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Business Ideas #249: AI for Friendships, Vertical Farming...

Plus How Ballet Dancing Led to a +$1bn Exit

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Welcome to Half Baked, the newsletter serving up business ideas as mind-boggling as Google’s new quantum computer 🖥️ 

Here’s what we’ve got for you today:

  1. Business Idea💡: Using AI to foster friendships

  2. Drunk Business Idea 🍻: Taking a bite out of the $14bn chewing gum market

  3. Just The Tip 📈: Less vertical integration, more vertical innovation

  4. The Moneyshot 🤑: How ballet dancing led to a +$1bn exit

P.S: If you want to read any previous editions of Half Baked you can on our website and if you were forwarded this email you can subscribe here.

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Let’s get into it.

BUSINESS IDEA | STARTUP

AI Copilot for Friendships 🫂  

AI got your back

Available Domain: Palpilot.ai

💡 TLDR: A mobile application that serves as an intelligent assistant for maintaining and improving friendships

1. Problem/Opportunity

The Problem/Opportunity: When you’re young making friends is “easy peasy lemon squeezy”. Whether you’re in school or college you just seem to naturally meet new people and make new friends all the time. But when you’re older, making friends is…to stay with the lemon metaphor…difficult difficult lemon difficult.

While many apps focus on helping us to make new friends, what about all of our existing friendships? For many of us our existing friendships are like a garden we’re not tending to, slowly but subtly withering away. So why not build an app which helps us to maintain our friendships? This is what we have in mind.

Market Size: The global personal development market size was $48 billion in 2023

2. Solution 

The Idea: A mobile application that serves as an intelligent assistant for maintaining and improving friendships

How it Works:

  • A user signs up to the platform and is prompted to give details about their close friends. Over time it builds up knowledge about your friends and their interests

  • The platform suggests regular check-ins based on how frequently you want to contact certain friends and sends reminders for you to check in for meaningful touch-points (birthdays, life events etc.)

  • The platform also suggests shared activities based on mutual interests that are happening, like concerts or festivals that you and a friend might enjoy

  • Over time the platform could also build out its own messaging and calling functionality to create a more integrated experience

Go-to-market: TikTok will be your friend here. If you manage to go viral with a few videos you’ll be able to acquire users cheaply

Business Model: Ad revenue and affiliate revenue from event suggestions

Startup Costs: You could start this as a GPT wrapper, test the waters, then build from there

Competitors: There are some “personal CRMs” like Monica on the market

3. How You’ll Get Rich 💰

Exit Strategy: Exit to a dating app company like Match Group who could fold this into their portfolio of products

Exit Multiple: Social/dating apps typically exit at 10-15x revenue

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DRUNK BUSINESS IDEA

Recycled Chewing Gum

Chewing gum is a real double-edged sword. Sure it freshens your breath, but people leave it everywhere. So what can we do with all of the discarded chewing gum left under tables or on the ground? Well we have the solution.

Introducing our brand new recycled chewing gum product. We scrape chewing gum off the sidewalk, from under tables and anywhere else we can find it, clean and treat the gum then combine it to make a brand new gum product. It’s good for the environment and for your wallet.

The flavor can change in every bite. Clearly a huge opportunity…

JUST THE TIP

Trend 📈: Vertical Farming

Vertical farming is an agricultural method where crops are grown in stacked layers, typically inside controlled indoor environments like warehouses or specially-designed buildings. It's essentially a way to produce food in urban areas by growing upward instead of outward. And it’s starting to gain more and more traction each year. I wonder does this mean we have to call farming “horizontal farming”. The jury’s still out on that one. Regardless this is a huge space for the future.

Business Ideas

  • Vertical Farm Real Estate Business: Convert unused urban buildings into vertical farming spaces for people or businesses to grow their own crops

  • Urban Farm-to-Table Restaurant Partnerships: Set up vertical farms that directly supply fresh produce to local restaurants

TOGETHER WITH BELAY

Accomplish More. Juggle Less.

When you love what you do, it can be easy to take on more — more tasks, more deadlines, more hours – but before you know it, you don’t have time to do what you loved in the beginning. Don’t just do more – do more of what you do best.

BELAY’s flexible staffing solutions leverage industry experience with AI systems to increase productivity without sacrificing quality. You can accomplish more and juggle less with our exceptional U.S.-based Virtual Assistants, Accounting Professionals, and Marketing Assistants. Learn how with our free ebook, Delegate to Elevate, and leave the more to BELAY.

THE MONEYSHOT

How Ballet Dancing Led to a +$1bn Exit

In order to make it in the entrepreneurship game, you need to lean into an area you love.

Take this founder, who followed her passion for dance which eventually led to a +$1bn exit.

This is her story.

Payal Kadakia was born and raised in Randolph, New Jersey to immigrant parents who came from India to the US to get married.

As a child Payal attended an Indian wedding (would highly recommend) and at the wedding she was blown away by the music. This experience left a lasting impression on her and was the beginning of a lifelong love affair with music and dance.

Payal graduated from MIT in 2005 with a degree in Management Science and after graduating went to work at the prestigious consulting firm Bain.

She worked there for three years but, in her heart of hearts, she didn’t love what she was doing. She spoke to her Mum who told her to follow what she was truly passionate about, which is exactly what Payal did.

She picked up a job at the Warner Music Group and at the same time she founded and led a Bollywood-inspired dance troupe called The Sa Dance Company. But Payal’s big idea would come from an unlikely source…ballet.

One day she was looking for a ballet class in New York she could join, but she couldn’t find one. She wondered…could you build a search engine for fitness classes, similar to Open Table or Zomato?

She believed she could so Payal teamed up with her high school friend Sanjiv Sanghavi and in 2010 they founded Classivity. But over time the search engine model wasn’t working, so the team pivoted. They launched a new product which allowed users to try one fitness class at a new studio, which they then expanded into a subscription service.

In 2013 Payal brought on Mary Biggins to help the company to move in its new direction and they redesigned the platform completely that year.

And with a change in direction came a change in name in 2014.

Classtivity was rebranded to ClassPass.

With the new product launched ClassPass needed to attract their first 1,000 customers. So they came up with a compelling promotion. New members would receive a $100 Lululemon gift card if they stayed with the service for six months, a strategy that was designed to make their users build long-term habits.

After the rebrand in March 2014 ClassPass raised $2 million in seed funding. The app initially offered an unlimited model, where users would pay a monthly subscription fee and they could attend as many classes as they wanted to. This led to rapid growth, with ClassPass doubling or tripling its user base every 1-2 months. But this model was expensive AF since ClassPass had to pay for all the classes. This meant the company had to keep raising money.

In September 2014 they raised a $12 million Series A and in 2015 the company raised $70m across two funding rounds from General Catalyst, Thrive Capital and Google Ventures. Around this time ClassPass was paying studios approximately $187 million per year which exceeded their revenue by about $65 million. Yikes.

But the company kept growing and so too did the funding it received, raising $70m in 2017, $85m in 2018 and $285m in 2020 in a round that valued the business at $1bn.

ClassPass was a rocketship that kept growing, but as it grew it needed even more cash. Which is when Mindbody stepped in.

In October 2021 Mindbody, a software platform for fitness and wellness businesses, acquired ClassPass in an all stock deal. While we don’t know the exact terms of the deal, if we assume the valuation stayed flat from 2020, then it was a $1bn outcome for Payal and her team. Mindbody also secured a $500 million convertible debt investment led by Sixth Street to pump into the business too, so the business could keep growing to where it is today.

In 2024 over 2 million users took fitness classes on ClassPass and as health, wellness and longevity all become increasingly more popular, the company still has more room to grow.

All of which goes to show that in entrepreneurship you need to follow your interests. Payal’s killer insight came from the most unlikely place. She just followed what was true to her and it led her down the right path for her.

So follow your interests, they’ll lead you where you’re meant to go.

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