in August of 2013, Rupert Murdoch invested 70 million in Vice Media. And then Disney got involved and A&E got involved in 2014. And today they’re now this really, really, really, really big deal.
Dave Young:
It’s really the story of a couple of guys that just refused to give up on their dream and doing what they love, right? Following their voice, being their authentic selves and trusting that if you keep at it, you’ll find a way to get people to pay you to do what you love.
Stephen Semple:
Yeah. So they went kind of through two iterations. The first one was just this crazy, “Let’s do this media thing.” Right? And then somebody invests in it with this dream of making it this big multi-channel thing, and that failed. And then they went back to their roots of, “Look, let’s just tell these controversial stories in this really raw aggressive manner, which not everyone is going to like. Screw it, we don’t care.” And they bootstrapped. But in the end, that is what made them successful. Because they eventually created enough of those things that some of it got real traction. Something got on the homepage of CNN and blew them up. Other investors came in and invested money with them. But at that point, they had already established their voice as being this bold, controversial thing and that wasn’t going to change. That wasn’t going to change at that point.
So it was really interesting iterations they went through. And it’s kind of a funny story from the standpoint that again, knew nothing about journalism and had in this head, “Boy, I want to be a journalist.” And along comes somebody’s saying, “Hey. Let me introduce you to these people. You should hire him.” And he’s suddenly doing journalism. But the other part that’s so raw to me, and we would all experience that, would be that freak out moment of, “Oh my God, what have I done?” And his friend gave him great advice. “What’s the downside? If you produce one magazine, you now got a magazine that you can show people. What the hell?”
Dave Young:
Yeah. I think about if you’re a young person and you’re trying to make something happen like this. Some advice that Roy H. Williams, I’ve heard him give over and over again, and he’s given it to even partners that do the same kind of consulting, is that keep your staying power cost low. Meaning, don’t get too extravagant on what you’re buying and paying for. Keep your cost of living low enough that you can focus on doing what you love and are not beholden to-
Stephen Semple:
Yeah. Stay in the game.
Dave Young:
… debts and to stay… Yeah. You just got to stay in the game. How long can you stay in the game and hold out till you’re doing-
Stephen Semple:
Yeah. Absolutely.
Dave Young:
… what you love? And on the face of it, it looks so easy. If you’re a heroin addict and you have nothing anyway, you have nothing, your staying power is, at that point it’s almost kind of infinite, right? How long can you stay doing nothing on welfare going to two heroin addiction meetings a day? You could probably do that, I was going to say the rest of your life, because who knows how long that is. But you know what I’m saying, right? The stakes are low and the worst that could happen is, it turns out you’re not a very good writer.
Stephen Semple:
And the stumble happened when they got away from that.
Dave Young:
Yeah. And you’re following somebody else’s dream.
Stephen Semple:
And then when they dial back to their roots is when they had the really big success.
Dave Young:
And Vice now is huge. Is it all Vice or they have other brands in the umbrella?
Stephen Semple:
Most of the other brands inside the umbrella all follow the Vice name.
Dave Young:
So they’re all aligned and [inaudible 00:17:36]-
Stephen Semple:
Yes. Yes. For the most part. There’s a couple little exceptions, but for the most part they’re all variations of Vice. Yeah.
Dave Young:
Cool. What a cool story. Thank you for sharing this one.
Stephen Semple:
Awesome. Thanks, David.
Dave Young: Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app and leave us a big fat, juicy five-star rating and review. And if you have any questions about this or any other podcast episode, email to [email protected].
