Friday, August 29, 2008

Making a Fortune with Make-up

Following the end of the Cold War in the early 1990s the administration of President George H. W. Bush (father of the current President, George W. Bush) opened the Internet to the public. Previously the Internet had been reserved exclusively for use by the Armed Forces, military contractors and academics involved in defense related research. A few years later in 1994 an Englishman named Tim Berners-Lee (now Sir Tim Berners-Lee, having recieved a knighthood from Queen Elizabeth II for his scientific contributions) working at the European Organization for Nuclear Research (CERN) in Geneva, Switzerland published the computer code for the World Wide Web which both greatly expanded what could be created on the Internet as well as making it relatively easy for people to create and use content on the Internet.

Use of the World Wide Web increase at such a fast pace that a mere four or five years later, as the 21st century was about to dawn, a full one-third of the U.S. economy was centered around the web. Today, almost every sector of the economy is in some way or another tied to the web.

The ease of use of the web and its vast spread is creating opportunities for people right and left and is changing the way business is done. In this new world of the Internet, one no longer has to have access to large amounts of capital, live in a big city or be a scientific genius in order to be a successful entrepreneur on the Internet. Thanks to outfits like eBay, Amazon, Google and numerous others, people can start and build successful businesses with nothing more than a computer, internet connection and possibly a digital camera.

A couple of years ago, after giving a report on the latest employment figures, which had hit an all time high, the anchor commented "and these figures don't include all the people who work from home producing content for their websites and blogs and living off the Google ad revenue their work generates". CNBC ran a story a while ago on people all over the nation, many in small towns whose economy collapsed following the closing of the local manufacturing plant, who learned to sell on eBay and built business that generated as much or more income than the manufacturing job which they had lost.

Then there is Lauren Luke. Lauren is a 26 year old single mother living in South Shields, a town of about 90,000 located at the mouth of the River Tyne in northeast England. Once a major shipbuilding center, the town's economy has been hard hit in recent years by the loss of that industry. A self-described loaner who lacks both self confidence and the stunning looks of a model, Lauren does not exactly fit the stereotype of a successful media personality or global entrepreneur. In adition to her other deficiencies (this is the way she describes herself) Lauren also lacks both the technical skills required for good video production and the presentation skills needed to perform well before a camera. Also lacking is formal training in the application of make-up even though her business is built around tips on how to apply make-up to achieve a desired look.

Operating from her bedroom in her home in South Shields, Lauren has built a world wide following and is generating thousands of dollars a month in revenue. What is the source of Lauren Luke's success? Self produced YouTube videos showing how to apply make-up. Thanks to Google's video ad sharing program, she has a stream of income from the ads that appear in the box around her videos. After pushing a button on the video camera attached to her computer, Lauren launches into her demonstration showing and describing how to apply make-up for the look in question. This is a one person production with Lauren demonstrating an narrating as she goes along. When she finishes, she signs off for her audience, stops the camera and uploads the video - there is no editing of the video since, again in her words, she doesn't know how to edit video. Google, in this case, has provided Lauren and millions like her the opportunity to make money by producing content designed to attract an ad clicking audience. Google also provides the easy to use technology needed to upload videos while advances in hardware and software have made it possible to purchase the needed equipment for a very low fee (compared to the cost of similar equipment in the pre-PC era).

This is the economic revolution that is shaking up and transforming the economic world around us.