💀 Terrible Businesses

Yes. This is the City Chad, your financial whisperer in charge of bringing the Zen into your wallet. Let’s tame the forest of uncertainty!

In this week’s edition:

• Markets: 🛍️ Mixed Bags

• Article: 💀 Terrible Businesses

• News: 🌵 Lose-Lose for Everyone

• Chad Of The Week: 🇺🇸 Vivek Ramaswamy

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MARKETS: 🛍️ MIXED BAGS

It’s been a mixed bag lately.

Some things are doing well… and others not so much.

And it’s not just between asset classes (e.g. stocks vs bonds). It is within them too!

What caught our eye recently is the big difference between the US and Chinese stocks markets.

Pieter Levels put it best here:

The Chinese economy keeps struggling and the US just keeps innovating and growing.

It’s impressive how good the Americans are at creating shareholder value.

We have talked about this at length already…

But a good story is worth repeating! Just like the one your dad kept telling about the fish he almost caught that was this big.

What to do with this information? Well you may be tempted to just sell China and buy the US. But be careful.

Things tend to revert to the mean and trying to time the markets or pick winners usually ends in tears.

Crypto as a whole took a big plummet as Bitcoin broke down its resistance around the $40,000 mark.

Ethereum got the collateral damage of Bitcoin and the added rumor of the Ethereum Foundation selling around $2 million of its reserves.

“No me gusta” was the collective scream of crypto bros across the Globe.

But hey, this is crypto. What do you expect? An easy ride? Nah, bro.

ARTICLE: 💀 TERRIBLE BUSINESSES

TLDR: No matter how much you love a business idea, you’ve got to remember that not all businesses are created equal. So it is important that whatever you do, you go into it with your eyes open. It may save you from tears!

• ❤️ To Each his Own

• 🥘 Restaurants (and Bars)

• 🛍️ Retail Boutiques

• 🌊 Wantrepreneur

• 📚 Bookstores

• 💪 The Chad Takeaway

❤️ TO EACH HIS OWN

No one is debating that starting any business can be very fulfilling.

It just hits different when you see cash come in from your very own entrepreneurial venture. Something that at some point was just an idea in your mind.

And as they say “if you love what you are doing, you are already succeeding.”

But let’s press pause on that thought for a sec.

Some businesses are just not big money makers. No matter how much drive and passion you put into them.

So let’s dive right in into four different businesses that will definitely not be killing it this year.

🥘 RESTAURANTS

Seems weird, right? I mean, eating will never get out of fashion.

But restaurants are a complicated animal to tame, and in fact, 60% of them close in their first year.

You need more than your extra secret recipe that your family passed on from generation to generation.

You need a well-oiled procurement system (that's getting all your ingredients without breaking the bank), predict how many hungry mouths you’ll feed (forecast demand), and deal with the wild world of food storage.

You don’t want to be that guy with a mountain of wilted lettuce, do you?

Restaurants typically see action during lunch and dinner so there is a mad rush to make bank in a short window… followed by crickets (a.k.a. “off-peak hours”).

Also, the restaurant scene is packed.

Even with people spending more dough on dining out, your local joint is duking it out with big names like McDonald's and that hip new sushi spot down the street.

So how can you still make money preparing food?

You may need to get creative and consider a different approach. Enter the dark kitchen.

No, this doesn’t mean not paying your electricity bill. It means that you prepare your dishes behind closed doors and take advantage of the surge of delivery apps.

No storefront means a huge cut on overheads while also having much simpler logistics. Your clients can just eat at their home.

The problem is that most people want to get into the food business to actually welcome people and sit them at tables. If that is you, I love you! I really enjoy going to restaurants.

But get ready to deal with the high probability of having to close doors quickly.

Oh and you can apply a similar logic to a similar business… bars. Sorry to slip this one in too. It is pretty hard to make money from this fun-sounding venture.

🛍️ RETAIL BOUTIQUES

Pretty much everything retail is getting hammered against e-commerce.

More and more stores are shrinking and shopping malls are at a record high of empty premises.

On the contrary, online malls that never close.

These digital heavyweights are like the superstores of the internet, offering everything from socks to sofas with just a few clicks.

Add to that because sales would happen upfront, you need to find a high traffic spot, which probably will also have a high rent to start.

Retail boutiques need to be more than stores; they need to be destinations.

So if you still dream of having your own real life boutique, how can it survive? Personalization is the key.

Try to offer an experience that there’s no way to be replicated online.

Something Instagrammable... think about great customer service.

As brick and mortar owners say, now more than ever they live and die by how good of an experience they can provide.

🌊 WANTREPRENEUR

This one's a bit of a curve ball. It’s not really a business per se, but an attitude to business that is doomed to fail. We hereby present the “Wantrepreneur”.

This style of doing business (or actually not doing business) can be seen in any industry. But it is most commonly spotted in the “Tech” space.

The name says it all. Someone who does everything but actually making money as a businessperson.

The path of the wantrepreneur is often littered with grand visions but lacking in the stepping stones of validation and consistency.

We have all met one at some point… captivated by the glamor of becoming the next Zuckerberg or Musk, they try to 'boil the ocean' rather than starting with a single pot.

They can be great at raising money, but terrible at actually making it.

Wantrepreneurs hop from one venture to the next without grounding their ideas in market realities. They are always envisioning the million-dollar jackpot but neglecting the practical first step of earning the first hundred dollars.

They see that as below them *facepalm*.

The antidote to this pattern is not less ambition, but more focus—starting small, validating early, and growing with intention!

Also focusing on less glamorous industries (like we talabout on Starting a Boring Business), can really push you to avoid the Wantrepreneur death trap.

📚 BOOKSTORES

It’s one you probably knew was gonna be on the list. And it is not without great grief that this beloved business joins this list because I love them.

Reading books? People still do it. The publishing industry? Believe it or not, still with strong sales. The twist? Brick-and-mortar bookshops are struggling to get a slice of that pie.

It just has too many natural predators to survive.

E-books changed the way people read. Fewer physical books mean fewer reasons to stroll into a bookstore.

And online shopping is like the convenience of microwave meals for book lovers. Trying to out-muscle Amazon in the book game might just be as impossible as dodging rain.

Another nail in the coffin? Audiobooks, which post stronger sales every year. They saw a 10% revenue increase in 2022, and that’s just flexing at this point with eleven straight years of gains.

So, how do bookstores manage to withstand the test of time?

The key here is differentiation. Some of them, like Peter Harrington books in the UK, specialize in rare, obscure and very hard to find books, aiming for the collector’s market.

But most others successfully transitioned into becoming “literary cafés”, becoming sort of a social pub. You can add selling lattes to your book sales.

😎 THE CHAD TAKEAWAY

In the world of business, just like in life, it's all about going into it with eyes wide open.

Knowledge is power after all.

So now you know what kinds of businesses and attitudes to business are best to avoid if you want to make the big bucks.

If you still want to give them a go, the key is not just to survive but to thrive by embracing change and creativity.

Whatever you choose to do, make sure you know how much money it can actually make you and that number fits with your life goals.

NEWS: 🌵 LOSE-LOSE FOR EVERYONE

The border crisis in the US Southern border is alive and well.

And the latest episode in this saga relates to Biden’s standoff against Texas Republican Governor Greg Abbott. So what happened?

In short, the state of Texas put up razor wire to prevent illegal border crossings. Biden and his crew objected. And finally the US Supreme Court allowed this Monday to let federal agents cut the wire.

Now this sounds like a victory for Biden. But is it?

Of course not.

Now, how do you think it looks when federal agents are standing up against state officers and the National guard to basically facilitate illegal immigration and promote human trafficking?

No matter how woke Dem voters are, it’s not a good look.

What’s Biden's other option, to back down? Not a good look either.

This is what happens when you try to outwoke everyone.

Egg on face for Biden.

But worse still, it is the US and human trafficking victims that lose out in all of this.

CHAD OF THE WEEK: 🇺🇸 VIVEK RAMASWAMY

What a refreshing thing to see in politics. A man that has the guts (and space) to eloquently say what the many are thinking.

Sounds simple, yet hardly seen.

Vivek Ramaswamy was a Republican presidential candidate.

He became an overnight sensation in the realms of Twitter and beyond. He has now gracefully pulled out of the Presidential race to support Donald Trump.

But what made him our Chad of the Week is how he has dealt with provocation and controversy in the last few weeks.

It was like watching Neo dodging all those bullets.

Exhibit A: The man took a classic bait attempt by a Washington Post reporter and flipped it on its head.

Here's where Vivek shows his Chad energy.

The WaPo journo asks him “if he rejects White Supremacy”. Vivek starts off with the expected "of course I condemn any form of vicious racial discrimination".

But he then takes a sharp turn and challenges the very premise of the question.

He suggests that the real issue isn't what the reporter implies, but rather the institutionalized racial discrimination baked into systems like affirmative action.

Bold. Chad move.

This isn't just about throwing shade or making headlines.

Ramaswamy is highlighting a deep-seated issue in American discourse. He's calling out what he sees as a hypocrisy in the system.

Exhibit B: Vivek is unfazed by 7-Eleven joke

The Babylon Bee (a parody website) made a (somewhat crude) joke with the headline “Trump Promises Vivek an Administration Position Running The White House 7-Eleven”.

Most people were hoping this would enrage the man. And maybe cause some controversy in the Republican camp. But what happened instead?

The man just laughed it off. Chad energy by the gigawatt.

Anyway, whether you agree with him or not, one thing is clear: Vivek Ramaswamy isn’t just playing the game, he’s changing the rules.

And in the world of politics, that's what makes him our Chad of the Week.

So, hats off to Vivek, for not just walking the walk, but talking the talk in a way that's got everyone listening.

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