06:01
Faizan
During recessions, companies focus on getting costs down and reducing debt. During boom times, hiring people, new products, and increased marketing require lots of attention. If companies could focus on all of the above at all times, they would surely be more effective. But how to accomplish that?
Looking at the potential to expand business models will often help companies to keep more balance in their thinking and actions that will create or increase competitive advantages. The key limitation to developing and improving business models is to treat each innovation as an end, rather than as a beginning.
In frozen fruits and vegetables, most people thought about how to innovate with products and did not consider other ways that the business model could be improved. Otherwise, the potential Mexican sourcing advantage (harvesting three crops a year with lower cost labor) could have been seized decades earlier.
Acacia Research was taking this concept seriously in 2000-2001. The company had begun as a private early-stage venture capital firm.
When the public markets developed a taste for venture capital investing in 1996, the organization went public as a way to access more and lower-cost capital. The company's management began to look for business models that were faster, better, and cheaper than what had existed before and would appeal to a natural set of public market investors.
Initially, most of these investments were made in Internet-related businesses. One of Acacia Research's last investments using its public round of capital was in an unconventional technology for producing low-cost, quickly available biochips for testing new pharmaceuticals, diagnostics, and agricultural products.
When the potential of CombiMatrix (the biochip business) came to be perceived as greater than its other portfolio investments in 2000, Acacia Research began selling and liquidating everything else in order to focus on this one venture and business model. While CombiMatrix focused on making the technology work in life sciences, Acacia Research and CombiMatrix will also have a joint venture to exploit the CombiMatrix technology platform into material sciences applications (such as for fuel cells with an extended battery life), thus extending the business model substantially while the original base is still being developed.
Looking at the potential to expand business models will often help companies to keep more balance in their thinking and actions that will create or increase competitive advantages. The key limitation to developing and improving business models is to treat each innovation as an end, rather than as a beginning.
In frozen fruits and vegetables, most people thought about how to innovate with products and did not consider other ways that the business model could be improved. Otherwise, the potential Mexican sourcing advantage (harvesting three crops a year with lower cost labor) could have been seized decades earlier.
Acacia Research was taking this concept seriously in 2000-2001. The company had begun as a private early-stage venture capital firm.
When the public markets developed a taste for venture capital investing in 1996, the organization went public as a way to access more and lower-cost capital. The company's management began to look for business models that were faster, better, and cheaper than what had existed before and would appeal to a natural set of public market investors.
Initially, most of these investments were made in Internet-related businesses. One of Acacia Research's last investments using its public round of capital was in an unconventional technology for producing low-cost, quickly available biochips for testing new pharmaceuticals, diagnostics, and agricultural products.
When the potential of CombiMatrix (the biochip business) came to be perceived as greater than its other portfolio investments in 2000, Acacia Research began selling and liquidating everything else in order to focus on this one venture and business model. While CombiMatrix focused on making the technology work in life sciences, Acacia Research and CombiMatrix will also have a joint venture to exploit the CombiMatrix technology platform into material sciences applications (such as for fuel cells with an extended battery life), thus extending the business model substantially while the original base is still being developed.
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