In the Hitchhiker’s Guide to the Galaxy, the rock star Hotblack Desiato is advised to spend a year dead “for tax reasons”.
The story is that Douglas Adams got the idea from Pink Floyd, who had to spend exactly a year abroad in order to avoid the astronomical levels of tax paid by British residents in the late 70s. Given that the tax system has got even more complicated since then, it may not be long before death is the only way to escape the tax man.
Death may already be good for business in other senses.
It is generally forgotten now how unpopular the singer Michael Jackson had become by mid 2009. Yet in the year since then he earned $275,000,000. What he did to turn things around was die.
He tops a distinguished list of dead celebrities who are earning more now than they did when they were here – and, in some cases, more than even the biggest earners who are still with us. Their earnings usually take the form of residuals from intellectual property rights.
So the question arises for those of us with intellectual property rights, but who are neither dead nor celebrities, whether it is a good idea to sell those rights while we can or hold on to them for our heirs?
Certainly there are some famous examples of people selling their rights for a pittance. Yet sometimes a pittance is what they really needed at that moment. There is something horribly sad about a great artist or inventor living and dying in relative poverty only to see his less deserving relatives living off millions.
It is also worth noting that selling an intellectual property may be the best way to maximise its value. If you have written a successful epic novel, you are more likely to make millions by selling an option to a big Hollywood studio than you are by trying to film it yourself. Even if you manage to raise the tens of millions necessary to finance the production, you will probably lack the expertise necessary to arrange the shoot and the marketing connections necessary to get the finished product into the cinemas. Something similar is true of most – but not all – new inventions: selling the patent to someone with an established distribution network is usually more profitable than trying to develop everything from scratch.
Of course, it is the ability to identify the exceptions to this rule, and know when it is best to go it alone, that is the mark of the truly great entrepreneur.