Aged 24, I am 211,851 hours old. For a company with 100 staff working 8 hours a day, management are responsible for putting those 192,000 hours a year to good work, only just under my life’s contribution thus far, since birth. Through the ‘automation of the unglamorous’, our longstanding investment thesis, those available hours can see improved productivity as precious time is reallocated to the value-add, such as strategic preparation ahead of change in the uncertain future market environment.
Preparation takes time, and time is a commodity. TikTok’s short catchy videos have done pretty well – well enough to see a $300 billion-valuation - to entertain a group of people for long enough to deliver adverts around content. So, if mere seconds of our attention in the aggregate are that valuable, where does that lead us?
The fundamentals are the difference between discretionary spend and essential spend. Once a Train Operating Company (TOC) experiences the benefit of Tracsis TRACS Enterprise, there’s no turning back. The Tracsis predecessor in those TOCs, with a much more basic framework style software, has often been in place since privatisation of British Rail in the mid-90s. Once something so essential is in place, it’s tough to swap out.
If every hour counts, it’s all the more differentiated that Intercede is built on over a thousand person years of investment; the ability for a tech giant, or a start-up, to replicate the depth of experience Intercede has regarding Identity and Credentials Management is all the more striking, especially when compared with the minimal attention spans that TikTok panders to. In such a case, the replacement cost is a good starting point to valuation, but will always miss the impact of “time” to add a logical premium.
We could list an entire cohort of time-savers: LendInvest (this week expanded into the specialist homeowner segment), Sopheon (trading update at the end of the month), Netcall (trading update next week), Crimson Tide (which released a positive trading update this week), GetBusy (ahead of market expectations in the mid-December trading update). What we hope to see is the continuity of their essential nature once their customers adopt the solution – and the corresponding absence of churn which should ensue. Above all else, that is the metric for the unglamorous, creating the base valuation: deliver new customer wins and then create the premium.
So let's see how many productive hours effort I can actually squeeze out of my next 211k hours, where tech should deliver 1-2x as much efficiency as I've previously ben used to. Unless of course I'm distracted by TikTok.