Silicon Valley vs Solopreneur

Silicon Valley vs Solopreneur Print-On-Demand Elizabeth Holmes. PYGOD.COM

Most of the following post is a resume of a series of posts written by Sean Broihier, the founder/CEO of Fine Art America and Pixels.com. The post links are in the sources. Sean Broihier’s post were definitely life changing to me.

Welcome to the parallel universe of Silicon Valley where money is created out of thin air…

Silicon Valley Model

  • Raising a bunch of Money from investors.
  • Spending Millions of dollars on your website, a huge payroll, a huge tech team, a big office, a sale team, product development, marketing and advertising.
  • Chasing revenues at all costs without caring about the profits.
  • Losing money for a couple of years.
  • Eventually trying to become profitable by cutting costs, squeezing suppliers, reducing seller payments, reducing payroll, etc.

90% of Start-Up FAIL. PYGOD.COM

Cases In Point of VC-backed e-commerces that were supposed to “revolutionize the T-shirt business“.

RedBubble (RBL)

  • 250+ employees. Despite outsourcing to third-party fulfillment centers. Just like I do!
  • Millions in venture capital.
  • 750,000 sellers/artists
  • 9.5 million customers
  • 10 million monthly site visits.
  • Has a great business model.
  • Nonetheless, lost over $8 Million in 2017.
  • RedBubble stock price drops like a hot potato…
  • Despite the fact that I’ve been banned from their platform. (My bad, I’ve fucked up!) As a former seller/designer on RedBubble, I have nothing but good to say about them. In my case, it was a very lucrative platform since the beginning where you can make your own margins on the products you sell.

CafePress (PRSS)

  • Cafepress went public in March 2012, they were worth roughly $322 Million at the time of their IPO. Despite a big $0 of profits???????????
  • Had 775 employees.
  • Had 20 million sellers.
  • Sales declined from $218 million in 2012 to $171 million in 2013. Cafepress lost $14 million that year, and the value of the company plunged by almost 70% from $322 million to $100 million.
  • Nonetheless, generated roughly $200 Million in sales in 2014.
  • 5% of that will be paid to their sellers. That’s $10 million being distributed to 20 million people… or $0.50 per seller. Less impressive!
  • During the first three months of 2014 (first quarter), Cafepress generated $48.19 Million in sales with…  $53.41 Million in expenses. Another $5.22 million in the hole in only three months. Just after losing $3.12 Million on the last quarter of 2013. They have been losing almost $1.5 Million per month for years.
  • At the end of March 2014, Cafepress had $22.15 Million left “in the bank”.  If they continue losing $1.5 million per month, they’ll run out of money in 14 months.
  • However, they kept the illusion alive by “growing through acquisition”. The plan didn’t worked out, and by 2018, Cafepress was worth roughly $36 million (down from $322 million at their IPO).
  • Again all odds they survived and were probably bought for peanuts by Snapfish.
  • Today, they aren’t listed on stock market anymore. And with their cheap 5% commission, sellers/designers have left the boat. For years, they aren’t relevant anymore in the POD world. Their website is a mess, a relik of the early 2000s. Surprisingly they are still alive today. But hardly kicking anything!

Leaf Group (LFGR)

  • A contine company that operates online brands.
  • Proud owner of Society6 and Saatchi Art.
  • An interesting business model.
  • Gary Vee on steroids: As of 2008, Demand Media (Leaf Group) owned 135,000 videos and 340,000 articles… Was one of the largest contributors to YouTube, uploading between 10,000 and 20,000 new videos per month, and gets about 1.5 million page views per day on YouTube. I love this business model!
  • Throwing shit to the wall to see if it stick. Being one of the largest buyers of articles and videos, using an algorithm to generate titles, then low-paid freelance writers and video creators have to submit up to 10 articles per week using the titles. Finally, submitted articles go through a freelance editor. Everybody is paid twice a week via PayPal. The end goal being: mass-producing, often low-quality, articles and videos on its websites to appear highly in Google search results thus attracting advertisers.
  • Creative accounting. Capitalizing the costs of content and amortizing them over five years, giving them the appearance of profitability.
  • Despite all their good intentions…
  • In early 2018, Leaf Group were losing $2–3 million every month.
  • While having $34 million left in the bank.
  • In 2021, Leaf Group was purchased in an all-cash offer by Graham Holdings (formerly The Washington Post Company).

Teespring now Spring

  • Raised $60 Million at a valuation of $650+ Million.
  • Were billed as the future in “T-Shirt economy”.
  • Employed 300 people.
  • By the end of 2017, they laid off most of their staff.
  • Had their valuation dropped to less than $50 Million.
  • Rebaptized as Spring… Disabled their marketplace to “influencer” DIY merch.

Framebridge (a feature… not a company)

  • This one is clearly the most ridiculous on this page!
  • Founded in 2014, Framebridge has raised more than $81 MILLION in venture funding!!!
  • The “company” allows customers to UPLOAD photography or mail in art to be framed. Custom framing. Nothing more, nothing less.
  • Just like Leaf Group, they were bought by Graham Holdings.

In resume, that’s a shitload of Money and people to operate e-commerce websites!!!

Business Valuations: 15x annual profits. The average PE ratio for publicly traded stocks is 15. That means that most companies, on average, are valued at 15x their annual profits.

Technically, the above Print-On-Demand companies are worth nothing.

15 x $0 = $0

Not even ramen profitability (the founder’s living expenses)!

Corporations that are owned by investors have one mission: maximize profits for their investors. The corporate POD companies above didn’t get the memo!

Except for this one…

 

Amazon.com the Everything Store Jeff Bezos book. PYGOD.COM

Amazon.com (AMZN) 

The GOAT to Rule Them All

Amazon.com is the Everything Store. Amazon.com is literally Everything to Everyone.
Despite T-shirts selling is only one piece of their business. Amazon.com is the King of Print-On-Demand. One of many other they dominate. So much that entertainment giants like Disney uses Amazon Merch On Demand just like you and me can use it. They probably don’t have to apply, get accepted and suffers their fuckin’ Tiers System.

CUSTOMER CENTRIC

  • Low prices
  • Fast shipping
  • Millions of Items

WILL RULE THE WORLD

  • Crushing the enemies (competitors).
  • Taking over the entire industry of everything.

 

Not Print-On-Demand industry related but worth mentioning.

Uber is losing billions of dollars. PYGOD.COM

Uber (UBER)

A huge Money pit…

  • Travis Kalanick was a ruthless warrior.
  • Travis Kalanick studied Jeff Bezos. Reinvesting profits in pursue of continual growth and expansion. Also pushing Uber in new markets just like Bezos did with Amazon. That’s where the analogy ends.
  • Uber is losing Money every year since its creation in 2009.
  • Losing $8.51 Billion in 2019.
  • Losing $6.77 Billion in 2020.
  • Losing $66 Billion in market cap. Hee Haw!
  • If you start a business today and made $1 of profit. You are more profitable than Uber by a very large margin.

 

Theranos Elizabeth Holmes Steve Jobs wannabe. PYGOD.COM

Theranos (THERA)

Horror story

  • Since her childhood, Elizabeth Holmes wanted to become a Billionaire.
  • Founded Theranos in 2003 at the age of 19 years old.
  • A dropout just like many tech moguls.
  • She became the youngest self-made Billionaire.
  • Has a fake voice. A manly voice to be take more seriously.
  • Forces her big blue eyes to never blink.
  • She was obsessed with Steve Jobs. Dressed like him among other things.
  • Having two teams working around the clock 24/7. Pitting the two teams against each other and firing the losing team.
  • Doing the marketing meetings on Wednesday just like Steve Jobs did.
  • She looked and acted the part of a James Bond villain.
  • She had a Board of Directors more suited to take over the world than to board on a health technology company.
  • Her intelligence, beauty, intense stare, deep voice, drive and ambition. That’s what made her Power of Persuasion.
  • Her product never existed, was charged with fraud and will most likely end-up in jail.

 

Solopreneur / Lean Profitable Business Model

Fine Art America (FAA)

Not listed on the stock market despite the ticker symbol style acronym.

  • 8 employees.
  • 500,000+ sellers/artists
  • Websites handling millions of monthly visitors.
  • $25 million in annual revenues
  1. Lean. 100% independant and operated by a minimal amount of people (8).
  2. Fully automated. Sean broihier is a lifelong programmer and worked as an engineer.
  3. Highly Diversified. FAA is diversified in 18 unique market segments.
  4. Private & Profitable. No investors. No board of directors. 100% ownership.

FU MONEY by Dan Lok

FU MONEY (by Dan Lok)

The 9 Characteristics of an Ideal Business

  1. Do what you love.
  2. Stable, growing, long term demand products or services.
  3. Be Portable. Digital nomad kind of business.
  4. High profit margin.
  5. Scalability.
  6. Low start-up cost.
  7. Requires little or no staff.
  8. Low overhead.
  9. Money coming in while you sleep.

 

And the best for the last…

Kylie Jenner self-made Billionaire on Forbes cover. PYGOD.COM

Kylie Jenner Billionaire solopreneur (KylieCosmetics.com)

Yes, I know that the Billionaire part was later denied but anyway Kylie Jenner is a solopreneur.

Kylie Jenner was the CEO, CMO, CCO of Kylie Cosmetics. A Shopify dropshipping store where all products are entirely outsourced by a company called Seed Beauty. The unofficial COO was mompreneur/momager extraordinaire Mama Kardashian getting her 10% fee over everything.

Self-funded, Kylie Jenner started her company with $250K – her modeling earnings – to produce the first 15,000 “Kylie Lip Kits”.

Kylie Cosmetics LLC is fully automated and lean. Only 12 employees, as of today, and half of whom aren’t even full-time.

How did Kylie Jenner turned a Shopify dropshipping eCommerce into a $1.2 Billion business??? I know the value was boosted for publicity purpose but anyway its worth is in the hundreds of millions of dollars. I digress!!

Here’s her secret. MARKETING. Her personal brand. She isn’t the CMO (Chief Marketing Operator) for nothing!

Lesson: Build a personal brand.

Kylie Jenner wink gif

 

Inspired by the Silicon Valley Model, I’ve decided to make…

My Christmas’ List for PYGear.com

  • Data Analyst
  • T-Shirt Designer
  • Product Uploader
  • Content creator/writer
  • Marketer (social media and paid ads)
  • 24/7 live chat Client support
  • 24/7 Website Techie
  • Kylie Jenner for girlfriend 😍🤑

A modest list, but a good start since I’m self-funded.

 

Health & Wealth

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Sources and related links:
https://www.billionairegambler.com/2021/05/fine-art-america-success-story.html
https://satansschlongs.com/e-commerce-succeeding-against-all-odds/

Here is the series of posts written by FAA boss himself. Proving that you don’t need to be well-funded and well-connected to be on top of the world.
Lessons From a Decade in E-Commerce – Bootstrapping the World’s Largest Art Site
Part 1: Launching the Business
Part 2: Competitors Arrive
Part 3: Bizarro World and the Benefits of Privacy
Part 4: Why Raise Money?
Part 5: Don’t Believe Everything That You Read
Part 6: The Finale (Lessons Learned and the Future of E-Commerce)
https://fineartamerica.com/newsletters/five-percent-commissions.html
https://www.influencive.com/passion-art-turned-25-million-business/

https://bettermarketing.pub/what-silicon-valley-can-learn-from-solopreneurs-and-digital-nomads-2f6b889dcf6d
https://fourweekmba.com/solopreneur/
http://www.paulgraham.com/ramenprofitable.html
https://yourlifestylebusiness.com/solopreneur/

https://digital.hbs.edu/platform-rctom/submission/the-everything-everywhere-every-time-store/
https://bettermarketing.pub/the-big-4-part-one-amazon-the-company-that-consumes-the-world-fb4679f10708
https://focus.business/blog/business-lessons-from-jeff-bezos/
https://homebusinessmag.com/businesses/business-spotlights/5-successful-business-models-silicon-valley-companies/

https://www.linkedin.com/pulse/90-start-ups-fail-janhvi-agarwal/

https://www.quora.com/How-did-Kylie-Jenner-make-630-million-in-sales-with-just-12-employees-without-brick-stores-and-with-an-80-000-sqft-lab-in-China

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