IPO momentum building on OpenTable

22 05 2009

Despite a broader market skid yesterday, OpenTable entered the public markets with a very respectable IPO that’s giving hope to the dozens of venture-backed companies hankering for an exit.  Good coverage by the San Francisco Chronicle points out that this is no flood-gate event, but it certainly wasn’t a failure.  Watch to see if OpenTable holds onto its 60% gains from yesterday; it closed at $31.89 and trades on the Nasdaq under symbol OPEN. The company will likely face difficulties growing revenue since it appeals largely to mid- and up-scale restaurants and diners – a market that is prone to heavy recession pullbacks.  (UPDATE 5/26: On a day when the tech markets were bullish, OPEN has stabilized and shed its value down to $26.80 or so.  While this is still a 30%+ return for IPO investors at $20, it’s a substantial decline off the opening day hype.)

Image from VentureBeat

The impetus for innovation at OpenTable has never been larger now; their revenue potential in servicing restaurant reservations is not the making of a billion dollar company.  As the company develops trusted relationships with restaurants however, look for OpenTable to extend online and mobile marketing services for its clients.  If management sees its core capabilities in the online reservation space, look for it to expand to golf courses, boutique hotels and villas, and private events to consolidate market share in those niches as well.

If other pre-IPO companies (and their VC investors) like what they see, there could be a sizable increase in IPO registrations as companies compete with new secondary offerings for investment dollars still sitting on the sidelines.

OpenTable IPO lifts hopes on stock exchange – San Francisco Chronicle

OpenTable IPO rises 59%; Critics sneer – Wall Street Journal


Innovation Value is in Business Models, Not Products

18 09 2008

BusinessWeek has some data in this week’s issue on revenue and profit growth for companies named to its Most Innovative Companies list, with some clear dominance from companies seen as innovating business models (in yellow below) – as opposed to customer experiences (green), business processes (purple), or products (blue).


Source: BusinessWeek

This is in line with research from innovation consultancy Doblin, which finds a bit of an 80-20 rule about innovation: ~80% of innovation is in products that account 20% of the value growth, while ~20% of innovation is in business models and other more lucrative areas that generate 80% of the growth.  Doblin’s reasoning: product innovation is often needed just to keep up, while business models can revolutionize value creation.

Business model innovation has led to a host of recent developments, including software-as-a-service (SaaS), fractional ownership, pay per use/rental/subscription services in music and movies, and even advertising (witness Microsoft’s cashback Search).

An Appeal for Universal Preventive Care

21 08 2008

It’s campaign time and no matter who you’re voting for, you’re bound to see some change in Washington following this November’s election. I’ve never delved too deeply into public policy, but I’d like to suggest a public policy for universal health care. Not the uber-expensive, tax-you-50%-of-your-income version that guarantees full health care at any health facility (as in Germany, where they spare no expense to make sure you get the absolute best treatment but tax income heavily).

Rather, I suggest a universal PREVENTIVE CARE plan that guarantees every citizen will be afforded a personal regimen of preventive care treatment. Preventive care has a whole host of benefits, not least of which is reducing the ultimate cost of health care by eliminating high-cost failures before they happen. Preventive care is essential to providing individuals with the regular health guidance they need to make more accountable health choices and achieve early identification of potentially dangerous conditions. A national preventive care program could also push individuals to augment the national preventive care program with private emergency care insurance that could more accurately reflect the costs of riskier health choices – further encouraging individuals to recognize the high cost of smoking, overeating, and other dangerous health habits. Read the rest of this entry »

Growth Leaders | Jeanne Liedtka on WSJ.com

14 07 2008

I studied with Jeanne Liedtka in Darden’s full-time MBA program while we successfully proposed a new design-oriented Strategy Lab and executed a “blue ocean” consulting engagement with a major international architecture firm. Here, Jeanne discusses some of the bigger points from a forthcoming study on “growth leaders,” the individuals who consistently lead innovating organizations to better serve customer needs and deliver market-leading performance.

Vodpod videos no longer available.

Jeanne and her co-authors, including Sean Carr, director of corporate innovation programs at Darden’s Batten Institute, recently produced an article in the Sloan Management Review detailing some of their findings on growth leaders as well.  Follow the link for the article:

In Search of Growth Leaders

Transforming business with open source models | Why Nokia Bought Symbian

9 07 2008

A couple weeks ago, Nokia surprised the world when it announced it would buy out the other partners in mobile operating system company Symbian for $410 million, repackage the software, then release it to the world under a business-friendly Eclipse Public License.  Why would this leading handset maker turn loose the market-leading mobile operating system, installed on roughly two-thirds of the world’s handsets?  And what does it mean for the LiMo Foundation and Open Handset Alliance, both of which are developing open source operating systems for mobile devices as well?

Scott Anthony, the President of Innosight and a Discussion Leader at Harvard Business Publishing, has offered one of the best analyses of Nokia’s business case for turning Symbian open.

Why Nokia Bought Symbian, Then Gave It Away – Scott Anthony

Essentially, the folks at Innosight reckon that consumers don’t purchase cell phones for the operating system – they purchase for the looks and, increasingly, the capabilities.  With new SDKs for the iPhone and the buzz around other open development platforms for mobile devices, Nokia could see its handset business threatened should a “killer application” be developed for a different platform.  Now Nokia is opening up the largest mobile development platform in the world, seeking to attract the best developers to Symbian so that Nokia’s handsets will be the most capable devices in the world.

I wonder if Nokia is also stepping down a path similar to IBM’s transformation into a services organization.  Could Nokia become a consultant and deployer of services when the platform is open?  Might Nokia become the preferred enterprise partner for mobile applications, given its expertise in handsets and operating systems?

What Nokia lacks is an integrated service tier, like that of Google’s mobile services, to make a concerted effort at becoming a leading mobile services organization.  Google, which is leading the charge on Android, has the potential to be the leader in mobile ad services for advertisers and publishers targeting Android devices as well as extend its reach of ad-supported services like GMail and Blogger to a world of mobile devices.

Google Mobile servicesGoogle Mobile Services

Google competes on the basis of choice every day, so it’s not likely to require use of its services in an Android deployment, but it is particularly well situated to benefit from wider mobile access to its web and ad services.

Follow-up on VisualCV

2 03 2008

BusinessWeek | A Facebook For The Seven-Figure Set

Breaking news about VisualCV.com: Heidrick & Struggles, one of the premier executive recruiting firms in the world, is planning to launch a private network featuring VisualCV technology to gather and promote CEO, CFO, and COO talent to the top positions in the world. A VisualCV is a web-enabled document that can host photos, videos, articles, references, and other important collateral that executive-level talent are likely to have amassed during their successful careers.


Read the rest of this entry »

BusinessWeek | Rapid prototyping on the web: Kluster at TED

27 02 2008

Gore, Geldof, Venter…And This Guy on BusinessWeek.com

Look out for Ben Kauffman – the man driving a new force in rapid prototyping and crowd-sourced innovation. He’s hoping to turn this year’s TED crowd into an innovation machine as they bid their Watts on product ideas using his Kluster web service.


What I want to know is will Kluster lend itself to rapid protoyping of brands, of delivery channels, of business models? Product development is by all means a necessary activity for companies to remain competitive, but it’s not the deepest source of value creation. Revolutionary business models, new services and experiences, and innovative branding ideas hold the keys to unlocking competitive advantage in value creation.