This is a very interesting way to apply the TOM framework of “business model” and “operating model”. The underlying argument here is indeed controversial as we can tell by the different reactions. Nevertheless, I think another way to look at the issue is to think about what are the social outcomes of the policies enacted by the current “set up” of the government are. I do not have the hard numbers, but it is pretty known today that the middle class is eroding, wealth is increasingly concentrated in the hands of a few, citizens are allowed to fail and go bankrupt but some corporations are “too big to fail”. I am not saying that all policies are bad, but for the most part the majority of the folks are not on a good trajectory here? The bottom line is that the influence that money has on politics is not philanthropic, it expects a return on investment. The return is mostly benefiting the people who can invest, which I believe is the point that Luca is trying to make.
Very interesting article. I am also puzzled by the decline in the stock price, I wonder if there were more general market forces that contributed to such a performance (some people mentioned the expiration of the tax credits, could it be also related to the overall poor performance of energy stocks recently?). From what I can tell and from a quick read on the internet (see link below), it seems like there were good synergies between the two companies. Vivint would benefit from the vertical integration and manufacturing expertise of SunEdison and SunEdison will get access to Vivint’s residential market. From what I know, companies typically merge when their operations complement each other, not when they overlap. Though I understand that SunEdison business model was initially targeting large scale projects, the addition of Vivint is not such a bad move if the integration could be executed properly. In any case, this is a very puzzling outcome, also given the fact that market reactions are often irrational.
Great story! I agree that Tesla has changed the rules of the game in the car industry, but I wonder if their business model is sustainable. At a price tag of $100K+, their target market seems very small. We are going through tough economic times, with a widening gap between the rich and the poor and an eroding middle class. Making a car that is not accessible to the majority of the population makes one wonder about the future prospects of the company. What made Ford successful at the turn of the century was the fact that he democratized cars during an era where only the rich could afford them. Could Tesla leverage its capabilities to develop a high quality car available to the masses? If they do not make this a primary focus in the near future, I will not be surprised that an incumbent comes up with such an offering. For a long time, Toyota and Honda focused their efforts in developing affordable high quality, fuel efficient cars, while the majority of the US companies were still building fuel guzzler vehicles. When these companies entered the US market, they attracted a lot of consumers and also redefined the rules of the game, forcing US companies to emphasize fuel efficiency. Will Tesla get ahead of this problem ?
What percentage of Conekta’s revenues is coming from small e-commerce companies? I am wondering if the move to big ticket companies is because the small company revenues were not growing anymore. Tech companies typically evolve in their scope over time, based on market and other factors. Like we saw with Facebook, they kept refining their model over the years. If Conekta could execute well with the high ticket companies, then their move might not be that bad after all.