ServiceTitan (NASDAQ: TTAN): An Armenian Precog Play on Precrime

ServiceTitan, which IPO'd this week, is a strong play on the prison industrial complex. ServiceTitan, as the scheduling and dispatch software for the construction and home services industries, has the best location data set on the movement and physical locations of thousands of undocumented Latinos in the US. ServiceTitan holds all the cards and has considerable negotiating leverage on an upcoming potential mass deportation of undocumented Latinos under the new Trump Administration.

Note: We're going to cover some concepts here that many may believe are "unethical" or "icky" or "unpleasant" to talk about in some way. For what it's worth, I personally probably mostly agree with most of these opinions. However, we're here to talk about equity and company valuations, so we shall sally forth.

In Philip K. Dick's 1956 novella "The Minority Report" future murders can be stopped before they occur thanks to precogs: humans who essentially lose their humanity to be curated and trained to see into the future and find murderers and their murder victims before murders occur. Future murder victims get to live. Future murderers are arrested and charged with future crimes before they occur.

The 2002 Minority Report film version featuring Tom Cruise and Colin Farrell is a bit of a farce on the spirit of the original novella and seems to serve mostly as an action movie vehicle to further Tom Cruise's career, though the points and plot lines are largely the same as the original work.

The film's protagonist, who is wrongly accused of Precrime, is chased around by futuristic government spiders who sense body heat and wish to tag his eyes and match his identity against their database. Today, this would not be terrestrial spider-like hardware but aerial drones, though the metaphor works well.

What if I told you there exists on the market today a company that is capable of not only solving Precrime but also locating offenders?

What if this company not only housed a large data set of who these precriminals are, but also data on the precriminals' physical locations and who is paying them and their employers?

This would seem very valuable, yes?

Well, this is ServiceTitan - the greatest data play on undocumented Latinos currently in the public markets today. ServiceTitan stock available to the public as of December 12, 2024, traded on the NASDAQ.

ServiceTitan's Data Collection Advantage on Human Movement and Location

ServiceTitan stores incredible amounts of Precrime data on human beings in the construction and home services industries and their physical locations, with dates and times.

Let's take a walk through ServiceTitan's Developer APIs, available on their public website. This is what ServiceTitan customers are able to access from ServiceTitan for their own data needs for their own company operations, though of course ServiceTitan has the master data set of all customers.

From ServiceTitan's "CRM" API we see ServiceTitan has "start" (what time a job is scheduled), "address" (the physical address of the job), and "JobID" (the internal descriptor of the job).

Then, from ServiceTitan's "Dispatch" API we have data linking the JobId to specific names of technicians who are going to show up at job sites and what days they will be at locations for various appointments, down to the specific arrival time of when a specific list of technicians will be appearing at the job site for whatever their assignment is, from installing plumbing to putting up drywall or doing a demolition, or whatever it is that job assignment would entail.

It gets even better though. ServiceTitan has a number of options for tracking technician phone locations via mobile devices. In fact, ServiceTitan allows its customers to give their customers the ability to track the physical locations of technicians.

Here is ServiceTitan's video about GPS tracking of technicians of their customers, from ServiceTitan's YouTube Page. This is what they were selling to customers about 7 years ago. They've only gotten more sophisticated since.

ServiceTitan: How Much Precrime Exists in ServiceTitan's Software Distribution?

A 2021 survey from Center for American Progress put the number of undocumented workers in the construction industry at roughly 1.6 million, with "drywall installers, ceiling tile installers, and tapers" at 38% and "roofers" at 32% as the two job titles with the highest rates of undocumented workers.

Further, the study found that these ~1.6m undocumented workers in construction had ~680,000 undocumented family members, so altogether we're looking at about 2.3m people.

The thing about carrying out mass deportations is that it's not especially feasible to just start rounding up people and filtering through them and seeing who is isn't undocumented. The Trump Administration is going to get fought every step of the way if this happens, plus we have Elon Musk and Vivek Ramaswamy going around claiming how they are going to use the "Department of Government Efficiency" to eliminate funding to federal jobs, so the alphabet soup of agencies from the NSA (everyone's cell phone data) to the FBI is going to fight to negotiate and withhold data.

It's far better, easier, and a lower lift for the Trump Administration to use private sector data.

Trump's "Border Czar" is going to be Tom Homan, and Homan's made it clear that "large sweeps" are not going to be on the menu, but rather worksite enforcement and resulting detainment. You can watch the below 60 Minutes interview from late October. The most important parts are between 2:15 and 5:36.

This is the perfect use case for the data of ServiceTitan: "The operating system for the trades."

Remember a few paragraphs up when we looked at job data? We found that according to Center for American Progress there were 75,600 undocumented roofers in the US.

Well, ServiceTitan offers the way to track roofers and their physical movements, job sites, and locations with dates and times about where they're scheduled for jobs and where they are located.

Okay, Lauren, you've made your point.

ServiceTitan clearly has a large data set on the movements of many undocumented immigrants in the US, even down to the daily physical movements of people.

However, Lauren, this is only the construction and home services industries and this only represents part of the undocumented population. There are plenty of undocumented workers in fields like lawn care and janitorial services.

Good point.

In 2021, ServiceTitan acquired Aspire, a very similar software focused specifically on the landscaping and janitorial services industries, which also holds data on who is moving around and where these people are physically located at job sites.

ServiceTitan has thought of everything.

Here's a video from August, 2023 announcing Aspire: A ServiceTitan Company's GPS location data, among other features. Just like how parent ServiceTitan has all the geolocation data for the heavily undocumented immigrant construction and home trades industries, ServiceTitan acquisition Aspire geolocation data for the heavily undocumented immigrant landscaping and janitorial staffing industries.

Why Phone and Scheduling Data is So Important for Upcoming Trump Administration Immigration Raids

One of the most difficult aspects in tracking down where individuals is understanding where they are actually located at a given time. While ServiceTitan has data job site addresses and lists of names who show up there, what is often the case with undocumented immigrants is that any home mailing address or formal address may be incorrect. The addresses on file may be where someone lived 3 months or 6 months ago, but it may not be where they live now.

ServiceTitan helps close this loop. With the geotracking data for many thousands of landscapers, construction workers, janitors, and other services people it's easy to figure out where individuals are physically residing. If users keep the app on their phones and these phones are geotagged every evening in the same location, this is likely where the end user lives as it's where the phone is located for 8-10 hours every evening. Even if users were to turn off the app every day the last known location where they were geotagged every day after work is more than likely where they live.

ServiceTitan offers law enforcement a full loop - where and when people will be showing up at job sites before they arrive, were people are in transit in almost real time on the way to job sites, and where these people are physically located when they are not at job sites.

ServiceTitan has incredible negotiating leverage over the upcoming Trump Administration, by offering a one-stop shop for all of this location and scheduling data.

How can you put a price on Precrime?

1) If ServiceTitan co-founders Ara Mahdessian and Vahe Kuzoyan are going to work with the Trump Administration, then TTAN is a huge long.

2) If ServiceTitan co-founders Ara Mahdessian and Vahe Kuzoyan are going to fight the Trump Administration, then TTAN is a huge short, as their customer base is going to lose end users and many of these small business ServiceTitan customers are insolvent without using undocumented labor.

This is the only question that matters for ServiceTitan management.

All CEO Ara Mahdessian has to do for this stock to fly is go on CNBC and say, "We're working closely with the Trump Administration. We support all of our customers who rely on legal immigration for staffing, customers who play by the rules and do not use undocumented labor to undercut competitors. We are strong believers in legal immigration."

If Mahdessian cannot state this in absolute terms, TTAN is a stinker.

You can leave all the SaaS metrics and P/E and P/S analysis by the side of the road.

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This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. Lauren Balik does not represent the interests of any fund or of any investor other than herself. Past performance is not indicative of future results. This content speaks only as of the date published. Any projections, estimates, forecasts, targets, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.