The influencer business model: I believe in it. You should too.
Never heard of it before? No big deal. That’s what I’m here for. Here’s the rundown: get well known social media users who play in the space your brand wants to be in, and have them produce content for you. Simple as that. So let’s say you’re a makeup brand. Maybe you could partner with a YouTube star who does makeup tutorials. See what I’m saying now?
Any brand that isn’t doing well in this space is losing.
But there can be more to this than being on the client side. What if you want to get into the actual business of influencers? I’m talking setting people up with great opportunities and managing them. Cool. Great. I’m all about that right now. Many of you may know my work with my company GrapeStory, where I partner Vine stars with brands. GE was a first mover on that, and they saw huge return on it. You can find the influencer model all over social now, from Pinterest to YouTube. Brands are partnering with the people their consumers are listening to because it WORKS. So it’s no surprise you want to cash in on it.
This is a FASCINATING business to be in right now, but there is a lot to consider. Obviously I have faced challenges in scaling GrapeStory, and I’m here to tell you about it before you get started. You’re welcome.
The challenge with scaling GrapeStory is that we’re essentially a talent agency. The talent gets built up, we build up with them, and then they get too big and they want to go somewhere else. Unlike investment building through technology, you are dealing with the intangible. The model issue for me is client service; it’s just people. You only have the leverage for so long. But don’t let that make you think that we are different from CAA or William Morris. Different areas of the same industry can exist at once, yes? If you’re the best and you’re good at it, absolutely. That’s when you have a real business. Of course, that is clearly the challenge. Being the best only comes with HUSTLE.
Basically what I’m saying is, if you’re trying to build a model where you’re not creating an asset, like technology or a physical product, you’re only vulnerable to your sources. When you’re an accountant, or a lawyer or an agency, you’re only as good as your last billing cycle. THAT’S why those business don’t get the higher multiple. And that’s why people don’t want to do that. They want to build technology.
For me, I love people. I’ve said it before and I’ll say it again and again. I’m always going to have an advantage betting on my competitive strength, because my competitive strength is interacting with PEOPLE. So I like building these businesses. But it’s not for everybody. There is a HUGE vulnerability, so evaluate and take a step back to self reflect before you start. Seriously. Think it over. Are you a people person? Are you ready to deal with the intangible? 🙂
Know somebody about to start something in the influencer world? Do them a favor and pass them this article before they buy that domain name. 😉