Dan Sweet

Ridiculous Revenue Growth

A friend at Apple brought this video to my attention.  Mary Meeker covers 10 questions for Internet company CEOs.  Watch the whole thing.  We are in very interesting times.  I found the 2.5 minutes starting at 14:25 the most fascinating.  Apple grew $12B in revenue to $20B between fall 2009 and fall 2010.  Wow!  Thats about all I can say.

Business is Solved

This concept is one of the major themes of the recent book The Lords of Strategy.  I listened to the Audible version which features a very wonkish sounding narrator.  The book is all kinds of academic/intellectual blah blah blah, but I definitely learned a lot from it.  Another of the book’s main points is that the roots of the top consulting firms are firmly planted in the academic and intellectual worlds.  Maybe this explains the choice of narrator?

Anyways, I wanted to jot down a couple of the main themes while they are still fresh in my mind.  Here they are:

1 – Greater Taylorism (that guy with the stopwatch) which led to
2 – The Fiercening of Capitalism
3 – BCG Matrix – the consultant’s Million Dollar Slide
4 – Bain – Thinking AND Executing? – profits at a discount
4 – Michael Porter – apparently not a hit with the tenured crowd
5 – The  Birth of Private Equity
6 – Where Are We Going? – good comments on “the shareholder”

See this link for a long interview with the author that covers most of the main points I’ve called out above.

Pieces of trivia/insights I found fascinating:

Bain was founded by a bunch of defecting BCGers. Bain’s big differentiator was that they wanted to do long engagements with a client and actually wanted to stick around to see the results of their strategies implemented successfully.  I liked the author’s description of the Bain sales pitch as tomorrow’s profits at a discount.  The evolution of Bain came a couple decades later when senior partners realized they’d never become “seriously rich” (only 3-4 million in personal wealth) staying in consulting.  So they started Bain Capital and created private equity.  Mitt Romney was co-founder (somehow I had missed this).  When the BCG Matrix reveals the pieces of a company’s portfolio that aren’t going anywhere (the Dogs), Bain can help you sell them off. In many cases, they’ll even buy the business from you.  Then throw a bunch of consultants at it, cut the costs to the bone, figure out the competitive landscape, re-invent the Dog of a company, flip it, and profit.

Being an outsider is powerful. In the best cases, consultants come in with a fresh set of eyes and lots of spare capacity.  No day job taking up 90-110% of their time.  No internal politics to navigate.  No 2-5 layers of middle management and multiple functions to navigate/get aligned.  Just a focus on analytics, costs, competitive benchmarking, market share, and a motivated senior leader to share the analysis with.  I got a taste of some of the elements of this experience when I interned at P&G.  Now that I have a full time job, it is a little more complicated.  That said, I like my family, so I’ll have to settle for this book as my window into the consulting world.

All in all, an interesting read.  A lot of useful background to help you understand key influences in the history of corporate strategy over the last 50-60 years.  Good refresher on key strategery frameworks.  Some interesting commentary on how capitalism has evolved / is evolving.  I’m guessing the print version is pretty dry, but thats why I did the audiobook.  A couple long drives, a grocery run or two, mow the lawn, a little work in the garage, and all of a sudden you come out a little more knowledgeable with a few more useful mental models.  I like it.
[end Audible infomercial now]