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Good morning! It's Tuesday, January 2nd. To break in the new year, we are looking at the incredibly unique company MSCHF and how it generates revenue from selling absurd and sometimes offensive products!

THE FEATURE

MSCHF— Making Millions from Selling Absurdity

We've covered plenty of interesting businesses here on Capital Letter, but none have earned the label 'unique' as much as this one. 

Miscellaneous Mischief (MSCHF) is the company behind the notorious Lil Nax X's Satan Shoes and the virus-infected laptop entitled "The Persistence of Chaos" that sold at auction for $1.3M!

The Founding Story

MSCHF founder Gabriel Whaley used to work for Buzzfeed. When the news site got shut down, Whaley created an internet project that combined his knack for creating viral content with his absurdist sense of humor. 

Whaley posted the first MSCHF project on Twitter in which users could send him 1 dollar for a piece of bad advice. 

The second project was "Late Night Snap Hacks," a website filled with pre-recorded videos of late-night partying that allowed users to post them on their personal social media accounts to make their friends think they had a more extravagant social life than they actually did. 

Whaley's early projects didn't cost much to create, but the ideas behind them made each a viral sensation. This viral content powerhouse caught the eyes of investors, leading to $11.5M in funding that's powered even more audacious and, of course, mischievous publicity stunts. 

The Business

MSCHF is often characterized as an art and media company, but its business model that runs on absurdist humor and offensive branding makes it entirely unique. To make matters more confusing, MSCHF's only post on Linkedin categorizes itself as a dairy company.

However, things get much clearer when examining MSCHF's two revenue streams. 

Product Drops

The MSCHF website releases limited edition product drops every two weeks. This direct-to-consumer business sells everything from bath bombs shaped like toasters to "Jesus Shoes" (Nike Air Max sneakers filled with holy water). 

Each product drop is highly anticipated as MSCHF plays on the knife's edge of humor and being downright offensive. Plus, product drops are always limited-editions, meaning they sell out fast due to perceived scarcity and rarity. 

Aside from these normal product drops, MSCHF showcases and sells its most unique products at online auctions for hefty price tags. Last June, MSCHF auctioned off a fluorescent green Louis Vuitton bag for $63,750— the catch being that the "bag" was smaller than a grain of salt and could only be viewed through a microscope. 

Marketing Partnerships

MSCHF is better than any other company at getting the attention of young consumers. For brands that aren't afraid of a bit of controversy, MSCHF can make for a fantastic marketing partner. 

These collaborations take the partnered company's branding and give it the MSCHF absurdist twist through a new product drop. 

For instance, Rihanna recruited MSCHF to help promote her makeup brand, Fenty Beauty. The result was a $25 box of ketchup packets filled with either normal tomato paste or Fenty's lip gloss. 

In 2019, the business messaging platform Slack partnered with MSCHF to create a trivia game on their application. That game was "The Word of the Day Is" and allowed users to take unlimited guesses on which word out of the 171,476 words in the English language was selected that day— essentially designed to be the biggest workplace time waster. 

Key Observation

Attention is the primary human currency. If you can learn to manipulate the attention economy like MSCHF, you don't even need to sell a real product to consumers.

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