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🍌 Could These YouTubers Build the Next Disney World?
Dude Perfect's $100 million theme park, plus a quick update on the newsletter
First, a quick newsletter update: I’ve been MIA the past few weeks because my mom was recently diagnosed with breast cancer. It’s her second time (she’s been in remission for 25 years) and it doesn’t look like her health insurance will cover much of the treatment costs. They did catch it early, but it has and will continue taking up time and headspace (we spent the weekend supporting her run a marathon (!!) in Indianapolis).
This newsletter has always been a second priority below all things Banana Capital. I do plan to stick with the same weekly cadence, but I’m putting the paid subscription on hold and pausing the billing for the time being (and happy to fully refund anyone).
Second, with the All-In guys talking about turning their podcast into a hospitality and luxury brand, it reminded me of one of my favorite “internet content to IRL business” concepts - Dude Perfect’s theme park. Let’s dive in.
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Dude Perfect’s $100 Million Theme Park
Started in 2009 by a group of friends in their backyard, YouTubers Dude Perfect have grown into the second largest sports-related channel on YouTube, with 20+ employees operating out of a giant warehouse in Frisco, Texas. Known for their outrageous trick shots that seem fake, they’re now building a “trick shot” theme park called Dude Perfect World that could cost up to $100 million. Watch their announcement from 0:50 to 2:30 below.
If you’re not familiar, Dude Perfect’s catalog of trick shot videos includes everything from water bottle flips (435 million views), ping pong (327 million), toy airplanes (254 million views), card throwing (181 million views) fidget spinners (180 million views) bowling (100 million views), soccer (93 million views), pool/billiards (81 million views), lacrosse, and its “battle” series like go kart’s, go kart paintball, remote-controlled cars, model rockets, and bubble gum blowing.
They currently own over 19 world records, and have many more they initially created and set themselves. Needless to say, they’ve made content around virtually every form of “sport” activity you can think of, and there’s a lot of concepts to play around with inside the park.
From what I can find, a short list of what expected include “crazy mini golf”, soccer with robotic sliding goalies, spinning basketball hoops, “throwing baseball’s through the window of a speeding car”, and 100-pin bowling.
The park will also feature a 330-foot trick shot tower (visible below and in the embedded video above), an ode to their first viral video.
The venue will be setup for visitors to create their own trick shot content and will feature a Dude Perfect Museum, a merch store, restaurants, and two acres of outdoor space.
Dude Perfect is on the record saying “after 13 years, it’s hard to make new impressive trick-shot videos” and “we don’t want our business to be reliant on how many times we’re in front of the camera”. Building their own park(s) that brings their content to life is certainly one way to do that.
It’s a pretty wild idea. But will it actually work?
An interesting parallel is Disney World. Similar to Dude Perfect, Disney built amusement parks and experiences centered around its universe of content. And it’s a good business - Disney’s “Parks, Experiences, and Products” business made up only 34% of Disney’s revenue in 2022, but contributed over 65% of its operating income. From their 2022 Annual Report:
Despite its historical success, traffic to Disney World was down 23% in Q2 of 2023. Some of this was due to a strong 2022 after easing of COVID lockdown restrictions, but they’ve also raised prices to the point of it getting expensive for many families. The average Disney trip in 2024 is expected cost a family anywhere from $3,700 to $12,000+ depending on budget.
Dude Perfect meanwhile had revenue of $25 million in 2022, up from $20 million in 2021. Most of this has come from businesses outside of YouTube ad revenue, like live performances and branded merch like sweatshirts and footballs. Forbes pegged them as the 8th highest earning YouTubers in 2021.
If you’re piecing together some of these numbers, you might think building a $100 million theme park with only $25 million in revenue is a stretch. I thought so too. But Disney started building Disneyland in 1954 at a total cost of $17 million, and the closest financials I could find was $2.9 million of net profit in the first nine months of 1958 (so $4-5 million for full-year?).
Adjusted for inflation, Disneyland was a $190 million project supported by $40 million in profits four years after the construction start date. If we assume Dude Perfect’s business doubles over the next four years and has ~30% operating margins, $15 million could support a $100 million park, especially if the cost comes in lower and there’s other financial partners involved (same as Disney’s first park).
For Dude Perfect World to work, I think city and site selection will be key. They’ve reportedly been in contact with 100+ different municipalities, and from what I can gather, it will likely be somewhere in the Southern half of the US.
I’d also expect the specific ride / attraction selection to be very important. Refreshing and cycling them in and out over time to keep things fresh will also be crucial to staying top of mind and driving return visits.
Dude Perfect has a near endless back catalog of content to bring to life (Real Life Rocket League anyone?). The right mix of “rides” - and viral content built around it - could absolutely drive visitors. And setting up the park in a way that best enables other people to create content will also be important for generating buzz.
I think the biggest driver of success will be if they can make this a destination, just like Disney. Having followed Dude Perfect for years and re-reading through their comments on YouTube while writing this, they’re already well positioned as family-friendly entertainment. It’s possible that some of these trick shot setups are so epic that parents and their kids spend hours or days trying to hit them all. It doesn’t seem like there’s a hotel or lodging involved yet, but I think they have the scale for that to eventually be a big piece of the park.
We’ve all read about the Creator Economy and watched the ups and downs over the past few years. It’s fun seeing creators like Dude Perfect continue iterating on their business models!
🚀 Product Launches
Overtime Select Launches New League for Elite High School Girls Basketball: Speaking of sports, Banana portfolio company Overtime just launched its newest league. The four-week league already has commitments from the #1 and #2 ranked high school players in the class of 2025.
Toyota’s Robots Can Teach Themselves: Toyota Research Institute unveiled a new approach that uses generative AI to create “large behavior models” that train themselves. Robotics could start getting very interesting…
Favorite quote from the video: “Each day I go to sleep and wake up to the robot learning something completely new”.
ChatGPT Can Now See, Hear, Speak and also Surf the Internet: Not to mention, OpenAI is also working on a phone. This confirms its ambitions to create its own platform. It might seem weird to see OpenAI leaning into both consumer and enterprise businesses, but it’s not that uncommon of a strategy at a certain scale when looking under the hood of companies like Microsoft, Google, Facebook, and Apple.
Substack’s New Feed: I’ve written about how Substack’s app is evolving into a social network before, and I really like this new design. The side-swipeable queue up top combined with the vertical explore feed below has a fresh blend of elements from other consumer apps. And it addresses the most common concerns of an algorithmic discover feed while not missing posts from your favorite authors. One of Substack’s biggest finance writer’s describes this new era as “the early days of YouTube”.
Amazon’s New Supply Chain as a Service: The newest Amazon Warehousing Distribution offering gives customers more of a long-term storage solution. This ultimately modularizes different pieces of Amazon’s supply chain, allowing third parties to pay to access specific pieces of it.
📊 Numbers & Charts
VC Returns Hit 10-Year Lows: This shouldn’t be surprising to anyone paying attention, but aggregate US VC returns measured by PitchBook dipped negative for the first time since Q2 of 2016, the lowest in over 10 years. If you’ve talked to a venture capitalist lately, you’ve likely heard that this is the best time to be investing in the asset class.
Who’s Buying Secondaries? Crossover funds have cut their activity by 80%, which has been mostly offset by increased buying from Family Offices. VCs are now almost half of total secondary purchase volume, and based on what I’ve seen and heard, it sounds like most venture firm’s secondary strategies is simply buying more of their winners at discounted prices.
Startup Shutdowns High New Highs in Q3: A lot of ways to slice this data from Carta, but the main theme is startups are running out of money. This indigestion is all related to 2020-2021, and is overall a healthy thing for the startup ecosystem.
New Rounds Are Getting Larger: My read of this data (which includes personal anecdotes) is that in 2022 and 2023, early stage capital has concentrated into the most consensus founders / markets, which meant fewer companies raising more capital at higher valuations. h/t Jackie DiMonte for sharing.
Social Media Traffic to Top News Sites Craters: Continuing a long-term trend, traffic sent from Facebook and X (formerly Twitter) to news sites reaches record lows. Most surprising to me is that Facebook has actually been sending less traffic throughout 2023 despite its much larger size and most of the headlines focusing on Twitter’s declining traffic.
Over 20% of Gen Z Identified as LGBTQ+ in 2021: This chart is pretty mind boggling.
Breaking down the numbers further, the same Gallup survey shows fewer Gen Z are gay or lesbian compared than other generations, and the higher LGBTQ+ identification is being driven by an increase in bisexuality. Younger generations see sexuality as a spectrum, and it will be interesting to see how this impacts other aspects of the economy and consumer behavior over the next few decades.
US Health Insurance Premiums Growing 2x Faster Than Inflation: It’s always eye-opening when someone realizes roughly 20% of their paycheck (and up to 40% for some families!) goes to healthcare, especially when they still may have to pay high deductibles and out-of-pocket costs for any significant care. h/t Peter Mallouk.
US Bike Trips Have Soared Since 2019: This growth was primarily in 2020 and 2021, while 2022 saw no change. Impressive considering the huge boost during COVID.
Is It Time to Replace Urban Delivery Vans? An interesting graphic and video on just how inefficient last mile delivery is in London.
Rural America’s COVID Boom: Americans in aggregate moved out of cities during COVID. This was largely due to ability to work remotely, lower cost of living, and the lifestyle flexibility it offers. Many municipalities across America don’t have the strongest financial profiles, and large declines in their tax bases could cause pretty significant problems down the line.
Quick headlines in case you missed them:
📚 Long Reads
2,851 Miles: Transcript of an excellent presentation on regulatory capture from Bill Gurley. You can watch or listen to the video below.
Childcare Is an Industry Harmed by Regulatory Capture: In an example of the above, Winnie Co-founder and CEO Sara Mauskopf argues that regulatory capture is rampant in childcare. She gives a few examples, which have ultimately led to a lower supply of caregivers - which means higher prices and longer waitlists for families.
Spotify’s Culture Next Report: US Gen Z listeners generated nearly 900 million podcast streams on Spotify in the first half of 2023, a 48% increase over 2022. Among Gen Z in the US:
72% think podcasts take you deeper into a topic
50% feel podcasts get them closer to the zeitgeist of culture than any other form of media
75% teach them about topics they wish they’d learned about in school
60% believe podcasts are more trustworthy than other media
44% predict culture will be shaped more by emerging markets than global superpowers
The Secret Life of Jimmy Zhong, the Thief Who Stole - And Lost - More Than $3 Billion Bitcoin: The story of how one of Bitcoin’s initial core contributors stole billions and evaded the FBI for over a decade.
How Declines in Independent Activity is Causing a Decline in Children’s Mental Well-Being: An article from the Journal of Pediatrics on how the declines in youth mental health over the past 10-15 years is actually a 5-6 decade phenomenon. The tl;dr is historically a “normal childhood” has always entailed much more independent activity, personal responsibility, and self-initiated exploration and learning than most children are now getting.
Inside Apple’s Plan to Change the Way We Watch Sports: If you liked my take on why Messi might actually help sell more Apple Vision pro headsets, this piece goes deeper into how sports and soccer specifically ties into Apple’s content strategy and why it signed the landmark deal to stream MLS games.
Favorite quote: “For the first time in the history of sports, fans will be able to access everything from a major professional sports league in one place. It’s a dream come true for MLS fans, soccer fans, and anyone who loves sports. No fragmentation, no frustration - just the flexibility to sign up for one convenient service that gives you everything MLS, anywhere and anytime you want to watch.”
Whose Domain Is It? A deep dive into the island of Anguilla’s booming industry - selling .ai domain names.
🔊 Podcast / Video
If you want to understand the implications of current events in Gaza and Israel on its tech industry, this is a good webinar put together by Vintage Partners (one of my investors at Banana).