Ted Gioia recalls his hopes of getting into the entertainment industry after graduation:
The story of how I became a strategy consultant is shameful.
I was a student at Stanford’s Graduate School of Business, and needed a job after graduation. I wanted to work in the music or entertainment industries — but I soon learned this was an impossible dream.
They didn’t want me. And they didn’t want my classmates either.
Hundreds of companies came to our business school to recruit talent, and they included most of the leading US corporations. So I talked with everybody — Coca Cola, Morgan Stanley, Atari, Procter & Gamble, you name it.
But no record label or movie studio ever showed up. They didn’t even send job listings.
Can you guess why?
I asked around on campus and was told the following (off the record):
Come on, Ted. You will never see the entertainment business recruit here. Those folks are not looking for business talent.
They give the choice jobs to their family members — the idiot nephew gets hired, not an MBA. Even better if it’s an idiot son.
And if there are other openings? Well … You’ve heard about the casting couch, haven’t you? Let me give you a hint — that couch isn’t just for auditioning the cast.
But you wouldn’t want a job there even if they gave you one. When time comes for a promotion, the drooling idiot nephew moves up — not you.
I’ve never shared that story before — because I know how people inside the music business hate hearing it.
And maybe it’s not a fair story.
All I can say is that I found this advice very helpful. I stopped planning on a career in the music business. And I also developed a very useful theory to explain why record labels are so bad at making strategic decisions.
I call it the “Idiot Nephew Theory”:
THE IDIOT NEPHEW THEORY: Whenever a record label makes a strategic decision, it picks the option that the boss’s idiot nephew thinks is best.
And what does the idiot nephew decide? That’s easy — they always do whatever the company lawyer recommends.
Maybe this theory is wrong. All I can say is that it helps me predict events in the entertainment industry with a surprising degree of accuracy.
I always operate on the assumption that there’s no business strategy in the music or movie business — only legal maneuvering.
Years later, when the music business got totally reamed by tech companies — a phase we’re still living through, by the way — I wasn’t surprised in the least. The record labels respond to every new music technology by litigating, but whenever they encounter a company with more legal clout than them (Apple or Google/YouTube, for example), they simply gave up.
In the future, you can test this theory yourself. You will see that it possesses great explanatory power.
