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Hey, it's Guy here, and before we start the show, I want to tell you about a super exciting thing.
We are launching on how I built this.
So if you own your own business or trying to get one off the ground, we might put you on the show.
Yes, on the show! And when you come on, you won't just be joining me, but you'll be speaking with some of our favorite former guests, who also happen to be some of the greatest entrepreneurs on Earth.
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And that's it! Hope to hear from you soon, and we are so excited to have you come on the show.
And now, on to the show! I never thought this would go further than my living room couch.
It took me hundreds of takes to say my lines because I kept messing up.
So all those takes later, I was finally satisfied enough with my first video.
I posted on Facebook, and I refreshed and refreshed thinking I'd get millions of views.
It never even broke 100 views.
My very first comment that I got said, Who do you think you are?
Tony Robbins? Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
I'm Guy Raws, and on the show today, How Dar Mann went from completely broke and living in a studio apartment to five years later, racking up billions of views for his videos on Facebook and YouTube, and building a powerhouse content studio.
A few months ago, I found myself in an industrial park near the airport in Burbank, California.
I was there to visit a production studio, actually a YouTube studio started by a content creator named Dar Mann.
Now, around 10 years ago, Dar Mann was just emerging from his third failed business venture.
He was broke and at a low point, which is a remarkable thing to consider when you see what he's built since then.
The warehouse, actually multiple warehouses, contained dozens of film sets, sets resembling schools and locker rooms, hospital wards, town square grocery stores, and on and on.
It's the kind of place that you'd have expect to see at a major studio like Paramount or Sony.
Every single day on these sets, a small crew films episodes for Dar Mann's shows that are then posted on his social media channels.
Inside the office, more than 150 producers, writers, editors, camera operators, and actors churn out content almost daily.
And all of this was started by a guy with no connections in Hollywood, no significant money, and no experience making films.
Yet Dar Mann's videos have been viewed over 60 billion times since he launched his channels just a few years ago.
The videos are best described as morality tales, sort of like bite-sized after-school specials, if you remember those from the 80s and 90s.
Now, not everyone loves the videos.
Dar's critics call them hokey or even cheesy.
But check out a typical video and you'll quickly see that they get millions and millions of views, more than a lot of prestige television shows.
Now, as many of you know, this month we've been looking at the business of content creation, and Dar Mann has become one of the most successful creators in the space.
But long before he got famous on Facebook and YouTube, Dar was famous for, well, a few things he regrets.
Failed business ventures and a life-chasing get-rich-quick schemes.
But as you will hear, all of these things were a necessary part of helping Dar become a better version of himself.
And now, a growing force in the world of media.
Dar grew up in and around Oakland, California.
His parents are immigrants from India, and as early as Dar can remember, both of them worked really, really hard.
They would eventually build one of the largest taxi cab companies in the Bay Area.
My dad tells us that one of the biggest days in his life, in my parents' life, was the day he saved enough money to buy a car.
And so, of course, he turns that car into a taxi cab.
So that was our personal vehicle.
Wherever we went, we were driven around in a taxi.
And my family is Sikh, and part of our religion is you're not supposed to cut your hair.
So my dad wore and still wears a turban.
And my brother and I also had turbans back then.
And so we would get bullied pretty bad for it.
People would call us Aladdin, a poo.
Every racial slur you can imagine.
The bullying was so bad that I remember that my brother would come home with bruises and bloodied all the time.
And even though it was the hardest thing in the world for my mom since she's so religious, one day my brother came home beat up so badly for his hair that she sent us with our uncle to go get haircuts.
Wow. And I remember crying the whole time at the barber shop thinking when you cut your hair, it would really hurt.
I had no idea what it was like.
But of course, in a moment, the barber closes his scissors.
My hair falls to the ground and it was over.
Wow. Tell me about the decision your mom made.
Obviously, she was trying to protect her kids.
And what a wrenching decision, right?
Because this is your faith.
And so I mean, I'm assuming after that point, you and your brother no longer kept your hair long, no longer wore turbans.
Yeah. I've got my hair cut when I was in fourth grade.
So in fifth grade, I'm still in the same elementary school and nobody recognized me.
I felt better at school because I wasn't getting judged as much, but I felt very shameful when it came to the Indian community and at our temple and places of gathering.
But I guess that's part of what every immigrant feels.
Yeah. Coming to this world as you get torn between these two different cultures and ultimately you have to find yourself in all of this.
And I think that's part of the challenge that I felt throughout my life was finding myself.
Yeah. As you got older and went to high school, did you end up kind of like finding a group of people, kids that you were comfortable with or not really?
Yeah. So in high school, as I got older, I always felt like an outcast being the only Indian kid in a very racially divided school.
I didn't have a lot of friends and because my parents weren't around, they'd give me money to make up for not being able to give me their time.
So I did discover there was one way to get kids to want to hang out with me and that was by me offering to buy them things.
And I noticed when I was paying for things like lunch or snacks or arcade games, a lot of people wanted to be my friend.
And I didn't realize this until my adult years, but I associated money with love since that's how my parents expressed their love to me since they were never around.
And at this stage in my life, I was only concerned with how could I make as much money as possible in order to be as quote unquote, as loved as possible.
Yeah. Tara, I know that as a kid, you did a lot of classic kid entrepreneurial things like sell baseball cards or candy.
But your first real business was like an advertising business, right?
That I guess you started in college posting flyers for local businesses.
Can you tell me a bit about that?
Yeah. So I went to UC Davis and at that time there was this really desirable place to live called Primero Grove.
And it was on campus, which means that you could walk to all your classes.
So this apartment was more expensive than I could afford.
So I needed to find a roommate.
So one day I'm walking by this bulletin board in a lecture hall and I thought, hey, that may be a good place to advertise.
So I make a cheap flyer looking for a roommate.
I printed out a bunch of copies and then woke up super early in the morning and posted flyers all around the different bulletin boards on campus.
And within no time I start getting phone calls and I found a roommate within that same day.
Yeah. So that's where I come up with the idea of Davis marketing services.
Initially at that time my idea was just to post flyers around campus on different bulletin boards for businesses.
But I didn't have any money to hire anyone to do the postings for me.
But one day when I was out posting, I saw a sorority putting up some flyers and I asked the girls how much they got paid and they said nothing.
They're pledges. So a light bulb went off in my head, I went to the sorority house and I asked if I gave them $50 if they could have their pledges go out and post my flyers for me every morning.
So now I have my labor supply figured out.
Forced labor. I know. I'm not advocating that this is the correct way to doing things, but 19 years old.
Yeah. No. So I mean you were from what I read like bringing in like a few thousand bucks a month doing this business.
And I guess at a certain point you decided not to go into the flyer business full time, but to drop out of school and focus on running a business.
And it turned out to be like a mortgage company.
How did that happen? Yeah.
So at this time this was around 2004, 2005 when real estate was booming.
Yeah. And my brother, he had just become a real estate broker and he had just bought a condo in San Francisco.
He bought a new Mercedes and me being money motivated at that time just saw whatever he was doing with his real estate business as much more successful than whatever I was doing with Davis marketing services.
But I knew he was in the business of helping people refinance their home to either take equity out or get a lower interest rate.
So when I asked him what it was limiting him to take his business to the next level, he said it was not having more leads to close more deals.
And so my idea was I could just start my own telemarketing company that could generate leads by cold calling homeowners and trying to get them to refinance.
So the next step was I needed to hire telemarketers.
And thankfully I was able to use my marketing company for that.
I put up flyers all around campus saying I was looking for commission based telemarketers and within a month or so I had four students working for me.
And just let me just interrupt for a sec.
You basically had four students working for you.
You would just start dialing.
Yeah. And then if you if they were interested that was a lead that you would then feed to your brother.
Exactly. So how a call would go is I would say hey I'm Dar calling from California real estate services and I noticed you're paying 6% on your home loan.
How would you like to lower your interest rate while also possibly taking cash out of your own.
And for every 99 people that would hang up on us one would say yes.
But what I didn't realize is an application didn't mean a closed deal and it certainly didn't mean a paycheck.
Yeah. But one day I get a phone call from my brother and he says I have some good news.
I got excited. And I said do we close one of my deals.
And he said not just one but we close three in that same week.
He wouldn't tell me over the phone how much it was.
And when I go see him he smiles and hands me a check.
It was for $40,000 and it was the most money I'd ever seen.
So I felt like a millionaire at that point.
So not too long after all this was happening I decided to get my own real estate license so I could close my own deals instead of relying on my brother's office.
And that's when things really took off.
So within that year I had three different offices and around 25 students working for me.
So I remember a big moment for me was at 21 years old when I bought an orange Lamborghini.
Wait pause for a sec. 21 and this is all by doing mortgage refinancing.
Correct. You had an orange Lamborghini and you were living in Davis, California at that point?
In Davis. Wow. So for the first time in my life I saw what having all this attention felt like.
I was driving around in this small town with this super flashy car.
And remember my whole high school career I felt invisible with no friends.
And now I was being seen by everyone.
Everyone wanted to be my friend at that point.
And how are you sustaining those payments?
Was the business doing really well?
Like how are you staying above water with all that debt?
So it was around 2007 when the real estate housing crisis started.
Yeah. So just like lots of other mortgage companies at the time, I ended up going out of business.
So this was the first time I'd experienced business failure.
And you'd think with a degree in Econ I might be saving money more in anticipation of a market crash coming, but I just didn't have that foresight.
I closed my doors and I had to move back to Oakland, but I still had the Lamborghini and the payment was really expensive.
And I didn't want to give up my car because my car in my head was the key to all this attention I was getting.
So instead of giving up the car, I started an exotic car rental company.
I learned some basic web design and put up my Lamborghini for rent.
So I was able to keep my car and more importantly the appearance that I was a lot more successful than I actually was.
And as time went on, I used my profit from that to also expand into limousines.
And I had a background in transportation because of my family taxi business.
So it seemed like a natural thing to do.
Yeah. And I should point out that this is a pattern that really continues to this day, right?
Which is this sort of serial entrepreneurship.
For example, over the next few years after this car business, you started like a property management company.
And then you had a real estate development company, which actually would get into some trouble with later.
And we'll talk about that in a minute.
But I want to ask you about something else that you got into that was actually pretty new at the time, which was medical marijuana.
And I'm just trying to get into your head, right?
Were you just thinking like, how can I make money in the fastest way possible?
Or were you genuinely interested in this particular industry?
Tell me how the cannabis idea got started.
Yeah, it didn't start that way initially.
I had a very negative perception towards the industry.
I thought it was illegal.
So when I was running the property management company, one day I had a commercial tenant who was running a catering company come in and tell me they had a break in in their unit.
So I asked if he had reported it to the police as I'm picking up the phone to call 911.
And he says, wait, before you call, I have to tell you something.
I'm not exactly running a catering company.
And he said he's using the property to grow medical marijuana.
And he was doing this legally.
That's what he said. And I thought he was out of his mind for saying that.
So I filed an eviction. And right before we went in front of a judge, my attorney comes up to me and says, Dar, I looked at all their paperwork.
And sure enough, everything checks out.
So I'll get my attorney and say, you mean it's legal to grow weed?
And he nods. And I had no idea that the cannabis industry was this huge industry.
And the epicenter of it was where I was.
Oakland. So I decided to fully jump into the medical marijuana industry because as I did more research, all I saw was green pun intended.
So I started what later became known as the home depot of weed.
And it was a 15,000 square foot hydroponic store right by the Oakland airport where we sold all the supplies patients would need to grow their own cannabis, not the actual plants or any flower, just the tools to grow it.
I've talked about this in the show a lot because it's like, you know, selling genes to the to the gold miners or pickaxes and shovels.
It's not going to the gold mine.
Exactly. And at that time, this was in 2010 when all the hydroponic stores still operated in the shadows.
So even though they had all these customers that were spending thousands of dollars on indoor grow systems, the stores had to act like these systems were being used to grow tomatoes.
So you couldn't mention medical marijuana in hydroponic stores or you'd get kicked out.
And I thought it was because the stores were concerned about the federal law.
So I was originally going to follow the same rules and not mention medical marijuana.
I had a press release going out the night before of our grand opening saying 15,000 square foot indoor gardening store opens by Oakland airport to help customers grow tomatoes.
But the whole thing just felt a little hypocritical to me.
So right before the release went out, I changed it to 15,000 square foot indoor gardening store opens by Oakland airport to help customers grow medical marijuana.
I sent it out the newswire and went to bed to get some sleep before our big grand opening the next day.
And I wake up a few hours later to all these phone calls from my store manager saying, Dar, you better get down here quick.
There's a bunch of white vans outside.
So they were there to cover the grand opening of my store.
I couldn't believe it. But the first interview I did, it happened to be on CNN live and every other major news outlet you can imagine was there.
Let me back up for a sec. I mean, how did you how did you finance it?
How did you get the money to buy the equipment and to stock that equipment into a 15,000 square foot warehouse?
I guess from an early age, I always over leveraged myself.
So I relied a lot on credit cards and for suppliers, you could actually get products on terms with them where you wouldn't have to pay them back for 30, 60, 90 days.
And I was just relying on product sales that would help me pay off the inventory I bought from them previously.
So it was a lot of leverage.
But if you remember how earlier I said, I thought all hydroponics stores didn't discuss cannabis because they were worried about federal laws.
I came to realize that it was actually because of rules that hydroponic suppliers that controlled the hydroponics supply chain had set up.
So there's a few big distribution companies that supply most of the products you see sold inside of hydro stores.
They were so big and selling products all over the world that they didn't want their products having any affiliation with cannabis.
So if you even mentioned it, you would get cut off from product distribution from them.
And here I am on CNN Live talking about the medical marijuana superstore.
So the night of our grand opening, I got contacted by the big distribution companies saying they were cutting us off from receiving any product.
So my business was pretty much doing from the start.
That was sort of the end of the Home Depot for hydroponics.
The business was failing.
Distributors weren't selling stuff to you.
Exactly. And my thinking was to try and save the business.
The city of Oakland around that time was about to issue medical marijuana cultivation licenses that were going to be the first of its kind.
And fortunately, I was one of four companies to be awarded the permit.
So I thought this was my golden goose, right?
Like I made it big, but that's the point in time where the shortcuts I took during my time in real estate development would come back full circle.
And it was time for me to pay the price for that.
Or as I say in my videos, what happens in the dark always comes to light because that's exactly what happens.
Yeah. So tell me what happened.
Like what were you doing as a real estate developer that got you into trouble?
So property management, that came easy to me.
But construction, that was a lot more complex.
And I quickly found out that construction projects take a long time to finish.
And they were very expensive so I could only take on a certain amount of projects at once.
But I always wanted to do things quickly.
So that's why I was really excited when I found out about this real estate grant program that the city of Oakland had where you could get a 50% reimbursement if you fixed up properties that were in certain rehabilitation areas.
So I decided to take on multiple renovation projects at the same time.
And what I didn't expect was how long of a time it would take for the city to issue these grant reimbursements.
It turned out the money could take anywhere from one or two years to come in after all the work was completed and all the money was paid.
So I found myself in this financial pinch.
I took on too many projects at once that I couldn't afford.
So that's when I made a huge mistake that would come back to haunt me.
I decided to take some shortcuts on my grant application.
I changed the dates on my paperwork to make it seem like the projects had been completed and contractors had been paid sooner than they were in order to start the reimbursement process faster.
You get this license to grow medical marijuana, which is potentially could be a really lucrative thing.
And just maybe a few weeks later, you were charged by county prosecutors with grand theft and forgery and defrauding the government of Oakland.
And this begins now a two-year saga of lawsuits and going to court and eventually a settlement around this.
Tell me a little bit about when you saw those charges, because that was public.
It was in the papers, right?
What was your reaction?
I mean, were you just terrified about what was going to happen to you?
I don't know. What were you thinking?
My life completely changed.
People that were doing business with me no longer wanted to work with me.
And the city of Oakland even revoked the cultivation license I had won based on the charges alone.
And then from that point forward, my life became all about defending myself against those charges.
So I was still running my different businesses, but my focus wasn't fully there.
So that started going downhill.
So I went in front of a judge and the judge said, if I agreed to pleading no contest, paying a $40,000 fine and doing probation, I could have my case completely expunged at the end of probation as long as I didn't mess up again.
And there'd be no jail time.
So given the circumstances, I decided to agree.
Dar, did you ever, I mean, you're now in your late 20s.
Did you think that this was going to, this reputational hit was going to be so bad that it might affect the rest of your life?
I definitely felt like a failure and I certainly felt people's judgment of me based on that.
And I certainly wish I could go back and tell my younger self how important it is to do things the right way and how much your reputation really matters.
The people you associate yourself with, the businesses you get involved in, decisions you make when you're in your 20s, you think may not have big consequences for you later in life, but they do.
All right, so Failure One, the mortgage refinancing company, and I'm chuckling because I think we talk about this all the time.
If there's one word in the Venn diagram that comes up again and again out of the 500 plus episodes of the show, it's failure.
Like it is critical to success.
You cannot become successful unless you've experienced failure and you've tried things that didn't work, but you already had two significant ones in the cannabis business.
Now you are poised to restart, but you would make a third mistake.
This is around 2013, 2014.
I guess you decided to move down to LA from Northern California.
Tell me about what was going on in your life.
What did you decide to do next?
I was looking for any sort of opportunity to once again make money quickly.
And around that time, I ended up meeting someone named Nick.
This is Nick Jussawala.
Correct. And he drove a really nice BMW and a lot of people would just say how successful he was.
And Nick was, I think, he was half Indian, right?
And so like you had a sort of shared cultural background a little bit.
Exactly. Yeah. So the day I met him, we hit it off instantly.
He seemed like he was a really open and honest guy.
He told me about all his businesses and he even showed me his bank account.
And what did he say his businesses were?
Affiliate marketing. Okay, right.
So he would get a commission every time somebody bought something that he would refer them to.
Exactly. Right. So he told me in his business in order to make money, you had to spend money.
Right. But the margins were great.
And he said the only thing that was preventing him from scaling up his business was needing more capital so he could grow faster.
So naturally I asked him if I could invest and he says yes.
Do you remember how much you gave him?
My very first investment I think was $30,000.
I think that was all the money I had.
So a lot. Yeah. But he would basically give you a monthly interest payment on that loan.
Correct. Or on that investment.
Okay, so it sounds like a pretty good deal.
And you had seen him live this like great lifestyle.
He had a nice car. He seemed like the real deal.
And after a few months of getting this return every single month on time in my mind, I was like, this feels very legit.
So then my mindset became how can I invest more in him to make even more passive income.
So that's when I decided to sell my limousines and cars and whatever was left to my medical marijuana company.
I invested every dollar I could and as I invested more, my monthly cash flow kept going up.
And Nick and I would be spending a lot more time together.
We became pretty close friends.
So one random weekend we decided to take a trip to Los Angeles.
And I was blown away by the LA lifestyle.
There was nice cars everywhere, good looking people.
So that trip on the spot, we both decided that we were going to move to LA.
I realized in LA, you need two things, money and fame.
And as far as fame, at that time with the explosion of social media, in order to be popular, you had to have followers.
And Instagram was skyrocketing.
It was just starting at that time, really.
I mean, it was starting to, this is 2014, around 2014.
Yeah. But once I discovered that, I decided that I was going to do whatever it took to build a large following on Instagram.
Yeah. So you'd be critical profile and how are you going to build that following?
Well, luckily for me, Nick also had the same interest in that superficial lifestyle I was into.
Partying cars, popularity, stuff like that.
And he told me he didn't have great credit, but if I agreed to use mine, he'd gladly split the payment for any cars or house I wanted to lease.
So the very first house we rented was a three-story mansion in the Hollywood Hills.
And at the same time, I got a Ferrari and a Rolls Royce.
One car for each of us, all this coming from the passive income from Nick.
And this is still, you were financing these things.
You weren't out right by.
I was living once again beyond my means.
Yeah. And you were posting photos of yourself like in these cars and in these kind of flashy places.
And that would increase your following.
Yeah. I still remember the very first picture I posted on my Instagram account as embarrassing as this sounds now.
It was me in front of these two exotic cars holding the keys to the new house we were renting.
So it didn't take me long to realize that the flashier I was on Instagram, the faster my following would grow.
So it quickly became this addiction for me.
I've never done any hard drugs in my life, but I would say Instagram was more addictive for me than any drug out there for someone who valued social acceptance as much as I did.
I'm looking at your Instagram now.
I don't see those pictures on there.
So are they, were they, did you delete them eventually?
That, my whole old self has been deleted many years ago at this point.
But getting a monthly check for this, I mean, sounds like one of the greatest investments, you know, I mean, it's amazing.
I mean, the returns make, I don't know, like Berkshire Hathaway look like, you know, an amateur.
And that's because it was a fraud.
It wasn't real. Tell me what, how you found out that this was not real.
Yeah. So around the same time, I started having some of my family see my Instagram and they began asking me how I was doing so well.
So I told them about my investment.
I was doing a nick and it wasn't long before my cousins, my brother, and even eventually my parents all started investing.
And so as my followers grew, I started getting recognized.
My life really felt like a movie.
And the icing on the cake was I met a girl who was on a reality TV show.
And within a few months of dating, we got engaged.
But everything went downhill at my engagement photo shoot.
One of the staff members pulls me aside and says, Dar, we have a problem.
My credit card for the payment of the photo shoot didn't go through.
So I opened my bank app and I was shocked to see the last payment Nick made to me bounced.
And even though I was making a lot of money because I was spending it so fast, I was still living month to month as crazy as I could.
I wasn't saving it all. So I call Nick and he tells me, don't worry, there was some banking error that he'd have it corrected the next day.
But the next day comes around.
No money from Nick. A week later, nothing.
And now it's taking longer and longer for him to respond to me.
Eventually he just stops answering completely and goes dark.
And that's when I found out his entire business was actually a Ponzi scheme, which I know what you're thinking, guys.
It sounds so obvious from the start.
But, you know, when you're in it, it's amazing how many red flags you're willing to look past because you just want something to work so bad.
And here I am again. I went from being this high profile Instagram baller to now being completely broke.
And even worse, having caused my family members to lose money because they all invested based on me saying this was a good investment.
So, I mean, did you lose all of your money?
I mean, did they everybody lose all their money?
Yeah, everybody lost their investment.
I mean, he was making payments for some short amount of time, right?
That's how these things work.
But it was a Ponzi scheme.
He was bringing money in and he was sending money out.
Exactly. So, you'd get a few payments, but you'd never, you only got like a fraction back of whatever the principal was.
So, at this point, I mean, this is like 2014, you're now, you know, 30, around 30.
I mean, what was your financial situation like?
That was the lowest point in my life.
I went from living in a three-story house to sleeping on a couch from having hundreds of thousands of followers to deactivating my account because I could no longer afford to keep up that lifestyle.
And then plus the girl I was engaged to broke up with me.
And I was completely broke.
I had less than $600 in my bank account.
When we come back in just a moment, how Dar starts to rebuild his life and finds an opportunity on social media as a storyteller.
Stay with us. I'm Guy Razz and you're listening to How I Built This.
I'm Guy Razz and you're listening to How I Built This.
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Hey, welcome back to How I Built This.
I'm Guy Razz. So it's the end of 2014 and Dar has lost just about everything in a Ponzi scheme.
Not only his money, but money from his own family and friends.
And he starts to think very hard about how he got to that place.
And the one main thing that got me through that period of time was reading inspirational stories of how other successful people went through rough patches in their life and somehow overcame them and still went on to be really successful.
I spent a lot of time reflecting on everything that had happened to me in my life.
I thought about Davis. I thought about after college working in Oakland.
I thought about my adventures in Hollywood.
And I realized that every time something went wrong, I never took personal accountability for anything that had happened to me.
My first failure in real estate, I blamed the economy.
My second failure in medical marijuana, I blamed the government.
My third failure with my investments, I blamed Nick.
Every single time, it was always someone else's fault, not my own.
And that's when it dawned on me that I was the common denominator in all of those failures.
I was the person responsible, not anyone else, me.
So that was the first time in my life that I realized I had to take personal responsibility for everything that went wrong, not just for the past, but that's how I would live my life going forward.
So you're doing this thinking, but what were you going to do to make a living?
Yeah. So one day, I'm at a lunch and I happen to meet a makeup artist that was a popular Instagram beauty influencer.
This is Tamana Roshan? Yeah.
And she was telling me a story of how she was traveling all over the world teaching makeup seminars and they were selling out every city that she would go to.
And students were paying hundreds of dollars a seat.
And I thought, what an amazing business.
And she mentioned, yeah, it's great, but all of that traveling all the time is really hard.
So I asked her if she had ever thought about teaching classes online and building an online school.
And she said she loved the idea, but she had no idea to go about it.
And for some reason, I blurted out, I can build it.
You said you would do it?
I said I would do it. Even though I had no makeup experience, no online education experience, no e-commerce experience.
And she looked at me and said, okay.
So we became 50-50 business partners in an online makeup school.
This is called Dress Your Face.
Dress Your Face Live. Students would get new live classes taught to them every month for $20 a month.
How did you figure out how to stand this whole thing up?
I figured it out just like, I guess, I figured out every other business that I ever got into.
I would just do a lot of research.
I would consult with people.
I remember I went to Best Buy and said, hey, I want to start doing live online classes.
What do I need? And they said, well, you probably need a webcam and two softbox lights.
And luckily they had a starter pack for $200.
And I still needed a website.
So I go on Craigslist and I put an ad up saying, I will pay someone to build me a website.
So then I get an email from a guy who says he likes the business idea.
And within a few days or so, I had a website.
And in order to market the classes, I had the beauty influencer I was partnered with record a short video explaining what the school is about.
So my web developer tells me that the best way to put the video on the website is to host it on YouTube and then he'll pull the link to the site, which is exactly what I did.
That was the only reason that we posted on YouTube.
YouTube was not part of my thinking at all at that time.
So I upload the video, I make the website live, and I went to bed that night before the launch.
And to my surprise, when I woke up in the morning, my inbox was flooded with emails, new user registration, new user registration, new user registration.
And there are all these payments for $20 that were coming in from PayPal.
I was so confused. I was thinking, how could anyone find out about the school when we had an announced it yet?
And I checked the beauty influencers Instagram thinking she may have posted the announcement early, but she didn't.
She didn't mention it one time.
There was no link or anything.
They found how do they even find out about the YouTube video?
Just because I put her name in the title and she was a popular makeup artist, it was gaining a lot of views.
And those views led to students signing up to the website.
Yeah. So I couldn't believe it.
I was literally days away from getting evicted from my little studio apartment with no money left to my bank account.
And within 24 hours of our website going live, we brought in six figures of revenue.
Wow. From signups. From signups.
But this was the first time that I experienced success and I decided that I would not be flashy.
I would not spend money wastefully.
I didn't upgrade my lifestyle even 1%.
I told myself until I paid back all of my family members that had lost money from the Nick investment.
And that's exactly what I did within about a year of starting that online makeup school.
All right. So you guys now have a bona fide business.
Does that become your primary focus now?
Working with this influencer with Tamanah.
Correct. And I think that's the biggest thing that I've ever done is that I mean, you were focused on, she was basically the brand.
Yeah. And you were managing this business.
So not only did the business I have with her continue to grow, but I also start partnering with more makeup influencers to build more schools.
And during one of those classes, I ended up meeting one person, particularly that would change my life forever, which is Laura.
And she would go on to become a hugely important business influence and partner for you too.
As you were sort of bringing on these influencers, you and you and Laura, you were a couple, you guys basically decide to create a new kind of cosmetics brand or company called LiveGlam.
Tell me about this idea because you must have had a bigger vision for something bigger you wanted to do.
Yeah, absolutely. So at this point, I was running the online makeup school, but I knew I wanted to build something bigger.
That's just always how I've been probably seeing my dad go from one taxi cab to my parents building their big taxi business.
So my idea was to scale the next step would be to start a cosmetics line.
This was right when cosmetics was starting to boom like Kylie Cosmetics had started, there were a lot of popular YouTube beauty influencers.
There was a lot of focus on the beauty industry, especially on social media.
And cosmetics as we done a lot on the show, it's an amazing opportunity because there's so many white label manufacturers and you can pick your ingredients and you can start a brand.
Yes, but it's also incredibly difficult, especially if you want to manufacture your own.
Products, which is what I wanted to do, but I had no knowledge about the makeup industry at all.
But luckily, Laura did.
So I asked her if she wanted to partner with me to create our own line of products and she agreed.
This was probably within a week of us meeting each other.
Because she had experience in the industry.
I mean, she was a makeup influencer kind of.
She was a beauty influencer.
She still is and she was also sort of the ambassador for other makeup brands.
Yeah. And when we started our partnership, things started off real scrappy.
So I moved from that small apartment in Hollywood to downtown LA.
We got a two bedroom apartment.
Laura moved in with me. I still kept my roommate that I had.
And then we also ran the business from this new apartment.
So the living room would be where we filmed all of our classes and create all of our content for the school.
The kitchen table would be where all the employees sat.
And we'd use the common area hall that leads to the elevator.
That was where we had our fulfillment team stuffing envelopes for shipping.
Yeah. And so you were basically, the idea was the influencers would use makeup.
The idea was, why don't we make the makeup?
They'll show people how to use it, but then we can also sell this brand.
Exactly. I thought the education and the products would go hand in hand like that.
And the brand was called LiveGlam.
Okay. Correct. I should say it still exists.
Yes. We still put out hundreds of products a year.
This was launched, I think, around 2015.
Yeah. I think I've read that at some point, at some years you were doing over $8 million in revenue.
What was that about, right?
It got to even bigger than that.
So within a couple of years, Laura and I had hundreds of different products and we got to about 100 employees.
We moved to an actual fulfillment center and we got to a point of we were shipping over a million products a year.
Were you profitable? The entire time.
Wow. And so, I mean, imagine initially you probably thought, this is it.
I found my business. I found my life's work.
It's going to be this cosmetics company.
Yeah. So this was 2018 and my life was great.
Laura and I were running a solid business together.
We were financially comfortable except I tell Laura all the time how I felt and how I couldn't stop thinking about my younger self, the guy who was so lost and needed change and needed help.
So around this time, there were a lot of popular motivational speakers that were going viral on Facebook.
People like Prince EA, Jay Shetty, Lewis Howes, lots of others.
And these influencers would talk directly to camera.
They still do and inspire their audience with whatever message they're trying to share.
I didn't really spend too much time on Facebook, so I didn't see these videos too often, but Laura did and she'd always watched these videos.
And she goes, you could totally do this.
Basically telling me to create short inspirational videos.
And I wasn't confident in my own abilities.
So I told her, no, I can't.
I'm in my 30s. People on social media are so much younger than me.
So I basically told her every reason why this wouldn't work.
But she kept on pressuring me to do this.
So after a while I said, you really think I could make videos as good as this?
She responds and says, no, I think you could do them better.
And in no way am I saying that my videos are better than anyone else's.
But she just knew that that was exactly what I needed to hear to get me going.
And sure enough, it was, it got me going.
So I started making videos.
All right. So to be clear, because I've seen the first video you post, it's still up.
It's before deciding to give up on your goals.
That's right. Like watch this.
And it's you sitting on a couch and talking to the camera about people who had failed like Michael Jordan, like Oprah, like Elon Musk, and that would connect people who succeed as persistence, not being bold, right?
And it's a short video, a couple of minutes.
When you recorded that, did you have a vision of like, okay, I'm going to build something out of this?
Or was it literally, I'm just going to put these videos out and see what happens?
The latter. I never thought this would go further than my living room couch.
Because it all started with just me hiring one person.
His name is Ruben Ortiz, and he was 22 years old at the time.
You hired him to film and edit them?
Exactly. So I sat on my living room couch and he would film and edit the videos.
Now, even though my video was scripted in only three minutes long, it took me hundreds of takes to say my lines because I kept messing up.
So all those takes later, I was finally satisfied enough with my first video.
I posted on Facebook and I decided to post it on my birthday.
That was almost six years ago now.
So May 29th, 2018. And? After I post it, I refreshed and refreshed thinking I'd get millions of views.
It never even broke 100 views.
I thought there was a problem with the Facebook algorithm at first.
That's how delusional I was.
So you make this video, and by the way, there's a style to the way you're talking.
It's very simple, short, enunciated, slow.
Was a part of you worried about being judged or like people like, who is this guy?
This is sound so dumb. I don't know.
Was a part of you all worried about that?
My very first comment that I got was from a longtime friend who said, who do you think you are?
Tony Robbins. Oh, wow. But I'm just grateful that I was at a stage in my life in my 30s where I was able to keep pushing past that.
Yeah. Even though I wasn't getting views, I still committed myself to posting two videos a week, no matter what.
And that consistency was key because you have good days, you have bad days when you're an entrepreneur.
Just like if you're trying to work out, right?
Like if you only went to the gym every time you feel like it, you'd never get in shape.
And how my videos work back then is half the screen time was me on camera, and the other half was stock footage of B-roll with whatever subject I was talking about that was intercut throughout the whole video.
What were you going to say, they were going to be inspirational, but where were you going to get your ideas from?
Like how are you coming up with things to say?
My ideas initially started off just inspired by my own life experience.
So if you look at my earlier videos, it was more so messages that I needed to tell my younger self.
My next iteration was I realized instead of just giving life advice, if I told a story and gave a moral at the end of it, then those videos started performing a little better.
So instead of getting a hundred views, maybe they would get to 500 views.
And since I was telling original stories, I couldn't just rely on stock footage.
I now have these cartoons that I would pay some international company around $200 or so to develop.
So very low budget animations.
And then I would tell voiceover over the cartoon.
And my face again would pop on at the end and tell the moral of the story.
So when I did that using the cartoons, now my videos went from 500 views to 1000 views.
So that's when I did one final iteration.
So one day my brother-in-law was visiting from San Diego while I was writing a script.
And the story I was working on was about cheating in a relationship.
I was trying to showcase how cheating can start off as a small, seemingly innocent act, such as a guy liking his ex-girlfriend's Instagram post behind his wife's back.
I look over and coincidentally, my brother-in-law is on his phone sitting behind a girl who has his back towards him.
And a light bulb goes off.
And then I go up to my brother-in-law on this girl and I say, hey, are you guys okay with being in this video?
And thankfully they agreed.
And I told them, just keep doing what you're doing.
My brother-in-law to continue being on his phone and the girl to continue to have her back towards him.
So just to give this some context, you are standing in a kitchen.
I think this is your kitchen, your apartment.
Right. In front of your brother-in-law who's just looking at his phone, there's a woman.
And who's the woman in the video?
I think she was just an employee or a friend.
Okay. I stand in the camera frame and I narrate the scene using them quote unquote my actors.
That was my first attempt at creating what I now know to be called live action filmmaking.
Okay. So I excitedly posted that video and while I love to sit here and tell you that was the one that went viral, it didn't.
That was not. It only got slightly more views than my animation format.
Right. So at this point, I couldn't help but feel really discouraged that after trying all these different formats, none of them were working.
Plus remember, I was still running a full-time cosmetics company.
Yeah. So I wasn't sleeping a lot.
I wasn't getting to spend time with Laura.
I wasn't really doing anything besides work.
So I told her that my next video I was going to post was going to be my last video.
It was another low budget live action video using actors I found on Craigslist and me narrating.
The topic was a husband taking his stay at home wife for granted.
There's a three minute video.
Explain that what you see in the video.
So it's a husband that comes home.
He's dressed in a suit and he's tired from a long day of work.
And as soon as he walks in the kitchen, his wife, who's hard at work making his favorite food, is excited to see him.
But he looks around and he's clearly upset.
There's this big mess that he's looking at.
And he goes, this place is a mess.
What have you been doing all day just sitting around?
And she is absolutely heartbroken.
She grabs this notebook that is on the counter and throws it in the garbage can and walks out of the room.
So he grabs the notebook out of the garbage and looks at it and it's a to do list of everything that she did that day.
And so then we rewind in time to show what she was doing.
She was doing the laundry, cleaning the dishes, taking care of the kid.
And then after she cleaned everything, the kid made a big mess once again.
And she didn't have time to clean it.
So he looks at this notebook and he realizes how hard her day actually was.
And then I would come on at the end and say a moral about how stay at home moms actually have it a lot harder than people may realize and why we need to appreciate them.
All right. So you put this video out there and this was going to be kind of the last one.
Correct. And sure enough, that video within a few hours had gotten thousands of shares and over a million views.
And I'll never forget it was posted on August 30th, 2018.
And today that video is gone to receive over 200 million views.
Wow. Was there a reason why this one hit?
Do you know? It just struck a chord with stay at home moms who happen to be on Facebook and spending time on Facebook.
So it was the right message for the right platform on a message that wasn't very prevalent on social media at the time.
And after I had that viral hit, that's when I got even more motivated, especially after reading all the comments.
So many people were saying my video brought them to tears.
Stay at home wives were saying that they felt seen and appreciated.
I started gaining a lot of new followers at that point.
Yeah. But it wasn't until I had a handful of more viral videos that I got the notification, my profile, qualified for Facebook ads in my videos.
And I think the first month it made around $160 or something.
So it was so small that I never thought too much of it or even looked at my dashboard.
And you were writing all the scripts.
I was writing everything.
Yeah. We were writing all on topics that were universal truths that everybody could agree on, which was very important to me because I didn't want to write about anything that was controversial or divisive.
So no politics, no religion, no swearing, no explicit content.
Everything from day one was meant to appeal to a broad audience of all ranges because in my videos, unlike in the real world, the good person always wins in the end and the bad person always learns their lesson.
So I stayed consistently putting out two videos every week using that same format.
And then my next iteration was to have actor speaking dialogue the whole time versus me doing voiceover for their lines.
And where would you film them?
Still in my apartment. Still in your apartment.
And for people who aren't super familiar with your videos, like, again, I think the best description is there are like many after school specials from like the 80s, you know, where it would be like a story about a bullied kid or an abusive parent.
Like just little morality tales.
And as you say, in every video, the good guy wins comes out redeemed.
Correct. I experimented a couple of times in my history with not having the good guy win and my community did not like it when the good guy does not win in the end.
Yeah. At what point did you start to say, maybe I need to focus my attention on this thing?
Like what was the turning point?
Because you had this small cosmetics business.
But at what point did you start to see the potential in this actually becoming something potentially significant?
So every year I would say I started diverting a little bit less time to the cosmetics business and a little bit more time to the studio.
But keep in mind, I'm not making any money at this point.
So I'm still relying on the cosmetics business in order to pay for all the content that I was creating.
But at this time, our videos are starting to get more and more popular.
They were getting shared by thousands of people.
Each one was consistently getting millions of views around the same time.
I remember randomly checking my bank account.
And when I look into my bank balance, I saw there was a Facebook deposit for like $20,000 or something.
Wow. So I was shocked. I hadn't even been paying attention to my earnings.
So once I saw that deposit, that's when it made me think, hey, maybe this idea is scalable.
When we come back in just a moment, how Dara starts to build a following on YouTube and eventually expands his studio from one living room to 40,000 square feet.
Stay with us. I'm Guy Razz and you're listening to How I Built This.
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Hey, welcome back to How I Built This.
I'm Guy Razz. So it's around 2019 and Dars videos are growing in popularity with millions of views.
And he's making enough money from ads to hire more people, a sound guy and then a social media manager.
And one day he asked me, Dars, do you think we should post the videos on YouTube?
And I thought about it and said, I guess, why not?
I didn't think anything of YouTube at this time.
I was 100% focused on Facebook.
So when we started posting on YouTube, my videos would get around 1000 views, which was low for me because my Facebook videos were now all getting millions of views.
So for two years that happened from the middle of 2018 when we started on YouTube, all the way to 2020, they stayed at around 1000 views.
So I completely disregarded YouTube.
But on Facebook, we were experiencing rocket ship growth.
So we kept up four postings a week all the way through 2019.
And by July that year, we hit one billion views.
So it took us just over a year from starting to hit that milestone.
But by October 2019, three months later, we hit two billion views.
And then two months later, by November, we hit three billion views.
But still YouTube, you weren't getting many views at all?
100% Facebook. So then 2020 came.
And that year changed everything because COVID hit.
We're still filming most of our productions in my apartment, but we'd also just started renting film sets to do some of our stories.
But when the lockdown was announced, suddenly became impossible for us to rent film sets.
So I had to make a big decision.
Was it time to rent an actual production studio to operate out of?
Yeah. We weren't even two years in.
And I had people in my ear telling me that the success wouldn't last.
Social media, so finicky.
Influencers don't have a long shelf life.
Facebook is a dying platform.
Plus the cosmetics industry was getting hit hard by COVID.
So that business started declining.
Then add on top to that, that I was also about to be a dad, which adds financial pressure.
So there were just a lot of things in my mind that made the decision to commit to a commercial building hard.
But I decided to take a leap of faith.
And I found this gym that was going out of business right next to the Burbank airport that was trying to sublease their space out.
So the building was around 40,000 square feet, a big space.
And it was an empty warehouse.
It was an empty warehouse.
We create this floor plan for all the sets we build.
I think there were six sets that could fit in the space I had allocated for ourselves.
And what were the sets going to be?
It was like a low income apartment, a high income apartment, a school, a restaurant, a hospital and a courthouse.
Do you remember how much it cost you?
Because again, like you're still fine.
You did not have investors, right?
When I saw the bid for all six sets, I think it was around 250,000, which I didn't have.
So I asked what were the cheapest three sets to build?
And the contractor told me it was the two apartments in the school.
So I said, all right, let's start with just building those three sets.
But since I had this school set now, I had to come up with storylines for it.
That's the only reason that I decided to write my first stories catered towards young people simply because I had the set.
So I remember after we recorded a bunch of school videos, I didn't want to post any of them because I thought they would all flop on Facebook.
And they did. But Tony, my head of social messaged me and said, even though Facebook views were low, the first school based video we did was our top performing video on YouTube.
Our videos were starting to get hundreds of thousands of views there.
And that's when it hit me, young people watch YouTube.
Kids, do you remember around 2020, how much roughly was coming in from Facebook every month?
I mean, you mentioned $20,000 earlier.
Was it like tens of thousands of dollars in revenue coming in from Facebook?
In 2020, I think we were bringing in hundreds of thousands of dollars from Facebook.
A year. No, it was around six figures a month.
Wow. On Facebook. But you started to see with YouTube that something was changing and it was kids or young people who were watching the videos.
They were resonating. I think this is important because tons of people out there don't like your videos, criticize them, and not just mean people, but people who are like, oh, these are overly simplified.
The dialogue is so hokey and it's cringy and all this stuff.
And you've seen that and I've watched the videos and they are very simplistic.
They are, it doesn't look like an Oscar winning film, but the point is it doesn't matter, right?
It doesn't matter what I might think or a critic might think or even you might think.
What matters is how understandable it is, right?
That's a great point. So in my experience, the more successful anyone becomes at anything, there's always a certain amount of criticism that you're going to receive.
And the important part is that you listen to your audience that you're trying to serve.
I saw a stat early on that a good percentage of our audience watches without sound on.
Because again, these are living on social platforms.
They're reading the subtitles, the captions.
That's why we have subtitles on every video and a lot of folks don't speak English as their native language.
So because of the simplistic language, it actually helps us cater to a broader audience.
So now that is designed on purpose, but as soon as it started hitting on YouTube, that's when I realized the next iteration has to be me writing scripts with YouTube in mind.
And then this is where we go from three minute videos to eight minute videos because our audience on YouTube wanted longer content.
And longer content on YouTube, as we know from other conversations we've had, also means more ad revenue, potential ad revenue.
Correct. So, Dara, here's my question.
I mean, how did you start to think about, okay, now we need to think about a diversified revenue stream.
We can't just focus on the money that might come in from Facebook and YouTube.
We have to think of other ways to maybe we bring in our own advertisers for these videos.
When did that, when did you start to think about that?
Because again, now you've got employees, you're running a business, it has to make money.
So how did you start to think about ways to do that?
I was not thinking about any other revenue source.
I was only focused on creating content for Facebook and YouTube.
And our business completely relied on us being able to generate revenue from those ads.
And it worked. You were getting big checks every month from YouTube and Facebook, which could finance this stuff.
Yes, there are so many people that said, YouTube is just a fad, Facebook is just a fad.
And that was a worry in mind.
So every year I treated it as if that may be my last year experiencing any sort of success.
But YouTube is now the most watch outlet on TV.
It's amazing. I believe the status half of YouTube's US viewership is now on TVs.
And YouTube gets more views than any other single network or streaming service, even more than Disney Plus or Netflix.
So the creator industry is experiencing this rapid growth.
It's an incredible opportunity.
And it is very scalable.
So as you sort of naturally had to hire more people, how are you managing the business and also being the writer and even directing?
How are you and hiring and bringing people in?
How are you doing all of that?
During this time when I started leading into YouTube, I made one more important decision.
I cut myself out from the videos.
So you know how earlier I was saying I would pop on at the end of each video?
You're not in them anymore.
Correct. And that was all based on looking at YouTube analytics.
And so I was humbled really quickly when I saw our audience retention would tank as soon as I would come on to tell the moral.
So I literally had to fire myself.
And that's one of the great things about being a digital media creator is that it doesn't take us two years to work on a film like traditional film companies.
I could write a script and one week later, two weeks later, put it out and have real time feedback from my audience so I could see what they like, what they don't like, and then I could double down on what's working and cut out what's not.
By the way, this is this out of all the YouTube conversations we've had.
This is a huge differentiator because Darman Studios doesn't actually need Darman.
There is a formula that a viewer can expect.
They know that it's going to be a redemption story, but that's really what you guys leaned in on.
That's what you focused on, not on, hey, it's me Darman here today with another, because if that was you, as you mentioned earlier, the brand would die if you stopped doing it.
Yes. That's the reason I mentioned this.
The reason I mentioned this is because that became a very important part in being able to scale our studio.
So once I made all these changes, I focused more on young people.
That's when I started really caring about YouTube and our YouTube exploded.
So we went from hardly getting interviews our first couple of years to 2021 finishing as the number two creator on the platform globally and number one in scripted.
So I went to L.A. to see my dad and I popped in and I was absolutely blown away because now it's what, two, three hundred thousand square feet of space, right?
Something like that? Correct.
And you've got a full town square.
You've got a supermarket, like a Target-like superstore set.
You've got police cars.
This is a massive production.
I mean, over a hundred employees now working around the clock plus freelancers around the world working around the clock making three videos a week.
I mean, this is a production studio.
And so what I wonder is, when did you start to sort of say, this isn't just me putting out YouTube videos every week.
This is actually a much bigger idea.
When did that start to click in your mind?
That happened in 2022. In 2021, what I didn't expect is while COVID had a negative impact to the cosmetics industry, it had a huge positive impact for the media industry because so many people were at home watching videos.
Watching, yeah. So that year, our YouTube got to 500 million monthly views and our Facebook was still getting around a billion monthly views.
So in 2022, we start putting out four 20 minute videos a week compared to four eight minute videos.
But since the videos were getting more complex with longer run times, we had to hire more people.
In my apartment, we operated two person crews, but now we needed five person crews.
Yeah. But to put in context of traditional media, that's still teeny tiny, right?
We operate on tight digital budgets, far from traditional media complexity and staff sizes.
The downside was that it started taking twice as long for each crew to make one video.
So we again had to double the number of crews we had from two to four and to keep up with that growth.
Now we need to hire specialized people and build infrastructure.
So that year is when we got a second building next door and built out an entire neighborhood block, just like you see at Universal Studio sets, which you've seen guy.
Yep. So that gave us around 30 film sets in total.
And then we get into different languages.
And by localizing our content, it added around another 250 million monthly views.
And we got really good at also repurposing our content.
So we started posting our videos on every social platform.
Yeah. All right. So 2022, I mean, it sounds like, you know, like everything is going pretty great, right?
I mean, you're expanding and hiring and making money.
I mean, just incredible growth.
But there's also a lot of stress that comes along with that.
And I think it started to take a toll on you personally, right?
Yeah. Can you tell me a little bit about that?
So as you can probably tell by everything I've said, I've always had this insane work ethic and I was neglecting my health.
I was neglecting my family.
I had no life outside of work.
I was so obsessive that there was no convincing me of anything else until COVID hit my whole family on Christmas Eve 2022.
So all of us were sick. So I remember Christmas night, I was working through my sickness on my laptop and out of nowhere, my breath starts changing.
It felt like it was becoming hard for me to breathe.
Now my heart start beating really fast.
I had to close my laptop, call the doctor and after explaining all the symptoms, the doctor says, he's just having a panic attack.
But these kept happening every couple hours for a month straight.
And so all my problems were stemming from me not eating right, not sleeping right, not having work-life balance.
So going into 2023, I knew I was going to completely change my lifestyle.
I started removing a lot of my responsibilities from work.
And you know how stressful it is when you start removing yourself from any sort of decisions.
But fortunately I had Laura and Ruben, the two people that were there from the very beginning to step up to the plate.
Laura took over all of human resources and finance and Ruben took over all of production and operations.
But the craziest thing happened.
While the first half of 2023, the business really slowed down.
The second half of 2023, the studio grew faster than ever.
So it turned out by removing myself from lots of different decisions, I created a domino effect.
Ruben and Laura had to relieve themselves from certain responsibilities to take over mine, which meant more mid-level managers had to step up to the plate.
And it helped be a big step for us to create brand new content divisions that did not rely on me.
And also develop our own in-house agency.
Like a creative agency to do ads or content for brands and clients.
Exactly. Dar, I want to sort of get a sense of right now how you earn revenue.
Are your revenue streams still primarily from YouTube and Facebook?
It's still 97% through ad revenue coming from Facebook and YouTube.
And the remaining Delta is us having brand sponsorships in certain videos.
And on average, how much does it cost to produce one 20-minute video or 25-minute video?
So for our main channel, which we do 25-minute videos, our cost is around $25,000.
So at what point does it become sustainable?
How many views do you need for that to become sustainable, like 5 million or 2 million?
A good rule of thumb is a creator will make around $5,000 per every 1 million views.
And that's the reason why we have to operate on digital budget.
So we have to break, you know, say like 5 million views just to break even.
Because this industry is maturing the YouTube content creator world, there are like consolidations and acquisitions and some really interesting things happening.
And you actually were offered, somebody offered to acquire you.
In the end, I think you decided not to go in that direction.
But I guess the idea was there's a bigger private equity or investment firm or whatever that has a portfolio of companies.
And to them, you are an opportunity to build out something even bigger.
Tell me about why you decided not to accept the offer.
In the beginning, we almost did.
But ultimately, I just thought the regret of me selling was much more likely than me feeling good about making that decision.
And I'm someone who takes such the long view in the creator economy.
I feel like we're just getting started.
We have new content divisions that are launching.
We're going into different genres, all these different aspects where we're barely scratching the surface.
So ultimately, I decided to turn it down.
I mean, it sounds like you guys are becoming much more of a traditional Hollywood style studio where you're like doing all kinds of stories, maybe even feature length films.
Correct. So just to kind of fast forward to where things are today.
We've outgrown our space again, our three studios and the house that we have.
We're now looking at a five plus acre campus to expand into.
We currently have eight production crews.
But before the end of the year, we're going to take that to 16 production crews.
Wow. And that's going to allow us to put out 25 new long form videos a week.
Is that entirely self-financed, by the way, or did you bring in?
Are you bringing in investors?
It's all self-financed, all bootstrapped and all made possible through Facebook and YouTube.
Wow. And now by the end of 2024, we should be at 200 team members and a lot of folks we've hired, it's incredible.
They've come from Disney, Universal, Pixar, top media companies in the world.
From Hollywood, people are now going from traditional Hollywood studios to YouTube studios like yours.
Yeah. With that great success comes all kinds of arrows and some of it, fair.
You're a public figure and so you're going to be criticized.
You've had some actors in the past, you know, about this who've complained of criticizing their underpaid.
And Hollywood is a union town, but you're not, for a variety of reasons, you're not working with union actors.
It's what you're feeling about that.
I mean, do you, would it be impossible for Darman Studios to work with unionized actors, for example?
That experience was definitely a tough one.
What happened was in the beginning of 2023, there was a small subset of our actors that were unhappy and they felt they wanted to be compensated more than the business could support.
So some of the things that were being asked for, we just couldn't provide, which put us in a hard spot because ultimately we were no longer able to work together.
But that's not to say that we didn't learn anything from that experience or make any positive changes from that.
We upped our actor pay rates.
We implemented minimum day rates.
And in terms of like working with unionized actors, is that just cost prohibitive?
I'm just curious, is it, would it be almost impossible for you to do that?
For us to continue on digital budgets, but we do have ambitions to go beyond just digital.
You know, later this year, we are planning on syndicating our content on traditional media platforms.
Are you in conversations with, I mean, we're talking about like streaming services like Netflix and Hulu and those kinds of places.
Yeah, we've had really interesting conversations with different streaming platforms.
So I think a world in which you can see Darman content outside of YouTube and social media is going to happen sooner than later and even on the big screen.
And so as those opportunities arise and our team gets bigger, I definitely think we're going to be working with all folks from Hollywood.
And then at the start of next year, we're also taking our content on the road and we're doing in person Broadway style shows.
Wow. Dar, when you think about like the journey, you're almost 40 and you know, not that long ago, you were at really a rock bottom professionally, personally, your reputation was in tatters.
You made a bunch of mistakes.
And now you are overseeing one of the largest, you know, digital studios, YouTube studios, whatever Facebook out there, right?
I mean, with hundreds of thousands of square feet of sets and, you know, now a guy like you can come out of nowhere and build a really significant studio.
I mean, when you think about it, you put a ton of work into this and methodical work.
But how much of where you are now do you think is because of work and how much do you think is because you were lucky?
I don't take, you know, this success that I've been able to experience for granted because the videos, they wouldn't be able to exist without platforms like Facebook and YouTube.
In the past, if you wanted to bring a film to life, you'd have to go get a big media networks approval for everything.
And do you think there was any chance that they'd agree to green light?
My idea in entrepreneur with no film experience and a troublesome past wanting to inspire others with life lessons.
They say, no, these are hokey or whatever.
Nobody would agree like it.
Exactly. And, you know, being able to do what my community loves and what I love doing every day is a blessing that I definitely appreciate.
It's what drives me every day.
And I've never lost sight that you can make mistakes in life and you can learn from them.
You can overcome hardships.
And most importantly, you can turn your life around.
And that's what I did with my life and I'm not going to stop helping other people try to do that with theirs.
That's Darman, YouTube creator and founder of Darman Studios.
By the way, as a privately held company, they don't disclose the revenue numbers, but Dar will say that annually it's in the eight figures.
Hey, thanks so much for listening to the show this week.
Please make sure to click the follow button on your podcast app so you never miss a new episode of the show.
And as always, it's free.
This episode was produced by Alex Chung and Casey Herman with music composed by Ramteena Reblewe.
It was edited by Neva Grant with research from Catherine Seifer and engineering help from Gilly Moon and Josh Newell.
Our production staff also includes J.C.
Howard, John Isabella, Keri Thompson, Carla Estevez, Sam Paulson and Chris Messini.
I'm Guy Raaz and you've been listening to How I Built This.
