4 Great Investments That Sounded Really Stupid in the 2000s
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Dee Speed Ridicule and high return are often positively correlated.
In the 1970's, there was the pet rock craze, which reportedly made $15 million in its first six months. Now fast forward to 1989 — would you have invested in the penny stock of a homebrew computer maker? Well, a $5,000 investment in Dell that year would have made you $4.5 million by the end of 1999.
History tends to repeat itself. Here are four investments that sounded really stupid in the 2000s, yet ended in big paydays for their early investors.
1. Santa Mail
If you're a fan of the TV show Shark Tank, you know that it takes a bold pitch with big numbers to impress the sharks.
Well, how's this for a pitch? "New York City's Operation Santa responds to about 500,000 letters to Santa every year for free. However, every year millions of American children write to Santa hoping to get a reply. My plan is to capture some of that market and charge parents about $10 for a personalized letter from the big guy himself! Are you ready to invest, sharks?"
This investment proposition sounded really stupid back in 2001 and it probably still does today. However, entrepreneur Byron Reese stuck to his guns and sold 10,000 letters in his first year of operation. His company Santa Mail has delivered over 350,000 personalized Christmas letters since then. With over $3.48 million in revenue over the years, he's surely having a Merry Christmas now!
2. Lucky Break Wishbone
After Christmas, Thanksgiving may be the second most important holiday in the U.S.
For those of us who love to enjoy a turkey on that day, we often have to fight for a chance to take a crack at the lone wishbone. In 1999, Ken Ahroni thought there had to a better way than fighting over the dinner table for choice turkey.
He devised a plastic version of the turkey wishbone and started selling them in 2004. His goal was to give folks a chance to make a wish with every single family member and friend — not only on Thanksgiving, but also the rest of the year.
His silly idea paid off. According to Investopedia.com, within two years his Lucky Break Wishbone Corporation was generating nearly $1 million in sales. You can find his product in several retailers, including Whole Foods, Fred Meyer, and Urban Outfitters.
Now, that's a lucky break!
3. Yelp
I bet you that you have already used or will use Yelp this week.
While Yelp is now a household name, it wasn't always so. Back in 2004, Jeremy Stoppelman and Russell Simmons were riding high on their successful stint at digital wallet company PayPal. Jeremy and Russell decided to leave Paypal and start their own "high tech" company.
What was this revolutionary idea that made them leave their cozy job? An email-based referral network dubbed Yelp. On top of its silly name, Yelp's original platform was so complicated that it didn't attract investors beyond the co-founders' friends and family.
However, Jeremy and Russell didn't give up and re-focused their company around a review feature. The rest is history. Yelp's user base grew from a total of 12,000 in 2005 to approximately 139 million monthly visitors in 2014. Despite its growing revenue throughout the years, there were still plenty of skeptics when Yelp went public in March 2012 at $15 a share. A $1,000 investment in Yelp then would be worth about $3600 now.
4. Slanket
When you think of sleeved blankets, you probably think of the Snuggie.
However, that's not the original wearable blanket. That title belongs to the Slanket. Created in 1997 by Gary Clegg, the Slanket was first used as a way to stay warm while flipping TV channels late at night in a cold dorm room. This investment idea sounded so stupid that Clegg waited until 2005 before fully committing to it.
His first run of 1,200 units sold out in seven weeks — a sign that he had to move really, really fast to keep the market. He enjoyed a successful run of QVC sales and was finally ready to introduce a cheaper version, called the Snuzzle, to big box retailers. Instead, in the fall of 2008 the Snuggie aggressively entered the market and became the new king of sleeved blankets. As of 2013, Snuggie has pulled in more than $500 million in sales.
While the Slanket is still selling, it has been estimated that the Snuggie has outsold the Slanket 20-to-1. The Snuggie has been such a hit, that there's even a version for pets!
If you snooze, you lose!
Ghandi said it best; "First they ignore you, then they laugh at you, then they hate you, then they fight you, then you win." These four ventures are proof that dedication to your ideas, no matter how much they may be ridiculed, pays off in the end.
What "crazy" investment from the 2000's do you wish you had jumped on?
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