In the next 30 years, all traditional brands are going to die
The end of faceless brands and the evolution of the influencer
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By now, you probably know that Kim Kardashian launched a private equity firm, Skky Partners, which she co-founded with Jay Sammons, a former partner at the investment firm Carlyle Group.
In last week’s All-In podcast, David Friedberg had an interesting take on the future of consumer businesses. He said that every traditional brand will be destroyed in 30 years by influencers who have built audiences through content creation and who are now creating businesses (even Private Equity firms) on top that compete with the traditional incumbents.
According to Friedberg, the most important M&A transaction of 2022 was Penn Entertainment’s (operator of casinos and racetracks) acquisition of Barstool Sports (David Portnoy) because it shows that consumer services businesses need to be content businesses in order to survive. It could be a sign of more to come. According to Friedberg, traditional brands not oriented around authentic and original content creation as their primary differentiating foundation will not survive. Instead, we will see individuals and influencers that create content build and distribute consumer goods and services more efficiently because they have scalable and massive distribution built in. In the future, advertising and marketing will be replaced by content creation which will drive awareness and sales. Essentially, direct distribution and relationship with millions of users at a low cost.
Creating a great product is hard, but distribution is even harder. It’s the #1 challenge in consumer services. B2C works if you either have extraordinary virality to the product or have found a low-cost and scalable distribution channel. B2C success will increasingly depend on having built-in direct distribution and sales.
MrBeast, a YouTuber, launched a chocolate bar that became the #1 chocolate bar in the US. He also opened a burger restaurant, with tens of thousands queueing up in 10 minutes, and setting a world record for most burgers sold in a day by a single restaurant (source). Kylie Jenner, Kim Kardashian, Gwyneth Paltrow and many other mega-influencers have launched billion-dollar businesses fueled by their personal brands. First, they build their brand, then convert it into a distribution funnel and pour services into it. Beyond these mega-influencers, thousands of individuals are becoming brands because of their content, and they are transforming their brands into businesses. These individuals are becoming the trusted source of influence. More so than traditional media and business companies.
We are just at the beginning of the influencer + business combination, and the travel industry seems a natural environment for this combination to succeed. Could we see travel companies doing M&A deals with influencers or giving them significant ownership shares to access their hard-earned distribution power? It seems to make more sense than pouring billions into marketing channels that generate transactions today but don’t necessarily build loyalty and preference. “Travel-as-a-Service” startups like Spotnana, Xeni, Dharma, Plazah, Luxury Travel Hackers, TrovaTrip, Drimer or Tripscout make it easy for small and large influencers (and iconic brands) to build travel services into their brands. They are addressing a potentially large and growing market.