A brilliant business with an ordinary story is still likely to be treated as an ordinary business. It doesn't seem fair. But then markets aren't known for taking the time to get to know you properly.
A brilliant business with an ordinary story is still likely to be treated as an ordinary business.
It doesn't seem fair. But then markets aren't known for taking the time to get to know you properly.
Intel used to make tiny, miraculous objects that could perform millions of calculations while hidden inside beige computers. And, for a long time, nobody outside the industry particularly cared.
Then someone put “Intel Inside” on the outside. Suddenly, the invisible component became a reason to buy the whole machine.
The processors hadn't grown cleverer overnight. People had simply been given a way to understand why they mattered.
RELX spent years quietly becoming a sophisticated data and analytics company. The market carried on thinking of it as a publisher. (Presumably picturing a very large room full of journals.)
Experian was a global information business living inside the same company as Argos and Homebase. Like keeping a supercomputer in a garden centre, then feeling disappointed that nobody has asked what it does.
The value was there all along, it was just wearing the wrong name badge.
Businesses often assume their quality will eventually become obvious: customers will study the product portfolio and investors will examine every capability. Employees will read all 76 slides and correctly assemble the strategic pillars in their heads.
They won't. They have other things to do. They're probably looking at their phones.
People don't experience a business as it appears in the boardroom, they experience the much smaller story they can remember about it.
And that story doesn't merely describe the business. It decides which mental drawer the business gets put in — and therefore which competitors it is compared with, what customers expect to pay and what the market believes it could become.
A weak story can leave a remarkable business competing in entirely the wrong category.
Prices get questioned, differences blur. And extraordinary capabilities find themselves politely filed under “end-to-end solutions”.
A brilliant business with an ordinary story is still likely to be treated as an ordinary business.
The answer isn't to make the business sound grander than it is, it's to make its real value easier to recognise.
Because the market doesn't always undervalue businesses it dislikes. Sometimes it simply applies a discount for having to work out what on earth they mean.
Read our minds