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Strategies & Market Trends : ZixIt Corporation (ZIXI)
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To: Rick Smith who wrote (1803)2/27/2000 12:40:00 PM
From: Kevin Podsiadlik  Read Replies (2) of 4120
 
One trap that I find many of the shorts falling into is relating the cash burn rate of the past year to the year going forward. If you will allow an analogy here...if your state puts in a new stretch of four lane highway the expense is many tens of millions of dollars, while the following five years of maintenance will be only counted in the tens of thousands of dollars. While examining the fundamentals of ZIXI, I find a striking similarity to this example.

I'm afraid I just don't follow the analogy here. How is tech development similar to road construction in terms of business model? They would seem to me to be almost polar opposites. The minute you stop development on any high-tech product and go into low-cost, maintenance mode on it, the product immediately becomes stagnant and is as good as dead. Within a year half the customers you do have will have wandered off to other products. With roads none of those things apply, but all that is just part and parcel with the nature of the tech beast.
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