COVID-19: How to Prepare a B2(B2)C Business for the ‘New Normal’
COVID-19 has, in just a few months, shaken and radically disrupted governments, economies and societies alike (even the publication of our GRAPH Papers was disrupted – but we are glad to be back at it).
The Battlefront for the Keystone Position in an Ecosystem
Direct competition between ecosystems – iOS vs. Android; Twitter (or "the X"*) vs. Instagram (Meta) – is often studied and constantly the subject of various tech press and opinion pieces. There are many good reasons for this that all analogize to the same reason journalists love to cover competitive tournaments:
CDD Plan of Attack: Risk of Overstatement of Digital Disruption Signals (and Opportunity)
The risk of ‘digital disruption’ is pertinent to almost every industry today. Naturally, acquirers look for signals that a target company will be able to brace the oncoming winds of change and enhance its products and services to meet the demands of an increasingly connected and digital world.
Assessing the Impact of Cyclicality in an Investment – a Voice-of-Customer Informed Diligence Approach
How a company will perform in weaker economic conditions is top of mind for investors when considering a potential acquisition. The starting point for that analysis is usually an examination of how the business fared during the last downturn. Studying prior financial performance – in terms of revenue, pricing and margins – is a critical first step. How steep was the decline? How fast was the…
A Practical Commercial Diligence Approach to Assess the Risk of Artificial Intelligence (AI) Disruption
The impact of constantly expanding applications of AI technology (Note 1) has many investors nervous about traditional human-labor-based businesses – from professional and technical services to administrative clerks. The sustainability of these businesses is a deep and challenging topic to assess. However, it is made harder by the convoluted analytics that many consultants have proposed to…
Avoiding Asymmetric Competitors in Technology Investing
In a recent conversation with a leading technology-focused sponsor, I was asked an interesting question: if [insert hyperscale technology company name] is getting into everything, then how do I know what’s safe? In this case, we were talking about Amazon, but the same could have applied to Microsoft, Google, Apple, Salesforce, Adobe, and more.
Commercial Due Diligence and Value Generation via Network Effects
Many attractive investments are predicated on network effects – these are businesses that connect users, buyers, and/or suppliers. Companies like Visa, eBay, and LinkedIn have famously enjoyed the benefits of network effects to accrue immense, highly durable value. Outside of software, businesses such as recruiting, retailing, media, health provider networks, and many others, enjoy network…
Fruit that’s Ripe for Non-traditional Disruption (and how to diligence the prospect of it)
The Amazon Whole Foods tie-up is certainly throwing more than a couple of mature industries for a loop: food production, logistics and distribution, mass-retail and groceries. Since the announcement (and as of today), Costco lost 17% of its value; Kroger is down 30%; Sprouts is down 24%; Wal-Mart took a hit but seems to be holding its own.