The world’s economy is changing as we speak, we just watched over the last 10 months as government’s shutdown local economies, shuttered business’s and the world hid inside, terrified to go out and contract the coronavirus. When the smoke finally clears from all of this we’ll be facing a new world and with that a new economy. The question people seem to be asking right now is will things ever go back to normal and simply put the answer is no. We’ve made the leap from the dated industrial age and information age into the Cyber Age. The world will never see it’s people go back to the office to work the 9-5. They’ve seen the other side of the coin called working from home and they don’t want to go back the other way. So that being said, what can we expect when the smoke finally does clear from this mess?
The Death of the Office:
For the last 100 years work has looked the same to a lot of people. Wake up, go to the office, put in your 8 hours then rinse and repeat until the weekend comes. It’s been the way of business for what seems like forever but COVID, the internet and cheap technology has changed all of that for us. The office as we know it was shattered by COVID, people either weren’t allowed to go in or didn’t want to. When this happened companies were forced to move their workforce out of the office and into their own homes. This was something that was going to happen regardless of COVID. Companies had been pushing this off for a couple of reasons. First of all, they didn’t want to invest in the new technology such as VPN’s, Laptops, Company Cellphones etc.. Secondly they feared that when employees worked from home productivity would substantially drop. Both fears were irrational, for the substantial investment into the new tech and equipment to move people’s office to their home it will quickly be offset when Companies no longer have to pay the costly leases, taxes and utility bills that come along with the Office High Rise. The other fear of lack of productivity proved to be the opposite, employees completed more work on time then ever before. Productivity levels skyrocketed! After seeing both of these Companies are quickly starting to realize that having office buildings and employees confined to them is no longer necessary to do business in the 21st century. As a result, we will see as the smoke clears from COVID that many people will elect to stay working from home. This doesn’t mean that office buildings will be completely moved away from but the more likely fact that they will be significantly downsized and only utilized for things that require the “in person” touch.
So what does this mean and how is it going to affect things moving forward? For starters Commercial Real Estate is going to plummet in value. This is going to cause some issues but I’m sure the market will correct itself in time and we’ll see those office buildings converted into other use. Whether that be apartment buildings, warehousing, shopping centers or something. This is going to cause a temporary drop in the price of commercial real estate and that’s something that needs to be looked at for the short term. Investment in Commercial Real Estate for the time being should probably be avoided. When the prices start dropping then it may be worth it to reassess the situation.
Moving more of the workforce to home is going to cause a need for VPN services, Laptop’s, Tablet’s and just about any kind of tech that is going to allow remote work. That being said, you should see a rise in tech sales for the next few years as companies will need to invest more in their Digital Infrastructure as opposed to their physical side of things. We’re also going to see a need for more IT specialists to come into the job field to keep the remote operations moving. I’d recommend looking at tech companies valuations as it seems likely they’ll be making steady gains even as we move into this recession.
Internet Based Business’s:
Internet based business has started to become more mainstream these last 10 years but is likely to make a huge jump moving forward. Private equity firms have begun investing in Content Marketing, Affiliate Marketing, eCommerce, FBA and Adsense websites in record numbers this last year. It makes sense as everyone has become so attached to their smartphones, tablets and computers. Purchasing or investing in these online business’s moving forward is going to become more common then investing in their Brick and Mortar counterparts. As more people do business online it’s going to shape the future of our economy and these websites are going to be the bedrock of it. The sooner you can get into the online space the more money you’ll make. We are in a unique time currently where there isn’t a lot of regulation on these so getting in now is going to be very advantageous in the long haul. Some ways to get in early are purchasing and running one, investing as Private Equity, building from the ground up or finding Managed Funds that are already competing in the space. Internet based business is the future and the sooner you get in on it the better. A brief overview of the different types of online business’ are as follows
FBA – Fulfillment by Amazon, this simply means that someone is selling products that they are either purchasing or storing with amazon. They have a website, do all the marketing and selling of the product then forward the order to Amazon. Amazon then packages and directly ships the product to the customer.
Affiliate Marketing – This is where you sell products for other companies through your own means such as owning a review website where at the end of it there is a link that sends you to the companies website. If a purchase is made after using your link the company sends a kickback of a pre-negotiated percentage back to the website operators.
eCommerce – eCommerce simply means that you are buying or selling physical or digital products while using the internet as your medium. For example, amazon.com would be a eCommerce business.
These are just 3 of the big ones out there, there are a ton of different types that aren’t included. If you are interested in getting into the online space you I’d recommend checking out a few websites that are listed below.
All of these websites act as marketplaces buying and selling profitable websites that are acting as businesses. It’s a great place to see how much money is already being made online.
KON Investing 