📺 From Failing Pipe Dream to $30B company

Mr. Beast gets buried alive.

Metro Boomin performs a symphonic concert. 

A 13 year old makes slime.

What do these all have in common?

You can watch it on YouTube.

In 2008, YouTube became the world’s 2nd largest search engine.

There is so much content on YouTube, that it would take 17,810 years to watch it all…

How did YouTube grow so big? What strategies do they use to attract users? And how can you do the same? 

Let’s find out:

• 💡 From bad to brilliant

• 💵 YouTube’s $30B bet

• 🥷 YouTube VS Tik Tok: Who does it better?

Read time: 4 min 35 sec

💡 From bad to brilliant

Here’s how one bad idea transformed into a brilliant one.

Chad Hurley, Jawed Karim and Steve Chen. Never heard these names? Neither had I. But these 3 men changed our world forever with just one idea. 

You know that thing called YouTube? Well it started as a dating website.

It was called  “Tune in, hook up.” It failed miserably.

Inspired by Hot or Not, where you post your picture and then rate other people’s pictures, the 3 founders wanted to do the same thing, but with videos.

Turns out, that was too much work for users. 

They even tried to pay girls on Craigslist $20 to get them to interact. No takers.

It took Jannet Jackson’s wardrobe malfunction on live television to spark a new idea. 

Jawed was frustrated by how hard it was to find the video online. 

So there you have it. The start of YouTube. (Thanks Jannet Jackson’s boob!)

After a few months they went from 0 viewers a day to millions. 

To sustain their growth, they found an investor (Sequoia Capital) for $3.5M. 

A year after launching, YouTube had 46% of the market share.

The same year, the founders sold the company for $1.65B to Google.

YouTube was just getting started. It only scaled up from there.

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💵 YouTube’s $30B bet

YouTube made $30B in revenue last year alone. (That’s 2,255,639,097 Chipotle burritos, add chips and queso.)

Youtube makes money two ways: subscriptions and ads.

But ads are the real money maker.

Unlike Facebook who shows ads in the middle of scrolling, YouTube chooses which videos to monetize. 

Why?

Because YouTube’s customer isn’t the viewer… 

It’s the people who sponsor the videos that viewers watch.

No sponsor wants to pay $1K to be placed in a video with 500 views.

So YouTube set up a threshold.

For YouTubers to monetize their channel, they need 1,000 subscribers and 4K hours watched in the last 12 months. 

Once content creators hit that, creators can start putting ads on their videos. 

YouTube gives creators something they can’t refuse:

Convenience. 

It’s one of the few places you can earn money online without setting up your own advertising. 

YouTube became the middle man. And they make bank.

For every ad on a video, the creator gets 55% of the payment and YouTube takes the remaining 45%.

A video with 1M views can make up to $16K per ad.

3.7M videos are uploaded everyday. 

In the last quarter of 2023, YouTube made $9,200,000,000 in ad revenue. That’s $101M a day. 

That sounds great and all. But how does YouTube rank against other creator platforms?

🥷 YouTube VS Tik Tok: Who does it better?

If you’re on TikTok making $100K a month, you’d be making $2M on YouTube.

Read that again.

Sure, it is easier to blow up overnight on Tik Tok. And making 30 sec videos instead of 15 min is tempting…

But the truth is: it’s harder to make money on Tik Tok. Unless you’re a D’Amelio, you probably won’t be making millions.

Here’s why:

One million views on TikTok makes you an average of $20-40.

YouTube? That goes up to $1.2K-6K.

Most content creators earning more than $200k a year do it with YouTube.

Why does YouTube give creators more potential?

Simple. It all lies in these 5 things:

#1- Longer shelf life. On Tik Tok, you have 48 hours to go viral. After that your video is irrelevant. On YouTube? Your video could be recommended to someone years later. Everyone’s dream: passive income. You can make money from a video you made 7 years ago.

#2- Better conversion rates. This is the ratio of viewers to people actually clicking on a link or buying the product. YouTube’s is 12%. Tik tok’s is only 1%.

#3- Higher quality viewers. Youtube is a search engine. So when someone searches something like “how to build an e-commerce store” on YouTube, they want to learn. So… if you are selling a product, YouTube users are better targets than someone on Tik Tok who just stumbles upon your video.

#4- More ways to make money. On Tik Tok, creators have two options: the Creator Fund and sponsored content. With YouTube? The possibilities become endless.

#5- More loyal followers. Subscribers from YouTube are more likely to follow you on other platforms like Instagram and Tik Tok. On Tik Tok, users don’t want to leave the app. It’s too addicting. 

More on this:

Which social media platform pays the most in 2024? (5 min)