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Is the Pandemic ‘Black Swan’ finally going to bed, and the future of market disrupters.

Opinion 

By Timothy Riemann

As we enter month 9 of the seemingly endless COVID Pandemic, I’m beginning to ponder the phrase “New Normal” and what it entails. 

Nine months ago, the fear of an unknown and uncontrollable virus spread around the world. The effects COVID have been felt by every nation and every economic sector, causing disruptions beyond almost any imagination. This singular event has highlighted the blind spots in our ability to plan for the unknown.

By very definition, this virus has caused a “Black Swan” type of event beyond any calculation or previously thought magnitude.

As COVID’s spread halted governments and businesses, a void was formed for anyone that could see it for what it was. A void that was quickly filled by dynamic entrepreneurs to varying degrees of success.

For most large-scale organizations, the rapidly changing environment was just too much to handle. As an effect, many battled with internal processes unable to adapt quickly enough to keep up. Even at this late date, it will still take months, if not years, for many to recover. But there is hope on the horizon.

It is now time to begin thinking about the next step forward. The mitigation strategies tested over the last six months have born many fruits. From remote work policies and virtual meetings to rapid medical testing and digital supply chain management, things start to get back on track. And with that, the void that was open for market disrupters has begun to close.

The ‘too large to fail’ companies have weathered the storm and are reentering the market spaces that the virus forced them to leave. And this poses a problem for any small company that could expand in this time of need.

Over the next few months, smaller companies, like those traded in the OTC (Over the Counter exchange) may be pushed back out of their newly established market niches, unless they can adjust to forthcoming changes.

We are entering the post-event consolidation phase that many should have been planning for in advance. As this void starts to close, many companies will feel the need to remain relevant in the current market environment. Because of this, we may see the vast majority of market disruptors, like those in the OTC, start to divide into two camps; the single vertical companies and the multi-vertical companies.

Both groups of companies face a similar problem, adapt or fall back into obscurity. Their action will be of significant interest to investors over the next few months, and one wrong step could spell disaster.

However, options do exist to avert the impending troubled times. Theses options may fall into three general themes: consolidation, expansion, or seek a buyout. Each option comes with its own set of conditions as well as risks and rewards.

In vertical consolidation, most companies will most likely be the preferred action because either they operate in a single market or other verticals have preformed marginally over the last nine months. This consolidation may be accomplished by securing supplier rights such as patent ownership, exclusive distribution rights, or sole manufacture of a given product. However, this will also carry a lot of risks. Larger companies may have the capital to outbid for those distribution rights or may be able to manufacture small companies with similar products, causing a decline in unit prices. Even the security offered by patents may not be enough to ensure long-term success. This may cause some single vertical companies to attempt a shift to a multi-vertical model. Still, unless they are already heading in that direction, it may be a long time before they are competitive again.

For established multi-vertical companies, expansion may be the preferred future action. They already have the means to shift capital when needed and adjust their focus to pivot to the next big idea. Many will be able or already have consolidated gains from previous quarters from success markets sectors for application in other ventures. Companies with existing verticals in under preforming sectors may see a marked increase over the next few months as those sectors come out of hibernation, but this expansion could be a two-edged sword. Being too timid may cause some to miss out, while moving too fast may open many to potential collapse when another COVID wave comes rolling in. It will be essential to find a balance between these two outcomes.

For those that lack the means to consolidate or expand, only one option remains, seeking a buyout. Due to COVID, many larger companies were forced to exit sectors or operations that didn’t add materially to their bottom dollar. Theses larger companies will be forced to take a hard look at what will have less impact on the balance sheet, reestablish from internal recourses, or buy out smaller companies that took advantage of their absences. Entrepreneur faced with a buyout option will have to analyze their operations before accepting or denying an offer carefully. Being bought out may have more to do with a smaller companies leadership team than with its process within a given market. A larger company wouldn’t offer a buyout unless the smaller company were already disrupting the market to some extent. The question will be whether or not the disrupted market is worth taking over or not. Is the penetrating the disrupted market a necessity for the larger company to continue its success, or is it just a convince for future expansion? If necessary, then a buyout may be the first option, but if negotiations fail, it may be only a matter of time before the smaller company is pushed out.

On the other hand, accepting a buyout offer may have more to do with the entrepreneur generation than their company’s success. For many of the younger generation of entrepreneurs, the goal of starting a new business or company is to disrupt a given market as quickly as possible to become attractive to larger companies. The idea of rapid market disruption and then exit through a buyout fits well this goal; however, this may lead many to undervalue their company’s. Conversely, entrepreneurs from previous generations may overvalue their company’s effect on a disrupted market, and attempt to hold out against a buy out to long and lose their edge when a larger company chooses to mobilize their resources.

Regardless of how smaller companies chose to move forward over the next few months, investors will have many opportunities to profit.

Demo of Media Analytic Platform: TalkWalker

This past week I had the opportunity to sit down and receive a platform demonstrate from TalkWalker. Here is my experience.

Before we get into the experience, I feel the need to lay down some base knowledge regarding marketing, advertising, and Social Media. Over the last ten years, there has been a noticeable shift in the avenues marketers use to convey advertisements to consumers. This shift was brought about by first by the introduction of social media, and it’s broadening to include and increase profit growth beyond user paid services.

Social Media has allowed businesses to connect with consumers like never before. Companies can communicate faster than ever, spreading new, announcements, sales, and even issues to consumers as the speed of a click. The downside to this is the over-saturation of the market. More is not always better.

Enter the age of Data as a Service.

Media sites and platforms of all shapes and sizes collect information on anyone that visits. Where you go, what you click on, how long you watch a video or stay on one page. Terabits of this data are collected every day by just about everything we touch. For a small or non-technical company or business sifting through or even having access to the mountain data created can be beyond their capabilities. That’s where platforms like TalkWalker can bring added value and understanding to unexploited data.

Social media analytics platforms, like TalkWalker, have a programmed ability to track keywords or phrases across multiple media platforms and provide information as to the who, where, when, the term is being used, and also the types of feels used with it. This can help answer many questions relating to brand recognition and market penetration. Some of these platforms also can compare your brand to a market competitor, enabling you to devise strategies for expansion.

Getting into the platform.

TalkWalker can best be described as a user-centric media analytics platform fed by opensource data from a verity of social media and traditional media outlets. Geared and advertised as a “Brand” monitoring system TalkWalker offers both a limited free subscription and a tired paid subscription. Although the free subscription is minimal, only allowing for analytics of the last seven days and no continuous account tracking, however, even this enough to provide some much-needed insights into specific search terms.

Within the free version, the user has a substantial amount of control over the filtering of information in relation to the term or phrase being searched. Filtering is handled by a series of preformatted tabs just below the search bar, which can be used to narrow down the returned information from the user’s search. These filters include the traditional Demographic, Language, Devices, and Country/Region most similar platforms include the additional filters of media type and sentiment enable the user to view the overall perception of the search term as it is across one or more media platforms. The other primary user control function involves the display of the desired returned search results. Between key metrics, themes and tags, influences, demographics, world map, and a full list of returned results. These functions enable the user to see where the search term is being talked about, who’s doing the talking, and how they’re talking about it. My overall impression of TalkWalker’s is exceptionally high. TalkWalker provides multi-platform inclusiveness not found in many other free platforms. So much so, in fact, I requested the offered free demonstration of their capabilities.

The organization I work for manages over 20 media profiles across multiple platforms. Collecting data in a timely enough fashion to act on changes in trends can be extremely difficult, and even compiling all the analytics associated in an easily consumable format can be beyond time-consuming. Having a platform that can track all those profiles would significantly reduce the time needed to analyze our data and would enable us to be proactive in our advertising campaigns.

From the start, our correspondence with TalkWalker was extremely professional. Email communication was kept short and to the point and proceeded quickly to confirming a telephonic fact-finding conversation, even to the point of sending a shareable calendar invite and encouraging for additional participants. During the fact find, the TalkWaker sales representative was sufficiently knowledgable about the platform and our organization to be able to ask open ended questions to let us define our use case and for TalkWaker to understand our intent clearly. After the fact-finding, TalkWalker requested a list of our media profiles. The reason for this request was clearly defined and explained as a way for TalkWalker to show the platform using data from our organization to demonstrate our use case to us. The follow-up demonstration was scheduled at the same time, and once again, an email calendar invite was sent at the same time.

As for the demonstration, it was well executed. In addition to the sales representative, TalkWaker also provided one of their technical experts to answer any platform-related questions we had. In just under an hour, we received a comprehensive capabilities presentation of the platform and how we can use it to validate out marketing perception in our region. In addition to this, by including our multiple media profiles, it was quickly demonstrated where and how we are active and where we are not. And with the platforms’ historical data capture, TalkWaker was able to provide additional insight into an annually occurring event that had had a significant effect on our organization.

In the final analysis, whether TalkWaker is chosen or not as a brand focused media analytical tool, it is definitely worth the exploration and time. This platform may not fit for every organization, but it’s tools and especially as a free service warrant the time to use and explore.

An Analyst Without Portfolio

I am an Analyst, and unfortunately, I’m also without a portfolio of accomplishment. But that’s why I’m here.

I’m here to accomplish two goals; apply my analytical skills to help companies grow and mature, and to build a portfolio of success.

Being without a portfolio does not necessarily equate to without experience. I’ve spent the last 15 years building that experience through education and practical application in the field of Analysis. I apply the skill of critical thinking, and my tools are the structured analytical techniques that successful organization have used for years to think clearer, faster, and better. These skills and tools come together to turn data and information into knowledge. When we test that knowledge with the intellectual standards, true understanding can be created.

I seek to help companies understand themselves better by applying those skills and tools because:

I believe a company’s story goes beyond stock price and filings.

And by analyzing the public face and press releases a company shares, true value can be determined.

Maybe its time to show the world what you’re all about.

Company Analysis https://randomanalysts.wordpress.com/stocks/

Assessment Request

Taking the next step.

Hey, thanks for stopping, I appreciate it, for those who have been following me for the last year or so, thanks for that as well. And for those that just found me, thanks for coming.

I started this page about a year ago as a personal challenge to write more. Although I haven’t reached my goal of writing every week, I have begun to enjoy writing in general and especially writing analytically about stock in the OTC. To my surprise, there are even A few accounts out there that think I’m good enough to write about that subject a lot more.

I’m not the most innovative individual out there when it comes to coming up with something new, but give me a data set, and I’ll pull all the points into congruity in some extream but informative ways (If you’re curious about that take a look around the site for yourself). So it came at me rather coldly last week when someone suggested I monetize the website. This is my hobby, and although I joked about getting paid for it, I didn’t expect to find a way for that.

After a week of digging in and researching options, I’ve discovered a way to do that, but there’s a catch. I’m going to have to write a whole lot more, covering more stocks, and doing that extremely fast. I’m not entirely sure I can be successful at this, but nothing ventured, nothing gained.

At the bottom of this page, there is a link to a survey. If you’ve read some of my analysis before, head on down, fill it out, and give me a ticker to take a look at. If you haven’t read anything else here, take a look around.

Whether you take the time to fill out the survey or not, thanks for stopping by, come by anytime.

Survey request: Analysis Request

Catching Up on No Borders, Inc. (OTC:NBDR)

It’s been a while since I’ve posted anything about one of my favorite OTC company’s NBDR, so here’s my take on the recent SEC REG 1A. Before I get into the 1A, I’d like to talk about my top three reasons for following this ticker.

1) Disciplined Evolution: This company is simultaneously in a constant state of evolution and focused on retaining proven practices. Somehow this corporate team has found a way of turning the chaos of operating multiple verticals into a well organized and governed plan. The company evolves and grows at a steady and managed pace by making small trackable changes over time. An example of this can be seen in No Borders Naturals. The CBD Wellness market has only taken off in the last year and has been very profitable for many companies. NBDR’s approach to it has been slow and measured, they evolved into it not by going for the most significant impact possible, like many companies, but by analyzing the market potential, finding a nitch they could fill locally and then expanding outward from there. I have no doubts that if after the initial launch of the natural line they had seen a detrimental to the company, they would have ended then and there and written it off as a bad idea.

2) The Black Swan and Ati-Fragile: all companies have some degree of fragility. They can be impacted by internal and external factors that can cause a disproportionate effect on the entire business. Right now, we are watching the collapse of the vape industry due to the fragility of the human body and the nitch vertical, so many companies have inhabited. In the case of NBDR, we see a counter balance approach to fragility. There’s a reason Medident and Naturals were announced at relatively the same time. Here was a new market vertical, recently legalized by federal law primed for businesses willing to take a chance. This was a high risk, high reward situation, just what a new company could hope for, NBDR could have jumped in with both feet and prayed it all worked out, and at the first hiccup in supply or execution, been destroyed. Instead, they found an established company in a separate vertical with low risk and steady but low reward to counterbalance that new market risk. Since Medident is in a stable market (at least until we no longer need dentists), NBDR is able to focus on getting the most out of the CBD market with Naturals.

And finally…

3) Driven by Data: businesses that collect and analyze data are more successful. They use the data to learn about themselves, their consumes, and their markets, then take what they learn and apply it to their goals. Have you seen how many pop-up stores Naturals has done? They’ve spent almost a year selling products and collecting data. They’ve gone to different segments of their market and have found what sells to each consumer group. I wouldn’t be surprised to find out that they adjusted the product line offered at each event based on the consumers in attendance. In addition to this, data is essential if you want to prove your products can and will sell in a commercial retail setting.

This brings to the real reason for reading this, the SEC REG 1A. There is a lot of information in there if you have the patience to read it. For me, after reading it, I’m left with one major question.

Why is it only necessary to pay for media commercials, if all shares are sold, there’s a $78k surplus, $800k in inventory, and can spend $800k in advertising?

I ask this based on the distribution of proceeds from the upcoming offering.

Based on the table taken from the offering documents, I’m making an assumption that the 10% funding represents the minimum necessary to continue operations. I also see the 50% funding column as the minimum essential required for company growth. I make this assumption primarily based on the compensation number offered. Only in the 10% and 50% funding columns do we see compensation amounts higher than inventory.

If we apply our knowledge of the company and subsidies combined with the table above, we can make some additional assumptions.

Looking at the numbers for research & development, website, testing & deployment, and inventory, we can assess where each subsidiary fits into the distribution of proceeds.

Since the three subsidies diverge so significantly in verticals, approach, and product, we can assess how they correspond to the balance sheet items. For instance, Medident Supplies is a distributor of manufacturer to consumer product lines for dental offices. Most research and development for this line would be done at the manufacturer end of the chain, meaning the $120k earmarked for research is most likely going to No Borders Labs or Naturals. Looking at website and website development, neither medident or naturals manage their website, which means all that is most likely going to Labs. I would lump in testing and deployment in with labs as well, the low dollar amount probably represents software over products, maybe an expansion of SaaS from labs over new product lines. This brings us to inventory. No Borders Labs, being digital, doesn’t have much in the way of stock. That would also go for Medident as well unless medident is keeping eight full dental suites on hand, which is unlikely given their model of distribution from manufacturer to consumer. However, it may cover display pieces for medident, considering they sell full suites for under $100k; why would they need 8 of them. Given all of that, I’d say most of the inventory would be bulk orders of Naturals products.

And that’s where the $50k for media commercials comes in. In my opinion, the $50k represents an expansion into a new market area for the Naturals line. Based on the company’s past performance and how they’ve carefully entered new verticals in the past, I strongly doubt that’s the direction they are going.

Because of how good the company is at play their cards so close to their chest, I am unable to speculate any further than this, but I would not be surprised to see some significant news come out after the funding round is closed.

We’ll have to wait and see what comes next.

Is blockchain looking at the wrong end of the agriculture industry?

My family has been farming for well over 100 years now, and in places like the state of Nebraska, that qualifies our farms for homestead status. I also happen to be in that first generation to grow up in the city. I see the modern pace of technology and dream of a simpler and slower time of working the land. As we continue to barrel towards the third internet revolution with such things at web 3.0, AI, and IoT on the horizon its beyond belief what the American farmer will soon be able to accomplish.

On a nice warm spring day the farmer heads down to the field. Bending down, he scoops up a handful of rich dark earth, rubs it between his palms and brings it to his nose. He inhales the fragrant soil, tastes just a bit of it from his fingers and he knows. Now is the time for his masterful work to begin. Hes waited through the bitter winter, dreaming of this day. The day his lifes work continues. The farmer has a great many things to accomplish and time is agaist him. He goes back to the house, but instead of grabing his boots and gloves, he heads straight to his computer. He brings it to life and he sees his farm in a way his forfathers never could. A map comes up, and he sees in vribrant multi colored hues the conduction of his farm. Sensor 5, the one closest to where he sniffed the earth show green, denoting oxygen and nitrogen levels need to bring life to the seeds that soon will be planted. But sensor 23 on the other side of the field tells a different story. Quickly he pulls up the commads for a automated shed picking the right tractor and the right discer to fural the ground. As the shed perpairs the equipment, the farmer reviews the yeildes for the acres around the misbehaving ground for the past 5 and 10 years. He sees how each crop has performed and checks his crop rotation schedule. This year, this particular field will grow corn. The farmer knows which mixtures of fertilizer and herbicides will produce the best yeilds in this field, and he commands the storage tanks to fill the hoppers on the tractor. As the shed completes its tasks, the farmer gets his coffee and prepares for the next task.

He brings the map back up. He prepares to layout the route the tractor will take through the field. The GPS track program alread knows how wide the path needs to be based on the equipment coming together in the shed. The farmer sees the width of the discer and the width of the fertilizer spreader. With his mouse, he draws a polygon around the field, taking into account all the deviations in the field and identifying points or areas that cannot be disced. The program considers the request, and laysout the best path for the tractor to take. He picks the start point and sends the plan to the tractor via wifi and GPS.

The shed alerts the farm that all tasks are complete and awaits it next instructions. The farmer grabs his remote sart and stop control box, and heads to the shed to inspect the equipment. The sensors on the tractor check out, and a visual inspection shows everything is ready. He activates the control box and the tractor and commands the tractor to move to the start point. He observes from the ground as the tractor begins its slow drive to the start point.

The farmers phone dings with an alert. It seems that the computer has identified a cheaper seed provider, and after cross referencing what the farm has on hand, has prepared a purchase request for the farmer to sign off on. With the request approved, the computer builds a new smart contract with the supplier and the farmers backing account for payments upon delivery. With the seed issue being taken care of the farmer sets the tractor to work and heads back inside to monitor its progress from the computer. An hour later and another alert. The farmer pulls up a status report and finds out the tractor encountered an unforeseen obstacle. He pulls up the video feed and sees a deer in the path of the tractor caused the operation to stop. The farmer uses the control box to activate the tractors horn and scares the deer off. Operations can begin again, and now its on to the next task.

This is an ideal future for web 3.0 and everything it has to offer. Every single technology stated above has the potential to revolutionize the farmers way of life, and how they put food on the table for themselves and for all Americans. These technologies, and many others, are slowly making their way from the labs tk the fields, but many of them only deal with production and the end result of farming.

But before any of that can happen or be used, it must be paid for. Unless a farm has a huge amount of capital he must take out operational loans. These loans are short in duration and generally low interest that farmers takes out to pay for all the equipment and supplies required for the season. Generally farmers payback the loan after the grain is sold, and revenue is collected.

The farmer has spent all winter tracking his expenses from last years operations. He reviews his paper work from last year and sees how well his budget worked out and what changes need to be made. All in all, to apply for operational loans, the farmer may be required up to nine separate forms for one application. Once all the paperwork is completed, the forms are sent to a local Farm Service Agent for approval. FSA can approve a maximum of $300,000, any amount over that must be covered by a personal loan. Once the loan is approved the farmer can begin operations. Once the harvest comes, most farmers send their grain to a local Cooperative for storage until the farmer decides to sell based on market price. To sell, the farmer must call the transfer agent at the cooperative and identify how much of the grain should be sold. Once the sale is complete, proceeds are sent to the farmer, then the farmer can pay back their loans. In the case of some farms the process can be complicated even more. As an example, some families own multiple farms that they don’t farm themselves. They essentially pay a local farm a percentage of the harvest per farm to do the farming. The farmer and the owner both accept some risk, but reduce their overall overheads. Some farms are owned by multiple individuals who have to cosign every decision.

Theres got to be a better way. Maybe theres a way to bring the fidelity and transparency of blockchain, and smart contracts, to bear on this portion of the agriculture industry.