SHM Thoughts:
Alright I will post the tidbits that stood out to me and not really summarize much in regards to what others have posted.
First I was really impressed with the NEOM management as well as the subsidiaries. That is why I went there and I wanted to meet the execs.
First I think Martin Copus is the real deal. As regards to global mobile marketing industry he strikes me as a best of breed and I suspect there are very few executives in this industry at this point of his caliber.
Secondly I quite impressed when Chaz outlined the vision of the corporation and discussed how all of the IP had been developed to be encompassing to capture the entire industry as well as be highly defensible. That foresight seemed really impressive. Also he reassured that NEOM has the earliest core art. Which was a critical question for me about how defensible our patents were. I'm sure they've done tons of due diligence on it.
What impressed me about Charles Jensen, was that I think he is actually a very good manager. He comes across as highly personable and a good person who can delegate, He will be a good fit to work with many high achieving execs and still be highly successful.
I tried to ask a few questions of the people demoing paperclick, but the young woman who was doing the demo I don't think was very aware of prior things done by the company. I asked her about the LBS patents NEOM had acquired from Loyalty Point and she didn't know even about Location Based Services or that NEOM had acquired that IP. I later asked Martin Copus about it and since there are lots of patents in the LBS space whether they were acquired to be more of a defensive patent. So if someone comes after us down the road we have our IP as a defense. I am not sure that loyalty point will have earliest core art if we went after others.
Copus said something interesting in response to this he said he'd rather not have to sue everyone and the best response is to have people pursue them as partners in the space. He said that actually there was a company doing something unique in the field and they contacted NEOM to license their IP before they even launched their product. He indicated that this is a really good sign, that as the industry matures, companies are recognizing that they need to licence NEOM's IP.
I also asked Copus about the Market Opportunity in Japan. Since barcodes on the mobile are so widely used, what is the market opportunity for NEOM in that market already established. He said they are pursuing some interesting ideas for the Japan market, but that he couldn't tell me about them.
The two execs who I had the best conversation with from the subsidiaries were the execs of Sponge and Hip Cricket. The sponge guy seemed quite bright and personable. He said some interesting things. The first was that it was about a year ago was when mobile marketing exploded in the UK. That their phones have been ringing off the hook since then. That he assumes when the US hits a "tipping point" we will see similar results here.
Secondly he said that they had gotten offers for far more money to buy them out from other companies. Such as Aegis which is a major advertising firm in Europe. They chose to be bought out buy NEOM though because they think they have way more potential to multiply their investment through NEOM and that they really thought the people at NEOM were classy and great to work with. That they were the sort of people they wanted to partner with. I thought that was really telling of NEOM's potential.
Finally I had a conversation with Jim Hood one of the founders of Hip Cricket. I asked him how they had built out their business and positioned themselves as a mobile marketing firm. He said he and his partners had been in different industries for about 30 years and they have major connections in US business. So basically they have connections to get meetings with anyone they want is what he said. Through people they know or coleagues of coleagues. I could tell they were major players by my conversation with him.
I asked him why they chose to become part of the NEOM conglomerate. He reiterated that it had not closed yet, which indicated to me that he was a savvy negotiator and that they are still coming to terms. But what he said was that the mobile industry is going to go into major consolidation soon and joining up early would be beneficial to them. He said neom has the potential to carve itself out as the mobile marketing go to company and that they will have the potential to get a large part of corporate mobile campaign spending.
Finally my thoughts from the presentation. I don't have much to add to what others said. I am curious what the relationship is between NEOM and Scott Schafer. They referred to him as their friend. And scott was the first one at the meeting. I think my father and I were about 4th and scott was already there. So I am curious what sort of conversations have gone on there. Secondly the Triton presentation was definitely dull but also very telling. I thought when management talked about the ecosystem of mobile marketing and how they were trying to basically wrap up as large a piece of that chain as possible it was really interesting. But what was really interesting in the Triton presentation was that they can provide transaction services. That struck me as incredible important.
One of the killer apps of this field I believe is the ability to go into a music store for example. Take a picture of the cover of the album using Mobot's tech incorporated into the Qode platform. Have it take you straight to a mobile music store and purchase a track on your phone from that album, or listen to a streaming sample, or purchase the ring tone.
The ability to have transaction services is huge. Eventually this will be a huge revenue stream for the NEOM company. What I realized at the whole presentation was that this space will be bigger than the PC based internet. The potential revenue stream for NEOM to be bigger than google is a very real reality.
When I look for companies to invest in I look for a company that has incredible visionary management, a very large market potential, a business model to capture it, a competive advantage (ie patents), and reasonable assumptions about how to best caputre that market.
At this point in time I believe NEOM is best positioned to eventually win this market space. They won't capture it all, but many of the pieces are in place. Realistically in 7 years I honestly think $40-60 is a reasonable assumption for neom assuming they hit google profit levels. There are major market risks for this though. The exec of sponge said he sees the biggest competive threat is actually some major marketing conglomerate buying alot of mobile companies and competing against neom. I think NEOM is building the pieces to win this space, but still a real threat. He says competition will heat up when tv spending starts to get redirected to the mobile space and hurt the major add agencies.
One more thought. I think that Charles Jensen was suggesting that the major launch would be sometime in the 4th quarter, because they want to wait till the operate on all 86% of the market. I could be wrong though. I am curious JP where the September date came from? Have you heard that from Management?
Alright well I am well aware of all the competitive threats that face NEOM, but I believe they have potential to be one of the greatest wealth builders of the next decade for early shareholders.
Good Luck and God Bless to all,
Brian
