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Excess Capacity Business Model

Taking the world by storm for a variety of logical business reasons is the EXCESS CAPACITY BUSINESS MODEL. You may not have heard of it by name, but it's been around for centuries. Simply stated, it's when businesses make money selling or leasing the extra capacity of their core business.

I first encountered the EXCESS CAPACITY BUSINESS MODEL when I was selling Digital Production Printers to established traditional ink and water or what we called offset printers. One such printer was in the Southwest part of the United States.  He had been in business for dozens of years and was considered a bell-weather indicator by a major university. He shared with me this EXCESS CAPACITY BUSINESS MODEL as one of his success business principals. Before he would purchase a million dollar offset printing press, he would sell contracts for the excess capacity to several smaller printers, thus having this huge investment paid for by his smaller competitors before he even finalized an agreement to purchase the press from the manufacturer. This brilliant idea is now being replicated by today's incredibly successful and innovative businesses such as Uber, Lyft, Airbnb to name just a few. So who will be the next "unicorn" to emerge using this brilliant business strategy?

Going back to the 1800's, this business model was successfully implemented by farmers and ranchers who had more land than they could farm or ranch. Realizing that they could lease the land to up-and-coming farmers and ranchers who were not in a position to purchase the needed land made for a great business decision and partnership.

Fast forward a couple of centuries, the US dwindling middle-class has not realized a true increase in income in some 20 years. I'm a classic example of this, averaging a nice six-figure income as a technology salesman in the mid-1990's, but then 20 years later nearly 18% less. But with more hours required to create less income, we had no choice but to either reduce lifestyle for our families or find a supplemental income to make up the difference.

Airbnb, Uber, Lyft as well as others have brilliantly recognized this need for additional income and they've matched it with their offering delivery requirements. This creates a win-win for these start-ups utilizing the EXCESS CAPACITY BUSINESS MODEL and who partner with the middle-class who are striving to earn more and get back on track with desperately trying to implement the AMERICAN DREAM.

The EXCESS CAPACITY BUSINESS MODEL has the opportunity to become the next big thing in business today for a variety of sound business reasons but, in my opinion, mostly because the delivery methodology already exists within millions of potential affiliates; eager and anxious to adopt a side job that will end their diminishing income levels and help them continue to realize the American Dream. Just think how long it took General Motors and Ford to build-up their delivery model consisting of thousands of automobile dealerships around the country, each requiring dozens of sales, service and administrative positions to be filled.

Fast forward another five or ten years, who will be the next up-and-coming innovative business to come up with another sector utilizing the EXCESS CAPACITY BUSINESS MODEL; and why do we care? It's important because these few companies that I mentioned previously rose from nothing to multiple billions in value largely because their use of the EXCESS CAPACITY BUSINESS MODEL offering them a ready-to-go delivery methodology. Any clues you ask? I've heard rumblings of long-term airport vehicle parking lots that pay you to leave the care with them versus charge you for parking as the car can be used by someone needing to rent a car in the same city you are departing. I've heard of start-ups using the EXCESS CAPACITY BUSINESS MODEL to deliver groceries, prescriptions, food, etc. in their spare hours. Sub-leasing your car to these delivery and driver companies is yet a another one. And just last week, a 12 year old daughter of a friend mentioned that she rented a fedora hat for two months for $7 from her school friend who had many hats to spare.

According to a 2016 article in the LA Times, UBER is an example of a company who is not even 6 years old and will do in excess of $25B in sales in 2016. Industry experts value UBER over $62B, so knowing who are the innovative minds working to become the next start-up using the EXCESS CAPACITY BUSINESS MODEL is like panning for gold in California in the mid-1800s.