So this was a keynote speech I recently delivered that I have slimmed down for this post. At a macro level;
countries are governed by systems, every system has its flaws, flaws present opportunities.
If there is anything you remember from this post, its this: 20 years ago the hustle of the generation was residential property investment. The hustle now is the INTERNET. 4 pillars that support this:
1. Low barriers to entry:
buying a house to rent out for a profit required low or no deposit and starting an internet business now requires low startup cost e.g. Social media celebrities, bloggers, youth brands etc.
2. Medium to long term investment cycles:
The focus with buy-to-let properties was either cashflow (good profit month to month) or capital appreciation (medium to long term asset value rise). With the net, it is comparable to social capital, i.e. building an audience through posting consistent quality content and monetising on it.
3. Strong returns, with small teams:
Individual investor leveraging a mortgage broker, solicitor and surveyor could purchase a property within a short timeframe with no one on the payroll. Tech allows us to leverage software over human resource, so one (wo)man bands and small tech teams breed incredible results, such as:
WhatsApp announced its first operating metrics in a year (Jan 16): it now has 1bn monthly active users, sending 42bn (unduplicated) messages a day, with 57 engineers. For comparison, the entire global SMS system does around 20bn messages a day. Software means you can stand on the shoulders of giants, and do it with very little capital. (I do think MAU is pretty meaningless for these kinds of services, though – you either use Whatsapp daily or you’re not a user).
4. New rules of engagement:
With property new profit making methods have emerged such as rent-to-rents, lease options and HMOs (House of Multiple Occupancy). We see everyday, YouTube celebrities and emerging disruptors such as Uber and AirBnB in the sharing economy that have created Blue Oceans that have regulators trying to figure out new rules of engagement
The shift in tech now means the RULES are different. We can learn to code for free or next to nothing, pick up a camera and produce YouTube shows for free or start a podcast and publish from the comfort of your home for next to nothing. The barriers to entry are low, and the returns are limitless. The downside is your current wage, whilst the upside is endless (HUGE). Now’s the time to get into Tech, we don’t know how regulated and restricted we will be in 20 years time! Start building consistent quality content today.
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Written by Andy Ayim
