Introducing Sticks & Bricks 🪵&🧱

Our new sister publication brings three brick-and-mortar businesses to your inbox every week

This week’s regular Thesis Driven letter came out on Tuesday and focused on the evolving role of branding in real estate. You can find it here. This note is about Thesis Driven’s expansion and future.

Since launching late last year, Thesis Driven has welcomed many hundreds of new paying subscribers and become one of the twenty largest business publications on Substack. Despite a chilly venture market for real estate tech, our focus on innovation in the built world has resonated with readers well beyond our expectations.

Today, we’re announcing the second publication in the Thesis Driven family: Sticks & Bricks.

Thesis Driven paying subscribers since inception. Who says proptech is dead?

Sticks & Bricks is the publication for entrepreneurs building or buying brick-and-mortar operating businesses. While Thesis Driven focuses on innovation in the built world, it’s not exactly tailored to the interests of someone buying laundromats or launching a pet daycare franchise—who has little in common with a multifamily GP or an institutional allocator. Sticks & Bricks is for the cash flow entrepreneurs of the built world, those creating the companies that venture capitalists like to call “lifestyle businesses.”

While Thesis Driven is high-depth but (relatively) low volume, Sticks & Bricks is the opposite: three bite-sized overviews of brick-and-mortar cash flow business ideas in your inbox every week. Letters will rarely stretch over 1,000 words, but each will come with an example P&L and (if applicable) guidance on typical purchase multiples in the sector. Given its broader audience, Sticks & Bricks subscriptions are a bit less expensive—$8 per month. Over time, Sticks & Bricks will add more tactical content, digging into business analysis, operations, finance, and more.

Why 🪵&🧱?

While the days of VC-backed brick-and-mortar businesses is likely over for some time, I’m a believer in the opportunity of “real world” businesses for a few reasons:

1. The real world is great. In other words, our impending move to the metaverse was much oversold. Humans are wired to seek out in-person interactions. Even as office attendance has sagged, retail and experiential businesses are having more success than ever. We need to, as the kids say, touch grass.

2. Lifestyle businesses are having a moment. The idea of buying or building cash flow businesses—as a path to freedom from both the 9-to-5 as well as the demands of venture capital—has gained tremendous popularity in recent years. And from anonymous Twitter accounts to expensive online courses to cash flow business coaches, a cottage industry has cropped up around enabling entrepreneurs to purchase and manage small businesses. Unfortunately, a large segment of this support ecosystem appears to be grifters, creating—hopefully—an opportunity for a voice that isn’t selling a $3,000 online course and $500 per hour coaching.

3. Software is increasingly winner-take-all. From AI to SaaS to marketplaces, the software business is increasingly challenging to penetrate—at least without taking on millions in venture capital and the expectations that come along with it. This isn’t 2012; incumbents are increasingly good at innovating their products and building strong moats to keep competitors at bay. While big software businesses will surely continue to be built, it’s a less fertile ground for low-barrier cash flow businesses than it once was.

This isn’t to say software isn’t important; rather, software has a key role to play in making brick-and-mortar businesses more successful. Software and online distribution in marketing, finance, operations, and more have made real-world businesses easier and cheaper to operate. And not competing against venture-backed competitors willing to operate unprofitable locations will be a tailwind for most entrepreneurs.

We’re not done yet

When I’m not writing Thesis Driven (or helping organize Play NYC, New York’s largest indie games conference), I’ve been spending time on a new product that will be a companion to the Thesis Driven newsletter: the largest database of real estate developers and the products they’re each building. I expect it’ll be ready for showtime this Fall, but shoot me an email (brad@thesisdriven.com) if you’d like to be in the private beta.

I’d be lying if I said I knew where Thesis Driven is headed. But I admire Packy McCormick’s hustle (Not Boring), Jessica Lessin’s savvy (The Information), and Andrew Florance’s vision (CoStar) and how they’ve each built their businesses. Content, data, and software tools can all have a mutually-beneficial and reinforcing effect in helping leaders, operators, and entrepreneurs run their businesses.

We couldn’t be here without all of you, our subscribers. Thanks for being a part of Thesis Driven; there’s much more to come.

—Brad Hargreaves