How cultural capital becomes financial capital

Welcome to season 2 of Hitmakers. In this season, we are going to track how culture moves margins, multiples and market cap. Today we are looking at moments when cultural capital turns into financial capital. We break down while a boom was still printing money, long after most thought the hype had reached. Why Highly Bieber wrote, became $600 million brand almost overnight. And why Butler Gucci is a hotter business than Gucci itself. Welcome everyone. How are you doing today Anna? And in grade, shall we introduce ourselves for a second? I am Anna Angelic. I am Leal and Masha Meyer. And this is long time in the making and it is finally happening and I cannot be more delighted. So who those who don't remember me from season one or don't know me, I work as a brand executive, formerly chief brand officer at Banana Republic NS3 and currently consulting author of two books, The Business of Aspirations and Hitmakers writing the newsletters sociology of business, Leal and your turn. Leal and Masha Meyer, I have done many many things but I'm probably most famous for being one of the co-founders of the consultancy Collins working with a lot of companies from a design perspective on increasing the value of their company for many years was the chief brand officer of Chabani. Yes, the yogurt company that we helped expand into being much more than a yogurt company, but also been an investor work with a lot of PE firms. But always in the space of using design as a strategic method for improving the value of a business and transforming businesses. Love that. So what have you been up to last week? Well, I have two kids. So it's always just about the kids and moving them from A to B and trying to get clothes on them and toothbrushes and their mouth. That's very good. Oh, yeah, I've been in Paris in Milan. Actually, I did do one cool thing. I was in Bhutan for ten days. Yeah, going to, that's why we're recording this so late because we were going to a bunch of monasteries up there had a very lovely audience with a king of Bhutan and got to learn about a new city that they're building which integrates Bitcoin and cryptocurrencies into the model of the city. And it's a whole mindfulness city and it's really fascinating listening to the king talk about it and stuff and got to ask him a bunch of questions about it and kind of interrogate the thinking and the approach to it because I mean, like how often do you get to design a city? That's wild. Maybe we'll leave that for some for a next episode on my end, there were fashion weeks. So that's what brought me there. And I'm really glad that we're going to talk about some of these topics later. But I had the opportunity to stop by Gucci flagship here on the Pelleon and see Gucci archetypes which I really love as the new model of brand building because what Dan and I has done basically brought down the code in brand code into 37 archetypes. And what he is doing is basically using mood and divide to sell products and saying, hey, there is not one way that Gucci is getting sold at 37 ways and we're using the telly-owness of this brand and breaking it down in different architects, the way you can wear it and which is very smart and modern way of doing it. It's not telling you, you've need to wear it like that. It's like what did he need to mood for today? So I find that so interesting because like obviously so much about business is about a singular idea that you consistently and efficiently execute on even what all of Sondro was doing it. Gucci before had a very singular aesthetic to it and it's very singular world building. I mean, it modified a lot and had a lot of kitchen, a lot of play to it. So there was always something new in there but man, 37 archetypes is a lot of managed. I wonder why he thought 37 and not like 32 for example. Honestly, when you go in and those stay, I ask store associates, I was like, what's selling? What's selling? And they're like VIP selling La Bomba sold like immediately, which is like far. And I'm like, who bought this gold and thing? And they're like, there was a Chinese customer in private sale and then the then he was selling really well. So they knew and then I got into conversation and obviously then being Italians, they're like, we're seeing this Renaissance-y fashion. Of course, they're going to say Renaissance, they're Italians, but it's sort of nice to see people being excited about creativity again, which I guess gets us to create DVD plus finance equals cultural capital becoming business capital and market more. So what's been happening in the market this week? We're going to have this segment that we call market moves. We're going to do it with every episode and it's really just kind of a check in on tracking how culture is moving the markets. And so a lot of stuff has been happening over the summer. So we're just going to get right into it and kind of give you an overview of some of the stuff that we thought was meaningful and worth noting from the summer. Schemes raised new funding in July at a $4 billion valuation up from 3.2 billion just last year. The boost wasn't just from sales. It was cultural dominance. Its new men's line launched with a campaign starring Nick Bosa, Neymar and Shay Gilgis Alexander turning sex appeal in sports, casting into viral fuel. Kim Kardashian built a fashion brand and priced it like a media company in August. In video, quietly hired its first ever global community manager, a signal that even the world's most valuable semiconductor company sees brand affinity as a strategic mode for a company that rarely speaks outside earnings calls. It's a major cultural shift. GPUs are now consumer objects, not just components. In September, Balenciaga and MoMo launched a capsule collection featuring archival imagery and logos, a collision of cultural institutions and commercial fashion. It's part of a broader strategy turning museum cache into streetwear clout and reframing heritage as hype. Can you just jump in? Balenciaga also has t-shirts and this looks like them as parting gift, question mark. To the brands, putting summer collections saying "Loggery" priced at $795. I love Paris, Britney Spears and then the rip-states for $7000. That's his parting gift for Pierre Paul, who quickly figured out how to sell this. Gone. Hey, it's a vebblan good. That's all it is. Vebblan good. Blondes, Eddie. Social capital, baby. Larianons, social capital to drive financial capital. That's culture. I'm a fashion designer. He's like so totally effing with shape. I was best at designing it. Okay, and Pierre Paul self-pissed my de faggrain. Gone. It works. You'll save that bone's unsaple. Okay, LVMH is always doing something, but recently a deepened its investment in Japan through artists and partnerships and fashion exhibitions, which is part of a strategy to hedge tourism volatility by betting on cultural permanence. LA Galaxy dropped a limit edition capsule with cult streetwear brand Ryoko Rain. It's the latest example of a sports team moving beyond ticket sales into high margin cultural merchandise. As match day revenues, plateau clubs are repositioning as lifestyle platforms with apparel now driving a growing share of both revenue and ROI on fan engagement. And finally, after years of confused brand identity, Burberry is finally embracing its British roots, which just seems so obvious, but they're finally doing it. Burberry leaned hard into Britishness with its its always Burberry weather campaign and a British music subculture inspired runway show featuring nods to a wasis Bowie and sting. The cultural collaboration appears to be working. Q1 losses were less severe than forecast, signaling early traction in the brand's turnaround under CEO Joshua Schulman. So Anna, that is just a small grouping of stuff that's happened, but a lot of exciting stuff going on. Love the summary. I just want to kind of like stay with Burberry for a second, because that's a brand that I have a long history with since that we were key to create a group for which is an agency that build websites for luxury brands more than 10 years ago. We did art of the trend. So there is nothing more British than maybe the Queen or now the King is more British than Burberry and it was like really strange to watch a brand that's so British straddle with its identity and it was fantastic. It is fantastic to see it finally embrace it and sort of find its way and like in a maybe a macro on a macro level just when Britain is I don't want to say struggling with its identity, but maybe that's what British need. Maybe they need to remind her what they are all about. Maybe they just need like I think they need a little bit of a category. Is it that always the case like when things go to shit you try to find who you actually are in the midst of all the like the fucked upness and try to recenter on that? I said the whole Burberry thing was so obvious that it's British. And I think it's just one of those things that it's like, it's so obvious that you overlook it, and it just seems too easy and of an answer. But my God, like, what a great history, what a great canon to pull from and reinterpret and remix at the heart of your brand. There is no other brand in the world that can do that except Burberry. And just for years, they just weren't focused on it 'cause they felt they had to chase some other stuff. - Totally, and not only that, the history of the trend, the way that the trend as the product, speaking of product-led branding, is the way that the trend was made as truly innovative. And it was not possible to make that like how it was, how the material was actually covered to be waterproof. That was a true innovation 100 years ago or whatever more than that how it was made and only that horrible, horrible damage. The kitchen inspired it. So going back to 2025 and the past year under Dosa Solman, the results are there, decline in sales is not as severe as before, they have clearly refocused the product focus on trenches. And what they have also been doing is again, branding that did they clearly on Britishness and then again refocused on the product strategy and the brands that did they are in sync, which is very clear in Daniel Lee, his latest show, fashion show at the London Fashion Week where he really leaned into, again, the British, one of the greatest experts is its music. And he leaned in the music subcultures or AC's David Bowie, the Queen and so on and had the codes of those music subcultures like AC's Peter Calfitfer, David Bowie, like Swede, Sjut and so on to kind of to inform his visual language for the latest collection. So those guys were familiar with my work and those were not, I use cultural programming a lot to say what is the narrative of brands in culture? How do you use subcultures and their sort of behaviors and tastes and codes and aesthetics to fight it with the subculture in a way to generate a new cultural story? An example is really that Burberry is using the language of a music subculture to create something new, both in terms of product and in terms of their cultural program visible in what they have done last summer when they went to Blastumbari and other famous British music festivals and what they did in their brand activations across British Isles and what they're doing now in terms of their short longer form content with Olivia Coleman, which is another British treasure. So they're almost hitting all the marks. We have the content, we have the right personalities, we have the right food, we have the right language that we are using so the consistency and the tightness of that program and the cultural products that they're using within it, the collaborations, the merge, the content, the experiences, the events is all, they're hitting all the marks. I have to say, I'm impressed, I'm very curious what they're going to do next year. And I think that's really well said. I was thinking of a conversation I had, I think at this point, two weeks ago. So I basically spent the better part of a full day with a CMO of a major tech company, like one of the largest in the world. And our entire conversation was around how a company can be widely known, trusted, score high on all the traditional brand metrics but be completely invisible in culture. And this was something that completely baffled him. And it was not like the company needed to be visible in culture in order to drive business. The business was fantastic, but it was a confounding challenge of how can one be true in the other not true. And a big part of what you just said is the idea of focusing on those subcultures, focusing on not just targeting and marketing up them, but contributing to them, almost participating in a conversation and a bunch of inside jokes, a bunch of inside code cues and stuff like that. And having sort of like this ongoing drip of little things that you do. No real different than you would do with like a campaign where it's like different levels of activations or different levels of communications, but you do it through the lens of cultural product. But this idea of focusing on smaller groups, creating sort of like cultural products for them, interesting activations that sort of like advance that subgroups narrative or enriches the storytelling within that group, like sort of like British music culture, for example, was an entirely new concept to him. He was really fascinating. We've sort of continued the conversation about it since then. But in this algorithmically driven world of media, where community, where memetic content, memetic artifacts and stuff like that are really driving most of the conversations in culture. This is like a very core thing. And it would be a big cultural shift within the organization of this tech company to start doing that. But I imagine even within Burberry, it would be a big shift. But the point that I want to make here really is, you know, the point that I made with him was as a tech company, as a Titan of Tech, he actually needed to look at fashion brands and what fashion brands were doing in this space. Because fashion brands rise or fall based on their ability to do this, which means they are the leading R&D labs of how to engage with culture. And it's from an outside, it can look frivolous, and it can look like, "Oh, these are just stunty things." But if you're really in it and you're really paying attention to it, it is thoughtful, it is intentional, there are clear mechanics to it, there are clear strategies behind it. And I think I like a lot of people who want to create cultural resonance and relevance for their companies and their products can learn a lot from what the Burberries of the world are doing, particularly Burberry, because they are leading that change over from the way they used to do stuff to something that's actually working and resonating in culture. I love that you said that, why do you think that that means you're interested in fashion? Here's a PhD for the love of God in sociology. So, you know, like, that is, I was always interested in brands that have cultural influence. Fashion is outsized. Cultural influence regarding their budgets, the size of their companies, and how innovative they are in all other regards, except that culture lived once. So, yes, thank you for saying that. And the other thing that is important, what you said, music culture, it's musical cultures. And that's why it's not just David Bowie or Oroasis or Queen or Nick Cave or others, it's all of them and using different colors. So, it's parka from one, like, like, I don't know, like skin, leopard skin from another and snake skin from third and really narrow the Beatles from the fort. And that's going back to where we started, it's the architect. There is no any more of us because you're more there, just all those different microcosmers. And that is really important, even when you're buying Ted. People are buying based on mood, based on different needs, and based on different behaviors. And it's not just psychographics. People make a mistake. It's the demographics plus. You don't figure out demographics and then psychographics. You can't separate it to anymore. Well, you're hitting on something that we'll get into in later episodes, but it's effectively a portfolio approach. So, whether Gucci is with 37 archetypes or Burberry talking to different British subcultures within the thing, it's never about one thing. It's never one monolithic approach, given the fragmentation of culture, given the fragmentation of media, and community, and just different types and levels of conversations. Companies have to run a portfolio approach very similar to like an investment firm on this. Because you never know what's going to hit. And so, very similar to a portfolio approach, you put a little money in a lot of different places as investments. When you start seeing a return on it, you shift some of that capital to continue investing, where you got traction in a particular subculture or community and so on. But anyway, we'll get into all that in other episodes. Absolutely. And that's exactly like, first of all, portfolio of audiences, but also portfolio of cultural products. And I do think that it's relevant what Burberry is doing, not putting gold at X in one proverbial basket with just a campaign, but doing a lot of things. And I don't know if it's like, again, maybe we're rejecting too much intention, but let's go to Ralph, Ralph Lauren. And they've been doing amazing. A reasonable thing. They had their earnings called three weeks ago. And I mean, I know that they changed their annual output because they've been their Q1 results. Here've been so amazing. They're doing especially well in Asia, but no one else is doing well. Everyone or larger in premium brands are complaining about the headwinds. Burberry is doing amazing. So again, it's not nothing that they've done well in the past couple of years, all the all respect and all credit goals. to the new CEO, it's what Ralph has been doing for the past whatever, 50 years. Which he understood, you don't build a brand by doing just one thing, but just going fashion. You build a world. You build a universe that has many doors into a brand. So he has fashion, he is purple label, he has polo, he has main collection, he has furniture, bedding, rest, restaurant, he has double RL, which is a completely different aesthetics of five hundred. I think he had paint for a while, like you could buy Ralph Lauren paint. You name it. You name it. So that's basically like there is nothing that it's not like that is not, but the point is that is that consistency in the portfolio. It's a galaxy model and you have all those different the gravity of one strong point of view and you can basically add whatever you want that fits into that galaxy and into that world. And like he has a cafe now and I was in medicine every new and it's crowded. Why is it crowded? Why are people buying Ralph Lauren coffee? Because they want part of that lifestyle and how the dead guy achieve American aristocracy, which is a complete oxymoron in itself. The four point of America is not the Harry's aristocracy. He sold his great guest be a aristocracy. He sold it as the wire in the west to aesthetics. East coast west coast under the same brand. It's it's it's genius. So no wonder like why is he doing so well? Because the portfolio of approach of completely market that the product pyramid is complete. And so image and merchandise you go ahead. So I think the thing about Ralph Lauren, which is really interesting, is you could kind of look at it and say well they're actually just benefiting from a fashion cycle right now. Streetwear dominated everything for a long time even Ralph Lauren tried to do streetwear for a bit. And really we're just coming back to preppy. It's part it's part of the zeitgeist and sort of the rise of conservatism and stuff in the United States and things like that. But when you actually like unpack it and really look at the mechanics of what they're doing, they're doing something fundamentally different than just writing a fashion cycle. I mean the fact that they are reselling vintage pieces at like a five times markup rate, which is like right now for them is about 7% of that total revenue. And it's like growing 100% annually. So people are reaching for more than just preppy fashion with Ralph Lauren. There's more of a story there. There's more of a new kind of value there. And I think this is something that you and I have talked a lot about, which is lots of times people end up talking about a product value from a utility or functional perspective or even a monetary perspective. Like it's you know a high quality good at a low price. But there's all sorts of different types of value. There's social value. There's cultural value. There is emotional value and so on. And when you layer these things on top of a product, it increases the willingness to pay of the consumer because they see greater value. And I think that's like a really important concept in all of this for like listeners to know, which is consumers aren't price conscious as much as their value conscious. They're not going to pay more for something that doesn't seem like it has a lot of value. And I think what Ralph Lauren has done over the decades so so well. And I mean they are really among the best at it despite having you know periods, financial periods of up and downs is they've they have romanticized a fake but idealized vision of aristocratic life in the United States. And I would actually argue that Ralph Lauren has done as much for the mythos of American identity as someone like Norm Klausen who's a photographer for the Marbrowman campaign did for the American West. You take sort of a forsimilitude of a partial truth and you elevate it, you romanticize it, you idealize it. Like just in the example of Norm Klausen and the West, the West prior to Norm Klausen in his photography for the Marbrowman campaign was really just cowboys and Indians as they would say back in the day. It was a wild wild west of these different groups fighting each other. But when Norm came in and started romanticizing the cowboy and really spent time with these people understanding and trying to figure out how to tell a story of those cowboys and capture the light, capture the color, the art direction. You created some of the most beautiful photography of the American West but it wasn't documentary. It was an elevated aesthetic that is distinctly Norm Klausen and has since then become sort of the archetypal image of our romanticized idea of the West, whether it's Montana or Nevada or Utah or whatever it is. And I would argue like Ralph Lauren did the exact same thing for sort of American aristocratic culture that in a meritocracy of the United States where we're all aspiring to be better and have more and achieve more, he painted the picture of what the top of the ladder looked like better than anyone else and romanticized it. But through the products made it accessible to everyone so that you could get a little piece of it when you went to a cafe. If you wanted your home to feel like you could paint in a rough Lauren paint where you could wear the clothes regardless if you were going to a black tie ball or going to hang out with chaps and stuff like that and being more casual and stuff. But it was this idea that he kept harvesting different products from and then commercializing it and that kind of cultural value, that symbolic value that was baked into the product is not something you just have on day one at his decades and decades of curating a story which he always did. I read stories about how Ralph would be on photo shoots and he would literally like in his mind come up with stories about the models in the portrait of like why they were there, what they were doing, their relationship with each other. And in many cases it comes through the photography and just makes it much more emotional than just a straight photo shoot of a beautiful person wearing the clothes. Always and I really glad you brought that all of that up especially in your static because I think it's not about trans cycles and all of it never. And with Ralph is always timelessness and if you there is a video that I saw this morning when he says oh in Europe you have you have people for drive cars that are 10, 15 years old and here in America you have like all the car is two years old and the neighbors are going to be like oh that's an old car. You need a new car after two years. So there is that kind of consumerism that you always need to replace and there is like this idea that you have like maybe a quarter of a shooter, a twitch shoot with like a sweet patch and then that has that heritage and that has that story. So the story in products themselves and the story in his advertising and his advertising looks the same. He's the years ago and now when you look what he shot its fellman college a month ago it's it's recognizable Ralph Lauren divide the atmosphere, the mood even the models the same. I want you to dig into that in a moment on the spellman college thing because the story of how they did their research of even though it looked distinctively Ralph Lauren they did their research as to what the models were wearing where they were showing up so it was deeply authentic and it wasn't just a shoot it was like there was a real heritage in the and if you knew the heritage in the photography. Absolutely and you cannot a someone with direct that shoots you cannot have that sort of photography that they mentioned if you don't have that story for banana what you see what you react that so well was because there was a quarter of those people where are they going what imagined world are there in shabby things if we didn't have so many props so many what the style was not that if we didn't have such a considered narrative it wouldn't have looked like that. Like that is the story that has to come through the photographer the setting is you can't just put a bunch of people together you need to have that research and I literally killed myself sort of to build that world and he did come through and I'm glad he did because there is a lot of work that goes into into building a narrative world but what I wanted to say why is that aesthetic so time goes ahead. Oh no I was just I was just going to do a shout out to you that like for anyone who's listening who hasn't seen honors work on revamping banana republic and taking it back to its luxury safari days you absolutely should I remember when it came out and I actually didn't know you were behind it. I saw it and I was like oh thank god they finally did this this is so right this looks so good and then I found out you were behind it and I was like oh this makes complete sense now but I loved it and so like you know you people should totally look it up because it is exactly where banana republic should be. Thank you Lee thank you and then go like just going back to the aesthetic and enduring power of Ralph Lauren is that that aesthetic was interpreted. So that is not one trepimonolithic aesthetic it's so it was taken in Japan and preserved and ripped off it was taken to Europe and ripped off and worn differently up turned colors so on and here it was if you can change it and refill it and make it your own and hip hop and rap and so appropriate that's what it shows durability and your an argument to talk a lot about, because collaborations are a way to ensure brand durability and to kind of take what I said to them has done to take DNA and disperse that DNA and that is what the static is. It doesn't matter if prep comes in goals because that prep is not the same prep that was 50 years ago but it's still the DNA, like the source code is the same but it has many different interpretations so it's like evolution is it's going to last forever. Because of the combination and I think that's super important when you have a static you need to open it up because the static is dead aesthetic. Well so I think again Ralph Laurence of really good example here because when they were, let's call it in the trough of their financial performance because of the sort of the dominance of street wear, they found their way into the street wear conversation and created a whole line using their preppingness within the context of street wear sort of like predating ALD and what he's been doing with that line. But the the, from everything that I remember, actually the Ralph Laurence kind of street wear approach was really well received from a fashion standpoint from an insider standpoint. I don't think it sold that well but it was a really good example of what you're talking about, about how they opened up their preppy aesthetics and began blending it with other stuff to keep it relevant but still timeless and and in Tigris to the Ralph Lauren brand. That's why you have modern grip and this like here growing blazers and ALD and that's why you had 1990s Kanye very, that no I'm not supposed to say Kanye but you know like you have all those different ways in and it's when you become a source called your immortal immortal. Well so so totally and I mean I think I love that phrase source code when, when culturally because I think so many times people look at culture like ripples on an ocean I'm going to use a really kind of poetic metaphor for a second. There's just a lot of activity and you just pay attention to the individual ripples but there are some brands who actually say why are the ripples happening and they understand the sort of movements underneath the ripples that create the waves and they say that's what we're going to align to and understand we're not going to pay attention to all the ripples and so when you understand that that source code of a culture what are its codes and cues what its ambitions who are its gatekeepers what are the canons all of that type of stuff then you have a position from which to create remix and constantly reinvent while maintaining a through line and everything that you're doing and Ralph Lauren has really been the one fashion brand to really do that so well and in times when they've been less creative in those reinterpretations they've been sort of knocked as being sort of stuck in the past and kind of regurgitating but they understood the source code that they were working with and they and they stuck to it like this next point that I'll make up we'll probably get into in like other episodes but this is exactly what I did at Chabani when I joined Chabani I said we're going to figure out what the categorical source code is for wellness culture and that's what we did and we minted a whole visual language around it you know as you would say an aesthetic and iconic aesthetic and stuff and it it since gone on to become an aesthetic that was broadly adopted by sort of global wellness culture there was just one brand after the other could have been doesn't matter the category it was like a cross categories that was just copying the DNA of the source code that we had interpreted for Chabani but it but exactly what you said and with like Ralph Lauren and even banana republic you knew the court code to go back to every time you had to do something different as a business or move a product into a new market opportunity you had that source code DNA that you could go back to and say okay now how do we take this and reinterpret it for this opportunity to expand extend or refresh the brand and so it's a really really powerful thing when you have it it's hard to get because you need some like nuance and sensitivity to culture in doing it but once you have it it is it is a powerful equity a powerful generator of value and consistency in the company it is and I want us to go back to that and I know we planned that because it is being started by portfolio of cultural products aesthetics is brand codes and aesthetics are two of the important ones and I also want to say that I also call that what is the intention when the founders create the brand what was that they do create a source code what is their intention why did they think that this brand was needed in culture that was that starting over dialogue with culture and of course culture changes and the dialect is going to change but what the brand story what the what the role of the brand culture is has to sort of morphs but the intention needs to be the same so let's use this as a jumping off point to move into our next segment in the deep dive which is another brand that seems to keep going despite seemingly having run out of steam it keeps finding new ways to reinterpret itself and that's LeBubu so it's been a little furry guys they're not furry and they're not meany so it's been a breakout year for LeBubu the mischievous snaggle tooth creature created by Hong Kong artist casing lung and produced by popmart once a niche designer toy LeBubu has become one of Asia's most coveted cultural collectibles with limited drops barking frenzy streetwear collabs and now a planned theme park attraction in mainland China which is like insane to think about the hype has helped drive popmart popmart stock up over 40% this year which outperforms legacy toward giants like Mattel and Hasbro who shares have remained largely flat over the same period LeBubu is now popmart's most valuable IP to date so Anna why is why is LeBubu still working why is it still at the center of of global culture honestly if I answer this question is going to ruin my street cred because LeBubu in my crowd is considered completely unqualled that's the end hey it was really peak peak last spring that again and it's but clearly they kind of wisdomed up that you know they didn't file copyright protection or trademark protection till 2024 because before that it was free there was a lot of food that was like you know they figured out there is something here in 2024 like you know like the reverse Pakistan is kind of going up and they quickly the trademark protection and like look at them now so now they figured out like okay IP is there and matches are coming so once the cool kids are like I don't want to be associated with this everyone else comes in which is where the money is let's you know let's do it yeah it's the exploitation phase of of any capables exactly it's that and you know the exploitation phases you know can go 50 years hundred years look at yellow key and I'm looking at these new I mean they change laws exploitation phases and I mean copyright laws so again it's going to start it's going to mean something else once it becomes part of culture because at the beginning it was like oh if you know you know I mean like when I spoke in Paris with with a stylist he said oh my friend and other stylist who works in Asia he told me this is going to be a thing like six months prior you know so it's kind of like the mood was getting set up for this to kind of explode and those in the know for dressing as celebrities they're like they were telling Rihanna they were telling Liz the hey patation this is going to be big like you should you should wear this this is cool you know so that was kind of like from status symbol or you you have this because no one else here to me wanting to have some something that's going to position me as cool to something that means like a ticket to something else oh now I have a whole collection or I have a mini one or I'm going to go to team park or I have an order like something someone someone everyone or I can access to cartoons or there is a movie you know now we're having the entire empire so it means something completely different than before well I feel like though like right now the boo boo is creating financial value for potmart mainly often aesthetics play where in in a a limited edition or collab play which are all effective but I feel like and you know correct me if you see it a little differently but I keep feeling like there's there's there's sort of reinterpreting the look of la boo boo or trying to do these really limited edition things to get these quick bumps of interest but I feel like that's going to like burn out after a little while unless they add in yes yeah but like I think they need to start adding in like a narrative layer to it maybe they'll do that with the thing part of the content now there in the now there in a mass phase so now there in a yellow kitty phase now it's time to start making cartoons movies theme park that is my whole point like now there is no more capital that is no more cultural capital yeah now in a story telling phase so now I'd be cuisine I'd be pure let's meal this like, "P" as much. Let's, let's create like, experiences, stores and codes and, you know, like, now it's, again, for the mess. It's theme park. - Well, 'cause like, the sort of like, daisy chaining of value, you have a toy that you got really good pop on because you associated it with the right celebrity at some point in the life cycle of the product. It got a bump. You realize it got a bump, so you kept making limited edition collectibles for it, 'cause right? 'Cause that's what fuels collective, collector culture is I got the one that has yellow and green colorways versus what you know, it's very similar to like, sneaker culture. But eventually, that's going to run out because there's only so many different versions that a person can collect and still feel that there's value and collecting stuff or getting the rare version of something. And so then, to your point, you daisy chain that to narrative. So now, we have all of these different versions and different expressions. What's the narrative that's holding it all together that actually makes this thing interesting beyond its aesthetics and brand codes? And then, from that narrative, and maybe with the narrative, I imagine you can start doing things like building a brand world. So you move kind of like into entertainment from just the collectibles, so there's narrative stories. And then you move into brand worlds and that's when you get into like, a hello kitty type of thing where it's like, close and make up and restaurants and all of this type of stuff to live in the world that dramatizes the narrative that's been created or around it. But I find that really interesting going from like, aesthetic driven collectibles to entertainment, IP narrative to brand world, which just gives you that full permission to move in lots of different categories. I think it's all part of the IP, but you just have product, service, experience, story. That's kind of like, you start with the product, then you have a service, which means how you connect those, like you maybe have a fandom or social network or something. Then you have an experience, which is your team part, a quarter store, and then you have a story at the center of all of that that's keeping together. - Well, so what's the service layer there with Enlabubu? - I think the service layer is like, what is happening? You know, with TikTok, with unboxing, with people swapping, you know, like those fan groups that are swapping different in the service layer, and then you have a lot of people who are swapping different types of people who are swapping different types of people. - Yeah, I think that's the way it is. - Yeah, there's the feet and ears, which brings us to bootleg Gucci, which is more popular than real Gucci, because you know, creativity, what I think is that now, because you know, when I peace starts to dominate, it's all financialization of culture, which means what worked in the past is going to work in the future. That's why we have 25 zoomers. - That's why we have the same movie, - The French has been done. - The old can bones or like not felt carbon, sorry, felt carbon, I stand correct, that you know, like either about 24 something else, like million and all, who is a son, exactly. That's why we have 17 fast and furious, and you know, like so, and any fashion, you have a lot of stuff, like, oh, this worked in the past. Let's do it again in the future, but like bootlegers, let's go crazy, like we need, well, so to- - You need to do this, but end the end of the page. - Yeah, so to that point, so let's on board everyone to this third and final segment with the podcast. So this one's all about bootleg Gucci. So once considered the shameful shadow of luxury, bootleg Gucci is suddenly fashion's hottest flex. Unauthorized remixes from the 80s and 90s are commanding thousands on resale platforms with TikTok creators and influencers flaunting ironic logos as signals of cultural savvy. Searches for bootleg designer are up 70% and Gucci knockoffs lead the pack. So what's the twist? Well, Gucci itself is slipping. Parent company caring reported a 21% sales drop last quarter, even as competitors like Dior and LVMH posted modest gains. In a strange turn of events, Gucci's most desirable pieces this season are the ones it did not make. So this is the topic that I've been excited to get into, because it is so counterintuitive, so make it make sense for us. Well, first of all, let's wait until damn that comes and Sarah's making lots of pieces for Gucci. If you wanted something bootleg, that's it, because you know what he did for Balenciada, you can find it on Kanapas Street, or like I don't know, 10 bucks. So you know what I think? I think that's exactly what we talked about for Ralph Warner. Again, bootlegers, they take the source code and they just riff off it. In a way, they are not constrained by merchandisers except spreadsheets. They're not constrained by P&L. They're not constrained by basically revenue and profit expectations. So what they do, they have good enough materials. Often those materials come from same factories, similar factories. And they say, hey, what would it be? They're not going to create exactly the same thing. Some of them, there's not bootlegging. Those are knockoffs. And knockoffs like pretend to be originals. Bootlegging is again taking different pieces of brand DNA and putting it together. And the point is now that luxury is so ubiquitous, that it's so accessible, that it's so expensive, that everyone is like, what am I really buying here? Am I really buying a ritx for $7,000? What is really that I'm buying here? I might as well buy something that they really like. That's a maddox the AD, that has all the codes of those logos. And that is not pricey, because I'm then showing my taste, my cultural capital. I'm plugged in with some no-name designer bootlegers, who has probably bigger street cred than some designer who's paid gazillion of dollars. That pretend is way more impressive personality than anyone. Yeah, well, I think to your point, what am I buying? I think that immense years ago really pushed that to the extreme. And it was just why am I paying this markup for stuff. But I think the part that you made at the beginning of your argument, I thought was really interesting, is that a lot of these bootlegers can get quality materials for good enough for everyday use. It's not going to be the best stuff in the world, but it's going to be higher quality. And they don't have entire teams and business functions sitting on top of them, making sure you're creating a line of collection that's going to sell. They're going to do short, small runs of stuff that's really interesting. And maybe even pushes the boundaries a little bit or plays with the edges of the brand or the expectations and stuff. And so there's a bottoms up creative directorship around it. And like at the end of the day, if the logo carries symbolic capital with it, symbolic value with it. And for many people, that's why you buy the product. Then that can be remixed and done in really interesting ways from the bootlegers. And so it offers fundamentally the same value. Whether you buy it from the bootlegger or you buy it from the brand itself, it's just that the bootlegger is a bit more unconstrained. And what they're doing with the brand. That's it because no one is going to mistake a bootleg item with the brand item. When you have a novel, you're trying to pass as someone who actually paid $10,000 for something with bootleg. You're not. You're saying, hey, I am confident enough to wear something that's bootleg. And by the way, I'm actually signaling my identity, my cultural capital, my social capital, but very dist. This is the duty that's specifically by I'm not hiding behind something that I cannot afford. Well, so there's like an interesting parallel here and bear with me as I build this bridge. But there's a really interesting parallel in corporate R&D and bootlegers. So here's what I mean about that. So I've seen data and longitudinal analyses of corporate R&D spend over the decades. I mean, going all the way back to like the early 1900s where a lot of that R&D spend used to be internal. And then what you see over time is more of that R&D spend is pushed into the market. Where startups are absorbing the risk, they're the ones being responsible for finding the capital and creating a velocity in a path to proof of value as quickly as possible. And then the larger corporations, as we know in our comment day today, are really just doing MAA of like buying all these people. You see it in CPG, you see it in tech. But all that innovation has been really pushed to the market because what corporations are always trying to do is you're always trying to remove risk from the system that you operate because you want more consistency, you want more certainty. So let's push risk out. Let's create more efficiency in capital spend. So we're only putting capital towards the things that we know work, which is why we get these recursive cycles of fashion and recursive cycles of IP. all of that's been pushed to the market. So if you actually look at the bootleggers in relation to the fashion brands, that's effectively kind of what's happening where you let the bootleggers again, not knockoffs, but you let the bootleggers do the R&D of pushing the boundaries of what's possible with your brand. And then I don't know that the luxury levels are doing this, but like almost like looking at that as they're doing really interesting boundary pushing high risk short run R&D out in the path. How do you take that and pull it in? And that's sort of why I mentioned the Gucci thing earlier with Dapper Dan is yes, it was basically just like a campaign where they acknowledged it and the history of it and stuff like that. But what happens if you go beyond just making people aware of it and saying, hey, we understand the lineage that we're a part of and actually look at those bootleggers as effectively startups in aesthetic startups in finding new boundaries for your brand and then pull them into a collaboration and acquisition per se with the fashion house. I think we need more of bootleggers all the deri-legals. Well, everything's illegal until someone says it's not. And so they just look at porn. We wouldn't have any media tech innovation without it. Okay, I think that porn is a perfect way to end this episode. So the key takeaway for me is that bootleggers, Burberry, you know, they just keep at it. They just keep at it. There is no such thing as one off of campaigns, the former model of media. There is only an ongoing cultural product, their cultural cultural program. Their cultural products are connected in a way so they amplify one another. So when Olivia Coleman came in with her fission chips, we knew exactly what she was building upon it because before that it was a fashion show with, you know, music and before that it was a music festivals and then before that was a previous fashion show with Burberry, Veddard and Trenches, the main character and so on. So like one thing the program is very tight, a very consistent, just keep going. Just kind of recapping things. So the through line for me today and much of the conversation is really the movement from a singular focus to a portfolio approach to stuff, whether you're Ralph Lauren, blowing out your world into lots of different ways, will we be trying to find different ways to manifest something as simple as like a fuzzy doll, or Burberry trying to embrace lots of different subcultures in British music. That portfolio approach and taking that approach to figuring out how to engage with and resonate with culture is a really powerful idea that it's non-linear, it's messy, but that framework of a portfolio management is something that can give people a framework for doing this in a way that a traditional linear campaign isn't an appropriate framework for that. So for me that's what really stood out. I love that and more of all of that to come and that reminds me of again what we said that like subculture is not a target audience, it's your creative partner. You got to contribute to it. Depart then and all all the others. Okay, so let's talk about next episode. So on episode two of season two of Hitmakers is going to be about something a little different. We're going to explore why the old adage that every business is show business is more true than ever. That's next time on Hitmakers. Thanks a lot. Thanks Lee.