11–20 of 38 posts
Earlier quoted context omitted.
By this metric, dropshipping is the best business ever then, and not just a zero-value-added activity for bropreneurs who are good at Instagram marketing.
Dropshipping is a great business idea. Amazon's price fixing has made it a zero sum game
About Best Parents
1. It sells the world - we have customers from over 30 countries now
2. Demand is inelastic - families are always going to seek out programs for their kids abroad / away from home
3. Cannot easily be substituted or copied - the suppliers have to trust you, that trust has to be earned over years
4. Minimal labor requirements - our website is automatically translated into 4 languages with AI
5. Enjoys low overhead
6. Does not need big cash outlays
7. Cash billing - we have a 6 month billing cycle, we hold all the cash
8. Relatively free of regulation - also common sense prevails
9. Portable / easily moveable - we live in SF but have spent 3 or 4 months travelling this year
10.Loads of fun intellectually - thinking about how AI can guide teenagers to better and more diverse experiences, teach them and their families how to appreciate and contextualize those experiences, teach suppliers what to offer and how to improve their offerings ... v fulfilling. Feels like the real future of education
11.Leaves me with some free time now, prospectively lots later. Still just our startup's second year in sales, my first year full-time, lots of product to build
12.Income is not limited by personal output
What I was surprised by was how little VCs in general seemed to respect my reasoning. I had not been anticipating that kind of a tepid reaction. There's a lesson I learned here - that the businesses VCs are generally looking for are far from the ones entrepreneurs logically probably want to consider. I believe that after the popping of the crypto bubble the whole ecosystem as it recovers will wend its way back to a more balanced, forward looking place where enriching the lives of children and helping families overcome their generational trauma by joining an international parenting community is seen plainly by many as exactly what it is - world-changing and relevant.
Another thing I did come to realize was just how sweet a business B2B SaaS and Enterprise SaaS really is. Wow. It's a money printing machine, makes marketplaces look relatively paltry even though eBay was "The Perfect Store" like the book @Animats cited. Oh well, at the end of the day the business has to satisfy your intellectual and emotional needs for you (i.e. me) to give it that 150%. And this one's a winner with 20%ish gross margin and really decent basket sizes.
Read "The Perfect Store" (2003), which is about eBay. No inventory. No shipping. No credit risk. Just a cut of each sale.
By this metric, dropshipping is the best business ever then, and not just a zero-value-added activity for bropreneurs who are good at Instagram marketing.
It's hardly the best business ever though. Dropshipping only works well in a low-competition world, but since its barrier to entry is so low (all you need is an instagram account) you can be assured that competition will pop up very quickly and all your profit will be competed away.
Professional service organizations with cross-border capabilities can qualify for this. As a lawyer who has founded a law firm, it's possible to qualify for all criteria, even item 12, which can be addressed by the founder knowing how to decouple the founder's personal labor inputs (e.g., time) from the firm's revenue and profit performance.
EDIT: not that it can't be a great business, it just "only" scores 10 out of 12 haha.
The definition of ideal here is based on: - minimizing risk - maximizing profit - making as much money as possible Up until the 80s, capitalism would optimize for this result with businesses that still somehow benefited society in one way or another. Once the computer revolution made it possible to operate at a higher abstrac level, especially on financial markets, the optimization game has become a many-times deriva…
This warrants emphasis, as this is the logical outcome of how the socioeconomic systems are nowadays. "Evil people conspiring together" are absolutely not necessary. And equally no amount of "good people" will remove that end condition.
Read "The Perfect Store" (2003), which is about eBay. No inventory. No shipping. No credit risk. Just a cut of each sale.
I spent a long time thinking about business like this after a decade and a half of hard knocks in SaaS and marketplaces where I simply hadn't been thinking clearly at all. That's how we came up with Best Parents (www.bestparents.com) in 2020. It's the first marketplace for high-end, in person, short courses and travel experiences for teenagers worldwide. My wife has expertise in the education sales industry from Turk…
Professional service organizations with cross-border capabilities can qualify for this. As a lawyer who has founded a law firm, it's possible to qualify for all criteria, even item 12, which can be addressed by the founder knowing how to decouple the founder's personal labor inputs (e.g., time) from the firm's revenue and profit performance.
1. Selling the world: Kind of depends what is meant by selling the world. It is very difficult for a single law firm to provide local legal advice in many jurisdictions. A small number of law firms have global reach, but many of those operate franchise models and none of them, to my knowledge, are truly global (operating in every jurisdiction or even the large majority of jurisdictions). On the other hand, if we are talking about, for example, an English law firm providing English legal advice to clients throughout the world, then yes, that is possible.
3. Minimal labour requirements: I don't think this applies to corporate law firms. Transactional and litigation work is labour-intensive. Advisory work too, to a lesser extent. You can see that play out the last few years where the large corporate firms in New York and London are paying huge salaries to get bodies in the door, while associates were getting burned out from the insane hours demanded of them.
4. Low overhead: This specifically includes "high-priced employees" as an example and I think that would include lawyers.
7. Cash billings: In theory this should apply to law firms. In practice, in my experience, it is more complicated, with lawyers often getting paid only at the end of big deals or cases or offering contingent fees, etc.
8. Free of regulation: Definitely not true for law firms.
9. Portable or easily moveable: Also not true.