Logan Paul's Prime is a cautionary tale for influencers

"George Clooney and Casamigos, Kylie Jenner and Kylie Cosmetics, Jay-Z and Tidal. It's easy to see why celebrities and influencers find brand building alluring. In the most successful cases, it ends with a celebratory exit, a nine-figure check, and, for some, the title of billionaire. But aspiring entrepreneurs, beware: The founder mindset is risky, and many creators walk away with almost nothing. "Ninety-seven percent of creators and celebrities should not be launching their own brands," Scott Van den Berg, the founder of HotStart VC, which invests in influencer brands, told Business Insider."

"The desire to own something, rather than promote other brands, stems from the "creator anxiety" of relying too heavily on advertising and brand deals to make money, said Eric Bogard, CEO of talent-firm UnderCurrent Management. However, betting on yourself presents its own drawbacks. Take the example of Logan Paul and KSI, two big-name YouTubers who launched Prime Hydration three years ago. The brand skyrocketed to success in its first year, but has since floundered in some markets - and may provide a cautionary tale."

Celebrity and influencer brand launches can produce nine-figure exits and billionaire founders, but most creator-led ventures fail to deliver comparable returns. HotStart VC founder Scott Van den Berg estimates 97% of creators and celebrities lack the audience to build billion-dollar companies. Many creators pursue businesses to escape reliance on advertising and brand deals, a pressure labelled "creator anxiety." Betting on personal brands can backfire: Prime Hydration surged initially before struggling in some markets. Savvy creators can prioritize short-term revenue through royalties, marketing commissions, or paid posts instead of risking ownership and uncertain equity outcomes.

Read at Business Insider