June 3, 2023 8:20 PM

Innovative and agile: three companies adapting their products to a changing world

Innovation has always been an important part of running a successful business and COVID-19 has shown this to be more true than ever. Now, in order to have the endurance to survive a world that can change at a moment's notice, companies that can reinvent their existing products at a moment's notice are those who will weather uncertainty the best. Here we take a look at three such companies.

/ Published 3 years ago

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At the start of the year, few of us would ever have imagined the extent of the impact that COVID-19 would have on our lives. For most of us at the time, it was just a distant crisis in a land far far away. We were safe, and life went on as normal.

Of course, that all changed, and we were forced to adapt at a lightning pace. If you found yourself in a country like France, it was literally an overnight change. One day everyone was working, going out to restaurants and bars, and going about daily life as normal. Then, in less than 24 hours from the moment of its announcement to the hour at which its enforcement came into effect, a total lockdown shut all of that down.

There are always winners and losers

If there’s one lesson to be learned from this scenario, it’s that many “safe” investments are not truly safe. Even traditional dividend stocks like banks have failed to rebound after the crisis, wiping out years of gains almost overnight. Even Warren Buffett’s darling, Bank of America, is still sitting at three-year lows.

But while many traditional investments have failed during the crisis, others have shone. The brightest stars have been those that cater to the needs of confined populations, like video conferencing technology firm Zoom, whose share price has shot up 500% since the start of this year. But this is a problem for the investor who’s looking to do more than trade the news.

The problem with both of these stocks is that their success depends on a certain state of the world. If the world shuts down, there is little the banks can do to stop their revenues dwindling, just as there’s little Zoom will be able to do to hold onto their current success once the world starts returning to normal. Their products are, for want of a better word, one dimensional, catering to needs that are dictated by the broader economy and ill-suited to adaptation to changing societal needs.

Are there more resilient options available?

For investors looking to add a little resilience to their portfolios and protect themselves against the unpredictable ebbs and flows of the economy, there are options. Finding firms who are able to adapt their products and revenue models to shifting circumstances is the secret, but knowing where to start looking can be hard.

While intricate knowledge of the underlying business model is not necessary, finding these firms requires a little more research than just finding out what they do.

With this theme in mind, we’re going to look at three different companies who have the ability to innovate and adapt their products and services to a rapidly changing world. As we’ll see, beyond the general category of products they are delivering, they each have attributes which make them well suited to surviving inevitable ups and downs.

XRApplied: Ready to jump into any industry at a moments notice

XRApplied is a European XR firm—XR is a term referring to Augmented (AR), Virtual (VR) and Mixed (MR) Reality—who has recently attracted the interest of Zadar Ventures (TSX.V: ZAD). Their speciality is the fundamental technology that underlies all XR applications, putting them in the unique position of being able to jump into any sector that is looking to jump into this sphere.

What makes them particularly adaptable is that, while their technology serves one specific purpose, that purpose isn’t tied to any one industry. The many uses for XR technology are still emerging today, but already applications across all industries are attracting a lot of attention.

During a pandemic like COVID-19, XRApplied is able to apply its technology into diverse fields. They can easily jump into the growing demand for online shopping, innovating in the warehousing space by developing glasses that overlay directions, quantities and other details to warehouse workers picking orders. And they can cater to video conferencing like Zoom can, by applying their technology to virtual conference rooms which allow remote workers to sit in the same place and interact from afar.

But unlike Zoom, who will see a lot of their revenue dry up with dwindling video conferencing demand, XRApplied can shift with ease into recovering industries. That could be, for example, in the auto industry, delivering technology for rapid prototyping.

While the applications for XR are broad. Not all XR firms will be resistant to disruptions and shocks to our ways of living and working, XRApplied is.

Rritual: Innovative formulas adapting to changing need-states

Rritual is a new startup looking to develop a line of functional mushroom products in the booming health and wellness sector. While this might seem a little like jumping on the trend of increasing health consciousness that’s emerged during the current crisis, Rritual is a lot more agile than one might assume.

Rritual is specializing in the adaptogens space, which is particularly suited to innovation that evolves with a changing market. As naturally-sourced extracts that help the body adapt to physical, chemical or biological changes and stresses, adaptogens are more than simple health products like vitamin supplements. Helping people adapt to different need-states, they offer tailored solutions to help people thrive in all of life’s different situations.

During a crisis like COVID-19, when people are stressed and anxious about the world, stress relief and mental health and wellness support are critical to people. But as times change, consumers will be increasingly seeking supplements that can help them thrive in a fast-paced work environment.

This is where Rritual’s adaptogen innovation allows them to shine. By being able to adapt their formulations to the most pressing needs of the world, their business has the endurance and agility to survive the shifting sands of our times.

Leaf Mobile: Changing with the times and catering to shifting motivations

Leaf Mobile Inc (TSX.V: LEAF) is another company that may appear to be just jumping on a trend. Delivering highly successful counter-cultural mobile games, they have certainly benefited from COVID-19’s positive bump to gaming.

But Leaf Mobile’s cannabis games are more robust than others when it comes to generating revenue through different circumstances. This is due to the fact that when their games are released they are not set in stone as many others are.

This is achieved through the use of special events and new episodes that are delivered on a regular basis. Each of these two aspects allows the game to be tailored to people’s available time and motivations for mobile gaming.

During confinements and social distancing, people may be more attracted to longer gameplay with detailed narratives that they can submerge themselves in. But then, as times improve and we all start heading back to work, the trend tends more towards short hits that can amuse workers during their daily commutes. This drops the desired level of narrative complexity, favouring short, punchy gameplay.

Leaf has enabled themselves to innovate here, even with already-released titles. By delivering new instalments and events for their games, player’s time and motivation can be accounted for, keeping loyal user numbers high no matter the circumstances being faced by the world.

(Featured image by fauxels via Pexels)

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