The Business Model

There are two types of leverage that maximize revenue: tech and media. Tech can mean anything from software to hardware to heavy machinery. Media, of course, means... media. Books, podcasts, videos, newsletters, and things of that nature. Three, if you count capital, but that is only after profits have been earned.

Keep in that in mind while I go through the next step of conditions.

If I'm asking for money to purchase equipment in order to produce food, then it must mean that the business model will be selling... food, right? No. To sell enough food in order to produce a 8, 10, 15% return on investment, and the full return in a 5-10-15 year period, then that will require a lot of land and a lot of workers.

If I'm asking for $2.5m, and at a 10% annual return, then in sum, using simple interest, I would owe about $5m. Compound interest would be about $6.5m. With compound, then that means I would need to generate at least $6.5m in profits over 10 years. An average of $650,000 a year. Profits. That means top line revenue would be a minimum of $2m a year. And I will want profits, too, so we're looking at maybe $3-$5m a year in revenue. Of course, growth would not be linear. So in all likelihood, the bulk of that return would be generated in years 7-10.

As I stated in another post, land would not necessarily be the problem, but labor will be. However, because of the sheer amount of goods needed to generate $3m a year, then land might become a problem.

In addition - with the way things are done on farms and given the labor market, a laissez faire management style would not be the best style. As a result of my lone wolf solitary nature, then there would be no founder-market fit in regards to agricultural products and an adequate return.

I would prefer to have a maximum of five guys working for me. Maybe there could be ten or fifteen. And it would be my right hand man that manages the others. I do not want that responsibility - the liability on my hands. Of course, that could be construed as an excuse, and it is, but it is a valid excuse that would have real ramifications if not accepted. You would and should not expect a squeamish person to become a trauma surgeon.

Do not assume that means I will not sell food. It will not and cannot be the breadwinner, so to speak. So what will be?

As of right now, I do not have an answer for tech. Software, I mean. In the course of action, I may realize a software problem, or even a hardware problem that could have a substantial market. But that is not guaranteed. Of course, nothing is guaranteed. However, I do like to believe in Definite Optimism.

If the main revenue stream is not food and it is not tech, then it must be media. I will start with the lowest rung - twitter, a newsletter, and a youtube channel. From there, I will go into self-publishing. I will start with a coffeetable book of culinary and agriculture adventures.

I will focus on Beauty and Awe. I am not going to go for the educational, home-steading market. The book will be presented in the same vein as the Aviary. It offers Beauty more than it offers Practicality. At least, that is what the reviews say.

There are, naturally, arguments that Beauty is Practical. In terms of economics, then Beauty can be Utility. Beauty is a goal and objective that we can maximize. We have aesthetic judgements and preferences.

In fact, in some cases, we can assign objective monetary value to Beauty. Of course, the minutiae of tastes and preferences could be intangible and subjective. Although it could be perceived as intangible, it does affect purchase decisions. As an example, if given identical t-shirts, and if a consumer will only make a purchase if their preferred color is available, then that taste becomes tangible. In other words, there are transactions that will only occur if aesthetic preference is available. That is the monetary value to Beauty.

I do not need to produce a book that appeals to either the general public or those who have already purchased a coffee table book. I do not need to appeal to the homesteading market, either. However, I do need to appeal to those with an appreciation for Beauty. Art. Stone and Brick. Blood and Bone. Fauna and flowers. To those who still speak of Michelangelo and Shakespeare, Monet and Picasso, Poe and Whitman.

There is a bit of irony - that last line is not to be taken literally. If it were to be taken literally, it would transform the market from a sea to a pond.

There might be a lingering question you have in mind, an objection. You may be thinking, how on earth will an impractical book solve the problem to factory farming? How would it build a clean and natural food supply?

As you might have caught on by now, I like my optionality. I like figuring out alternatives. So, of course, there will be a couple ways to do this.

• Provide Educational Materials. I'll do research and development and forward that to experimental farmers. But farmers geared towards production. Not a gentleman farmer (read: hobbyist) such as myself.
• Introduce a fellowship program. Could be towards restaurant concepts, new and experienced farmers, projects concerning adjacent infrastructure and distribution, and so on and so forth.
• Financing. Different from the fellowship program. Fund projects such as meat processing, fiber processing, leather tanning, quick-service restaurants, etc

The simple premise is that we'll make money from the high-margin media. Then, we'll subsidize the hard good projects with the excess margin.

So as a more succinct re-statement: even though the main purpose of this project will be to produce a clean and natural food supply, our core business will be media.

There need not be a home run. There need not be virality. Base runs are not guaranteed, sure, but everything runs a risk of failure. It is my belief that actions in the market are less important than the time in the market. Time in Force, in other words.

And to tell you the truth, I will concentrate my efforts so that that the return on investment comes within 5 years. Of course, luck plays a role, but fortune favors the bold. My Definite Optimism showing again.