America’s largest companies are facing an epic crisis.
It’s been taking shape for 20 years. But now things are reaching a boiling point.
If left unchecked, this crisis could completely ravage the face of American industry...
Wipe out billions of dollars in market value...
And cost thousands of U.S. workers their jobs.
Simply put, the fallout from this crisis could make 2008 look like a walk in the park.
However, several companies are working on a bold solution to this problem.
And if their bet pays off, not only could it save their businesses, but it could hand investors like you massive profits.
Disruptive Businesses
What’s been happening is a phenomenon known as “disruption.”
Disruption occurs when a company develops a new method of doing business. Perhaps this new method allows it to cut costs, create a better product, or grow its business faster than the competition.
Take the Internet as an example....
When the Internet first emerged, it quickly disrupted many, many industries.
Amazon.com, for example, disrupted the market for selling books. Its sales (and stock price) took off like a rocket ship.
Meanwhile, sales at Barnes & Noble swiftly declined. And Borders was forced to shut its doors for good.
Hundreds of industries and thousands of companies have suffered similar fates thanks to the Internet.
And, perhaps surprisingly, we’re still in the early innings...
Playing Innovation “Catch Up”
You might be wondering how that’s possible. After all, inventions like the Internet have been around for more than 20 years.
Can’t the incumbents see what their competitors are doing and then just copy them? Over time, wouldn’t they be able to catch up to the newer, disruptive start-ups?
Well, here’s the thing, innovation and disruption don’t work that way.
You see, things like consumer behavior and technology are constantly evolving. Companies are either behind the curve or ahead of it.
For example, the Internet today isn’t the same as it was 20 years ago.
Connection speeds are faster, there are more people online than ever before, and consumers carry powerful internet-enabled mobile phones around with them 24/7.
This has allowed new, disruptive services and businesses to crop up.
The incumbents are still many steps behind younger, more disruptive companies—companies that have been spending their time innovating as opposed to “playing catch up.”
The same applies to other forms of disruption as well...
Perhaps a company develops a unique product offering that better meets emerging consumer demands. For example, look at the growth that’s occurred in the organic and natural foods markets over the past 10 years.
That industry didn’t exist 20 years ago but today is growing 300% faster than the overall food industry.
Buying Innovation
As you can see, the disruption story is unfolding across dozens of industries—but none more so than consumer goods and services.
Sectors like retail, media, and consumer packaged goods.
These industries are being bombarded by newer, more nimble and more disruptive companies every day...
And if these incumbents don’t do something soon, they could see their dominant market positions evaporate—and the effects would be catastrophic.
Can you imagine what would happen if Walmart’s market share got cut in half?
They’d see a $241 billion decrease in sales, lose over $100 billion in shareholder value and more than 1 million workers would be out of a job.
But some of these companies are starting to take action. And instead of trying to innovate from within their organizations, they’re taking a radically different approach:
They’re buying innovation from the outside…
More specifically, they’re acquiring innovative and disruptive start-up companies.
Buying Spree
For example, last year Walmart acquired a young e-commerce company called Jet.com.
As we reported at the time of the acquisition, Jet.com was only 36 months old. But that didn’t stop Walmart from paying an estimated $3.3 billion to acquire it.
More recently, we’ve seen a number of similar takeovers in the communications and media markets.
For example, traditional telecom companies like Verizon have been aggressively buying up newer media and communications companies.
Over the past 15 months, Verizon has spent nearly $9 billion buying up two of the largest Internet companies on the planet: Yahoo and AOL.
What’s interesting, however, is that some of the largest takeovers have actually been happening in a very “low-tech” sector: the Food & Beverage industry.
For example, PepsiCo recently announced that it was acquiring KeVita—a maker of healthy probiotic beverages—for $200 million.
And Dr. Pepper Snapple just agreed to acquire the healthy beverage maker, Bai Brands, for $1.7 billion.
Again, by leveraging their massive balance sheets to buy up smaller, disruptive companies, the incumbents are betting that they can hold onto their dominant position in their respective markets.
If this works, obviously it’s a good thing for the companies, their employees and their shareholders...
But it’s even better news for investors like you and me. Let me explain...
Takeover Profits
You see, this wave of M&A activity has been making some investors very rich.
For example, early investors in Jet.com made more than 1,100 times their money when Walmart acquired the start-up.
That’s the equivalent of turning every $5,000 you invest into $5.5 million.
And around the same time of the Jet takeover, another large consumer products company was making a strategic acquisition of its own...
This past summer, Unilever acquired a young start-up company called The Dollar Shave Club.
Dollar Shave Club had only been around for X years but had already captured more than 2 million subscribers to its unique monthly razor blade subscription service.
This caught the attention of Unilever. Dollar Shave Club was disrupting one of Unilever’s core business lines. But instead of trying to compete with Dollar Shave Club, Unilever decided to buy them out instead. For $1 billion in cash.
It’s estimated that early investors in the company made 166 times their money on the deal. That’s like turning every $5,000 you invest into $830,000.
How You Can Get in On the Action
Normally, individual investors like you would be forced to sit on the sidelines while the insiders made enormous returns by investing in disruptive companies.
But thanks to a new set of laws known as The JOBS Act, you now have the opportunity to participate in this trend.
You see, The JOBS Act makes it legal for all investors—regardless of their income or net worth—to invest in early-stage, private companies.
You can find and invest in these companies from the comfort of your home or office.
That’s because many of these investments can be found on special websites known as “funding platforms.”
Funding platforms are websites where you can find and invest in early-stage companies. There are literally hundreds of funding platforms, and each one has its own specialty.
For example, some platforms focus on Clean Technology, while others focus on start-ups from specific geographic regions.
And here are three platforms that focus on disruptive consumer products start-ups:
By building a diversified portfolio of high-quality consumer products companies, you’ll have a chance to ride today’s wave of takeovers...
And hopefully, earn life-changing returns.
Happy investing.
Best Regards,
Founder
Crowdability.com
