Come for the Ride!

At the Gang of 5 meeting yesterday, a few of us entrepreneurs gathered to further discuss the chatter that’s going around the Atlanta startup scene. During the conversation, a number of possible solutions were proposed to get something going and many seem like worthy efforts. (More on that later) However, I was surprised to find a post today by Paul Freet that talked about the Hollywood Startup Model which was also something we touched on during the meeting – did you have a spy on us Paul?

Note: It seems these posts tend to step on peoples’ toes so my disclaimer is that EasyAutoSales is not looking for investment money today but may do so in the next few months. These discussions were sparked by the frustrations felt in the Atlanta early stage startups so please, don’t kill the messenger.

If you haven’t read Paul’s post, go ahead and check it out.  To put it simply, it is a great analogy, it makes perfect sense and I agree with his views completely.

On the flip side, the attraction to Hollywood today isn’t so much on the number of talented producers in the area, but more so that the movie studios (VC investors) make an active investment in the community.

As one of the Go5 members pointed out, while movie and TV studios swing for the fences and aim for two to three blockbusters a year, they also put out tons of crappy movies in the field and help produce hundreds of TV pilots each year that never see the light of day. (Many of these pilots use significant budgets and film few episodes deep!)

Why are the studios willing to make these altruistic investments into ideas that may have little chance of making it big?  My guess is they want to keep the community going, attract new talent into the area and make sure it’s not hard for existing producers and actors to get together and create something. After all, if studios only funded blockbusters like Gone with the Wind, Titanic and The Dark Knight, there’d be extremely long pauses between movie releases and generation gaps where some may not even know what a movie is. (Not to mention everyone who currently works for the studios as prop specialists, camera crew, etc. would be working full time at In-N-Out Burger and would be expense to recruit for movie projects.)

On the consumer front, if people aren’t used to going to the movies as one of their routine weekend options, would these three movies even be as successful as they were?  Most likely not.

The other benefit of the Hollywood Community Model can be seen mimicked in Silicon Valley as well.  The studios invest in the community to help not only the producers (entrepreneurs) see what will be sticky, but they also help the studios (angel or VC community) dip their toes into new types of films and learn what makes certain shows or movies stick.  The reason why Hollywood is successful and why others want to mimic it is because they fail fast and hard and get right back to work after failing and learning.  Every movie or TV pilot that gets pushed out, no matter how great or bad, becomes an educational tool and networking tool for the community. If the idea itself didn’t work, maybe an actor did something great and can be used for a different role. It’s because of these repeated investments that we now know we don’t necessarily like Rob Schnider in a leading role (The Animal), but we love him for secondary roles or one-liners in comedic films. (Someone please ask Adam Sandler how much he spent to figure THAT out.)

Our point is, if every micro investment in the Atlanta area fails in the next 24 months, that’s not to say everything is lost with nothing gained.  If micro investments do exist and are heavily publicized for the Atlanta area, there’s no reason why the early stage startup scene won’t be significantly more mature and more populated in 2 years time. (Along with greater chances of successes.)

Another key feature of the Hollywood community is its ability to spin off of partial wrecks, complete failures and remake what was once successful.  The Ang Lee version of the Hulk sucked.  However, the fact that it was made allowed a new team to come and tweak that franchise and helped boost the comic book movie industry as a whole.  The old King Kong flicks while great for its time, is probably a bit out of date for today’s audiences.  However, the fact it existed allowed for the Peter Jackson remake which I thought was amazing. (My startup EasyAutoSales is essentially retooling something that used to work but is now perceived broken by many of today’s dealers.)

One closing thought for the entrepreneurs… whether your ideas get funded, if your idea or startup fail, consider joining another startup in the area for the sake of learning and forming better teams.  We’ve been told time and time again investors invest in people and if we all refuse to get out of our own sandbox to help others, form better teams and learn something new, then no one will really grow as an entrepreneur.  If everyone fail fast, learn and regroup; it’s only a matter of time before an all star cast will form and be able to throw out crap like Ocean’s 12 and still make a ton of money.