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Reddit Entrepreneur - is this $12k/month entrepreneur idea real?

Opening Argument

A morning’s browse through Reddit Entrepreneur recent posts, I ran into a catchy thread.

As skeptical as I normally get regarding get rich quick schemes, this guy posted a Reddit Entrepreneur post that got lots of attention and positive feedback.  It’s surprisingly simple, and he uses Reddit Entrepreneur to dissect exactly how he does it.  He claims to make $12k/month by essentially charging $250/month from local small business owners (barber shops, hair salons, etc) for doing an indirect form of review filtering as follows:

  • customers get a business card offering a 10% discount if they send SMS
  • customer gets a reply text that asks if they were happy with the service
  • If they are happy with the service then it asks to leave a Facebook review, but otherwise takes them to a special “leave feedback” page
  • Small business ends up with bunch of high reviews (since bad reviews never make it in) and get a nice boost in organic customer referrals 

The Reddit Entrepreneur OP claims he only spends 1 hour/weekly maintaining this system and has good success rate getting new small local businesses signing up.  Many Entrepreneur Reddittors try to poke holes in the system, but he pretty elegantly answers all the questions.  

I still think this Reddit Entrepreneur OP is dancing on the border line of FTC regulations. Incentivizing online reviews is deceptive advertising per the FTC and could result in penalties up to $16,000 per infraction. He is offering the discount for opting into a marketing campaign by texting the number, and leaving the review is an add-on, but if there is any wording that makes a customer believe they're required to leave a review in order to get the discount you could be in violation of Section 5 of the FTC Act.

https://www.ftc.gov/news-events/press-releases/2015/02/ftc-stops-automobile-shipment-broker-misrepresenting-online

I think that it seems legit from legal perspective, but not clear how easy in practice to get local small business owners to pony up $250/month in return for a free 2 week trial.

Also, the fact that Reddit Entrepreneur OP posted a full recipe on Reddit Entrepreneur how to get this done, now has low barriers to entry and opens to  local price competition until margins are eroded. Still I thought it was a really clever way to bundle simple concepts to a practical solution and I enjoyed reading it.

What are your thoughts if it's a good idea or not?


https://www.reddit.com/r/Entrepreneur/comments/7r8317/how_i_stumbled_into_the_business_idea_that_makes/?utm_content=title&utm_medium=front&utm_source=reddit&utm_name=Entrepreneur

https://www.reddit.com/r/Entrepreneur/

natbarons
  1. Reddit Entrepreneur - is this $12k/month entrepreneur idea real?

    1 vote
    1. Yes
      100.00%
    2. No
        0.00%
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