Why celebrity businesses are often a failure
While there are many successful examples, some brands might be mundane fairly
Art by @RESLUS
Starting a business is always a risk, but how big that risk is depends on how much you have to lose. Celebrities, unless they are in truly dire straits, usually do not have everything on the line when they open a bar, restaurant, or clothing line.
Yet there is a peculiarity often associated with any public personality who turns entrepreneurial — their tendency to flop. Not all celebrity-driven businesses fail, mind you. There are plenty of successful examples like Dan Akroyd and his Crystal Head vodka, Sean “P Diddy” Combs has a finger in many financial pies, there’s Gwyneth Paltrow’s GOOP, and multiple famous figures have well-known cosmetics brands. But for every success story, there are countless abject failures. Why exactly is that?
First and foremost, celebrities are already ultra-rich. To them the cost of starting a business is a smaller gamble compared to the general public. Celebrities have plenty of cash to play around with while suffering minimal consequences. A business going bust for them would be equivalent to an average person losing 20 to 50 dollars in a bet — bad luck but nothing to declare bankruptcy over.
Connected to that is the fact celebrities simply do not always know what they are doing to begin with. On paper, or in the playground that is the human imagination, anything seems possible. That is until the time comes to act.
It also doesn’t help that the ultra-rich tend to be out of touch with regular people’s wants and needs thanks to their high incomes and decreased instances of socialization. When your social circle is small and you are stratified in an isolated social class, then, shockingly enough, your ability to gauge what is and is not in the public interest becomes compromised.
If you can’t figure out what people actually desire, then whatever you might have to sell will not be appealing, whether it be because there is no real demand, it was improperly marketed incongruent with trends, and/or paired with too-high of a price tag.
On the business side of the fiascos, if a star is aware of their ignorance, then they will leave the nitty-gritty to advisors and board members who ought to know better while they focus on promotion.
However, this is not always the case. Quite a few of these celeb-backed businesses have been hamstrung by legal and financial troubles before crashing and burning. The business world is one big shark tank and there are plenty of sharks swimming about.
The star may also have installed those who cannot say “no” into the business and decision making grounds. Thus, when a famous person makes a bad decision, everybody, from the boardroom to the ground floor, has no choice but to swallow the bitter pill. Either way, the business will not be in the long run for this world.
To make it all worse is the spotlight. When a business scheme fails it will make its rounds in the tabloid and gossip circuits as well as the financial news, making it seem as if well-known personalities are particularly bad at managing brands. The same principle applies when big-names break-up, divorce, feud, or run into the law.
With all this in mind, our insight into what goes on in the world of celebrity brand expansion becomes clearer. Those who provide us entertainment are not always capable of offering us goods and services. Whether it be a them-problem or misplaced trust, be a diligent consumer and remember, caveat emptor! Let the buyer beware!
