This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hello and welcome, this is Side Hustle School. I am your host, Chris Guillebeau. Question for you, do you like the sport of baseball? And I do realize this may be more of a question for our North American audience, although perhaps our Japanese audience as well. Perhaps any listeners from Cuba or the Dominican Republic, maybe some other baseball-loving countries out there in the world, I'm not sure, but it is identified mostly as a North American sport.
And you know, as I was working on this episode, I had some fond memories, because once upon a time, I was a star T-ball player. T-ball, for those who aren't familiar, is kind of like junior baseball. You play it when you're like five or six years old, and it does require some advanced skills. It is pretty competitive. Lots of six-year-olds don't make the cut.
They're told they're just not good enough. And for me personally, I could have gone on and played professionally at age 10 in the T-ball leagues, but I decided to pursue a career in juvenile delinquency instead. So more on that another day, perhaps. Today's story is about two baseball players who advanced a bit further than me. In fact, one of them was actually drafted by a major league baseball team, and they create a subscription service for baseball bats that now serves thousands of customers, mostly kids and their families, all across the country.
This side hustle has grown to earning up to $50,000 a month. So let's take a seventh inning stretch to say thanks to our sponsor, and then it's Batter Up. [Music]
For Oscar Yarena and Eric Rico, baseball has always been a part of their lives. The two best friends who have known each other since they were five years old grew up playing the sport together in Miami. Oscar played through high school, and Eric was drafted by the Toronto Blue Jays.
When the pair decided to hang up their cleats, they wanted a way to stay part of the sport that didn't involve getting on the field or waking up with a sore shoulder. So when Eric moved back home to Florida, he decided to set up his own baseball academy. Although the kids he coached were great athletes, he often found they were playing at a disadvantage. Because they didn't come from an affluent area, they were often intimidated by teams that did. When those other teams showed up with the newish bats, the shiniest cleats, and fresh pressed uniforms, it intimidated many of the players.
As Eric observed, this meant they felt they were behind before the first ball had been thrown. Sitting down to catch up one day, Eric came to Oscar with this problem. He felt there had to be a way to make the sport more accessible and help all children have the best possible experience, regardless of their family's income. They explored lots of options before finally landing on one. What if they started a subscription program where people could rent bats for the time they needed them?
People did it for cars and bikes and electrical goods, so they could try it for baseball equipment as well. If it worked, it would allow them to bring the upfront payment of $300 to $500 for a new bat down to an affordable monthly payment. Over the next few months, Oscar and Eric invested a lot of time into working out their business model. They needed to find a price point that was affordable for families, but wasn't too high that they felt they'd be better off just going out and buying a bat. This was tricky because they would still need to buy the bats from the manufacturers, so they had to ensure the price worked for the customer and the company.
After crunching some numbers, they settled on a sliding scale of payment. Depending on the age of the player and the type of bat they used, the payment will be customized to be the lowest possible to the player over a 12-month contract. Younger players can expect to pay $17 a month, and the prices grow to $45 or more per month as you get older or choose a higher caliber of bat. In September 2016, they decided to run a test. They offered this new subscription idea to 15 people in Eric's Academy to see if it would work.
The model went well. They received lots of great feedback from the families, so they decided they'd open it up to a wider audience. Now here's where they made a significant choice, and this choice does diverge a bit from the Side Hustle School model that we usually recommend. Okay, so for their new company, which they called Bat Club USA, they wanted to scale early in. Instead of building as they wanted, they decided to go big right out of the gate, which was, of course, a bold strategy, but it ended up being a real home run.
All told, Eric and Oscar spent a grand slam total of $140,000 in startup costs. Definitely not a $100 startup, but they felt this was too good of an idea to pass up. Oscar says that 95% of those costs went to cover the inventory for up to 2,000 new members. So yes, that's correct. They went out to purchase 2,000 baseball bats.
Thankfully, they did get a wholesale rate, and Eric decided to store the bats at home in his garage. The other 5% of the costs went into infrastructure, including building a website and creating a payment system that would support these kinds of subscriptions. Despite their relatively large budget, Eric and Oscar also had to invest a lot of time into marketing Bat Club USA in person. They would set up stalls and attend major tournaments in Texas and Florida, where there were at least 100 teams in attendance. Because each team has 10 to 12 players, this meant they had the opportunity to speak to between 500 and 1,000 people over a weekend.
And targeting the kids was a smart move by Eric and Oscar. They knew from their playing days and the experience with their own kids that many of the children there would be looking to buy a bat. If they could get the kids on board with the service, that would go a long way in selling it to their parents. So in just over a year, how are things going? Well, it has indeed been a home run.
Out of those 2,000 bats, they now have 1,600 members. Eric makes daily trips to the post office to fulfill these orders, mailing baseball bats all across the country. When the rentals are done, those bats are then returned in the same fashion. So lots of baseball bats going back and forth in the mail. They also ramped up their advertising budget, which is spent mostly on Facebook ads.
They found this to have the greatest return on investment of any marketing channel they've tried. And the combination of all those things has led to Bat Club USA earning a recurring $50,000 a month. To be clear, as always, this hasn't been without its trials and tribulations. And especially because of their extremely rapid growth, there have been some problems. One of their least enjoyable experiences is when they found somebody trying to commit fraud against the company by ordering bats for the low monthly subscription fee, and then canceling their payment method while keeping the bat.
They were able to mitigate this problem once they stopped accepting prepaid cards and created tighter security around their payments. Tracking their bats users has also been challenging. In the beginning, Oscar and Eric tried to remember themselves who had ordered which bat and where they were in their contract. That worked fine when there were 15 people in Eric's Academy. It didn't work so well as they recruited hundreds and hundreds of new members.
They built a simple system with Stripe and Shopify that's working okay, but they're still looking for a better solution to the problem. So as a side note, if there's somebody out there who thinks they could have a side hustle fixing this problem for them, maybe there's a mission for you. And for everyone out there looking to start their hustle, Oscar and Eric recommend testing and retesting everything you do. Start small like they did and prove the model before you invest large amounts of money or time into it. Even though the side hustle school model is not to make big investments, in their case, they were able to make that large investment because they had confidence.
Going forward, these designated hitters want to look at how they can expand their model by breaking into other sports, perhaps providing a similar solution for other types of equipment. But for now, they're happy making the sport they love as accessible to as many kids as possible. You could say they've hit it out of the park. Awesome, congratulations to Oscar and Eric. You know, a subscription model is challenging enough when it's a virtual service, sending out a physical product like baseball bats.
Hundreds and hundreds, actually now in the thousands of baseball bats, surely adds a lot of complexity and logistics, but they figured it out, so good for them, good for their customers as well. I had to laugh to myself when I was thinking about them trying to manually track each new customer and where they were in their contract. It sounds so absurd, but it also sounds like something I would try to do. Like if I was getting into this business, I would think, "Oh, how hard can it be?" And then of course it turns out to be pretty hard once you have hundreds and hundreds of customers. So it's great that they've been able to overcome despite that challenge, and I really am impressed with their tremendous rapid growth.
Of course, that did require that substantial investment, but not only does it seem like it's paid off, it also seems like they did their research before they made that investment. So if you are pursuing a project that requires that kind of investment, do whatever you can to make sure you have that confidence, or at least as much confidence as possible before spending the cash. Okay, well, I hope you enjoyed this story. I hope that you're working on your side hustle, or at least you're thinking about it, making some plans. Perhaps it's time for you to step up to the plate.
Don't forget, inspiration is good, but inspiration with action is better. If you wanna see the show notes for today's episode, learn more about Bat Club USA, Stripe, Shopify, anything else I mentioned, just go to sidehustleschool.com/493. That is 493. And if you have any questions, if you have any comments, if you have a request, if you have something you'd like to share, feel free to give me a call on the Hustle hotline. That number is 8449 Hustle, or 8449487853.
You can leave a quick little message, and we'll play some of those responses on an upcoming episode. Thank you for listening. Have a wonderful morning, afternoon, or evening, whatever it is for you. I'll be back tomorrow. My name is Chris Guillebeau for Side Hustle School.
