BRAIN CLOUD
Some thoughts on Gorilla Game investing ..
MONEY.COM: Just for review, What is the "gorilla game?"
KIPPOLA: The gorilla game is a type of growth investing that's focused
very narrowly in the high-tech markets and on very specific kinds of
technology companies. We look for companies involved in spaces that have
not undergone hyper-growth but will undergo hyper-growth. And when they
undergo hyper-growth, there will be a dominant player in that space,
which we call the gorilla.
MONEY.COM: How does an investor use the Gorilla Game to try and identify
companies that may become gorillas?
KIPPOLA: Well, I think the first thing they need to do is plot where
they believe certain categories are in their life cycle. Are they before
the chasm, are they in the chasm, are they in what we call the bowling
alley -- which is stage three of the life cycle -- are they in
hyper-growth? Where are they in their life?
Number two, do those categories exhibit the characteristics that we're
looking for in a marketplace that will ultimately have a gorilla, i.e.,
do the products have high switching costs in proprietary architectures?
If they do, the theory says that if the marketplace actually makes it to
hyper-growth, it will pan out to be a gorilla/chimp/monkey marketplace.
Number three is timing;knowing when to invest. I'm summarizing this,
but in general, we're suggesting to private investors that they wait
until a category has passed the chasm; that way you get rid of the
downside risk of the product category never making it to the mainstream.
But you buy before the tornado and, therefore, you're buying into lots
of potential upside.
EOM--------------------------------------------------------
Buying break-outs to new all time highs
would certainly be an appropriate entry
point for qualifying issues and confirmation
of having "entered the tornado" .. see QCOM
chart first half of 1999 .. |
