TMBA561: The Smoking Tire

Podcast 1:01:43 | Download | Spotify| Stitcher | iTunes | Comment

One of our favorite things about this podcast is that we get to talk to people who have inspired us and entertained us over the years.

Matt Farah is certainly one of those people.

Matt is somewhat of a pioneer in the automotive journalism community on the internet.

His long-running YouTube channel The Smoking Tire and his podcast of the same name are both incredibly popular, and among our very favorites.

Matt was gracious enough to talk to us back in 2016 about breaking through on YouTube, and since we last spoke to Matt a lot has changed in his life.

Matt joins us today to talk about how his YouTube channel and podcast have grown over the last four years, and why he is choosing to diversify the money that he earned on YouTube into a somewhat unorthodox brick-and-mortar investment.

See the full transcript below

 

 

Listen to this week’s show and learn:

  • One of the biggest mistakes that Matt made in his YouTube career. (6:02)
  • Why he feels like the stakes are much higher with a brick-and-mortar business. (15:25)
  • What went into Matt’s decision to build a storage facility for collector cars. (24:51)
  • Why Matt believes YouTube is like a casino. (37:39)
  • How the collector car market has changed in recent years. (45:36)

 

Mentioned in the episode:

Before the Exit – Our New Book
TMBA Masterminds
Partner With Us
The Dynamite Circle
Dynamite Jobs
Dynamite Deals
Tropical MBA on YouTube
Matt Farah
The Smoking Tire on YouTube
The Smoking Tire Podcast
Westside Collector Car Storage
Top Gear
The Joe Rogan Experience
Tom Segura
Vimeo
Bring a Trailer
Porsche 911 GT3
Ferrari 458
Lexus LC 500

Enjoyed this podcast? Check out these:

TMBA336: Matt Farah on Breaking Through
TMBA354: Who is Mr. Regular? The Story Behind the Hit YouTube Channel Regular Car Reviews
TMBA425: Meet The Deal Master

 

This week’s sponsor:

Today’s podcast is sponsored and hydrated by Drink LMNT.

Proper hydration is critical for optimizing mental and physical performance.

LMNT is a specially formulated hydration tablet that replaces your electrolytes without any of the sugar, artificial ingredients, coloring, or other junk ingredients found in so many popular electrolyte drinks on the market today.

LMNT is used by many of the world’s top-performing athletes including the Navy SEALs, Team USA weightlifting, and dozens of NFL, NBA, and other professional sports teams.

They also offer a no questions asked refund policy, you don’t even have to send it back.

To get free shipping on all US orders head on over to DrinkLMNT.com/TropicalMBA and a big thanks to Drink LMNT for sponsoring the show.

Listening options:

Subscribe via iTunes.
Listen on Stitcher Radio.
Android users can grab our RSS feed here.
Right-click and “save file as” for direct download.
Or click here to get sent to the top of the page where the on-site player is.

Have comments about the show?

Do you have ideas for things you’d like Dan and Ian to discuss on future episodes?

Our producer Jane would love to hear from you at [email protected] or leave us a voice message using the record button below.

 

 

Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST.

Cheers,

Dan & Ian

 


 

 

 

 

 

Full Transcript

Matt: This is not the best way to make money. If your goal is to turn your money into as much money as you possibly can in profit. I do not recommend doing this.

TMBA ident

Dan: All right, welcome back to the TMBA pod. I just dialled up the Bossman here on a cellular. Are you available Bossman?

Ian: That’s the way I like it, man.

Dan: Yeah,

Ian: Just call me, we’re not gonna go back and forth, 20 emails, all that. I told our team members, he’s like, ‘What’s the best way to keep in touch?’ I was like ‘Call me’. He’s like, ‘Do you want to put on the calendar?’ I’m like, ‘No, just call me’. Remember a time when you didn’t have to schedule a phone call? You just called somebody. And then if they answered they’re available, if not, it went to voicemail and then they called you back. That’s the age I want to live in again. It’s easier.

Dan: Things are cooling down here in Austin, Bossman. We’re both back in town and the prospect of outdoor activities is upon us. But of course things here at the podcast are heating up. How do you like that?

Ian: Sizzle.

Dan: Today, we have one of our favourite former guests on the show. Matt Farah from the ‘Smoking Tire’, podcast and YouTube channel. Of course, one of the amazing things about having a show like this is that we get to reach out to people that inspire and entertain us. And Matt is certainly one of those people. I was listening back to the interview Ian, and Matt was incredibly open in this interview talking about so many things not only, you know, his business diversification is taking some of his YouTube and podcast profits and moving them into real estate, an interesting version of real estate investing, but also just issues beyond cars and marketing strategies and things like that. What’s your take on the the interview here before we roll it?

Ian: There’s always this danger, Dan, of getting me on the phone with somebody else that likes cars. And I tried my hardest

Dan: At the production meeting, I mean, we were like, ‘Do not … step away from the car topic’.

Ian: Truth be told the reason Matt was on the show the first time in 2016 and while we brought him back is because I think he has an interesting perspective on YouTube, and now into how to diversify some of these YouTube profits into a brick and mortar business, which honestly Dan, I see a lot of I see people making money on the internet, and then having a good old diversification strategy, going into something new, going into something different, going into something sounds like maybe even harder than breaking through on YouTube, just in terms of dealing with the City of Los Angeles in California. So you’re going to hear those stories and more from Matt today.

Dan: Yeah, it’s interesting for anybody interested in turning their passions and their opinions and their interests into profits, one of the things about that business models, you kind of got to keep having opinions and passion and stuff like that. So a lot of folks that take that route, they look for ways to capitalise on that audience but also to invest the ultimate profits in something that’s a little bit more sustainable. So we’re going to hear about all that and more today. Really loved listening back to this one Bossman. We’re gonna roll it now and we’ll be back at the end to share some thoughts.

Music

Ian: For those that don’t know, introduce yourself.

Matt: I’m Matt Farah. I’m the host of the ‘Smoking Tire’ podcast, the ‘Smoking Tire YouTube’ series, and I’m the owner of ‘Westside Collector’ car storage in Playa Vista, California,

Ian: So I want to talk about this Westside car collector storage, but I want to circle back because the last time we talked was like 2016, I consider you a pioneer in the online space in terms of automotive journalism, you kind of came on the scene where the internet was starting to become important. You were kind of the right age to take advantage of that. And you have the right kind of attitude and you know, automotive journalism had been around forever in some kind of print form and here comes this new form of media, the internet and video and you jumped on it.

Matt: Yeah, I mean, it was definitely more videos specific than the internet in general. I mean, there were certainly automotive blogs and websites, and of course the digitised version of magazines and stuff like that. I was definitely one of the first people to approach it from a ‘YouTube video’ first perspective, I mean anyone else other than, like ‘Top Gear’ and you know, ‘Best Motoring’ out of Japan and stuff like that. Anyone else who was making videos was really probably also doing a magazine or a blog that had some sort of little video component. I was one of the first one of, certainly not the, first folks to dive in from the video side first, and then work my way back towards print as I got older.

Ian: I think when we talked in 2016, I mean, you’re really in the thick of it. You had a bunch of different kinds of shows that you’re pursuing on your channel. And also, I don’t know if he’d started your podcast by then.

Matt: Well, we started that podcast in 2011. We moved the podcast, we added it as a video component, added a video component to the podcast with the YouTube channel in 2017. And actually adding the podcast component to the video channel, as opposed to starting a brand new channel just for the podcast, was probably one of my biggest professional mistakes.

Ian: In what way?

Matt: Well, I took a common sense approach to it, which was that, okay, if you’ve got at the time, I don’t know, six or 700,000 people that subscribed to you and you’re putting out four videos a week, why wouldn’t you feed those people more content? It seems like it’s not like we were overwhelming them with content to begin with four posts a week is not a lot and someone who subscribes to you wants to hear what you had to say. And so why wouldn’t they want more?

As it turns out, people who click ‘subscribe to you’ do not necessarily want to see more. They want to see you do that exact thing they came to see you do in the first place. And if you veer from that, even if they don’t unsubscribe but let’s say you put now I put out four videos and two podcasts a week, but people only click the four videos and not the two podcasts. Well, now what I’ve told the software algorithm is that my audience only likes two thirds of my content. Right? And so they stop, they literally stop sending your content to people who have subscribed to you.

If I put out five videos a week, and the subscribers on average, click on four of them, that’s good. If that goes down to three or two, then the algorithm will literally stop suggesting and sending them videos, even if they have subscribed,

Ian: It’s like, this guy is becoming less and less relevant. Obviously, his user base is less engaged.

Matt: Well or is becoming less and less relevant to the subscribers interests or whatever. And in hindsight, a very important lesson that other people did learn and I didn’t learn, maybe because I’m older and more stubborn or whatever. Is that if you’re going to change even just a little bit from what you’re doing on YouTube that made you popular, just start over with a new channel.

I mean, it sounds so crazy. What do you mean, I just built this whole thing up? I’ve got 1000s of views and you want me to start at zero just because I have a new idea? That’s ridiculous. But that’s literally how it works.

Ian: So when did you realise this and what did you do?

Matt: I realised it, I don’t know a year ago. It was a six month process very time consuming, very expensive to start a brand new channel called \the Smoking Tire podcast on YouTube’ take down all 200 plus episodes we had put on our channel and re upload them in order from zero. It was a slog. Really, really really, really gnarly.

Ian: You guys are up to like a million now or something like that, right?

Matt: No, no, I mean we’re at like 980 something thousand but but really, it really stalled out at like 900, it really, really stalled. And other channels, I mean, look, I don’t necessarily compare myself with other channels, there’s no podium at the end with a gold medal and a trophy right? It’s just ‘Can you do the thing you want to do’ it with enough success to feed your family right? That’s, that’s, that’s the goal. You can’t win. You know, can’t win the internet. You can lose the internet but you can’t fucking win.

And so I try not to compare myself with other people directly, especially if the other people are doing something on their channel that I don’t want to do. But as we really stalled out around eight 900,000, other channels that started way, way, way, way after us, you know sailed past a million. I believe that a lot of that had to do with the fact that that we hosed ourself by doing a thing that to me seemed like common sense. But business and the internet isn’t always common sense. Iit’s not like I like I killed my channel. It’s not like I killed my income. It’s not like killed my career or anything like that. But we definitely didn’t in the last two or three years we did not grow as fast as we could have, because of an intentional decision that I made that turned out to be wrong.

I don’t have time to analyse the data. I run like three separate businesses that are almost completely unrelated to each other. The video show, the podcast and ‘Westside collector car storage’ all require me to be in specific places at specific times. And so I find myself struggling frequently just to get myself in the right headspace for, ‘What job am I doing right now’, like what needs to be done. The last month of my life professionally has been far and away the most difficult month of my life ever. By a lot, by like a lot.

Ian: What is it now that’s making it so hard for you?

Matt: At the time I started ‘West Side’, five years ago, we started with this project, I wanted a business that would provide regular income, so I wouldn’t have to participate in the gig economy for the rest of my life. And in between, then and now, my ad sales on the YouTube show are so successful, that I now have to really hustle and find and keep and review cars to keep up with my ad commitments.

That’s happening at the same time that I have a brand new studio and I’m trying to maximise that. I’ve sunk a lot of cash into that studio trying to get a return. And I have a new ad salesperson on my podcast that I got from Rogan and Tom Segura, that’s like killing it with like smashing on that. But Zach, August is the peak month travel travel month for Zach. So I have to record all these podcasts to satisfy our ad sales requirements. But I don’t have Zack.

I have to schedule these on a couple of days that Zach is here. And on top of that I’m at a crucial point and ‘Westside collector car storage’ where we finished construction, but we’re not open. So I’m training staff on how to do all this stuff. I’ve never run a valet lot in my life. And yet somehow, I am expected and have to train a staff on how to do this at like an extremely professional level. And also, you know, there’s so much stuff coming on with the building. Like there’s FedEx and UPS and inspectors coming by and customers on tours.

I have so many things that require me to be here. And yet my other job making videos requires me to almost exclusively be anywhere else. And so, this month has just been, you know, I suffer from anxiety really, I’ve really bad anxiety. I always think this dollar could be the last dollar, I act as if it could be the last dollar. So I take everything, I do everything. I always want to make a customer happy, I always want to take advantage of an opportunity to make $1 you know, in an ethical way. And so, until like next week, when my staff comes on full time because we’re a seven day a week business. And there’s at least going to be sometimes when I could pivot and focus elsewhere, it’s been really, really hard. It’s been really hard. You Not a lot of sleep, a lot of sweating. Now we’re in therapy.

Ian: Aren’t we all?

Matt: This is therapy right here. But yes, I am also in therapy.

Ian: But podcasting can be therapy. Well you’re not alone brother. I mean everybody listening to this show is going through something similar that you are which is, you know, as entrepreneurs. As you mentioned something which is you’re paranoid, it’s like some kind of wiring in our head makes us paranoid thinking this is going to be the last dollar. But when you turn around and you look at your computer, and you look at this big, beautiful building that you built, and you look at the cash flows that you have, and you look and you think, ‘This has been going pretty well the last 10 plus years, why would it just disappear tomorrow?’ I mean, rationally, it doesn’t make sense.

Matt: I don’t feel that way about the YouTube channel, but the best thing about the YouTube channel is, and the podcast, if you grow something slowly, you know, odds are, you’re not just going to die, you know, the next day.

Ian: It’s not made of sand. It took a long time to stack the bricks,

Matt: Right. And so it’s just, it’s more just, um, it’s just been very difficult because I’ve never had a staff, a payroll, health insurance. I’ve never had to have a police permit. There is nothing about this business that I’ve actually done before.

Ian: But so when you started when you started ‘Smoking Tire’ I mean you had not done videos and things like that before but

Matt: Nobody was counting on me. And by the way I have a degree in film and video. So it’s not like no, I have no idea what I’m doing, I was actually trained in certain things, certain parts of that.

Ian: Sounds like you feel like the stakes are a lot higher to for whatever reason.

Matt: Well and that’s true because I carry the weight of the world on my shoulders for something as simple as parking cars, but the stakes are very high. If one of these machines collapses it could kill somebody. I mean, if you have a malfunction, someone could be maimed or killed here very easily. Yeah, the stakes are high, the stakes are high.

Everyone comes in my building looking for reasons to not trust me. You know, they want to trust me, but it’s ‘But what about this, but what about this’ and I have to I have to and I have to even though I’m offering something that no one else is offering literally I could be, ‘Go leave, go find it somewhere else you won’t’, you know, but still, I have to do this kind of dance of, here’s why I have your best interests looked out for right now.

But it’s a lot to keep straight. About 100 times and not 100, maybe 20 times a day. I haven’t ‘Oh, I forgot, like, like\, probably 20 times a day. And this, my notebook. And this is right here. That’s one year of lists. That’s a full Moleskin notebook one year. I check off a whole page thing every day. And I still feel like I don’t keep up and I have a GM here at Westside, who’s very experienced in the valet parking industry. He’s run big crews.

Ian: Who did he work for? We used to, we used to be in the valet industry.

Matt: Oh, he runs a company called ‘Parking management’s associates of America’ or something. He basically runs lots all over la like at restaurants, events, stadiums, hotels, stuff like that. He’s coming from that volume industry into my sort of boutique, so low volume industry and it’s great because he’s able to help me out in terms of knowing what to expect in terms of staff and the payroll and, and literally the big concepts of running a business, right the the branding and the operations and how things are supposed to look like these things are not difficult for me and they’re difficult for other people. What’s difficult for me is sheets of paper, making a schedule, like the most basic shit that anyone who’s ever run a tiny little store in a tiny little town could do on a high school education. I’m like, so paranoid that I’m going to be terrible at these things. Because I’m 38 and I’ve spent my whole life focusing on doing this other thing really well, and fundamentally paying no attention whatsoever to the real business world.

Ian: That doesn’t seem like something, shouldn’t be ashamed of that right? I mean, I think what you pointed out there is really important, which is you got really good at this other thing and so you can’t be really good at 25 things.

Matt: Yeah. Without Eric here, like I’d be a real disaster. I think one of the things I did really right in this process is I really did a very thorough hiring process. And not just Eric but my other regular employees, who I ended up with are both really smart guys, and they’re really energetic and they have really good spatial awareness for the cars when it comes to moving cars around. You know, that’s a hard thing to teach if you don’t have it.

Ian: And then now you’ve started to bring on other people for this ‘Westside car collector storage’. So what is it? What does it been like actually Having to bring on people you know, into your organisation?

Matt: It’s very challenging. I was certainly more comfortable hiring people for the car shop than I am for hiring people on the show.

Ian: That’s interesting, you’ve been doing the show for much longer.

Matt: The problem with the show is – it’s me, the show was me. There’s not so much for someone to do on the ‘Smoking Tire’ without me physically being there.
And if I’m gonna be there, I might as well just do the thing. And, I don’t want to have an assistant or someone because now I got to talk to that person. Anyone who wants to work for the ‘Smoking Tire’. It’s always about what they can learn from me. Always right? Nobody ever even fucking lies.

My time sucks, right? The things that waste my time and prevent me from being more productive are the kind of things I don’t want to offload to another person. I got to move my cars around from one place to another, I’m not just going to hire some dude and make them do that, you know, things with that involve my bank accounts, my passwords, my internet accounts, the back end of the channel, like physical keys to buildings and offices and alarm codes. The idea that I could bring in the kind of person I could probably afford and not one of those like badass six figure executive assistant types, like, that’s a different level. There’s no in between, there’s no one that I could afford. That would be enough quality and trustworthiness. And that also isn’t trying to get something out of me.

And so I think that, that the next step for me, and for us, is going to be to get Zach back over here full time. That’s the bottleneck, the bottleneck right now is that because of a variety of reasons, Zack that were actually those reasons were more relevant about eight nine months ago than they are now. Zach has a day job and we need Zach to not have a day job. If Zach is a full time Smoking Tire employee in the next 12 months, we will be substantially more productive and I will be substantially less stressed because he’s one of the only people that I could trust with the literal keys to my life.

Ian: And Zach is the other guy on the ‘Smoking Tire’ podcast who you have been handing over some of the shows to, he’s been doing a great job. Well, he Yeah,

Matt: He started reviewing cars. You know, he started doing some fat like when I stopped driving, fan owned cars, which is something I stopped doing in 2017

Ian: Probably good for your safety. Number one.

Matt: Safety was one, boredom was another, I was just bored of doing it I was burnt out, and I wouldn’t remember anything about the cars and I started to learn that pretty much all tuner cars like drive the same, like you can do almost anything to an STI and it’ll drive exactly the same as every other STI, it doesn’t matter. And also I realised that when you’re driving people’s personally owned cars, you are making a judgement on their choices.

Ian: Yeah.

Matt: Which I didn’t really want to do.

Ian: Right. It probably didn’t make them feel great about it either.

Matt: Sometimes it does, and sometimes it doesn’t. But if they’re sitting right there, you’re not going to be totally honest. If they’re not sitting right there, you feel bad that they brought you their car and that was sort of their reward for doing it. So ultimately, I felt way better when I said, ‘Listen, if I just drive press cars’, and I know that everyone drives press cars, and what I was doing was a little more unique, but I just drive press cars, and I drive them for a week at a time. I actually have something to say. We’re not we’re no longer talking about someone’s individual choices for how they modified their car. You’re talking about a big, nameless, faceless Corporation that cynically wants to extract your money for their product at a big profit. And so I feel a lot better going, ‘Should you give these people your money or not?’

Ian: And so you’re just getting back to Zack, and your Your relationship with him and how this might play out in the future for other people in your organisation, but he’s the one guy that you feel like you would trust, you know, the keys to your car and to your business and out of the back end. What did it take for Zach to get there? And what would it take for somebody else? Because, you know, I’m listening to you talk about these businesses. I think, Matt, there’s no way you’re gonna be able to be on all these different places that all these different tools

Matt: What I can’t scale myself. That’s the problem. I’m not replaceable. Zack is not replaceable, he’s not. And the ‘Smoking Tire’ right now is us and it’s gonna be us. And so the good news is the brand ‘Westside collector car storage\ does not require my physical presence, at least once we’re open and staffed and moving smoothly. And so, the ‘How do we grow something without Matt’s physical presence?’ is going to come from that side. So I anticipate in the next 10 years, having multiple facilities run by most General Managers that I can have a phone call or two with each day and check in, and they can otherwise run somewhat autonomously.

Ian: Let’s rap about this car storage, it’s actually one of the reasons I want to talk to you is this is something brand new. And I actually bought a piece of land down the street from my house. And it has the potential, not on the same scale that you’re doing. But the potential to do the same thing and so I’ve kind of been going back and forth, right? Real estate, never really been that interested in it, but it’s starting to come on my radar. And so you’ve got this. What is it? 10,000 square feet. How big is your building?

Matt: It’s 11,500 but it’s 45 feet tall. So it’s pretty tall.

Ian: So you start to think, I mean, if you’re if you’re me, maybe if you’re not you but you start to think about how can I monetize that square footage. And for you, this is a very fun way to do that because it’s something that you’re interested in. So, first question about ‘Westside car collection storage facility’. Did you always envision buying a piece of real estate to do this? Or did you think, hey, I want to get into real estate?

Matt: No, I wanted a collector car storage facility because I wanted to be a customer of a collector car storage facility and one that satisfied my needs did not exist.

Ian: So maybe a little bit like how the YouTube channel started.

Matt: Yeah. Something like that. So I rolled out of control, It started with, maybe I’ll just buy a smaller building, you know, and rent it out, split it with a couple of friends. The math didn’t work on that the building was way too expensive. So okay, well, if I go a little bigger, and maybe I can rent it out to 30 or 40 people and the math doesn’t work on that. The math doesn’t work until you get to what I’ve built, which is quad stackers, you know, cars stacked five vertically, I mean, the whole the whole craziness. And by the way, saying the math works. You know, this is a very expensive project. I mean, really, really, really astronomically expensive.

I’m literally across the street from Google, like that’s Google, the ‘LA Clippers ‘practice. I could hit a pitching wedge onto the roof from here. Also the dirt that we bought was never industrial, that’s a big deal in LA. Because if your property was industrial in the past and leaked chemicals into the ground, like basically everybody did in the first half of the 20th century, you become the defendant on what is potentially a massive class action lawsuit for the wreckage of the groundwater here in Culver City. And then there was about a year of planning, and about two and a half years of building.

Ian: And can you shed a little bit of light into you how you pulled together the funds for this? I mean, Is this a group thing? Is this a you thing? Did you go to the bank?

Matt: No, it’s a me thing I I have. My father is extremely successful in his field, which is fashion and retail, so a part of it is from family money and then part of it we got a construction loan.

Ian: Cool.

Matt: But I own the building and the property which is good.

Ian: And so you started to put some numbers down on paper and you figured out what it’s got to be like over 100 cars for this thing to make sense?

Matt: It’s more about the fact that the space that you would need to park one car on your property, you need to park five cars to make money.

Ian: Hence why it’s 25 feet tall basically?

Matt: Correct. So you have to go one underground and then four vertical, so we have 18 indoor quad stackers.

Ian: And so when you started to put kind of pen to paper on this, I mean, starting to give me anxiety about all the capital that you’re going to have wrapped up and how long it’s going to take to pay it back and all that stuff. Was this stuff that you thought about? Or was it just purely? ‘Hey, I’d love to have this kind of facility. I’m just going to go for it’.

Matt: This is not the best way to make money. If your goal is to turn your money into as much money as you possibly can in profit. I do not recommend doing this. It’s not worth the headaches. It’s not worth the anxiety. It was a lot more expensive than we thought it was. If you talk about just in terms of the construction costs, we went about 18% over budget. It wasn’t so much about that, it was if I can have a real estate investment that is extremely premium. And that’s what we did with this building is we designed two buildings in one. So there’s two sets of plans for this building. One is what we built. The other set of plans is that if God forbid, this business is a huge failure, or I hate it or whatever, I can pull out all the lifts, sell them. And this building can become a 24,000 square foot permanent office building, creative office building.

So I had a backup. But fundamentally, what I’ve wanted this to be was the hub, the image main hub, where I worked, for what will ideally be a chain of these places in Southern California. And we can offer a variety of different services and locations and stuff for for different types of customers and if I can build more, this one is so expensive because of specifically where it is. If it was in if it was even 15 or 20 miles away, we would have been in a completely different universe in terms of costs. The other ones, in theory should be substantially cheaper.

Ian: I read a quote from you and you know, quotes go, you probably don’t even remember saying that if you’re me. ‘You said, my business model depends on putting these things in places with a lot of money and no parking’.

Matt: I mean, that’s true. That’s true. I mean, a lot of people have called me about, ‘Can I build one in St. Louis?’ It’s like, bro. Anybody with $1 in St. Louis can buy a giant garage, you know? I mean, like, there’s so so what is it? What are you going to do in St. Louis, and I’m coming up with St. Louis randomly but like, minded business is not universal. My business satisfies, like four miles around me. And that’s about it, right?

This business works when you can’t go anywhere else. So if I’m the guy who puts the place in a place where none of them exist, you’re surrounded by money and no space. We’re talking about dense – San Francisco, New York City. West LA, dense, right? That’s where you have to put it, you have to put it somewhere where you don’t have to sell it. And, of course, I do sell it because I’m a nice person. And I like to tell people about the features of my property. But fundamentally, the attitude should be, ‘Where else should gonna go?’. And if you can have that attitude, you put your building in the right place.

Ian: Yeah, there’s a big barrier to entry, which is millions of millions of dollars.

Matt: Yes, not just millions of dollars a year. My life dude. The money is a lot, right? I, as much as anyone, can recognise my privilege. Okay, not just my privilege of being a white male born in America, not just my privilege of winning the financial genetic lottery. The balance of that is I lost the physical genetic lottery.

Ian: In terms of the location, you know, sounds like you might have an idea to have a couple of these but what is exactly the thesis for this one is it like you said within four miles, so maybe you walk or Uber you pick up your seat of the car

Matt: I made a map of Los Angeles and all of the collector car storage facilities. And right where I live Venice, the beach cities is where they are not. There’s Burbank there’s the valley. There’s the South Bay. There’s East LA there’s Pasadena, there’s a big horseshoe, big circle that goes right around West LA and there isn’t one. So the point was, Why isn’t there one there? And what do I do to put one there? And we learned why there isn’t one there. It’s because anyone else who even given considered doing one figured out how much it would cost and how annoying it would be. And they went to Scottsdale and built in Scottsdale, or went to Seattle and built in Seattle. I didn’t invent the concept. I shouldn’t be given any credit for any of this shit, except I fought the city. And I won. And I did it in the place that everyone else said you couldn’t do it. So I’m either an idiot or I’m a genius. Or I’m somewhere in between. But the point was, that it had to be here because this is where it is not.

So the nearest place to me is in Beverly Hills. If you live in Venice Beach, the idea of going to Beverly Hills to get your car is absolutely absurd. That’s a 35 minute drive each way. If you have a car, that’s your fun car, and that car is more than five or 10 minutes from your house, you’re never going to use that car.

Ian: And you feel like there’s a couple other locations like this, that you’ve identified that would work.

Matt: Oh, for sure. For sure. Now that I’ve established my brand. The other facilities don’t need to be this premium. I don’t have to build ground up. I didn’t want to build ground up. I had to build ground up. There were no suitable buildings for this purpose. But if the land is cheaper, and I only have to use double stacks and not quad stacks, the snowball gets bigger,

Ian: You are making my decision to leave California six years ago. The worst business decision I ever made was starting a business in California. And it is really hard work. It is really hard work doing what you’re doing and bureaucrats and everything else

Matt: But the cost is passed on to the customer. So anything that costs me money costs the customer money, and the customer is unable to get this for less. It is impossible to offer what I’m offering here for less money, it is impossible. I don’t have to compete on price but I do. And we will extend this business model to other facilities around Southern California. And look, I understand why people, I hear that a lot, I don’t think it’s just California, i think part of it is California, because we have fires because we have earthquakes. LA’s bureaucracy is a bit of a mess. COVID isn’t helping. Yeah, and yeah, the taxes are high, but like, look, sunshine is free. weed is legal. It’s very civilised. And I like living at the beach. I like living in Venice where I can walk, maybe not so much during COVID. But I can walk to 50 restaurants, you know, I like my neighbourhood. And, and yeah, it was really hard to start a business in California. But the whole point was to start a business in California. The whole point of it was a location based business.

If I went somewhere else where it was easier, well, it might have been easier to build but now I got to sell everybody about why they should park their car with me instead of build a shed in their backyard. Now, you got a two car garage of your $5 million townhome in Venice. You want a third car? Where are you going to put it bro? You either park in the street or you buy your own seven figure non income producing commercial property. Those are your choices, or ‘Westside collector car storage’ $599 a month.

Ian: Matt, what do you think in terms of, you know, you worked on the internet for a long time. And now you’re kind of transitioning into this brick and mortar, on one side, you have the bureaucracy and you have a lot of rules that you have to follow. And on the other side is kind of the Wild Wild West. And I think most people or a lot of people that I know that have seen the wild, wild west side of it, they would never get into what you’re getting into.

Matt: In my opinion, YouTube is like a casino. You can be up. But you have not won until you take your money and you go home, that’s when you actually win. And so for me, YouTube is a great platform for creators because it is totally open. There are no barriers to entry. Literally any person anywhere can make a YouTube channel. And if you are, if you do the things you can earn a living, right. But the problem is with YouTube, the flip side of that coin is you get paid based off an algorithm they won’t share with you.

YouTube knows exactly how little money you are willing to work for. And they will pay you that much. So when I first started making videos, we would earn $11 per thousand views. Now it’s like $3.50/60 Wow. Yeah, its views times algorithm equals money, right? But the algorithms are completely out of control, all you have control over is your views. So the only way to make more money is to get more views and go up and up and up and up and up. But the whole time, YouTube’s trying to squeeze you down and down and down and down. There will never ever, ever, ever, ever as long as YouTube exists, be a day where ‘Matt the content creator’ can go, ‘Excuse me, YouTube, I’d like to get paid more per click, and I think I deserve it’. And here’s why that doesn’t exist. There’s no ‘Hey, can I get a raise?’ You never there’s no raise, you can’t get a raise. So once you realise that and you realise that YouTube is very easy to get on, very hard to get off and ultimately a giant hamster wheel that just keeps getting smaller and smaller and smaller. You just got to figure out a way to get your money and go home.

And unfortunately, YouTube is the main way that I quote ‘stay in the club’ because I don’t want to be out of the automotive journalism club either, right? I love press cars, I love access, I love going on launches and driving the newest stuff, meeting the engineers, you know, being on the inside of that dichotomy, you know what I mean? And and being the person that gets to craft the opinion about the car and that the manufacturer then sees and maybe they improve the car. I don’t want to give up that role in my life. But unfortunately, we’re now at a place where that is among the most time consuming and absolutely the least money producing thing that I do. Making videos is now become a loss leader. Ironically.

Ian: So when I asked you the question before, if, are you focused on your email list? You’re kind of like ‘Nah’. But kind of the point of having an email list is is owning your customers. And I assume that’s one of the things that you’re able to do a little bit better at the podcast, maybe? Have you thought much about, if there was a day where you had to transition off YouTube? Or if you want to transfer, transition off YouTube, how you might do that?

Matt: Oh, no, you go where the audience is. The idea that a creator could take the audience off one place and bring them to another place is an absolute fallacy unless you’re an A list celebrity or something. I use YouTube not because I like YouTube, it’s because that’s where the audience is. We don’t have a choice in that matter. Vimeo is a much better video player, much better. Quality is so much better that people are really nice who run it. It’s like a great setup. But like there’s no there’s no native audience.

Ian: So at some point, the podcast revenue, eclipsed the revenue from YouTube?

Matt: Yeah about a month ago. It went off a cliff. Everyone, everyone butt holes tightened up in March, right. And then once people were like, ‘Oh, hang on a minute. Everybody’s listening to podcasts’. After May we’ve been smashing.

Ian: So when you guys select advertisers, is it just purely on who’s paying the most? Or is this somebody that you have an identity with? Or how do you guys choose?

Matt: On the podcast, my ad sales people hit me up and they say, ‘Hey, this brand is interested in working on your show, or have you heard of them? Do you like them? What are your thoughts?’ And I’ll go if I haven’t heard of them, I’ll poke around their website or whatever. And usually I have them send me whatever it is that they’re selling, to try to check out. And, if it’s not illegal, dangerous, sketchy, then usually I’m about it. I mean, there’s definitely things that I’ve advertised that I don’t personally use, but that I think are made in a reasonably ethical way. You know, they’re not like scamming people. If I see something come through the ad sales pipeline that I don’t use, but someone could conceivably have a use for it like, ‘Yeah, sure’. I try not to do weird like supplements that aren’t like FDA approved and stuff like that.

Ian: A question I have related to that is, my guess is we’re around the same age of 40. It sounds like 38 but yeah. 38 So you know, growing up, yeah, maybe it was starting to become okay. But you’re probably still hiding it from everybody. And well, maybe you weren’t?

Matt: Weed? Are you talking about weed?

Ian: Yeah. And then now, you’re a guy. You’re in front of cameras, you have a presence. But you also have to interface with these large corporations. For or somebody gives you a car. So has there ever been a moment or an expectation where they might have asked you something about your personal life and weed?

Matt: No, it would be it would be the most hypocritical for them to ask me about weed because fucking auto journalists have been talking about drinking for as long as the things been around. I mean, there’s liquor sponsors on some of the biggest races in the biggest teams racing in the biggest motor sports around the world. It would be absolutely hypocritical for them to say, ‘You smoke weed in your spare time you talk about weed and therefore you’re somehow not responsible enough to be driving our cars’. When I sign a press car loan agreement it’s a contract, because the car is you know, there’s paperwork involved. When I sign those agreements, it’s you know, you will not be negligent, you will not drive under the influence, etc, etc. And if I were to breach that agreement, and something bad were to happen, they would probably throw me right into the bus. But um, no, they don’t they don’t care if I talk about smoking weed and stuff, or if I smoke weed, as long as I’m not doing it while I’m driving their car.

Ian: Matt, I’m gonna let you go here in a minute. But I want to ask you a couple questions about car collecting because it comes up on this podcast that you know, this is a podcast about business and lifestyle and travel and I inject as much of my car life as I can, but people get tired of it. I’m sure. So I’m glad to have you on the show. So we could talk a little bit about it, and how it relates to business because one of the things that’s changed, maybe like weed, in the last 20/30 years is there’s always kind of been these cars that are worth collecting that are collectible and that go up in value. But now I think we’re seeing something totally different. I mean, we’re seeing cars that are just skyrocketing in value.

Matt: What examples are we talking about?

Ian: Just buy a Ferrari Pista off the showroom floor.

Matt: Oh we’re talking about speculation.

Ian: Yeah. So I mean, a 240 Z six months ago on bring a trailer went for $300,000

Matt: Well, that was a museum piece, that’s not indicative of the entire industry. 240s have been flat since Nissan put them in the commercials like 10 years ago. You will find one off examples of exceedingly rare cars, very low miles, very original cars that will bring huge dollars. A Ferrari 308 I don’t know if it was a 308 or 328. A couple months ago on ‘Bring a Trailer’ went for $250,000 i think it had like 1000 miles on it.

Ian: Which are traditionally 75 grand, $70,000 cars.

Matt: You know, car collecting is cyclical, right? It’s the kind of cars, the folks who got money now. It’s whatever they wanted to drive in high school. That’s what’s popular, and as folks get older, the stuff that they were into, you know, falls off. And so what we’re seeing now in the collecting is that the stuff from the 60s with the exception of very special cars and 50s, with the exception of very special cars, is pretty flat.

There aren’t a lot of new people coming in and collecting cars from the 60s and 50s. What you do see is a lot of people that are collecting cars from the 80s and 90s. Because these cars are a little more usable. And we’re at the point right now when you have 80s and 90s cars, especially, you have this confluence of their analogue feeling, but they have enough electronic engine management that they start and work properly. And they might even have air conditioning, you know. And so you’re seeing the cars of the 80s and 90s are really starting to have their moments now.

And I think that’s happened a little later than in the past because of the recessions and stuff and people not necessarily having as much money but we’re also starting to see a lot of hoarding at the top. People just with big money just buying up all kinds of stuff. I like collecting cars because as a part of my portfolio, it’s not all I do. I have traditional investments. I have like a Vanguard thing, I’ve got an IRA. I’ve got a variety of, of, you know, I don’t watch markets, it’s just not what I do. And so I work with professionals that I’ve inherited from my father. And then I’d say I’ve got 10% of my net worth is cars, it’s a small percentage of my portfolio. But that’s where I have kind of my fun.

Ian: How did you get to that 10% number? Was it arbitrary? Is it just like hey, these are all the cars I want to own and now my 10%?

Matt: Wasn’t it wasn’t it wasn’t like, I didn’t make a thing and go I’m gonna do 10% and I bought what I liked and could use and I stopped when I got enough of something that I couldn’t really start that I couldn’t really use it enough anymore. At one point I had like seven cars. It was like too many. Now I have four which is ridiculous.

Ian: I have 11.

Matt: But they’re all old and i and i actually do use them and so every time I think about buying another car or every time I think about buying another watch I have to ask myself, because I you know I like shiny new things i’m not a saint and I think to myself, ‘How many days a week am I going to leave this car I’ve got at home to drive this new thing’ you know what I mean? And that one thought of like, it’s not just do I want it? Can I have it? Can I afford it? It’s am I gonna use it? And in order to use it. I’ve got to put this thing I’ve already got and enjoy on the sidelines. Do I really want to sideline this thing for some time with this other thing and that usually keeps me from buying. I mean, obviously it sounds crazy because I already have far more than I will ever need but it keeps me from buying more than I can use. I’m really surprised I made it through the pandemic without buying a car or watch. I really impressed myself for not not shopping. I did buy a motorcycle last week, but I didn’t even buy it to ride. I bought it specifically to park in my lobby and look cool.

Ian: So In terms of your collection, Matt, you got four cars you got a couple motorcycles it sounds like. I was kind of found it interesting that you review all these new cars, these new supercars, sounds like you might have the means to pick one of them up but you kind of steer towards the older cars. Yeah,

Matt: No I do and it’s not that I don’t like new supercars at all. I really like them. And I’ve thought about buying a new modern car I’ve and I probably could afford one. I’ve considered a 911 GT three, I’ve considered a Ferrari 458 which is a very very usable car. I’ve looked at you know, a couple of different modern things, some even some stuff that people might not think of like I thought about maybe getting a Lexus lc 500, which is a fabulous LA car. I’m so in love with the LC 500.

Ian: Yeah, they look really sick.

Matt: Oh, and they’re so nice to drive. I mean, there’s so great and I’m a big Lexus fan in general and that goes back to my childhood but you know, ultimately, even if I could afford it, it would still be a tonne of money for something I just don’t need.

I have a new press car every single week, every week I’m driving something new, something something modern. So, you know, I’m sitting in traffic or whatever, I’m in a modern car. And the truth is if I’m not driving an old car for fun, or if I’m not driving a test car for work, I prefer to ride a motorcycle. I don’t like traffic and so if I don’t need To be in a car, I am more than happy to be on either a press bike that I’m testing because I do get pressed bikes as well. Or my Vesper I mean my Vespa one of my favourite things I’ve ever bought.

Ian: The guy that reviews, supercars and brand new cars for a living prefers a Vespa.

Matt: But yeah, you know why? Because I could beat anybody in a drag race that doesn’t know I’m racing them.

Ian: Obviously you’re betting on the car collector market in some way you got this big facility that you’re sitting in there. I think that the value of some of these cars is going up. Certainly there’s a lot of cars that people are lusting after. I think your theory is pretty spot on with that being the 80s and 90s. And now guys like us can afford cars like that. But do you think this is going to continue? Everybody’s always scared of – it’s going to end on this generation? It’s not going to go any further. Do you think that that’s gonna happen?

Matt: No, we got a while until people grow up without any nostalgia for the cars of their youth.In fact, this facility has proven anything to me, it’s that people want the car they want and if they can afford that car and they can afford to keep it somewhere safe. You know, they’re going to do that. I have a couple of cars in the facility right now that are worth in excess of $200,000. I got a couple cars in the facility right now under $20,000.

Ian: Wow and they’re paying $500/600 a month to keep them there.

Matt: Yeah. And there’s definitely more of the latter than the former. And so it’s not a rational decision to keep your car somewhere like this. It’s literally oftentimes it’s, it doesn’t matter what you paid for the car. It’s, ‘I’ve got this car, it means something to me’. I mean we’re near LAX. I got folks that live in other countries and they’re keeping cars with me for when they come to town, either they’ve got family here or work or whatever and and they use their cars and and in a couple of the cases the cars are like it’s like – you don’t live here anymore, in this country. You don’t want to sell this car, you know what I mean? You really this you want to spend this much to keep this and yeah, they do.

Like that’s the thing with cars, like what we’ve seen in the last six months, like the stock market is like all over the place, right? Like you can be sweating, you can be up you can be down, you can be broke, you could be flush, like you could be anything the next day. You know what I mean? Like, the shit can hit the fan, but with a car. It’s not going to go to zero. You buy a Porsche for $100,000. If you buy it used not you’re not new with the depreciation but you buy a used car, you drive it a reasonable amount, you know not you don’t you don’t put 100,000 miles on it, but you drive it some. You maintain it, you take care of it, you don’t crash it, and you insure it. If it catches fire, or if it crashes or if it floods, it’s insured, you get your money back and maybe you sell it for five or $10,000 less than you bought it for in a couple years. But maybe you did 5000 miles. So right it costs you just drove a GT three for a buck a mile. All right, that’s fine, too. You know what I mean? It’s like, the car doesn’t need to go up. Just think about your price value, like the most expensive car I’ve ever bought, in terms of how much a car cost me.
Ian: Money in, money out

Matt: I spent $22,000 driving a Ford Focus RS for 18 months. It was 11,000 miles I put on the car right so two bucks a mile to drive focus on it. I could have financed the Ferrari 459 mm hmm those same 11,000 miles would have cost me maybe $18,000 or $19,000. I think there’s a lot of people in the watch community and the car community that won’t just admit that they want a trophy. Nothing wrong with that, whether it’s a Ferrari or a Porsche or a Rolex or whatever it is, if you worked hard, or you had a milestone or whatever, and you want a trophy that other people see, that’s okay.

There’s no problem with that, like, really women can have women have diamonds, you know, rappers can have chains like there’s nothing wrong with a trophy. But I think there’s, there’s also a something a little deeper than that. And I think that if you don’t at least attempt to explore the deeper connections, then I think you are missing out a little bit. Yeah.

Ian: Matt I want to thank you so much for being on this podcast. Thank you for taking the time out of your day. I congratulate you on getting married recently, I think since last it’s been over

Matt: A year, but yes, thank you. I like the married life. It’s good. Well, thanks for having me. Yeah, anyone in LA need a place to keep your car WCCS dot com is where you’ll find us. We’re on Centinela Ave, just south of Jefferson. And of course, if you want to hear me ramble about cars, ‘the Smoking Tire podcast’ on iTunes, YouTube or wherever you get your podcasts, and ‘the Smoking Tire YouTube channel’ is where I do my car reviews.

Music

Dan: A big shout out to Matt Farah for coming by the show. I’m gonna ask you for your reflections in a hot second about this conversation, but just s some housekeeping here in the following weeks Bossman and I are doing a mailbag episode in response to your voicemails. And if you’d like to send us thoughts, reflections, COVID stories. Send them over to me, Dan at tropicalmba.com, you can just pull out your iPhone or Android hit that voice recorder app.

Let us know what you’re thinking about what you’d like us to address on the show. We’d love to hear from you. Also, this show was hydrated and sponsored by the good folks over at LMNT. You know, this is one of those products Ian that we would talk about even if they weren’t a sponsor. We both love to put those essential salts in the water, low calorie, no sugar, you know, just makes you feel good to get a little bit of electrolytes in your water.

Ian: Drink it every single day.

Dan: Bossman any final thoughts on this conversation with with Matt Farah before we flip off the ep?

Ian: Yeah. Dan, I mean, on so many, so many levels, I think I agree with Matt and his strategies, you know, building this online business for the last gosh, it’s probably been at least 10 years for him while he’s been doing YouTube and then kind of diversifying maybe the second half of his life into something a little bit different.

But one thing I really respect about his approach, and that we discuss is that, you know, both of these businesses is a car collector storage facility and his YouTube come basically directly from his passions, in serving his own needs, you know, so at the time, nobody was making YouTube videos about cars in a way that guys like me and him wanted to see them made. Not with the high production costs and, you know, cheap tricks and things like that, a la ‘Top Gear’.

And so, Matt started making videos for himself and then now he’s also solving his own problem, which is where am I going to park my cool cars? I live in Venice Beach, and there’s no affordable parking for him. Sometimes these things turn out to be What other people want too but that’s not necessarily your intention. So I think there’s a bit of good luck and there’s a bit of fate. But there’s also an element of trusting your taste, trusting what you like, and then trusting that other people are gonna like it.

Dan: Can a guy with the minivan weigh in on what’s going on here with a little perspective? Because a lot of people might be asking, ‘Okay, you got this, you know, now he’s a YouTube famous guy. He’s driving around in all these amazing cars. How old does that comport into my desire to grow, start and build a better business?’ And for me, I love watching Matt’s videos because it’s immediately obvious, the depth of his knowledge.

And because he has such a depth and breadth of knowledge about the cars he’s driving, he’s able to analogize in a way that you rarely see in other information about cars. So he’s able to say ‘The suspension on this car reminds me of this car from two years ago, and they’re progressing this way’. And, and it reminds me that that’s really at the core of all of this, if you’re sitting around saying, ‘Oh, I want a business to grow this way, so I can have this amount of money and live this kind of lifestyle’. It’s like, well, that’s fine. But what are you offering to the world? What are you bringing to the table from a strategic point of view that you know things that other people don’t know? And I think Matt’s channel for me is a good example. Like, this guy just knows a lot of things that a lot of other people don’t know, number one, and number two, the people who do know they’re not willing to share in that capacity. And that’s a lesson all of us can take away.

Ian: Another thing that I find interesting about Matt, and just as like a car guy, you know, for a living, he basically reviews press cars, so companies come to him and they let him drive for a couple days or a week, their newest version of whatever it is, so it could be new Mustang. It could be a new Lamborghini SUV I think he did recently. And then you pull back the curtain on the guy and what is he driving – older cars?

Dan: Well, look, Matt is very clear about why he drives older cars because they’re more fun to drive.

Ian: Exactly.

Dan: It’s sort of like, you know, ‘Why haven’t you bought a new cell phone for the last four years? Because the camera on my one four years ago was good enough and it works and it’s affordable, and it’s easy to fix’. And in the case of cars, you know, they started to drive themselves for you and have all these funky bits on them. It’s just not nearly as much fun, especially on the kind of real drivers roads that Matt’s you know, taking these cars out on. So, anyway, what a wonderful conversation, thanks again to Matt and Bossman for bringing this conversation to us. And just one quick reminder, we will be doing a response to your voicemails in the coming weeks Dan at tropicalmba.com click on that voice recorder. And another big thanks to the folks over at LMNT for sponsoring the show. That’s it as always, we’ll be back next Thursday morning 8am Eastern Standard Time.

TMBA Ident