3 Innovative Ways to Monetize the Used Car Business. HoldCo Bros Are Back! Ep #062

This is such a perfect audience to buy and sell through because it's the person selling is about to have cash on their hands. The person buying already has cash on their hands. It's high ticket. They're very like anyone showing up is highly incentivized to buy or sell. It's just like the best audience. Welcome to the Kerner office, the only podcast where we discuss business ideas, business launch ideas, business growth ideas and business business business top. Today's Friday and you know what that means. That means it's time for Holdco Bros. Of me and my partner Nick Hulesky and we discussed three things today. We talked about an update for our perfume vending machine business. We had a good month in August. We talked about a car fair idea, specifically two to four different ways where you can monetize in the used car business without having to buy used cars or actually be in the used car business. And then the last idea we talked about is like growth hacking. So social media apps or students or is kind of unique but I think you're going to like it. So part two of this episode will be next week on next Friday. Go check that out as well. Please like subscribe, share with your friends and your grandma and I love you. Bye. All right, so as many of you know, I posted a video in July about a perfume vending machine went viral. We contacted the manufacturer and said, hey, we want to be the exclusive North American distributor. And after much back and forth, we're now selling perfume vetting machines, which was not on our bingo card for 2024. And in our first full month, August, we sold 19 machines for a total of $72,000 at about 40ish percent gross margins, 50% gross ish. Somewhere in there.

Less than that. But that's okay.

What are our gross margins then?

35.

Okay. But it's a high ticket item. Back of the Napkin. We're talking 23, $24,000 of gross profit and the first month in business before we pay our sales guy and our expenses. Not bad.

And it will be more than that. Our pricing was a little bit messed up so we were only charging a margin on the machine itself. But there are upsell, not upsell, but there are other models that you can choose. Like it takes a card or it takes a bill reader or it takes coins or it takes some combination of those things or it's on a stand or it has a TV and every additional add on we were just passing through at cost. So that dropped our gross margin down pretty significantly. But once we fix that pricing. Yeah, we should be in the 45.

And the currency fluctuations, that's been.

The other weird thing is like they price everything in euros and they've just started invoicing us in dollars. And we have a static price on our website off percentage points, upwards of 10%. But we're like, okay, well how do we account for that? Do we just need to update every quarter? Do we update every month? Do we just kind of let it be? So that's one of the things that we're trying to figure out at the moment.

I'm just smiling because I'm thinking of a bit that could happen right here if we were more organic than we are. And I could be like, man, other currencies, who knew? If only they taught us that in business school. And then you'd be like, chris, first of all, they did teach us that in business school. Second of all, you should know that. You just should know that.

Chris, you've worked internationally, haven't you? Like, how did you pay people in China? Oh, I paid them with bitcoin. I paid them with Bitcoin. That's not another currency, though.

That's why we kept getting scammed, actually.

Oh, gosh.

Still, some things we gotta figure out. We just hired a second sales guy who seems to be a rock star. We're very excited about him. So now we have two full time sales guys. We're setting up our systems. But the TBD is, how do these machines actually work? Will they be delivered on time? Will they break? Is it a scam? We feel pretty good about it.

Am I gay?

Why would you say that?

No, I mean, like, we're just being totally trans here, right? We're just letting people see behind the kimono. Yeah, there's a couple things. We have placed these orders. I mean, we're confident, but it's also like none of the machines have been delivered yet. So that's a question mark. We also have. We've had over like 2,500 leads, but our lead tracking and follow up system stinks. And so, like, currently everything's in Otter AI and we're trying to get it transitioned to HubSpot, but HubSpot and Otter AI don't have an integration. And so we don't really have a good idea of where people have been in the pipeline. So, like, there's a ton of opportunity for us to optimize, which is why we brought on this other sales guy. Like, I'm very excited for September and October, but yeah, there's still some there's definitely things that we need to figure out, but I would say net $70,000 in our first month of sales. It's pretty awesome. Like, it's pretty awesome to have done that. It just reminds me of that, like, SNL or not snl Seinfeld sketch where the yada yada, yada. Like, yeah. So I posted a video and yada, yada, yada. We did $70,000 last month.

We're billionaires. In all seriousness, we are trying to share the behind the scenes, the actuality, like, what gets ugly after the sexy virality. So we're learning in real time. One thing that we've learned is it's much easier to sell to an end user of the machine, AKA a gas station owner or gym owner that wants to place them himself on property that he already owns or. Or herself. It's much easier to sell it to that person than it is to an enterprising entrepreneur that wants to place it because they want to go to research, they want to do studies, they want to go stand outside a gym and talk to people and say, would you pay a dollar for this? And friction equals time. Time equals dead deals.

Yeah. That's the other thing that people have been, like, trying to figure out is, where should I place these machines? If I do place them in a good spot, how much money am I going to make? And there's the manufacturers, sort of FAQs that tell people what to expect, but they want to talk to other owners, and we've got to put them in touch with other owners.

Spoiler alert.

There's no other owners in the United States. Like, they're in Europe. They don't necessarily speak English. So, like, we're trying to figure all this stuff out on the fly. That's why I'm like, $70,000 in our first month. In spite of all those obstacles, I'm. I am bullish.

Yep. Yep. All right, I've got an idea. Can I lead us out?

Absolutely.

Okay. I told you about this idea years ago, and you'll probably remember it, but we didn't ever really go deep on it. You'll like this idea because this hails from your hometown. Well, Sacktown.

Okay.

Sacramento. Well, NorCal. Okay.

Okay.

The Sierra Auto Fair. Does that ring a bell?

No.

Okay. Sierra College, huh? Yeah.

It's held in the parking lot. Yes, yes, yes, yes.

Yep. You remember this idea?

I do. I mean, no, but.

So this is a great idea because a lot of ideas we talk about, it's very approachable, and you don't need much money at all to start this. So the idea is this. You play middleman between a business or organization or university that has a big parking lot and a bunch of consumers that own a car that want to sell that car. So what you do is let's say there's a community college or high school, right? Let's just use Allen, Texas as an example.

Tell them what this is first.

I'm getting there. I'm getting there. So Allen High School is one of the biggest high schools in the country. They have a massive parking lot. And of course, the parking lot's really only used Monday through Friday, aside from the occasional football game. So what Sierra Auto Fair is, it's named after the community college in the area. And it is an auto fair where anyone that has a car that they want to sell will go to the parking lot of the community college on the weekend. And after paying about $149 to Sierra Auto Fair, and they will have a parking lot or a parking spot reserved for them with a number, they'll show up, they'll fill out a form, they'll scan a QR code, they'll park their car, they'll leave their keys with an attendant, and then they'll come back two days later to pick their car up. While they're gone, other potential car buyers will show up to this auto fair for free. There's no admission fee. And they go, they look around, they shop, and. And they can take it on a test drive if the car owner wants to leave their keys. Some don't. And then it's great because you don't have to go through the used car buying experience. You can go directly through a seller. It's. They're very, very high intent buyers and sellers right there, all in one spot. All thanks to a company that brings them all together on a parking lot that would otherwise be unused.

Do you know how the purchase works? Are they using like cashier's checks? Are they just like, I don't even know, transferring bitcoin?

It's completely up to the buyers and sellers. So Sierra Autofair doesn't even get involved there. Okay, we made our 149. We're good. We don't care what happens. They do, like, tracking to see if the car is selling for their testimonials and advertising and all that. But what's your gut take on copying this idea in another market?

Specifically the cars, or just the idea of utilizing the parking lot space?

The whole business?

I mean, I really like it. I think it's if you can get people there. Yeah, it's a great business model. My question would be like, are they paying rent to the schools? Like how are they getting that space? What does that look like?

I would assume they are. I have no idea how much. What I don't like about this is that it's like a three sided marketplace almost. You got buyers, you've got sellers, and then you have a venue. Right. The venue would be the easiest. It's one point of contact. But then you got to get the buyers there and you got to get the sellers there. And a marketplace is hard enough when it's on a website, but in person, man. What if you have a hundred cars there and five attendees? What if you have 500 attendees and 10 cars there? How do you balance that? Because if you put out a Facebook ad and the ad blows up for people to buy cars, but your ad for people to sell cars doesn't blow up, that's tough. It's embarrassing. It's stressful. Very. Like the stress of an in person event versus like an online event are incomparable. So I don't like that about it. But I do like how approachable it is and that it's a proven model that you could replicate somewhere else.

Here's what I don't like about the business. I'll start there. I think there's a potential liability, right? Like do you have to get approval from the city in order to host one of these, in order to conduct commerce? I just have no idea. How would you work with the school? And then there's if people are scammers, like who do they come after? The potential liability to you for organizing the event, et cetera. That's the downside. I think the upside is physical goods, probably high ticket physical goods because you don't want to craft fair, you don't want to have people come and selling a bunch of like cheap trinkets, but you want to have a space for people to come and bring their things that would typically want to be inspected pre purchase, potentially furniture, cars, maybe electronics. Like I'm trying to think of some of the other things. So finding that in any community I think is really easy. Anybody could find the high school. The question is like how do you, how would you go out and drum up interest and demand? Because like you said, it's a three sided marketplace. Would you start with the supply? Would you start with the demand first? Like where would you start?

I would start small for sure and try to get like 20 cars to pay and I would plan it like two months out in advance. Like it's like okay, October 27th we're gonna have this car fare. It's usually 199 but it's $99 for our first 20 people. I get 20 people and then I shut it off and then it's like, okay, paid. These guys have already paid. They're gonna be there now. Let's go find the demand side and then just run. I'd go into all the Facebook groups and I would just start posting like we do with our home service businesses and just start generating organic interest. And I might even charge like $5 just so I have some real intent to show up.

I'm guessing for the Sierra one it probably organically grew over time where each year got bigger and it was word of mouth, right? It was like pre Internet. Now I'm trying to think you'd probably have to spend a lot of money in order to get awareness or do some like neighborhood door knocking, flyers, like those types of things to get really creative. But that first year you're, it's probably an investment or that first car show is probably an investment, probably not making any money. But it's one of those long tail investments where you spend a lot of money up front and then it's just sort of self fulfilling. Every year after the first year you've got the Facebook group and people are talking about the next event and you know what I mean? It's like I think there'd be some built in infrastructure after year one, but it would probably take, I don't know, I would guess you're probably spending a couple thousand dollars just to do the first one as a test. You're not necessarily profitable on the very first one.

Here's what I do. You ready?

Oh, okay.

I would go to Facebook marketplace and autotrader.com and just start messaging all these people, private party only, that are already selling cars. I would say it's a hundred bucks but you're going to get a full refund after you show up. Whether you sell your car or not. I just want to be sure that you show up. So if you never show up, you're not going to get a full refund. But I need to make sure that you're there. So it's 100 bucks, it's 200 bucks. You pay in advance. Now I know you're going to be there. I'm going to give you a full refund. So they're especially going to be there. That way you get the demand side. Okay. You just start messaging people that are already selling cars. Not just any cars, Nick, but cars that you know are likely to sell.

The supply side, you mean?

Not the demand side, supply side. Yep. Yeah, yep. And then you can even go into Facebook groups of people that are buying, selling, buying and selling cars. Cause that's a thing. And then you could start posting in there to get the demand side. Or you could just use Facebook ads, Facebook groups and all that. But I think if you can get 20 to 30 people to pay a hundred bucks to get their car there, it will actually be easier to get the people to show up. Especially if you can say, hey, we're going to have Honda Civics there. We're going to have Ford F150s there. Like, you're not going to allow the Subarus or the weird things. You want things that are going to sell.

Because the whole idea is not a car show. Like, it's not just for you to come look at. Like you want to buy and sell cars there.

Yep.

You know what else could be interesting? You know those high school fundraisers where they sell like the little books and within the book are like coupons to Chipotle and the local Raley's or supermarket, whatever. Like, you could probably put a coupon in there as well. Like maybe pay for a spot in that book. And then when all like just piggyback off of the high school kids selling to all their friends and family. Because essentially that's what you want, is the local community to come and be active in buying and selling these cars, right?

Yep.

That might even be an interesting distribution model. Yeah, that might be an interesting business period.

Well, here's another idea. I'm wondering if you reach out to the people on Facebook Marketplace that are selling something that is in Demand, a Ford F150, best selling truck of all time. And you say, hey, I'm going to charge you 100 bucks, but I'm going to give a full refund. And what I want you to do is everyone that messages you about your truck, I want you to point them towards our car fare. And that way it's much more efficient for you. You don't have to meet people up in the Walmart parking lot or at your house. That becomes your distribution channel. They start funneling people to your car fare.

That's interesting. So then you're contacting people who. It's already a weird thing anyway to have somebody come over to your house and inspect your car. You could scrape it and be like, all right, anybody who's Posted in the last three days. I'm going to message and I know that anybody within the last three days, I'm going to schedule out seven days in advance a car show for them and just see who's interested in. Okay, bring your car here. The potential problem with that is if their card isn't running, like, how do they tow it there?

I think they normally would be.

That's an interesting way to do it. You're just scraping the new listings and.

You'Re getting them to break.

Bring people and you're pitching to them like, hey, don't have people come to your house?

Well, here's the pitch. It's like, hey, you have four interested parties for your F150. Have them all come at one o' clock on Saturday at the parking lot at the community college. All of them at one. Then you've got fomo. Now you have a four to one ratio of people interested in the car and you got. I'll take 21 grand, 22 grand, 23 five. Right.

Are you ready for this? Are you ready, my boy? All right, then. Who knows if this will work? Then you go to three local auto body shops and you say, hey, I want you to sponsor this. We'll put your name there. Give us a mechanic. Just give us one mechanic for the hours between 10 and 1. Well, okay. Why a mechanic give people the option to pay for an inspection on that car. So they're just right there. Obviously, you can't do the full suite because, like, you'd need to actually jack up the car and get under all that stuff. But maybe it's something quick where you can get a better idea of what's wrong with the car, what issues might be associated with the car. Because then the repair shop has, like, warm leads, right? Like, well, I just diagnosed it. But to get the rest, I'd really have to bring you into the shop. They're there. It's easy. The customer pays for it. It's like, oh, 50 bucks for a quick inspection. And so essentially they're like paying 50 bucks for leads. Does that make sense what I'm saying?

Yeah, I kind of. I'm hearing something in your mic. Is that you eating? Because it almost sounds like you want to have your cake and eat it too. Nick, is that you want to monetize from the sellers and from a local business owner. Is that good? I don't know, because I was taught that you only want one stream of revenue, but maybe that's not right.

Honestly, I think you were just hearing that because Big dog's got to eat.

So I love it. I love it. Like, why wouldn't you? Because then you.

Then you de risk a little bit the investment. It's like, hey, you sponsor this? Yes. You're getting people to pay to actually bring their cars, but you're also getting the local auto body shops to or mechanics to sponsor it.

Dude, this is such a perfect audience to buy and sell through because it's. The person selling is about to have cash on their hands. The person buying already has cash on their hands. It's high ticket. They're very like anyone showing up is highly incentivized to buy or sell. It's just like the best audience.

You could take this idea. Let's say you did it for electronics and you were very specific. Let's just say it's, I don't know, an Apple Electronics fair and you only can bring iPads and MacBooks and iPhones that are of a certain generation and beyond. Like, whatever. You make it specific. You can do the same thing. You could have Geek Squad there and sponsor it. Or like the local you break, I fix there. Like, and they're just diagnosing these things on the spot. So you have again, people sponsoring it, but then also people paying to be a part of it.

You got your cake and you're eating it. I mean, you could have a local. You could have a local moving company. You know, these people buying and selling are likely either have just moved or about to move. They're in a change of life moment. You have all kinds of people come.

And sponsor it because the more stakeholders from the community that you get to be a part of it, the higher likelihood that they're going to post and get the word out about it.

Right.

So of course you want as many people there who are invested in its success. So it's not just the sellers, it's also the sponsors. Like if there's a way for the buyers, obviously that'd be cool. I mean, the mechanics could even do something where, yeah, we'll look at these cars. But also if you come from the community, you don't have to come to sell your car.

You could for a quick.

I'm sure there's some $50 you can.

Do oil changes on the spot.

That's interesting. Mobile oil changes. Did we just.

Why not?

We're in business.

Tire changes, brake changes, Johnny on the spot. The. The best thing that you could happen, that could happen is if you had 50 cars for sale and like 500 people show up and like by 1pm like, everything's gone.

Right.

That would be the best scenario. Right. Then it's like, oh, instead of doing this next month, we're going to do this again next week.

Yeah. I think you'd have to be somebody who's like, really well connected in their local market like that knows that space. Like those local businesses that can kind of work the buyer and seller side that might have a relationship. And there may be somebody who's like, dude, I could do this. I know the principal at the high school and I know Jimmy Doe Bob down at the mechanic shop. He'd for sure come down and maybe pay a couple pennies, rub a couple pennies together to fix some oil.

I tell you what, honestly, it'd be smart if a used car dealership did this and it's bringing people to their dealership and it's like, oh, why would you do that? Because these people don't want to use car dealership.

They might.

It doesn't. It's not like this is going to put used car dealers out of business. They might go to look at that Acura and. And they don't really like it, but the dealer has an Acura that they do like. It's like the dealer can just sit by idly watching someone else profit off of used cars or they can get involved. Yeah.

Like you said, if it grows. There are a host of businesses that would be interested in having access to that community that you're bringing there. Right. Like, used car dealerships would be one of them. Banks would be one of them. Not just because they're going to have cash on hand to deposit, but it's like, oh, you need to finance this car. Like, you can finance private party transactions. That's absolutely a thing. So you could have the local credit union come by and just be there in case anybody wants to have a conversation. There's a million different businesses that could be coming, dude.

You could also just take the registrations of the people that are interested buyers. They're not paying anything. You get their name, email, phone number. You could sell those leads five times, sell them to a bank, sell them to an auto detailing business, sell them to a car repair shop.

Well, dude, okay, take it a step further. You get their Social Security number and their credit card number. Dude, you can sell it like eight times on the black market.

You could literally steal their identity. Wow.

All right, I like this idea. Now here's my question to you. It's like a tangent on this idea. Are there not mobile, like, oil change companies?

Yes, they're Growing like crazy right now.

Are they growing like crazy, huh?

Yeah, it's like it's growing in popularity.

We need to talk about that. Like, I remember the company. When was it that you and I talked about? This was probably like seven years ago where they would do mobile gas.

That's growing like crazy, too.

It makes sense. It totally makes sense.

Yeah. So there's a business in Huntsville, Alabama, that's very similar to this car fair, but it's just like the three acre strip of land right off a highway where there's no attendant and you just pay $200 a month to park your car for sale. There's with a for sale sign, and everyone just knows there's like a sign. And they just come and shop at their leisure. There's no one there, and you just call the number. And that's how they monetize their land. It's just raw land with a gravel parking lot. Really? Pretty smart, right?

Well, because, like, every community, no logistics, really, wherever you live, there's like that one street or that one part of the street where people park their for sale cars.

Mm.

And they're not paying anybody for that. They're just like, parked on the street. Yeah.

Okay, here's an idea. You ready?

I'm in. I'm Sheryl Sandberg right now. I am leaning in, bro.

You are. You are. You're going full Cheryl. Never go full Cheryl. So let's say you want to do this idea. You got to go buy land on some highway that's super expensive. It probably works really well for some boomer that's owned that land forever. Right. And he's just like, monetizing it somewhat passively. What if you went to a. A huge shopping complex like a Walmart or a Hobby Lobby that has a parking lot way bigger than you need, and you say, hey, kind of like a Dutch brothers would lease land in the middle of a parking lot. You're going to lease 20 parking spots on the edge of the parking lot that's least desirable to the shopping center because it's far away from the shop, but it's most desirable to you because it's closer to the road. And you can literally just play middleman. You. You lease the. These 20 parking spots for 500amonth. And you could have people come park their cars for sale in that spot. You could put some signage up.

I like that idea less because I. I don't know, I just. I would worry about the liability of k car gets broken into and stolen.

You're not pulling the actually card on me, right?

Actually, no, I'm not pulling the actually card on you. What I'm saying is if you went and did it at a supermarket or a Walmart, for me it's like, okay, well then we could set up cameras to make people feel safer and then we could like, it expands the scope of the services.

It's simple on, on paper, but in actuality it's less.

Yeah, yeah, that's, that's what I mean. Like, I still think it's a great, I think it's a really cool idea. I just, that one would make me more nervous because at least with the fair, it's like this is a designated time. We're going to be here between 10 and 2. Cool, done. You're out where you start, like sublease and if you own the land, cool, great. I'm generating revenue from this and I actually own the land. But then you start like subleasing the spaces from Walmart. I don't know. Makes sense.

I think to your point, the liability, let's say you could easily go buy insurance. Okay, you solve that problem. You really don't solve that problem. Because the massive property developer that owns that land is probably just too scared of the liability to care that you can just go buy it. They don't want it. But if assuming you could overcome that, I see this as a good way to get your feet wet in the bigger idea, right? Prove the demand, prove the model. Maybe a month to month lease. Because it's like, listen, Dutch Brothers is gonna, they're gonna break up your concrete. They're gonna put in plumbing and electrical and all that. If you don't like us, we're gone in 30 days. We're just testing something here.

Yeah, I like it. So I, I got an idea for you.

Let's hear it.

Okay. You know who Nikita Beer is? All right, so I'm going to do a really bad job. You'll probably correct me, but this is like the background. Nikita Beer has grown a couple of companies in a viral manner and made a ton of money. So his first company was called, I think it was called tbh. Essentially it was an anonymous compliment app that high school students could compliment other high school students. And then if you downloaded the app, you'd get a notification that's like you have, I don't know, X number of anonymous comments about you, but you've got to pay in order to see them. So the compliments were behind a paywall. And high school kids are obviously really curious. They're like What? Did someone say I was cute? Did someone say I was nice? Did someone say I was funny, athletic, whatever. And he was very strategic in this. He went to three high schools. I think it was in Alabama.

Georgia.

Was it Georgia? Okay. So he goes to three high schools in Georgia, he throws up an Instagram page. He starts friend requesting on Instagram, every student there, but it was a private Instagram page. So it got them to accept and buy. And all it said was like launching on this date. There was like a tagline and a launching by this date. So it built up all this excitement. And so when they launched, they already had a bunch of people who were following them on Instagram. It was very targeted at these schools. And it caught on like wildfire, right? Like these three high schools. It catches on and he decides to, to grow it. And it grows like crazy. He ends up selling it to Facebook for $100 million in 2017. And he has a non compete Facebook, they've got more money than they want to do with. They end up not actually taking advantage of this app or this idea. And so five years later, his non compete or whatever he had signed with Facebook lapses. And in 2022, he has an idea for a new app, except it's the same app. It's like literally the same idea, the same playbook, everything. And he launches it in October of 2022. Check this out. Launches it October 2022. October 11, it becomes the number one app in the App Store. October 21, he's got a million active daily paying users. October 23, they hit 1 million in sales. December 1, they hit 5 million in sales. And in January, January 17, he sells to Discord for an undisclosed amount, but probably eight to nine figures. So like in four months, basically, he launches and sells this like $90 million company.

He's a rainmaker.

He's a rainmaker, but the Playbook's the same. He's exploiting these viral hyper popular products and it's nothing new. Like in the 80s we had the Pet Rock and it got viral and all the kids liked it. Like it was the same idea, right? There was a social pressure of like, oh well, so and so has the Pet Rock. I want a pet Rock. And then the 90s, we had to Tamagotchis, like little animals that we would take care of on these little computers. That freaking weird. And you know, in the 2000s, I don't even know Pokemon. It's nothing new. He just went and it, it was now applied to the app generation. So all of that first of all, any. Did I miss anything with the story?

No, no, you're good. Okay, cool. All right.

So the. It just got me thinking that this like novelty product scaling hyper fast and then selling is the same. It's just different iterations of technology that are being used. And the last generation was apps and I think the next generation is going to be Chat GPT or artificial intelligence. So I don't have like the idea, but I wanted to brainstorm on this with you because over the last few weeks I've been having this thought, thought of how funny it would be to build an AI chatbot called Chad GPT who, who just like roasts people. Like, it would just be. And he talks about like the Carnivore diet and listening to Joe Rogan. And I'm sure Chad GPT exists because it's just too good of a name to not exist. To me, that would be something that kind of fits the Nikita Beer framework of like, that could go hyper viral shared really quickly with a bunch of high school students. It probably doesn't take a ton of time, energy or effort to build the infrastructure for it for kids to play around with it, but it's something that could catch fire really, really quickly. So potentially a chat bot that's trained on a proprietary like hold cobros. Right? Like we, we create our own chatbot and we sell for a dollar a month or something like that. But I'm curious to get your thoughts.

I have many thoughts.

Okay.

First of all, love it. Second of all, about a year ago there was this heyday for apps and Chrome extensions, these little SaaS tools that leveraged OpenAI's API and it basically allowed college students to, quote, get help on their assignments, AKA cheat on their tests. Okay. And the marketing for these was brilliant because picture this, picture a TikTok video of someone sitting in class. It's like a stadium style seating and it's like a grainy video sitting in class. And the text on the screen says like, oh my gosh, what is my classmate doing? And it zooms in on their classmate's laptop which is sitting in front of them. And it shows them taking a test or a quiz with a Chrome extension, like automatically inputting all the answers.

Oh my God, those went.

And so it looked like it was an organic natural video, but absolutely not. The people posting these were the people behind the company. And there were like three or four clones of this. And like, I swear they all went to like a hundred K MRR or more immediately because it spread. So Easily and so virally. So I love the distribution aspect of that of it because there's a lot of precedent. I think the tool itself needs to be something that offers more value than like something that's funny, although it could go viral because it's hard to pay for things that are funny. And it's hard for something funny or clever to have real lasting staying power. Right. So I think the idea should be tweaked.

Like when Nikita did, it was essentially putting the paywall in between you and finding out what people thought about you, which makes sense. But the. The funny aspect isn't necessarily creating the same type of fomo.

Yeah. So let me tell you about an idea that is similar to Nikita's idea, but it's low tech that you don't have to have any coding or app development skills to do. So I'm gonna give a shout out to my friend Sam Aldridge. He emailed me eight months ago. Cold University of Georgia student Roll Tide. And it was a very well written email. And he just told me last week that it took him like hours to write this email. And he kept rewriting it, rewriting it. And it was like, put down your PE energy drink and listen and read this email that was like the subject. And I read it and I ended up tweeting a screenshot of it. And it did really well. And people were like, you need to hire this kid. I've talked about Sam. He's helped on a number of different projects. Anyway, his not his first hustle, but the hustle that he was doing at the time. January 2024 I'm going to read his email. I pulled it up. So he says, during the summer before college, I stumbled upon this Instagram account. UGA Class of 2025 enter college class Instagram accounts College class Instagram accounts connect rising freshmen to their peers so they can meet each other and most importantly, find roommates. Without these pages, there's no way to find out who is attending your college until the first day of class. So this reminds me of the not.com idea that we had or just point that we made, where wedding planning is happening on Instagram and not on the not.com anymore. So roommate finding is happening on Instagram now. So he says the email proceeds so everyone who's going to a certain college will follow that page in a heartbeat. For every single college there is a class of page. I estimate there are hundreds of them. Back to the story. So I followed this page and submitted all my info to be posted through the page's. Dm. So it's like, all right, you're going to go to the University of Georgia, you don't know anyone, you DM the page and you say, hey, will you post my picture? A, so I can feel gratified that someone's talking about me on Instagram, and B, so I can find a roommate. And so he says, I get a response and they tell me, sure, just venmo them $4. And he says, mind blown. I remember thinking, this page is making a killing. Anywhere between 1,000 to 2,000 students are posted in an admission cycle that's four to eight grand just for posting on Instagram and barely any work. And you could automate all this. The Georgia page has made about 30 to 50 grand since inception. I estimate there's. They have over 5,000 posts with an AOV per student poster of $10. 500,000 to a million dollar market cap for all the pages, I'm assuming. So anyway, he started doing this. He copied this idea verbatim at Purdue just because he didn't see that they already had one. And he started making a ton of money. I'm not gonna read the whole email, but it's the gist of it. Yeah. And so he says, I charged $4 for the half of the first year and increase it to $8 by the end of the first year. Now I charge $12. And there's no price resistance.

Just like one time.

One time, yeah.

Okay.

And there's barely any price resistance. So long story short, he was doing that and it went really well until this company called Meet yout class came along. Meetyourclass.com that basically operationalized this, made this sophisticated, and they got VC funded and, and now they have like over 400,000 students. And it's like a roommate finder app that they launched with this exact same strategy.

Oh my gosh. And that's what would happen, right? Like you launch this, you start making a bunch of money and then people see it and copy you and then VCs fund it and that's fine. But like there are these windows in time where you can make a hundred thousand dollars in two months.

Yep.

And that's an example, not necessarily using AI, but just like hopping on a trend really quickly and monetizing it.

And that's what Nikita Beer did to grow so fast is he took the three high schools, I think he started with one and then three, and he geofenced the app to where you would only see the app in the App Store if you lived within five minutes of Valdosta, Georgia, or something random. And so it was very exclusive to that high school. And I think he might have even named the app after the high school. So it was like, wow, this is an app just for us. It's just genius.

Do you think there's an opportunity to do that, do something similar in high schools and colleges? Like, is there something unique in the targeting of that demographic in that manner, or is it lightning in a bottle?

I think it's a bit of both. I think you could niche down with, like, a major or, like, which college you're in, like business school, you know, whatever. Or I think you could do it with bigger high schools around the country. You just take a list of all the high schools in the country, sort by enrollment, and try it with that. Basically the same Instagram strategy. Because I don't think VC is ever really going to care about that. It's probably too small of an opportunity, right? But I love stories like these.

Dude, that's rad. I've never seen you post about that.

Yeah, I need to. You do.

It's a good story.

Okay, what'd you think? Part 2 of this episode will be next week where we'll talk about a trampoline idea, a mattress idea, a viral video business idea, a viral store idea, and how to invest in creators. So enjoy.