BUSINESS IDEA | CASH FLOW BUSINESS

Home Video Restoration Agency 📹️  

HD Memories

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1. Problem/Opportunity❓

The Problem/Opportunity: Sam Altman, in a short intermission from his ongoing Elon Musk feud, recently took some time to write a blog post called “Three Observations” (which is well worth a read). He mentions that we’re starting to get a clearer picture of the future of AI with “systems that start to point to AGI are coming into view.” And interestingly as we’re starting to see AI’s future with more clarity, AI is now allowing us to see the past in more clarity too. Check out this diffusion based video restoration tool from Topazlabs which turned old, grainy NASA footage into crisp, modern cinema.

New technologies = new business ideas, which got us thinking about the estimated 8 billion home videos that were produced between 1977 and 2000. Why not apply this technology to these home videos to give us a clearer picture of our pasts? Here’s how.

Market Size: The global video restoration market is estimated to be worth $3.5bn

2. Solution ✅

The Idea: An AI-powered video restoration service which creates high quality versions of old home videos

How it Works:

• Customers provide old video footage to the business, either through uploading digital videos to a a portal or they can mail-in physical tapes to the business

• The footage is then digitized and remastered using this diffusion model. Once it has been cleaned up the upgraded footage is shared back with the customer through the online portal (and their original tapes are sent back too of course)

• Customers also have the option to get the upgraded footage edited into a short movie/short videos for an extra fee

• There’s also an in-home option where someone from the company goes to the customer’s house and performs the service in person (which you can combine with our previous idea from edition #134 around digitizing old photos) to create a full-service agency in this market

Go-to-market: You’ll need to do a lot of offline marketing here to hit your target market

Business Model: One-off charge for the service

Startup Costs: You could start this incredibly cheaply by offering to do this for people in your community for a small fee, gauge interest, test different pricing strategies then build from there

Competitors: There are companies that offer to digitize old videos, but combining the diffusion footage upgrades and the in-person service you could create a really unique business here

3. How You’ll Get Rich 💰

Hold: This could be a great cash flow business, but unlikely to ever get a big exit here

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DRUNK BUSINESS IDEA

Phone Case Cheese Grater

• Is your phone just... a phone? Can your $1,000 smartphone handle even a basic kitchen task? We thought not…until now.

• Introducing the GraterCase™ - the world's first phone case that doubles up as a precision grating instrument.

• The ultra-sharp, stainless steel grater surface ensures your phone is always ready to grate some cheese or zest a lemon, whatever you’re feeling.

• Note: We won’t be held responsible for any pocket shredding, don’t say we didn’t warn you.

Vote

• ✅ Yes this actually exists

• ❌ Nope you totally made this up

JUST THE TIP

Trend 📈: Vibe Coding

• Andrej Karpathy, OpenAI co-founder, has recently been tweeting about the idea of “Vibe Coding”, a term he himself coined.

• Vibe coding is basically letting an AI model handle the nitty-gritty of coding while you chill and give it high-level vibes about what you want. It’s coding on autopilot, where you trust the AI to do most of the heavy lifting.

• As AI gets better and better at coding (OpenAI predict the best programmer in the world will be an AI program this year) more of us will have to embrace the vibes and let the machines do the heavy lifting. Fine by me.

Business Ideas

• Vibe Coding Coworking: Create a live co-working platform where users sign on and code for a fixed period of time, after which they share their progress on their build

• Vibe Coding Bootcamp: A bootcamp which specilaizes in teaching users how to code in this new, AI-assisted way

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THE MONEYSHOT

How Illegal Streaming Turned into a $1.2bn Business

Napster. Pirate Bay. Limewire. Silicon Valley is full of tales of illegal businesses that made their mark before getting shut down in the end.

But these four founders managed to transform their illegal streaming business into a $1.2bn company.

This is their story.

Back in college Kun Gao, James Lin, Vu Nguyen, and Brandon Ooi were the best of friends.

They all attended Berkeley and after graduating went their separate ways. But the team kept in touch because together they were running their own side project that would eventually blossom into a billion dollar business.

Back in 2006 the foursome had built a YouTube-like platform which users uploaded videos to. Pretty quickly though the platform started filling up with one particular type of content…anime. Users would illegally download or record new anime episodes, translate them,add subtitles, and then upload them to the site. This approach quickly built their library, but (and I’m not a lawyer) was super duper illegal.

Their platform quickly gained popularity due to the growing demand for anime outside Japan, but they faced extensive criticism from anime licensors and studios for hosting pirated content. Despite the pushback the team doubled down and in 2007, the founders decided to quit their day jobs and work on the idea full-time, without pay or any prospect of funding, maxing out their credit cards to keep the site alive. Ballsy move.

The turning point came in 2008 when the founders decided to legitimize the platform. They secured $4m in investment from Venrock and started reaching out to license holders to get permission to host their content on the website.

On New Year's Eve 2008 the change happened and the founders removed thousands of unlicensed videos from the site overnight, reducing their content from thousands of titles to just 20 overnight, costing them millions of users.

But despite losing millions of users due to this purge, about 1 million users still chose to stay with the platform.

They had officially founded Crunchyroll.

In 2009 Crunchyroll began securing legal distribution agreements with companies like Gonzo and TV Tokyo, committing to hosting only content they had legitimate rights to distribute.

In 2008 they also decided to monetize the site, introducing a premium subscription service, offering ad-free streaming and access to simulcast episodes.

From there, supported by a general growth in anime’s popularity, Crunchyroll grew incredibly fast. They kept expanding their content library and over time entered new international markets, growing their subscriber count massively. In fact by 2017 Crunchyroll reached one million paid subscribers.

Crunchyroll was a cultural phenomenon, so much so that it was acquired twice in the space of two years. WarnerMedia acquired the business in 2018, which was then acquired again by Sony in 2020 for $1.2 billion. And since Sony has taken over growth has exploded.

Today the platform boasts the world’s largest streaming library dedicated to anime, offering 50,000 episodes and more than 25,000 hours of anime series. As of June 2024, the streaming service surpassed 15 million monthly paying subscribers. The company plans to hit 25 million paying subscribers in 2025. Turns out playing by the rules was the right call in the end.

In fact many companies charted a similar path to Crunchyroll. Uber, Airbnb and many other tech giants weren’t afraid to break the rules in the early days to get their ideas off the ground, although Crunchyroll pushed the boundaries here.

But here’s the thing…sometimes you have to break the rules in the early days to set yourself up for bigger success later on. So don’t be afraid to push the boundaries early on, as long as you keep yourself out of jail obviously.

Because in the early days you have nothing to lose and everything to gain.

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