The rise of 'latch-on' businesses

A business that 'goes for the ride' with a core business thereby reducing risk significantly

I love this type of business lately and think it’s going to be a growing trend.

So what is it?

Well it’s where you enable an entrepreneur to build their own business that is sort of latched onto your core business, which already has traction.

You can almost think of it like building an app for Apple’s app store except without having to have an app store.

I’m creating a number of these ‘latch-on’ businesses for my Reviv company.

Let me explain more as I think this will be more and more popular in the years to come.

I’m opening TiktokShop in various countries as ‘latch-on’ businesses

The model looks a bit like this. I find someone in that country who I know and either is already an entrepreneur or wants to be one.

They set up Tiktok Shop in that country (eg. we’re already doing this for Germany, UK, Philippines). And to do that they need to have their own local legal entity (this is a TiktokShop rule).

Then after they set up the shop my team creates the SKU’s and sends a bunch of Reviv inventory on consignment (ie. they don’t pay upfront, but rather only when they sell).

And then once the inventory arrives we start selling.

My team sets up the ads on TiktokShop and we pay for them. We also help them with content that we translate for them (using HeyGen) and if we have creators we know in that country we ask them to be affiliates.

Then we split the margin that is made after all costs have been covered. Meaning we first take out the cost of the inventory, the ad spend, the Tiktok commission, and the shipping fees…. and split what is left 50-50 with the local partner.

It’s very much win-win

The local entrepreneur wins because they have their own business with very little risk. All they needed to do was invest a bit of their own time and whatever it cost to set up a simple local business entity (usually very cheap).

They don’t pay for inventory or ads or content or anything.

And they have a product that already has traction and we know can sell.

It is a win for us (Reviv) because we don’t need to go through the hassle of setting up a local entity in that country and maintaining accounting books. We don’t have to hire someone and don’t pay anyone a salary.

Plus we have someone that knows how the local market works and will be very motivated to make the business a success. Whereas we would likely not know certain local nuances that might be key to making the business successful in that country.

Also we throw these partnerships together in days and NOT months or even weeks. A simple agreement that we both sign and we are off to the races.

I’m now creating more latch-on businesess

We’re doing similar partnerships for a mobile tracking app we want to build, for a Shopify-based business in Brazil, and to sell on marketplaces in Russia.

The investment needed from us to be doing all of this? Basically just the inventory we send, which is not that big initially, and some support.

Sure, some of these partnerships may not work in the end.

But hey… we also set them up very quickly and cheaply and will be learning all of the time about who makes for a good partner, how to make it more successful, etc.

Plus we are diversifying our core business into more geographies and channels. And creating a foundation that will make it harder for clones to get entrenched. They will need to compete against us from day one.

Closing thoughts

Creating a successful business and getting product market fit is incredibly tough. It took me many years to finally find a model that truly ‘worked’.

But once something works your next problem is… how do i scale it in an effective way?

And when you’re bootstrapped you want to avoid anything that requires taking on lots of employees or large capital outlays.

On the flipside tons of folks want to be successful entrepreneurs, but are unable to. Especially given this backdrop of layoffs and unemployment everywhere.

But the deck is stacked against them. There are so many things you need to get right in order to be successful.

In my experience only folks who are both very good AND very lucky truly make it.

But what if you made it a lot easier for folks to become successful entrepreneurs? By giving them opportunities to create these ‘latch-on’ businesses that are significantly de-risked.

They still get to be their own boss and if it works they still get their desired state of ‘freedom’. Meaning they don’t have to work for some company and have a ‘boss’.

To me it makes so much sense from both sides.

It’s a bit like the barnacle and the whale. Each helps make the other successful.

Now the hard work… of making all these latch-on businesses successful! LOL