>>Could you please comment on this article with respect to where NSI is headed<<
Geeze thanks Bruce, this reminds me of a few exams I had when I was in University a looong time ago. So much for a slow night curled up by the fire. <ggg>
Here is my attempt at responding to your request. I want to make it clear, that these are just my own comments and views. I could be way off with them and the executives at NSI may see things differently. But what the heck, since I can't get a hold of any of them now to confirm that I am correct with my statements, here goes . . .
Net Shepherd is the parent company which will hold the patent and licenses for their unique search and service models. This technology will be licensed to their spin off businesses and other corporations who may want to pull it in house. There will be five businesses in all, with four separate companies (so far) which will be spun off from the parent company. These are: Answers.com, Business Intelligence, Market Research, and Systems Integration.
Here are Mr. Harmon's Measures . . .
1) The better investments in the Internet have ecommerce as the center piece, primary markets (this includes investing as probably the best method)
ecommerce - (my definition) the use of the Internet to conduct commercial transactions on-line.
Answers.com: This company will be primarily focused on assisting commercial enterprises service their customers and respond to the queries of other Businesses for non-critical information (technical assistance, catalogue shopping help, and inventory listing queries, etc.). The provision of 'Real Time' Customer Relationship Management (CRM) for Corporations is reputed to be one of the highest potential growth areas in the near to medium term. The ERP companies (who I believe will see a resurgence this year) are scrambling to include CRM as part of their complete suite of services for their customers.
Net Shepherd will have significant ownership positions (a.k.a. investments) in all of these spin off businesses. As a result, when these businesses are all fully operating, the licensing and revenue stream into NSI and the corresponding share value appreciation from the combined IPO's of each company will be significant.
2) If not ecommerce the next best companies aggregate buyers and sellers of other products, market makers for others (this includes firms like eBay)
The Market Research Capability of NSI's technology is one of the things that most impresses me. In a matter of hours (versus the days or weeks industry leaders now take) they will be capable of collecting and analysing a tremendous amount of strategic and time sensitive information and data. Such things as determining what the potential market for a product is, or who the competitors are for a product or service are, will be a big feature of their service offering. I am convinced that they will also be in an enviable position to easily capitalize on their ability to migrate from working on contracts for specific customers to identifying and capitalizing on opportunities on their own. NSI, and all their spin off businesses will have the ability to provide almost 'Real Time' research and feedback to Corporations on market acceptance, competitor success, and 'in the field' data collection. Their Business Intelligence capability has already been demonstrated by their Dun & Bradstreet demonstration project.
3) The company's marketing must be viral in nature and not just traditional. Example: ICQ (the instant message platform) won 40 million global users by the nature that to use ICQ one must encourage others to use it. That meant sending an email to someone who then downloaded ICQ and the communication channel grew biologically without a single print, radio or TV ad. HotMail also grew this way. Pagoo (which enables single-phone line homes online to know when someone is trying to call them while online) may be the next big winner here (it's still privately held).
Without taking anything away from the power of this form of marketing, I feel that the viral marketing model is somewhat inappropriate for specific types of business. That said, I know that NSI is relying on Viral Marketing to help them sign on-line researchers. They feel that the word of mouth will be a powerful way in which to attract the people in specific areas of expertise that they need (technicians know other technicians who may be interested in this opportunity, etc.). I also see the NSI group of companies signing significant contracts with large corporations as well. The Business Intelligence demand is huge. It is hard not to get excited about the potential market for their services.
4) The more attractive companies are based on outsourced services and not software on its own or selling software licenses. This is how DoubleClick (DCLK) and Commerce One (CMRC) have gained an edge. Earlier examples are Yahoo vs. Netscape. Yahoo is a service while Netscape was software. The irony is that Yahoo employs probably just as many software programmers as Netscape but look at the valuation gaps. Yahoo north of $100 billion vs. Netscape's sale to AOL at $10 billion. Ditto for Amazon.com. Lots of software programmers. In fact, founder Jeff Bezos has a software programming background. Its value is built on service, not software. Software enables, service creates value.
NSI will have, and will license, their technology. It is how the technology is used, and how their distributed task force maximizes it will illustrate the level of service that they will provide to their customers. When companies begin to offer NSI's / Answers.com's Real time on-line customer service from their contracted "Task Force" to their customers, then I think that it will create a wave of excitement that will set a new standard for customer care on the Internet. The software will have been developed, what NSI will be selling is the effective utilization of that technology to mobilize an virtual army of researchers and customer care agents from around the world. To loosely quote Mr. Harmon, "their software will enable, but how it will be used will be what will create the value."
5) Management team must be flexible, embrace the scalable models and not solely the offline way of doing business. Offline models don't port easily to a digital environment, like square pegs in round holes. Most of the businesses on the Web are weighted too heavily to doing business the old fashioned way. That's why Fatbrain's eMatter may be more important than Amazon's paper book selling. eMatter scales digitally without paper, makes markets and is a new way of doing business for authors, readers. The new fashioned way incorporates commerce, communication, community, , content, continuity.
One of the key advantages that NSI built into their product was the ability to easily scale it up. Their management team has been having to work in kind of a virtual world as they have been growing their business(es) at a very rapid pace. Their offices are spread around N. America and they are active in Europe. Mr. Harmon's description of "The new fashioned way incorporates commerce, communication, community, content, continuity" is basically a good description of the management model, and technology of NSI. Their virtual community management system will be used within their own website to carry on discussions with the management of the company and its shareholders. It does not take a big leap to see the potential for this technology to be used to conduct on going business within the corporation. I have to assume that their neural network work products that the software engineers are hammering away at right now will also be assessed as to how it could be incorporated as an integral management tool they can use to help them run their own business(es).
6) The better Internet companies combine vision with implementation. Jerry Yang and Jeff Mallett (Yahoo's president) provide a nice example. Or Broadcom's Henry Nicholas, both visionary and implementer.
Re: Vision - Just one example, NSI was inducted into the Smithsonian Institute 'Permanent Research Collection' for its highly innovative and pioneering technology.
Re: Implementer - One quote from a satisfied customer . . . "Net Shepherd's software is phenomenal. What Net Shepherd has done is figured out how to control people over the Net with very high quality, and very good efficiency."
Don Sandford, Ron Warris and the rest of the folks at NSI have taken a concept and have transformed it into a dynamic group of companies. Jan Baan will only make it easier for them to grow and realize the potential.
7) The market for the services or goods needs to be global, dynamic, portable, and large enough to sustain at least three or four substantial firms in significant revenue and earnings potential. Firms that are able to garner market share of two or three slots should command a premium. First movers and market leaders are known by their marketshare, revenue, growth and how fast they grow.
By the end of this year, the NSI group of five companies will be taking in revenues and will be operating in North America and in Europe. Answers.com will be a leader in the huge 'small to mid size company' CRM market. Their Business Intelligence company will be dynamic force in the collection, analysis, and distribution of intelligence to large corporations and Governments. These are just two examples, and I hope to learn more about their plans for their Market Research business in the near future. With the recent injection of money, and resources from Vanenburg Ventures, I see this company's time to market and ability to grow being tremendously enhanced.
I hope this attempt at addressing these questions makes sense. In my opinion, if they can realize the potential before them then I am confident that this will be a very interesting, exciting, and profitable year for NSI and its shareholders.
Crazy Canuk |
