Be BORING !

I’m blue in the face for all I’ve spoken about the startup/tech business world being obsessed with Unicorns and huge funding rounds.

If you follow me on LinkedIn you’ve probably seen me bang on (and on) about it !

While the tide is definitely shifting and people are seeing a different way of building a business and ultimately making money, I still think there are places where founders and investors are missing an opportunity… that opportunity:

Being BORING… and doing things that just make sense, but that aren’t the shiniest and flashiest.

To caveat, boring isn’t an insult at all. We love “boring”. We love the things that don’t get the most press. We love pen and paper, traditional businesses that are doing one thing and really well.

Here are my thoughts on “less flashy” opportunities that investors and founders are missing out on:

BUSINESS ADVICE
Unicorns > Tortoises > Horses.

By this point it’s probably clear I don’t obsess over Unicorns. I won’t deny they are essential for the UK economy, but the obsession can become unhealthy for both investors and founders.

Nathan Latka put it better than I ever could, in his LinkedIn post:

Some of the levels of dilution can be incredible !

The reality is, to build a Unicorn you need constant funding and to go through funding round after funding round. It’s fantastic for some, but I’ve seen life-changing exits from founders who have bootstrapped or funded with much less dilution.

A Unicorn is a life-changing exit. Raising less, and maintaining more equity also creates life-changing exits.

For us as investors, we don’t search for Unicorns, instead we search for “tortoises” and that we recently renamed to “horses”.

Tortoises were sustainable businesses, rather than growth at all costs, moving slow and steady. But we felt that this didn’t make our businesses sound brave enough, so instead we now have:

Horses, not unicorns.

Horses mean:

🏇🏻 Should their growth take off, within them is the possibility of becoming a Champion Racehorse.

🐎 However, the downside protection is they plough the fields- bringing in solid returns.

This is where we see huge opportunity in the next 5-10 years. Businesses that aren’t chasing Unicorn status, with lower dilution, that are focused on sustainable growth over growth for growth’s sake.

These companies look like marketplaces for dog groomers, CRM SaaS products, niche products to make lawyers lives easier, for example… and all of these have the ability to reach that life changing exit, without as much dilution and constantly chasing the funding flywheel.

THE FUTURE OF BUSINESS
Offline to Online

I passionately believe that some of the biggest business opportunities over the next 5-10 years is in digitising existing “boring” and “unsexy” businesses.

I’m talking:

• Hairdressers

• Accountancy firms

• Legal services

• Pharmacies

Basically anything that doesn’t look like a company you would typically focus on digitising. So many of these companies are still very manual, ‘pen and paper’ companies that could massively benefit from tech put behind their offering.

Within our own portfolio, we’ve digitised a window cleaning business (more on that below). It’s the perfect example of a “traditional business” that’s growth can be boosted with tech.

A lot of VC money goes after very “sexy”, hard problems that end up in TechCrunch etc. (your next Uber, Airbnb) as they have massive upside opportunities, and work with the VC economic model.

But there are also MASSIVE opportunities in things VCs aren’t typically interested in.

Digitising existing businesses and focusing in “boring” areas, because:

• An existing company already has revenues and customers - the riskiest part of building a tech company !

• They’re way less likely to fail - so whilst investors might not get 100X returns, they’re more predictable.

Whilst Unicorns and sexy businesses are dominating headlines, “boring businesses” are driving the economy !

Whilst most others overlook these businesses, we think they are the sexiest of them all !

FOUNDER SPOTLIGHT
Ralf from Tidal

As promised above, the story of how Ralf build Tidal is a fascinating one.

Ralf started Tidal Services, a window cleaning service, after Googling: ‘How to get rich quick.’

There he came across a video from a YouTuber who talked about ‘How to make $500 a day washing windows’.

The video was about the US market which asks for much deeper cleans than in the UK, but he realised he could make money cleaning windows in his local area, Darlington.

He spent £200 on some equipment and got started. His first job was cleaning a whole house of Georgian windows… as you can imagine, it took him 2 days.

After a while he could see the business had legs and was making him more money than his current job. Soon he had a van and began to gain more and more customers. It was a traditional business generating revenue, about as traditional as you can get.

Instead of continuing the business with phone calls and leaflets through doors, Ralf decided to put tech behind the business. With this he wanted to go from a business that uses tech in some ways, to a tech business that helps both people who need their windows cleaned AND window cleaners (that’s where we came in !).

Now, Tidal has a brand new window cleaner app and admin tools to allow window cleaners to self-serve and enable Ralf and the team to work more efficiently, and a customer booking flow to allow more customers to self-serve.

Ralf had been out in all weathers cleaning windows himself for many years. This means he knows the problem, pain points and customer base inside out, plus how to talk to and resonate with other window cleaners.

He built what we call a “proper business” from scratch that can now be scaled further with technology ! It’s these types of businesses we see as a key part of the future of tech companies.

FEATURE
BoringCashCow

Want a boring business idea? BoringCashCow is the place.

They’ve got the right idea about tech business ideas that are quietly generating huge revenue.

Examples like: a hotel management SaaS generating $1.3 million a year, an online journal generating $2.1 mil a year, a web scraping tool generating $8000 a month.

Of course these ideas are purely tech, rather than digitising traditional businesses, but it solidifies the success behind doing something other people may find boring. Not so boring when it generates that revenue !

(not an ad, just think it’s super interesting !)

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Always open to feedback, content suggestions or collaborations. Tell me your thoughts.

All the best,

Matt Jonns