Batch brew #18

Vertical integration and Capitalist Camping

Hey, the Caffeine Capitalist is here! ☕

Time to pour your espresso-tonics with ice in this hot summery weather, so you are less depresso.

Camping as a capitalistic endeavour? Let’s jump into the business model!

+ enjoy some older VC wisdom from Founders Fund.

4 minutes and 48 seconds this time.

Welcome to 13 new subscribers from the last Batch! 🙏🏻

Dept. of Tiny Thoughts

“Formula for startup success: Find large highly fragmented industry with low NPS; vertically integrate a solution to simplify value product.”

- Keith Rabois @ Founders Fund

One of the key assessments a VC does before investing in a venture is analysis of the market. Through size of the market, growth of it and also competitiveness.

Just smaller number of markets have low competition, usually the new technologies and deep tech start-ups can have the advantage of not having too many competition (yet). But how about older and bigger markets?

The key factor lies in the fragmentation of the competition. Are there any dominant players or high number of smaller ones? And how about the satisfaction of the customers on that market overall?

This short summary from Founders Fund summarises the thinking well.

Vertically integrate and provide more valuable product with better customer experience than the rest of the competition on the vastly fragmented market.

No need to create your own market to be successful.

Dept. of Insights

Turning Camping into Capital: A $3M/year Glamping Venture

Take a gulp of your cappuccino as we share a fascinating story of a couple turning glamping into gold. They've crafted a $3 million per year business by setting up boutique tents near major national parks, and with 75% occupancy, they recoup their investment within the first month. The next six months? Pure profit.

Their secret lies in strategic land selection within a 30-minute drive from the crowd-pulling national parks like Olympic, Yellowstone, Bryce Canyon, and the Grand Canyon. But before they venture into the land hunt, they smartly validate demand with a placeholder Airbnb listing.

Once demand is confirmed, they strike a deal with a landowner and sign a year-long lease, investing no cash upfront. If a site performs well, they commit and buy the land. Their lean business model involves initial investment in the tents, which is made back in a month.

A majority of their bookings flow in from Airbnb or other OTAs (80%), while a growing social following drives the rest. The journey isn't without obstacles - obtaining permits, managing staffing, and weather uncertainties being major ones.

The couple's future plans? They're eyeing higher-end cabins in their top-performing markets, and if it all goes as planned, they might explore franchising these cabins. In essence, their $3m glamp-operation strategy includes partnering with visionary landowners, validating demand, buying land, and potentially pivoting into franchising.

Could this glamping goldmine work in Europe? Absolutely. Europe's diverse landscapes and thriving tourist spots could be fertile ground for a glamping venture. Navigating local regulations and gauging demand would be crucial, much like in the U.S.

Despite the cultural diversity of Europe potentially posing challenges, it also opens doors to cater to varied tourist preferences. The rising popularity of sustainable and unique vacation experiences could place glamping right in the European market's sweet spot.

Just a little side note - if this glamping business idea has piqued your interest, leave us a message. We might have an opportunity in this area on the horizon.

Thank’s to Danny for shedding light on this intriguing glamping business.

Dept. of Twitter Thread Research:

1/ In the market for a new business ideas? Nick Huber has got you covered!

2/ The Evidence? Yup we seem to be getting more and more numbers out regarding the current freezing temperatures in the fundraising market.

Dept. of Visual Research:

Yup it’s that time of the economic cycle, just do it!

Fundraising Cheatsheet

News from our portfolios & where to shake hands:

  • Finally the summer arrived so no significant events and conferences to meet at in the coming weeks. Enjoy your espresso tonics during hot summers!

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The Caffeine Capitalist is a bimonthly newsletter written by Slavo Tuleya, Andrej Petrus & Martin Nemecek. It is written in partnership & in support from ZAKA.VC and Chop Chop Ventures.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.