This episode covers how TCG invests in media brands with die-hard fans (anime, sports, hunting) and turns them into businesses. They love 'accidental companies' started by passion, not profit—like Barstool Sports, where the founder paid bills from his personal checking account. TCG sees NFTs as the biggest shift since the internet, letting creators earn forever from resales. Key holdings: Barstool Sports (fans so loyal they could launch a pizza chain), MeatEater (bought First Lite, the clothing brand its host already wore), and Hodinkee (from watch blog to e-commerce, now selling used watches).
In this episode of Invest Like the Best, TCG partners Mike Kerns and Jesse Jacobs discuss the strategy of transitioning from "content to commerce." The core argument is that media companies should replace sponsors by building their own brands (e.g., MeatEater's First Lite, Hodinkee) to achieve highe
Guests: Mike Kerns and Jesse Jacobs, partners at TCG (The Chernin Group), a multi-stage investment firm focused on consumer companies. Main Theme: How to identify and help media brands with passionate fan bases transform into sustainable commercial enterprises (the "content-to-commerce" model). Core Judgment: Mike Kerns believes NFTs are "the biggest thing since browsers and mobile devices", with significance extending beyond digital art to enabling creators to permanently participate in secondary market revenues, potentially completely reshaping the capital structure of the creator economy.
Jesse Jacobs points out that TCG does not invest in ordinary media, but in “brands that form part of a person’s identity.” He cites examples: Crunchyroll (anime), Barstool Sports (sports/pop culture), MeatEater (hunting/outdoors), Hodinkee (watches), Food52 (food)—if these companies disappeared tomorrow, “people would not know how to spend a meaningful part of their free time.”
Historical Context: TCG was founded in 2010 by former Fox/News Corp executive Peter Chernin. The core insight is that traditional media (ESPN, HBO, MTV) were essentially wholesale businesses distributing through intermediaries, unaware of who their customers were (the customers were Comcast, DirecTV). With the proliferation of broadband and mobile, content would reach consumers directly, and TCG aimed to invest in this trend.
Mechanism Breakdown: TCG avoids two types of companies: ① DTC e-commerce reliant on paid marketing (concerned about dependence on large platforms and margin erosion); ② digital media with pure advertising models (unable to compete with platforms on technology and data). They seek brands that “people are willing to buy the logo and wear it,” i.e., brands with identity attributes.
Data Support: Crunchyroll grew from 100,000 subscribers at the time of acquisition in 2013 to over 4 million; Barstool expanded from 18 content creators to over 125.
Mike Kerns emphasizes that TCG's most successful investments often come from "accidental companies"—founders who initially had no intention of building a business but were driven purely by passion. These companies have no business plan, no Slack, and not even a clear distinction between corporate and personal accounts (Barstool founder Dave Portnoy used his personal checking account to pay company expenses, and the company even owned three horses under its name).
Evaluation Framework: TCG assesses potential investments across three dimensions:
1. Audience Engagement: Not just view counts, but the number of comments, shares, and social interactions per post; email open rates and click-through rates are key metrics ("Someone claims to have a 5–7 million email list, but only 7% open it, and of those, 5% click to buy—that's not a good metric").
2. Conversion Evidence: Whether users make purchases driven by content (articles, podcasts, videos, tweets, Instagram posts) rather than relying on paid advertising. TCG tracks the proportion of "content-driven purchases."
3. Repeat Purchase Rate: For example, with Food52, users come for recipes or community and buy kitchenware, and a meaningful proportion of them make repeat purchases.
Unique Judgment: TCG is not afraid of companies that are "too messy"—incomplete management teams, messy products and technology are actually opportunities because "we can improve through operational arbitrage." What is truly irreplicable is the connection with the audience and the position within the vertical.
Mike Kerns detailed MeatEater's transformation path:
Jesse Jacobs summarized the core logic: "Gradually replace sponsors with owned companies"—sponsors are willing to pay because there is ROI, and that profit margin can be captured internally; at the same time, owned brands reduce customer acquisition costs.
Jesse Jacobs described Hodinkee's evolution:
Jesse Jacobs Analysis:
1. Demand for Alternative Investments: The younger generation is no longer satisfied with "putting money into a 401k index fund, earning 6% compound interest, and retiring in Boca." They want control and emotional connection—whether through WallStreetBets, Bitcoin, or sports cards.
2. Spillover from Sports Betting and Fantasy Sports: People want to "prove their judgment about a player is right," and buying cards becomes a speculation on a player's future performance.
3. Correlation with Bitcoin/Crypto Assets: Amid expectations of cash depreciation, people seek assets with limited supply.
Mike Kerns Adds: The way information is consumed in the collectibles space is extremely fragmented, poorly produced, and non-real-time—this mirrors the success logic of Yahoo Sports/Finance (personalization, real-time changes, community interaction). He believes this is a massive, underserved opportunity.
Mike Kerns Makes a Bold Call: "NFTs are the biggest thing since the browser and mobile. I know that sounds exaggerated, but I think it's more likely to be true than wrong."
Three Key Arguments:
1. Consumer Gateway to Blockchain: NFTs introduce mainstream users to the concept of blockchain ownership. Sorare (a football trading platform) secured $50 million in funding led by Benchmark, and NBA Top Shot exploded—these are happening now.
2. Creator Participation in Secondary Markets: Beeple's JPG sold for $69 million. If it resells for $150 million in two years, Beeple will receive another 10% cut—something impossible with physical art. Blockchain allows creators to permanently share in the appreciation of their work.
3. Profound Impact on the Creator Economy: In the future, creators may issue "personal tokens"—100 tokens at $100 each, with holders gaining call rights, T-shirts, digital artwork, and 0.05% of the creator's future income. This would be an upgraded version of the Patreon model, combining emotional connection, utility value, and financial returns.
Jesse Jacobs Responds to Skepticism: Some ask, "Why spend $690,000 on a JPG that can be freely copied?"—He counters: "If I have 10 Mona Lisas and only one is authentic, can you tell the difference? You hang a replica on your wall, but it's not the real one." All investments are essentially bets on the evolution of human behavior—people who bought Amazon stock also received no cash returns; they were simply betting on whether the management team could grow revenue.
Mike Kerns describes the current market polarization:
TCG's response: It does not participate in "a race to the highest price and fastest speed." If the founder prioritizes price and brand-name VC labels above all else, TCG chooses to walk away.
Jesse Jacobs summarizes three principles:
1. Give creators "unlimited upside": Do not merely pay a fixed fee; let them share in the commercial outcomes they help generate — if a specific vertical content drives substantial sales, they should receive a cut.
2. Stay out of their creative process: Do not micromanage the content. TCG follows this approach with Dave Portnoy and Steve Rinella — "We do the easy work; they do the hard work."
3. Help with measurement and distribution: TCG provides advice on how to measure effectiveness, how to distribute content, and how to structure talent incentives — not creative guidance.
Mike Kerns is bullish on three directions:
1. Low-code/no-code game creation platforms (e.g., Roblox): Millions of creators (rather than players) build games on them. In the future, "entire media companies could create game universes around brands and personas" — analogous to Mr. Beast launching Beast Burger (which could become the fastest-growing fast-food chain), Barstool should launch a pizza chain.
2. Quantified Self: Biometric data collection devices such as continuous glucose monitors. The current experience is "brutal," but looking back 10–20 years from now, today's rings and wristbands will seem like rotary dial phones.
3. Webtoon (webcomics): Already exploded in South Korea, Japan, and the U.S. Vertical scrolling format; to read the next chapter, users either wait a week or pay. The audience is young, cross-gender, cross-ethnic, with built-in monetization mechanisms — a fertile source of IP.
Jesse Jacobs adds: "Gamification of life" — your life becomes a game: earn points for doing certain things, others can invest in you, bet on your future, or collect you. This will be the convergence point of all trends.
| Position | Guest Stance | Key Data |
|---|---|---|
| Crunchyroll | Bullish (exited or still holding) | Grew from 100k subscribers to over 4 million |
| Barstool Sports | Bullish (controlling investment) | Content creators expanded from 18 to 125+ |
| MeatEater | Bullish (controlling investment) | Netflix show entering Season 11; acquired 3 companies including First Lite, with a 4th close to completion |
| First Lite | Bullish (acquired by MeatEater) | Outdoor apparel brand, already worn by Rinella on the show |
| Hodinkee | Bullish (investment) | From blog to one of the first authorized watch e-commerce platforms in the US; expanded into the secondary market |
| Food52 | Bullish (investment) | High repeat purchase rate, content-driven buying |
| Headspace | Bullish (investment) | Subscription model |
| Surfline | Bullish (investment) | Surfing content and community |
| Exploding Kittens | Bullish (investment) | No business plan; founded by a game designer and an illustrator |
| Golden Auctions | Bullish (investment) | Sports memorabilia auction; 450 customer service calls per day, all handwritten on yellow sticky notes |
| Sorare | Bullish (not invested but watching) | Benchmark led a $50 million round; blockchain-based football trading platform |
| Beeple | Mentioned as a case study | JPG sold for $69 million, becoming the third-highest-priced living artist |
| Roblox | Bullish (trend) | Millions of creators (not players) building games on the platform |
| Mr. Beast / Beast Burger | Bullish (trend) | Could become the fastest-growing fast-food chain |
| Pokemon Go | Mentioned as a case study | Early example of gamification blending with daily life |
1. “We invest in brands that form part of a person’s identity.” (Jesse Jacobs) — TCG’s screening criteria is not market size, but “if this company disappeared, people wouldn’t know how to spend their free time.” This applies to Crunchyroll, Barstool, and MeatEater alike.
2. “The best investments come from ‘accidental companies’ — founders never intended to build a business, they just followed their passion.” (Mike Kerns) — These companies have no business plan, no Slack, no separation between corporate and personal accounts. Of the 5-10 pitches TCG receives per day, zero come from these companies.
3. “Gradually replace sponsors with owned companies — sponsors pay because there’s ROI, and that profit margin can be captured in-house.” (Jesse Jacobs) — The logic behind MeatEater’s acquisition of First Lite: Rinella already wore their clothing on the show; rather than collecting advertising fees, it makes more sense to own the brand.
4. “NFTs are the biggest thing since browsers and mobile. Creators will permanently participate in secondary market revenue — impossible with physical art.” (Mike Kerns) — Beeple’s JPG sold for $69 million; if resold for $150 million, he would receive another 10%. Blockchain allows creators to forever share in the appreciation of their work.
5. “All investments are essentially bets on the evolution of human behavior — people who bought Amazon stock also received no cash returns.” (Jesse Jacobs) — Responding to NFT skepticism: if only one of ten Mona Lisas is authentic, can you tell the difference? Value lies in the eye of the beholder.
6. “Three rules for working with creators: unlimited upside, stay away from creation, help with measurement.” (Jesse Jacobs) — TCG doesn’t tell Dave Portnoy what to create; instead, it helps build infrastructure, structure incentives, and let creators participate in the commercial outcomes they generate.
7. “Information consumption in the collectibles space is extremely fragmented, poorly produced, and non-real-time — this is exactly the state Yahoo Sports and Yahoo Finance were in before their success.” (Mike Kerns) — Personalization, real-time updates, and community interaction — these three elements are almost entirely unmet in the collectibles space.
8. “In the future, your life can become a game — others can invest in you, bet on your future, and collect you.” (Jesse Jacobs) — The convergence of low-code gaming platforms (Roblox), quantified self, and NFTs: personal tokenization that combines emotional connection, utility value, and financial returns.