Recombo 2005

In 2005, Recombo seems to be a company that has finally settled on a direction, and has started to make a name for themselves, attracting at least one large customer. Brad McFee emphasizes focus as their current direction. This means focusing on a single product path and working with one major client to establish themselves and to prove to other prospective clients that they are the major player in their narrow field.

Recombo is a growing company, with plans to nearly double in size. This is in preparation for potential new clients, and so that they can adequately service Mindleaders, their new lighthouse partner. An interesting aspect of Recombo’s business model is that they are going to try to also service Mindleaders’ customers. While there are incentives for Mindleaders, it could sour the relationship.

Brad McFee is candid about the company’s exit strategy. If there is enough money on the table, then it might just make sense to sell out. Nevertheless, McFee has a plan to grow his company independently, and hopefully service all four of the major players, including Mindleaders, in his target field.

As an investor, there are a few concerns with Recombo. First of all, they are a company in transition. To me, transition means that they were doing something ineffectively, or that they have taken a new direction. Either way, they are venturing into new territory, and they are gambling their future on one player. The other concern is the overhead involved with their line of work. Mr. McFee spoke about creating content before being able to provide a quote for customers. While this does ensure that they price themselves appropriately, it also means that there’ll be a lot of work done by a lot of employees before the potential for profit even exists.

At this time, I would weigh my investment as much on Mindleaders as I would on Recombo, since it seems that Recombo’s success depends on their lighthouse client.

1 comment

1 davidp { 09.17.09 at 12:01 pm }

One of the way that companies shift their thinking and focus, is to shift the management team.

Clearly, this has happened in the Recombo case. Some of the early founders remain, but in different roles. The CEO has changed, as have other team members.

More importantly, the market niche at which Recombo is aimed has also shifted and stabilized.

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