A wonderful example of the spirit of small business
One of the things we find delightful about our chosen field of work is that it opens our eyes to all sorts of unique and innovative small businesses. While not all of these enterprises fit our investment model, we still enjoy learning about a wide spectrum of markets where entrepreneurs see opportunity and work to fill demand with supply. As such, ahead of the Canada Day holiday, we wanted to share some insights into a uniquely Canadian idea: the market for rental goalies.
As the stereotypes would suggest, most Canadians are pretty into ice hockey. But, that enthusiasm is not limited to watching the professionals or semi professionals on TV. The sport is a shared common pastime enjoyed by youth, adults, amateurs, and professionals alike.
There is a bit of a problem however – to play ice hockey, you need an ice rink, and getting ice time is not free. The thousands of amateur leagues that generally play on weekends and weeknights have to rent ice time, which can run up to a few hundred dollars an hour in the larger cities. If a team has to forfeit a game because it doesn’t have enough players, not only does the team lose the game, it is also quite common for the league to charge that team a forfeiture fee.
Given the popularity of hockey in Canada, finding players to sub for your team is typically not that much of a hassle. The problem comes in finding goalies. Keith Hamilton, Toronto-based goalie for hire explains to NPR:
“The equipment to play goalie is quite a bit more expensive than it is for a standard player. And I guess there’s also – not many people are super keen to stand in front of flying rubber pucks. They prefer to shoot them.”
Hence, a goalie shortage. And whenever there is a shortage, market forces work in wonderful ways to find a solution: Enter, the rent-a-goalie market.
The business model is basically that of a temp agency. Goalie rental services sign up goalies, charge teams anywhere from $35-50/game, take a 20% commission and give the rest to the goalie. So over the past eight years, an individual like Keith, who is also a musician, has played over 4,000 games at a price of $40/game, which is a pretty darn good side hustle.
And in case you were wondering, yes, there is an app for that – the PuckApp. According to their website, they have a roster of over four thousand on-call goalies available in cities across Canada. From their website:
“When you need a goalie for beer league or shinny hockey, you download the app at www.puckapp.ca, you select the city you need, the skill level, the rink and the time,” Brennan Bleile explained. “It sends out a push notification to all the players … From there, the goalie gets to decide if he can make it or not.”
And yes! There are additional revenue opportunities. If you have a last minute request, it costs more. A late night game has a $5 surcharge. Rates change based on whether or not the game is 60 or 90 minutes. Goalies can be ranked based on performance, and better performers cost more. And, if your rent-a-goalie helped your team win the game, there’s an option to provide a tip. Finally, there’s a nice working capital component: the teams pay up front, but the goalies get paid at the end of every month.
Doing some quick back of the envelope consultant math, hiring out 4,000 goalies at $50 per game with a 20% commission, if every goalie plays 1 game a week, that’s a little over $2 million of revenue per year.
Obviously, this is not a billion dollar market opportunity. But those opportunities get enough press. We loved learning about this random niche market because it’s a great example of how enterprising people see problems and figure out ways to make money by delivering valuable solutions. This is the essence of entrepreneurship, an ethos we hope to preserve regardless of how big our businesses may eventually be.