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June 18th, 2019

Dive into the events business

Boring trade shows win the day, while these affiliate blogs more than pay.

Last week we asked you what industries interest you the most. The most popular? CBD and cannabis.

Because of that, I’m writing this sentence while drinking Recess*, a CBD drink that promises to make me feel “calm, cool, and collected” and more creative. I’ll be done with the drink by the time I finish this email…so you be the judge if it worked.

*Not sponsored. I acquired this can myself for $5 at a tiny bodega on the Upper West Side of Manhattan. The cashier said they’re selling like crazy.

 



Recap: Last week’s email had a 266% open rate, meaning many of you opened numerous times (or forwarded it!). The most popular stories were on the big business of expired pharmaceutical patents, an interview with a founder who sold his company for $100m after just 3 years, and a free book called Founder to CEO.

Today’s edition contains:

  1. Case study: The billion-dollar events business (link)
  2. Interview: Brian Scudamore, CEO of 1-800-GOTJUNK?, whose company took 8 years to hit $1m/yr. in revenue. Today it does ~ $1m/day. (link)
  3. Quick takes: Why we’re bullish on online plant sales and affiliate blogs.
NOTE: Trends subscriber Ryan Krebs, who works for Google’s Cloud team, is hosting a Trends meetup in New York City on Wednesday, June 19th at 5:30. I’ll be there. Come hang. You can RSVP here.

Now let’s get to it…

– Sam of The Hustle

Would you recommend Trends to your friends? 
1 – 2345678910 
(1 is hell no, 10 is absolutely)

 

Case Study

The Boring Industry That’s Minting Billions

Last week Anindya Lestari, a Trends subscriber, posted financials from a conference business.

So, because we’re a brand for the people, we created a comprehensive case study on boring tradeshow businesses that mint billions.

Here’s how they do it: An often-forgotten business, there are 100s of business trade shows with revenue numbers and profit margins that rival the biggest software startups. In today’s case study, we deconstruct three businesses and explain how they do it.

How big is this? The companies we studied have market caps in the 10s of billions.

Who are we talking about?

  • Informa – The $12B event giant you’ve probably never heard of.

  • Gartner – The $10B IT event company that has made 50% margins for over a decade.

  • Ascential – The owner of fintech conference Money20/20 and Cannes Lion, which makes $60m per conference.

Why you should care: If executed correctly and in the right market, conferences can make hundreds of thousands of dollars in less than a year with very little startup capital (source: The Hustle did this).

Plus, many companies want to host conferences to promote their brand. So, here’s your playbook…
Read the report →

Around the web

Facebook launched cryptocurrency (Barrons): Announced today, FB’s new coin is a cross between a wallet and a coin. Uber, PayPal, and other big names are already signed on and FB’s stock is up this AM from the announcement.

What’s been your best prediction in tech? (Twitter): Popular VC asks his Twitter following what’s been their best prediction — and their biggest misses. The hits (85 comments, 171 likes as of this writing) were interesting. But the misses (596 comments, 1,300+ likes) read like a giant fail wall. Our takeaway? Predicting the future is incredibly challenging and even the best seem to be wrong half the time.

The $9B dollar store (Vox): Wish.com is basically a General Dollar but online. The company doubled revenues last year to $1.9B, and its app is consistently one of the most downloaded apps in America with 161 million installs. This company is incredibly fascinating but isn’t talked about much. We’re in the middle of writing a review of the online dollar store industry. Stay tuned for more.

Investors haven’t been this bearish since the 2008 financial crisis (Bloomberg): That’s according to a Bank of America Merrill Lynch survey of money managers with $528B among them. Equity allocations saw the second-biggest drop on record, while cash holdings jumped by the most since the 2011 debt-ceiling crisis, the June poll showed. Concerns about the trade war, a recession, and “monetary policy impotence” all contributed to the bearish sentiment.

Obsessions

The Economics of Marketing Agencies


After reading and watching a series of interviews with Gary Vaynerchuk, CEO of VaynerMedia, an ~800-person digital agency in New York, we outlined his company’s revenue per employee.

The takeaway: If Vayner’s numbers are accurate and a representation of early(ish)-stage agencies, then it’s a tough business to be in, particularly in a high-cost city like New York.

Join the convo: In our Facebook group, we discuss these numbers. Join. Additionally, there are multiple agency CEOs in the group, including Jason Harris, founder of Mekanism, an agency that does tens of millions in revenue. Jason did an AMA here, so ask away. And he has a new book on persuasion.


Succulents are suddenly big business

I love old school businesses, and flower delivery is one of my favorites, which is why I was excited to find this gem in 1-800-Flowers’ 2018 annual report.

When describing its new products, the company said its “expanded succulent plants line at 1-800-Flowers.com…is a growing product category, particularly with millennial customers.”

How big we talkin’? Americans spend $48B/yr. on gardening, with nearly 30% owning an indoor plant. 1-800-Flowers brought in $1.1B last year. So, big.

The trend: The indoor plant industry is like the mattress industry of 2010: A handful of digital-first startups worth $100m+ will soon emerge. US indoor plant sales have surged 50% in the past 3 years to $1.7B. Have plants become the new pets?

In the coming weeks: We’ll dig into the online plant industry, as we see big gaps in the market.
 



Why I’m Bullish on Affiliate Blogs

Opportunity: I saw five things recently that make me bullish on affiliate blogs.

  • Wirecutter Has $49m in Revenue: The New York Times reported that “other revenue,” which is predominantly affiliate revenue from Wirecutter, was $49m in 2018. In 2015, Wirecutter was in the ballpark of $7m.

  • Let’s Blog: Hiten Shah, founder of now-defunct KissMetrics and Quicksprout, said that if he had to start from zero, his next business would be a blog. He would make money from affiliate revenue from Amazon and “write interesting things about products.”

  • Group Nine Hires Affiliate Leader: Group Nine, owner of Thrillist, NowThis, The Dodo, and more announced that it has hired its first head of affiliate advertising.

  • $1.2B in Revenue: j2 Global, the owner of PcMag.com, Mashable, and dozens of other content sites, announced revenue of $1.2B in 2018, 25% of which came from affiliate revenue.

  • Tribune Publishing Buys Affiliate Site BestReviews.com for $110m: Tribune Publishing, the owner of The Chicago Tribune and a handful of other big-city papers, is now running content from BestReviews.com on its sites. The company bought the 4-year-old bootstrapped BestReviews.com for $110m last year.

The prediction: Investors clearly believe that software for businesses will grow quickly. This leads us to believe that more blogs will pop up that are dedicated to niche product categories.

Like BestVPNs.com, which supports a staff of 6 on simply reviewing VPNs.

Expect more on that topic soon…

New This Week


Introducing: Startup Smackdown

🤼 🤼 🤼

Any Shark Tank fans out there? How about Celebrity Deathmatch? We’re cooking up a new feature that’s a cross between the two popular shows.

In the next few weeks, we’ll explore a budding market — and ask some prominent entrepreneurs to tell us how they would attack the space.

We love a little competition. So, to up the ante, we’ll be asking all of you to vote on the strategy you would fund.

We’re calling it Startup Smackdown, and the winner will emerge victorious as our reigning Smackdown Champion.

But WAIT, there’s more.

Want to go head-to-head with the heavy hitters of the business world?

Throw your hoodie in the ring. Send us a brief pitch (< 100 words) for how you’d tackle the fast-growing VPN market with your own startup. (Follow the link below for more info.)

We’ll pit our favorite submission against our two guest pitchers, then let the audience be the judge.

Who will be the Smackdown Champ? The crowdsourced contender, or an industry stalwart? Find out when the gloves come off.

🤼 🤼 🤼

Pitch Us Here

Trends Interview

One Man’s Junk

Last week we showed you an email about a mysterious founder who owns 100% of a ~$400m/yr. business. The author? Brian Scudamore, founder of 1-800-GOT-JUNK?.

It took Scudamore 8 years to build a $1m-a-year business. Now the company earns more than that every day.

What makes his story remarkable is that the business nearly flamed out. He was 3 days from going bankrupt when he did the unthinkable: Fire 52 people, including his chief operating officer, a former president of Starbucks’ US operations.

Scudamore has since made a name for himself on the entrepreneurial circuit, using his story as a cautionary tale for up-and-comers.

Hear how close he came to packing it in — and how to reverse course if your business is faltering.

 
Read the interview →

Reader Pick

Last week we did an impromptu Trends AMA (our version of the community Q&A) with Jim Wang, who previously sold his personal finance blog and runs a new one now.

Highlights:
  1. Jim’s business model: affiliates. Write articles and make money when people sign up for what he writes about.
  2. Jim explained his process for finding keywords using Ahrefs.
  3. He gives away numbers like blog posts written per week, his traffic, and valuation of these types of businesses.
  4. A former employee of The Points Guy chimed in. Their blog is like Jim’s and did over $50m in revenue with only 30 employees.
Our Facebook group lit up with dozens of insightful questions for Wang. You can check it out here.

Let us know who should be the subject of our next Trends AMA by clicking the link below.
VOTE! Who should we interview next?

Coming soon

We’re in the mid-stages of working out a deal where you, our subscribers, will get access to many profit and loss statements of companies that’ve recently sold.

Our vision is simple:
  • aggregate as many of these statements as possible
  • give people benchmarks so they have unprecedented insight and transparency of past transactions of privately operated businesses
  • show you all how certain privately held companies operate so you can learn from their wins and mistakes
So, here’s what I need from you:

In the comments section, tell me what you are interested in for this database!

Would you recommend Trends to your friends? 
1 – 2345678910 
(1 is hell no, 10 is absolutely)

 

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