Beyond Silicon Valley: Unsung Business Heroes

If you ask someone how to become a successful entrepreneur, chances are they will mention Silicon Valley. After all, those are the stories that make headlines. In the fast-paced world of tech startups, success happens quickly— and what sounds more exciting than growing by 50% year after year? It is no wonder other paths to success remain hidden in the shadows. But in reality, Silicon Valley makes up only a small portion of wealthy entrepreneurs…so what about the rest of them?

There are opportunities hiding in every corner of the world. There are businesses all around us for the goods and services we take for granted. The Wall Street Journal article “Meet the ‘Stealthy Wealthy’ Who Make Their Money the Boring Way” mentions an owner who built an entire business on elementary school carpeting. There is an industry out there for schools that need their carpeting redone almost every year— as making messes is something young children are talented at. In 2022, that business owner made over half a million dollars (excluding capital gains).

The article mentions another business owner who found success through car floor mats. Upon realizing floor mats abroad were much higher quality than those in the U.S., he began importing and selling the English-manufactured mats locally. As the business grew, he added to the product line and manufactured more and more goods in the U.S. This year, he predicts around $800 million in business revenue.

Making money in ways like these is more common than you would think. 1719 Partners has worked with business owners in industries like metal fabrication, value-added distribution, and flexographic printing. In the flexographic printing industry, we helped Custom Label transition ownership to a talented management team, and then worked together to create significant wealth. Indeed, we built this success the “boring” way: with a compound annual revenue growth rate (CAGR) of around 12%, a far cry from the exciting 50% some tech startups boast. However, after 20 years of ownership, the long-term growth has been notable.

As this story demonstrates, slow and steady often wins the race. While tech companies can hit the ground running, they can also become outdated just as fast. Short of elementary schools becoming 100% remote (doubtful), school carpeting will always be a need— as will car floor mats. Regardless of what new technology is emerging in Silicon Valley, the need for certain “boring” goods and services never changes.

Indeed, if you invest in companies that will always be a staple to society, growth is virtually unlimited. While the growth may happen at a slower rate than a Silicon Valley startup in its infancy, it may well outlast the flash in the pan. Long-term growth also enables returns to compound. When comparing closed-end fund structures of a typical private equity firm with long-term holds, we found that longer investments far outperform the shorter ones. Click here to see how much.

With all this in mind, more entrepreneurship dreams should focus on industries like manufacturing or value-added business services. If you and your management team are ready to step into ownership and just need a partner, reach out. 1719 Partners is as passionate about business ownership as you are.