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July 23rd, 2019

The billion-dollar phone business is buzzing

How to sell a Bible millennials will read, and a savvy investor buying tech companies with speed.

Today’s reading time: ~6 minutes

Next week I’m piling my belongings into my Honda CRV and moving three hours up the road, from Austin to Dallas, to be with my girlfriend. After 12 years of friendship and two years of long distance dating, we’ll finally be living in the same city.

I’ve lived in four cities and moved nine times since 2012, which makes me a rarity: Only about 10% of Americans moved in 2018, a population share that continues to fall. With stagnant salaries and a shortage of affordable housing in many cities, it’s no wonder people are staying put.

The startups finding success are going after DIYers like me, who like to move themselves. Moved, backed by Lowe’s, emphasizes a personalized moving experience with a questionnaire app. Bellhops has tried to undercut its competition by using algorithms to simplify the moving process.

Whether you’re in the US, Asia, Europe, or somewhere in between, we hope our coverage is applicable no matter the location. Among the highlights this week:

  1. Millennial Bibles: How do you make the bestselling book of all time more relevant in the modern age? Create a niche market for young people who want fancy new religious books.

  2. The billion-dollar used phone business: The used smartphone market is expected to grow 4-5x times faster than the overall market — more than doubling by 2025. We explain how you can get involved.

  3. Buffett buyouts for tech companies: Andrew Wilkinson’s Tiny Capital is taking a Warren Buffett-like approach for the internet age — snapping up companies in ways that modern entrepreneurs crave.

Last week’s email is available here. Our top stories were our reports on microweddings and RV life. And you’re still clicking on our M&A database.

Now let’s get to it!

    -Mark of The Hustle

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Bibles image

1. And on the 8th day, God said: “Let there be millennial Bibles.”

Bibles are as old as time, and they’re available in hundreds of world languages and English translations. Yet, until recently, there was one religious tongue missing: that of a millennial. And it’s created a clear generational dropoff within the Christian church.

The Bible is the runaway best-selling book of the last 50 years, with 3.9B copies sold (sorry, J.K. Rowling), and the photography-based Bible publishing company, Alabaster, is working to bring heaven down to earth for the under-40 Christian crowd.

Recently more spiritual texts, from the Gita to the Talmud, have hit the public domain. They’re ripe for a redesign — but make sure to keep it quick and easy to read.

And don’t forget secular classics with wide fan bases. We tracked down a list of nearly 200 creative works that entered the public domain in 2019 for the first time in at least 20 years, including hits by Willa Cather, Anton Chekov, and Rudyard Kipling. 

Because in the paraphrased words of Steve “Jeebus” Jobs: It’s all about the packaging. Amen.
Read more here
Phone image

2. Prepaid phone service moves into the mainstream

A few blocks from where our Miami-based contributor, Alex Moskov, lives is a strip center with a check-cashing service, a laundromat, and a MetroPCS dealer, where they sell prepaid phone plans.

It’s the kind of neighborhood where the prepaid phone business has long flourished, serving a lower-income population that can’t afford $750-a-year data plans.

But the demographic that business serves is changing fast. Prepaid phone deals are no longer a cheap, crappy alternative to Verizon and AT&T. Yes, their plans are cheaper, but their service is virtually indistinguishable, Moskov writes.

Hundreds of startups have established significant revenue off prepaid customers. And analysts say the market has room for more players, as the global prepaid industry is expected to climb to more than $650B in annual revenue within a decade.

Not convinced? Consider these numbers:

  • There are roughly 2.5B people without a mobile phone.

  • And if the world’s 5B+ current cell phone users consider prepaid plans, that could dramatically alter the landscape of the business.

Want to learn how to capitalize? Check out the full story here.
Click here to read
Vintage phones image

3. Vintage phones are creating a massive new industry 

Ok, vintage is a stretch. But today’s smartphones last far longer than their 1st-gen predecessors, and now the market for hand-me-down devices is finding service.

Secondary phone sales go for almost half the price of a new model — a big markdown for consumers, and a rather large markup for sellers, fixers, and investors.

The best part? The market is still fresh for investors and DIY entrepreneurs.

  • For investors: There’s plenty of room at the top for brands that can win buyer/seller trust and own the end-to-end repair and resale process.

  • For DIYers: To make $1k/month, you’d need to fix and flip about 25 cracked iPhones (a little over eight hours of labor).

Read our piece to find out why the pre-owned cell phone business is expected to grow 4-5x faster than the overall smartphone landscape, and where the best opportunities are.

Click here to read

4. News you need to know

The cold-warehouse industry is the new Wall Street darling (Bloomberg). Regular storage facilities aren’t the only smart investment these days. The new twist? Cold storage. Because of the growth in online grocery sales, demand for these facilities is expected to increase by 50% over the next five years — some 200 malls’ worth of storage space. Though established players like Americold and Lineage Logistics dominate 60% of the industry, smaller companies are starting up, including Cold Summit Development in Idaho. The key is finding tenants for your space before construction.

The secondary apparel market is exploding (2019 Retail Report). The secondary apparel resale market is expected to grow at a CAGR of 36% over the next 5 years to $23B. Luxury brands and department stores are well aware of this trend. In early 2019, Neiman Marcus acquired a minority stake in high-end fashion reseller, Fashionphile.

Disrupting the baby market (CNN). The smart diaper is here. Pampers is launching Lumi, a diaper that tracks when babies are peeing and sleeping and can alert parents — and there’s already a waiting list. The US baby products industry is expected to grow from $7.4B to $9.7B by 2022, according to IBISWorld. New tech is expected to influence everything from cribs to night lights to pacifiers.

What healthcare startups are missing (TechCrunch). The next step for healthcare entrepreneurs: mixing opportunity with public good. Sarah Lisker, a research analyst in the SF public health system, says $30B has been invested in digital health initiatives since 2011 — but mostly to help a small segment of wealthy people who don’t have that many health problems. Millions more people with bigger needs could be reached through public-private partnerships. She pointed to one digital health startup, HealthTech4Medicaid, which has employed technology to better service the 75 million or so people that get little attention from most healthcare tech companies.

5. Highlights from 3 of our recent AMAs

Last week, Jack Smith sold his video advertising startup Vungle for $750m to the private equity giant Blackstone. He joined us in an AMA to discuss how he built Vungle and what he sees in the future for advertising and marketing companies.

Check out our 6 Takeaways from that conversation by clicking here. You can also read an in-depth Hustle Q&A with him from 2016 here.

We also recently talked to children’s vitamin company First Day co-founder Alice Li and campervan company JUCY co-founder Tim Alpe about their tips for starting businesses and their insights for future opportunities in the wellness and adventure tourism industries. You can view the AMA with Li here and the AMA with Alpe here.   

Andrew Wilkinson image
6. Meet the guy who wants to buy your business like Warren Buffett

Selling a company sounds like a great idea. You make money and can possibly move on to another adventure. But there’s a whole process that typically last months, with private equity professionals scrutinizing every financial statement and playing hardball after an offer has been made (and why are they all wearing that same damn Patagonia vest?).  

Andrew Wilkinson knows the frustration as well as anybody. The British Columbia-based entrepreneur has started 20-plus companies and sold only two of them. Now, he runs Tiny, a firm that purchases internet companies in days or weeks rather than months, a la Warren Buffett’s Berkshire Hathaway. 

Wilkinson buys internet companies — about 10 so far — that have been in business for at least three to five years and that make profits ranging from $500k to $15m. Tiny looks for companies that have good products rather than features that can be easily replicated by Google, Facebook, or other giants and those that are providing a positive service for the world.

He typically asks a few questions before deciding to make an offer:

  • What is the revenue, profit, and growth rate?

  • Is there a management team?

  • Do the current owners want to stay or go?

Click here to find out how his company has grown and what it means for startups.
Read more here

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