The economy is quickly transforming. This is a lesson that Amit Raizada has learned repeatedly from his teenage children.
His son refused to get a driver’s license when he turned sixteen. This confused Amit Raizada because his son loves cars and he is an independent kid.
“Why go through the trouble of getting a driver’s license when I can easily get a ride on my phone?” That was his response
Amit realized that his son has a point.
Driving was once an important part of the teenage experience. However, millennials value immediacy over independence. A millennial would rather take an Uber rather than own a car or go through the hassles of getting a license.
Shifting Consumption Patterns From Retail to Digital For Gen Z
This shift in consumption is having a major impact on the American economy. Lyft, Stripe, and Airbnb, among others, are now part of the exclusive unicorn club. These are privately held startup companies with a valuation of over $1 billion. The value of Airbnb has surpassed some of the world’s most respected hotel brands.
Millennials have already changed our consumption patterns. This should influence the way you invest if you are a shrewd venture capitalist.
Smart investors understand that the unique preferences of millennials will pave way for the most transformative future industries. To better understand this fact, you need to study two elements of the consumption patterns of millennials: immediacy and healthy living.
Immediacy
Millennials value immediacy. They are accustomed to fast response and fast delivery. Amit Raizada has observed this with his children and the children of his friends.
When a young person wants something, they want it right now. If it is a movie, they instantly download it through Netflix. For food it is UberEats and for a ride it is Uber or Lyft.
A venture capitalist should focus on consumer delivery times when making investment decisions. How quickly and at how much, can a business deliver its products to consumers? The market is shifting towards the demands of millennials. Therefore, businesses with slow delivery times are likely to suffer.
To satisfy the need for immediacy, a business should refine its logistic processes. Through watching his kids’ habits, Amit Raizada has discovered many new investment opportunities.
Because of the sense of urgency pervading modern-day consumption, Amit Raizada has invested in state-of-the-art warehouse spaces throughout the nation. His goal is to ensure that he has a warehouse space ten minutes from a major airport.
Warehouse space in the vicinity of shipping hubs and airports has become a prime commodity as e-commerce stores overstock inventory. Understanding millennial intolerance with long wait times has made Amit Raizada to invest in this burgeoning industry.
Healthy Lifestyles
From premium gyms to vegetarian diets, healthy living is a vital component of the millennial life. It is a major source of social capital.
The ever increasing demand for healthy foods poses a threat to the fast-food industry. As much as millennials love immediacy (the concept behind fast foods), this does not extend to sugars and unhealthy fats associated with America’s fast-food chains.
Amit Raizada has realized that his children don’t ask for Burger King or McDonald’s when he takes them out for lunch. Instead, they want healthier alternatives like Sweetgreen and Tocaya.
That is why Amit Raizada invested in fast-casual restaurants in the Los Angeles area a leading innovator in food while offering reliable and quick services with a strong focus on healthy living. These restaurants are clean, organic, and vegan-friendly.
Millennials are defined by healthy lifestyles. They exercise regularly and eat healthily. They are willing to pay three times more for a luxury gym rather than save money with a sub-par fitness program.
The Bottom-Line
This investment strategy is ripe for replication. Many companies that will revolutionize future markets are currently experimenting with this strategy.
