'Crystal balls don't exist, but landscape analytics can help chart a strategic course through complex technology markets'
XLP applies cutting edge analytics and landscaping tools to synthesize and recommend clear, simple investment hypotheses in technology markets. These tools were developed and refined in-house over the past two decades by the founders, building on 40 years of combined management consulting client and case experience, and over $250mm in venture and private equity deal experience. Although we employ our tools primarily for the purposes of operating our investment funds, we occasionally work on an advisory basis with large technology, consumer goods, energy, semiconductor, or telecom companies. We apply our investment tools to help our clients quickly assess dynamic and rapidly changing technology markets, chart research and development priorities and multi-year program budgets, and provide due diligence during high tech mergers and acquisitions.
The Pace of Change in Technology Markets
While it is often stated that the pace of change is accelerating, this is not uniformly true across all technologies and all markets. Our tools and analytics precisely quantify rates of growth in both specific and broad technology categories, so that our clients can develop appropriate leadship vs. fast follower strategies. When technology markets are growing rapidly, rapid fire R&D programs paired with prospective IP filing programs, and aggressive quick release strategies tend to predict ultimate market leadership. However, zero-sum or collapsing technology markets often prove that platform strategies, technology choke point ownership, and shared R&D costs through multi-party licensing programs can often drive greater profitability.
Competitive Advantage in Technology Industries
The pursuit of sustainable competitive advantage, even after more than 75 years of business strategy case studies, continues to evade even the seemingly unassailable technology companies. Their strategy frameworks are often wrong, misleading, based on traditional - albeit easily measured - business metrics. Traditional corporate market sizing and income statement-based time series metric analysis provides only a partial view of the shape of an industry. In high tech industries, patterns of collaboration amongst leading researchers and scientists, as well as their publication volume, and ultimately their intellectual property rates of productivity, can often be more meaningful indicators of market structure. Certainly they are more accurate illustrations of the pattern of activity these technology companies engage in. Predicting or anticipating these market dynamics evades most Wallstreet analysts, as the traditional financial and accounting tools provide only limited portals into the business and strategy of managing a high-tech company. Our data mining and technical literature analytics summarize and quantify these operating levers, and provide both high-level and detailed audits of competitor activity for the strategy and executive audience.
Working with XLP
Although our team is often deployed in service of our several investment funds, we occasionally take on new clients. We are happy to work with leading technology company executives, and the easiest way to learn more is to email and to request a phone call introduction, where we will be happy to walk through a presentation of our tools, analytics, and an introduction to our team.