because live tweeting an old show would be reckless and insufferable.
The show itself doesn’t really matter, there’s a dozen of them and they’re all basically the same: rich business guy goes in to struggling small businesses and helps turn them around. He invests some money, takes a heap of equity, makes a TV show about it and moves on. Cool.
Here’s some thoughts in no particular order about the broad scheme of different businesses.
- Woah, people are in crazy debt. I realize that these shows intentionally pick companies that are the worst off, both for TV drama’s sake and for business investment sake, but it’s shocking to remember how many companies out there are bleeding money every month. Most not even breaking even, these people are just propping them up often with tens of thousands of dollars in personal credit cards. It’s terrifying.
- Marcus (The Profit) doesn’t seem to care about or even grok the idea of making a business purely for the niche and the craft itself. I get it, old business doesn’t often work in those terms — micro business and profitable art might be things that we’re deeply into as creators, but in the wider world he’s interested in investing in something that’ll hit 90% of humans with money, that’s all that matters.
- With that said, these niche businesses are often woefully under-profitable, so I can totally see where the correlation is made. There’s a longboard company here who hand builds and hand paints gorgeous longboards, but his first comments were “your product is the wrong size and too expensive for the demographic” “Our demographic is 35 year olds” “I doubt that — the skateboard market is typically 9–15 year olds” and I’m screaming at the TV that longboards aren’t about that, or that $300 for what you’re getting there is totally in line with the longboards I’ve bought as an average consumer. The “solution” to a failing longboard company isn’t to make skateboards, even if that would be the widest possible demographic jump.
- I can empathize and understand why business owners are hesitant and outright defiant to make this jump. If you’re an artist, or a craftsman who’s deeply interested in one thing, it feels like a bum deal to be forced into doing something different.
- I’ve written about this many times before (I swear, I’m just going to compile it into a book some day) but artists are often terrible at business and businessmen are often terrible at understanding artists, but that breakdown in communication doesn’t need to exist and we should all work on both sides to bridge the gap because we can make so much better stuff (both for money and for craft) if we had common language.
- The Profit is a bad example of this communication. He’s likely very good at what he does, and I do appreciate him for his interpersonal communication style / generally level headed commentary on the more drama-filled episodes (see next point) but in the end his goal and outcome is always one-sided and he appears to leave a wake of disappointed craftsmen behind him, forced to do lowest-common-denominator work in an effort to do better business (read: money).
- Drama is toxic and partnerships where power distribution is equal but not charitable results in a standstill. Again, it’s a survivorship bias because these shows are designed to find those specific people (there’s likely tons of great partnerships who run smoothly, but don’t end up on TV like this) but man, picking a business partner is like picking a spouse.
It’s interesting to watch these shows in parallel with our company and also in the greater whole that I’ll call tech startups at large. We’re niche within niche, and we get that. The difference is the amount invested (very little, fractions of what “real” businesses would) and goal seeking towards small, stable growth and immediate profitability. They call it bootstrapping. The money we make from the very first sale goes into buying the material for the second sale, and so on. It’s a slower curve, but it doesn’t start you off in debt and that’s the idea: building businesses from nothing.
It’s also interesting to watch the cavitation of the retail market implode. Malls are closing down everywhere, brick and mortars are going bankrupt at record pace. Yet, The Profit seems very intent on these types of sales models. I’ve never once seen him suggest “hey, maybe you should make a Shopify and sell direct to consumer instead of giving up 50% margins to wholesale your product into physical stores” which is almost always his angelic generosity to the company: hooking them up with retail. This is likely more indicative of his time than anything else — the old formula used to work, I’m sure it worked for him, and now he’ll keep repeating it until it collapses.
So, if I had any advice to people watching these sorts of shows and gleaning business knowledge I would say: his financial savvy is great. Getting out of debt, implementing systems and structure and organization is seemingly most of the battle for these business owners who don’t really know anything about running a business. That’s awesome. Solving interpersonal issues, mediating fights between partners and digging to the root cause of why they’re upset to address the cause instead of the symptom — all of that is really good to see in action and use in your life.
Buuuuut, I find it frustrating that he’s building paint by numbers businesses with seemingly little attention to what these people actually want to make or why they got into the business in the first place. I recognize that making niche candles isn’t selling well in the big candle store, but there are lots of other business models and sales methods for making that profitable / sustainable in a way that isn’t saying “make more generic candles” to the dude who obviously really cares for and loves the esoteric parts of his weird craft. They might not be for everyone, but that’s often an issue of connecting niche audiences to niche makers more than it is one of product itself, and of course wholesale retail environments aren’t going to work there.
Finally, it wraps around to profit itself: personally, I’d much rather be a guy who makes weird esoteric candles and breaks even + a little living money than be a guy who makes the biggest candle empire the world has ever seen.
The truth is, as an investor, his whole goal is to build the latter — that’s where he makes the most money. That’s what investing is (and, contrary to the many articles about how VCs are ‘evil’, is really quite okay) and so I totally understand why that would be his goal for the companies he invests in / helps / owns 33% of.
But know, if you’re someone who wants to make weird niche things, you totally can build them and not go into the ridiculous debts these people do. You can make niche products and sell them to niche audiences in a way that we never could before when shelf space was limited. The shelf space on the internet is infinite and if you can connect yourself to them, you can make sales at a higher profit margin, with lower overhead, with fewer (or no) staff, with no corporate rent and so on: it’s way easier to cut expenses than raise prices, and that territory is ripe for the optimizing.
You might never build an empire, but if you truly just want to do your craft, you probably don’t feel like you want to / need to anyway.
Make money. Make good work. Sell it to good people. Be organized. Optimize expenses. Leverage living in the future. Go. Fight. Win.