Invisible Companies
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Invisible Companies
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Re: Invisible Companies
#2One of my favorite topics, and one that many people argue exists. The conventional thinker really dislikes this concept, as if it points out some personal flaw of theirs. I mention that only because it really sticks out, the personalized perspective people take on this idea of invisible companies they cannot see.
Re: Invisible Companies
#3I have thought about this a lot over the years and tried to spot these companies - many of them are the type of business that Berkshire Hathaway would love to find.
Some of them are a little more visible simply because they’ve scaled and developed a moat - logistics, particularly trucking in the UK, and international cargo shipping, stand out here for me. But also social care, floristry and grocery wholesaling, weird sectors in aviation (I worked in that for a while), all sorts.
And then I look at family businesses that shouldn’t be able to exist all the time. In my nearest town centre there is a grocer, a fish shop and a butchers on the high street. Common sense tells us the extra large supermarket built on the outskirts of the town in the 1990s should have obliterated them, but no.
In the UK there is a common assumption that a lot of vape shops, barbers and even some takeaways are fronts for money laundering (and that definitely happens - there is a chicken shop in one Northern town I know that to my knowledge has no ability to actually sell you chicken, nor can the 4 others next door to it). But there are definitely some that are making good money via the legal route.
As a software guy I look for opportunities to sell to them and there’s one theme that stands out across many of them that is also an invisible sector: have you noticed how many small companies make and sell touchscreen tills/cash registers? In the UK it seems to be a thriving cottage industry.
Re: Invisible Companies
#4There's a whole genre of YouTube cartoon videos about this.
Dry cleaners.[1]
Parking lots.[2]
7 boring businesses.[3]
[1] https://www.youtube.com/watch?v=_B0cASirKyE
[2] https://www.youtube.com/watch?v=La4SAUvmKz4
[3] https://www.youtube.com/watch?v=ebaiF97mCtM&pp=ugUEEgJlbg%3D...
Re: Invisible Companies
#5I have thought about this a lot over the years and tried to spot these companies - many of them are the type of business that Berkshire Hathaway would love to find. Some of them are a little more visible simply because they’ve scaled and developed a moat - logistics, particularly trucking in the UK, and international cargo shipping, stand out here for me. But also social care, floristry and grocery wholesaling, weird…
I used to think that all those Persian carpet stores on University Avenue in Palo Alto were a way to get immigrants jobs in the US. But no. Turns out the carpet store guy had been renting upstairs office space to startups in exchange for an equity stake. That worked out very, very well for him.
Re: Invisible Companies
#6There are many opportunities to start the your own invisible company. I once started a small business ($33k/year) that sold exactly one product to one company for a few years. One thing the article glosses over in the Steven Ross discussion is that this guy was clearly entrepreneurial: he was able to see the gaps and find or build solutions to fill them. You can in fact build a business around solving a "simple" problem for one business, and because it is a small scale you are essentially invisible to the would-be competition.
Re: Invisible Companies
#7[flagged]
Re: Invisible Companies
#8Constellation Software (mentioned in the article) is such an interesting company.
Re: Invisible Companies
#9There are many opportunities to start the your own invisible company. I once started a small business ($33k/year) that sold exactly one product to one company for a few years. One thing the article glosses over in the Steven Ross discussion is that this guy was clearly entrepreneurial: he was able to see the gaps and find or build solutions to fill them. You can in fact build a business around solving a "simple" prob…
every large XLS-file/table in any large/mega Corp is basicly crying to get "re-invented" as a SaaS service and being sold to them (-:
Re: Invisible Companies
#10I have thought about this a lot over the years and tried to spot these companies - many of them are the type of business that Berkshire Hathaway would love to find. Some of them are a little more visible simply because they’ve scaled and developed a moat - logistics, particularly trucking in the UK, and international cargo shipping, stand out here for me. But also social care, floristry and grocery wholesaling, weird…
I used to think that all those Persian carpet stores on University Avenue in Palo Alto were a way to get immigrants jobs in the US. But no. Turns out the carpet store guy had been renting upstairs office space to startups in exchange for an equity stake. That worked out very, very well for him. [1] https://en.wikipedia.org/wiki/165_University_Avenue
Oriental carpet stores are interesting businesses. I always wondered how they stayed open until I met someone whose family has been in the business for several generations.
Individual sales are in the thousands, so they operate more like high-end jewelry stores than a "normal" business. One sale a day is minimum 250K/year.
The store itself seems to be more of just a show room. There are other sales routes too. Selling into hotels would be an example. There are also maintenance services, so a high end rug in some sense can be seen as a recurring revenue source.
It's a interesting little corner.