#AskGaryVee Episode 126: How I Balance Risk & Reward in Investments

“Which of your views do
you think has changed “the most in the past five years and why?” – Oh, we’re coming out strong. Which of my views has changed the most in the last five years and why? I yell at everybody to
not draw lines in the sand but the four, five things
I actually care about are pretty hardcore lines in the sand. You know, I’ll talk about
some things that have changed. I think that I’m a better communicator as the CEO for VaynerMedia than I was with Wine Library. I think that I hate confrontation
and negativity so much that I lollygagged, and
it wasn’t easy for me to give critical feedback. I mean, even people in this room have gotten critical feedback, and have fundamentally benefitted from it, and it’s not something that I’m sure that I could’ve delivered
as a younger CEO, which is, I didn’t like it. I literally kind of took the role of like, well, if they’re not
winning in this environment, then eventually I’ll
just, they’ll get fired. If they can’t figure it out,
it’s so good, they’ll get fired and I wasn’t providing that value, so I think micromanaging along the way instead of letting complete capitalism and complete openness
kind of rule the day, is something that I’ve changed. You know, I don’t have that many, you know what’s funny about
that question, Brandon, is I’m over-the-top
passionate lines in the sand as equal as I am to being
willing to change them. I always like to say,
I’m a mobile, mobable? No, no, no. What’s that? Moldable, thank you. Modable dictator, movable,
too, and moldable. Make me! Moldable dictator, because I think that the thing the team will about
is, if you can debate it out, and if it makes sense to
me, I’m willing to try, I’m willing to test. So I don’t get too passionate about it. I’m trying to think. Kids, family balance, work life balance, profit topline revenue. I feel myself changing
on YouTube a little bit, in the current moment, like, you know, Jeff Nicholson on the paid team
is really selling me hard on preroll YouTube and it’s value prop and so that’s a rabbit
hole I’m intrigued by. Growth hacking, I think I was cynical to the term, I didn’t love the term, and so I would kind of like zing it, because I thought it was, I thought, like, Ryan
and other people in it, I thought were really great players, but I thought the term
was getting huckstery, but I very much value, kind of, you know, understanding, you know, result driven marketing, so maybe that. – [Steve] Are you any
risk-adverse in your investments? – Risk-adverse in my investments. No, but I definitely think
that I struggled a little bit to calibrate the 25 million
dollars in Vayner/RSE versus Angel 25 and 50 k for
the first three to four months, but I haven’t changed
my point of view there, it’s still jockey and. There is something I’ve
really changed my mind on, and I’ve brought it up recently. Dammit, I’m so pissed, I’m
good at this top of mind stuff. I’ll keep going with the show, and see if I can dig it up, or we’ll come back to
it in another episode. I’m very into changing my mind. I’ll give you a preview
to changing my mind. I will bash Facebook advertising in three to four years. Bash it. We’ll say that it’s overpriced
and doesn’t deliver, because that’s what always happens, the same way I bash banner pre-roll, and the same way I bash SEM to not being as good
as people think it is, those are my calling cards,
along with e-mail marketing. I’m definitely way more
down on Twitter today than I was three years ago, so, I don’t know if it’s like,
you know, it’s not like a religion change, but
the tactics I believe in constantly change, it’s my kind of, write similar books over and over. Sid, you’re smiling. Something happening on Periscope? – [Sid] They’re like,
‘we wanna ask questions.’ – They wanna ask questions. Periscope, why don’t you
calm your goddamn role for a few seconds and let me do the show. And so, my tactics change a lot, but like, you know, the core things, I believe in being good
to people bring value, things like that means you’re
having shifted that’s so much.

“When looking at potential
investments that you might “be on the fence about, “how do you balance risk versus reward?” – I always, always, always dramatically value reward over risk. Hey, this is such a great
episode to do this in in the context of everything going on. When I invested in Meerkat, it was obvious that
Periscope was gonna launch within the week of my investment, and that it was completely backed on Twitter’s infrastructure, and that Meerkat was gonna get shut down. As a matter of fact, Meerkat got shut down on Twitter before I made the investment, but the upside was so great, if they were able to win that game, in the world of, remember,
Facebook’s attempt to slow down Snapchat, right, with Poke? Like, you know, the leader
doesn’t always win, right. Remember Blockbuster was
gonna go after Netflix? You know, with their service? Remember Walmart’s gonna
crush Amazon six years ago? Happens all the time, and so, the reward was much greater than the risk, even though the risk was very obvious. I’m always, always going for the upside. The other thing is, I
bet on the jockey a lot. You know, I bet on the jockey a lot, and so investing in someone is not necessarily always
just about that startup. You know, if they’re a true entrepreneur, and I feel they’re a true entrepreneur, they’ve got two, three, four, five, six, there’s a female-driven
company right now in New York that I just bet on that
I’m so obsessed with. I think she’s gonna win in this one, but, like, there’s no doubt in my mind she’s gonna multiple times, and I think Travis and Uber
was the final nail in my coffin that it’s always about the jockey. if you can bet on the right
jockey, you’re gonna win, and so, reward over risk every time. I’m on the offense in life, you know, I do not value, and I feel a far majority of people watching this
show are on the defense. I really do. I feel like when I quantify
the world that I know, 70, 80% of the people fall into defense. They’re telling you and themselves why not verus why it’s going to work, and I do believe that
blind optimism and naivety and self confidence are
enormously delicious traits that allow you to win
more often than you lose, because it’s truly a net-net
game you can lose 800 times. There’s four to five substantial bets that I made in driving
VaynerMedia this year. Two of them are really
working, three of them are not. We won big. That’s how I look at it. I’m not gonna cry about the three. There’s no crying in business. Or baseball.

“What’s your strategy with
Facebook long form posts?” – Been waiting for this moment,
this is the one I picked, I’m super excited about this question. You know, it’s really interesting. I’ve been really challenging
myself, you know, we’re a buck and a quarter into this show, and I’m like, what can
I do to make the show better and better and better. Clearly, the entertainment
value has gone up, because we’ve found the
characters, the context, some of the fun little things, you know, but how do I make the show better? Depth, right. Entertainment, utility,
entertainment, utility. I need to balance them. And so, this falls into probably
the strongest utility play that we’ve executed on this show, and so really get cozy, you
may wanna even pause this right now, go get yourself
a nice glass of wine, really settle in, because this
is a very important moment in the show’s history. The question is, what
is my strategy, right? Two great things are gonna
come out of this answer. This is gonna be your
favorite answer of all time. Because two things are
gonna come out of it. Number one, I’m gonna make you understand why when I do things on social
networks that confuse you in lieu of me writing a book called Jab, Jab, Jab, Right Hook,
and then you telling me that’s not native, and many
of you have commented like, Gary, isn’t that what you
say not to do in your book? Yes, in a net-net score
if you look at my stuff, I’m following that blueprint, but things change, and more importantly, the number one thing
that I’m worried about that so many people here do is they don’t challenge themselves. Back to the first question. I always wanna put myself out of business, wanna call my bluff before
somebody writes a blog post saying Gary Vee is wrong,
I wanna write a blog post saying Gary Vee is wrong, right. God, I hate their person. I wanna do that, so I’m
always testing myself, so I wrote a long form piece on Facebook two weeks ago, right, two Saturdays ago. I just did it. Like, not talking to the team
on a Saturday, just did it. Xander just went to sleep,
Misha and Lizzie were tied up with something, like,
alright, got a minute here, let me just, this has been on my mind, you know, I’ve been seeing
some things in the trenches, I’ve been feeling something
in my gut, my intuition, let me write a long post. Let me treat Facebook like
a blog, like a website. That’s really been sitting in my mind. I did it, it did extremely well. A lot of reach, a lot of
sharing, a lot of engagement, and I’m like, huh, so I
wrote another one that day. Actually, not wrote another one, reused things I wrote on
Medium that we did months ago. And that did really well. Did another one, and that did really well. As a matter of fact, DRock,
let’s roll it out right now. Here’s some screenshots
of the same exact article being written natively, longform, doesn’t feel like a native execution, but in the feed of Facebook, versus a picture and a
link to go out of Facebook. And that, my friends, what
you’re seeing right now, and, D-Rock, I want you
to take over the screen, jump into, like, splitting me, I don’t know if it’s here or if it’s here, but let’s keep going, just keep kind of going here, I want them to really grasp the numbers. It’s just working. And so, that’s what I’m doing. I’m always challenging
myself, I’m always testing. I did longform Instagram,
actually doesn’t feel native, right, the, you know, I
think we could all agree that the right hooks, tag your friends, all that things, that doesn’t
feel native to Instagram. It’s supposed to be nice
pictures and artistic. These are the things that happen, right, these are the things that happen. You’ve always gotta test, and I think I’ve hit on something, and I’m really excited
about passing it onto you, and I expect the
disproportionate amount of the Vayner Nation right now to write a longform Facebook post within the next 24 hours,
in whatever shape or form, you’re an NGO trying to
raise money, tell a story, you’re trying to sell some
t-shirts, you just wanna talk to your friends, this is a page dynamic, this is my page, not my account, so you’ve gotta take that into account. If you’ve got a business page, roll it, write it, try it, big picture, longform, feel it, I think you’re gonna see results. And again, I look at Facebook’s algorithm the way I look at Google’s search results. They’ll keep changing things, they keep doing that, and
so, right now it feels right. By always challenging myself,
I was able to get results, and double down on them, and
I will squeeze that orange until I get every ounce
of juice out of it, and then I’ll just find another orange. And that’s what you do. And so, whether that’s another orange within a Facebook environment, or if that’s Snapchat, of if
that’s boogaboogadooga.com, wherever it is next, I will
squeeze the mother (bleep) orange.

The hashtag Instagram expert, and I just wanna ask you, how do you decide which projects to say yes to, and which ones to pass on? Because I have a shit-ton of projects and opportunities coming my way on a regular basis, and
it’s often a challenge to know how to prioritize which ones to put at the top, and which
ones to take a pass on. So, I thank you for your time, and I look forward to your answer. – Sue, I’m really pumped you asked this. A lot of entrepreneur
self, kind of, you know, one off of freelancers,
different things of that nature, I’ve got a really good answer for you and it came to me immediately, unlike the first question. I, if I were you,
hearing what I’m hearing, would continue to raise
your price on every project substantially and choose
the ones that pay you the most, if that’s what you want. I would do the ones that network you with the most networkable,
or biggest brand, or the kind of people
that you wanna be around, and so I would, here’s what I would do. When you have a supply
and demand issue at hand, you know, I mean high
class problem, right, too much coming in, it’s going well, and trying to pick which ones, it’s all about raising the stakes, whether that’s a better
networking opportunity, famous people, rich
people, connected people, nice people, whatever makes you tick, or money. So if it’s $3,000 a month
or $2,000 a project, then it needs to be five and 35 hundred, and if it’s five and 35 hundred, then it needs to be 75 hundred and 6,000. Like, raise your price. There’s a lot of you right now that are doing services
that only scale you, that are not building you a business because you’re not understanding
how to raise your prices. Let the market say no,
let the market say no, let the market say no. Let me tell you the story about
my first speaking gig ever. My first speaking gig ever,
never spoke, got a random email, at Wine Library, they’re like, we want you to speak at
this internet conference, I’m like, okay, cool, amazing, I get on the phone, guy tells
me about the conference, how much do you wanna get paid, I think I’ve told this
story on the show before. No? Oh, good. This is a good one. On the phone, how much
would you like to get paid, I’m like, oh, crap, what the
hell do you get paid to speak? I’m like, alright,
throw out something big, you know, I’m a good negotiator, you know, I’ve been buying a lot of
wine for the last ten years, I’m like, alright, $5,000. Right? Remember, like, you
guys know me as me now, like, this was literally like, it’s like you saying
$5,000, Staphon, right? You’d be pumped as shit
right now to speak for. You’ll stand here naked,
right, so, so, so, I was like $5,000. He goes, okay, I go, crap,
that was way too fast. So, I’m like, okay, now we’re
talking about logistics, I’m like, alright, I gotta
get more money out of this. I think I got crushed on this negotiation. So, I get to the end, I’m like, okay, to recap, 30 minute
talk, and it was an hour, 30 minute talk in Miami, July 17th, he goes, no, no, no, no, he goes, we need you for an hour. I’m like, oh, I go, we’ll that’s $10,000 for the speech. He goes, okay great, I go. Still too little! And I kept raising it until
the market at that point settled me in, between five and fifteen, which was unbelievable and blew my mind, and it was market, I didn’t know, and, obviously, it’s grown since then, and so, I really think that
you need to keep pushing the boundaries of money,
or upside opportunity. I would do stuff for free
if you thought it was going to lead to happiness,
paying forward to somebody you believe in, or something
down the line for you without expecting it,
remember that whole thesis. So, that’s what I would do. I would pick the ones
that you’re just pushing, you’re pushing the pricing,
you’re pushing the pricing.

“s using a forum to build a
community a dying practice?” – Alysha, Alysha, you know what’s funny? I’m a very big believer in this. That’s a pendulum swinging, right, so forums, then it’s all
social and it’s open. I actually think forums are the future, not the past. I’m going out on a limb
here and I’m gonna say that people are gonna
start closing down things. It’s kinda like social, right, Facebook, Twitter open,
along came Snapchat, right, closed, private. And I think after this
generation goes through that, the next generation, the eight-year-olds, the seven-year-olds, they’re
gonna want open again, because they haven’t
felt this generation play that we all felt with
Facebook and Twitter. This is what we do. We do it with celebrities,
build them up, crash them down, and then they come back. I mean, we want Britney back, bitch, you know, like that’s
what we wanna do, right. A-Rod, I mean, are you watching
what’s going on with A-Rod? We will build you up, we will destroy you, we will build you right back up. We love it, we absolutely, outside of murder,
we’ll do it for anybody. it’s unbelievable, and so, I think forums, because people are gonna wanna close. Look what’s going on
with the social networks. Pinterest, Facebook,
Twitter, they’re cutting out their ecosystem. Less API unless they’re
really valuing from it, right? Like, you know, YouTube doesn’t want MCN selling for half a billion dollars and them not making any money. People are gonna shut it down, and so, I think, look, we’ve talked about the Veechat, the Gary Vee
app, we tried it, like, owning the data and creating a CRM and keeping it in your world is valuable. I mean, as a matter of
fact, actually, we wanted to attack some stuff here. We’re almost ending with the show, I wanted to do this whole
Facebook thing, right? So we’ve got some
imagery behind this, we’re gonna show them,
are we gonna do a video? So, one of the things that
I’ve been thinking a lot about is the show’s exploding,
we’re doing well on YouTube, we’re exploding on Facebook, but the way the Facebook algorithm works, you’re not seeing this all the
time, so here, for example, let me take a step out
of the show for a second, here’s a, are we doing a video? Like, a quick little video? Something. Watch this. – [Voiceover] Head over
to Facebook.com/gary Hover over the ‘liked’ button, and hit ‘get notifications.’ This way, you’ll never miss
an episode of the show. – Alright, now that
gave you the opportunity to now always get the show in your feed, but I’m at the mercy of Facebook. I don’t wanna be at the mercy of Facebook, I don’t wanna be at the mercy of Google, I don’t wanna be at the mercy of anybody, which is why building
your own e-mail list, building your own forum,
on top of the web, which is what they’re building, they’re building products
on top of the web, is a very intriguing and important thing, and so I wanna build up, you know, making sure the algorithm shows my stuff. I wanna build up my
subscriptions on YouTube, I wanna build up my Gary VIP e-mail list, and having a side forum, I
did it with Wine Library TV. There was a forum for Wine Library TV, and it was important, it was an important place
where I could kind of, and so, I don’t think it’s going away, I think it’s, it’s fine, but, much like the Facebook question, getting somebody to leave where they actually wanna consume it, because time is the value prop, you have to give a value prop. You have to make that forum valuable. If you’re the celebrity,
or the Z-list celebrity, or the personality, you
need to spend time in there. When I stopped spending
time in the Wine Library TV forum, the community had been built, and then kept themselves together, but it lost momentum. It definitely lost growth
and over time, it waned. And that’s what’s just gonna happen, so, that’s what’s happening there. So, cool, we checked the
box on getting people,