The Next Mark Zuckerberg or Elon Musk won’t invent a Social Media or Electric Car.
As part of the LiveTradr team we’ve talked to a few billionaires. We have done a thousand hours or more of research on them.
There are many aspects of what it takes to be a billionaire.
There are many things we can learn from. Here’s one:
Billionaires can SEE and CREATE the NEAR FUTURE
We hate to use term “futurist.” That’s some pundit who goes on TV or writes a book and makes a prediction. It doesn’t matter if the prediction is right or wrong.
Billionaires don’t do that.
They make accurate predictions about the near future and then build businesses around that future.
Jeff Bezos saw that things would be sold online. So he created the big- gest online retailer in the world.
Sam Walton saw that big-box stores with easy-to-access distribution centers would replace small mom- and-pop stores in every community, so he started the Walmart chain.
Henry Ford saw that the principles of the Industrial Revolution could be applied to making automobiles, so he invested in the assembly line for the fast construction of cars.
Peter Thiel saw that people would need an easy and secure way to pay online, so he created PayPal.
And so on.
Nobody ever made a dime creating a business for the far future. But the near future, the next one–five years, is ripe for the picking.
So what is the near future now?
At the risk of being labeled a “futurist,” We will describe 7 areas where we think more billionaires will be created
One of us are definitely not going to be one of those billionaires. But maybe you will be.
1) The Access Economy
The access economy is all the businesses that contain these three parts:
A) People who have empty space.
B) People who want access to that space.
C) A platform to connect the two.
A prior example is Airbnb, which has:
A) People with empty homes or apartments.
B) People who want access to those empty homes when traveling.
C) A platform to connect the two.
Estimating the value of stock or stock market is more complicated. Over the decades stock returns should be higher than bonds. As Benjamin Graham puts it, in the short run the stock market is a voting machine, but that in the long run it is a weighing machine.
The platform must contain search, secure transactions, reviews and mediation when there are problems.
Why is a platform needed? Because secure transactions and mediation are problems with “pre-access economy” businesses like Craigslist.
Other current examples are Uber
(empty car seats), Fiverr (people who have free time to do tasks), 99designs (graphic designers with extra time), WeWork (empty office spaces), etc.
This is like e-commerce 2.0. It used to be a place like Amazon would be “one to many.” One store sells to many people. That was e-commerce 1.0.
But Uber is many drivers connecting to many people, and the platform is just the facilitator.
If you want to start the next billion- dollar business, find what else is “empty” in the access economy.
One possibility is an Uber 2.0.
Some people have empty cars but DO NOT want to be Uber or Grab drivers. Other people want to make money but don’t have cars.
They just need a platform to connect them.
Or maybe a newspaper 2.0. Let’s say a news event happens. People post articles about it (they have free time) and a newspaper that has no reporters buys the best articles posted. So a newspaper is created each day (or all day long) by freelancers.
Maybe income 2.0: Some people have access to future income streams and other people want to supplement their income by having access to those income streams. (Let’s say Ron is an up-and-coming programmer in Silicon Valley. Ron can sell off 10% of his future income stream on the income 2.0 platform.) What else?
2) The Subscription Economy
Netflix and Amazon Prime and newspapers with online firewalls are version 1.0 of this.
Other examples: JetSmarter is access plus subscription. You can subscribe and then get access to empty jet seats.
If you have an area of expertise, you can sell a subscription newsletter.
Or take it meta: Make it easy for someone to create a subscription newsletter and sell that as software as a service (SaaS).
There are many examples of subscription services (Tinder, HBO, newspapers, etc.) but we think this area is just beginning, particularly when combined with many other areas we describe here.
Maybe a GolfPass gives access to golf clubs all around the country.
Or BookPass allows you to get four books a month from any bookstore around the country.
This is a very Warren Buffett-style business (think everything ranging from his Blue Chip stamps in the ’70s to insurance).
Money is paid in advance (this is called “the float”). That money can be invested until it is used. It may
not be used. Or it may be used in the future. But the money invested and the money not used are the profit.
3) Innovations in Currency
Bitcoin solves the basic problems of government-issued paper currency by ensuring the following:
• No forgery
• No human error
• Fewer intermediaries per transaction
• No government intervention
• Much cheaper basic con- tract law and logistics via blockchain.
But there will be even more innovations in cryptocurrency 2.0 once all the initial scams are flushed out.
Then we’ll see currencies dedicated to greater privacy. Currencies with specific purposes like gambling or trade finance or contract law or converting “travel points” into currencies, etc.
And then there will be the “picks and shovels” companies for these new currencies. Software agencies to make new currencies. Media companies for the new currencies, innovative peer-to-peer exchanges, etc.
4) New Media
Everything in media is already dead.
Book publishers are dead. They have been replaced by self-publishing.
Local TV is already dead.
Netflix is going is face a mountain of rivals.
We will tell you why. What is Netflix?
It’s simply a very popular service that used its profits to make TV shows, so we use that service (via our TV set- top boxes) to watch shows.
But any popular website can do the same thing. In fact, they already are:
Uber has a Spike Lee-produced TV series on it. Facebook
is making TV shows. YouTube had user- generated short videos, and now YouTube Red is making highly produced shows.
We bet LinkedIn will be next.
To be a TV producer you have to find a website that is very popular and profitable, pitch them a show
and go for it. You no longer have to pitch one of the three networks (media 1.0) or the streaming services (media 2.0). Now you can pitch anyone (media 3.0), even companies with a big email list or social media following.
Combine this with the access economy and perhaps people with excess ideas for shows can be on one side of the platform and people with money who want to be producers (or websites with a lot of traffic) can be on the other side of the platform.
5) Data Economy
We have been writing a lot about the data economy for the past few months. But it’s still the first inning.
- To publish a book you no longer need a publisher. You can self-publish on Amazon
- To make a TV series you no longer need to depend on producers or studios. You can create a mini version on YouTube
- To start a company you no longer need to wait for funding by a venture capitalist. You can use AngelList or Kickstarter OR you can start a company for 1% of the old costs using freelancer.com.Choose what you want to do and then find ways to do it. Will this create a billionaire? We don’t know. we know it will create millionaires. we have seen it happen.But perhaps it will create billionaires as the ability to create companies gets cheaper and cheaper.
In the data economy, firms with data can leverage that and create entire new services. For instance, a dating company that
• Match people based on their buying patterns on Amazon
• Match people based on the news articles or books they read
• Match people based on which ads their eyes look at. Which art they like. Which people they look at in the street. Etc.
• Match people based on what Airbnbs they choose, what res- taurants they eat at, etc.
It’s not short-term like Tinder but a data-powered “relationship app” could be the most powerful dating tool of all.
Now… we used dating as an example. But we already live in a data economy. There are more data on you than you can possibly imagine.
As a data expert once told me, there are companies that can tell you how many apples you ate last month.
Data like these are available from
data-based companies like Experian or, if you have some programming ability, companies like Bitly or Twitter.
So what other possibilities are there?
6) AI Economy
When the world went from horse- driven buggies to cars, no jobs were lost. How come?
Because every horse driver be- came a cab driver. Every person who cared for horses became a car engineer. And so on.
When ATMs replaced bank tellers, no jobs were lost. How come? Because banks made higher profits, opened up new banks on every corner and hired more tellers than ever.
But now, if AI performs surgery on you, we don’t need a surgeon.
If AI creates a contract for you, we don’t need a lawyer.
If AI fills out your taxes, we don’t need accountants.
But there will be lots of money made, lots of profits, and an AI class of billionaires will be created.
If AI can study what different musical chords do to the neuro-chemicals in your brain, it can create music tailored just for you and your moods.
And on and on.
7) The “Know-Me-More” Economy
What if I sign up for “Amazon Know-Me-More” (the subscription economy plus AI) and you simply get things delivered before you even know you want them?
Amazon knows your buying patterns so it can assume that before summer allergies kick in you will need a certain kind of medicine. Or before John Grisham’s next book comes out, you get an advanced copy. Or based on your toilet paper.
buying patterns, it sends toilet paper before you run out.
What else can be in the “Know-Me-More” economy? Software that plans my Uber rides for me. Maybe a place that schedules restaurant reservations or orders food for me on Grubhub or finds possible Airbnbs for me when it sees vacations approaching.
Who knows? What else?
Notice that all of these things exist to some extent already.
Billionaires don’t get rich by creating some- thing 100% new.
Mark Zuckerberg created the 10th social network. But the first with verified identity.
Jeff Bezos created probably the 50th e-commerce company but the first that spread to other areas (he started with books, then clothes, then electronics, food, etc.).
The access economy already exists. But have we truly exhausted its possibilities?
Maybe not, if we combine it with the subscription economy, the AI economy and the yesterday economy.
Or we provide the “picks and shovels” companies for the above. Just like Richard Branson loved music but he wasn’t a musician, so he provided the picks and shovels for the music industry.
Nobody knows what the far future will bring. The “futurists” are very often wrong. And the billionaires don’t care.
But the near future is already 50% here. The billionaires will fill in the final 50%.
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