Startup Ideas Recap of My First Million Podcast 💵 Episode #101

The latest startup ideas Sam, Shaan and Ryan Begelman discussed on the August 14, 2020 episode with time stamps and links

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2:45 How to make money with your house

  • Buy a house outside of a major city in a destination people want to go (like Hudson Valley, NY)

  • Renovate the kitchen to be a high end chef’s kitchen

  • Offer premium cooking classes / experiences

  • 2 classes a day, $500/person, 10 people per class, 5 days a week, 50 weeks a year = $2.5M revenue with 30% margins

  • All the while living in the house, get big tax write offs (reduce your tax bill = higher profits)

  • Higher end offering that costs $2000+?

  • Ryan did this over a weekend at Summit and charged over $2000, different chefs, different taste testing, etc

10:30 How to succeed applying private equity structure to startups / a “branded Berkshire Hathaway” model

  • A long discussion ensues about this until 19:40. It’s worth a listen.

  • At 19:40 they begin discussing the downsides of applying this strategy

  • 21:00 You manage challenges is through your licenses and control. You either want to control the brand as best you can thru your license (maybe by using a brand committee) or by raising a fund or have the money to own the majority of the company you apply your brand to

24:40 Ryan discusses creating wealth while still having a good life / lifestyle entrepreneurship) / holistic entrepreneurship / “lead disruptive lives” instead of disruptive startups

  • Build skills that will allow you to make money around your passion

  • Shaan: 1) What do people want, 2) what do you enjoy doing and 3) what are you good at: The intersection of those three is the “zone of genius” you want to operate from.

  • There are master skills needed to succeed: communication, sales, persuasion (copywriting), digital literacy, etc.

  • Think small. The world is dominated by venture unicorns. Instead ask yourself what is the Minimum Viable Market—the smallest market you need to generate the amount of money you need. Think expensive, think cheap…offer a cooking class for $5,000 and 10 people a month or charge $50 for class and need a lot more people.

  • Good example: Joel Holland of Harvest Host, he loves RVing and created a very profitable product for RVers.

40:40 Think about the exit multiples of business the you are considering starting (how much it will sell for)

  • Trade expos sell for 12x EBIT and newsletters sell for less, etc

  • High exit multiples means the company has more substance and meaning

  • If you are going to put 5 years of night and day work, build a startup that is hard to disrupt…one way is to look at high multiple sells

41:43 Start multiple iterations on the same startup concept and double down on the one that starts working

  • get a feeling of the audience and profitability, etc

  • Ryan would cut some ideas in 3-6 months

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44:33 Build a portfolio of activities (coaching, consulting, ticket sales, etc)

  • Piece together income streams with a combination of different avenues

  • Shaan says, sell your by-product. Like 37 Signals who created Basecamp as an internal tool and then decided to sell Basecamp to customers

  • Sam’s favorite by-product example is Kingsford coal brand. Started by using the leftovers from a Ford vehicle

48:05 Financing: Too many people raise venture money they don’t need

  • For example, if you are building a subscription product, you can charge a “lifetime” (or a 5-10 year access) option at a really high price to get a lot of money upfront and give some extra fringe benefits

  • Presales

  • Crowdfunding

  • If you can’t do anything of these things, start a consulting company that can bring in some cash flow to keep the lights on while you’re building the real company you want

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