There is some pain for a customer to switch away. When is the last time
you switched banks? Most people do not change. Why? It's hard work and even harder if they are meeting most of your needs.
What % of people switch banks? Oh no...I can feel a Mozzie Quiz ® coming up?!
Your turn, please choose one:
1) 43%
2) 30%
3) Nah I know these quizzes now...it's always a ridiculously way off answer...my guess is 12%
Well as per usual you are wrong...4%
3 is the percentage that switched in the US last year and that's despite one of the largest banks, Wells Fargo behaving badly and creating millions of fraudulent accounts to pump up their figures.
4 Medical Devices is another example. So much training is required for staff and the accounts dept. in hospitals, they have set ways to deal with companies, issuing invoices and paying for consumables, it's a big job to change. This is one reason why some of the medical device companies are doing so well, it's the sticky factor.
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Moat 3 doesn't necessarily infer the lowest price. It's the lowest amount of money per unit to bring the product to market and this should be on-going.Example WALMART..it's all about volume.Oh no, must we have another Mozz Quiz ® ? Yes please - so what's the revenue of Walmart? What is
your answer?
1) $35 million
2) $250 million per annum?
3) Ok well I'm learning from these quizzes, go big...much bigger...these things are always off the scale..my guess is $14.5 Billion and it's USD to boot.
Answer? Yes you were close this time... $514.4 Billion.They employ 2.2 million people (well in 2019 they did).
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This includes non brick and mortar assets such as Brands, Patents, Intellectual Property and Goodwill. Brands may not be all that applicable to us. Competition shouldn't be an issue...this isn't an area like Ford -v- Ferrari.
Even Paul Rennie joked at the AGM last year about shareholders asking him "What have u done with all that [capital raised] money apart from your new Ferrari........and Porsche?". (The small AGM crowd laughed). The ironic part is that he could well afford a few of each! Good on him, he deserves it in my books, couldn't happen to a better person.Ok Mozz, I understand the Moat stuff, all well and good in theory, how does this apply to
us?Ok let's tackle each separately with the magnifying glass on us:
One of the most powerful ways our word will get out is simply through word of mouth. We have seen in the past that the neighbours would notice these little things...the ex Pro American player last week was hobbling down the sidewalk...but now he has some sort of spring in his step? How is this possible, Martha, go chat him up a bit and find out what he is on?
In addition to this...we will effectively, one day, BUY OVERNIGHT a massive and perhaps GLOBAL network? We will
not have to recruit literally thousands of sales people, train them, transport them and get them to convince Doc's to include us as part of an OA arsenal. Don't forget finally it's all about the Docs, you get them onside and the rest is like Medieval history. We will probably partner up with a huge Pharma that has this established network in place. Yes we will pay for it in terms of royalty but we will save years, maybe even decades and certainly hundred of millions establishing this network. As a result, Paradigmers, can you just imagine the scale? Europe and US are on Mozz's radar. I acknowledge Fifty One Cap here for the seed they planted in my head for this next paragraph, R0.
What is the R0 value? It depicts how quickly something can spread, In this same way I suspect our own R0 value will be high...once people hear and see and
feel the difference that our safe drug works, this ain't going to stay low for long.
R0 (Pronounced R Naught), value for word of mouth spreading of iPPS? Could be a decently high R0 value in the future?In our case the wonderful effect of iPPS will automatically help us spread the good word....this can be likened to the R0. We will effectively be buying into an established network, how? Through potentially a large Pharma distribution deal. To build it ourselves would take ages. In fact it wouldn't be worth it going it alone...it would cost us years and years.
Not even an issue for us, what will they switch to? Back to the current std of care? I think not. Once we become the standard of care I can't see any turning back. The only thing we have to be mindful of is that if some day in the future some company comes up with an equivalent of iPPS and it only involves one injection or no injection. This of course will be a decade away at the min. in my view, it may never happen? We will have a decent window of opportunity regardless.
In this field we will also have a great advantage. The first thing is that no competitors can actually produce the exact same product batch to batch ....they have tried...for years...but no one has been able to do it. We also will have the advantage or large volumes once granted the green light go ahead for US and Europe...this scale will bring the costs down not unlike what the buyer's experience at Walmart.
While branding isn't directly important to us, it could be indirectly important via the high standard that Paul and the team impose. Their due diligence, attention to detail and making sure each step is thorough, their attitude towards the patients makes a difference and results in a high standard of operations and of course product via our trusted partner Bene. Indeed Bene display such characteristics, you need to have such traits to be in business for as long as they have. Usually a company such as ours has a very limited window of opportunity before the competitive sharks start circling. A prefect example of what can normally go down is the example of Lipitor. It was one of the largest revenue drugs, as soon as it went off patent, revenue fell by some 95%! Potentially this won't happen to us...it will be terribly hard to copy and even if someone does, clinical trials will be required.
Lipitor Sales decimated after it was off patent.
Moats form a very important part of protecting and enhancing a business. No point in investing millions only to have one of these moats dry up and the enemy swarms. I believe we have a strong castle aided by a great deep and wide moat on not just one, but several fronts (sides).
The wars even back in Medieval times were terrifying. Things can go wrong...the enemy might have ways to attack we haven't thought of. Always best to DYOR and stay aware of what's out there and never invest too much in one, err Castle,
1] Taylors Shiraz Clare Valley (2017) A nice drop and like PAR, one I recommend! :
https://www.taylorswines.com.au/?gclid=Cj0KCQjwtLT1BRD9ARIsAMH3BtXWYdYWzwBtfLJ8IEu6nhLFMmzdV8B0b9RZC5kF2sItlu207JaSnwaAvBZEALw_wcB2]
https://blog.hootsuite.com/facebook-demographics/3]
https://www.forbes.com/sites/ronshevlin/2019/05/01/why-are-fewer-consumers-switching-banks-because-checking-accounts-have-become-paycheck-motels/#3ba17a482aa94]
https://en.wikipedia.org/wiki/Wells_Fargo_account_fraud_scandal5]
https://www.business2community.com/strategy/make-business-sticky-010930296]
https://moneyinc.com/20-things-you-didnt-know-about-walmart/
(20min delay)