
8 "frat-boy" business ideas - jasonlbaptiste
http://www.iwillteachyoutoberich.com/blog/8-stupid-frat-boy-business-ideas/
======
pg
The problem he's describing is certainly real. There are characteristic traps
young founders fall into when thinking of startup ideas.

I don't think he's gotten to the root of the problem, though. The root of the
problem is not certain categories of ideas. It's a half-baked way of looking
at the world.

As long as you avoid that, there are good ideas to be had in several of the
categories he describes. For example, I'm sure there will be huge new
businesses that depend mainly on advertising. Is Google going to be the last,
ever? And if “Flickr + ___” is a recipe for failure, it wasn't always.
YouTube's goal was to be the Flickr of video, and that worked out well for
them.

~~~
prospero
_For example, I'm sure there will be huge new businesses that depend mainly on
advertising. Is Google going to be the last, ever?_

For better or worse, Google defines the baseline in online advertising. New
companies can't compete on ubiquity, so their service has to be superior in
how it targets specific demographics. Assuming that succeeds, they then have
to then figure out how to leverage that limited dominance into something
broader.

It's certainly possible, but it's also certainly more difficult than it was
ten years ago.

~~~
potatolicious
The problem with startups comparing their potential success to Google is that
your business model probably isn't Google-like at all.

The standard startup ad-based model is: offer content, show ads. This is _not_
Google's model.

Google's model is rather: build up a _massive_ 3rd-party network of ad
displays, and then broker ads onto this ginormous network.

Google is not a ad-displayer, they're an ad-broker. Unless you want to tackle
things much the same way, you won't be replicating the success of Google.

~~~
prospero
I thought about pointing this out, but Google displayed ads on their site
before anything else, and the ad network was an outgrowth of their initial
success.

Anyone who has enough people wanting to advertise with them can create an
affiliate network. Creating that initial demand strikes me as much more
difficult.

~~~
potatolicious
It's true they did - but bear in mind that (AFAIK) displaying ads _just_ on
their own pages was never profitable. Google didn't actually start raking in
the cash until they got into adwords and adsense.

IMHO it's more difficult to create the affiliate network by virtue of the fact
that to be profitable, your affiliate network needs to be obscenely large.

~~~
ntoshev
You overestimate the importance of AdSense.

Search ads have much more clicks per page view because they are better
targeted. Google generated 67% of their revenues in Q4 2008 from their own
site and just 30% from the AdSense network.

------
brianr
_NO BOOK EXCHANGE HAS EVER REALLY SUCCEEDED._

I did a variation of this my freshman year, by actually buying about $10k of
books from students on campus and then selling them on Amazon. We made about
$3k all told... I guess the author is right that it didn't "really succeed"
and become a huge business, but I definitely learned a ton. (And notably,
Chegg is in this space and seems to be doing well enough to get Kleiner
Perkins to join their $25m series B.)

 _THERE IS NO MONEY IN T-SHIRTS._

Nonsense. There's a lot of competition, but plenty of people are making tons
of money.

 _Anything where you plan to make your money exclusively from ads_

Bashing ad-supported business seems to be popular these days, but somehow
those people are overlooking the fact that Google made $21B last year doing
just this. Making significant money from ads requires getting to scale, but if
you have the drive and the right mindset, getting there isn't as hard as you
might think.

~~~
Raphael
Google is an ad broker. A better comparison would be MySpace, which displays
ads.

~~~
brianr
Most of Google's revenue comes from AdWords, the ads they run next to their
search results, not from AdSense, their content network.

From their 2008 Q4 earnings report (
[http://investor.google.com/releases/2008Q4_google_earnings.h...](http://investor.google.com/releases/2008Q4_google_earnings.html)
), Google-owned sites generated $3.81B while partner sites generated $1.69B.

~~~
t0pj
_Google-owned sites generated $3.81B while partner sites generated $1.69B._

I think the act of comparing the amount Google makes from AdWords to AdSense
is moot -- Both of these channels are very successful. Both of these numbers
end with a capital _"B"_.

So question: Do I become an ad broker and take on Google or simply utilize
Google to display ads on my property and make some coin?

At this point, I don't care how much Google is making off of me as a
percentage, but I do care how much money I actually do put in my own pocket.

------
mixmax
Now that the article mentions coffee shops: A good friend of mine started a
coffeeshop six years ago, and today he has four of them. He drives a mercedes
and has a huge house overlooking the ocean. He started with nothing.

~~~
tptacek
It's a good anecdote, but the data seems to overwhelmingly favor his argument.

~~~
neilk
Counter-anecdote: "My Coffeehouse Nightmare".
<http://www.slate.com/id/2132576/>

~~~
Tichy
They should have read "The E Myth Revisited" first, about the "turnkey
revolution".

I think it is still possible too succeed with coffeehouses, but one shouldn't
be romantic about it...

------
Tichy
Every idea is a "frat-boy idea" until it succeeds. Ignoring the naysayers is
one of the necessities for being successful (I think, from my unsuccessful
perspective...).

~~~
bemmu
Even though I had none of the ideas he mentioned, reading this article gives
me a strange urge to start a business in each of these categories, just to
prove him wrong.

------
ROFISH
I stopped reading at t-shirts because that's (kinda) my business. While it's
not just about the t-shirts, I run a video game community and we sell legally
unofficial merchandise like t-shirts and hoodies to support the website. If
you have something you cannot advertise to (because there's no money in ads),
and you cannot provide a 37signals style of direct service, never
underestimate the power of merchandising.

~~~
aston
If you're making money on merch, your business is your brand, not the t-shirts
themselves. The article's only critical of people who think they're witty
enough to sell t-shirts based just on the screen-printed content.

------
swombat
This article started well, but the list of "frat-boy ideas" was actually quite
poor and unhelpful... seemed more like examples of business types the author
doesn't like rather than inherently stupid ideas.

Also, he seems under the fallacious impression that better ideas are somehow
easier to implement. Sorry, pal - good ideas are just as hard to pull off as
bad ideas.

~~~
neilk
You lost me. What differentiates good and bad ideas other than the difficulty
of pulling them off?

Speaking in the abstract, of course. In reality difficulty is relative,
because we all have different resources to draw on.

~~~
swombat
Good ideas have a better chance of success - but they also take stupid amounts
of work, luck, timing, skill, etc.

The t-shirt idea that he mentions, for instance, is a good example of an idea
that is neither good nor bad. Basing a business around a handful of t-shirts
is obviously a bad move, but a t-shirt business can certainly be created - and
in fact that has been done many times already. There's nothing inherently bad
about the idea.

You could say that building a search engine in 1996 is an very difficult idea
- lots of hard work, little chance of success, lots of established
competitors, and requires a rare breakthrough, incredible amounts of work
marketing the new engine and getting all sorts of larger companies to use it,
etc, etc. Does that make it a bad idea? Hardly.

Ideas are only a small component of success - execution is far more important.
If the aforementioned frat boy are willing to give it their all and are
competent enough, they can likely make any of these ideas succeed. Even if
they fail, it's at least a great learning experience. I say go frat boys, go.

------
uberc
This is more a screed against a "frat-boy" -- i.e. naive, un-thought-through
-- approach to business ideas than a useful list of ideas to avoid.

------
burke
Actually, I threw together a book exchange in a weekend and sold most of my
books on it. Quite a few people are still using it. Granted, it doesn't make
any money, and it's operated through the Engineering Student Society, so I
guess it doesn't count.

------
danielrhodes
There was an article linked to from there on Slate where this quote ended the
piece "The most dangerous species of owner ... is the one who gets into the
business for love."

That quote is both very true and very wrong. It's true that you can get into
entrepreneurship with very idealistic values that drive you to ignore some of
the more important financial aspects of running a business, and wrong in that
if you don't do it for at least some type of love then you are probably going
to fail for lack of passion.

------
lallysingh
Loved the article. Going to school during the internet bubble, I heard most of
these a lot. People want the independent business lifestyle, but don't spend
more than 90 seconds thinking of the business idea. Then they convince
themselves on the concept by how much they'll enjoy the lifestyle, not how
viable the business idea is.

Hence the lack of analysis on if the business has been tried before, has
current competitors, or what your costs per product would be comparatively.

~~~
jjs
> Then they convince themselves on the concept by how much they'll enjoy the
> lifestyle, not how viable the business idea is.

On the other hand, if you don't price out the lifestyle you want (in terms of
money and _time_ ), then you have no metric to determine whether a given
business will be viable for _you_.

------
fallentimes
_> Anything that is “the Netflix of ___,” “Flickr + ___,” or “MySpace + ___.”
>_

Those are just ways to describe an idea, not necessarily the idea itself.
People do this to quickly convey their message or business; it's straight out
of the excellent book _Made to Stick_.

------
jasonlbaptiste
I read this article about 3 years ago. I found it again today while googling
around or something of the sorts. Hacker News wasn't around the first time I
found the article, so I was curious to see the HN comments around the article,
hence the submission. Some of my notes:

* These ideas aren't destined to fail. Look at chegg. * Just because it's been done before, doesn't mean you can't. ie- busted tees. This goes back to our is there room for another photo sharing site discussion from last week.

Here's why I don't particularly agee with the article, despite Ramit being a
badass:

*It focuses on the business types MORE than it focuses on why they won't work. It doesn't focus on things like: uniqueness, execution, design, segmenting growth at first to niches,etc.

------
lionhearted
Also remember: There's rarely money in the most glamorous stuff. Simple supply
and demand there: Everyone wants to run an airline, no one wants to run a
sanitation company. If you're in tech, it's cool to play for first-mover, but
don't forgot about markets people don't want.

"What are other people unwilling or unable to do?"

That's your play. After social networking has been firmly established,
everyone wants to Lord over the next Facebook. "Yeah, I could see myself
running a social networking empire" they say. Yeah, you and 150,000 other
people. Good luck with that.

Things other people are unable to do - because you're better, or think
"outside the box", play on. Things other people are unwilling to do -
sanitation, rehab, WYSIWYG website creators for people who are bad with
computers - play on. T-shirts, coffeeshops, airlines, social networks? Might
want to go back to the drawing board there...

------
rm999
As long as an idea can make things more efficient or provide a useful service
people are willing to pay for, it's a viable idea.

This is an illogical argument: "NO BOOK EXCHANGE HAS EVER REALLY SUCCEEDED. I
HATE TO CRUSH DREAMS BUT PLEASE FORGET ABOUT THIS."

------
timcederman
This is one of my all-time favourite entrepreneurial articles. I still think
of it all the time, especially when I see a new business being pitched.

------
ahoyhere
I think the point is that the "frat boy" ideas come most often to people who
have a romantic idea of business, but lack the will to actually make it
happen.

So if they don't really have the will to do it, then yes, one should
discourage them from doing it. For their own good.

People with will will ignore the advice anyway. (Will will will!)

That said, the desire to build a book exchange is like a nerd disease.

