Why ‘Boring’ Businesses Can Be the Smartest Investments

I love roofing, but home services isn’t everyone’s idea of an exciting niche. In fact, most people tend to think of my sector as a fairly slow-moving sector.

That’s part of why Roof Maxx has been so successful. Introducing our roof restoration solution for asphalt shingles gave homeowners and businesses a way to get more life out of their existing roofs that was both practically unheard of in residential roofing up to that point and potentially thousands of dollars less than a roof replacement they might not actually have needed.

We didn’t reinvent the wheel by trying to engineer some brand-new roofing material. We just identified a simple problem in a large market and found a practical solution others were ignoring.

The point is, a business doesn’t need to be flashy or sexy to be profitable. Here’s what founders should be focusing on instead.

Focus on recurring revenue instead of impressing investors

A lot of new founders forget that recurring revenue and investment potential are related concepts. Recurring revenue signals that your customers trust you, that your business is stable and that your products or services offer long-term value. All of these are major green flags for prospective partners.

The issue with a lot of flashy startups is that they decouple these concepts and focus exclusively on investment potential. Hype can carry a company, but only for so long. That’s how OpenAI managed to achieve a valuation between $27B and $29B in 2023. Numbers like that probably sound pretty good, as long as you ignore the fact that OpenAI has never yet achieved profitability in a given year and isn’t expected to until 2029. At that point, the company’s cumulative losses could be as great as $143B.

But even more importantly, most companies aren’t OpenAI. They don’t have the same levels of political cache or a massive media-driven hype machine working 24/7 to help them stay afloat until they can solve their cash flow problems.

When you don’t have those tools at your disposal to create speculative value, you have to create real value instead. Recurring revenue is one of the best indicators of real value there is, and the best way to generate it is with products and services that solve common problems for large audiences. If you can do that efficiently, you may not even need outside investors.

Specialized niches mean smaller audiences

Innovation is important for any startup. You want to be doing something unique that sets you apart from the competition. Unfortunately, the more unique your offering becomes, the less appeal it tends to have for a broad audience.

This is the point at which you start to get memorable but totally unmarketable ideas. Some still manage to succeed on sheer novelty alone, like Potato Parcel: a startup that lets customers send messages to loved ones on actual potatoes. But most don’t.

When my brother and I started Roof Maxx, we took a different approach by looking for pain points nearly every homeowner had. Previous experience in the roofing industry had already shown us that many contractors were recommending expensive full roof replacements even when rooftops didn’t need them, that owners recognized this unnecessary expense for what it was and that they resented it.

It was a massive market of people who all had the same problem, and nobody was solving it. We knew that if we could be the ones to do it, we’d be onto something. And we were right.

A fresh twist and good messaging beat reinventing the wheel

Roof Maxx didn’t invent roof maintenance, but we were pretty much the first ones to bring the concept of restoration to asphalt shingle rooftops. Previously, restoration options had existed for metal and flat roofs, but there was nothing of the kind for shingles. In fact, the product we acquired had originally been developed for use on asphalt roads. What we did was refine it into a safe, all-natural solution for restoring asphalt shingles that could restore their flexibility and durability without any harsh chemicals.

This did more than give us a fairly unique product. It also gave us an incredible messaging opportunity by allowing us to accurately assure health-conscious homeowners that our solution was safe to spray onto their roofs — a claim we backed up with research from The Ohio State University.

We didn’t need to go into the red inventing something from out of science fiction so we could capture the world’s attention. We also didn’t need to look for use cases so specific that they ran the risk of capping our market. We just found a way to make a necessary service viable for a huge group of people who didn’t have access to it before.

Boring? Maybe. I prefer to think of it as practical. Whatever you want to call it, it worked for us. And the same approach can work for you as well.