5 Things Entrepreneurs Can Learn from Hollywood

One of Hollywood’s productions with global appeal is its business model itself. It is based on freelancing: A team of freelancers is gathered to work on a short-­term project. Once the project is delivered, their cooperation ends. This on-demand work format has become an alternative to the corporate business model, based on long-term employment contracts. A shift towards the Hollywood model has already started: Project-based work is quite common in product development (e.g. apps, cosmetics) and enterprise establishment (e.g. restaurants). Also, more attention is being paid to the internal work practices with the aim of implementing them in other industries. Here are 5 things entrepreneurs can learn from Hollywood:

Read 5 Marketing Lessons from Hollywood.

1.  Marketing should be at the top of your project agenda. One of Hollywood’s most striking features is the ability to launch brands which become easily recognizable worldwide within a few days. “Each film is a separate product that needs its own marketing, and the stakes are incredibly high: if it has not gained sufficient momentum by its opening weekend, it may sink without trace,” explains The Economist. Because of stiff competition, film studios need to allocate a significant part of their budgets for creating distinctive and appealing brands. In many cases, the total cost of a promotional campaign is as high as the production cost itself. However, such an investment pays off if a film appeals to a large audience. The Hollywood case shows that other industries should not underestimate the importance of marketing. Film marketing techniques are a good point of reference for developing a marketing strategy which would quickly create consumer awareness with purchase intention.

2. Try out Hollywood’s proven innovation practices. Pixar Animation Studios and RealD Inc. would not have been able to develop such advanced 3D projection systems without incorporating employee creativity into their business models. If an employee has come up with an interesting idea, they are given enough freedom to test it. In some cases, they even have full creative control over their project. Hollywood is also open to different kinds of creative ideas regardless of where they come from. Anyone – even a newcomer or industry outsider – can pitch their ideas. “If a project gets greenlit, it’s just, ‘Let’s do it,’” says Scott Kirsner, author of Inventing The Movies: Hollywood’s Epic Battle Between Innovation And The Status Quo. In addition, film studios are willing to partner up with each other to implement too risky projects. Such partnerships help spread the risk. “Titanic was co-produced by Fox and Paramount. They were scared the movie was going to be a failure, so they managed the risk,” explains Larry Gerbrandt, an independent entertainment analyst. 

3. Describe your product in a short but evocative phrase. With the growing importance of social media and messaging apps in marketing, it is only a matter of time when to-the-point communications will become a standard. Sales messages will need to be short – 5 to 7 words long – but evocative. For example, film producer David Rotman managed to sell the idea of the film Cliffhanger with the phrase “Die Hard on a mountain”. The reference to the film Die Hard  helped him communicate what his next project would be about in a clear and appealing way. 

4.Make small bets with big risks,” advises John Landgraf, President of FX Network, which specializes in cable television entertainment. He offered creatives full creative control over their projects but tight budgets. His small bets brought TV hits like Archer, Sons of Anarchy and The Americans. His idea can also be applied to other industries. For example, you can try to solve a company problem on your days off. It is a cost-effective way to test new solutions. If you come up with a good solution, it can have a profound impact on your career. If you do not succeed, at least you will better understand the issue. You might also get some ideas of how to proceed with it further. 

5. Plan long-term but keep upgrading your plan. Hollywood is one of the most turbulent industries: there is a constant change of production circumstances with sharp focus on finances and deadlines at the same time. For this reason, each project requires a lot of careful planning. No matter how good a plan seems to be, there is always something to improve. In many cases, the final product differs a lot from the initial idea. One of the techniques filmmakers base their creative decisions on is multi-angle shooting: There are several cameras set to capture scenes from multiple angles. During film editing, each scene can be seen from various perspectives in real time. After a careful revision, the best shots are assembled together. This multi-angle technique can also benefit other entrepreneurs. If they decide to use advanced analytics technologies to see all their business operations from different perspectives – from ‘the macro level of the enterprise’ to the ‘close-up on sales’ – they will be able to make better-informed decisions and improve their overall performance.

References:  [1] Adam Davidson, The New York Times / [2] The Economist / [3] Mara Gay, The Financialist / [4] Geoffrey James, Inc. / [5] Christopher Ming, The Muse / [6] Ian Stone, freshbusinessthinking.com