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Location Based Technologies Is Enabling
Families In Today’s Fast Paced Society To Stay Connected While Apart At
Work, School Or Play
Technology
Location-based Services
(LBAS-OTC: BB)
Location Based Technologies, Inc.
4989 E La Palma Avenue
Anaheim, CA 92887
Phone: 800-615-0869
Dr. David M. Morse, Ph.D.
Chairman, CEO and Co-President
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published – April 4, 2008
BIO:
Dave Morse is a 20-year telecommunications senior executive (AT&T, Pacific
Bell, and SBC) with strong collaborative skills and proven record of
accomplishment for delivering measurable results. Dave has significant
experience in strategic and tactical deployment of very large-scale
operations (having led a customer service organization of more than 5,000
employees) with a focus of engaging every employee in performance enhancing
behaviors that will drive bottom line profitability. He is firmly committed
to balancing the “Voice of the Customer” with the needs of the shareowner
and basing decisions on data.
As the corporation’s Chief Customer Officer he was responsible for all
customer research and measurements with the expectation that knowledge
gained would be applied to internal process to increase customer
satisfaction, reduce costs, and increase profitability.
Company Profile:
Based in Orange County, CA, Location Based Technologies, Inc., has built
our business by adhering to our mission statement, “Linking People through
Technology.” We are the developer of the PocketFinder® Personal Locator and
the PocketFinder® Network. Our company is dedicated to applying and
integrating existing and emerging technologies that will facilitate our
customer’s ability to locate our PocketFinder® Personal Locators with
increased ease of use and accuracy.
The PocketFinder® Personal Locator family of
devices meets the growing demand for location-based services that will allow
family members to keep in touch with one another in an increasingly busy
world. By taking advantage of the latest in GPS and GSM technology, our
locator devices will optimize the ability for families to stay
connected. Applications may include: outdoor and extreme sports enthusiasts,
parents, adult children of the elderly, elder care providers of patients
with Alzheimer’s and dementia, special needs providers for those with
disabilities, pet owners, and for the tracking and recovery of valuable
property and luggage while traveling.
CEOCFO: Dr. Morse, what is your vision for
Location Based Technologies?
Dr. Morse: “The vision that we share at
Location Based Technologies is to help people, specifically families, to
better connect with one another through the use of technology. We contribute
by providing a family of personal location devices (the PocketFinder and
PetFinder) and services that will help families better meet some of the
demands that we experience in our society today. For example, many families
have both parents working, or are single parent homes, and either parent,
perhaps both, may find themselves in different cities or countries during
the day and yet come together as a family in the evening or at the end of a
workweek. In such a mobile society, one thing that we do not have is a tool
to enhance a family’s ability to stay connected and to coordinate with one
another, to know where each other are during the day with just a simple
click of the mouse or a phone call to our automated location service. That
is what prompted us to move into location-based service, and to build the
PocketFinder and PetFinder the way that we have.”
CEOCFO: How
does the device work?
Dr. Morse: “Our devices utilize GPS
(Geospatial Satellite Systems) technology as well as the wireless network
that your cell phone may use. That gives us the ability to provide direct
and instantaneous or real-time location information to our customers. As a
parent, I can now check to see, at 8:20a.m., if my two kids are at school
sitting in their classroom when the bell rings. It is a completely
non-invasive process, as you don’t have to call the child or disturb the
classroom. When you wish to do a locate you click on ‘locate now,’ input
your account information, and see where the device is. It is almost
instantaneous, the best-case lag time will be 4 to 6 seconds, and worse case
should be 8 to 10 seconds. We are talking very real-time.”
CEOCFO: Is
the wireless part connected to various wireless carriers?
Dr. Morse: “Yes it is. We are a GSM
based device so you will need to have access to the GSM network. We provide
that service and have partnered with KORE Telematics as our M2M provider. KORE
has relationships with hundreds of GSM carriers so your device will work
throughout most of the world.”
CEOCFO:
Where is your product in the process of development and commercialization?
Dr. Morse: “We are in the final stage of
development. We will be submitting our devices for multiple certifications
in just a few days. FCC approval is most important to our future customers
in the US but we are also going to secure other certifications so that we
will be able to sell in Europe, Asia, etc. This is a very exciting time for
our company!”
CEOCFO: Are
you using this for pets as well?
Dr. Morse: “Yes. Our PocketFinder device
itself is not application specific. It is completely sealed and there are no
on/off switches. We designed it to be waterproof so that your child or pet
can run and play in the sprinkler, goes swimming or fall in the local pond
and it doesn’t matter. It simply will not damage your locator whatsoever.
Liquids have been one of the biggest challenges for parents who have tried
to stay more connected to their younger children by giving them a pager, or
more likely today, a cell phone. Research says that the number-one destroyer
of cell phones or hand-held electronics is liquids. If a child spills a
drink on their phone, or drops it in the sink or into a puddle, there is a
good chance that the phone will be out of commission. Instead, we built a
device designed to meet the demands and rigger that a child or pet will
subject it to. Family members, whether they are your children, elderly
parents living with you who may be experiencing the early stages of dementia
or Alzheimer’s, or you just love your little four-legged critter, they are
all a part of your family. Our PocketFinder devices will help you to locate
them from almost anywhere and at any time.”
CEOCFO:
What will the revenue model be for you?
Dr. Morse: “The revenue model is based
on delivering a high value product, the easiest end-user interface, and a
price point that is family friendly. We actually will have profitable
hardware sales and monthly service fees because we built our device from the
ground up. No pre-existing modules are used in our devices. I believe it
bears mentioning at this point that the reason our devices are so different
from others in the market today is that we started with a sole focus on our
end-user customer. We carefully researched desired device characteristics,
carefully defined each application, validated the mass-market price point,
everything we could possibly learn from the customer and then we worked
backwards into the development cycle. Knowing what our customer valued, we
sought out technical solutions that meet those needs that had been
identified before we started our build. That included tedious and specific
Use Cases and expectations. We found that we to deliver a device under $150
dollars, we will enter the market at $129.95 and that the monthly service
fee must be under $20. We anticipate a monthly service fee of approximately
$12.95. We are still in final negotiations but we believe that the $12.95
price will be a good one for us.”
CEOCFO: Is
there any competing technology?
Dr. Morse: “Certainly. There will
always be competing technology – that is what keeps a company sharp! By
teaming with market leaders such as NXP, we retain an edge of what is up and
coming. One example that comes to mind is a teenager who already has a cell
phone. The next logical step would be to get a GPS-enabled cell phone that
will allow you to know where your family member is. However, there are still
have some limitations with that solution as once the cell phone is turned
off you no longer have location information available to you - and that is
more of an issue between the parent and their teenager. The market segments
do not have that concern and our devices are “always on.” Parents of young
children, maybe four or five years of age, who are going off to school or
pre-school and leaving mom for the first time see this kind of connection as
a example of their love and caring. Elderly parents with early stages of
forgetfulness, Alzheimer’s, or dementia will be able to retain more
independence if their adult children can discretely check in on them. In
addition, as for pets, we don’t see cell phone competitors eroding much of
these market segments. RFID is a completely different technology and does
not give you on demand, real-time location capability.”
CEOCFO: Do
you have the rollout plan in place; how will you get people to know about
this and buy it?
Dr. Morse: “We are a public company, so
I don’t have a lot of flexibility in what I can share with you regarding our
distribution plans. We are in negotiations with industry leading
distributors utilizing a two-tiered distribution model. They will be our
access point to the big-box retailers. We have a number of negotiations
on-going with companies who want to white-label our products or to label it
with their own names. They may be supporting a market segment or niche that
we would not reach for some time. We are pleasantly surprised by the number
of opportunities and the volumes represented for OEM work like this. We have
standing offers from tech-based or new gadget type shows (TV and radio) from
Seattle, Portland, Chicago, Los Angeles, San Diego, Florida, Texas and New
York. As we draw closer to market entry we will certainly be taking
advantage of that. In addition, we have guerilla marketing activities that
we will be kicking off. We will look to leverage our advertising dollars
through co-op advertising with strategic big-box retailers.”
CEOCFO: How
big is the device?
Dr. Morse: “It is fifty millimeters in
diameter which is about 2 inches – or about the size of an Oreo cookie. In
fact, if you have the double-thick Oreo cookies, well that is about the
thickness as well. It fits easily into a child’s pocket, their backpack, or
onto a belt. The PocketFinder and PetFinder will come with a form fitting
neoprene pouch that is easily slid onto a belt or a pet’s collar. How the
device is worn is one of the areas that we are most excited about and we
intend to listen intently to our customers. They are so creative and we know
that if we follow their lead we will be able to deliver great solutions for
how the PocketFinder can be worn.”
CEOCFO:
What is the financial picture like for you today?
Dr. Morse: “I would invite you to look
at our SEC filings since we are a public company and it is fully disclosed
there. We have sufficient capital to complete development and the limited
initial manufacturing run for entry into the market place. What we did not
anticipate was the level of interest and the volume of demand that we are
experiencing over the past 30 to 40 days. Because of that, we may be looking
at raising some additional capital in order to meet the inventory
requirements and associated sales and marketing costs. We look at this as a
good problem.”
CEOCFO: Is
your team in place for the commercialization or do you still need to beef it
up?
Dr. Morse: “We will be filling a few key
roles in the next few months. We operate with an “outsourced” model of
highly selected individuals and organizations that have quick growth
capacity to keep pace with our anticipated fast growth. It also allows us to
tightly control our overhead so, as we now shift our primary focus from
being a development company to becoming a sales and marketing company, we
have the right resources in place. The infrastructure and critical
organizations for success are all in place. We have a very talented senior
management team with partners who bring the right knowledge, skills and
abilities to deliver world-class products and services. We have brought in a
master of distribution with specific knowledge and experience in the
location based services arena. We have a well-seasoned, energetic, young man
who is an expert in customer service to ensure that our customers experience
the best level of service from day one. As shown in one of our earlier SEC
filings, we signed a contract with an awesome company called “24/7 INtouch”
and they will handle our call-center customer services. They are a high
quality, award-winning, mass-market customer-focused support organization.
We are good to go.”
CEOCFO: Why
should potential investors look at the company now, and what might they miss
when they first look at the company that should be understood?
Dr. Morse: “The
entire location-based services arena is hot right now and a lot of people
are wondering if they should get involved. It is impossible to learn
everything about a company by looking at their filings and what people might
miss is how specific our market research was, how intently we focused on the
customer early on in the process that led us to where we are today. Most of
the products that are in the market today got there through re-packaged
technology that was already in place and they went searching for an
application. Not necessarily a bad strategy but you don’t quite hit the
sweet spot even though you do meet a lot of the needs and requirements for
some market segments. There is certainly a lot of space for a host of
providers! We are talking about 37 million kids in our prime target market
just in the US with another 42 ½ million in Europe. There are kids all over
the world with parents who care about their whereabouts and safety. You
throw on top of that 68 million pets just in the US and another 12 ½ to
fifteen million seniors who are in some level of dependence upon their adult
children. Those are huge markets and our devices deliver benefits to each of
them. What a potential investor may not realize is the kind of rigor we put
into our early Use Cases and that our products are built from the ground up
to meet our customers’ needs. Last, we built our own boards, so we are not
using an existing modular solution and that give us a price point that no
one has been able to achieve in the market to date.”
CEOCFO: In closing, would you touch on
the market potential?
Dr. Morse: “Absolutely. International
Data Corporation is one of the best research organizations following our
sector and they have been tracking it for a number of years. Their
projection of demand for global positioning systems devices is just
phenomenal. They foresee an expansion of ten to twelve times the number of
devices that are in the market today in the next four years - by 2012! In
addition, we have no idea what new capabilities are going to be forthcoming
in this rapidly advancing sector so, as we move forward, we will always
retain a treasure chest for development activity. We will constantly be
looking at what new capabilities are being developed and how we can apply
them to better serve our customers. We will be listening to what our
customers are saying and based on their and other data we will make new
decisions about product development, product enhancements and new
opportunities.”
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