Bits or bricks

Last week, an old friend called me, ecstatic. "I just closed on a triplex in Toronto! I'm officially in real estate!"

I could hear the pride in his voice. And why not? For generations, physical real estate has been the go-to for building wealth.

But as I hung up, I couldn't help but think: did he make a mistake?

While he's unclogging toilets at 2 AM away from his family... Some kid in Nebraska is building a $10M business with AI and a Discord server.

While he's sweating over his TD Bank mortgage... A college dropout in Mumbai is scaling to 100k users without spending a dime.

In 2025, the real opportunity isn't just in bricks and mortar. It's in bits and bytes.

It's never been a better time to start an internet business.

Real estate is cool, but you know what's cooler?

1. Spot a niche problem. Dive into Reddit, TikTok, YouTube comments and Discord. That's where gold nuggets hide. Example: "Golfers struggle with swing consistency". Once you find that problem, go and validate.
2. Mine GitHub for opportunities. Popular repos are treasure troves of unsolved problems. Each issue could be your next startup. Always surprising to me that Github repos are largely ignored in the ideation and validation process.
3. Validate with data. Use Google Trends. Look for steady 5-year growth, not spikes. That's where sustainable businesses are born.
4. Focus on "forgotten" demographics. Military spouses, immigrant grandparents - these overlooked groups could be your goldmine. Less competitive, more desire for products.
5. Run $50 Facebook ad tests. Cheap way to validate before building. I call this "marketing R&D". Can scale later with someone like BoringAds. This is more to figure out your messaging and channels that might work.
6. Build a dead simple MicroSaaS. One killer feature beats a bloated app. Spend $5000 or less on your MVP. Or if you can do it yourself with Replit, even better. It's okay if it's ugly. Solving the problem is what matters. You'll scale later.
7. Create a "velvet rope" launch. FOMO + exclusivity = organic growth. 95% of MVPs in 2024 could be a social account/group chat + waitlist. I'm seeing video work really well here. Your MVP journey starts with a video that your niche shares.
8. Get 100 real conversations. Use something like MixMax AI for cold emails. Ask, "What's your biggest pain around XYZ?" These insights are worth their weight in gold. Or just do it manually.
9. Bake virality into your product. Give users incentives to share. Make it as frictionless as possible.
10. Iterate based on actual usage. Use something like Hotjar + FullStory = goldmine for user insights. Or hire LCA to bring your product to next level.
11. Leverage "exit intent" popups. "Why are you leaving?" Tells you what's missing. Usually a quick javascript snippet and teaches you so much you didn't know.
12. Focus on word of mouth. Make 10 users love you, they'll bring 100 more. Beauty about the internet is it scales.
13. Partner with micro-creators. 100 small influencers can outperform one big one.
14. Show behind the scenes. Build in public, but don't overshare.
15. Bootstrap unless necessary. You can always raise VC later as you're scaling.

No down payment. No mortgage. No office lease. Just pure digital leverage.

While my friend is dealing with tenant complaints and property taxes, digital entrepreneurs are serving global markets, scaling infinitely, enjoying 50%+ profit margins, avoiding debt and having tons of fun.

The Framework for Choosing Your Path:

1. Scalability: Can you serve 1 customer or 1 million with the same effort?
2. Location Independence: Are you tied to a physical location?
3. Initial Investment: How much capital do you need to start?
4. Ongoing Costs: What are the recurring expenses?
5. Potential Returns: What's the ceiling on your earnings?
6. Time Commitment: How many hours per week does it demand?
7. Skill Leverage: How much can you amplify your unique skills?
8. Market Reach: Are you limited to local customers or can you go global?

Remember: It's not about bits vs. bricks. It's about understanding the game you're playing and optimizing for what matters most to you.

Your edge might be in bits, bricks, or both.

Where will you get the most stress? Where are you best suited to win? Where will the stress be worth it? Where will it won't? Where is the upside there? Where is the upside not there? How much is it going to cost? Can you acknowledge that today is a special in building internet businesses with AI, social etc?

These are the questions worth asking.

Call me crazy, but I tend to think the internet is the place to be.

#1

Larry Cheng @larryvc Sometimes spending an hour and setting a bunch of things in motion is more satisfying than spending an hour and closing out a lot of things. 11:29 AM • Sep 26, 2024 101 Retweets 930 Likes Read 87 replies

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Never thought of it this way. But feel the exact same way. I tend to want to close out things, but more often than not, should be setting a bunch of things in motion.

#2

𝙗𝙡𝙖𝙣𝙠 @blankspac_e 9:53 PM • Sep 22, 2024 433 Retweets 3831 Likes Read 5 replies

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#3

Ryan Kulp 🇺🇸 @ryanckulp TIL the term “B.O.” (body odor) was invented by an advertiser to sell Lifebuoy deodorant. (source: Breakthrough Advertising by Eugene Schwartz, 1966) 9:49 AM • Sep 22, 2024 0 Retweets 8 Likes Read 1 replies

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Mind blown. "B.O" was invented by the ad industry.

#4

Robleh @robjama 2:2 PM • Sep 24, 2024 5 Retweets 58 Likes Read 8 replies

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This got me thinking of my content diet. How do you feel it up so that you get inspired instead of stressed when you login to social?

New Startup Ideas Podcast (SIP) episodes🧃 How to build a $1M+ vertical SaaS business (step-by-step guide) ​Apple Podcasts, Spotify, YouTube​ ​ How to write on X that generates 300M+ impressions with Nick Huber ​Apple Podcasts, Spotify, YouTube​ ​

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Thank you for reading Greg's Letter. I hope you found it valuable. Reply if you did. I won't be able to get to every response, but I read everyone.

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Until next week.

Be well,

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