Influencers

You've probably heard of brands like Proper No. Twelve Irish Whiskey , SKIMS , Feastables , IPSY , Kylie Cosmetics, LLC , and PRIME. You may also have heard that these businesses do $1B, $275M, $20M, $500M, $375M, and $1.2B in annual revenue respectively. These companies have been created and achieved ascendent growth at mind-boggling rates. Do you know the one thing that these all have in common? They all generate their traffic via online personalities, via influencers.

In the world of modern entrepreneurship, the emergent synergy between influencers and business is not just a trend, but I see it as a transformation in how new companies are conceived, grown, and integrated into the daily lives of consumers.

To understand this shift, you gotta first consider the traditional model of building a business. Historically, you start a bidness and develop a product or service. You then use various marketing strategies to promote it, right? These could range from print advertising to TV commercials to even sponsoring Formula 1 liveries, depending on the era.

Back in the day, the aim was to create a brand image and recognition that would attract consumers to the product. This method, while effective in its time, was like using a megaphone: it was a one-way communication from business to consumer.

Enter the age of the clout machines. These influencers aren't just people with a bunch of followers; they're people who have the power to sway the opinions and purchasing decisions of their followers. And what I think makes influencers so powerful in the business context is not just their reach, but their ability to create a two-way communication channel. They engage with their audience, understand their preferences, and create content that resonates with them. This is not a megaphone, but a telephone line - a two-way conversation that's far more personal and persuasive.

Proper 12, SKIMS, Feastibles, Ipsy, Prime, Kylie Cosmetics - have leveraged this new paradigm to an extraordinary degree. They are not just using influencers as a marketing tool; in many cases, the influencers are integral to the brand. They are the brand. This is a radical departure from traditional business models where the product was the hero. Here, the influencer's persona, their credibility, and their connection with the audience are equally, if not more, important than the product itself. The product reaches the consumer directly through a trusted voice they already follow and engage with.

This new dynamic isn't limited to the million+ follower crowd either. I see micro-influencers in the world in almost every niche from beauty to BBQ. You've probably even seen some people from your city getting paid brand deals to post about the newest steakhouse opening downtown. It's super powerful.

But look, this new deal isn't without its challenges. The reliance on a personal brand means that business is inextricably linked to the influencer's reputation. Any missteps by the influencer can have pretty direct consequences for the business. Additionally, as the market becomes more saturated with influencer-led brands, the competition for audience attention becomes fiercer. The sustainability of these businesses will depend on their ability to innovate, both in terms of product development and in how they engage with their audience.

The rise of influencer-led businesses marks a significant evolution in the landscape of entrepreneurship. It underscores the shift from traditional marketing to a model that prioritizes direct, authentic connections with consumers. As we look to the future, it's clear that the businesses that understand and harness the power of these connections will be the ones that thrive in this new era. The one's that don't may simply not thrive. This is not just a change in business today; it's a cultural shift that reflects the changing dynamics of trust, influence, and consumer behavior.