Research

We can attach the argument for value proposition to the odds of strong differentiation

View above about Issue: Our odds that HVR will be One of a Few alternatives for OR High Risk training

We excerpt from stories about an investment opportunity to support judgments about the key drivers of the odds of upsides & downsides to that investment's future returns. These key drivers can include the odds of HVR being one of only a few alternatives for training in OR High Risk settings, and the video below shows us supporting our judgment for this with a compelling excerpt from management's slides.

Research

HVR's product may enable the effectiveness of in-person simulation at the efficiency of online learning

View above about Issue: Our odds that HVR will be One of a Few alternatives for OR High Risk training

Our VR offers 10x efficiency improvement vs. in-person simulation and 250% learner performance improvement over eLearning.
Analysis

We see a 1/3 chance this company will produce more than about $600 million of cash over the long-term and a 10% chance it makes more than $1.6 billion

View above about Issue: HVR Equity Value

With our judgments for key drivers, together we produce many scenarios for long-term cash flows. For example, we see a one-third chance this company will produce more than about $600 million of cash over the long-term, which it could do if it’s One of Many alternatives in its first 2 target markets but One of only a Few in its 3rd market, the much larger market for resuscitation training. To read the table below on a smartphone, flipping to landscape may help. Then drag the dot at the top to the 90th percentile to see why we see a 10% chance it makes more than $1.6 billion!
Analysis

We see a 50% chance revenue multiple in 2 years is above Healthstream, the current leader in its market, and a 25% chance it’s above Vocera, a higher-growth comparable

View above about Issue: HVR Equity Value

We can even produce scenarios for expectations for those long-term cash flows by other investors in the future, such as in 2 years. Here we see 100 scenarios for those expectations for cash balance. Those expectations in 2 years will influence multiples in 2 years, and our odds for the expectations enable us to handicap odds for multiples. If reading on a smartphone, flipping to landscape may help. We see a 50% chance that revenue multiple is above Healthstream, the current leader in its market, and a 25% chance it’s above Vocera, a higher-growth comparable. We see a 10% chance it’s more than double Healthstream, and we can see investor expectations for Growth, Profitability & Scale that could motivate that, by hovering dots around that multiple. Try it! On the other hand, we can see investor expectations that would motivate a multiple below Healthstream’s. By estimating odds of those stories, we can estimate odds of exit multiples, which is much more useful than just looking at a wide range of multiples in a data table with no explicit odds for either end of the range.
Analysis

We see a 10% chance of > 13x today’s value in 5 years and almost a 50% chance of losing more than 50%

View above about Issue: HVR Equity Value

Our story-driven odds for investors’ outlook for this company at various future horizons help us produce odds for its valuation at various future horizons. We see a 10% chance it is more than 13 times today’s value in 5 years. On the other hand, we see a 50% of losing money and almost that much chance of losing more than 50%. If we had diversified investments like this in a portfolio, we would expect it to return the mean of more than 4 times over 5 years. These odds can help us weigh better whether and how much to invest in this company, and with what deal structure.
Analysis

Investor Expectations at Year-End 2024 for Odds that HVR is One of Many in Disaster Preparedness vs. NAV by company and horizon and org HVR and at horizon 12/31/2024

Having Quantified Stories about this company in these Scenarios for future return on it, we can get a quantified perspective on how much that return depends on investors’ outlook for specific drivers. For example, in 5 years at year-end 2024, investors are likely to continue thinking that this company will be One of Many players in Disaster Preparedness, but if ongoing research suggests instead that they are likely to be more differentiated, then we might see much higher odds of making high returns, with our mean return going to 10s of times the current $30 million post-money valuation. Drag the blue bars yourself to change the odds and see the relationship! This quantitative confirmation of the importance of this expectation will motivate us to prioritize more research on it, which we will attach directly to our judgment for these odds in order to improve that judgment.
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Investor Expectations at Year-End 2024 for Odds that HVR is One of Many in Disaster Preparedness

Odds
100% 75% 50% 25% 0%

NAV by company and horizon and org HVR and at horizon 12/31/2024

Research

Vanderbilt's nursing head says 15-20% of trainings could be best in VR

View above about Issue: Our odds that HVR will be One of a Few alternatives for OR High Risk training

Across all training courses, my guess is 75% of them can continue to be done on Learning Management System platforms. For example, the annual state required coursework doesn’t need a VR simulation. The remaining 25% are face-to-face simulations. Of that 25%, maybe 80% (or about 15-20% of total) could potentially be done using HVR.
Research

More and more nurses are millenials, who like new technology

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In general, nurses tend to be more visual learners. They like to touch and feel. And more and more nurses are millennials that want to be involved and connected. Millennial nurses would love using HVR.
Research

It's hard to find time for nurses to do in-person training but online training isn't enough

View above about Issue: Our odds that HVR will be One of a Few alternatives for OR High Risk training

One of the biggest challenges as a manager is finding the time for a nurse to complete the competency coursework. A nurse already has a jam packed schedule in their 12 hour shifts. They often receive additional paid time coming in on their days off to fulfill the requirements. Training is performed via online learning as well as face to face simulations, which are essential from a skills development perspective. A nurse can read as much as possible but once they come face to face with a high pressure, life threatening situation, the health system needs to have comfort in knowing they understand the algorithmic approach to handling those events.
Research

VR training is becoming more common to educate workers or assess their ability

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The country’s largest private employer is using a VR skills assessment as part of the selection process to find new middle managers, watching how workers respond in virtual reality to an angry shopper, a messy aisle or an underperforming worker. VR training is becoming more common in a variety of industries to educate a large number of workers quickly or assess the technical ability of high-skilled workers like electricians or pilots. But Walmart’s use of the technology to gauge a worker’s strengths, weaknesses and potential is significant because it pushes VR evaluation out to a massive hourly workforce and in some cases helps determine who gets raises and who gets demoted.