Our shareholders and customers (all 50,000+ of them so far) came for the experience of being an investor in an early stage startup. We’re working hard to honor that. To be as transparent as possible as we pioneer the journey for a crowdfunded startup through to something we hope becomes much, much bigger. Becoming traded has complicated our ability to communicate everything in the detail I’d like. It’s my intention to get as close to completely open in this letter as our lawyers will allow.
Stock market activity
This month we’ll start with the fun stuff. The last week or so has seen real ups, downs, ups and downs in our stock price, and more importantly, I think, much more volume as more of our stock changes hands. The increase in transaction volume seems to encourage the market makers to offer to buy more stock (and at higher prices). That’s all good.
Why our stock is traded on the OTC market
Two main reasons, and one definitely not the reason.
First – we wanted to have a publicly priced stock so that our members could see what their rewards were worth. Not what I told them it was worth, but what the market said it was worth. Second reason – we wanted to make it possible for loads (1,000,000+) of ordinary people to get our stock as a reward. We wanted them to LEGALLY participate in the American Dream of ownership. They’re building a great big company and getting rewarded with a piece of the business they build. That meant we needed to jump through the regulatory hurdles of the SEC and FINRA.
The consequence of jumping through those hurdles – our stock is publicly traded over the counter (OTC). We have yet to do a traditional IPO. One of our long term goals is a traditional IPO, and getting listed on the NASDAQ or NYSE.
While we’re publicly traded, we’ve not sold lots and lots of stock to investors. We’ve not raised a bunch of money, yet. And that translates into high stock price volatility and low liquidity. Hardly anybody who owns stock they can easily sell (and that’s not all that many people yet) are interested in selling.
The “definitely not” reason? Short term gain. iConsumer is a long-term investment for our founding team, and for our early investors. We’re all looking for a home run. The low liquidity that comes in part from being traded on the OTC means that the stock we own can’t easily be sold for a price we’d love to see. Healthy liquidity is probably going to have to wait until iConsumer gets much bigger and qualifies to be listed on the NYSE or NASDAQ exchange. Of course, as I taught my kids, never say never. It’s always possible somebody will come along and want to buy us before we do an IPO. I want to be clear … I can be bought.
Small investors take note: An upside of being traded on the OTC is that smaller amounts of stock CAN be sold pretty easily. I’ve seen early members sell their stock for a 4X return or better. At least one person got a 10X return (that’s a home run in anybody’s book).
How we’re doing
The summer months are usually slower, but not for us. You’ve seen the rate of our new member recruitment go up and down if you visit our site. We think that’s coupled, in part, to our stock price. We don’t think the new member rate will go up dramatically until we start spending real money on marketing for member recruitment. We looked at a group of 500 members who joined recently to see if their shopping behavior was promising. It was. They more than paid back the cash it took to recruit them in less than two months.
Our revenues are still small, but we’re seeing month over month increases in cash generated by shopping (basically cash after we account for the Bitcoin and stock earned by shoppers). The increases come from new members and the continuing shopping from existing members. Both good. Amazon Prime Day contributed to about a 50% bump in Amazon revenues July over June.
Our revenues still don’t cover the costs of running iConsumer. I do so want to get there.
June suffered because we weren’t able to offer stock as a reward for shopping for the first 13 days (we were still offering Bitcoin rewards). The silver lining is that it proved that our members care deeply about the stock component of our reward structure, not just the Bitcoin piece.
A change in attitude and emphasis
I started out trumpeting the fact that we were traded. Woohoo! You could see our stock price. It changed nearly daily. I was impressed with myself (it did take a boat load of money and time to accomplish that – I’m actually really proud of where our team has gotten iConsumer – we’ve got a number of firsts to crow about).
While I’m still slightly impressed with myself (you don’t do this kind of thing without an ego), you’re going to see that we’re now emphasizing that we’re an early stage company, with our big rewards ahead of us. We’re traded because we had to be, but being traded is only an interim step on the journey.
Don’t get me wrong. It’s spectacular that we’re traded. It gives options to our shareholders that very few early stage investments offer.
But the goal is being listed on the NYSE / NASDAQ after having done a proper IPO.
It’s going way too slowly. The opportunity is now, and we don’t yet have enough funds to take real advantage of the fact that new members pay for themselves in less than 60 days. It’s the feedback I’ve gotten from the investment market that is causing a shift in my attitude. We’re early stage. Basically, if we were a traditional early stage company at this phase of our growth, the marketing money we’re seeking would be called a Series A round. But because we’ve emphasized the “traded” part of our story, traditional early stage investors don’t know what to make of us.
For investors who are interested in traded companies, we’re still too small and early stage.
Thus the change in how we present iConsumer.
How you can help
We love four things our shareholders can do to help build the business.
- Recruit more shoppers (ultimately the best thing we can do is build our revenue). Spread the word. Word of mouth is the cheapest, most effective means of marketing. By the way, you get more stock for every new shopper you recruit.
- Shop (but only for stuff you would buy anyway). You can shop at Amazon, too. We win, you win, but you don’t get extra stock or Bitcoin.
- Ask friends to invest, if you’re comfortable with that.
- Invest. We recently redid our Invest page, take a look. Help accelerate our growth.