Entertainment as Real Estate investments.

During the past 18 months, as we’ve been getting LOOR off the ground, I’ve spoken to hundreds of investors. A lot of them are very successful, some of them were self-made, others were born into it and never knew anything else. Most all of them are looking for a quick exit on their investment.

Quick exits are critical for investment portfolios and venture funds. They are essential in keeping revenue flowing. There is nothing inherently wrong with quick exits. But as I have spoken to these men, especially among the conservative political and faith based spectrum, and they tell me the sort of things they invest in, there seems to be one common demonstrable equation.

The faster the exit, the least cultural impact their investment has. The longer the exit, the more cultural impact an organization has. Think about it in terms of flipping a house, vs revitalizing an entire downtown district. The house is a quick investment. Ideally, no longer than 90 days. The cultural impact of flipping that house will probably bless one or two families. But you only profit from one once the house is sold.

But to revitalize an entire downtown district of a city is probably a minimum 20-year plan. Sure, there are quick exits along the way, selling lots of land to others. But it is all part of the same long-term goal. And what is the impact of that? The downtown district becomes a cultural centerpiece for a community. With restaurants, music, and arts. It’s the gathering point for the community and the place where people meet to create friendships and business partnerships that will create more revenue for the city as a whole.

The same is true with B2B SaaS. You can go for the quick exit, and create a piece of software, sell it to one of the FANG companies (Facebook, Amazon, Netflix and Google) and get a quick return and die and be forgotten. Or you can invest in building a new technology company that has the potential to be a true rival to these organizations. The latter is hard and way more high risk. Chances are it won’t even happen. But empires are not built by cowards.

I’ve spent over a decade being entrenched in some form of Christian or Faith Based media. The last half of that at the highest levels. From running millions of dollars in digital ads for Pure Flix, to building my own streaming service. Most people in the industry are fighting for some sort of cultural relevance, and they are trying to shortcut it. If we just spend enough money, we can get respect. If our budgets are big enough, we can become culturally influential. But the one thing every faith based investor doesn’t understand is that culture building is a long game. As my friend and business partner Jason Farley always says, “You can’t buy a blockbuster.”

Let’s take my favorite example. Saturday Night Live. Here you have a cultural institution that has unquestionably defined the landscape of American comedy for fifty years. Everyone from Bill Murray, Steve Martin, Dan Aykroyd, Belushi, all the way to Will Ferrell, Tina Faye and Colin Jost and Michael Che. And that is just on-screen. Off-screen you have writers such as Conan O’Brien, Bob Odenkirk and Adam McKay. And the many sketches that became new IP such as Wayne’s World or The Blues Brothers.

If you dive into niche cable brands, the one thing that has been the most neglected since the rise of streaming, you see cable behemoths like Discovery, HBO, MTV, Food Network, and Fuel TV starting with hardly any budgets whatsoever. The lack of funding forced them to rely on unconventional ways to create content that would fill a 24/7 time slot. But all these cable networks became their own “Downtown Districts” where each have their own culture, food and music. It took ten years or more, but MTV got an entire generation named after it, The MTV Generation.

Just like real estate, entertainment investing can be seen in much the same way. You can invest in a quick flip, producing a mediocre movie or four or five God’s Not Dead movies (I like to think of those as duplexes) that might make a return in the box office within a year, but will soon be quickly forgotten, and even faster memory holed if it’s a biopic or documentary. Or you can invest in content distribution networks, entire channels and niche pipelines, these are the downtown districts.

Whether you invest in a house, or revitalizing an entire neighborhood, or a movie or an entire entertainment pipeline, the same is true. The amount of culture that an asset produces in both cases is what creates the value for that investment. The more culture that is created, the higher the value of the investment.

A downtown district that doesn’t have a lively nightlife, or restaurant scene eventually becomes an abandoned town. The same is true for your entertainment investment. So the next time you are looking to invest in the next hot movie idea, ask yourself a simple question. What culture will this entertainment property produce? Will the movie lead to children carrying lunch boxes and T-shirts with your IP on it? Will kids scour the Wal-Mart toy aisle looking for the latest action figure? Will adults dress as characters for comic cons, or create fan art and fan fiction because of your property?

It seems as conservatives that these questions are never really asked in any meaningful way. Perhaps it’s because we don’t believe it’s possible, but I would argue that we have been so focused on the quick flip we have not even tried.