Let’s talk about what industries to focus on in your Alpha 2.0 business — meaning you have high-margin, low-work income that is location independent that comes in from anywhere in the world without you being tethered to one city. When you’re designing your Alpha 2.0 business, it is important to be cognizant of the types of industries you choose to service within your niche.
“Industry” and “niche” are two different things. I always talk about how you have to “niche” your Alpha 2.0 business, a very narrow niche — and industry is not a niche.
An industry would be health care. You can’t say your niche is health care; that’s not a niche, it’s an industry, and it’s too broad for an Alpha 2.0 business. Instead, you would say your niche is obstetricians who are over the age of 50. That’s a niche within health care. Within any industry, there are thousands of niches. That’s the beauty of niches, there are so many of them. So today, just to be clear, I’m talking about industries, not niches.
When you select an industry, it’s very important that you understand the pros and cons, if any, of that industry. It’s not as simple as good industries vs. bad industries or rising vs. declining industries. I’m going to give you five categories on the types of industries, and every industry you can think of will fall into one of these categories.
Objectivity is Key
Don’t be stupid about this. Be objective and honest about what your industry is and the strengths and weaknesses of that industry. You want to factor in both of those things, not just one or the other.
Don’t bullshit yourself, don’t emotionalize this stuff, but be very objective, particularly in your business life. Being subjective and irrational in your woman life — that’s one thing. But don’t be subjective and irrational in your business life. This is your money.
There are five categories of industries. Every industry you can think of will fall into these five categories, and that goes for the industry you have chosen or are thinking about choosing. It’s very important that you understand the differences between each and make your decision accordingly. Some of these are good, some of these are bad, and some of these are grey areas, depending on what you’re doing.
1. Growth Industries
The first one is growth industries. These are the industries that are doing very well and will continue to do well over the next five to 20 years or so, industries that are growing for the mid to long term. These are good industries.
The number one industry, top of the list, in terms of growth industries (and I’ve said it a million times) is health care. Health care is going to explode, and now that we have coronavirus, it’s going to explode even faster.
Now, what verticals are there inside health care? There are a lot of them that are good; the one I like is anything having to do with helping old people survive and be comfortable. Geriatric care, elder care facilities, things like hearing aids, everything you can think of having to do with keeping old people alive and comfortable will be huge. And it will become even bigger as time goes on. Health care is awesome.
Another one I talk about is cybersecurity, keeping everybody safe on computers. Cryptocurrency is another one, and you can even mix some of these. You can do cybersecurity in health care — holy shit, awesome!
You should get my business course if you want more detail in growth industries.
2. Dying Industries
The second category is industries that are dying, industries that are screwed, like newspapers. Who reads newspapers besides your 82-year-old grandpa?
Another one, unfortunately, because of the coronavirus, is travel. The travel industry is probably dying, and as an entire industry, it’s going to take a massive hit over the next few years. It may never completely recover. I have a lot of buddies in the travel industry who are having a lot of problems and my heart goes out to them, but that’s probably a dying industry. Tourism, as well, is not dying, but it’s definitely on the decline for a number of reasons.
There are a lot of dying industries, and these are not industries you want to get into. These are industries you want to avoid (unless you are hyper niched in a very unusual way).
Or you can help companies or individuals transition out of these industries into different industries in the other categories, including growth industries. That could be a business in and of itself.
3. Stagnating Industries
These are industries that are just sitting there like a bump on a log; over time, they will not decline too much, but they will not do well. They’re just kind of floating there like a turd in the pool, not really doing anything. There are a number of examples, like the auto industry. There’s nothing super exciting going on in that industry other than Elon Musk, but that’s a rare exception. These stagnating industries are fine as long as you are very, very niched, because like I said, stagnating industries don’t decline, they’ll just kind of hang around.
A “country” version of a stagnating industry would be New Zealand and Australia. Those are the only two parts of the Western world that aren’t going to collapse, but they’re not going to do well at all. They’re just going to sit there and float along; nothing really amazing is going to happen with them — just like stagnating industries.
4. Solid Industries
These are industries that are rock-solid no matter what happens in society, whether it’s with pandemics, economic recessions or depressions, and so on. These are industries that will endure because they are needed services. For example: grocery stores. Who’s not going to go get their food if the economy is bad? You’re going to spend less money on food perhaps, but you’re not going to stop buying toothpaste. You’re not going to stop buying tuna fish; you’re not going to stop buying dog food. So grocery is a solid industry, as anything else having to do with mandatory, required items (housing, clothing, water, etc).
You could argue that health care is a solid industry also, but health care is growing. Solid industries don’t necessarily grow, they only grow with the population. So if you’re in a part of the world with a rising population (Africa!), then solid industries are on the rise. Other than that, they’re just going to be solid and static no matter what. These are good industries to get into, again, as long as you are niched. It’s very hard to lose money if you focus on the grocery store industry (as just one example).
I used to work with a guy who worked out of a small office with one secretary. He was a milk broker; all he did was broker deals between the dairies and grocery stores on milk and dairy products. He made around $400,000 a year and only worked a few days a week because he was in a solid industry. And he was in sales — the most important business function is sales and marketing.
5. Cyclical Industries
This is a tricky one; a lot of people don’t know what this means and get burned by it.
A cyclical industry is one that does amazing and people are making gazillions of dollars, and then they crash. They do terribly for a while, then they do great again, and then they crash again.
Mortgage brokers are good examples. During the boom of the 2000s, there were guys selling mortgages and making $700,000 a year, and then the next year, they couldn’t pay their bills.
Another big one in this category is construction. I have a lot of experience in this industry. I know a lot of guys who work with construction companies (or own them) who are either rich and kicking ass or starving and can’t pay their bills. It’s one or the other; construction is highly cyclical.
Another one is tourism locations — not tourism in general, but specific locations. Places like Vegas and Aspen do great when the economy is good. When the economy is bad, these places get murdered. They’re highly cyclical.
You do not want to be in a cyclical industry. I want you to be long-term consistently happy — that’s what Alpha Male 2.0 is all about. If your livelihood is reliant on a cyclical industry, you’re never going to be long-term happy. Sometimes you’ll be really happy and sometimes you’ll be miserable. In other words, you’ll be an Alpha Male 1.0 if you focus on a cyclical industry. Not a good place to be.
Those are your five options. Choose well. Obviously, growth industries are the best. Very hard to go wrong there unless you’re stupid.
Another good category is solid industries. These are great as long as you niche, niche, niche! Don’t just sell to grocery stores — that’s an industry, not a niche.
If you’re very careful, you could go after a stagnating industry (maybe). I would completely avoid dying and cyclical industries.
And if you don’t know what categories your target industries fall into, do the research. There’s this really great website that will show you exactly what industries will fall into which categories. It’s called “Google.”