Stardust: How To Make The Fame Economy Work For You | Zack Greenburg | TEDxPrincetonU
The speaker, a Forbes editor, argues that the modern "fame economy"—seen in sports, music, and film—is fundamentally different and vastly more lucrative than its earlier iterations, urging attendees to emulate the success of leveraging personal reach and creating entirely new market categories. She traces this evolution from early studio patent issues to modern equity deals, citing examples from Michael Jordan, Jay-Z, and Jessica Alba. The key takeaways center on leveraging brand equity, pursuing self-created categories, and prioritizing investments that contribute to social good. ## Speakers & Context - Forbes entertainment editor, media entertainment editor. - Audience: Attendees of the Forbes 30 under 30 summit. - Setting: A conference in a crowded restaurant in Boston. ## Theses & Positions - The "fame economy" is defined as the world of sports, music, film, and TV. - The modern fame economy is drastically different from how it operated about a century ago. - Success requires creating an entire new category rather than merely improving upon an existing product. - Capitalism itself is not immoral but is inherently amoral. - The best modern investment strategy is focusing on companies that contribute to social good. ## Concepts & Definitions - **Fame economy:** The world encompassing sports, music, film, and TV where individuals with brand recognition can invest in top startups. - **Reserve clause:** A condition in most professional sports contracts limiting a player to one team, which was successfully challenged. - **Free agent:** The status achieved by successfully challenging the reserve clause. - **Billion dollar baby:** The concept exemplified by The Honest Company, which reached a valuation exceeding one billion dollars. - **Capital/Political capital:** Assets leveraged by individuals, such as Ashton Kutcher's Twitter reach, to gain access to venture capitalists. ## Mechanisms & Processes - **Hollywood relocation:** Film companies moved from New York/New Jersey to Southern California to avoid infringing on patents held by Thomas Edison. - **Early studio model:** Involved the combination of talent (actors) and capital (studios), aiming to own the means of production (e.g., United Artists). - **Modern endorsements:** Shifting from straight cash payments to negotiating equity stakes in companies (e.g., 50 Cent). - **Brand leveraging:** Using an individual's public image (e.g., wearing Beats headphones) to elevate a product to a fashion statement. - **Self-creation:** Initiating a business because a needed product or service did not exist (e.g., The Honest Company). - **Venture Capital process:** The mechanism used by The Rise Fund to vet investments based on a commitment to social good. ## Timeline & Events - **Early 1900s:** The entertainment business was centered in New York/New Jersey due to Thomas Edison holding patents. - **1932:** James Cagney was the number one movie star, earning $400 a week. - **1950s:** Marilyn Monroe was making a mere $120 a week. - **1963:** Elizabeth Taylor earned one million dollars for *Cleopatra*. - **1969:** The year marked the "floodgates opening," driven by Curt Flood's legal challenge. - **Early 1980s:** Michael Jordan entered the league, popularizing the Air Jordan one shoe. - **1980s:** Michael Jackson released *Thriller* and began developing ancillary revenue streams. - **Mid-90s:** Jay-Z attempted an endorsement deal with a company called Iceberg. - **2008:** Dr. Dre walked down the beach with Jimmy Iovine, leading to the Beats headphones development. - **2008:** Jessica Alba was pregnant with her first child. - **2014:** Apple purchased Beats By Dr. Dre for three billion dollars. - **2009:** Ashton Kutcher invested one million dollars in Skype. ## Named Entities - **Ashton Kutcher:** Subject who wrote a cover story on and invested in startups like Airbnb, Uber, and Spotify. - **Nick Nolte, Susan Sarandon:** Actresses seen with Lorenzo in 1992. - **James Cagney:** Movie star who was number one in 1932. - **Edward G Robinson:** Actor who received $40,000 for his next film. - **Marilyn Monroe:** Actress who was making $120 a week in the 1950s. - **Elizabeth Taylor:** Actress who earned $1 million for *Cleopatra* in 1963. - **Curt Flood:** Baseball player who challenged the reserve clause. - **Michael Jordan:** Athlete/investor who wore the Air Jordan one shoe in the early 1980s. - **Kareem Abdul-Jabbar:** Athlete who received about $100,000 a year for his shoe deal in the NBA when Jordan arrived. - **Michael Jackson:** Artist who released the best-selling album of all time, *Thriller*, and started his own shoe line. - **Diddy:** Entrepreneur/musician who traces success to customer service, owning multiple paper routes in middle school. - **Jay-Z:** Musician/entrepreneur who tried to get an endorsement deal with Iceberg in the mid-90s. - **Dr. Dre:** Musician/entrepreneur who, with Jimmy Iovine, made Beats headphones. - **Jimmy Iovine:** CEO of Interscope Records (at the time) who suggested making speakers. - **Lady Gaga, Justin Bieber, Will.i.am:** Artists noted for wearing Beats headphones in music videos. - **Jessica Alba:** Entrepreneur who, while pregnant in 2008, created The Honest Company. - **Bono:** Activist/musician who stated capitalism is amoral and started The Rise Fund. - **Richard Branson:** Billionaire who started The Rise Fund with Bono. - **Forbes:** Publication for which the speaker is an editor. - **Airbnb, Uber, Spotify:** Startups invested in by early investors mentioned. - **United Artists:** Company founded by D.W. Griffith, whose initial idea was to own the means of production. - **Warner Brothers:** Studio that employed James Cagney in 1932. - **Columbia University:** Institution where Edward G Robinson threatened to study medicine. - **Major league baseball:** League that had a reserve clause preventing free agency. - **Nike:** Manufacturer that provided the five-year $2.5 million deal for Michael Jordan. - **Pepsi:** Company involved in an endorsement deal with Michael Jackson. - **Def Jam:** Record label established by Russell Simmons. - **Bad Boy:** Record label established by Diddy. - **Rockefeller Records:** Record label associated with Jay-Z. - **Iceberg:** Company where Jay-Z attempted an endorsement deal in the mid-90s. - **Apple:** Company that purchased Beats By Dr. Dre in 2014. - **The Honest Company:** Company founded by Jessica Alba, which is worth over a billion dollars today. - **Headspace:** Meditation app invested in by Jessica Alba. - **The Rise Fund:** Venture fund started by Bono and Richard Branson, investing only in social good. ## Numbers & Data - **6,000:** Number of world's top young entrepreneurs at the Forbes 30 under 30 summit. - **8.5 x:** Return rate on initial investment achieved by Kutcher and his fellow investors over several years. - **A century ago:** Time period when the fame economy began. - **Early 1900s:** Time period when the entertainment business was concentrated in New York/New Jersey. - **1932:** Year James Cagney was the top movie star. - **$400 a week:** Salary James Cagney earned in 1932. - **$40,000:** Amount Edward G Robinson received for his next film. - **1950s:** Decade when Marilyn Monroe earned $120 a week. - **1963:** Year Elizabeth Taylor earned one million dollars for *Cleopatra*. - **1969:** Year of the "floodgates opening" (Curt Flood). - **$100,000 a year:** Salary estimate for Kareem Abdul-Jabbar's shoe deal in the NBA at the time. - **Early 1980s:** Time Michael Jordan entered the league. - **Five-year $2.5 million deal:** Contract details given by Nike to Michael Jordan. - **$130 million:** Revenue projected by Nike from Air Jordans in the first year. - **1980s:** Decade when Michael Jackson was active. - **Mid-90s:** Time Jay-Z attempted the endorsement deal with Iceberg. - **2009:** Year Ashton Kutcher invested $1 million in Skype. - **$30 million:** Initial investment gathered by the venture fund group. - **Quarter billion dollars:** Amount the venture fund grew to over a few years. - **Three billion dollars:** Purchase price paid by Apple for Beats By Dr. Dre in 2014. - **2008:** Year Jessica Alba was pregnant with her first child. - **50 years:** Time frame comparing the NBA's current state to 50 years prior. ## Examples & Cases - **Boston Encounter:** Finding oneself in a crowded Boston restaurant next to Ashton Kutcher while he fled thirsty young entrepreneurs. - **Early Hollywood Patents:** The move of film companies from New York/NJ to Southern California to escape patents held by Thomas Edison. - **The Bluff:** Edward G Robinson threatening to study medicine at Columbia University, which convinced studios to keep him in film roles. - **The Air Jordan Deal:** Nike securing the deal with Michael Jordan, backed by the threat of NBA fines for wearing different shoes, leading to a projected $130 million first-year revenue. - **Diddy's Service Model:** Physically placing newspaper through a screen door to save customers the step of going downstairs. - **50 Cent's Equity Move:** Negotiating for equity (Vitamin Water's Formula 50) instead of cash, leading to over $100 million when the parent company was acquired for over four billion dollars. - **Ashton Kutcher's Digital Leverage:** Using the prospect of hitting one million Twitter followers to gain meetings with top venture capitalists in Silicon Valley. - **The Beats Strategy:** Dr. Dre and Jimmy Iovine promoting headphones as a fashion statement, allowing the company to compete with sneakers by creating a new product category. - **Jessica Alba's Initiative:** Starting The Honest Company because she could not find organic, chemical-free baby products. - **The Rise Fund:** Bono and Richard Branson starting the fund to invest exclusively in businesses doing demonstrable social good. ## Trade-offs & Alternatives - **Hollywood ownership:** The initial model of owning the means of production (United Artists) collapsed when owners sold stakes or died. - **Career bluff:** Accepting a lower salary than a doctor was strategically useful in the early studio system. - **Endorsement negotiation:** Choosing to accept equity (50 Cent) rather than cash when doing an endorsement deal. - **Product competition:** Competing by creating a new category (headphones) rather than directly matching a competitor's product (sneakers). - **Investment focus:** The choice between pursuing "sexy" industries or investing in essential but less glamorous services (HR, household chores). - **Investment philosophy:** The tension between pursuing maximum profit and directing capital toward social good (The Rise Fund). ## Counterarguments & Caveats - **United Artists failure:** The initial idea of owning Hollywood failed because the founders ultimately sold stakes or passed away. - **Curt Flood's initial legal outcome:** Flood did not win his initial lawsuit against major league baseball and was temporarily blackballed from the game. - **Early fund capital:** The initial $30 million investment gathered for the venture fund came from friends, including billionaires like David Geffen and Mark Cuban. ## Methodology - Drawing on historical accounts of the entertainment industry's evolution to illustrate modern business models. - Utilizing anecdotal evidence, such as meeting Ashton Kutcher in Boston, to contextualize current investment trends. - Comparing historical structures (e.g., the studio system) against modern capital formation methods (equity, digital influence). ## References Cited - *Thriller*: The best-selling album by Michael Jackson. - Air Jordan one shoe: Iconic footwear associated with Michael Jordan's deal. - The Honest Company: Company founded by Jessica Alba. - Headspace: Meditation app. - The Rise Fund: Venture fund started by Bono and Richard Branson. ## Conclusions & Recommendations - Attendees must learn how to apply "secrets from people like Ashton Kutcher" to their own lives. - If an itch exists for a needed product or service, the individual should initiate its creation. - Customer service remains a critical, enduring business philosophy. - The guiding principle for massive success is creating a new, distinct category rather than simply optimizing a current one. - Philanthropy should be integrated into business practice via investing in social good. ## Implications & Consequences - The modern trajectory of wealth creation favors leveraging personal brand, equity stakes, and access to capital. - Failure to adapt leads to falling back into older, less profitable models, such as being treated as mere employees rather than owners. - Successful application of these principles can generate exponential wealth (e.g., $100 million to billions). - The trend suggests a sustained shift toward linking financial success with explicit social benefit. ## Open Questions - What is the future pathway for entrepreneurs who lack the immediate public recognition or established networks demonstrated by the figures cited? ## Verbatim Moments - *"I've actually had an 8.5 x return on his initial investment for himself and his fellow investors."* - *"I like to call the fame economy which is the world of sports and music film TV of course well."* - *"I've written three books on the business of Fame."* - *"If you have that kind of reach and you're associated with the startup one tweet can really send something from you know being a nonentity to to a really hot young company."* - *"I keep aise him what happens when you try to prevent somebody from doing something or tell them they can't have it they just want it more."* - *"Take that Ciroc off of the bottom shelf and put it up here where it should be because I'm Diddy and I say so and they listen to him."* - *"I said this is what I want it doesn't exist I'm gonna create it myself."* - *"Capitalism is not immoral but it is amoral."* - *"Do well by doing good."*