is Ben Rudgers

Where Do I Want to Send a Check?

This morning I read Fred Wilson’s You Are Working Too Hard And Not Getting Anywhere via HN.

In any business idea, I start by thinking, “How can I get people to give me money.” No doubt because of my background in a family of people who worked for paychecks. I suspect that most people think that way.

TACODA scaled their business when they answered the question, “How can a give money to other people?” As I noted in one of my comments, its easy to sell mailbox checks* to a business person. It makes them look and feel clever.

What I take out of Wilson’s article is that deciding who to mailbox-check may be a good starting point for developing a business model. Compared to getting Lamborghini to send me a check, sending a mailbox-checks to Lamborghini is trivial. Monetizing the process of mailbox-checking Lamborghini is non-trivial, but may be several orders of magnitude easier than getting them to send me a check.

It’s just a matter of recognizing this is just a cognitive shift, not a process shift. I could open a bike shop, but unless I want to write checks to bicycle distributors, I should look for something else.

*”Mailbox checks” come from my time with real-estate developers. They were the relatively small recurring payments from the deals done years ago – the rent from a twenty unit small-market subsidized apartment complex might only be a few thousand a month. But it was every month for many years.

It seems to me that figuring out the right people to mailbox-check is the essence of investing and taking investment – investor’s give money, investments give money back.