October 17, 2020
Dobrik is wealthy already. His monthly YouTube check is around $275k, and he probably makes a little more from his merchandise sales. After a seven-year career becoming one of the most famous YouTubers, he’s probably worth around $30 million. However, if he succeeds with Dispo, his earnings-to-date would pale in comparison.
Dispo is a compelling product, and there’s a good chance it will be very successful, for two reasons. First, Dobrik is outrageously popular with an everyman appeal and a loyal following in a highly valuable demographic. Second, Dobrik’s reach is enormous. By himself, he has 26 million subscribers on YouTube, 23 million on TikTok, and 14 million on Instagram. The rest of his entourage have millions more. Dobrik himself has accumulated 8.5 billion YouTube views.
With only light marketing, Dobrik has gotten a million downloads for Dispo already. If he starts seriously pushing Dispo, he will easily get millions more. Normally, the biggest hurdle for consumer software/social media apps is solving the initial chicken-and-egg problem: how do you get people to sign up if no-one else is on it? Dobrik bulldozes this problem. He is a one-man network effect. While other companies spend years slowly growing by word-of-mouth and spending millions of dollars on marketing, Dobrik eclipses them from day one: he gets his first million users by just telling his followers to download his cool new app. While traditional brands might balk at forking over tens of millions of dollars in cash to influencer advertising campaigns of hard-to-assess effectiveness, for Dobrik, this is free.
It’s hard to overstate how important this is. Lots of great products die because they can’t get early-stage consumer traction, sometimes for no reason other than bad luck. Dobrik can catapult a product into the growth stage. He creates what normally takes years of brand development instantly with zero cost. Normally, an early-stage consumer product in a highly competitive space like social media will pay about $10-30 in customer acquisition costs (CAC) to register a single new user. Dobrik’s following gifts him the equivalent of tens of millions of dollars in CAC.
Consumer software presents an elegant solution to an age-old problem: influencers (more traditionally, celebrities) have millions of people watching their every move, but often struggle to monetize all these eyeballs, even though attention is arguably the most valuable scarce resource in our internet economy. Historically, these people have sold merchandise, been paid for appearances, done book deals, acted in movies/TV, endorsed products, and sometimes even put out music albums. These things all make money, but relative to the value of their brand and the attention it gets, these monetization techniques are earning pennies on the dollar. These are five- and six-figure deals when their full CAC potential is worth hundreds of millions.
If Dobrik succeeds, it will change the influencer monetization game. While top-tier influencers previously made single-digit millions of dollars, commercial success for Dispo could be worth hundreds of millions, if not more. If Dispo just raises a Series A or Series B, Dobrik’s share in Dispo (at least on paper) would be more valuable than his current net worth.
Regardless if Dobrik succeeds in this way, some influencer will, sooner or later. Consumer tech has been moving steadily from San Francisco to Los Angeles over the past few years – virtually all the cool new consumer companies are out of LA – and it’s only a matter of time until the tech and influencer worlds intertwine more in this way. For a start, TikTok influencers at the Sway House are starting to angel invest into consumer social companies, and use their followings to help grow those businesses.
This intertwining seems inevitable. The entrepreneurial spirit is already there. Emma Chamberlain (10 million YouTube followers) started a coffee company. Bryce Hall and Josh Richards (combined 36 million TikTok Followers) started an energy drink company. The only issue is that merch or beverage companies have low upside and command low multiples, compared to software. By opportunity cost, it’s not the best use of these influencers’ brands. It’s only a matter of time until they start co-founding businesses in the high multiple, high-upside consumer software space. In the past, consumer tech made influencers. Soon, influencers will make consumer tech.