Perpetual Innovation

Category: war chest

  • Who will beat Amazon in the New-Abnormal

    The COVID pandemic creates winners and losers. Will it simply accelerated some winners and some losers. As with any recession, it creates destructive innovation. In the sad carnage of the pandemic should lie silver linings. Telework is one. Winners are ZOOM, losers are office buildings. We’re spending some time on this concept trying to estimate how permanent this shift to remote work will be and the massive savings (time, fuel, traffic, etc.)

    But the focus of this discussion is on the Amazon effect. The death of the department stores in favor of buying online and having a shipper like Amazon deliver to your door. The Forbes article, Amazon has Finally Met its Match, by Stephen McBride got me started on this topic. Even though Amazon is BIG, you can’t call it a monopoly because anyone can do it, kinda. They are simply big, the gorilla in the room.

    How much has Amazon (AMZN) subscription services (prime, music, unlimited, etc.) increased related to the covid shutdown, how much has Amazon online purchasing increased, and what percentage of that online purchasing will dissipate once things get back to normal. Since we don’t think that things will ever go back to “normal” we refer to the post-COVID world of the future as the “new-abnormal”. Amazon has more than doubled in a year, reaching an all time high Sept 2, 2020 of $3,552 per share, a market capitalization of $1.8T. Wow!

    Amazon became famous in the Intellectual Property (IP) world with the one-click patent.Look away from your screen for just a second, and you could find that you accidentally bought the item(s) you were scanning. That patent expired in September of 2017 allowing everyone to accelerate the purchase process and reduce shopping cart abandonment. Amazon still has had more that 13,000 patents granted (many have expired) and 1,259 applications (according to Justia). That’s a pretty significant war chest.

    Walmart (WMT) was not doing a good job to compete with Amazon, so they took an extreme measure in 20016 of buying an upstart name JET that was developed from the ground up to compete with Amazon. In 2016 Walmart bought JET for $3B (more discussion here). Walmart has the unique advantage that you can return online orders to the store. An advantage for Walmart is that people who return something at the store, will likely spend that money and more before leaving. Walmart has 1,237 patents and 820 patent applications as of August 2020.

    In the August 2020 Forbes article, McBride thought that there would be several winners in the Amazon space. Etsy (ETSY) is a wonderful place for customized products, arts and crafts. Etsy and the artists who utilize their online marketplace excel in this area where Amazon cannot. 

    The last one is Shopify (SHOP) a software platform for small and medium sized companies that integrates all of their business. Businesses that have online, storefront and mobile businesses find Shopify works well to bring all the pieces of the business together. Since most small(er) companies have very little online presence, Shopify helps them jump over the intermediate stages of going online and managing all the sales’ processes. Shopify hit its all time high Sept 1, 2020 of $1,147, up from its low in November of $282. That’s more than a 300% increase! Wow!

    Shopify had zero (0) patents in 2015 and only maybe 32 today. Etsy has about 25 patents; many are interesting in the use of fuzzy logic and categorization of products. The stores that use Shopify and Etsy need to build their own intellectual property protection including trademarks, copyrights and patents.

    Who do you think will be the winners in the new-abnormal world? Big boom for AMZN, of course. But what about these Amazon competitors in the move away from brick: SHOP and ETSY? And what about the ultimate click-n-mortar: WMT?

    #Invest #Stocks #patents #ecommerce #NewAbnormal

  • Yeti, cool ideas and lots of patents

    Yeti has a rather cool new cooler out, the Hopper(r) M30 uses a magnetic seal. Although it might be a bit gimmicky, it should work much better than the heavy (klunky) zippers. They say that it is nearly leak proof. GearJunky does a nice review of the M30. For $299.99 at high quality sporting goods stores like Dicks, you too can have one.

    Yeti is a $2.5B market cap company, up about 70% from its IPO. It is hard to maintain a premium brand in an era of knock-offs. But Yeti is and continues to do so.  I got in on the IPO, sold half at a good profit, and held on through the couple rough patches for a consumer product like this. They came out early for better (sane-er?) gun controls, and had NRA members making a spectacle (viral videos) of throwing Yeti coolers in the dump. (That was an ugly couple days for the stock.)

    In Sept. 2019, Yeti has just introduced a major line of coolers for “everyday bags” adventures and the Urban crawler: Crossroads(tm) backpacks and totes! Press release at Reuters. Big purse or a backpack. Not sure if it will replace your Prada, but it should keep your beer in the office cold. (Maybe that’s one reason why Yeti stock popped about 8% on 9/4.)

    “We already offer premium bags designed to excel in harsh outdoor conditions. But even the world’s most extreme adventurers need something durable and comfortable to keep them organized during their daily commute,” says YETI CEO, Matt Reintjes. “Our Crossroads bags offer YETI’s signature durability and performance, but are designed for your everyday adventure.” 

    Yeti is a premium brand with a premium price, and everybody likes to do knock offs. Trademarks are helpful. A big patent portfolio is one way to keep the knock-offs at bay. Here’s Yeti’s patent page by product.

    PatentBuddy summarizes Yeti patents:

    YETI COOLERS LLC AUSTIN, TX
    257 active patents, with 34 applications.
    Updated 9/5/2019.

  • Dodgy YayYo IPO advertised on TV – Business Insider

    YayYo IPO advertised on TV – Business Insider:

    Dodgy is probably the best term for Yay Yo IPO, for the inner circle, and for the product-less crowdfunding approach using the JOBS act.

    In the true spirit of a pyramid scheme, Yah Yo has the promise of a product, but there is little or no “there” there.

    They are selling the business model that they will tie in all the ride-share companies like Uber and Lyft into an integrated interface that gives you the best pricing. They generally imply that the BIG 2 unicorns will happily interface with Yay Yo. However, the two world-wide rideshares have insisted that Yay Yo cease and desist from any implicates of partnership.

    So, they say, they will work with the largest 3 to 100 ride share companies. In the US, Uber is down to about 74% with Lyft at about 24%… leaving about 2% for the other players. (See here how Uber’s fortunes have fallen from 91%, including a #deleteUber campaign based on a Trump backlash.)

    The talking head spokesperson/expert in the video is J Peterson from Sienfeld fame, a show about nothing, seems appropriate… An IPO about nothing.

    Comparing to Uber or Lyft that actually produce something and have lots of intellectual property (like patents and such) at their disposal, seems a bit like a reach. People from near and far, think that the advertising of the investment, not the product, is mostly misleading and far from the truth. Taking excess advantage of the Wild-Wild west for small investors made available for low regulation (near no regulation) IPO thanks to the 2012 Jumpstart our Business Startups, or JOBS Act.

    Want to hear an overview of the investor requirements for this “Regulation A+” investment, straight from Elaine’s dodgy boss from Seinfeld look at the bottom right of this page: https://yayyoipo.com/form/ 
    Consider carefully signing up though.

    There should be no comfort in investing in a guy who was banned from public IPO for 5 years because of wildly risky and/or criminal acts in a publicly traded company in the past.

    You read through the SEC filings to see if this is a IPO scam, a dodgy crowdfund, or simply an uber-risky pink-unicorn investment.

    On the plus side, the Business Insider article that started this blog post, YayYo IPO advertised on TV – Business Insider:, is a wonderful overview of the whole JOBS act and really good uses of it to fund smaller businesses and give smaller investors an opportunity to play. Companies that seem to have real products and interesting market niches are Elio and Knightscope. “Regulation A+ IPOs include Elio Motors, which is working on an inexpensive three-wheeled car, and Knightscope, which designs robotic security systems.”

    Ironically, Uber (global) and Lyft (US only) are both private companies, not public, valued at approximately $68B  and $7.5B, respectively. Real revenues in 2016 of about $6.5B and $700m.

    Uber has 298 US patents in force with 117 applications pending (via PatentBuddy), amassing a serious war chest organically and through acquisition. Not just anybody is gonna go jump into this market.

    Lyft got their first patent issued in Sept 31 of 2016 for music preferences (“jukebox”) and its second patent for “ride chaining” almost exactly a year later. The ride chaining patent is about a pickup and drop-off sequence, weaving through a rough terrain of of (Uber) patents.

    I vote for dodge the dodgy, IPO or no.

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  • The End of a Patent Dynasty, IBM has been Dethroned


    IBM is no longer King of the Patent World! 
    Samsung now reigns supreme.

    US Patents for 2016 by Fortune by IFI Claims Patent Services. IBM #1 with 8,052 patents issued. Samsung Electronics Co Lmt with 5,518. But, a better measure would have IBM coming in second in 2016, and even in 2015!… 

    The other approach that consolidates related companies here, or more directly from Sqoop here.   IBM #2 when Samsung has more patents collectively with 8,551 issued in 2016.
    In terms of patent applications, 

    In terms of patent applications, Samsung really beats out IBM:

    • Samsung — 10,695
    • International Business Machines Corporation — 8,800
    Samsung is way ahead of #2 Microsoft in Design Patents with ~1,500 vs. ~500. IBM is not in to the top 40 in terms of US design patents (as would be expected for the type of products (services, really) that they produce.

    Wow, no 25 year run for IBM. A questionable 24 year run through 2016. And arguably, not even a 23 year.

  • Apple-Samsung Case Muddies Future of Innovation – NYTimes.com

    Apple-Samsung Case Muddies Future of Innovation – NYTimes.com:

    Oh boy, this is gonna get ugly. Especially if you are in the habit of ripping off other companies technology.

    Samsung, just got smacked down hard. A $1B verdict is just the beginning. Apple will of course, try to get treble damages for “willful” infringement of Apple’s technology. But the $1B is only the beginning. On September 20, the hearing (resumes) related to an injunction of the sales of Samsung’s offending products.

    One would assume that the new Samsung line (Galaxy) does not infringe, but that too may soon become subject to tighter scrutiny.

    Faced with injunctions or licensing Apples technology, that is the issue that will be confronting players in the market, including Google.

    The war chests of patents are: Apple; Samsung (kinda); Google (now with Motorola wireless that they seem to have bought primarily for the patent portfolio); and Microsoft (now with a boat load — $1B worth actually — of patents from AOL).

    Who else is there. RIMM? Palm’s technology that went to HP is dwindling fast.

    Of course, Samsung is appealing. But it’s outlook is not, well, appealing. And this loss in the US, is going to seriously shape the face of the screen in there rest of the world.

    Samsung is down 7% in Asian trading on Monday Aug. 27, 2012. Expect Apple to open up big on Hurricane Isaac Monday.

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