My chair trembled, just for an instant.
A moment later, it drifted to the left, then to the right.
I was on the phone, sitting at the far end of a trading floor as big as a football field. I figured one of my work buddies was playing a prank on me, so I ignored it.
But then, with me in it, my chair started rolling towards a wall of windows.
This was on the 44th floor of the Citigroup Center in San Francisco. And suddenly it dawned on me:
This was no prank… this was an earthquake.
In a moment, I’ll tell you what happened next—then I’ll show you how this alarming experience led to an unexpected lesson about investing.
The Citicorp Center sits on huge “rockers.” Theoretically, the rockers allow it to move laterally without creating catastrophic damage.
Maybe the rockers did their job particularly well, or maybe it’s just that this 1988 quake wasn’t “the big one.” In any case, the drama was soon over and we tried to get back to work.
But as it turned out, the trembles I’d felt had caused severe damage throughout the city. Certain structures (for example, buildings made with wood frames) are just inherently more susceptible to earthquakes.
You might be wondering what this has to do with Crowdability, or how it’s related to investing in early-stage private companies—so now I’ll tell you.
Reaching Certain Sectors First
I often think of my “earthquake story” when I’m attempting to identify and profit from the next big thing in the technology world.
You see, when a breakthrough technology is just starting to emerge, it’ll reach certain sectors first.
For example, look what happened when the Internet came along:
Big clothing retailers like Macy’s were hardly impacted at all—consumers weren’t ready to buy clothes online. But very quickly, a start-up called Amazon.com crushed established booksellers like Barnes & Noble.
Before the Internet “earthquake,” B&N was doing just fine. But as a seller of commoditized, “one size fits all” products like books, it suddenly found itself susceptible to the new forces around it—just like a wooden house becomes susceptible during an earthquake.
When these disruptions take place, nimble start-ups get their shot at taking down the incumbents.
If you own stock in the incumbent, this can be a scary time…
But if you invest in the upstart, you can make a lot of money.
VR Prepares for its Earthquake
If you’ve been reading Crowdability recently, you already know that we’re in the midst of preparing for a technology “earthquake” called Virtual Reality.
Virtual reality (or “VR” for short) is a computer-generated environment you can interact with. Just put an electronic headset over your eyes, and you magically enter a world that feels completely real.
VR has been around for decades, but now it seems poised to break into the mainstream. The recent event that set the tech world trembling was Facebook’s 2014 acquisition of Oculus for $2 billion.
Oculus makes a VR headset called the Rift. And given that Facebook has more than 1 billion active users, it’s not unlikely that millions of them will soon be using a Rift. (In fact, Facebook predicts it will sell more than 2 million Rifts this year.)
So if you’re looking for quick profits, the question you need to answer is this:
What sector is this breakthrough technology likely to reach first?
Or, to complete the metaphor we’ve been using today: In the VR earthquake, what sector is the wooden house?
VR’s Most Susceptible Sector
We think the answer is clear:
Whether we’re talking about movies (picture yourself behind the wheel of the Millennium Falcon, zapping it into hyperspace), television (imagine sitting next to Scarlett Johansson at the Grammy’s), or the high-tech world of video games, we believe VR will reach the entertainment sector first…
And we believe it will deliver huge profits to early investors.
Here’s what a recent article from Singularity University (a Silicon Valley-based think-tank, university and business incubator) had to say: “Consumer VR promises to immerse viewers in visual experiences more completely than IMAX… Look right, look left, look up, look down—each viewer in VR gets to dictate and experience their own sequence of the story.”
To see what Singularity means, check out this video for “The VOID,” a VR gaming center where you can “touch real objects, smell various scents, and feel temperature changes on your skin and vibrations under your feet.”
And with the stakes so high, entertainment titans like Disney are getting in on the action too: Disney recently released a VR short of "Circle of Life," the opening number from its long-running Broadway hit "The Lion King."
You can check it out here» — you just need a VR headset like Google Cardboard and an Android device, or use the Littlestar app on iOS.
No expensive tickets to buy, no waiting in line—just enjoy the show!
Keep an Eye on Your Inbox
As we hinted at last week, we’re about to give you a chance to invest in a specific early-stage opportunity in VR.
And to be clear, it’s in a sector that’s highly susceptible to the VR earthquake.
So stay alert for your chair to start trembling…
And keep an eye on your inbox for news from Crowdability.