Creative Entrepreneurs: The Next Masters of the Universe
For decades financiers of one type or another have been the “Masters of the Universe”. People who, as Bob Dylan once sang, “make the rules, for the wise men and the fools”.
In the 1970’s, with stagflation and oil crises, it was the commodities traders who ruled the roost. As the 1980s kicked in, the forex traders had their day; when Tom Wolfe published Bonfire of the Vanities in 1987, the leading character was a bond trader. From 1995 to 2000, the VCs in Silicon Valley had inherited the formula for turning base metal into gold.
Today the crown is shared by Private Equity (PE) and Hedge Funds. When you see the PE big shots selling shares to the public, you know the PE party is nearing its riotous end. And the Hedge Fund party is getting crowded, with too many lesser talented investors dragging average returns down - to levels similar to buying an index fund (but with massively bigger fees).
So who will be the next 'Masters of the Universe'? For the first time ever, maybe it won’t be another financial asset class. All those assets classes remain and their practitioners will always be wealthy and influential; it's a great time to be in commodities again for example. However, we are at a unique moment in history when power is shifting to creative entrepreneurs.
What are Creative Entrepreneurs?
I was going to just say “entrepreneurs”, but it is broader than that. Creative people - whether they are developers, musicians, actors, scientists, writers or (insert creative type that I have annoyed by omitting) - are the next Masters of the Universe. Entrepreneurs who tap the rise of the creative class will do well, but the trend is a deeper one that makes creative people into entrepreneurs.
This has huge disruptive and destructive implications for big companies which today act as the toll booths, through which creativity has to pass. Hedge Funds that like selling short can take note.
It is of course the Internet that changes everything. Here are the “straws in the wind” that indicate a pretty profound change:
* Radiohead opt to sell all their music online, by-passing the 4 major firms that dominate music sales and even by-passing the “new” toll booths called iTunes and Amazon. They are not the first and won’t be the last music artist to do this.
* Software developers who build an intuitive user interface on a SaaS model don’t need to sell to CIOs to get traction within companies.
* People seeking attention (for themselves, their products and services) no longer need to hire PR firms to get journalists to look at them; as long as they have something worth saying of course.
* In Hollywood, clout has shifted from the studios to actors and directors. Outside Hollywood, the path from YouTube to Sundance (and alternatives) to a growing network of independent cinemas is increasingly well trodden.
* For authors, yet another publisher rejection letter is less depressing when you can self-publish using Lulu.
* For entrepreneurs the VC round is no longer mandatory; with much lower start-up costs, lots of 'pay as you go' infrastructure, increasingly active angels and, yes, Hedgies willing to jump in with creative financing when you need to scale. See Fred Wilson's recent post and Alex Iskold's follow-up for more on this trend.
Conclusion: Power Shifting to Creative People
I don’t mean to underplay the very real barriers that still remain and the power still wielded by incumbents. This is a big transformation and one that won’t happen quickly.
A big reason that power is shifting to creative people is the reduction in inter-company friction. You can outsource pretty much everything, other than creativity. More importantly, you can use multiple smaller, specialist vendors on something close to a level playing field relationship - rather than being dependent on one big company that does everything to get you to market. When you add in millions of new knowledge workers from what we used to call the emerging markets, you have a formula that keeps the prices down and terms for these services quite reasonable.
Photo by Thomas Hawk
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No question, it's a wonderful time to be a creative -- a genuine seller's market, at least for determined, resourceful talent. But if I'm reading right you're equating greater power to get your vision out there in front of people, to make a living (even a really lavish living) from one's talents with the power of the "master of the universe" -- the power of the super-rich, the billionaire financiers and those nearly at that level. If so, that doesn't make sense to me. There's world of difference between serious capital and the greater ability creatives now have to write their own ticket. I'll settle for the nice, modest title of "master of my domain." (Yes, self-mocking pop culture reference intended.)
Posted by: Ian Wilker | October 5, 2007 6:37 AM
This is a great article and outlines our approach for EnomalyLabs very well. You may want to check out http://www.enomalylabs.com
Posted by: Reuven Cohen, Founder EnomalyLabs | October 5, 2007 7:09 AM
You are definitely right about this. I think the money follows the most creative people in their niche. For example, only the best bloggers make big bucks.
Posted by: KCLau | October 5, 2007 7:18 AM
Ian, think about the creative superstars in music and film and the money they get. Sure not every creative guy makes it big and that is true in the financial world too. There is always a power law. I am just saying there is a power shift from capital to creativity.
Posted by: bernard lunn | October 5, 2007 8:58 AM
This is an important (and terrific article.)
In each industry, the creative people typically worked through the media companies that financed, distributed, and marketed their services. As a necessity, fewer creative ideas reached the public directly, and the media companies--of necessity--were a filter for what could, and could not, be created.
It seems to me there is, however, one important block to bringing creative ideas to market: the need to overcome the extreme "noise" as a thousand creative ideas compete for attention.
Recently, we launched a creative new service of the type you are describing: Search Free Apps (www.SearchFreeApps.com). In essence, this is a search engine that finds the valuable applications, across the spectrum of activities, that are available free on the Web. All of the services in the database have been hand-picked, so we can ensure a high qaulity level in the results.
Our new service was fortunate enough to attract the attention of the "Wall Street Journal" and your own Alt Search Engines (http://altsearchengines.com/2007/09/28/a-search-engine-for-free-applications/) . This type of coverage helps to kick-start positive momentum and buzz about usage.
But, I can't stress enough that although it's a great time to be a creative person---that's not enough. You also have to be able to master marketing in this ever evolving environment. There is now so much noise that even great creative services can get lost.
Once again, congratulations on a terrific post.
Bruce Judson
Founder, Search Free Apps
www.SearchFreeApps.com
Posted by: Bruce Judson | October 5, 2007 1:15 PM
Great article!
I think that growth of entrepreneurship and how the web has allowed creative people to take control of their own destinies is going to become an increasingly important part of business in the future.
More of my thoughts on the topic here:
http://knightnewschallenge.wordpress.com/2007/10/05/become-the-master-of-your-own-universe-get-creative/
Posted by: Jacqueline | October 5, 2007 6:26 PM
Please can you stop all this semi-spam comments. People who write comments to self-advertise e.g phenom, bruce, cohen above, make the comments less useful.
The comments section should not be a place to market products or websites; they buy ad spaces if they want to do that.
Please RRW do something about this.
Posted by: frank | October 6, 2007 12:00 AM
Frank, you make a good point. My usual rule of thumb is to let a comment stand if it's relevant and not directly spam. But it's a thin line all right... I'll monitor it.
Posted by: Richard MacManus | October 6, 2007 1:00 AM
Thanks for this intriguing post. Prosperity and available technology are catching up to the human heart's desire to soar. It's a great century to be creative.
Posted by: Leslie Carbone | October 6, 2007 4:19 AM
Isn't this exactly the point that many big magazines such as BusinessWeek (with a cover story of an entire edition in 2006) and Fast Company have been making? At least give some credit to the sources of your 'original' ideas. Geez.
And as for my take, there is NOTHING NEW in creative people being rewarded. By creative, let's clarify that we do not mean the red-haired ear-pierced "designer types" toting their macbook pro, but people with clever ideas. You got a good idea and are creative enough to carve a market and some funding for it? Sure, you'll likely succeed. How is this a novel new thing that this generation has sussed out? Wake up.
Posted by: Phoenix | October 6, 2007 8:24 AM
Great article! I just visited FOWA conference and there was a lot of buzz around "utility computing" - outsource everything and only focus on what you do best.
In fact, you can even outsource creativity... OpenAd.net does just that, but it seems to more useful for red-haired ear-pierced "designer types" as Phoenix described them :)
Posted by: besso | October 7, 2007 5:34 AM