Here’s a business that you can start for less than $5k that I’ve already validated for you.
Question: What’s the best brand of power cables?
The typical answer I get to that question is “I don’t know. I actually can’t think of a brand of power cables.”
My answer: “Exactly!”
No one has created a household name in the category of power cables…yet.
That’s the opportunity.
RV Power Cables
I would start with RV power cables.
Why?
It’s a smaller niche that you could quickly own.
RV Owners tend to have disposable income and a high willingness to pay.
New RV’s typically don’t come with the necessary power cables to plug it in to various ports at campgrounds or at home.
There are high margins to be had…especially if you nail the brand
In my research of this category, it’s easy to see 50-60%+ margins after paying all of your fees.
And RV Owners don’t just need one item. They need a bevy of cables and connectors to make their rig work in various situations. An RV with 50 amp capability (most common) will need:
50 Amp extension cord (for hard to reach poles)
50 Amp to 30 Amp converter (for parks that only offer 30 Amp)
50 Amp to 15 Amp converter (for plugging in at home)
50 Amp Surge protector (for protecting your rig against inevitable power spikes)
If you don’t have this equipment, you’ll pay dearly. I plugged a very expensive motorhome into a Utah State Park with 50 Amp service without a surge protector. A surge ended up frying many of my internal components including the refrigerator (which you have to remove the windshield to replace as it’s too big to remove out the door and they place the fridge in the unit before they build around it…crazy, right?)
Here’s your competition. A lot of “same-ness” isn’t it?
These numbers are compelling as is, but I think you can do even better if you had a compelling brand.
Brand
Have you ever seen a football player being hauled off the field?
What color is the stretcher?
It’s yellow, isn’t it?
That’s because the marketing Geniuses at Stryker not only made a great product, they made it yellow.
Suddenly, any EMT or emergency room equated quality with yellow. If you don’t have a yellow stretcher, you don’t have a good stretcher. Stryker stretchers quickly owned the market from the recipe of good product+striking color.
The same thing can be applied to a power cable business. Read on.
Ogre Cable Study
Years ago, at Movement Ventures, we wanted to see if people would buy a brand of cables that they had never heard of before. So we ran a painted door test.
First question, would people click on an ad of a brand they never heard of? And what was more compelling? Price? Quality? Or brand?
We ran $500 in Google search ads with the following copy.
Would you click on any of these if you were searching for power cables?
Which one?
Which one do you think won?
We were surprised to learn that the brand ad won. Here’s the results.
Armed with this data, we ran another test. We loaded up another $500 in Google and ran the brand ads to a landing page with cables we photoshopped to be green to fulfill on the brand promise of being made with 6% ogre skin. We faked videos of people pulling trucks out of the mud with these cables because they were so strong.
We allowed people to see a variety of cables (all photoshopped) in our store. When they added them to the cart, we would flash a message that said “Sorry, this product is out of stock.” We just needed the click data to be able to build a model.
From this conversion rate data, we were able to build a model where we could see with reasonable confidence that we could build an ecommerce brand of power cables and scale to a projected $2M in revenue in the first year.
That sounds great, right?
To us at the time, it didn't as we had created the venture studio to hunt for whales, not tuna. So we passed on the concept.
It still remains valid to this day. No one has built a recognizable brand around power cables.
What if all of the high end RVs suddenly started showing up with neon green power cables? Wouldn’t that make you wonder if they know something you don’t?
This could be your opportunity. I’ve handed it to you on a neon green platter.