Warehouses investments for investors go mainstream: What’s the takeaway for investors?

Amit Raizada

February 10, 2021

A recent report from the New York Times found that air cargo had increased significantly in cities across the country in 2020, a difficult year in which the COVID-19 pandemic brought brick-and-mortar customer traffic to a halt and increasingly forced Americans to shop online. As a result, warehouse investments for investors became a growing trend, with major players like Amazon rapidly expanding their logistics infrastructure.

In response to this significant uptick in demand, retailers like Amazon are rapidly investing in new shipping and receiving facilities at, or in the close vicinity to, many of America’s largest airports.

To those who have shrewdly watched the growing prominence of this sector over the last few years, it is obvious that the pandemic did not create this trend; it merely accelerated it.

Our lives have come to be increasingly defined by the internet. It’s where we stay in contact with our friends, pay our bills, read our news, watch our favorite shows, and—en masse in 2020—buy things. While online shopping is more than a decade old, it has been within the last five years that we have turned to the internet even for basic essentials like food, household necessities, and even the most valuable commodity of 2020—toilet paper.

But as any close observer of incipient market trends will tell you, younger generations—those most likely to shop online—are infatuated with immediacy. As children of the internet, they want to receive their goods and services with the same rapidity with which it now takes to buy them. In response, retailers like Amazon have invested heavily in their delivery apparatuses.

Their efforts have paid off. Delivery times have shrunk nearly as quickly as the industry has grown. Customers in 2021 can now expect many items to arrive at their homes within 36 hours of purchase.

To support these demands, online retailers took to overstocking key inventory in large markets. Anticipating that many people will want to purchase the latest New York Times Bestseller, for example, retailers will ship copies to local distribution centers before customers have even placed their orders. With these items already in stock locally, retailers can lower delivery times by preempting orders, ensuring that the product is shipped and in transit within hours of the customer’s clicking “purchase now.”

That is where venture capital comes in. In my capacity as CEO of Spectrum Business Ventures, I have invested heavily in the requisite warehouse space to help accommodate this new model. The problem with pre-shipping items to preempt orders is that these items need to be stored somewhere in the interim. I’ve focused on purchasing warehouse space within ten miles of the country’s major airports to ensure that, as goods sit in online order purgatory waiting to be shipped, they sit in my facility.

Warehouses are far from the flashiest of real estate investment—that much I won’t dispute. But investing in this field illustrates one of my primary investment philosophies—backing the ventures that help the major markets, and the major players within them, operate smoothly. Founding and scaling a competitor to Amazon would be tricky, but backing the ancillary ventures that Amazon needs to succeed—like warehouse space investments—is as feasible as it is profitable.

I would encourage aspiring investors to apply this approach to the myriad new markets that have emerged over the course of these difficult last ten months. Major industries from travel to entertainment to logistics are undergoing once-in-a-generation recalibrations. Look for the deficiencies in these markets, figure out ways to ameliorate them, and be on your way with an innovative and profitable venture tailored to the challenges of today and the promise of tomorrow.

Predictions for a new year: Bullish markets, family events and sticky social distancing?

Amit Raizada

February 1, 2021

We’ve made it. After an incredibly difficult year that challenged the very fabric of our society, left nearly 400,000 dead and millions unemployed, we’ve set sail to 2020 while navigating business trends and economic predictions for recovery

As we enter 2021, the world seems poised to settle down. In the waning days of 2020, regulators at the Food and Drug Administration, the country’s highest medical regulator, approved for emergency use COVID-19 vaccines from Pfizer and Moderna. Now, we face one of the defining logistical challenges of our lifetime, as state, local and private actors coordinate to ship and distribute millions of vials of the life-saving vaccines to cities and towns across the US.

Many hope that, as the distribution of the vaccines becomes more widespread, life will eventually return to normal—caseloads will fall, businesses will reopen in full, and life will begin again. I’m confident this will be the case—but we’re not there yet.

Just the other week, the Department of Labor announced that more than 140,000 people lost their jobs in December. There is still a dire need for economic stimulus. Businesses remain shuttered in many of the nation’s largest cities. COVID-19 caseloads have reached all-time highs around the country. Earlier this week, more than 4,000 Americans died of the coronavirus.

Things will get better, but work remains to be done. It is this paradigm—hope for the long-term and trepidation for the immediate days ahead—that informs my business outlook for this year. Here are a few trends I think will transpire over the coming 12 months. It is this paradigm—hope for the long term and trepidation for the immediate days ahead—that informs my business outlook for this year and aligns with key business trends and economic predictions shaping 2021.

Stocks Soar: A Growing Disparity

A major storyline of the COVID-era economy has been the profound disconnect between the stock market and the labor market. Just last week, at a time when the economy again contracted by hundreds of thousands of jobs, the Dow Jones Industrial Average surpassed 31,000—a remarkable figure unthinkable just years before, never mind during a global pandemic.

It is likely that we will see the market continue to rally this coming year. So long as the Federal Reserve, America’s central bank, continues to keep interest rates low and inject liquidity into financial markets, investors will have a driving incentive to put their faith—and their money—into the market, driving up demand and stock prices.

Given the dire state of the labor market, it’s unlikely the Federal Open Market Committee is eyeing a rate hike anytime soon, continuing to breathe wind into this unorthodox recession-era market.

The Economy of Experiences Makes A Comeback

When herd immunity finally does kick in and the profile of the economy reverts more closely to normal, there will be significant consumer demand to spend money on experiences—novel, inventive family outings that can be shared on social media and form the backbone of lasting social memories.

Thanks to the efforts of online retailers, we’ve all been able to purchase things during the pandemic; it’s the experiences—travel, restaurants, nights out—that have fallen into short supply. Demand for these activities hasn’t evaporated, only supply has. And as soon as is deemed safe, this industry will come roaring back.

Is Social Distancing Sticky?

In economics, the adjective “sticky” is used to describe goods, services, markets or phenomena that change little in response to prevailing market conditions.

The pandemic and its attendant consequences have been indelibly difficult, but I project some aspects of the last year will stick around.

Masks, for example, could be here to stay. Sure, vaccines may wipe out the threat of COVID, but masks have proven to be effective tools in keeping influenza, the common cold, and other respiratory bugs at bay. The pandemic has shown that the logic behind masks is intuitive—if you’re feeling sick, why wouldn’t you wear a mask to avoid spreading contagions to the public? A year ago, few of us thought that way, but it is reasonable to suggest that, moving forward, masks could be flu season mainstays.

I anticipate that mask-wearing will not be the only way in which consumer behavior has changed. Seeing just how sticky the sacrifices we’ve come to live by in the COVID era end up being will be one of the great economic questions before us in the year of hope and renewal.

It's All Logistics: Shipping Becomes a Pandemic Hero

Amit Raizada

December 27, 2020

As an investor and venture capitalist, I’ve always sought out logistics investment opportunities in the firms, products, and industries that produce returns and improve peoples’ lives. Over the course of the COVID-19 pandemic, we have seen a number of new industries rise to prominence, while many former economic giants have contended with rapidly evaporating market shares and changing consumer behavior.

While the rise of streaming services and tech firms during the pandemic has been well documented and frequently discussed, little conversation exists around the industry I think has truly powered the economy during this difficult time—logistics. As we continue to navigate the pandemic, I can’t help but think how logistics investment opportunities embodies the ethos of my central investment philosophy.

With COVID-19 confining millions to their homes, Americans have relied more deeply than ever on logistics and delivery services—from the Postal Service to Postmates—to acquire the goods and services they need. Whether we have noticed it or not, the logistics industry has played a significant role in our lives over these last few months.

The demand for efficient, quick deliveries first began to skyrocket during the onset of the pandemic, when restrictions were at the tightest and national anxiety at its most acute. With nearly all nonessential retail closed in major markets like New York and Los Angeles, millions of Americans took to Amazon to acquire items from consumer goods to face masks to household essentials. When many Americans felt unsafe traveling even locally to pick up groceries or medications, micro-delivery platforms like UberEats and Postmates filled in a crucial void.

With the holiday season fast approaching, countless Americans are again counting on logistics and shipping firms to move their gifts from point A to point B. As many consumers conduct the entirety of their holiday shopping online, delivery services have increasingly taken on the role of Santa Claus.

Even more importantly, logistics will play an inextricable role in our nation’s mass vaccination campaign. Now, as pharmaceutical firms like Pfizer and Moderna have obtained emergency FDA approval for their COVID-19 vaccines, the logistics space is tasked with getting millions of vials of the vaccine from factories to health care clinics around the country, no matter how remote. Even air carriers, one of the pandemic’s most salient victims, have begun to contribute, retrofitting passenger airplanes to transport vials of the vaccine around the country. With vaccines on the way, our capacity to recover from this pandemic will be good as our logistics capabilities.

In many ways, we would not have made it through this moment without logistics firms and providers. Our well-being depends on them.

While accelerated by the pandemic, the logistics and shipping industries have grown over the last few years. And where there’s growth, there’s opportunity to service that growth. Over the last few years, I have gotten in on the ground floor of this trend by investing in warehouse space within ten miles of the nation’s major airports, which helps store key inventory for online retailers.

In this very moment, logistics perhaps most appropriately embodies my principal investment philosophy of supporting the ventures that generate social and economic returns. I would encourage aspiring investors to look for innovative opportunities in this field.

Restaurants: A Year in Review

Amit Raizada

December 27, 2020

In my more than twenty years as a venture capitalist and entrepreneur, I’ve always felt a strong affinity for the restaurant industry. I’m a foodie at heart, and I love being able to back the ventures that help share the wonders of food with the world.

Restaurants have always comprised a significant portion of my investment portfolio—and, as such, I write a lot about the industry. Back in February, I wrote an article about developing successful restaurants in which I stated that restaurants should work to cultivate a unique atmosphere and embody a certain energy.

Wow—to think how much has changed in the last ten months! Little did I know that no less than a month after writing that piece, restaurants around the country would be asked to close their doors upon the coronavirus’ arrival in the United States. Little did I know that most of these restaurants would go months without accommodating a single dine-in customer, that proprietors would need to devise a wholesale transition to patio dining just to stay afloat, and that millions of hospitality workers would soon lose their jobs.

The restaurant industry has been turned upside down in the time since I wrote that piece.

Now, restauranteurs and investors are constrained by a national patchwork of regulations and restrictions. In some states, restaurants are operating almost as normal. In others, like California—one of the nation’s culinary capitals—restaurateurs have been on a rollercoaster ride.

After only being permitted to offer take-out dining in the spring, most restaurants were able to accommodate outdoor dining during the summer months. Proprietors spent large sums of money on tarps, decks, and furniture to build attractive outdoor patios for diners. In late November, amid a nationwide surge in cases, outdoor dining was shuttered across the Golden State, leaving restaurants to pivot back to take-out only models.

As this troublesome year winds down, I wanted to share a few thoughts I’ve had about the restaurant industry, where it’s been, where it’s going, and how it can make the most of this inauspicious situation.

FOCUS WHAT YOU CAN DO

The COVID-19 pandemic has significantly constrained restaurants’ ability to operate in a normal capacity. While many of these restrictions are necessary to slow the spread of the virus and ultimately save lives, it benefits restaurateurs to focus less on what they cannot do and more on ways to maximize what they can still do.

In states like California, the answer may be that restaurants are only permitted to fulfill take-out or to-go orders. In other markets, restaurants may be able to accommodate the public on outdoor patios. Whatever the restrictions in your municipality may be, discern which functions are still permissible and leverage those to the best of your ability.

CREATE NOVELTY

In earlier iterations of my musings on restaurants, I wrote that proprietors should focus on cultivating within their establishment a unique and trendy atmosphere that transforms dining at your restaurant into a sharable, unique experience.

While new restrictions have recharted the ways in which this is possible, I encourage restaurateurs to figure out how to make eating at their establishments feel like a novelty—and something worth sharing with family and friends—during the pandemic.

This could involve a pivot in service or recalibrating your cuisine to better meet the needs of a pandemic era-crowd. Developing ambiance during a pandemic is far easier said than done, but must nonetheless be a priority for restaurants adapting to this era of uncertainty.

THINGS WILL GET BETTER

I know that the last thing any struggling restauranteur wants to hear during these trying times is a platitude, but with the Pfizer and Moderna vaccines already being administered to the public, the restaurant industry looks ripe for a resurgence at some point in 2021.

When the clock struck midnight last January 1, no one could have foreseen the struggle and discord the proceeding 364 days would have in store for our society, the boom to Zoom & at home fitness companies like Peloton, and our country. But we’re here now, vaccines are on their way—keep your heads up.

Streamlining employee onboardings during ad post COVID-19

Amit Raizada

December 10, 2020

Employee onboarding strategies have become a peculiarity of the COVID-era office place. Hired and trained over Zoom while the rest of the office works from home, these employees are now commonplace on work teams across the country. While many have quickly become impactful members of their organizations—and many others deeply embedded into their companies’ workflow and ethos—challenges exist in integrating these employees into extant company processes and cultures.

For many firms, employee onboarding strategies take up a significant degree of time and energy. Many companies’ internal processes, procedures, and software were not designed to be taught over Zoom, leaving virtual employees feeling frustrated and demotivated during their first few weeks at work. For teams, it often feels paradoxical despite being in contact with new hires every day over Zoom and email, they remain relative strangers.

With COVID-19 cases increasing in states across the country, these challenges will likely persist well into the new year. Below, based on my experience running Spectrum Business Ventures, I’ll share insights and employee onboarding strategies businesses can use to smooth the process and improve new hire experiences.

Enhanced Onboarding

When it comes to onboarding employees during the work-from-home era, the traditional “sink or swim” model is simply obsolete.

“Working from home, while necessary to reduce the spread of COVID-19, effectively places your entire team into silos”. “To effectively onboard a new employee, management must first acknowledge this fact and accept that, without a proactive and integrative onboarding process, new hires will struggle to learn your company’s ethos.”

One of the most effective employee onboarding strategies is to frontload onboarding sessions into the new hire’s first few days with the company. By doing so, hires will be presented with their full range of responsibilities up-front, affording them time to learn and follow up with inquiries.

Most importantly, management should cut new hires some slack.

“Joining a new company, even one that you love, always involves a period of transition and adaptation. The pandemic makes this markedly more difficult,” he said. “But incorporating new hires into your team is as much a mental game as it is a logistical one. Reassure your new team members that they are adapting well. Be amiable and generous with your time—they will respect you immensely for it.”

Utilize your team

Effective employee onboarding strategies do not need to rely solely on management. Instead, experienced employees should also play a role in helping new hires integrate. Often, these employees already handle myriad tasks for their companies, and leaning on them for support with onboarding can be helpful to all parties involved.

I recommend asking key members of your team to block out “office hours” for new hires, in which they can pose any questions, comments, or observations they may have.

“This builds an important sense of camaraderie between teammates, which is integral to running a successful venture. For one, it gives your team an opportunity to interact and to build trust and connections. It also helps your new, virtual hires learn more about the company from the individuals conducting its day-to-day business.”

The best way to learn about a company, Raizada said, is to speak directly with those who have the most experience driving forward daily tasks in a safe, non-judgmental setting.

“Many of your veteran teammates are experienced in navigating onboarding processes and can answer specific questions—work-related or otherwise—that the new hire may have,” he said. “It’s a win-win.”

Talking about Investing at the Thanksgiving Table

Amit Raizada

November 28, 2020

There will be a lot of empty seats at Thanksgiving tables this year. Staying close to home is in fashion this holiday season, and—because of the pandemic—people are limiting their Thanksgiving celebrations to only their closest family.

Being forced to stay away from the people we love can be devastating. However, I think close-knit Thanksgiving celebrations allow a rare but important opportunity: to talk with your closest family members about the importance of investing (and the strategies behind it).

There can only be one word to describe investing in 2020: rollercoaster. Never before have we seen the stock market fluctuate so wildly. With the single fastest stock market drop in history in March, to the single fastest recovery in the months that followed, investing in 2020 has been anything but normal.

That’s why we have followed the same tried-and-true strategy at Spectrum Business Ventures: Invest in the future and invest for the long-term. With the unprecedented volatility that came in the wake of the COVID-19 pandemic, it’s possible that one or more of your family members may have shifted their investing strategy. Whether it’s your father—who panicked in April and liquidated a majority of assets—or your daughter who discovered Robinhood in June and piled in on overinflated stocks perpetuated by hype rather than value, many of us have engaged first hand with investment over the last eight months.

During this unprecedented moment in our world and in our markets, it’s important to debrief and center yourself—strategically and emotionally—with your family. And here’s how you do it.

Talk about what happened—and why it happened.

On March 16th, the reality of COVID-19 kicked in for the real world. Markets dropped an astonishing 13%, halting trading within the first 15 minutes and sending the Nasdaq to its worst day ever. However, Markets had been on the downward trend since mid-February, even as all seemed normal.

When the reality of the pandemic hit the real world a few weeks later in early April, many were wondering why the stock market wasn’t dropping now. After all, panic was in the air and toilet paper was flying off the shelves. Enter the concept of “pricing in.”

Large-scale investors can’t predict the future, so they “price in” what they think will happen into their real-time decisions. This means that, when a big market event occurs, it likely was already reflected in the price movement weeks or months ago. This is exactly what happened in late March—markets were uncertain of the status of the coronavirus back in late February and many fund managers opted to get out rather than endure the possibility of economic impact.

It is vitally important to understand and talk about these stock market fundamentals with less-informed investors. Those who invest without knowing how the market works are destined to be crushed by the waves of the more informed.

COVID-19: A teaching moment

These concepts are not simple, nor are they instantly intuitive. There’s a chance that someone at your table this year may have gotten caught up in some rash investment decisions that kept their balance a lot lower than it could have been.

Of course, we can’t go in back in time, but if we could, it’s likely that you or your family member would have been much better off continuing their long-term investment strategy and not reflexively taking money out of the market.

That’s exactly why this is the perfect teaching moment for aspiring investors. The last year has made expressly clear the importance of having a comprehensive, long-term investment strategy based in the firms and markets of the future. Now is as good a time as ever to start putting these philosophies into practice.

Finances are one of the most important aspects of our lives, so why shouldn’t we discuss strategies with those closest to us? As you are all seated around the small Thanksgiving table this year (or maybe you’re Zoom-ing in), don’t be afraid to bring up the mistakenly taboo topic of investments.

IPO Mania: Tricky Investments and Long-Term Strategy

Amit Raizada

October 12, 2020

If you have been paying attention to the stock market at all these last few months, odds are that you’ve seen skyrocketing IPOs that seem to defy all logic. Snowflake (SNOW) IPO’s at $120 a share, then closes at $254 after reaching $319 at its highs. Lemonade (LMND), a tech/insurance hybrid, opened its big day at $29 and traded to highs of $64—a 132% gain on the day. These are the kinds of jumps investors dream about seeing once a year, let alone in one day.

Even in the midst of the deepest economic crisis we’ve seen in decades, IPO’s are having a banner year. September was one of the best months on record for IPO funding, and all signals are pointing to an October defined by the same astronomic impact. In fact, IPO tracker Renaissance Capital found that IPOs this year are enjoying 2.5x more first-day pop than the historical average. These head-turning debuts are exactly what financial bloggers and stock market reporters salivate over, creating headlines that catch even the most casual investor’s attention. Pair that with the meteoric rise of easy-to-use online, app-based brokers like Robinhood—which has an $11 billion valuation itself—and you have a recipe for quick success (and in many cases, ensuing disaster).

Gains of this magnitude can paint a rosy picture over a rough canvas, highlighting the outliers while ignoring the true reality of the underlying economy. This primes amateur investors and get-rich-quickers to enter into IPOs purely based on the initial event, ignoring the inherent value of the company and long-run considerations. As I have frequently cautioned in the past, investing with a long-term time horizon in mind beats fast, speculative trades. Every. Single. Time.

As a venture capitalist and entrepreneur, I’ve long pursued opportunities in the economy of the future. At Spectrum Business Ventures, we see the world differently, closely monitoring the preferences of young consumers and emerging market trends to gain footholds in the firms and products that will come to define our economy in ten, fifteen, or twenty years—even if doing so means incurring short-term losses. I urge aspiring investors to do the same.

IPO deal hunters have the right idea—they just need to refine their approach. Investing in IPOs requires meticulous research and assiduous reading of market trends. Rather than funneling this energy into boom-and-bust stocks, though, look for the ventures promising to deliver innovation for the long-run.

FOMO-induced surges

The allure of 200 percent overnight gains has attracted many aspiring investors, and while some may have realized gains from these one-day pops, most are being dragged down by the subsequent crashes. As the legendary Jim Cramer says, you never have a gain until you actually take it.

Take hydrogen-powered vehicle company Nikola (NKLA), for example. After a significant run-up to $80 a share in early June, very shortly after its IPO, the stock now sits at a cool $24.15. This means that there are some people out there who got trapped at $80/share who are now sitting on nearly 75 percent losses. Those who bought at the top were not making decisions based on long-term considerations—they were jumping in on a short-lived rocket ride.

Shades of 2000-2002

The 2020 IPO landscape is demonstrating remarkable similarities to the tech melt-up of 2000-2002. Driven by simple online investing, unrestrained optimism, and manic buying, the current valuations of some tech stocks have soared through the roof.

I urge aspiring investors new to the stock market to look toward fair or underpriced businesses whose products or services have the potential to change the way we live. Some of these IPOs even have these traits, but make sure you are getting a good deal on any stock you get into. And if that means pinning the stock to your watchlist and buying in after a sharp decline, then waiting is the way to go.

Those in search of lucrative IPOs have the right idea—they’re searching, ultimately, for innovation. But I caution aspiring investors to look toward the long term. Search not for lucrative stocks to purchase for cheap and sell at a profit a few weeks later, search for the ventures and opportunities that are popular among young consumers and in emerging markets and that deliver innovative new products or services that improve peoples’ lives. Investing in these opportunities for the long-haul is when venture capital truly becomes worth it.

Biomedical Research Is Our Ticket to Normalcy

Amit Raizada

September 26, 2020

Last month, Russia made international headlines after claiming that researchers in Moscow had found the Holy Grail of our present moment—a successful COVID-19 vaccination. The announcement sent shockwaves around the world. At a moment when millions remain out of work, international travel has come to a grinding halt, social unrest has proliferated and daily lives continue inexorably interrupted, a COVID-19 vaccination could be our golden ticket back to normalcy.

Health authorities from around the world, though, were quick to cast doubt on Russia’s purported breakthrough. Dr. Anthony Fauci, America’s top infectious disease expert, said that he “highly doubts” the Russians had truly developed a cure—a refrain repeated in media across the globe. It later came to light that Russian researches had foregone critical phase 3 clinical trials, a crucial set of large-scale human trials regarded as the final—and most onerous—stage before a drug is approved.

While now more than a month in retrospect Russia’s vaccine looks far more like a publicity stunt than a medical breakthrough, the false sense of hope it elicited placed the FDA’s clinical trial procedure into the limelight.

I’ve written before about the hurdles investors and researchers must overcome to get new drugs approved in the United States. As the CEO of Spectrum Business Ventures, I know all too well the frustrations that accompany biomedical investments. In my time at SBV, we’ve backed a firm that pioneered a groundbreaking new cancer treatment that weaponizes the body’s immune system against tumors, eating them away from the inside. We’ve also helped back Dalent Medical, whose trailblazing SinuSleeve has changed the way medical professionals approach ear, nose, and throat treatment.

When approaching a venture within the biomedical sphere, investors should consider the lengthy FDA approval process that could significantly delay returns.

To get a drug off the ground, firms must conduct pre-clinical research. After having procured the necessary data, properly functioning treatments are sent through three rounds of clinical trials. During Phase I clinical trials, the drug is administered to healthy patients. If successful, it will advance to Phase II trials, in which the drug is tested on a small group of individuals who have the condition it was designed to treat. Phase III trials vastly expand the size of this treatment group, garnering critical information needed before taking the drug to market.

This is an arduous process that often disincentivizes investment in biomedical technology and novel treatments. But despite these difficulties, the FDA approval process is a critical mechanism that ensures the products being sent to market are able to effectively carry out their intended function without inflicting any significant side effects.

I urge aspiring investors to continue to look for innovative biomedical research ventures, despite some of the hurdles associated with investing in pharmaceuticals. Investors should look for opportunities that both deliver returns to their firms and partners and life-changing innovations to those desperate for new treatments and procedures.

Venture capitalists are uniquely positioned to push the medical industry to new heights. Plenty of innovative firms are developing the kinds of drugs and firms many of use once regarded as science fiction—they just need entrepreneurial investors to help get them off the ground. While the Russians’ faux COVID vaccine may be little more than a publicity stunt, the hope it elicited has shown just how desperate our world is for a vaccine.

Lessons from the Rideshare Giants

Amit Raizada

September 23, 2020

The state of California and rideshare giants Lyft and Uber engaged in a remarkable display of political brinksmanship last month. As the state moved reclassify rideshare operators from independent contractors to employees, the two firms threatened to shut down their operations in the nation’s most populous state. Just as the firms were about to sever their services, the courts intervened, allowing Lyft and Uber to resume operations as usual while litigation took place.

Politics aside, this saga offers an incisive case study into the ways that firms like these—which were founded initially as startups—impact our daily lives.

As an entrepreneur, venture capitalist, and CEO of Spectrum Business Ventures, I always find it fascinating how innovative startups like Lyft and Uber have developed innovative, novel products that are now societal staples.

Thinking back just a decade ago, the rideshare concept was alien and unthinkable. The idea of catching a ride in a private citizen’s vehicle for a quick trip to the grocery store or a night out at a local restaurant was, for many Americans, frightening at first.

But both firms were able to overcome this initial concern by addressing an acute need in many communities—access to safe, clean, reliable transportation.

Americans needed new ways to get around, and Taxis simply weren’t cutting it. Often expensive and inaccessible, Americans needed access to quicker transportation at a lower price point. As they began to look for options, Uber and Lyft offered solutions.

In many ways, both firms embodied the entrepreneurial mindset that I think is integral to Spectrum Business Venture’s unique approach to investing.

At Spectrum Business Ventures, we have always sought to closely observe emerging market trends and the preferences of young consumers. While ventures of these sorts may not be immediately profitable, we are always willing to accept a loss in the short-term to secure a foothold in the most prolific firms, industries, and products of the long term. Investors in Uber and Lyft did just this—and it’s one of the reasons for which I admire them.

I believe the success of rideshare firms can be boiled down to a few factors. The first was a present need—Americans needed transportation and were hungry for innovations in this age-old sector. Second, was innovation from millenials. Uber and Lyft were able to harness the latest technology to marry transportation with the increasingly prevalent smartphone. By using their iPhones to hail rides, consumers now had a new way to secure taxi-type services for the first time since the advent of the automobile. Third, were innovative venture capitalists, whose foresight identified a problem and developed a solution.

Ridesharing, of course, quickly caught on with younger populations who were more tech-savvy and who were already accustomed to using their phones and the internet to streamline everyday processes. Shrewd investors closely followed emerging market trends, understood the increasing prevalence of personal technology, and realized that the rideshare model—while maybe unorthodox in the moment—could be the way of the future. It was this combination that ushered in a new wave of creative destruction, giving us, the consumers, access to a great new product.

Investing in Health Care: A Once in a Lifetime Opportunity

Amit Raizada

August 21, 2020

The COVID-19 pandemic has prompted a healthcare revolution that could usher in the next wave of biomedical innovation and redefined healthcare investment opportunities. This shift has created a unique opportunity for investors to align capital with transformative medical advancements, ensuring a healthier and more resilient future.

As the CEO of Spectrum Business Ventures —a private equity firm that has been at the forefront of revolutionary trends in biotech, payment processing, real estate, and many other industries—I’ve always sought to use capital as a tool to improve people’s lives.

With more than 150,000 Americans dead at the hands of this virus, healthcare and medical technology are now the sectors in which this philosophy can be most effectively applied.

I urge venture capitalists to seek out innovative and entrepreneurial ventures in two healthcare subfields: preventative health and biotech. Now, more than ever, we need large scale private investment in medical technology to help build a healthcare apparatus capable of withstanding future shocks like the novel coronavirus.

Preventive Health

At one moment, we are witnessing both the most significant stress test our healthcare infrastructure has ever endured, and an unprecedented leap forward in technological innovations. The intersection of these two defining moments will inevitably lead to exponential growth in the healthcare sector.

As we embrace this new reality—a reality in which we understand the true impact a novel virus can have on our world—we are also hyper-aware of the need to establish resources that keep us healthy.

That’s where preventative health comes into play.

Telehealth companies are an interesting new vertical within this field that fit well within the COVID and post-COVID reality. One telehealth company, Livongo (who is now in talks to merge with industry titan Teladoc), is leading the way with a revolutionary platform that helps people with chronic conditions reduce their risk for future diseases with alerts and lifestyle tips based on user data. It also helps organize health reports for doctors, streamline the purchasing of supplies, and connect patients with live coaches.

Companies like Livongo make prudent investments in the post-COVID paradigm, deliver key services to those hungry for innovation, and help mitigate public health concerns before reaching crisis-level proportions.

Biotech

COVID-19 has shown us all just how disruptive a public health emergency can be to our lives and institutions. We must place an emphasis on staying healthy now if we wish to hedge against an unpredictable future. At the same time, biotech companies like Gilead, Moderna, Abbvie, and many others are in a race for what has the potential to be the most profitable vaccine ever created. While the winner of this race has not yet been determined, other companies are undeniably looking toward the next virus, investing in R&D for new drugs that we don’t even know we need yet.

Any time there is an opportunity to invest in, and in turn, catalyze life-changing innovations, I jump at the chance. That’s why I have sought out biotech companies making innovative strides. The COVID-19 virus has awakened a newfound, widespread interest in what these incredible companies do. When a new industry becomes inundated with demand, we can expect an unprecedented influx of capital into that sector. As we saw with tech at the onset of our century, healthcare could very well be the industry that defines the next decade. Don’t miss the chance—this could be the only one in our lifetimes.