Exponential / Power law

This locks toy companies into a challenging bet. Every year, they have to a) predict trends, b) invent them, and c) commit capital to them. All without knowing how the rest of the year will turn out. Since toy trends exist, but don’t last for very long, they have to invent new products every year—but the technological state of the art doesn’t advan... See more

Picking a few hits requires a tolerance for many bad ideas, mediocre ideas, and even good ideas cursed with bad timing. Above all, it requires a business model that supports the inevitability that most new things fail; the most promising ideas often attract a chorus of skeptics; and one big hit can pay for a thousand flops.

As a result of these much larger outcomes we've built a movie-making system that is focused on big hits because the business model can't really absorb too many massive flops. So you get sequels, prequels, and spin-offs. Established IP and bankable stars. No big risks. And you don't get nearly as much experimentation, innovation, or creativity.