"A Stupid Frat-Boy Business"

Well, the final word is in -- Cafe Evoke is a "stupid frat-boy business idea" according to Ramit Sethi of I will Teach You To Be Rich. A stupid frat-boy business idea is an idea that sounds attractive on the surface, but ignores the graveyard of failures before it. It's usually hatched when a few guys get together, drink a lot, and end up talking about stuff that "should" exist. Sometimes the discussion gets entrepreneurial and they talk about a few ideas, which one of the guys will pursue the next day (when everyone else forgets about it). But frat-boy business ideas are expressly started to make money--they're portrayed as "companies"--and they ignore the fact that these ideas hardly ever succeed. If you're going to do something cool, why pick something that dooms yourself to failure? He has a list of businesses that he puts in this category including -- book exchanges, T-shirt companies, coffee shops and restaurants, social networks, and a few others. While I know he is talking about the foundation of these businesses and how many that start them are quick to enter the market, it seems that he is missing the fundamental element of each of these businesses -- business planning. Sethi mentions that the people who are starting these companies -- and if they are starting them over beer and a few friends he might have a point -- are doomed to fail and not make money. Tell that to Starbucks, Peets, or Caribou Coffee who all had to start somewhere. I understand that coffee and tea houses are a tough business to make millions of dollars and maybe that is the platform this student consultant (a profession that I would classify as something that should be on this list) is preaching from but with planning, there is money to be made with the worlds second most popular beverage and one of the most traded commodity on the markets. He even goes into this story about a guy who's cafe ruined his life that I posted about months ago. There was more to it than bad business with this guy. There was no planning. No personal assessment to make sure this was the right business for this "entrepreneur". If the planning is done correctly, it will give you a chance to fail on paper and not put yourself through the pain and suffering of opening a business and having it fail. The coffee business is not for everyone. It is not something that will put in you a Bentley or in a 12,000 square foot house within a few years but it is something that -- for the right owner -- will bring satisfaction and service to a community for years to come (and a decent wage if you do it correctly). The point isn't to mock these ideas. Well, yeah it is. If you're going to do something entrepreneurial, DO IT!! Don't let some guy's blog post stop you. But don't waste your own time. Learn from ideas that have failed and will continue to fail. Of course there will be exceptions, but you should try to get every edge to succeed you can. And if that means taking a few minutes to research your idea before you start, good. And don't ever, ever start a book-exchange company. Take his last advance and maybe spend a bit longer than a few minutes on it. If a book-exchange is right for you and after you have the market research and numbers to prove it can succeed, go for it. And one more thing -- as those who know me well will tell you, I am as clueless about "frats" as they come and far from being a member. (link via Business Opportunities Weblog) ...be bold Tagged: Cafe Evoke, coffee, bozeman, montana, startup, entrepreneurship