May 19, 2020

The Universal Truths of Business Success with Rich Antoniello

Not too long ago, Complex CEO Rich Antoniello tweeted this—what he considers the formula for success in publishing. Seems pretty straightforward, but...

Not too long ago, Complex CEO Rich Antoniello tweeted this—what he considers the formula for success in publishing. Seems pretty straightforward, but...

It got the Business Casual team thinking: Does such a formula really exist? And if Rich is right in saying that it does, how can lessons he espouses from the publishing world apply to every other sector?

This week on Business Casual, we get an answer straight from the media CEO’s mouth. Rich answers every burning question about his formula for success, from what matters most to how differently things would’ve gone if he’d just invented YouTube.

There’s a reason we’re talking about this right now. It’s because now more than ever, success in publishing is hard to come by. In an industry known for its thin margins and stubborn resistance to change, a pandemic and recession have accelerated hardships already being played out. 

We recorded this episode on March 31 as the COVID-19 pandemic began to take a stranglehold on the economy. The lessons have aged better than we could’ve ever expected: One look at this list of newsroom layoffs paints the picture better than any episode description could—layoffs have come for everyone, from old media to new. 

  • Understanding how to insulate your business (whether it’s in publishing or not) from having to make those hard decisions to let your people go? That’s important today and will be important tomorrow.


And FWIW, Rich’s wisdom spans far more than just the youth culture his Complex team is so devoutly dedicated to. Here’s a small sample of his pep-talk-but-realistic vibe:

  • “There is no excuse not to evaluate yourself, every word, every story, every video, every social post, every campaign that you’ve created. There's always ways to get better. And you have to be pushing yourself and you have to go not to do more of it. Like this is not a more thing. It's a how do we do it better?”

Listen now.


Kinsey Grant, Morning Brew business editor and podcast host [00:00:06] Hey, everyone, and welcome to Business Casual, the weekly podcast from Morning Brew, answering your biggest questions in business. I'm your host and Brew business editor, Kinsey Grant. And now, let's get into it. 

Kinsey [00:00:17] In 2019, U.S. adults spent an average of 12 hours, 9 minutes with media per day, over half of which was spent consuming digital media. That's a lot of time. And if you follow Malcolm Gladwell, or digital media consumption experts, [indistinct] just about two years and change. And that's my stat-heavy way of saying that we watch and read a ton of stuff on the internet, and we're constantly fed new stuff to watch and read. But with that, we also wield enormous power as consumers over who lives and who dies in the media world. 

Kinsey [00:00:48] So how are media companies earning and keeping our attention when we're spending over half of our waking hours, by some counts, consuming media? Is there a formula for success? To help me answer that question, I'm very excited to welcome to Business Casual, Complex CEO Rich Antoniello. Rich, thank you for joining me today. 

Rich Antoniello, CEO of Complex [00:01:06] That was a peppy, peppy [Kinsey laughs] intro. I love it. I'm very excited. 

Kinsey [00:01:11] Thanks. We like to keep things high energy here at Business Casual. So Rich, for those of us who are listening here who may not be as familiar with Complex—you have been running things there for a while now, right? Since like the early aughts. 

Rich [00:01:25] Eighteen years. 

Kinsey [00:01:26] Yeah, 18 years. Which in the media world, is eons. 

Rich [00:01:30] Yes. Oh, I mean, first of all, I always say, it's not the age, it's the mileage. Well, in my case, it's both. So I'm roughly 150 years old. A few media years. 

Kinsey [00:01:41] OK. So is that like dog years? 

Rich [00:01:43] Oh, it's way worse than dog years. 

Kinsey [00:01:45] OK. Got it. [laughs] But Complex is kind of the go-to media platform for what we call, quote unquote, youth culture. Lots of coverage dedicated to pop culture, music, style, sports, even sneakers, a lot of sneaker content. And I was looking today before we got on this remote recording for today's podcast—there is a funny headline that I liked. It was ranking the weekend's albums [laughter] that was, I feel like, a perfect first headline to see when you go on to Complex—is that now you see news and things like how to style your Air Force 1s, but it's also something that's super-timely and something that people probably are searching for a decent amount, I would I would imagine during these times. 

Rich [00:02:24] I think disproportionately so now. But to your point earlier, those stats about how much media consumption—think about how much media consumption is actually going on now versus those numbers that you threw out at the beginning of the podcast. 

Kinsey [00:02:37] Right. Right. 

Rich [00:02:38] So for us, what's interesting is, I think, you are nailing the bit of the vibe. We always talk about hip hop being the kind of backbone and cartilage—and hip hop as a culture, not hip hop music exclusively. And that really drives all of our touchpoints. That's the unifying factor among sneakers, art, design, music, even sports. The through line through everything is hip hop. And that's the lens in which we look at everything. And I think when you really think about youth culture and what disproportionately informs that, it is hip hop. That is why I think we are just so relatable to such a large audience from a youth perspective. Not that you asked—I just thought it was a good way to describe. 

Kinsey [00:03:20] I love it. But I'm wondering how you became a hip hop voice of expertise and voice of reason. What was your trajectory to getting to this point? 

Rich [00:03:28] Well, I'm a Brooklyn kid, and a great deal of what I listened to was hip hop. There are some really bad photos, I can show you some things. We used to break dance and a lot of some very embarrassing things for my junior high school and high school days, which were really the origination days of not just hip hop, but if you really think about where sneaker culture was birthed, it was birthed in Brooklyn. It's very interesting. Those touchpoints for me, sneakers and hip hop, were so important to me growing up. 

Rich [00:04:05] And then I went into the corporate world and got a whole bunch of business acumen. And then I was able to, once I was mature, around 30 years old, had the opportunity to merge the two—my childhood passion points and my business acumen—from a corporate perspective, to be able to do Complex. 

Kinsey [00:04:22] Right. 

Rich [00:04:22] So I kind of lucked out beyond belief. 

Kinsey [00:04:25] Yeah. It sounds like it. But I mean, the harder you work, the luckier you get. You've put in a lot of hours and a lot of effort and strategy over the years. 

Rich [00:04:33] And blood. And sweat. And tears. Yes. [Kinsey laughs]

Kinsey [00:04:35] All of the above. But that's why you've sort of become this outspoken voice in media—in a good way, I mean that, in recent years, and I want to talk to you today about how and when and when they do not succeed in media, when companies do not. So part of this conversation, and I let you know ahead of ahead of time that we wanted to talk about this, but part of this conversation is about a specific tweet that you tweeted on March 24th that caught my eye. And I think this tweet really speaks to the conversation that I've been looking to have for some time now. 

Kinsey [00:05:07] But the tweet reads—and I'll put a link in the show notes so people can see the formatting, because I think it really adds to things, and the capitalization—but it reads, in general: "Simple formula of needs for publishers to be successful, especially in this tumultuous time. Brand. Consist. Real audience. Plus [indistinct]." 

Rich [00:05:24] It was supposed to be consistent. So I screwed that up. 

Kinsey [00:05:27] Well, hey, it still works, right? "Brains, ingenuity plus balance sheet ability to weather challenges equals a real business that will stand all the tests of time." So the concept that brand plus brains plus balance sheet is a business. 

Rich [00:05:42] That's right. 

Kinsey [00:05:43] I want to take this apart a little bit and take each of those different elements one at a time and pick your brain about how they interact, why they're important, who's doing things right, who's doing things wrong. So what do you say? Let's get started. 

Rich [00:05:57] Well, yes. 100%. I'd love to break this—let me even just jump in quickly and explain something there. 

Kinsey [00:06:02] OK. 

Rich [00:06:03] And you know, I've had this conversation in pieces before. All over the place for a long period of time. I used to be like, there's a lot of people who have some businesses that actually don't have brands. And then there's people who have brands who don't have businesses. And those mean a lot of things, and we're gonna get into some of that. What's interesting was when I was thinking about who is going to come out the other side within the very current challenging context, I was like, how, if I had to simplify this and say, what are the ingredients at any time for a successful business that just get heightened during a very challenging time? 

Rich [00:06:38] That's how I came up with brand plus brains plus balance sheet equals a business. And there's a lot of people who have one. Some people who have two. And there is a very short list of people who have all three of those things right now. 

Kinsey [00:06:52] Right. And I imagine that this extends beyond just the publishing space. 

Rich [00:06:57] Oh, 100%. I mean, even right now, the stock choices I'm making from a market investment perspective. My first question that I'm asking my financial adviser is, what does their balance sheet look like? If they had a 50% revenue cut, are they still in business from a balance sheet perspective in 18 months? 

Kinsey [00:07:16] That's a pretty hot take these days. [laughs] Taking a look at the balance sheet. 

Rich [00:07:18] I mean, I've been asking him for a month now [laughs], and that was where—because to me, I thought the winners and losers in the market—and I think it's going to be true for the publishing sector as well—is who is going to be able to survive, because this is going to be challenging. But I want to—also to this point earlier and I know we discussed it a little bit, is—I don't want this to be just about corona right now. All of these things are universal truths all the time. 

Rich [00:07:51] And when I say that, is if you've been building up your balance sheet because of running a disciplined business, and then you now have the capital, you can withstand something like these disasters that go on or the resets from a financial perspective or a downturn in a sector. That is your responsibility. 

Rich [00:08:11] A balance sheet isn't a luxury and a nice-to-have. It is an absolute fundamental need-to-have that a lot of people have ignored for a very long period of time, that I think from a behavioral perspective, or I hope from a behavioral perspective, will be changing as we go forward. 

Kinsey [00:08:26] Right. Inevitably, there will be challenges in the future. They might not be pandemics, but like you said, it could be a financial downturn. It could be a recession. It could be any manner of things that will crop up and affect large swaths of the economy and of U.S. businesses and global businesses. 

Rich [00:08:41] Or your individual business, vertically, as well. 

Kinsey [00:08:44] Right. 

Rich [00:08:44] Like different things can happen. You can have a social media disaster. All of those things, whatever. I mean, there's so many things, lawsuits, so on and so forth. That is your job as a leader, as a business leader, to really have this checklist, checked off across the board. 

Kinsey [00:09:02] Right. Creating these moats for your business to stand, like you said, the test of time. 

Rich [00:09:06] That's right. 

Kinsey [00:09:07] OK. So let's jump in, starting with brand. Complex's brand, like we were talking about at the top of this conversation, it's strong. It is a very specific brand. And I think a lot of people, especially young people, can relate to very strongly, can understand pretty naturally. They don't really have to be explained, you know, why the weekend matters [laughter] or why they should care about it. But I'm interested to hear your perspective here on trying to cater to this, quote unquote, youth culture. Is this something that limits the number of people you can get in the Complex pipeline? 

Rich [00:09:39] Well, first of all, I would argue we don't cater to anybody. 

Kinsey [00:09:43] [laughs] Ah, OK. 

Rich [00:09:44] No, no, no. And I don't mean that—I'm not trying to, you know, it's not this peacocking thing. It's that's not our strategy. Our strategy is to define, create the news, and let others report on what we think the conversation should be. So we're not catering, we're not chasing, we're not reactive from a news perspective. I think that's one of the reasons we have a brand. When I say brand and then I say the typo, consistent, real audience, I don't mean like, oh, my God, the biggest, most amount of uniques or video views or pages, of which we have lots and lots of those as well. 

Rich [00:10:18] But when I say brand and that consistent real audience, I mean the depth of connection. A depth of connection to a whole bunch of people at scale, but a super-deep connection with them because brand is the definition and the defining ability to then go take that audience and port them to other platforms. Are you going to be strong on social? Are you gonna be strong—you know, we have lots of programs on different cable channels and television channels and streaming platforms. And there's a lot of people who have dotted line relationships with their end consumer. 

Rich [00:10:52] And then when they try and move them, they can't get them off the platform because the brand doesn't really mean anything to the end consumer. Why we've been successful diversifying our business is because of the fundamental connection and depth of connection we have with that audience at scale. 

Kinsey [00:11:09] So it's almost like going a mile deep before you can go a mile wide. 

Rich [00:11:15] True. Exactly. Now, the miles won't be the same because the distribution platform will define that. But when you go a mile deep the first time, the ability to be effective and move 30 to 40% of that audience so that you have scale immediately and viability of that product enables you to discover other audience on that distribution platform itself. We're a very qualitatively driven business, but there's a lot of analysis, thought process, and quant that goes into amplifying the quality side of it. 

Kinsey [00:11:48] I think that that is something that's often missing in the media world today. As someone who works at a media company [indistinct] [laughter], when we started this podcast, it was a lot of oppo research trying to figure out what's out there. And there are a lot of podcasts, but there aren't a lot of good podcasts. There aren't a lot of really strongly branded podcasts. And the same could be said for so many —. 

Rich [00:12:07] It's not just podcasts. It's anything. 

Kinsey [00:12:08] Right. Exactly. You could say the same thing for almost any platform. 

Rich [00:12:12] Oh yeah. I would agree. 

Kinsey [00:12:12] Or any medium. 

Rich [00:12:12] Most content sucks.

Kinsey [00:12:15]  Right. Exactly. 

Rich [00:12:15] It's true. 

Kinsey [00:12:15] Except for this podcast. [laughs]. 

Rich [00:12:18]  We have a few things that are pretty good, so. 

Kinsey [00:12:21] Right. [laughs] So, like you said, a few things. You have a lot of brands under the Complex umbrella. I know you brought up Hot Ones, which is one that is very, very popular, especially with my peer group. But explain to me how you approach platforms when you come to creating these new brands. Do you approach branding in a platform-agnostic way when you decide you want to start a new brand under the Complex umbrella? 

Rich [00:12:43] Well, it depends on where we're starting it. I don't know how familiar you are with Complex's history, but we used to be an ad network as well. We used to have all of the best sites in each of the verticals: sneakers, art, design, culture, music. And what's interesting is, what we look at is the series that we create: Sneaker Shopping, Joe La Puma, Hot Ones, The Taco Show, The Burger Show, Full Size Run, Everyday Struggle. All of these brands and series that we create, we look at as the new school websites for us. What websites used to be is where we'd have a deep conversation with individual communities and audiences and develop a community ourselves. 

Rich [00:13:25] We do the same now from a serialized perspective. What's interesting about video, though, is it's distributed across multiple platforms, whereas the website was one place where you went to go consume it. 

Kinsey [00:13:37] OK. 

Rich [00:13:37] So we just look at those series as the new school websites for us in the manner in which we used to approach our business. Does that make sense? 

Kinsey [00:13:45] It does. It does. And I've heard you say before that you guys are spending less time on text and more time on video, pretty regularly. 

Rich [00:13:54] Well, we made that decision—I mean, text is still important to us and we still do a lot. We put out over 200 pieces of new text content every single day. It's just that we're kind of a content machine in a lot of ways. So we put out—I believe right now we have 26 weekly or daily shows that we put out. We basically put out more original programing than most cable channels. 

Kinsey [00:14:21] When we talk about the ways that the video acting as the website—that the video can be transported kind of across the platforms here—anybody can go to and look at the top of your website banner. You have Facebook, Twitter, Instagram, Snapchat, YouTube and TikTok icons, which is more than the normal media site. You're lucky if you get Facebook, Twitter, and Instagram. But to add Snapchat, YouTube, and TikTok to the mix—all of those I feel like, kind of prioritize different types of content. Is that something that you think about when you're creating all of this, you know, and branding—that a video that does well on Snapchat won't maybe have the same kind of performance on TikTok? 

Rich [00:15:03] You know, it's an interesting question. And for a while, we definitely thought of the platform first. But because of the distributed nature of what we're doing and the fact that we try and build communities, we've kind of flipped that a little bit now. But let me make a point about—I love the fact that you caught that we publish to all of those platforms and don't just publish to check a box. 

Kinsey [00:15:28] Right. 

Rich [00:15:28] But if you notice, you go there and not only—I hate to say this, but no shots at a lot of people—you know, like a lot of brands are strong on one or two platforms. Oh, like, we're really good on YouTube, but we suck on Instagram or we're really good on Instagram, and we have no Facebook and no YouTube following. If you go to any one of our platforms, we're gigantic and not only large from a scale perspective, but our engagement are off the charts. I don't know if you saw the Paul Rudd episode of Hot Ones, but to say that we took over the world [Kinsey laughs] from a meme perspective—it was unbelievable, right? I mean —

Kinsey [00:16:05] I'm pretty sure we've used it in the Morning Brew news. 

Rich [00:16:07] Everyone has used it. Everyone has used it. It is insane. I mean, that's my—again, my point. It's a proof point, yet another proof point of us creating the news and others reporting on us as the news. 

Kinsey [00:16:18] If you feel like saying—what companies are or, I don't know, aggregators or platforms out there, do you feel like are not taking that tack—that are more focused on covering what you're doing and catering to a consumer like we were talking about earlier? 

Rich [00:16:32] I don't want it to come off as a criticism. Some people's business is not to be in the original content game. 

Kinsey [00:16:39] Right. 

Rich [00:16:39] Or they don't want to spend the money to do that. That's their choice to do it. But my viewpoint is it's up to the advertisers and the brands and the consumers to go, who's giving you value? Where's the value exchange? What's the value exchange with the consumer? What's the value exchange with an advertiser? What's the value exchange with a brand? 

Rich [00:17:01] If somebody is an aggregator only of other people's content, should you be spending? If you're Procter and Gamble, should use be spending money going, "Oh, help me craft my brand conversation and I want to be on your platform." Of course not. Does that make any sense? 

Kinsey [00:17:17] Yeah, it does. But I mean, I think that there is a place in the media ecosystem for aggregator-type services. 

Rich [00:17:26] 100%. 

Kinsey [00:17:27] I say this as a newsletter writer. We create original content, yes, but half of what we do is — 

Rich [00:17:31] 100%. But their business—the way brands should interact with them, would be buying them in a programmatic way, because it's more of a last-click thing, because it's more based on the aggregation and curation rather than the creation of that content. That's my point. People shouldn't be doing branded content with people who are aggregators. 

Kinsey [00:17:51] Right. [Rich laughs] And part of the brand has to be adding value in some way. If you're not going to be breaking the news, you need to be adding value in some capacity. And I think a lot of what we're experiencing in this influx, of constant influx of information, is not that. 

Rich [00:18:05] And look, again, everybody has their own path and not everybody can be an original content developer. It is very hard. It is very expensive if you also don't have a great deal of reach and scale to have people discover your content. And that advantage. I understand why people have to take different routes. What I would hope is that all of your customers, as a business, evaluate you appropriately. And it's not—they don't group media together. That's my point. 

Kinsey [00:18:41] How do we get to that point? 

Rich [00:18:43] I mean, look, you don't do buys off of lowest common denominator. I understand you have to use, you know, Comscore numbers or things like that. And, you know, it's not a shot a Comscore at all. I look at Comscore the way I look at SATs. Are SATs going to give you an indicator of how successful someone's going to be in their life or not? 

Kinsey [00:19:05] No way. No way. 

Rich [00:19:06] No. But you have to have a guidance. 

Kinsey [00:19:08] Right. 

Rich [00:19:09] You have to have something. But people going, I'm gonna make a decision—if you're creating a brand messaging campaign on an integrated basis with very specific messaging and it's this sponsored content or branded content play and you're making your decision exclusively off of someone's Comscore reach, then no wonder it's going to come out poorly. 

Kinsey [00:19:37] OK. 

Rich [00:19:37] I mean, it's just that simple. 

Kinsey [00:19:39] So let's say a brand does strike gold in the way that you were just explaining—that it has very, very engaged consumers and it is creating the right messaging and they are coming back for more time and again. And it's all original. Let's say someone copycats that. How do you approach that kind of—I don't want to call it competition, but how do you approach the concept that people, if you're doing something right, other people are gonna try and do the same thing because they also want people to pay them money? 

Rich [00:20:06] Well, are you intentionally trying to segue into the brains portion of this? Because I think you're already dead. 

Kinsey [00:20:12] OK. [laughs] 

Rich [00:20:12] No, no, no, no, no, no. It's just perfect. That's the perfect segue. I grew up in print. My first job, in '95, my first sales job in '95 was at Wenner Media for Men's Journal and Rolling Stone and US magazine, those groups over there. And when we used to figure out, like a formula for a great piece of brand campaign or a great marketing play or even great editorial, you had six months, a year, to kind of own that. And, you know, that was a very big luxury and a print basis to be able to have that kind of length of time to exploit something or defend the differentiation. 

Rich [00:20:59] Now, if you come out with something—to say that someone might have an iteration of your product, your content, your idea up within four seconds on Twitter or on Instagram or anywhere. And look, we don't love people copying us. But we look at it as imitation is the sincerest form of flattery. But I think it's up to us not to whine about it, but to go out there and go, how do we constantly reinvent, innovate, and get every one of our products better? 

Rich [00:21:35] And that's that brain portion. And brains can be used to drive innovation at a product level. So a massive strategic basis. But there's no excuse not to evaluate yourself. Every word, every story, every video, every social post, every campaign that we've created. There's always ways to get better. And you have to be pushing yourself and you have to go, not to do more of it—like this is not a more thing—it's a how do we do it better? 

Kinsey [00:22:07] Yeah, I think one of the best lessons that I learned early on in my time at Morning Brew is that you're never gonna grow if you're comfortable, that you have to make yourself uncomfortable. And if that's going back and listening to your first podcast and saying, wow, I've really sucked at this, [laughter] that's going to make you better and it's worth doing. OK. I want to talk more about this brains part of the concept and the formula in just a second. But really quickly, let's take a short break to hear from our partner. — And now back to the conversation with Rich Antoniello. Rich, we're talking about brains and how it plays into this concept of media success or business success in general. I'm interested who you compete with the most for talent and for brains. 

Rich [00:22:49] Wow. That's a big question. You know, even a lot of our content developers are not traditional journalists. I think I've said this before. I know I've had this conversation, but when we transitioned to video, I learned a lesson. I thought we could take a lot of our content creators from the text perspective, and it was gonna be an easy transition into making video. And when we got out of news and moved as video to serialized programming, we realized that the journalists are reactive people. 

Rich [00:23:27] They're not original idea people. They can come up with an angle on things and they can report on something. But like a whole new, just fresh perspective in general—very challenging for most journalists. So what we really skewed to were just really idea people. So we pulled a lot of people from a lot of different places. Some people were like, sneaker designers who had great ideas about how to speak to the audience. We're very nontraditional. So the most important thing that we look for when we hire anybody, especially our creatives, is are they super-passionate and super-knowledgeable about the vertical topics that we cover? 

Kinsey [00:24:08] Yeah. It's interesting. We, and obviously the [laughs] products that are being put out at Morning Brew and at Complex are very, very different things. But, when we hire people on the editorial team, rarely do we hire people who have journalism degrees. 

Kinsey [00:24:21] I think I'm one of only a couple now and I was the first when they hired me. And it's something that I think is bred into these people who graduate with journalism degrees. It's not have an opinion because that's not how you do journalism, quote, unquote. 

Rich [00:24:33] Right. 

Kinsey [00:24:34] And it can almost be a hamstring kind of a thing that you lose your ability if you practice this very objective approach to writing for so long—you lose the ability to create something new and actually make an opinion for yourself. But there's also a fine line between having [laughs] an opinion and delivering people what they need and the content that is fair and accurate. 

Rich [00:24:56] That's right. And look, there's room for all of that, especially depending upon the category. But, you know, again, I hate going back to this line, but I think it's important to make that delineation, is if you were to ask me what the most important thing for any of our brands are, is we have to be must-consume. So when something happens within the topics or the categories that we cover, we have to be the resource that people have to know what our take and opinion is. 

Kinsey [00:25:25] Yeah. And it's just knowing your value and knowing your place in the lifetime of a specific piece of information. You don't always have to be the news breaker. But if you're adding something down the line that's different, it doesn't diminish what you're doing and vice versa. You brought up this this video thing. [Rich chuckles] I know you get asked about it a lot, but the YouTube thing, which we can do a brief explanation of. 

Kinsey [00:25:49] So I guess, from my understanding of what happened, is that for a while you kind of didn't want to lean fully into YouTube, because when you do that, you have to give part of the money that you make to YouTube and to its parent company. So if you make money off of a video, you don't get to keep all—you have to give a decent chunk [chuckles] back to the platform. So what your strategy originally was, was create content that drives people from YouTube, the platform, to Complex, the platform. 

Rich [00:26:16] No, no, no. No, no, no. It was actually—it was simpler than that. 

Kinsey [00:26:20] OK. 

Rich [00:26:20] Like at that time back in 2011, the end of '11 into '12, when we launched Complex News and a lot of our really original aggressive foray into video, we actually had probably the largest truly verticalized ad network in the world at that point. And I was like, look, instead of paying YouTube a 45% tax, we have all of the best sites in the world that everybody is coming to. Why don't we create our custom player and just do rev shares back to each of our publishers and we'll do a closed network play. And this is the only place to view this. And what I —. 

Kinsey [00:26:59] So building an alternate YouTube. 

Rich [00:27:02] But a closed version of it rather than an open one. 

Kinsey [00:27:05] OK. 

Rich [00:27:05] And closed in a controlled way. So my viewpoint was we would make more money that way and we wouldn't be in control of the data, and all of those things. What I didn't factor in—and this was my ignorance at the time—is that, yes, we did have the most important conversations across all of these publishers in all of these key categories. But at that time, all of the content that was being consumed was text-oriented. 

Rich [00:27:40] And people—they wanted a super-high-quality video experience that actually worked all the time. And I don't if you remember 2010, '11, and '12, but the players, especially on mobile, were not exactly top-notch at the time, other than YouTube. As well as YouTube had done the best job in the world for anybody under 25 years old, that if you were going to consume and discover a video, you had to be on YouTube. 

Rich [00:28:09] And I quickly—it's six months into the thing—we were doing OK. But the programing was not scaling up to the relative, not just the investment, but I felt the quality of it. So when we started then testing YouTube as a player, that's when the numbers started going through the roof. 

Kinsey [00:28:30] OK. 

Rich [00:28:30] And I realized we can have a massive amount of growth. You know, that's me a) having a big ego at certain times but then quickly having enough acumen to challenge myself and go, you're thinking about this the wrong way. 

Kinsey [00:28:48] Right. Did anybody at that time, even in 2011, say, "Hey, Rich, YouTube's [laughs] still pretty damn big? Are we biting off more than we can chew?" 

Rich [00:28:56] You know, they were huge, but they were, I mean, you have to remember, they were still looked at—I think even up until '12, '13, maybe—a lot of people used to dismiss it as a youth culture, UGC dumping ground. And it wasn't that. It's just that was the default narrative that a lot of premium players wanted to, especially television as a category, wanted to call it that. And a lot of people just had their head in the sand. And we did too, for a little while, not around its power, but around the value exchange of the YouTube tax. 

Kinsey [00:29:34] And what do you think about that tax now? Now that you found immense success on YouTube? 

Rich [00:29:39] Yeah. You cannot access the video-oriented audience to the [indistinct]. We would not have built Hot Ones into what it was without YouTube. 

Kinsey [00:29:49] Right. 

Rich [00:29:50] Sneaker Shopping with Joe La Puma wouldn't be what it is without YouTube. We wouldn't have television deals and we wouldn't have "Hot Ones: The Game Show" on TBS and Tru right now if it wasn't for the discovery-oriented ability for YouTube to expose Hot Ones to as large of an audience on a domestic and international basis as it actually does. 

Rich [00:30:15] Period. End of story. 

Kinsey [00:30:16] Yeah. 

Rich [00:30:16] So it's an expensive value exchange, but it is a worthy value exchange is the best way I can say it. 

Kinsey [00:30:24] Right. Cause even just thinking about the sheer volume of data that YouTube can put that content in front of people who would never know to go to an original streamer / video product that you would make. 

Rich [00:30:36] 100%. 

Kinsey [00:30:37] Yeah. 

Rich [00:30:38] 100%. 

Kinsey [00:30:39] So, this is a question that is inspired by a recent piece in The Verge. They asked people to imagine a world without YouTube. I would like you to imagine a world without YouTube. What is your business look like without YouTube ever coming into the picture? Or you never making that pivot to YouTube? 

Rich [00:30:55] Wow. Well, those are two different questions, right? 

Kinsey [00:30:58] OK. [laughs]. OK.

Rich [00:30:58] Those are two different paths. Let's take the first one. Let's take YouTube never happened. I would say, you know, what's funny is our original concept of distributing that video on our player to the heavy-user audience of the best sites in the world in '11 and '12 probably would have worked, actually. [laughs] if there hadn't been an aggregator at that point, where the youth could go to discover all of those videos. 

Rich [00:31:26] You know, I could actually even turn it around, say we might have had so much success vertically that we would go, well, why don't we open up the platform and spin it out the other way and make it just a universal viewing platform rather than go watch the player on everybody's individual sites? 

Kinsey [00:31:42] Rich, are you saying you would have been YouTube? 

Rich [00:31:46] Look, I'm saying we might have ended up that way. 

Kinsey [00:31:48] OK. 

Rich [00:31:48] I mean, if you ask yourself the right questions from a business perspective about, you know, are you a brand? Are you a platform? What is the right opportunity for that product within that? And I think we would have asked ourselves the right question. Maybe we would have ended up as YouTube. 

Kinsey [00:32:04] Interesting concept. So what about tech more broadly? What beyond just YouTube as a platform? And we've touched on some of the social stuff as well, but maybe even just mobile viewing and mobile consumption in general. How do you think about tech in terms of the strategy that you've been implementing? 

Rich [00:32:22] We are not a tech-first company. I want to be very clear. We are a community-first, like content-first that creates the community and then we exploit technology to maximize and optimize those communities and conversations. So we have a few products that we've launched recently that are interesting from a technology perspective. We are launching the kayak of sneakers, the ultimate price and comparison engine, where that's obviously a technology play first. 

Rich [00:32:53] But we're not a tech-first company. I feel like there's so many people who are so much better at technology than we are. Why spend all that time building it when you could partner with them and get the best-in-class product and let them have the cost structure to constantly iterate that product? Because that is also a backbreaking cost structure very often. 

Kinsey [00:33:16] Right. 

Rich [00:33:17] So, you know, it's a little bit of cheapness and it's a little bit of honesty around the fact of what we're good at and what we're not good at. 

Kinsey [00:33:26] Okay. You just said both cost structure and cheapness. I feel like it's time to go to the balance sheet [Rich laughs] portion of the conversation. But really quickly, let's take a short break to hear from our partner. —

Kinsey [00:33:38] And now back to the conversation with Rich Antoniello. Rich, you were just explaining to me some of this. I made a joke that cost structure and cheapness are finance words, we need to talk [Rich laughs] finance now. 

Rich [00:33:48] Yeah. 

Kinsey [00:33:49] But this is an interesting concept that, you know, we need to dig in to hear. You mentioned that you can recognize when it makes sense to buy and when it makes sense to build, which is the conversation we've had on Business Casual before. Explain to me some of the financial reasoning behind those decisions. When you say, let's build the kayak of sneakers, but let's not be a tech company because that costs too much money. 

Rich [00:34:16] No, no, no, no. I mean, look, it's one of the reasons we don't really build that many apps. The cost structure of the continuity of it. And then actually, we all know the reality of the if you're not on the home screen and how long usage goes and so on and so forth. Why it's worth for us to build the kayak of sneakers is, you know, if we went outside for that, the technology itself might be better, but I don't think the product would actually be better. 

Rich [00:34:48] It's not the P&L that drives it. It's the expertise that we know we're gonna be able to build a differentiated product that is the user experience and the qualitative play more so than just the technology. The technology enables that. And it's an easy way—it'll end up being a P&L play later because that level of control and investment of building it inside-out will make a better product that is more defensible, therefore more monetizable. 

Kinsey [00:35:18] Speaking of inside-out-built defensible products, this vertical ad flash brand machine that you've been alluding to in this conversation. The ad revenue side of this conversation, I feel like could be enough to be an entire podcast. What percentage now—I know that there's been a focus on diversifying—but what percentage of Complex's revenue now is ad drip? 

Rich [00:35:43] It's about 47, 48%. 

Kinsey [00:35:46] What was it, say, five years ago? 

Rich [00:35:48] 99%. [laughs]

Kinsey [00:35:51] Explain to me more the reasoning for that decision. 

Rich [00:35:55] Well, look, the ad market, you know, I'm birthed out of it. My first job out of school was Saatchi & Saatchi on the media planning side. And I'm sorry—if you're a brand company, like we are, that happens to disproportionally make its money from digital publishing—and I mean all aspects of digital publishing, not just advertising—you can't be honest with yourself. Hold up a mirror and say, I want to make my whole entire bet on advertising, which a great deal of people, you know, whether it's an ad unit or it's a new idea, the level of how fast advertising gets commoditized is unbelievable. 

Rich [00:36:45] So my viewpoint is, I want to be in the most differentiated, have the most differentiated products which I can charge the most premium price for, which I'll have the greatest margin, which will have the greatest EBITDA, which allow me to build the greatest balance sheet, which then I will have a more successful and more defensible business. 

Kinsey [00:37:03] Yeah, absolutely. So Rich, a lot of what we've talked about today are creating these defense mechanisms for when things do inevitably go south. I think one of the big conversations people have been having recently, especially as we kind of navigate this new normal with coronavirus, is that ad spend is changing. For some companies, it's increasing. For others, it is significantly decreasing. 

Kinsey [00:37:28] And a lot of the companies that, like Complex five years ago, are relying 98% of their revenue on advertising and ad business are going to feel the effects of that immediately, if they have not already. 

Rich [00:37:41] And more severely. 

Kinsey [00:37:42] Why? I mean, how should we be thinking about this right now? Is there any end in sight? What can businesses out there that are maybe not as diversified as Complex do to make sure that they stay afloat? Because this, for now, we don't know when this is going to end. 

Rich [00:37:58] Wow. I mean —. 

Kinsey [00:38:01] Is there anything to do now? Is there a reactive? 

Rich [00:38:05] Unfortunately, let me say it this way. If you've waited this long, now, when this is about to slap you in the face, and you have no balance sheet or you haven't diversified your business yet, or you don't have a super-deep connection where you could potentially ask your readers for more money from a subscription perspective, I don't know what to say as a response because even whatever I would tell them, they'd be doing it as a knee-jerk or out of duress. 

Rich [00:38:36] And very rarely when you do anything out of a knee-jerk or out of duress, is it very strategic. And if it isn't very strategic, usually it's not very long-lasting. And I don't like to give people advice on a short-term reactive basis. I'm not trying to cop out on the question. I just—it's hard for me to comprehend it because that's just not the way we think about our business and behave. 

Kinsey [00:38:59] So the takeaway is you might be up the creek without a paddle if you did not insulate your business in any way. But if you are one of the many people who will likely take this downturn as an opportunity to find this new source of optimism or a new business idea or create something like so many businesses were created in the wake of the financial crisis, here is your strategy for ensuring that the next time something like this happens, you are not one of those companies up the creek without a paddle. 

Rich [00:39:25] Right. Learn. What is your version of my simple formula? 

Kinsey [00:39:31] Right. 

Rich [00:39:33] My simple formula doesn't have to be applied. Maybe somebody has a different formula, different variables that go into it. But you have to know that it can't just be one thing equals success. It's not. 

Kinsey [00:39:45] OK. 

Rich [00:39:46] It's got to be multiple variables that go into everything that make you different, special, and give you flexibility and creativity to be able to win, optimize your business, and solidify and defend it, and weather storms. 

Kinsey [00:40:03] OK. 

Rich [00:40:03] So the balance sheet will probably always be a part of it. I think if you're in media, brand will always be a part of it. But maybe it's not brains, it's leverage for somebody else who's raised a lot of capital and has a completely differentiated franchise that they can leverage into other ways. But somebody has to make their own formula, and then that becomes something that is part of your corporate culture, and then your entire team behaves that way even on the lowest tactical basis all the way up to the biggest strategic decisions you're making consistently. 

Kinsey [00:40:40] Sounds simple enough. Now I just gotta come up with a business idea. [laughs]. 

Rich [00:40:45] Yeah. [laughs]. And then get it funded in this environment. 

Kinsey [00:40:49] No biggie. I'll figure it out. [laughs]

Rich [00:40:50] Sure. No problem. 

Kinsey [00:40:52] So, Rich, I'm curious here. And we used to play a game in the early days of Business Casual, when we first started, called Kiss Marry Kill. But it's basically F Marry Kill. Let's say F Marry Kill: brains, brand, and balance sheet. 

Rich [00:41:05] Oh, boy. Oh, my god, that is — [Kinsey laughs] Holy shit. 

Kinsey [00:41:13] Exactly the reaction I was looking for. 

Rich [00:41:14] Wow, that is hard. Well, I mean, let me say it this way. You probably want to sleep with the money. 

Kinsey [00:41:24] OK. 

Rich [00:41:25]  And I mean that on many levels. But the most important one is, you know, you could kind of, you know, have a one-night stand with the money. Steal as much as possible. You probably, for me, you want to marry the brand. 

Kinsey [00:41:41] OK. 

Rich [00:41:41] Because to me, everything comes back to that. You can always get money from strength, a brand. And I guess you'd have to kill brains just because you've got to pick something, so I'm going to go with that. 

Kinsey [00:41:55] OK. That was probably the best possible answer to that that I think I could have imagined you'd say. [laughs]

Rich [00:42:00]  I'm working on it. Sorry. [Kinsey laughs]

Kinsey [00:42:03] I know. I love it. 

Rich [00:42:03] That was that was a total curveball, so — 

Kinsey [00:42:05] I'm glad. That's exactly what I wanted to hear. OK. But I want to take a second here to bring out our wheel and play a quick game here. Rapid-fire. So we're recording this remotely, so I'll spin the wheel for you. But let's see [sound of wheel spinning] what we land on. Let me turn up my volume so you can [sound of a ding] hear this. [sound wheel spinning] [Rich laughs]

Kinsey [00:42:24] OK. [sound of a ding] So we landed on Follow for Follow. Who is your favorite person to follow on social media? 

Rich [00:42:31] Oh, wow. Can I give you two answers? 

Kinsey [00:42:36] I will allow it. 

Rich [00:42:37] OK. So from a pure entertainment, probably he's incredibly intelligent, yet wildly acerbic, is Brian Koppelman. 

Kinsey [00:42:46] OK. 

Rich [00:42:47] Who happens to be the writer / director of my favorite movie of all time, "Rounders," and one of my favorite TV shows of all time, "Billions." 

Kinsey [00:42:55] Yeah. 

Rich [00:42:55] He is a great follow. And from a business perspective and an entertainment basis, is Jason Calacanis, who is just nuts, but like so wickedly smart, because he never looks at anything the same way everybody else does. 

Kinsey [00:43:15] Yeah. 

Rich [00:43:17] His perspectives and angles are sometimes—like he can take the most complex thing and give you the simplest, freshest perspective on it. Or he could take the simplest issue and give you the most complex view that you would never have contemplated. And he's fucking awesome. 

Kinsey [00:43:33] OK. I like it. All right. Let's take another spin around the wheel. [sound of wheel spinning] And we landed on [sound of a ding] Truth or Truth. What's the biggest misconception about youth culture? 

Rich [00:43:45] Oh, that's a good one. You know, I think it's that they are deep as a puddle. I think that's a bunch of shit. I think to say that these kids, they might not be always biggest historians from a respect perspective of the elders, but their references, their knowledge, the passion they bring to things. 

Rich [00:44:15] I think they have a level of caring about topics they care about that is unsurpassed by any previous generation. 

Kinsey [00:44:25] All right. 

Rich [00:44:25] And I think, yeah, that would be my answer. 

Kinsey [00:44:29] OK. Well, Rich, thank you so much for coming on Business Casual. I've really enjoyed this conversation and I appreciate you taking the time. 

Rich [00:44:36] Thank you very much. I enjoyed the time as well. And I'm a huge fan of what you guys are doing. Keep at it. And you know what? 

Rich [00:44:44] Don't ever lose that spark and the personality, not just you individually, but I believe everything you guys bring to the table. It has an energy about it that is just so different than everybody else out there. And it's just really enjoyable. 

Kinsey [00:45:00] Thank you so much. 

Rich [00:45:01] I just wanted to say thank you. 

Kinsey [00:45:03] High praise from someone we very much respect. 

Rich [00:45:06] Right back atcha. 

Kinsey [00:45:06] All right. Have a good one. 

Rich [00:45:08] You too. 

Kinsey [00:45:15] Thank you so much for listening to this episode of Business Casual. Now, don't just take my word for it. If you're going to listen to someone, it should be Rich Antoniello. He just gave Morning Brew a ringing endorsement. So if you haven't tried out our daily newsletter already, head on over to to subscribe, and I'll see you next time. [sound of a ding]