You have to choose
Leaders imagine deep impact while running a business on "wide" actions. Margins are consumed. Prospects are confused. You can't be both broad and deep without spending ungodly amounts of usually someone else's money. It's time to decide.
FWD 118: The simple decision to save you money, frustration, and great employees
This will be a short missive this week: The growth choice that every firm has to make as soon as possible. And I'm gonna start in an unexpected place: The business of Hollywood.
I'm a big movie guy. I love going to the movies. Love art films and trash films. Love sitting in the dark in giant rooms our faces lit only by stories crafted by hundreds of specialists who all had to align together to make (when well done from Infinity War to Bridget Jones' Diary to The Brutalist) something impossible to imagine in the mind of one person.
This week I listened to one of my favorite podcasts, The Town, about the business of media and what's going on in the boardrooms of Hollywood. The episode was an interview with a truly off-putting person, the Chief Content Officer at Netflix, Bella Bejaria.
Without dragging you into the nuances of the interview, the podcast surfaced a long-term trend in media - the widening gap between prestige production, often for a very small audience, and a mass market production intended to be consumed by many.
In today's consumer climate, mass-market productions are increasingly banal, bland, and structured to require nearly nothing of their consumers. In the case of Netflix, think of something like last years' holiday film The Carry-On. The film was a huge hit for Netflix (according to their internal completely unverifiable numbers.) It features Jason Bateman literally phoning in a performance and a tense showdown over a suitcase being evaluated by various layers of Transportation Safety Administration while the guy who played Elton John actively narrates the action as he does it. Riveting stuff. But consumed by a broad audience. A good widget for Netflix's broad-spectrum, "do a little bit for everyone but nothing substantive for anyone" business strategy.
By contrast, you have this year's slate of likely Oscar-winning films: The Brutalist, Anora, Nickel Boys, to some degree Emilia Perez, even A Complete Unknown or Conclave. By comparison, these films are built for a very small audience. They artfully assembled (do not read that I liked all of these, I'm just speaking to the intentionality of the work). And, most importantly, are very narrowly distributed. Even with the algorithmic boost and 8-figure marketing campaign from Netflix, how many readers of this newsletter saw Emilia Perez? (🙋🏻♂️ Regrets, I have many.)
We are a million miles away from when middle-market films like The Pelican Brief or Saving Private Ryan would both serve the niche audience of film critics and receive blockbuster-wide viewers.
The broadly accessible are increasingly formulaic, commoditized, and only deployable by firms with enormous distribution (a la Netflix). They all star The Rock.
The carefully made, intentional, and artful are forced to eschew the broad release and must be made and distributed for the narrow and the specific. Beloved by the people they were made for. (The aforementioned The Brutalist for example, a 3hr and 38 min incredible time at the cinema has a whole fanclub of people who stood in line and traveled hours to see it in its intended 70mm film format calling themselves "The Brutalist Boys.")
Broad appeal is a commodity and is a distribution game that eschews quality. It's the only way to get enough scale to make up for a minimal margin.
Deep impact is a niche product and must be built to target a very specific clientele. It's the only way to pick your genius and not burn money.
There used to be a middle ground between these two, in film and the broader American economy. But algorithmic thinking has transformed the playing field and every business now has to choose.
Wide or Deep? Choose.
Every week I meet with organizational leaders who say they want t0 have deep impact. And yet, a cursory analysis of their messaging, their website, their service model, their staffing structure, and their client experience all confirm one overwhelming thing: they haven't done any of the necessary hard things to do deep impact.
They're busy trying to do big firm things on a small firm budget. They're reading dumb and useless industry benchmark studies that take diverse ideas, average them down into themes that only encourage you to chase what you can never catch. They are paying prime dollars for "industry experts" selling back to them "industry norms" which means they are about to implement the thing that will make them the same as everyone else. They're overspending on Google ads, SEO content, Facebook ads, and the like so that they can show their founders all the "great marketing" they are doing. They are trying to compete on an incumbent scale with less resources, less experience, and less reach.
Leaders imagine deep impact while running a business on "wide" actions. Margins are consumed. Prospects are confused. And to bolster outcomes they are leveraging outside capital (losing control), buying leads (introducing systemic risk), and churning talent (undermining brand value and credibility).
All concessions made to avoid clarity.
One basic decision, 0ne we expect and guide every client through: Will you go broad or deep?
If your answer is "ideally both," you are setting yourself up to lose control of your business to outside capital, revenue sources, and market irrelevance. That is the only "both" and it eventually becomes a "neither" as the thing you're building is someday merged into something bigger, blander, and more efficient (code: AI-powered) than what you're building.
If you choose Broad? Awesome. There are really powerful, enterprise tools to get broad fast and not waste time trying to have a big impact.
If you choose Deep? Awesome. You have a built-in competitive advantage once you understand the client best suited for your particularly odd-shaped firm.
Until you make this choice and align accordingly, everything else will be hard, if not impossible.
What will you choose?
P.S. - I know that last year's Oppenheimer was arguably a "both." It is a significant outlier in a two decade-long trend.
P.P.S. - If you're a movie person and have watched this year's slate of award-winning films, I have so many thoughts. What did you love?
P.P.P.S. - I and my team can help you answer this question with a 12-month roadmap of your most essential decisions in 30 days or less. It's the easiest and most important investment you can make this year. Do the thing that other firms in your space call, "the most important decision we made in 2024."
