Oct 14, 2018
The next Warren Buffet is making videos
Creating great media like videos, music, podcasts, software will make you rich.
As first seen on :
What generates wealth?
The way to get rich is to make money work for you, rather than you working for money.
Auto pilot
The basis of the argument is that you have to have to have multiple sources of income that brings you money even on days you aren’t working. Sources that operate in auto pilot mode. Think of buying a property. Once you buy it, you just sit on it. The value might appreciate over time, and you’d make profits without any intervention. You put in money once to buy the property, that money is now working to get you profits.
When you have self sustaining cash flows, you can utilize your day in creating more sources. This process compounds your income.
Create a money churning machine — put it on auto pilot — repeat.
Until recently the only way to make money in auto pilot mode was to invest it into businesses (stocks, mutual funds) or assets (gold, land).
A special kind of business
If you were making toys, you’d have to procure polymers and mould them into toys. The day your factory shut down, no more toys are produced and your business will stop making money.
There’s one peculiar kind of business that doesn’t follow that rule. It is media. Once a music album is produced, the album can be released to the public and may make money for the rest of time. Music lables still drive a lot of money through music albums by The Beatles. The band no longer exists, but the cash flows do.
Why media?
One to Many
Media could encompass any form of communication that is strictly one-to-many. For example,
- Songs — once recorded, anyone can listen to it
- Videos— once captured, anyone can watch it
- Photos — once clicked, anyone can see it
- Software — once coded, anyone can use it
The criteria of one-to-many exists because it ensures that the marginal costs of distributing digitally are very low. You don’t need to procure polymers to make more people listen to the song — you just need to upload it to iTunes.
Media distribution has become so efficient that the distribution costs is usually zero. Platforms like YouTube even pay users to distribute their videos through their service.
Why now?
We are now at the inflection point where making great media is not necessarily a thing for big production houses.
Music —Entire band’s instruments can be played by a single person on Garage Band
Videos — Anyone with a mobile can record engaging videos
Software — Anyone who can code can write an entire app from back to front. Full stack engineer is a recent job title.
With great software tooling, a single person can now create media that has the potential to create a source of revenue.
Suddenly, anyone who wants to add a revenue stream has the option of creating media instead of making financial investments.
Financial investments makes the rich richer. Media makes the creative richer.
What should I do?
Just start
You should create media. Tweeting is great too. Put your creativity out there. Monetization of the media might not always be straight forward. But, having skin in the game will help you figure that out.
Avoid news
News is a great media business. It is however not the kind of media we are talking about.
Make media that transcends time. Something that always stays relevant. Netflix invests into shows that are not going to die any time soon. That’s why they don’t do live streaming, even though there might be considerable amount of money in that business. Create media that will live a 100 years. People still listen to The Beatles.
Sell
Creating great media is one. Getting it into the hands of people is another. Figure out who would love your content, how to find them and where. Go there and show them what you’ve made.
What’s trending
Media is ever evolving. Dubsmash came and went in a few months. Vines were a thing not very long back. Stories are so in. Websites aren’t so cool any more. And Jazz?
Live on the edge of media. Position yourself to spot the next trend. Make great media, ride the waves to setup cash flows.
