3D Printing – Unique Webinars

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The Certified Emerging Company Analyst designation recently ran a very interesting webinar entitled “An Overview of the 3D Printer Industry.

The Certified Patent Valuation Analyst designation recently ran a webinar on “The Intersection of 3D Printing and Intellectual Property”.

These webinars are available at www.certifiedeca.com and www.cpva.info respectively. Mention The Disruptive Investor for a 10% discount.

Must Have Strong Programming Efforts to Scale Fast-Growing Businesses

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I found this comment on www.quora.com to be extremely insightful.

In companies where the technical operations are world-class in size and scale, it becomes necessary to be able to directly develop and extend the technologies being used since the scale of the operation means that new technological ground is constantly being broken. Closed-source off-the-shelf technology (even with direct on-site assistance from the vendor) places the company at the mercy of the vendor, who implicitly lacks as strong a motivation to solve key scalability challenges because it is not their core business (it’s just another vendor, albeit an important one). The vendor may also lack the ability to extend their technology to the scale at which it is being used, and will resist attempts to evaluate whether their technology should be replaced or re-written.

The Importance of Names

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“What’s in a name? That which we call a rose
By any other name would smell as sweet.”

Romeo and Juliet (II, ii, 1-2)

When it comes to naming emerging companies, I disagree with Shakespeare: Names matter.

For instance, I have used SurveyMonkey to conduct surveys. However, I stopped using SurveyMonkey because the name of that company is very unprofessional and ill-suited for the people that I wish to recruit to participate in surveys. My sending requests for participation in SurveyMonkey surveys would reflect poorly on me and my business. This is a shame as SurveyMonkey is a very good tool.

I believe the names of emerging companies should be easy to pronounce; related to the business at hand (after all names are a marketing tool); and suited to the community that the business is designed to serve. As for the last point, names can be cute if the business is directed to children, cool if directed to teenagers but must carry some degree of gravitas if directed to professionals.

It is best if a name of a company translates worldwide. For instance, Kodak is pronounceable in just about every language. (Also, names that have the same letter at the beginning and end are said to be catchy and memorable.) On the other hand, the automobile named Nova, means “doesn’t go” in Spanish.

Finally, names that begin with the letters at the beginning of the alphabet benefit from being listed at the top of directories and trade show listings.

I welcome your comments.


Be Wary of Illogically Capital Intensive Businesses

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My understanding is that Chegg.com has raised $200 million from investors. Chegg.com arranges for the rental of college textbooks. It seems to me that such a business should be a tremendous generator of cash. Why is $200 million needed to ignite the revenue generator?

It seems that Chegg.com is inexplicably devouring cash.

Whatever the merits of the business model may be once the Chegg business gets going and despite the pain (of overly-expensive textbooks), a business this illogically capital intensive is a non-starter for me.

I welcome your comments.

Assessing Revenue Quality

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As George Orwell might have said, “Revenue is revenue. But some revenue is more valuable than others.”

Since it is much more expensive to recruit a new customer than to serve an existing customer, recurring revenue is more profitable and thus more valuable than revenue received episodically. It is better to be a zookeeper than to have to embark on safaris when searching for new customers.

Revenue generated from a marquee or referenceable customer is more valuable than revenue that comes from a generic or non-referenceable customer.

Revenue derived from customers that are price insensitive is more valuable than revenue that comes from customers that are more price sensitive.

Revenue that can be seized immediately is more valuable than revenue that will take a long time to receive.

Another way to think about revenue is to put it in the context of agriculture.

Slash & Burn refers to monetization strategies that cause customers to defect. Customers are essentially cut-down and sold off. They are monetized, but lost in the process. Examples of this are aggressive sales tactics such as when salesmen try to sell you warranties, cold callers, and pop-up advertisements. These tactics bulldoze the customer once while not leaving a fertile environment to receive follow-on sales, referrals or generate positive word of mouth marketing.

Harvest refers to monetization strategies that don’t impact the customer experience and ultimately do not affect usage levels. These strategies monetize customers but like agriculture they leave the customer’s roots in fertile ground to be monetized again in the future. Examples of this include subscription businesses such as magazines, insurance premiums and pharmaceuticals.

Fertilize refers to monetization strategies that enhance the customer experience, increasing the rate at which customers grow in value or in number. Examples include companies such as Amazon and Netflix whose artificial intelligence enables them to make better book and movie recommendations as customers use their services more intensely. Also, products–such as Bloomberg terminals–that make their users more competitive are priming them for more purchases.