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

- On this episode, I talk about India's grandparents, risk, and rewards, and longform Facebook posts. (laughter) I didn't even know where that came from. (upbeat hip hop music. ) You ask questions and I answer them. This is the #AskGaryVee Show. Hey everybody, this is Gary Vay-ner-chuk, and this is episode 126 of the #AskGaryVee Show. I am very fired up, we're Periscoping in the background, which is exciting, a tremendous product owned by Twitter, a competitor to my start-up investment in Meerkat, two incredible companies battling it out for livestreaming leadership. Look out for Facebook and Snapchat in that game, by the way, I still just feel it in my tummy. Tum, tum. Really, really sad that I missed yesterday, kind of missed the show, feel like we're clearly in the golden era. ("Hallelujah") We've talked a lot about that, it was fun to have the winners the other day, whole crew's in the house, the Periscope is adding an extra dynamic. You know, it's funny, I feel like there's more people watching, even more than watching, so my energy's a little high this morning. Excited this is gonna get out early, no pressure, DRock. And that's where we're at, so. I wanted to make the show a little tighter today. Feel like they've been running a little long. I had to do this in Wine Library somewhere around the 400ths, where they were getting into 39, 40, they're becoming epic. So, India. Let's get into the show. Good try, kiddo. (laughter) - [India] Alright, from Brandon. - Where are the show t-shirts? Do you have yours yet? The two I bought for you? - [India] They haven't arrived yet. - Alright, you'll wear it as soon as you get it, right? - [India] Yeah, that's right. - Now, do they have, like, female cuts, or does that website not have it? - [India] I think they do, yeah. - Okay, they did, okay, can't wait to see you rocking that. Expect you to rock it every day of your life. India.

- [Steve] Brandon asks: "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. 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 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.

- [Steve] Joe asks, "When looking at potential investments that you might "be on the fence about, "how do you balance risk versus reward? " - I always, always dramatically value reward over risk. Hey, this is such a great episode to do this 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, 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'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. Flores.

- [Steve] Crystal asks, "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. 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, 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 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. 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, 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. You like that? Alright, it's true. What's the Scope think? - [Sid] They're trying to open that website and they're saying it's not working. - Well, yeah, that's right. We'll be ready for you guys later. You guys're getting a preview. - [India] There's a video from Sue Zimmerman. - Sue. - That's terrifying, Gary. - Sorry, India. - It's fine.

- Hey, Gary Vee, it's Sue B. here. 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 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, no. Let me tell you the story about my first speaking gig ever. 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, 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, 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.

- [Steve] Alysha asks, "s using a forum to build a community a dying practice? " - 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, 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 Facebook, 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, 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, that's a really important thing, if you wanna make sure you're seeing the show in your Facebook feed, make sure you follow that, and I'm feeling pretty good. Anything else? We're good? We got the detail-oriented third question. Feeling pretty good, yeah, okay. Question of the day, damn, I had a good one, I gotta start writing this shit down. Did I forward anything to you guys? I thought I almost did, nah. Damn, I really liked it, too, I really wanted the answer for it. Alright. Question of the day. Ask India, I don't even wanna do it. - What are your grandparent's names? Either side of the family. - Oh, I like that. Now, your grandparents were featured. - Yes, they were, so cute. My grandparents were featured in the LA Times because they relived their honeymoon, like, 62 years later or something. - Picture. You keep asking questions, I'll keep answering them. (upbeat, hip hop music)