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We are in the pioneer stages of what is called the “Experience Economy.” People today, especially millennials, are more interested in buying experiences than products. Today I talk with Case Lawrence a thought-leader in the experience economy. He is the CEO and founder of CircusTrix, the largest indoor recreation and trampoline park company in the world with more than 290 locations. Today we talk about how our addiction to sharing our experiences is changing the world economy as we know it.
Be sure to tune in for a thought-provoking episode.
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Show Notes (abridged script)
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About Case Lawrence
After getting a law degree from Duke School of Law, he worked with a firm in Silicon Valley. While in the area he was exposed to a multitude of successful entrepreneurs, including Elon Musk. Being exposed to these people shaped his perception of the world and contributed to his success.
After practicing law, he began developing commercial real estate in Central California until the Great Recession of 2008-2009. He lost almost everything due to the Recession. As a result, he spend two years of his life working to avoid bankruptcy.
“I like to tell my company, my family, and anyone that will listen, that no matter what I accomplish with CircusTrix or anything else, my great business accomplishment was avoiding bankruptcy in ’08 and 09′. I mean that sincerely.” ~ Case Lawrence
“I left that trip with my imagination soaring.” ~ Case Lawrence
In 2010, Case took his kids to a baseball game in San Francisco. While he was there, he visited a trampoline park located in an airplane hangar.
“I was overwhelmed by this really weird place. It was filled with trampolines, had music playing, had people in workout clothes playing trampoline dodgeball. It was this mashup of all these different things.” ~ Case Lawrence
Case launched his first park in Madera, California, in 2011. Now the company has over 290 facilities. Case says that he was really inspired by the creativity of the trampoline parks. They mixed all types of different things to create this age-defying, club/gym-like environment.
The Experience Economy
“People want to do things. They want to have adventures, narrative, and meaning in their day and their activities.” ~ Case Lawrence
The Amazon Effect
To understand the emergence of the experience economy, Case says, we must take a step back and look at a few of the macro-trends preceding it. He describes how the Wal-Mart model of big-box retail operated for thirty years before being disrupted by e-commerce, mainly Amazon.
People are now buying more, if not all, of their goods online. Shopping went from an activity to a to-do item.
“We’ve sapped the romance out of that shopping…Now we’re looking at experiential-type retail.” ~ Case Lawrence
Case describes that part of the experience economy is luring shoppers away from home and back to the physical locations.
Millennials and Experiences
“Millennials are spending four times more than the other age groups on experiences.” ~ Case Lawrence
Case cites a study from McKinsey & Company, which tracked trends in the experience economy. While all age groups have begun spending more on experiences, millennials spend significantly more than other generations.
“This is also tied to a lot of data that’s come forward recently, that backs that up. It shows that scientifically, we get more yield in-terms of happiness and joy from experiences than we do from things.” ~ Case Lawrence
Case believes that people spend so much time in front of screens, that the human soul craves time away from them. Part of the way we satisfy this is getting outside and experiencing new things.
Social Media as a Factor
“We like to say that we’re in the business of selling selfies.” ~ Case Lawrence
People are planning their lives around social media; they want to be able to share the activities they participate in online. One of their objectives in going somewhere is to post it online afterwards.
“If you want to participate in social media, and actually excel in it, you do have to lead an active life. You have to have experiences that can play well on social media as posts.” ~ Case Lawrence
The Photo Studio
“We treat our parks as if every inch, head-to-toe, floor-to-ceiling, is a photo studio.” ~ Case Lawrence
Case describes how CircusTrix spends 10,000s of dollars making the parks more photogenic. They blackout the ceilings, add murals with street and graffiti art, and put colors on the walls, all to assure that photos taken by customers are attractive.
“Many of our attractions are very popular simply because they make for a very compact and highly produced social media post.” ~ Case Lawrence
CircusTrix uses dunking trampolines, trapeze attractions, ninja courses, and more because they are easily sharable. The trapeze, for example, is one of their most popular attractions because customers can easily share it in a three-second Snapchat or Instagram post.
There will be a shift in jobs, but the experience economy presents an opportunity for people to pursue careers they really enjoy.
“For example, there will be a much greater opportunity for people to pursue professions in golf, skydiving, or in extreme-sports.” ~ Case Lawrence
CircusTrix employs around 3,000 employees around the world. They are not only in corporate positions, but in the parks themselves.
Can the Experience Economy be Taxed?
Since sales taxes don’t apply to experiences, there will be an extreme effect on the total sales taxes gathered. States are all over the place on taxing experiences. For example, California, who is notorious for its high taxes, has no entry tax. However, Virginia and Europe tax entry to CircusTrix’s parks. Case tells us that such taxes are a disincentive to having parks in those regions.
“The existence of an admissions tax or not, is certainly a big factor on our pro forma.” ~ Case Lawrence
The Impact of a Recession on the Experience Economy
“Even in times of economic hardship, people are willing to spend micro-payments to escape from reality.” ~ Case Lawrence
One of the main questions regarding this emerging economy, is how it will react to economic downturn. The only real evidence as to how is will react comes from the Great Depression. During the Great Depression, the movies and entertainment became vastly more popular. People wanted to get away from the horrors of everyday life.
Since the experience economy is fairly new, there is not a lot of evidence from the Great Recession. However, movie-going still remained strong.
The Future of Experiential Opportunities
“I think it’s the very early pioneer days of the experience economy. I think we’re going to see an absolute explosion of experiential opportunities in the marketplace.” ~ Case Lawrence
Case believes we are just in the beginning stages of the experience economy and that there is a lot of room for it to expand and become even more popular. He states that it will continue to combine new technologies with real life experiences to create a whole new kind of human activity.
“Virtual reality will not just be something people participate in a dark room at home. It will be something that is combined and synergized with real life experiences to create a whole different kind of human activity.” ~ Case Lawrence
We discuss how Six Flags Magic Mountain and Harry Potter World are beginning to implement technology into their park experiences. This is not all, Case believes this will spill over into our sports, our workouts, and most parts of our lives.
The Future of CircusTrix
“One of the challenges of being in the experiential space is that you need to continually innovate and provide new attractions and experiences to your clientele to give them reasons to keep coming back.” ~ Case Lawrence
Case believes that the trampoline park venue is here to stay, but that it will evolve far beyond just trampolines.
Visit a CircusTrix Park!
You can find out more about Case and CirusTrix on Twitter or at CircusTrix.com.
Bills with Luke Scorziell does not provide investment, tax, or legal advice or recommendations. This material is solely intended for educational purposes based on publicly available information and may change at any time. Additionally, this article’s content is a summary of the Interviewee’s comments and, while rephrased by the Author, are not from the Author himself.
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