About Marvel’s worldwide record, its business strategy and lessons for startups
These days most of the entertainment industry is talking about the smashing hit of Marvel’s Avengers Endgame and its 1.2 billion revenue in the opening weekend (also practically everyone in the pop culture talking about the movie). Indeed, most of the industry leaders praised the significance of this achievement comparing it like trying to go to the Moon but actually landing on Mars. Furthermore, the impact of this success is magnified if we consider that this endeavor was started by a company that one time was bankrupt and was looking ways to avoid disappearing but that had a one million dollar idea supported by their management, something that we could find similar to most startups.
A company that in 1996 have to declare itself bankrupt and sold some of its most valuable assets a decade later was pitching the idea to generate the most profitable movie franchise in history
How they manage to build not only the most profitable franchise in movie history but also a culture with a devoted fan base with only one good idea? Well, as always not everything as it seems and even when the idea plays a major role in any endeavor, team execution will always be the key factor combined with timing and even sometimes luck.
Starting is always about THE IDEA
I’m not trying to disprove the validity and value of an idea but the truth is that most of us have had million dollar ideas in our lives and we let them go. Actually, sometimes you only need a little bit of inspiration by watching a physical product, service or an internet post to start thinking you could start a business. Unfortunately, the effort required to build or implement that idea greatly exceeds the one required to conceive it.
Accordingly, the idea to bring comic books to the movie industry has always been there since the 70s with the high success of Superman movie but in the coming decades a lack of planning and a poorly execution has put the concept in doubt. Thus, many bad movies deteriorated the genre and even led Marvel to declare itself bankrupt in 1996. Unfortunately, even the rich content from the comics didn’t help directors and producers to create a plausible movie. Indeed, I just put below the picture of one of the first Captain America movies created by Marvel (quite different than what we have today)
Thus, we can see how difficult it was to translate what it was in one comic book into a movie even when you already count with a great concept, already build histories and content and existing fan base. Similarly, even when nowadays we have new tools to validate ideas (i.e. Kickstarter, Indiegogo, Steve Blank’s list), to build applications (i.e. AWS, Google Cloud) and get customer feedback we still face the challenge to properly create a product or service that the market want to use and pay.
Truth to be told, the reality many times is that the idea for a product/service evolves over time and the best way to conceive it it’s by solving a problem. In this case, Marvel was solving one of the Hollywood’s biggest issues by creating original content that resonates with the audience.
One idea tested in the market give us extremely valuable insights to know in which ways we were right and in which we’re completely wrong. Actually, a first draft of the idea (MVP or prototype) will allow us to reduce risk and save money before building a product based on completely wrong assumptions. Accordingly, Marvel did exactly that to test their concept by creating their first original movie Blade (their minimum viable movie). Thus, after the enormous success of the movie they had enough information to plan something bigger.
Timing is a key factor
Notwithstanding Marvel had a huge success with Blade, there were other movie flops that happened years later like Daredevil, Elektra and the Fantastic Four 😜. Nevertheless, the time was different than from a decade ago because the technology advanced enough to produce visual effects capable to build new realities and immerse audiences in them. Indeed, technology can make the difference between launching a market success like an iPad and a flop like the Newton. Furthermore, I’d like leave a link about a TED talk about the importance of timing for the most successful startups (feel free to watch it whenever you have enough time).
Accordingly all the startups face the same question in any stage of their development Why you? and Why now?. While it’s looking for investors, acceptance in an incubator or in an acceleration program. About what you it’s something that you’ll need to answer based on your knowledge, your professional experience or in your connections. On the other hand, the Why now is often helped by external factors like if everybody is investing in one sector you have a higher probability to receive support. And so, this was the case for Marvel.
Back in 2004 Peter Cuneo, CEO of Marvel said “We have all of these interesting characters and story content that can be turned into films. We are going to have 10 James Bond franchises,”
The Marvel CEO in 2004 was convinced that they have enough content to build a movie franchise. The time was perfect because Hollywood was looking for original content and the comic books presented a good alternative besides the novels and books. Indeed, many movies were launched and the cashflow was perfect given the success of Nolan’s Batman. Actually, you’ll have one last chance to apply everything that you learned for your previous projects.
Build your team and outline a plausible strategy
Sometimes when we’re building a company we look for the best talent out there but we should instead look for the ones that fit the best in our company. We usually think that people will easily adapt in the culture we’ve created for the startup but the truth is sometimes the people is the one that helps to shape the culture. Furthermore, people with good attitude and commitment with our business will be more helpful than super stars that doesn’t really care about building your company (at least at the beginning)
The obvious case here is the selection of Robert Downey Jr. for the role of Iron Man. At that time he wasn’t in the position in the entertainment industry and there were many other awarded actors considered for the position, but as he said recently in an interview he sat his mindset to focus that no one else will be better for that role and that only he will be perfect for it. He not only built Iron Man persona but it set the ground for the entire franchise. Indeed, as many people said, Robert Downey Jr. didn’t fit in Iron Man but Iron Man was build around the personality created by him.
Marvel launched the movie at the right time and it became a hit. It wasn’t a massive success like Batman The Dark Knight but it didn’t matter because it was part of a bigger strategy.
Actually, this is a good time to mention that often a strategy is not a straight forward path, many times you’ll have to go back and forth between conceiving ideas and testing them. Anyway, in Marvel’s case they already got a really good feedback about the way they made movies from a considerable amount of people now was the time to set a strategy.
At this stage is better to look for the best support you can get from management and executives that had previous experience building something similar. Thus, it’s necessary to design a path that it’s going to deliver the vision but at the same time it’s flexible enough to handle changing conditions. This is the time to look for mentors and successful entrepreneurs. In the case of Marvel this support came when it was acquired by Disney in 2009 and Kevin Feige was able to execute Cuneo’s vision plus generate large profits.
In the previous chart it’s possible to see how beautifully Marvel executed its strategy. They started with a project like Iron Man that was based on plausible concepts and then go beyond and launch a fantastic movie like Thor which reality was difficult to relate. Again iterate and learn from the flops and get the best feedback they could. In this case they had opposite extremes and many histories in the middle to launch a new franchise.
What Marvel did with their vision to create the most successful movie franchise in history by setting milestones and test phases of their ideas remembers me to one concept that I read a couple of years ago in Harvard Prof. Clayton M. Christensen’s book How you will measure your life that says that in life you should aim for long, medium and short term goals. Accordingly, long-term goals are big expectations that we want to achieve and many times there are supported by short-term targets that serve us to fulfill with our daily responsibilities.
Finally, make the things happen!
Now is the time to work your a$$ off. As I remember to heard back when I was at MIT (make the sh!T happen). You’ve a long way since conceiving the idea and you have the right to be stubborn. To work hard and fight for your idea.
Sometimes you have the right to be stubborn and pursue your vision if you have enough evidence that what’re looking for is plausible and that there is a market. Because you’ll always find opposition
Also, it’s mandatory to pick the right sponsors and investors for your idea. In many meetings that I had with investors I’ve always heard that most of them prefer the team than the original idea. Actually, the idea may change but the team should be smart enough to adapt. It’s necessary to always pick somebody that trust in the founder vision no matter the short term results or technical difficulties. More than money you’re looking for a partner and a guide.
For Marvel this was a key part and to count with the support from Disney and count with their entire support. Actually, it was funny how I found an article in the Huffpost that now you can call it infamous but at the time it may seem as a possibility, the most interesting excerpt says:
The Thor trailer is pretty terrible, and there’s been no real word on Captain America thus far. Could Paramount have simply seen the writing on the wall and taken the quick cash rather than risk untold millions on the massive question mark that is The Avengers and the sure-to-be complicated Iron Man 3? For the record, my concerns about The Avengers have more to do with the unwieldiness of the project and those at Marvel than it does with Joss Whedon’s capabilities as a filmmaker
With the team and the investors in hand it comes the most difficult part of any startup, make things happen. Now it’s time ti put all the effort and sweat necessary to pursue the vision, to adapt to the changing conditions in the market and overcome to difficulties. At the end of the day the payday comes for most startups in their IPO or acquisition.
And this is what happened to Marvel, now they collect the effort of a decade of hard work, failures and investments.
It has been an incredible 10-year journey and as a fan I wanted to express my gratitude for the company that build a set of compelling histories that shaped a good part of the culture of my generation. Anyway, I’m not pretending to build a recipe to build companies for that I highly recommend you to check Bill Aulet’s Disciplined Entrepreneurship . Neither I’m trying to narrate Marvel’s true history but myself as an entrepreneur wanted to reflect the ways Marvel acted as a startup pitching one idea, adapting to uncertainty and building a sustainable business from one vision.
