Andrew Lark

The IPO Market

I was asked on my recent trip to New Zealand about the US IPO market. Somewhat fortuitously I received an email from America's Growth Capital with a good summary. Here is the rub:

The U.S. IPO market thrived in the 1990s, averaging more than 500 IPOs per year over the entire decade.  However, as we entered the new millennium, the once vibrant IPO market drastically shrank, not only because of the implosion of the Internet bubble, but also due to the following reasons: i) the market cap threshold of targeted investments for mutual funds increased as these funds ballooned; ii) the most active IPO underwriters either disappeared or moved up-market; and, iii) overzealous regulation and costly litigation significantly deterred both executives and private equity players.

These factors led to the dip in IPO volume that we saw from 2001 - 2003; however, the U.S. market has clearly rebounded with a strong finish in 2006.  In Q406, 89 IPOs were priced- the highest quarterly total the market has seen in recent years.  228 IPOs were priced in 2006 on U.S. exchanges, compared to 202 in 2005, an overall increase of 13%.  So far in 2007, 48 IPOs have priced, compared to 40 IPOs at the same time in 2006 (as of March 16). The tech IPO market saw 41 deals priced in 2006, the same number as in 2005.  Tech IPO filings increased by 35% from 2005 (51) to 2006 (69).  Expect substantially more tech IPOs in 2007-2008 compared to the post-bubble doldrums of 30-40 IPOs a year.

We believe that this increase can in part be attributed to an influx of private companies that sat on the sidelines during unfavorable market conditions and are now considering going public.  Most are successful later-stage companies with $30-100 million in revenues.  While many of these companies need capital for growth or liquidity, they may be unwilling to raise another round of private equity due to unattractive private valuations and often onerous liquidation preferences.  In other cases, these companies do not yet want to sell to a strategic acquiror or have not generated a compelling offer.  In early 2007, there is now an abundance of private companies that are proven with strong market penetration, established customer bases, and demonstrable growth and profitability (or near-profitability).  However, these private companies do not meet the minimum IPO criteria as determined by the bulge bracket banks and traditional large fund IPO investors.

An Economist's Courtroom Bonanza

Great profile on Kiwi David Teece. The one thing it doesn't mention is the incredible job he did with Stephen Tindall in creating KEA.

Meet David Teece, renowned expert on lots of things and pioneer of a lucrative consulting niche that has transformed business litigation. The University of California, Berkeley, business-school professor is one of America's busiest expert witnesses, billing corporate clients as much as $850 an hour for his insights. He has built a publicly traded 1,300-person research shop, LECG Inc., that does much of the legwork for him and other economists, so they can zoom through more assignments.

And this made me smile... "And his New Zealand accent worked nicely on the witness stand; it made him sound erudite without being pompous."

NZ's Need For Speed

Echoing Rod's calls for better bandwidth in NZ, David Cunliffe just issued a report pointing to NZ's woeful broadband performance.

The Ministry of Economic Development report comparing New Zealand's telecommunications performance with other OECD countries uses figures from the organisation that show uptake of broadband in June last year was an unchanged 22nd place out of 30 countries.

"While New Zealand's performance - especially with broadband internet uptake - has improved in absolute terms, we are in a competitive international race and our relative performance has not improved," Cunliffe said.

I don't believe the issue is in the fat pipes coming in and out of NZ. There is no question that part of the issue rests in the last mile and provisioning of services. Beyond that, there are a ton of issues.

As a visitor to New Zealand I'm constantly amazed at the appaling public and hotel-based Internet services. I just spent a few days at the high-end Sky Tower in Auckland. Great room. Great food. Crap Internet service. Unlimited high-speed Internet at a good price is more important to me than Hotel food.

If I'd been paying I would have checked-out and gone to another hotel. Anyone charging a day-rate and MPS is nuts.

I then got to the airport early figuring I'd get some work done. Still no Internet service out there.

Getting In The Flow

Interesting post on productivity and "getting in the flow".

1. Clear goals.

To enter the flow state, you need to define a short-term goal. If you’re working on a large multi-session project like a web app, decide your purpose for this single creative session. Be careful not to overqualify your purpose; your purpose should be “an arrow, not a container”. (- Steve Pavlina)

2. A high degree of concentration on a limited field of attention.

3. A loss of self-consciousness, the merging of action and awareness.

4. Distorted sense of time.

5. Direct and immediate feedback; behaviour can be adjusted as needed.

6. Balance between ability level and challenge.

7. A sense of personal control over the situation or activity.

8. Intrinsically rewarding action, so there is an effortlessness of action.

9. Focus of awareness is narrowed down to the activity itself.

That Timesheet Thing Again

Stumbled onto this piece (sub required) from Peter Arnell that hits nicely at what I keep ranting on timesheets and agency billing about. In this case, replace hours billed with request for a full time equivalent employee:

It is time to reconcile archaic FTE accounting with the talent-driven, multidimensional world we live in today. There is more creative doing, more crossing of traditional boundaries, more thinking and contributing by talent who multitask and participate on many levels at once. Great ideas are the cultural currency that clients will profit from in the end, and attaining this level of contribution does not run on a clock or time sheet.

Let's put a typical staffing allocation formula in terms of MasterCard:
An experienced account director: FTE of 1
A sane creative team: FTE of 3.2
A person with one good idea: Priceless

The goal of clients should be to seek what is priceless at a cost agencies and their talent deserve.

Source: Advertising Age - CMO Strategy - Peter Arnell: Find Value in Results You Cannot Measure

Congratulations...

Congratulations to Golin Harris and Nintendo for winning PRWeek's Technology campaign of the year. And to Fleishman-Hillard for their Honorable Mention for the Zillow.com campaign. Both were exemplary programs with results that hit the bottom line. I loved Colin's for its creativity. And, Zillow's for the results and courage in banking on PR as the primary launch vehicle.

Congrats also to Manning Selvage & Lee and Philips Norelco: Creating Buzzzz for Philips Norelco Bodygroom – Product and Web - They picked-up the "Best Use Of Internet" category.

It was a privilege to be a judge in the awards. Couple of quick observations:

• It was amazing how strong the consumer entrants were in both categories, and how absent the Enterprise players were. Get your entries in next year gang!
• Measurement phrases like "impressions", "OTS" and the like are bandied about like old hats. Keep using them - a couple of years ago we bemoaned the fact that most didn't have good measures. What makes for a winner though is a direct correlation to bottom-line, business performance.
• Participatory media (blogs, wikis and the like) still seemed to be, for the most part, an adjunct to the core PR program. The judges next year should see some of the first pure-play entrants where participatory platforms are the lead vehicle for engaging people.

And the biggest observation: this is one highly creative, dynamic industry to be associated with. Frankly, all of the finalists were brilliant.

Apple Launches New Product...

Too funny... All joking aside Apple are really the masters of the product launch.

Top 10 Firefox Extensions to Improve your Productivity

Great post. Love it. 

Link to Top 10 Firefox Extensions to Improve your Productivity - lifehack.org

Soundbites & Links

• Are blogs headed for a slowdown? "Research by Gartner, according to the magazine, found that the number of blogs will top out at about 100 million this summer. But it also noted that some 200 million blogs are no longer being updated--many of them abandoned by their authors." What a terrible measure of the health of blogging. Lets look at the growth of posts, comments, video content. This is the equivalent of measuring the health of the Internet on the basis of URL registrations. Garbage.
• I've got some Joost beta invites if you'd like one. Still can't get it to work on Vista though.
• Interesting: Scribd. Scribd is a free online library where anyone can upload. Use our embeddable PDF player to publish and view documents right in your web browser.
• Like this from Nick:

"I like to think of the blogosphere as a vast, earth-engirdling digestive track, breaking down the news of the day into ever finer particles of meaning (and ever more concentrated toxins). Another word for "parasitic," in this context, is "critical." Blogging is at its essence a critical form, a means of recycling other writings to ensure that every nutritional molecule, whether real or imagined, is fully consumed. To be called a literary parasite is no insult. It's a compliment."

• Rod Launches Xero (beta) and scores a Kiwi sports star. Brilliant move.

Measurement Landscape Shifts

One of the two leaders in communications measurement - CYMFONY - just got gobbled up. Consolidation was inevitible in this market - and as I've said before, it won't serve communicators as well as it will serve marketers.

Ultimately what we needed was an evolution of communications measurement that was an inch wide and a mile deep. Maybe we will get that... But back to the announcement:

Steven Fredericks, TNS MI president and CEO, said the company had been looking to acquire a company in the market influence analytics space for about a year and decided on Cymfony because "they were the most advanced in terms of the technology."

"We decided we had to go and get the leader [in the space]," he added. "We think this whole area is going to explode in the next couple of years. We think it's going to reach the tipping point very quickly and we wanted to target it."

Now, CYMFONY is a very fine company with some great talent and neat innovations - I'm not sure there is much credence to them being the most advanced in technology or being the leader in the space, but then his guess is as good as mine on both fronts. What I do agree absolutely with is that this validates the incredible investment of time and money made by the big measurement vendors.

Where CYMFONY had established an enviable lead is in measuring conversations across blogs and in the various recommendation zones of sites such as Amazon. When coupled with core media data, this is immensely powerful to everyone from product management through customer service. Brand tracking is just one dimension that this capability delivers. CYMFONY were on the right track in delving into product monitoring, reputation analytics, and marketing performance measurement.

The real rub here is that the kind of data and insight CYMFONY and Biz360 have been generating is of immense value to media planners and marketers as a whole. TNS are now armed with the most complete set of tools for the CMO and that will make for a pretty compelling proposition that others will have trouble competing with - especially the smaller vendors who are already under substantial pressure. As Katie says, the giants are lining-up.

We needed a powerhouse and we got one. Congrats to TNS and go for it - you have a very large market waiting for what you have just created. In many respects they could be answering a question that many of us have had about this space for some time - "is communications measurement a feature of a broader marketing performance and analytics tool-kit, or, a stand-alone industry serving the communicator...?"

BTW, hat-tip to CYMFONY's PR team - they did a great job of SEO optimizing the announcement and complementing the press release with blog posts and a podcast.