Do you want to create a service with a subscription price of $1,000 per month? After all, with just 100 clients, you could generate over $1 million a year! Considering that in many countries, the number of dollar millionaires ranges from hundreds of thousands to several million people, starting with 100 clients is entirely feasible. Now, here’s an example of a service that you can offer to such individuals.
Project Essence
Long Story Short has just launched. There is no information on the website itself; you can only log in or register, which requires sending either an American ID or a social security number. It gives the impression that the startup is not interested in attracting users browsing the internet. And that’s exactly how it is 😉
Because Long Story Short is a marketplace for selling goods exclusively for wealthy individuals willing to pay $1,000 per month for a subscription to this service.
Currently, the marketplace features around 50,000 luxury goods from various categories — from gloves and scarves to watches and jewelry, and ending with cars and yachts. The startup promises to add new products to the marketplace every day.
Subscribers to the service don’t need to go through the purchasing process — they just need to tap on the desired item and click the “I want this!” button. After that, the service’s employees will contact the seller, purchase the item, check it for quality and authenticity, and only then deliver it to the buyer, who remains unknown to the seller. The seller cannot contact the buyer with newsletters, calls, or messages about promotions and special offers 😉
An additional feature is that the service’s employees will negotiate a discount with the sellers on the purchased items. The catch is that prices for expensive goods are usually negotiable even in regular stores, although not everyone knows about it, and some simply don’t want to negotiate. And if we’re talking about a whole channel of supplying buyers with expensive items, prices become even more negotiable. As a result, the service usually manages to secure discounts for its buyers in the range of 20-40%.
At the same time, the service has no intention of making money from markups for buyers or commissions from sellers. They say that they are satisfied with receiving membership fees. Well, with a monthly fee of $1,000, just 100 subscribers will allow the service to operate in a quite comfortable mode.
The startup was founded by two people — one of whom is a serial entrepreneur, and the other is an active business angel. However, at the moment of the launch, there was information that Long Story Short attracted $500,000 in investments. Whether it’s an American habit to launch startups exclusively with other people’s money, or someone from the rich potential buyers they tested the startup idea on decided to join them 😉
What’s interesting
Is that a similar service is not the only one.
In the spring of 2022, I wrote about the startup Myria, which launched a closed marketplace for goods and services that “you can’t just Google.”
As claimed by the founder of Myria, who previously managed a family investment office serving 48 families with a total wealth of $400 billion: “300,000 of the wealthiest individuals [in the U.S.] spend an average of $1.3 million per year each purely on lifestyle purchases, but still struggle to find what to spend these funds on. Renting a very expensive vacation home online is impossible. They can’t book appointments with the doctors they’d like to see online. Restaurants where they’d like to dine say that everything is booked eight months in advance.”
At the same time, Myria decided not only to be a closed marketplace but also a club where members can interact with people of their level — hence, it’s not so easy to join. To do so, one needs to first receive a recommendation from someone already in the club, confirm the legality and size of their wealth, and then undergo an interview with a representative of the service.
Membership in the Myria club is even more expensive than today’s Long Story Short — its cost starts from $30,000 per year.
As the founder says, in September 2023, they had 35 participants, but by the end of the year, they planned to admit another 85 people to the club. There is a waiting list of around 1,000 people, but the founder does not want to expand it quickly, admitting only a small number of new members at a time.
In March 2022, Myria attracted $1.6 million in investments, and in June of the same year — an additional $4.3 million.
Where to Run
The first general conclusion is that it’s better to take your positioning to the extreme. If you decide to sell something for the less privileged, sell it for the poor. Whether in a barn or without attempting to provide a high level of service — but at the lowest prices. If it’s for the affluent, then exclusively for the rich with a corresponding ambiance and service level.
Engaging in sales at “average prices” for the “middle class” is getting into a brutal meat grinder that, for some reason, most sellers strive to enter. In the process, you constantly have to defend yourself from buyers attacking you from two opposite sides. Explaining to some why it’s so expensive, and to others — why the same thing is so cheap, and whether there’s a catch with quality and status 😉
The funny thing is that there aren’t that many sellers for the rich. Even taking Russia, in the early 2000s, private banking and concierge services “licked” the client, and in decent restaurants, waiters stood along the walls, whom you didn’t need to call or wait for. A decade later, the level of such services descended to the general denominator of the hypothetical middle class without much distinction and respect 😉
Meanwhile, the number of dollar millionaires in all countries continues to increase. In 2022, in the United States, there were almost 26 million dollar millionaires, or 9.7% of the population; in Australia — 11.2%; in Spain — 5.9%; even in Russia, there were 353 thousand people.
Yes, of course, the dollar is not what it was in the early 2000s 😉 Nevertheless, affluent people make up a certain percentage of the population and are, therefore, a potential target audience.
If today’s Long Story Short believes that 100 subscribers are enough for the comfortable functioning of their service, then finding a hundred or so customers from several hundred or even tens of thousands of millionaires in the country shouldn’t pose any problems if they offer the right range of services and the necessary level of service.
And a hundred or so such customers, at a price from $1,000 per month to $30,000 per year — that is, annual revenue ranging from 1 to 10 million dollars — is almost the epitome of distant dreams for many startups aiming to capture a much broader potential audience.
As a result, a possible direction of movement is the creation of services for affluent people with a corresponding set of services, a matching level of service, and, naturally, at corresponding prices.
What services could you offer to such individuals? What will be their exclusivity?
About the Company
Long Story Short
Website: longstory.sh
Latest funding round: $500K, May 1, 2024
Total investments: $500K, rounds: 1