Investing in Unsexy Companies

I am and have been particularly interested in investing in companies tackling unsexy problems.

As a consumer, I love the travel or food industries as much as the next person, but there’s a dime a dozen companies out there trying to solve every single niche problem associated with these traditionally “sexy” industries.

While I don’t believe competition is necessarily a bad thing for a start-up, some industries just have no defensible moat leading to an undifferentiated market. How many personal finance apps or meal kit companies are out there at this point?

As someone who has done small fun consumer side projects in the past, I understand the appeal. It’s fun starting that food, travel, or clothing company. Fun doesn’t always make a good business though.

Tackling the unsexy problems of the world may prove to be an easier path to success with much less resistance.

For one, there’s less competition naturally as people tend to gravitate to solving only the sexy problems.

And two, people are much more willing to pay to take care of problems they don’t want to deal with, i.e. the unsexy problems, e.g. I’d much rather book my travel or spend time researching where to eat dinner than researching what soil to buy for my garden or dealing with my overfilled garbage can.

So bring on the waste management, soil, and other obscure start-ups of the world. There’s lots of problems in the world to be solved and they don’t always have to be sexy.