Photo credit: Jerry Yu

Horror Movies + Wayne Gretzky = Innovation

One of the best approaches for creating new products and experiences

You’ve probably never heard of movie producer Jason Blum. However, you’ve likely seen or heard of at least one of his movies. And if you haven’t, you won’t forget him after this because his production company is blowing up Hollywood’s way of thinking. Jason has been pioneering a new business model for making films for the better part of the past decade.

The typical method of creating films is a lot like the corporate way of creating new products or services; on the outside some of the best brands and companies seem to know what they are doing, but once you take a look under the hood, it’s a bit chaotic and lacking in direction.

Essentially, they are betting all their chips every time they show their cards. Like Hollywood, most companies are trying to find the next blockbuster — and not the Blockbuster that Netflix picked off.

There are scripts and movie pitches bought and sold every day in the film and TV industry. Some deals get partial traction and die. Others get produced and created only find that no one is interested and go direct-to-streaming. In the worst cases, they end up never released.

Similarly, in corporate America there is a lot of money spent on new ideas and business models that never see the light outside of a dingy cubicle farm. Or they are released to find that they spent the entire budget on the completely wrong thing.

The Blumhouse Method

What makes Jason Blum’s method better? It seems he has taken a page or two from the notebooks of innovation, design and startup methods and brought it to film production.

Jason has set up his own rules of how he creates movies and rigorously follows them: 1) Set a lean budget, 2) Limit speaking parts, special effects, locations (see #3), 3) Never go over budget.

While the typical Hollywood film budget is astronomical, Jason sets budgets that rival the catering cost alone for a typical movie. And he never budges. How much? Around $4–5 Million!

So for the price of feeding a cast and crew Blumhouse Pictures makes a full movie, that’s ready to release — and ready to make the money back, with hopefully a lot more.

Jason is taking ROI to the next level. His “cheap” films rank amongst the most 20 profitable films released in the last 5 years. For example, his latest production “Get Out” was made for $4.5 Million and has grossed over $184 Million since it’s release in February 2017!

So what’s the secret here? Jason builds a pipeline of diverse films based on his criteria — essentially, figuring out if he can tell that great story at a lower price and in less time. He also treats every film as an experiment and (most importantly) expects about half of what he releases over a year to fail. Yes, failure is an expectation.

Like most companies (and people), Hollywood is afraid of failure. It only takes one bad movie to ruin a promising career. But Jason only needs a few “Get Out” level movies a year to pay for his 4–5 complete and utter failures. Do the math. It works out in his favor.

Jason understands that it takes a lot of misses to get your hits on target. And even when his movies end up performing just s0-so he turns a profit. By finding great stories and creating his minimum viable movie (the MVP versions of the story), he’s able to still deliver big entertainment value.

Take Multiple Shots On Goal

In building innovation the name for this method is called: Taking Multiple Shots On Goal. It takes many smaller, quick experiments to get to the creative, successful solutions. Jeff DeGraff tells the story of sports legend Wayne Gretzky:

Retired center Wayne Gretzky is still referred to as the Great One because he holds the record for the most goals scored and assisted in the history of the National Hockey League. In the frozen North Country his legacy of splitting defenses with spectacular serpentine maneuvers and the individual and team victories that followed him endures as the watermark of excellence on skates or otherwise.
What is often overlooked is that Gretzky also ranks near the top of the list for total shots on goal taken. That is attempts to score that did not result in a goal. Gretzky followed a simple formula — the more shots on goal the greater the probability of scoring. We find this same swing and miss approach in peers from other sports like footballer Pelé or baseball’s Henry Aaron both among the most celebrated athletes of their age.

It’s simple, but powerful: taking a lot of inexpensive, diverse shots increases your chances of hitting your goal. It’s about acceleration of failure, rather than the avoidance of it. It falls in line with the Law of Probability and also very similar to The Lean Startup’s Build-Measure-Learn cycle of always testing and learning to find out what works and what doesn’t, then making adjustments.

Setting up a pipeline of concepts with the expectation that a good number of them will fail is the key. Stay within your constraints, launch as many variations as you can, and the numbers will yield something great.

There’s a story about a ceramics teacher who had half the students in his class focus on quantity, making as many clay pots as possible. They would be graded on the weight of pots. The other half of students would focus on quality, working on only one all semester. They would be graded on the perfection of the pot.

Which ones came up with the best vase in the end? The quantity group. Sure, the first few were horrendous, but they learned from their failed pots and got better over time, discovering how to create a high-quality piece of work. The quality group ended up in an endless cycle of debates having nothing to show but theories and wet clay.

There is a lot we can learn about design, innovation and creating new business models from Blumhouse Pictures; seeing the power of taking multiple shots on goal in action and the success that follows.

I’m Director, Innovation & Experience Design, for IndigoLabs. We’re an innovation design consultancy. Learn more at IndigoLabs.