Thread
17 weird ways people got rich
A 🧵:
A 🧵:
“Selling the Data”
You get data from users and sell it.
Example is FlightAware.
They provide free software where 32,000 hobbyists track airplanes globally.
They get the data for free and sell it to rich corporations.
The founder just bought an $18mm home:
You get data from users and sell it.
Example is FlightAware.
They provide free software where 32,000 hobbyists track airplanes globally.
They get the data for free and sell it to rich corporations.
The founder just bought an $18mm home:
“Found Money"
You “find” revenue like Jim The Pancake Man.
Jim uses a giant griddle trailer to help organizations fundraise.
1) They get their donors to buy breakfast for $20 a person.
2) Costs Jim $1.50 ea. He sells it for $7 ea
50+ events/yr with some >1000 people.
Crazy.
You “find” revenue like Jim The Pancake Man.
Jim uses a giant griddle trailer to help organizations fundraise.
1) They get their donors to buy breakfast for $20 a person.
2) Costs Jim $1.50 ea. He sells it for $7 ea
50+ events/yr with some >1000 people.
Crazy.
"Regulated Monopoly"
This is where the government eliminates all competition.
My favorite is this fireworks store near Memphis.
This shack has the only retail permit in a 30-mile radius.
Impossible for anyone to compete.
I estimate netting $2mm/yr.
This is where the government eliminates all competition.
My favorite is this fireworks store near Memphis.
This shack has the only retail permit in a 30-mile radius.
Impossible for anyone to compete.
I estimate netting $2mm/yr.
"CAC as a profit-center"
Businesses that make CAC a profit center.
My fave is @freightwaves founded by @freightalley.
It has a media arm and a SaaS data business.
The media business is *negative customer acquisition cost* for the SaaS business!
Businesses that make CAC a profit center.
My fave is @freightwaves founded by @freightalley.
It has a media arm and a SaaS data business.
The media business is *negative customer acquisition cost* for the SaaS business!
"Cash from Trash"
You get a “waste product” from a manufacturer.
You offer to take it off their hands.
Repurpose and sell it.
Bonus if the manufacturer lets you set the price.
(I have to be vague because I have friends doing this!)
You get a “waste product” from a manufacturer.
You offer to take it off their hands.
Repurpose and sell it.
Bonus if the manufacturer lets you set the price.
(I have to be vague because I have friends doing this!)
"Patent-backed Innovation"
Most innovation can’t be protected by patent, but some can.
My favorite is the Popsocket.
A philosophy professor invented and patented it.
In 2018, they did $200mm in revenue, $90mm in profits.
All protected by a patent.
Most innovation can’t be protected by patent, but some can.
My favorite is the Popsocket.
A philosophy professor invented and patented it.
In 2018, they did $200mm in revenue, $90mm in profits.
All protected by a patent.
"Insurance that never pays"
Sell insurance or service that never gets used.
We all know the title insurance "industry" (1.2% loss ratio in TX).
But my favorite was a local psychologist who sold counseling services to companies as HR benefits.
Nobody called. All profit.
Sell insurance or service that never gets used.
We all know the title insurance "industry" (1.2% loss ratio in TX).
But my favorite was a local psychologist who sold counseling services to companies as HR benefits.
Nobody called. All profit.
"Selling to collectives"
When someone is the customer, you get them bargaining hard.
But, when you have a collective (like an HOA or government), nobody is really motivated to hold you that accountable.
My friend's business does outsourced HOA admin.
He flies private.
When someone is the customer, you get them bargaining hard.
But, when you have a collective (like an HOA or government), nobody is really motivated to hold you that accountable.
My friend's business does outsourced HOA admin.
He flies private.
"Buy by Acre/Sell by the Foot"
You buy a large tract of land.
Then sell it in pieces.
We did this a few years ago.
Bought 23 acres.
Sold it in pieces for more than we paid.
And we still own the cash-flowing portion of it.
Cost basis is zero, so infinite ROI.
You buy a large tract of land.
Then sell it in pieces.
We did this a few years ago.
Bought 23 acres.
Sold it in pieces for more than we paid.
And we still own the cash-flowing portion of it.
Cost basis is zero, so infinite ROI.
"Side Hustle"
In 1995, guy was working as a scout for retail chains.
He'd find land for them.
Carve out a bit for himself to build strip malls next door.
Now owns 10 of them.
They produce $3.75mm cash a year.
(h/t @ionrecourse for this one)
In 1995, guy was working as a scout for retail chains.
He'd find land for them.
Carve out a bit for himself to build strip malls next door.
Now owns 10 of them.
They produce $3.75mm cash a year.
(h/t @ionrecourse for this one)
“Rent a Brand”
This is where you get paid by others to let others use your brand.
One is a business we had on @acquanon
They run competitions where wineries pay to enter.
You win? An award on your label.
It profits $900k/year.
Working 5 hrs/week.
This is where you get paid by others to let others use your brand.
One is a business we had on @acquanon
They run competitions where wineries pay to enter.
You win? An award on your label.
It profits $900k/year.
Working 5 hrs/week.
"Market expansion"
You help someone enter a new market.
One is Tom Friedkin, who started Gulf States Toyota.
They’re billionaires now.
Here's how he heard about the opportunity
Then pounced.
Bringing the first Toyota into Houston now gets $ on each.
You help someone enter a new market.
One is Tom Friedkin, who started Gulf States Toyota.
They’re billionaires now.
Here's how he heard about the opportunity
Then pounced.
Bringing the first Toyota into Houston now gets $ on each.
"Controlling a tollbooth"
I love the story of the Ambassador bridge in Detroit.
25% of all cargo from Detroit to Canada goes across it.
Monopoly on access.
It's a money printer.
So good that Warren Buffett waited years to own 25% of it.
I love the story of the Ambassador bridge in Detroit.
25% of all cargo from Detroit to Canada goes across it.
Monopoly on access.
It's a money printer.
So good that Warren Buffett waited years to own 25% of it.
"Geographic Arbitrage"
Buy something in one place and sell it in another for more.
I've done this.
For decades we imported fireworks, then sold them to Mexicans who’d take them into Mexico.
Why?
Mexico had a big duty on fireworks from China. The US didn't.
Buy something in one place and sell it in another for more.
I've done this.
For decades we imported fireworks, then sold them to Mexicans who’d take them into Mexico.
Why?
Mexico had a big duty on fireworks from China. The US didn't.
"Help Rich People Show Off"
Here you help people show off wealth or status.
The Sea Bags company does that well:
· They take old sails (usually free).
· Hire locals to make $150 bags from them.
· Sell at ~80% gross margin.
I estimate they're clearing $5mm/year.
Here you help people show off wealth or status.
The Sea Bags company does that well:
· They take old sails (usually free).
· Hire locals to make $150 bags from them.
· Sell at ~80% gross margin.
I estimate they're clearing $5mm/year.
"Tax Harvest Facilitating"
Exploiting big corporations that are being entirely rational.
One that has become popular is people buying perfectly good (but fully depreciated) equipment from bigCorps.
You then flip it.
The BigCorp buys new so they can depreciate that one.
Exploiting big corporations that are being entirely rational.
One that has become popular is people buying perfectly good (but fully depreciated) equipment from bigCorps.
You then flip it.
The BigCorp buys new so they can depreciate that one.
"Polishing Diamonds"
This is where you find assets, do a little work and unlock value.
We all know house flipping.
I have a friend who does heavy equipment flipping.
He flies around on his private jet to equipment auctions.
Buys good deals, fixes them and flips for $.
This is where you find assets, do a little work and unlock value.
We all know house flipping.
I have a friend who does heavy equipment flipping.
He flies around on his private jet to equipment auctions.
Buys good deals, fixes them and flips for $.
I talk business, holding companies, and life on Twitter.
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