The power of celebrity is not limited to social circles and red carpet after-party admissions. Many famous celebrities have successfully capitalized on their fame to cofound and grow their own companies to lofty heights.
In the past, celebrity involvement in a venture was limited to stakeholder buy-ins and endorsements.
But a new generation of celebrities has begun to foster their own personal entrepreneurial spirit — and they have inspired and infused the same in Hollywood. Many celebs have put their personal assets and money — not only their fame — into the build-and-scale technology-enabled companies.
Gwyneth Paltrow owns the wildly successful retailer Goop, Gary Vaynerchuk runs his own online media conglomerate, and Beats By Dre has become a household name. Jessica Alba has been able to leverage her fame and industry connections to raise over $70 million in Series C venture funding for her company, The Honest Company.
Shows like Shark Tank, Dragon’s Den, and the ability of startups to advertise for funding, has shown a clear trend — and this trend is about to explode.
Here are just four reasons that highlight the power of celebrity involvement in any startup.
Slated as the number one reason businesses fail, is insufficient cash flow. Genuinely, many startups struggle to acquire the necessary capital they need to fund their business plans and keep them running until the product or service can stand on its own, monetary-making, feet.
Investors look to business leaders they can trust — who have the prowess to produce a viable product — earning the investor a good return in capital. We tend to believe in what and in whom we know — and most people are familiar with celebrities.
Take actress Kate Hudson’s startup which sells fitness products online. While all of these products are high-quality, the idea itself is not unique. Fortunately, Hudson and company were able to raise $85 million in Series D funding, and the company is worth over $1 billion. Hudson has plans to significantly expand Fabeletics to become a global giant.
Celebrity endorsements can also be a powerful tool for crowdfunding online or advertising your startup. Think of the crowdfunding campaign that made Kylie Jenner, who is already rich — much richer. Take expert knowledge and advice — and add an endorsement from a celebrity for your startup. Money is money, and the ability to receive crowdfunding solely for the namesake of a star celebrity will allow you the timeframe in which to build your product or service and make it a workable business.
Investors and customers rely heavily on social proof (i.e., reviews, endorsements, etc.) to decide whether or not they should purchase from a brand. One study purported that consumers have an easier time recalling a product that is endorsed by a celebrity.
Think of Jennifer Anniston’s Smart Water campaign, Kylie Jenner’s (now disastrous) Pepsi campaign, and Britney Spears’ famed Got Milk campaign. Influencer marketing is nothing new, but celebrities bring along their own influence and the influence of others, which is quite rare.
Access to Other Thought Leaders and Influencers
Celebrities and influencers also have access to thought leaders and bloggers in their industry who can give startups some much-needed buzz. Consider the countless interviews Jessica Alba has given and produced on behalf of her company — with small magazines and bloggers to drive traffic to her company’s website.
Celebrities like Kevin Hart have built a technology network through their investment — including backing companies like the talent-booking marketplace Special Guest App — cofounded by comedian/actor Damon Wayans Jr. Showcasing this much requested and needed tech-app, Wayans was able to promote the Special Guest App last year on National TV — during his interview on the Ellen Show.
People want to interview celebrities, and they want to hear from stars. Clients and customers often want to hear from a celebrated individual because celebrities and celeb influencers have gotten to where they are today by doing something. Celebs and celeb influencers have had to work — and we all relate and hold-on to that belief. In the recent past, celebs and celeb influencers have also become much more involved in the products or services they are endorsing — making them doubly appreciated.
A celeb’s entrepreneurial understanding of what is involved in businesses is shown by so many of them entering the tech and business fields with their own well thought out products, services, and business plans. Not only are stars and celebrity influencers opening-up online opportunities — but they’re also leveraging the speaking opportunities at conferences, events and trade shows.
Access an Established Audience
Celebrities carry a certain amount of influence with their audience that encourages brand loyalty and recall. Whether it’s gaining initial traffic to your website or getting some social shares — having celebrity involvement in a startup eliminates much of the footwork required to build a following.
As this trend continues to expand, we see the tech industry and Hollywood becoming much closer — we need each other. Finally, the time has come for the tech industry to be supported by the broader audiences gaining the benefits from their years of work and capital to bring a product or service to market. Hollywood celebrities are feeling the entrepreneurial essence, and these stars and influencer celebrities can, at last, be established in a strong partnership.