Jag’s thoughts on Recombo and Ingenia

First off, I enjoyed watching all the ‘pitch’ examples and the use of video technology has definitely made this course more personable.

The two venture’s that I reviewed were Recombo and Ingenia.  I found both companies focused on offering e-learning services to traditional companies that are trying to digitalize their training or product offerings.  These clients have a choice in how to enter the e-learning  marketplace.  Either they develop the platform and resources ‘in-house’ with intrapreneurs and hire ‘IT’ specialists, or they contract out to a 3rd party entrepreneur who will develop and manage the technical infrastructure.

Recombo – offers clients a technological infrastructure that will allow the clients applications to be shared and used across other applications.  The company has made the transition from multiple product offerings to strictly being a service provider and a manager of the technical infrastructure that Recombo would customize for their clients.  A major client of Recombo is the traditional publisher Mindleader, and through this major client, Recombo is hoping to gain further clients.

Ingenia – specializes in e-learning applications and is focusing on the developing S.E. Asian market, specifically Vietnam.  Locally, this company has many government clients (SFU, ICBC, to name a few), yet when looking to establish overseas they are concentrating on multi-national corporations.  The e-learning applications for corporations could be for internal training or for accreditation.  In order to compete for government contracts in Vietnam, Ingenia did partner with a local software firm…ensuring that jobs and wealth are being re-invested back into Vietnam.

As an investor, I found both CEOs to be credible and knowledgeable about the industry.  That being said, I found it interesting that Recombo’s VP, Brad MacPhee, was wearing an earring.  I know that earrings are no big deal and apart of today’s norms, however I come from a traditional family and if Recombo is looking to venture into foreign markets,  it would be worth investigating how other cultures  perceive piercings and even tattoos for that matter.

In terms of the business model, both ventures revolve around large-scale contracts with major companies or with various levels of government.  Information technology and software architecture is a huge business, what is stopping giants such as Microsoft or Google from entering this market?  How would these companies respond and/or survive with greater competition?  Or is the goal of these ventures to be bought out by one of the larger companies allowing all investors to cash out?

In regards to the e-learning industry, are these programs being used for accreditation or are they being used by companies for internal training?  As an investor, I don’t see continuous cashflow in these businesses without the large scale contracts from major clients.  From my senses, it seems as though these companies are relying on large multinational corporations or governments to supply them with that ‘home-run’ contract.  Outside of these contracts, there are no external sources of revenue.  While I wish both entrepreneurs success in their ventures, I would not invest in either of these ventures…but than again, I never invested in Microsoft, Google, or Apple for that matter.

1 comment

1 davidp { 09.17.08 at 12:53 pm }

Jag, you make a good point about investors potentially wanting to cash out early in these kinds of ventures. This is definitely an intentional strategy of smaller companies in the IT solutions business.

Many “serial entrepreneurs” do just that.

They identify pain points in the market, invest in smallish ventures that address the pain, and use their track record of sales with the company to seek an early buy-out by a larger company.

It has happened multiple times in Vancouver over recent years.

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