Understanding Optionality and TMARA-ALKEBULAN’s Approach to creating and investing in new market categories.
Please first listen here:
Optionality Defined:
| You have optionality, when you can rely less on your intelligence, knowledge, insight, skills (so to speak).
Why, because you have sufficient (frequent) asymmetric (big upside/limited small downside) opportunities coming your way, and with a favourable success rate. That means your upside will be more than your downside, over time. That way, you are always above the market average. Optionality aims to gain from the positive side of uncertainty, without exposing oneself to the same magnitude of downside. |
Addressing the Limitation in Early-Stage Investment.
Currently there is no way to predict the next big start-up winners accurately at an early stage– one is limited to a high degree of uncertainty (uncertainty has two sides – a negative side and a positive side).
TMARA-ALKEBULAN’s Solution:
TMARA-ALKEBULAN uses optionality to achieve an above-average return in the early-stage investment space, by employing a codified scientific category creation methodology to test/validate a continuous pipeline of asymmetric opportunities (potential new category leaders) BEFORE investing, and with a favourable success rate.
This is all done through a virtual start-up factory called the Market Category Creator (MCC), where we marry the category creation smarts with the founders and their investors.
How Investors have Adapted to Facing the (above) Current Limitation:
Investors are constantly try to improve their ability to predict the winners, and resort to relying on a portfolio approach to increase their odds of success.
Optionality as a Strategic Advantage:
Everybody knows the statement “the higher the risk the higher the return”.
Optionality in TMARA-ALKEBULAN does the opposite – a higher return at a lower risk.
Every investor is looking for the opportunity to invest (early-stage) at a lower risk for higher return product.
TMARA-ALKEBULAN could therefore be that opportunity (new way) for some investors.
Components of TMARA-ALKEBULAN’s Select/Test/Invest Methodology:
To achieve optionality, four necessary conditions must be met:
| 1. The Ability to Control the Downside.
2. The Upside Win Must Exceed the Downside. 3. A Sufficient Frequency/Pipeline of Opportunities. 4. A favourable Success Rate. |
How we achieve optionality:
TMARA-ALKEBULAN – unlocks the potential reality of 10x returns
- Selecting only ASYMMETRIC OPPORTUNITIES (potential new category leaders) with big upsides and capped downsides.
- Putting ventures through a rigorous market validation journey, to either fail fast or become NEW MARKET CATEGORY LEADERS
- Exercising OPTIONALITY by taking options on the future market winners, where failure carries a low cost, but wins deliver big.
- We follow one rule: EXERCISE OUR OPTIONS PROFITABLY OR EXIT (The MCC) FAST
TMARA-ALKEBULAN – makes 10x returns probable
- We’ve discovered the type of problem that, when solved successfully, leads to the creation of a NEW MARKET CATEGORY, by default – where the venture gravitates up to 75% of the market and controls 80% of total margin.
- Applying RATIONALITY (First Principle thinking) to exit ventures fast, that don’t have PRODUCT-CATEGORY FIT (PCF)
- Leveraging TMARA-ALKEBULAN’s scientific market category, screening, and validation formula, to ensure that weak ventures exit at low cost, while SUCCESSES ARE MASSIVE.
- An African-focused impact investment fund that has the ability to (reliably & repeatably) create new market category leaders.
- Within an investment structure powered by TMARA-ALKEBULAN’s Market Category Creator (MCC).
Risk and Performance Evaluation:
The necessary conditions of optionality of TMARA-ALKEBULAN’s base strategy, are constantly assessed to spot any deviation outside the control parameters to signal improvement (to make the process stronger), and to highlight the associated risk (and how it could impact future returns)
