Failure to adapt to technology the reason for seasoned businessmen failing in their current endeavors
I held a conference call the other day with a very successful gentleman. The individual had invested twenty one million dollars into a cutting edge development. There is celebrity sponsorship and government connection at the highest level. There is an exclusive club component that is broken down into three levels. In addition to this feature it is an “Invitation Only” situation. The members cannot have enough money to get in. The members must be invited.
World leaders are connected and a portfolio manager that once held over 1bn under management at Charles Schwab is a founder.
What’s the issue?
They are operating on a 10 year old model. What’s the proof? They have taken 9 years to get going and are in their 10th year. The project is a four hundred million dollar monstrosity with one hundred and thirty million invested to date.
What is the issue with yesterday’s project? The project has no technology incorporation, no emerging presence, no mobile application interface, and no algorithmic choice for candidates…the project is nothing for tech.
Basically the project is a beautiful resort kept on the hush with a celebrity name golf course that is not suppose to be branded to the general public.
I had to politely decline to work with the group.
If you were born after 1981 you are considered a Millennial. Millennials are almost forty years old. When I was a child we viewed forty year old people as “Over the Hill”. It was at best considered “Mid Life” and at worst called “Old”.
Wealth transfer is happening. Baby boomers who subscribed to models of times past exist no more. These individuals are twenty to forty years older than their Millennial children. In twilight years people are concerned with preservation, legacy and acting responsible. New ideas and startup risk is not on the agenda for investment (generally).
Failing to identify your audience is the number one reason why most entrepreneurial projects fail.
The wealthiest American generation is on the verge of transferring their wealth to a new generation. The new generation is built on twitter, facebook, next generation video games, virtual reality, membership versus ownership (People prefer lower subscription in lieu of outright ownership), tiny houses, and a gig economy (i.e. Uber, Fiverr, et cetera).
The vast majority of investment capital is done on platforms like GoFundme, Acorns, and Fundable.
The Millennial generation, over 75 million strong, is America’s largest working population. The Millennial generation is two fifths of the working age population. The rest are largely older people and children.
Why a person would fail to attract an investment base that represents the largest portion of investment eligible people is beyond me. I play odds. Odds say this group will spend the next 9 years searching for one massive whale that falls in love with their idea of its own private golf course. Offering a sub 10% return means you have to sell emotion not logic. Most wealthy people are logical.
I wish them the best of luck on that. The eligible investor base is less than 0.1% of the population. I don’t like operating on that narrow of a margin.
The high probability of failure for this project is characteristic of non technological application.
Anything is possible. I can show up and hit a grand slam in the World Series despite not being a professional baseball player. This represents a “possibility” not a “probability”.
There is a difference.
A recent report from the World Economic Forum highlighted why financial services should welcome what has been dubbed the “fourth industrial revolution”. The report details a range of sectors such as healthcare, retail and agriculture.
The Reports states “For an industry that has developed over arguably thousands of years, and which has strong economic incentives to modernize and optimize its performance, it is somewhat dumbfounding that the financial services sector hasn’t been more tech-enabled. Why does this matter? Because having easy access to capital systems across demographics is the heart of what moves societies forwards — and until financial technology (fintech) fully embraces the Fourth Industrial Revolution, we simply won’t get there.”
The lesson for current business owners is that old models are not your grand scores. To a large extent old models might not apply in today’s world. I am personally contracted to run Anti Money Laundering (AML) and Counter Financing Terrorism (CFT) reports for one of the largest asset managers in the world. This group has nearly 300bn USD in allocation funds for one asset class alone. Do you know what their largest portion of allocation is? It’s called technology.
JP Morgan is coming out with a Crytocurrency for crying out loud. Don’t be stubborn and refuse to evolve.
This is the same thing that happened to 99% of the species that once walked the Earth. Look up the “Great Dying”. You will find nearly all species that fail to adapt go extinct. Yesterday’s businessman is no exception. Find out more about how you can change your business by signing up for my free quarterly newsletter here.
About Christopher: Christopher Knight Lopez is a Professional Entrepreneur. Christopher has opened over 7 businesses in his 14-year career. Christopher’s purpose is to take advantage of various market-driven opportunities. Christopher is a certified Master Project Manager (MPM) and Accredited Financial Analyst (AFA). Christopher previously held his Series 65 securities license. Christopher also has his General Lines — Life, Accident, Health & HMO. Christopher has managed a combined 286mm USD in reported Assets Under Management & Assets Under Advisement. Christopher has work experience in 29 countries, raised over 50mm USD for various businesses, and grossed over 7.5mm in his personal career. Christopher worked in the highly technical industries of: biotechnology, finance, securities, manufacturing, real estate, and residential mortgages. Christopher is a United States Air Force Veteran. Christopher has a passion for family, competitive sports, fishing, martial arts and advocacy for entrepreneurs. Christopher provides self-help classes for up-and-coming entrepreneurs. Christopher’s passion to mentor comes from belief that entrepreneurs need guidance. The world is full of conflicting information about entrepreneur identity. See more at www.christopherklopez.com.