We have an interesting little refutation of the strictures of the Senior Lecturer in International Political Economy at Islington Technical College here. For, as we all know, he insists that intellectual property means nothing. It’s just a manner of moving money around the world to dodge tax, it has no real economic import whatsoever. We should therefore simply ignore it all – for all purposes, not just tax if I’ve understood the drivel correctly.
Which is interesting, given that the world’s about to be youngest self-made billionaire, Kylie Jenner, seems to make her money from nothing at all except intellectual property:
Model Kylie Jenner is the cover star and youngest woman on this year’s Forbes magazine 60 richest self-made women in America.
The 20-year-old is number 27 on the annual list after amassing a fortune of $900m (£681m) in less than three years, according to the magazine.
Most of her wealth comes from her make-up company Kylie Cosmetics, which has now sold more than $630m (£475m) worth of products.
But a cosmetics company makes and sells real things, right?
Keeping Up with the Kardashians star Kylie Jenner is worth $900m (£680m) at just 20 years of age, says Forbes.
The business magazine said the social media star is on track to become “the youngest-ever self-made billionaire”.
The fashion guru, the youngest of the Kardashian clan, starting selling her own cosmetics three years ago.
You don’t make a billion in a few years out of ephemeral phantasms like intellectual property now, do you?
Just 20 when this story publishes (she’ll turn 21 in August) and an extremely young mother (she had baby daughter Stormi in February), Jenner runs one of the hottest makeup companies ever. Kylie Cosmetics launched two years ago with a $29 “lip kit” consisting of a matching set of lipstick and lip liner, and has sold more than $630 million worth of makeup since, including an estimated $330 million in 2017. Even using a conservative multiple, and applying our standard 20% discount, Forbes values her company, which has since added other cosmetics like eye shadow and concealer, at nearly $800 million. Jenner owns 100% of it.
Well, OK, that’s real money.
Her near-billion-dollar empire consists of just seven full-time and five part-time employees. Manufacturing and packaging? Outsourced to Seed Beauty, a private-label producer in nearby Oxnard, California. Sales and fulfillment? Outsourced to the online outlet Shopify. Finance and PR? Her shrewd mother, Kris, handles the actual business stuff, in exchange for the 10% management cut she takes from all her children. As ultralight startups go, Jenner’s operation is essentially air. And because of those minuscule overhead and marketing costs, the profits are outsize and go right into Jenner’s pocket.
Basically, all Jenner does to make all that money is leverage her social media following. Almost hourly, she takes to Instagram and Snapchat, pouting for selfies with captions about which Kylie Cosmetics shades she’s wearing, takes videos of forthcoming products and announces new launches. It sounds inane until you realize that she has over 110 million followers on Instagram and millions more on Snapchat, and many of them are young women and girls–an audience at once massive and targeted, at least if you’re selling lip products. And that’s before the 16.4 million who follow her company directly, or the 25.6 million who follow her on Twitter, or the occasional social media assists from her siblings and friends.
No, no, the senior lecturer is quite right. Intellectual property is of no matter, far better to simply ignore it for economic and taxation purposes. After all, that billion bucks ain’t real. And a brand, a name, is not intellectual property either, is it?