By: Ross Silver, Principal
I have been reading a lot about innovation lately and innovation gets a lot of press. Someone discovers a cure for cancer in a petri dish or creates an antenna that can harness the power of lightning, count on articles being published and for those people to get media attention and of course investor attention. While those articles are entertaining, what is disturbing to me is that reality gets ignored. Let me give you an example.
A little over 4 years ago, I was introduced to a company that supposedly had revolutionary technology that would change the way people experienced any electrical display, think a television screen, cell phone screen, etc. The technology was licensed from a university and in the laboratory setting, where controls such as temperature, dust, humidity, etc., are perfect, this technology was incredible. The companies convinced me that leaders in display were salivating to get their hands on this technology and were lining up to sign licensing agreements. I sat with the CEO and the company’s IR person and asked if in 2016, a year out from our meeting, if $10M in revenues was feasible. The CEO responded that that level of revenues sounded ULTRA conservative. The IR person jumped in and asked if the $10M in revenues was a quarterly estimate and said he would be shocked if they were doing ONLY that amount in revenues quarterly. Both were convincing and made it sound like this was a slam dunk. Enter one of my favorite words…HOWEVER.
After this brazen display of confidence, I asked the CEO and the IR person if they had borrowed every dollar they could get their hands on and emptied their life savings in order to buy the stock. I was met with blank faces. I asked them if this was such a sure thing how could they possibly lose. The CEO then told me he had millions of stock options and as such was invested in the future of the company. The IR person told me he had stock, to which I asked if he bought it in the open market, he said no and the stock was given to him for his services. I then asked both of them if they owned homes, they both nodded. I asked if they borrowed against their homes to buy the stock given this was a rocket ship headed to the moon, again blank faces and heads shook left to right repeatedly. Well, the confidence party came to a screeching halt right there and as they say, money talks and bullsh*t walks.
Perception is always different for everyone. Despite differences in perception stay grounded or acknowledge gravity.
Silver Family Sports Desk
The flag football season has commenced and I must say I am loving life. I coach both of my older boys and our team looked deadly this past weekend. I coach 1st and 2nd grade flag football just so that we are all on the same page and coaching children that age is a lot of fun. I am running a fairly sophisticated offense for 1st and 2nd graders, 7 plays in total, but what I have found is that the more your push children (and adults) to use their brains, you will be surprised by what can be accomplished. In our past game, my oldest son took a hand off deep in our territory to the house for a touchdown and he also caught a touchdown pass deep in our territory. He also had an interception returned for a touchdown and my youngest son ran for his first ever touchdown. I am not sure who has more fun with 5×5 flag football, them playing or me coaching ☺
My soon-to-be 4-year old daughter started gymnastics and loves it and my 2 year old is an absolute beast, stay tuned on updates on the younger two as the years progress!
September Featured Company:
Each month we will feature a company in the newsletter that we believe may offer a compelling narrative:
CleanSpark, Inc. (OTC: CLSK) provides microgrid solutions to military, commercial and residential properties. This is accomplished by providing advanced energy software and control technology that enables a plug-and-play enterprise solution to modern energy challenges. Their services consist of intelligent energy monitoring and controls, microgrid design and engineering, microgrid consulting services, and turn-key microgrid implementation services.
The Company’s products and solutions are ideal for commercial, industrial, mining, cannabis, defense, campus and residential users and ranges in size from 4KW to 100MW and beyond and can deliver power at or below the current cost of utility power. The Company’s services consist of turn-key distributed energy and microgrid implementation services, distributed energy microgrid system design and engineering, project development consulting services and solar photovoltaic installation and consulting. The work is performed under fixed price bid contracts, and negotiated price contracts.
The markets in which CleanSpark is operating may offer considerable future growth and these markets are large. According to Navigant Research, for 2016, the global advanced energy market surpassed $1.4 trillion in 2016, a 7% increase compared to an updated 2015 total of $1.3 trillion. Advanced energy has grown by nearly a quarter (24%) since Navigant Research began tracking for AEE in 2011, adding $257 billion in revenue over six years, counting only data complete for the entire period. Advanced energy is almost twice the size of the global airline industry, and nearly equal to worldwide apparel revenue. According to Navigant Research, the global microgrid market, is expected to be worth more than $40B by next year alone.
CleanSpark may prove to be a disruptive force in how we access our energy. The company’s microgrid technology ultimately ensures that when power is lost on the grid, customers don’t experience outages. Their software is uniquely capable of enabling a microgrid to be designed specifically to the user’s needs and can be widely implemented across commercial, industrial, military, agricultural and municipal deployment.