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In 2009, we started a Halloween retailer.
The model was pop-up stores.
Like Spirit Halloween where they rent big vacant spaces for the weeks before Halloween.
It started great.
It finished terribly.
I learned a huge lesson about tailwinds -- and why you want them.
The model was pop-up stores.
Like Spirit Halloween where they rent big vacant spaces for the weeks before Halloween.
It started great.
It finished terribly.
I learned a huge lesson about tailwinds -- and why you want them.
At the time in 2009, I had been CEO of our family fireworks business for over 5 years.
The fireworks business has a big problem. People only buy fireworks for one or two holidays.
What do you do the rest of the year for profit/cash flow?
Can you reuse your real estate?
The fireworks business has a big problem. People only buy fireworks for one or two holidays.
What do you do the rest of the year for profit/cash flow?
Can you reuse your real estate?
Frankly, everything has been tried to solve this.
We tried Halloween.
It started great.
People bought from physical retailers like crazy then.
Want something? Drive to the store.
We could compete on selection and experience.
We tried Halloween.
It started great.
People bought from physical retailers like crazy then.
Want something? Drive to the store.
We could compete on selection and experience.
Around 2011-2012 something changed.
I recall the moment.
I was in one of our stores.
A husband was talking loudly on the phone,
"Yes, I found the costume."
"No, I didn't buy it. I got it for $2 cheaper on Amazon on my phone now."
He walked out.
I recall the moment.
I was in one of our stores.
A husband was talking loudly on the phone,
"Yes, I found the costume."
"No, I didn't buy it. I got it for $2 cheaper on Amazon on my phone now."
He walked out.
We'd been "show-roomed."
What I saw was the first spotting in the distance of the opposite of a market tailwind.
It was a giant head-wind called e-commerce!
It was coming for us.
And that was going to happen quickly.
Costumes are a great product to buy online.
What I saw was the first spotting in the distance of the opposite of a market tailwind.
It was a giant head-wind called e-commerce!
It was coming for us.
And that was going to happen quickly.
Costumes are a great product to buy online.
You can imagine how this ends.
We shuttered the effort a year later.
Sold off our inventory at below cost and moved on.
It was an expensive lesson:
You want to be in a business with tailwinds.
Otherwise, it's "picking up pennies in front of a steamroller."
We shuttered the effort a year later.
Sold off our inventory at below cost and moved on.
It was an expensive lesson:
You want to be in a business with tailwinds.
Otherwise, it's "picking up pennies in front of a steamroller."
Inverting this, how can you use tailwinds to find good business ideas?
Well, tailwinds come from trends.
Trends emerge from regulatory or social changes -- or technical innovations.
Start with those and you can work backward to find a wave to ride.
Well, tailwinds come from trends.
Trends emerge from regulatory or social changes -- or technical innovations.
Start with those and you can work backward to find a wave to ride.
For example, our venture studio started a biz help US companies hire finance/admin/accounting/analytics talent in LATAM like they hire remote US employees.
Why?
Because *EVERYONE* is having trouble hiring them and the trend is it's getting worse.
(h/t @hirewithnear)
Why?
Because *EVERYONE* is having trouble hiring them and the trend is it's getting worse.
(h/t @hirewithnear)
So, on any new business venture, ask:
What are the tailwinds? What are the trends?
If it's not obvious that they're strongly going to help you, run away.
Life is too short to work on hard ideas with headwinds!
What are the tailwinds? What are the trends?
If it's not obvious that they're strongly going to help you, run away.
Life is too short to work on hard ideas with headwinds!
