What is the best way to securing stuff?

In today's world where getting hacked is so common place that it is being discussed over a quiet beverage after work, I was asked this question and thought the answer was worthy of sharing.

When you look at securing anything, all solutions are based around 3 basic fundamentals:
1) Something you are (#1).
2) Something you know (#2).
3) Something you have (#3).

Diverting for a moment to some historic examples:

• In the old days, the key to your house was something you have (#2). Obviously if someone manages to steal it or copy it they get access to your house. Low hassle and higher risk.
• Banks stepped it up when they originally issued cards (#3) that required a signature (#1) although the signature check became inherently weak over time.
• The Payments Cards Industry altered that second factor by changing signature (#1) to a PIN code (#2) and forced everyone to use it (although some countries see limited benefit and are slow to adopt). They have recently lowered security for low value items in Australia (paywave) to just (#3). 

If you want to secure your own 'stuff' that has significant value to you you have to do the following:
a)  Firstly have a back up in a completely different ecosystem (I will explain that in a different post if people are interested).
b) You need to use at least two of #1,#2 or #3, with #1 being the most secure.

To demonstrate a poor security example:- A username and password is just two of the same type (#2) and quite insecure.

As we head into an increasingly digital world, there is the temptation to lower your security level for convenience. An example is a single tap to access an APP (#3) or automatic login. Phone companies are trying to help protect you by adding biometrics (#1) to unlock the phone (face, fingerprint), but you are also giving your biometrics to the phone companies that have a huge number of employee's and the misuse of corporate access to your devices and data is increasing.

When looking to secure anything, it is best to use at least one each of two different types.

So, that's the point, from houses, cars, cash, online identity and data, they all follow the same basic fundamental concepts.

If you have any questions, please send them through and have a great day!


Ross.

True Customer Engagement and the right people drives Growth

Exceptional Growth through People and Engagement

When we acquired Grabba International in 2017 it primarily was an R&D company, continually evolving their product into the best product possible within their field. Their field was enabling digital transformation for large entities by providing bespoke (custom created) devices that operate at the fringe of operations to automate all different forms of processing from simple POS systems and logistics through to biometrics.

They were able to get the contracts that no one else wanted. The ones that required all the tough customisation work. The devices where they are turning the customers dream into reality. The end effect on the business was integrating the new knowledge from customer generated requests into their core platforms. After doing this for many years, the capability of their underlying platform is truly impressive. Their customer list and product was also impressive, but the sales revenue was poor.

They had an amazing R&D team which can be easily seen on Linkedin, but the management attitude of 'built it and they will come' failed to deliver stable results leaving them in a weak position.

The primary problem was the best use of their product was large government or large corporate with the resulting large contract value. These are not sales, they do not need a 'hunter' to catch them. These large 'deals' are not only the classic transfer of trust, but also require a consulting angle with the key aspect being process improvement through digital transformation.

Ultimately, they need a partner and guide. The key contact in the business or government needs someone knowledgeable in both how the technology may be bent or twisted and also in the underlying business of the customer. This enables ongoing robust conversations around how the technology can be customised to produce a result far more outstanding than any off the shelf product that can be found today.

This is an approach that works in today's society where people want to purchase that they need, not what is available. After enormous growth over the last 3 years, one thing I can say is:
None of this is easy, but having the right people and true engagement with our customer leads to controlled profitable growth.

Accretive acquisition beyond EBITDA

Hello everyone,

A short while ago I did a short LinkedIn post to say that Crystalaid Manufacturing had joined our VC group.

They officially joined the group on the 12th April 2019 and I must say we are truly blessed to have the team with us!

The team have ISO 9001 and AS9100 certification (aerospace and military) for manufacturing and is one of the truly advanced manufacturing facilities in Brisbane. Their knowledge on manufacturing is very impressive and after the last month I would say, equals the best in the world.

We are very fortunate to have existing large customers in the military and aerospace market and whilst I cannot disclose where our products end up, they are extremely impressive use cases around the world.

The impact on our other companies manufacturing processes cannot be underestimated as well as we see an internal lift to the quality processes within our other existing companies.


My Thoughts - The competitive nature in targeting the largest markets is driving margins down and the incessant desire for volume is eroding global profitability through increased competition. Step outside that bubble and re-engineer your business to be a premium provider with the best product the world can offer. Whilst the market forces are driving for volume into an increasingly competitive landscape, you will provide yourself with clear air and better margins.

Some people just want to pay more for a quality product that will last.

Have a great day everyone!


Ross.

Faith vs Hope. What is the business difference?

In business, Faith trumps Hope every day.


Hope is a desire.
Hope is an expectation beyond reasonable.
Hope not having a plan.
Hope is all about not being in control.
Hope is an unconfirmed next step.

Hope is all about the desires of the self and not the reality of the situation.

Faith is putting all the pieces in play.
Faith is providing your customer with all the right information to make an informed decision.
Faith is acting with integrity and honestly and standing with your customer.


Faith is taking the customer with you on the journey of reasons and planning the next step together. With Faith in your process and customer, you have a reasonable expectation the next step will occur.

Obviously there are many obstacles in business, but Faith trumps Hope in business.


Ross.

IoS / Android, middle-ware to SAP all in the one package (www.Grabba.com).

As some of you know, I recently was part of a group that acquired Grabba International. It is a company with unbounded potential and has experienced massive growth since our acquisition in September 2017. It is the only company in the world able to build custom bundled data capture devices for mobile devices, tablets and PC's.

The opportunities are endless, but I do like this particular innovative ways the product has been used. It appealed to me due to my history in logistics, retail and ERP systems.

This customer is using an IoS device (connectivity to their WAN), clipped into a Grabba device equiped with barcode and RFID (http://grabba.com/products/barcode-reader/). With a simple custom APP, they are pushing data in and out of SAP with Apple! Awesome, its great to see Apple as an enterprise device. #AppleEnterprise or #SAPApple anyone?

The neat part for me was instead of the complexity of pulling data from SAP for the BI repository they post the result from the APP to SAP and the BI repository at the same time for simple quick to implement real time intelligence.

Ingenuity at its best. Of course they could do this on Android or mobile tablets, but implemented the solution on the cheaper iPod touches.

SME Update - Loyalty vs Rewards

Rewards vs Loyalty programs. 

I regularly get asked by small to medium businesses whether they should consider joining this loyalty program or this other loyalty program. Is it worth the cost and how can you judge the effectiveness? I am writing this blog to explain in detail what a small to medium businesses should consider when looking at a program for their consumer base.

Firstly - It is highly likely that the solution you are looking at is not a loyalty program, but a rewards program. They are easier to implement and also generic, hence easily sold. Interestingly, they use the word 'Loyalty' in most of their branding material, but in reality, when you dig into the detail, they are a rewards card. In fact, they are usually high margin rewards card with a high cost. Loyalty and rewards are two vastly different structures and you need a loyalty program which may or may not have a rewards component.

What is the real difference between the two and does your business actually need either?

The question can be answered by the following question.

Are any of the following items of interest?:
1) Increasing frequency of consumer purchase.
2) Increasing average purchase value or duration of consumer?
3) Do you want to increase breath of offering for your consumer?
4) Do you want to leverage more consumer data?
5) Do you want to lower your costs of goods sold?

If you answer no to all, you do not need a loyalty or rewards program. An example of this is a real estate business. Their customers are infrequent and an extremely high percentage of customers are single visit per multiple year.

What are reward schemes?

There are literally thousands of schemes in this segment as they are actually easy to implement. You charge the merchant as little as 0.7% through to 10%. The big names in the business are Visa, Mastercard, Amex, Flybuys through to the lesser known more expensive ones like Lyoness. They are an extra cost to the merchant, so the merchant who services these cards has to consider this in their margin planning and typically has a slightly higher price to incorporate those costs. In general, these cards profess to increasing your revenue by driving customers to your business which more than offsets the cost of the card lowering your marketing overheads as you only pay for it on 'success'.

Issues with reward schemes?

Longevity - The more expensive the scheme is to the merchant the more they become noncompetitive on price and also the more likely they are to drop the scheme. Numerous expensive rewards schemes have come and gone over the last 15 years. Some of the cheaper ones, just linger on as the cost to the merchant is bearable, but the benefit is also intangible and they are loathe to drop them due to perceived risk.
Margin erosion - These schemes take off the top and can be more than your normal marketing expense as a % of revenue. Does it actually translate to increased revenue. For lower margin businesses, that may require a doubling of revenue just to break even.
No Loyalty - They are reward schemes, they do not create attraction and retention. At the lower end, as a customer, do you choose a location just because they take Amex or are you just happy if they do so you get a few extra points?

So, what is a loyalty Scheme?

A well executed loyalty scheme is different for all industries, but it does the following:
1) It is inclusive.
2) Status needs to be earnt and the result is recognised (Potentially publicly).
3) It creates recognition of the individual.
4) It has multiple tiers (gamification) which confers multiple levels of high perceived value rewards. It elevates the customer to a higher perceived 'social status'.
5) It gives the customer a value differential. The perceived value the customer receives by being included in the club is significantly higher than the actual cost. In a similar fashion to elegant currency in a negotiation.
6) The rewards that are given are unobtainable easily with money and are conveyed graciously to those with elevated status.

These types of structures as a loyalty program in your business will drive up frequency and breath of purchase and result in a higher average sale as well.

How do you structure those 6 points for your business? You go back to the customer and analyse their journey and what they value. Having done this analysis numerous times for small to medium businesses, it is the same analysis whether you are a electrical supply company for tradesman, a caravan park or a main stream retailer. All businesses must ask the same questions as their customers are generally human. What do they truly value from your business?

If you would like to have a chat about what type of program would work for your business, give me a call. I love these types of business model / consumer discussions.

Have a great day!


Ross.

The Dry Season of Innovation Funding

Whilst I am a complete advocate for the new Tax Incentives for Innovation Bill 2016 for early stage investors, it actually has one very large problem...

It has created an immediate absolute dry season of funding. A complete drought!

To be eligible for the tax incentives (for early stage investors such as capital gains tax exemption and a 20% tax offset), the purchase of newly issued shares must occur after the 1st of July 2016 or Royal Assent, whichever comes later.

Even if the bill passes quickly, everyone has to at least wait till the 1st July 2016.

I am aware of one investment group on a project who understandably no longer wants to invest in April, but now wants to wait till at the bill comes into effect.

The interesting thing is, admittedly, almost all the tax amendments over the last 10 years have been closing down holes and usually are dated back to the announcement date. Why in this case did we create the funding gap and put the effective date into the future? Even deals that are on the table and haven't been signed are highly likely to be postponed due to the generous effect of the bill for investors. Even existing open channels are likely to dry up.

So....

Where will ESIC's (Early Stage Innovation Companies) get funding between now and 1st July 2016 / Royal Assent?

How many ESIC's will now fall over with no access to funding for at least 3-4 months?

Lets hope for an amendment to back date the effective date and that existing funding will sustain you until the wet season!