We are arriving at the ten year anniversary of the financial meltdown later this Summer. At the time and for several years after, we heard of how hard things were for luxury businesses, especially creative businesses. Clients just did not want to spend money on events, design, art, etc. and creative businesses had to cut their fees or face bankruptcy. Something like that — you fill in your own doom and gloom story.
Except history tells a different story.
Let us just take one example, LVMH — owner of Louis Vuitton, Gucci, Moet Champagne, etc. — arguably the premier ultra luxury brand in the world. Should have cratered in the five years after the meltdown right? Not so fast. Have a look at the numbers. Revenue actually grew faster than any other period in company history, profits too. Why? Because, while there were, in fact, devastating losses and a global crisis, not all was lost by those who had so much to begin with. And those with the means invest in those things that matter to them will find a way to do just that. For those of you think that LVMH products are not substantial enough to compare to a home or a wedding. Fine. Then cars like Bentleys should plummet in a crisis. In 2009, you would be right but then wealthy people remembered that they can still buy what they love and sales started to explode in 2010 and they have not looked back.
Here is the lesson history is trying to teach you — you are not your clients. While you may have in fact suffered terribly (and possibly permanently) from 2008, your luxury clients clearly did not. Even if they did, their suffering did not persist as yours did. LVMH and Bentley show that while you were feeling the pain of 2008 in 2010, your high luxury clients were not.
Second, as you were worried about the financial crisis, the mobile age was dawning with the iPhone in 2008. By 2010, creative businesses were talking about how they could not recover from the crisis while all things digital was upending the world we all knew. Yes, your luxury clients were starting to search everything you told them literally seconds after you told them. The value of your idea plummeted if its delivery was not impactful. But it was the crisis don’t you know.
I am, not for a second, refusing to acknowledge the short-term pain so many creative businesses felt in 2008-2009. The pain was severe and highly traumatic. However, for too many it was also the crutch that justified apathy in the face of opportunity. It is one thing to weather the storm, it another thing to build a better boat. For those of you who were around then, think about where you would be if you had invested in all things digital, worked harder to understand what your clients actually needed, what they really wanted to pay for your art to do for them. In other words, what really mattered.
Even though it may not feel the same, the chaos of our world today has created a distraction to opportunity leaping at us. I would venture to say that ninety-five percent of teenagers today know more about virtual reality than any creative business owner out there. Make no mistake, virtual reality is going to upend almost every creative industry in the next five years. You can say your work is too simple, straightforward, understated, etc. to justify learning about virtual reality right up until you get run over by that very same teenager five years from now.
We hear all the time about how anybody can call themselves a wedding planner, interior designer, graphic designer, you name it. Some are screaming for professional standards. Sure, why not? But far more important, how about we acknowledge that we are not talking about the same thing unless that newbie looks like you and your creative business.
And that is the thing. While everyone is complaining about the competition and how it hurts all creative businesses, the reality is that the world is changing under your feet once again. You see the problem that requires a new solution. I see a waste of time. Go find a new problem to solve. Here’s one for you to chew on:
What does custom mean today? Is it in the plan? The ability to distribute it? To say you had it first? How micro can it go? Will there be a day when almost anything can be created custom for your clients or even just for your creative business? Like sneakers?
Of course, you can ignore the challenge and worry about how the used car salesperson of a creative business is out to eat your lunch. Your choice. My hope is that you will not give into the perception of solutions to fading problems, and instead get to work on creating new problems with even better solutions.
Your turn, what are some new problems you can dream about?
