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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (23701)	4/27/2000 9:24:00 AM
From: Bridge Player	Respond to of 54805

<<It is early in the game for elon, but it is definitely a company worth watching.>> I agree, Frank. I like ELON and the concept, and the potential. IMO the stock would be a decent long term speculation, at around $9-10/share, where it traded a few months ago. BP

To: Uncle Frank who wrote (23701)	4/27/2000 11:55:00 AM
From: spiral3	Respond to of 54805

It is early in the game for elon, but it is definitely a company worth watching. Agree that it's early and that Janet's report made this quite clear. I've been reading Crossing the Chasm and imho elon seems to be playing their game "by the book". For companies in a tornado the key metric may be sales growth but according to Moore this is not the case for pre-tornado companies. If we can assume for a minute that elon has been in, and is now on the verge of crossing the chasm, then their focus should not be to maximize sales, but rather should be on satisfying a chosen niche market. Consider what Moore has to say. The consequences of being sales driven during the chasm period are, to put it simply, fatal....the sole goal of the company during this stage of market development must be to secure a beachhead in a mainstream market- that is, to create a pragmatist customer base that is referenceable, people who can, in turn, provide us access to other mainstream prospects....the only right strategy is to take a "big fish, small pond" approach.....for all these reasons- for whole product leverage, for word of mouth effectiveness, and for perceived market leadership- it is critical that, when crossing the chasm, you focus exclusively on achieving a dominant position in one or two narrowly bounded market segments. If you do not commit fully to this goal, the odds are overwhelmingly against your ever arriving in the mainstream market. see pages 68 to 71 of Crossing the Chasm. imho elon is well on their way to becoming the de-facto std for open distributed control networks in the Building Automation and Industrial Control markets.....they are a big fish in a small pond and Honeywell and Cisco will help to establish a referenceable customer base. I believe that by capturing these markets they will be able to establish a strong position in the coming market for Control Networks in Home Automation. Having said all that I am never-the-less encouraged by the rate of change in elon's revenue growth. Elon's 1st qtr is always the slowest or 2nd slowest of the year. Comparing 1st qtr '99 to 1st qtr '98 revenues grew by about 10.6% and comparing 1st qtr '00 to1st qtr '99 shows 30% growth. This imho is a significant increase in the rate of growth and it provides an appropriate measure of the direction that the company is moving in. If the first qtr is anything to go by, this yrs revenue growth, imho, ought to be substantially higher than what management is suggesting. It is fine for me/us to decide if a company is a gorilla or not, and/or at what stage of simian development it may be, but for those interested in investing in pre-tornado companies/ sectors what may be more important is whether management is playing the gorilla game or not. In the early stages this may not be immediately apparent from quarterly numbers and I have found that reading Moore's "Chasm" book has given me a tool with which I can evaluate management's strategy. His insights have been most useful in enabling me to make a more complete qualitative assessment of the folks I trust with my money. Thanks for turning me on to Mr. Moore et al.