The global stock markets are in turmoil. There are rumblings from China, Europe and the USA. Are we in the middle of another crash – or is this just market turbulence? Whatever it is, we’ve seen this sort of thing before, and we should brace for the potential bear* market. It’s also just good business practice to be prepared for a downturn.
So with that in mind, here is what we potentially could expect to happen during the next few weeks and months and maybe (but hopefully not) years.
One of the findings, back in 2001, from McKinsey’s Evergreen study, was that there are a niche of companies that successfully grew through making a series of acquisitions. We called them M&A-led-growth companies. (M&A stands for Mergers and Acquisitions)
There were a few caveats.
I’m struck that there are some basic things that those of us from the Internet sector just take for granted, and yet sometimes appear to be new ideas to those used to other sectors.
We learn these basics by being founders, being embedded in the start-up and growth ecosystem, taking part in events like Webstock and Gather and by reading sites like Hacker News, books like Lean Start-up and following and understanding stories like Amazon, Apple, Trade Me and Xero.
Ryan Baker and Andrew Schofield have done it before, building BookIt and then selling it to Trade Me in 2010. It’s 2013, and the pair were still spending time at Trade Me up until a few months ago, but were also working on a new company – Timely.
Timely is an online service for companies who run appointment based businesses. Their website is a homage to doing everything right for cloud based businesses selling to small business.
Today we saw an announcement that Optimizer HQ has raised $4 million from local and offshore investors. They are apparently considering an IPO, but needed cash to tide them over for the next few months.
For me Optimizer HQ, who have 60 staff here and offshore, comes out of nowhere, from the non-aligned community or non visible community in the diagram below.
Brian Gaynor asks, towards the end of his latest column:
Sam Morgan and Rod Drury have created $1 billon technology companies in New Zealand but why haven’t we produced more?
Lance Wiggs has been appointed to the Physical Science and ICT Investment Committees of Return on Science.
The success of an investment does not depend on what is generally known about a company at the time the investment is made. Rather it depends on what gets cheap jerseys to be known about it … Therefore wholesale Cleveland Browns jerseys it is not the profit margins of the past but those of the future that are important to the investor.
That’s a quote from Philip Fisher, an investor with a long term perspective and a fondness for buying stocks in high technology companies. That was a very uncommon approach to take, given that he was active from 1928. He wholesale jerseys wrote Common Stocks and Uncommon Profits in 1958, a book which is still well worth reading today.
At LWCM we see that value comes from satisfying end user needs, but that’s only part of the story. This diagram from a presentation I gave at Innovation Tech Week yesterday explains a bit more:
In order for investors to get their lasting returns, we need to also identify and sell to the paying customers, and to build a company that creates, sells and supports the products and services. Investors also need to think about lasting returns, and not about quick gains. Investors searching for quick gains are really indulging in trading, and while that may be perfectly valid as a financial strategy for some, businesses themselves should focus on creating lasting value.