During our Court Reporting & Captioning Week 2021 there were a couple of press releases and some press releases dressed up as journalism all about digital recording, automatic speech recognition, and its accuracy and viability. There’s actually a lesson to be learned from businesses that continually promise without any regard for reality, so that’s what I’ll focus on today. I’ll start with this statement. We have a big, vibrant field of students and professionals where everyone that is actually involved in it, from the smallest one-woman reporting armies to the corporate giants, says technology will not replace the stenographic court reporter. Then we have the tech players who continuously talk about how their tech is 99 percent accurate, but can’t be bothered to sell it to us, and whose brilliant plan is to record and transcribe the testimony, something stenographers figured out how to do decades ago.
You know the formula. First we’ll compare this to an exaggerated event outside the industry, and then we’ll tie it right into our world. So let’s breeze briefly over Fyre Festival. To put it in very simple terms, Fyre Festival was an event where the CEO overpromised, underdelivered, and played “hide the ball” until the bitter end. Customers were lied to. Investors were lied to. Staff and construction members were lied to. It was a corporate fiasco propped up by disinformation, investor money, and cash flow games that ended with the CEO in prison and a whole lot of people owed a whole lot of money that they will, in all likelihood, never get paid. It was the story of a relative newcomer to the industry of music festivals saying they’d do it bigger and better. Sound familiar?
As for relative newcomers in the legal transcription or court reporting business, take your pick. Even ones that have been incorporated for a couple of decades really aren’t that impressive when you start holding up the magnifying glass. Take, for example, VIQ Solutions and its many subsidiaries:
VIQ apparently trades OTC so it gives us a rare glimpse of financial information that we don’t get with a lot of private companies. Right off the bat, we can see some interesting stuff. $8 million in revenue with a negative net income and a positive cash flow. Positive cash flow means the money they have on hand is going up. Negative income means the company is losing money. How does a company lose money but continue to have cash on hand grow? Creditors and investors. When you see money coming in while the company is taking losses, it generally means that the company is borrowing the money or getting more cash from investors/shareholders. A company can continue on this way for as long as money keeps coming in. Companies can also use tricks similar to price dumping, and charge one client or project an excessive amount in order to fund losses on other projects. The amazing thing is that most companies won’t light up the same way Fyre did, they’ll just declare bankruptcy and move on. There’s not going to be a big “gotcha” parade or reckoning where anyone admits that stenographic court reporting is by far the superior business model.
This is juxtaposed against a situation where, for the individual stenographic reporter, you’re kind of stuck making whatever you make. If things go badly, bankruptcy is an option, but there’s never really an option to borrow money or receive investor money for decades while you figure it out. Seeing all these ostensible giants enter the field can be a bit intimidating or confusing. But any time you see these staggering tech reveals wrapped up in a paid-for press release, I urge you to remember Fyre, remember VIQ, and remember that no matter what that revenue or cash flow looks like, you may not have access to the information that would tell you how the company is really doing.
This also leads to a very bright future for steno entrepreneurs. As we learn the game, we can pass it along to each other. When Stenovate landed its first big investor, I talked about that. Court reporting and its attached services, in the way we know them and love them, are an extremely stable, winning investment. Think about it. Many of us, when we begin down this road, spend up to $2,000 on a student machine and up to $9,000 on a professional machine and software. That $11,000 sinkhole, coupled with student loan debt, grows into stable, positive income. So what’s stopping any stenographic court reporting firm from getting out there and educating investors on our field? The time and drive to do it. Maybe for some people, they just haven’t had that idea yet. But that’s where we’re headed. I have little doubt that if we compete, we will win. But we have to get people in that mindset. So if you know somebody with that entrepreneurial spirit, maybe pass them this post and get them thinking about whether they’d like to seek investors to grow their firm and reach. Business 101 is that a dollar today is more valuable than a dollar tomorrow. That means our field can be extremely attractive to value investors and be a safe haven from the gambling money being supplied to “tech’s” habitual promisors.
Know a great reporting or captioning firm that needs a spotlight? Feel free to write me or comment about them below. I’ll start us off. Steno Captions, LLC launched off recently without doing the investor dance. That’s the kind of promise this field has. I wish them a lot of luck and success in managing clients and training writers.