Wall Street is Desperate to Play This Disruptive Technology
How often do you believe it when you hear something is “the next big thing”?
Every company out there claims its product is the product to end all products, the biggest thing you’ve ever seen, the last product you’ll ever need.
It’s pretty rare that they’re right.
But when it happens, it happens just like this...
Streaming Killed the Video Store
You may still remember the unique feeling of wandering through a Blockbuster looking for the best flick to occupy your evening.
The smell of plastic and popcorn...
The sound of rattling that indicated another poor soul thought there was a tape, and later a DVD, in the display case...
Even the horror of opening a box to find the video I’d rented was not actually the video I’d rented has a sort of odd nostalgia for me now.
We’ll never experience anything like this again:
Part of this sad story, however, is something we do see every day: disruptive innovation.
Just 50 years ago, we didn’t have half the technology we rely on now:
Less than 20 years ago, the streaming behemoth known as Netflix offered itself up to Blockbuster as a revolutionary on-demand video service.
The company’s CEO laughed in their faces.
Had Blockbuster taken the deal, it may have lived to be the $74 billion company Netflix is today.
But instead of seeing the streaming company as a serious disruptor, Blockbuster laughed off the idea that anything in the booming rental business could change.
A Change in the Wind
It’s true for massive companies and individual investors alike: if you can’t adapt, you’re going under.
Well, it’s never been truer than it is now.
Daily innovations make even the most reliable tech obsolete in a matter of years, if not faster.
The same thing is happening right now to an industry so big, so longstanding, that many assumed it would never be replaced: parcel delivery.
Yeah, sure, it doesn’t sound glamorous... yet.
You see, the industry really is massive.
I’m talking $264 billion per year massive. Nearly every person in America, not to mention the world, uses it on a daily basis — that kind of massive.
And like every massive industry, it’s got some massive flaws.
For example, the system still relies mostly on gas-guzzling vehicles that can run through as much as 85 million gallons of fuel per year.
Fuel alone costs nearly $225 million annually, not to mention regular maintenance costs can top $450 million per year.
And you still can’t get those packages on time!
Without a doubt, the industry is in desperate need of improvements.
And here’s where they’ll be coming from...
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A few years ago, Amazon began planning what it called Prime Air, a service wherein customers could get their deliveries made in a matter of hours, not by traditional parcel delivery trucks, but by drones.
Yes, Amazon insists it can create a system where these flying toys can get packages “to millions of customers by providing rapid parcel delivery that will also increase the overall safety and efficiency of the transportation system.”
But it’s not just Amazon pushing for this disruption anymore.
UPS is looking into drone technology for its deliveries now, stating that if its drivers could give just a single mile of their routes per day to drones, the company could save as much as $50 million per year.
Which is why UPS has essentially handed the keys over to this tiny drone company.
Today, more than 5,000 companies use drones for commercial purposes. That number is about to explode as regulations give more allowance to drone airspace.
And the best part: you don’t have to wait long to see the results.
September 30th marks the day this company stops being a quiet investment and truly becomes the next big thing on Wall Street.
More important, however, is how early investors are starting to position themselves in this game-changing disruptive technology.
Until next time,
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.
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