She doesn’t even need the Kardashian last name to beat Jeff Bezos and other mega-tycoons, as long as a few age-old spoilers cooperate with her ambition.
Fans donating money to make Kim Kardashian’s reality TV little sister a billionaire have been met with a mix of disbelief and derision, but there’s nothing ridiculous about the situation.
Kylie Jenner is already on track to earn billionaire status though her entrepreneurial efforts. She’s a bona fide 20-year-old tycoon.
All the fans can do is accelerate the process. The fact that they’re willing to help only signals the power of her personal celebrity brand.
With that kind of fame and her youth on her side, only one factor can keep her from joining the mega-billionaire pantheon of Warren Buffett and the Silicon Valley founders.
Like a latter-day Cinderella, she’s got to defend her position from jealous sisters.
More than a fairy tale
We usually add up Kardashian-Jenner wealth on a transactional basis. Kris Jenner’s kids are rich because they’re famous and they monetize their fame in specific ways.
Kris allocates each one a piece of the family’s TV contracts — still going after 14 seasons — depending on their contribution to the show. They then rent their public social media profiles to promote other people’s projects in exchange for cash or, in rare cases, equity.
While a lot of licensed Kardashian-Jenner products have come and gone, all the family-branded fashion and jewelry rarely adds up to more than a veneer on that basic business model. From time to time I’ve wondered whether they’re actually just tax sinks, essentially vanity companies.
Kylie is different because her “vanity company” sold over $300 million in cosmetics last year. That’s real scale. It’s a real operation.
And in the ruthless world of makeup, even that slice of the market is worth a lot of money. Do the conservative M&A math and give Kylie Cosmetics a 3X sales multiple — never mind the profit margins or how much the founder pays herself.
Unlike the other licensed Kardashian-Jenner stuff out there where the family earns a slice of someone else’s business in exchange for their name and marketing support, Kylie owns this venture outright.
If it sells to an Estee Lauder, L’Oreal or Coty eager to boost its growth profile and stay relevant to the “kids,” Kylie is looking at a $900 million payday. In the meantime, the business keeps growing on its own.
That proposition is as real as Facebook in 2010, Snapchat in 2012 or Amazon in 1995. It’s a billionaire maker. And Kylie hasn’t needed outside funding to grow the company, so her stake remains undiluted.
Her fans don’t care that she comes from an entertainment dynasty. They like the lipstick, they buy it.
That’s the secret of this effort to raise more cash from fans in order to speed up her billionaire journey. She isn’t personally involved in the donation website. It’s a stunt.
But millennials love online stunts that demonstrate how huge groups — they’re the biggest generation in history, after all — multiply the power of trivial individual contributions.
Right now the donations haven’t even added $2,000 to Kylie’s net worth. They’re unlikely to unlock the full $100 million the campaign sponsors say they want.
Every dollar shows her hold on the millennial psyche. Bemoan or praise it, that’s a fact. It’s a big part of how her lipstick company attracted that $300 million run rate in the first place.
A role like that in a generational market is a blank check.
Offer something with real value and Kylie can sell them anything, attracting a whole lot more than $2,000 as an online joke.
She can sell them the celebrity-endorsed financial services of her choice. Kylie Banking, Kylie Investment, Kylie Retirement.
Would those more serious services attract the same response as the relatively frivolous lipstick purchase now and then? It doesn’t matter. Even a sliver of this untapped market is effectively free money at this point.
And does the business need to offer competitive results and internal margins compared to a conventional advisory practice? Again, it doesn’t matter. Conventional advisors aren’t chasing Kylie’s people.
Youth and the wicked sisters
Kylie’s people are her age or younger. They’re the future. She turns 21 in August.
Mark Zuckerberg and Snapchat’s Evan Spiegel were that young when they started their businesses. Jeff Bezos, Bill Gates, the venerable Warren Buffett were older and they’re definitely a lot older now.
Bezos may be headed for the financial stratosphere now with his $112 billion in Amazon stock. He’s 54 years old. With luck and a lot of science, his wealth might keep compounding another 30 years.
Buffett and Gates are effectively done. They’re living on the equivalent of inertia as their massive fortunes necessarily grow on their own accord.
Anyone who’s explained retirement planning knows that a 20-year-old who’s already worth 900 million can multiply her net worth many times over across a normal lifespan. Add in the power of her millennial brand to cross industry barriers and the growth rate accelerates.
She didn’t go to Wall Street for funds. She owns everything outright. It wasn’t an orthodox journey and it’s barely started.
Sure, any of the Kardashian sisters could’ve done it, but they were busy being famous and collecting tiny stakes in vanity companies — app developers, phones, clothes, all made by other people who earn the bulk of the profit.
But they didn’t put in the effort. They didn’t have the ambition. That’s all right. They’re rich and famous on their own.
Will they get jealous? Will mom get jealous? It doesn’t take a lot of pressure to make a little sibling miserable enough to walk away from a chance to define a generation’s commercial lives.
And of course if they run into trouble when the show is over and their lifestyle needs don’t scale back, they’ll lean on the biggest family success story.
Kylie Jenner needs to worry about her own ability to keep executing on her ambition over the next half century. The people closest to her are the key. If they support her, there’s no problem here. After all, the millennials already do.