In 2009, I interned at Bridgewater Associates, a Connecticut-based hedge fund famous for its uniquely ‘open and honest’ culture… and for perennially generating billions of dollars in investment returns for itself and its clients.
Ray Dalio, Bridgewater’s founder, is revered (and sometimes mocked) for his ‘macro’ thinking, whereby he deconstructs markets into their constituent parts in order to understand how resources flow through them. Relying on its understanding of what’s going on in the world, Bridgewater uses financial assets to make informed bets on what will happen in the future. (To learn more, check out this video and this podcast.)
I was a mediocre intern at Bridgewater; the only thing I did better than anyone was gain weight while working there. But I loved my time there and took to Dalio’s big picture, understand-how-it-all-fits-together approach.
To this day, it’s deeply impacted how I go about attempting to understand the world around me, including the comedy space. By extension, it’s also impacted how we’re positioning Laughable to have the largest, most positive impact possible on both creators and consumers of comedy.
DECONSTRUCTING THE COMEDY MARKET
Every market starts with consumer demand. In comedy’s case, demand is driven by people’s desire to laugh and be entertained.
That appetite catalyzes the production of supply, i.e. jokes and people who tell them. Comedians these days create lots of different ‘stuff’, for lack of a more scientific word: podcasts, standup, TV shows, movies, improv skits, social media posts, merchandise, live performances… the list goes on.
We came up with a catch-all term to describe anything a comedian creates with the intention of reaching fans and making them laugh: “comedic output”, or “CO” for short.
In return for comedians’ CO, interested consumers part ways with two things: their time/attention (always) and their money (sometimes).
It’s hard to measure the exact amount of money flowing through the comedy ecosystem, given its amorphous, constantly evolving nature. But across all mediums, American comedy consumers spend billions of dollars each year in exchange for CO, including over $1bn on tickets to live shows alone. There’s a reason Netflix paid Dave Chappelle $60m for three standup specials: comedy sells.
We think the comedy market, as large as it already is, can and should be even bigger. Less than 15% of Americans have gone to a live comedy show in the past year, and most of us can’t name more than a couple of comedians whose CO we regularly consume. In our view, that’s not explained by a lack of interested consumers or talented artists; it’s explained by an inefficient market. Supply just isn’t linking up with demand frequently enough.
These conclusions led us directly to what Laughable is all about: helping fans find content and comedians to love, and helping artists grow their fan bases and make more money.
We’re executing on these goals by using technology to reduce inefficiencies in the market and to increase the amount of CO, time/attention, and money flowing through it.
Here’s an oversimplified illustration of how everything fits together:
We’re still a young company, but early indications are that we’re executing effectively so far. For example, 87% of Laughable users have reported becoming fans of new podcasts and/or comedians thanks to our iPhone app (which you can download for free here).
And podcasts are just the beginning. If it qualifies as CO, we want to be capturing, amplifying, and focusing it: standup, TV shows, movies, merchandise, live events, and more. As we scale up, a virtuous circle will increasingly take hold, with supply and demand feeding off one another while generating a scarce and tremendously valuable asset as a byproduct: data. (There is so much to say on the topic of analytics that I’ll save it for its own post.)
With this framework guiding us, we’re excited to continue making both creators and consumers of comedy better off – and building a kick-ass company in the process.
Oh, and Ray: hit me up if you need an internship. Is unpaid OK?