“Respect the Process” Interviews X4Y Founder Michael Sugar

Jordan Brady: We have a very special episode that’s going to be of interest to everyone making commercials: Michael Sugar.

Now Michael is our first Academy Award-winning guest. He won the Oscar for Spotlight. One of my favorite films with, oh my gosh, Michael Keaton. A wonderful, understated performance by Mark Ruffalo with a handsome, nervous tick that he did that I thought was interesting for the character. Rachel McAdams, I could go on and on.

Michael was also a partner at Anonymous Content, which is one of the huge leaders in commercial production, literary management now, and, and all kinds of things. And Michael's clients, I mean, go to his Wikipedia: Steven Soderbergh, Edgar Wright… I could go on and on, but what we're talking about today is his venture X4Y.com. Dan Sorgen was on a show talking about X4Y and I've talked about it at commercial directing bootcamp. It's a place where you can make a brand-agnostic spot. Helen, I hope I'm getting this right cause I just listened to the interview. It's a marketplace for ready-to-brand video.

So if you make a spot, a spec spot, Michael and X4Y can sell it around the world to one high-paying buyer and they will put their logo at the end of it. Now, when you listen to the interview, Michael was so patient with me. One he's much smarter than I am. And it took me a while to really get it because he's invented a new way of servicing brands.

And at the same time, helping filmmakers get a return on their investment instead of making a spec spot that goes on your reel – but you'll never get any money back directly from that spot. He's going to take it and sell it. And not him personally. He's a big macher as we say. But he does have a very personal touch on this business.

You can hear the passion for it as he explains it to me. And I'm a little, Helen, I'm a little thick-headed, so I keep asking him questions, but he, like I said, he's very patient. And by the end, I certainly got it. And I think this is a wonderful opportunity for you, the listener, to consider when you go out, spend your money and gather your friends and make a spec spot.

As I teach at commercial directing bootcamp, the first rule of spec spot is it can't look like a spec spot, because if people can tell it's a spec spot, it won't serve your reel.

And I don't think X4Y would be able to sell it if it looks like a spec spot. And I think even Michael Sugar would agree that the more, well, not even Michael Sugar, but especially Michael Sugar would agree. The filmmakers that have a point of view that have their voice laced throughout their work. They succeed the best. I mean, we mentioned Edgar Wright, I can always tell an Edgar Wright film.

I can tell a Steven Soderbergh film, even though he is so diverse in his storytelling styles, I can always feel like, oh, that is a Steven Soderbergh movie, film, picture. I like saying “picture.” I'm old school.

I could kiss ass for at least eight minutes, but let's jump right into X4Y if you're comfortable with that.

Michael Sugar: I mean, I’m definitely comfortable with about six more minutes of – no, I'm kidding. Yeah, I'm so happy to be here. Thank you for taking the time with me.

JB: Of course. So do you fund spots? Or everything has to be funded by the filmmaker and then brought to you? I know from when Dan Sorgen was on the podcast, we put links. And we'll put links, if you're listening, go to my website and I'll have links you can click on and see the stuff. And it'll take you to X4Y. Are you considering funding things?

MS: Down the road we may do that. But the idea here is to create a conduit between creators and buyers, right? So we're not funding these commercials. We're telling folks that are creative, that want to make something, and they're going to do it in one form or another anyway, go make one of these. Because if you make that short film, which will cost you a lot of money and take a lot of time, you're never getting your money back. I can think of probably five exceptions in the last five years where short films made their money back.

JB: What about, do you personally look at the spots that come in? Are those curated for you?

MS: Well, now at this point, we're not fully automated yet, so everything is manual and by hand, as we're building out the technology. So my eyes are on pretty much all of the spots that are coming in, in one form or another, or the team, which is you know.

JB: You're the draw, right?

MS: Well, I hope not. I mean, I want the draw to be the opportunity. I think I'm an advantage early on in attracting the brands, candidly.

JB: Even forget the accolades for the movies and the TV shows. The fact that you were at Anonymous Content – and for you younger listeners, Anonymous, back in the day, was the biggest before going into what I saw as management, literary management and managing directors, was the biggest production company of commercials, like Anonymous was top of the rock.

MS: Yeah. And still is, of course – it’s the greatest.

JB: So, coming from that pedigree towards spots, I'm a young filmmaker, I want you to look at my spot and maybe – this is my next question – Do you offer some criticism? Like, you know, “It's really good, kid, but why don't we trim this? Did you shoot a better close up of her? Is there any moment where they were in the same shot together?”

MS: Yeah. I mean from time to time, I'm seeing all of them now. But the idea here is to launch a global technology platform. So, at scale, I hope it’s big enough that I can't see them, but at the end of the day, my hope is that – first of all, there will be educational resources and tools inside of the platform, there already are some, with more to come. And we will be sharing specs that have sold in various forms to our creator base. My hope is that this is a fully automated global marketplace where, at any time of the day, anyone can go out and make something with their collaborators and friends that has some brand ubiquity. And on the other side of our marketplace, somewhere in the world, there's someone who will pay money for it.

JB: So, better to do it without dialogue? Does that open up a spot to be sold in France, Spain, Zimbabwe, America? I mean, if it's emotional and moving?

MS: I think that's an angle to play. I think a dialogue tells a story sometimes better than silent, or content without dialogue. So, I think, that's just an ROI question. But my advice would be, make something that has at least one category: agnosticism. Right? So it would work for anything inside of a category. And, at best, multiple categories, we have one that came in, of a woman dancing, with a beautiful poem being read in voiceover. It was gorgeous. It works for Nike. It works for Estée Lauder. It works for any aspirational brand. It works for smaller companies, and so, I think the sweet spot is if you can think of 10 different kinds of companies that could put their logo on it, you've probably got an X4Y spot. But we're creating something that doesn't exist yet, really.

And so people will have to unlearn what I think has been the sort of traditional wisdom of how to make a spec commercial and make stuff that's a little bit more ubiquitous in terms of its, you know, brand appeal. And by the way, when I say brands, I don't necessarily mean global brands. I mean, global brands are seeing these spots already, for sure. But there are so many millions of advertisers doing flat image advertising only because they don't know that they can afford it.

So 15 years ago, people that had a car and a phone didn't realize that they had a job, until Uber came along and gave them permission to monetize their car on their phone. That's what we're trying to do with X4Y. If you have a camera, you have an idea, you have a crew of people that can come together and make something awesome, we're going to give you a place to sell it.

JB: Quality, by the way. ‘Cause I don't want anyone listening to think, oh, I can go out with my cell phone and make a spot. It would have to be very specific, creative to be served by a phone. You're talking nice production value, high production value.

MS: I mean, I am. However, I think that it's–Well, certainly quality needs to be great because nobody wants to buy something that's not of quality. I'm not sure it has to be done on a Red camera or with film. I think it has to be good enough –

JB: Depending upon the concept.

MS: And depending upon the buyer, right? If you're making something on your phone for $500, that's awesome. And somebody–

JB: That'll go to the candle-maker.

MS: For $10,000, but that's still a great return. Right? So the way that our model works is the creators make the content, they set the price. Whatever the price is, is the price that we sell it for.

JB: But you advise them on the price. If someone's way out of their league with what they think they can get for it, someone will advise –

MS: Right now we are. And then what our hope is, is that as they see, as our creators, see how much spots are selling for, they have points of reference and then they'll set prices accordingly. I mean, certainly, the baseline is what it costs, right? You definitely want to at least get your money back, then you want to build in some profit. But the sky's the limit. I think we're going to see things made for $5,000, $10,000, selling for hundreds of thousands of dollars.

I mean, we already have a couple of examples of content that could go at that price point. I think we'll see people making things for 30, $40,000 and selling them for 10 times that money.

JB: So someone listening right now is thinking about going out, making a spec spot, they're going to get their friends. Maybe they give them some gift cards. Their wife makes chili, or their husband, or whoever. And they're going to make this spot and they know they’ve got to make it great. What I'm learning is you would advise that they don't make it for a specific brand and go after that specific brand, or even give up on that specific brand ever seeing their spot, but they would have a legit looking spot on their reel.
I don't want to say Nike, but let's say it's a Miller Lite. They're going to make a Miller Lite spot. So they study that brand. And they make it in the voice of that brand. Now they just have a spot for their reel, with the only hope of monetizing it would be getting future work. But for that specific spot, they're not going to see a dime.

MS: Correct.

JB: So it would be an investment, a calling card in their reel. What I'm learning today is, it might be better to make the same spot. Forget Miller Lite. Should I shoot five different beer bottles that shoot day with my friends?

MS: I mean, I would argue that you don't make a beer commercial. You make a great, funny 30-second spot that a beer company could put their logo on and it still connects, or another beverage company could, or another kind of company.

JB: Because when you said category, I don't think you said category-agnostic, but maybe you said it could appeal to different categories. That's what I'm struggling with. Just because I teach, “study the brand, make it for the brand, give up the hope of ever getting them to watch it, but you'll have a spot,” because the first rule of spec spots is it can't look like a spec spot.

MS: The second rule of spec spots is, you're going to lose money in time.

JB: Of course. That’s a given.

MS: So I'm trying to get rid of the second rule. I agree with your first rule, but the rules change. That's what we're doing here. It's not bad advice that you give your students, that they should study a brand's ethos, look at their aesthetic.

JB: But that might be too narrow of thinking now.

MS: But to me, that's the waste that I'm trying to solve, right? So we're at the very early stages of this revolution in creativity, but why make something and spend all this time and money? That when, you know, you're never going to even sell it. Where the best case scenario is that you get to do it again.

JB: Or a cease and desist letter from that company that you can put on your Instagram. That would be like a badge of honor, some buzz.

MS: And moreover, even if it's great, even if the brand would want it, there's so much baked-in friction between their creative agency or internal CMO, that it's almost harder for them to get it.

MS: To buy it, even if they loved it. So given that if it's going to take you three days of work of shooting and $10,000 of your own money, and you have the opportunity to get discovered – which is a big part of why people make spec spots – but also the opportunity to sell it to any one of multiple brands, whether it is category agnostic or not.

I think the better proposition is to make it where you can sell it. And, for a platform on which you can sell it, because we're not trying to solve for creativity. We're not trying to create a Mecca or a haven for creators. This isn't the Soho house.

This is a marketplace. This is literally designed to commoditize your content, right? So if that sounds crass, I apologize. I've spent my entire life in service of filmmakers, and I've worked with many, many, many great filmmakers.

JB: Some of my favorites.

MS: But I also know that people need to make a living. And I think that what is sacrificed in creating brand-agnostic or unbranded content in terms of your ability to deliver the exact message to a brand, is mitigated by the opportunity and upside of being able to sell it. I mean, even a spec spot that has been made for a specific brand already, if the product is not inserted, just if it's just a logo at the end, think about whether we can change the logo for another brand.

If you can think of one other company that this commercial will work for, then you've got something that works on X4Y.

JB: The example that I was talking with Dan about when I first heard of this, it kept popping right in my mind. I think they're probably still running. It's a guy looking at a mattress, but he sees a giant slice of pizza. And then the other one in the same campaign as a woman sees hockey sticks coming out of a trash can, but she sees giant french fries. And it might be revealed differently than I'm saying it. And at the end, it's, you know, “when all you can hockey about is french fries.” So they flip it and it's for GrubHub.

The trick is, I think it's for GrubHub, because it would work for Uber Eats, the pizza one would work for Domino's or Little Caesars. It would work for, for anything so that to me–

MS: It would work for Adderall. Right. But you see that's, what's fun is, and it could work for–

JB: So that proves your point, that a good spot that resonates with people – because those spots are kind of a hit, I think. And maybe it's in my little world, but we like them that the idea catches you and then they put the logo on the end. So it works what you're saying.

MS: That’s my belief and, and we're seeing it happening over and over again. So even if you make a spec spot for a specific brand, I would argue that you should leave an opportunity to replace the product insert at a later time or green screen the shoes, or whatever it is that you need to do to protect the ability to sell it to a different brand, because I'm bringing that buyer to you. If one of your students goes out and makes a Nike spot, as good as it is, it's not getting to the CMO of Nike.

JB: Side note: I always say, don't make a Nike spot. Because you don't have LeBron. You don't have Serena.

MS: But that's the reason not to make it right?

JB: No, that is the reason not to make it.

MS: But when we looked, when we started doing our research for this business, tons of Nike spots, tons of Coca-Cola spots, tons of Gatorade, Adidas – those are the ones that are least likely to break through. So if you have a person running and there's something that's emotional or funny, or connective to a wide audience, it could be for any beverage, any sports drink, it could be for any apparel company. It could be. I worry a little bit about over-indexing to big companies, right? I think we're really, really trying to solve for as a small to medium business. The company that would spend $40,000 on a commercial if they knew it existed, but in order to create it, to hire a production company, taking that production–

JB: That's $400,000.

MS: And it's all risk.

JB: What’s an example of that size company? Because I think I went too small with the candle-maker. What led me to the candle-maker was when you said, you know, our privacy and sort of the democratization of being able to show an ad with Facebook ads or, like, small businesses can thrive with video advertising now, whereas before they couldn't. But do you want to skip those? Because it's not probably not a lot of profit.

MS: Actually, no. And I brought up the candle maker, so that's my fault.

JB: By the way, I used to work at a candle factory Saturdays and Sundays, but I didn't like working on wick-ends.… Wow. Wow. Did he just say that, oh wow. Ouch. That was horrible. I may have been six years old when I heard that joke in a joke book.

MS: It's really good. No, actually, I would argue that what we're really hoping for is the mass marketplace – and X4Y is for all of those companies, when you go on your Instagram or your Facebook and you see a still advertisement for some companies, some apparel companies.

Some, there's so many that we’re fed every day. If you go through your Instagram and you spend 20 minutes scrolling, you'll see probably 100 ads. Those companies would love to have a commercial, but they don't know if they can afford it.

JB: I hear that there's music that I used to use for this podcast, Michael. In the beginning, it was a plucky banjo with, like, a hip-hop beat. And I hear it all the time in commercials, there was a kazoo track that every editor in the 0-thousands would use under a commercial and you would hear it and go, yeah, we've all used that track. So I'm segwaying into stock footage.

It’s kind of a lesser competitor, no? Like this is a better alternative, a more premium alternative to the businesses that you're describing. They can go, well, I can buy stock footage of an emotional couple, a couple having an emotional moment and I can put my greeting card logo at the end.

MS: Yeah. I mean, there's been a number of advertising technology platforms that have brought stock footage to the brands and to companies. That's not what we're doing at all.

JB: Correct. This has nothing to do with that.

MS: Not at all. In fact, it's the opposite of stock footage. It's original footage. It is only owned by one person, one company. So if you're a creator and you've made a 30-second commercial and another company buys it, they're buying it.

Like, it's as if you were a painter and they bought your painting. And that's what we're providing, is the art gallery.

JB: You're the broker.

MS: We’re the broker, we're not curating it creatively. We're not–

JB: Not yet, I think you should.

MS: Listen, down the road. Certainly. If we see things that are, that, that we feel we can create additional value for the creator, we will right?

If there's a phenomenal idea that we think Coca-Cola would want to redo at scale and pay that creator a bunch of dough, by all means we’ll do it because there are two tiers of subscription on the brand side. There's the small to medium-sized business. There are 30 million advertisers globally that we're trying to attract and we've already attracted many.

And then there's the global brands that pay a lot more and we will provide bespoke services to those brands. So we will additionally curate opportunities for those brands through our community, which is a great opportunity for the creator to be linked. We'll also be trying to help them if anything makes sense for adaptation. Ted Lasso was a commercial that's done really well, and we are not taking those rights from the creators.
So when the creator sells his or her commercial, it's going to the brand, or the company that buys it, and it will be their perennial license on the advertising content. But the underlying derivative rights will remain with the creator and, when appropriate, we will help facilitate and broker those opportunities, including, you know, leveraging our own platform for that.

JB: Wow. That's a good one. You're very passionate about this.

MS: I love – listen, this excites me because there are so many storytellers that can't make a living storytelling. And there are so many companies that are desperate for stories.

JS: As a manager of directors and writers, do you still sell a lot of spec projects and, part two of that, is it because those people are established? Like you represent Steven Soderbergh, right?

MS: Yes.

JB: One of my favorite directors, writer-directors. Okay. If he wants to write something on spec, he'll write it and you could go out and sell it. Because he's got a track record. Do you still do that with new directors and writers in movies and television, occasionally?

MS: Yeah. Yes. I mean think–

JB: And I'm going to loop back to how that analogy fits with spec spots.

MS: Right, I mean, I think in long-form traditional entertainment, you know, it all starts with a well-executed screenplay. And once you have that, the rest of the pieces can come into it, including the money. And so, I always encourage people – have for 25 years – to write on spec. You have more control.

You have a finished product which sells at a higher price. So, in every instance, even with big writers that I've represented, I've always encouraged them to write, because in Hollywood now, quotes aren't allowed to be – people aren't allowed to use quotes anymore. But big screenwriters have different quotes for a pitch and a spec screenplay.

And the spec screenplay price is always higher because the finished product is worth more than an idea. And that's what X4Y is trying to do. Finish the commercial, make it – don't just pitch an idea, which is what Tongal or some of our competitors are doing.

JB: Ugh don't say that, I didn't even know they're still around.

MS: Well, I don't either, but we're saying go make it go make it. Take the risk. Worst thing that happens, you've lost the money you've invested and you've gained something for your reel. Best thing that happens, you monetize it. Get discovered, start directing movies. Let's go. But, we're really trying to create the opportunity to monetize the work that you do on spec.

Doesn't mean it'll happen every time, but if you write a screenplay on spec, it doesn't mean you'll sell it every time. It's just more likely to sell if it's well executed than if it's just the concept in your head.

JB: Right. Do, you can pass on any question by the way, you know that. What about ad agencies? Do they, you know – hate's a strong word – but are they threatened by you or do they see… They may not even see it as a threat because it's this own thing. Like you've invented a new category.

MS: A lot of people have said to me, since they've heard of what we're doing, that the agencies are going to hate us.

JB: And you don't care about that, I mean, come on.

MS: I mean, I want to be liked. I don't like people hating us. You know, this is a solution. It's called X4Y because X4Y is literally a term for solving a solution. And that's why we came up with the name. I don't know that agencies are going to hate us. I think the agency, and there are many agencies that are aware of what we’re doing, including some of the biggest.

JB: They may pluck talent. They may see this as a breeding – a petri dish, if you will – for directors that they're going to have bid on their projects.

MS: I think it's going to go both ways. And I think ultimately they're going to embrace us, because they're going to have to embrace us because what we're doing is, is pulling a far larger creative team than they have inside of theirs.

JB: Could I come to you with my hot sauce commercial and I get my cousin, who's an actor, and she's in it. I want you to sell this, but I want to reshoot it with Catherine Zeta-Jones. Could you, is that a possibility you could go, oh,

I'll sell this idea based on you're going to reshoot it.

MS: Sure. I think that's an opportunity that will come. Oh, sure. I mean, I could do that. If we had a phenomenal – all day long, we would love it. Big ideas that we can help sell to the big brands. Right? So that'll be the bespoke part of the –

JB: Cause it’ll make it bigger.

MS: Sure, well, look, some things belong on bigger platforms and some things don't. We sometimes remake movies from France at Warner Brothers because they deserved to be on a bigger scale. And sometimes that movie from France deserves to be in French forever because it's best in that form. So, I think that's not largely what we're indexing to with X4Y. I think what our core proposition to creators is, is: go make brand-agnostic content that has real narrative drive, emotional connectivity, and ubiquity to multiple brands or kinds of companies.

And I think that the word “brand” is – I have to be careful because I use the word brand a lot. But I see brands as global fortune brands like Gillette and Coca-Cola, but I also see brands like small and medium businesses that just need some video commercial that looks better than something they can make themselves.

JB: If they go to X4Y.com, they can see some commercials. If you scroll to the bottom of the page, there's some examples there. And the call-to-action is, people should go and sign up, create an account, it's free. Right?

MS: Correct.

JB: Then they look through their database, which I mean, a hard drive, and they find something they've shot. Maybe they recut it, recolor it, and they upload that to the site. Someone will look at it. It's not automated yet. And will you give them, like, what, do they get a grade or some kind of feedback? Like hey, you don't have a shot at this, or that's really good?

MS: We're trying to ensure some level of quality control in our invitations. Right? So you sign up then you'll get an invitation to be part of the community. That's why you'll upload some of your existing work.

JB: Even if it's not a spec spot?

MS: Even if it's not a spec spot. We're not going to be giving specific feedback on individual commercials, other than making sure that they're not violating copyright, making sure there's no–

JB: Pornography.

MS: Exactly.

JB: Bad words.

MS: Well bad words can be bleeped out. But I think, I think largely we want to welcome – we want this to be an open marketplace, right? So it will have its own curation in terms of quality. It'll be similar to Uber's rating system on both sides. We'll have premium creators. You will get, the more you sell, the more credible you are as a creator for us.

JB: Oh that’s cool I didn’t know about that.

MS: And so, there will be built-in curation, but I don't want it to be too many barriers to entry here because the best creative could come from somebody who has never done anything before. So the creator sign-up, we'll give them lots of information. We are communicating with our creators already before we haven't launched the full automation yet, but we're already providing feedback, next week, I think it's next week.

In the next couple of weeks, we'll be sending out examples of some of their commercials. Some of them that we've sold already so that they can start to see the level of quality that’s being sold, and try to emulate that.

JB: I think the mindset too will be communicated by what you send out.

MS: That's the idea.

JB: Like, if it's not clear from this podcast alone, what you send out, will people go, oh, I get what they were talking about?

MS: Yeah. I mean, we're trying to, like I said, we're kind of creating something that nobody understands yet, which is this concept. Right.

JB: Hence my many questions.

MS: But I would ask you, other than Marvel and Lucasfilm, I suppose and you know, the comic book films, if I said to you, what kind of – if you think about the 20 movies that aren't, you know, big comic book movies – you wouldn't say, well, that's a Paramount movie or that's a 20th Century Fox movie. I mean, gone are those days, right?

Miramax had that for a long time. But I think that the content, the creative for commercials is the same, right? Like, I think where we're going is people are going to say, remember that? I mean, and I would challenge you to think about the best commercials that you can think of over the years. You're not remembering the product in that commercial in almost every instance.
You're not remembering. I mean, you take the classics, where's the beef, but do you remember where she was holding? What kind of burger she had in her. No.

JB: Well I do. I'm a student of advertising, but so I'm not the right audience, but I mean, Old Spice comes to mind – that they hit it out the park with, “smell like a man, your man smells horrible,” but I get your point.

MS: My point is, you know, Budweiser did Wazzz Up, right, for years – nobody remembered the beer. Where they held the beer. They remembered it was from the beer company. So my point is, make content that is going to be memorable, emotionally. The product insert is less important. And the companies that are advertising are starting to realize that, more and more, I'm hearing it from the mouths of the deciders at the biggest brands in the world.

JB: People writing the checks for the commercials.

MS: Some of the biggest brands in the world, there's two sets of CMOs that we've been talking to, that said that we would never make a commercial without our car in it. Without our drink in it. And the other set that's like, all we really care about is that millions of people remember that we had that commercial on the air, and that opens the door for X4Y.

JB: Yeah. I've enjoyed this conversation. I appreciate you taking the time. I implore listeners right now as always to when you shoot stuff, try to infuse it with your voice. Like one of my favorite directors, Edgar Wright. I am an Edgar Wright fan. My son saw his film over the weekend in a movie theater, by the way, which was fun to hear.

And he goes, you gotta see it. I go, you could really have, it really has his stamp on it? He goes, it's an Edgar Wright film. Soderbergh, same thing. Even though, there they have variety within their repertoire, you still feel the sense, the filmmaker's voice, right? So I implore the listener right now to go out and make a spec spot that has your voice in it.

But now I'm going to have an open mind after this conversation with Michael, that you can be brand agnostic. Or unbranded. Make an unbranded spot with your point of view infused in it, which will get you a higher rating as you sell more spots through the platform, and you could become an in-demand filmmaker who goes out and does this new thing.

MS: Correct. And we’ll also allow the company to come directly to you to source you for whatever needs they may have. We're not going to get in the way of that. We're going to create that–

JB: You do the transaction, you back out.

MS: Then we let you know, right. We do the transaction on the commercials, but we want our community to be of service to the hiring community of advertisers.

So we think that's a great opportunity. And the one thing I would say, just to be crystal clear: I'm not encouraging any X4Y filmmakers to make generic content. So, to your point about infusing what you make with your own voice, I couldn't agree more.

JB: Finally we agree on something.

MS: Generic content won't sell except to a generic buyer.

JB: That’s stock footage.

MS: That’s stock footage. So does what I'm saying – you referenced Edgar Wright. Now, he's a brilliant filmmaker and I look at Baby Driver, one of my favorite movies. And, and if you took the first say 60 seconds or three minutes of baby driver, cut it into 30 seconds. There is a heist gone wrong. There is a getaway driver who does amazing driving. They get out of the car and you see shoes or, you know, then Baby comes out, goes into a coffee place, right?

That's a great X4Y spot. It could work for any car company. It could work for Southwest, “Wanna get away?” It could work for Starbucks, they could walk into a Starbucks, you know? So I think that there's all kinds of ways to execute on unbranded content and we're relying on our creators to help us define the model.

Right? My model is you make something that has broad appeal to advertisers and we'll bring the advertisers for you to monetize. But I think, just like YouTube started as a file-sharing video site and became what it is today, I think X4Y will evolve in service of its creators and what they're able to identify as opportunity.

So my proposition is, make stuff that's bad-ass, that has your voice in it. That has some brand ubiquity or company ubiquity. Multiple advertisers could want it. Do it as cost-effectively as possible so that you can price it as low as possible and still feel really good about the price so that you open it up to more buyers and I'll bring you the buyers to allow you to monetize that work so you don't have to work for free.

JB: Maybe a handful. Maybe a handful of buyers.

MS: And hopefully many.

JB: Wow. you just summed up the whole conversation with that last bit. That was really good.

MS: Well, I was trying, look, I recognize that it's a, it's a buy-in right? Like. I talked to friends that were early investors in Uber. And they said that it was very hard, initially, for people to understand the concept that people in their own cars and their own phones would show up for people who didn't realize they could afford an Escalade to take them around the corner for dinner, until it becomes something that everyone understands as a product.

It's a little out there, but when you break it down, it's really quite simple. Make something that someone wants to buy. And if you're making something that you want to sell, it's in your best interest to make something that a lot of buyers would want. So if you think about what you're going to make as an X4Y spot, think about what would have the broadest appeal to the most advertisers and I challenge your listeners to go on their own Instagram accounts, if they have it, or Facebook, and just scroll for 15 minutes, and count how many advertisers they're seeing flat image advertising for. And as they look at those advertisers, think, what would a commercial look like for them? And then see how many other companies that are similarly situated on your feed that that same content could work for.

And you'll see what I'm saying. Like, there is an opportunity here that has never existed before.

JB: It’s quite inventive. Michael, the show's called Respect the Process. I don't know if you knew that or, not done a lot of podcasts lately I bet.

MS: Not that many.

JB: This is your most recent.

MS: This is definitely the most recent podcast I’ve done.

JB: So what if every guest answers this question: What does “respect the process” mean to you?

MS: Well, for me, respecting the process means observing the process, but it also means examining it. And for me–

JB: Subverting the process is part of it. That's respecting the process.

MS: To me, that's right. I mean, to me, disruption for disruption’s sake never works. Disruption happens when there's a need for change.

And the advertising business hasn't changed in many, many years. It is not working. The brands don't know how to connect anymore because everything's on streaming. Nobody's watching television. Where do you advertise? I think that it's time that we offer a solution. I think what we're really ultimately trying to do is solve for a change that is long necessary.
We have the agency business that has been the same for many, many years. The brands are struggling to connect with audiences. The audiences are struggling to connect with advertising. It's something that they have to get through on certain platforms. And in many platforms, they don't even have to see anymore.

So the real challenge is how do you deliver content that sticks? That's what the brands need. That's what companies want. They want their message to resonate and remain. They want to remain relevant with the consumer. That's it. So why not leverage the world's best storytellers, which is a global community on X4Y, to tell those stories?

JB: That's a great answer. Michael, thank you for being on the show. Listeners, you know where to go. I'm going to put links everywhere. Thanks for being with us.

MS: Thank you very much.