Don't Chase Business Trends, Do This Instead.
The latest trends and "hot and sexy" industries are not the best place for you to make money. In almost every case, you're better off applying this strategy.
One of my main business philosophies is “boring is profitable.”
Too often, young entrepreneurs flood into immerging and hot industries in hopes that they can cash in on a new trend.
In the 1900s, it was the .com bubble.
In the 2000s, it was web 2.0.
In the 2010s, it was social media, apps, and mobile devices.
Now, it’s A.I.
To be clear, there are obvious winners in any new and upcoming market. A.I. will create many millionaires and even a multitude of billionaires. I’m not implying that every trend is a net negative investment opportunity.
Rather, I want to point out the cyclical nature of the immerging industries that capture our attention.
First there is disruption. Then there is funding. Then there is over funding. Then once businesses start out competing each other, there is consolidation. After most of the failed companies go under or get acquired by the winning companies, the market regulates and finds it’s natural price points.
The point is, in almost every “hot and sexy” new market, the landscape is such that a few winners take home almost all the gains, and most everyone else walks away with nothing.
If you’re going to invest in tech, you need to win.
It’s for this reason that I genuinely avoid tech investments. I’m interested in consistent cash flow, and tech investments are asymmetric bets on potential huge payout. I don’t need that stress.
A Better Option
A few months ago, I listened to a Jeff Bezos interview on The Lex Fridman podcast. Bezos said something that really stuck out to me. He said that at Amazon, they aren’t interested in what’s new. Rather, they are interested in what’s going to still be here 10 years from now.
He said “10 years from now, people are still going to want low prices and fast shipping.” (That’s not a direct quote but that’s basically what he said.)
That really hit home for me. I’ve been thinking about it ever since.
Ever since listening to this interview, I’ve been asking myself the same question in many other regards.
What is always going to be valuable?
For instance …
For Stodzy Internet Marketing, we decided to triple down even more on generating high quality leads and inbound phone calls for our customers. We’ve debated offering new services that are more media driven and cool to talk about. But we killed all of those ideas because we know that generating high quality inbound phone calls and leads for our customers is ALWAYS going to be valuable.
For my portfolio, I’ve started thinking about industries that are going to be just as important ten years from now as they are today, so I’ve been researching boring and profitable industries, such as …
plumbing
roofing
lawn care
electrical work
moving companies
I’m also very interested in blue collar industries because the demand for the services is increasing due to demographic and economic changes, while the supply has gone down because everyone wants to be a YouTube influencer and no one wants to build houses anymore. (Shoutout to Mike Rowe).
Also for my portfolio, I’m slowly funneling my profits into rental properties. We plan on turning our current house into another rental property and there are units in young tech centers in The Philippines I plan to buy and rent out.
Boring And Profitable
It’s possible that you could be the next Mark Zuckerberg, but it’s not likely. It’s much more likely that you will become a millionaire by doing simple and important service work within your community and then investing your profits.
As I get older, I am less excited and less impressed with inflating my ego. I’m interested in cash flow and profits. I have learned that the people who make money are usually the ones who have the simplest business plans.
Why?
Because simple things don’t break.
Over the next ten years, I am fully focused on boring and profitable industries.
I think that entrepreneurs, and especially Americans, are way to obsessed with the concept of scale. You don’t need to have 100X scale in order to build an amazing business.
What you need is a service or a product that people need, and a great reputation that generates business, leads, and revenue.
I’m excited to dive into these boring and profitable businesses in the coming days, weeks, months, and years.
Remember: boring and profitable is way cooler than sexy and broke.
Love you guys. Talk to you on Monday.
Tim
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