The 4 Types of Media Entrepreneurship
Traditionally, when we think of entrepreneurs we think of Steve Jobs starting Apple in a Garage, or Jeff Bezos Traveling across the country to raise funds while writing his business plan in the back seat of the car while his wife drove. However, there’s more to entrepreneurship than that. Entrepreneurs find new and novel solutions to problems by building organizations despite a huge amount of risk and uncertainty.
Since this month is Entrepreneurship Month on both this blog and the blog I run over at ProductionNext, I thought I’d start out the month with a little of an expansion of Film Entrepreneurship in general. In this post, I’ll adapt a rather notable post by Steve Blank from a decade ago to the current landscape media entrepreneurs face, as well as where you’ll most likely find those entrepreneurs.
In his post, Steve outlines that there are 4 types of entrepreneurial organizations which are generally accepted as follows small businesses, scalable startups, large companies, and social entrepreneurs. You can (and maybe should) read Steve’s post before reading this one. (it’s short)
If you still don’t agree that filmmakers are entrepreneurs, I recommend you read more of my writing on that topic, in particular this blog and this blog. While I could expand these into how other film industry stakeholders like sales agents, distributors, press, critics, or YouTubers, in the interest of keeping the scope completely addressable I’ll be working with a more traditional indie film archetype.
Small Business Entrepreneurship Exemplified by Truly Indie Filmmakers.
According to Banks, these are the entrepreneurs who run a small businesses like a bodega or mom-and-pop shops. They have no intention of nationwide franchises, but they still do what they can to make a living for themselves and their family. This is where the vast majority of filmmakers are. They’re the people wanting to do what they love and find a way to get paid for it.
The owner of the bodega must figure out who buys what from them, and the way they stay afloat is through personalized service that creates a deep connection with their customers. Convenience also plays a factor. They can’t compete on price alone with the huge multinational chains down the street, so they need to make sure that they offer something that the mega-chain down the road doesn’t.
In this day and age, the job is similar for indie filmmakers. We can’t compete with the major studios, but those studios don’t target a small niche, they target everyone who has 12 dollars. As a result, they miss a lot of people which leaves a hole open for clever filmmakers to establish an audience, keep them engaged, and build a business for themselves.
Scalable Startup Entrepreneurship: Best Exemplified by Indie Filmmakers on the Traditional Studio Path.
Scalable startup Entrepreneurs are people like Steve Jobs, Mark Zuckerberg, Bill Gates, or Jeff Bezos. They start a company from (next to) nothing, and then look to do more than address an existing need, they want to disrupt the entire system by creating a need and then filling it. In doing so, they become mega-wealthy and change the world.
Those starting a scalable startup are faced with an incredibly high degree of uncertainty, as well as a long road to profitability. In general, they need significant outside funding in order to succeed. Most of the time, they must invent something that can be patented that demonstrates a novel solution to a widespread problem with a working prototype in order to raise significant funding from institutional investors. After that, they’ll need to take on an experienced team and specialized advisors in or If they have a track record in their industry, it helps significantly.
For filmmakers, these scalable entrepreneurs are those who have already made a successful project or two and are scaling up to make something bigger. They’ll need to have proven themselves by getting validation either in the form of a huge engaged audience, a hugely successful film, or a Tier 1 festival win just to get their foot in the door. Once their foot is in the door, they can then seek to raise money using their previous work or a concept trailer to raise the funds to make a much bigger movie. In order to successfully raise those funds, they’ll need a strong package of people with specialized skills and followings of their own.
Large Company Entrepreneurship: Best Exemplified by Digital Divisions of major studios & networks.
Large company entrepreneurs are people within large organizations seeking to either create new projects that solve a need that has not yet been addressed by the company that they’re working for. Sometimes this is achieved by creating a new division, other times it's a new product from an existing research and development division.
A couple of examples of this would be when Intuit started what would become Quickbooks, as well as many other similar projects like Quickbooks pay, expense tracking, and what would become the among many others. For the Film Industry, I’d say the most notable recent example would be Disney+, although the digital divisions of every major network would also qualify. Adult Swim starts new experimental projects like this on a regular basis.
The challenges faced by large company entrepreneurs outside the film industry are as you would expect. With a large company comes bureaucracy, bureaucracy tends to move slowly, so adapting to change can be extremely difficult. Funding also becomes highly political, so it can be difficult to keep projects afloat.
For film companies, this is extremely similar. Much of the top brass don’t want to give up the cash cows they’ve build for risky divisions that will burn through cash and not necessarily make more of it. Also, at least until recently many of the digital divisions were considered a career downgrade from the more traditional media divisions. We’ll see if it remains true.
Social Entrepreneurship: best Exemplified by Documentary Filmmakers.
Social entrepreneurs who care more about the benefit of the work than the bottom line. They don’t just want to change the world, they want to save it. Think of Tesla, OSIGroup (Makers of the Impossible Burger) or Jinko Solar. Similarly but on a smaller scale, there’s BiosUrns (makers of a biodegradable clay urn that grows a tree from your ashes.)
Success on this front is hindered due to the perception that it’s not much of a money maker. It can be harder to find investors as well since you’re specifically saying profit isn’t your primary concern. Most successful companies started with one idea that they could refine and execute before moving to other ideas that complement the same customer base. They also are very conscientious about stating that their product does more than they provide whatever it is you bought. There are other intangible benefits associated with the purpose that customers may consider weighing in their purchase decision.
For film, this is best exemplified by documentaries, but more recently diverse media has also been put into the spotlight in as a similar cause for social change. Documentaries are different when it comes to funding, but when they’re well done there is an addressable audience that’s hard to ignore and easy to convert. Some movies do tree-planting campaigns with ticket sales as an additional incentive to convert, and most community screenings also benefit a non-profit organization.
Thanks so much for reading! Let me know what you think of this in the comments, and PLEASE share It helps more than you’d think.
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