Do you know what Peloton, Pinterest and Postmates have in common?
Yes – they all start with P, but they also claimed a few of 2019s most highly anticipated IPOs. And chances are, this isn’t the first time you’re hearing of them.
What about Farmers Business Network, Instrumental, Windward Maritime Analytics?
Now THOSE sound like the next Ubers and Spotifys of the world, right? Not exactly.
But you don’t need to find a sexy startup to get the huge returns you’re looking for.
My investment in a tattoo removal company was far from sexy, but standing alongside them at the NYSE for their IPO sure was.
In With The New: Fresh Air into Old Industry
In our series Emerging Industries, we usually show you brand new industries and verticals with big potential that are just popping up on the horizon.
This week we thought we’d give you something different.
As angel investors, we need to follow the cutting edge and sniff out the newest innovations in the hottest fields. But it’s important not to fall into the trap of going tunnel-vision on the sexy, shiny startups in the industries of tomorrow.
The truth is, there are many long-running, neglected industries that have major room for growth.
Some of these have been stagnant for decades — which is exactly why entrepreneurs are targeting them with ground-breaking ideas.
So, this week’s Emerging Industries is all about challenging your perception of where to find new angel investing opportunities. We’ll show you old, traditional, or stagnant industries that are set to experience huge changes. Then, we’ll explore the innovative startups breathing fresh air into them.
Top Industries and Companies
We’ve identified a few overlooked and not-so-flashy industries that are surprisingly ripe for the taking. Sneaky and brilliant startups are popping up in these fields, changing fundamentals and breaking rules.
For each industry, we’ll show you a startup that has had great success disrupting and rejuvenating their respective playing field.
Let’s jump right in.
The Industry: Agriculture
Those with their eyes trained on the sleek, techy offices of Silicon Valley may not realize the immense potential in the well-fertilized, green fields of Central Valley.
Look — we get it. Everyone has their area of expertise, and for many of us, that sure ain’t farming.
It’s good to stick to what you know, but it’s better to expand your portfolio into big-potential verticals that not everyone is aware of.
Today, for most angel investors, farming doesn’t seem so trendy. It’s better to invest in the next big sharing-app or a cybersecurity startup than to invest in agricultural tech — right?
I want to show you one farming startup that is revitalizing an entire industry. This company is upsetting traditional powerhouses with a data-driven, transparent social network.
The Startup: Farmers Business Network
Farmers Business Network (FBN) connects farmers together to provide transparent insights that improve agricultural decision-making.
FBN gives farmers yield analysis, product performance, and predictive analytics. The system is all based on the real-world experiences of other farms.
Machine learning enables users to gain insights about their farms guided by billions of data points from across the network. Basically, this is the same farmer-to-farmer small talk as always, but on a massive scale focused on objectivity.
FBN not only gives businesses a competitive edge — it breaks the mold that has always cast them in a rigid and inflexible position.
Classically, sales of essential agricultural products, such as seeds, have left farmers in the dark.
Suppliers offer farms incentives to maintain long-term relationships. Often, these incentives hurt business. They keep farmers buying, even when products are producing less and cost too much. A consolidated entourage of major suppliers thrives on this lack of information.
FBN is the first to democratize agricultural information. They have modernized a traditionally low-tech and stagnant industry.
Since its creation in 2014, Farmers Business Network has raised an incredible $368.9 million in funding.
The Industry: Manufacturing
Originally, goods were only made in workshops by skilled workers. Production was low and costs were high. Until urbanization, industrialization, and the assembly line, this was the world of manufacturing.
Since then, things have improved. Modern manufacturing gives billions of people cheap access to necessary goods.
Yet, innovation in this sector has mostly come down to lean manufacturing and robotics. While factories are running more smoothly and quickly than in the 18th century, much has remained unchanged.
While the trend towards removing humans from manufacturing continues, factory management and oversight have still fallen to human workers — until now.
One manufacturing startup is making assembly lines easy to track, changing quality assurance, and giving companies a way to use the data they collect.
The Startup: Instrumental
Even the slightest defect in a product can result in delayed launches, brand damage, and lost revenue.
Instrumental is revolutionizing the way factories operate by automatically assessing production at each point using imaging systems and AI. Machine learning allows Instrumental’s software to identify defects quickly so action can be taken. This removes costly workers from the equation and prevents small defects from becoming major problems.
The founders, Anna-Katrina Shedletsky and Samuel Weiss worked in the Chinese factories that churned out iPods and Apple Watches. Here, they identified the elephants in the room: defects, data collection, and data utilization.
Over this period they developed algorithms and imaging equipment that can survey and organize the massive amount of information zipping across the conveyor belts of the world.
Since the end of 2015, Instrumental has garnered over $10.3 million in funding. It is now used on many global assembly lines by premiere manufacturers.
The Industry: Maritime Transport
Since the beginning of time, we have used water to transport things from one place to another. The earliest “ships” were just logs with items attached to them that floated down rivers for trade.
Let’s fast forward a few thousand years to the 19th and 20th centuries. Here, we began using cruise ships to transport huge numbers of passengers and started using container shipping techniques to spread goods across the globe.
From there — things sort of slowed down.
Today, while ships use satellites and computers, there still haven’t been many big ideas that shake up the industry. Information is still underutilized. When dynamic events pop up and trends emerge, info is basically walkie-talkie’d from party A to party B.
But now, an innovative startup has stepped in to change maritime shipping and travel for good.
The Startup: Windward Maritime Analytics
Windward is a maritime data and analytics company that is redefining the shipping industry. Leveraging AI and big data, Windward checks global vessel behavior to deliver predictive insights.
Basically — it’s an information service for shipping companies that helps them to streamline business and reduce risk. It acts like a social network, logistics planner, and business management tool, all in one.
The thing is, oceans have always been notoriously difficult to conduct business on. They are complex and unpredictable. Windward solves this problem by collecting data 24/7, analyzing it, vetting it, and making use of it across all maritime verticals. The system gives businesses information on sea-routes, ship reliability, and weather and social trends that shape ocean travel.
Early on, founder Ami Daniel discovered that his service had applications far deeper than security and intelligence. Today, Windward data is being used by financial markets, global supply chains, international trading partners, and more.
Since 2013, Windward has earned over $32.3 million in funding. In a few short years, it went from concept to a global leader in maritime analytics.
There is still so much untapped potential in every industry imaginable.
An industry’s age, traditions, and leaders don’t define potential — entrepreneurs do.
I believe that rigidity in a vertical can be a sign of extreme potential. When industry trends become ossified and leaders are overconfident, young blood will always come in to chip away at the market.
When people don’t think there is room for innovation in an area, they are usually wrong.
Luckily, this means there are more open fields, ripe for the harvesting by savvy angel investors.
So, remember to never underestimate an industry. Step outside your comfort zone and look towards something that wasn’t even on your radar. Often, you will find, the biggest innovations are disrupting and revitalizing stagnant industries in fascinating ways.