Sep 20, 2023 · 1h 34m · acquired
Doug Demuro on Analyzing the Car Industry, Creator-Led Businesses, and Porsche Follow Up (Raw Video) · Acquired
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Acquired hosts Ben Gilbert and David Rosenthal sit down with automotive creator Doug DeMuro to dissect the mechanics of creator-led media, digital marketplace business models, and the technological and financial trends transforming the car industry.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ben and David hold 36.3% of the talking time here. How this is scored →
Ben and David as informed peer 4.9 Guest teaching 6.2 Guest disagreement 1.9 Ben and David pushing back 1.6
speaking balance: gold is Ben and David, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:03:30 Doug calls anti-autonomy car purists insane
Doug forcefully dismisses enthusiast purists who insist on manual driving in dense traffic jams, labeling their anti-driver-assist stance as contrarian nonsense.
Hardest push from Ben and David ▶ 18:00 Ben challenges the definition of production qualityBen steps in to correct David's loose usage of the term quality, delineating high-end production aesthetics from core content value.
Biggest teaching moment ▶ 1:10:10 Doug reveals secretive press finish factory codesDoug educates the hosts on industry tradecraft, revealing that automakers add power and extra build scrutiny to press fleet vehicles via hidden window sticker codes.
Ben and David hold their own ▶ 1:17:05 Ben and David outline VC capital correlation thesisBen and David demonstrate deep startup expertise by analyzing how raising large venture rounds often correlates negatively with startup success outside of outlier mega-caps.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ben and David as informed peer | Guest teaching | Guest disagreement | Ben and David pushing back | Why |
|---|---|---|---|---|---|---|
| Reflecting on the Porsche Episode Garage Recording | 3 | 1 | 1 | 1 | Ben and David open with casual banter reflecting on recording in Doug's garage for the Porsche episode. They discuss the audio challenges of recording in a garage with moving blankets compared to higher-end studio setups. | |
| Algorithmic Discovery and Outlier Video Performance | 5 | 6 | 2 | 2 | Ben shares analytical data on the Porsche episode's 400k YouTube outlier performance compared to typical podcast distribution. Doug explains algorithmic indexing, noting that his name specifically triggers search traffic and recommendations. | |
| Early Monetization and Strategic Channel Optimization | 4 | 7 | 2 | 1 | Doug details how he learned YouTube business economics after earning $21k in December 2016. He outlines his strategy of timing premium content to coincide with end-of-quarter and year-end corporate ad spend flushes. | |
| Lean Production Philosophy Versus High-End Complexity | 6 | 6 | 3 | 3 | Ben compares Doug's lean production to Costco's cash-only discipline. Doug reframes the definition of quality, asserting that high information density and factual depth outweigh expensive drone camera work. | |
| The Pandemic Surge and Car Industry Headwinds | 4 | 7 | 2 | 2 | Doug breaks down the macro dynamics of the pandemic car boom, explaining how manufacturer shutdowns combined with low interest rates sparked unprecedented demand. He illustrates this with stories of dealerships having zero inventory and charging well over sticker. | |
| Dealership Economics and Marketplace Failure Rates | 5 | 7 | 2 | 2 | Doug explains dealer floor-plan financing economics and end-of-month manufacturer push tactics. He details why nearly thirty competitor car auction platforms failed while Cars & Bids succeeded due to organic distribution. | |
| Operational Logistics and Business Model of Cars & Bids | 6 | 6 | 1 | 1 | Ben and David examine marketplace unit economics, comparing Cars & Bids' 4.5% buyer fee (capped at $4,500) to platforms like Etsy. Doug surprises the hosts by explaining that enthusiast buyers largely purchase vehicles in cash rather than using financing. | |
| Enthusiast Vehicles as Store-of-Value Assets | 5 | 6 | 1 | 1 | David and Doug contrast rapid commuter vehicle depreciation with enthusiast cars that act as stores of value. Doug offers concrete advice on modern safety cutoffs, identifying the 2005 Porsche 997 generation as the minimum for modern crumple zones and tech. | |
| Technological Transformation, EVs, and Autonomous Driving | 5 | 7 | 3 | 2 | Doug argues that driving dynamics are mostly commoditized in EVs, meaning interior technology and quirks matter most to modern consumers. He mocks automotive purists who resist autonomous driving in highway traffic jams. | |
| Modern Vehicle Quality and Automotive Press Practices | 4 | 8 | 2 | 1 | Doug details why universally bad cars barely exist anymore due to widespread information access. He pulls back the curtain on automotive press departments tuning media vehicles under a secretive 'press finish' build code. | |
| The Chernin Group Investment and Enterprise Integration | 7 | 6 | 2 | 2 | Ben and David analyze venture capital dynamics and P&L incentives in creator acquisitions. Doug discusses The Chernin Group's $37M majority investment and explains the strategic decision to merge his personal YouTube channel and Cars & Bids under a single entity. | |
| Creator Entrepreneurship and Exotic Car Market Cap Thesis | 5 | 7 | 2 | 1 | Doug reflects on the operational challenges of working with creators who lack corporate discipline. He shares his proprietary exotic car market cap formula (production volume multiplied by trading price) for finding undervalued collector models. |
Statements from this episode (30)
Gilbert: Acquired's Porsche Episode Reached 400K YouTube Views
“We put up this episode with Doug, and it's gotten 400,000 views, and is adding another 6000 a day, which in big YouTuber land doesn't sound like much, but for us, It's multiple orders of magnitude over anything else we've ever done on the platform.”
Gilbert: Podcasting Lacks Algorithms, Preventing 2x Outlier Breakout Episodes
“So there are no breakout hits. No episode is ever twice as big as your next best episode.”
Rosenthal: Acquired Keeps YouTube Monetization Turned Off
“So we have monetization turned off for our YouTube channel for us because it's not our primary business model.”
DeMuro: YouTube ad revenue reached $21,000 in December 2016
“And what happened that month was I made 21,000 dollars in ad revenue.”
DeMuro Scheduled Top YouTube Uploads To Capture Quarter-End Ad Surges
“And if you go back through my videos throughout 1819, 20, 21, my best stuff was always updated, uploaded like at the last month, the last two weeks of each quarter and the last month of the year. And I never really talked about that, but that was always someth…”
DeMuro: High-end video production traps creators and limits content volume
“The really expensive DSLRs hanging off of drones, you can do that stuff, but it slows you down and it limits the amount of content and you can do. And then you end up hating your life. Then three, four years down the road, you're kind of married to that. Your …”
DeMuro: YouTube channel is approaching two billion total views
“People can make fun of me and they do all the, all they want to, but like I'm closing in on two billion views.”
DeMuro: YouTube Creator Views and Monetization Are Down Due to TikTok
“Every YouTube creator will tell you their views are down and it's not as monetizable.”
DeMuro: Content Creator Merchandise Is A Hamster Wheel, Not A Business
“So many of my fellow content creators sell merch, but I feel like that's just sort of the hamster wheel. Like you sell merch, you do your videos, you sell merch, you do your videos, but that's not a, that's in my mind, that's not like a business. Like, yes, it…”
DeMuro: Dealers commonly sold Ford Broncos $20k to $30k over sticker
“I mean, say they were selling Broncos for 20, 30,000 over sticker. That was like a common thing. These dealers were, have been living incredibly large over the last couple of years.”
DeMuro: Almost 30 online car auction copycats launched and failed
“We, I would say, 30 other auction, car auction, online car auction sites popped up in the last couple years, and 29 of them have failed, or 27, and the other three are barely hanging.”
DeMuro: Porsche Digital's Online Car Auction Site Marqued Is Fledgling
“Porsche has a business right now an auction business called marked that they're running and as a, from Porsche digital, and it's fledgling to say the least.”
DeMuro: Creator affinity converts marketplace traffic far better than ad spend
“You can't just throw money at trying to get an audience. It's not that easy. And having an audience where people love the dude who's at the top and are fans and want to be a part of his business, that makes it even easier to like convert them to real traffic a…”
DeMuro: Cars & Bids charges buyers a 4.5% fee capped at $4,500
“We take four and a half percent of the final sale price from the buyer. So there's no fee for the seller. The buyer pays us four and a half percent and we cap it at, A 100,000 dollar car. So 4500 dollars. And so if it's a 200,000 dollar car, we still only take…”
Gilbert: Marketplace upsell services grew to exceed half of Etsy's total revenue
“I remember when Etsy first launched, it was a hundred percent the transaction revenue on the take rate. And then over time, I haven't looked in a few years, but I remember when it surpassed 50% revenue on the services, on the things that they were able to upse…”
DeMuro: Enthusiast car buyers use cash far more than expected over financing
“We thought financing would be a bigger thing than it is. I think that it is a big purchase, but since we're selling mostly enthusiast cars, I think that A lot of people, we found more people are buying with cash than you might expect, even for higher value car…”
DeMuro: Cars & Bids accepts only 40% to 50% of submitted cars
“Yeah, we only accept enthusiast cars, and in fact, we only accept about 40 to 50% of the cars that are submitted to us.”
DeMuro: Car enthusiasts will resist future modeled on Tesla Model 3
“I think the model three is kind of the preview of where cars are going to go in the future. And I think car enthusiasts will be dragged Kicking and screaming into this world.”
DeMuro: Electric Vehicles Eliminate Driving Dynamics As A Purchasing Differentiator
“All electric cars pretty much drive the same. And so nobody really cares that much about the driving experience.”
DeMuro: Cadillac Super Cruise is the best driver-assist system in the business
“Cadillac's self-drive, driver-assist technology is called Super Cruise, and it's the best in the business, no question.”
DeMuro: Drivers can travel hands-off from LA to SF in a new Cadillac
“You can be totally hands-off in a new Cadillac. You could drive from LA to San Francisco completely, 100% hands-off, except when you have to go and refuel.”
DeMuro: Public Information Ended the Production of Bad Cars
“Every automaker has realized information is too readily available to people to just make a bad car anymore. People aren't going to stand for that. They just won't buy a vehicle.”
DeMuro: I Pay My Own Way to Automaker Press Events
“I've always made this big holier than thou stance that I don't accept anything from the automakers, including plane trips and hotels. If I'm invited to a press event, I pay my own way and stay in a hotel at my own cost.”
DeMuro: Automakers Secretly Add Horsepower To Review Vehicles Via 'Press Finish'
“There is an option code that most automakers have but hide from their window stickers called press finish, and there is dispute about what that is. Some automakers, there is absolutely no question that press finish adds power. Absolutely no doubt, like they've…”
DeMuro: Solo YouTube Business Ran At Roughly 90 Percent Net Margins
“Except for travel. There were a few things. I was paying an editor. My best friend, like read, reads my emails, so I pay her. And there was some travel, but the, it was, the expenses were, yeah, I mean, I was, we were probably 90% net.”
DeMuro: Cars & Bids auctions 30 cars daily at 85% sell rate
“I mean, we're selling basically 30 cars a day or we're auctioning 30 cars a day. We have about an 85% sale rate. And so, and the average transaction value, I don't know, but you could figure it out very easily just from looking at the site. It's somewhere in t…”
Gilbert: Venture funding correlates negatively with startup success, excluding extreme outliers
“Well, I think most of the time it is negatively correlated, except for the most extreme outlier successful outcomes, it is required.”
DeMuro: Chernin Group Invested Roughly $37 Million In Cars & Bids
“They threw in like thirty seven million or something like that. And some of that was secondary. And then there was additional that they kind of threw on our balance sheet to help us grow.”
DeMuro: Content creators must build external businesses beyond YouTube and TikTok
“The advice I give to all my creator friends is you need to do something. You need to do something. YouTube is not enough. TikTok is not enough. You need to take your audience and go do something.”
DeMuro: Analog Exotic V12 Cars Will Appreciate Rapidly As EVs Dominate
“As cars start to become more electric, more, sort of, the all-electric cars sort of have a similar shape because of aerodynamics and fuel range Gas-powered, old-school, wedge-shaped, exotic V-twelves are gonna be, like, the cars that continue to go up.”