The Place to Validate and/or Launch a Business That Everyone Overlooks. Holdco Bros Discuss! Ep. #104

In 2004, Americans spent $34 billion on their pets. Last year, in 2023, they spent $150 billion on their pets. It's like $3 billion a year just for pet supplements, and it's projected to double in the next 10 years. So you could just be a supplement bro slang and supplements using the distribution of existing businesses on Shopify that just haven't thought about growing their business other.

Ways and just say, hey, just put my product on your website. That's it.

Super easy.

Yeah.

Why would you not do that?

Someone do this. I promise it will sell. Three days ago, I'm sitting around right here in my desk and I'm thinking, why can't I buy beef jerky that imitates the exact taste of authentic Texas barbecue? And what I mean by that is authentic Texas barbecue is a few things. It's an offset smoker. None of that pellet grill crap. You got post oak logs with a specific moisture content of about 14%. You're cooking at about 250 degrees. It's got to be brisket, lightly trimmed, 50 to 50, salt to pepper ratio on the rub. That's it. You wrap it at 165 degrees, you pull it at 205 degrees, you let it sit for an hour, you slice it, okay? That's Texas brisket. End of story. Why can't I buy that in a jerky version? Why can't I? It's. It doesn't exist. All right? If you want to go eat jerky that has a smoky flavor to it, they're going to use liquid smoke, which is fake smoke. It's not real. It's an imitator. It's a copycat.

It's like vape jerky. Ew.

Vape smoke, basically. Now they've got peppered beef jerky. They've got. But I'm not talking about a beef jerky that tastes very different. I'm talking about a beef jerky that's branded differently. An ultra premium, you know, brisket in your car. Beef jerky. Okay, so curious about this. Just so happens I love excuses to go smoke some meats, right? Oh, twist my arm. Oh, no, no. I got to go smoke some meats and play with fire all day. Oh, no.

Pieces of meat, a grill, and the outside cold weather. Touch my arm.

So that day, coincidentally, my wife was picking up the two deer that I shot last month, and she was going to Costco.

Okay, two deer from the butcher?

Yeah, yeah. From the process.

I call it venison, but yeah.

Oh, really? Do you shoot venison? Have you ever shot venison?

No. You shoot deer, you idiot. I would never say I shot a venison. The meat is called venison. Get it together.

Even when you call me an idiot in a joking tone, it still hurts my feelings. I want you to know that this is critical feedback for you. All right?

So she goes to the butcher, picks up the meat, goes to Costco, picks.

Up the meat, goes to Costco. I say, give me a brisket. Okay? So she comes home with a bunch of meat. And this was like an hour after I had the idea, okay? You throw the brisket in the freezer because it has to be pretty stiff when you slice it. Hold your jokes. Hold your jokes. So I slice it up and I 50, 50. I put half of it in, like, your standard jerky marinade, and the other half, 50, 50, salt and pepper, just like a brisket would be. Put it out on the smoker, put some post oak logs in there, light it, get back to work, check on it every hour. By the end of the day, I've got jerky. So the question is, how did it taste?

How did it taste?

It was fine. It was kind of mid. It was kind of mid. It tastes like beef jerky that, like, you know, it's like we. We talk a lot of crap about food companies that put all this crap in our food, but that kind of makes it taste really good, you know? Very good. Is a Peanut M M or a Reese's Pieces going to taste any different in 50 years? No. Hopefully it might have different ingredients, but it's going to taste the exact same because you just can't screw that up, right?

Well, no, we know people. People put things into our food to make them taste better. Perfect example. Everyone will resonate with this. Chris, do you like Coke?

It's literally the first thing I drank this morning. Okay. It's full sugar Coke.

I love Coke. I freaking love Coke. Is there a difference between McDonald's Coke and Coke you buy at the store?

Is there a difference between men and women? Like, are you kidding me right now? What are you talking about?

Absolutely. You know, McDonald's does something to their Coke. It tastes so much better than regular Coke. So, yes, I believe you that your. Your smoked jerky was mid because you probably didn't add all the preservatives and other flavors that people do.

Yeah. Side note, tangent. Did you know why McDonald's Coke is so much better?

I'm guessing because they add more syrup.

No, I don't think so, but they have this big, expensive filtration system where they filter the water before they add it to the syrup. And they make their straws bigger because there's something about the science of drinking through a wider straw. Like, activates more taste buds. Those are, like the two main things. But there's actually like six to ten different things that they do to make it taste better. It's very intentional on their part.

Again, you know, there's two Mormons talking about alcohol. But I know that when you're drinking wine, you're supposed to aerate it or something. I don't know. But, like, changes the taste in it. Edit this out, Muhammad. But I believe it. I believe. I believe that filtering the water and whatever, creating more surface area, what you're drinking makes it taste better. All right, keep going.

Anyway, there's got to be a business there, right? Like, yeah, it tastes mid first round. One try. I'm not going to chase it. I wanted a reason to chase it. But more broadly speaking, the business model of just taking a commodity, let's call it a food product that everyone's already buying and pricing it higher and just framing it in a different way, right? Like, it's you. You can make jerky out of chicken, right? So it could be like a buffalo wing jerky that tastes just like a buffalo wing, but in. In a bag, in a car, unrefrigerated.

Or you could do like, liquid death. You're selling water in a can, but you called it liquid death. And through some cool marketing on it, you could. You could have jerky and just call it Jerky Boys. You know what I mean? Or like some creative. Some creative name that makes it sell. I agree with you. You're talking about the idea of taking something boring that everybody knows and slapping some marketing on it.

Yes. And I am saying this is a public call to action. Someone do this. Like, someone make authentic Texas brisket in a bag in a jerky form. I promise it will sell. Like, you can make it taste better than mine, but it would sell. There's a free idea for you.

Great idea, Great idea.

One more food idea real quick. We're just going to lump in the food ideas together post Thanksgiving.

You got a lot of food ideas. I get it.

A lot of food ideas. So I got a pizza oven. I've had a pizza oven for years. I got a different one, propane powered, called Gosney. I cooked in it last night. It's really fun. It's delicious. I'm a pizza snob. You got to cook it at 900 degrees. You got to use authentic mozzarella. You got to use San Marzano tomatoes. You can't put too much crap on it. This pizza cooks in 60 seconds. Okay. Anyway, I thought it would be so cool. We have a farmer's market here where we live, and I thought it'd be so cool to bring the pizza oven because it's like, it's industrial grade. You could cook on that thing all day if you want it. And you can crank them out every 60 seconds if you have someone preparing the pizzas. This is a $15 product. The cost, what I paid for these Amazon and Costco ingredients is like a $80 per pizza. It's like a 90%. 80 to 90% gross margin business roll up at a farmer's market. Set it up. You got one person making pizzas and accepting payments. You got another person cooking the pizzas. You got one option margarita. One size, one option. Keep it simple. No drinks, nothing. Because we're having a farmer's market this weekend for Christmas, and there's not, like, any food vendors. I was this close to signing up to be a food vendor just to literally take my pizza oven down the road and start slinging pizzas. But then I learned you gotta have a food handler's permit. So not too hard. What do we think? Because I'm gonna do that.

I just want to say first, I really love. Have you ever had. Have you ever had it? So it's like, first you take a hot dog and you wrap it in a pizza, and then you stuff it with some jack cheese and you got cheesy blasters. 30 rock reference there. So I hate food businesses. I just hate them because. Because they might make sense individually, but, like, the ability to scale them freaking sucks. However, if you're going to do it, you do the in and out model, which is like, these are the options. Nah, we're not. Like, this isn't build your own. This isn't blaze, where you're coming in and building your own pizza. It's like one type of pizza. Take it or leave it. Like, then that helps you scale, I think, pretty quickly. So I like it. I think it's a good way for someone to test entrepreneurship, like take their pizza oven, sell at a local farmer's market. But I do. I just think you hit a scalability ceiling. So I had somebody. I had somebody on my podcast, and he makes hot sauce, and he was on. You've seen the YouTube series Hot Wings?

Yep. Hot ones. Hot ones. Hot ones.

Where they're like doing interviews and they're eating and it gets progressively hotter. So like his. His hot sauce was on Hot sauce.

Hot ones.

Hot ones. This is on hot ones. Lucky Dog Hot sauce is the name of it. And this is how he sells. So everything sourced locally, like literally within a 60 mile radius. Everything except for the glass bottle, which he's like, I have to import that from China because I can't not. And he goes to local farmers markets and that's where he sells them. But he has a scalability problem because it's just him. He's like, at $300,000 a year, it's a really good product. It's won a bunch of awards. But he's like, I don't know what scale it. Yeah, exactly. So I think you could do that. I think you could like do the farmers markets to test the idea. But then you have to have the thought of like, all right, am I cool with just a 2 to $300,000 a year revenue business that I make personally? Maybe 100 grand, and I just essentially created a job for myself. Or is there something I can do to scale this?

Let me zoom out two frameworks for you. Totally agree. 100%. 100%. Very hard to scale. Number one, I'm speaking to the guy that's just a capitalist at heart, right? The guy that just wants to turn $1 into two like that. I don't care how wealthy I ever get, I'm always going to want to go do that. The hustle. I'm just speaking to the hustler out there, okay? It's just fun. Number two, we're overlooking farmers markets. Why aren't we talking about farmers markets? How many different selling venues can you get immediate, direct feedback face to face from the person consuming your product? It doesn't happen. You could take that feedback and scale the feedback. Scale your product globally or nationwide based on the feedback that you get face to face. You don't have to only scale through farmers markets, right? So let's say you're. Some people are short on ideas. Maybe that's why they're listening. You spend a Saturday, go to four different farmers markets and you just take note. Where's everyone lining up? Oh, wow. Interesting, huh? Okay. Wow. Everyone's lining up at the pizza place, but this other farmer's market doesn't have a pizza place. But it's a half hour away. Surely these people want pizza just as much as these people. You're not going to find a pizza place at every farmer's market. You could Find out where the supply and demand imbalances are just by farmer's market hopping. And then go learn how to make pizza and selling it at a farmer's market. All right, if you are watching this clip right now, you are watching this on YouTube. And if you are a fan of podcasts, please check out my podcast while you're at it. Because sometimes I have podcasts that aren't on YouTube and sometimes I have YouTubes that aren't on podcast. Podcast. So check out the Kerner office on any podcast platform. Or you can go to tkopod.com also my newsletter will throw that in there. There are no ads. It's weekly. It's different content than my podcast and YouTube newsletter.chrisj kerner.com you'll see the link and we'll see you there.

That's an interesting framework in and of itself. Go to the farmers markets, see which products have long lines, like which ones are really popular, the ones that are made to order. Maybe you don't focus on, maybe you just focus on the ones that are packaged goods. And you're like, hey, do you sell online? I can help you set up a Shopify store or I can help you with your E Commerce. Or if you have a marketing agency, you can help them with their marketing or paid ads. Or like, that might be a really cool place to go and get customers or to find businesses to support and grow and scale. I like that idea. That's a really cool.

There should be like an Etsy for farmers markets where you can go like an online website where farmers markets could list their wares. It's a marketplace and anyone worldwide could buy something from someone that primarily sells through a farmer's market. They can have their own Shopify store. That's fine. It's not like they're only selling through farmers markets, but just an online farmer's market.

Would it be like the online version or the, the Etsy version of Gold Belly?

It's a good way of putting it.

Well, Gold Belly is more like it.

Doesn'T have to be food, right? Yeah, because like at our farmer's market, food is maybe half of the stuff one guy sells. Handmade cutting boards or all kinds of handmade jewelry and trinkets and whatnot. So it's, you know, as everything is mass produced, the pendulum swing towards, you know, local one on one, bespoke, custom, et cetera.

It would be hard to do. But if you could create, like you're saying that platform and then you, you can start in real time identifying like oh, these are the products that are taking off in the local markets and then go to them and say hey, we have this e commerce store. Let's have an affiliate relationship. That would be really interesting.

You could start by taking the McKinney Farmers Market and putting it online. Right. And just going all in on the McKinney Farmers Market, leaving the brand broad enough to expand and then maybe add a second at some time or a third.

I don't know the answer to this. Who owns the farmer's market? Is it the city who puts it on?

Sometimes in our case it is but sometimes it's private landowner and they charge 1 to $300 for a 10 by 10 spot.

Because that could be something. As you go to private landowners and you're like let them rent your land. I'll do the all the admin and then you collect all of the vendors information and you tell them I'm going to list this. This is now the McKinney's Farmers Market. And this will allow you to sell product online as well as market when the next farmer's market is going to be. So you're like building in a distribution e commerce store as well as a marketing tool for the farmer's market itself. That would be interesting. You're setting up local marketplaces is what you're doing.

Yeah, that's a whole other idea that like in Fulshear, Texas when we live there, there was a farmer's market just off the side of the road, maybe on three acres. You don't need power, you don't need gravel, you don't need a parking lot, you need a grassy field. And provided it's not wet or muddy, you, you could set up and if the vendors need power, they bring a generator. Right. So you really don't need anything. You need a grassy field and some hopefully drive by traffic. And a lot of times these landowners are just sitting on the land waiting for it depreciate. They're not trying to build a Taco Bell there, they're just holding it. So might as well generate some revenue. I like that.

That's a really good idea.

One more thing. Oh geez. Just about farmers markets. No, it's same, same thing. Same thing is if you are interested in farmers markets, look at your state and their laws about selling food. Because in Texas they have what's called a Texas cottage law, which means if you sell baked goods or things that don't need to be refrigerated, you don't need any food license, you don't need any Licensing whatsoever. You can make baked goods in your kitchen and you can sell it to the public. But in Texas, the differentiator is the refrigeration. If your product has to be refrigerated, they basically treat you like a restaurant. That's why I couldn't do pizza. Right. So look up, look to see in your state if there's a Texas cottage law variation and that can.

I mean, he's in California, and they're very stringent with their, with their regulations on what they sell, even at farmers markets. So, yeah, you're definitely different for each day. All right, I had a guy on my podcast last week, Nickonomics, and he sells pet supplements. So I'm gonna give you an overview of his business. Did you know pets have leaky gut?

Tom, don't. I'm not doing this. I'm not doing this. I'm opting out of this segment. Why? No, I'm just kidding. I'm just kidding. It's just like. It's just like. Of course they have leaky gut and they suffer from depression too, don't they? So we should pay to fix that.

All right, let me give you some stats. In 2004, Americans spent $34 billion on their pets. Last year, in 2023, they spent $150 billion on their pets. That's a massive increase. And it's not just because people care more about their pets. Listen to this. In 2004, 66 million households owned a pet. Today it's about 87 million. A massive jump in the number of people that own pets and a massive jump in the willingness of people to spend on their pets. So we know that there's a big industry and market for pets. All right, so his in particular, he started out where he wanted to just sell supplements. And then in the process of doing his research, he found someone who had a protocol for fixing leaky gut. And he combined the two. Anyways, they have leaky gut. And leaky gut just essentially means that. Exactly what it sounds. You're not holding in the nutrients and you're making yourself sick. So he, he has this protocol. Essentially what they do is they do three things. They get the dog on new food, they detox the yeast in their stomach using some oil that he has, and then they reintroduce and repopulate the gut with healthy bacteria. And it's a three month regimen. And after the three month, there's a maintenance thing that he has. He has about 300 to 400 active customers. Their current monthly revenue is $15,000 a month, but they've got like 50% margins, so they're making decent money. But he's sold over 5,000 customers, so he has like a significant amount of churn.

Is this the guy that was that heard our segment about dog electrolytes that we were emailing with? Okay, very cool.

Yeah, it was a really, really cool conversation. And his current channels for acquisition are Facebook ads, a TikTok account that he runs that has 2,000 subscribers, and a list of 70,000 French bulldog owners that he bought from somebody. Like those are. That's his. That's how he currently gets customers.

Okay, a list of 70,000 French bulldogs. Not their own salesforce.

Just the pullback, man. There are a lot of Fidos. Did you know people name their dog Fido a lot? Anyways, so that's his business. And it's, it's, it's recurring revenue, it's mail order. He sends this stuff to them and I'm like talking to him and I'm just thinking, dude, there's so many cool opportunities I think people could do. So number one, I really, I really liked what he did with the French bulldog owner list. And so I kind of want to work my way back from a distribution model into ideas. And so I think what I would do first is I would go and look at how many small pet related businesses there are in the US and where I would go is like, you know, the site we've talked about, the site built with. I would go and just try and find companies that sort of fit maybe less than $5 million a year in revenue criteria and just see what kind of offerings they have. Generally speaking, what do they do? Do they offer food, do they offer insurance, do they offer supplements? Like what accessories? What is it? And then I would look at, I wrote myself like five, six categories. I would pick from one of these product categories. Pet food and treats, which there's a big push into natural foods right now, Pet insurance, pet supplies, pet pet grooming, pet accessories, and then pet technology, you know, trackers in particular. And they do now have technology that like tracks their vitals, which is nuts. I would pick one of those categories. I really like supplements. I think supplements is a really cool category. And then I would start reaching out cold to some of these businesses and say, hey, I want to piggyback off of your list. You've got a lot of customers that you sold to and I think they could really benefit from XYZ product. What do you think? And then you could have either an affiliate relationship you could have a equity relationship.

You could.

Or you could buy the list from them. The other place I've thought of going is to like Flippa or Quiet Light like some of these sites that sell e commerce brands. And so just off we. And we talked about buying email lists before but offering to buy pet specific email lists and then launch a business around the product using the distribution that you've essentially either piggybacked your way into or purchased.

I love it. Why not Facebook groups? There's so many Facebook groups for pet owners.

That would be a freaking great one.

I like the idea of starting with a breed like going that niche like X X Toy or insurance or whatever for French bulldogs, Goldendoodles, whatever it is.

And that's why he started with French bulldogs is because supposedly they, they have the worst leaky gut and. And so that's why he bought the list and that those have been primarily his customers. By the way, I did ask him the difference between leaky gut and Taco Bell and he said they're synonymous.

Oh, interesting.

Yeah, it's really interesting. So I have leaky gut. Just so you know.

I think both words originate from the Latin origin of chalupa. I think. I'm pretty sure. Huh.

I think the faith script groups would be the perfect way to market it. In fact, you could just like we talked about the other week, you could buy a Facebook group around a niche breed and you could like, you could do this with cats, you could, you could do this with dogs. You could do this with. I'm trying to think of what are some other really common. Cats and dogs are the two most common pets that people are going to have in their homes. That's probably, that's probably where I would start. But you could even go even more niche if you wanted to. Like ferrets. North American swallow ferrets are the ones that I'm gonna start targeting. Like the industry is just growing like crazy. Like the supplement industry. I didn't know this. It's like $3 billion a year just for pet supplements and it's projected to double in the next 10 years. So you could just be a supplement bro. Slanging supplements. Using the distribution of. Of existing businesses on Shopify that just haven't thought about growing their business other ways.

Like why not? I would go to built with. I would get only Shopify brands that are selling pet products. Let's say we're selling supplements. We find all of the toy like the dog toy brands. So they're. They're not selling and they're they'll never be selling supplements. And just say, hey, just put my product on your website. That's it. And every time it sells, we'll have an automation that tells me I need to ship that order over there. That's it.

Super easy. Yeah. Why would you not do that? I don't know. I mean, you know, built with much better than I do. Can you sort like, does it tell you business type or does it just tell you the business name?

Both.

Oh, okay. So it will actually tell you the category. So like this, because it could be a pet food sales company, but it's called Alabama. You're like, what's, what's Alabama? Oh, that's a pet food company. You know what I mean? People pick these cute names that don't. That aren't descriptive of what they actually do.

You can export list by category. So you could export. Like you could set the filter for Shopify pets, then export like that.

This was another idea that I'll bring up another time. But I also was like, how many dead Shopify stores are there that you could just contact and get their email lists? Now? You wouldn't know if they're dead or not necessarily from Built With. Maybe you could. Maybe Built with would say like, they haven't had a sale in six months or something like that. But those would be really interesting to target as well, just for their lists.

Well, it's interesting you bring this up because Shopify has a marketplace for selling your store. Did you know that?

No, I didn't.

It's pretty genius. It's basically like an ebay for Shopify stores that's hosted on and owned by Shopify. And their reason for doing it is brilliant. Reduce, churn. That's it. Because if you go out of business, you're not paying them 79 bucks a, a month anymore, or in some cases $2,000 a month. They would rather you sell that and not even take a percentage of, of the sale. They just want your store to stay open so they can keep that revenue going.

And do they take a percentage if you sell or is it just like, hey, we're just helping facilitate the, the transaction?

When I checked, they didn't. They might now, but it's, it's, it's quite genius because it's all verified by Shopify. You don't really have to trust anyone. Shopify will say, this is their revenue. This is how long they've been in business, this is how big their email list. Whereas if you sell a Shopify store on any other marketplace, it's like, what am I getting? I gotta trust this guy.

If you go to a website like Flippa, they, they do, they do like a. Not a due diligence process, but they do verify and I think that they request financials from you. But I don't know if it's like an integration with Shopify. It may be self reported, but that's even better, right? Because it's like Shopify's telling me cool that that works.

I think someone like Flippa has an API integration with Shopify where they will pull your data directly and essentially do the same thing, but it's not as trusted.

Yeah, that makes sense. By the way, dude, I forgot about Flippa. I started, I started messing around with Flippa this week. Like how you are about subreddits and like business ideas. Like the smoked brisket thing, right? Like you're just always going to be trying to slang smoke brisket and smoke brick. Smoked brisket is a euphemism for businesses. Anyways, I got on Flippa, I'm like, that business is for sale.

Holy crap.

They have this. How many newsletter subscribers? I just forgot how much time I can lose looking at business listings. Holy crap.

I know, like window shopping for businesses.

I know, it's terrible.

I mean that's how we found Money Syndicate.

I know.

For better. For better or worse, but I do.

Not need to spend another $100,000 on a business this year. I do not.

So I just looked it up and it was called the Exchange Marketplace and they decommissioned it two years ago.

Shopify did cut this out, Mohammed.

No, I mean it's an opportunity for someone, right? Like there's an opportunity for someone to do what Shopify was doing. What I was about to say if this was still existing is this is a perfect use case for that. Distill the IO tool that we talked about where you could track changes on a website. Because I, I guarantee you the majority of the listings that make it to that old Exchange Marketplace were people that were going to close their store anyway. So if it doesn't sell and if it's listed, been listed forever, you can come in there and be like, hey dude, I'll give you a hundred bucks. I know it's listed for 20 grand. I'll give you a hundred bucks. Because we both know you're just gonna, you're just gonna shut this down.

So you're freaking bargain shopping before we move on to your next idea. How proud of me were you when I brought up Built with? I'm.

I had it I had to edit out me crying. Let's just put it that way. Chris. I was watching you. You didn't edit anything.

When I was thinking about this idea and I was, like, writing about it, I'm like, oh, yeah. I could just go to Built with and find. Just because of the conversations we've had. And it was cool. It was just cool. It was a cool moment. Full story.

It's a flex. It's a flex. All right. What'd you think? Please share it with a friend, and we'll see you next time on the Kerner Office.