Let’s talk about what industries to focus on in your Alpha 2.0 business — meaning you have high-margin, low-work income that is location independent that comes in from anywhere in the world without you being tethered to one city. When you’re designing your Alpha 2.0 business, it is important to be cognizant of the types of industries you choose to service within your niche.
“Industry” and “niche” are two different things. I always talk about how you have to “niche” your Alpha 2.0 business, a very narrow niche — and industry is not a niche.
An industry would be health care. You can’t say your niche is health care; that’s not a niche, it’s an industry, and it’s too broad for an Alpha 2.0 business. Instead, you would say your niche is obstetricians who are over the age of 50. That’s a niche within health care. Within any industry, there are thousands of niches. That’s the beauty of niches, there are so many of them. So today, just to be clear, I’m talking about industries, not niches.
When you select an industry, it’s very important that you understand the pros and cons, if any, of that industry. It’s not as simple as good industries vs. bad industries or rising vs. declining industries. I’m going to give you five categories on the types of industries, and every industry you can think of will fall into one of these categories.
Objectivity is Key
Don’t be stupid about this. Be objective and honest about what your industry is and the strengths and weaknesses of that industry. You want to factor in both of those things, not just one or the other.
Don’t bullshit yourself, don’t emotionalize this stuff, but be very objective, particularly in your business life. Being subjective and irrational in your woman life — that’s one thing. But don’t be subjective and irrational in your business life. This is your money.
Industry Categories
There are five categories of industries. Every industry you can think of will fall into these five categories, and that goes for the industry you have chosen or are thinking about choosing. It’s very important that you understand the differences between each and make your decision accordingly. Some of these are good, some of these are bad, and some of these are grey areas, depending on what you’re doing.
1. Growth Industries
The first one is growth industries. These are the industries that are doing very well and will continue to do well over the next five to 20 years or so, industries that are growing for the mid to long term. These are good industries.
The number one industry, top of the list, in terms of growth industries (and I’ve said it a million times) is health care. Health care is going to explode, and now that we have coronavirus, it’s going to explode even faster.
Now, what verticals are there inside health care? There are a lot of them that are good; the one I like is anything having to do with helping old people survive and be comfortable. Geriatric care, elder care facilities, things like hearing aids, everything you can think of having to do with keeping old people alive and comfortable will be huge. And it will become even bigger as time goes on. Health care is awesome.
Another one I talk about is cybersecurity, keeping everybody safe on computers. Cryptocurrency is another one, and you can even mix some of these. You can do cybersecurity in health care — holy shit, awesome!
You should get my business course if you want more detail in growth industries.
2. Dying Industries
The second category is industries that are dying, industries that are screwed, like newspapers. Who reads newspapers besides your 82-year-old grandpa?
Another one, unfortunately, because of the coronavirus, is travel. The travel industry is probably dying, and as an entire industry, it’s going to take a massive hit over the next few years. It may never completely recover. I have a lot of buddies in the travel industry who are having a lot of problems and my heart goes out to them, but that’s probably a dying industry. Tourism, as well, is not dying, but it’s definitely on the decline for a number of reasons.
There are a lot of dying industries, and these are not industries you want to get into. These are industries you want to avoid (unless you are hyper niched in a very unusual way).
Or you can help companies or individuals transition out of these industries into different industries in the other categories, including growth industries. That could be a business in and of itself.
3. Stagnating Industries
These are industries that are just sitting there like a bump on a log; over time, they will not decline too much, but they will not do well. They’re just kind of floating there like a turd in the pool, not really doing anything. There are a number of examples, like the auto industry. There’s nothing super exciting going on in that industry other than Elon Musk, but that’s a rare exception. These stagnating industries are fine as long as you are very, very niched, because like I said, stagnating industries don’t decline, they’ll just kind of hang around.
A “country” version of a stagnating industry would be New Zealand and Australia. Those are the only two parts of the Western world that aren’t going to collapse, but they’re not going to do well at all. They’re just going to sit there and float along; nothing really amazing is going to happen with them — just like stagnating industries.
4. Solid Industries
These are industries that are rock-solid no matter what happens in society, whether it’s with pandemics, economic recessions or depressions, and so on. These are industries that will endure because they are needed services. For example: grocery stores. Who’s not going to go get their food if the economy is bad? You’re going to spend less money on food perhaps, but you’re not going to stop buying toothpaste. You’re not going to stop buying tuna fish; you’re not going to stop buying dog food. So grocery is a solid industry, as anything else having to do with mandatory, required items (housing, clothing, water, etc).
You could argue that health care is a solid industry also, but health care is growing. Solid industries don’t necessarily grow, they only grow with the population. So if you’re in a part of the world with a rising population (Africa!), then solid industries are on the rise. Other than that, they’re just going to be solid and static no matter what. These are good industries to get into, again, as long as you are niched. It’s very hard to lose money if you focus on the grocery store industry (as just one example).
I used to work with a guy who worked out of a small office with one secretary. He was a milk broker; all he did was broker deals between the dairies and grocery stores on milk and dairy products. He made around $400,000 a year and only worked a few days a week because he was in a solid industry. And he was in sales — the most important business function is sales and marketing.
5. Cyclical Industries
This is a tricky one; a lot of people don’t know what this means and get burned by it.
A cyclical industry is one that does amazing and people are making gazillions of dollars, and then they crash. They do terribly for a while, then they do great again, and then they crash again.
Mortgage brokers are good examples. During the boom of the 2000s, there were guys selling mortgages and making $700,000 a year, and then the next year, they couldn’t pay their bills.
Another big one in this category is construction. I have a lot of experience in this industry. I know a lot of guys who work with construction companies (or own them) who are either rich and kicking ass or starving and can’t pay their bills. It’s one or the other; construction is highly cyclical.
Another one is tourism locations — not tourism in general, but specific locations. Places like Vegas and Aspen do great when the economy is good. When the economy is bad, these places get murdered. They’re highly cyclical.
You do not want to be in a cyclical industry. I want you to be long-term consistently happy — that’s what Alpha Male 2.0 is all about. If your livelihood is reliant on a cyclical industry, you’re never going to be long-term happy. Sometimes you’ll be really happy and sometimes you’ll be miserable. In other words, you’ll be an Alpha Male 1.0 if you focus on a cyclical industry. Not a good place to be.
Conclusion
Those are your five options. Choose well. Obviously, growth industries are the best. Very hard to go wrong there unless you’re stupid.
Another good category is solid industries. These are great as long as you niche, niche, niche! Don’t just sell to grocery stores — that’s an industry, not a niche.
If you’re very careful, you could go after a stagnating industry (maybe). I would completely avoid dying and cyclical industries.
And if you don’t know what categories your target industries fall into, do the research. There’s this really great website that will show you exactly what industries will fall into which categories. It’s called “Google.”
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And here I thought 2020 would be a shit show because of the election! I was way off.
It’ll be interesting to see how all these ‘rona impacts shake out over time. I think we’re just seeing the tip of the iceberg. A lot of the jobs lost won’t come back, at least not any time soon as companies get by with less staff or close all together. Not to mention some significant inflation down the road with all this money printing going on which I’m sure will continue, especially if Dems take control.
I’m in a band as a fun side project and the music industry is pretty fucked too. No concerts any time soon and that is the main way bands make their money these days. Plus I’m guessing a lot of these smaller music venues won’t survive being shut down this long-they were on thin ice before all this hit. Some guys that run big fests are saying late 2021 or early 2022 for shows, in big part due to insurance costs.
Travel is most definitely fucked-I know some folks in the airline industry that are switching careers now. It’s almost impossible to plan trips now with the continued lockdowns and quarantine rules that seem to shift week to week.
This will also happen if Republicans maintain control; it may even be worse.
Is travel going down or is it in a temporary slump for the next few years? Eben Pagan (David DeAngelo) has said in one of his online courses that travel is on the rise for the next two decades. Granted this was before COVID happened. I’m in the travel industry but I focus on travel hacking credit cards so I’m wondering if that’s the same thing or because it’s a hybrid of travel and finance that it’s okay.
A little of both. There will be a temporarily slump in the next few years before more people start to travel again, but even after that, very old people are going to (likely) be nervous about traveling in close quarters for the extended future (planes, cruise lines, etc) and they represent a decent percentage of travelers. Add to that the coronavirus-duh-realizzation of many companies that they don’t need to fly their employees around anymore and can just use Zoom. Also add to that the reduced purchasing power of Westerners as the West continues to collapse. And so on.
1. Did he say that before Covid?
2. Travel will be on the rise in the next two decades… for the Chinese. But for Westerners? Probably not (outside of a few isolated niches).
No, it’s travel, not finance.
And in my opinion, I would not start a travel-based business. But it’s your life, do whatever you want.
Another very big growth industry after this crisis will be tech (which has more or less been growing for the past 80 years). Things like:
– nanotechnology (billions of useful applications for this)
– renewable energy (solar panels)
– quantum computing
– AI and “smart” crap everywhere
Oil and gas industries (AKA the “old school” energy industry) are absolutely fucked. There are expected to be 150+ bankruptcies in this sector alone within the next year.
Side note: the cyclical industries are the industry version South America (and maybe Russia?), the growing industries are like Southeast Asia, the dying industries are like the USA, Canada, Japan and Europe. The solid industries are like Utopia, except that they exist. It’s interesting how it all interconnects 🙂
Correct. A close #2 to health care is tech. And not just after Covid, but now as well.
As Dan Pena recently said, “If it’s not health care or tech, short it!”
Eben Pagan said it before COVID so perhaps the landscape will change moving forward. I have a second niche business on the ENFP personality MBTI personality type since you always said to have 2-4 different business in different industries. I’ll have to pivot and focus my attention on that. I don’t think travel will be down for good but your logic that it will be down for the next few years makes sense so I might put it on maintenance mode for now until things pick up again.
Cybersecurity seems to be another potential growth area. There’s already two ETF that focus on it, one with the great symbol HACK
On that note, plenty of people are staying on home office permanently after this blows over. The old folks in charge finally realized what younger generations have been saying for a long time: office work is an outdated idea and employees are just as efficient (if not more) when working from home.
Agree.
I’m currently doing Translation (Dying, due to AI and machine learning and stuff) and Localization Consulting (Solid, I guess, you always want advice to efficiently sell to a specific local market)
I just love translation and don’t want to let it go because it’s one of my strong expertises. Do you think highly niche to a growth industry, for example ”Translation service for Healthcare companies serving Elder people” would be able to do well? Or it’s still a bad idea? Thx.
Translation is inherently bad because you’re selling your time. Now if you devised an automated translation solution, perhaps a highly specialized one (maybe forms of some kind that have to follow a rigid structure), that would be different.
Out of curiosity, do you translate everything by hand or has it become viable to run machine translation and then proofread the result?
Many men who drove horse and buggy carts when the automobile was invented said the same thing. Your emotions are irrelevant, as is your past training.
In the short term it would be fine. In the mid to long-term, terrible idea.
@Caleb Got it, thanks.
You can only do that when translating easy/common materials. MT isn’t that efficient yet but I believe it will be in 5-10 years.
I run a translation agency kind-of business, mainly do marketing and just outsource the translation+proof-read part (only do proof-reading myself if it’s a hard project or for big clients). It has been going well and very Alpha 2.0 compatible, too bad it’s a dying industry.
Hi Caleb,
As for 2. Dying Industries, I kinda disagree with you on that part. You can do amazing money on a dying industry, if its death is slow enough.
My example: Im a “vulture” (Sales and Acquisitions mediator) in the old school paper industry in Europe. My job is to cannibalise falling factories for machines and parts, and sale those to emerging small-time factories in the Developing world, who had yet to get the news that their industry is a corpse.
The Europeans and the Americans are desperate to sale their equipment, since nobody reads papers anymore. The Indians and the Africans are dying to BUY these old crappy machines, because they cannot afford better. And all I do is sit in the middle, exchange emails and collect commissions.
Of course, this scheme won’t last, and eventually I will run out of clients. But this “eventually” is 20-30 years down the line, I will be long retired on the money, or go off do something else.
Dying businesses are awesome if you know how to ride the wave of the collapse.