The new year is upon us. Today I’m going to discuss the year ahead in greater detail than might be typical. The reason for that is simple. Our 50,000+ member/shareholders are critical to our success. You own iConsumer, you’re our customers, our advocates, and our backbone. Giving you the reasoning behind our efforts only makes sense.
Later this year, after we’ve finished prepping our annual audited financial statements for release in April, we’ll discuss last year’s results. So no scintillating insights yet.
In 2019 we’re building upon two themes. Scale up and scale out. In 2018 we set the table for success. We became feature complete – all the pieces were in place. We added Bitcoin to the mix, and late in the year adjusted that offering to make us more suitable for a wider audience. We traded on the OTC. We got our SEC filings in order, and completed our rescission offer successfully. Most importantly we established that we could attract valuable shoppers at a reasonable cost and recoup that cost in a short period of time.
The world around us changed radically. Crypto ran into the regulatory walls set up to protect American investors. We’d spent three long years navigating the regulatory waters, making sure that ordinary people could invest in and own our publicly traded security.
To paraphrase the Osmond’s song, we’re a little bit crypto and a little bit rock and roll (ok, maybe more traditional security than rock and roll). Now we have to use that combination to our advantage.
We need to have consistent messaging and products that primarily appeal to audiences interested in shopping and being part of a publicly traded startup. As a secondary goal, we need to respect the fact that we’re at the intersection of crypto and the regulated markets.
We talk more about that messaging in our post about Shop. Share. Earn. Learn.
Scaling up means take what we do today, and do lots more of it. More members, more shopping, and more investment. Much more investment. iConsumer is woefully under capitalized. Each dollar we put to work building the business brings back many dollars in return.
Scaling Up – The Math
Our systems can handle much more volume than they currently do, without any more investment. For iConsumer, that means more members. We spend less than $20 cash (closer to $10 usually) to recruit new shoppers. They shop enough to pay back that $10 or so in less than two months.
That bears repeating. New shoppers pay for themselves in less than two months. New shoppers at scale don’t create any significant additional operational costs.
< $20 Customer Acquisition Cost (CAC)
< 60 days payback
Estimated $75 Customer Lifetime Value (CLV)
As we get bigger and spend more money on marketing, I expect that math to get a little bit worse. We’re watching that conversion metric carefully.
To put it in perspective, shopper acquisition payback for our competitors is rumored to be in the 1 – 2 year range.
Strategically, scaling out done right creates new stories for us to share with member/shareholders, the financial and consumer press, and prospective investors. Our first efforts in this regard will be announced in February for delivery later in the year. They build on opportunities surfaced by surveying our 50,000 member/shareholders. They will initially focus on providing existing members additional ways to earn RWRDP.
Focusing on existing members initially allows us to pursue scaling out without committing any significant capital until we see we’ve gained traction.
One danger with scaling out too early is the potential loss of focus on the core business no matter how much capital we have. We mitigate that risk by targeting our initial efforts to existing members who have said “I want, I want”. Once we see success, we can safely ramp up our efforts.
The Challenge – Money
We knowingly did this going public thing backwards. Creating a company where every customer was a shareholder AND they could get their ownership “for free” was a terrific way to build a great company. At the same time, we involved a whole generation that felt disenfranchised. Being public was required in order to legally have 1,000,000 shareholders (the crypto guys are still struggling with this whole notion of adhering to regulatory requirements). Normally, we’d have raised venture capital, then gotten bigger, then gotten really big, and THEN gone public.
Success is 50,000 + member/shareholders and counting. Almost all are ordinary Joes and Josephines. Success came with a downside. It made raising money more challenging because we don’t fit into a neat financial framework.
We’re still a startup. But we’re no longer a suitable investment for venture capital firms because we’re publicly traded. And we’re really too small for most public company investors to be interested yet.
There are groups we DO appeal to, but it takes more digging on our part to reach them. We hired an IR firm (Investor Relations) last year to help with this effort. The results of that investment are beginning to show fruit.
How We’re Meeting The Challenge
We’re actively reaching out to non-traditional and retail investors. In the stock trading world, retail means people, rather than institutional investors. People who like the stock market, not the JP Morgans of the world. The other group we’re reaching out to are professionals who straddle the world of people and institutions. They invest on behalf of family offices. Think really rich people’s investment advisors. Their investment criteria and investment time horizons often favor companies like iConsumer.
You’re Invited to Orlando
Our first formal event in support of this effort is called The Money Show. Very much targeted at retail investors. We have free tickets. Click on over to read more here. Orlando isn’t a bad place to go when they’re forecasting sub zero temps in much of the U.S.
I have two speaking slots talking up our company. My goal – get prospective customers and investors. Have them visit our prospective investor page and then invest. The money we’re raising goes immediately into new member recruitment, which pays back so very quickly.
If you do get a chance to stop in, please say hi!
As we start out the new year, I’d like to remind everybody that this all exists because of you. It belongs to you, it grows because of you, and it thrives because of you. Shopping and referring new members is our lifeblood.