Can MrBeast Grow Up?

The YouTube star known for outlandish stunts is making his most audacious move yet: Bringing in the adults. Can they help him turn his media business into an entertainment empire? By Lucas Shaw

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Episode Transcript

Speaker 1 (00:00):
Can mister Beast grow up? The YouTube star known for
outlandish stunts is making his most audacious move yet, bringing
in the adults. Can they help him turn his media
business into an entertainment empire? By Lucas Shaw read aloud
by Mark Leedorf. In early August, a seven person team

(00:21):
is on the ground floor of Beast Industries in Greenville,
North Carolina, studying how to light water on fire. This
has been going on for a few weeks. Lead producer
Maddie Montana has already identified the essentials propane to fuel
the fire, a conduit to funnel the fire to the water,
and is now penciling out the cost of a propane tank,

(00:42):
PVC piping, and cement. When Jenoe Swark filmed Jaws two,
their research has revealed the crew poured oil directly on
the water and lit it on fire. That's not the
way it's done anymore. It's too dangerous. Montana's team is
sensitive about revealing too much. All she'll say is that
she needs to be able to control the blaze for

(01:03):
a video titled would You Risk Burning Alive? For five
hundred thousand dollars. The idea for the video began as
they all do with a title and a thumbnail. The
small photo that appears above the title on YouTube. Beast
employs more than a dozen people who produce thumbnails. Then
the creative team refined the concept, debating whether it should

(01:25):
involve multiple contestants or only one, as well as the
right amount of money to give away, before handing it
off to Montana's team. To execute. A former film major
in her mid twenties, she must deliver multiple scenes for
the video, all of which are written on a whiteboard
that covers one wall. Montana's priority is to make viral
videos banger content in company parlance. The average one posted

(01:50):
to its main YouTube channel, there are others for gaming, etc.
Gets almost two hundred and fifty million views within a
year of being uploaded. But with less than two to
finalize plans, Montana has one main concern. I like to
be on time. She'll have ten days to shoot in
mid August, most of which she'll use to test that

(02:10):
each scene will work as planned for this video, the contestant,
ultimately they settled on one, will have to brave seven
challenges to capture the prize, including one in which they're
launched eighty feet in the air. The whole thing is
expected to cost about two point six million dollars. So
as long as everything's on time, we're good, she says.

(02:32):
I test, I fix, I shoot. If you haven't heard
of Beast Industries, or if watching people potentially burn alive
isn't your thing, perhaps you've heard of the company's namesake founder,
mister Beast, a twenty seven year old whose real name
is Jimmy Donaldson. YouTube is the most popular place to
watch videos in the world, and Donaldson is its biggest star.

(02:56):
His main channel has more than four hundred and thirty
million subscribers, more than the population of all but two countries.
The content is similar to that of reality competition shows
such as Fear Factor or Survivor, but it's tailored to
the short attention spans of the Internet. Donaldson begins each
video by shouting the premise to hook the viewer and

(03:16):
dangling a huge reward or twist, typically a large cash
prize to keep people watching. A recent example, I just
bought this luxurious private jet and if this pilot can
spend one hundred days trapped inside, he keeps it. A
clock at headquarters gives a live update of the subscriber
count which grows by the minute. Donaldson's channels across YouTube, Instagram, TikTok,

(03:40):
and x reach more than one billion unique viewers every
ninety days. The company says there's literally not a single
company that's ever existed in the universe that can consistently
turn out videos that get over one hundred million views.
He says the YouTube channel is truly a one of
a kind machine. Donaldson's six foot five frame is splayed

(04:01):
out on a couch in his office on the second
floor of the Beast Building. The all white room has
a private bath and a bed where Donaldson often sleeps.
A Steve Jobs poster with the think Different tagline adorns
one wall opposite a big TV an admirer of Jobs
and Elon Musk, Donaldson wants to build a multi billion
dollar business empire. So far, he's leveraged his fame to

(04:25):
sell chocolate bars, snack kits, and digital tools to help
other content creators go viral. In the next few years,
he plans to build an animation studio, create a video
game platform, and write a thriller with author James Patterson.
The novel, which prompted a bidding war among publishers, will
center on an extreme global contest, according to The New

(04:46):
York Times. In this way, Donaldson is part of a
larger orbit of content creators building businesses. Dude Perfect, a
quintette of Texas trick shot artists, is building an entertainment
complex that will include a three hundred and thirty foot
trick shot tower, mini golf, and restaurants. Alex Cooper, who
hosts the Call Her Daddy podcast, started Unwell, a drink

(05:10):
brand and podcasting network. Logan Paul, a YouTuber turned podcaster
and wrestling star, co founded Prime Hydration, an energy drink
company that did about forty five million dollars in sales
last year. He's also Donaldson's co investor in the snacks business.
Donaldson is operating at a greater scale than his peers.

(05:31):
Beast Industries employs about four hundred and fifty people, more
than three hundred of whom make videos. Another one hundred
work on the chocolate business Feastables, and dozens work on
the snack company Lunchley, and the software company view Stats.
Beast generated about four hundred and fifty million dollars in
sales last year, evenly split between the video operation and Feastables.

(05:55):
Yes Donaldson pulls in more than two hundred million dollars
a year in dark time chocolate, sea salt bars and
peanut butter cups, a business projected to double in size
in the next few years. According to pitch documents sent
to investors, Feastables vending machines are scattered around the offices,
and posters remind employees to incorporate product placements in videos.

(06:17):
We are able to generate the demand, he says. I'm
not going to act like I knew all this data
when I went into it. The division, which is run
out of Chicago, was projected to generate more money this
year than the media operation, and it's the model for
newer initiatives that bear Donaldson's name but don't require his
daily involvement. Beast was valued at five point two billion

(06:39):
dollars last year in a fundraising round led by Alpha
Wave Global, an investment firm tied to the United Arab Emirates.
He'd like to take the company public in the next
few years. Right now, however, Beast Industries is hemorrhaging money.
It's had three years of losses, including more than sixty
million dollars in twenty twenty four. The viral videos account

(07:02):
for all of it, overwhelming the profits from Feastables. Donaldson
has been spending between three million and four million dollars
on every video he produces for the main YouTube channel,
most of which lose money. In twenty twenty three, Beasts
spent ten million to fifteen million dollars shooting videos it
never released to the public because they weren't up to

(07:22):
its standards. He also lost tens of millions of dollars
producing Beast Games, a popular show for Amazon Prime Video
in which one thousand people competed for ten million dollars by,
among other things, moving a ten thousand pound boulder. Last year,
he brought on a chief executive officer to help professionalize
his operation and reduce costs. Jeff Hausenbold fifty five, spent

(07:46):
three decades in Silicon Valley doing stints at eBay and
media company Shutterstock before joining Beast Industries. He's worked at
twenty two companies, sat on forty four boards, and invested
in more than one hundred businesses, and he's not shy
about saying he hit pause on a comfortable existence in
northern California with three kids who grew up on mister Beast.

(08:10):
In the Beast office, he talks about targeting more than
one hundred million dollars in savings to turn the company
from a high growth startup into a profitable enterprise that
can live for decades. He compares Beasts to Uber Technologies
and door Dash, two companies he invested in and advised.
Hausenbold actually built, scaled, and ran companies that have done

(08:32):
billions in revenue. Donaldson says, I've never had a leader
like that. Housenbold pitches Mister Beast as the company's Mickey
Mouse and says the goal is to turn Beast Industries
into Walt Disney, a diversified entertainment conglomerate. They're such a
bigger opportunity here than just being a YouTuber. He says,
Jimmy will always be the cornerstone, but Jimmy doesn't scale.

(08:56):
He already filmed twenty six, twenty seven, twenty eight days
a month. Hausenboldt envisions building out a Mister Beast cinematic universe,
and he's put together a writer's room that's sketched out
a world bible the back story. He's reluctant to share
many details, but says they're developing seven or eight characters
from a fictional planet that will inspire an animated series,

(09:17):
a comic book, a TV show, and toys. And though
the Disney comparison is flawed, it's not insane. Every entertainment
company wants to be Disney, and none are. But Donaldson
has more followers than almost any person or company on Earth,
letting him drive fans to whatever he's selling. He's even

(09:38):
flirting with opening a theme park. The channel, now known
as Mister Beast, began as mister Beast six thousand, Donaldson's
pseudonym while playing games on Xbox at home in Greenville.
Although he was barely a tween at the time, he
was already entrepreneurial. In between posting clips of himself playing
Minecraft and Call of Duty, he'd upload videos such as

(10:01):
how much Money does Pewdy Pie Make, in which he
analyzed the economics of YouTube's top creators. Pewdy Pie was
then the most popular creator on YouTube. His gaming videos
were sprinkled with the juvenile humor and commentary that attracts
one of its core demographics, tween and teen boys. Donaldson
calculated the number of views Pewdy Pie got per day

(10:24):
subtracting from those the forty percent of videos that likely
had no ads because of ad blockers and viewership on
mobile phones. At the time, YouTube didn't make money from
mobile viewership. He then multiplied that sum by the average
AD rate and deduced that YouTube's biggest star was bringing
in about four hundred thousand dollars a month. Donaldson was

(10:45):
dabbling in online side hustles, buying knives from China and
selling them at five times the price. These early experiments
in arbitrage almost gave his mom, Sue, a heart attack.
What if someone kills someone with a knife, Donaldson says,
she asked him. So he focused on YouTube and had
his first viral hit with an almost twenty four hour

(11:06):
video in which he counts from one to one hundred thousand.
It previewed what would become the Magic Formula. It has
a catchy title I Counted to one hundred thousand, and
is built around a stunt that's both absurd and intriguing.
By twenty sixteen, with high school coming to an end,
Donaldson knew he wanted to be a YouTuber, but he

(11:28):
enrolled at East Carolina University in Greenville at Sue's insistence.
Donaldson wasn't yet making enough money from YouTube to support himself,
but he was obsessed with a topic he couldn't learn
in a classroom, virality. He and his friends watched the
most popular YouTube videos and analyzed why they were successful.
He's since codified his precepts in a thirty six page

(11:51):
memo leaked online by former employees titled how to Succeed
in Mister Beast Production. I spent basically five years of
my life life locked in a room studying virality on YouTube,
Donaldson writes. Some days me and some other nerds would
spend twenty hours straight studying the most minor thing, like
is there a correlation between better lighting at the start

(12:13):
of the video and less viewer drop off? There is?
He dropped out of college after a semester. The chronic
loss of money, notwithstanding much of the Mister Bee's strategy
boils down to less is more. Rather than produce one
hundred videos and hope one hits, he makes one video
that he expects will get as many views as possible.

(12:35):
In twenty eighteen, he decided to buy a twelve thousand
dollars car for his stepdad with coins he intended to
withdraw one point two million pennies from the bank, but
after realizing there might not be that many pennies in
all of North Carolina, he included Nichols, dimes and quarters,
which he and his friends hauled to a local dealership
in wheelbarrows. Donaldson grabs the viewer by injecting doubt about

(12:59):
the mission. Surely the dealership wouldn't accept twelve thousand dollars
in coins, right, But it did, and Donaldson settled on
a twenty fourteen Jeep Patriot with ninety eight thousand miles.
If a video works, this one got twenty six million views,
which was a lot seven years ago. Donaldson recreates it
with a twist, such as buying a seventeen thousand, five

(13:21):
hundred dollars Chevy Camaro with one dollar bills. Many of
Donaldson's videos have a philanthropic bent, which is a priority
for him. En Sue, a retired lieutenant colonel in the
US Army, who she says pushes her son to be
a positive role model. In one, he tipped pizza delivery
guys hundreds of dollars when they dropped off pies, ultimately

(13:43):
giving out about ten thousand dollars he repeated the stunt
with Uber drivers. In another video, he took thirty thousand
dollars from a sponsor and gave it to a random
Twitch streamer. He gave three million pennies to his three
million subscriber. Productions grew more elaborate, with Donaldson developing regular
formats such as the trapped video I spent fifty hours

(14:05):
in solitary confinement. By late twenty twenty, he had more
than thirty five million YouTube subscribers, mostly males aged twelve
to twenty four, and was spending about three hundred thousand
dollars per video. As Donaldson became the most famous YouTuber,
he began exploring other businesses. In twenty twenty, he teamed
up with virtual dining concepts on Mister beast Burger, a

(14:28):
hamburger chain that primarily operated out of ghost kitchens. A
year later, he started Feastables. Growing up with Crohn's disease,
he was sensitive to unhealthy, mass produced foods, but he
also saw an opportunity in promoting hamburgers and candy to
a highly receptive audience. Chocolate, in particular, seemed to him
a category he could monetize with a better product and

(14:50):
Beast style aesthetics, which lean to light blue and pink.
In twenty twenty two, Donaldson moved into his current headquarters
on a one hundred and forty acre lot in an
office park on what was once farmland. It was supposed
to house everyone at the company, but Beast outgrew it
in four months. He spread his crew across six or
seven different locations in Greenville, including a fifteen thousand square

(15:14):
foot former church now known as Studio A, which is
where he shot his most watched video to date, eight
hundred and seventy three million views, his take on the
Netflix hit Squid Game. To fund the rapidly expanding operation,
Donaldson raised money one hundred and ninety five million dollars
total in two rounds, which put the value of Beast

(15:34):
Industries at one point five billion dollars. In early twenty
twenty four, as he was raising yet more money, venture
capitalist Chamath Polyhopatia, who led the first round, introduced him
to Hausenbold, who had an investment fund and was a
CEO coach. Donaldson had long resisted hiring anyone with too
much business experience. He was convinced that if you came

(15:57):
from a traditional background, especially Hollywood, you wouldn't understand the
Beast way. He targeted people with a passion for YouTube
and tried to clone himself by training them personally. Many
employees started working at Beast Industries in college and never left.
The general manager of the main channel, Will Fowler, started
as a producer and the head writer on Beast Games.

(16:20):
Kyle Bennett is a former production assistant. Almost everyone was
hired by Kara MacLeod, who joined the company in her
mid twenties after managing waffle House restaurants. I was very
much bringing in younger people who thought different. Donaldson says.
The problem there is then you don't have the experience,
and you make a lot of mistakes that everyone's made before,

(16:42):
and it wastes time and money. In other words, his
strategy worked in certain parts of the operation, but not
in others. Hausenboldt says, we had people who had absolutely
no experience and had no idea what they were doing.
We'll be right back with can mister Beats to Grow up?

(17:03):
Welcome back to Can mister Beast Grow Up? The strain
of responsibility war on Donaldson and the company. He was
not just the star of every video, but the de
facto CEO of every division. Mister beast Burger was first
conceived during the pandemic as a way to give struggling
restaurants a potentially popular menu item, but as it grew

(17:25):
into a chain serving thousands of locations, customers complained. Donaldson
sued his business partner, Virtual Guiding Concepts in twenty twenty three,
claiming people got orders that were delivered late in unbranded packaging,
failed to include the ordered items, and in some instances
were inedible. The lawsuit is ongoing. VDC said at the

(17:46):
time that it was riddled with false statements and inaccuracies.
In twenty twenty four, a former employee accused Donaldson of
faking giveaways and sourcing feastables ingredients from suppliers who used
child labor. Donaldson denied the claims and says he's building
an ethical supply chain for chocolate. As Donaldson shopped a
TV show to Hollywood, many buyers, including Netflix, balked at

(18:10):
the cost and his ownership demands. Most streaming services insist
on owning a show unless it's produced by a major studio,
and even then they seek long term control. But Amazon,
looking for a hit to draw attention, to Prime Video,
committed to spending one hundred million dollars on the first
season of Beast Games, about ten million dollars per episode,

(18:33):
and seeded ownership. Making the show was a new experience
for Donaldson. He says Beast went over budget on it
because of mismanagement and experience, and his decision in the
season finale to double the prize to ten million dollars.
In the months before the release of Beast Games, YouTuber
Rosanna Pansino, until then best known for the baking show

(18:54):
Nerdy Nummies, posted several videos accusing Donaldson of overseeing inhumane
working conditions on set. Separately, a few contestants sued Donaldson
and Amazon, making a wide array of allegations about the production,
including a lack of food and medical care, and sexual harassment.
Neither Donaldson nor Amazon commented at the time. He said

(19:16):
later on x that the allegations were blown out of proportion,
without specifying which ones. The suit, whose plaintiffs haven't been
named publicly, is ongoing, though Beast and Amazon have asked
the court to dismiss the case, which they say has
no merit. A spokesperson says Donaldson attempted to contact every
contestant on the show and spoke with hundreds who said

(19:38):
they'd compete again. Amazon declined to comment for this article.
Donaldson spoke with Hausenbold for the first time from a
Walmart in Greenville. He was checking on the supply of Feastables,
something he does regularly. He invited Hausenbold to visit and
they spent much of their time together discussing how to
expand Feastables to Australia, which seemed like a strong potential

(20:00):
market for the line. Hausenbold was impressed by Donaldson's interest
in data, his ambition, and his unmatched audience, which would
reduce the cost of acquiring customers for new businesses. He
was slightly alarmed, however, by the team's discussion of a
feastable's promotion that potentially included dropping Lamborghinis on a to
be determined iconic Australian venue. I watch a bunch of

(20:24):
kids googling what are the most iconic sites in Australia,
Hausenboldt says. While the Beast team researched the weight of
the average Lamborghini and how big a parachute would be required,
Hausenboldt asked if they had permission to fly in Australian airspace.
They didn't. Hausenbold offered to call Caroline Kennedy, then the
US Ambassador to Australia, though he wound up not doing so.

(20:48):
A promotion in Australia with Lamborghini's did happen, but they
weren't dropped from the sky. At the end of twenty
something hours with Jimmy, I'm like, okay, this was fun,
Housenbold recalls. I get in the car to drive to
the airport and he calls me and goes, I was thinking,
can you come back and meet my mom? And I
was like why, He's like, you should just come meet

(21:10):
my mom. So I spent a couple hours with Sue.
I miss my flight. Despite her initial misgivings about Donaldson's profession,
Sue has since embraced it. She's collected memorabilia from most
of his major videos, including a big doll from the
Squid Game shoot, and houses all of it in a
warehouse the staff calls the Mister Beast Museum. Working in

(21:32):
the offices every day, she's the ultimate arbiter of who
spends time around her son. Housenbold passed the Sue test,
which begins with not trying too hard to impress her
or boast about your private plane. Donaldson, whose majority stake
in the company brings his net worth to at least
two point five billion dollars on paper, still flies commercial

(21:53):
most of the time. We're just humble people, she says.
Donaldson hounded Hausenbold for the next few days, inviting him
to come hang out again, which Housenbold did. Donaldson eventually
told him what he really needed, someone to help run
his business. In a conference room on the second floor
of Beast Industries, Shrek plays on a TV. In the background,

(22:16):
a security guard sits along the wall watching a dozen
young adults around a table flatten out one dollar bills.
Donaldson gives away such large sums of money in his
videos that he withdraws millions of dollars in singles from
the bank. His team then crumples the bills to create
a mountain that looks more impressive on camera than would
a neatly stacked pile. The crumpling is so time consuming

(22:39):
that an employee eventually created a machine to automate the process.
I never thought when I went to Harvard Business School,
I would have to figure out how to crumple money,
says Housenbold, standing next to a black tub filled with
bills that look more crumpled than not. Beast doesn't use
the singles to pay rewards. It wires money to winners,
so employees flat and reband the bills to return to

(23:02):
the bank. Hausenbold's top priority since joining Beast Industries has
been reducing its reliance on its namesake. I don't want
to be the main character of every show, says Donaldson,
who can use the time he once spent hiring or
ethically sourcing chocolate to focus on new ideas. Housenbold and
Donaldson speak seven to ten times a day. The CEO

(23:24):
moved into a former house of Donaldson's in Greenville, and
Donaldson routinely drops by at all hours two, as he
puts it, grind on various topics. They're bringing in more
adult supervision or what the two of them are calling
people with lived experience. Housenbold has hired more than fifty employees,
including a general counsel, chief people officer, and chief financial officer.

(23:48):
It was hard to persuade a CFO to move to
the Eastern Carolinas. He plans to hire dozens more in
the next year. Although Donaldson prefers to have his staff
around him, The team now has him employees in Chicago,
Los Angeles, New York, and San Francisco, as well as
relationships with dubbing studios around the globe. Even with the
hiring and expansion, Housenbold wants to cut one hundred million

(24:11):
dollars from Beast's budget this year, which was forecast at
roughly eight hundred million dollars. In a pitch deck to
potential investors, he wanted to help Donaldson raise about two
hundred million dollars in twenty twenty five, but they raised
less than that, Housenbold says because they're developing new businesses
with undisclosed partners that will invest directly in the company.

(24:31):
Housenbold says the business will almost break even this year
and should turn a profit in twenty twenty six. It
wasn't hard to find savings. Beast paused production temporarily on
its gaming channel, cut the channel's staff from seventy to fifteen,
and reduce the time Donaldson spent filming its videos. The
new ones are slightly less popular but much more profitable.

(24:54):
Cost cutting on the main channel has been even easier.
Beast routinely built sets, then tore them down, only to
rebuild them for a later video. People in Hollywood build sets,
so when you need a school, there's a school. Housenboldt says,
you don't have to rebuild it. Then there are the deals.
Beast Industries has purchased more than fifty Teslas and about

(25:15):
a dozen Lamborghinis from local dealerships for shoots without a
discount or product placement arrangement. Hausenbold is now in talks
with a larger US Lamborghini dealership about a twenty five
million dollar sponsorship that would include using its cars in videos.
And when Hausenbold learned the team was shooting a video
to save one thousand animals, he mentioned the idea to

(25:37):
the chief marketing officer of a company that sells pet products.
The company wants to sponsor the video and has asked
that it helps save two hundred dogs as part of
the one thousand. Hausenbold isn't meddling much with Donaldson's creative approach,
including the joy he gets at giving away vast sums. Recently,
Donaldson called Hausenbold to tell him he decided during a

(25:58):
live stream to donate four hundred one thousand dollars to
Team Water, a project he's leading to bring clean water
to disadvantaged areas that wasn't in the budget, but Hausenbold
has created a Jimmy Fund to cushion the company against
profligate impulses. Donaldson has learned, though, that he doesn't always
need to spend more money to drive viewership. There isn't

(26:19):
a huge difference between giving away one million dollars and
one hundred thousand dollars. An average viewer sees both numbers
as big and will tune in for the results. In fact,
giving away one million dollars sometimes suppresses viewership. We definitely
found the point where money doesn't equal more views, Donaldson says.
If I were to give a random person on the

(26:40):
street a million dollars, a lot of people who see
that video, especially because we have a very international audience,
they just don't think it's real. Although this isn't an
official shoot day for Donaldson, he'll spend three hours filming
shorter videos and doing some work for a main channel video.
He's put two people who used to date to get
there for thirty days, yoked by a chain that grows

(27:03):
shorter during the shoot. If they make it to the end,
they'll split two hundred and fifty thousand dollars. The video
is filming in a facility on the Beast campus, not
far from a mock prison where they trapped a detective
from Brooklyn and a white collar criminal in the same
cell for one hundred days. They made it through and
each got two hundred forty thousand dollars. Donaldson and his

(27:25):
crew travel around the grounds by car or golf cart.
Hausenboldt has freed Donaldson from more operational tasks that weren't
a strength. We're not where we're at because I'm a
genius level business guy. Donaldson says, I know how to
make better content on YouTube than any one else in
the world