Open Source Business Analysis

I was talking with a private equity firm last week about how they did their research into software and hardware technology niches to understand potential investments, competitors, and market dynamics.  They estimate that 80% of the material they read is a waste of time, yet they consider their research process a proprietary advantage.  I think that conversation reveals a basic business assumption that is about to change dramatically.

In every industry, you can picture thousands of unfortunate analysts across dozens of companies all doing essentially the same work.  They’re all forecasting market growth, analyzing competitors, trying to understand customers, and so on.  And they read the same news, the same financial reports, and the same market research, for the most part.  The results of this work are closely guarded proprietary analyses, yet they’re all very similar.  There’s a huge amount of duplicated effort that doesn’t add much value. Continue reading Open Source Business Analysis

The Many Faces of LinkedIn

Having taken a look at LinkedIn’s financials, I also want to drill down a bit and look at the product from a user perspective.

LinkedIn is clearly going to have an extremely good IPO, whether they end up valued at $3 billion or $4 billion.  So it’s odd to say they’ve done a bad job of leveraging their assets, but it’s true.  The reason is that LinkedIn is really three or four very different products bundled into one.  The company has done a good job of developing and exploiting the recruiting product, but they’ve been pretty mediocre on the other ones, whether due to constrained resources or a lack of attention. Continue reading The Many Faces of LinkedIn

Is the LinkedIn IPO a Good Deal

Among social networks, LinkedIn is a fascinating outlier.  It’s by far the largest professional network, and as such it personifies the debate over whether people want different networks for different purposes.  I think the answer is yes.  Both Facebook and LinkedIn are based on webs of relationships, but no degree of privacy controls or slapped-on features can turn Facebook into an effective business networking tool.  Perhaps I’m biased.  For me, Facebook is a place to socialize, while LinkedIn is a place to promote myself professionally.  Just because two products look similar, it doesn’t mean they do the same job.

Let’s take a closer look at LinkedIn now that the company is moving towards an IPO. Continue reading Is the LinkedIn IPO a Good Deal?

Who Will Survive Hospital Consolidation

Healthcare providers are under pressure on a variety of fronts.  Patients demand extensive care regardless of cost.  Payers both public and private are struggling to reduce costs, and the resulting billing struggles result in high administrative overhead.  Staffing is in short supply, resulting in high overtime and temporary staffing costs.  New technology and equipment require large capital expenditures that many facilities cannot afford.  Pharma and medical device manufacturers get a much bigger share of the healthcare profit pie.

The situation is even worse for hospitals in particular.  They’re overwhelmingly complex organizations, and as a result they’re difficult to manage.  They also have high fixed costs, and there is often over-capacity in specific geographical markets, leading to intense competition.  From a Porter’s Five Forces perspective, most of the puzzle pieces look pretty bad. Continue reading Who Will Survive Hospital Consolidation?

What Can HCA Tell Us About the Healthcare Sector?

When HCA Inc. was acquired in 2006 by a private equity consortium including Bain Capital, KKR, and Merrill Lynch (now of course Bank of America), it was the biggest leveraged buyout in history.  For that reason, the announcement a couple of weeks ago that HCA was pricing its IPO at around $3.7 billion piqued my interest.  The company is the largest private healthcare provider in the US, providing 4-5% of all hospital services with 156 hospitals, not to mention 97 freestanding surgical centers.  Just because of HCA’s sheer size and influence on management practices, it is an interesting company to analyze a bit more closely to understand trends in the US healthcare sector. Continue reading What Can HCA Tell Us About the Healthcare Sector?