
Justin Bieber, Venture Capitalist - Lednakashim
http://www.forbes.com/global/2012/0604/celebrity-100-12-justin-bieber-investments-venture-capitalist.html
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citricsquid
Justin Bieber blows my mind every time I read about him and I really respect
him (mainly because his life is insane and he somehow hasn't screwed it up
yet) but his success is much more his management and Justin Bieber (the brand)
is a story of how good management can make a success.

Just looking at how the entertainment industry works is fascinating, they can
create such incredible brands in so little time. Take the boy band "One
Direction", every single teenager in the first world has heard of them, they
haven't even existed for 2 years and the hype surrounding them is huge, they
were formed artificially. There's also the boy band "The Wanted" (Bieber's
manager Scooter Braun is their manager too) who were also formed artificially,
they're growing as a brand too and there is huge hype surrounding them.

The entertainment industry appears to the outside to be very simple, most
people think that bands start out and make some music and grow in popularity
organically, but that seems to rarely be the case, SOMEONE put every
successful musician where they are and often it's a very strategic thing.
Entertainment is where the money is.

This is the sort of thing the people that want to "disrupt" the music industry
don't understand, they think that artists not getting 100% of their music
sales is a terrible thing, what they don't seem to understand is there's a
reason the music industry takes a big cut. Justin Bieber would not be making 9
figures a year if he'd sold his music on Bandcamp.

~~~
jcampbell1
Off topic, but the whole notion that tech industries "disrupt" other
industries outside of tech is confused.

If we list tech companies that massively disrupted non-tech industries, you
come up with a list like:

* Napster

* Wikipedia

* Craigslist

* AirBnB

If you list companies that didn't disrupt non-tech industries, and created new
value, you come up with a list like:

* Apple

* Microsoft

* Google

* Facebook

* Oracle

* Dropbox

Based on my naive list of companies, disruption of non-tech industries seems
overrated.

~~~
confluence
_You have to be careful with that list._

You need to look not just at the direct products produced (which may not be
disruptive in the classical sense), but also at the positive externalities
that they effect.

Apple made the computer personal when it was founded (or at least that is my
impression). That didn't disrupt too many people, but think of all the
secondary effects. People could learn to program, people could automate
things, they could reduce their reliance on word typesetters, photocopiers,
radios, television, encyclopedias - the list goes on.

Oracle did kill a lot of big government/company paper waste (not that there
isn't any left :), and stuck it into databases, effectively wiping out an
industry and creating the new data warehousing/analysts that we know of today.

Google makes research/discovery democratic - instead of editorial. It allows
people to directly connect with what they want (information/news/stuff),
disintermediating a lot of advertisting channels at a lower cost
(TV/Radio/Newspapers especially).

Microsoft got "a PC on every desk", think of all the secondary effects of that
(networking/internet/app development/programming tool etc.)

 _You see my point?_

~~~
jcampbell1
I don't see your point. Your reference to "positive externalities" is the same
as what I meant by "new value".

~~~
confluence
> _If we list tech companies that massively disrupted non-tech industries, you
> come up with a list like:_

It should be Fair to say that the popularization of software, hardware and
search has disrupted quite a few industries via secondary effects - which is
what companies on the second list have done (the ones you list as non-
disruptive).

Google has destroyed the newspaper advertising model. Oracle has destroyed the
big corporate/government back offices (not all). Apple destroyed a great many
jobs (via popularization of PCs -> Lotus Notes/App development).

My point is that they are disruptive companies :).

------
enki
A hip kid investing in things he likes probably has a higher hit-miss ratio
than most VCs... :)

~~~
robryan
Especially when he also has a stack of power to influence the fortunes of
investments that he makes.

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tlrobinson
Well, that's a step up from 50 Cent's pump and dump schemes:
[http://www.cbsnews.com/8301-505144_162-36943822/50-cent-
penn...](http://www.cbsnews.com/8301-505144_162-36943822/50-cent-penny-stock-
pump--dump/)

------
pdeuchler
"These deals aren’t equity-for-endorsement trades. Bieber put cash into each
one, and few of the companies have promoted their links to the singer.
Spotify, which is still working to establish itself in the U.S., wouldn’t even
discuss Bieber’s investment."

"Bieber has come a long way in the finance department since I first broached
the subject with him a bit over a year ago. 'I have a business manager,' he
told me at the 2011 Grammys. 'That basically sums up the question.' Today
that’s changed: 'I do calls every week with my business manager and my
lawyer,' he says. 'Each week I’m learning something about my business and what
I need to know for my career.'"

"His eye for technology and trends ultimately determines the go or no-go--and
some of the investments have come through his own contacts--but the guy
actively scouting deals, whether venture capital investments or brand
extensions, has a nickname worthy of a teen idol’s manager: Scott Braun, known
to all as Scooter."

"On the tour Bieber will be showcasing the more grown-up fare of Believe--a
crucial step as he tries to transition from teen idol to adult icon. 'It’s not
really a transition, it’s just opening doors,' he insists. 'I’m trying to make
music that’s a little bit more mature and that can appeal to all ages, and I’m
not trying to lose my younger fans.'"

It sounds like he's essentially paying for glorified advertising and/or making
marketing deals. Hardly "Venture Capital". Looks an awful lot like a puff
piece to me... "teen idol to adult icon"?

~~~
corin_
Given the monetary value of his time you could argue it an investment on its
own, but since he is investing cash I don't see any way this isn't "venture
capital".

~~~
pdeuchler
"all venture capital is private equity"

[http://www.privco.com/knowledge-bank/private-equity-and-
vent...](http://www.privco.com/knowledge-bank/private-equity-and-venture-
capital)

------
DigitalSea
It's a smart move. You're not the darling of the entertainment industry
forever. One day the royalty payments won't be enough to pay the bills, the
next flavour of the month has come along and taken your revenue stream, market
and fans. Justin Bieber is setting himself up for life, venture capitalism is
a good game to get into if you have the cash like Justin to make substantial
investments in big tech startups.

Another high profile celebrity doing smart things with their money is Jessica
Simpson (she hasn't done any venture capital investing... yet but she has
quite a large empire of businesses and investments in the property market).
She buys houses, renovates them and then sells them for a profit, not bad for
someone who is portrayed as an idiot. She has clothing lines, a perfume range
and a whole heap of other pieces of equity.

It always makes me glad to hear celebrities spending their money wisely and at
the same time (even if an investment has been given for an expected return
much like every other investor would expect) people like Justin are helping
the little startup guys get a break and make a difference.

~~~
jonknee
> Justin Bieber is setting himself up for life, venture capitalism is a good
> game to get into if you have the cash like Justin to make substantial
> investments in big tech startups.

Did you miss the part about making $105M in the last 24 months? He's already
set up for many life times.

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iag
It's very smart for these celebrities to build a brand other than what they're
currently doing. Not many singers can be hip for more a few years, and not
many models can look better when they go past 40. It's good for these people
to build a second career later on so if/when they need to switch, the options
are open.

Props to Ashton Kutcher to leading the way for venture investing. Smart move.

~~~
rhizome
Have either of them been the first investor of something that succeeded yet?

~~~
peteretep
Why do they need to have been the first investor?

~~~
rhizome
It would speak to their personal skills, the difference between "Justin
Bieber, Venture Capitalist," and "Justin Bieber(tm), Venture Capitalist."

Frankly, I think stories like this are PR designed to muddy this exact
distinction. Forbes.com is certainly not above that kind of thing.

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MortenK
When talks fall on whether or not there is a bubble, a common argument is that
we shouldn't worry until the cab drivers and waitresses start investing. I
wonder if the argument in 10 years will be that we shouldn't worry about
bubbles, until the pop singers and actors start investing.

------
protomyth
The music's world version of VCs is to own your own label and sign new
artists. One of his was sitting at #1 on iTunes, so he seems to get the
concept.

~~~
Axsuul
Props to Usher as well.

------
maeon3
I want to know if he's going to be held responsible for his
punching/assaulting the cameraman with moves he learned from mike tyson.

If this whole situation of him assaulting a cameraman is just swept under the
rug, with his managers insisting that he never do anything like that again. It
will be an indication that news networks can even be bribed to not report on
criminal behavior. I think it's funny the managers are trying to cover up all
the court proceedings as Justin leaving for a while to do some secret
concerts. Galling. I do hope that he fails in life, show me that this world is
indeed a meritocracy after all, and that fortune can purchase fame and success
for a while. As long as you pay dearly to sustain it.

I wish I had Justin Bieber's Managers propping me up in life, I'd be a world
sensation too if that were so.

~~~
eshvk
1\. Do you actually expect his managers not to try to put a positive spin on
it for the media? A celebrity trial is not exactly in the same league as an
everyday misdemeanor case. He has a brand and he should (just like Dropbox or
Path or whatever) be allowed to defend his brand.

2.

" I do hope that he fails in life, show me that this world is indeed a
meritocracy after all, and that fortune can purchase fame and success for a
while. As long as you pay dearly to sustain it. "

This is incredibly harsh. When you say that you "want" him to fail to show you
that the world is "indeed a meritocracy", you are implicitly assuming that
there is an inherent total ordering in which he comes at the bottom and that
this is all that matters. This is a rather flawed assumption for two reasons
1) I am not even sure you can characterize an accurate objective total
ordering for music 2) Even if you did, just like in the CS tech world where
there are people who are incredibly smart but don't sell their products for a
billion dollars, I would argue that musical ability is not really the only
thing that matters when it comes to financial success. This is even more true
for pop where success is determined by the number of people who enjoy the
artist's music (and apparently from Bieber's financial success, it looks like
there is a huge bunch of people who like his product and wish to buy it.)

"I wish I had Justin Bieber's Managers propping me up in life, I'd be a world
sensation too if that were so."

Remember that he wasn't born with these magical "Managers". He also had to get
his break in the wide world before he gets these magical "Managers".

