We took a risk this week…
One we knew might have a material impact on our business.
But we “went there,” as we promised we would do here at Brownridge Research.
It doesn’t have to do with yesterday’s Steeped Coffee recommendation. We’ll get to that in a moment.
I’m referring, of course, to Monday’s issue of Outer Limits, titled Google’s Dystopia, which was about the release of Gemini 1.5, Google’s new and improved large language model (LLM) as a response to OpenAI’s ChatGPT.
We felt it was imperative to inform readers of the dangers of an artificial intelligence (AI) that has been intentionally pre-programmed to push an agenda…
Versus an AI that has simply been given factual information to learn from and is “free” to synthesize and answer with the facts that it has from its learnings.
If you missed that issue, we highly encourage you to catch up right here. It is a must read and cannot miss. But fair warning, it might get your blood boiling…
Of course, we knew sending this issue would be risky. Which is why we placed a large note at the top of the issue. Here’s what we said:
[NOTE: Due to the sensitive nature of the content of this email, email clients (such as Gmail, Outlook, YahooMail, Hotmail, etc.) may restrict its visibility. The practice of quietly restricting reach on a platform such as Gmail — without notification — is called shadowbanning. And it’s very real. Therefore, we are also posting this note to the website version of the email.
If you are reading this note, that’s the great news. It means that your email client isn’t yet limiting your visibility of Brownridge content. However, given our promise to “go there” with our content, it’s very possible that that won’t always be the case… and soon we will begin showing up in your SPAM folder. To prevent this from happening, it’s imperative you mark Brownridge as a safe domain and whitelist our sender email address. You may find instructions right here. I hope you enjoy today’s Outer Limits.]
In “the email world,” one of the primary channels we operate in, email deliverability is a big deal.
If our readers don’t receive our emails, like this one you are reading now, we really have no other way of maintaining our relationship.
So it’s imperative that our email channel stays open between us.
But over the years, and with the increase of spam email and the proliferation of digital marketing material, email clients like Gmail, YahooMail, Outlook, and more have had to implement algo-controlled filtering… in order to help ensure that users continue to have a good experience. It’s never a great experience to have to sift through lines and lines of spam.
The problem is when that AI-driven filtering goes too far — too far in deciding which emails you should and shouldn’t see. In other words, when the companies that own those services have an agenda of their own…
We suspected that in sending out Monday’s email, we would experience some “censorship.” We suspected that Gmail, Outlook, YahooMail, Hotmail and more might begin limiting the visibility of Outer Limits, sending our issues to your promotions tabs (despite us not selling anything) or worse, your spam folder.
So the following morning after we sent out the issue, it came to no surprise to Lindsey and I to see that exact thing happen. And if you read Monday’s issue, what happened next should come to no surprise to you either…
With that specific email, we saw a 362% spike in email “bounce backs” — the email equivalent of snail mail’s “return to sender.” And we’ve continued to see a significantly higher-than-average bounce rate in the days since.
Coincidence? We’ll let you decide.
In the meantime, if you’d like to continue getting Outer Limits, our free daily e-letter service, you must send a strong signal to your email client by whitelisting our domain and sender email addresses.
It should take no more than two minutes. For your convenience, you may find instructions here.
Jeff
Hi Jeff, I invested in Steeped in the initial round, when you advocated for it while you were at Brownstone. The gentleman who replaced you at Brownstone, Colin, sent out commentary expressing no confidence in Steeped. I believe he said he couldn’t advise investors to add more $$$. Why the contrast between your take and his? (BTW, I since have terminated my Brownstone subscription.) Respectfully. — Steve M.
Thank you for your very insightful and informative update on Steeped Coffee. I, and I am sure many others, are very excited that you are keeping in touch with your portfolio, regardless of where it was published! I am guessing you will get many other responses from Brownstone investors from this article, as you probably already know, we were advised against re-investing on 2/6, with a communication that lacked insight or detail. IMO based on the read, this was not recommended because Wilbur did not share requested financials with Colin. Not sure how much you can comment on this but to read your backstory again as to why this is a potentially profitable investment but highlighting the future potential of this company beyond the balance sheet was a breath of "Jeff" air! So my question has to be, have you seen their financials and do you harbor any concerns regarding this company being able to continue to finance their growth? Regards. — Carol C.
Hello Carol and Steve,
Thanks for writing in with these questions. Another subscriber was kind enough to forward what was written by Brownstone. I appreciate having that context. And as a reminder, I have no affiliation whatsoever with Brownstone Research or Legacy Research.
In short, what was written was extremely light on any detail or context.
I spoke with Josh Wilbur, CEO, several times over the last couple of months. He informed me that he made every attempt to contact Brownstone with updates and detailed information about Steeped Coffee, and he found it difficult to get replies despite his efforts.
Since my very first meeting with Josh in January 2022, I have found him to very responsive, and always willing to provide transparency and detail to any questions that I had about Steeped’s business or industry. This is very much the case for the last couple of months, as well. He has shared with me the company’s financials, forecasts, and additional information that I inquired about.
Claiming that an executive was unwilling to provide requested information while at the same time refusing to answer e-mails/calls is disingenuous and unprofessional. That’s not how me and my team work, and we never treat founders and professionals that way.
Steeped’s shift towards outsourcing manufacturing was also painted as a negative. As I mentioned in my analysis, this was Steeped’s plan from the beginning. It had to manufacture its own products early on, because it needed to master its own production technology and scale up its sales. Once its sales were large enough, the production volumes became attractive enough to outsource manufacturing.
And of course, the benefit of outsourcing manufacturing is a big jump in gross margins to around 40%. These gross margins will improve further with additional scale.
Naturally, when shifting from in-house manufacturing to outsourcing, Steeped had to restructure the business. It had to let go of personnel related to the manufacturing process. That’s normal.
In short, this is a very positive development for Steeped, which improves gross margins and increases the overall production capacity… which it will need as some of the large partnerships start to fall into place.
I’d feel very comfortable doubling the size of a position in Steeped in this follow-on round. For example, if an investor invested $1,000 in Steeped back in the summer of 2022, it’s okay to invest an additional $1,000. Given the major progress made over the last two years, dramatically improved gross margins, fantastic product, and sheer business opportunity, this is a great investment for anyone’s buy-and-hold, long-term portfolio.
On a fun and related note, Brownridge’s own Lindsey did her own boots on the ground research in Florida at her local Whole Foods because she was so intrigued by our research on the company. She got the last box. The shelves were bare.
But what happened next was even more fun. She’s a finicky, particular coffee drinker. She was a skeptic… until she drank Steeped Coffee this morning.
Here were my favorite comments from her:
Told you so, Lindsey…
And for the rest of my subscribers, as you know, Outer Limits is free. It’s very expensive to produce and e-mail every day, but I’ve been committed about making Outer Limits accessible and open to all subscribers.
Sometimes subscribers read my work for years before they’re ready to become an active investors. So my research on Steeped is just a taste of what’s to come. Please feel free to forward to any friends, family, and co-workers. We’d love to have them join the Brownridge community.
And for those who haven’t yet seen my research on Steeped Coffee, you can find it right here. And for those interested in investing, you can see the crowdfunding raise on Republic right here.
And for those who haven’t yet tried Steeped Coffee, Lindsey and I both can highly recommend it.
New reader? Welcome to the Outer Limits with Jeff Brown. We encourage you to visit our FAQ, which you can access right here. You may also catch up on past issues right here in the Outer Limits archive.
If you have any questions, comments, or feedback, we always welcome them. We read every email and address the most common threads in the Friday AMA. Please write to us here.
