Think about it. If we all followed the Peter Lynch philosophy of “Invest in what you know”, 250 million people out there would love to own a piece of Facebook stock.
And soon enough, as was confirmed this week by these initial filings, some of those folks (although a very select few, I’m sure) will have that chance when Facebook finally has its IPO.
This isn’t a stock and bonds blog, so what does this have to do with Broadway?
What interested me about the articles I read about the IPO was how long it took Facebook to become profitable.
6 months? 1 year? 3 years?
Wrong, wrong, and wrong again.
It took five years for Facebook to make a dime. Five years.
I found that intriguing, because in the Broadway world, a five year payout would be celebrated, but still slow. Our monster hits pay back in about 9 months to a year now (it used to be a sell out could recoup in about six months, thank you rising costs). Of course, it’s an entirely different type of economic structure, so admittedly it’s a bit like comparing apples to pineapples. (The problem with Broadway is that our costs can’t be controlled as much as the costs of a tech company, and our upside is a wee bit more limited so companies can afford the risk of investing more capital as you go.)
But still, I took it as a great reminder that sometimes, even when you’ve got something that 250 million people want to use, you’ve got to be patient and unbelievably persistent if you want to be profitable.
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