What’s ripe for change?
Technology has touched almost everything but some verticals have had more change than others. As I think about my investment thesis for 2017 there are a few areas that interest me because I believe they are ripe for change.
I am still very interested in the cannabis space. The consumer products is what I find the most interesting and being based in California is also a bonus. The state is big enough to build a very large business without every having to go into other states but it will be easy to move up the coast to Oregon and Washington. The biggest issue here will be capital. Most institutional investors will not be investing in this area because of their LPs. Eventually this will change but right now the majority of investors are people like me.
I have been a fan of the real estate sector for years and it shows in my portfolio. There is a lot more opportunity in this space particularly when it comes to building. There will be changes in the next decade in urban living from rethinking space from new materials to new innovations around innovating old buildings. It is an area that I spend a lot of time in and as much as the past decade has changed the foundation for architects, real estate owners and contractors with software and products there is much more to do here.
The other area is the art. The art world has been slow to change but the consumers have changed quickly. New collectors are across the globe and how they operate and collect is a bit different than the traditional way that galleries and auction houses operate. This particular industry is like turning around a cruise ship but eventually it will get there with smart founders who get the space and connect with the forward thinkers in this vertical.
The farming industry, when it comes to waste, is just starting to hit strides. I have seen a lot of start-ups in this arena the past year and expect to see more.
Of course there will be outliers but my thesis has always been geared toward areas that are just starting to change. I invested in healthcare and education years ago and certainly there is much more to do there but it is an area that has become so saturated with new ideas and change that I no longer feel comfortable jumping into it. The investors that spend the majority of their time in those spaces are much more equipped than I am to invest in that arena. As a generalist I have to look into areas that are still underserved.
As always, looking forward to what’s next.