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Celebrity co-founders that do more than just pose with products

In the past, celebrity business ventures usually consisted of endorsement deals through which the stars would support a product. However, these co-founders show that the "lend your name and then step away" trend has been on the decline.
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The song “Watch Me (Whip/Nae Nae)” was an unstoppable force in 2015, managing to crack YouTube’s ten most watched music videos of 2015. It’s recently come to light, however, that it was the first monster hit created by DreamOn, a company co-founded by Madonna.

But while Madonna has so far only been a figure in the background, there are a few celebrities out there that not only co-founded a company, but have been known to be quite active in the business they helped created.

Take, for example, Jessica Alba, the co-founder of Honest Company. When Alba was pregnant with her first daughter, she once broke out in hives while washing her unborn child’s onesies. She said: “I was thinking, what if my baby has a reaction and I don’t know? What if her throat is closing? I had all this fear and anxiety because I was always so sick as a child.” 

That night she Googled every ingredient in the detergent she’d used and discovered some toxins could be labelled as “fragrance”. Her mission was clear: “I wanted safe and effective consumer products that were beautifully designed, accessibly priced and easy to get.” 

But it was only when Alba had her second child that the company was launched. Her husband had introduced her to a childhood friend by the name of Brian Lee, who co-founded LegalZoom.com. At first he declined the offer to start a business with her, but when he had a child of his own, he changed his tune.

“When someone asks if there’s a company that I didn’t invest in that I wish I had, I always say Honest,” said Kirsten Green, a venture capitalist at Forerunner. Green suggested that Alba had redefined the celebrity business model as she did far more than just pose with a product, and many of them – such as Reese Witherspoon, who started  Draper James – are eager to follow Alba’s lead.

Read here to find how Alba runs her business with an iron fist

Much like Alba, Dr Dre was a part of the process from the very beginning. Beats Electronics, created by co-founders Dr Dre, Jimmy Iovine and Luke Wood, currently controls almost 70 per cent of the market for premium headphones

“You’ve got to be lucky enough to identify a problem where you think you can help,” Iovine explained. He suggested two of the music industry’s biggest problems were piracy and the degradation of audio quality because of Apple’s plastic earbuds. “Apple,” he said, “was selling $400 iPods with $1 earbuds.”

Dre claimed that it was one thing that people stole his music, but it was another thing to destroy the feeling of what he’d worked on. However, he still held some admiration for the tech giant’s creator, who had married technology “directly with popular culture”.

With that in mind, Iovine and Dre set up a plan. “They’re making a beautiful white object with all the music in the world in it,” Iovine said. “We’re going to make a beautiful black object that will play it back. Dre and I decided to market this product just like it was Tupac or U2 or Guns N’ Roses. We wanted to recreate that excitement of being in the studio. That’s why people listen.” 

Read more about celebrities in the world of business:

And sticking to the key theme of celebrities branching out to the business world due to a bad experience, football player Louis Saha created a company on the premise that athletes were too trusting. He claimed that numerous stars had been duped and taken advantage of by people they trusted when it came to finance.

Together with old friend Patrice Arnera, Saha launched an exclusive social network for elite stars, which is set to redistribute ten per cent of its profit to charity organisations selected by its members and help promote philanthropy via a dedicated group.

“Many youngsters who play football at the top level have a hard time managing their money and making the most of the revenue streams that are available to them,” said Saha. “You need to understand the pressure that players are under. All the time it’s about getting fitter, stronger, more efficient in front of the goal, you don’t think about anything else. You don’t have time to think about investments and taxes and there are just so many propositions thrown at you all the time.”

The social platform, called Axis Stars, enables players, clubs, sponsors and agents to connect in a secure environment. It also acts as a “virtual department store” and “one-stop shop”. Here, athletes view the latest brand products and discuss topics such as endorsements and sponsorships with each other.

Related: Why ex-footballer Louis Saha launched a business preventing athletes from going bankrupt

Bono is, however, possibly the most entrepreneurial star on the list. In 1992, he bought and refurbished a Clarence Hotel in Dublin, with U2 guitarist The Edge, and turned it into a five-star resort. Together they even had a nightclub called “The Kitchen”. 

But it was in 2004 that Bono truly became a business mogul by co-founding Elevation Partners with former Silver Lake Partners’ Roger McNamee and Marc Bodnik, Apple’s Fred Anderson and Electronic Arts’ John Riccitiello. The private equity firm invests in entertainment and media businesses, having stakes in companies such as Forbes, Facebook and Edios. 

The company is named after popular song “Elevation” and its first investment was computer game companies BioWare Corp. and Pandemic Studios.

Furthermore, in 2005 he co-founded Edun Clothing with wife. According to the Edun website, “the company actively works to increase trade with Africa and it is aiming to have 40 per cent of its fashion collection produced in Africa”. 

But will having celebrity on board with your business, no matter whether they’re co-founders, brand ambassadors or clients, really make an impact? With a client roster being one of the most important validation points for any business looking to attract new custom, we asked the founder of Bozboz whether his star-named customers have been a boost.

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About Author

Shané Schutte

Shané Schutte is a senior reporter at Real Business, with a particular specialism in employment and business law, human resources, information technology and sales/marketing.

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