What pops into your head when you think about start-ups?
Young entrepreneurs in shower sandals trying to change the world?
A dark, cramped room stacked with computers and blinking lights?
Brilliant scientists tinkering with the human genome?
For many folks, those are the images they think of.
And frankly, those images can make investing in start-ups seem foreign and unrelatable.
Recently, however, I came across a video that paints a very different picture.
I hope you’ll check it out.
But be warned:
This video is pretty moving.
It nearly brought a roomful of wealthy businessmen to tears.
This Video Almost Made The “Sharks” Cry
The video I’m referring to is from a recent episode of the TV show, “Shark Tank.”
Every week on the show, entrepreneurs pitch a panel of judges (i.e., the “sharks”) to invest in their start-ups.
But on this particular episode, the judges got quite a surprise:
From Tech to Trees
As you can see from the video, not all start-ups aim to be the “next Google.”
Johnny Georges is a farmer.
His father was a farmer.
When it comes to farming trees, no one understands the market better than Johnny – and no one understands its problems better, either.
His deep understanding is what inspired him to create a simple, effective product:
It’s called the “Tree T-Pee.”
Basically, it’s a cone-shaped plastic “containment system” that keeps young trees fed with water and nutrients – and it can save hard-working farmers a fortune.
An earnest farmer like Johnny...
A valuable but unremarkable product called a “Tree T-Pee”...
This isn’t what comes to mind when most folks think about start-ups.
But thousands of early-stage businesses around the globe are just like Johnny’s...
And surprisingly, whether a start-up is selling technology or trees, valuable start-ups share some common ingredients...
It Starts With Passion
Whether it’s a tech company like Google, or a farming equipment company like Johnny’s, valuable start-ups have a few key ingredients.
1. Passionate Founders – Look at Johnny, then look at high-tech pioneers like Larry Page from Google, or Steve Jobs from Apple. Each of these founders was passionate about two things:
Their customers, and their product.
Jobs would settle for nothing less than perfection in every product Apple released. Product launches were sometimes delayed for years because he didn’t think the product was ready.
And what about Johnny? He refused to sell the Tree-T-Pee for more than a few dollars. He was so passionate about his product that he wanted to ensure that everyone in the world could afford it.
2. Large Target Market – In the U.S. alone, there are roughly 100 million citrus trees. If each tree used Johnny’s solution, he’d have a $500 million business.
And if he increased his prices like the Shark’s advised, he’d have a $1 billion business.
Now look at Amazon. Initially, the company focused strictly on selling books. Its founder, Jeff Bezos, calculated that, if he could just convince Barnes & Noble customers to buy their books online, he’d have a billion-dollar business.
For Jeff and for Johnny, being able to address a large and specific target market is essential.
3. Solve a Specific Problem – And finally, successful start-ups offer their customers a proven way to solve a specific problem.
Whether we’re talking about Google (helping people quickly find the information they want)...
Or Johnny (helping farmers save money)...
A valuable start-up helps people solve problems.
Never Forget What You’re Investing In
So when you’re looking for start-ups to invest in, keep in mind that they’ll come in all shapes and sizes:
Some technology companies might look scary and “unrelatable”...
And other companies might sell products that seem “unremarkable.”
But if the start-up has passionate founders who are solving a big, specific problem, you’re on the right path!
Happy investing.
Best Regards,
Founder
Crowdability.com
