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I left this blog post deeply curious about that family's business. I'd like to know how they set out to earn an extra few thousand each month and accidentally s

by dsacco 10y ago

I left this blog post deeply curious about that family's business. I'd like to know how they set out to earn an extra few thousand each month and accidentally stepped into an "empire" that will gross $100M in the span of a few years, without venture capital.

coldtea 10y ago
>I'd like to know how they set out to earn an extra few thousand each month and accidentally stepped into an "empire" that will gross $100M in the span of a few years, without venture capital. That happens a lot more than 1 billion exits happen, and even outside the startup space. There are tons of 10-100M companies in all kinds of sectors, even in local fast-food chains...
- mehwoot 10y ago
  No kidding- a single supermarket can gross $100m a year
  - nostrademons 10y ago
    Net margins are only 1.5%, though, according to the industry trade group [1]. With median sales of about $25M/year, that's under $400K profit for running a supermarket. It's a decent living, but before giving up programming to buy a supermarket, consider that you can get to $400K/year income a lot quicker with less risk than you can grow a business with 1.5% margins to $25M/year. Business is about profit, not revenues. $100M revenue is considered a huge number in software because it's assumed that your marginal costs are close to zero, and so that's basically pure profit. $100M in many other industries gives you a decent living in exchange for a lot of work. Hell, I could easily build a billion-dollar business selling $100 bills for $99.99, but I'd lose $100K on it. [1] http://www.fmi.org/research-resources/supermarket-facts http://www.fmi.org/research-resources/supermarket-facts
    - coldtea 10y ago
      >Business is about profit, not revenues. Considering you criticize supermarkets for this, consider how the tech "unicorns" usually celebrated on HN are all about revenues (at best), and eyeballs (at worse) and hardly about profit. Even Amazon took 10+ years to turn actual profits...
      - nostrademons 10y ago
        It ain't working out so well for most of those unicorns... There's a complication in that if you're spinning off massive profits per customer but re-investing them in expansion, you won't show any GAAP profits, but your revenue will increase exponentially and as soon as you stop expanding you'll be massively profitable. Amazon & Uber are in a very different league from say Fab or Homejoy. If your core business segments are profitable but you're investing that money into moving into other segments, then you're in good shape. If you're losing money on every new customer and making it up in volume, you have a problem.
      - nathan_f77 10y ago
        Amazon could have turned a profit far earlier, they just re-invested all of their revenue into growth.
    - jmnicolas 10y ago
      > [...] $400K profit [...] a decent living [...] You startup people always make me think I live in the third world :-)
      - ryanSrich 10y ago
        With 700 square foot shacks being sold for >$1m $400k won't take you far.
        rmason 10y ago
        Who says that your supermarket needs to be in the Valley? In Michigan you can live like a member of the elite on $400K a year. In Detroit you could live like a king.
ryanSrich 10y ago
$100m in ARR is a company valued at nearly $1b...so yeah, this seems like an extreme outlier.

by dsacco 10y ago

coldtea 10y ago

>I'd like to know how they set out to earn an extra few thousand each month and accidentally stepped into an "empire" that will gross $100M in the span of a few years, without venture capital. That happens a lot more than 1 billion exits happen, and even outside the startup space. There are tons of 10-100M companies in all kinds of sectors, even in local fast-food chains...

mehwoot 10y ago
No kidding- a single supermarket can gross $100m a year
- nostrademons 10y ago
  Net margins are only 1.5%, though, according to the industry trade group [1]. With median sales of about $25M/year, that's under $400K profit for running a supermarket. It's a decent living, but before giving up programming to buy a supermarket, consider that you can get to $400K/year income a lot quicker with less risk than you can grow a business with 1.5% margins to $25M/year. Business is about profit, not revenues. $100M revenue is considered a huge number in software because it's assumed that your marginal costs are close to zero, and so that's basically pure profit. $100M in many other industries gives you a decent living in exchange for a lot of work. Hell, I could easily build a billion-dollar business selling $100 bills for $99.99, but I'd lose $100K on it. [1] http://www.fmi.org/research-resources/supermarket-facts http://www.fmi.org/research-resources/supermarket-facts
  - coldtea 10y ago
    >Business is about profit, not revenues. Considering you criticize supermarkets for this, consider how the tech "unicorns" usually celebrated on HN are all about revenues (at best), and eyeballs (at worse) and hardly about profit. Even Amazon took 10+ years to turn actual profits...
    - nostrademons 10y ago
      It ain't working out so well for most of those unicorns... There's a complication in that if you're spinning off massive profits per customer but re-investing them in expansion, you won't show any GAAP profits, but your revenue will increase exponentially and as soon as you stop expanding you'll be massively profitable. Amazon & Uber are in a very different league from say Fab or Homejoy. If your core business segments are profitable but you're investing that money into moving into other segments, then you're in good shape. If you're losing money on every new customer and making it up in volume, you have a problem.
    - nathan_f77 10y ago
      Amazon could have turned a profit far earlier, they just re-invested all of their revenue into growth.
  - jmnicolas 10y ago
    > [...] $400K profit [...] a decent living [...] You startup people always make me think I live in the third world :-)
    - ryanSrich 10y ago
      With 700 square foot shacks being sold for >$1m $400k won't take you far.
      - rmason 10y ago
        Who says that your supermarket needs to be in the Valley? In Michigan you can live like a member of the elite on $400K a year. In Detroit you could live like a king.

ryanSrich 10y ago

$100m in ARR is a company valued at nearly $1b...so yeah, this seems like an extreme outlier.