There are different formulas for launching highly successful companies. First, create a product that solves a problem that no one knew they had — for instance, how online search engines replaced encyclopedias. Then, there are ideas that help solve problems that plague millions of people.
Back pain, for example. Not only do approximately eight in 10 adults experience low-back pain at some point in their lifetime, but it’s also the most common cause of job-related disability.1
One individual who suffered severe back pain while sitting at work all day decided to invent a new kind of desk. This desk would allow him to stand while he worked, alleviating his back pain. This man was a co-founder of VARIDESK, a new type of office furniture manufacturer. But this new company didn’t just enter the office supply industry; it introduced a new sales model that was key to its rampant success: Selling online direct to consumers.2
According to Ernst & Young, one of the country’s largest accounting firms, there are four main drivers of growth-oriented companies. They: (1) identify growth goals, (2) build an appropriate corporate structure, (3) develop supportive capital strategies and (4) utilize quality talent acquisition strategies.3
Designing a personal investment portfolio follows a similar process. You want to identify your long-term financial goals, build an asset allocation strategy, develop a capital strategy for ongoing contributions/rebalancing and find an experienced financial advisor to help manage your financial picture. Once you’ve established this framework, you can consider interesting and potential growth ideas like those emerging every day from the tech industry. Just remember to keep your portfolio diversified to help reduce your day-to-day market risk. If you could use assistance constructing your investment portfolio, please call us to schedule a consultation.
Speaking of diversifying, don’t forget that new technology is being developed throughout the world. It’s important to consider global opportunities to help diversify a tech sector position. In fact, the Chinese are becoming highly adept at reaching U.S. consumers, particularly in the app market. Despite the current trade war, many Chinese tech firms have made significant market inroads in just the last year. For example, the Chinese app TikTok was the third-most downloaded app in the U.S. in the first quarter and contributed to first-quarter revenues that were 67 percent higher year-over-year for the same period in 2018.4
More and more, we see tech and health industries merging as the technology industry focuses on better ways to deliver, communicate and monitor consumer health concerns. A new app allows patients to record their doctor’s notes during an office visit. The recently launched free app Medcorder is part of a greater trend that underpins the intersection of health and technology. Led by tools that help hospitals, health plans and other industry stakeholders improve the patient experience, investors have put up $30 billion in capital for health-tech start-ups since 2011.5
And yet, with more tech comes more security and privacy concerns, at both the corporate and consumer level. The key commodity today is consumer data, and companies will pay big bucks to get it — even though you may not even know that a company is gathering the data. To that end, be aware that if you use Google maps and apps on your phone, the company maintains a log of your location and activities spanning years. If the thought of someone being able to tap this data concerns you, Google does provide tools to limit your tracking history. Check out this article for details.6
The cable industry is presently working on a quantum leap in broadband speed and accessibility. In just two years, one gigabit broadband Internet has expanded availability from 4% of U.S. households to 80%. Now the cable industry focus is on 10G technology, which will increase speeds by tenfold, reduce lag time, enhance reliability and security, and enable a larger spectrum of immersive skills and applications.7
1 National Institute of Neurological Disorders and Stroke. August 7, 2018. “Low Back Pain Fact Sheet.” https://www.ninds.nih.gov/Disorders/Patient-Caregiver-Education/Fact-Sheets/Low-Back-Pain-Fact-Sheet. Accessed April 29, 2019.
2 CNBC. “What is the right path to accelerate growth?” https://www.cnbc.com/advertorial/what-is-the-right-path-to-accelerate-growth/. Accessed April 29, 2019.
4 Arjun Kharpal. CNBC. April 29, 2019. “How Chinese apps like TikTok are quietly racking up American users.” https://www.cnbc.com/2019/04/29/how-chinese-apps-like-tiktok-have-been-catching-on-with-us-consumers.html. Accessed April 29, 2019.
5 Christina Farr. CNBC. April 28, 2019. “Google vet launches an app for patients to record their doctor’s notes, as more Silicon Valley execs migrate from tech to health.” https://www.cnbc.com/2019/04/28/google-vet-david-weekly-launches-medcorder-app-to-record-doctor-notes.html. Accessed April 29, 2019.
6 Todd Haselton. CNBC. April 25, 2019. “Google knows everywhere you go — here’s how to stop it from tracking you and delete the logs.” https://www.cnbc.com/2019/04/25/how-to-stop-google-from-storing-your-location-history.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail. Accessed April 29, 2019.
7 Phil McKinny. CableLabs. Jan. 7, 2019. “10G Platform: Coming to Homes, Offices and Cities Near You.” https://www.cablelabs.com/10g-platform-coming-to-homes-offices-cities-near-you. Accessed April 29, 2019.
Content prepared by Kara Stefan Communications
We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.