Yes you can make billions with ‘Boring’ Business (but put your ego aside first)

Warren Buffett didn't build Tesla, Facebook, Google or Microsoft. In fact he himself told in an interview he missed some of these great technological investments. Those are the big big mistakes. He didn't build any of these world's largest companies and yet became one of the wealthiest men on the planet. Warren Buffett discovered something else but first he had to put his ego aside and then he found the underestimated power of boring businesses. Watch this whole video and see how Warren Buffett and people like him make billions starting or investing in boring businesses. When I say boring businesses I am talking about companies that rarely make headlines. Businesses like the storage facilities, trash collections or even renting portable toilets. These are everyday products and services we all depend on but they're not the kind of thing that you will brag about to your friends at the party. They don't have a cool cutting-edge household name CEO like Steve Jobs yet they make steady cash day in and day out and for some reason people think something like a sandpaper manufacturer or parking lot owner does not have this huge exponential tail at the end and that is simply not true. Warren Buffett and even companies like 3M, Amazon, Costco and many other businesses like Kohler Co. that you've never heard of are a great example of that. The Kohler family, owners of Kohler Co. built a massive wealth manufacturing something as simple as toilets. Kohler Co. over the decades grew from manufacturing farm tools to manufacturing a wide range of products most famously toilets and sinks. The Kohler family amassed a multi-billion dollar fortune by focusing on a product that many people take for granted and boring businesses don't only have to be products they could be services too. Self-storage facilities, parking lots or garages, commercial cleaning services, pest controls, waste management, portable toilets rentals, car washes or roadside assistance. All of these businesses have something in common. It's not very hard to recognize them. I usually use a four-step rule to spot a boring business. First is people won't get recognized for doing that. Second it's hard to get motivated to do it. Third it's easy to predict demand and price and fourth the businesses will be here 10 years from now. The source of their solid business foundation comes from the extreme high utility they provide. Most of these businesses run on a thin margin and are very efficient. Let's take warehouse business. For many people it is quite inexpensive to use a warehouse. It usually has a good price per square foot and convenient location and from a business perspective minimum maintenance cost. And once the storage facility is built it requires very little upkeep, no expensive labor force, no inventory and no high-tech equipment that needs constant upgrades. The beauty of the warehouse business is that the world is producing more and more things so people have more things to store and that will probably always be true. Therefore it is very useful business and you will always find someone willing to pay reasonable money for that service. In contrast for example the risky startup trying to spot the next big trend. Boring businesses thrive on reliability and necessity. Once you understand this you will start to see opportunities everywhere. None of them are popular but all of them generate money. So why is that? That you can make so much more money with boring businesses. The following is also the main reason why they are the most underestimated businesses. When we look at the business like a storage center what separates them from the other businesses is that the storage center will be here for a very long time and require minimum maintenance. And since it doesn't require maintenance they focus on building out even more storage. This has very simple but profound result. The business itself is compounding. So if the financial situation allows it they just keep building more and more storage. What is genius about it is that the prices rise with inflation so the value of the business at least on the paper increases every year. There is a big big contrast to businesses that are trendy on social media often pushed by social influencers that never ran a business. For example marketing agencies. Products of marketing agencies are not timeless like the storage center and maintenance of their clients is extremely high. None of the marketing agency clients are guaranteed for the next year. None of the campaigns that they create regardless of how genius they are are likely never to be used again. Agencies also need to educate themselves to keep the agency relevant. So maybe the margins are high but there's nothing that compounds. And I have worked in marketing for the past 20 years so trust me I should know. The maintenance of the marketing agency is so time consuming that they don't have time to find new clients. So the business is not compounding and usually they reach a specific size and then they are left treading the water. And I'm not saying you can't make a solid business running marketing agency but compounding this business is extremely difficult. And if you watch some of my videos you know that compounding is the key element of exponential growth. There is a reason why Warren Buffett loves boring businesses. They aren't just profitable they compound over time. A great example of how compounding works is the snowball effect. Think about rolling a small snowball at the top of a hill. At first it's just a tiny lump of snow but as it rolls it picks up more snow getting bigger and bigger on its own. By the time it reaches the bottom it's way bigger. 5 times, 10 times or 20 times bigger. That's exactly how compounding works in business and investing. The longer you let it roll the bigger it grows and the bigger the ball at the start the bigger at the bottom without needing extra effort. The key is patience and time. Think of self-storage facility. You build one it makes steady money. You reinvest the profits into another and then another and soon you are making more money without doing more work because your past investments keep growing on their own. This is how boring businesses quietly compound into really big businesses. What is the weirdest thing about boring businesses is that people would choose the safe path to become rich every time. Yet they go and gamble their way into some speculative business models someone talked about on youtube. People are drawn to gambling to risk it all. We ignore the easy consistent guaranteed business because it doesn't feed our ego. Our ego prevents us from working hard on boring projects and becoming wealthy. And deep inside we know boring business is easy consistent money. So why are we in pursuit of making extreme products like iPhones, Instagram, Louis Vuitton handbags and Teslas? Why do we want to create a trend-driven product like fashionable handbags rather than plain white t-shirts that will always find its customers? Now think about this deeply and answer this question honestly. If I could guarantee you right now you would make a million dollar a year. You would have to give up everything you are doing right now and you would go and start a mobile toilet business. Would you do it? Would you give up right now all the projects ideas that you have planned for this year or the next year? You would go and buy five mobile toilets and start lending them. And I would guarantee you that after 10 years of hard work you would make a million dollar every year. And I don't know why but I bet your brain goes immediately defensive. Probably thinking about that other thing that you had on your mind for already some time. So then you come back to the idea of mobile toilets and you think well I mean not mobile toilets maybe something a little bit different. Well why not? People need it. There is a demand. You only need one or two mobile toilets to start and you can scale it to hundreds of toilets. What is it in your brain that doesn't like about this business? Well our brain doesn't want us to be associated with toilets because it doesn't give us social status. In other words our ego is on our way. But aren't we in it for the money? Money gives us social status. Is it then that the brain refuses to see the potential of that business? We all want to invent things like Tesla, SpaceX, OpenAI, Nike and Apple and become not only rich but also respected by our friends. This has probably nothing to do with logic. This is our ego trying to convince us to gamble everything into one speculative project. The same way we as kids want to be astronauts. Dreaming of walking on the moon and being the hero of every conversation. Later most people find out that working in the office will pay the bills just fine. We idolize the extraordinary. We seek stories of visionaries who changed their industries. Elon Musk launching rockets and Steve Jobs unveiling the iPhone. But somewhere along the way we overlooked the boring businesses that quietly build billion dollar empires while staying under the radar. And it turns out you don't need to invent a spaceship or build the next AI model to create a massive wealth. In fact some of the most lucrative businesses are so boring that they've never made it into a publishing media outlet. Think about it. Parking lots, literally just empty spaces, can generate millions in income. Self-storage facilities where people pay monthly to keep junk that they will barely use in their lives have revenues that would make tech startups jealous. And I know people deep down know this. I've made a video about 3M and this video got 120 000 views. Companies like 3M now generate billions by selling sandpaper, tape and post-it notes. Products so ordinary that you would never think about who makes them. And people deep down know that. People who wasted years of their life chasing the next cool thing. And I know it because I'm one of them. I think what is actually smart to do if you are not an experienced businessman is to take a step back and see if building a boring business is not actually the smartest business strategy of all. While the world is obsessed with the next innovative startup you can focus on providing utility for a great price and compound. Watch the video about 3M next to get the sense of how underestimated are companies that build boring products like sandpaper.