Yesterday I posted an article about TrackingPoint’s restructuring following a conversation with their CEO, John McHale. The fact that they ceased operations followed by a big restructuring gave the impression that they were cutting their costs to remain profitable … and John took exception to that idea. He called back to explain what’s going on, and I felt that the information he gave me was sufficiently interesting to warrant revising and extending the article and an update with his comments . . .
According to John, the market for TrackingPoint products was strong and continues to be so. The company grew over 200% in its first year and orders quickly outpaced their ability to manufacture the firearms. In the eyes of TrackingPoint’s main man, that market isn’t drying up any time soon, but he was reluctant to get into specifics about their forecast of the market and its ability to keep buying their guns.
There’s no doubt that at some point the demand for firearms that cost as much as a new small car will be saturated. But according to TP’s numbers that isn’t something they’re worried about right now. Much like the market for other high-end items like private planes and African safaris, it seems like there are always more people out there who are waiting to plunk down their cash and get a piece of the action. And McHale believes that they aren’t even close to that saturation point.
Even then, their new plan to focus on creating a community around the brand and pushing the TrackingPoint experience should keep the existing customer base engaged, pumping more money their way.
The real grand prize, of course, would be a government contract. There’s already some work going on between TrackingPoint and the military to get some of their tech into the hands of American soldiers, and if they can get their guns into the armories of the armed forces, that would really start the cash flowing. Either way TP seems on stable footing. For the moment.
I am not at all interested in TP but do appreciate that TTAG will go on record with further info when appropriate.
So… what is the point here?
The product doesn’t seem to work half the time and when it does work, I’m not exactly clear why tagging then firing is any different from simply firing.
Looks very cumbersome
The reason why Tracking Point is important is simple, they are the company pushing the tech for consumer use. The gold mine, and I’m sure they see this, isn’t a government contract. Colt proved that. Yes, government contracts are lucrative, but trust me from someone who has been on both sides of them, they are horrifically expensive to acquire, both in terms of time and actual dollars. And so fickle.
The real brass ring moment for Tracking Point happens when it is just expected that a new rifle, made by any manufacturer, comes Tracking Point Ready. Then it migrates to pistols as well. Why am I buying an RMR? Because my newest pistol comes ready to mount it. Just like half the people buying one.
To do that, they will have to build this community they keep talking about. Other manufacturers need to get involved, AR and bolt gun alike, as well as different component and gear companies. You get those wagons circling for a complete product offering and they will keep the wheels spinning in the right direction.
As a disclaimer, our company, Fighter Design, has been supportive of Tracking Point in the past by way of providing belts, pants, and gear for their shooting team.
Pushing what tech? The best you can say they are doing is refining tech that has been in existence for years. DARPA is pushing tech that is going to revolutionize long range shooting. Tracking point hasn’t come close to doing anything exciting yet.
Pushing tech that consumers can use now. That’s something DARPA, by it’s very nature, isn’t doing. Will DARPA’s tech get used by consumers one day? Probably, and I certainly hope so, but I’m not seeing it on display at the media day at Shot Show and I can’t order it from a local gun store.
Earlier you mentioned “Then it migrates to pistols as well.”.
You actually think that can scale down to a red dot on a pistol slide?
How many years can they stay in business until the product is appealing enough to be profitable?
Ask Amazon.
Amazon was popular before it was profitable at least though, no? Don’t get me wrong, I like to see companies this ambitious do well.
Sorry, I was being cute and I suck at that. My point was years, even over a decade. The question is, how long will the company remain interesting enough to garner new investment? Many companies, Amazon being the best example I can think of, having just recently actually made a profit after 11 years of growth. Because actual profit isn’t as important to many investors as revenue, and potential profit.
That comparison isn’t super favorable for TrackingPoint, is it? Amazon started selling books and gradually expanded to selling everything under the sun. That’s serious growth potential. TrackingPoint sells an extremely expensive (if they stick around long enough, I’m sure the price will come down, but they’re a long, long way from a “budget” TP system), highly-specialized product. They may not have saturated the market yet, but TP’s growth potential is limited by the nature of the product. I doubt their investors are going to have a decade’s worth of patience.
John McHale has enough money to keep TP running for a while. But if past is prologue, he’s looking to take TP public and then have a larger company acquire it. Or skip the public part and just be acquired. What’s missing for me in this latest news are 1) a new product that would show continued innovation. As far as I can tell (never having used TP), it’s the same product they’ve had since 2012. Showing any kind of new product would signal that the time they’ve been dark has been spend building even cooler stuff, and the effort counts; and 2) new funding. I believe the last round of outside funding came in early 2014. Funding is a tech company’s signal for success. It signals interest in a highly competitive market of tech ideas. Not having new funding isn’t fatal, but it’s surely frustrating to a guy like McHale. He’s done this before. That’s why a bet on TP is a bet on McHale, not the product.
You gotta love a fire control system that considers the target to be a reverse recip-excluson.
A reverse recip-excluson is anything which can be defined as being anything except itself.
I’m thoroughly disappointed they disabled comments on the Youtube video. LOL.
Anytime you guys are on a forum and you hear the chorus of Brittish and Australians attempting to shame America for our liberated gun laws, you should link them to this video to point out they’re just jealous.
Still not interested in paying $30,000 for HAL to shoot a deer for me.
No kidding. The video just showed how cumbersome the thing is for hunting. I guess it tracks moving targets, which could be useful, but then what fun would hunting be? I can’t see how dropping this kind of coin for the product makes hunting more enjoyable than getting a nice custom bolt gun with the best optics on the market and getting to really know it.
Doesn’t the enjoyment from long range shooting and hunting really come from knowing you put in the time and effort to become skilled enough to achieve your goal?
I guess Tracking Point could compare themselves to the original innovators of Global Positioning Systems, those investing in it at the beginning knew that it would open up markets in the long term. Tracking Points real challenge is convincing people they need this, a need that isn’t as obvious as GPS units in the 1980’s.
Watch out guys, if you rip on tracking point like I did yesterday you are going to be called a “luddite.” I stand by what I said and here is why. Their technology is expensive, it requires a battery, it is prone to failure and bulky/heavy. People who have been around rifles for awhile all know someone that can shoot lights out with “antiquated” technology. But it seems that if you point it out you are standing in the way of progress.
As a loud and proud Luddite, I would like to say “Hear hear!” to all objections presented above.
how do you grow 200 percent your first year in business. 200 percent more than what, nothing. going from selling none to selling 2. Have never been a fan and until they figure out a way to put transponders in the bullets to send back telemetry it will just be a gimmick. in true long range there are still too many variables that the scope cant know.
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