This is a bad time in the world and in the economy. Could it be a good time to open a new business? Maybe – if it’s the right one. In this article I’ll take a look at a couple of ideas that occurred to me. This isn’t my normal mission here, but maybe it could help some people in what’s coming.
I do not believe the Corona Virus is finished with us. Although it looks like state authorities are about to open up businesses again, I have my doubts about the wisdom of doing that, and it also seems unlikely that things will stay open. On the contrary, I think we’re in for a longer haul. And when normal returns, it will be a new normal – I saw one study projecting that over 40% of jobs lost now will not come back. So an alternative could be a good idea.
I make one suggestion to people considering a new business. Make it pay immediately unless money isn’t an issue for you. This isn’t a good time to go out on a limb.
The two ideas I’m going to discuss are pretty different from each other. The first is something almost any adult with a car could do. The second is far more specialized but could be used as a template for anyone with such a specialized background in various things. Neither should involve an outlay of cash at all, and both are “scalable” (can be ramped up and leveraged). Both are based on current realities.
Restaurant Food Delivery
As everybody knows, most restaurants have been forced to shift from in-store dining to curbside pickup or delivery. And you may know that they are relying on certain delivery service apps. For a much fuller discussion of the way this is hurting restaurants and the way the companies involved make money and use their power, check out this link: Uber-Grubhub: How the Pandemic Is Launching the Era of Online Platform Regulation. To summarize the article very briefly, the delivery service apps are charging up to 30% of the price of the meal for delivery. Some (few) jurisdictions have mandated a maximum of 15%, and some have required that tips be given to the drivers, instead of what appears to be the prevailing custom of having them go to the apps.
The money charged restaurants is killing them. I’m told that there is also a direct charge to consumers as well sometimes, and there is another danger of which restaurant owners may, or may not, be aware. But I know.
The way most phone apps work is not by charging for their use. Do you know how they make their money? They make money by selling data the apps generate to big data processing companies (“Big Data”). Food delivery apps are creating a lot of data. Of what? Of restaurants and their customers, of addresses, food preferences, time preferences, spending habits, and net delivery income. If you owned Joe’s Pizza, would you want Sam’s Pizza, or Frank’s Italian Food, two blocks away, to know all these things about your business?
Not unless you’re crazy. And do you trust Big Data not to sell that information to your competitors? Again, not unless you’re crazy. But restaurant owners might not know what the delivery apps are, or could be, doing. And they may not have a choice.
You could give them that choice. You could call up Joe’s Pizza and offer to deliver for them. Make your best deal, and see if you can make it pay. It’s low risk physically if you’re careful, and if you already drive, you’re risking only your time, financially. You’d be local helping local business and local people, and you would be thwarting, to some extent, Big Data (which I think is a significant social benefit). There could be regulatory obstacles, of course, and eventually you will need to take it seriously as a business, of course, but those things wouldn’t stop you from starting. And as you learn, you can figure things out.
Dungeons & Dragons Dungeon Master
Dungeons and Dragons (D&D) is a “table-top role-playing game” (ttrpg) that several people can play. You create characters and navigate a “dungeon,” which is a made-up world inhabited by a large variety of creatures, many of them hostile, and some with missions for you to perform. Your character starts at a certain level of skill and talent and gains experience and items as you navigate the dungeon. I played the game in college and found it addictive just like that. There was a computer game based on D&D which had overall goals – a “game story” of which you were a part. Whether that’s part of a dungeon master’s trade I don’t know.
An amateur dungeon-master was facing eviction and a great need to earn money but was worried about leaving the house and possibly risking the life of at-risk members of his household. I suggested he consider being an online professional dungeon master. I know that gamers, and especially D&D gamers, are often techies who have not been as hurt by the Corona Virus or social distancing, so the customers for dungeon masters should have money. But if they’re social distancing, people who were playing the game in person might want to do it online, but how? They’d need an online dungeon master.
D&D is an intensely social game, with interaction between player-characters and the dungeon master, and between player-characters as they face various battle scenes and strategic choices. That’s what makes it such a fun game. An online dungeon master would need a video app. The person to whom I spoke also said he needed a computer program costing $300 and microphone, another $100. So that was a $400 risk – that he could not afford to take, and which I said everybody should avoid anyway.
And anyway, who knows whether online dungeon mastering would pay? How would you find out without spending a ton of money?
Here’s how you solve both of those issues. You advertise, for free, in Craigs List or whatever online advertising forum you can, as long as it’s free. And what do you advertise? Online dungeon mastering, of course. Figure out how much you would need to make for it to be worth it to you, and how much people are willing to pay, and if those two numbers intersect, you have a start. But you still have to get $400 to set it up, how do you do that? You sell prepaid subscriptions. If it was going to cost $50/month per person for one evening per weekend, you offer a prepay price of $25. When you have 16 customers paying that, you buy your equipment and start.
Note that I just made up all of the numbers I used (except the equipment), from what the market would pay to how many evenings per week you would do. I just wanted to illustrate the way prepaid subscriptions could get you started. That would be true of any board game or, actually, any other service you might sell, at a profit, if you needed capital to start. You can get it from the people who want your service – and looking for those people helps you learn how valuable the service is and what the demand for it is.
I believe the market is going to be very tough for wage-earners or people with jobs dependent upon physical customer contact for quite some time, and I also think that many jobs that previously existed simply won’t come back. If you can find something where you are not an employee and which does not require a lot of customer contact, I think that would be a smart thing to do.