Here’s a controversial thought:
“The idea that we need to “pay our dues” is a lie told to us by people who want our labor on the cheap.”
In this world today where 1 out of every 3 people has been let go or furloughed there are a whole lot of people going around searching for someone to “pick them.” It’s like an adult version of high school kids standing in a line waiting for the Capitan to pick you in a game of dodgeball.
The problem is, what if you’re the kid who keeps getting passed over? So I give you two ways to profit (one w/ 80% margins and a team of 1).
But before that let’s make the need human.
I had a call with such a woman, a woman who wanted to get into the cannabis world. She wanted to work at one of the big firms and she was banging her head against the wall. After all, she’s been trying for as long as I’ve known her, maybe 2 years? It breaks my heart to watch. She’s a strong New Yorker with a big of an edge, who doesn’t like the word no, and has run a major manufacturing business.
She hasn’t been able to catch a break. Job after job applied to and rejected. She doesn’t fit their mold. In our last conversation I could hear the cracking in her voice, she was utterly defeated.
It transported me back in time. I remember wanting to leave Goldman and go into a bigger job in institutional investments at SSGA in 2009 (great timing Codie). I interviewed with 22 people, flew myself to their HQ in Boston and San Francisco, sent more follow-up emails, kitschy thank you notes and quasi-pleading voicemails than I care to admit. What happened? I got turned down for not one but TWO jobs by them. Finally, probably due to annoyance > aptitude they gave me shot.
My next move I wanted to break into alternatives. I targeted a role at Credit Suisse, I thought I was a shoe in. I had the pleasure of getting grilled in three different countries in English, Spanish and even rather haughty British (say it in your head with an accent for the full affect). After many “tell me about a time you failed conversations,” they went “a different direction.” I felt complete juvenile satisfaction when that other direction didn’t work out and they called me a year later. At the time, I was devastated.
Here’s the truth I clung to, no one owes anyone anything.
Including me and including you. We have employees and/or we report to someone whether it’s our investors, our board or our boss. And every single one of them have every right to say no to us. It’s their castle.
Yet, in this day and age you simply don’t need to have someone “pick you.”
You can and should pick yourself. Gatekeepers be damned.
That is the beautiful part about the world we live in. It’s what we do every time we develop another income stream, every time we build a new startup, get a side hustle, invest, or buy a rental property. We choose ourselves. I literally have some 300 bosses (our investors) many of whom are incredibly wealthy. Want to know the one thing they all have in common?
NOT ONE OF THEM MADE THEIR MONEY OFF OF ONE STREAM ONLY.
Even the titans who run giant PE firms or oil companies who invest with us have multiple revenue streams.
So I told my friend this:
If we don’t get picked for a game of dodgeball we can just give ‘em the old one finger wave and go start our own.
Despite so much optionality, we are still falling into the traps of waiting to be chosen.
The whole point of this is, don’t make that mistake.
Go build your own castle, go start one with a friend, go buy a distressed business and turn it around, go work a few gigs or label yourself a consultant, go work for equity to own a portion of a business.
No one has to give you permission. If you sit around waiting you may never get it. Better to ask for forgiveness.
Let’s start with two ways I’d be choosing myself if I was you:
#1 Higher Ed Online Means Huge Money.. For Someone
#2 Newsletters are a Cash Cow w/ 80% Margins and Little to No Overhead (when done right)
The fact that we haven’t all mass boycotted and protested what is going on in higher education is beyond me. Universities who have taken $1.5T in credit from young people, received more than $6B in Covid aid, get around $200B in aid a year from state and federal governments, have multimillion dollar endowments, but can’t survive on a reduced budget in order to lower tuition costs to go virtual, should go bankrupt.
Then we let these universities massively limit the amount of attendees so they can raise prices like this.
If you think this is only at the elite institutions, think again. Good old Wichita State is having a field day. Can those kids honestly say it’s worth it?
If Universities are going to do online programs then they should have online prices. For the record that is $100-400 per online class as opposed to, $600 on average for in person. That’s a 500% increase between the two. Why? So that teachers can teach kids how to memorize, what is politically correct to say, and how terrible capitalism is while they rake in a 500% margin.
Oh, the irony.
What to do about it:
If it was my kid, I’d be protesting the tuition loudly and publicly. Let social pressure from organized campaigning keep money in their parents pocket books.
Do online courses instead for a fraction of the cost. Online course provider Coursera reported more than 13m new registered users since mid-March, a 535% YOY increase.
Crazy idea – Let your kid take a gap year right now and give them that tuition money to start a business, or invest in one. Maybe even start one in this booming industry of online ed. If you haven’t seen the growth numbers online language tool Duolingo is up 101% in users since the pandemic, Masterclass (celebrity courses) just raised a $100MM round.
Don’t wait for overpriced schools to choose you, push back.
2) Make Yourself the Product: Start a Newsletter, Blog, Linkedin Video Series
I had a conversation the other day where someone asked me why I have all this “online stuff,” in tandem with the VC firm we run. I had to think about that, besides the fact I just love writing. The answer is if you want opportunities to come to you as opposed to having to chase them down and beat them into submission, there is nothing more powerful than having an online presence. You can have it as a company or as an individual, but have one. I use my platform to get sales for our portfolio companies, investors, dealflow, PR, partnerships… the list goes on. It’s led to about 30k of you following along on this ride full of rants and raves.
Not to mention I have a big thing for high margin, low people businesses. That’s why I like finance.
But do you know the monetization you can do with a Newsletter?
My friends over at the Dispatch (former AEI guys) hit $1MM ARR in less than a year launched
Agora Financial acquires newsletters and reportedly makes $500MM ARR
Stratechery supposedly makes around $3MM (it’s a one man show)
Axios is at $25MM ARR and the list goes on
So, while people chortle at the idea of a “cute” little newsletter or building your personal brand, others are printing money with basically zero overhead. I just switched this newsletter you are reading to Substack that allows for conversations on the newsletter and more community, which I want to build out and while it’s not a paid for publication it could be at some point. P.s. tell me in comments what would make you pay for a newsletter? Why?
Let’s get granular. Substack revenue calculator shows the profitability on a subscriber basis at varying price points for newsletter. The calculation to keep in mind is that you usually get 2% sign ups of your total newsletter list.
SO theoretically if I converted 2% of my 30,000 person email list I would have 600 subscribers at say $10 a month which would be $6k a month or $72,000 a year. For work I do on the side with no employees.
The magic is really in growing your ecosystem whether it be LinkedIn, Twitter, Instagram, or Newsletters so that as you have social proof you can convert the content you create into profits.
Then imagine something else, imagine I grow my subscriber base to 1000 people so the business is making $120k a year.
If I take out processing fees of
10% for Substack
2.9% for Stripe
3% cushion for admin expenses etc
I would make $100,920 on this newsletter with a margin of 84.1%.
Then I can go on Flippa (or straight to Agora Financial) and sell for a multiple of profits. Small businesses at this level usually sell for 2-3x profits but selling to a strategic like Agora you could probably sell for more.
That means a $300k profit for a sweet little micro-personal brand business that only has 30k subscribers.
That isn’t even mentioning adding multiple products to it such as courses, affiliate links, ads etc.
Again – choose yourself. It’s easier than everyone says it is.
Drop in the comments on Substack what you would write about, I’ll help you narrow your niche if you’d like. People are making $ talking about China, Cats (yes Cats), Climate Change, and even the suburbs(?), the niches are endless.
Don’t let the noise fool you, you don’t have to be picked, you can pick yourself.
Questions everything (and stack revenue streams),
*Let me know if you want me to flush out how I started and grew my newsletter and how I’d do it if I was you.
DISCLAIMER: This is the be an adult section, not advice, just what I did. Said otherwise: This article is presented for informational purposes only, is an opinion, and is not intended to recommend any investment, and is not an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Entourage Effect Capital, LLC, Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing does involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. Reading and using this newsletter or using our content on the web/server, you are indicating your consent and agreement to our disclaimer.