Thanks for the great post! I enjoyed learning more about the operating model and was struck by how much the firm is investing in their R&D capabilities. Many of their competitors have pulled capital that used to be allocated to R&D and diverted it to M&A. Roche’s move could increase the risk level of their product portfolio; however, it could also give them a long-term advantage as they consider new areas of development. I am curious to see if they pull back their R&D budget slightly if the valuations of various HC companies come down and make it more affordable to buy than build.
Thanks for the post, Steven. 3PL is an incredibly competitive environment with many companies that do not have exceptionally strong operating models so its great to see how this one is different. I am particularly struck by the compensation structure and asset-lite distribution model. I imagine adopting a profit-sharing model is quite unique among their public competitors. It does a wonderful job aligning incentives and maintaining a focus on profitable growth. Furthermore, utilizing partnerships with other providers with equipment should give them a relative cost advantage during down periods; however, I wonder how this affects the long-term profitability of the operation. It looks like the market is relatively neutral on the company (down from its $55 high in 2011 and up from its $34 low in 2012). How does this compare to its competitors and is there room for further upside?
Thanks for the post. Twitter’s operating model is not compelling to many users, including myself. Individuals can access the same streamlined information directly from various news sources such as WSJ, Reuters, NBC, etc, which leaves access to the “community” as their best course for adding value to customers. Unfortunately, Twitter has not been able to capitalize on its early start and has not been able to cultivate a trendy environment to grow within. I fear that without a major rebrand or introduction of novel features, the platform may drift out of favor. This would inevitably lead to a decay in the company’s current business model, thus requiring a major pivot. Doubtful the public markets will take too kindly to this.