Shane Smith (Vice Photo)
I don't know if VICE Media Inc. is really worth the billions founder Shane Smith says it is, but I do know that he's a great salesman.
Smith believes the youth media company he founded in Montreal in 1994 will haul US $1 billion in revenue this year with 50% profit margins, telling Bloomberg VICE could be worth as much as Twitter, and that an IPO down the road is possible for the Brooklyn based company.
"We'd be stupid not to test what the market would bear."
Being a private company, there's not a lot known about VICE's finances.
Rupert Murdoch's 21st Century Fox paid US $70 million for a 5% stake in 2013, valuing the company at $1.4 billion.
The Telegraph said VICE's revenues were $175 million in 2012.
At a Business Insider conference in October, 2013, Smith said VICE has an in house ad agency, Virtue, that helps big brands understand digital strategy.
VICE are considered pioneers in the economics of new media, but old media has always had in house creative and marketing departments. Could Smith's salesmanship have anything to do with it?
This 2011 Globe and Mail profile describes Smith as someone who has always believed there was a seat at the table for him.
"Whatever you want, whether it's street cool or media power, come on as though you've already got it."
Smith's got it now. Selling that equity stake to Rupert Murdoch apparently helped him buy a 3000 square foot Tribeca NYC loft apartment, and he's estimated to still own about a third of the company (1/3rd x $1.4 billion = Cha Ching).
VICE also sold some stock to publicly traded ad agency conglomerate WPP.
“There’s a changing of the guard for every generation in media,” Smith told the Telegraph.
“We believe that we’re the changing of the guard for Gen-Y. Somebody will come up and eat our lunch for us in 20 years. But guess what – we’ll have a fun 20 years.”
On average, VICE generates 60 minutes of video content each day. The best stuff can be found on VICE on HBO, now in its second season, which has atheist comedian Bill Maher as a producer, and CNN statesman Fareed Zakaria as a consultant to the program.
Smith's Canadian roots came up on Real Time With Bill Maher last week.
If you're big in Montreal, you're big in Quebec. If you're big in Toronto, you're big in Canada, but if you're big in New York, you're global, Smith told viewers.
He took a jab at his native country though by saying Canadians do not embrace and support the success of their peers enough.
Now VICE is venturing into the news business with VICEnews.com; it has opened bureaus in 30 different regions.
Smith will need more than some love from critics in Canada to succeed financially in the news business.
In the meantime, he's convinced the ad world that he's the smartest guy in the room and they seem to be lining up to write him big checks.
And there's no denying that the editorial content VICE is creating is pretty incredible (Ex: The Vice Guide To Liberia).
Smith's success is inspiring and a reminder that it takes 20 years to build a business, not 20 months.
So no, he's not a Con Man, but he is a hell of a good salesman.
