One Hit Wonders: Celebrity Entrepreneurs

In the 1996 film That Thing You Do!, Tom Hanks finds a garage band of (mostly) moody and immature teenagers and promotes their careers to short-lived stardom on the strength of a single hit song. The band calls itself the One-Ders, short for One Hit Wonders, a common industry slang expression for performance careers that crash and burn after a single popular product has faded and the general public has focused on other acts.

Indeed, many one hit business organizations struggle to disengage from their charismatic founders and stand the test of time. Their problem is rooted in the fact that most celebrity business entrepreneurs learn to do one thing extremely well; they then attempt to sell this same product over and over again through as many outlets as possible. Some brand managers call this strategy synergy exploitation; although they often sing its praises, the approach also carries its risks.

The Product is the Lifestyle

Examples abound of celebrity business entrepreneurs who astutely manage their personal lifestyles and then find products that express them. Donald Trump, for instance, has parlayed his personal taste for residential luxury into condominium developments in major cities, condominium developments (again) on golf courses, condominium developments (yet again) with hotel service … and a hit network television show where interns help him create – yep, you guessed it! – new condominium developments around the world.

Martha Stewart has also traveled this career path, turning a television show about do-it-yourself fine cuisine into the lifestyle conglomerate of Martha Stewart Living. Magazines, videos, and branded products as diverse as hand towels and wall paint all help Ms. Stewart sell a single unified image, that of gracious country living in a modern home environment, to her fans and admirers.

And what of Steve Jobs, the co-founder and public face of the technology giant Apple? Few business executives in the history of American commerce have been as closely identified with their enterprises as he. Although Jobs first launched the firm as a desktop computer company, he changed its corporate name from Apple Computer to the more marketing oriented Apple brand moniker at roughly the same time that he created its landmark I’m a Mac / I’m a PC lifestyle advertising campaign.

I’m a Mac? Now that’s a lifestyle campaign slogan! If you’re not yet convinced that Apple is selling a lifestyle instead of a family of products and services, check out Shufflegazine … an online publication that is dedicated to maintaining an Apple lifestyle in (of all places) the United Arab Emirates!

When Bad Things Happen To One-derful Business Strategies

Is this personal branding strategy a wise one? Does it always lead to one-derful results?

The short answer is … it depends. Two weeks ago, Donald Trump’s Atlantic City casino organization filed for bankruptcy a third time. Did it bother The Donald? According to the Associated Press, as reported by the Huffington Post, Trump explained:

“Other than the fact that it has my name on it, which I’m not thrilled about, I have nothing to do with the company.” He acknowledged being sad over the end of a venture that was so publicly and relentlessly associated with his name and image. Yet he said the company “represents substantially less than 1 percent of my net worth, and has for some time.”

In other words, Trump believes that he (and, of course, his firm) have been down this road in the past; he is confident in his ability to manage his way through these problems in the present and future. Martha Stewart is accustomed to managing her publicly discussed personal problems as well; after all, she managed to use a prison sentence to rejuvenate her company and quadruple its stock price.

Apple’s shareholders, though, are far less sanguine about their firm. Last month, the Securities and Exchange Commission announced that it will investigate the manner in which Steve Jobs is disclosing (or failing to disclose) intimate details of his personal illness to the general public. Apparently, investors are so concerned about the reliance of Apple on Jobs as an individual that they continued to demand access to his personal health information at their annual shareholders meeting last week.

So how is an investor supposed to know when a healthy reliance on a celebrity business entrepreneur’s lifestyle image becomes an unhealthy burden on his (her) firm? When, exactly, does a lucky necklace turn into a biblical millstone around one’s neck?

From Image to Icon

Gazing across the history of American commerce, one cannot help but notice and admire certain business celebrities who were able to disengage themselves from their own firms. By proactively establishing their own careers at a subsequent time, they successfully transformed themselves from business spokespersons into icons in the minds of the American public.

Thomas Edison, for instance, emerged from his role as President of the Edison Electric Light Company to become known as the Wizard of Menlo Park. Henry Ford, likewise, transformed himself from the founder of the Ford Motor Company into the father of the socio-economic doctrine of Fordism. The Kennedys and Rockefellers gravitated from finance and energy into national politics, and Bill & Melinda Gates transitioned from software mogul-dom into global philanthropy.

By establishing their original firms in their own images, and then by disengaging from those images and creating new ones, these entrepreneurs effectively distanced themselves from their own corporate offspring. By doing so, they allowed firms like General Electric, Ford, RKO Studios, Exxon, Chase Manhattan Bank, and Microsoft to survive (and generally thrive) in the years and decades after the departures of their founders.

Thus, from an historical perspective, investors in the Trump Organization and Martha Stewart Omnimedia may indeed have some cause for concern. On the other hand, although Apple’s investors may share in this concern, their firm’s willingness to discontinue Jobs’ celebrity keynote addresses at the annual Macworld conferences may presage a prosperous and independent future for the organization.