This academic debunking of XBRL shows that we are now in the slough of despond and great productivity will soon ensue. April 5, 2013Posted by bernardlunn in Uncategorized.
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Hell, what do I know, I am just an entrepreneur and investor and this study is from a leading business school no less but….if you enjoy amateur hour rants read on.
Here is my theory.
1. The stock market today is driven by High Frequency Trading (HFT) and Central Bank Intervention (CBI). Fundamental analysis – the sort of thing that XBRL enables – is irrelevant in this world.
2. This too shall pass. HFT plus CBI is no way to run a real market. When everybody sensible (read, the herd) ignores fundamental investing, you can be sure that a few contrarian investors will be making fortunes with fundamental investing (spotting good companies at low prices, you know the silly way that Warren Buffet wastes his time). Those overlooked gems are likely to be small caps, lost and lonely in small cap hell. When news of these investing dudes surfaces in mainstream media, lots of people will rush to join the action. They will need some tools, which will have to be XBRL based.
3. XBRL is deeply disruptive to “the way we do things around here” on Wall Street. By Wall Street I also mean the conventional academic researchers at the “leading” business schools. XBRL democratizes financial analysis in the same way that PCs democratized computing and social media democratized HTML. When you can compare the cash holdings across 100 companies with a single entry in your spreadsheet, or see quarter to quarter revenue growth for every company in the index that you devised, do you need mega brokers and their me too reports churned out by freshly minted MBA graduates in an outsourcing center somewhere?
So, expect a lot more negative stories about XBRL. Ignore them. Unless the lobbyists manage to overturn the XBRL Mandate; if that happens NYSE and NASDAQ will die as trading shifts to Asia and London.
I think XBRL is nearing the bottom of the slough of despond in Yossi Vardis great “picture tells a thousand blog posts on innovation”. That means great stuff ahead for XBRL. 2013 should be year XBRL goes mainstream, but as I tend to underestimate the power of inertia, it will probably happen more in 2014.
Hyperlocal Reporting Needs To Be Paid Through Hyperlocal Commerce. February 19, 2013Posted by bernardlunn in Uncategorized.
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The key to a sustainable Local News business is a great proposition for Local Merchants. Locals should sell to Locals and that should be 90% of revenue for Local News. Chains will pay $1 CPM via Ad Nets. That is Patch’s problem. Imagine a local community with 12,000 inhabitants. If you get 50% as regular readers you have “the market”. That is only 6,000 readers. How on earth do you meet payroll selling banners at $1 CPM? Fergeddaboutit as they say in Brooklyn. Writing one post about a celebrity is a far, far smarter business proposition. Nick Denton cracked that one.
Local merchants connecting to Local customers through a Local Newspaper is the Local Tollbooth that Warren Buffet loves and that has had entrepreneurs and VCs salivating about Daily Deals and Hyperlocal News for a decade or more. Both Daily Deals and Hyperlocal News are in the Slough Of Despond and that offers a great window of opportunity for those who like to zig while others zag.
Daily Deals aka Groupon works on the model of telemarketers in a distant call center. This is both expensive and unsustainable. The Internet giants eyeing this market like Google and Facebook have the opposite strategy, they assume that merchants will sign up online. Somewhere over the rainbow that may happen, but it does not seem like a match for today’s reality either.
Local Merchants want calls or feet through the door, not clicks. That is why Google tried to buy Groupon for $6 billion. But a business based only on coupons is not the answer.
Nobody has cracked this one yet. Somebody will. My bet is that news will be key – that commerce will pay for access to customers who come for news. That is back to the future. The last decade has decimated, commoditized and cheapened the news business, so I recognize that this is a contrarian bet.
The local commerce bit will also require a bit of back to the future thinking. Neither remote telemarketers nor self service alone will provide the answer. Somewhere in the mix will have to be locals talking to locals, old fashioned selling using shoe leather, pressing the flesh and breaking bread together. The mix of local schmoozing, call center and self service will crack this, bit the proportions of this cake mix are still not in any recipe book.
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I have seen lots of good comparisons at a technical level. At the business level I see it as a trade off between ease of getting started vs flexibility to adapt to future needs. But more than that it is a business bet on which platform will still be thriving ten years from now.
WordPress is a no-brainer if you want a blog centric CMS and your technical capability is limited.
At the other extreme, Django works if you have a couple of good developers and you are building something quite new. It won’t get you a super quick result, but nor will it constrain you when you want to innovate.
Drupal sits in between these two. That could either put Drupal in a confused position, neither “fish nor fowl”. Or it could be in the sweet spot. I incline to the latter view.
I think we will see Drupal emerge the winner from this for two reasons:
1. The network of enthusiastic developers makes Drupal a platform that companies can bet “will still be around in ten years time”. Some developers will point out that most Drupal developers are not rocket scientists. That does not matter. In developer centric platforms, quantity does trump quality; just ask Bill Gates. Django fans will proclaiming its technical superiority as the platform fades into the history books.
2. WordPress will struggle to reinvent itself as we move from a blogging centric world to something else that emphasises photos, videos and quick text. WordPress is doing a good job adding photos, videos and quick text features, but this is playing catchup. I say this sadly, I am a “wordy” guy, I enjoy writing and I love WordPress – it just works and is never annoying. But if I was CIO at a publishing company I would not bet on WordPress.
Why Twitter Killed My Posterous Travel Blog, Why I Don’t Care But Why You Might Care. February 17, 2013Posted by bernardlunn in Uncategorized.
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I used Posterous as my travel blog. I did not want that content going to my WordPress site as I keep that for more professional stuff.
Why I like(d) Posterous:
1. Post by email. This was a biggie for me. It was the simplest way when I was on the road, posting straight from my iPhone’s Camera Roll. This was what set Posterous apart when they started, but now everybody offers this. I just enabled it on WordPress and have posted this by email.
2. Private Subscribers. I did not want my travel blog public. My reason was an unusual use case. I was travelling with my kids and in my gut distrusted that content being public. So I really used Posterous as a glorified email list for my family and friends. (I don’t trust Facebook and never got that habit). That fit my needs but I can see that Posterous would find that hard to turn into a business and why this won’t work for Twitter’s model.
3. Own domain: I actually did not set up my own domain but I had a vague idea that I might in the future. I liked the fact that Posterous made this dead simple. Of course Twitter wants to close this option; their business depends on advertising so they cannot lose traffic to your domain. I assume that Tumblr will sell at some point (they have investors) and the big consumer Internet ventures that are Tumblr’s natural acquirers will want to kill that option. WordPress may stay independent, but that is still a crap shoot. If this matters to you, route content that you care about to a domain that you control from day one.
4. Cross post to multiple social networks: I read that Posterous enables this but I prefer Hootsuite. Actually the only three that are relevant are the professional ones – WordPress, LinkedIn and Twitter. I can cross post from both WordPress and Twitter, so don’t really need Hootsuite any more.
Why I really don’t care that Posterous is closing down. This was ephemeral content. Being self-mocking I would call these “brain fart” posts. It was fun for me and sometimes for family and friends, but archiving these posts would like keeping every drawing your kids do; a manic, self important task that just clutters our lives. I sent them by email so I can retrieve them that way if needed. I may archive them somewhere but if I forget, I won’t lose any sleep. In short I don’t care enough to pay $5 per month to use PostHaven (the site created by one of Posterous’s founders).
So I don’t care. But you might care. If you use Posterous or something like it for professional/business reasons, you might care.
Now look at these 4 features from the point of view of a professional/business site:
1. Post by email: you can get contributions from anybody with a smartphone. You no longer have the friction of getting people to download an app. Nor do you need to tell a contributer to use one social network to post when that contributer prefers a different social network.
2. Private Subscribers: of course this matters in business. Some content should only go to paying subscribers or to colleagues/partners on a need to know basis. The “must be open to everybody all the time” mantra is driven by the need of big social networks to sell a lot of advertising.
3. Own domain: in the world of content marketing (which LinkedIn has put in the spotlight), having your own domain is essential. Scattering your content across multiple social networks owned by firms that sell ads against that content is an inherent conflict.
4. Cross post: if you have content on your own domain you want to get traffic by amplifying that content across social networks.
The end of Posterous leaves a hole. It will be interesting to see how the market fills that hole.
Tags: cities, demographics, everyblock, hyperlocal, news, patch, suburbs, towns
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Patch came from a Suburban insight by Tim Armstrong and Burbs fits the view that you care about Local News when you become a parent.
Yet it was the big city vibe that stirred passions when EveryBlock and the great newspapers from the print age mostly came out of the cities.
But in those days the cities were more like small towns today and had families and multiple generations living together.
The villages that are hubs in the country have often lost the youngsters who drive online adoption. And they are small enough that news travels mouth to mouth, people don’t rely on a news intermediary.
I find it hard to think about this clearly as I am a parent who dislikes the car culture isolation of the Burbs; I like the extremes of small villages and huge cities.
Is there any data on this? Where are the profitable Patch sites? Where are the Authentically Local sites?
Hyperlocal Slough of Despond. After EveryBlock, Hipster & Patch Will Authentically Local Create The Sustainable Model? February 8, 2013Posted by bernardlunn in Hyperlocal, Journalism.
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Today many online publishers will be eying the AOL Q4 results. A small sub segment will be poring over every number and word revealed about AOL’s expensive experiment in hyperlocal news called Patch.
UPDATED: quick look at Q4 results. Good overall, but this is all I could see about Patch – “lower year-over-year Patch expenses”. So, I assume that means no revenue growth or they would be bragging about that and starting to scale back quietly.
Coming the day after NBC closed down EveryBlock without any notice, bad news about Patch will signal that we have reached the slough of despond in Hyperlocal. If that is the case, those who still believe in Hyperlocal will be cheering. This will be like the days in 2002 when everybody declared that the Internet and software were hyped and useless. This Economics Of Dreams picture from the great Israeli entrepreneur Yossi Vardi says it all:
I think we are somewhere between Panic and Capitulation in Hyperlocal. If I am right, it is a wonderful time to be an entrepreneur in Hyperlocal. This is like being Mark Zuckerberg in 2003 or Marc Benioff in 1999 when everybody sensible had written off social networking and enterprise software.
Hipster was the other Hyperlocal experiment that died recently. Unlike EveryBlock, few attended that funeral. It passed unnoticed.
What all these experiments failed to understand is that there is no hip early adopter market in Hyperlocal. Hipster failed most obviously in this regard. That name is just so appallingly bad for Hyperlocal. The hipster market goes to Foursquare and Instagram. Young singles care about who is hot in a hot bar. They don’t care about the kid’s soccer match, the school budget, the town hall meeting. The hip young singles would not be seen dead hanging with the grannies and the kids at the street parties. To make it worse, Hipster forced you to download an app before you could report news (it even insisted on IOS6, so you had to get crappy maps as part of the package).
EveryBlock did a lot better. Lots of people mourn EveryBlock’s passing. The mistakes are not as obvious as Hipster. It also got some early adopter tech love because the founder of hipster framework Django was one of the founders of EveryBlock. I dropped in once on EveryBlock but did not stay. It did not have content for the place I cared about. But more important, the tone was wrong. There was a lot of do-gooder talk about caring about your neighborhood that did not resonate with me; people who care about the neighborhood are out on the streets and in town halls doing something about it. Being on a forum or tweeting about something that affects a neighbor next door is just weird. Why not pop in and say hello? I hear that a lot of the EveryBlock “community” (a horribly overused word) became very negative in the later stages. EveryBlock was also only a city thing, it did not speak to people in villages and small towns. It was also too US centric.
One blog comment about EveryBlock’s demise, from Mark Armstrong of Nieman Journalism Lab nails the issue. He says you care about Local when you have kids. As a parent I agree. I am not sure I agree that Local news will end up being a byproduct of a parenting app. The issue is broader. How do you reach a mass market without going through the hip early adopter market?
But the most fundamental problem was that EveryBlock did not have a sustainable business model. Getting a one off grant is the worst way to build a sustainable business. VC will at least force you to make business decisions. EveryBlock went straight from philanthropy (money is there to do good) to corporate world (money needs to make a lot more money and it needs to do it this quarter) without going through the normal rigors of start up life that force you to connect to a real need that will generate revenues and profits. There was no real editing of the content, because people have to be paid to edit (curation eventually turns into spam and scam, people need money to do a real job).
That is what AOL is attempting with Patch, paying reporters and editors to cover local news.
AOL’s Patch experiment is a big one. Tim Armstrong, CEO, has made this his big bet. It therefore does not lack for investment and commitment. But he is running a public company and that means he needs to show results that show up in quarterly statements. If the results don’t show up, he will be faced with a “kill Patch or kill my career” decision. An entrepreneur like Steve Jobs or Marc Benioff or Jeff Bezos, with a track record or going against the herd and winning, can play that contrarian game. Tim Armstrong does not yet have the track record to thumb his nose at Wall Street and have Wall Street come back and ask for more.
I think Tim Armstrong made the right bet on Hyperlocal. Whether Wall Street gives him enough runway to prove his thesis, is another matter. I think there is a pony in there somewhere. I am not sure that AOL has found the pony and that it is called Patch. Maybe if Google was doing Patch it would be different. Their massive cash cow can withstand years of investment in dreams until they pay off. AOL only has the dwindling cash cow from dial up subscriptions. But Google would not do Patch, they fundamentally don’t believe in the model of paying reporters and editors to cover the news. I hope Patch makes it. Lots of jobs are at stake. If Patch does not make it, something else will. The reason is very simple and Warren Buffet articulated it years ago when he called local papers the best toll booth around. Buffet is back buying local newspapers. Of course now he is doing it at very low valuations (like 4x EBITDA). That shows the problem. Hyperlocal comes from a Silicon Valley world that wants 10x revenue and 100x EBITDA. That is what you need at exit to fund the start up risk. When Buffet buys at 4X EBITDA, he can wait for a decade for his bet to pay off.
In fact Hyperlocal is a horrible name. I use it because it is the accepted name. I think of it as Hype? Err. Local. It was a pathetic attempt to hype an unsexy business. Local News does not sound like something that will get a VC or Wall Street Analyst salivating. Yet Local News is what this is about. Call it Hyperlocal and you can call it Color and raise $41m in VC funding. Or you can do Yet Another Daily Deals site and get funding. Daily Deals are about connecting you to local merchants. Like Coupons – remember that is where the name Groupon comes from. But do you buy a local newspaper to get the coupons? No you buy it to get the local news and a few coupons fall into your lap. The Daily Deals business is unsustainable without Local News and vice versa. That is a blindingly obvious insight but nobody has connected those two dots yet to create a sustainable business. Somebody will, once we get past Capitulation.
So when all the hot money has left, who will make a success of Local News? I think it will be the same sorts of people who made a business out of Local Newspapers originally, hardscrabble entrepreneurs who are deeply committed to the area they live in and who love reporting the news. You can see the shape of this in the Authentically Local movement. This is tiny today. It is like the Homebrew Computer Club in the 1970s. You need passion to be in the Authentically Local publishing business; you are certainly not doing it for the quick bucks or the financial security. As the founders of Authentically Local say right on their cover – Local Doesn’t Scale. But it may do something more important which is create a sustainable model for news in local communities.
The greatest minds in our generation are creating the new leads for Glengarry Glen Ross January 18, 2013Posted by bernardlunn in Uncategorized.
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I just watched Glengarry Glen Ross again. It left a deep impression when I first saw it when it came out in 1992. It has the most amazing cast and Al Pacino is on top form. But it is the Jack Lemmon character who’s performance sits with you. He is an ageing sales guy working in a crappy boiler room operation selling real estate to suckers who desperately needs to close a sale to pay for the hospital where his daughter is in a bad way. We never see the daughter. We only see him on the phone to the hospital. In fact we never see any women in this movie, they are all off stage. Women – wives and daughters – are why these guys hustle.
America used to be about sales. The never give up sales guy was like John Wayne, a kind of folk hero. He has been replaced by the hacker as folk hero. But if you watch this movie, you will see the power of leads. That is all the hacker is doing now – producing the leads. I don’t know who said “the greatest minds of our generation are working on generating clicks” but that does nail the reality of the social media wave of innovation.
Tags: competitive advantage, enterprise software, moat, SaaS, subscriptions, transaction revenue
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Yes, “software is eating the world” as Marc Andreessen puts it. But the software game is changing at a fundamental level. The opportunities are massive, but it is harder than it used to be to create sustainable value.
The big change is the revenue model for software; that is as fundamental as you can get. The revenue model used to be perpetual licensing. Then it moved to subscriptions aka SaaS. The next iteration is to transactions. The software enables a transaction to happen and the software owner takes a cut of the transaction as revenue. This fully aligns the interest of the software owner and the software user (as opposed to the licensing model where all the risk/reward passes to the user/licensee). This transaction revenue is variable but predictable; the metrics are similar to consumer web ventures.
Software licensing was a wonderfully simple game. Once you had built the software and sold it, all you needed to do was send a disk to the customer. The first time I saw this for real – I had sold the deal, signed the contract and asked “what do we have to do now?” and was told “just send them the disk”. This was a contract worth high six figures and the cost of the disk was a couple of bucks. During contract negotiations my boss told me that “the only thing we can warrant is that the software will have bugs”. My eyes were opened to the wonders of 100% gross margins. Customers eventually woke up and revolted against having all the risk passed to them; into this gap charged the SaaS pioneers.
During the SaaS wave of innovation, which started with Salesforce.com over a decade ago, the game got a bit more complicated. But only a bit. You now had to manage a data center or an outsourced infrastructure provider. Lots of vendors rushed in to make that pretty simple. Gross Margins went from 100% to around 85% to pay for the hosting infrastructure – still incredibly high compared to most businesses.
But SaaS is still a licensing game and that still passes most of the risk and all the upside to the customer. The SaaS vendor takes away the hardware capex cost and the technical implementation risk. But these are not costs and risks that keep the CXO folks awake at night.
To really build value in the enterprise software you need to build a moat to keep out the “ankle biters”. Then you need to put alligators in the moat. That may sound a tad cryptic, so let me explain.
“Ankle biters” is a term coined by Fred Wilson in this engaging talk to describe the startups that will invade any good niche with dramatically lower prices. The upstarts use open source and cloud infrastructure to copy the functionality of market leaders for a fraction of the cost and then use that lower cost to offer an alternative to the market leader at a dramatically lower price. A classic upstart game is to offer free license and charge only for maintenance. Say the market leader is charging $500k for a Perpetual License with 20% Annual Maintenance (ie $100k per year). The upstart simply charges $100k per year; whether they call this an Annual Subscription or Maintenance with a Free License is mostly optics.
It is very hard for the market leader to defend against this. Their cost structure and sales team incentives make it impossible to compete on price. The usual response is to greet the upstart with FUD and scorn, pointing out the functional gaps. This does not stop the upstarts; their customers happily trade a 10% loss of functionality for a 90% drop in price.
The only sustainable defense is to build a moat. Historically this has been through Patents but this is increasingly a weak defense (the reasons are too complex to cover in this post). The best moat is network effects, where each new user brings in more users or brings in data (or both). For example, you can easily recreate the functionality of Facebook, Twitter or LinkedIn but that does not give you a shot at beating those network effects champions.
Network effects is the best moat. In Consumer markets that is all you need. There is now plenty of advice, most of it free in blogs, telling you how to generate network effects. Despite all that advice, this is a totally Darwinian game, thousands of ventures attempt this and only a handful succeed.
Nobody has yet mastered the game of network effects in B2B. This game is just starting. Fortunes await those who succeed, as B2B has a direct revenue model; combining that direct revenue model with network effects is the magic quadrant of ventures.
What about the “alligators in the moat”? This is using service as a game changer. This matters in B2B where there is lots of functional complexity. To get people to commit to transactions you need to offer really high quality 24/7/365 support. That is of course not easy or cheap but once you build it you have a real competitive barrier.
HP Autonomy. When You Need Forensic Accounting For Enterprise Software, Who Ya Gonna Call? November 22, 2012Posted by bernardlunn in capital markets, Corporate Strategy, Deal-making, Enterprise Sales.
Tags: autonomy, forensic accounting, HP, revenue recognition
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Wow, what a story! It makes me wish I was till writing the Enterprise Channel for Read Write Web. It is a fascinating story because how you see it depends on where you sit. This story sits at the intersection of accounting, software technology, enterprise sales and business strategy. I have sat at all those intersections.
The best Forensic Accountants usually make money from their skills by shorting stock. Folks like Jim Chanos who spotted problems at Autonomy don’t need to know a lot about running an enterprise software company to know that when cash flow is way less than profits, something good is not up. They look for simple signals such as high receivables and low deferred revenue. You don’t need years of running an enterprise software business to know that those signals are worrisome (or exciting if you make your money shorting). Of course if, like Larry Ellison, you have years of running an enterprise software business and had your own issues with revenue recognition, you will quickly come to a conclusion that the price being asked for Autonomy was too high.
Why did the massive number of highly paid accountants and lawyers from fancy firms not read those same signals? I am sure they asked a few questions around this but got snowed by the replies. That is when they should have got advice from a grizzled veteran of running an enterprise software sales team who has seen every technique for boosting revenue at the end of a quarter or year (channel stuffing deals, deals done on the 35th of the month, bundling deals with disguised discounts – the gaming ingenuity is endless). Then you need an accountant who has a passion for understanding the nuances of IFRS and GAAP accounting standards as they relate to revenue recognition (yes, they do exist, a quick bit of online searching will surface them and I am sure they can use a consulting gig).
Parsing through the “he said, she said” stories, my guess is there was something wrong in the accounts, something that was either aggressive accounting or fraud (I will let the lawyers parse that one as I am sure they are doing) but nothing even close to enough to justify the $5bn that HP is claiming. HP needs to decide whether they are a consumer company or an enterprise company. The Autonomy acquisition was part of a strategy to ditch the PC and the consumer business and emulate the IBM turnaround under Lou Gerstner. HP clearly wanted to do the deal, knew they were over-paying and were OK with that as part of a broader strategy. If HP had stuck with that strategy and executed well, the price paid for Autonomy would be a footnote in history.
It looks like Meg Whitman leans to the HP as a consumer tech company strategy. That fits her eBay past and the prevailing fashion in Silicon Valley. She may execute brilliantly on that. What clearly does not work is marching determinedly north (enterprise) and then a little later marching determinedly south (consumer). The HP Board is rightly getting a lot of flak for this kind of flip flopping that destroys value really fast. Nor will a fudged strategy work (“a little bit of his and a little bit of that with chocolate sprinkles on top”). Focus matters. Strategy means clarity. “Which direction do we go, Sir?”
Looking at this from a modern software perspective, this mess adds to the move from perpetual licensing to subscriptions and transactional revenue models. These new models simply don’t lead to the same frantic “must hit the numbers this quarter by bringing in that sale NOW and maximising every $ on that sale”. Subs and trans revenue is fairly stable and predictable. Nor do subs and trans models leave as much room for gaming. I suspect the Boards of enterprise software companies that still rely on perpetual licensing will be debating this subject more vigorously than before the HP Autonomy story broke.
Where Do Niche Enterprise Software Companies Go To Retire? October 10, 2012Posted by bernardlunn in capital markets, Enterprise Sales, Enterprise Web 2.0, SAAS.
Tags: george koukis, holding company, misys, private equity, rollup, temenos
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Many years ago I worked for Misys, after they acquired a company that I worked for. The founder, Kevin Lomax had simply taken the Hanson Trust model (for industrial companies) and applied it to software. Misys was a good exit option for the founding management team and Misys had a simple model that worked very well for a long time. The basic model worked as follows:
1. Buy a mature enterprise software company in a niche market. Mature meant lots of Maintenance Fees, which has good revenue visibility, almost SaaS like. I worked at Kapiti when Misys acquired the company. This was Misys’s first foray into banking software, their initial market was Insurance.
2. Buy other companies in the same niche, become the dominant vendor and get economies of scale. Fairly soon after buying Kapiti, Misys acquired ACT (a public company that had a couple of bad quarters and was available at a good price). ACT owned Kapiti’s two major competitors – Midas and Kindle. Overnight the instructions changed from “beat the crap out of those guys” to “compete, sort of, but do it nicely and for goodness sake don’t get into a price war”.
3. Then buy lots of young and more technically leading edge companies and sell that into the market that you already dominate.
So, what is wrong with this picture? Today, Misys is a shadow of its former glory. It was nearly bought by Temenos and now is a bit vulnerable after they walked away from the deal. In 1996, when Misys owned Midas, Kapiti, and Kindle (representing the number 1, 2 and 3 by market share), a tiny upstart run by a great entrepreneur called George Koukis decided that Misys was vulnerable and could be taken on! That was some crazy strategy, but he was right. His company was Temenos. The fire had gone from the belly of the Misys folks, but it burned fiercely at Temenos. (Watch George Koukis, a Greek, talk straight about the Greek Crisis, a refreshing entrepreneurial take on a tired old story).
The big question for all the holding companies that emulated Misys and all the Private Equity buyouts and roll-ups is how do you keep that fire in the belly? How do you go for growth when you already dominate your niche? The basic strategy is to move into adjacent niches. This requires a start-up/entrepreneurial mind-set, the kind of skills that the company had in its founding days and then lost.
Misys would have been fine had they not had a really driven entrepreneur like George Koukis coming after them. There was no disruptive technology or new market to worry about. Temenos had no tail winds to help them. The same is not true today. The legacy companies are being attacked by lots of Koukis like entrepreneurs and these entrepreneurs have the huge tail wind of working with native cloud technology. The old-software company’s retirement home is not as serene as it used to be.