WatchMojo: from a second mortgage to a YouTube channel worth over $100 million
Ashkan Karbasfrooshan put his whole savings, his retirement money and finally his house behind one bet: that online video would replace TV. For years it lost money. Then Top 10 lists took off. Here is how it happened, the numbers, and what you can copy.
Overview
Ashkan "Ash" Karbasfrooshan was born in Iran. His father worked for the Spanish Embassy there. After the revolution the family moved to Spain, then to Montreal.
He was a curious kid who read encyclopedias and magazines. "I always felt like the richest, luckiest kid in the world," he says.
He finished a finance degree in 1999, straight into the dot-com crash and then 9/11. "Wall Street is not rolling out the carpet for anybody named Ashkan Karbasfrooshan." So he worked what he calls 31 hats: bank customer service, an early search engine called Mama, then five years at AskMen doing sales, partnerships, writing and interviews.
When AskMen sold, his roughly 2% stake came to a check for $282,500. He was 27. He treated it as a seed round he wrote himself, and bet it on one idea: online video would do to TV what cable did to network TV.
Timeline
| Year | What happened |
|---|---|
| 1999 | Finance degree, into the dot-com crash |
| Age 27 | AskMen sells. His 2% = $282,500 |
| 2006 | Starts WatchMojo with about $250,000 of his own money: $50,000 cash plus $200,000 from selling stocks and his retirement savings, penalties and all |
| 2006 to 2011 | Years of losses, about $820,000 to $1 million in total |
| 2011 | Signs a second mortgage on his house, personally liable for the debt. His wife, a co-founder, signs next to him |
| 2011 to 2012 | The Top 10 list format takes off on YouTube |
| 2012 | Offer of $3.5 million plus a $6 million earn-out. The buyer pulls out. He is relieved |
| 2017 | Turns down $80 million for 80% of the company ($64 million cash) |
| After 2017 | Says yes to every expansion. Profit falls by more than half |
| 2020 | Sells 25% to Star Mountain Capital at a $90 million Canadian valuation |
| Today | Net worth over $100 million. Working to bring Major League Baseball back to Montreal |
The numbers
| Figure | Number |
|---|---|
| Net worth | Over $100 million |
| YouTube subscribers | About 26 million |
| Total views | About 18 billion |
| Starting money | About $250,000, all his own |
| Losses before the turn | About $820,000 to $1 million |
| His salary, first five to six years | $32,000 a year |
| Revenue climb | About $800,000, then $1M, $3M, $5M, then $8M to $10M |
| Profit margin, best year | 60% to 80% |
| Team | From under 10 people to 50 to 60 |
| Offer he turned down (2017) | $80 million for 80% |
| 2020 deal | 25% sold at a $90 million Canadian valuation. The family kept about 70% |
| Outside money raised | None for almost 15 years |
How it makes money
WatchMojo makes videos, mostly Top 10 lists about movies, games, music and pop culture, and earns from the ads that run on them.
- YouTube does the selling. YouTube's own ad products, like skippable ads, sell and place the ads. WatchMojo did not need a big sales team.
- One format, made over and over. Lists are quick to plan and easy to repeat across thousands of topics.
- Low costs. He did the CEO, CFO and lawyer jobs himself on a $32,000 salary. That is a big reason the margins reached 60% to 80%.
He made four bets early: YouTube, lists, fair use of clips, and that "geek culture was going to overtake pop culture."
What he did right
1. He bet on where things were going
In 2006 online video was small. He bet his savings that it would replace TV. "Sometimes you as an entrepreneur think you're late, but you're really early."
2. He kept going through the dark years
Five years of losses, his retirement money gone, a second mortgage. "Every time I thought we were at the end of the tunnel, the oncoming light was really just an oncoming train." Quitting never crossed his mind.
3. He kept costs tiny
A $32,000 salary and three executive jobs done by one person. When the money came, most of it was profit.
4. He knew why he said no
He turned down $80 million because the terms could have let the buyer cheapen the company and fire his team. "I didn't kill myself to save my team for you guys to come a year later, financial engineer us into destitute and fire my team." Three years later he sold 25% at a $90 million Canadian valuation, on his own terms.
5. He learned the cost of saying yes
After 2017 he said yes to every expansion, event and project. "Like a drunk sailor at a bar." Profit fell by more than half. Focus came back, and so did the numbers.
Do what he did: step by step
1. Bet on a shift you can see coming.
Look for something people are moving toward that big companies still ignore. For him it was video on the internet.
Do this: write down three habits you see younger people adopting that older businesses have not caught up with. Pick the one you understand best.
2. Find one format and repeat it.
WatchMojo did not invent a new show every week. It made Top 10 lists, thousands of them.
Do this: pick one simple format for whatever you make, and make ten of them before you change anything. Keep experimenting until you find something that clearly works. Once it works, hold on to it for dear life and milk it for all it is worth.
3. Keep your costs as low as you can stand.
Low costs are what let him survive five losing years.
Do this: work out the smallest monthly amount you need to keep going, and how many months your savings cover. That number is your runway.
4. Say no to anything that pulls you off the main thing.
Saying yes to everything cut his profit in half.
Do this: list everything you are working on. Cross out everything except the one thing that brings in money.
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Sources
- Hampton, Moneywise with Daniel Berk, "WatchMojo Founder Ashkan Karbasfrooshan: Second Mortgages, 80% Margins, and a $100M+ Net Worth" (interview and full transcript)
