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8 stupid frat-boy business ideas

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First of all, let me say that I loved writing this.

See, when I was in college, I would walk by the Quad and see a poster for some new book-exchange service literally every week. “SCREW THE BOOKSTORE!!!” it would say. “TRADE YOUR USED BOOKS WITH THIS NEW SERVICE!” The idea is that bookstores charge too much, so why not give the power back to the students and let them trade books at the end of the quarter?

Perhaps one reason could be that this is one of the worst business ideas on Earth–yet it persists in thousands of colleges with many students pursuing the same dismal goal. Why?

Because it’s a stupid frat-boy business idea.

A stupid frat-boy business idea is an idea that sounds attractive on the surface, but ignores the graveyard of failures before it. It’s usually hatched when a few guys get together, drink a lot, and end up talking about stuff that “should” exist. Sometimes the discussion gets entrepreneurial and they talk about a few ideas, which one of the guys will pursue the next day (when everyone else forgets about it).

“No! Don’t do it!” I want to say. Do something else, but not that. It was a stupid frat-boy business idea. But I can’t, because this frat boy probably isn’t reading my blog (also, he is imaginary).

Now, a quick caveat: I totally admire people who take ideas and do something with them. It doesn’t matter if you make money or not for your first project; the biggest problem with doing anything entrepreneurial is getting started. I’ve written about this before (Chompz, On Greed and Speed). But frat-boy business ideas are expressly started to make money–they’re portrayed as “companies”–and they ignore the fact that these ideas hardly ever succeed. If you’re going to do something cool, why pick something that dooms yourself to failure?

Here are the worst stupid frat-boy business ideas:

  • Book exchanges. Without fail, college students love to complain about textbook prices. Also without fail, some joker on every campus in America will start a book-exchange service this week. Saving money and screwing the bookstore sounds nice, except for a few problems: Book exchanges are worthless unless there are a lot of people on it; this chicken-and-egg problem is really hard. Developing a website for this isn’t trivial. And although the creators love to proclaim this a “company” instead of just a project, they usually forget to create a way to make money. Finally, one minor point: NO BOOK EXCHANGE HAS EVER REALLY SUCCEEDED. I HATE TO CRUSH DREAMS BUT PLEASE FORGET ABOUT THIS.

  • T-shirt companies. We all love to think that our clever ideas will be so loved that thousands of people will buy t-shirts with them, but there are already millions of clever shirts out there. Seriously, search for funny t-shirts.

    Having started a t-shirt company myself (Bittershirts.com), I feel entitled to spend a little time on this. When I started mine, it was for one reason: To put some funny shirts out there and build my personal brand. 2 out of my 3 shirts were failures, but the 3rd one took off almost exclusively due to luck. THERE IS NO MONEY IN T-SHIRTS. It’s a hopeless business with no margins and horrible inventory problems. “But BustedTees does it!” you might say. Yeah, and I beat my friend Doug in H-O-R-S-E five years ago. That doesn’t mean I can be Michael Jordan.

    With all of that said, check out my famous dysentery shirt (I have girls’ designs/sizes too):

  • Coffee shops / restaurants. Although few college students actually open coffee shops, many of the people who do are suffering from the same stupid frat-boy business syndrome. It goes something like this: “Oh, a coffee shop! How cute! We can make a cute little place where people come and drink espresso every day!” I would be more than a little hesitant to invest in a business based on cutey feelings–especially one with high fixed costs, labor costs, and customers who (1) won’t switch from their regular place and (2) if they do, they’ll sit at a table the entire day. Also, see one man’s story of how opening a coffee shop ruined his life. Basically, this coffee example consists of any business idea that centers around a romantic idea (independent bookstore, bed and breakfast, etc).
  • Anything that is “the Netflix of ___,” “Flickr + ___,” or “MySpace + ___.” These companies had wild success, and now there are 50 million copycat companies. You are one of them. Also, maybe we’re just not ready for ideas like “the Netflix of furniture!” and “Flickr + Tic-tac-toe.” See this article for more: Startup Reality Distortion #4: Flickr, MySpace and Others Did It, So You Can Too.
  • Ideas that compete on price. I was worried about putting this one down until I heard a friend of a friend say he was going to start a service to compete with Wal-mart on price. WAL-MART, THE WORLD’S MOST TECHNICALLY ADVANCED COMPANY IN LOGISTICS AND PRICING. Anyway, listen up: It seems like competing on price would be a good thing, until you realize that when you lower the price, you usually make less money. People are completely willing to spend more for other things like design (Target), service (Ritz-Carlton), hot people (Hooters), etc. Don’t compete on price. Once you factor in things like time and gas costs, it’s very hard to compete against the scale of bigger stores. Also, you’ll get the worst clients–the ones you’ll have to pry money from–frustrating you with your low cash flow.
  • Discount cards. College students love to try connecting local merchants to their campus, negotiating deals, figuring out how to print a real laminated card, setting up a website, and more. They just forget one thing: customers. Hardly anybody buys these things, whether they save money or not. “But mine is the best because…” frat-boy creators say. Well, do they own a discount card?
  • Yet another social network. After Facebook took off, you could stand in line at any Silicon Valley McDonald’s and hear 15 people talking about starting their own social networks. “It’s different because…_____” they would say. AND YET, THEY’RE NO DIFFERENT! The chicken-and-egg problem is pronounced here, with fickle users who go from one site to another like roving vikings. (Remember, just a few years ago we all thought that everyone would be on Friendster forever.) Also, it’s not popular until it’s popular. In other words, early growth doesn’t mean much for later growth, and there’s a lot of luck involved. Will there ever be another social network? Of course. But the chances any individual one will take off are infinitesimally small. Just ask yourself: Would you use another social network?
  • Anything where you plan to make your money exclusively from ads. If your business consists of doing something and making money off ads, do some research and you’ll discover that for most situations, ads don’t pay very much. Really.

The point isn’t to mock these ideas. Well, yeah it is. If you’re going to do something entrepreneurial, DO IT!! Don’t let some guy’s blog post stop you. But don’t waste your own time. Learn from ideas that have failed and will continue to fail. Of course there will be exceptions, but you should try to get every edge to succeed you can. And if that means taking a few minutes to research your idea before you start, good. And don’t ever, ever start a book-exchange company.

Thanks to Chris Yeh and Noah Kagan for their thoughts on this article. Check out their blogs.

What now?
Read my section on personal entrepreneurship to learn about starting something cool.

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128 Comments on "8 stupid frat-boy business ideas"

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Hawk
Hawk
10 years 3 months ago

we were taught a similar thing in a software engineering class. “Don’t reinvent the wheel.”

student project team: “We’re going to develop (website).”

Prof: “Okay. How is that different from My Yahoo!”

student project team: “blah blah blah.”

prof:”How is that different from My Yahoo!”

etc etc.

The website, if it would be a success, would look at what people don’t like about My Yahoo! and provide what the users want instead. These people were really just trying to get out of doing something hard, but doing something they could still put on their resume.

Just another _blank
Just another _blank
10 years 3 months ago
One more for the record of dumb ideas: online classifieds. Do you know how many of these exist? Well, 3 years ago we had the brilliant idea of competing against eBay and Craigslist – a free classified site (with photos!) that would draw people with its ease of use and good looks. Long story short, after a LONG development process and a lot of money out the window, we finally launched. Got some press, started strong and even raked in a few dollars. Then the novalty wore off and we realized that we had a money draining albatross on our… Read more »
Ramit Sethi
10 years 3 months ago

YES! I can’t believe I forgot that one!

Doug
10 years 3 months ago

This post and these ideas are relevant now and absolutely true…but it wasn’t…and they weren’t until a decent number of talented individuals (or frat boys) got a lot of VC’s to dump $xxx million into them over the last X years, to prove the point. Some of those fratboys are at home today, blogging and watching Entourage after their subsequent acquisition and exit strategies played out.

Frazier
Frazier
10 years 3 months ago

You made that famous dysentery shirt? I’ve seen one with a blue background and white text, my friend Jason linked to it on his t-shirt blog Preshrunk.

If you came up with that first, kudos. Your blog is one of my favorites out of the 67 feeds I read.

Sudarshan
10 years 3 months ago

While I agree with most of your points

  • Anything that is “the Netflix of ___,” “Flickr + ___,” or “MySpace + ___.”
  • Yet another social network.

These two do ot seem right.
Infact even before Facebook there were a gazillion me too social networkng websites.
Similarly there will be room for the next Netflixs and Flickrs of whatever.
As you had written in an earlier post the execution is more important than the idea

Kirubakaran
10 years 3 months ago

Totally true. But a 100 such failures later, the “frat boys” will figure it out (the hard way – but probably the only real way). But at least they are doing something. Its the “all speak” guys who give me the creeps.

After all, like Paul Graham says, isn’t failing faster the secret? More mistakes and bad ideas please…

alec
10 years 3 months ago

Astericks on the ads idea

* Anything involving GoogleAds

Craig Clayton
10 years 3 months ago
First and foremost, I agree that a lot of people have these “unrealistic” ideas that have “been there – done that”. Some times though, you can take a concept and apply it to other areas. Obviously, communities are huge. You could make another MYSPACE or FACEBOOK, but why? Now, saying that, I dont think you could also NOT have other community pages that have profiles, but serve other purposes. I have an idea for a site that would be much different than facebook – but has varied streams of revenue. It would be a community. My friend, who is also… Read more »
Jason
10 years 3 months ago

But what happens when a frat boy doesn’t follow through with one of these ideas but someone with intelligence and a plan does?

One of the smarter kids in my class created a book exchange that was so slick that the bookstore asked the school administration to force its closure. But it’s still going strong and thousands use it each semester. Check it out here: https://bookexchange.byu.edu/

jmelesky
jmelesky
10 years 3 months ago

NO BOOK EXCHANGE HAS EVER REALLY SUCCEEDED.

Um, you are familiar with Half.com, right?

Financial Reflections
10 years 3 months ago

You make some pretty good points here. While it can be said that there are examples of successes in some of the ideas, the motivations behind the ideas are often flawed, as is the case with the coffee shop example.

And the slew of followers that come after any success is a great point. There are like 100 “Diggs” out there now.

It takes effort to come up with an original take on an idea, let alone an original idea. Then it takes a *lot* of determination to move that idea forward.

blah
blah
10 years 3 months ago
i think a university bookstore (rather than a book exchange) thing could work. you just can’t do a half-assed job of it: you need to stay on top of what is required for all the courses, have a computer in your little shop where students can just enter their classes/IDs/whatever and get a printout of everything they need, just like the actual university bookstore, but cheaper. and it needs to be correct, and you need to have helpful staff who can quickly get students what they need. most of the dumb-fratboy-cheap-book things are just flyers on a bulletin board with… Read more »
Kevin
Kevin
10 years 3 months ago

How about any idea that involves thermoelectrics? For example, there’s a guy at Case Western Reserve University who (unfortunately) got a grant to develop a thermoelectric-based kegerator because he got the idea drinking with his frat brothers. Obviously, this whole market is filled though because thermoelectrics have been around for decades.

Ivy
Ivy
10 years 3 months ago

You know that Netflix of handbags… http://www.bagborroworsteal.com? It’s a crazy idea, but it works and I was even tempted to try and “borrow” that latest season goucho Christian Dior bag. Somehow those sorority sisters thought of something different and I’ve seen copies of their handbag website too!

Eric Berlin
10 years 3 months ago

Love this post, but I somewhat take issue with the last two points (social networks and ad-based sites).

* Social networks — I agree with you BUT social networks are here to stay. There will be lots of losers but a number of winners. It’s an open and growing space.

* Ad-based sites — This I really disagree with. Online media lives off ads. Now, I’d not advise a “stupid frat-boy” to start an ad-based business, but I think it’s very viable for someone with good ideas and unbeatable work ethic/connections/parents with a spare bedroom.

Andy Triboletti
10 years 3 months ago
>Book exchanges O BOOK EXCHANGE HAS EVER REALLY SUCCEEDED. The most successful book exchange in the world is Amazon’s used book marketplace. I bought about half of my college textbooks from those places. >Ads Anything where you plan to make your money exclusively from ads. If your business consists of doing something and making money off ads, do some research and you’ll discover that for most situations, ads don’t pay very much. Really. Almost all of Google’s revenue is based on people making a living off ads. If you really don’t believe you can do this full time only with… Read more »
Random
Random
10 years 3 months ago

“Ad-based sites … I think it’s very viable for someone with good ideas and unbeatable work ethic/connections/parents with a spare bedroom.”

I am constantly hassled by impending millionaires asking me to build them their ad based website. I hate to burst your bubble, but if you think a website with any kind of meaningful revenue can be run out of a spare bedroom, with the investment that implies, you are totally delusional.

Martin
Martin
10 years 3 months ago

Now i want to hear about 8 nice ideas to make bussiness.

Jared Goralnick
10 years 3 months ago
Ramit- I hear you, most people’s ideas will fail whether they fit into the buckets you’ve allocated as “frat boy ideas” or whether they come up with something truly innovative. But as another respondent mentioned, the main problem with these ideas is that people want to “make a difference” but forget exactly where their bottom line is…they also tend to be very naive about marketing. Most college student ideas don’t work because college students aren’t necessarily ready to start a business. But the world has not proven that book exchanges will fail. In College Park we have a successful one,… Read more »
paul
paul
10 years 3 months ago

threadless.com is an online tshirt company started 5 years ago by two young guys and now revenues $1.6 million per annum

Darren Heitner
10 years 3 months ago

Great post, but I am not exactly sure why you call them “frat-boy” business ideas. I am at the University of Florida and I cannot begin to tell you how many new book selling/social networking/etc. websites have sprouted up recently, but a simple search on facebook shows that most of the creators are actually the farthest thing from “frat-boys.”

Anyway, instead of only dissing on the people who have the balls to startup their own ventures in college, maybe you should offer some suggestions about ideas that may work.

Pula Desh
Pula Desh
10 years 3 months ago

Horrible opinionated article. Give some rational explanations for your bombastic opinions, and maybe somebody would listen.

fartikus
fartikus
10 years 3 months ago

yet people are making money on some of these ideas…when i was in college, my housemate made a killing doing a discount card.

is everyone stupid?
is everyone stupid?
10 years 3 months ago

yet more people are not. are you people reading the article? it doesn’t say all of these are always failures, it says they are most of the time. which they are.

huey
10 years 3 months ago

i know what i’ll do, i’ll make another wiki! 🙂

just kidding, ramit, i think pbwiki is actually quite useful.

reid
10 years 3 months ago

You forgot eBay drop off store. I wish I had.

Ty
Ty
10 years 3 months ago

Well, apparently PBWiki isn’t all that great either. Or Yahoo might have acquired it instead of another Wiki service.

Anonymous
Anonymous
10 years 3 months ago
I have an issue with “I hate to burst your bubble, but if you think a website with any kind of meaningful revenue can be run out of a spare bedroom, with the investment that implies, you are totally delusional.” I am a 19 year-old full-time college sophomore, and I run an online business from my bedroom. I make about $100,000 a year profit, which I think is pretty meaningful. Obviously, I was lucky in a lot of ways, and not everybody can achieve the same thing, but its possible. With the internet, you can start a website for $20… Read more »
Nathaniel
10 years 3 months ago
There is the Toronto University Student’s Book Exchange (TUSBE). But I don’t think that was created to make money (since there is no way I can see to make money with the site) and it also had the cooperation of the university bookstore. Not to shill (I’m not involved with it, and since it doesn’t make money there’s no point to pay shills), but if you’re at Toronto and not using TUSBE, then you’re probably wasting a lot of money. The way TUSBE seems to survive as a useful service is that it allows students to markup their used textbooks… Read more »
wayolder
wayolder
10 years 3 months ago
So, from now on, anyone who fails with businesses based on any of these ideas (I’m sure there will be many) will be people who failed to listen to your advice. Of course, anyone who succeeds with any of these ideas (I’m sure there will be at least a few) will also be people who failed to listen to your advice. Where’s your pertinence? I could be flippant, and advise you not to start a business based on giving entrepreneurial wannabes such meatless advice about business, but there is some chance that you could be quite successful at such an… Read more »
Leon
10 years 3 months ago

Every idea is a good idea. The key is on evolution and innovation. There aren’t any starbucks if the co-founders think coffee shop is a dumb idea. Same goes to if Flickr founder thinks Yahoo! Photo is enough.

Shanti Braford
10 years 3 months ago

I make $3k per month doing 2-5 hours of work from ad-based sites.

No, I’m not a millionaire. But you can do the math — that’s $600 per hour.

Setup time for ad-based sites can range from a few minutes to a few long weekends.

To build a service that people are willing to pay for, it can take considerably longer. (many months, usually)

Obviously there can only be 1-2 Googles/Overtures, but those are ad-based businesses as well. Would you have given the founders of Google the same advice?

Great points though, Ramit.

vex
vex
10 years 3 months ago

yeah you shouldnt talk about how you cant make money doing things esp if you havent tried it.

Neville
10 years 3 months ago

Hahah…great post Ramit! In my college experience, I’ve met people who’ve tried starting EVERY one of those biz’s!

starkfist
starkfist
10 years 3 months ago
Your advice is terrible, and you have nothing to back it up with. You started an online t-shirt company with cafepress, with 3 designs, and your company failed? You just don’t know how to sell T-shirts. My sister bought 144 T-shirts from American Apparel, did some doodling and stitching on them, brought them to Japan, and sold all of them for $72 each. Remember those “Girls Kick Ass” T-shirts that were around in 1994? That guy made $1.2 million dollars in six months off of those. Some guy didn’t know how to start a coffee shop, so it is a… Read more »
Aaron
Aaron
10 years 3 months ago

I think business failure statistics are greatly inflated by people who literally wake up one day, quit their jobs impulsively, and start one of these eight businesses (or similar ones).
No planning or prep of any sort…

Bryan
Bryan
10 years 3 months ago

I’m a fan of your blog, but as a frat boy, I’m mildly offended at the way you stereotyped us, Ramit.

Stu Schaff
10 years 3 months ago
How did you decide upon the label “stupid frat-boy business idea”? Does this mean that the idea is stupid or the “frat-boy” himself is stupid? The list of “frat boys” who have gone on to do great things is quite impressive. My chapter of the fraternity I belonged to was home to Martin Leaf (Founder, Leaf Candies and Donruss Baseball Cards) and Ron Popeil (Inventor and Owner, Ronco Industries), among many illustrious others. These two “frat boys” had great ideas and stuck with them. And I would argue that they’ve been tremendously successful. I think that the list should have… Read more »
Dan Marques
10 years 3 months ago

I just wrote about this on my blog.

I think a more clear understanding of entrepreneurship is required on Ramit’s part. The ventures listed are lifestyle ventures, not every idea needs to be (or should be) the ‘next google’.

Andy H
10 years 3 months ago

This article was so right on, it’s not even funny…

george
george
10 years 3 months ago
Wow…What a pathetic article, not to mention web site. Who are you to tell people what will work and what won’t work? You basically just killed the dream of hundreds of people who might have launched a business here and made it successful, heck I have launched 3 of them and 2 of them are successful, with one being wildly successful. Furthermore, what credentials do you have to advise people on their financial situations or their future endeavors? The reasons these businesses fail is because someone sees a site like facebook and says wow I can do that, forgetting that… Read more »
Andrew
10 years 3 months ago

Amanda was wearing the dysentery T-shirt on yesterday’s Rocketboom.

crazy girl
crazy girl
10 years 3 months ago

yeah i worked for a student company that had a discount card business and it basically tanked after this year. i sold 20 cards and had so many left overs this year.

Levi
10 years 3 months ago

Although I do see lots of stupid tshirt companies, they don’t all fail. Look at http://www.johnnycupcakes.com for example, good shit.

Stephen M (Ethesis)
10 years 3 months ago

Hmm, when I was in law school we had a book exchange. Worked like a charm, had been going for years and kept going.

But, I found myself agreeing with the rest of the article, glad I read it.

John
10 years 3 months ago

My favorite part of this thread is the guy in #39 bragging about how Ron Popeil was in his frat. One wonders if the comment poster himself owns a Showtime Grill.

By the way, the best fratboy business idea ever, given to me by a drunk fraternity member friend, is this: A bar that sells gas.

Hawk
Hawk
10 years 3 months ago

#42 needs to CTFD. Figure that acronym out for yourself.

While I honestly have no idea how qualified Ramit is in terms of financial advice, I took this article to mean, “These are stupid ideas because they seem obvious, people will start them up without thinking, and they generally don’t succeed in the form they are started up in.”

If someone decides not to start MyDogPoopedOnYourTeeShirt.com , or PredatorSpace.com, I highly doubt we’re losing valuable business. [hint: I’m being funny with that last sentence]

G
G
10 years 3 months ago

>> I hate to burst your bubble, but if you think a website with any kind of meaningful revenue can be run out of a spare bedroom, with the investment that implies, you are totally delusional

i run a online business with no employees from my spare bedroom. I make more than 1 million/yr in net profit

Sudesh
Sudesh
10 years 3 months ago
Ramit, I disagree with your “making money from ads” concept. If you are someone like YouTube, yes you will have a problem making money from ads. Advertisers don’t want to associate their brand with crappy home made videos. However, if you are an online media company (for example) and you offer value (and have the traffic), you will and can make money from ads. Online ad spending is touching $25 billion according to some reports in the next give years and content companies have the most to gain from this. Don’t forget that HP or Intel doesn’t like to spend… Read more »
Robert
Robert
10 years 3 months ago

This has to be the worst article I have ever read. People fail, its just about getting it right. You think 50 years from now MySpace will be the only one? Be innovative! Revenue from ads are googles main source of money.

R. Kennedy
10 years 3 months ago
This is funny because I actually had the idea of starting a college text exchange when I was in school and thought it was the most original idea in the world. When I finally did some reserach, I found that it wasn’t exactly a novel idea. In-fact, the internet is littered with exchange sites, many with very little usership and as mentioned the success of these exchanges depends on students actually using them. So I decided not to start a text exchange, but as a side project I did start a site that tries to help college students talk about… Read more »
Matt Lauzon
10 years 3 months ago

You seem to have forgotten College Humor clones. Although even mediocre ones can turn a profit, they have to be one of the most common college ideas. I personally have heard about ten people discuss starting thier own since arriving at college.

Grady
Grady
10 years 3 months ago
Ramit, I must say I am disappointed in this article. As a proud second generation member of Sigma Chi, not only am I offended of your stereotype of “frat boys,” but would you not argue that college is about learning? Lets not kid ourselves, very little of learning at college happens in the classroom. Granted, some of the businesses might not succeed, but what the people involved with them should have learned throughout the process could be invaluable later in life. You should go into business with what you’re comfortable with, and what else are college kids more familiar with… Read more »
Sam Garfield
10 years 3 months ago
I agree with everyone except ads. It’s really easy to make money off of ads – even serious money. Just not on google ads. Look at your average semi-successful blog like lifehacker. 3.5 million pageloads a month and 5 ads running with an average CPM of $8. When you do the math you realize they are making over $100k a month, and this is just one of their 10+ blogs. There is a reason bloggers make $30k a year and it’s because blog owners aren’t going to miss that much money. The ad industry is 10x bigger than the computer… Read more »
Pragmatic Finance
10 years 3 months ago
The book exchange idea had crossed my mind earlier this year. I’m not a “fratboy” but I considered it when I walked by the bookstore as they were buying back books for the semester at prices much less than you could get on Amazon or half.com. I think you could create one to “screw the bookstore” but not really to make much profit. At least not any that would make it worth the time to set up the business, website, and market it across campus. You would need to have a very large group of friends in similar classes to… Read more »
sandy kory
sandy kory
10 years 3 months ago

nice post, ver provocative,
but i have to call you on this.

t-shirts: lots of traffic heavy sites are making a killing on t-shirts. google “t-shirts” and i promise you everyone in the serps is making serious cash.

online ads: umm…i think google and yahoo are doing pretty good with this.

social networks: lots of money to be made here. it’s tough to get consistent traffic, but if you do, monetizing it is trivial…see my two points above.

Noah
10 years 2 months ago

I agree with them all except the one about ad based revenue.
Ive amde great money primarily off ads in a variety of different venues.

Him
10 years 2 months ago

What is this world coming to? Frat-boys getting offended by being stereotyped? Have another beer! That’s what I did when I was in my frat house.

Those 8 ideas aren’t all crappy – as stated here in the comments many people have have successes with those businesses. But, as with any start-up, poor implementation and execution are surefire ways to fail. These are the business that seem deceivingly easy to start, but are equally as easy to fail.

Dr P
Dr P
10 years 2 months ago

I have a great idea – buy some cheap t-shirts, draw a design on them in coffee, traced from a book that I bought off one person to sell to another. I can sell these on my community site (with Sudoku) at a ridiculously low price that can be discounted further by purchasing my exclusive discount card.

Have I missed anything? Oh, yes – of course – each t-shirt could have a targeted ad, which is where I would make all my money.

Alistair
10 years 2 months ago

I agree that many of these ideas are destined to fail, but that doesn’t make them stupid ideas.

I made all my mistakes with an on-line t-shirst store before I started a ‘real’ business.

I knew I’d run it for 12 months then close it down, no richer than when I started.

The experience was invaluable and it only cost a few hundred dollars.

I’m glad I did that first, rather than my real company – mistakes in this industry are far more expensive.

Andy Higgs
10 years 2 months ago
I agree with some of the points you make; these are very common businesses amongst students, and often they don’t work. However, I don’t believe this is due to the concept, it’s down the to the way you run it. I know people who run t-shirt businesses, discount card schemes and book exchanges who are very sucessful. Its a question of lateral thinking and providing a product people will become intoxicated with. Maybe it’s different in the US, but I know a lot of entrepreneurial types who seem to capitalise on these sorts of ideas, mainly because they have no… Read more »
Sam
Sam
10 years 2 months ago

iwillteachyoutoberich.com is an infinitely bad domain name. It contradicts itself.

I’m going to start a new business selling domains. It’s called iwillsellyoureallyshortandeasytorememberdomainsawesome.com

Mikel Maron
10 years 2 months ago

Dude, I started a book exchange site that failed .. but it failed long before any elses failed!!

unknown
unknown
10 years 2 months ago

This story makes me want to go out and try to do every one of these. I mean, if 9 out of 10 businesses fail, then here is a great list of no-fault failures. I can get all of mine out of the way without ever stretching for a NEW enterprise to fail at.

Plus, it just feels like a great challenge for someone: stop whining about whether or not Ramit’s right, give us a really good piece of worthless anecdotal evidence.

In other words put up, or shut up.

Lou P.
10 years 27 days ago

Great post. Interestingly, I had a plan to start a t-shirt business when I was a college “frat boy” in 1998. I bought the URL for it and everything. But once I realized the difficulties in it that you pointed out, I decided to call it off…

Will
10 years 24 days ago

I agree. A lot of people start a business without research and end in failure. Maybe that’s part of a requisite learning curve for some people. Even with good research, it’s sometimes still hard to root out that magicical formulation of success when you’re new in business.

patrick
9 years 11 months ago

you fail because you haven’t put enought time into it. you can’t just do something half assed and think your going to make a lot of money off of something.

check out my myspace site.

http://www.myspace.com/kingpatrick1

Jon
Jon
9 years 11 months ago

Ok.

I am going to comment on the last point in the post…making money on ads.

My company publishes magazines for colleges around the country. We started the company in January and sold $350,000 during June, July and August.

We are operating on a 35-40% margin.

Projecting $1.2 million next year.

Jonathan
9 years 11 months ago

I think the point is that if you’re going to start a business, you have to be very serious about it. And it is very hard to compete against sites like Myspace and Netflix. They have a lot of money and you probably don’t.

It is very possible to make good money with Google ads, but it takes a lot of work and time.

Beez
Beez
9 years 11 months ago

The reason your t-shirt business failed is because your t-shirts are horrible.

All it takes is one good idea. I bet the guy who invented Big Johnson t-shirts is laughing at your article as he counts his millions.

Jon
Jon
9 years 10 months ago

As a frat-boy I resent your article – but you are correct. Having ran a successful online business for the past 6 years I am constantly pitched ideas similar to these, and it’s hard to tell people they won’t work, or to put it better – that it’s not worth my time to work on it.

John
John
9 years 10 months ago
My favorite posts here are the one that say something to the effect of: how can you say book exchanges aren’t a good idea! what about half.com? what about amazon.com? That might be a good point had you written the article before these companies existed, but does anyone want to start a company in direct competition of one of these companies (or Wal-Mart, for that matter). As for me, I think I’ll pass in favor of something a little more original. I guess many people don’t understand the numbers game. Any dumbass can tell you a horse is going to… Read more »
Munyaradzi
9 years 9 months ago

I’m shocked at the unwillingness of people in taking risks. Thats true entrprenueship…..taking risks.

Alex
Alex
9 years 9 months ago

Stupid frat boy business idea? These guys seem to have an interesting rev model.

http://www.techcrunch.com/2006/11/10/dormitem-regional-college-classifieds-in-rails/

moom
9 years 9 months ago

The key to a business like a coffee shop is going to be all about location relative to traffic and competition. As the article says the margin on coffee can be very high but you do need to sell enough coffees to cover the fixed costs. In my town here 4-5 coffee shops opened in the last couple of years where there was one before (and nothing else changed). Only one closed down so far which has surprised me actually that more haven’t failed yet.

Growth in Value
9 years 8 months ago

Am I the only one who thinks “THERE IS NO MONEY IN T-SHIRTS” would be a hilarious T-shirt slogan?

There’s a free frat-boy business idea for you all. I fully expect to see those being sold on ebay shortly.

huge art
9 years 8 months ago

I prefer japanese way of thinking: do what other people do but do it better. The fact is anything can be done better…

Mr Funny T Shirts
9 years 7 months ago
Some very good points here but I don’t think these ideas are necessarily bad ones, they are just ideas that lots of people seem to think will be easy, hence lots of people do them and fail. It is possible to make money with T shirts so long as you do it properly and think it through and understand where you are going to get your customers from. As for advertising this is similar, people think if they stick a few Google ads on their myspace page they will rake it in. But again it is possible to make serious… Read more »
Paul
Paul
9 years 7 months ago
Most so called “new business ideas” are just copies of already existing businesses. As another respondent mentioned the main reason numerous businesses fail is that people want to “make a difference” but fail to create something new and if they finally do, they usually fail in marketing. Let us face it. Small people as me have usually little chance to achieve something big alone without loosing sanity and money. I prefer to keep things simple and make rather small certain business instead of big one involving many uncertainties and risk. At http://www.business-idea.com I met similar guys like me looking for… Read more »
Iyad
Iyad
9 years 7 months ago
You can learn more from experienced people rather than professionals.. I had a coffee shop, ran it for 2 years. It always made money, not much, but solid + revenue. It was a coffee/snack shop before I took it over but it shut down; so I took it over because I had a vision. I removed the food, added Hookah (key unique product in this tiny town), after first year of operation, I added high point beer and wine. Saturday nights I had belly dancers. The point of this comment is if you have a dream/vision, go for it. No… Read more »
Marcus
Marcus
9 years 7 months ago

Before there was myspace and facebook there was FaceParty.Com and FaceTheJury.Com …

FaceParty allowed you to have friends, a network, etc.. it just didn’t have comments..

FaceTheJury is now basically defunkt and has now turned it self into some Free Online Dating site..

Before home depot there was Menards

Before Walmart there was KMart..

I see your point, and 99.9% of these frat boy ideas will fail..

Oh.. lets not forget the book exchange called..

Chegg.com

Which just recieved 2.2million dollars in Venture Capital this week. 🙂

popo
popo
9 years 7 months ago
Here’s a friggin genius idea kiddies: Start a blog. Yeah, start yet another tired blog that rants and raves about how stupid everyone else is, without actually offering anything constructive. Like talk about all the stupid business failures out there and cite a few poorly executed ideas as proof of your platform. Tell people that competition is the reason they’re ultimately going to fail. That, and lack of originality. (Because genius bloggers like you know that the only successful businesses are the ones that have never, ever, ever been tried before. Nature loves a vacuum, kiddies). And tell your readers… Read more »
Nick Pantic
9 years 6 months ago

hello,

I liked some of your explanations against easy businesses above, but I must suggest to that any of this business are not exploited in my country and across Eastern Europe, in it’s genuine form, on local language.
So people it goes on…

Best regards
Nick Pantic
Serbia

Sebastian Balaciu
9 years 6 months ago

good post, i like some of your ideas i’m not sure all of your conclusions are right.

Nat
Nat
9 years 6 months ago
I think a lot of the negative comments missed the point of the article… of 100 businesses that start any of these ideas – maybe 1-2% will be successful – these ideas are the most commonly applied – and hence – most commonly failed business ideas… if you want to do something successful either do something innovative or do something 10x better than the competition… and just a point re: the ads – google may have massive market capitalisation with approx $150 billion in shares – but its profit is still only around $1 billion per year – thats about… Read more »
Mr Zone
9 years 6 months ago

Also one more bad idea is posting in blogs just so you can put a link to your website.

brucemagnus
brucemagnus
9 years 5 months ago

what about stevepavlina.com or pr the guy at problogger.net. these people make 6-figure salaries from ads on their blog(s). i think that steve pavlina is right when he says that you can make money (from ads) as long as you’re producing great content (although it isn’t for everyone)

some links: http://www.stevepavlina.com/blog/2006/05/how-to-make-money-from-your-blog/ and http://www.stevepavlina.com/blog/2006/01/how-to-build-a-high-traffic-web-site-or-blog/

Alex Boutet
Alex Boutet
9 years 5 months ago

Hey Ramit

http://www.bookmooch.com works really fine. I’ve sent three books, recieved four. I manage to get more books than I actually send, but this book-trading system works fine.

😛

kidW3rd
kidW3rd
9 years 5 months ago

You are an idiot. T-shirt not make money? maybe if you had shitty text and clip art on cafe press tee. It’s not about selling the t-shirt, it’s about selling the brand.

Parker
9 years 5 months ago
Interesting stuff… I am a college frat boy currently and I have a t-shirt company, among other businesses. I have run my t-shirt line for 4 years and have landed it in 50 stores in 3 countries, on the jay leno show, the country music awards, and even had one design ripped off by Target. I feel that this article is discouraging, and you have to appreciate people whoa re able to start businesses at a young age. Usually the businesses that are started to meet a certain demand do the best. Businesses like Kinko’s, Domino’s, Jimmy John’s, Fed Ex… Read more »
yona
yona
9 years 5 months ago

Well how should I start hum—about the T-shirt business being “stupid frat-boy business ideas…” I strongly disagree to that comment. I think its a good business to be in. I have two store in Ocen City MD and each of them last year alone made $250k profit… so i am not realy sure what you are trying to say..” stupid frat-boy business ideas”

Scott
Scott
9 years 3 months ago
There’s only one good point that this article brings forward quite clearly. All of these businesses either WORK OR THEY DON’T. Am I the only one that realizes this is applied to ALL types of business, not just “frat” ideas? Some coffee shops work (Starbucks), some don’t. Some online bookstores work (amazon), most don’t. Some classified sites work (ebay), most dont… and not to mention the number of clothing lines out there that are bringing in enormous revenues. Will anyone ever attempt to make it as an entrepreneur if they listen to your opinionated (bullshit) article? The only paragraph worth… Read more »
tinky
tinky
9 years 2 months ago
There’s only one good point that this article brings forward quite clearly. All of these businesses either WORK OR THEY DON’T. Am I the only one that realizes this is applied to ALL types of business, not just “frat” ideas? Some coffee shops work (Starbucks), some don’t. Some online bookstores work (amazon), most don’t. Some classified sites work (ebay), most dont… and not to mention the number of clothing lines out there that are bringing in enormous revenues. Will anyone ever attempt to make it as an entrepreneur if they listen to your opinionated (bullshit) article? The only paragraph worth… Read more »
amit
amit
9 years 2 months ago
hey ramit… i dont agree with most of the points you’ve made as i believe that any business can be made successful.. its just that not all people can be successfull in all types of businesses.. for example,in the same way that you may not have been able to run a t-shirt business successfully, coke might not be able to run a supermarket or restaurant business successfully. Can you imagine that even big companies with all their clout,money, consultants,research and every other benefit they have on hand still fail in many new businesses they try.. All i am trying to… Read more »
Just another browser
9 years 28 days ago
Well, it seems to me that most of the people commenting on this article have taken some sort of offence at the poster. I haven’t even scrolled half way down and have come across several f.this and f.that types. All that I can say, in my own opinion, would be that such commenter’s have really missed the point of this article. There are so many people trying to prove the poster wrong by stating “Google”, “Yahoo”, “I make a million on ads”, “I make a million on t-shirts”. When in fact the poster is talking about college students whom are… Read more »
E-Rock
E-Rock
9 years 7 days ago

Well, it apparently why he is putting down those business ideas—
He obviously wants to start his own t-shirt businesses, cafes, and social networking sites and wants to eliminate the competition. Bravo

Dustin
8 years 11 months ago
E-Rock’s right yet wrong — if Ramit really wanted to kill the competition, he shouldn’t have written this article at all. He should have let the drunk (let’s be honest, they’re high too!) college students with an “idea” keep starting these businesses and failing, so a committed entrepreneur could step in and make a killing doing it right. I think a lot of the posters here miss the point: as someone else said, all these ideas can and have made money for people. There’s successful T-Shirt companies, coffee-shops, ad-revenue generating websites, etc. These businesses are run be entrepreneurs or by… Read more »
Bladelaw
8 years 9 months ago

“THERE IS NO MONEY IN T-SHIRTS. It’s a hopeless business with no margins and horrible inventory problems.”, followed by a link to purchase your t-shirt…nice.

Derp
Derp
8 years 9 months ago
Excellent post. Thank you. I don’t believe that these ideas are worthless. One can come up with a T-shirt company that is successful, but they would have to have good content or provide something unique. Actually, all of these ideas would work perfectly if they had a unique aspect to them, or if the people involved are really passionate about what they are doing. The problem is that most of them aren’t, and as you stated, most of these people are only trying to make money. They follow niches. “OK we need money! what’s making money right now? Starbucks? Let’s… Read more »
Dan
Dan
8 years 8 months ago
Ramit, I found your site about a month ago and, surprisingly, I agree with many of your opinions. I say “surprisingly” because I am a broker of mortgages so my views are typically very different from that of popular media and the crap I hear some of my clients come to me with. However, I must say that I resent being catagorized as on of those “frat boys” and I would say if you were to catagorize the group this blog describes it would be better described as “naive college entrepreneurs” or “drunk entrepreneurs”. I realize “frat boys” makes the… Read more »
John Cason
8 years 6 months ago

http://www.paperbackswap.com/ has successfully developed a “project” to swap books and make money by purchasing credits. The same guy has started http://www.swapacd.com/, and http://www.swapadvd.com/.

This is the only “swap” system that I have seen work.

mufaro
mufaro
8 years 6 months ago

personally i disagree with most of your points. i think that the only person who can limit you is yourself. you will never know whether an idea works until you try it out. the greatest business people started with an idea and took a risk by trying it out.

Shana
8 years 6 months ago
I think the point of this article, which is never stated clearly, is that starting a business without an understanding of the market niche, and having an understanding of what it takes to run a business, is what will make a business fail. Personally, I know someone who created a website based solely on (referral) ads for other websites, and he spent a few months getting it off the ground, and now he sits back and the website earns him 5 figures each month. The problem in entrepreneurship is not the idea, it’s the execution. And a couple points to… Read more »
David
David
8 years 5 months ago

Wow, it took a long time before a former frat boy trotted out the old chestnut about “don’t call a fraternity a frat, you wouldn’t call your country a…”

whatever
whatever
8 years 4 months ago

I don’t get this article, you can make money with all of this you just have to do it right. You shouldn’t compete on price? Because it’s hard? Do you live on another planet?

http://en.wikipedia.org/wiki/List_of_billionaires
Half of this list is full of people who competed on price

Andrew Kinnear
8 years 4 months ago

What a great list. Many of my ideas have fallen into this category. So many in fact that I started a contest for people to submit these kinds of ideas, put my own money in as the prize, and have no legitimate business model.

Win my $1000 by telling me and the judges what your genius has blessed you and your readers with lately:
RockTheTaskBar.com

Let me know what you think of the concept…

Your Worse Nightmare
Your Worse Nightmare
8 years 3 months ago

Stop writing to discourage entrepreneurs. Part of starting a business is rough patches and failures. Get a life and write about something positive.

business
8 years 1 month ago

Threadless(dot)com is making tons and tons of money selling shirts. Millions, with a startup cost of $500. But yes, most t-shirt companies will fail because they’re boring, mediocre, with no purpose or passion.

Fan-Dabi-Dosi
7 years 11 months ago

As I keep saying to an old school mate ‘ You can start a business with a couple a £’s’
All you got to do is rotate the money such as buy your first small amount of stock, sell that and with it you buy more stock and-so-on.
then before you know it your on your way.
Make sure you have your head screwed on. Only buy products that you know that’ll sell.

Luke101
Luke101
7 years 8 months ago

The guy at meshplex makes alot of money im sure. He has a guide on how to make money from articles for the rest of your life:
http://www.meshplex.org/wiki/Money/How_to_Make_Money_with_a_Website

Chris
Chris
7 years 8 months ago

I COMPLETELY agree with this article, mainly because we share the same sentiments. For those who think that this article is meant to be discouraging, get your panties out of a bunch cause it isn’t. I believe it’s just urging budding entrepreneurs to think outside of the box, and try to create something that hasn’t been overdone. Who gives two shit about threadless.com, T-SHIRTS ARE OVERDONE. I mean, c’mon its the 21st century. A lot of the businesses mentioned in the list just isn’t gonna cut it anymore in the future, so we need to step our game up.

Victor Teixeira
7 years 7 months ago
I just don’t agree. If everybody thinks this way there would be no Google, since the search market was already dominated by Yahoo, Altavista, Hotbot, AOL and others. But them the guys behind google just created a better product, created all the buzz and now they are number 1. Again, You Tube was not the first viceo sharing site, but the guys made the best video sharing site and now they are number one. Basecamp was not the first Project Management webapp, it’s not the most feature rich, but it’s the most successful. They have more than 1 milion customers.… Read more »
Jack
Jack
7 years 6 months ago

The stream of lame business ideas with which I’m assaulted is exhausting. What amazes me is how people continually come up with the most pathetically obvious ideas and seem to think they’re original,especially anything related to advertising, auction, job or dating websites.

I don’t bother trying to explain why they suck anymore, I just nod and say “you might have something there” while I slowly back out towards to door.

Gabe da Silveira
7 years 6 months ago

I’m reminded of this t-shirt–just substitute “ideas” in place of “questions”

Actually I wouldn’t be caught dead trying any of those ideas, but frankly, I think there are people out there who will make every one of them work. Any particular business idea requires the right characteristics in an individual to develop the potential. Without looking closer at how past ventures have failed, it’s silly to write off an idea because a lot of drunks have come up with it. At least that tells you there’s some demand.

mokane
mokane
7 years 6 months ago

Let’s not forget the fratboy entrepreneurs from the University of Florida who started a cocaine business; then sold it to an incoming pledge and his buddy. After running the business for a couple of years, they cashed out and sold it in turn. They used the money to start LensExpress. True story. Of course, they were eventually caught and spent time in prison, but LensExpress is going strong.

True story.

Dave
Dave
7 years 3 months ago
Did No. 5 while in College. You’re right. I learned a lot about how to not run a business. No. 1 was done “successfully” while in grad school, but only because its sole purpose was to get the students cheaper books at the Peoples Bookstore, which was staffed by the students. So not a “business” and no one got rich, but the students spent less. As a follow up on the Peoples Bookstore when I was teaching at a different school, my course materials were photocopied, that bookstore charging my students, but not giving me anything for it as an… Read more »
CARL
CARL
6 years 3 months ago

Stop stereotyping

MarselJ
MarselJ
1 year 24 days ago

I have my own idea of small business.So case actually that: I’m gathering content for my new web-site. Of course I hope for a large number of website visitors reside in multiple countries. And I want to set up this CDN http://cdnsun.com . Do I really need a Content Delivery Network or a simple hosting will enough?

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is.gd/CvFq3U
4 months 7 days ago

I’m gone to convey my little brother, that he should also visit this blog
on regular basis to get updated from newest reports.

Dmitriy
3 months 8 hours ago

A 100 such failures later on, the “frat children” will figure it out (the tough method– however most likely the only genuine method). Its the “all speak” people who offer me the creeps.

Neo
2 months 18 days ago

This article got me from the beginning because a friend approached me about starting the book store idea too.

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