When I started acquiring businesses, I followed the advice of experts, mentors, and even popular books. They all told me that deal flow—finding more investments—was the key to success. Like many others, I bought into the hype and became an investment hunter. Fast forward through several acquisitions, and I realised just how wrong I was. The biggest mistake I made? Hunting for more deals.
Today, I want to share why investment hunting is a flawed strategy and how shifting your focus can lead to long-term success and more significant returns. After all, real wealth isn’t built by hunting for deals—it’s built by creating opportunities.
The Investment Hunting Trap: Why It Doesn’t Work
At first glance, hunting for investments seems like the right strategy. You’re trying to find great deals, after all, right? But here’s the issue: hunting for investments is like trying to shoot a target at 1,000 yards with a shotgun. It’s the wrong tool for the job. Instead of hitting a precise target, you’re wasting resources, time, and effort.
In the early days of my business acquisitions, I scoured online listings, worked with brokers, and joined countless investment groups. I thought that by increasing the deal flow—finding more opportunities—I’d increase my chances of success. It made sense on paper. But the reality was different.
Every time I found a potential investment, there were dozens of other buyers looking at the same opportunity. This competition drove the prices up and the potential returns down. Worse still, I was relying on the market to give me the options, instead of creating opportunities that fit my specific skill set and goals.
The breakthrough came when I stopped trying to find “good deals” and started focusing on what I could bring to the table. By over-investing in core competencies, I was able to build a unique niche for myself and create custom opportunities. This shift not only allowed me to spot better investments, but it also gave me the ability to add value in ways others couldn’t.
The High Cost of Investment Hunting
Here’s a concrete example of how investment hunting cost me both money and time. One of my first major acquisitions was GloFX.com, a company that sold festival accessories and diffraction glasses. On the surface, it seemed like a solid business, with impressive growth and revenues. However, most investors would have just seen it as a “festival accessory company.”
But I saw something different. I realised that GloFX.com had huge potential—if only we could integrate our expertise in digital marketing, intellectual property, and on-demand manufacturing. While others were eyeing it just for its revenues, I saw the long-term value in leveraging its existing capabilities to create something even bigger.
It took a lot of effort to rebuild the company culture and align GloFX with our broader portfolio. But the results spoke for themselves. We increased its value by more than 20% in just a few months. This is what happens when you stop being an investment hunter and start becoming an investment creator.
How to Move from Investment Hunter to Investment Creator
Here’s the shift I made to move from blindly hunting for deals to creating my own tailored investments. The process involves more work upfront, but the payoff is substantial:
1. Start with Capabilities, Not Opportunities
Instead of hunting for any opportunity that looks good, ask yourself: What unique skills, resources, or insights do I have that can give me a competitive edge? This is the first step toward creating your own investment opportunities.
2. Look for Businesses That Benefit from Your Core Capabilities
Once you have a clear idea of your strengths, start looking for businesses or niches that can gain from these skills. For example, if you’re a digital marketing expert, look for businesses that are underperforming in that area and can benefit from your expertise.
3. Focus on Synergy Potential
Don’t just look at individual businesses—think about how a potential investment could complement your existing portfolio. Synergy is key to building a business empire. How can your new acquisition strengthen your other investments? This creates a portfolio incubator strategy—a collection of businesses that grow together, benefiting from each other’s strengths.
Building an Untouchable Investment Empire
By shifting from investment hunting to creating tailored opportunities, I’ve been able to build a robust portfolio that not only generates consistent returns but also grows organically over time. Here’s why this strategy is so powerful:
1. Natural Moat
As you add more value to your portfolio, it becomes harder for competitors to replicate. Your unique skill set and core competencies become your natural moat, protecting you from competition.
2. Risk Reduction
By focusing on complementary businesses, you automatically diversify your investments, which reduces risk. For example, if one business faces a downturn, another in your portfolio might do well, acting as a natural hedge.
3. Network Effect
Each new investment should make your existing businesses stronger. As you add value, you’re not just getting returns from individual businesses, you’re creating a network effect that amplifies the value of your entire portfolio.
How to Start Creating Opportunities Instead of Hunting for Deals
Here are a few actionable tips to get you started on creating opportunities instead of hunting for investments:
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Invest in yourself: Focus on over-investing in your core competencies. The more skills and resources you have, the more opportunities you can create.
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Look for value-add capabilities: Build businesses that not only stand on their own but also create value for the rest of your portfolio. Think strategically about what each new acquisition can bring to the table.
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Focus on processes, not just deals: It’s not just about finding a business—it’s about creating the right process and systems that will allow you to increase the value of that business over time.
The Real Cost of Investment Hunting
Investment hunting might seem like a good idea, but it’s an expensive, time-consuming strategy that leads to more competition, lower returns, and missed opportunities. Building wealth requires value creation—and that comes from understanding what you can bring to the table and using that to create better, more profitable opportunities.
Relevant Links for Further Reading:
- Investment Hunting vs. Value Creation Learn More
- Building Your Digital Portfolio Digital Business Guide
- Why Synergy Matters in Business Synergy Explained
Photo credit: wansagaf Indonesia
