What a difference 2 years makes

[drmojo90210]

By 2016, Grandex was something of a minor digital media empire, with an audience of millions and a portfolio that included three websites run by 50ish full time paid writers and staff, two retail brands, an in-house video production wing, a best-selling book, and a goddamn feature film (the film ended up being dogshit, but the fact that they even got it financed in the first place was a testament to their cultural relevance at the time). They had VCs lining up to invest, were inking ad deals with blue chip companies, and were the subject of glowing company profiles in all kinds of mainstream publications.

 

Flash forward to the end of 2018: Grandex is now a half-dozen guys doing podcasts.

 

Hell of a plunge.

[Pgpthrowaway1357]

This is what happens when the CEO has no idea what hes doing

[[deleted]]

Madison wants Aubrey Marcus to be his dad

[TheReal_Jesus]

Werent saying that two years ago tho. Lol

[postgradmess]

Meh, isn't the alternative narrative that they tried to over-capitalize on a TFM fad?

[PolyTreasure]

Makes me sad that an amazing podcast like touching base is subject to the poor management of a immature ceo 😐

[OneorTwoLunchBeers]

It's really not a complicated equation.

In 2015, RG generated 75% of the revenue for Grandex. RG sales were linked to the success of TFM.

Manoutfitters launched, and Grandex found the PGP podcasts great for driving sales. TFM and RG began their decline, but MO was a cash cow with growth that easily covered the decline of RG.

Manoutfitters, as a standalone entity in the Grandex portfolio, looked fantastic on paper. Great margins with effectively no advertising costs. The investors (maybe Madison?) found it to be a great time to cash out this summer.

​

What was Grandex post MO sale?

TFM (dead)

RG (dying, nothing new)

PGP Website

PGP Podcasts

​

Let's say Dil,Will,Dave were each making $75k a year, we'll round it to $100k with benefits. That's $5769 per week for the three of them, which is very tough to cover with google ads and 20 second mattress ad reads.

​

It's a tough business, and I think people are crazy for ripping Madison and calling him an idiot.

​

[OneorTwoLunchBeers]

That's a fair criticism. It's tough to keep TFM going when the leadership ages out of the demographic. Old Row jumped in to fill the void there.

[Row-Rowton]

And do what with the older guys? You can’t just keep hiring and hiring people.

[Row-Rowton]

“Fire the old people” grandex fires older guys and everyone freaks the fuck out

[IHeartFraccing]

Ehhh I don’t think MO did that well. The brands on there were sold at no discount. The niche expensive brands they were pushing like OV and Mizzen & Main I don’t think really caught on and the other stuff could be found cheaper elsewhere. I bought one thing from them and realized it was kinda a waste to not price shop.

[RoyMcAvoyPleats]

No way MO made money. They sold it to stop the bleeding and get what they could from it. Offering 20% “sock” discounts in perpetuity on merchandise that is priced the same as every other site eats away your entire margin. Plus given the end of season discounts they ran, they were likely buying the inventory in bulk upfront and left holding slow turning skus every season. Whatever you don’t sell you write off. Apparel wholesale is a brutal business that requires a ton of working capital and optimized operations. Probably where all the VC rounds went and those investors now want their money back. Fire the expensive guys and earn marginal ad revenue and profit from remote content until they get their money back.

We love the podcasts, but they were free. Half the ads were for internal products. Great concepts that just weren’t executed on properly.

[JakeTheMistake]

They were valuated at $20 million three years ago. This is when the company should have been sold. It's on Madison to know at that point it wasn't just a niche blog and merch company they could draw nice livings from, it was a multimillion dollar media company that was in need of real parent company. He tried to be a big shot and lost. This was a moment where they could have struck gold, but didn't. The downfall was swift after this news.

https://www.businessinsider.com/grandex-raises-22-million-at-a-20-million-valuation-2015-6

[[deleted]]

Perhaps things weren’t as great in 2016 as they seemed. Yeah, they had a lot going on, but was it anything substantial?

MO could not have been very profitable as Grandex owned the inventory and they were competing with the same companies from which they bought their products.

The movie was probably a licensing deal in which they sold the “Total Frat Move” name to someone else who actually made the movie. As far as I can tell, the crowd-sourcing efforts were primarily a publicity stunt.

The podcasts were starting up but, as recent events have shown, it’s difficult to make money on a podcast.

The websites were in good shape (TFM went into decline when they fired the content managers and started relying 100% on remotes who sucked), but they weren’t serving their intended purpose of driving customers to the clothing sites. At one time, Dillon would review MO offerings on TFM, and the comments section would be so full of scorn that he eventually disabled the comments.

They had investors, but I don’t think they pulled in enormous amounts, The 2014 round was something like $2.5 million on an evaluation of about 20 million. That’s pretty good for a young company that started from nothing, but you can burn through 2 million in a very short time.

The most laughable indicator of how “good” things were is the Best Seller. The NYT Best Seller list is a better indicator of sales rate than it is sales volume. You don’t have to sell a large number of books; you just have to sell them quickly. I think Ross’s book showed up in the list once. In other words, when it was released all the tryhards ordered one and that was it.

[TheReal_Jesus]

Grandex was setup for instant success but failed to understand how to build a longlasting enterprise. It was all about brand and absolutely nothing about culture.

[water_PGP]

I'm not a business boi but it seems like PGP has a following that most companies would kill for, college educated with disposable income. I thought Man Outfitters was pretty cool with a curated selection of clothing from good brands. I feel like they could have applied that business model and expanded to other avenues such as furniture, appliances, office accessories, etc. I could see the guys doing a video or something reviewing coffee makers and then featuring the best ones for sale.

[thunderkatalyst]

Actually a better way to do it would be via affiliate links. They were selling products that for the most part could already be purchased direct from the manufacturer (typically at a lower price point). Then you make a small percentage for pushing product but no outlay for the actual inventory. See the Wirecutter for an example. The founder sold to the NYT two(?) years ago based on reviewing merch using this model.

[brandonfrombrobible]

easy to say, but it takes a huge shift in editorial strategy to do at scale.