Welcome to Fully Baked, our Sunday newsletter where we validate one of our ideas faster than Sergey took over Google again 👀
In today's edition:
💡 An idea at the intersection of investing and playtime
🔬 We validated this idea - here's what we found
🚀 The go-to-market playbook for this product
🤑 What do the unit economics look like?
⚔️ How the competitive landscape looks
❓ Our verdict: is this a go or no-go idea
Let's goooo 🚀
🧱 Fractional LEGO Investing Platform
Blockrock
Available Domain: BrickShares.com
👤 Source: Edition #38 - this one's been sitting sealed in the vault since March 2024.
❌ Problem:
Who doesn’t love LEGO? In a world dominated by pixels and scrolling feeds, LEGO is still the king of the kids’ toy (that adults love too of course).
But the most interesting thing about LEGO sets is how valuable they can become.
Research on 2,322 LEGO sets found the humble brick returned 11% a year between 1987 and 2015, beating gold, stocks, bonds, stamps and wine. Fortune covered it. The Guardian covered it. You may have read it yourself. So why not create a platform around this premise? Here’s the idea.
✅ Solution:
A fractional investment platform for LEGO. Think Masterworks, but for investing in LEGO sets.
The business researches and buys sets it believes will appreciate, securitises them through an SEC offering circular, and sells shares to investors on the platform.
Sets are held for 5-10 years, then sold with proceeds distributed pro rata. In the meantime, investors can trade their shares on a secondary marketplace.
🧑💻 Prototyping: Google AI Studio demo | Remix this build
Rate this idea
🩺 Your Health is Your Wealth
As a founder, you obsess over your company's metrics. Revenue, run rate, churn. But what about your most valuable asset? Your health.
That's where Function Health comes in.
Function Health is a tech unicorn that offers a groundbreaking health membership that gives you access to 160+ lab tests and advanced, FDA-cleared MRI scans, all designed to detect diseases before symptoms appear for a few hundred dollars per year. Oh, and scans take just 22 minutes.
Because no amount of wealth matters without your health.
🔬 Our Validation Process
🖥️ Desktop Research
A 2018 paper called "LEGO: The Toy of Smart Investors" found LEGO returned at least 11% a year (8% after inflation) from 1987 to 2015, outperforming large stocks, bonds, gold and other alternative investments. It went everywhere. It is the reason this idea exists.
But after doing some digging, we found a second paper that needs to be considered. In 2020, the Journal of Risk Finance published a study built specifically to fix the survivorship bias in the first one. Using an exhaustive sample of 10,588 sets from 1966 to 2018, the bias-adjusted LEGO index returned 1.20% real per year, against 5.54% for equities. That’s a pretty important finding…
The survivorship-bias study doesn’t prove that every LEGO set is a bad investment. A specialist buyer could theoretically outperform by choosing the right themes, identifying scarce sets and buying before retirement. But you aren’t selecting the survivors. You’re predicting them.
The pitch is that the team would identify the small number most likely to outperform. But that turns this from a bet on LEGO into a bet on the manager’s ability to pick winners. And most of the obvious signals, like retirement dates, licensed themes, rare minifigures and signs of production scarcity, are already tracked by experienced collectors, who can buy the same sets directly without paying platform fees.
🚀 Acquiring Users
👥 Early Users
Manual, founder-led outreach will be your starting point.
Adult Fans of LEGO (AFOLs, as they’re known) are going to be your early users. You’ll find them in Brickset forums, Reddit and Facebook groups. Spend time with them, understand them, engage, then sell. Don’t forget about the surprisingly large brick-investing YouTube scene too.
📈 Scaling Acquisition
Content and SEO targeting searches like "best LEGO sets to invest in" searches is a good play here. Search volumes are high.
Sponsorships in alt-asset and personal finance newsletters could work well here too. Look at similar products like Masterworks and “take inspiration” their marketing playbook.
🤑 The Economics of This Business
🏷️ Pricing
Sourcing markup: buy sets, then offer shares at a spread above acquisition cost. This is the Rally model, where the platform gets paid the moment the offering closes, before the asset has appreciated a single penny.
Management fee: 1-1.5% of AUM per year to cover storage, insurance and the intern whose job is checking eBay sold listings. Masterworks charges 1.5% plus 20% of profits, so there's precedent for the number.
Secondary market fee: ~1% per trade once shares unlock after the initial hold period. In theory a nice recurring revenue line. In practice, thin markets mean thin trading, and thin trading means this may not be super lucrative.
Exit commission: get a cut of the upside when a set finally sells in year 5-10, aligning you with investors.
🧮 Unit Economics
Target CAC: low via community-led growth, this audience is concentrated and obsessive
LTV: theoretically strong if investors buy into multiple offerings.
Note: a 1.5% annual fee on an asset returning 1.2% real means your fee is larger than the entire return. A 1.5% annual fee would consume more than the category’s entire historical 1.2% real return, before accounting for storage, insurance and transaction costs. Oof.
⚔️ The Competitive Landscape
🏷️ Primary Competitors
Rally (2016, still standing) - the pioneer of securitised collectibles, from classic cars to a sealed iPod. An independent review of its SEC filings found 111 verified exits at a 1.20x median multiple and 6.8% median IRR, with a 16% loss rate. The lesson: even the category winner delivers index-fund-ish returns with none of the liquidity.
Mythic Markets (2017-2021) - fractional Magic cards and comics, closed its marketplace and auctioned everything through Heritage. The lesson: passionate niche communities don't automatically translate into a securities business.
The free alternative - brick investors already do this themselves: buy sets at retail, store them, flip them on eBay. No management fee, and they get to keep the LEGO.
🎯 The Gap
On paper, it's wide open. Nobody has built a dedicated, regulated, LEGO-only fractional platform. You'd have the category to yourself, a passionate ready-made community, and a famous statistic to put on the landing page.
But many teams walked past this exact gap on their way to building broader collectibles platforms, and a lot of them are dead. When a gap sits untouched next to a graveyard, it's a major warning sign.
❌ No-Go
Fractional ownership works when people want an asset they cannot afford outright. Most LEGO sets cost hundreds, not millions. Collectors can already buy one, store it, sell it on eBay and keep all the upside.
With the broad category returning just 1.2% a year after inflation, BrickShares only works if it consistently picks the small minority of winners. But the obvious signals are public, and experienced collectors can act on them without paying platform fees.
Any selection edge must then survive sourcing, storage, insurance, regulation, management fees and exit costs.
So this is a no-go as a regulated platform today. You could build a research business first, publish every selection in advance and see if you can consistently identify winning sets.
Only then should you even consider starting this.
👋 That’s All Folks
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