Discl: Not Held

I have watched ASX:360 from afar but could never quite clearly understand its purpose, why people would sign up to it, what drives the growth, and why it would be sticky.

Fell off my chair when my 16 year old daughter sent me a link to sign up so that she can see where I am. Not sure she fully realised that it cuts both ways - I can see where she is as well, which is the whole point of the app. So, it was a wee bit of a shock to her when I said "Oi, what are you doing in the shop 200m from the library when I thought you were in the library studying ...". But such is the power of social media that despite this, she was pulled to signing up and dragged me into the mix as well.

Anyhow, I signed up and took the opportunity to give the app a spin to see the investment case. Comments are my immediate reactions/thoughts only – have not done any prior research into 360, so have no prior context, and comments below could be way off the mark!

Totally welcome any pushback/clarifications to these very raw, dumb initial user thoughts!

THE APP

The App appears to be positioned as a "Location-based security for families" app, so everything is built around the whereabouts of the people in the "circle" (people who you invite in).

 Free Version

1. Each member of the "circle", can see where the others in the circle are, real time.
2. Shows me she is in a car, how fast the car is driving etc – similar to the progress of your Uber/Didi ride in their respective apps
3. Can specify 2 set locations and I get alerts if my daughter goes to those locations eg. school
4. I can tell how many minutes she has been at the current location
5. I can see where she has walked as she walks from place to place
6. 2 days of location history
7. Crash alerts from driving
8. Data Breach alerts – scans for data breaches, presumably based on mobile number and email as it picked up a 2019 breach of my email, pretty basic

Paid – Silver $79.99/yr

1. Place Alerts – get notification as Circle members come and go from the specified place – 5 places with Silver, then Unlimited with Gold & Platinum
2. Location history ie, where members of my circle have gone for 7 days

Paid-Gold $159.99/yr

1. Place Alerts – unlimited, 30 days location history
2. Driving Safety on the road - Crash Alerts with 24/7 Emergency Dispatch
3. Individual Driver Reports – know how (and what) your family is doing behind the wheel when they drive – the app detects driving behaviour via motion and the GPS from the phone
4. Roadside Assistance
5. SOS with 24/7 Emergency Dispatch
6. ID Theft Protection – USD25k reimbursement from stolen funds from a data breach
7. Stolen Phone Protection - $500 for replacement cost

Paid -Platinum $249.99/yr

1. ID Theft Protection – USD1m reimbursement from stolen funds from a data breach
2. Stolen Phone Protection - $1000 for replacement cost
3. Disaster Response – get help in life-threatening situations like natural disasters, active shootings or disease outbreaks
4. Medical Assistance – looks like links to telehealth manned by nurses, medical referrals etc
5. Travel Support – help with travel arrangements, lost luggage, translator services etc

THOUGHTS ON APP

It thus feels like a “family safety/family tracking/concierge” app. With all the drama’s in the US, impacting personal safety, I can see the attraction of the app – the cost is really small for all the benefits IF the family members get caught up in some strife. With less strife in Australia, in relative terms, I do feel the cost seems a wee bit high relative to the value.

The “value add services” differentiates 360 from basic WhatsApp/iPhone live tracking etc and that is what drives the value/decision for the paid subscriptions.

It also feels that country expansion is not quite automatic – the value add services need to be set up in each country before the subscriptions can fully kick in for that country.

The key issue is getting family members to actually agree to being tracked to the n-th level 24/7. Which is what surprises me the most – that my 16 year old would WANT to be trackable like this. I know my older girls would be dead against this level of tracking. It is really extremely creepy to be able to access so much location detail. As I am writing this, I am actually trying out the texting capabilities within the app to tell her I know exactly where she is to see if I would provoke an adverse reaction. And as I expected, this reality is creeping her out ...

So perhaps the key is to start the app going when the kids are just getting a phone (and make the app a condition to getting the phone) so that it becomes part of the family thing that carries through as the kids get older. The issue also extends to the adults and whether the parents will also consent to be tracked ad nauseum. I personally don’t have an issue with being tracked, but there will be a lot of parents/adults who will deeply resent being tracked like this.

RISKS

The risk then is that as kids get older, they will resent being tracked like this and once they reach high school or Uni, the 360 family unit starts to “break down” and subscriptions are downgraded or stopped. I wonder if there are demographics or churn-related stats to see how prevalent this is or is not.

It would also be interesting to research the duration of subscriptions and whether there is an implicit fixed lifespan. Assuming kids get phones when they are say 10 years old, Years 4-6 maybe (out of security fear), and assuming they get antsy being tracked when they hit 15 or 16, which means a contract duration of 6-10 years, after which churn could rise.

Family breakdowns could also be another reason for churn.

INVESTMENT CASE?

With, admittedly my perceived, teenager and human aversion to being tracked, 360 does not feel water-tight “sticky” as my other SAAS companies like CAT, XRO which are deeply integral to the team or operations of the customers.

It does feel like there is a natural cliff when location-tracking not only stops being useful in a family, but could cause internal strife such that it creates a jump-off point for subscriptions. Am also curious as to whether Life360 has been around long enough to confirm or debunk this unease. 

I was quite surprised with the availability of the additional security services – that does make sense for a family. But from this list, I wonder what else “safety-related” that can be added to the app that would add further value to the family that justify future cost uplifts.

SUMMARY

With the growth in the price, and my perceived less than water-tight subscription stickiness, I think I will give this a pass for now.