Erik K

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On December 15, 2015, Erik commented on Box: Culture, Press, and Sales driving enterprise value :

Thanks Tyler. Yes, I see public markets as a double edged sword too. The founders have been significantly diluted in percent ownership, but dual class share structure has given them outsized control and voting rights. Not sure how much voting power they have, although surely less control than Zuckerberg at Facebook (who had really strong negotiating power as they progressed down the path of going public)

On December 15, 2015, Erik commented on Box: Culture, Press, and Sales driving enterprise value :

All good points, thanks. Their systems architecture is designed for massive scale, security, uptime and redundancy (lest a natural disaster, for example, takes one of the many servers out). They are focused on meeting industry compliance standards (e.g. HIPAA for healthcare, FINRA and SEC 17a-4 for financial services, etc.) So, the top notch systems architecture and breadth of security compliance standards are key differentiators vs. competitors. There is inherent tension between collaboration and security, but I think they’d point that out about any system. Cool that you use Box, and yes your sales experience sounds typical of experience the longtail of smaller organizations can expect, while more resources are focused on the massive enterprises.

On December 14, 2015, Erik commented on Parts Town: A Case Study on How to Disrupt a Sleepy Market :

Well-written post. Interesting that they are operating like a startup, bringing the underserved (and not super visible) industry into the 21st century. As you’ve mentioned, they could easily replicate this model in other “laggard” industries. How do you see their operating and business models evolving as they continue to grow and mature? At what point (if ever) should they diversify into other industries? Which industries?

On December 14, 2015, Erik commented on EPAM Systems: Defying the Odds in the IT Services Industry :

Great post about an important industry. Given EPAM’s commitment to offering high levels of configurability and operational performance for diverse users/environments, their value creation is inherently less scalable than specialized product development service providers. The use of Agile development methodology seems necessary but not sufficient for them to deliver on this customer promise while continuing to grow the business. In the context of rapidly changing technology industry (big data, IoT) which other types of “adjacent” (or non-adjacent) businesses (e.g. AGS) should EPAM consider acquiring to achieve both operational model and business model improvements? How will EPAM need to change themselves in order to grow organically rather than via acquisition?

Interesting company and well written post. Does the near price parity of alcoholic beverages (i.e. one area where you mentioned Texas Roadhouse would offset its lower margin steaks) across all menus in the comparison suggest TR are providing alcohol at dramatically lower cost than competitors? Also, I was surprised that such high commission rates (contributing >50% of GM compensation) led to improved service, given the importance of table turnover in restaurants trying to maximize net income. Which part of their strategy offsets the risk of high commission rates leading to poor service? Do they operate mainly in rural geographies where restaurant capacity is not an issue? Does takeout make up a significant portion of their business? Do repeat customers return for the excellent service or value?