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Producing a Broadway hit has a few things in common with investing in tech start-ups

LEILA FADEL, HOST:

They say there's no business like show business. But Hunter Arnold, producer of Broadway hits like "Dear Evan Hansen," disagrees. He began his career in tech, and he actually sees a lot of similarities between the two industries. Wailin Wong and Adrian Ma from our podcast the Indicator from Planet Money had him break it down for us.

WAILIN WONG, BYLINE: In musical theater, there's something called the I want or the I wish song. It usually falls in the first act, and it's where a main character expresses their heart's desires, like Alexander Hamilton singing I'm not throwing away my shot at the beginning of "Hamilton."

ADRIAN MA, BYLINE: But, you know, the I want song is not just for fictional characters. And for Hunter Arnold, his I-want-song moment happened years into what was kind of an accidental career in tech startups.

HUNTER ARNOLD: I sort of woke up in my mid-20s as a tech guy, but that was never really the plan.

WONG: The plan had been to work in theater. Hunter's I want moment was realizing he wanted to get back into that world. So Hunter went to New York, and he put his money into stage productions.

ARNOLD: I would say to these people, I'll give you 25 grand, but I have to be able to sit in everything and see how it works.

MA: Now, Hunter knew the tech playbook for investing in Silicon Valley startups. Entrepreneurs who need money go to venture capitalists. And these VCs cut checks, make bets on various companies, and then hope these companies grow as fast as possible.

WONG: And Hunter's insight was that theater is not that different from the Silicon Valley tech scene. So in Broadway, investors put up the upfront costs of mounting a production.

MA: Only one out of five Broadway shows actually recoups their upfront costs, so there is a lot of pressure to find a hit.

ARNOLD: The industry fully functions like venture capital. If you fail, it just goes - (imitating draining noise) - to zero.

MA: But there's one key difference that Hunter found between the worlds of theater and venture capital, and that is in the scaling up part of the process. With tech, companies grow at this breakneck pace until they go public or they get acquired by a bigger company.

WONG: In theater, it seems like the move would be to start small in some tiny, far-flung theater, then scale up to Broadway.

MA: But Hunter says, scaling up a show, that's a process that can kick off after the Broadway run. And one important way that scale happens is by taking the show on the road, literally through a touring production. Mara Jill Herman is a performer and creative producer based in New York who's experienced this scaling up firsthand.

MARA JILL HERMAN: Sometimes the joke is you live here to work everywhere else (laughter).

WONG: Mara has traveled the world as a performer, like around 15 years ago when she got cast in a North American tour of "Jesus Christ Superstar."

(SOUNDBITE OF PLAY, "JESUS CHRIST SUPERSTAR")

UNIDENTIFIED MUSICAL GROUP: (As characters, singing) What's the buzz? Tell me what's happening.

HERMAN: We did 90 cities in five months.

MA: Our protagonist producer, Hunter Arnold, he says even if investors lose money on the initial Broadway run, they can still end up ahead if the tour is successful. And there are also other ways besides touring to make a return like, a show can get picked up by regional theaters.

WONG: Or some productions get licensed by university or high school drama departments. Hunter calls that mailbox money because it's just money that shows up without any additional investment.

MA: Mailbox money? Now that is something that I can pretty much imagine everyone having an I want song about.

Adrian Ma.

WONG: Wailin Wong, NPR News.

(SOUNDBITE OF PLAY, "HAMILTON")

LIN-MANUEL MIRANDA: (As Hamilton, rapping) I am not throwing away my shot. I am not throwing away my shot. Hey, yo, I'm just like my country. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Wailin Wong
Wailin Wong is a long-time business and economics journalist who's reported from a Chilean mountaintop, an embalming fluid factory and lots of places in between. She is a host of The Indicator from Planet Money. Previously, she launched and co-hosted two branded podcasts for a software company and covered tech and startups for the Chicago Tribune. Wailin started her career as a correspondent for Dow Jones Newswires in Buenos Aires. In her spare time, she plays violin in one of the oldest community orchestras in the U.S.
Adrian Ma
Adrian Ma covers work, money and other "business-ish" for NPR's daily economics podcast The Indicator from Planet Money.