Tag Archives: Market capitalization

The Fast-Changing Landscape

Image representing iPad as depicted in CrunchBase

In tech, we talk a lot about how fast things change, how dynamic things are.  As an investor in mobile, I think and talk about this all the time.  I sound like a booster, sometimes even to myself.  I try to balance that, I really do.

This week, though, wow, if you ever thought that the landscape was settling and the picture was coming into focus, did that ever get thrown out of the window.

Intel saw a 27% year-over-year drop in earnings as the PC market continues to shrink.  Chipmaker Qualcomm, which is riding the mobile wave, overtook Intel in market cap: unbelievable.  Also highlighting the headwinds in the PC market, Michael Dell is reportedly looking to take the company he started in his dorm room private.  Hard to imagine giants like Intel and Dell facing such a changed landscape.

At the same time, it’s not like new markets are standing still.  Sharp is reporting that its ramping down production of the full-sized iPad as the demand for the iPad Mini is so much stronger.  Gee, that was quick!  Has the iPad Mini even been out for 6 months yet?

And finally, it’s exciting to see that someone other than Apple is starting to see consumer hype and love in the mobile market, with the WSJ is reporting that the upcoming Galaxy IVS from Samsung is seeing “iPhone like hype.”  I’m not hating on Apple here, I just think its great for everyone when there’s strong competition, which Samsung appears to e bringing.

However stifled innovation may seem today, it sure seems like the market is pretty dynamic.

 

 

 

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Market Cap / Employee

Monday I caught up over lunch with long time friend and superb Japanese entrepreneur, Nori Matsuda.  Matsuda-san is the CEO & Co-Founder of Sourcenext, a publicly listed consumer software company in Japan.

During the discussion, he talked to me about how he thinks about building public technology companies.  He mentioned a metric he thinks about a lot: Market Cap per Employee.  He thought that this was an interesting expression of a company’s culture, of how much opportunity, how much energy there likely was at the company.  He then rattled off the Market Cap per Employee of several large public tech companies.

I built this simple chart below, and I think it’s telling:

Company Market Cap (B) Employees (K) M/E (M$)
FB 52 4 $13.0
APPLE 528 73 $7.2
GOOG 219 54 $4.1
MSFT 227 94 $2.4
AMZN 107 51 $2.1
YHOO 21.8 14 $1.6
CSCO 98 67 $1.5
Zynga 1.8 3 $0.6
Nokia 13 105 $0.1
HPQ 23.6 350 $0.1

 

If you’re thinking of working at a public company, then this is probably an interesting metric to look at and consider.

Alternatively, if you’re running a startup, it’s also an interesting metric.  You might consider your current valuation and divide it by the number of employees.  See where you stack.  It’s probably at least some kind of indicator of the opportunity and the momentum in front of you.

 

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