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News Explorer -【體育快訉。Sports News】2019年10月19日

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Why startups need an anchor as they pursue disruption

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Technology

Why startups need an anchor as they pursue disruption

Innovation
Innovation needs a strong base from which to either unseat incumbents or open up entirely new markets. FILE PHOTO | NMG 

This year, capital raise announcements have come in hard and fast. Maxime Bayen of Greentec Capital has been updating a public tracker on Twitter that puts the latest numbers at just under 80 startups having raised over $1 million for a total of over $1.1 billion closed from 168 investors. Several industry verticals seem to be mopping up all the attention, namely, financial services, logistics, agriculture, and education. But as the tides turn for what has been a long patchy season of inaction by the investor class from the angels to the series X heavy hitters, we must ensure that the fundamentals of the businesses are sound and not just pump-and-dump operations.

Innovation needs a strong base from which to either unseat incumbents or open up entirely new markets. Startups must assume positions in key and ‘immovable’ parts of any ecosystem, supply chain or production line for them to stand a chance at sustainability beyond any hype that their industry segment might undergo.

In financial services, for example, being a payment gateway made for a great business until suddenly it did not as the race to zero transaction fees started. Payments is getting commoditised and the base from which a startup here needs to operate from would either be a bank, telco or distinct owned product.

In agriculture, it has always been about removing the middleman. Startups come in trying to connect the farm to the fork, off price discovery and demand aggregation positions. Time has shown that the true opportunity is in reimagining the role of the middleman, moving downstream and getting dirty with actual farm operations, or value addition, the three base positions.

In logistics, which covers the movement of people and things, connecting riders or consignment loads to available capacity is no longer enough.

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Many unicorns in this space are still trying to figure their path to profit yet traditional players are still thriving with their unsexy models. Thinking different about asset ownership and offline elements that are central to service experiences is key.

Operating in the middle with a simple marketplace or mediator model is not a defensible strategy long-term as you either exist on the patience or cluelessness of an incumbent for whom you are teasing and testing the market or offer proof of value to a newcomer who would then, using a core anchor position, get to bullseye product-market fit much faster.



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Asia Tonight: Business news in brief Nov 20

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Business Briefs on Asia Tonight, Nov 20:
— Malaysia’s October Consumer Price Index (CPI) up 1.1%
— Emirates has ordered 30 Boeing 787s and reduced 777X order to 126 jets

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Target is the retail trade of 2019, with the stock up nearly 90%

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Target CEO Brian Cornell appears on CNBC after ringing the opening bell at the New York Stock Exchange on the morning of November 28, 2014 in New York City.

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Target is far and away the best performing retail stock of 2019.

After reporting third-quarter results on Wednesday that crushed Wall Street’s expectation, Target shares rose 12% from its previous close of $110.85. Target’s shares are up nearly 90% this year, topping even the strong performances of TJX Companies and Walmart, and is this year’s sixth-best performing stock on the S&P 500 index.

«We thought the market was already pricing in more of TGT’s progress, but today’s results (esp. margin expansion) came in well above even the most bullish expectations,» Goldman Sachs wrote in a note to investors.

Target also raised its profit outlook for the full year, ahead of the all-important holiday shopping season, while cutting the cost of handling online orders.

«Overall, we believe Target’s strategic transformation initiatives—price investment in everyday items, differentiating merchandising with new private brands, remodeling stores, and investing in digital and delivery, including Shipt—are resonating with consumers,» Telsey Advisory Group wrote in a note to investors.

Options trader Pete Najarian believes Target’s stock will climb even higher, saying on CNBC’s «Halftime Report» that he expects more strong revenue from the company’s investment in private label products.

«When you look at what’s going on with Target – whether it’s in the grocery space or the rest of the store, and there’s five different segments to their store in terms of revenue streams – they have private label everywhere and that is something that will be huge for them. That just helps and is something that’s going to kick in for Target in the future as well,» Najarian said.

– CNBC’s Michael Bloom and Lauren Thomas contributed to this report.



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