I’ve been fascinated with the stock market for as long as I’ve known about it. I ran a “dummy portfolio” competition against classmates when I was at school and then when I was finally able to, bought a few stocks on my own when I had a little spare cash. I’ve had my shares of disaster over the years and a few big wins, “ten baggers” as they are sometimes called.
These days I’m a fan of value investing rather than speculation, buying slivers of successful businesses rather than gambling on what a share price might or might not do. And as a value investor I am of course a fan of Warren Buffett, known as the worlds greatest investor, the Sage of Omaha. The shares in Berkshire Hathaway he started buying up in the 1960’s for $7.50 are now worth a staggering $250,000 each.
Buffet’s investing principles, based on the work of Benjamin Graham, involve a set of criteria for any business he invests in. If any one of the success criteria are missing, he probably wouldn’t bother. One of these criteria, is the principle of the Moat. To be successful the business must have some form of “unbreachable Moat.” These can be of different types, but a couple of them relate directly to our world, the complex world of forging a career in magic.
The Brand Moat – One of the intangible moats is the power of the brand. A good brand is hard to copy. It makes it hard for competitors to muscle in on your territory. Great magicians develop that for their business. Some examples – David Kayes “Silly Billy”, at his peak charging far more than the average entertainer in his market. Steve Cohen in the same city. Siegfried & Roy, carved out an empire with both intangible and physical moats. The Illusionists franchise is doing the same thing. Solo performers like Derren Brown, Pop Hayden, Jon Stetson or Raymond Crowe all have that strong brand. You know exactly what you are getting. Is your image and brand clearly defined?
The Switching Moat – Another moat that Buffett looked for, was businesses with sticky customers. The cost for them to switch to another company is high, in terms of learning curve, time and money. A great example here would be the software product AutoDesk. Tricky to learn and once installed in their customers business, few change away from it, allowing them to charge appropriately.
Magicians can use this principle too. Getting to be the “preferred Performer” at a venue for instance. They suggest you to their clients, knowing that you are easy to work with, have security clearance etc. The regular gig at a restaurant fits here too. You understand the way they work, the rhythm of the service, the demographics of the clientele. They don’t need to re-train you each time. It’s a win-win. Trade show workers often develop long term relationships with their clients, becoming indispensible members of the team. Conference organisers are another sticky client. I have one client who uses me for 10 multiday events each year. My MC colleague Scott Williams here in Australia has just done his 14th year in a row for one particular client! Have a look at your clients and decide who are the sticky ones. Or if you are targeting new ones, why not focus on those who could become so.
Which ever way you do it, work on your Moat, making it wider, deeper and filled with alligators.