New Year, New Ideas
Or more of the same?
“Time, as he grows old, teaches all things.” - Aeschylus
The world is moving at a near-impossible pace, and it feels like doing nothing means you are being left behind. There is a lot of noise taking place.
The speed of progress has accelerated over the past few decades, as the birth and growth of the internet has led to an ever-accelerating pace of development.
Now, AI has begun what we can only imagine is an evolution into a very different future.
There appears to be a mix of both excitement and fear in the air, and both are competing for the collective attention.
Are we heading to a Matrix-like future of control and subjugation or a Star Trek-like one in which technology allows us the freedom and ability to explore?
I cannot answer these questions; no one can. We can only observe and speculate. I, for one, hope for a world that sees AI use become a net positive in which we can still create, build, and find purpose in the world.
So, where does that leave us when it comes to our work and the pursuit of an income and hopefully something that we can derive a purpose from?
In a world of AI, start-ups, and major technological advancements, do we need to create something that hasn’t existed before to generate significant value? Do we need to build a business or find a job in a new, fast-moving industry or risk being left behind?
The tech world is full of flash and potential, and it is where the majority of the attention and interest is focused.
Yet, certain things persist, and countless other industries exist that service many other aspects of life; these, too, are changing, but in many ways, they are staying the same.
This is by no means an investment thesis, but a few thoughts. It is about being aware of the traps and hidden potential that exists in the world.
What should we be on the lookout for?
What options are out there?
The Traps of Novelty
“People will not look forward to posterity, who never look backward to their ancestors.” - Edmund Burke
Innovation moves us forward as a society, but it has its limitations.
There is so much attention focused on the future and technology that old notions are immediately treated as disposable and simply scrapped.
What we should always consider is the fact that tradition exists for a reason, and things that have stood the test of time have done so because they have made it through the stress testing of multiple generations.
I am not trying to downplay or ignore the fact that it is truly amazing the opportunity that’s available to us at this moment in time, or that we should consider regressing to a simpler time.
We are witnessing a colossal expansion of tech companies’ valuations into the trillions at the moment, something never before witnessed.
Investors (or wannabe investors) are flooding into the markets in higher numbers, as online platforms have allowed us the capacity to trade with the tap of a button.
I am no expert, and I do not claim to be, but I’m wary. There is a Tulipmania or Dot-Com bubble feel to the market at the moment, but time will tell on that one; there is no way of truly knowing, other than in hindsight.
If this is the case, there will be many losers, and those who win will likely do so by scooping up what’s left over when the dust settles for much lower prices than what is now being paid.
I am only speculating, but history has appeared to have many examples of this.
Joseph Kennedy Snr is an example of someone who recognised the mania taking place running up to 1929 and decided to protect himself, first by deleveraging any speculative stocks or margin risk and buying cash-flowing, hard assets such as real estate.
He is one of numerous stories, but there are many more cases of people who lost out by being on the wrong side of these market forces.
Novelty wears off; being first to the newest thing is not the best place to be. It is rarely the pioneers of new ideas or technology who benefit from them, but those who come after.
It isn’t always about being first, but who does it better.
Google was not the first web browser, but it did it better. Spotify was not the first streaming service, but it did it better. Henry Ford did not invent the assembly line, but he perfected it and did it better. History is full of such examples.
You may be the next Steve Jobs or Thomas Edison, but the odds of being one of those people are low for the vast majority of people. However, you can take something that already exists and improve on it, make it better, do it better, improve its efficiency.
Toyota took an industry that was extremely heavily centred in the U.S.A and improved how they carried out the process; they invented what would be known as the Toyota Production System (TPS). It was the practice of lean manufacturing, improving efficiencies in the existing production model, which allowed them to turn the car industry upside down. They invented smaller, more efficient cars that were more reliable than anyone else. They began to outpace the bigger, less efficient U.S car manufacturers.
The concept existed; they simply approached it with an eye for improvement.
Southwest Airlines did something similar in the airline industry, the streamlined how things were run, simplified it, removed waste and inefficiencies and used it to reduce fares, which started to reshape the industry (In the Republic of Ireland, Michael O’Leary has had similar success with that model in growing Ryanair).
Embrace Change; Respect Tradition
“No man ever steps in the same river twice, for it is not the same river and he is not the same man.” - Heraclitus
Study the past, it has many lessons to teach us.
Large industries exist in the background that may not receive the same level of media attention as others, and may not appear to be keeping pace with the times, but are growing stronger every day and are also utilising technological advances to evolve.
Food processing, for example, is a massive global industry that is constantly evolving, yet one in which stability prevails, as the global population’s need to eat remains constant.
Yes, these are industries with large global players and ones that are seeing changing behaviours and ideas of how and what we eat, but offer opportunities to begin, grow and develop careers and businesses.
John Bragg is a Canadian Billionaire who currently controls a large part of the world’s Blueberry market through his company, Oxford Frozen Foods.
An industry that isn’t flashy, it doesn’t experience the immense growth potential of the tech sectors or the crazy business valuations that go along with it.
What it does provide is consistency. Long term investment is approached with a long-term timeline in mind, and industries such as this are much less likely to disappear overnight when a new technological advance comes out.
Hermès, the famous French fashion house, is a great example of a company that has respected tradition but at the same time embraced the modern world.
The company was first established in 1837 by Thierry Hermès to make saddles and harnesses for the equestrian industry.
Today, it has a market capitalisation of over €230 Billion at the time of writing, and it is now a massive French Fashion house that, unlike many competitors, still handcrafts its own goods. It has been able to move forward with technology, but still holds on to the traditional aspects that make it what it is.
It is a publicly traded company, but due to a unique ownership structure is still family-controlled, which allows decisions to be made with a much more long term focus in mind.
The changing global dynamic also means that these large industries are ripe for disruption.
An example in the U.S.A is Vital Farms, established in 2007 in Austin, Texas. Its founder, Matt O’Hayer, had a simple idea: to produce and sell pasture-raised eggs to the U.S. market for consumers who truly cared about where their eggs came from and how the animals and farmers were treated. The company went public in 2020 and has gone from strength to strength
Many old-established industries can offer similar potential for those willing to look hard enough.
Closing Thoughts
I am in no way trying to make an argument against innovation; I am a massive believer in it, but like anything, it has to be taken as part of the whole.
There is no one-size-fits-all approach to life and business; what works now may not have worked in the past and vice versa. What is consistent is the fact that opportunities are out there if we can avoid all the noise that comes our way.
The future is unknown, but that was always the case; technology has always been moving forward, and people were never able to predict exactly where it was going.
Those who benefited from it were able to see the larger trends and aimed their efforts in that general direction, allowing themselves the flexibility to make moves as needed.
Thank you for taking the time to read this article!
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