Stardust: How To Make The Fame Economy Work For You | Zack Greenburg | TEDxPrincetonU
## Speaker Context * Speaker identity: Forbes entertainment editor, media entertainment editor. * Audience: Attendees of the Forbes 30 under 30 summit. * Setting: A conference setting, implied by the mention of the Forbes 30 under 30 summit. * Framing the speaker establishes: Will tell about the history of Hollywood and the entertainment industry to show how others can use "secrets from people like Ashton Kutcher" to apply to their own lives. ## People * Ashton Kutcher + investor + recently wrote a cover story about and invested in startups like Airbnb, Uber, and Spotify. * Nick Nolte + actor + appearing with Lorenzo in 1992. * Susan Sarandon + actress + appearing with Lorenzo in 1992. * James Cagney + movie star + number one movie star of his day in 1932. * Edward G Robinson + actor + received $40,000 for his next film. * Marilyn Monroe + actress + making a mere hundred twenty dollars a week in the 1950s. * Elizabeth Taylor + actress + got Cleopatra for a million dollars in 1963. * Curt Flood + baseball player + challenged the reserve clause. * Michael Jordan + athlete/investor + wore the Air Jordan one shoe in the early 1980s; Nike gave him a five-year $2.5 million deal. * Kareem Abdul-Jabbar + athlete + getting about $100,000 a year for his shoe deal in the NBA at the time Jordan came in. * Michael Jackson + artist + put out the best-selling album of all time, *Thriller*; started his own clothing line; did an endorsement deal with Pepsi; started his own shoe line. * Diddy + entrepreneur/musician + traced success to customer service; had four paper routes in middle school. * Jay-Z + musician/entrepreneur + wanted his own endorsement deal for clothing in the mid-90s; went to a company called Iceberg. * Dr. Dre + musician/entrepreneur + walked down the beach in 2008 with Jimmy Iovine; made Beats headphones. * Jimmy Iovine + CEO of Interscope Records (at the time); suggested making speakers. * Lady Gaga + artist + wearing Beats headphones in music videos. * Justin Bieber + artist + wearing Beats headphones in music videos. * Will.i.am + artist + wearing Beats headphones in music videos. * Jessica Alba + entrepreneur + was pregnant in 2008 with her first child and wanted organic baby products. * Bono + activist/musician + stated that capitalism is not immoral but it is amoral; started The Rise Fund. * Richard Branson + billionaire + started The Rise Fund with Bono. ## Organizations * Forbes + publication + speaker is an editor for it. * Airbnb + startup + invested in by early investors mentioned. * Uber + startup + invested in by early investors mentioned. * Spotify + startup + invested in by early investors mentioned. * United Artists + company + founded by D.W. Griffith; idea was to own the means of production. * Warner Brothers + studio + employed James Cagney in 1932. * Columbia University + institution + location for Edward G Robinson to study medicine. * Major league baseball + league + had a reserve clause that said you could only be on one team. * Nike + manufacturer + provided the five-year $2.5 million deal for Michael Jordan. * Pepsi + company + subject of an endorsement deal with Michael Jackson. * Def Jam + record label + by Russell Simmons. * Bad Boy + record label + by Diddy. * Rockefeller Records + record label + by Jay-Z. * Iceberg + company + where Jay-Z attempted to get an endorsement deal in the mid-90s. * Apple + company + purchased Beats by Dr. Dre in 2014. * The Honest Company + company + founded by Jessica Alba, 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, invests only in companies doing social good. ## Places * Boston + location + where the speaker was found in a crowded restaurant. * Southern California + location + where film companies moved from New York/New Jersey due to patents. * New York + location + where the entertainment business was centered in the early 1900s. * New Jersey + location + where the entertainment business was centered in the early 1900s. * South Bronx + location + where hip-hop started in the 1970s. * San Francisco + location + where Jessica Alba conducted business. ## Tools, Tech & Products * Air Jordan one shoe + product + worn by Michael Jordan; involved a red and black design. * Beats headphones/speakers + product + made by Dr. Dre and Jimmy Iovine. * Formula 50 + product + flavor of Vitamin Water created by 50 Cent. * Ciroc + liquor brand + mentioned by Diddy. ## Concepts & Definitions * Fame economy + concept + the world of sports and music film TV where people like Ashton Kutcher can invest in top startups. * Reserve clause + concept + part of most professional sports contracts stating a player could only be on one team, preventing free agency. * Free agent + concept + the status achieved after challenging the reserve clause. * Billion dollar baby + concept + Jessica Alba's company, The Honest Company. * Capital/Political capital + concept + assets leveraged by Ashton Kutcher in Silicon Valley. ## Numbers & Data * 6,000 + count + number of world's top young entrepreneurs at the Forbes 30 under 30 summit. * 8.5 x + return rate + return on initial investment for Ashton Kutcher and fellow investors over a few years. * Century ago + time period + when Hollywood started. * Early on in the 1900s + time period + when the entertainment business surrounded NY/NJ. * 1900s + time period + when Thomas Edison invented filmmaking techniques and owned patents. * 1932 + year + James Cagney was the number one movie star. * $400 a week + salary + earning James Cagney in 1932. * $40,000 + amount + Edward G Robinson got for his next film. * 1950s + decade + when Marilyn Monroe was making $120 a week. * 1963 + year + Elizabeth Taylor got Cleopatra for a million dollars. * 1969 + year + when the "floodgates opening" started changing things (Curt Flood). * $100,000 a year + salary estimate + Kareem Abdul-Jabbar was getting for his shoe deal in the NBA at the time. * Early 1980s + time period + when Michael Jordan entered the league. * Five-year $2.5 million deal + contract details + Nike gave to Michael Jordan. * 130 million dollars + revenue figure + Nike projected from Air Jordans in the first year. * 1980s + decade + when Michael Jackson was active. * Best-selling album of all time + title descriptor + *Thriller* by Michael Jackson. * Mid-90s + time period + when Jay-Z attempted endorsement deal with Iceberg. * 2009 + year + Ashton Kutcher invested $1 million in Skype. * Quarter billion dollars + amount + initial investment gathered by the venture fund group (from friends including billionaires). * 8.5 x + return rate + growth achieved by the venture fund over a few years. * $100 million + credit line amount + deal from Liberty Media. * 2008 + year + when Dr. Dre was walking down the beach with Jimmy Iovine. * Three billion dollars + purchase price + paid by Apple for Beats By Dr. Dre in 2014. * 2014 + year + Apple purchased Beats By Dr. Dre. * 2008 + year + when Jessica Alba was pregnant with her first child. * Quarter of a billion dollars + investment amount + raised by Jessica Alba over several years. * Half-century + time frame + comparing the current state to the time of Curt Flood. * 50 years + time frame + amount of progress shown in the NBA comparing then and now. ## Claims & Theses * The current state is what the speaker calls the "fame economy." * The fame economy is the world of sports and music film TV. * The fame economy is an incredibly different case than it was when it started out about a century ago. * Hollywood came into its own because people were escaping Edison. * The entertainment business mostly surrounded New York, New Jersey in the early 1900s because Thomas Edison owned the patents. * The initial model of owning Hollywood was an idea that eventually collapsed because owners dropped out, sold stakes, or died. * The system that sprung up after was the system of "employees only." * The bluff of threatening to leave to study medicine at Columbia University was so good that the studios didn't call it. * The change was catalyzed by "the floodgates opening in 1969" (Curt Flood). * The modern day of free agency was led to by Curt Flood's legal challenges. * Jordan's success showed that Nike projected the shoe would do a few million dollars a year. * Michael Jackson's path paved the way for guys like Diddy, Jay-Z, and Dr. Dre. * Hip-hop was not initially wanting to pay rappers to put hip-hop on wax. * Jay-Z needed to start his own company when his endorsement attempt was rejected. * Diddy was able to use a service-oriented approach (saving customers the step of going downstairs) which he applied to business. * 50 Cent proved that accepting equity instead of cash for an endorsement deal could lead to greater returns. * Ashton Kutcher leveraged his Twitter reach (when about to hit a million followers) to gain access to venture capitalists. * The Beats line allowed Dr. Dre to compete with Jordan not by starting a shoe, but by creating a headphone line. * Jessica Alba proved that if she wanted a product, and it didn't exist, she could create it. * The NBA now has owners, not just employees, compared to 50 years ago. * Capitalism is not immoral but it is amoral. * Investing in companies doing "some kind of good in the world" is a key takeaway from the fame economy. * To achieve incredible success, one must create their own category, not just their own product. ## Mechanisms & Processes * Film companies moved from New York/New Jersey to Southern California to avoid film patents owned by Thomas Edison. * The initial studio model involved talent (actors) and capital (studio) trying to own the means of production. * The pattern of success in the early studio era was that stars were paid amounts that were often less than doctors, making going to medical school an acceptable bluff. * The process of challenging the reserve clause allowed professional athletes to become free agents. * Michael Jordan's shoe deal leveraged the physical product with the threat of NBA fines for wearing different shoes. * Diddy's customer service mechanism involved physically placing the paper in the screen door. * 50 Cent's mechanism was negotiating for equity in lieu of cash payment on an endorsement deal. * Ashton Kutcher's mechanism involved leveraging digital reach (Twitter followers) into political capital within Silicon Valley. * Dr. Dre's mechanism was creating a whole new product category (headphones) to compete in a space previously dominated by sneakers. * The venture capital process allowed Jessica Alba to raise capital ($250 million over several years) to found The Honest Company. * The Rise Fund mechanism involves vetting potential investments based on their commitment to social good. ## Timeline & Events * Early 1900s + Initial period where the entertainment business was centered in New York/New Jersey. * Period of patent control by Thomas Edison + Cause for Hollywood's relocation. * Time "about a century ago" + When the fame economy started. * 1932 + Year James Cagney was the top movie star, earning $400 a week. * 1950s + Decade when Marilyn Monroe was earning $120 a week. * 1963 + Year Elizabeth Taylor earned a million dollars for Cleopatra. * 1969 + Year that marked the "floodgates opening" (Curt Flood). * 1971 + Year Curt Flood returned to play after his initial lawsuit and was in disgrace. * Early 1980s + Time when Michael Jordan came into the league. * 1980s + Decade when Michael Jackson was active and put out *Thriller*. * Mid-90s + Time when Jay-Z attempted the endorsement deal with Iceberg. * 2008 + Year Dr. Dre walked down the beach with Jimmy Iovine. * 2014 + Year Apple purchased Beats By Dr. Dre. * 2008 + Year Jessica Alba was pregnant with her first child. * Shortly after (after investment) + Timeframe for Skype: $1 million investment in 2009, followed by Microsoft buying the company. ## Examples & Cases * Ashton Kutcher encountering a scene in a crowded Boston restaurant next to Kutcher while Kutcher was running from thirsty young entrepreneurs. * The initial movement of film companies from New York/NJ to Southern California to avoid Edison's patents. * The studio system's structure involving talent (actors) and capital (studio). * James Cagney as an example of a top star earning $400 a week in 1932. * Edward G Robinson's experience of earning $40,000 for a film after threatening to study medicine. * Marilyn Monroe earning a mere $120 a week in the 1950s. * Elizabeth Taylor earning $1 million for Cleopatra in 1963. * Curt Flood's challenge to the reserve clause leading to free agency. * Michael Jordan's Air Jordan deal with Nike, which included a five-year, $2.5 million contract. * Michael Jackson doing an endorsement deal with Pepsi and starting his own shoe line. * Jay-Z going to Iceberg for an endorsement deal in the mid-90s and being laughed out of the room. * Diddy's physical act of placing newspaper through a screen door to save customers. * 50 Cent negotiating for equity in Vitamin Water's endorsement deal, resulting in walking away with over $100 million when Coca-Cola bought the parent company. * Ashton Kutcher using his imminent million Twitter followers to gain meetings with top venture capitalists. * Dr. Dre and Jimmy Iovine encouraging artists to wear Beats headphones in videos, making headphones a fashion statement. * Jessica Alba starting The Honest Company because she could not find chemical-free organic baby products. * LeBron James, Steaks and Beets, and Blaze being mentioned as current investments/ventures of NBA players. * Bono and Richard Branson starting The Rise Fund to invest in companies doing social good. ## Trade-offs & Alternatives * Film industry's options: Staying in NY/NJ and risking patent infringement, or moving to Southern California. * Early Hollywood studio ownership: Becoming an employee vs. owning the means (United Artists). * Career bluff: Appearing as a star making less than a doctor, but using the bluff to secure deals. * Sports career option: Being sold like "piece of property" vs. challenging the reserve clause to become a free agent. * Product competition: Starting with sneakers (like Jordan) vs. starting by creating an entirely new product category (like headphones with Beats). * Initial endorsement payment: Accepting cash vs. negotiating for equity (50 Cent). * Investment focus: Investing in the "sexy" industries vs. focusing on non-sexy, but profitable, companies like HR (Zenefits) or household chores (Handy). * Investment philosophy: Getting rich by exploiting the fame economy vs. investing in businesses doing "good" (The Rise Fund). ## Counterarguments & Caveats * The initial idea of United Artists owning Hollywood failed because owners eventually dropped out, sold stakes, or died. * Curt Flood did not win his initial lawsuit against major league baseball and was blackballed from the game entirely for a year. * The initial venture fund investment of $30 million was gathered from friends, including billionaires like David Geffen and Mark Cuban. * The initial investment in Skype was $1 million in 2009. * The current NBA situation involves owners, not just employees, a change from previous decades. ## Methodology * The speaker draws on historical accounts of the entertainment industry's evolution. * The speaker uses anecdotal evidence, such as meeting Ashton Kutcher in Boston, to illustrate modern trends. * The speaker compares historical models (e.g., early studio system, Jordan's shoe deal) to modern models (e.g., equity deals, social good investing). ## References Cited * *Thriller*: Best-selling album by Michael Jackson. * Air Jordan one shoe: Product 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 should learn "how you two can use those secrets from people like Ashton Kutcher and apply them to your own life." * Jessica Alba's takeaway: If you have an itch, scratch it yourself. * Diddy's takeaway: Nobody's too big for customer service. * Ashton Kutcher's takeaway: Even "sexy people invest in on sexy companies." * Dr. Dre's takeaway: To have incredible success, you must create your own category, not just your own product. * Bono's takeaway: Do well by doing good. * Final advice: Follow these steps to potentially be in a position to receive investment in the future. ## Implications & Consequences * If the modern pattern of wealth creation continues, the focus will shift toward leveraging personal brand and equity stakes. * Failure to adapt to these systems means falling into older, less profitable models (like employees vs. owners). * A successful application of these principles can lead to accumulating significant wealth (e.g., $100 million from 50 Cent, billions from The Honest Company). ## Open Questions * What is the future path for entrepreneurs who do not have the public recognition or access that the examples cited have? ## 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." * "I'm going to tell you about that today and and why me I'm a forbes entertainment editor the media entertainment editor." * "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." * "I think there's no better example of that than Michael Jordan." * "I like to call the three kings of hip-hop especially hip-hop monetization right." * "Hey you can have some free t-shirts if you want that was it so he said I'm gonna go start my own." * "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."