If you have agile team, you can do high impact from rapid global changes.
99% of the world is too slow to act and the ones who have existing solution prefer perfecting the product over selling.
Your only limitations are working capital, liquidity of your assets and personal risk-willingness. You do not always need external funding.
The situation
2008 was a year when financial crisis turmoiled the stable historical growth of financial industry. Before the Sep. 15th of 2018, economics of scale was a domain function to generate revenue which also kept new Unit Inc’s away from the industry. Why? There’s many theories and many of them are built around the theory of combination of bull market. And secondly, short- and mid-term decision making.
Naturally, when you have something that generates value, the act what you want to do is to make it as secure as possible. However, when it is built in a way where it can develop without supervision the results may at some scenarios be damaging.
Barriers of entry are often built around wealth and relationships. Restrictive contracts, reputation and lack of transparency work as a short-term and mid-term solution. Major actions are done behind the scenes — until there’s a unit, black swan or change of rules that cracks them open. To clarify, COVID-19 was not a black swan phenomena.
2020 first order change acted a global pandemic. That’s what we all know, so my focus is more on the similar phenomena that happened during financial crisis. February ended the era of global medical distribution. Offshoring, lean supply chain management and centralized material flows was built for the stable economical growth.
Junk bonds of the 2020 era were middle-layers of distribution. Junk bonds were a method of generating low but stable profit by making a cut out of the opportunity that did not exist within all scenarios. Traditional distributors can also be seen, as a way of taking a cut out of cuts that does not exist in a price-competitive landscape.
The opportunity
Both of the issues were a result of the similar limitations:
- Restrictive contracts (housing bubble bonds vs. non-compete clauses)
- Reputation (risk-taker alter ego vs. brand-oriented purchasing)
- Lack of transparency (no transparency vs. no transparency)
2008 rebuilt many layers of the financial industry from grass-root level. Now was the time to do it again by increasing transparency, technology and millennial values.
Key to success: do the act ethically when others won’t
Medical distribution industry started fixing its issues with same recipe that was ruined the market earlier. Pool of opportunists, called as brokers, started selling factory production allocations that never actually existed. Organized criminals, distributors and hedge funds saw a huge opportunity in a market where price gouging provided exceptional profits (margins of 100–15000 % per unit).
To clarify, I am not against high profit opportunities. I judge it only if it is done with ways that abuse people or commonly accepted rules.
We were able to leverage our position of building our value proposition around fixing the industry. We wanted a build a solution where the grey area agents was left out of the opportunities. Without aggressive telemarketing. Without fooling people (margins 30–50 %). Without salesforce.
Unit Inc in a nutshell
Origin: launched during 2020 in San Francisco
Team: globally-connected remote undergrad. university students
Experience: Limited (read: high ambition without understanding)
Solution: Find broken distributors and due diligence them and use the information connect their clients to new suppliers
Marketing: Less than $2k allocated from revenue
Ops: No hired persons.
Business Model: 10–20% fee from generated sales
Starting capital: $500 to file paperwork
We were able to leverage our solution by combining elements from e-commerce, dropshipping and sales automation. We built e-commerce site without ability to purchase, personalized email sequences and built our brand to hit the press hard as an anti-act to price gouging.
Now Unit Inc has hired it’s first employee and decided to skip first funding rounds.
Never let a good crisis to go to waste, Winston Churchill
We did not have assets or equity to change the situation to multimillion opportunity. We had many opportunities to do it which in the end failed with the way or another.
Our next step is to make exit so we change the multi-year contracts into a cashflow. After it, we will launch our next solution within the same industry because the situation still continues.
Simply, this worked out to make our first million(s) as undergrads.
