Welcome to Funding the Kryptonite, a blog that will take a look at comic book super villains and discuss them from a business perspective.
To kick off on a good business idea, we take one of Marvel's most well known business villains: Wilson Fisk, A.K.A. The Kingpin. An overview of this character in his many different incarnations can be found here, but I'll be examining one of his best business decisions from the Ultimate Universe version of him.
The Kingpin discovers that Spider-Man, noted superhero and general thorn in his side, never registered his likeness or name as trademarks and that a subsidiary company of his legitimate business empire purchased the company that did register those trademarks. In short, the Kingpin owns the merchandising/film/TV/book rights to Spider-Man. He floods the market with products based on that likeness, generating significant revenues for himself and reaping the benefits of Spider-Man's increasing popularity and fame as Spider-Man attempts to stop Fisk, and other villains, from their villainy.
What's the business element?:
This is an excellent example of risk management in action.
Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. (Source)
Identification: Mr. Fisk identifies superheroes, as a whole category, as a potential risk to his illegal businesses due to their proclivity to involve themselves in stopping criminal activity. Spider-Man is a noted New York City based superhero, where the majority of Mr. Fisk's activities are conducted. He is an external threat, meaning based outside of the confines of the Kingpin's organization.
Assessment: Spider-Man is assessed as a fairly frequent occurrence (NYC-based, previous pattern of targeting the Kingpin, deals with "street level" crime), particularly compared to other superheroes (the Fantastic Four, as an example, generally focus their activities above "street level" and therefore do not target the Kingpin). Spider-Man's impact on the Kingpin's business can also be rated fairly highly, as he goes beyond stopping financial dealings and into the realm of trying to have Mr. Fisk jailed for his crimes.
Prioritization: Risk is generally assessed on a composite scale whereby you multiply the probability of occurrence on a 1-5 scale and the impact of the occurrence on a 1-5 scale, resulting in a 5-25 point final score. These scores can be determined in a fairly arbitrary manner. Going back to the Assessment section, a 1 score for probability of occurrence would be "Extremely infrequently to never" and a 5 score would be "Fairly frequent to always". Impact of occurrence can also be scored in such a manner, usually in financial terms, whereby a 1 might be "Extremely low cost (under $10,000)" and a 5 might be "Extremely high cost (over $1,000,000)". These will vary based on an understanding of the specifics of the company that you assess risks for.
In this case, Spider-Man's risk score would be a full 25. This is because he scores the highest possible value in both frequency and impact of occurrence. By comparison, the Fantastic Four might rate only a 1 on the frequency scale and a 2 on the impact scale. With a final score of 2, they are clearly a lesser risk than Spider-Man and must be prioritized after him.
How do you deal with risk?:
There are four main categories that risk management options fall into:
- Avoid the risks
- Reduce the risks
- Share the risks
- Accept the risks
Avoiding the risks, in this case, would mean withdrawing from criminal activity and thus preventing Spider-Man from interfering in your illegal activities by no longer having any. While he may dislike the Kingpin for his previous criminal affiliations, he would no longer have an active reason to target him.
Reducing the risks could, in this situation, mean hiring super-powered villains to act as security for the illegal transactions, or perhaps creating a tracking system that allows for hired goons to be forewarned of Spider-Man's imminent arrival on the scene and disperse before he arrives. These measures require additional costs and operational controls, which may arguably offset the benefits gained from them.
Sharing the risks in a criminal enterprise could be accomplished through terms of payment and contract. The Kingpin may pay only a token sum before the completion of crimes such as weapon purchases and the remainder upon successful completion. Thus, if Spider-Man interferes, he has lost less in the overall process. While a plausible solution, it requires negotiation with counterparts being willing to accept a share of the risk and having to make it worth their while for their own risk increases.
Therefore, the Kingpin can accept the risks. He cannot avoid the risk, reducing it is not feasible for him, and sharing is equally implausible. By budgeting the costs of Spider-Man's attacks on his criminal enterprises and launching a legitimate business that generates profits in excess of those costs (and grows as Spider-Man's fame and success do), he can contain the risk and put into place a strong mechanism to prevent the damage from this risk.
"So no matter how much of a pain in my butt you think you are to me-- No matter how much money you think you cost me... It is nothing compared to how much I make from you just being you." -The Kingpin (Ultimate Spider-Man #109)
Final Rating: Good business!
Thank you for reading and please let me know what you think!
Originally published at Funding The Kryptonite.
Written or Contributed by: Funding The Kryptonite