Code Academy for marketing, curation startup ideas & ultra luxury drop shipping...
Recap of My First Million podcast episode #128 and other startup ideas & trends
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Weekly roundup of startup ideas & trends…
Curation business startup ideas
(Source: My First Million)
The guys spent a good chunk of the podcast talking business and startup ideas focused on curation. Sam loves curation businesses that bring together other direct to consumer (DTC) companies products. It tends to be easier to start this type of business. It’s low cost but on the downside it’s also low margin.
What if someone created a Shopify app that connects multiple DTC brands in one shop? There’s a movement of unbundling DTC products but Shaan thinks there’s a movement back to bundling.
The idea is to co-market with other DTC brands (like Warby Parker and Away luggage and Casper mattresses). They are all acquiring a similar customer so can work together.
You could create an app where you upsell (post-purchase) an item from another DTC shop that sells to the same customer and you get a kick back (affiliate fee) if they buy the upsold item. Take the three best brands of multiple categories and sell them on your shop by marketing them and take 15% commission.
The guys estimate the average store may spend 30% of revenue on customer acquisition via Facebook. If stores can get a customer for just 15% (the commission fee) they’ve cut their cost in half to acquire the same customer.
Unlike Amazon, the seller would share the customer info to the upsell product company.
Sam thinks this could work but would be a lot of work and favors the upsell idea best.
There’s a company called Coop Commerce that can help companies bundle their products together with other stores.
The Fascination is an example of a company attempting to curate DTC brands and offer great deals on those products. The argument is if your store was one of their brands, it’ll get lots of attention and you just give them a 15% cut of sales.
B8ta is another curation business example that offers real-life popup stores selling curated products—sorta like a new version of Sharper Image.
To make this work you need to sell products that demo well in real life.
Companies would pay the pop-up store a demo fee and then customers could buy their products on the spot.
Ultra high-quality dropship business (at mid level pricing)
(Source: My First Million)
There exists a gap in the market between ultra-expensive luxury goods and shitty knock offs. What if you could sell the same quality ultra-expensive luxury goods but at a “mid level” pricing strategy?
Italic is a DTC company that sells hundreds of luxury goods from the same manufacturers as leading brands for up to 80% less.
They charge a $10/month membership fee and you get access to luxury quality, without the luxury label. They made this work by making smart deals with luxury Chinese suppliers.
The real money here is in the recurring subscription fee.
Shaan likes that they not only found the same supplier (or identical) of the name brands but went to them with a no-brainer idea: “Hey we don’t want to hold inventory, so why don’t you double the amount of money you get per unit but I’m not going to buy the inventory.” So the suppler takes the risk but still gets great revenue—especially if the items sell well.
This model of business is very capital efficient by sharing more of the upside and it fills the void between shitty quality knock-offs and the ultra expensive name brand luxury goods.
How to jump on the emerging trend of high-quality goods at mid-level pricing?
Work out an agreement with a manufacturer of high-end luxury consumer goods to make you one specific luxury product. Convince the manufacturer to hold the inventory until you sell it but double the manufacture’s payment per unit so they participate in more of the upside. Then work out a “drop shippable” model.
Opportunity to gamify a Facebook Ad learning program (“Code Academy for marketing)
(Source: My First Million)
Facebook Ads has created one of the best tools for building your business through marketing online, but there is a very steep learning curve.
What if you created a learning program or simulator for Facebook Ads or other marketing, sorta like a “Code Academy for marketing”.
Code Academy does $24M / year business maybe worth $100M.
You could take the Facebook Ad UI/UX, dumb it down to beginner level and give students the chance to get reps at driving growth thru marketing.
Students wouldn’t have to create the ads since that’s very time consuming. Instead the student would have a bank of them that you choose and decide which one is most effective.
Sam said he would do it by finding the best Facebook Ad strategies that actually work (Trump presidential campaign, Native deodorant, etc) and re-create them for your company. It could be geared for different types of companies: newsletters, e-commerce, digital courses, etc.
The students would create Facebook Ad campaign and test / simulate them against actual Facebook data to see how well the ad would perform without having to spend money on ads.
That’s it for this week! Hope you enjoyed and don’t forget to subscribe so you don’t miss the next issue…