Innovation

As mentioned in my last blog there appears to be a bifurcated recovery underway.  Inflation is starting to take hold and this is filling the purses of the bankers, the farmers and the miners.  Small business in America is not so lucky.  In my discussions with many small business owners it is a real struggle.  Capital is scarce and where capital is scarce, growth slows.  Layoffs are common place and in some cases the owners themselves are doing all the day to day chores that they used to hire people to do just so they can survive a little while longer.  This does not translate into a lot of confidence for the future and this is reflected in the consumer confidence index.

Outside of these groups there is a burgeoning group of innovators and entrepreneurs that are starting new ventures that potentially could put business on its head in the coming years.  In the 1930's there were plenty of "new" companies that burgeoned in the poor markets of the great depression.  United Technologies ($54B in revenues), Tyson Foods ($24B), Fischer-Price, Duracell, Texas Instruments, Starwood Hotels, Unilever and Fortune Magazine, just to name a few.  All of these companies started at the absolute "worst" time in economic history and all have prospered.

This spirit has not died.  In fact I believe that it is even more prevalent than ever before.  During the last year I have assisted two start ups with financing.  Both of them are growing in leaps and bounds.  The first is in the business of providing assistance to agents and homeowners by negotiating the sale of the property through short sales.  The company can be found at www.lotusrealtygroup.com.  To date they have closed more than 50 transactions and have a pipeline of just under 100 properties.  They are helping to unlock the gridlock between the banks and the homeowners while profiting in a poor real estate market.

The second company is a network of 15,000 freelance writers and editors that can create content for everything from white papers to web content for a fraction of what it costs to hire in house expertise.  Furthermore they can crowd source ideas providing advertising campaigns with a huge boost.  Why choose from a handful of options when you can have 500?  They can be found at www.ecopywriters.com.   This freelance network of writers and editors is rapidly replacing the brick and mortar offices and allowing people to work on their own time where ever they are while still providing a wonderful product to the clients at an unbeatable price.

Other ideas that have been presented to me recently is a novel way to advertise on the caps of fountain drinks that are found in fast food restaurants and take-out places.  There was a novel way to track advertising through mobile devices.  Real estate groups that are providing their agents more than just the tools necessary to sell a house but also to help the owners of the house with access to free tax and legal advice.  A way to earn a rate of return on your CD style investment of 2.50% rather than nothing at the banks.  Designs for cars, bandages that heal wounds, medical devices that light up the back of the patients throat so that emergency crews can save them.  The list goes on and on.  Considering that I run a relatively small fund the fact that these people are coming to me rather than the big houses says a lot about the illiquidity of the market, but the good news is that a lot of these companies will prosper and will provide employment in these bad times and it is these companies that will provide a great future for those that work there and for my investors alike.

If you would like any more information on the two listed companies or the short term investment opportunity let me know and I can forward your details to the relevant party.