Investing - What happens when you invest in your dreams.
In this episode of the MidLife Entrepreneurs podcast Business Coach, Kevin H. Boyd tells the tale of how he got persuaded to invest all of his money in “2 Hours”, a low-budget family sci-fi movie!
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Kevin H. Boyd:
Midlife Entrepreneurs Podcast Number 5.
Kevin Boyd: (00:09)
Part 1 – The Opportunity
Kevin Boyd: (00:12)
When my longtime collaborator in short films pitches me the idea of making a feature film, I was so excited because it aligned with my childhood dream of making a movie one day. You see, the movies as a place I escaped too as a child growing up in the damp and dreary world of the 1970s on the west coast of Scotland, it rained almost all the time. There were only three channels on television and the Internet was a good 20 years away. So my local cinema, The George, in Irvine, was where I went to fly spaceships, fight monsters, and ultimately escape from the troubles of my young life. You see, we were too poor to afford a film camera back then. So in my early teens, I started recording increasingly ambitious audio plays on my little mono Cassette recorder. I even built small electronic sound effects devices to add that big budget movie soundtrack to them.
Kevin Boyd: (01:15)
Then as personal computers started to become affordable in 1981, I started programming simple eight animations on my Commodore VIC-20 with a massive 16K of RAM and recording them onto VHS videotape. And after winning a national computer animation competition, using this process. I got my first job as a software developer in a new industry called interactive video just starting up on the south coast of England in Brighton. But this involved using real video cameras and an edit suite that cost over a million pounds. So making my own films, well, it was still vastly out with my reach.
Kevin Boyd: (01:57)
Since those early days of optimism, I have spent tens of thousands of pounds on trying to make movies myself. I even went to film school and trained as a film producer. I bought all the latest camera gear when it became affordable in the early two thousands thinking all I needed to do was learn how to shoot and edit a film, and that was all that would be needed.
Kevin Boyd: (02:23)
I was making the classic technician mistake, you know the one, just spend more and more time and money perfecting your craft. And one day this will magically lead to your business success. I became aware of this folly when I read the E-myth by Michael Gerber, who states the problem so clearly.
Kevin Boyd: (02:45)
1 – the entrepreneurial myth, the myth that most people who start a small business are entrepreneurs.
Kevin Boyd: (02:52)
2 -the fatal assumption that an individual who understands the technical work of a business can successfully run a business that does that technical work.
Kevin Boyd: (03:05)
So after 10 years of making short films that went nowhere, my Director was telling me that he had reached the conclusion that for the same amount of effort as making a short film, we could make a feature film. I felt so excited. I just wanted his film idea to happen.
Kevin Boyd: (03:22)
So there and then I promised him 10,000 pounds. You see while, I had spent the last 10 years of my head in the clouds playing at making movies. I had also had my feet squarely on the ground investing in the London property market. And over that 10 years, the four properties I had bought and developed had doubled in value and had generated enough income for me to become financially independent, a subject I talk about in my other podcasts, and that I wrote about in my 2012 book The Job Delusion.
Kevin Boyd: (03:56)
But I’ll be honest, I was bored of the sheer certainty of the money turning up every month and the tediousness of dealing with tenants complaints and faulty boilers. Why do they only ever fail on public holidays? Anyway, and so I wanted some excitement. I wanted glamour, I wanted Hollywood and as Tony Robbins, but it’s so clearly in his book, Money Master The Game. The number one priority in life is certainty and the number two priority is uncertainty.
Kevin Boyd: (04:29)
Part 2 – The Money
Kevin Boyd: (04:33)
As the project progressed, producers were brought onboard, a script developed and a date for the shoot agreed, 21 days in London. Straight through with no breaks, a punishing schedule. But we are low budget independent movie. We could not afford to rent cameras over a weekend and not use them. In parallel to this ambitious but low cost schedule. Fundraising was going on. At first it looks so promising. We only needed 150,000 pounds to do the shoot and lots of people were interested. But what we discovered was that people love to talk about investing, especially in movies because they’re glamorous and exciting. But when it came down to actually putting the money into our bank account, they faulted. Why? Well, making a movie is a very high risk venture. There is absolutely no defined return. We had estimates of four times returns, but the truth was we did not know for certain if we could even sell the movie? In truth, we could lose the lot and the movie just go straight to video and only be shown in prisons and film schools, as lessons on how not to make a movie.
Kevin Boyd: (05:47)
A few weeks before the shoot is due to begin, I am round up my Director’s house borrowing, his new 4K camera for a corporate video shoot I was doing the next week and he tells me I need another 70,000 pounds to be able to shoot the movie or it just won’t happen. And in that moment I was hooked. A combination of my frustrations with the glacial excitement in my property business, combined with my childhood ambition to make a movie, collided deep in my unconscious mind, leading me to utter the words out loud, I’ll give you the extra 70,000 pounds on top of the 10,000 I’ve already promised
Kevin Boyd: (06:28)
Part 3 – The Outcome
Kevin Boyd: (06:31)
That was last summer and in the six months since the film did actually get shot in 21 days. But the budget grew and grew and after 21 long days of shooting, another eight days was required to complete it, but there was no more money left to do it. As we would spend every penny and only had 85% of a film to show for it. At first we were all optimistic. The money would be found as we could now show potential investors rushes from the shoot and they will see how amazing it looked and how funny and poignant the story was. And of course they would get out their chequebooks and write a check for 10 or even 50,000 pounds.
Kevin Boyd: (07:11)
But after six months, no money had come in. In fact, some potential investors lost their nerve and pulled out. We were in what Silicon Valley entrepreneurs often refer to as “the trough of sorrow”. In tech speak, we had run out of runway, the runway, you’re hurtling down to launch your product and the runway is made out of cash and we had none left. So our plane was definitely going to crash as we only had, a half-built plane with only one wing and no fuel to take off with.
Kevin Boyd: (07:46)
What should I do? I own 13% of this movie and had 80,000 pounds of my money invested in it. My internal critical voice was having a field day with me. You idiot! Why didn’t you just stick to property? Yeah, it’s boring, but it works and generates income for you every single month. Stay safe. Stop taking crazy risks.
Kevin Boyd: (08:09)
If I’m honest with you, when I invested, I was doing so from a place of detachment. I’ll give you all my money that you do all the work I was being like a parent all knowing and wise. Just tell the children what to do and then stand back and watch them do it, but does any parent knows? Our children really ever listened to our advice and even if they do, they don’t implement it exactly as we intended it to be and now just like a parent, I knew the time for allowing the kids to experiment and explore had come to an end. I was going to have to step in and stop the whole thing getting much worse.
Kevin Boyd: (08:49)
I gathered the Producer and Director together and we had a really tough conversation about what was not working, what we could do to raise the money we needed and what action needed to be done. I could see people had got stuck in a perspective of it’s hard to explain people to invest in a movie made by a team with no track record and as I say, if you believe you can or believe you can’t, then you’re right. It was clear we needed to do a whole bunch of things to change this story and one of them was to get a movie trailer made. Out of the 85% of the film we had shot and then send our Director to the Cannes film festival. Fortunately happening just two weeks away and get him in front of film investors and distributors to really sell this movie. There was no money left to do any of that and I realised I was going to have to put yet more money into this movie to at least give us a chance of completing the film. But I also felt, am I just throwing good money after bad?
Kevin Boyd: (09:52)
They say that when we lose money on a venture like this it is best to just think of it as the school fees you needed to pay to learn the lesson. So here is 80,000 pounds worth of learning for you. So pay attention, this is valuable stuff!
Kevin Boyd: (10:12)
Part 4 – The Lessons Learned.
Kevin Boyd: (10:15)
Lesson Number 1 – only ever invest money that you can afford to lose. So not your kid’s college fund or your pension pot. Purely cast. You’ve got easily that you don’t know what to do with, then that’s a great investment in your childhood dream of a movie or even a Hove-Board, whatever it is, dream big and invest small.
Kevin Boyd: (10:38)
Lesson Number 2 – look, if you’re trying to convince people to invest in your business, you need to make sure the investor feels, they’re going to miss out. If they don’t invest right now. Find out what motivates them, what dreams are unfulfilled in their lives, and that becomes your hook, as money is rarely a good motivator. They must feel the train is leaving the station and they need to run to get on it.
Kevin Boyd: (11:03)
Lesson Number 3 – what is your unfair advantage? Why are you going to make a better movie or widget than the next guy? This tastes great. Belief in what you’re doing is natural to have doubts, but don’t convey these to the potential investor. They want to feel confident in your abilities. Imagine that everything goes perfectly in your business. That is what you want to convey, not what might go wrong, stuff will definitely go wrong, but the investor doesn’t need to know that. Letting them believe you have the perfect business.
Kevin Boyd: (11:38)
Lesson Number 4 – dance in the moment. Whatever team you end up with, you can focus on what they’re not good at, fantasise about firing them or make the best vase you can from the clay you’ve been given.
Kevin Boyd: (11:51)
Lesson Number 5 – a sign that you truly are stretching yourself outside your comfort zone is the fact that the frequency of failure increases. Though of course it really is not failure. It is the important feedback cycle of learning a new skill. I’ve never seen a baby give up after its first attempt to take a step. It cries or even laughs and then gets right back up and tries again and again and again until it walks!
Kevin Boyd: (12:21)
Lesson Number 6 – Sometimes you just have to throw good money after bad to see if it really is bad because we don’t truly know what the arc is in our own story. This may be just one part of the training we going through to get to the next level. Ultimately, keep the faith.
Kevin Boyd: (12:43)
As I record this podcast, we have a new movie trailer which truly shows the humour in our film and our Director is traveling back from the Cannes film festival with a calendar full of appointments for meetings with investors and film distributors who all love what we were doing and really wanted to help us get over the finish line.
Kevin Boyd: (13:01)
I will follow up in a future episode how things turn out and whether or not we will be going to Hollywood for our next venture.
Kevin Boyd: (13:12)
And if you’ve enjoyed listening to this podcast, then please subscribe to it on iTunes and leave a review as it helps others discover it too.
Kevin Boyd: (13:22)
This podcast was brought to you by Upward Spiral Coaching. Visit our website at www.upwardspiral.uk.com
Thank you for listening. This has been Kevin Boyd of Midlife Entrepreneurs. Please subscribe to my podcast and follow me on Youtube and get in touch if you want to discuss how I can help you transform your life.