≡ Menu
Own the engine

Own the engine

The arrival of spring means the “retirement” part of my semi-retired seasonal working pattern has once again commenced. The sun is shining, the birds are shagging, the flowers in Holland Park look spectacular… and moments after I packed away my heavy winter coat last weekend it inevitably started snowing!

My retirement meant I was home when my son had a few mates around after school. A few weeks ago the year 6 kids learned where they would be attending high school next year, so I asked them if they were happy with where they had ended up?

Gardening

Spring time is here! Image credit: Little Toys TV.

Alarmingly both the head girl and the smartest boy in the year will be attending an also-ran school, from which it is very difficult to make it to university. Such is life when your parents can’t afford to live within the catchment area of a stronger school, and your applications for scholarships were unsuccessful.

The head girl was disappointed, she was clinging to the hope of an in-year transfer to a better school when a waiting list place opens up.

The smart boy didn’t seem troubled at all. I asked him why, and he responded it didn’t matter where he went to school because he was going to become a professional vlogger on youtube.

I raised an eyebrow. Is that even a thing?

The kids assured me it was.

Career of choice for a new generation: vlogging and gaming

They showed me an article reporting vloggers who earned 8 figures in 2017, including a 6-year-old boy!

Next they showed me a report detailing how many views and subscribers the top channels had. In amongst the likes of Ed Sheeran and WWE wrestling were some vloggers with billions of views and tens of millions of subscribers.

Here is the scary bit. All the kids wanted to be vloggers or professional gamers. The head girl wanted to make youtube videos of her gaming, she said you make more money that way.

Apart from the head girl, none of the kids cared about making money. The important thing was the popularity that came from being a celebrity. They felt only famous people got listened to, plus they get given things like cars and clothes for free by sponsors.

None of the kids wanted to be professional sportspeople, actors, doctors, teachers, or business owners. Too much work! Instead they wanted to be Jake Paul, Kurt Hugo Schneider or Mr Stampy Cat.

Better to be famous than rich… WTF?

I challenged them.

Wouldn’t they rather own the engine?

Be the person who owned youtube? You make money off every video that way.

Write the computer game that the gamers play? You make money from every unit sold.

They were shocked at the notion.

Why would anyone want to do that? To be famous you had to be in front of the camera. Nobody cares about the person who owns the computer game!

It is ok” they said, “you are old, and don’t understand how the world works today. Deep times.

Sigh. One of us certainly doesn’t get it. I’m pretty I am right about this.

Challenge the premise

I’ve spent the winter helping a client figure out how to solve a fascinating problem. How do you preserve a long established ten figure revenue stream when a looming regulatory change will make your existing business model illegal overnight?

The easy answer would be to relocate, join the exodus of businesses who are migrating some or all their operations overseas. That certainly remains an option, though not a preferred one. Those in the C-suite enjoy their current lifestyles, their families are comfortably settled in schools, and so on.

It proved to be a brutal and at times attritional few months.

Challenging the client’s premise that the status quo must be maintained was certainly unpopular.

Own the engine

I made much the same argument to the client’s board that I had attempted with the kids.

You could continue to do the obvious thing.

Or

You consider how the market actually works. How information flows. Where the money ultimatley ends up.

Would you rather pay to turn a handle, or own the engine that others pay to use?

This is hardly an original idea, is just an application of the old  “give a person a fish, and you feed them for a meal. Teach a person to fish, and feed them for a lifetime” parable. There are numerous examples of this approach in action, such as  Visa / Mastercard credit card settlements, or IMS Health’s pharmaceutical sales data.

This line of thinking allowed the client to introduce some long overdue innovation to their business model. The existing revenue stream was preserved, so the tricky problem was successfully solved.

In addition, the client is now positioned to grow their business over the next few years. As opposed to their current approach, which was fighting an ultimately doomed battle to jealously defend a shrinking market position.

A couple of those innovations won industry awards last week, which was lovely way to finish my winter working hibernation.

If only 11-year-olds were as easily convinced as C-suite executives!

Next Steps

  • Financial freedom solves many problems, but understanding 11 year olds isn’t one of them.
  • Check out the incredible stop motion video talents of Little Toys TV.
  • If you liked this post then please share it with your friends.
Disclaimer: I may receive a (very) small commission from any purchase you make via links on this website.
{ 8 comments… add one }
  • The Rhino 26 March 2018, 22:51

    Haha – reminds me of this..

    “I’ve come up with a set of rules that describe our reactions to technologies:
    1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.
    2. Anything that’s invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
    3. Anything invented after you’re thirty-five is against the natural order of things.”

    ― Douglas Adams, The Salmon of Doubt

    • Slow Dad 26 March 2018, 23:46

      Lol, very good. Thanks Rhino.

      I did have to ask what “Deep times” meant. Was met with synchronised eye rolling, and a pitying pat on the shoulder.

  • The Rhino 27 March 2018, 09:53

    haha – but do they know what ‘Deep-Thought’ is?

    On owning/inventing youTube I would agree its very lucrative, but the chances of being that person are infinitesimally small.
    On the Internet theres only one high-street. Imagine the whole world only having one high-street, what are the chances you own John-Lewis?
    You’d have better odds on becoming an Olympic gold medalist (another fruitless mission IMHO)
    Therefore the odds on becoming a successful vlogger are orders of magnitude better than the odds of owning the platform those vloggers use.
    Maybe those kids aren’t so misguided after all?

    • Slow Dad 27 March 2018, 11:46

      Rhino, as always you make well a well reasoned argument, and from a statistically speaking perspective you are no doubt correct.

      However having seen these kids making their videos, I can honestly say they are currently positioned firmly at the enthusiastic participant end of the talent spectrum!

      I’m sure the same was once also true of Steven Spielberg, so while I encourage them to explore all avenues, I will also insist on my boy learning some marketable skills should this vlogging endeavour fail to pay the rent.

  • The Rhino 27 March 2018, 12:01

    Maybe you meant owning a little bit of the engine, after someone else has built it? i.e. buy some shares..

    Vlogging does sound a little bit faddish, marketable skills are never going to be a bad thing to have under your belt. Get them trained up!

    • Slow Dad 27 March 2018, 12:14

      Owning shares or being a partner is fine to a point, but given the choice I much prefer owning the whole business.

      As the owner you get to decide where, when and how capital will be deployed. You get to keep any profits. You have to own the decisions, and are accountable for the failures.

      In many way it is refreshingly honest. There is nowhere to hide, nobody to shift the blame onto.

      It isn’t for everyone though, and I do hold a diversified mix of investments to mitigate those occasions when my business decisions prove to be suboptimal.

  • The Accountant 1 April 2018, 22:58

    A former boss described this idea to me with this maxim: “To get rich in a gold rush, sell picks and shovels”.

Leave a Comment