Bright Things Share Discussion Threads

[the analyst] 21/5/2010 23:13

Something that has been very good for the company recently has been the weakness of the pound

(or strength of the dollar, if you prefer to look at it that way):



Maybe we will see it continue to fall? - not so good for your holiday money, but it would be very good for BGT

If we were to predict that SocialGO manages to get up to 2000 paying networks at some stage during the summer and they still average $50 per month per paying network, then at $1.40 per pound that would mean they are making over £70k per month and over £850k pa in revenue

If the exchange rate were to drop to 1.2, then we would be looking at an annual revenue rate of £1m, which would be a major milestone to acheive, imo

[the analyst] 21/5/2010 22:45

SocialGO are hiring again - new job posted on Gumtree:



Again, they mention 'thousands' of networks, but still no clue as to whether that means 'premium' networks or not. The ad also mention that the new employee will be receiving stock options plus sales-related bonuses (despite it being a low-paid job), which is good to see

[the analyst] 21/5/2010 22:41

Reading your post Carl, it looks like we are in complete agreement

I've always said that marketing is vital, but that the product must come first whilst they establish it as a leading software tool that is loved by its users. As a matter of priority, SocialGO needs to be brought up to standard by meeting basic minimum criteria = that is, it needs to be bug-free with 100% uptime

I hope that what we are seeing can be put down to the fact they are putting all of their resources into V2. They do have quite a few staff now and I don't see much happening to V1, or much going on with support, so surely all these human resources must b going into V2, right?

[carl79] 21/5/2010 18:54

thanks norbus...volume is nearly always crud and the share price has practically always spiked in anticipation of news then drifted back down - im used to it and typically top up. however, i am not topping up now until i understand how they are ding and where they are going now that ning as fully joined the tea party...hopefully they are well geared up to compete with them for the premium wallet

[carl79] 21/5/2010 18:51

Hi TA, erm, yes and no. I still think marketing is vitally important but over the last 2 months or so, ive experienced a number of, shall we say, hiccups with the product / service levels. Until you know about a problem it is, to put it bluntly, not a problem - so previously i thought the platform capable of a big marketing push. I dont think i do anymore. Until I see a full 90 days with zero issues i'd probably say they need to develop more. Sometimes the platform has behaved as if it were still in beta - i mean whats with the merging of networks and the sporadic downtime of what can be hours at a time...you quite frankly dont expect that when you are paying...free, fair enough, you get what you're given but if my broadband goes down for an hour, i phone BT, it gets resolved (eventually) and then i get a free month rental...with SG the issue may be fixed before you get a response but that is not a good thing - just indicates they can take too long to respond...I must state that they are not always poor - far from it...but they have let me down on enough occasions for me to factor it into my investment thought process - ie if i am experiencing poor service, so are others...and that is eventually bad for business...That was a really long winded way of saying that my issue is more service related that product (although i am not oblivious to the fact that a flawless product eliminates service issues so appreciate the two are linked)...

So in a nutshell, I do still think SG need to grow their premium base and grow it quickly, very quickly. But i also understand the danger of marketing at the wrong time - you only make one first impression...with this said, for now, i feel the priority must be platform stability, customer service (so people dont mind paying the premium) and customer retention...once these boxes are ticked, i'll be banging on about marketing becasue our competition are not standing still - Spence has a good story over at Labsecrets and whilst he will work with people on SG platforms, his clear preference is BuddyPress...if i were a concierge customer i would be hard pressed to give SG my $150 a month over Labsecrets because he just seems so responsive and knowledgeable...SG need to up their game - V2 may be the answer - i bet (and hope) it is...

I may sound like a bit of a bear, im not. I'm just a bit disappointed they are still here and not past the "server issues", "growth pains", "widget problems", "too busy to be responsive" phase...they SHOULD be all about marketing now...

BUT, all this said, they are acquiring customers on a daily basis, some are big ticket names! They do have a lower cost base than some of their competition and they do have a young talented developer team who can inject innovation. I just see a lot of potential and want them to realise it quicker :-)

I still think V2 is months away unfortunately. I may ask the direct question but i doubt they'll tell me...

[norbus] 21/5/2010 12:30

Carl
I say this as I see the share price travelling the way of a fundraising; movement on no volume. No knowlegde informed or otherwise; just a gut feel.

[the analyst] 21/5/2010 11:53

By they way, when are you expecting V2, Carl?

My guess is late September

[the analyst] 21/5/2010 11:52

I agree that debt finance would be best for all, but very difficult to secure in this economical climate. Plus, you'd think that if they are doing well, the Directors and friends would prefer to top up their share holdings with extra options or warrants thrown into the equation. Not ideal (to put it politely), but seen it too many times to expect anything different. I try to include that sort of thing into my investment calculations

I suspect they will need to raise cash soon - costs involved in opening new US offices and new hosting locations, servers etc may have taken their toll

I can see you swaying more and more toward my opinion that the product is more important than the marketing at this stage, Carl. Previously you were asking for a marketing push as your number one priority. Is it the fact you are using the product that has led to your change in heart?

[the analyst] 21/5/2010 10:04

Hi Norbus,

Repeating myself here, but as you know, more shares at 1.25p is exactly what I have expected since the last fund-raising. I would be pleased with that, but I am aware that they could raise more cash as low as 1p if they wanted to. That would be less good, but (of course) it would palatable if it's the last fund raising and they go on to become a £100m company

So, how much extra cash they will need to see the company through to break-even?

A lot depends on V2 (when it is released, whether it is up to scratch when it is released etc), but my guess is that they need around £1m more

I plan to contact Dom again next month

[carl79] 21/5/2010 09:32

hi Norbus,

what makes you think we are due another dilution? Just the timing or something more specific?

[norbus] 21/5/2010 07:43

TA

Seems like nothing changes here and another slug of shares could be about to be issued for a funding round at the magic 1.25.

[carl79] 20/5/2010 17:42

the number of spam links on socialgo networks is now so high that my "socialgo" google alert gets diverted to my junk file...not good. Of the eleven article links, only one was a genuine site...They need to knock that on the head...It is not professional to have such a large affiliation to spam...as a competitor, you could twist that into a good "why not to buy" story...I still think a charge on all networks of £2 a month (or more depending on package of course) or something nominal like that would sort a lot of issues out and they'd only lose networks that were never going to go premium anyway...imo...and in the scheme of things they only want networks at least willing to consider moving up the value chain...

[carl79] 20/5/2010 08:40

In most cases when someone says they dont see much downside they mean that they perceive the odds of the downside coming to fruition as remote - or at least they believe that on balance there is a better chance of an upside.

This is why I think the downside is limited. So, whilst i dont dispute going bust is a possibility, of course it is, i think the odds of them going bust are quite remote given where we are...

There is a proven market. Although I always thought this, and argued against the likes of LDM who told us the market was saturated over a year ago, it is reassuring to see them grow the base week on week.

They are making revenue. It has been a significant period since BGT made regular cash and this is also a solid sign that things are on the up.

They have alignment with influential and successful investors - no point me harping on about Vik's credentials

They are recruiting. Janet and John really, you simply dont inflate SG&A unless it pays off very quickly, certainly not in times like this when cash is king. So, my thoughts are that the existing base is in need of fresh developments and support, they want to grow as quick as possible by hiring new development and support resource or probably a mixture of both. In any event, recruiting is a clear positive.

[uncle_bob] 20/5/2010 06:10

The downside is they go bust.

[carl79] 20/5/2010 00:35

Hi, not been an easy ride Joe but the downside is limited imo...if they gave more news for me to hang my hat on id consider topping up but i have been burned before in actions like that...if they capitalise on all the good fortune they've had and let's be fair, the hard work they've put in, we could see significant upside from these levels...good luck!

[joeblogg2] 19/5/2010 23:14

Carl. I haven't bought back into BGT since I sold a couple of years ago at around 2p and lost about £7k. Appreciate your views as still keep an eye on these, thanks!!

[uncle_bob] 19/5/2010 19:13

Socialgo giving it away for free. No wonder the share price is dropping through the floor. This will continue to fall until the market gets some visibility on earnings. If they are looking at another placing they better get their finger out.

[the analyst] 19/5/2010 12:33

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[haff1] 19/5/2010 12:16

...worrying drop, albeit a small one...

[norbus] 18/5/2010 12:51

Good Job we have a successful honest management team running BGT, else I'd have started worrying ,as we have heard zip from them for ages, that they might have scarpered with the company's money:-(

Or, It could well be, that if they've been doing work, that they've already spent it and now racking up debt?

They'll have to surface soon enough and unveil the results to 31st March, as required by law

[carl79] 17/5/2010 06:09

Well if that is the case it must be a major investment since that would require a platform overhaul...they physically can not do it on their current / old set up - it was one of SocialGo's key differentiators...If it is no longer a differentiator SG may need to look at more innovative ways to stand apart from Ning