Hey Jonathon,
I was in the process of writing some notes yesterday when you posted this. In two minds whether to post, but think it worthwhile, just for the record.
Thanks again for your excellent interview. I've been a shareholder for five years. I've taken some profit along the way but am now rebuilding my position for the long term success of Pointerra. I have never heard Ian so confident and willing to talk so openly about Pointerra's pedigree, where it's come from, where it is now and where it's going.
He speaks to the maturity of the company, the validation of the business model and its acceptance in the market, especially North America.
This is a basically a transcription of some of Ian's commentary, which hopefully will be useful for everyone for future reference whether people have listened to the interview or not.
AIROVANT ACQUISITIONThey came with a technology stack, but it was all about the people. In Matt, Jonathon, Ori and Logan, four guys who have grown and exited a few businesses in the geo-spatial sector in Nth America, it was very much about them and their pedigree. They brought a 2D stack that we are using, and spun up a drone business and have some fantastic customers that unfortunately I cannot name, but some really high profile Tier 1 customers in Nth America, so it was very much about the people.
In our core verticals which are the Survey and Mapping space, the Transport Sector, then Utilities, then Mining Oil and Gas, the AEC space and then Defence and Intelligence, to build out our core product suite in each of these verticals we need people with domain knowledge in the BD and Sales sector, so deep domain knowledge, and then build out the Dev team with people who have been building geo-spatial technology solutions in these specific verticals.
So the Airovant acquisition was very much about the people.. I think we will be making more of those acquisitions of that 5 - 30 person team over the next few years as a pathway to, as a way to step up our growth, because our growth path to US$50 million ACV and then US$100 million ACV is about people. Getting the right people is the hardest part of the journey.
POINTERRA'S MOAT AND COMPETITIVE ADVANTAGE
Our moat, our competitive advantage, is our business model.
So whilst there are tech platforms, cloud and desktop, trying to make sense of 3D data, the way we have deployed our tech stack and our business model remains to this day our point of difference.
There are lots of people trying to compete for the capture of 3D data, and then the analysis and interpretation of it. We don't actually compete with any of these people. That's our pitch. Some of them think they compete with us, but they actually don't.
The ones that are in the capture space should be, and some are, particularly the entrepreneurial ones, are using us as a way to lower their cost of business. So in a really low margin game if you can gain a few points back by being smarter about how you process data once you've captured it, then we will help you.
Increasingly, these Utilities are going to the market and saying, here's a Request For Purchase (RFP) for $1 million worth of capture, 50,000 power lines, whatever the number is, and you need to deliver your data on Pointerra, into our Pointerra account. So the utilities themselves as they adopt our platform in their central data environment, and the data repository for their digital twin, they are actually saying to the capture community, whether it's mobile, aerial or terrestrial, you need to deliver your data into our Pointerra platform.
US DEFENCEKnowing as everyone would, it makes sense that selling to Defence, whether it's Singapore Defence, Australian Defence or the US DOD, they're slow-moving. It's tough. It's bureaucratic. The Americans very cleverly a few years ago through their Small Business Administration, which is an arm of government dedicated to getting small businesses off the ground - most of the people are employed in small business - you have the global Tier 1 giants who employ people, but the majority of the population is employed by small business.
So the US set up the SBA and bizarrely teamed with the DOD to allow early stage businesses like ours. So an arm of Defence can come to the SBA and say, here's a problem that Defence or Intelligence has got, yes they are internal programs looking at it, but there's also these really cool early-stage businesses working at the very cutting edge of technology, we'd like some money to do a program with them.
These are these things called SBIR and STTR. They are funding programs with short horizons - US $200k - US$2 million, defined period of time, defined outcome.
So we've got many, many conversations with different arms of Defence around different R&D projects that can get funded. That's the way to fast-track an outcome that we are looking for.
ATAK PLATFORM
Civil Defence, Intelligence and Foreign Defence in the US, and First Responders, have this Android hand-held device that's like a small iPad, that has an OS that runs on it called ATAK - Android Tactical Awareness Kit. This is a Defence and Intelligence sector secure environment that delivers situational awareness to the person holding it whether they are a first responder or a troop on the ground.
So the big prize for us among the other projects we're looking at with different arms of Defence, is to be deployed on that ATAK device for use by any arm of Defence or Intelligence. There are a couple of hundred thousand of those devices out there in circulation. So the business model for that would be a certain amount of dollars per set per month, so the ACV is probably an eight-figure number.
POINTERRA'S PEDIGREE
Ultimately when you think about where Pointerra is in five years time - we've been listed on the NASDAQ for a period of time, our business is matured, still very much focused on that North American market, and moving into Western Europe.
We think that the natural acquirer for us will be someone from data analytics or even one of the massive Defence and Intelligence contractors, simply because of the scale of the opportunity in that space.
Interestingly, LIDAR was a Defence hardware platform that was declassified in the mid-1990's. It was developed by the Defence sector, entered the commercial sector and indeed two of our founding US team members - and I recruited them for this reason - they worked for the very first commercial business in Nth America in the 90's that was doing airborne capture with this declassified tech hardware.
So we've got this pedigree in our business now with 20+ years in 3D capture particularly in Nth America, and that's standing us in really good stead as we turn back into the military and Defence sector and say, we've been doing this since you guys let us play with this cool technology, or our people have, in the 90's, and we've taken it to the next level and we think you should subscribe to this platform
.
It's a long run, but I think your observations around market excitement, yeah, it'll be interesting to see what the market thinks when we do make an announcement about having secured some work in that sector.
ASPIRATIONS
Our job, working within the framework of the ASX Continuous Disclosure obligations, is to give as much information as we are able to. We don't have forecasts, we have aspiration targets of US$50 - US$100 million and beyond of ACV.If you look at our presentation with our Target Vertical Markets, we've got in our CRM (Customer Relationship Management), in our sales pipeline, deals and prospects that support that US$50 - US$100 million and beyond, just in each one of those sectors.
So whilst it's aspirational that level of revenue, it's not just made up - oh that would be a nice target. It's actually built from the bottom up with real prospects and existing customers who are paying us a certain amount of revenue who we expect to continue to grow their spend with us.
So the confidence comes from knowing we've got a solution to a problem that's endemic across each of those sector verticals. And the problem is, I need to get the answer faster. So we know we've got some relevance.
THE FUTURE
When people better understand our story and take in some of the broker research that's being done, they will understand that this is going to be a very, very high revenue, high profit business.
I mean, we're going to be - we think we are going to be - one of those perfect stories in a few years time that's growing revenue, that's growing earnings but that's also paying dividends.
Because we will be generating a significant amount of cash, and short of hiring more people to continue to grow the business, there won't be a lot to spend it on."
