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PLAN | SMART IDEAS
“Could your business learn
from Lady Gaga? One
business prof thinks so.”
S
HE’S ON TRACK to earn $100
million this year, she’s won five
Grammy Awards, and she’s the
most-googled person of all time. And
now Lady Gaga has earned another
distinction: entrepreneurial icon. Her
meteoric rise from NYC club-scene
nobody to marketing juggernaut
recently inspired a business school
case study, in which a very earnest
professor draws on Gaga’s life story to
impart lessons to executives. We
translated a few of those lessons from
academese into English for smallbusiness owners—refreshingly, few of
the lessons involve wearing 11-inch
heels. And we asked a couple of moremodest business-launchers whether
the Laws of Gaga ring true for them.
LESSON ONE: Position yourself as the
underdog. Gaga uses her personal
story about growing up as an outcast
and a school-bully victim to create
empathy and connect with her fans,
says Martin Kupp, program director of
the European School of Management
and Technology in Berlin and coauthor
of the case study “Lady Gaga, Born
This Way?” Gaga, whose real name is
Stefani Germanotta, also frequently
references her father’s blue-collar
origins (although he eventually
became an Internet entrepreneur,
and she grew up in comfortable
surroundings). “I was never the
winner,” she has said. “I was the loser.”
Today Gaga, who was not available for
an interview, plays up that image,
making it the linchpin of an emotional
connection with her fans.
Todd Hills, 47, founder of the online
pawn business Pawngo.com, says he
can relate to the approach. His own
early career involved a “loser”
experience: His family’s horse ranch,
which he was counting on for his
future livelihood, went bankrupt when
he was 22. Opening his own chain of
pawnshops gave him the ability to
“help people,” he explains. Today,
having taken the business online, he
connects with customers through a
video on his website that highlights
how misfortune struck him and
reassures them there’s no shame in
stumbling. “Businesspeople get so
wrapped up in their charts and
business lingo, they forget to make an
emotional connection,” Kupp says.
LESSON TWO: If the rules don’t work,
rewrite them. Germanotta knew talent
wasn’t enough to draw attention in a
crowded music landscape. Adopting a
catchy name helped (the Gaga
sobriquet came from a song by glam
band Queen); so did her outré sense of
fashion. But perhaps most important,
she worked at first without help from a
very skeptical recording-industry
establishment. One label turned her
down; another dropped her, reportedly
after one of its executives made a
cutting-his-throat gesture while
listening to one of her tracks. So Gaga
fed her music and promotional info
directly to her fans, via social media.
An early-adopting Twitter user, she
communicated with her followers an
average of five times a day and used the
service to announce the release dates
of her new albums. Kupp says it’s all an
example of how upstarts need to ignore
the standards set by large, risk-averse
corporations: “If you don’t break the
rules, you won’t make it,” he declares.
Kristy and Coulter Lewis, a married
couple who live near Boston, have had
to work outside the system to raise
money for their natural microwavepopcorn company, Quinn Popcorn.
They carry a steep mortgage and are
still paying off student loans, so getting
bank financing was a very long shot.
Several months ago, Coulter made a
video featuring an emotional appeal for
For more on start­ups and entrepreneurs, visit smartmoney.com/small­business.
48 SmartMoney | October 2011
PHOTOGRAPH BY AFP PHOTO/SAM YEH/NEWSCOM; COLUMNIST ILLUSTRATION BY ALEXANDRA COMPAIN­TISSIER/ART DEPARTMENT
DYAN MACHAN, a senior writer at
SMARTMONEY, can be reached at
dmachan@smartmoney.com.
FILE NAME: SMX_20111001_48_RUN01_V02 - Printed on 20110830 11:37
PLAN | SMART IDEAS
Photo by Randall Slavin
Jimmy Smits
Actor,
Cancer Advocate
One in two men and one
in three women will be
diagnosed with cancer in
their lifetimes.
Cancer, be afraid. We are survivors,
families, doctors, nurses, researchers,
and advocates working together to
end this disease. The best and the
brightest in the cancer community are
coming together to Stand Up To Cancer.
Are you with us? Stand up with us.
Together, we are changing the way
we fight cancer, and we won’t stop
until we win.
Visit: weallstandup.com
LESSON THREE: Build a community.
For Gaga, it’s almost a higher calling.
She has referred to her fans as her faith
and her religion—that is, when she’s
not calling them “my little monsters”
(and herself “Mother Monster”). With
nauseating frequency, Gaga credits her
fans for supporting her, and her social
media community—12.5 million
Twitter followers and counting—helps
her boost music sales, along with
anything else she promotes.
Kristy Lewis, the popcorn
entrepreneur, can only dream about
those kinds of numbers. But she also
feels a great indebtedness to her
backers, one that inspires her to update
her company’s blog almost daily, no
matter how exhausted she may be at 2
a.m. In return, her blog followers and
Facebook friends have helped her
choose flavors for her popcorn (peanut
butter–honey, for example, was
dismissed as “too messy”), and they’ve
pitched in on the couple’s Kickstarter
campaigns. The experience has made
Kristy evangelical about her business:
“It’s more than a product; it’s a way of
connecting with people and friends.”
But would Kristy go so far as to
wear a raw-meat dress, as Gaga did at
the 2010 MTV Music Awards, if it were
good for the brand? “Yes, I would,”
Kristy says, “but I’m not sure how I
would feel about it, since I haven’t
eaten meat for the longest time.” As
for Hills, of Pawngo.com, no meat suit,
but he tells us he would consider a
Batman costume. S
50 SmartMoney | October 2011
GAGA GUIDANCE
What can an entrepreneur learn
from an outlandishly costumed
pop idol? Plenty, it turns out.
IDENTIFY WITH THE
LITTLE GUY.
LADY GAGA VERSION: Identify
yourself in interviews as a “loser.”
MERE­MORTAL VERSION: Assure
your customers that you relate to
the problems they face. Todd
Hills, himself a bankruptcy
survivor, uses an I­feel­your­
pain video to promote his online
pawn business.
WORK AROUND
THE SYSTEM.
LADY GAGA VERSION: Record
labels hate you? Use social
media to promote concerts
and recordings and, eventually,
leverage that into a major­
label deal.
MERE­MORTAL VERSION: Banks
mistrust you? Raise money from
friends and neighbors, as Kristy
and Coulter Lewis did, via online
fund­raising platforms, to
launch their natural­popcorn line.
CREATE A COMMUNITY.
LADY GAGA VERSION: Use your
Twitter following to continually
thank, thank, thank the fan base.
(She also calls fans her faith
and her religion.)
MERE­MORTAL VERSION: Solicit
suggestions from customers,
and respond to their complaints.
Blogs help; so do Facebook and
Twitter accounts.
PHOTOGRAPH BY FRANCK ROBICHON/EPA/CORBIS
funds and posted it on Kickstarter, an
online platform used mainly by artists
to raise money for creative projects.
Within days, $10,000 was pledged to
their cause—with no need to pay the
money back. “It’s out of the goodness of
[donors’] hearts,” gushes Kristy.
Through continued pledging, Quinn
Popcorn has now raised $23,000 from
nearly 650 backers. The company has
been able to pay its suppliers for startup materials, and it will soon begin
selling its popcorn on Amazon.com and
in selected Whole Foods stores.