I have spent time trying to build a business that is profitable from day 1. My general approach is inspired by people like Tim Ferriss, Noah Kagan, and Nick Huber, who have slightly differing beliefs but overlap in their emphasis on being very intentional about de-risking ideas, taking a problem-first approach, and adopting a resourceful, humble mentality, rather than the approach of the archetypal Silicon Valley visionary.
As I have experimented with different business ideas and found moments to reflect, I've realized that each attempt has taught me at least one lesson about business. In this way, I see these series of explorations almost like courses I've taken in my very-mini-MBA.
This page of the website lets me formalize my mini, self-driven education.
I noticed that my gym's sauna was frequently under repair, which was bothersome. One day, a man said that this was because people kept pouring water on the heater. Folks enjoyed doing this, he continued, to create a burst of steam, which supercharged the heat. The electric heater that heated my gym's sauna was designed to handle a little bit of water, but it could not handle water from dozens of members daily. After enough pours, the water trickled into the electronics, causing the heater to shut down and, sometimes, break. This was very frustrating for gyms.
My next step was to quickly get a read on whether this was truly a problem for a business, or just a bit of friction that all parties tolerated. I did this by quickly ideating a solution (an alarm that sounded when it sensed steam), creating an AI concept image, and sending a higher-up in the gym's corporate branch my proposed solution and why it was high ROI. To my surprise, he responded and was interested in learning more. The CEO, he said, was considering upgrading all saunas to a new type, in part of because of this issue: I confirmed it was a real problem.
My one data point suggested this was a problem someone was maybe willing to pay to solve. My next step was to estimate the potential demand. I did this by calling ~200 gyms, and asking them 1. Whether they had a sauna, 2. Whether they had an electric sauna heater, and 3. Whether they faced the problem I found.
My data suggested that 70% of gym's had saunas, 40% of those had electric saunas, and ~50-60% of those had the problem I described. With 113k gyms, these numbers produced a favorable TAM (for me, anything over >$1M). In having these conversations I also grew in my conviction that it was a significant annoyance for gyms.
I knew that this was a problem many gyms faced and that it was large enough that someone would consider spending resources to learn about a solution (proxy for being willing to pay). My next step was to create a prototype solution and try to sell it.
After speaking to manufacturers and designers, and reminding myself that I had no experience in electrical product design, I ditched the alarm idea because it was high cost and slow to prototype. Instead, with help from family, I ideated a wooden enclosure that would cover the heater, not allow water in while still allowing ventilation. I spoke to contractors and carpenters to arrive at average building cost, which allowed me to set my price. I created a cardboard model and a website that showcased the concept, then began calling gyms to sell it.
I cold called gyms and finagled my pitch email into owner inboxes. I got two interested customers who eventually ghosted me. I couldn't get anyone to buy it.
Ultimately, I was confused: Anecdotally, this problem was very meaningful for gyms. It cost them bad member experience in the form of sauna outages, replacement parts, frustration for staff, and electrocution risk for the maintenance team. And yet, no one wanted to buy it.
My product would be priced at $1200 and costed me $800-$1000 to build. My model would be creating detailed designs, then outsourcing the construction to local carpenters who would measure, build, and install the product. After many hours of thinking, I concluded that this product and model was the only commercially viable solution I could conceive of.
I made 30 calls to gym managers and no one wanted to buy it. It felt like pushing a rock up a hill, and the signals were pointing to the fact that I couldn't build a business around this product. Because I was very confident that this was a problem people were willing to pay to solve, I settled that my product wasn't the right one. My product wasn't right to match people's demand.
One day I was in a public place, surrounded by babysitters with their kids. I took the opportunity to try and spot pain points this demographic of people had. One baby sitter sat next to me and set up an interesting high chair, called the Inglesina fast table clip-on chair. It immediately drew compliments from the other baby sitters, and some quick research reinforced that it was a best-selling product with many design awards. Intrigued, I narrowed my study to just this chair, trying to spot pain-points I could solve with accessories, which would make a beloved product even better for customers.
Research on Reddit revealed: 1. Although it was machine washable, cleaning the chair was very cumbersome. 2. People loved taking the chair with them on the road and easily moved their child from room to room with it.
Two product ideas came out of this. The first was a cloth cover to protect the chair from food. The second was a compatible art tray, which would be a variation of the compatible plastic tray it already came with to allow the child to draw and be creative in restaurants or on the road.
My online Reddit and Youtube research suggested the pain-points were meaningful and worthy of being solved. But I needed to get a better read on how widespread they were in order to estimate potential demand.
To accomplish this, I walked around in the street hawking people with strollers. My efforts showed: Roughly 50% of people with little ones owned a fast clip chair, and 5% of people with the chair already owned a cover.
These numbers showed enough potential sales to be interesting to me:
COVER: 3.6M babies born in US per year * 50% chair owners * 5% chair cover owners * 20% market share * $20 profit per cover = $540k
ART TRAY: 3.6M babies born in US per year * 50% chair owners * ~10% interested in this idea * 50% market share = $1.8M
Enough to pursue either.
My next step was the most emotionally draining: To see whether someone would buy my idea.
Up until this point, in my hawking efforts I had shown people an AI rendition of my art tray idea and received only positive feedback. Everyone willing to talk to me loved the idea and encouraged me.
To create a prototype, I bought the attachable tray made by Inglesina along with art supplies. I superglued together a prototype that looked convincing, and then set out to try and sell it for $25: "Hi!... oh you have the chair? Oh you like the idea? ... Here it is! Want it for $25?"
I spoke to 4-5 people with repeated and awkward "No's." I also learned that there was a fundamental problem with my product. Kids that were developed enough to draw were often too big for the chair. One mom suggested I pivot to a 'busy board' angle, which I did. Kids loved playing with the busy board prototype, but parents hinted that they had other, more versatile products to solve this problem already. The market was telling me that there wasn't real demand for my art tray.
As for the cloth cover, I learned late into the exploration that there was a Chinese bulk seller of cloth covers on Amazon and a patent-holding seller on Etsy. The Chinese seller had only 13 reviews in two years of operation and the Etsy seller also had a meager number of reviews. I conservatively extrapolated the total industry sales based on the number of reviews both sellers had, and arrived at a number much lower than my market research suggested. This signaled to me that the potential demand was small and already pretty well served by patent-holding competitors.
Although the demand looked promising at first, my two solutions either weren't truly wanted or were wanted my much fewer people than my initial market research suggested.
I learned many things:
Tactical advice for hawking - Don't say the words 'quick question,' don't approach from behind, make sure to have a visual you can explain with, you're pitch doesn't have to be 100% logically sound for someone to want to talk to you.
My art tray idea wasn't actually solving a problem I defined well. I heard on Reddit that people liked taking their kids to restaurants and generally with them places using the chair. I then overlayed the need for this art tray on to people. This felt like a problem-first approach at the time, but it really wasn't. Instead, it was a cool idea that I thought would be helpful in a certain situation.
The time to create accessories for best-selling products can be generous. The cloth cover came out 13 years after the chair was first released to the public. If you can catch on to best selling items early, there is time to ideate.
I came across an article online where I learned that housekeepers were making $150k per year in Palm Beach, Florida. This was due to the fact that there was a demand-supply imbalance that grew in the last several years, wherein swaths of wealthy New York moved to Palm Beach and bought luxury estates. Too few housekeepers in Palm Beach were experienced and knowledgeable enough to care for these high net worth homes, resulting in a premium salary for those that were. I was intrigued by this, and saw a problem that could be solved. The problem has several sides: Unskilled housekeepers want to make big money but don't have the knowledge, homeowners in Florida want more readily available skilled housekeepers, and staffing agencies (companies that match make homes with housekeepers) would be able to serve more clients effectively. In the short run (3-5 years), solving this problem would be a win-win-win. Over time, as supply met demand, things would equilibrate.
I did not methodically size demand, but gut checks signaled that it was interesting (and, importantly, untapped) enough to pursue. If I could get 40 students from the ~10 agencies in Palm Beach to take the course, and I made $400 on each course, that quickly got me in the >$100k profit range. This was enticing enough to take the initial steps. Additionally, this was very much a base case, as this course could be easily scalable by going digital and other parts of the world see similar trends (small parts of West Virginia, Miami, Denver).
I quickly created a course website to seem professional, and reached out to the largest staffing agency in Palm Beach. After some persistence, I got in touch with them and they were intrigued by my course. The model I proposed: They refer their under qualified candidates to me to be trained and receive a leg up in the staffing process.
Next, I needed to create a curriculum. With no experience in the space, I tried different avenues to find people that would have the knowledge. I tried Reddit, but ultimately found the most success when I put out a job ad on Indeed, offering a part time role to be an instructor of my course. I received 10 applicants in 24h, which then increased to 30-40 in the coming week. One applicant, Fernanda, was perfect-- we quickly formed a working relationship, collaborated on creating a curriculum, and plotted the next steps for building demand for the course.
Currently we are trying to build a real relationship with agencies where they refer their candidates to us. This is ongoing.
So far here are some key learnings:
1. Don't waste time interviewing people who don't hit the bar through their resume.
2. One human connection can completely change a project from vague idea to concrete probability.
3. Luxury Housekeeping space: EQ and appearance matter as much as technical skills in the luxury housekeeping world, Agencies receive $5k - $10k upfront fee just for finding someone.
4. In small organizations, getting a touch point with more junior people can be an in for more senior people.
