INVESTING IN SPEED
some miracle, millions of people across the
USA suddenly become huge followers of
RACER racing – say, 2-3 million watching on
TV and 100,000 attending every race.
Such a scenario should attract the
attention of industry professionals of all
kinds – sponsors, drivers, promoters, media
– and with it, a huge influx of investment. So
what happens to the cost to be competitive
in the U.S. National RACER Championship?
I think you’ll agree that even if the
technical rules were very restrictive and
stable, the investment and therefore cost of
being competitive would go up exponentially.
First of all, the value of a good driver
would be huge! Money would be spent in
finding, developing and keeping them.
Contracts with options, commission on
future earnings, etc., would be the norm. It
goes on, limited only by your creativity.
The value of an engineer, the person
everyone thinks can find more speed in your
little RACER, would also rise. New initiatives
and technologies on how best to set up your
RACER, optimize tire use, get more blood
out of the stone, would emerge. Ultra-precise
and ultra-expensive equipment to assemble
would be purchased. You employ people
who can use this equipment. More testing,
more equipment, more of everything…
Yes, it just depends on your imagination
(and competence); it goes on and on.
Clearly, in this scenario the cost of
participation is still low, and nothing’s
stopping you pulling your savings out of
the bank (they’re not earning any interest
anyway), buying a little RACER, getting a
buddy to lend a hand over the weekend, and
attempting to qualify. But it’s unlikely you’ll
get to kiss the girl come Sunday evening.
So now let’s delve further and imagine
exactly the same scenario as before, but
with one difference: no technical rules. Show
up with anything with four wheels and go!
In this even crazier scenario of turbocharged fiction, the cost of participation
probably goes down! Remember, anything
goes, so steal the girlfriend’s wheels for the
weekend (in an effort to be impartial to all
car brands, I shall not characterize “wheels”).
Your buddy’s free anyway, so let’s go! Cost,
all in, maybe $10K, a tenth of RACER racing!
But, that darn date, Feb. 31, comes
around and the miracle happens again!
So what next? Same as before, maybe
more so. But the areas into which investment
is poured would likely be different. As is the
norm in free markets, people eventually
find the best bang for their buck.
In fact, think about how the cost of going
racing has evolved. Through the years, people
got better and better, learned better ways
of doing things, understood better where to
find performance, be it driver or car. Mostly,
that learning has led to more expense.
But you can’t unlearn what you’ve learned,
and you can’t forget how to go faster. If the
money supply is there, you’ll invest in applying
all the lessons you know. You’ll try to be
efficient and effective in your investment,
but you’ll still invest all you can afford.
Obviously miracles don’t really happen in
racing, and one has to consider the effects
of the competitive landscape of scenarios
one and two (or many other scenarios) on
mass appeal, and therefore income, and
how best to balance the equation. Which is
indeed a whole different discussion...and
once again I’m out of space.
My concluding piece of advice: Before
you sit at the poker table, make sure you
know who you’re playing with!
put, as people have
got better at going
racing and better at
finding speed, the
cost has gone up.
But as Gil de Ferran
points out, “you
can’t unlearn what