Starter Story - Frankie says relax

Hey,

This is Pat, founder of Starter Story - every week I write this email to share the lessons we learned after talking to successful founders around the world. If you're not interested, you can unsubscribe here.

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Here are this week's stories, enjoy!

Frankie says relax

Americans spend $143,280 to “treat themselves” in a lifetime (2018 data). With as much as 60% saying that they’d rather spend big bucks on a luxurious experience rather than on a luxury item.

And with the world just coming out of a global pandemic, people are craving feel-good experiences.

This trend has helped an NYC day spa reach $3M/year in revenue short after almost closing due to COVID.

But there are more types of businesses making money in the relaxation space:

• An $18K/month bath products brand
• A $13K/month mobile meditation studio
• A $20K/month pet spa
• A $150K/month healthy superdrinks brand

By the numbers:

• $47.5B -> global spa market size
• 3 -> years took this spa to go from $30K to $240K per month
• 100+ -> case studies of wellness-related businesses

Our take:

This type of business can be done in any city, which is not a problem because there’s a huge trend of people spending their vacations in their own city. Avids of experiences.

Tends to be a very lucrative business, with high average tickets. The average American will spend as much as $368 on a special, one-time experience.

Quick hitters

(1) This guy makes $600K/year with a simple online directory. Building a directory is not a very “sexy” business, but it’s super low cost to start, and you can focus on literally any niche. Achieving a high Google rank will result in an inbox flooded with requests to be included (and you can charge money for that).

(2) This $500K/year business teaches people a unique way of making a living. I am fascinated by this formula of building online properties to capture leads.

I’m not surprised that it’s doing so well, leads are expensive and if you can figure out how to get them, you got a lucrative business in your hands. See more examples: $120M/year (lawyers), $9M/year (local SEO monitoring).

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The power of Reddit

Although it’s largely overlooked in the mainstream social media conversation, Reddit is where a lot of viral content gets early traction, before it ends up on Twitter or gets butchered by dads on WhatsApp.

What I love about the platform is that there is a subreddit (community) for almost everything. Cat lovers, Memphis Grizzlies fans,... the kind of market segmentation every entrepreneur dreams of.

If you hang out there long enough, you just might find your next business idea. Some examples:

• This guy got inspiration from Reddit to create his $9K/month product
• This guy used Reddit to validate his $180K/year business idea
• These co-founders met on Reddit and started their $48K/year business
• This guy used Reddit to triple his business revenue

And did you know? The founders of Coinbase (a $16B company) met on Reddit.

By the numbers:

• 52M -> Reddit’s daily active users
• 2.8M -> subreddits are currently active
• 1.2M -> members in r/Entrepreneur

Our take:

If you’re looking to find a business opportunity, hang out in theme-related subreddits and listen to the community.

To identify growing trends, check out what subreddits are gaining more members.

I personally used it to get the first Starter Story users, and it worked! Here’s a post I wrote a while back detailing how I cracked Reddit.

One last thing...