Adam Bain’s “Framework Triangle for Acquisitions”
This The Gong Show by Andrew Parker post explains Adam Bain's Framework Triangle for Acquisitions. Basically the points of the triangle are:
"Technology Advantage
New Audience or New Revenue Streams
Long Term Strategic Influence (Does it help you for the long term by enabling some larger end goal down the line? Sometimes this may also mean: an acquisition to stop the technology or product from falling into a competitor’s hands)
Once set up in the triangle, you get a framework that companies can be judged. When acq targets hit all three points on the triangle, it’s an easy decision. Usually the tough decisions come when you only have two out of the three points. So here’s what happens when you see just two points:
Tech + Long Term Strategic Value (and therefore lacking Audience) = The company is an Enabler. These are potentially undervalued by the marketplace...
Audience + Long Term Strategic Value (and therefore lacking Tech) = At best case, a Network Effect. Worst case: it’s an overvalued company...
Tech + Audience (lacking Strat) = At best Case: A Category Expander. Worst case: Non-core. Or…a sign that the acquiring company may be in trouble– because the acquiring company is looking at a business which has unique technology AND audience or revenue (thus traction) BUT it doesn’t currently fit into their world view of long-term strategy."
