Finance

356: Why The Creator Economy Is The Next Big Movement: Joseph Einhorn of Loot

Joseph Einhorn is no stranger to entrepreneurialism. With almost 25 years of startup experience under his belt, Einhorn knows the ins and the outs of the game.

In this interview with Nathan Chan, Einhorn discusses his incredible journey from becoming a self-taught engineer for Capital IQ, launching and selling the global ecommerce phenomenon Fancy.com, and how his life-long love for comic books evolved into founding Loot.

With a penchant for satiating curiosity and deep respect for creators the world over, Einhorn will leave you inspired to chase your dream and to never give up.

Nathan: The first question that I ask everyone that comes on is how did you get your job, aka how did you find yourself doing the work you’re doing today.

Joseph: Sure. Oh wow. So I’m 39. I’m turning 40 pretty soon. I’ve been doing startups for almost 24 years. When I was 16 years old, actually was when I got my first official startup job, but I was actually working professionally a little bit before I was 16. When I was a bit younger than that, my mom worked in a hospital and I was able to volunteer at the hospital and I would push the book cart from the library, and I would go into the different rooms and read to the patients. So, that was around the age of 13.

Then when I was 16, I became the first employee, like a self taught engineer in the mid 1990s for what became sort of a web based bloomer competitor called Capital IQ. It was a really interesting time to be involved in startups and the internet and technology because so much of it hadn’t been fully baked yet. So I think we’ll probably talk more about it later, but the idea that we were trying to implement technology that was emerging and evolving, even things that we take for granted today like client server networks and databases and things like that. They weren’t fully operational compared to the way they are today.

So anyway, long history of doing startups, and ultimately, to answer your question about how did I end up with the job I have today, is sort of a career of doing startups for well over 20 years now. I always had this dream when I was a kid to be involved in the comic book world, in the comic book space. As I became a parent myself, I saw this need to bring some type of family activity to the table that could diversify our family’s entertainment from screens, iPads and computers and TV and all that stuff, video games. So it’s just one of these things. Throughout my life, I talked to different entrepreneurs and founders, and I remember talking to somebody I really admire along the way and asking them why do we do this stuff. Why do we do startups.

He said that we have an idea of the way we want things in the world to be or how we want them to look, or what we want to see in the world. We just try to make them happen. So long story short, it’s a combination of having an interest in comic books and the arts, and a career in startups that sort of led me to this place where we are today, which is Lute, my comic book shop for kids in Brooklyn, New York.

Nathan: Yeah, love it. So cool. I’m a big fan of comic books. I really like the Marvels, and also I’m a sucker for Riverdale. Never got into the comics, but love the TV show.

Joseph: That’s great. That’s great. It’s funny that you mention Riverdale. That has a sort of important part in my story, which is the first comic book that I ever actually got, my mom got me, was Archie. I’m a kind of person who was learning how to read from comic books and things like that, so it’s been really fascinating to see the evolution of comics into entertainment. I know Riverdale is a really terrific show. If you look at these shows that they’re putting out now related to these characters from comics, it’s incredible. They’re so creative and so unique.

There’s one on Disney Plus right now. I don’t know if you’ve seen it over there, Wandavision.

Nathan: Oh yeah, my brother was recommending it highly. I haven’t got into it yet.

Joseph: That one will I think really blow your mind. It actually stars a guy who’s sort of a friend to our shop, which is Paul Bentany, who plays Vision in the Marvel franchise, who’s also a Brooklyn native. That show is really out of this world, but Riverdale is also phenomenal.

Nathan: Interesting. So I find it interesting. You talk about Lute, but you haven’t talked about the Fancy.

Joseph: Yep.

Nathan: Which you’re trying to build the next Amazon in many ways there. How did that start? I’m really curious because that’s massive, man.

Joseph: Yeah. So in total now, in my career, I think Lute is my fourth startup. So all along the way, there was sort of the evolution of technology combined with the evolution of consumer behaviour. So the first startup I was involved with was called Capital IQ. That’s a web based platform for financial professionals to do better work. So that’s a big project involving data collection and data cleaning, and ultimately some CRM functionality. It’s sort of a research tool combined with an actionable intelligence.

So the first thing I was involved with was structuring unstructured data for financial professionals. Then after that, I did a company called Informed, which was a structuring unstructured data for media companies. The idea was that we did natural language processing. So when you would look at an article on a site like CNN, we would link certain entities in the text like names of politicians. Barack Obama could be linked up. Then when you were to click it, that would drive a topical page around him. So it was like structuring unstructured data for finance and then structuring unstructured data for news and media and information. Then the next one with Fancy was around eCommerce.

There’s so much of retail was moving online. What could we do that could make the experience more native to digital but still capture some of the magic from traditional retail? That’s actually something … because I listen to and watch a lot of Foundr content. One thing I wanted to mention is that there’s sort of a common thread which is, when I listen to the different amazing people that you guys have on the show, the magic that comes with these projects. So it sort of manifests itself in different ways, right? To take an experience that is so simple and organic from real life and translate that to something on digital, like making an interesting type of retail and commerce, the end experience, ultimately there’s some magic there. Then it kind of takes on a life of its own.

What I would say about Lute is that this is the first thing that I’ve been involved with, and remember this is very low tech. This is the first thing I’ve been involved with when I just walk in the door, turn on the lights, and it’s got the magic. So I know that everyone who’s trying to do their own thing, myself included, you’re always searching for the magic. I think it starts with just the core concept, which is you have some … whether it’s high tech and something cool, eCommerce like you were talking about, or it’s really low tech and it’s just the reverse, like a physical retail experience. What’s the spirit of what you’re trying to do and how does that come out in your work?

So in many ways, all these projects that I’ve been involved with are fairly similar. There’s this creative spark, whether it could be something as potentially mundane as financial information, but doing something radical with it, to structuring data for media companies. But if you think about the end user and how people might consume information and become smarter, that’s something to … coming up with a different way for people to shop online and then ultimately to try to do something disruptive for young people, there’s this thing going on with entertainment, digital entertainment for youngsters, which is incredible but it’s also very different than our childhood. I don’t know. You’re not quite as old as I am, but the point being that, if you have this concept and it’s something that is real and true to you, you can sort of bring it together with whatever resources you have. That’s all that ever happened with any of these startups.

I’ve noticed it when I look at your community. Just a simple example will be I’ll go into your guy’s Instagram page and I’ll see … I always like to look in the comments to see what are people actually doing. There’s all these great influential people who talk or who share. Then there’s like well what do the people actually do with it. Just like a really simple thing I would say, I was looking at it earlier this week, is sometimes the only thing that people have is their point of view. So using free tools that are available on the internet … You may not be in a position to open up a store right now.

Actually, it’s a really interesting time because of COVID. Commercial real estate is actually distressed. You may be able to bring an idea … There’s a new concept of who your partner could be. Your partner doesn’t necessarily have to be a venture capital firm. Maybe your partner could be a person who owns a building or who owns a space that needs help and wants to do something for the community. But in the case of Foundr, what I go on, what I saw, is there’s people who just say, hey come look at my page. Whether it was actually on Instagram or they were saying go to Instagram and go link in their bio to go to their You Tube or whatever it was. They were doing stuff like curating, not just startup stuff, but lifestyle stuff.

There was art curators on there who would just say … They didn’t have a website. They didn’t have an app. They just had their point of view, but they’re in the mentality of trying got make stuff happen that sort of goes with your guy’s brand. So I think that’s really interesting. Whereas when I joined this movement of startups 24 years ago, the platforms and the tools were so important. Now everyone has access to platforms and tools to some degree. Certainly there’s people who are changing the game and making platforms and tools that I never even thought could exist before, and that’s incredible. But now it seems like the differentiator in a lot of these cases is, well what’s your point of view. What are you bringing to the table. A lot of that manifests itself in terms of, well who’s popular in these different genres of media.

Again, because I have kids and because I’m very interested in this field, I pay a lot of attention to the entertainment related to gaming. There are these amazing games which I could have never imagined existed. There are these people who are so talented at the games. Before I go any further, do you play any video games by any chance?

Nathan: I used to be a hardcore gamer. Used to play Counter Strike. Probably the most recent game was Fortnight with my brother a lot, but not so much anymore.

Joseph: Actually, I was hoping you would say that. What happened with Fortnight, which is really interesting, is that there’s all these dimensions to it. With young people … This is before COVID. Young people would meet up afterschool on Fortnight. You’d get together. You might do a tournament together. You collaborate, you coordinate ultimately to help each other. They feel like they’re helping each other. Sometimes they’ll carry somebody through the whole game. But what I noticed in terms of Fortnight players is sometimes you could have people who are really good at this or really good at that. I don’t know if you remember when you were playing it, when people are very good at building, all of the sudden you have people who are building.

In one second, they could build a four story tour. Not only are they making a shield for themselves, but they’re moving up and down. It’s happening at a speed that’s uncanny. It’s unbelievable. I don’t know if you remember that. Now people are just … So you watch this … I guess you’re out of it and it’s probably good you’re out of it, because it’s taken a lot away from your productivity probably. But when I look at the talent that is emerging from this field, sure there’s people who have incredible stats, who win every tournament. Some are just really good at building, like I was saying, but a lot of times it’s their personality and their point of view that is bringing them to this level of relatability and fame, and ultimately influence.

It’s been amazing to see what they do with it. There were so many people that I learned about through my kids, who are so talented in so many ways. Basically kind of game changers. These people like Mr. Beast.

Nathan: I was just about to say what about Mr. Beast.

Joseph: In terms of entrepreneurship, I looked at something that he did recently which was-

Nathan: The burgers?

Joseph: Well, of course, but I was actually talking about this puzzle tournament that he did, which was like … he released a new digital puzzle and he made a contest which was, as soon as you complete the puzzle, take a photo with it complete. The first one to complete it wins $100,000. Something crazy, and somebody won. Then you try to reverse engineer the math on it and it was like, wait a minute. His audience is this many people. I think the puzzle was like $20-30. He might have netted several million dollars on the puzzle tournament.

To your point about the burgers, he seems to be really thoughtful about what he does with this incredible platform that he’s made. So big picture, what I’m saying and the main thing that I wanted to bring up is that the only thing that we all have and that’s unique to all of us is our perspective and our point of view. The greatest news for all of us is that we’re finally at a time in civilization that there’s so many different resources available to you to get your point of view across that, if you focus on what matters to you and you stay loyal to that idea, you can start something up ultimately with potential minimal financial resources, but quite a bit of effort and personal … well, we always talked about sweat equity.

So yeah, one project … all these projects that I’ve been involved with have always definitely satisfied a curiosity for me. I always said, man it would be cool if this was that. It would be cool if we could make another Amazon or if we could make news more informative and sort of … not only informative but potentially unbiased and factual and things like that. That was sort of the idea with that. Definitely at the time, when we were doing finance, this type of organised data collection and those kind of projects were really revolutionary in themselves. But I viewed all of these projects that I’ve been involved with on a kind of similar path, on a similar kind of plane, which starts with an idea of something I want to see in the world, and then try to find people in alignment of interest with myself and my colleagues. Then just try to put it together.

Nathan: Hey guys, I hope you’re enjoying this episode and learning a tonne. As you know, in this series, we interview some of the greatest founders of our generation to find out how they did it. However, if you’re thinking of starting your own business and you want to hear from some incredible stories from everyday people like you or I, who are actually in the trenches, only been building a business for maybe one year or two years, like they’re building right now, and they’re only in the early stages but they’re getting success, you should come check out our new podcast From Zero to Foundr, hosted by our community manager Molly Flynn.

These are in the trenches stories from our very own successful students that have gone through some of our programmes. People just like you who are deep within the process of building their very own successful business. These are the founders of tomorrow. You can find the From Zero to Foundr podcast on all platforms. Remember, it’s Foundr without the E. All right, now let’s jump in the show.

Some interesting takeaways there for me, I live that you call them projects.

Joseph: Yeah.

Nathan: I think that’s a really interesting distinction because, oftentimes, if you think of it as a project, it really is just like a fun experiment kind of. It is a business, but I’ve always thought of these kind of things as projects too, but a lot of people don’t describe it that way which is really cool. But in saying that, trying to create the next Amazon, like a platform, that is no small fait.

Joseph: Right.

Nathan: Any social platform is very, very, very, very difficult.

Joseph: Right.

Nathan: I’m curious why create Lute when that must be taking up the majority of your time.

Joseph: Yeah, so I’m fully … for the last two years, I’m fully going Lute. I’m not working at any other companies. The reason why is I’m at a point in my life where this particular project … Remember, pre COVID, I thought that it was important to bring something like this into the world because, as much as I love those entertainment mediums we were talking about, I saw how disruptive it was just psychologically to young people. Not just my own family, but just because I’m around so many young people, all of our friends. So what’s happened because of COVID is that these trends have really accelerated and I’ll give you a simple example.

So typical young person here in the states, at some point in their early … I would say between age five to 10 years old, they get their device, usually like a tablet. Probably like an Android tablet or something like that. I’m talking about just broadly. I’m not talking about necessarily rich people. I’m talking about anybody. So they get this tablet and their families start to invest into the tablet. So for Christmas and for all these other moments, they are gifted experiences inside the tablet. So then you factor into the equation that different people live in different situations where they might feel like their neighbourhood isn’t safe to hang out outside in or to play outside in.

Then couple all of that with these sort of addictive mechanics that are involved in these systems that we love. Not just the social platforms, but the games and frankly everything that comes in these platforms. Then when you throw all that in the mix in the pot with COVID, where now they literally live on these devices, I feel that it is more important then ever. So I guess, because I started in the business when I was young, so I spent a lot of time at each of these projects, I kind of get this feeling like, after 20 some odd years in the industry, that it’s now or never. You’ve got to either do this thing that you want to do or not.

Luckily, I started this prior to COVID because, when I started this company or this comic book shop for children, the whole premise was no digital, no website, no email address, nothing. We got going and people kind of loved it where parents, moms and daughters and moms and sons, would connect and relate over, similar to what you were talking about, your interest from your childhood all the way through to current entertainment. It was working really, really well. We expanded it to beyond just a lending library or reading library and a place to hang out. We expanded it to sort of an educational thing, art and other kind of experiences.

COVID hit in less than a year from when we opened. COVID hit and that was pretty shocking because our whole premise was out the window, which is no digital. Well, no digital … Let’s forget the part about, oh what’s going to happen if no one comes into my store, which I know that’s devastating to a lot of people. But no digital means you can’t reach these people that you were trying to impact. So as soon as COVID hit, I think in one of the first few days, what we started doing … I have some really talented people who work here. We started doing free online lessons, both live and on demand that we could put up on Instagram, on like IGTV, because IGTV you could do an hour long thing. So one of our teachers was just doing the same script that he was doing in the shop, but now he was doing it online.

So we put up, during the initial lockdown here which was like 100 days straight, every day including weekends, something new there. Then we moved into online classes, and we have online programmes that are going on right now, and we have in store as well. All that to say that, in a way I feel that it’s more important than ever to try to follow through with this concept that was always nagging at me. My first company, I was there for five to seven years, something like that. My second company, five years. The third one, I was there for over 10 years. So we’re coming up on year two, or we’re in the second year of this thing. I think there’s a long way to go in terms of adapting to the change in people’s behaviour, which doesn’t seem like it’s every going to go back to what it was when we opened this place, meaning how comfortable are families just coming into an indoor space.

So at some point in life, you’re working on a project and something is reaching you and making you think about moving on to the next project. Where do you want to impact people or where do you want to contribute to society before we’re all gone. For me, once I get going, I’m trying to be loyal to it and stick with it for as long as it takes for it to fully be realised. So these kind of moments in between projects, they just happen pretty naturally. If something’s been nagging at you for 20 years or since you were a kid, and things fall into place where the location of my shop is on top of a restaurant that’s owned by some people I’ve known for like 20 years. Incredible entrepreneurs. The guy was a chef at a really cool restaurant in New York City. Next thing I know, he opened up a group of restaurants on his own with his partners and they’re so important to people in the whole city. Not even just in this neighbourhood.

So a chance meeting with him where he said that he liked the idea and he would be supportive to make this even happen, that we would even have a place to do this in, is what was a spark that allowed me to do this. So it’s sort of like the stars being aligned, and then also just conviction. I know that everybody has different means and resources at any given moment, but if you have conviction and you have a point of view, I think that it’s a great time to get stuff off the ground and move on from whatever amazing productive project that you’re in to the next level.

Nathan: Yeah, I love that. I love the take on point of view because I think it’s so true. We have to work towards wrapping up, but it sounds like you are very interested and see this creator economy and movement forming, as am I, as are we at Foundr. So much to the point that I want to start shining a lot and spotlight on some of these creators like the Mr. Beasts of the world because it is fascinating what is going on right now.

Joseph: Yeah. So let me give you some feedback. I am completely aligned with you here. What we have been doing with Lute is, when the kids started creating their own content here, we set up a marketplace so that kids could collaborate and ultimately sell their goods. So selling comics. Then we did this contest where the kids designed … this was the perfect activity for COVID. The kids designed superheros, their own characters, and then we actually worked with a phenomenal artist who actually made the action figures for them. So this emerging era of the creator economy is absolutely mind blowing to me, and I actually think what you guys have been doing with Foundr in a way is to date … pre whatever you’re going to do with the Mr. Beasts of the world, which are necessary. But to date, when you talk to old people like me, is we’re all sort of the old creator economy, which is we use what platforms were available to us.

Just really importantly, I wanted to remind you of when I got started in technology. My first company, things like Microsoft SQL server and Oracles database, things weren’t working properly. So I remember calling up Oracle or calling up Microsoft at 3:00 in the morning and saying, “Hey, database replication doesn’t work.” They would say, “Yeah, we know. If you figure it out, let us know. There’s a bounty. We’ll post it on.” So, that was at a time when these platforms were emerging. Now that the platforms are so robust, it’s absolutely all about the creators. I think that we’re going to see. There’s some of these creators here that are so popular. You’ve already seen what they’re doing shaking up things like the stock market where people are saying, “Hey, I’ve done some research and we can band together, and we can have an impact on global financial markets.” That’s crazy, right?

Some of these other character’s personalities and talents, people are talking about them as politicians. I’ll give you an example of one that really inspired me, caught my eye, the guy from Barstool.

Nathan: Yeah. I was just about to say him. Yeah, Dave Portnoy.

Joseph: If you haven’t had him on already, he’s got to be on here because what he did with the Barstool fund was so radical. He took what Mr. Beast and others are doing, and I think they all contributed to him because they saw what he was doing, and he took it to a whole other world. So he’s a perfect example of everyone is different in terms of their personality and sort of their sort of sense of humour. Everyone is different of course in their politics, but what did he do with his platform is he created this Barstool fund. Last time I checked, over $30 million had been contributed. Every day, he calls up small businesses and he says, “What do you need? It’s coming. We’re going to help you.” That wasn’t able to be done in our own government.

So the reason why I’m mentioning it is every day people talk about people like him as being somebody who could be in politics. So all of the sudden, the creator folks, they’re the most important entertainers. They’re basically up there with Lebron James already, which is amazing. They have such an impact on young people and such an influence, and often really positive one. Now we’re talking about in the political sphere or in the finance sphere. So we’re trying to do that with Lute. You’ve got to keep in mind that our continuants are really a lot younger, but I’ll tell you this. The talent that I’ve seen in art and in writing, and in sort of entrepreneurship here, I’m really certain that there will be creative talent from this younger generation that will exceed everything we’ve seen. They will disrupt Marvel. It won’t be me unfortunately. It won’t be you.

There’s a kid in here recently. I tell this story a lot because it blows my mind. He was talking about how much he loves Lute because he is going to showcase his work here and he’s going to become famous one day. He’s going to be somebody in the industry. I said to him, “That’s great. I hope so.” “The reality is we’re going to hitch a ride on your star because you’re so talented and you’re so creative, and you’re so special that basically you’re going to really change the world, and we’ll have been lucky to even know you.” That’s sort of what we’re seeing with the creator economy. It’s part of the inspiration why I’m so sure that I want to keep at this, is to try to continue to develop talent like that.

Nathan: Yeah. That’s amazing. There’s definitively a movement taking place that we are noticing as well, which I hope that we can be a part of fueling. So look, Joe, super conscious of your time. We’ve already gone over. This is a great conversation. Really enjoyed chatting with you and connecting.

Joseph: Likewise.

Nathan: Just one last question. Any final words of wisdom that you’d like to share with our audience?

Joseph: Sure. It’s probably the cheesiest thing. I’ve heard it a million times, but given everything going on in the world, the only thing that has resonated with me that actually worked is when the super famous entrepreneurs who tell me never give up. Everyone always gives up because it’s so hard. It’s not hard to express yourself and share your point of view. It’s hard just getting through life. There’s people who have health issues, mental issues, mental health issues. People have real problems and I understand that. So if there’s a way to hang on a little bit longer, then your chances of breaking through are going up exponentially the longer that you hang on.

Along the way, there were people who … I would always ask, how did you break the ruler. How did your platform get so many users, or whatever it was. They said, at the beginning, there was nothing. It was tough. Sometimes it takes two years before anything happens. So I know that it sounds kind of cheesy to say, but I do believe that you’ve got to try to never give up and you’ve got to try to stay at it. I think, if you do that, then good things can happen to good people as well.

Nathan: Love it. Awesome, man. Where’s the best place people can find out more about yourself and your work as well?

Joseph: Yeah, at this point, I would say on Instagram. The handle is Loot, L-O-O-T. That links back to everything else. Otherwise, on Foundr.

Nathan: Awesome. Thanks so much for your time, man. I hope you have a fantastic day. Really appreciate it.

Joseph: You too. Thanks for the time.

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