When I lived in Denver, there was a store a couple of blocks from my house that sold pinatas. Nothing but pinatas. Even as gentrification was happening at a breakneck pace, and the area’s remaining Mexican-American residents were cashing out and moving to suburban Brighton, the store moved into a larger location.
On a related note: Mexican music stores. I can imagine one or two in a large city doing okay, but when I lived in Austin, they were everywhere in Mexican neighborhoods. If the recorded music industry is hurting, it seems as if the last thing I would want to get into is are stores that sell nothing but Norteno music to a mostly working-class customer base.
Cupcake bakeries don’t strike me as having a great return on investment, especially considering that they’re most popular in high-rent cities like New York and San Francisco.
Also an up-and-coming business where I wonder “how the hell do they make any money?” - organic baby boutiques.
Lately, I’ve been checking out area estate sales. The sales in blue-collar and lower-middle class neighborhoods are absolutely chock full of this crap. Although it doesn’t seem that way, I’m guessing the Jean Teasdale demographic is much, much larger than we might think.
For years I was certain Starbucks would flame out. People aren’t going to wait in line to pay double the normal price of coffee, not to mention the hundreds of non-nutritious calories in the fancier drinks. Who in their right mind would make a habit of this?
I also have been to an Ikea store exactly one time. The one near my house is a three-story building with a huge hole in the center and insufficient escalators, making it impossible to get around. The merchandise is bland, the prices OK but nothing that Target can’t match. The day I was there, the escalator-type thing for shopping carts was broken and everyone with a cart had to wait interminably for an elevator. There was something annoying about the check-out lanes – you have to bag your own stuff? I forget now. And you can’t take the cart to your car, you have to bring the car to the cart. Yet, people would drive from downtown Chicago to Schaumburg just to go to Ikea – in fact it was the only reason some of them would go to the suburbs at all. Of course, most of these people are daily Starbucks slurpers, so a different species from me anyway.
There were a lot of places like that near where I lived in Oxford…obviously not Mexican music stores but Indian or Pakistani grocery stores. Some places would sell a few token food items–a few dusty jars of chutney or bags of rice. Only if you looked carefully did you notice customers going into a back room, going in to send money to the family back home.
1998! Are you kidding? Business plans with “web” and “media” in them in 1998 were not having trouble raising money.
Remember pets.com? Great adverts, terrible idea! Let’s sell bulky heavy stuff like pet food to people over the internet! They got money. This one really should not have. It was a terrible, terrible idea.
Or Webvan -or whatever such nonsense- ? Also got money.
VC money in 1998 was happy to fund bad ideas. Netflix (not a bad idea, but even if it was) should not have had a problem at all.
It’s not just advertising. You think things like Farmville, Bejeweled Blitz, and Mafia Wars get to “piggy back” on Facebook for free? Hell no…their publishers pay lots of bling bling to be “a Facebook game.”
I can’t recall where I saw it, but supposedly it costs Netflix 5 cents to stream an HD movie. It’s important to realize that Netflix doesn’t stream its whole catalog. Just certain, usually older, movies are available. Netflix would love to stream everything, but the studios have control over what they do and don’t license for streaming.
And they don’t even do as well as they potentially could. My wife and I publish an e-newsletter detailing events and things to do locally for kids and families. We wanted to boost the subscriber base, so we’ve been experimenting with Facebook ads.
We were given a ton a parameters to choose from with regard to who would see the ad, but there was one critical piece of information we couldn’t use: if they had kids or not. People always have their kids listed on their profile, but that’s not one of the options you can use for selecting target demographics. Silly, silly, silly…
They’ve been getting a lot more in the past few months. The entirety of Comedy Central Presents is available, which is 200+ episodes, something like 70 hours of video, just by itself. Many newer movies are also available, and Netflix is pushing the streaming part of their business like crazy.
You know those commercials for silver dollars and two-dollar bills that they sell for like $25 or $30 a piece? Who buys those things? Is there some guy out there with WTC silver dollars and Yellowstone National Park two-dollar-bills lining his walls?
I’m sure a whole bunch of other stuff was going on back there, mostly drug-related. Although that falls into “business model that is definitely going to work.”
YouTube is owned by Google, and Google has a lot of cash and has to do something with it? It doesn’t need to make money. Ads on YouTube and Facebooks are generally not worth it, but it takes a good while for the person paying that money to figure out, the return on the ad is nothing. So then they pull out and the next guy steps in.
This is why online marketing has problems. It was supposed to replace the B&M stores but at best it only supplements it.
Often things don’t have to pull in money. I worked for two hotels which were privately owned and the owner had other properties. The one hotel lost money hand over fist, but the other hotels carried it. It was a high end prestige hotel.
The other was the opposite, it made money hand over fist, and supported all the other hotels that the owner had.
You can’t assume because a business is functioning it makes money. A lot of smaller businesses are very marginal, and get by because the whole family from wife to little kids work there for free.
The inner city has a submarket that allows things like arcades to make money because so many of their citizens don’t have access to computers.
I am going to go with the internet advertising. Google makes BILLIONS. That is inconceivable to me.
I practically had to have it explained to me. Apparently there are links at the top and sides of your search results with sites that pay to be there. And here is the really crazy thing. People click on them!
The first time they appeared, my brain instantly labeled them as “worthless junk” and filtered them out. I don’t even see them anymore.
How this scheme nets Google billions is amazing. There is no way I would believe that until it happened.
As an arcade enthusiast (I own three machines and semi-regularly travel to compete in fighting game tournaments), I can tell you that knowing arcade operators, they have been slowly dying off since the 80’s, and the industry got absolutely DEMOLISHED in the 90’s and '00s, arcades will not exist except in very very small niches (bartops in bars maybe) within my lifetime in the US.
They are still VERY popular in poorer countries where consoles are prohibitively expensive. I am on my way back to the Philippines in two weeks, and Manila is arcade HEAVEN.
The rise of online gaming really killed off arcades, because you could get the same benefits of Arcades (human competition) at home, for near-free. For fighting game players online play is a very crappy substitute because of lag issues making the games fundamentally different online vs off, but for FPS and RTS these issues aren’t as big a deal. In fighting games, every single frame counts, 1/60th of a second is the difference between winning and losing. Plus consoles finally equalled (and in many cases, have eclipsed) arcade hardware in computational horsepower, so often the most high-end gaming to be had is at home, no longer in the arcades.
Hate to do this…but “bling bling” hasn’t been cool for over 6 years, and even when it was acceptable, it never meant “money”.
In addition to the sizeable ad revenue alreay mentioned, do realize that they reeeeeeally put the screws to game companies like Zynga for providing them with an esentially captive audience. Something like 1/3 of the $1.5 Billion that Facebook will bring in this year is coming from the games.
Very true. Oftentimes, “mom and pop”-type businesses are merely tax shelters. The family’s personal purchases get tacked on to the business expenses, saving the family roughly 30% on everything that they buy. Small motels and hotels are notorious for this. Of course, they do have to make some profit in order for this to work. It just doesn’t have to be much.
But this is exactly my point! When I log onto facebook a good third of it is invisible because my brain has screened out all the ads - even if they’re for things I could potentially want I would far rather research my needs and find products myself, thank you.
Like facebook, it amazes me that Google can not only be valued so highly but actually make real money in the billions range through advertising for precisely the same reason.
Yes, I get this, but again having played these games I almost don’t get how they generate that amount of revenue. They’re mainly free to play, unless you’re the kind of person who really wants to spend real money on in game items or bonuses (so clearly enough people are or there wouldn’t be a working market in them).
