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Another one: high-margin city-level business that can be repeated in every big city in the world. Brick and mortar: Starbucks, Jamba Juice, McDonalds, Whol
by yurylifshits 14y ago
Another one: high-margin city-level business that can be repeated in every big city in the world.
Brick and mortar: Starbucks, Jamba Juice, McDonalds, Whole Foods, Wal-Mart, Kumon
Online: Groupon, Uber, Yelp, RedBeacon, SkillShare, Thrillist
There are around one thousand cities with 1M+ population.
If you can build something novel with 1M$ annual revenue and 20% profit margin that can be repeated for every big city, you can raise in order of 100M$ for global scaling.
- GuiA 14y agoIf you follow Ries' definition (which seems to be the most accepted and popular), those don't count as startups though.
- yurylifshits 14y agoAt some point they all were startups. These companies follow very different trajectory than classic high-tech ventures. First, they raise little round to build a single city high-margin unique/defensible product. Then they raise big bucks to go global. It's not about terminology. Local-to-global is an important and a bit YC-neglected strategy to build a great company that changes the world.
- jasonshen 14y agoThat's an interesting one. I didn't think much about local/brick and mortar businesses. I bet there's a whole other set of pitches that work for those.
- yurylifshits 14y agoCity-level startup can be both online and offline. Besides Groupon and Uber, there are 42floors, General Assembly, Skillshare, ThrillList, Yelp etc.
- jasonshen 14y agoThe thing about those is that ultimately the city-by-city approach is a distribution strategy. A single jamaba juice can exist on its own. For Uber or 42Floors to succeed with venture backing, they really need to dominate a large market (like all major cities in the US). Thus the pitch still becomes much more high level and not focused on individual units.
- whatusername 14y agoNot to mention Craigslist.