OK, I will admit that this sounds like a regrettably middle-aged observation. But the billionaires really are getting younger all the time. In the past few days we have learned that, while Facebook’s Mark Zuckerberg had to wait until the grand old age of 23 to make it on to the list of people with 10 digits attached to their net worth, Kylie Jenner has beaten his record. The cosmetics tycoon has just become the world’s youngest ever self-made billionaire at the tender age of just 21.
Across FTSE boardrooms and within the business schools and management consultancies, that will probably be dismissed as completely inconsequential. Jenner looks like a celebrity internet star who will probably be forgotten by next year and her “business” with it. But hold on. That would be a mistake. In truth, the way that fortunes are being made tells you a lot about how the global economy is developing.
So what can businesses learn from Jenner, apart from the fact that it helps to be young, good looking and a half-sister to the Kardashians? In fact, there are three lessons every business can take from her success: make a brand real; partner well to leverage an opportunity at lightning speed; and understand the web inside out.
The global cosmetics industry, worth an estimated $500b (NZ$728b) globally, has always been one where fortunes can be made, and some of its pioneers were also women who redefined the way business works. Florence Nightingale Graham, a Canadian-American entrepreneur, founded the Elizabeth Arden brand in 1909 and it made her one of the richest women in the world. Estée Lauder founded her face cream company in New York in 1946 and was the only woman to make it on to Time magazine’s list of the 20 greatest business geniuses of the 20th century.
The richest woman in the world, with close to $50bn to her name, is Françoise Bettencourt Meyers, whose mother, Lilianne Bettencourt, oversaw the transformation her father’s company, L’Oreal, into the biggest beauty company in the world. We can now add Kylie Jenner to the list of women who have minted a fortune from helping the rest of the sisterhood look good.
For anyone who hasn’t been following her on Instagram, which is probably a lot of us, Kylie is the daughter of the Olympic decathlon winner and transgender icon Caitlyn Jenner and the TV personality Kris Jenner. From her mother’s side of the family, she is the half-sister of the Kardashian sisters, Kourtney, Kim and Khloe. She started appearing in the reality TV show Keeping Up With the Kardashians from the age of 10 and turned that into a massive social media following, and then into her own make-up brand, Kylie Cosmetics. It is that business that has catapulted her into the list of the world’s billionaires.
So far, there is no sign of an in-depth report from McKinsey on the Kylie formula for marketing; Harvard Business School has yet to add it to its list of case studies; and Donald Trump hasn’t yet tweeted anything about making her treasury secretary. It would be easy to dismiss her success as the latest manifestation of a dumbed-down celebrity culture of no lasting impact. But then, it would have been easy to dismiss Zuckerberg as a flash-in-the-pan when he broke on to the billionaires list 11 years ago. In fact, anyone who wants to understand how the global economy is developing should be working out how Jenner has managed to be so successful and what everyone else can learn from her.
First, make a brand real. Most companies spend a fortune cloistered with consultants, advertisers and designers crafting a formula for a product that is then tested to destruction with focus groups until it is honed to perfection. The name, values and history are often imaginary. Frankie & Benny’s, for example, doesn’t come from Twenties New York, but was started in Leicester in 1995. Hollister wasn’t started by John M Hollister in California in 1922 after he travelled through the Dutch East Indies – that was a back story Abercrombie & Fitch created for the brand they launched in 2000.
That kind of marketing works up to a point. But Jenner has turned it upside down. She created the brand – herself, or at least a version of herself for public consumption – and then attached the product to it. It may be shallow, trivial, and slightly self-obsessed. But it is real – and that counts for a lot.
Next, partner well. It can take decades to build up the manufacturing, distribution, finance, and sales and marketing teams that make up billion-dollar companies. Then again, you can just get all that stuff off the shelf, so long as you choose the right people to work with. The company itself has only seven full-time and five part-time employees. That might seem flimsy, but the real value is in the brand, and Jenner has plenty of time to concentrate on that. By partnering with other more established companies, she can be nimble, and move at lightning speed – which is one of the secrets of her turbocharged growth.
Finally, understand the web inside out. It helps to be a celebrity, and star power is increasingly important as a way of building brands. But it is not just that. Jenner understands the 24-hour, seven-days-a-week relentlessness of the web, its hunger for gossip and immediacy, and its fixation on looks and images. Just sending out a few tweets about your product is not going to work. Companies have to create a narrative in real time based on actual people – and if they can, the results can be spectacular.
It remains to be seen what happens to Jenner’s company. It may disappear in a blizzard of divorces and family arguments. Then again, it might be the new Estée Lauder or L’Oreal. What it does tell us is this: in the internet economy, businesses can be built out of nothing in a couple of years. So long as that is true, the billionaires will keep on getting younger – and it won’t be long before Kylie is knocked off her perch.
– Matthew Lynn writes for the Telegraph