The Koerner Office - Business Ideas and Deep Dives with Chris Koerner - Two Overlooked Industries No One Is Thinking of Disrupting. Ep #074

Episode Date: October 4, 2024

HoldCo Bros are back! Nik and I break down why print shops, despite being capex heavy and often ignored, are actually goldmines. We also talk about starting a GPO (Group Purchasing Organization) for niche industries and how to make money selling pricey widgets to airline manufacturers because you have to be FAA registered.Learn more about Nik here:http://linktr.ee/cofoundersnikTimestamps below. Enjoy!---Watch this on YouTube instead here: tkopod.co/p-ytAsk me a question on or off the show here: http://tkopod.co/p-askLearn more about me: http://tkopod.co/p-cjkLearn about my company: http://tkopod.co/p-cofFollow me on Twitter here: http://tkopod.co/p-xFree weekly business ideas newsletter: http://tkopod.co/p-nlShare this podcast: http://tkopod.co/p-allScrape small business data: http://tkopod.co/p-os---00:00 Highlights01:02 Introduction to the Boomer Businessman01:42 Challenges of Running a Print Shop02:11 Innovating the Print Shop Business03:06 The Interactive Website Solution04:47 Exploring New Business Ideas09:24 Lead Generation and Ethical Bait Switching15:22 Validating Business Demand22:22 Recap of Business Ideas23:08 Challenges in Healthcare Negotiations27:27 Group Purchasing Organizations (GPOs)34:04 Innovative Product in the RV Industry35:46 Framework for Idea Validation and Distribution39:15 Leveraging Insider Knowledge for Business Ideas43:47 Conclusion and Final Thoughts

To sell anything to an airline, you have to be like FAA registered, which is a lot of red tape, which makes sense. But a lot of these like super niche vendors have a monopoly on a little widget because they're the only ones thinking of doing it. And so they charge whatever they want. All right. It is Friday, which means another episode of Holdco Bros with Nick and I. We talked a lot about print shops today.

Print shops are one of those businesses slash industries that no one's really looking at. They're ugly. It's capex heavy. But they can do really, really well. So we talk about a bunch of business ideas around the print shop industry. For some reason, we just kept gravitating back to that industry. We talked about starting a group purchasing organization, a GPO for industries that you might not otherwise think of.

And then the last segment, which is my favorite, we talked about selling very, very expensive widgets to airline manufacturers because you have to be FAA registered. So there's some red tape there, which means there's not nearly enough competition there. I think you really like that one. Enjoy. Please like and subscribe, share with your friends. and we'll see you next time. I'm coaching a guy right now, and he's a boomer.

But he's awesome. I like him a lot. He lives in San Antonio. Okay. And he's got two things going for him. Number one, he owns a print shop. Like your typical boomer owned print shop, he's doing a lot of the work. He gives quotes over the phone, business cards, flyers, you name it.

It's a little over a million dollars a year in revenue. And he's acquiring other print shops, which is really, really interesting. That could be a whole other conversation. I kind of look at it like an accounting practice, right? He's just like buying customers. He doesn't have to integrate all these employees. He uses his own equipment. He's just buying recurring customer database.

And like nobody wants to buy a print shop. I'm going off on a tangent. This isn't what I wanted to talk about. Nobody wants to buy a print shop. It's not sexy. Like most of them make like 50 grand a year in profit. Therefore the multiples are like 2x, 2.5x. But like this guy is basically rolling them up without even realizing it.

That's interesting. We could talk about that later. But he's doing two interesting things, maybe three. He's rolling up print shops. He's growing his print shop. And he just invented a product. And so I want to talk about him growing the print shop real quick. So his website is static.

It's on WordPress. And 50% of websites are on WordPress. And when I say it's static, it's not like vista print. It's like, all right, how many business cards do you want? What color? Do you want rounded edges? Like an interactive, quote, generation. tool. He doesn't have one. And he said he used to spend literally eight hours a day just giving custom

quotes over the phone. Jeez. Still a good business, like 25% net margins making good money. And then he just took all of his prices and put he spent like a whole day putting him in a price sheet like a basically spreadsheet and then gave him to one of his team members and that cut his time like by 80%. But even still, someone is spending hours a day generating these quotes for random print jobs because there's a zillion different things you can print, right? And so we were just talking and he's like, man, I really wish I could get someone to just make my website interactive. I don't want a new website. I just want people to be able to generate their own quotes like vista print. And he listed off a few other websites. And I was like, well, dude, I can help you with that. Well, you know how to build websites? I'm like, no, I'll just go

to Upwork real quick. I'll post a job and I'll get a quote for you and I'll just hand over the virtual assistant. And he's like, okay, good, because I've been getting quotes for this and they're outrageous. I'm like, what are we talking? 30 grand, 20 grand. 30 grand. Yeah. And he's like, 30 grand? Yeah. What are they building? Healthcare.gov. The freak. Yeah. And so he's like, I would pay five grand for this. Like, I think it's very much worth five grand. And I was like, dude, I agree, but it's not even going to cost that much. And so I helped him out.

I posted out, I worked out a bunch of quotes, $500, $5,000, everything in between. Here's the idea. Basically, web agencies are not new. Like, agencies are not, this is an agency. But more specifically, there are 23,000 print shops in the U.S. I did a little cursory research, and I would bet that 90, plus percent of them are not interactive. Probably 90 percent have a website, and 90 percent of those are not interactive.

And there's a world where you could find a VA, have them build an interactive tool, and then have that same VA copy and paste the interactive tool on print shop websites and charge two, three, four grand for one time, plus a little bit a month to maintain things. What do we think? All right. There's a couple things that I really like about this. The first thing is that you threw in, so there's this guy that I'm coaching. I love it. Now everybody who's listening knows that you coach and you're going to make a lot more money.

I'm coaching exactly one guys right now. Because it's not something I do. And 17 girls. No. Dude, so we looked at a print shop like two years ago. Oh, yeah, we did. Alabama. Yeah. I liked him at the time because I get it that they're unsexy, but the printing equipment does cost a lot of money. So there is a barrier to entry from that standpoint. You have to spend a lot of money on capital expenditures. You could lease the equipment, but it's still expensive to get the print shop up and running. Which is also one reason why they're good to buy, right?

And not start from scratch. Exactly. When you said he's rolling them up, maybe I missed this part, but he's not buying print shops. So how, like, how is he rolling them up? He basically is. So he knows like all the competitors in town. And they're like, hey, I'm retiring. I'm done.

Do you want to buy my business? Well, I don't need that machine or that. I don't need your building. Like, I want your customers. And so they're just like selling the assets and then seller financing the business slash customers at really low multiples. He doesn't have to take on any employees, no new processes. He just starts printing those jobs because a lot of these people are wedding planners. They just come back for jobs every month.

It goes back in line with what we were talking about a week or two ago where this is like a perfect lead magnet. Right. Remember when we were talking about going and building a lead magnet business where you just find these businesses and you're like, hey, I could build this lead magnet for you. Maybe it's one step more than a lead magnet, but to me, it's a lead magnet, right? It's like, hey, you're interested how much your print job would cost? Fill out this thing and they click on it and they click through it. And then in order to get the quote, they've got to put their email in.

So it becomes like a warm lead. And you, like we were talking about, you build it once and easily replicate it to tons of print shops around the country that are probably in a similar situation. Because, again, you're printing these physical goods. they're not really disrupted by AI. You have like the same customers every year. It's the high school who's printing the banners. It's the business that needs to put up poster. Like it's kind of the same companies that are buying these things.

So they don't really, their websites are static because they don't necessarily need, quote, unquote, the lead magnet. But I think that's why there is such opportunity for those companies that create the lead magnet is because nobody's catering to it. So there's a huge opportunity to capture that business and shift them, especially because you don't have to have a printing shop that's like, in your town. You could have a printing shop in St. Louis, Missouri, and you just print custom stuff and you acquire people online from all over the country and then ship it to them. That's perfectly normal for print shops. So I really like the idea for all those reasons. I think you could go even more niche. You could say your agency website could say, we make print shops built on WordPress interactive. That's it. Only WordPress, because that makes it so efficient on your end.

Only print shops. And then, but the name of the business is something more generic. And then over time, you could add auto body restaurants, anything like barbershops, anything that needs a more interactive feature on the website. We can't talk about an idea without talking about the distribution strategy, right? Yes. But before you do that, yes. How do you see this as different than the lead gen kind of idea that we were talking about?

The lead magnet that you just referenced? Yes, the lead magnet, right? To me, it's kind of the same thing, right? Well, like to me, if I need business cards printed and I land on a local print shops website, I'm very high intent. And I just want to know how much that costs. So I think by nature of what it is, it is a lead magnet, right? Like you could make the decision on do we want the email at the beginning or at the end of the form?

Do you want to optimize this as a way to save your time quoting jobs? Or do you want to make this a lead magnet? It's both. What do you prefer? right? What's your strategy? I think it's both. And this one, because it's a tool that you're using to quote, it's probably going to be a higher ticket item than just a lead magnet. Because a lead magnet's going to be generic. I got a lead coming in. I still have to talk them, qualify them, see what they want, whereas this is a tool that's actually creating a custom quote for somebody who's

looking for specific services. Yeah. So I would just go reverse engineer what VistaPrint's doing. They don't require you to give any information before giving you a quote. They probably assume that you're going to buy, right? It's like too much friction at a certain point. I think the way that you could acquire customers here is something I like to call. And when I say I like to call it, I mean, I'm calling it this for the first time in my life. So something I like to call greater good bait and switching. Okay. Oh, okay. He just took something crappy, which is bait and switching, but he called it the greater good. So it must be good. Yeah, it's an oxymoron. Yeah. Ethical bait and switching.

So there are bots that can basically go to websites like this and go to all the contact forms and just send a generic message, right? I did this for LCD cycle when we were looking for iPhone repair customers. And so you can use a bot or you can use a virtual assistant. You scrape all the websites using built with and you say all the ones that have a contact us form, just put this message in there with my name, email and phone number. And here's the message. You ready? I'm ready, Freddie. Hey, I was wanting to get a quote on some business cards.

I didn't see your quote generator. That's it. Like, I have a problem that's not being solved. And then if they get back to you, they're going to say, oh, I can give you a quote over the phone. And then it's, oh, you're still doing that? Oh, I can help you fix that. So it's like they think it's an interested customer, but it's not. Does that piss people off?

Honestly, let's say I'm the business owner and it's like, I get your inquiry. Oh, hey, yeah, cool. What can I help you? What can I do you for? Were you looking to buy? Yeah, I would just start into my sales pitch. Okay. Let's hear the sales pitch.

Are you saying if I called people and said this? I'm doing a role play here, Chris. I got distracted in my head and started thinking about something else, okay? Okay, I'm the business owner. You're going to need to say that again. I get you. It's your fault. This is all your fault.

I love the gas lighting. I'm the business owner. I get your tool to outreach. Hey, can I use your tool? Oh, hey, Chris, we don't have a tool, but I can quote you over the phone. Oh, okay. I'm sorry, you don't have an interactive widget on your website? Sorry, I'm just confused.

We love personalized customer service. You ever see that episode of The Office with Michael Scott when he was competing against Staples to win a large account and how he lost that large account, but then he got it back because he was able to show customized service when he called. His receptionist picked up and it was Pam. Okay. That's us. We provide customized local.

service. Okay, sorry. Is your name Greg or Gary? Because if you're a white 65-year-old boomer, I'm going to assume it's one of the two. Is it Gary or Greg? My name is Gary. Middle name is Greg. Okay. Okay. Okay. Let me answer your question with another question. Would you rather be a publicly traded company like Staples or Dundra Mifflin, ran by Michael Scott? Okay. You know what? You just offended me and I'm not going to sell T.A. Howard. No, so your question is a great one and it's valid. And I will say, yes, it will anger a minority of people, but it is a net win. An example of this is I got a DM on Instagram from this kid that was like 13 years old. And he's like, hey, Chris, do you offer any high ticket coaching sales?

Because I would love to buy from you. And I'm like, oh, I know exactly what this is. So I responded to him. And I get, I see a bunch of these. For some reason, I just wanted to pick on this kid. I was like, oh, let me guess. You're going to wet my appetite by pretending like you're about to give me $5,000. But really, you just want to sell a high-ticket coaching service to me so I can sell high-ticket coaching services to my followers, right?

And he responded. And he's like, ha, ha, you got me. You got me. He's like, but he's like, I've A-B tested all the outreach methods. And this one by far crushes. So is he really 13, though? I thought that was going to be the bait and switch. He looked very young.

He was like catfishing you. Yeah. So. But it works. What you're saying is the ethical bait switching works. And that's how you would reach out to these. Like the distribution makes sense to me. That seems like a fairly easy list to scrape.

Yeah. So it would basically be, hey, I'm interested in some business cards, but I didn't see the interactive form. Oh, we don't have one. Let me get you on the phone. And then either you get them on the phone right then and pitch them. That could be a little hairier. Or you could respond and say, okay, awesome.

The reason I ask is because I offer this as a service. And, you know, leads go up. 38% and you'd actually be surprised by how little this cost. It's not as expensive as you think. It's not a site redesign. We're just adding a widget to your website. I'm going to take your idea. I'm going to layer on another thing. I don't know if this will work, but my mind goes to programmatic SEO. Could you just build some programmatic SEO to capture people who are looking for printing pricing and then sell those leads to local print shops? One million percent. Right? Because then you build, you build a tool like they come they get it quoted and like yeah you may not know you obviously you're

not going to know everybody's pricing but maybe you price it at a level that makes sense that you feel like is like overpriced i don't know you capture all those leads and you build out like a network of print shops that you're able to then send those leads to that they purchase from counterpoint okay you don't build out a network of print shops because that by far will be the hardest part about this business you go to minute man press which is a nationwide franchise hundreds of locations you go to the one decision maker there and sell all the leads to them and or you go to vista print and sell the leads to them two decision makers instead of 2000 but i love that idea there's a like think of all this search traffic like insert any type of thing needed to be printed multiply by any market

any city state region zip code yeah and you've got tons and tons of search volume tons tons dude i just got a business idea off of this you got a business idea off of this you got a business idea off of our business idea? Yeah. I'm changing directions here. Is that cool? Please. All right. This won't work for most businesses. I don't know, actually. I'm just going to say it. But one of the things that you want to do when you're buying a business is like you want to understand not only like how good is the business, right? How well is it running? How old is it? What's the team like? Yada, yada. But you also want to get an idea of how well, how much you can grow that business, how much upside of opportunity there is within that business. And an example that I will give is an example that we have done in the past. we were looking at buying an RV park, and we wanted to test demand for the upside, right? We knew what the rents were, and we wanted to know what we could raise them to.

And so what did we do is we went on Facebook Marketplace, placed ads at different price points, and we just saw, did we get any hits? And based on the response that we got, it validated our idea that, like, we could triple rents with this park. And so it was more than willing to pay for the price that they were asking for. And that was just like one testing method. this would be a company that essentially maybe you partner with private equity or maybe you partner with searchers like this would be like a perfect kind of searcher partnership and you help them forecast

and test demand with these types of services so let's say I'm a searcher and I'm going to buy this company a print shop right and they come to you and they're like hey I know what the business is like currently but I need to know over the next five years like what I can project and what the market looks like. I need you to run a one month test for me to see what demand would look like if I decided to go online. And we already have the systems in place. So we build out a programmatic SEO or we post an ad somewhere and we just get inbound and we go to them. And maybe we have like two leads with $1,000 of ad spend or maybe we have 500 leads with $1,000 of ad spend. But then we're able to go to them and say like, yeah, if you bring this business online, you can reasonably expect

this much demand. Because that's... is one of the scariest things about buying a business. You don't know potentially what your Tam is your total addressable market or your total upside. What's the ceiling on this? Yeah. And like now that I'm thinking about like, I don't know why it wouldn't apply to most businesses. If I want to buy an HVAC company and I want to test the demand in a certain market, I can easily test the demand in that market. And maybe it wouldn't be programmatic SEO. Maybe it'd be, I don't know, throwing something up on a Facebook group about needing services or I'm just trying to think through it. But I think especially for private equity and especially for searchers, a service

that would be affordable to show this is what demand and upside looks like for your opportunity in this business would be like I would have paid for that for sure. I would have paid for that. Because you're not only giving me an idea of what the demand is, you are also the solution on the back end because like you just generated all those leads, right? It's like, yeah, when I buy the business, of course I'm going to use Chris's company because they already generated the leads. And like, I know that I have business there to go and close. So what you think. I like it.

I like this more than what we talked about a month or two ago where we talked about like validating a location. Remember that as a service? And we talked about, ah, it's tricky because a major, like someone like Wendy's, they do it in house, but a one location restaurant, you know, you got to find a guy that wants to grow. It's hard to find the right customer. I like this because it's even more niche than that, which thinks, which,

which makes it even more valuable, I think you could go through the brokers, like the really, really good business brokers and call it like Tam validation, total addressable market, validation as a service, because no searcher, no business buyer is going into a business thinking like, okay, this makes $100,000 a year, a 3x multiple, I'm going to make my money back in three years. That sounds good. I don't need to grow. Like they all are craving to grow.

They want to grow. That's the whole strategy. but how do they know how much they can grow? Well, and on top of that, a huge part of the buying process is underwriting. And a part of the underwriting process is the bank looking at the deal. But there's this thing called the Q of E, the quality of earnings. So they do their own quality of earnings and they do an assessment and they say like, how healthy is this company?

But other than that, they also look at the purchaser. Like, does this person have the experience? Can they run it? Can they grow it? If you added this into the packet into your business plan and you were like, hey, this is my experience. I have the cash. You've seen the QOE. And I've already done market research. I've already generated this many leads. This is how I validated the potential upside. It only makes your case stronger. I don't think it's necessarily going to be like the differentiator, but it just,

it makes your case stronger for the bank to underwrite you. Yeah. I got to work on the acronym because it doesn't roll off the tongue, but I'm thinking like a quagap quality of growth potential. Okay. It's got some work to do. I mean, we're doing. this in real time here, Nick. Growth, opportunity, upside potential. A gup. I don't know. Guo.

Guo. See Scott, Guo. Yeah, the hardest part about any new concept is that it's a new concept. And a lot of these sound great on paper, but will people pay three, five, ten grand for something like this. This is probably, honestly, this is probably more of a lead magnet for a lead gen agency that is trying to get new customers because searchers in particular. particular, they want to grow their business post-acquisition.

And so if you're able to show them, hey, I can generate leads, but you're also providing the service of like, hey, I'll show you what the demand is. Then it's going to help their case, obviously, but then they're also bought into you as the lead gen agency post-closed. They're like, okay, well, yeah, I'm going to use Chris because they showed me. So maybe that's a lead, a lead gen strategy. You could be like a growth marketing agency specifically tailored for searchers that just closed and use this as your foot in the door.

Exactly. It could even be a low ticket foot in the door, like $500 to validate how much growth potential there is in this business and then $5,000 a month to help grow the business after you. It's actually kind of genius because they pay you a one time $500. You go and do the research, you as vendor may do it and be like, oh, this industry kind of sucks or like this was really hard to validate because I can't get the phone numbers or I can't get in Facebook groups or I can't get my paperclip optimize, whatever. And so both of you are like, no, no thanks, right? But if it does work out, you've done the research and you also know the best

channels to go through. So it's like you're getting paid to do the research to validate it. And then you also have an idea of implementation. Like you're the only guy that knows how to implement it at right. Interesting. I like that a lot. I like how we bring up all these ideas and every single time we're like, yeah, this is a good one. This is a good one. But this one's good. We're the guys that sniff our own farts and I'd be like, oh, yeah, that's good. Yeah. That's a quality. That really doesn't stink. Like, it really doesn't stink. It doesn't, Ms. Jackson. Sorry. Oh, wow. Yeah. All right. I like that. So just to recap, the idea to be an agency for print shops or blue collar businesses that need an interactive website, they're wasting money in time, providing quotes or scheduling for

pricing quotes. Yep. Yep. Pricing quotes. And then you've got the idea to be like a lead magnet for searchers that we just talked about or the programmatic idea to sell leads, right, print shop leads. That's like three ideas and one. You're welcome. God, thank you. We're freaking spitting gold today. We are really cool. Our wives must not resent us behind our backs. Not my wife. You want me to go next to you? What do you got? Yeah. Yeah. Okay. Fire away. So my experience is in the healthcare space.

Love healthcare. It's also an incredibly difficult space to operate in. But one of the things about healthcare that I think is very difficult for individual providers is having leverage when it comes to negotiations. So there are a ton of providers that actually provide services to patients. Many of those might be a dentist who owns a clinic or a physical therapist who owns a clinic or a family practice physician who has a practice that he owns, right? They're not necessarily affiliated with any hospital system or any health system or any insurance company. They're just a standalone independent provider.

The hard part about being those standalone independent providers is that they have to get contracts with all of the insurance companies. So, you know, just think about who you're insured through. I'm not you because I know how yours works, but, you know, United Health, Etna, Blue Cross, Blue Shield, all of those companies, they're the ones that you pay your premium to. And then when you go and see the doctor, they pay the doctor for the services that they rendered. And for the most part, those individual providers are at the mercy of the insurance companies. Whatever the insurance company says they're going to pay them, that's just what they're going to pay them. And if the physician doesn't want to take those type of patients because they can't make any money on them, then most of the insurance company says they're going to pay them, then most of the insurance company says they're going to pay them, Most likely the insurance company has another provider that they can send them to because they've got so much negotiating power that they've somehow, whatever, built out their network of individuals. So it's hard for these individual providers to go and negotiate with larger pairs. So I was thinking this week because I was talking to an individual provider, they're having a hard time. They're trying to negotiate something right now. And there's other providers that are doing the same thing, but they're all doing it separately.

and the insurance company's not budging and individual providers are like dropping off one by one. And I asked them, I'm like, why don't you like get together and have like a collective bargaining, you know, agreement that you negotiate with the insurance provider? And they're like, yeah,

I don't know why we've never done something like that. So I think it would be really interesting, specifically in the health space. And I don't know if this is feasible, but like conceptually, it sounds like it makes sense. For somebody who knows healthcare, like somebody like me,

to target a specific group of providers, maybe it's psychiatrists, maybe it's family practice, maybe it's physical therapists, dentists, whatever it is, and get a group of them together. Maybe you build a local group, like not a Facebook group, but like a local Boise Dennis group or a local Boise physical therapy group. And then you organize them into a group that has bargaining power with these insurance providers. But in order for them to organize, they've got to pay, obviously, a membership fee to you

to be the host to organize those things. and you have monthly meetups and you send out information and maybe you help them with continuing education and webinars and those types of things. But I really like the healthcare space. I think it's growing like crazy. I don't ever want to be a provider again, but I think there are tons of opportunities like this to service providers in the healthcare space. And this would be one way to help them negotiate their rates, but also be a good service to them. What do you think? I like it. Yeah. So I don't know anything about healthcare. You know this. I don't even know what you did for the last 15 years of your career. I still haven't figured that out. It's true. I'm going to

talk about what I can wrap my brain around. And I was wondering, I was here thinking as you're talking, how do you charge? Is it $50 a month? Is it $500 a month per? Is it like kind of the model where you charge a very, very low amount and you just try to get a bunch of volume? Let's say you have a 500 different restaurants and you're going to negotiate like agency services for their Facebook ads because they all want to grow and you charge them all $100 a month. And you just kind of, you're charging that to put them together and to reach out to the agency and negotiate prices on their behalf. You're going to help me with the distribution. Let me explain to you really quickly. It has to be regional because many of these contracts aren't national. For health care, it does. Right. Yeah. For healthcare, it has to be regional

because what they pay a provider in Boise is different than what they pay a provider in Dallas and what they pay a provider in New York, right? There's cost of living adjustment. So I think you'd have to have it in these like specific geographic areas for healthcare yeah yeah just for health care okay so i'm wondering if the monetization strategy is to take and i'm going to use a non-health care because i can wrap my head around that is to take the savings like let's say you found 50 Shopify stores that i'll sell merch okay and there are thousands of them it's like apparel is like the biggest category in shopify So let's say your whole shtick is to gather Shopify stores together that all sell apparel and you can negotiate anything. Their clavio bill, their agency bill, anything.

And you basically go to an agency like Brandons, one that's reputable, well known and say, hey, what would you charge me? And you can kind of use this ethical bait and switch, right? Actually, it's not even that. You want to know what their quote is before they know what you can offer them. You want to get the honest answer from them, right? Yep. So you get them on the phone and say, hey, I've got an apparel store on Shopify. You know, our ad spend is about X.

We really want to outsource our agency services to you. What would it cost? Three grand a month. Okay, cool. What if I told you I have 50 of those businesses? Same. All apparel, all merch, all Shopify. How much would that be?

If it's three grand for one, how much is it for 50? Well, it's, you know, carried across. It'd be 150 grand a month. Maybe they say, well, geez, economies of scale. We could use a lot of the same creatives. Like, it's going to be 50 grand a month. because we'll do a lot of the same stuff with a lot of them. Wow.

Okay. It's like a 65% savings. So then you go to the 50 and you say, hey, here's what I negotiated. We're going to save 66%. My fee is going to be 30% of the savings. So what you are describing is a GPO, a group purchasing organization. They're freaking amazing. And I don't think enough people actually create them and utilize them because there are a lot

of individual, independent business owners that, they all make purchases to Clavio or Shopify or whatever, whoever they're using, but they don't have bargaining power because they're not buying in the volume necessary to allow them to negotiate. But then there are these groups, these group, GPO's what they call them group purchasing organizations that bring those people together that are organized by an individual that then goes and negotiates purchasing pricing on their behalf. The healthcare example I gave is a little bit different because it's not, they're not negotiating purchasing power. They're negotiating revenue, where it's like, what are you going to pay us for the services we're

providing as opposed to what we're going to, you know, pay for this. And so I've seen it on the expense side of things, these GPO's. I haven't necessarily seen it as much on the revenue side of things because typically revenues individually negotiated in other settings, but in healthcare, it's not. It's kind of like these are like the standard fees when it comes to a revenue standpoint. But I freaking love that GPO idea because I have seen multiple companies do this. You remember the guys I worked with a couple jobs ago. I won't mention them. They started a GPO.

So they had a bunch of healthcare operations in different states. Either they started or they invested in one. I can't quite remember. But they had healthcare operations in a bunch of different states. And so they took that size. And then they started going to other healthcare providers in their areas and said, hey, join us. And let's get together and negotiate a contract with this supply company.

And you'll get this lower rate, but we'll keep X dollars. in savings. So I think organizing these GPO's just around pricing and then you don't have to worry about any other membership, I guess support. You don't have to worry about conferences or like continuing education or anything like that, especially if you know the space. I like that a lot. You can either do it industry specific or you could do it like service specific. Like, hey, I have a Clavio GPU if you guys want to join it. Well, yeah, I think the problem with the Shopify example that I gave is that a lot of these 50 stores might not want or need agency services. And so you negotiate that bulk pricing and then you go to the 50 and only 12 of them are like,

yeah, okay, I'll take that. Then you have to go back and be like, actually, I only have 12. Oh, well, the price is different then, right? So maybe the, and I think I have seen like a couple VC funded startups that are trying exactly what we're talking about, which doesn't mean it's not an opportunity anymore. In fact, it means it is an opportunity. Maybe the play here is to do this with blue collar mom and pop businesses that no one is thinking about starting a GPU with.

Let's go back to the print shop example, right? What do print shops buy every month? 100% of them. Ink. They're all buying ink. They're already doing that. So there's much less friction. You gather 100 of them together.

And you don't have to get on a sales call. It's just an email. It's like, hey, do you want to opt into this? Yes or no. There's no cost. Yes. Okay, cool. Then you go to the,

there's probably like three to five big ink manufacturers and say, hey, we have 100 locations. What's your book pricing? And then it's recurring. And then they're already spending money on what they're already spending money on, they just get a discount and you just capture a percentage of the discount. Maybe you charge it to the manufacturer. And so they don't even have to pay you anything. I mean, they're paying for it, just not directly. Let's use that example, ink, right? You get 100

print shops together. You negotiate the price of ink with the manufacturer. Do you then have to, you know, accept the orders and ship them? Or does the manufacturer know that you're just a middleman and they're shipping directly to the individual shops? you need an agreement on visibility. I don't want to operationally have to fulfill orders, right? No, no, this isn't that. You just need the manufacturer to agree to share the visibility with you, so you don't have to take them at their word. Got it.

That makes sense? Yep. Yeah, yeah, so you know what to charge them. Yeah. So let's say if an average print shop spends 10 grand a month on ink, they can start spending $8,000 a month, and 500 of that goes to you directly from the manufacturer. Is there a way you could do it where you build a website and they purchase through you, quote unquote? But then the manufacturer just ships to them because then that way you can charge them. You don't have to keep anyone honest.

Right. You're in control. The hard part with that is there's probably a zillion different skews and you'd have to like replicate that on your own website. So maybe it's better if you did it in an industry that's more simple with like less moving parts. maybe you start with like the honesty system of like the manufacturer sharing with you and then if it grows to scale you invest in building the website so you don't have to follow up with the purchase orders i like that it's a way to get into it's the way to get into yeah yeah okay so same guy with the print shop okay the other thing he's doing this really

interesting he is inventing a product and he's very excited about this and I'm excited about it because I think it's a great idea. I'm not going to say exactly what it is to protect his idea. But let's just say it's an idea in the RV industry that makes life a lot more convenient. And it's one of those ideas that is so obvious. Like it's just, he tells it to me and I'm like, okay, that's already being done, surely. And then it's not. It's not being done. It's like, don't go ever go in an RV. It's like, duh, you know, like, why would anyone ever want to ride in an RV around the country? You know what I mean? That's offensive. And I'm going to.

boss right over. Muhammad, edit that up. What was the most validating thing about this idea for me was the fact that the dealership he bought his RV from, he told them the idea and their minds were like blown. And every time he goes back there, the sales guys are like, dude, are you going to make that idea? Like, we want to sell it. Like, we have so many people that would buy this from you.

Like, please, like, please make it. Well, you can use our email list. Like, they're wanting to help him because there's so much demand for this little widget that solves a very specific problem yet no one at the dealership or any dealership had thought to execute on it or develop it. And it's not something you need to like start a manufacturing facility for it. You just need to take a few moving parts and like assemble them by hand. Like you don't need all this expensive equipment. And it just blew my mind that there are so many ideas left out there. Not just a service, but like an actual physical product that are

seemingly right there out in the open for anyone. And like I'm confident he's going to make a lot of money with this idea. He needs the distribution, but that's it. It's crazy to me how many good ideas left there are out there in the world. We need to like think through at some point we will, the formula of like idea validation, but also coupling with distribution. It's like, I think everybody who's listening to this knows somebody or could figure out some way if they thought long enough about a distribution channel. Maybe they know. Maybe they know. someone who works at a dealership or maybe they know somebody who has an e-commerce store. Like there's something that they have access to that somebody else doesn't have access to that

would allow for distribution. But figuring out what to sell through that distribution channel is hard, right? Like you have to do a lot of brainstorming. I think it would be fun to think about what the framework would be to help people identify. Okay. Idea distribution. How do you pair them? Which one comes first?

Is it idea or is it distribution? It could be distribution first and an idea or it could be, you know, vice versa. So because that's essentially what we're doing on with each one of these these brainstorms is idea, distribution, idea, distribution. It's interesting you say that because I would have said the exact opposite that most people have an idea with no, no, no, even clue of how to distribute it or sell it, right? You think that's the opposite? No, no, no, no, I don't. No, no, I think that most people have an idea first. What I'm saying is like if they really rack their brain, they could think of a way to distribute it.

that or for most people who want to get into entrepreneurship, I think they want to be 99% of people who become entrepreneurs are just like, I want to do a business. I don't really care what it is. These things kind of interest me more than other things. I'll fall into this space. There's the 1% of people who are like, nope, I only want to do this product and sell it to these type of people. Like they're very mission driven.

I think that's maybe 1% too small. But it's a smaller percentage of most entrepreneurs. And so if you fall into the category of people who are like, I'm kind of kind of idea agnostic. I'm not necessarily passionate about any one thing in particular. Then I think there can be a very proven framework for finding your idea. And if I were in that position, I would start with distribution and then work my way back to what the idea would be. As opposed to the idea and then work my way up to distribution. And we're talking about starting a business, like buying a business is different. If you're starting a business and you're like

just trying to test something, I'd start with distribution and then work my way back to what the product is. Yeah. I still think there's something there. We talked about this a month or two ago of getting a community of like white collar employees together. Racist somehow. And just having them brainstorm on ideas that they're seeing in their jobs that could be peeled off, right? As a standalone business. That's an amazing idea. Maybe it's not a big. business, but it's like, organize a lunch once a week and invite certain people in your community to come and join and discuss their problems. Like, what are they facing? It's similar. I posted a tweet about Nick Gray recently. He was on my first million and he's the dude who organizes these parties

essentially. And like his idea is if you become known as the guy who's organizing events, you become sought after and you become interesting. You may not be interesting in your own right, but if you're the guy who's organizing stuff, you become interesting. And so I think there's opportunity to just organize these events become interesting and then hear those ideas and start kind of playing around with it. That's a really cool idea. I like that. Well, it makes me think I've got a friend named Carlos and he works for, I went to TCU with him for my MBA and he works for one of the big four, not accounting firms, but airline seat manufacturers. Okay. That's right. Yeah, yeah, yeah. I remember Yeah. And he, I love Carlos. He's kind of entrepreneurial, but he's so late in his career,

even he would admit he's never really going to start a business, right? He's never going to quit his job to start a business. Right. But I love guys like these because they always come to me with their ideas. Like, I just do this. Just give me 1%. So one idea you had that only someone like Carlos would know. And I still love this idea. And it's so simple. They make airline seats. And he said that the cable that attaches to like the main electrical infrastructure in the seat and the seat back heads up display. A lot of these heads up displays like they pull out or they rotate, right? And so the cable that connects them frequently breaks. And it's literally an electrical cable, a plug. I want you to guess how much this company has to pay for the replacements. For just a cord? Just a cord. I don't know,

five bucks per unit? Six thousand dollars. Shut your mouth. That's such. I'm not exaggerating. I'm not exaggerating. That's stupid. I promise you. $1,000. I swear on my life. Are these cords to text me and I'll send you the screenshot.

Are they imported from the future made by children of like? There's one seller. To sell anything to an airline, you have to be like FAA registered, which is a lot of red tape, which makes sense. You don't want to fire on an airplane. Of course. But a lot of these like super niche manufacturers or suppliers or vendors have a monopoly on a little widget because they're the only ones thinking of doing it. And so they charge whatever they want.

And the C manufacturer doesn't care at all because they're just passing it on with a 50% markup to Boeing or to Lufthansa or whoever. Hey, wait, wait, wait, wait, wait, wait, wait. $6,000 and then they're marking it up 50%. So they're passing up about 50%. But they mark everything up. They mark it all up. If I was in the airline, why wouldn't I be like, let's just bring this in house? I guess maybe the opportunity cost is. So, That's nuts to me. We talked about this a ton where he's like, dude, you got to do this. Like, you got to go find a manufacturer in China, get FAA registered.

And I looked into it. Like, I went down that rabbit hole for a while. And then, you know, I abandoned it. But that's not even the idea, right? That's an idea in and of itself. But the idea is to find the Carlos's of the world that have all that see these insights that no one else would ever see because they're so internal and to share them somehow. Maybe it's a like a marketplace.

You've got a community over here of Carlos's that are sharing ideas. And then you've got a community over here that are paying a lot of money to get these ideas that are not Googled. Like there's a whole framework around that, around building a business that like answers questions that can't be Googled. Kind of like Hampton, right? Hampton interviews these high net worth people. It's kind of like a CLG. You heard of CLG? Yeah.

Like they're this company that essentially if there's private equity funds that they want to do research in an industry, they will go and find someone in that industry, they'll pay them a lot of money and they'll get like first hand knowledge of what's going on. It's kind of like CLG, except you're not necessarily validating an idea or getting advice on whether or not you should invest in something. You're just trying to pick their brain. Like, what are your problems right now? That's really interesting. Because it's like, yeah, you can go start, and I'm not trying to crap on ideas that even we've talked about. You can go start an agency. You can go start whatever business. But I think a lot people want like the inside scoop, like the idea that no one else knows about. And I think they'd pay a

premium for that. Of course they would. Yeah, that's what anybody wants because you want to feel like you have a competitive advantage. Otherwise, you're just competing against everybody else's creativity on what might be an issue in an industry that they've never operated in. Yeah. And there's this selection bias going on where the guys like Carlos is they probably make 250 to 750 a year. They're doing great. They've got stock options. They see that, you know, they're going to retire at 55. And even if their job is soul-sucking, they're not about to quit. But the people at those levels in a business are the ones that see the best ideas. So it's like the same people that would never start the ideas are the ones seeing the best ideas. That is such. There's a disconnect,

right? Yeah. That's pretty awesome. All right. Let's cut it. All right. This is great while we're ahead. Love you. Oh, okay. I like you too. Okay, what did you think? I text my friend Carlos and I got a screenshot from him. So I'm going to tweet it and you'll see it and go subscribe to my newsletter while you're at it. Kerneroffice.com. No the, just Kerneroffice.com. See ya.