Before I make a big bet in the technology sector, there’s a special indicator I consult.
I call it “The Peter Indicator.”
Over the past 18 years, it’s been nearly 100% accurate.
Today, I’ll tell you about it – then I’ll show you where it says to invest right now.
Meet Peter
“Matt, you’re a good kid,” said my family friend Peter. “But this idea of yours won’t work. No one will buy clothes online.”
The year was 1997.
Peter was a senior partner at a white-shoe law firm, offering free advice about my new business idea.
“People need to try clothes on first,” he told me.
I respected Peter’s opinion, but decided to move ahead anyway.
Peter’s Track Record
Thankfully, my business ended up doing just fine…
And meanwhile, the overall market for online clothing did far better than "fine"...
It became massive.
U.S. consumers now buy 13% of their clothes online.
That adds up to $26 billion every year.
Online Clothing, 1. Peter, 0.
A few years later, I asked Peter what he thought of online dating companies.
“They’ll never go mainstream,” he said. “Too much of a stigma.”
How did things turn out?
Annual revenues for Match.com, the industry leader, are approaching $1 billion.
Online Dating, 1. Peter, 0.
More Wrong Calls
Over the years – despite his professional success – Peter made the wrong call on some of the biggest technology trends of his lifetime.
Perhaps it’s because he was too tied to the status quo…
But I think it was something else, too:
Peter drastically underestimated how far people would go to avoid inconvenience and painful experiences.
Many people, for example, find clothes shopping a chore.
And for some folks, going to bars to meet “the one” is torture
Peter didn’t grasp the idea that people will flock to an alternative, as long as it offers a way to avoid inconvenience and pain.
Once this gap in his thinking became clear to me, he became my special indicator for new business ventures…
If he was going negative, I might have a winner on my hands.
So when he recently shot down an e-commerce company going after a trillion-dollar industry, I knew I might be onto something.
A Most Painful Experience
For most folks, aside from purchasing a home, buying or leasing a car is the single biggest financial transaction they’ll experience.
But it can also be one of their most painful experiences…
Car salesmen tend to make people anxious, and they can be aggressive.
In 2012, the FTC reported 59,214 fraud reports related to car sales.
A company called TrueCar (Nasdaq: TRUE) tries to reduce that pain by making it easier to do car research online.
But a new company called Drive Motors is going further:
It aims to stop the pain of buying a new car.
Drive Motors
Drive Motors is putting the entire process of buying a car online…
From reading the reviews, to securing financing, to getting insurance.
This is seamless, one-stop shopping.
No more dealing with aggressive showroom or insurance salesmen.
No more pain.
Purchase a car online on Saturday – and by the following weekend, your new car will be sitting in your driveway.
And this is a massive market:
In the U.S. alone, new car sales in 2014 totaled $592 billion.
Sounds great, right?
But surprise, surprise:
Peter thinks it’s crazy.
The Peter Indicator
“We’re talking about a new car,” he said. “People will want to test-drive it!”
Maybe, Peter:
But given the pain of the traditional process, perhaps people will welcome an alternative that lets them test-drive it at home.
Once again, I believe Peter is failing to “feel the pain.”
Which explains why I’m so excited to explore an investment in Drive Motors.
Investment Opportunity
Drive Motors is currently accepting investments from investors like you >>
This is an earlier-stage opportunity than we’d generally look at…
Drive hasn’t even launched to the public yet.
But given the size of the car market, the quality of the founder (he sold his prior start-up to Yahoo), the professional venture capitalists that have already invested, plus the fact that Peter’s negative on it… well, we’re willing to dig deeper.
If you decide to dig deeper, too, here are a few details:
- You’ll be investing in the same round as Khosla Ventures, a venture firm with prior investments in companies like ZocDoc, Jawbone and Yammer.
- You’ll be investing alongside Gil Penchina (an angel who’s invested in winners like LinkedIn and PayPal) in his AngelList Syndicate (click here to read about AngelList Syndicates >>).
- The minimum investment is $10,000.
Please note: Crowdability has no relationship with Drive Motors, AngelList, or Gil Penchina. We’re an independent provider of education and research on start-ups and alternative investments.
Best Regards,
Founder
Crowdability.com
