Lie #2: The reality of numbers, or how Rory makes them look good
As always this is all from what I know and in my opinion.
This is my olive branch to all of you, I think this is something we can all agree is happening. I would have loved to talk about how Denise beefs up the DD but I think this is good.
MLM Numbers: adding users
Yes is true Verb is adding NEW USERS like crazy but is also truth this is the nature of MLM. The success rate on MLM is really low, in some, it reaches up to a 90% drop rate. Naturally, to keep their business going they need to add new users.
So YES VERB IS ADDING A LOT OF USERS EVERY WEEK, but how many are staying? what is the retention rate? and for how long do they use the app?
We can only guess because Rory won't answer any of this questions, but we can assume it follows the same pattern as MLM that usually has a peak of new users on Q1, when all people are looking to start the year with a venture, and slowly decreases over the year as we saw.
YES VERB IS ADDING USERS EVERY WEEK, BUT IT DOESN'T MEAN ITS USER BASE IS GROWING.
Adding new customers
Verb is adding new customers every week is impressive and more companies seem to be using interactive video.
Here is the trick so you beef up the DD:
A lot of the people you see posting videos like SAPTv and Dr2Marketing are companies with a reduced or a free package from Verb. Many of these companies have never paid Verb to use the platform, Denise brought them to boost the company technology usage, so it would seem like someone was using it, and get the SaaaWeeeeeet !! press releases.
And for all the MLM companies being added a lot of them do not pay for all their users, they get to pay to have the application white label and then get different conditions for their users, sometimes even free trials that are all the user ever uses.
Adding an MLM doesn't mean they get money for all their distributors on day 1.
So yes lots of new customers, but not a lot of new revenue.
Cost is sky rocketing
SoundConcepts was a nice little company turning a small but good profit, but now they are Verb and with it they are eating all the new costs.
SoundConcepts brought all the MLM clients, brought all the revenue (except the $200 Verb had), and brought all the technology (Tagg, V2, and V1 only Verb products are being deprecated and phased out).
And now they have to carry all the cost nFusz / Verb brought to the deal, they went from turning a profit to diminishing revenues in Q2. Rory just dumped all his crazy expending on them and didn't help them get any new revenue.
Verb can't get normal loans because their money state sucks, and they have no assets. The New Port Office is a rental, the LA office is a rental and the Utah office is a rental.
Thanks to the last 5 million even their future is a rental.
You can make any numbers look good with a little lying, but at the end of the quarter you still need to show growth. And at the rate Verb is BURNING money, they need to show a LOT.
Coming up: ORACLE or how Rory got his pumping stripes
