Junky movies, junky start-ups

Waiting in line at Safeway, I noticed the crappy movies near the impulse buy candy: Adam Sandler’s Zohan and Mike Myers’ Love Guru and they got me thinking…. So many junky disposable movies get produced. So many junky disposable start-ups get funded. Where do the similarities end?

Studios are a bit like VCs. They even share similar language, “green lighting” works for both movies and start-ups. They both invest in something risky with the hopes of a big pay day sometime soon. They both construct hand-picked teams to finish or ship. They both exert subtle and not-so-subtle control on the creative direction.

The various tech conferences/showcases like Demo or Techcrunch act like film festivals. There are winners and losers, panel discussions, buzz generation, etc.

Both industries are equally clueless when it comes to predicting success.

Granted, I’ve done nothing but list a few superficial similarities but this idea seems pretty obvious, others surely have written more. This is a tough thing to Google tho—no matter what terms I use I keep getting Marc Andreesen’s Rebuilding Hollywood in Silicon Valley’s image. Not quite the theme.

There is, however, a book called Hollywood Economics: How extreme uncertainty shapes the film industry by Arthur De Vany.

Just how risky is the Movie industry? Is screenwriter William Goldman’s claim that “nobody knows anything” really true? Can a star and a big opening change a movie’s risks and return? Do studio executives really earn their huge paychecks? These and many other questions are answered in Hollywood Economics. The book uses powerful analytical models to uncover the wild uncertainty that shapes the industry. The centerpiece of the analysis is the unpredictable and often chaotic dynamic behavior of motion picture audiences.

It sounds like a fun project to mis-use De Vany’s math by shoehorning start-up industry numbers into his models.

Just to show you can’t extend this analogy too far, here are some places where it breaks:

Scale: everyone is equipped to see a movie. Most start-ups never get bigger than your college graduating class.

Impact: a great movie makes an emotional connection to the viewer. Short of the Pets.com sock puppet I haven’t made an emotional connection with a start-up since.

Success: a movie’s success is measured by the amount of money that trickles in over its lifetime, a start-up’s success is that it goes public, a big chunk all at once.