Ann: Company Update, page-184

Fair enough concerns in considering a logistics company.

Just some thoughts to consider...
Remember there are 5 areas of margin/revenue. Logistics. Market. Liquidity. Connect. Direct. They have built only one fully (logistics) and another two partially (Liquidity and Connect). But MARKET is the centrepiece. DW8 is a B2B/Tech company.

- MARKET launch is the main business of DW8. This matters because, this MARKET has been in development for years and has been the focus for a long time. The Logistics business is simply a precursor. Something that was done in order to attract suppliers, to provide them a complete solution (giving them next day delivery and saving them the hassle of worrying about logistics). But Logs was part of the attraction to get them to MARKET. Low margin is in logs (that is OK and management know this).

- Market was put off last year (simply because it wasn't ready). So? well it has been worked on extensively since then. It was put off due to the importance of getting the launch right and ready. Dean having done many startups, recognises and knows the importance of trying to start something new and gain market share.
- 100s no 1000s suppliers have been built up since then, in order to gain a tipping point, once it is launched. It will launch with significant numbers of suppliers/buyers.
- Margins on MARKET - may be as high as 85% (CEO's words on latest webinar).

Of course, all of this remains to be seen, (whether market is successful, margins are big enough). However, past performance is a good indicator. DT has done this before in startups and has the runs on the board to suggest this will be successful too.

It is a start-up so the best indicators we have at this moment are...
1. Experience in management. Discussed above.
2. Idea (will it disrupt?). This is not some idea that has been cooked up in the last year. Dean has been building toward this for decades. He (and others he has gathered around him) have enough experience to see that idea will greatly benefit suppliers/buyers and disrupt the whole wine industry.

This is always risk. But for mine, the risk/reward is skewed heavily toward reward. Of course you can wait to see if it is profitable. By then there will be risk taken out, but the SP will be higher.


DYOR and all that.