Category: Business Ideas

When I start writing up a wacky business idea, one of the things I do is a quick search to see if someone has already done something similar.  I don’t spend hours on it, but I’ll look for 5 or 10 minutes.  In many ways it’s surprisingly rare to find someone is already doing what I’d thought of (I gues word spreads fast these days).

Presented, for your consideration, are three ideas that I had which turned out had already been thought up by other people when I went looking for them.

Electric Hookahs

Hookahs are pipes for smoking tobacco (a special variety called “shisha”) which involves filtering the smoke through water:  remember the caterpillar in Alice in Wonderland?  It’s really bad for you (smoking a hookah for 1 hour is about the equivalent of smoking a pack of cigarettes), but it’s also quite nice :-).  When you set up a hookah, you typically use charchol to heat the tobacco.  There’s a whole ritual to it, where you load a special bowl with the shisha, cover it with foil (with as small as possible holes placed it in), and put the burning coals on top of the foil.  By inhaling on the pipe, you pull air in, past the tabocco being burned by the coal, and into the pipe (through the water and into your lungs).

The idea for this is to remove the charcoal by adding a fine element that rests above the shisha and burns it in the same way the coal does (but without getting ash everywhere and having to deal with hot coals).  Some may argue that this isn’t proper, while others may say this is taking the hookah into the 20th century.

Either way, it’s been done.  I even found a student at my university who has designed one.

An Academic Proofreading Marketplace

English is the language of academic discourse.  In the past, French and Latin have been used, but now it’s English.  If you want to have your ideas noticed, the top venues (conferences and journals) operate in English.  Increasingly, strong universities will teach in English, even if it isn’t the native language of the country the school is located in.

This obviously puts non-native English speakers at a disadvantage.  I’ve read a number of papers (published and unpublished) where the ideas were hidden by the awkward choices of spelling and grammar.

There are student “proof reading” services, which either help students who aren’t native English speakers or do the homework for lazy students everywhere, but this idea is to focus on academics, and provide a writing service catering to professors.  They’d be connected with native speakers working in the same area as them (so they can accurately express the ideas).  I did this (face-to-face) when I was abroad for computer science professors and found there was a lot of interest in it.

It’s already being done in the way I envisioned (at places like this) .  I still think extensions on this idea are possible (like a site that places a premium on reliability and the pedigree of it’s proofreaders or a service that would send an in-person proof-reader to a foreign department on an on-going basis).

Zero Calorie Foods

It always seemed weird to me that there’s SO many choices for diet beverages, but no options for “diet food” (e.g. 0 calorie food).  I get that food has to be made out of SOMETHING, and typically this something has calories.  I’m not talking about so-called “negative calorie foods” (which are incorrectly believed to require more calories to digest than they possess) but instead something like diet soda, with ZERO calories.  It may not be the most appetizing idea, but imagine taking some diet drink, then thickening it with an inorganic agent like melamine (the ingredient that Chinese company added to the baby milk that killed a bunch of infants).  Except, you know, make sure whatever you use doesn’t kill people…

Even if the first version was basically zero-calorie Jello people would eat it.  Over time more appetizing versions could be developed.  There are people who would worry about the long term health consequences (just like some people worry about with diet drinks) and there are people who would refuse to eat something so unnatural (just as there are people who refuse to drink diet drinks), but I think there’d be a massive market that would be willing to give it a try.

A friend told me they saw “zero calorie jam” at the grocery store which intrigued me.  I went looking, but didn’t find it (in any grocery stores or on-line).  I’m assuming they saw “no sugar added” jam and misremembered.  Unfortunately (for me), even if there isn’t zero-calorie jam on our shelves  it already exists in Japan and some Kansas state researchers were working on it 7 years ago (so I’m sure if there’s any way to do it they’ve figured it out by now).

I was talking to a friend recently and used the term “ramen profitable”, which she found incredibly amusing.  I realized that I had never used the term on the blog or posted about it, even though it’s a very useful perspective on starting a business.

The term was coined by Paul Graham, and he discusses it in the context of technology startups and fundraising (venture capital, not professional begging).  It basically refers to a business that makes enough to cover all its costs, plus provide a meager lifestyle for its founders / operators.

When a company is spending more than it makes, the monthly deficit is sometimes known as the burn rate.  By dividing the company’s working capital by its monthly burn rate, it can be determined how long until the company will go out of business (unless it can raise more money or something changes).  This is clearly a very stressful situation to be in, and investors will be delighted to take unconscionable terms from the founders if they realize the company desperately needs the cash to stay alive.

It’s standard for companies to have their highest burn rate at the beginning.  Imagine a professional opening an office (perhaps a lawyer, accountant, dentist or therapist).  She has to pay: rent on the office space, liability insurance, salaries (for receptionists or assistants), advertising, furniture, decorations, office supplies and all the other necessary expenses before she earns a dime from a customer.  In such a situation, it would be hard to imagine that there WOULDN’T be a high burn rate for the first few months as the company grows towards profitability.  The reason why people start businesses that are losing money on the first day is they expect it to grow to the point where it becomes profitable (then hopefully earn them more per hour of labour than they would have made working for someone else).

Some companies intentionally accept a large burn rate in order to dominate their industry.  Webvan tried to do this and went out of business when they ran out of money before they became profitable (apparently they were too ambitious and analysts have speculated they might have survived if they’d expanded a little slower).  Amazon.com lost money every year from 1995 to 2001.  These years of losses were part of their original business plan, a strategy that they have effective executed.

There are a number of benefits, for people starting a company, from focusing on becoming ramen profitable as soon as possible:

• Most founders aren’t pursuing a “billion dollar company or bust” strategy.  They’re happy to earn a comfortable living running a successful business and don’t need to take the extra risk necessary for explosive growth.
• It gives a clear and attainable first milestone for the company to reach.  By constantly tracking the company burn rate (and working to get it to zero), it keep a young enterprise’s priorities straight:  increase revenue while keeping expenses low to become profitable.
• There are all sorts of risks that can kill a business, but becoming ramen profitable decreases the chance of one big one (running out of money, which technically is probably always the official cause of death).

Thicken My Wallet has written a number of excellent posts on entrepreneurship.  One of the running themes in his posts is the importance of keeping costs down when starting a company.  This is clearly 1/2 the equation of getting to ramen profitability (the other half is getting people to pay you for your product or service).

Ramen profitability isn’t an ends to itself.  If someone is working hard for a student lifestyle, they’d be better off going to get a job instead of taking all the risks of running a company.  However, reaching this stage gives you breathing room to figure out how to grow your business to a level where it is more lucrative than working a 9-5 job.

Scott Adams writes some of his business ideas on his blog, and he says people react in one of two ways, they tell him either: it’ll never work dumbass or someone’s already doing it dumbass (and they provide a link). Both are valid reactions to any of my business ideas .

A few years ago MBA programs were all the rage (they’re still popular today, but the market has been flooded with MBAs).  They’ve introduced a variety of flavours (executive MBA, part-time MBA, etc)  to cater to the needs / desires of various workers.  In every case the value proposition is the same:  this program will improve your business skills (and from this improvement, make it easier to find work and move up the ranks at a company).  Businesses were convinced of the value enough that they have sometimes paid to send top employees.

One problem, for the school, is that students take the course and leave (no repeat business).  You hope that students are happy enough with what they’ve learned that they recommend the program to others (and evangelize it in their workplace), but a school is unlikely to get the same student a second time.

This idea would be a program, put together at a school offering an MBA, that runs for a pool of employees for a short period (perhaps for one week) annually.  The school would put together a variety of classes and events, designed for employees at a specific level in an organization.  Each year would have SOME tailoring to the current business climate, challenges facing the companies industry and company specific problems, but would also focus on fundamental business skills (it wouldn’t be a week of learning how to attach cover pages to TPS reports).  Kinda like summer camp for business people (with catered lunches replacing hot dogs, and lectures on how the subprime meltdown or stimulus payments will affect their industry replacing canoeing).

The value to the employee should be obvious that they’ll learn some specific skills, make them better at their current job, and potentially get some “bullet points” to add to their resume

The value to the company is, in part, that they’re strengthening their work force without losing employees for months like they would to a standard MBA (it also “protects” them from meeting people who will work at other organizations and may try to hire them away).  The other value is that a group within the organization will all be exposed to the same ideas, and ideally would then be able to reinforce each other if they tried to enact change within the company based on what they’d learned.

The real (hidden) value would be employee retention.  Such a program would be useful for identifying the future leaders within a company and making it clear who they are (the ones sent to this every year).  This would be useful for the employees themselves (to show them the company recognizes their future potential and is investing in them and grooming them for greater responsibility), for their co-workers (to learn who they might be working with after future promotions and start getting to know them) and for these people’s supervisors (the company is signalling that they’re an important resource and not to mess with them).

For a large organization, multiple groups at different levels could be sent at different times.  For a smaller company (that wouldn’t have enough employees to fill out this sort of program), they’d probably be better focusing on this type of thing in-house.

For the school itself the clear benefit would be that the programs would continue indefinitely, with potentially multiple groups going through every year if the school could convince the company of its value.  The school should be able to reuse its faculty, facilities and resources to pull together a curriculum cheaper and faster than the organization itself could do in house.

For this post, or any other of the wacky business ideas I post, obviously I’m releasing any ownership claims I may have over these ideas. If you like something I post and feel like you can make money from it, please feel free to do so! Let me know when you’re opening and we’ll do a post on it to give you some free advertising.

Confucius says “Man without smiling face should not open store”

When I lived at Bathurst and St. Clair, in Toronto years ago, there was a steady stream of new businesses opening and closing.  It was great for me, as I loved to try new restaurants, but it got to the point where I could tell when a small restaurant or independent retail store was going to fail.  I wish there was some way to make money off of betting on a small company’s failure, but I was never able to think of a way to do so.

The common factor in the businesses destined to fail was that the owners were pretty sour.  One Turkish restaurant opened up and I ate there once or twice a week for months.  Every time I came in, one of the family members would take my order stone faced while other family members gave me malevolent looks.  The food was decent, and they did it to everyone so I didn’t take it personally, but I couldn’t understand how they expected to build a business treating customers that way.

Another family tried to open a Dollar-store style liquidation store.  Similarly, they’d act like they were doing people a favour selling cheap junk.  They used to always post misleading signs (like “1/2 price off everything”, and when you got to the cash it turns out whatever you were buying wasn’t part of “everything”).

In both cases I’m sure the families lost a ton of money on their business ventures, and probably console themselves with the old chestnut “most businesses fail in the first 5 years” (which apparently isn’t true).  I feel bad for anyone who fails at starting a business (I think it’s great when people try to start a business), but I really think they could have had a much higher chance at success if they’d been nice to their customers (it’s a wild and crazy concept, I agree).

This is fairly widespread, when I moved to Pape and Danforth I tried out a new Caribbean restaurant that was opening right as I moved in.  I ordered a meal, paid, and when he brought it out there wasn’t any coleslaw (which was listed on the menu).  I asked if I could have some coleslaw, and the guy (who I *think* was the owner) told me “Sorry, we’re all out.  I’ll get you next time!”.  There wasn’t a next time.  If you’re going to list something on your menu, charge full price then not give the person part of their meal, you aren’t going to get repeat business from Mr. Cheap.  I haven’t checked since I moved away, but I’m sure he’s shut down by now.

It’s painful to admit as a techie, but businesses need to be sales driven, especially at the beginning.  It’s crazy to do your initial marketing, have people from the neighbourhood coming into your store out of curiosity, then treating them badly and making sure they don’t come back.

Some people might object to forced friendliness to all their customers and say “I’m opening a business to be my *OWN* boss, not to suck up to everyone who walks through my door!”  If this is someone’s attitidue (viewing being friendly as “sucking up”) they definitely shouldn’t try to run a restaurant or retail business (and should probably have someone else deal with customers if they open another type of business).

I was originally going to stop after 20 wacky business ideas, but I think some people enjoy them (and they’re easy posts to write), so I’ll keep going with them.  Sorry if you’re sick of the whole category of posts (I’ll forgive our regular readers if they skip THESE POSTS – you MUST read everything else I write however).

Faceless (and potentially anonymous) communication has been an intriguing element of electronic interactions.  When we were teenage punks, a friend and I got on his brother’s CB radio and started moaning and groaning (and slapping our necks ala Christian Slater in “Pump up the Volume”) to disrupt the conversations.  I was a System Operator on a BBS, and the same troll behaviour would happen in the message forums, people would say antagonistic things (usually anonymously) then delight in watching the chaos that emerged.  It has long been known that people say things over the Internet that they would never dream of saying face-to-face.

You get the evolution of communities where they start out being really interesting, engaging forums where like-minded individuals meet up to chat, and if they last any length of time and grow, eventually they attract unpleasant users who drive out the old guard and destroy the place.  I talked about one solution to this in Wacky Business Idea #4, but this is another approach.

Basically users would join a website devoted to chatting (think Usenet, Yahoo Groups or any of the topical message forums such as Canadian Money Forums).  There wouldn’t be any specific topic, just people who want to chat in a group by leaving messages to one another.

When a new user joins, they would be in some general intro chat areas, and could start a new topic, or participate in existing topics.  Every user could give a thumbs up or a thumbs down (think StumbleUpon) to other users, or to a specific comment.  The system would do collaborative filtering to match up users who tend to like interacting with each other (or like the same messages / topics).  These users would then be put into a group with one another and could carry on their discussions privately.  This would be constantly recalculated, so if a user suddenly turned into a jerk (or a user was accidentally added to an inappropriate group), the flurry of thumbs down from other users would quickly eject them.

If good groups kept growing, at a certain point the system would view it as too many people to carry on discussions (or too many conversations occurring for members to follow), and break it into two groups (trying to match users with the sub-group that they’d be best suited for).  Conversely, if a group got too small or conversation died out, the system would merge it with another “quiet” group or add some new users who might be a match.

Groups could evolve to be focused on personal finance, technology, or movies (or just be general discussion that drifts through topics of interest to participants).

One option COULD be that people in groups could “invite” their friends to their private groups, however if the person quickly got “thumbed down” by the other participants, they’d be ejected from the group (and the system would do its best to introduce them to a new group of people they might be better suited to).

Hopefully the “self policing” nature would avoid the need to have moderators or heavy-handed controls in place, while still allowing user the feeling of being in control of who they interact with (and groups being able to protect themselves from users whose goal is to disrupt the community).

One of the things that really impressed me when I first met Mike was HOW involved he was in the personal finance blogging community.  When he found a blog he liked, not only would he add it to his RSS reader and start following it (and commenting at it), but he’d dig in and read through its complete archive (he’s stopped doing this, but he used to do it all the time).  It makes perfect sense, if you like what someone writes about, why wait for the new stuff when there’s a massive amount of existing material free for the taking?  I’ve never been able to do the same.  After going through (at most) a month or two of the archive, I’ll get distracted and move on to something else:  even with the strongest blogs out there.  I get the feeling most people are like me in this respect, even if they like a blog, they don’t go through its archives.

Given that this is something of value to most blogs / bloggers, it keeps bugging me that there must be ways to make better use of the archives.  I have four ideas, which some people are already doing, but there must be better ways to use them.

1. Reference old posts in current posts.  I do this all the time (along with everyone else), typically when I want to make a point, but don’t want to explain it again.  I reference the old post, and let anyone who doesn’t believe me click through and read what I previously wrote.  This definitely provides exposure for old posts, and there’s probably a tendency to refer very often to your best stuff (we’re always linking back to Mike’s excellent posts on real estate agents).
2. Collect cash from advertising on well-indexed old posts.  Apparently (Mike tells me) older posts that have a high rank on Google are one of the most lucrative parts of a blog, as people searching for things will come to the blog, click on an ad or two, then carry on with their browsing.  Regular readers never click on ads (and often don’t even see them if they’re reading the RSS feed).
3. Use the old posts as the core of a book.  Kevin Smith did this (non-affiliate link) along with a number of other bloggers.  I suggested a few times that a “Canadian Personal Finance Annual” collecting the best posts of the year from various blogs and selling them with some additional material from each blogger as a paper book would be an interesting project (that I don’t *THINK* would take much work), but whenever I’ve mentioned it to people there hasn’t been much interest.
4. Have a “best of” re-run day.  I don’t actually know anyone doing this, but on a day when you don’t usually post (such as the weekend perhaps), bloggers could start re-running old posts that newer readers haven’t seen before.  Long time readers can ignore the re-run day, while newer readers will probably have a look when it ends up in their RSS reader.  Mike tells me that having duplicate content on your site can get you in trouble with Google and other advertisers…

None of these ideas are terribly appealing, so I’ll throw the floor over to our (far more intelligent) readers.

What neat projects could established bloggers with a large archive, that few people read, do with that archive?

This idea is targetted primarily at real estate agents.  Like many other middle-men, the Internet is destroying a previously safe and lucrative market for agents.  Either property sales will shift to be predominantly for-sale-by-owner, or agents are going to have to start adding more value to their role in the process.  This is one way they could do so.

This would be an insurance product, that would guarantee the value of residential real estate.  Agents would use it (in part) to sell their services to customers as a guarantee that they would be able to re-sell the house they are buying for at least what they paid for it.  In order to claim this, they would have to list the house with the original agent, give her a reasonable period of time to sell it, at which point if it hadn’t sold the agent would buy it from them herself (less her commission).   In reality, it would be the insurance company who is purchasing the property (and probably the agent would lose out on her commission).

This is obviously reassuring to the buyer, as it’s a guarantee they won’t lose money on the purchase.  It’s good for the agent, as it guarantees them repeat business (previous clients will want to list with them in order to be protected by the guarantee, if the agents sells for MORE than it was originally bought at, it’s gravy for everyone).

In the current market I can see why people would think that either insurance companies would be crazy to offer policies along these lines, or that the premiums would be outrageously expensive, but I don’t think either would necessarily be the case.

Typically house prices go up or plateau (stay the same).  Sharp dives, like we’ve recently experienced, are fairly rare (leading to the now obviously debunked myth that real estate always goes up).  In normal environments, policy premiums will be pure profit, with few or no payouts from the insurance company.  From one perspective, each year the owners are in the property inflation decreases the insurance company’s liability (since the dollar value of the property is worth less in the future than it is today).  Even in the case of a sharp drop, there would be a number of properties that have increased enough in value that they wouldn’t drop back to their purchase price, and there would be owners who just don’t want to sell.  A market like we’re currently in, where interest would be highest in such an insurance product, would probably be the safest time to offer a product like this (how much further can values drop?).

It’s also important to remember, in the worst case they’re only going to cover the DIFFERENCE between the lower sale price and the original purchase price, not the full value of the house.  Also, there should also be exclusions for major changes to the property (such as it being burnt down in a fire) which would be covered by other insurance, not by this.

If agents (or brokerages) bought this as a blanket coverage for all transactions they’re engaged in, I suspect the insurance could be offered to them at a fraction of a percent of the purchase price (perhaps Riscario can comment on whether my intuition is correct on this).

For this post, or any other of the wacky business ideas I post, obviously I’m releasing any ownership claims I may have over these ideas. If you like something I post and feel like you can make money from it, please feel free to do so! Let me know when you’re opening and we’ll do a post on it to give you some free advertising.

I’ve been reluctant to post many game or book ideas in the Wacky Business Idea series, just because every gamer or reader has TONS of ideas (which are usually pretty lame).  This is one of my best (although probably still lame) video game ideas.

In the distant past, computer role-playing games (RPGs) were quite popular.  Games like Bard’s Tale, Wizardry, Ultima or heck, even The Legend of Zelda would involve fighting your way through an adventure, where your character(s) would become more powerful as you went.  I wrote about paper role-playing games, and their connection with personal finance, extensively in a previous post.  One of the elements of computer RPGs was that at the end of the game there would be a massive reward for your characters.  They would become the saviours of the world, kings and queens, gods or some such thing.

When massive multiplayer role-playing games (MMORPGs), like World of Warcraft, became popular, they had the added dimension of being able to play in a world inhabited by thousands of other real people.  You could join with them on quests, fight with them or trade with them, all of which lead to a vibrant, dynamic world (which is why they’ve become very popular and there are fewer single player RPGs being made).

One thing that players complain about is that they aren’t important in MMORPGs.  They’ll complete a quest to save a princess from a dragon, and 10 minutes later she’ll be back in her tower captured by the dragon again (and waiting for the NEXT player to save her).  There *ISN’T* an end to the game, and players only have as much renown as their accomplishments warrant.  Given that everyone is running around doing the same thing, its pretty hard to be noticed at all, let alone be the most famous character in the world… of Warcraft.  Probably the most famous World of Warcraft character is Leeroy Jenkins, who is famous for being stupid.

This business idea is to try to tie single player and massively multi-player RPGs together and get the best of both.  Customers would purchase a RPG which would include both the game and a server (a computer program that lets other computers connect to your’s).  Like a MMORPG the game world would run all the time, and you could invite friends to come and play in it.  Like the single player RPG, there would be a central “world threatening” danger that the players would have to band together to fight.  At any time, one, some or all of you and your friends could be playing, and when you’re playing together you don’t have to stay in the same area (perhaps at points in the game you would be required to split up to deal with different issues).

The game could be sold in “modules” where the same characters continue playing in the same world, but the purchased content adds new areas, character types and new over-arching mission(s).  The world would change as the characters accomplished things, and these changes would remain when new content was added (so if a character was the head of the thieves guild in Skara Brae they would remain the head of the guild, and no one else could be the head of it).

Optional extensions could be things like offering to run the game on the company’s servers (so that you wouldn’t have to leave your computer on for your friends to play), or even helping people to run their own public servers (as smaller, more intimate alternatives to MMORPGs) – even for a small monthly fee if it was good enough for people to pay for.

Some games, such as Neverwinter Nights or Diablo do something SOMEWHAT similar to this.  The major differences between this would be the focus on adding content extensions, and the game being built to be played multi-player (rather than it being an “add on” to the single-player game).  MUDs (basically non-graphical, text-only, MMORPGs) were an old school idea along these lines but what I’m describing would be something a lot closer to a single-player RPG than a MUD is.