Mint Condition - November 7, 2022
Key elements of a successful hobby business
I write an email discussing the latest action in sports cards, fractional, and collectibles - all in 5 minutes or less. If you would like to receive it directly in your inbox, subscribe now!
Now Published on Sports Collectors Daily
I am happy to announce that my newsletters are now being published on Sports Collectors Daily, a leading site on which you can get hobby news daily. Be sure to check out this post as well as the other articles written regularly on the site!
Leading Off
If you take a step back, it is really interesting to think about how the hobby has evolved over the last decade, or even just the last two years. A few examples…When I was collecting in middle school, eBay was the end all be all if you wanted to sell your cards quickly and safely online. Now, there are a number of reputable platforms that can facilitate transactions just as securely. 10 years ago, there weren’t any mainstream ways to track your collection and how much it is worth from one day to the next. Now, there are a handful of startups offering “portfolio management” and “real-time price tracking.” A decade ago, group breaks were happening but only in the dark corners of the hobby. Now, they are common with multiple different platforms supporting their growth.
This is all to say that the hobby has changed a lot in such a short time, and both the number of people and companies in the space have grown tremendously. For each of the trends I shared, there are multiple different startups helping support that shift in the market. In an ideal scenario, everyone would be successful and as the hobby continues to grow, all boats would be lifted by the rising tide. Unfortunately, the economy doesn’t work like that and there will be winners and losers. There will be companies that are ultimately able to be acquired for several hundred million dollars (see: TCGplayer) and there will be those that will run out of funding and have to stop doing business. What are critical components of card businesses’ success? Is it the same as running any other business or are there unique aspects of operating in this industry that must be considered? What can companies do today to position themselves for the future?
Let’s discuss my perspective…
Mint Condition’s Take:
(1) Community is key
In other industries, community isn’t always an important component of a startup’s success. So many companies can be successful just by providing the most seamless experience for customers, a solution that’s better than current offerings, or a lower price point than competitors, but in the hobby, it takes much more than that. Building community is imperative for startups in the industry to be successful. They know that if they can achieve critical mass and the backbone of the hobby supports them, they will have a greater chance of being successful. And in this space, where no matter how big it grows it will always feel like a tight-knit ecosystem, putting customers first, not forgoing or forgetting the longstanding traditions of the hobby, and being authentic at all times are critical for companies looking to gain a mass following.
(2) Leaders must be a part of the hobby
I don’t think a startup can be successful in the hobby if it is being led by a CEO or others who are invisible and don’t immerse themselves in the industry. Card collectors looking to interact with the hobby in new, innovative ways aren’t only going to be drawn to a platform’s unique offering or cheaper price point. Rather, if they see that a founder or CEO is a collector, participates in industry podcasts or live shows, and engages with others on social media, they will be that much more likely to support a company’s new marketplace or portfolio management solution. Whether it be Nat Turner at Collectors, Ezra Levine at Collectable, or Leore Avidar at Alt, just to name a few examples, the ideas and changes they are introducing to the hobby have an inherent trust factor built in that an outsider leading one of these companies would not be able to achieve. Of course, a company’s product must be impressive enough to keep users engaged once they are in the door, but even if there are bumps in the road with a platform’s development or a change that users don’t like, companies run by collectors will be more likely to receive the benefit of the doubt and have more leeway in solving the issue.
(3) Some businesses will be ahead of their time, so they must pivot
In an industry in which its participants (card shops and collectors both) like doing things their way and at times are resistant to change, not all companies will be able to get people to adopt their way of doing business. However, this isn’t to say that a company will never be successful. Rather, it might just not be able to achieve success today. Some companies can be ahead of their time and ahead of the level of innovation and change that an industry is willing to currently accept. While a founder might have a vision for what the hobby should look like, if participants are not ready for it, there is only so much that a founder can do. Education and awareness can be helpful and that goes back to leaders being visible in the community to show the hobby what they are bringing to the market. But when companies run into this issue, it might mean they need to pivot their strategy. Businesses have a finite amount of cash to sustain themselves, and they don’t have the luxury of sitting and waiting for the stars to align. My suggestion would be to pivot to providing users with a less radical solution initially, get them in the door, and slowly start introducing parts of the ultimate product founders envisioned. You might have a million dollar idea, but if it’s not the right timing, you must pivot and bridge the gap until the industry is ready to make it worth millions.
(4) Capitalize on talent entering the market
We are entering a period in which a lot of labor talent, especially technically-focused (think computer software expertise), are being laid off from some of the largest companies (Facebook and Twitter to name a few). Companies in the hobby, specifically those whose backbone is a tech platform that needs to continually improve, must use this to their advantage. Being proactive in finding strong technically-focused workers who are looking for their next job will be beneficial in both the short-run and long-run. Several businesses in the hobby have recently raised new funding and are aggressively looking to build out their teams. The pool of technical talent is growing larger by the week, and card companies should be laser focused on attracting premium talent. In the race to develop the best platform for users or the quickest, securest marketplace, high-quality technical talent can put companies over the edge and provide a sustainable competitive advantage.
As always, I would love to hear your thoughts. You can reach me at jbmintcondition@gmail.com or on Twitter @jbmintcondition
Thank you for reading. Be sure to subscribe and share with friends and family. See you soon!