THE JAMES ALTUCHER REPORT

THE UBER
EQUATION
HOW TO SUCCEED IN THE
INNOVATION ECONOMY
 SPECIAL REPORT

The Uber Equation

How To Succeed In The Innovation Economy
Welcome to the Innovation Economy

My whole life, I’ve felt like a stray dog, dashing around until I could survive in
the jungle. Table of Contents
I was dead on the ground. I was broke. I was separated. I was scared and lonely.
2 Welcome To The
Everywhere I looked, I couldn’t believe people knew how to smile. They were Innovation Economy
faking it, I thought. It took a long time for me to get it—but now I get it.

Ideas are the new currency of the 21st century—a century already defined by 4 What Is The Innovation
declining currencies and volatile employment. Economy, Anyway?
What does that mean? It means you need to know more (and do more) to not
just survive, but thrive in this new economy—to constantly be thinking about
4 Recognizing The Tides
new ideas in order to get ahead.
9 Peel The Onion
In this innovation economy, good ideas are directly linked to wealth.
11 Finding Your Way In
Once upon a time, Mark Zuckerberg had a good idea. Now that idea is called
Facebook and he’s worth $46 billion. The Innovation Economy

Jack Dorsey had a good idea, too—a way to save a struggling podcasting company. 13 Now It’s Your Turn
It wasn’t even his company’s main product; it was just a side project. Now we all
know that idea as Twitter, and Dorsey (along with a lot of other people) is a billionaire.

That’s what I mean about the innovation economy. It’s all about creating good
ideas, leveraging them, and then selling them to other people.

It’s about creating your own future.

Peter Thiel, the founder of PayPal and the first investor in Facebook, underlined
this for me when he told me the story of how, in July 2006, Zuckerberg turned
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down Yahoo’s offer of $1 billion to buy Facebook. Zuckerberg
would’ve made $250 million that summer. Thiel, who was
advising Zuckerberg at the time, wanted him to take it, or at
least consider accepting the offer. Zuckerberg decided within
10 minutes: No. As Peter put it, ideas were more valuable to
Mark than money.
Not everyone is going to create Facebook. I never will. But
everyone can create abundance in their lives and enjoy
wealth as a side effect of the ideas that they create.
Many people are idea slaves. They get their paychecks
working 9-5, or longer—and all they do is work on the bad
ideas of others.
This is not a natural state for human beings. We need to
explore. We’re curious. We want to adapt constantly to new
environments and use the part of our brain that evolved
specifically so we could create new works of art or new
productions.
But a century of corporatism has fooled us into thinking
that, if we just pay our dues and climb the ladder, we’ll find a
pot of gold waiting at the end for us.
Not true.
Such loyalty on behalf of companies toward employees
never really existed, and is now gone forever as people
adapt to this new world. Unless you’re creating your own
ideas, working on your own things, you’re an idea slave and
you’re falling behind.
I learned this lesson a long time ago, when I was still
working for HBO. I was initially hired to do some basic
computer programming for them (idea slave), but then I
started pitching them ideas for their website.
I was still under their umbrella but I was able to become an
“entre-ployee” by working on good ideas under the umbrella
of HBO. I made more money this way, had some fun, and
got some promotions—but I was still an employee.
For me, it wasn’t enough. I had ideas that didn’t fit under the
umbrella.
So I left. I created my own company, designing websites for
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some of the biggest brands in the world. A few years later, I
sold that company for $15 million. (Two years later, almost
all website design businesses were out of business, so I
have to admit I timed that one pretty well.)
I did it again less than 10 years later, and ended up selling
my next company for $10 million after less than a year.
Everyone always wants to know how I did this—how I built
up Stockpickr, a social network for investors, and turned it
into a successful site so quickly.
It was just an idea. Really.
I decided to do the only thing I knew how to do and the
only thing that has ever made me money and marry them
together. And, thus, I created a new thing. I loved Internet
businesses, having built and sold one already.
And I loved the financial business. So a financially focused
Internet business it was.
I created a spec site—and when I say “spec,” I mean I wrote
down what all the buttons on the front page would do and
what other content would appear, completely defining all of
the layers of the site—and paid an Indian firm to design the
look and feel of the site. That cost me $500.
Then I took that document, which was just a visual interpre-
tation of my idea at that point, to another Indian firm and
had them create all the code to turn the images on paper
into a real, functional site. That cost me another $2,000.
And then we were in business.
I put ads on every page, got us to a million users per month,
and all with no employees. So we were profitable. We were
making about $100,000 a month with zero employees in
just four months.
(Being too afraid to build this into a big business, I sold the
site almost instantly.)
But the point is, that Stockpickr started as an idea and grew into
a sizable, profitable business pretty quickly. I had to learn what
I was doing along the way, and figuring out how to grow my
audience was a big part of that, but in the end it paid off big time.
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What is the Innovation Economy, anyway?
The Industrial Revolution gave way to the so-called Knowl-
edge Economy, which is now giving way to something
totally new—the Innovation Economy.
What is the shift?
It can be summed up this way: Everything that can be
outsourced will be outsourced. Anything that can be
replaced with technology will be replaced with technology.
We all grew up partly in the industrial economy of the 20th
century and partly in the knowledge economy. But industry
has become outsourced to distant parts of the world.
Eventually, everything will be outsourced to robots. And
knowledge is now outsourced as well.
This streamlining and outsourcing can be traced back
throughout human history. Back in the day, monks living in
isolated monasteries would toil for years copying a book
by hand. And then, BAM!, along came the Gutenberg press,
eliminating the need for the scribes. Historically, we as a
species love to make difficult things easier, cheaper, faster.
These days, with new technological innovations around
every corner, the practice is picking up steam.
Almost any skill—even skills that are paid for with brutal
educations—will be outsourced somewhere.
The horse gave way to the car. The VCR gave way to
streaming video. Bookstores are giving way to Amazon.
Some of it is sad. I miss wandering the aisles of bookstores
at the mall. I’m actually nostalgic for the days when we had
only three channels and had to find the just-right angle for
the rabbit ear antennae in order to
watch our programs uninterrupted by static. I’m nostalgic
for boredom and sitting around in my bedroom and just
daydreaming about the future, or riding my bike down
safe suburban streets, looking for my friends to play with.
Sitting at home with my grandparents on a Saturday night,
laughing along with “The Golden Girls”—something my
grandparents and I bonded over.
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Now, kids and their parents spread out in their big houses,
with one eye on their phones, one eye on the TV with a
billion channels and one eye, who knows where?
But the good part of the Innovation Economy is the part
where you break free from the system. Where you realize
that everything is a stage set and now it’s time to get to
work. This is where you do what you want, and ask for
forgiveness rather than permission.
Recognizing the tides
Steve Jobs didn’t invent the computer.
By the time Apple cofounder Steve Jobs started tinkering
on what would become the Apple I personal computer in his
parents’ garage, the MITS Altair—sold in a mail-order build-
your-own PC kit—had already been around for more than a
year, hitting the market as a kit in 1974. It was remarkably
successful, considering it had no screen, no keyboard,
and was basically just a box with series of flashing lights
controlled by a toggle switch.
No, Jobs didn’t invent the computer, but he did take what
was already out there at the time and make it better. That
may not be invention, but it is innovation. He saw that the
computer would be ushering in a new age—not only in
business, but in the day-to-day lives of BILLIONS of people
worldwide—and set out to make the best, most useful
computer that he could.
That turned into the Apple I, a machine designed to be
simple to use. The computer that everyone could have in
their home.
Bill Gates didn’t invent anything either.
Now he’s the richest man in the world, but back in 1980
he was just one of many entrepreneurs in the then-new
software business.
When he got a call from IBM to help them develop an
operating system for their new line of desktop PCs, he didn’t
have anything to give them. So he found a local company
in Seattle that had been working on a hardware platform
similar to the IBM PC—called Seattle Computer Products—
and licensed the software they were using from them.
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After making a few tweaks, Microsoft shipped the software
to IBM for a one-time fee of $50,000.
And this is where Bill Gates did something really smart. This
is why we’re still talking about him and his company some
40 years later.
Rather than selling IBM the copyright to this software,
which presumably would have brought him and Microsoft
a much larger payment than just $50,000, Gates held onto
it, assuming that he could license it out to the dozen or so
other vendors that were working on similar hardware at the
time.
He was right.
Within a few years, MS-DOS was the default operating sys-
tem on millions of computers worldwide, and Microsoft’s
place at the center of the personal computer revolution was
sealed.
He recognized not only that personal computers were
the big, massive business opportunity of the future, but
also that all those computers would need a standardized,
reliable set of software tools to use with them. The market
didn’t want 50 different spreadsheet programs and 50
different operating systems; it wanted one great version
that would work on every machine that was out there.
That was the trend in the 1980s and that’s still the trend
today.
And that’s the thing about succeeding in the innovation
economy. It’s one thing to have an idea—a great idea, a
WORLD-CHANGING idea—but if the market trend isn’t there
to bring customers to your idea, it’s going nowhere.
If you don’t align your ideas with the big trends that are out
there in the world, you’re inventing in a vacuum. No one
cares.
Think about it this way:
By the time Henry Ford developed the Model A, the automo-
bile industry was more than a century old.
Seriously.
5
Starting with steam-powered vehicles in the 18th century,
the first internal combustion engines in the early 19th
century, and the first “production” vehicles in the 1880s,
automotive design was a long way along by the time Henry
and his company set up shop in Detroit in 1901.
The idea of a passenger car was far from new by that point.
Different engine designs, different body styles, different
cabin configurations… it had all been tried.
But Ford recognized the untapped potential for an inexpen-
sive, mass-market car that almost everyone could afford.
Up until that point, cars were luxury toys for the rich. Most
people still relied on horse-drawn carriages or rail transit to
get around. Or they walked. The potential for market growth
was huge.
And the Ford Model T, produced inexpensively using Ford’s
new assembly-line manufacturing process rather
than hand craftsmanship of each car, proved that to be true.
Manufactured from 1908 to 1927, the Model T sold more
than 16.5 million units and remains one of the top 10 best
selling cars OF ALL TIME!
The key to all of this is recognizing what I call the tides—
those trends that are so big and so powerful that they have
the potential to radically change life as we know it and set
humankind on a new path.
The development of mass transportation, like the Model T,
is one of these tides.
Before the invention of steam power, the railroad network, and
(most importantly) the automobile, most people lived their lives
in an area of just a few hundred miles. They were born there,
they met their spouses there, they raised their kids there, and
they died there. They literally couldn’t get away.
But once transportation became more widely available,
people were able to move to nicer places, they were able
to find work in different cities, they were able to travel and
meet people in different areas and countries.
They were able to stop inbreeding with their neighbors. And
it changed everything.
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The Internet is another one. Prior to widespread adoption
of the consumer Internet in the 1990s, information was
locked away in silos, in libraries, and in company archives.
Everything was still there, it was just hard to find.
That’s why we had librarians, to help us find information in
the library.
That’s why we had newspapers, to share what they had
learned with us.
But the Internet tore off those doors and set them on fire.
Information was now free. Everything we had ever wanted
in the world—stock prices, movie times, restaurant reser-
vations—was now available at our fingertips. Whenever we
wanted it! It changed the world.
Smartphones took this flood of accessible information
and made it mobile. Now we didn’t even need to be at
home to find out what we wanted to know. We could spend
more time out with our friends. We could travel the world
without losing touch with loved ones. We could bring all of
humankind’s collected learning and understanding to even
the most remote cultures on Earth.
That’s a life-changing trend.
Think about it like riding a wave. You’ve driven down to the
beach, paddled out into the surf, and you’re waiting to catch
your first ride of the day. But there’s an art and science
to surfing waves. You can’t just pick one and start flailing
madly at the water. It has to be a big enough wave to carry
you. It has to be going in the direction you want to go.
And you have to start paddling at just the right moment for
it to grab hold of your surfboard and carry you in to shore.
If you start too early, you’ll run out of momentum before the
wave breaks. Others may catch it later, but you’ll be ahead
of the curve.
If you wait too long to start paddling, the wave will pass you
by. You won’t have enough momentum built up to catch it.
It’s all about timing, about knowing exactly what to do and
when.
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It’s the same with entrepreneurship.
There are trends all around us. Some are well developed at
this point, like mobile apps and daily deals sites—we’re too
late to catch those waves. Some are still too far out, like,
say, harvesting minerals from asteroids—there isn’t enough
momentum around those yet for us to profit.
Trends are an interesting metaphysical topic for several
reasons.
For one thing, I strongly believe the key to success is to be
calm today, since that’s the best predictor of a successful
day tomorrow. But that doesn’t mean you stand at the edge
of the beach when a hurricane is coming. You still have to
do whatever it takes right now to ensure your survival, to
make the moves that will help you and your family survive
today, and empower you to thrive tomorrow.
The trends that are coming are that hurricane. An emerging
trend can tell you a number of things, if you know what to
look for:
• It might indicate what stocks to buy.
• It might indicate what businesses to start. And for every
one trend, there are many different businesses you can
start.
• If it’s a negative trend, it might suggest how you can
position your family to survive.
• It gives you something to talk about with your friends.
• It gives you ideas that may morph into revenue streams
that nobody has ever thought of before.
I make money through the last item listed.
I think of ideas for other companies who call me, and my
“business” is to help them implement those ideas on their
own and become massive successes. If you combine the
ideas born of trends, with an understanding of demographic
trends, there are trillions of dollars waiting to be made.
A trend is a reflection that some way of life is ending and
another way of life is beginning. For instance, Henry Ford
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could’ve said that the era of transportation by horse was
ending, while that of the automobile was dawning.
The era of lamplighters ended when the electric light bulb
was invented.
The era of American textile manufacturers ended when
cheaper alternatives emerged overseas.
Any time there is change, people will complain and resist.
Some people will always insist that the “old way” was the
best way. But you and I know better.
Most of the trends I’ll discuss are based on two important
ideas:
1. All things end, and the better we prepare for that end,
the more we can benefit from it.
2. Innovation takes place nonstop. Basically since the
introduction of the printing press, have been innovating
at faster and faster rates. Every year, the level of
innovation is higher than that of the year before.
So if you want to buffer yourself against any eventuality, the
best way to do so is by focusing on a trend that is formed
around one of the above two themes.
Trend #1: The aging population
As you’re probably aware, the baby boomers—members
of the postwar generation born between 1946-1964—are
aging. As of a few years back, 76 million boomers had hit
the traditional retirement age and—surprise—kept going.
They kept playing tennis. They kept skydiving. And because
of the nature of the economy, many of them kept working.
But here are a few things that happen to lots and lots of
people when they get older:
• They become ill.
• They become more and more farsighted.
• They get lonely.
• They look for cosmetic treatments—topical or surgical.
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• They might look for new spouses after old ones get
sick or die.
• Their children are no longer massive financial burdens
on them, so they can finally spend some money on their
own interests.
These aren’t things that happen to a small segment of the
population. Aging happens to EVERYONE whether we like it
or not.
The companies that rise up to address these various
problems and needs are the ones that I’m watching for the
long term.
Trend #2: Healthcare
Here’s a problem: when I switch from one doctor to another,
there’s no easy way for the new doctor to access all of
my health records. There are technological and regulatory
issues. But some companies out there are figuring out ways
to overcome these issues.
Software that helps human resources deal with all the
new changes in healthcare laws will be a huge trend. By
being on the board of directors of an employment agency
with over $1 billion in revenues, I became the ultimate HR
department. I’ve seen the trends that people are innovating
in this space. It’s an enormous space and the companies
that get it right will make billions.
Trend #3: Surveillance
You are being watched.
And the people who are watching you are getting better
at it. When you make a purchase or a phone call, indirect
surveillance hones in on certain patterns in your activities
and either labels you as a terrorist or not. They don’t know
or ask who you are until they need to.
You’re being watched all the time. And it’s only going to get
worse/better, depending on how you view it.
Fortunately, there are many ways you can take advantage
of this trend. You can write a newsletter about the
technologies. You can start your own company involved in
 T H E JAMES ALTUCHER REPO RT
the “observation industry.” You can buy one or some of the
many “watching” stocks that keep getting bigger each year.
Trend #4: The temp workforce
One trend that’s taking place right now is that many people
are getting fired or demoted from middle-management po-
sitions. Sometimes they get fired because their companies
no longer need them. Sometimes they get fired because
they’re getting outsourced to temp employment firms that
instantly hire them back to the companies that fired them.
Why would companies do this? So they don’t have to deal
anymore with human resources, healthcare, etc.
Uber is the perfect example of one of these companies.
It allows people who are out of work, but who have a nice
car, to make some money with very little commitment or
overhead. This will slowly become a way for a workforce
to connect with the people who need it. It’s about logistics
more than it is just a car-hailing service.
Airbnb is another example. This website allows people with
extra rooms in their home to post the availability online
for people looking to stay in that particular place at that
particular time. These extra rooms essentially become hotel
rooms for people looking for accommodations (except
they’re usually a lot cheaper). Airbnb has more rooms
available in New York than all the hotels combined.
Figuring out how to piggyback on this model—which is
becoming widely known as “the sharing economy”—will
provide ways for people to make money. In essence, people
are taking what they already have—homes, cars, time—and
using these assets to create wealth.
Trend #5: Robotics
In 1988 I went to a lecture given by MIT professor Rodney
Brooks. I was neck deep in studying the technology behind
current-day robotics at the time.
He said something that really intrigued me. He said that
robots don’t have to start out “smart.” They can figure out
lots of small things along the way—just like humans.
He showed an example of a small robot that would
bump into a wall a few times, then realize that a wall was
8
there, and turn around and go a different direction. That
robot, more than a quarter century later, is now called the
Roomba and it vacuums your room. It’s also called many
other things, in many industries, and has enhanced many
technologies.
We now fight our wars with robots. We perform surgeries
with robots. Robots listen to our phone calls.
What do robots need? They are hungry for technology, for
more powerful batteries. Every battery uses lithium.
We’re going to go through a worldwide lithium shortage
(is this a trend, or a subtrend? I don’t know, but it’s there).
They are going to need more powerful cameras. They are
going to need more powerful sensors. They are going to
need more powerful techniques to communicate and then
store what they learn. What they need changes every day
because they are getting more and more powerful.
Trend #6: Chemistry
Alcoa has been making aluminum the same way since the
late 19th century. The trouble is that by this point, everyone
knows the aluminum manufacturing process.
It’s a historical fact now, not just a proprietary process. So
anyone can supply the appropriate chemicals and metals at
just the right price.
However, this is going to change. Someone (I don’t know
who) is going to find a new way to make aluminum. They
might discover new elements to use and new processes
to smelt. Companies that hoard those elements or develop
those new processes will benefit in a big way.
And we’re going to be looking at the next great American
industrial powerhouse. All thanks to chemistry.
Chemistry is going to be much more in influential in the
coming years—more so even than information technology
is now. Computers and information technology were big in
the ‘70s, ‘80s, ‘90s, but that trend is over now.
Keep track of the changes in how people are innovating
in chemistry and suddenly you will see what’s happening
in alternative energy, battery storage, isolation of valuable
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chemical isotopes (like pure oxygen, for instance), etc.
Understanding trends is not a day trader’s game. It’s the
long game.
Trend #7: Financial technology
There are many things happening in the financial technol-
ogy world. For starters, the rise of the cashless economy.
Take PayPal. Can I go to a hotel, pick up my key at a kiosk,
go to my room, stay overnight, and then walk out, without
having to pay or deal with a line and tips and a desk clerk
and so on? Yes, now I can. Thanks to PayPal. And this is
only one example of the sort of thing that will begin to
happen in every service industry.
Payday loans are another phenomenon in financial
technology. There’s a massive alternative banking industry
comprised of people who, for various reasons, don’t use
traditional banks. I’m not sure why they’ve opted to do this.
Maybe they don’t trust the banks or maybe the banks don’t
trust them.
But here’s something that will never go away: People who
live paycheck to paycheck, a rising phenomenon, will need
money the day or days before their check arrives. What do
they do?
They go to a payday loan company that might charge them
one dollar for a $100 check even though their paycheck
may be there tomorrow. That’s 365% interest. A payday
lender charges much higher interest rates than the banks.
Sometimes this is regulated, sometimes it isn’t. It’s a great
business to be in but there’s one problem: Many people who
borrow money are scamming the lender.
There’s no check coming. This is not a frequent problem but
it’s a problem in the industry and keeps margins low.
What if you can solve this problem?
Keeping track of the changes in this space will make
someone a lot of money.
Peel the onion
Of course, as with surfing, finding and catching the wave of
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a trend is only the start of the process.
You have to turn these trends into actionable, profitable
ideas in order to truly benefit from them. Once you recog-
nize the trend you want to follow, ask yourself:
1. Where is this trend or innovation happening?
2. Who is it impacting? (Either positively or negatively)
3. Why is it happening?
4. What industry is this impacting? (Either positively or
negatively)
The key is to define the word “idea.”
Here’s a potential idea: “I can make an elevator that goes
into outer space.” That seems like a good idea, but it’s not
an idea. It’s just a thought, not something that I can go out
and actually do. Think of a real idea as a unit that contains
several different components. All of the components have
to be filled in in order to call it an “idea.”
Here are the components of an idea:
• What is the idea?
• To whom can you delegate in order to put the idea into
action?
• Why will this idea help people?
• What is the EXACT next step in the idea? And the next
step after that?
• How will I make money on this idea?
If you can answer all of those, THEN you have an idea. If
not, you’re still just brainstorming.
Also, if the delegation part involves someone other than
yourself, then you can move onto your next idea. Often
delegation requires money, which is why people with more
money seem to have lots of ideas. But all they are really
doing is filling in those components and moving onto the
next idea.
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Let’s consider this process through the lens of one of the
trends I mentioned earlier: the aging population.
Where is it happening?
We live in a global society, but that doesn’t mean that
everything is the same everywhere, always. Innovation
happens in different places at different speeds. In South
Korea, for example, mobile phone technology far exceeds
what we have in the United States. That means connectivity
is far better too.
At the end of 2013, 69% of the world’s 4.2 million Wi-Fi
hotspots were in Asia-Pacific. Market research firm ABI
Research expects the worldwide total to exceed 10 million
hotspots by 2018 thanks to mobile growth, more than
doubling today’s totals in Asia.
That’s HUGE, and it’s not happening in the United States at
all. Yet.
Where something is happening plays a large role in what
path it takes and whether or not it takes hold. Mobile
adoption in South Korea might make a certain kind of app
a no-brainer for that market—truly everyone in that country
is connected at all times, meaning a potential user base in
the millions. That wouldn’t be the case in a less-connected
country.
The good thing about aging is that unlike other trends,
aging is happening everywhere. Everyone is doing it. No one
gets out of the aging process. It’s universal.
So, the trends around issues related to the aging world
population matter everywhere you look. There is no country
on Earth where this isn’t happening—in fact, in some
countries, like Japan, the aging population trend is even
more pronounced than it is in the United States.
Who is it impacting?
One common but unfortunate event that occurs as we
age is that a lot of us suffer from physical ailments and
diseases, such as cancer. Everyone in the world has cancer
cells in their body. You do and I do. Sometimes those cells
aggregate together in such ways that it hurts us and we
go see a doctor. The doctor says, “Oh my god, you have 10
10
months to live.” Like I said, aging happens to all of us. So
the potential customer base for products related to these
problems is massive.
Every day, I look for companies that are able to diagnose
cancer faster and more efficiently than the current biop-
sy-and-test method. Tests are taking place at all the largest
cancer research facilities in the world for testing cancer via
your stool, your urine, and your DNA. I keep track of all of
these tests. I go out and visit the facilities. I get doctors to
explain the science to me.
How can you take advantage of this trend? For one thing,
you can buy stocks of companies that are involved in these
new technologies. You can write a newsletter about the
latest technologies. You can use the technologies to create
other companies to help make people aware of them.
I invest in companies that diagnose cancer. I invest in
companies that I think can diagnose Alzheimer’s. I don’t like
to invest in the cures but I like to invest in the diagnostics. I
stay away from the cures because the FDA charges you $2
billion to test your cure and then they still might reject you,
which doesn’t seem very fair. Given our aging population,
the FDA does much more harm than good now. But I do
look into more natural cures.
It’s important to be aware that the FDA and the pharmaceu-
tical industries have a vested interest in charging some of
us tens of thousands a year for a medicine, when we could
be seeking more natural cures at a fraction of the cost. So
billions have been spent to suppress useful information
about many diseases.
Why is it happening?
I remember a poster for the HBO show “Six Feet Under”
from about a decade ago that had the tagline: “Everything.
Everyone. Everywhere. Ends.”
It might have been for the last season of the series, I don’t
know, but the message was pretty clear.
We’re all dying; some of us are just closer to the end than
others.
But death itself isn’t the “why” of the aging population trend.
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That’s a given. We’re talking about this as a trend because
of the sheer scale of the group that’s involved here, just how
many people are approaching the end at about the same
time.
The baby boomers—the generation defined by the boom in
U.S. births following World War II—have for years made up
the nation’s largest living generation. According to the U.S.
Census Bureau, there are currently about 74 million boom-
ers (aged 51 to 69) living in the U.S. That’s a lot of people
to be dealing with health problems, paying for medical
services, moving into nursing homes, etc.
So the aging population is a question of scale.
(This trend isn’t going to end with the boomers either.
The Pew Research Center has already predicted that the
millennial generation—those between the ages of 1834—will
surpass their parents’/grandparents’ generation with about
75 million members as soon as this year, as the boomers
start to die off. Not to be morbid, but that means a lot of
people will be dying, every year, for a long, long time.)
What industry is involved?
In Silicon Valley and the technology industry in general,
you hear a lot about disruption. Companies are always
looking to get into existing industries and “disrupt” them,
shake them up, and extract profits by improving on tired,
old business models. Amazon disrupted the bookstore
business when it became the biggest, cheapest bookstore
on the planet.
Uber is disrupting the taxi industry big time, offering a better
alternative for many people.
Airbnb has effectively disrupted the hotel industry.
With trends, once you know where you’re focused and who
is being impacted, the industry that’s involved is the next
most important factor to consider. Maybe your trend stands
to involve a large group of people in a high-income part of
the world, but the industry that it involves is very big, strong
and entrenched.
Not so easy to disrupt.
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(But not impossible. I would argue that Elon Musk and
Tesla are disrupting the auto industry—one of the most
entrenched industries out there—with their electric cars and
have made a real dent in that business.)
Or maybe the industry is one that’s long overdue for disrup-
tion. Uber’s founders saw that with the taxi industry, which
had a lot of regulatory walls around it that they had to work
to dismantle, and have profited mightily because of it.
Aging has wide-reaching impacts. True, healthcare is a
major concern for many people as they get older, and is one
industry that remains ripe for disruption, but that’s not all
I’m looking at.
Older people get lonely: Maybe we should look at social
media and dating services for that age group. How can
technology help them? Older people have more money to
spend on their interests: Maybe we should look into travel
and entertainment options that cater to this segment,
offering things that younger customers may not be as
interested in.
Older people have financial interests to maintain: We all
know that planning for retirement is important, but where
are the financial services for those that are already retired?
Finding your way in the innovation economy
After you recognize a trend and break it down to fully
understand it, it’s time to profit!
The problem that many entrepreneurs run into, though, is
that there are as many ways to monetize good ideas as
there are ideas out there. There is no set-in-stone way to do
it every time.
But the truth, in my experience, is that the monetization side
of your business often develops naturally alongside your
product.
Think about Google. When Larry Page arrived at Stanford in
1995 to begin his PhD program, he brought with him a long
list of ideas he wanted to work on. Self-driving cars was
one of them. An improved algorithm for Web search was
another.
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His advisor wisely steered Page toward the search idea—
which was the most attainable at the time—and the rest is
history.
But it wasn’t until Google Search had been up and running
for more than two years that the company really figured out
how to monetize its massively popular product. As early
Google investor Michael Moritz told John Battelle about the
company’s early days for his 2005 book “The Search”: “We
really couldn’t figure out the business model. There was a
period where things were looking pretty bleak.”
The answer was Google AdWords, which launched in
October 2000 and enabled advertisers for the first time to
tie their ads to search terms. Web users would literally tell
Google what they were interested in, and AdWords would
show them ads relevant to their interest.
As of 2014, AdWords was Google’s primary revenue driver,
bringing in more than $50 BILLION a year for the Web giant.
The best way for a person to monetize their ideas is to think
about them from two different angles: helping yourself and
helping others.
Helping yourself just means taking that trend or idea and
turning it into something that directly benefits your own life.
Start a business, get a promotion,
Helping others can include everything from writing a
book about the trend to starting a blog or newsletter that
examines the trend in depth on a regular basis. Find ways
to use the knowledge and ideas that you have generated to
help other people improve their own lives.
The possibilities for idea monetization are endless:
A Invest: Read all you can about the trend and the
companies and markets involved in it. Do this enough,
and for long enough, and you will start to see the trends
within the trend and begin to understand the right
places and moments to place your bets.
Investing in companies in these growth industries is a
great way to profit in the innovation economy, but you
have to do your research ahead of time to be sure you
fully understand not only the stocks you’re buying but
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the market these companies are facing as a whole.
Maybe you want to invest in biological nanotech, but
something as simple as a negative ruling from the FDA
could drive half of the companies in the space out of
business overnight. You need to know what those risks
are before they happen.
B Network: I like to be where the technology is happening,
as close to the laboratory as possible, in order to
understand where to invest or where to build. Does this
mean I need to be an expert? Not at all. I barely know
what half of this stuff is or does. But I am able to read
the latest reports and try to figure out how they are
going to be applied. I know the right people to talk to
when I have questions. Then I use that information to
make informed decisions when the time is right.
C Start a business: If the trend is big enough and your
take on the idea is unique enough, starting your own
business is often the best way to cash in on “the wave.”
Create a product that companies in your trending
industry can use, or develop services to help them do
their jobs better. Find an underserved part of the market
and create a solution that people will pay for. It doesn’t
have to be a homerun, $100 million idea. When you
tap into a growing market, your sales will grow right
alongside the rest of the industry.
D Invest in someone else’s startup: Growth industries
like robotics and self-driving cars rarely include many
publically traded companies that you can invest in with
stocks, so another option would be to invest in startup
companies as an angel investor.
E Get better at your job: Technology and innovation
aren’t just for entrepreneurs. You can even use these
trends to make more money and do better at your
current job. Not everyone is an entrepreneur. I’ve been
an employee as often as I’ve been an entrepreneur (and
I’ve gone back and forth from employee, to entrepre-
neur, to employee, to entrepreneur a few times too). But
understanding the Innovation Economy can be a great
benefit at work.
Even if you don’t go out and start a new company
around your ideas, just applying them to your existing
job is a great way to generate new revenue for your
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company, make existing processes work better, and put
yourself in line for a promotion (i.e. more money).
F Find a better job: Or maybe your current employer is in
a different industry, maybe it’s an industry that is dying
and laying people off. When you identify the winning
trends in the Innovation Economy you can find the
companies that are best positioned to leverage those
trends. Go work for them. Help them do what they’re
doing better and faster.
G Write a book: You’ve spent months and months
researching trends, talking to business leaders, learning
all you can about the leading industries of both today
and tomorrow. Put all of that information down into a
book and sell it on Amazon. You can self-publish for
next to nothing these days—I should know, I do it all
the time—and it’s a great way to profit off of your ideas
when other people look for information and buy your
book.
H Start a blog: Forget the time-intensive work of writing a
book. Just put together a blog about your trend. Inform
your readers about what’s going on in the industry,
who the major players are, what they’re doing, and how
everything is growing and changing. Sell ads on your
pages.
I Start a newsletter: Take those blog posts and sell
access to more in-depth reporting and analysis via a
paid newsletter subscription. Bring in experts from your
industry to write guest articles and participate in the
conversation.
J Consult: Starting a business doesn’t always have to
involve developing a product, leasing office space, and
hiring employees. Consultants are often oneman shops
whose “product”—their knowledge of a given subject
or industry—is something that they can sell directly to
clients. Figure out what the startups and companies in
your industry need and find a way to help them get it.
K Get involved with these companies: Identify the
companies that are currently working on your ideas and
reach out to them. Come up with a list of 10 things they
should be doing and email it to the CEO—I did this with
Amazon and their self-publishing business a while back
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and ended up getting a free trip to their headquarters
out of the deal. Serve as an advisor.
L Find the innovators: No companies are working on
your idea yet? No problem, just find the individual
innovators out there who share your passions and get
to know them. Link them into your network. Brainstorm
with them. Work on your ideas together. When their
ideas and your ideas develop to the point that a compa-
ny comes out of it, you’ll be there on the ground floor.
M Invest in your skills: As I wrote in “Choose Yourself,”
there is no better investment that you can make in life
than to improve your own skills and marketability. Take
classes, read books, learn from the great minds in your
industry—anything to become a leading expert on your
idea.
Now it’s your turn
No one can predict the future. It’s like when swine flu killed
one person and then the U.N. announced that 200 million
people around the world would die of swine flu in 2008.
Nobody died of swine flu in 2008.
But there was a stock with the symbol HOGS that fell 20%
that day. That’s an opportunity to buy. Just because.
Most predictions are wrong, and so many irrational things
happen when a trusted source makes an outrageous
prediction.
And then, there are the trends that are irrefutable:
• People are getting older
• The nature of the workforce is changing
• People want alternative energy
• The economy is becoming more globalized
• Robotics technology is being used for more functions
• Wearable computing is generating larger and larger
revenue
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Think of each trend like a rainstorm. It’s coming down and
you can’t block it. But you can open up an umbrella and
be safe. There are many things that can fit under a big
umbrella. The bigger the trend, the bigger the umbrella you
can have. Think of each trend and the things that fit under
those umbrellas: stocks, new businesses, new information
products, new ways to live your life,
Let me tell you how he got started. Mick was just reading
the paper. He read that thousands of people in the country
of Sudan don’t have arms because of war injuries.
And they just live with it. They can’t afford prosthetics, so
they hand-feed each other, dress each other, and help each
other with all the other daily necessities.

I’ve made use of each one of the above trends to make my
life better. For instance, when I saw the trend in employ-
ment, I went on the board of an employment agency, they
implemented my ideas, and everyone makes money.
With the trend of people getting older, I started investing in
startups that diagnose cancer and some of these startups
have now gone public.
Success in the idea economy is when you see what’s wrong
with the world and say, “That’s absurd. Let’s change that.
Let’s hack that. Let’s modify that so it’s affordable.”
That’s what Mick Ebeling does—founder of the Not Impos-
sible Labs and the Not Impossible Foundation. Through
these two entities, Mick figured out how to build whatever
he wants, and solve impossible problems.
Mick sees the world through his own lens. It’s the reason
he’s successful.
He creates technology that solves problems like having
your arms blown off. Or being paralyzed and unable to
speak to your family.
The technology to fix these problems does exist. But when
you can’t afford it, you have another problem.
This is why Mick hacks. He disrupts the system, doesn’t
wait for permission, and believes in impossible things. You
can, too.
Mick decided to do something. He flew to Sudan with no
plan and figured out how to create prosthetic arms using a
3D printer. This is someone with no experience in medicine
or engineering. He’s just a guy with a big heart who decided
that nothing is impossible.
“We’re not trying to create the next $700 pill,” Mick told me,
“We’re trying to create something that totally disrupts a
particular fill-in-the-blank, maybe it’s a way of communica-
tion, a way of transportation.”
This is the winning mentality today: Uber, Airbnb, Not
Impossible Labs.
So how can you get the big idea, do the impossible, and
become beautifully successful?
First of all, believe in the mentality that nothing is impossi-
ble.
Try it.
Second, look for absurdities. They’re everywhere when you
read or watch TV. When something bothers you, think of
solutions. Be an idea machine.
Third, disrupt. Don’t wait for big government or big business
to give you permission. Forget bureaucracy. Disruption
starts now.
We’re hacking the system. Now it’s your turn.

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