Schumpeter: Creative capitalism

Hollywood is a land of retakes. Everyone understands that constant revisions improve the product. In a recent book, “Creativity, Inc.”, Ed Catmull, the founder of Pixar and president of Disney Animation, argues that every film starts out as an “ugly baby”, growing through countless changes into a graceful adult. “Up”, Pixar’s hit film from 2009 about a widower who travels around the world with the help of balloons, began with a completely different premise. It was reworked drastically on the advice of the “Braintrust”, an internal group set up to give frank feedback. Mobile-app firms can also be adept at adjusting products in response to internal and external feedback, and makers of consumer goods are learning to tweak their products and packaging in response to reviews. But in many businesses, bosses still tend to spurn constructive criticism.

Like Hollywood, California’s other world-beating industrial cluster, Silicon Valley, has overcome the fear of failure. Films are like tech startups in that flops are tolerated because they are so common, even when the initial idea seemed promising. In both cases, the value of failure as a learning experience is well understood.

So in this part of American life, there are second, and third, acts. Studio heads sometimes roll when a film flops, but executives, directors and other talent can find redemption.Perhaps Hollywood’s most remarkable skill is in launching brands that achieve global prominence in a matter of 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. Studios spend vast sums on promotional campaigns, often as much as they spend on producing the film itself. Businesses that are sceptical about the value of marketing, and about the possibilities for creating consumer awareness rapidly, should look closely at how Hollywood manages to come up with new brands on a near-weekly basis. The key is to treat the marketing as a core part of the project, rather than as an afterthought.

vía Schumpeter: Creative capitalism | The Economist.

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