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One of the most popular YouTubers in the world is a tall, rather awkward 25-year-old from North Carolina named Jimmy Donaldson, better known to his fans as MrBeast. He has more online followers than Elon Musk, generates millions in advertising revenue, and wants to turn his loyal subscriber base into a business. But trading the virtual glory for the real world is difficult.
If you haven’t spent your teenage years on YouTube, Donaldson’s success might come as a surprise. The videos he makes are reminiscent of MTV’s “Jackass,” with lots of screaming and elaborate stunts. Antics include crushing a sports car in a hydraulic press and driving a train into a brick wall. Recently, his work has become increasingly philanthropic. Video titles are traded with big, flashy numbers: “1,000 deaf people are hearing for the first time,” for example.
Donaldson doesn’t have the qualities one would associate with a superstar. He’s gained confidence but can still seem awkward in front of the camera. While his videos follow the pseudo-casual YouTube style of quick cuts and shots of laughing friends, he rarely seems relaxed. Still, his comments section oozes respect. Under a video of him sitting on a chair and counting to 10,000, a viewer wrote: “This is craftsmanship and dedication at its finest!” His patience and mental strength are overwhelming, I don’t know how or where he gets the motivation from. ”
For Donaldson and the other online stars like him, the question is what’s next. Even the most successful content creator is at the mercy of the algorithms of social media companies, moderators, and the vicissitudes of digital advertising. Whoever owns the platform sets the rules. YouTube, owned by Google’s parent company Alphabet, is currently trying to convince more YouTubers to upload short videos to compete with TikTok. TikTok has been threatened with bans in the US. As YouTubers gain more followers, lack of control can lead to problems. Autonomy becomes a valuable possession.
Content creation is also exhausting work as audiences demand a constant stream of new videos – another incentive to build offline businesses. He may be young, but it took Donaldson a while to reach his 178 million subscribers. He started posting on YouTube when he was eleven. Speaking to podcaster Joe Rogan a year ago, he described himself as “hyper-obsessed” with the platform. He explored ways to make videos viral, for example by examining how bright video thumbnails were. His own are cartoonish and hyperreal.
MrBeast videos are a prime example of this genre: not too long and opening up with explanations useful for viewers with faltering attention spans. He also likes to tie in other famous YouTubers. Felix Kjellberg – aka PewDiePie (111 million YouTube subscribers) – recently joined him on a rollercoaster ride in Japan.
As its audience grows, so does the number of businesses. In addition to generating 55 percent of video ad revenue through YouTube’s affiliate program, its businesses also include a ghost kitchen called MrBeast Burger and a candy bar company called Feastables, as well as investing in other YouTubers through a fintech called Creative Juice.
Earlier this year, Donaldson tweeted the idea of selling parts of his company “for billions of dollars.” Earlier he had mentioned the idea of an IPO. Last year, news website Axios reported that he was considering outside financing that would take his business empire to around $1.5 billion in value. In technical parlance, that would make him a unicorn.
Celebrity-owned companies are nothing new. In the late ’90s, David Bowie issued asset-backed securities based on earnings from his albums. George Clooney used to sell tequila. Rihanna has a makeup line.
However, for online stars who trade views, the ratings are still a work in progress. Even YouTube megastars can find that their names mean little to an older audience, hurting their chances of building a brand outside of social media.
In 2022, an online media company comprised of 93 content creators and esports competitors joined the markets through a merger with a special purpose vehicle. FaZe Clan, as they call themselves, has a combined fanbase of more than 500 million across multiple platforms including YouTube, TikTok, and Twitch. Revenue comes from sources such as ads in videos and branded offers featuring the scary-sounding orange chicken pizza roll. But the market interest in FaZe Holdings does not bode well for Donaldson. Spacs typically start at $10 per share. FaZe Holdings now trades for less than 30 cents a share.
Donaldson’s enthusiasm for an IPO appears to have waned. After customer complaints, he sued Virtual Dining Concepts, the company behind Beast Burger, and was subsequently countersued. Meanwhile, videos keep coming. It will be difficult to escape the limitations of YouTube.
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