28 Jul The Million-Dollar Question: What exactly is our Industry? (Part 1)
This week, while conducting an interview for the good folks at Uptick Newswire, this question came to mind. It occurred to me that unless you have the right perspective, it will be difficult to truly grasp what Zen’s industry actually is. As a public company, this is crucial because analysts and investors alike love to categorize companies according to an easily understandable valuation metric. For example, deregulated energy companies or ESCO’s are valued by how many Residential Customer Equivalents (RCE’s) they serve. Alarm companies are similarly valued by their number of subscribers. Conversely, technology or Internet-based companies present a more unique and arguably more complex value proposition that may pose challenges in terms of getting them to fit into an unequivocal box. Sometimes, it takes years to figure out the valuation metrics for these types of companies because they just haven’t been explored yet.
So back to the question at hand – What exactly is our Industry?
Well, before I can adequately answer that, I first have to lay out some foundational truths. I am a firm believer that the Internet Age has completely changed and revolutionized entire economies, ecosystems, lifestyles, industries, retail and commercial commerce, marketing, and decision-making frameworks across the board. What’s more, these changes have only just begun to take root in earnest. What I mean to convey here is that as a modern, Internet-age company, the nature of our products and services are starkly different from what they would have been 5, 10, or 20 years ago. Yet, many investors and the general public struggle with this because they make the mistake of viewing us through the lens of a dated 5, 10, or 20-year old paradigm. Whereas, in order to best characterize the nature of our business or identify our place in this emerging industry, I posit that you must first understand our core ideology.
We believe that we are at the embryonic stages of changes that are going to impact and sweep across the Home Alarm, Smart Controls, Building Automation Systems (BAS) and Retail Energy Services sectors and sub-sectors. It is this belief or core ideology upon which we are building our business. We further believe that there is a convergence that is just now taking effect and will continue to expand over the next 10 years; this is best described as the convergence of smart controls, home/building automation, energy consumption, and energy conservation & efficiency. This convergence is being driven by the Internet of Things (IoT) and advances in hardware peripherals and devices hitting the market. These would include on-site battery storage from upstart companies such as Orison Energy, Smart Appliances by Samsung, Smart Doorbells, LED Lighting, and, of course, voice-controlled smart devices like Amazon’s Echo (Alexa). Lastly, changes in consumer behavior and lifestyle are also significant drivers of this emerging convergence we reiterate represents our biggest opportunity in this merging of industries.
In conclusion, I recognize that it’s clear as mud now, but the silver lining is that the answer to the million-dollar question will get clearer as our company grows. Make no mistake, there is no uncertainty on our part as to the nature of our business or our place in our complex space; I simply think that the Zen Story is easier shown than told. That said, as more and more customers come into our portfolio of business and as we expand our offerings, our value proposition to the market will become crystal clear. Moreover, I am hopeful that, as a result of this impending growth, it will be easier for investors and the general public alike to grasp and appreciate the innovation in our product and service offerings.
More to come… look for part 2 of this blog sometime next week.
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