Good morning. A24 just shared the first poster for Backrooms, the horror film made by YouTube creator Kane Parsons.

If Backrooms is anything like the short film it’s based on, you can catch us sleeping with the lights on for the next 19 years (which is coincidentally how old Parsons is).   

— Hannah Doyle & Syd Cohen

Last August, AI education creator Catherine “CatGPT” Goetze launched a line of bluetooth-powered landline phones, Physical Phones. By the end of the year, the company—made up of Goetze and four part-time staff—generated $750,000 in revenue.

“Usually to get those revenue numbers for a custom hardware product you’re looking at a two- to three-year lead time, massive institutional investment, and a team of five to six full-time people,” Goetze told us. “So the fact that we pulled this off broke every rule.”

The key to hitting those marks—with a small team? Creator distribution + AI tools. Now Physical Phones is aiming for $5 million in revenue by the end of the year. Here’s how it’ll get there →

Leverage AI. Goetze said the team used AI to increase output through research, debugging, and expansion. For example, to get phones cleared for the FCC, ChatGPT was able to assist with the legal process that would’ve normally required a consultant. “Our project manager said she couldn’t have done it without ChatGPT and it saved us thousands of dollars,” Goetze said.

Hire smart. Goetze promoted Physical Phones part-time product manager Josh Silverman to CEO. He’s now responsible for top-line revenue and deciding new sales and marketing funnels (like whether Physical goes into retail or Amazon). 

Focused content strategy. Goetze will prioritize how Physical Phones fits naturally into her content. “For me, it’s more about leveraging the CatGPT platform overall as a host for the story of how Physical Phones can exist in the first place. Less of ‘hey buy this Physical Phone’ and more ‘here’s how we use AI to get the Physical Phone FCC cleared,’” Goetze said.

Looking ahead: Goetze is looking to expand to new verticals leveraging AI and creator distribution. “In the last six months I learned, holy sh*t this is not a fluke. This is a formula,” Goetze said. “So why just do this once? Let’s run this back.”

PepsiCo Foods just announced its first creator-led product line—featuring creators IShowSpeed and Dude Perfect.

Crunch time: The creators (along with mainstream celebrities like Madison Beer) are featured on the packaging of new “Flavor Swapped” chips. For example, Dude Perfect on Ruffles “Cool Ranch” flavor. In addition to retail, the chips will be sold on TikTok Shop. 

Worth noting: In recent years creators have flooded the CPG market—from launching products to joining brands as investors—with varying success. 

Big picture: With legacy CPG brands under pressure (Frito-Lay volume fell last quarter, Campbell's snack revenue is down) creators could be the key to unlocking a new growth lever. And the win for creators? Reinforced star power in grocery aisles and bodegas.

What do you think? Will we be seeing more creator faces on chips and cereal boxes? Hit reply and let us know your thoughts.

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If eBay is the nerdy uncle of online shopping, and Depop is its cool, Gen Z nephew, then they just formed the LMFAO of ecommerce. Last week, eBay bought clothing resale site Depop from Etsy for $1.2 billion.

Context: Depop is a favorite among fashion and lifestyle creators alike, with creators like Marissa’s Y2K Heaven and Heidi Aspi selling their wares on the platform. eBay has not disclosed how or if Depop would change with the acquisition, but the magnitude of the deal is on par with luxury brands—like Prada Group’s purchase of Versace for $1.3 billion. 

Worth noting: Last fall, TikTok Shop reported $19 billion in sales—making it the same size as eBay.