Friday, April 26, 1996
Real Jazz
by Bigfootmm

Tuesday, at the Iomega shareholder's meeting, we were beguiled by Kim Edwards (KE) and his team who put together a fabulous presentation. It was in fact the same presentation given on the road show. Lots of graphs showing the dramatic changes in the company over the last year. Precipitous drops in fixed costs, stratospheric rises in market potential for storage products, and margins at healthy levels (rising to 30% levels after ramp ups).

For me the most important part of the show was the sense I got that this is the beginning. The foreign markets are untapped right now, but KE said (after the show) he sensed "smooth sailing" (my words, his affirmation) all over the world. He reiterated that he looked at the whole world as a market for Iomega and that Roy was no longer the "center of the universe." The Chairman also said that Iomega's strength was in its people and that he could not believe that these people would be slowing down anytime soon. In other words, we ain't seen nothin' yet.

My impression is that KE rules. None of the VPs were on stage to help answer questions. Only the Chairman spoke other than KE in response to questions. KE appears to have the respect of folks, however, and has recruited people he has worked with before.

We were shown some of the new TV commercials. One word: kewl. Had some jazz musicians clowning around, saying cool things and acting cool. Way hip, man. What all this says is that Iomega is going to raise some hell in the advertising world. Iomega will be a brand that will be known for its easy, trouble free, up-beat, responsive, up-to-date, and really cool products. Good prices, good quality, and good feelings. It looks awesome to me. So well done and interesting to watch that people will be searching the channels to see this stuff.

The television ads are what is going to put Iomega over the top, in my humble opinion. KE has looked at the market potential and is going to go after it as if he were selling Snapple. He has the market research that is telling him he is at the right price points for easy selling. No competition in view that does not have some major flaw, whether in pricing, performance, or availability, so there is an open field for KE to charge ahead. I do not doubt that he will do just that.

Frankly, this company looks to be a behemoth in the making. This is long-term investing at its finest.

With 10 point rises, 30 points pre-split, each and every one of us needs to remain emotionally grounded. So much about this whole experience with the Fools and the Wise and Iomega is dramatic in the extreme. Yes, we have prevailed, but this does not mean that we are the chosen of the earth or that we are destined for greatness. The less of this success that we attribute to ourselves the better off we will be. We worked at it, we persevered, and we gathered together in trust and respect to realize this blessing. Celebrate that, and not that we are special human beings. We are not. We are people who are acting properly. We cooperate instead of compete, we use our brains, we are humble in our ignorance, and we trust and rely on those who have proven themselves to have integrity. These behaviors do not make us wizards and the keepers of wisdom; they make us ordinary in the healthiest sense of that word. We are at the common level, and it is at the common level that we can be at peace with our good fortune.

May we always be humble in the presence of Foolishness.

Bigfoot

Transmitted: 4/26/96