Every week I uncover intriguing companies, trends and ideas through my work on Australian Small-Cap Investigator.
Many are too raw and newly formed for most readers to be able to stomach them.
But I wouldn’t put you in that category.
As a Money Morning reader, you know to look beyond the mainstream for meaningful investment returns…and you understand the quirky start-ups of today could be the small-cap stars of tomorrow.
A deluge of home-grown invention is hitting the market. That makes now a great time to take a close interest in new tech ventures.
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As I’ll show you today, these firms can reward you in several ways.
By the way, before I go on…you should know that our tech analyst, my old mate Sam Volkering, has discovered the next tech set to transform daily life.
Mass adoption could be just six months away. And if you invest now, it could multiply your wealth in just a few years.
As I was saying, 2014 has been an exciting year for Aussie tech. Barely a month goes by without news of tech-led upheaval rocking one industry or another.
The services sector — which employs more than three quarters of our workforce — is fair game for disruption.
I’m sure you know all about the threat Uber, the ridesharing app, poses to the likes of Cabcharge Australia Ltd [ASX:CAB]. The mainstream press is all over it.
The idea of paying a cabbie for a ride is as old as the hills…and it needed an overhaul.
But more than the ancient trades are abuzz with new competition.
Even sectors that you might consider newer…like recruitment…are churning away with bold upstarts.
I met the team behind one such upstart —Workible —earlier this year in Sydney.
This budding start-up harnesses tech to redefine the recruitment game.
The company’s online marketplace connects jobseekers with employers.
But Workible ignores the white-collar jobs where Seek Ltd [ASX:SEK] and LinkedIn Corp [NYSE:LNKD] dominate.
Instead, the company brings flexible and temp staff to some of Australia’s biggest companies.
The Aussie workforce is becoming more and more flexible. I spotted and discussed that trend earlier this year in Australian Small-Cap Investigator.
Workible co-founder Fiona Anson saw this trend too — early enough to seize the first mover advantage.
Ms Anson asked: ‘If a dating site can match love interests, why can’t a job site match availability?’
Almost seven million Aussies work outside the old-style 9:00am to 5:00pm. That gives Workible a large addressable market.
The ‘holy grail’ would be cracking the US market…where that figure is currently 92 million.
Most recruiters ignore flexible workers. They view them as ‘transactional’, lower-value business. But Workible made well over $50,000 in sales in the first half of this year.
If this business strikes a chord with employers and jobseekers, it could grow bigger than Seek.
Workible’s story has gathered pace for months.
But another start-up, pushing into the same sector, could prove even more successful.
What’s more, this little firm could put real cash in your pocket…for minimal effort on your part.
I’m talking about PeerBrief…a company aiming to turn ‘the crowd’ into paid talent-spotters.
PeerBrief’s slogan is ‘get paid for who you know’.
The company promises to pay you a fee of $1,050 every time you refer one of your contacts for a job — and your friend gets that job.
The cash comes from the employer. As PeerBrief founder Rob Fanshawe puts it, ‘most companies have a referral system and would be used to paying $1000 and up for referrals.’
PeerBrief carves off a smaller chunk of that success fee…and a business model is born.
This cuts out the middleman. It forces companies like Hays plc [LON:HAS] and Robert Half International Inc [NYSE:RHI] back to the drawing board. Recruiters will have to think harder about the value they add to candidates and employers.
I see three bright ideas here. One: attracting employers through cost savings. Two: motivating people to refer talented friends for roles. Three: tapping into referrals as an effective source of quality candidates.
As you might expect, software firms have been the earliest PeerBrief adopters. But I can see this model rolling out to every profession from actuaries to zookeepers.
A common challenge for start-ups like Workible and PeerBrief is the low barrier to entry. Deep-pocketed players can sound the death knell for once-exciting companies.
That’s why these kinds of firms aim to scale up quickly. They often see a trade sale or initial public offering as the end game.
It’s too early to tell if Workible and PeerBrief will reward their early backers’ faith.
But that’s okay. Investing in early-stage tech is as much of a punt for billionaires as it is for you and me.
Firms like this are risky investments. But if you back the right horse here earlier than everyone else does, you can enjoy super returns.
That’s why I focus on the small end of the stock market.
You can only buy into start-ups like these if you engage with the company and take a big stake. Few investors enjoy that privilege.
But everyone can consider small-cap companies that still promise tremendous growth prospects.
In fact, some of my Australian Small-Cap Investigator readers now sit on a whopping 196% profit. That’s on an ASX-listed tech stock that I tipped just one month ago.
This little company’s fortunes link into an exciting theme that’s only just taking off…and the stock could have a long way to run.
Great tech companies emerge all the time in Australia. You just have to know where to find them.
Tim Dohrmann+
Small-Cap Analyst, Australian Small-Cap Investigator
Ed note: The above article was originally published in Tech Insider.
Special Report: The Hundredth Robot : Sam Volkering has discovered the next technology set to transform daily life. Its mass adoption moment could be just six months away. And if you invest now, it could transform your wealth in just a few years .
The post How Can This New Start-Up Put $1,050 in Your Pocket? appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
