Today I’m talking to Doug DeMuro, one of my all-time favorite YouTubers. Doug’s channel is real simple: he reviews cars. New cars, old cars, weird cars: he drives them, pushes all the buttons, and tells you about their quirks and features, a phrase that is now inextricably linked to Doug in the car community.
And last year, Doug expanded beyond YouTube and launched a car auction website called Cars and Bids, which is tightly focused on selling cars made after 1981, something Doug told me he will never change. Now, a lot of YouTubers I know are trying to hedge against YouTube, so I really wanted to know about Doug’s business — how does he make his videos? How big is his team, and how does he manage his costs? These are questions every creator faces, and I think it’s worth exploring them more often.
What’s going to surprise you is how much data from YouTube Doug actually tracks and how he uses that data to make decisions about what videos to make. Doug’s also a product reviewer, so we talked about what reviews are for, who they serve, and how Doug manages to keep himself independent in the face of auto industry glad-handing. Doug was pretty direct that he considers himself a journalist — and direct about how various car companies try to get favorable reviews.
Of course, I also wanted to know about Cars and Bids — how’s it going almost a year later? How many people work there? Is it the exit strategy from the YouTube grind? And if so, how’s he going to get people to use it without calling it out in every video? I think the answers to all of that will surprise you.
This transcript has been lightly edited for clarity.
Doug DeMuro, you’re the host of a very popular YouTube car review channel. And you run Cars and Bids, a car auction website. Welcome to Decoder.
Thank you for having me, I appreciate it.
I feel like I’ve watched so many videos, I have to say “Cars and Bids” the way that you say it, or go my own way.
Right, right. “Cars and Bids.”
I’m very interested in the dynamic between you running your YouTube channel and using the channel to launch a car auction website. But let’s start with the YouTube channel, it’s very interesting. We talk to a lot of creators on the show. There’s a lot happening in the creator space. When did you launch the channel and when did it become a full-time gig?
I launched the channel in the fall of 2013. There was one video that I launched with. I didn’t have any other videos planned. It was just the one. And at the time I was writing for Jalopnik, which was like, sort of The Verge tech blog of car blogs, basically. It was like the big one that everybody went to. And I had gotten a note from a reader who said, “Hey man, you should make videos.” And this was in 2013. I mean, this was kind of the forefront of this. And I was like, “Huh, that’s an idea.” Of course, now that’s how everybody starts. Video is more now the way to do it.
So I launched the channel at the end of 2013, and then it took off. And at some point in 2015, I realized that I was actually getting more views on the videos than on the writing. And I was like, “Well, maybe I should just be transitioning.” It’s never technically been a full-time job, I’ve always been doing something else on the side, but it has been sort of my main source of income since the end of 2016 or the beginning of 2017. So it’s been five years now — crazy to think about actually.
Those five years seem very short, but in internet time you’ve lived through 50 different iterations of YouTube.
I went back and watched some of your earliest videos and they bear a striking resemblance to the videos you put up now. The format is kind of the same. How have you thought about the pressures of YouTube as a platform changing versus what your audience is telling you versus what you want to make?
I will say, doing car reviews, you’re kind of insulated from some of the pressures of YouTube. It was interesting throughout this process. I watched from the sidelines the whole, Logan Paul and the “suicide forest.” And I watched on the sidelines, the whole demonetization due to cursing, and then I watched the child-friendly ad things, child videos. And none of that really applied to me because I do car reviews. It hasn’t really been that big of a deal in terms of how I structure my content to kind of deal with YouTube and with their changing policies.
But there is this sort of pressure as a YouTuber to exist to create content and that sort of thing. And that’s always been the tough part of it for me. In terms of them changing the format, it’s interesting. When I first started, I didn’t know what to do. I thought I would do Top Gear-style stuff, like funny videos and stupid car videos and stuff. And over the years I changed a little bit to do these car reviews that I do now. Which I prefer, frankly. So it worked out for the best.
But initially, I did a video about how to pick up women in a Ferrari, which was so stupid, and there was all this dumb stuff. But the reviews are where I prefer to be. And it seems like that’s where a lot of the audience is. More and more people are using YouTube to actually buy a car; “Is this something I’m interested in?” “How does this work?” “How is this better than that?” Whatever. And the automakers haven’t quite caught up with that completely yet, but people are there. And so those videos, they do really well.
The first magazine that I loved, it’s a competition between Wired and Car and Driver. And I feel like my car magazine consumption has tapered in direct correlation with how much car YouTube I watch. Whereas all the other kinds of stuff that Wired covered, I’m reading more in all these other places. But when it comes to cars, I want to see it.
You’re very focused on, “I’m just going to push this button and see what happens and show you what happens” in a way that no written piece of journalism can necessarily capture. But that kind of focus and distilling lets you have a format, and a trademark — have you trademarked “Quirks and Features”?
No, but I think at this point, if you were trying to use that, the YouTube audience would rip you apart. So it might as well be trademarked.
That’s great. You have a secondary enforcement mechanism. Like you don’t need to file the paperwork. The stan army has your back.
Do you find that format limiting? Because that’s kind of the other side of the coin. Now you’re known to deliver X thing and you kind of have to fit everything into X format. Do you find that limiting?
Yeah, for sure. And for a long time I had a second channel where I kind of experimented a little bit more, and now I’ve taken the videos that I used to put on my second channel and I post them on the weekends on our main channel because I think there was an algorithm shift that kind of allowed me to do that. But yeah, it’s limiting for sure. It would be kind of fun to do some other stuff occasionally, but I have to say, I actually love this the most. Of all the content I’ve ever made, written, video, anything, I love checking out the new cars and pushing all the buttons and seeing how it all works. And based on the views, people seem to like that as well. So I don’t know. It is a little limiting, but I love it.
I love checking out the new cars and pushing all the buttons and seeing how it all works ... It is a little limiting, but I love it.
And I’ve been doing this format probably for about five and a half years. And I’m not even slightly tired of it. I would do it for the rest of time. Every single time, to this day, I go get in a new car, there’s like this sense of excitement and wonderment. ... Now some cars, I’ve just done a certain new Mercedes, then I do a different one, a lot of the tech is the same, that stuff I’m not as excited about. But I just did this Hyundai pickup truck, which is this little car-based Hyundai truck, it’s really weird. And I was just so excited when they delivered that. I was like, “Oh my God, I can’t wait to see what the hell this thing’s going to be about.” That’s still there, believe it or not.
Is it the Santa Fe?
It’s the Santa Cruz.
Santa Cruz, that’s right.
Which is a terrible naming decision, in my opinion. You have two cars called Santa something.
For the listener, if you haven’t seen a picture of this truck, it does look remarkably crazy.
You just mentioned an algorithm shift that allowed you to start posting more videos. That is kind of what we’re talking about here. Like did you get an email? Did Neal Mohan, the chief product officer at YouTube, let you know? Did you perceive it? How are you tracking that stuff?
That’s a question not that many people ask me about. When people come to me in the street, they only want to talk about cars. They don’t really ask about the business of YouTube, which is half of what I do, right? Like half of it is cars and half of it is YouTube. And I only ever get to discuss this with my fellow creators, so it’s always interesting to me to have these conversations. I am pretty obsessive as far as YouTube creators go. I don’t know anyone else who’s quite as obsessed as me in terms of tracking metrics. And I’m sure there are others, but in terms of car YouTubers, certainly none of them. And so I am able to kind of pinpoint what I believe to be moments in time where there are algorithm shifts.
“I’ve always found it a little bit strange. If [YouTube] told us a little bit more about the algorithm, we would probably be able to create content that better served it, but they don’t do that.”
YouTube doesn’t publicize it. They don’t want you to know. There are a couple reasons. It’s a proprietary algorithm, they don’t want you to know what it is. But I’ve always found it a little bit strange. If they told us a little bit more about the algorithm, we would probably be able to create content that better served it, but they don’t do that. And so anyway, the point is I noticed these shifts and I noticed them with other creators. I pay a lot of attention to what other people are doing, what kind of views they’re getting. And so for the one that we’re talking about, I had started a second channel to do some more creative content because it became clear to me that sort of lesser-viewed videos would pull down your more-viewed videos.
And what I’ve learned, in what I believe to be a recent algorithm shift, was that’s not true anymore. And maybe the algorithm is a little bit more advanced now, and it can detect these videos that are lesser and kind of distinguish between them and the bigger ones. Although I should note, I’m still kind of workshopping that and I’m not sure that’s true. I still need to look at some more data to come up with that conclusion, but that’s what it’s looked like to me. And so, I don’t know, you just have to pay close attention and hope for the best.
You say you’re obsessed about tracking. What are the metrics you’re tracking? Is it view counts? Is it drop-offs? Is it minutes watched?
It’s a lot of different stuff. It’s changed over the years with the algorithm. A couple of years ago, the first five hours was everything. Within the first five hours, I could tell you how popular the video was going to be. That’s changed completely. The algorithm no longer rewards the instant success. It kind of builds over time. And so I tracked that for a long time. The first five hours was everything and the loss rate between hour one and two and three and four. What I’ve learned now is that the one-week number for views is a really, really good metric. And the change between the next morning and the one week is a really good metric. How much is it kind of growing in that time, that now is sort of the metric for me, that it’s going to be a more successful video.
But I also track a lot of other stuff, revenue and watch time. One thing I’ve been interested in recently is that YouTube has provided a new metric, which is you can see where in your video people drop off, like at exactly what point. And I found that tremendously interesting. “Oh, here’s what people don’t want to see.” “Here’s what they want to see more of.” You will even see sometimes videos actually increase in the middle of the video, presumably because people have been linked or something and it’s like, “Oh, well maybe that should have been sooner to hook more people or whatever.” And that is really interesting stuff. They give you so much data that you can peruse.
What’s really interesting about this is, it is true, you seem like the most data-informed YouTuber that I’ve talked to … but for someone who makes something with a format that you’ve just described as kind of rigid, where would you see any of those data learnings coming through as a viewer of the channel?
The biggest way to see it is the vehicles that I choose to review. It is very clear to me that certain types of vehicles do a lot better than others and even certain vehicles’ country of origin. And that heavily informs the decisions that I make about which vehicles to review. I’ve always told people and I believe deeply, if it was up to me, my entire channel would be ‘80s and ‘90s weird cars that were too high-tech for their time. I just did a review on a Nissan Maxima from 1986 that talked to you, like when the door was open, it would say, “The door is open.” Ridiculous. And I would love to review more cars like that but my metrics tell me that actually people don’t really want that all that much, they want new cars.
There are a lot of SUVs and family cars on your channel. Is that the connection between the metrics and what people are buying?
Yeah, for sure. And obviously there is an ad rate connection there too. As much as I love to do videos with weird European cars, it’s the regular American cars like the Cadillac Escalade or Chevy Tahoe that just make all the money. You can get half the views and make the same money with a video like that because the ads can target in-market car shoppers, Americans looking for these cars, and Canadians. So that’s what pays the best.
Do your ads come through the YouTube partner program or do you sell them direct? How does that revenue work?
Yeah, all through YouTube ads. That’s what I use the best.
Your channel is a huge success. You were able to leverage it into launching another kind of business entirely — and I do want to talk about that — but the actual mechanics of how a YouTube channel works, where the money comes from, who’s getting the splits, and how predictable it is. They are just a black box for everyone on every side of the equation. And I’m always curious, like how big is your team that makes the channel with you?
I make all the scheduling, I write the script, I film the video, and then I have an editor whose name is Nick and he’s the best, and he edits them. Now I was editing my own videos up until a year ago and it just got too time-consuming with Cars and Bids. I actually really love editing the videos. It’s kind of a fun puzzle to put it all together and make it all work. But it takes about four hours to edit a video and I just don’t have time anymore. But that’s it and then I post it, and I’m the one who kind of solely analyzes all the data — and my best friend also answers my emails. And that’s it. That’s the whole team.
You don’t have a business manager or business development person?
No. None of that stuff. I learned early on one of the key ways I think to do well on YouTube, especially financially, is keep the overhead low and people don’t want, necessarily, super high-quality stuff with seven camera angles. I think part of the appeal of my channel is I’m a guy who gets in a lot of cars and tells you about cars. I’m not necessarily like some crazy professional that leads you to wonder, “This stuff is so good, can I really trust it?” I’m just a guy and that’s really who I feel like I am. I just show up and start pushing buttons.
I feel that. I asked our video team for their questions for you and a lot of the questions were about video creation. Like are you shooting everything on iPhones? GoPros? What does that look like?
Anytime you see me in the shot, I have a Sony 4K camcorder that I use. Anytime you see a button being pressed or a window rolling down, that is all shot on my iPhone. And what’s funny about that is people get upset. They see it occasionally in a video – I catch a reflection. I try to keep it out of the way, but sometimes it’s not possible. If you’re filming a mirror, you have to see the iPhone. And I get angry people in the comments, “How can you do this, you have this many viewers, on an iPhone? You need to upgrade your camera.” And I want to be like, “Hey dude, you’ve been watching for three years and you’re just noticing.” It doesn’t matter, right? So it’s just great quality, that stuff is great quality. Now it could be better obviously, but it couldn’t be a million times better. Like it’s good enough that it’s watchable for pretty much everybody.
When Apple rolls out new iPhone camera features, does that blow up your workflow? When they say “It has HDR now,” do you think, “Crap, what does that mean for me?”
I am a tech person in the sense that I love certain gadgets, but I’m not a huge tech person. I do buy the new iPhones immediately because typically now the upgrades to the phone are camera-related. The stabilizing stuff was so big, that changed everything. That was what really enabled me to go to the iPhone for a lot of shots because you really can’t tell. It’s more stabilized than my stupid camcorder, which costs a ton more money. And the quality is so good. iPhone camera updates are a big deal in the Doug world.
So, I’m honestly curious. When the iPhone 12 came out last year it added HDR video. I remember we had a conversation with our video team, “What does this mean for us? How will our workflow change?” And then we sort of had this side conversation, “Oh man, what’s Doug going to do?” Like, “Are all the Doug videos going to be in HDR now?” So do you turn that stuff off? Do you reinvent your workflow? Are you thinking about it ahead of time or are you just kind of seeing how it goes?
No, not really. And it’ll blow you away, but I pretty much use the default settings that come straight out of the box.
I mean, all of this stuff is super interesting to me because one of our theses on Decoder is that your distribution platform really affects what you make. And in this case that also means your capture platform changes what you make. So stabilization in the phone lets you make a different kind of video.
Do you connect that to distribution? Do you think, “Oh man, a lot of people are going to watch this on the same phone I’m capturing on.” Or “YouTube stats tell me lots more people are watching YouTube on TVs now, I should make something that will work on a TV”?
That’s an interesting question. And I did switch to 4K. I was one of the earlier YouTubers to switch to 4K in part for that reason but mainly because I realized, people are watching on big screens now and you can get away with that stuff. And in fact, one of the things that I’m really a little disappointed about is the quality of some of my earlier videos. This is before anyone was doing 4K, before there was a period where you couldn’t even do that on YouTube. I did some great cars and they look kind of crappy — the camera quality is crappy. And there was not much I could do about that. Even then, there wasn’t much I could’ve done. But I look back now and I’m like, “Damn, I wish the F-40 was in 4K.” People are watching this on TVs today, the screens are huge, people want to see super high quality. But you know, what can you do?
When I’m reviewing something I want to spend a week with it. And I rarely get that, especially when there’s a video involved. I get the thing in my hand and a member of the video team is in my back pocket asking, “Are you ready? Are you done? What do you think?” I’m like, “I just got it.” How long do you get to spend with a car?
When I first started, I was militant about not taking press cars, because I thought that there was some kind of quid pro quo in the industry there. I still feel that way. But you do realize, when the press cars come and you have them for a week, as opposed to going to a guy’s house and reviewing the car for an afternoon, you learn a lot more about the product that way. And it is nice to get the stuff for as long as possible.
“People get mad at me because I don’t do my reviews on a racetrack ... But people don’t really use the car that way. They think they need that information, but they really don’t.”
On average, when it’s a press car, I do generally get a week with it. When I’m just shooting a car at a dealer or whatever, I shoot it in a day. I’ve made something like 600 videos. So I’m pretty good at figuring out what to look for, and knowing what’s going to be good, and what’s going to be bad. And I can drive a car for a short amount of time and decide, “Okay, is this part of the driving experience good, bad, whatever.”
People get mad at me because I don’t do my reviews on a racetrack. And that would be nice to really experience the car at the limit and really find out if the M3 is better than the whatever, 911, I don’t know. But people don’t really use the car that way. They think they need that information, but they really don’t. They want to know, “Is it going to feel great on my regular commute?” And I can figure that stuff out pretty quickly, but yeah, the more time, the better. Always.
One of the things I think about as a reviewer — versus other kinds of stuff you can do with new products — is that my goal is to help people make a purchase decision. I’m basically saying, “Is this worth the money or not?” And there’s lots of different ways to evaluate that. There’s lots of different ways to make the case that something is or is not worth the money. There’s lots of different ways to connect things like antitrust policy or chip shortages.
You can connect a lot of things down to, “Is this worth the money for you?” Is that how you approach your reviews? Or is it, “Hey, I got to just generate a Doug score at the end of this video,” and you can think about all that stuff on your own.
No, that is it. At least when I review new cars, or nearly new cars, that is my goal. And it’s actually kind of a weird thing. It’s a little bit difficult because there’s precisely two types of people who watch my channel. There’s enthusiasts who watch every video. And then there’s people who just stumble across videos here and there because they’re looking for a car. And trying to please both of those audiences in one video is really hard.
People don’t realize how tough that is. People will email me and be like, “This is the third time you’ve mentioned this on BMWs in the last year.” And it’s like, “Well, some people, they didn’t watch the M4 video and they’re only watching the X5 video because they’re not interested in M4.” That is the really tough part about being the product reviewer and the entertainer at the same time.
When you’re writing your scripts, how long does it take you to write a script for one of these videos?
The script is only the part you see with me standing next to the car. For everything else I make a shot list on my phone as I’m going through the car and pushing all the buttons. So the script is just a few lines of background. “This is a whatever, and it comes with this engine and it came out this year,” and that kind of stuff. And that doesn’t take long, just a little bit of research.
Start to finish then, is it, you said four hours to edit and a day to shoot? Is it two days? I mean, this is incredible.
I can shoot a video in say, four or five hours. Plus the script is probably another hour, just to do the research, background, it’s an hour or two. And then editing it takes about four hours. And then that’s it. Plus travel time to get to the places where the cars are.
Do you see that split in your audience? You probably have kind of a big, long-tail audience of one-and-dones, or search is finding you. And then you’ve got people who ring the bell, in YouTube parlance, who are watching every video.
The videos that are the real home runs are the ones where you get both. So I put up Tesla Model S Plaid today, and that will get both. That will get the people who are interested in a Plaid, or any electric car, probably. And also my longtime subscribers who want to see every video. And those are the ones that they really blow up. But yes, otherwise, it’s bizarre. I’ll put up a video on a certain weird quirky car, and that will only be the Doug subscriber loyalists.
And then the next day, I’ll put up a video on a RAV4 that people are interested in buying and all the people from the prior day are gone. And the RAV4 video won’t get any views right away. But over time, as people search the car, and Google the car, that video rises up and probably eventually actually surpasses the quirky Doug car video because of so many in-market shoppers. It’s a bigger audience than the quirky Doug people. But yeah, that’s a weird one for sure.
How do you map that back to your revenue? You said the channel is your biggest income stream. Are you ever thinking, “Man, I hope the car industry puts out more mid-range SUVs this month.”
No, I don’t have to worry about that. The car industry is doing just fine. Truthfully, if I wanted to, I could change the channel so that it was only new car reviews of cars people are going to buy. And probably I would earn more money and I’d probably get a little bit more views — but that’s dull. And so I don’t need to review the Volkswagen Tiguan after I already reviewed the CX5 and the Ford Escape. And it’s tiring. But no, I truly believe the car industry has so many new models that I could just review new cars and be completely 100 percent fine. But I like to do the weird stuff, and people would complain if I just did new stuff too. So I like to keep them coming back.
I very much enjoyed the review of the Oldsmobile Silhouette, which my uncle had. And when I watched it I thought, “I knew this was a mistake when I was 13, I’m 100 percent sure it’s a mistake now.”
Did his have the power sliding door?
Yes. He drove it to all of our houses so we could see.
That back then was the most legit luxury feature any of us had ever seen in a family car. Remember? It played the little noise, the sound.
I remember the noise. I also remembered what that car looked like. And seeing it again in 4K, because I think that video is in 4K, I was like, “Yep, it still looks bad.”
Well, here’s a little behind-the-scenes on that video. That car was on its literal last legs. And in fact, if you look closely in some of the shots you can see that I filmed it in a junkyard. If you look close enough at some of the shots you can see it. And I am certain that at the end of that video, the dude junked it. And that was its final swan song.
That’s amazing. You talked about lots of cars coming out. You mentioned the Tiguan, Volkswagen has 9,000 SUVs that all look the same in slightly different sizes — it’s like they’re just pinching the zoom on the same design.
A lot of cars seem to run the same operating system inside and they have the same button layouts. As a reviewer, are you seeing software just eat the car the way that it’s sort of eating everything else, and the cars are getting similar?
Yeah. But it’s still really manufacturer-dependent. And so it hasn’t been a problem for me too much yet. Some of the Volkswagen, Audi, Porsche, Bentley, Lamborghini — those are all under the same roof now — they pretty much run very similar software. Those are a little bit more difficult to distinguish, but it is in the brand’s best interest to make sure the cars are relatively distinguished.
And so each car generally has enough differences, and they tend to come out with enough gap that if I’ve reviewed the Audi A8, and then the A6 comes out with similar tech, usually they’re 18 months apart or something and by then, it’s time for a refresher anyway so I could do all that stuff again.
I was worried about that as screens started to become the thing and yeah, software started to become a thing, but I haven’t noticed any drop in views, even on cars where I reviewed sort of a similar thing twice in the same year. Last year was the big year Audi came out with RS7, and RS6, and RS5, and RSQ8. There were all these new Audis, and I reviewed them all. And they all had about the same stuff inside, but they all did well. I think people are interested in watching the video about the one that they want to buy.
Yeah. I asked because I think about Verge stuff, which is often, “Here’s a computer inside the car. It’s slowly extending its tentacles everywhere.” I watch all kinds of car reviews. I watch a lot of yours. A lot of people just gesture at the center screen and say, “It has CarPlay and Android Auto,” and then they move on because honestly, that’s what people are using.
But do you think, as somebody who sees all these cars, is the industry doing a good job of getting away from the “put your phone on the screen” mentality? Because they need to get away from it. CEOs of car companies come on this show and admit they need to get away from it. But everyone who reviews cars still ends up saying, “It has CarPlay and Android Auto. We’re moving on to what’s actually cool.”
Yeah, I do. I think it’s interesting. This isn’t quite a direct answer, but you’ve hit on a very interesting point, which I think about a lot. Car reviewers are not great tech reviewers. And frankly, I think vice versa too, but that’s a different conversation.
Shots fired, dude.
Not always, not always. But I’m sure you agree with me. You’ve seen some tech reviewers review some cars. But car reviewers, I think, are actually worse at being tech reviewers, in part because of the car industry. Those people are into it because of the sound they make or whatever. And a lot of times, they’re just bad at going through the tech. In more and more of these cars, the tech is a huge component, like an absolutely massive component of it. And car reviewers like to gloss over that stuff.
“Car reviewers are not great tech reviewers.”
And yeah, it’s become super easy for them to be like, “Oh, it has Android Auto and Apple CarPlay,” and they move on. Well, cars have a lot more depth to that than their infotainment. And the problem is that users use them in a lot more ways and it does require more in-depth information that they’re not getting. And actually, I think in that sense, tech reviewers are way better car reviewers than car reviewers that are reviewing cars. And I think a lot of car reviewers need to watch out, because that’s going to become more and more of the car, and tech reviewers are going to gain a higher and higher level of advantage. … Car reviewers need to realize that the tech is a big reason people are buying a car now, it’s the software, the tech, the infotainment.
Yeah. I think a lot of the marketing that’s been around self-driving is you’re going to get in this car, and it’s going to go where you want it to go, and you’ll be in a world of screens.
Right. And you’ll be able to do stuff on these screens. And thus, the screens are really important.
Whereas I don’t think we’re anywhere close to that, but the way some of that’s expressed now is, the new Jeep Grand Wagoneer runs Fire OS in the backseat. And you have to know something about Amazon’s TV strategy to tell people whether or not the screen in the back of a Jeep is any good.
That is a huge collision. And there are huge business decisions that were made. They partnered with Amazon as opposed to Google to run Chromecast or whatever. And that to me feels like a level of complexity added to a car review that might turn you away from quirks and features like, “Here’s the light design. Here’s where all the logos are,” to, “Now I’m walking you through an interface of a Fire TV in the back of an SUV.”
I do get complaints when I go too much into the infotainment, because I get really into it. When I get into a car that has fully new infotainment technology — I just did the new Mercedes S-Class the other day — I’m really into that, but I have to walk it back a little because people get upset if you go through too much.
I’ve always felt that as cars get more screen-focused, it’ll actually help me because I focus more on the quirks and features and less on the driving experience. These screens are now offering some wild quirks. Tesla’s got video games in the damn cars. That’s insane. I was in a Chrysler Pacifica, I think, where YouTube was built in. Baby Shark has its own app in the rear seat DVD entertainment. There’s all this crazy stuff in cars, and in car tech and in screens. And I’m here for it. Bring on the weird stuff because it’s just more quirks to talk about. And that’s what people seem to really love. I love that stuff.
You talk about helping people make a purchase decision. I look at all the screens. I look at EVs. I’m like, “Oh crap. These things are smartphones on wheels. I should never buy a car again. I should only lease a car and I should just trade it in every three years, the same way that I trade in my iPhone.” Do you see that from your viewership? Is that reflected in how you evaluate the purchase decision?
It’s certainly more and more how I’m feeling about new cars, but it’s not how everybody feels for sure. And especially because most people still haven’t even come close to making the transition to EVs — but there are a lot of screens and stuff. But out-of-warranty ownership of some of these vehicles is not the world I want to live in. I don’t know about my viewers. I don’t know that it would matter that much to my channel, because whether you’re leasing the car and then ditching it or buying it to hold, you still want to know the new stuff, what’s cool, what’s interesting. So I don’t know that it would matter that much to my channel, but I do think that more people are going in the direction you’re talking about as far as leasing. And improvements are made so quickly and so dramatically that I get it, who wants to buy a car? If you lease you can get it for a little while. And some of these leases are so heavily subsidized by tax breaks and such, especially for electric cars, that you can’t not lease them.
Do you think about software updates? Tesla has this full self-driving beta. That is a loaded term that we should talk about, but when there is a software update do you think, “Crap. I got to review the car again?”
No, I generally won’t re-review because usually there’s another car from that automaker coming down the line that I can review. But I do think about how the videos I make are not current for that long, when you really think about it. Maybe you can get three good years. But typically, at that point, the automaker is doing something else that makes me want to re-review the car anyway, like there’s a full redesign, or a big facelift, or a performance model comes out. And I can kind of sneak some of the new stuff into a review of that car.
We spend a lot of time on the show talking about big tech; Apple, Google, Facebook. They’re in the cars, in some ways, with Android Auto and CarPlay. You obviously built your business on a Google platform. How have you seen all this collide? How has big tech shaped this industry? It seems like it’s shaped it in a lot of ways and no one has ever taken a step back and said, “This is what the industry looks like now.”
Yeah. That’s an interesting point. In terms of taking a step back, I don’t really think about it holistically. Tech has shaped this industry. I think about 10 years ago, my Ford GT has no screen in it. In theory, you could turn your phone on airplane mode, get in that car, and no one would know where you are. Right? Now it’s insane. I record the videos on an Apple iPhone. I make all the money on a Google platform. The big tech has owned an enormous amount of every space, but of the car space as well.
And I think it’s only going to continue to increase. And Apple CarPlay or Android Auto is absolutely essential for most people in cars. It’s crazy. And like we were talking about earlier, I think a lot of traditional car people aren’t ready for this, or they weren’t ready for it. And they’re now either curmudgeonly going with the flow or new cars are leaving them behind. But it is pretty crazy how the tech world has taken over a lot of worlds, to be honest.
So now you gotta answer. Which carmaker is doing the best and which carmaker is doing the worst?
In terms of tech?
Not a popular answer, but I truly believe Mercedes-Benz has the best in-car tech. The MBUX system is amazing. It really works incredibly well. It’s fantastic. In terms of driver assist, Mercedes is also great there. Chrysler is also good, believe it or not. I was in a Jeep the other day that had amazingly good driver assist. And Tesla, truthfully, Tesla has great driver assist tech. I don’t think Tesla’s infotainment tech is quite at the top anymore, but I would put it right up there behind MBUX for the very best. But there’s a lot of great systems on the market.
It’s kind of funny. Everybody says there are no bad cars anymore, which is kind of true. All cars are pretty good. They get good mileage, they’re safe, but there is bad tech in cars, and that’s the new frontier. You can get in some cars, you touch screens, and you have to wait after pushing a button. It’s a millisecond, but it’s not a tenth of a millisecond, so you’re upset. But generally I think that the luxury brands do a really good job, but I think specifically Mercedes-Benz is great. Tesla has some great stuff. Some of the cars are not quite as strong. Honestly, exotic cars are bad, Ferrari’s new tech is kind of a disaster. But yeah, I would say those two are probably the best.
You were careful to call it driver assist there. I know there’s a little controversy in your world.
I’ve gotten called out on that, yeah.
There is a fight for every reviewer between the marketing, the reality of tech, the marketing of how tech works, and they often diverge. And then there’s what people just call stuff. And this is for every product, for every marketing decision. How have you landed on that?
I much prefer to say self-driving, as in “the Cadillac CT6 has this great self-driving feature,” because truthfully, if you talk to humans, any non-tech person or non-car reviewer, that’s how they know it. And I think in the end, the lexicon is going to probably win out. That will probably beat this movement to call it driver assist, but I have gotten called out for it. And so I’m very careful these days.
I call it driver assist. It is not self-driving. I’ll use those terms for now because I have to, but I do think there’s a lot of things in the world that aren’t quite what we call them, but that’s what they are. And I think that’s how people think of it, truthfully. You get in the car, the steering wheel turns itself, and it’s going and stopping and starting. To most people, that’s it. That’s self-driving. That’s all you need.
It’s funny because the episode before this is my interview with the CEO of a self-driving company. He’s like, “We’re nowhere near there yet.”
Right. And I think that gap is interesting.
That is a good point. They’re not truly at the level that they would consider self-driving, but talk to your nephew, talk to your friend, right? You sit in a car and the steering wheel starts turning going around a curve and they’re like, “Holy crap, this thing drives itself.” That’s what they’re saying.
My mom has a Mercedes that can do some of that. And she’s like, “F this. I will never trust it.” And then my sister has a Tesla Model 3 that can do some of that. And she’s like, “This is all I want in the world.”
It’s all I want in the world. It’s so funny. Car enthusiasts are behind. I drive to LA twice a week to film. And in Southern California, driving from LA to San Diego, that’s a nightmare. With no traffic, it’s an hour and a half. With traffic, it can be four hours. Driving in a car that has good driver assist technology is crucial. My ultimate goal is to just answer emails. I love my Ford GT and I drive that on the weekends and I have so much fun — I just took it out before this, it was great — but in traffic, I want to answer emails and scroll Instagram. That’s what I want to do. And so I think car enthusiasts say they’ll never buy a self-driving car. But they’re wrong. It has a purpose.
Yeah. I think the second they can actually do it and that steering wheel goes away, the entire industry will change in dramatic and catastrophic ways.
Is your mom’s problem with it, do you think she’s too old to comprehend it or she’s scared of it?
She doesn’t trust it. And I think there’s just a generational trust of computers making decisions. And I don’t even know if that generational trust maps to age.
Yeah. Yeah. True.
I have friends who don’t even use their cruise control. They say “I want to drive the car,” and they’re my age.
It’s like boomer is a mentality, not an age. Right. It’s that same sort of thing. Yeah. That’s probably true. That’s interesting.
I feel like you brought up Tesla, so now we have to talk about Tesla. Tesla is this disruptive force in the auto industry. Do you get the Tesla stans? Whenever we review a car on The Verge, like the Mustang Mach-E, and we call out the parts that are good and the parts that are bad — all of our comments are just by Tesla people.
The Tesla people are insane. I’ve never quite seen anything like it. On Twitter, they’re so insane. I mean, I get just crazy — well, not death threats, it’s not that level — but they just accuse me of being wrong about stuff that hasn’t come out yet or that’s years away, based on the promises of a CEO, which I just find so weird. ... And it’s also funny. Their anger is purely based on what I’ve said most recently about Tesla. I named the Model 3 Performance my Car of the Year in 2019. And I was every Tesla person’s best friend.
But then I said that I think the Cybertruck is ugly, and stupid, and it’s not going to be sold like this, and it’s going to be bad compared to other trucks. People lost it. Then I was the worst. Well, just now I put out the Model Y video that was very complimentary, and that put me back in their good graces. And it’s kind of funny.
They’re so obsessed with the day’s story. And I think that’s in part because a lot of these people who are that obsessed have a big financial incentive. I think a lot of people own the stock and are paying very close attention to the hype that helps drive the stock. I don’t live in that world. I review the cars. I try to be as objective as possible. The Plaid was amazing, but it has drawbacks and I try to talk about all of it.
Actually, right before we came on, you said you think of yourself as a journalist. There’s a Venn diagram of being a journalist, of being a YouTuber, of being an influencer, of being an entrepreneur on YouTube. Tell me why you say you’re a journalist.
I consider myself to be more of a journalist than an entertainer. I’m doing product reviews. A lot of in-market car shoppers are basing decisions, or at least partially basing decisions, off what I’m doing.
And so I consider myself mostly to be a journalist. The automakers are the most interesting when it comes to this question. They vary in how they consider us. Some of them call me a journalist and they want to get the product to me as soon as possible for a review, just like the magazines. Some of them don’t want to work with YouTubers. They don’t care. They see us as influencers still. And I’m like, “Listen, an enormous portion of your buyers are using videos like this to buy cars.” And they haven’t got there yet. It’s an interesting mix about the legitimacy of this career.
When I say “I’m a journalist,” what I tend to mean is there’s a tiny link on every Verge page that says “ethics statement,” and you can click it. And that will tell you, we don’t have stock in Tesla — I’m not allowed to own any. We can’t take things for free. And if we do take review samples, we have to give them back, and on and on and on. Is that what you’re trying to communicate? Is that from your time at Jalopnik, how does that play out for you?
I’m militant about stuff like that. So for years I didn’t take press cars. When COVID hit, my wife and I were trying to get pregnant, and I just couldn’t go into car dealers because we felt we had a little bit of a higher risk. So I started taking more press cars and that’s kind of continued. I would say, now, a third of the cars that are reviewed are delivered to my house and I film them and they’re from the automaker. But other than that, yeah, I don’t have any stock in any automaker in any capacity ever.
I’m very cautious about press trips. All of my journalist compatriots go on free press trips. This is something that not everybody is aware of, but I’m sure you are. The automaker pays to fly the journalist, often business class, to whatever city they’re having an event. They put them up in a beautiful hotel and they give them this amazing experience. Often, they do one day as a driving day of the car, but then the second day is like an adventure at a theme park, or a private tour of something. Then you’re supposed to go home and write an objective review of this product. I think that shit’s crazy. I don’t know if I’m allowed to say that.
You’re definitely allowed to say that. We’re keeping that.
I think that stuff is crazy. When I go on press trips, I pay my own way, and I think I’m the only car journalist right now who’s doing it. The New York Times used to also do it, but they stopped reviewing cars, probably because it was so costly to have to do all that stuff. But I’ll put myself up in a Days Inn a couple of miles away. I don’t want to be involved in any of that stuff. I make good money from YouTube and I don’t want anybody to ever accuse me of, “Oh, you took some $400 flight, you’re biased.” It’s like, no, I can do it all myself just to be completely free of that kind of stuff. But be careful when you watch car reviews or frankly, any product reviews, but especially cars, because you have to get the person to the thing, it’s very different than when a company can just send you a product. And I find that to be so ethically troublesome, personally.
Yeah, that’s our policy too, you can go read it. What’s funny is the two industries where it’s the worst, the car industry and the camera industry.
If you review cameras, a camera company will be like, “Would you like to come to Iceland and use the camera to take pictures of an iceberg?”
I didn’t know that.
And it’s like, “No, dude, just give us a camera. It’s small, you can just send it to us.”
That’s what I always tell the automakers about cars. I just got an invite to go drive the new Ford Maverick in Nashville. And they probably have some country music-themed thing that you get to go to — just bring the car to my damn house. I’ll drive it around my neighborhood where I usually drive, and then I’ll review the car. I don’t want the special treatment because there might be a day when you make something that I want to review negatively. And when that day comes, I don’t want to sit there and say, “Boy, if I review this negatively, I’m not going to get to go on that next trip. They’re going to cut me off from getting that next car.”
And so I’ve also always maintained very close relationships with car dealerships. I just had an incident this week where an automaker told me no, they wouldn’t let me review a certain car, and I called up a dealer and I’m reviewing it tomorrow anyway. And I’m cool with that, so if an automaker thinks I’ve said too many negative things, fine, I’ve got other sources, I’ll figure it out. But the other guys don’t always do that.
Yeah, I feel like a part of that comes because you started at Jalopnik which was militant about that stuff too. Do you think that’s where it comes from and that’s maybe why the other car YouTubers don’t do it that way?
Yeah, that, but also because at the same time I was working for Jalopnik, I was working for another publication where we would go on the trips. And we all kind of thought it was stupid. But I saw the stupidity firsthand when the guy from the Schenectady Eagle is getting flown out to Palm Springs to review some new supercar. And I’m like, “How is this happening? I can’t believe this is so gross. I just don’t trust these things anymore.” And you mentioned the camera industry, don’t you think the travel industry is probably the same? Like hotels?
Yeah, I feel like once you go into real lifestyle, like hotels, tourism, that stuff.
I only look at Google reviews for that stuff. I don’t buy any professional reviews. They’re all lying to me.
Luxury handbags, just down the line. But I feel like that coverage is tinged with a hint of absurdity. I know some of those writers and they know, it comes through, that fundamentally this whole cycle is ridiculous. And the luxury handbag, it couldn’t murder you the way a car can.
That’s true. That’s true. And when you read it, it does come through in the pros. It’s like, “Yeah, this is ridiculous, but whatever.”
Kind of an important intersection here with YouTube is brand deals. There is a YouTube partner program, that’s where you’re making a bunch of your money, but there are brand deals too. People want to do integrations. I’ve seen some of those ads that you’ve done.
You’re your own business manager. One of the lines for us is we have a sales team. I know they’re often irritated with me, but they’re off doing their thing and there’s a wall between our newsroom and sales. You don’t have that wall. Do you feel the pressure there?
Yeah, I almost never do those. So I’ve only done four in the entire time I’ve done this. And there’s a reason for that. And the main reason is because I feel like I’m a journalist reviewing these products, in order for me to have an objective, nonbiased standard, I think it’s bad for the videos to have a stupid ad at the start, especially because you can just tell some of these guys are so hollow the way they introduce it like, “You should check out this watch,” or whatever. And it’s like they’re so obviously not believing in it, they’re just reading a script.
So I don’t get involved, I don’t like to do a lot of them, but at the same time, I look at everybody else doing them every video. And I’m like, “Well, here and there, I should do one.” And so if it’s a product that I’ve used or a product that I like, I will occasionally do them. But yeah, I don’t like doing that stuff. And also, I think the real key, the real important reason I don’t do those kind of things, and I like to believe this is true, is I’ve always felt that if I do those, I get more money up front, but I think long-term, people get annoyed with the content and I think people question your objectivity.
I think one of the reasons that I’ve been able to remain near the top in cars is because I don’t do those brand deals. And people believe the stuff I’m telling them and don’t think I’m getting paid off. And I think that that’s a really, really important standard to maintain. And so, yes, I know my colleagues are making more from those ads than they will for the whole video no matter how long it’s up and I’m not getting that. But I’ve been at this for eight years, I think that that longevity is rare on YouTube and it’s kind of proven that thought.
That kind of leads into sustainability. You obviously have pretty low overhead. You’re doing well. Is your YouTube revenue sustainable, can you keep doing it for a long time?
Yeah, and I think with new cars, it’s interesting. Something I hadn’t even considered is the difference between a YouTuber who does lifestyle content and product reviews until I went on the MKBHD podcast and Marques brought that up. It was something I had never even thought of. Some of the lifestyle influencers fall off the face of the earth because people get tired of them. People will surely get tired of me, but at the end of the day, I’m doing product reviews. The product is the new thing, not the lifestyle thing, the weird new thing you decided to do that day for views. And so I think as long as I can do product reviews, I think it’ll sustain. I hope so for a long time, that’s the dream.
Yeah, we had MKBHD on Decoder and we had a version of the same conversation and he was like, “Look, it’s pretty hard for me to get in trouble like some of the other YouTubers. I’m just like, ‘Here’s a new phone.’ I don’t swear. And that’s enough to keep me in the pocket.” I think that’s pretty fascinating.
It is fascinating. And whenever I watch some of these people, I think to myself, like, “Oh my gosh, that could happen to me.” My personality comes through in the videos to an extent but at the end of the day, yeah, I’m doing a car review. I think in some sense it’s easier to do a product review because I hear a lot about the pressure to come up with content from my fellow YouTubers and I have the opposite problem. I have too much content. I have the pressure of scheduling everything and actually getting everything filmed and that sort of thing. And I definitely would rather be in my position than trying to come up with something new every day or every week.
Do you worry about burnout? Because that’s something I hear from creators all the time.
Yeah, I worry about it, but it’s never happened. Like I told you before, every time I go to film a car, I’m so excited. I am terrified that one day I’m going to show up and be like, “This sucks. I don’t want to do this.” But it has never happened and I’ve been doing it for a long time. So I don’t know. Yeah, maybe someday I’ll get burned out. I do worry about it because I hear about other creators feeling it and I also think for a lot of creators, you can tell when they’ve got to turn out content but they’re not into it. And I’m very lucky that that hasn’t happened for me yet.
The way that’s expressed is the algorithm changes and everyone chases the new format and then they burn it out and the algorithm changes again, but with you, you’re like, “Here’s my format. And I’m going to use the data to review different kinds of cars, but the structure is there.”
What’s really interesting about this is that I have this whole series of questions about why you launched Cars and Bids, and baked into them is the assumption that you need to diversify away from YouTube in case there’s burnout or the algorithm kills you — but that doesn’t seem to be the case at all.
Well, there’s a couple of things I do see with the algorithm and with YouTube. Views are slowing down and that’s generally true among car YouTubers. There are more of us now and so it seems to me that we’re sharing in it more. When I first started this, the views were definitely stronger. Now interestingly, income is up almost enough to compensate, so it hasn’t really been a problem, but I could see it being a problem. The biggest issue that I have though with YouTube, ultimately, is I’m not in control of any of this stuff. So at the end of the day, they could turn it off tomorrow.
“The biggest issue that I have though with YouTube, ultimately, is I’m not in control of any of this stuff.”
It’s obviously not in their best interest to do that, but I still worry. And so yeah, Cars and Bids was born from the desire to diversify. It wasn’t just necessarily a thought that I would lose YouTube or lose the revenue or lose the views, it was also like, I’ve got this platform, I would be stupid if I didn’t take more advantage of it somehow. And so I just felt like I had to. And so it is diversification in a sense, but it was also like, “You’re lucky. No one else has this platform. You should do something with it because otherwise you’re wasting this amazing gift.”
When I talk to other creators about diversifying, it’s usually to TikTok or it’s to another platform in some other way. You built a business from the ground up. There are major competitors in that space. What was your decision process that got you to car auctions?
Well, it was clear to me that there was room for more. The biggest competitors, I think, were leaving a little bit of room for more. And also I don’t know, if I had known how hard it was going to be, I don’t know if I would’ve done it. I should’ve just gone on TikTok. I often tell my business partner, “I should have just started a damn podcast.” It would’ve been way easier. But the benefit of this is now that it’s been a year, I don’t feel like we’re safe in this business at any stretch of the imagination, but we’ve proven the concept, it’s working, we’re profitable, we’re running 20 car auctions a day. This works, and the benefit now is, here’s something I actually possess that I could sell or that I could transition to and the channel isn’t really quite like that.
Yeah, when we had Marques on the show, he was hinting heavily that he was going to start another channel that other people were on. They’ve launched that channel. You don’t have a B team. There’s not a secondary channel with other car viewers that you’re going to introduce, right?
Right, no, I don’t think that that’s a legitimate strategy really, if you’re trying to diversify away from YouTube, you’ve got to look at it and be like, “How is that the smart move,” basically. It seemed to me that the smart move was to create something like this. I didn’t realize that not that many creators had done it until I spoke to more people in the creator space, and the first thing they want to know is how I was able to take my audience and move them to a different thing. It seemed to me to be kind of a logical move. But at the same time, I can look at it and say, “It was and is an enormous undertaking, an enormous amount of work.”
I have my channel, I keep really low overhead; well, Cars and Bids, we have a dozen employees, it’s a whole different ball game. And that was all very, very, very difficult.
So you launched this in the middle of 2020, obviously the easiest year to launch a business with a dozen employees.
What were we thinking?
Just go for it, man. Did you hire everybody remotely? Do you have an office? How does this work?
No, everybody’s remote. Most of us are in San Diego just by chance. My partner’s here and then a couple of other people. And then we moved a guy out here thinking we’d have an office, but we’ve all agreed that an office is not the way to go. We now have people all over the country. And a couple of our writers are in Europe. But yeah, what were we thinking, launching this business in the COVID? But you know what’s funny, obviously you’ve seen what’s happened in the car world and the home prices, consumer anything, any consumer goods have gone up.
We got lucky. When we launched the business, we had spent so much of our initial costs paying salaries and developing it, that we needed to launch the website because we needed to start making some revenue. And we kind of thought it would fail because we launched it in June of 2020. And it was the worst time in the world to do anything. But obviously it actually turned out to be the perfect time and so it worked out okay.
Did you have investors? Did you fund the whole thing?
No, I didn’t fund the whole thing. I launched it with a company here in San Diego that funds some startups, and we were kind of the first, and then I have a partner who’s my co-founder and it was his company. And so they backed us financially and now that we’re profitable, it’s a big load off. When you take on investors, that’s a big thing you’re thinking about. It’s a lot of pressure.
Now we’re in the heart of the Decoder questions. You mentioned selling it, is that the goal, to sell it and exit, or is it to operate it, or just take profit?
I honestly don’t know. I don’t come from a startup world. I don’t know anybody in my entire life personally who’s ever founded a startup. So I don’t live in that world. And so that wasn’t even something I was thinking about when we were starting this, which now seems ridiculous. The answer is it just depends on what happens. I would be happy to run it forever and make good money, or sell it if the right offer comes along. I truly and honestly don’t know.
When I say the heart of the Decoder questions, we’re in it now.
Go ahead, feel free.
What’s your org chart like? Do you have a ton of management responsibilities and individuals in addition to making videos? How much extra work did you actually take on here?
No, a lot. One of the stupidest things I ever did was decide that I should write my opinion of each car in each auction. And so now I’m writing 20 of these a day. This is truly the stupidest thing I ever did. It’s not scalable at all. And I don’t know what we’re going to do, but yeah, it’s a lot more work.
And it’s important to me to put out a product that’s really super high quality, which is kind of funny if you watch my videos, because they’re sort of amateurish, but it’s really important to me. I wanted to launch this and make it damn good. And so I’m pretty involved trying to make sure when stuff is misspelled, I kind of get on my team like, “This can’t happen.” When the spacing is not right or words are wrong, that irks me. And I’m there every single day. Most of what I do in a day now is Cars and Bids stuff.
The submission form is pretty involved. You have to submit like 100 photos. Do you have a lot of experience buying and selling cars at auction? Or is this a clean sheet — this is what it should be like?
I have a lot of experience buying and selling cars. The auction part is difficult because you basically have seven days to make a decision, these people on these cars. But I’ll tell you something — some of these people are submitting 300 photos and videos and a description and they’re spending a week answering questions and you’ve got the Carfax. At the end of the day, there’s not a lot more you’re going to uncover from all that stuff. You’ve got service history for some of these cars. Having the auctions last for a week gives you the opportunity to pursue an inspection beforehand if you want. You can kind of organize that when the car lists before it sells. So I don’t know, it’s tough for people, but yeah, we distill down what you absolutely need to know about a car. And our hope is that that will provide you with the information that you can make a rational decision, a purchase decision.
And honestly, very few people come back to us and say the car was not represented correctly. Very, very few. I was really afraid of that, that it would tarnish my reputation. That almost never happens. There’s just so much info in these listings.
As you’re launching it, selling a car in lots of different states, lots of different laws, lots of different regulations. Was that a challenge you had to overcome or you just kind of yoloed it?
Yeah, it was a challenge. We consulted a lot of attorneys. The good news is the legal technicalities are not as substantial going across state lines. Even into Canada. It hasn’t been that difficult. The more difficult part is we’ve been asked by a lot of our viewers and our fans, because a lot of my audience is foreign, “Hey, why don’t you expand to Australia, why don’t you expand to Europe?” And that’s just a little bit more difficult. The regulatory stuff there is harder. I’m sure it could be done not that difficultly, but it’s a lot of work on our end to try to think it through. And we’re not sure if it would even work. But no, for the states, we did spend a lot of time trying to figure that stuff out. And there were some states where it’s a little bit more complicated and we had to tweak certain policies or whatever, but we got it done.
Okay. You’re targeting a younger audience. ’80s, ’90s, modern, classic cars. There’s a lot of interest in that stuff. What’s the next audience you’re targeting? Are you going to try to go get some boomers and do some ’50s Corvettes? Are you going to be like Gen Z wants 2002 Acuras and that’s what we’re doing next?
People ask us this all the time. What if someone submitted a 1960s Ferrari that was worth a million dollars? You would turn it down? Yes. We are not going to go older. At least right now. We have no plans. It hasn’t even come up. What we see is this trend is just going to continue. Young people are interested in the cars they were interested in when they were young. Some young people have money. Some older people are interested in the cars that young people like as well. And I think that the trend is just going to continue. And the good thing about our business is every year, it expands one more year. That’s the thing.
Wait, you’re not moving the window? The window is just getting bigger?
Only forward. It’ll only move to newer cars. It will not go older than 1981. And people think this is crazy. And it seemed crazy when we launched. It seems a little less crazy now. There’s a sustainable business to be built from doing this. There is a big market in this type of car, and truthfully it was the cars that I was the most interested in. And to be completely candid, it’s more difficult to sell the ’50s and ’60s stuff. Stuff is less verifiable, records are less verifiable. And to be totally honest, the owners of those cars often have a more difficult grasp of the online auction process. And going after younger people has enabled us to be a little bit more streamlined than our competition.
I have to say, you’ve pushed up the prices of Fox body Mustangs and no one should pay that money for Fox body Mustangs.
All cars. Some of the prices that are... I am blown away and I’ll tell you, I can’t take credit for any of that. Holy crap. The current car market is wild.
You’ve got a lower commission rate than some of the competitors. You said you’re profitable. What’s the balance there? Are you having those kinds of business conversations where, “If we want to hire more people, we have to make more money?”
Yeah, of course. And I’m sure all startups have those conversations. “Oh, it would be nice to have someone doing this. Well, revenue needs to increase. Maybe we should do this or that to increase revenue.” But I don’t know, the business has been scaling, it’s been increasing in scale. And so to us, that’s kind of the biggest thing. If we can just get more cars, more users, all the problems take care of themselves basically.
And you’re the top of the funnel for users, right? This is the, “You’ve got a big platform, you’re going to move them to another kind of product.” Are you still the best part of the marketing funnel for Cars and Bids?
Yeah, there’s no question about that, in part, because somehow I became ubiquitous in the online car space and so thus it was easy to direct people to a product like this. And I’ll tell you, proof of the fact that I’m still kind of the driver — there have been other sites that have popped up since we launched. There hadn’t been a lot of others before we launched, but since we launched, many others have popped up and nearly all of them have failed. And I think people see, “Oh, there’s stupid Doug with his stupid T-shirt and shorts starting this website, it must be easy.” It ain’t easy.
And it’s especially difficult to get people to it. It’s difficult enough to set up a website that works in this fashion. That was hard, but to actually bring people there, that’s a whole other thing. And especially when there are established players that you’re competing against. How do you compete against people where sellers know they’ll get top dollar at XYZ website? How do you compete? You have to have a huge audience. And I think you can really only do that if you already have a huge audience, basically.
Do you have a formal connection between Doug the YouTube channel and Doug the proprietor of Cars and Bids? What if you get mad at yourself and you stop doing the Cars and Bids tout at the beginning of the videos? How does that actually work? Do you know that you’re going to drive audience? Do you depend on it?
Truthfully, I don’t know the answer to that question. We’re terrified to find out. We’re terrified to stop advertising the videos because what if people don’t come? I don’t know, but hopefully it just continues in this path. I have thought about that, “What if I hate this? I hate these people, I want out. I’m done with this.” I don’t know. But that hasn’t happened and our fingers are crossed that it doesn’t.
What happens if you sell it? If you get burned out of YouTube, and you’re like, “Cars and Bids is my job,” and your marketing funnel goes away, that’s one risk. If you sell Cars and Bids, they’re going to be like, “Well, now we want 50 videos a month to increase the funnel.”
That’s right. And that was something we always thought about. And it’s something we often think about still, if we ever sell it. Yeah, they’re going to want Doug because he’s a part of that. I will say, if you go on the site, you’ll notice there’s not a lot of Doug integrated into it. And that was intentional for the same reason.
We wanted to be able to break it away if we could. Either in a sale or honestly, if it ever became bigger and different than Doug, they wanted to go in different directions, we could do that. And so aside from that little thing I write about each listing, it could stand alone. And the goal, I think, is to get it big enough to the point where it does stand alone and you don’t really need Doug. But yeah, I’m terrified. If some buyer’s going to want to come and be like, “Hey, okay, we want the site, but we also want Doug.” And I’m just like, “I don’t want to deal with this crap anymore. Get me out of here.”
I think this is kind of related to the overall question for every creator, which is expressed in different ways and different zones that we talked about. But if the business is you, you either don’t have a lot to sell and walk away with. There’s just you. And when you’re done, there isn’t lasting revenue. You’re just like, “I’m done making money now and I hope my Bitcoin investments pay off” or whatever it is that people are doing — I don’t know. I’m not allowed to do any of it. It’s a real disaster over here.
You are one of the rare YouTubers that has set up an entirely independent business that once it’s self-sustaining could just be the business. What do you think your overall exit looks like? Or are you still just in the meat of it?
Well, part of the thing about YouTube is a lot of people just lucked into it. They started making videos here and there and it just sort of happened. And so a lot of people aren’t that qualified financially or from an education perspective, they just don’t know what the hell they’re doing. And I’m rare also in the sense that I got an economics degree from a decent college and I intended to work at a desk job my whole life, and the YouTube thing just sort of happened. And so I beg my other YouTube colleagues who do crazy stuff with their money. I say, please, please invest, save, buy property, buy anything you possibly can because this won’t last forever. I’ve been cautious for a few years and I’ll be continuing to be cautious for as many years as I can.
“The biggest advice I can give to any YouTuber on the planet or anybody trying to do anything in entertainment is just be really, really cautious.”
And that’s the biggest advice I can give to any YouTuber on the planet or anybody trying to do anything in entertainment is just be really, really cautious. If people do ever get tired of me and they’re done with me on YouTube, I feel pretty confident that I could survive for a long time before having to get some sort of extra job. I try to live relatively below my means, that sort of thing.
Says the man with the Ford GT.
Hey, the thing is though, that’s an interesting point. It’s so funny. On the channel sometimes I’ll say, “Hey, I can’t afford this new car.” And people are like, “What do you mean? You got a Ford GT.” Well, that Ford GT is up 15 percent in value since I bought it. All these other YouTubers buy new Lamborghinis. Those cars lose $100,000 in value within the first year. And I look at that stuff and I’m like, “This is a terrible decision. How can you do this?” I try to make sure that any big purchases I make at least retain their value to some extent.
I will say, I bought a Ford Raptor last year and I showed my wife your video, “You should buy a Ford Raptor.” And her response was, will this make you stop talking about it?
And did it?
And it was the best investment. No, definitely not. Now I just talk about how cool it is.
Now you want to modify the Ford Raptor and so that’s where you are.
It might’ve already begun. Do you trust YouTube? By the way, Doug is smiling.
That is an interesting question. In some ways, yeah. And in some ways, it’s not that I don’t trust it. It’s just that... I don’t know. I don’t expect they’re doing secretive stuff or they’re trying to screw me or anything. Truthfully, they’ve given us a great life, me and my wife, and so, yeah. But at the same time, you’re always a little bit nervous, I think, is the answer.
Do you have hedges? Do you have a Twitch channel that you haven’t told anybody about? Have you done Instagram Reels?
No. Cars and Bids is pretty much that. And also a fairly engaged following that I think I could maybe bring elsewhere if I had to, like the site, but I don’t know. I believe in YouTube. I believe in the product. I believe in what they offer.
“Trust is a little harder when you can’t see every facet of [YouTube]. But I trust it as much as I can.”
The greatest thing that YouTube ever gave us was the democratization of stuff. You can get how-to videos without having to check out a book at the library or buy a book or buy information. You can get car reviews. I can do car reviews without having to work my way up at a magazine where I’d still be making coffee for people at this age. It’s so cool to be able to have that. I know YouTube has flaws and they would probably recognize it as well, but from a pure perspective of what it’s done for the world and what it’s done for me personally, I love YouTube. I truly, truly love YouTube. Trust is a little harder when you can’t see every facet of it. But I trust it as much as I can.
Well, the reason I ask is, we had the chief product officer of YouTube on the show a couple of weeks ago. I did my best to ask him all the hardest questions I could. And, to be perfectly candid, it felt like I was hitting a bunch of brick walls. And that is what it is. His job was to come and promote a thing, and he did a good job at that. But I asked him; people’s money, their livelihoods, depend on you. Don’t you need to be more transparent? And he was kind of like, I think we are.
And that tension, to me, is something that — as every platform tries to become a creator haven and do NFTs, and Facebook is going to pay creators a billion dollars over the next five years or whatever they’re promising to do — the pull away from YouTube might actually be more transparency versus more money.
Yeah. That’s an interesting point. YouTube has kind of drawn this line in the sand. This is how transparent they want to be. And yeah, maybe people will want more transparency, but it’s just so hard because disruptors come. Right now, there doesn’t look like a truly viable YouTube disruptor, but I wouldn’t have said that about a lot of stuff three years ago and you never really know.
Creators are generally a little disappointed with the platform. I’m on YouTuber Facebook pages and closed car YouTuber groups and you get complaints, and I get it. Some days, some months, your ad rates are way down and you’re like, it doesn’t make any sense. But you just have to take the bad with the good... I just look at the opportunity that I was given and this amazing life and I realize, even if it did turn off tomorrow, it was a pretty cool few years.
Some other creators I talk to, especially the more lifestyle creators, they’re trying to leverage themselves into TV shows or Netflix deals or Hulu deals or whatever. I’m assuming a lot of people have approached you to make Doug for Peacock or one of the streaming services. Does that interest you?
Yeah, I’ve been approached. But the deals are just never that good. That’s the problem. The flexibility that I have is wild. It’s just the next level of insane. I can shoot a video in a day, whereas I shot a commercial with Audi a couple months ago, and shooting a couple scenes in a four-minute commercial took a whole day. Shooting maybe 30 seconds of footage that they use took a day. I can shoot a 34-minute video in a morning and be home. And going up to LA and having to do all that stuff with TV, or even if it came here, doing all the canned stuff, it’s never great. If someone came to me and was like, you could do this cool thing for Netflix or whatever and it really jived with my life, I would do it, but I don’t know. Right now it’s just hard to look past the benefit you get from the pure schedule flexibility on YouTube. My wife is having a baby here in a couple of weeks.
Thank you. And I’m able to shoot 12, 18 weeks of content beforehand. And then I can take a paternity leave. That’s not always that easy on other platforms. I don’t know. It’s just harder. YouTube is a good way to live if you can.
I think you’ve lucked into particularly a format and a category that allows for that. I talked to other YouTubers. The idea of a parental leave is just terrifying to them.
That’s the thing that if it was up to me, beyond the transparency, beyond the income, beyond the ad rates, that’s the thing that YouTube should be getting taken to task more for — the inability to take a break. The algorithm probably punishes you if you do. And that’s not really great for people’s health.
“Beyond the transparency, beyond the income, beyond the ad rates, that’s the thing that YouTube should be getting taken to task more for — the inability to take a break.”
Now the problem is no one wants to advocate for YouTubers. They’re living these great lives and making a lot of money and they have the cameras. They’re kind of annoying. And so nobody’s there helping the creators. But I really think that’s the one thing that I wish YouTube would do. Give two weeks off a year and just average of your last two weeks of views or whatever. And you don’t get penalized or anything for now. That would be nice. But I think you start to get into some employment law situations that they don’t want to deal with.
Okay. You’ve given us way more time than I anticipated. Thank you.
No, I’m happy to do it.
What’s next for Doug the channel? What’s next for Cars and Bids?
And by the way, I’m happy to answer these questions, in part because I never get to talk about the business. Every podcast, everybody wants to talk about cars, which is great, but it’s so interesting to discuss this sort of thing. To me, at least.
What’s next for Doug the channel? I don’t know. I guess more car reviews, more new cars. I do a big December every year. So I’ve started thinking about that. It’s tough. It’s a lot of pressure, but the ad rates are always higher in December. So I try to take advantage of that.
The next thing for Cars and Bids is more growth and more new features. Those are the things that we’re looking at. More new, cool stuff that we can do to differentiate more and to make it an even better experience. So there’s always a lot of stuff happening. It’s a lot of work.
Well, that’s great, man. I love talking to you. I could keep talking to you for hours, but I know you got to go. Thank you so much for being on Decoder.
Thank you. I appreciate it. Thank you for having me.
Decoder with Nilay Patel /
A podcast from The Verge about big ideas and other problems.