- Jason R. Stevens, CFA
Let’s hone in on our b00st.com product brand. Its Real Easy Ads button takes a one-hundred click task on multiple platforms to a single four input form. And that single form generates data for at least eight assets over ten days or more.
We simplify, improve, and financially measure the impact of altering the process that musical artists and their teams have to invest in themselves. In the process, we get closer to solving needed engineering and data assumptions for our investment problem formulation and eventual products.
How Tincre is scaling via product brands
More succinctly: Tincre builds subsidiary brands that solve a niche industry problem for users monetizing some type of content, radically simplified from some prior process. These brands leverage the same underlying core technology stack which we build to maximize potential product surface and user benefit impact.
Core tech trampolines
Our company is now strongly focused around core technology trampolines, from which business brands are able to most mightily spring. We gain substantial internal synergies in focusing our firm in this manner. b00st.com is just one of many semi-autonomous brands to which we will allocate resources. Our early brands will surroud our cross-platform ad APIs and integrations.
Dogfooding our ad tech
b00st.com is known by its users as a simple tool to market their music, videos, websites, and merch stores all over the web. But to us it is merely the first of many dogfooding brands we’re building.
What is dogfooding, you ask? For example, b00st.com is a client of some of our original (and much improved) ad buying, pricing, and management APIs. In addition, the ads button is its own integration, a user interface that makes it easy for other developers to plug into our ad technology. In other words, b00st.com dogfoods our deeper software application technology for ads.
Ultimately, the b00st.com brand is one of many consumers of the exact same underlying core technology stack, backend web application and frontend marketing site generators, and our developer integrations for cross-platform ads. We even run generated content management applications for internal business users to update site copy and content on the fly. We will scale this core ad and business process technology across carefully selected industries with niche brands, allocating capital over time to those most likely to succeed financially and operationally.
Industrial scaling of our ad tech core product
In particular, brands will include sub-industries such as retail and direct-to-consumer investment management. We intend to expand our autonomous ads brands, like b00st.com, into a well-diversified portfolio that covers as many GICS sub-sectors as is reasonable. Each of these brands has or will have its own focus, its own clients and users, and its own financial statements.
Each brand is constructed from modular core technology components that flexibly allow our firm to manage, improve, and expand resource allocation, dependent almost entirely upon sales and marketing business activities. One of our key takeaways from operating b00st.com is that there are incredible financial efficiencies in architecting software systems correctly. Our core technology API and integration operating compute costs scale up and down with use, nearly at wholesale.
This is expected of software IP assets, which are known to produce operating profit margins in excess of ninety per cent. Therefore extracting our core technology use into other assets (brands, for example) should be expected to produce beneficial scale effects on our profit margins, by simply managing the friction/overhead of maintaining other assets (brands) linearly.
Little chunks of sequential risk
Our dogfooding brands we’ve been discussing, like b00st.com, will be or were mostly generated from a technical standpoint -- the public sites, the downstreaming of our core ad technology APIs, and even those internal business applications that allow business users working for us to respond to client requests, update marketing copy, and improve the business.
We’ve already automated many of these major key processes involved in building online product businesses. Those that we haven’t automated are being keenly observed as we conquer the task. We are dutifully attempting to entirely automate the creation, maintenance, and improvement of these processes.
And lastly, by building robust independent brands that specifically consume our technology core, we, as users, earn invaluable real-world iterative feedback.
Though Wall Street may not be traditionally concerned with quality control, we are.
Feeding the accretion addiction
As an addendum to our strategic plans as outlined above, I should note that each brand will maintain its own electronic financials, founding legal documents, product licensing and investment documents, as wholly owned and operated subsidiaries of the firm. It is the firm’s strong opinion that the large regional and global corporations will continue to acquire other companies for accretive purposes for the foreseeable future. Each brand is built for continual deal-readiness, whether license or acquisition-based.
Lastly, I expect many potential acquisitions to take place in a tax-beneficial manner for the firm. We are structuring our subsidiaries to fit the transactional requirements for potential corporate acquirers. Various types of transaction structures between subsidiaries and acquirers I expect include reorganization transactions, Morris Trust transactions (reverse and regular, depending on acquirer size and circumstance), tax-advantaged stock-for-stock transactions, mixed cash-and-stock transactions, and highly-marked-up asset sale transactions, and in transaction circumstances where those tax liabilities for us, the asset seller, can be paired with future tax assets. U.S. Code § 368 outlines many of the rules and stipulations surrounding tax-free or tax-advantaged transactions to which many of our deals will be subjected.
Our financial objective here is simple: we view future subsidiary transactions as a product as well and our customer as the pool of potential acquirers, for each particular brand subsidiary. We are preparing and maintaining each brand’s operational structure to maximize convenience and benefit for those acquirers in order to maximize the probability of deals consummating and minimize operational impact on our firm and its brands. That said, our success in transactions is conditional on the success of our brands’ core products and services.
Maximizing financial flexibility
With this approach we are effectively taking small bites of risk, with less cost to scale, while maintaining aggregate hyper-growth in the scale benefits of our core technology.
We’re growing our highly-valued option and its underlying assets (tech core) while operating autonomous software assets to pay our bills and maximize the potential benefits to future external corporate accretion-seeking partners.
And when the resource market (developers) and the right institutional venture partners begin to align with us, we intend to do a capital raise on this core tech center.
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