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IP Research: Intuitive Surgical: Da Vinci Sales & Training Process

Since its 2000 IPO, Intuitive Surgical, the global leader in robotic assisted surgery, has compounded at over 27%. Given the recent new entrants from J&J and Medtronic, our research has focused on understanding the history of ISRGs go-to-market strategy and potential barriers to entry.

One topic of focus was ISRGs sales and training infrastructure. Intuitive has spent decades refining its surgeon and hospital training programs to drive adoption. This may be difficult for for J&J and Medtronic to replicate. Many companies have pulled back lap training programs which could make it difficult to rebuild the infrastructure required to drive RAS adoption:

Laparoscopic training, for the most part, isn't provided by Johnson & Johnson anymore. Companies like Intuitive are trying to offload training to residency and fellowship programs. This allows them to scale down their training operation instead of scaling it up. Johnson & Johnson has largely done the same. - Former VP Clinical Sales

This IP Company Learning Journey covers the following in detail:

These are the further research questions we plan to explore over the next 6 months:

  1. How have insurance incentives affected robotic surgery penetration?
  2. How will ISRG’s digital ecosystem help fend off competitors?
  3. What are Medtronic and J&J doing to take market share?
  4. What will be the reception of the Da Vinci 5 and its impact on procedure growth?

Danaher, Cytiva: Downstream Sales Process

This interview follows up on our Cytiva chromatography research and focuses on Danaher's cross-selling opportunity with Pall's filters and Cytiva's chroma resins. We walk through the sales process of chromatography and filters, the buyer decision making process, and bundling opportunities:

there must be a benefit for Danaher and for the company to do it like that. So this is something that is being discussed. It will not be explicit. In other words, you cannot say Danaher is a dominating supplier because you don't say dominate. But of course, they are. And I bet you when they are sitting in the purchasing department, the purchaser will bring it up. We buy this from you. We buy that. They will show you the complete purchase, everything they're buying. So, guys, here it is. Give me an offer. - Former GE Healthcare Executive

FTAI Aviation: CFM56 LLP and USM Parts

Over 80% of an aerospace engine shop visit cost is parts. The majority of this part cost is from the airfoils, blades that are found across the compressor, turbine, and fan module. HPT blades are the most expensive and can only be replaced via GE directly. It can cost up to $20k per HPT blade, of which there are 70+ to replace per full overhaul. Replacing a full set of HPT blades can amount to a quarter of the full shop visit.

This interview walks through CFM56 LLPs and how FTAI leverages the USM market to drive module swap volume.

An engine's value is all a function of the cost of maintenance. For example, a dead engine with very little LLP life, say an engine is at 10, zero, five. That's when a lot of engines come off, and the core is done. There's still 10,000 in the fan, 5,000 in the LPT, and nothing in the core. So this is like a dead engine, right? You either have to build it up, or that engine can trade, or it used to trade. - Former FTAI Executive

Carvana: ADESA Integration

In this interview, a former Senior Manager at ADESA, with over 25 years of operations management experience at the company's physical locations, sheds light on the integration process Carvana is undertaking to integrate ADESA sites post-acquisition as well as the potential synergies and challenges such a large-scale operation entails.

"I'll give you an example. At an ADESA location, detailing a car from start to finish consists of seven people, and each person has a workstation. They perform multiple processes at their workstation, and it functions as an assembly line. When I went into a Carvana facility, it was 14, I believe 14 or 16. It was significantly higher. I remember watching, given that I had so many years of experience, I was just really kind of shocked with the number of people that they had. - Former Senior Manager at ADESA

Smartsheet: Enterprise Footprint, Pricing Changes & Churn Risk

A current Smartsheet Platinum Partner discusses its new pricing model and potential impact on churn:

Even though they were licensed, they weren't necessarily productive licenses. So in that 25 out of 100, because we were 25 out of 1,400, probably five were pretty active licensed users. But again, that was the model, so it worked fine that way. This new model doesn't give you that ability, so you need to look more critically. - Platinum Smartsheet Partner

LGI Homes, Lennar, D.R. Horton: US Building Material Supplier Relationships

In this interview, a former Executive VP of Strategic Accounts at Builders FirstSource explains the dynamics between home builders and their material suppliers in the US and the key variables that ensure profitable home-building projects.

"I was in a meeting with a senior executive from a large national builder several years ago. He made a statement that we all kind of knew, but it was profound. He said, if we cut a good land deal, we're almost guaranteed to make money. Conversely, if we make a bad land deal, we're almost guaranteed to lose money. - Former Executive VP of Strategic Accounts at Builders FirstSource

Louisiana-Pacific: Distributor Relationships & Market Footprint

Louisiana-Pacific is a siding manufacturer with a $6.5B market cap. In this interview with a Former Executive VP of Strategic Accounts at Builders FirstSource explores the distributor-manufacturer relationship:

" The third reason, and I think this is probably one of the biggest reasons, and what really keeps the two-stepper engaged with the big one-stepper, is all of these manufacturers. Now, James Hardie, LP, have come out with a color product, a pre-finished product. The big one-steppers find it hard to have a broad offering. They don't want to stock 15 colors. So, they will use the two-stepper for that. And I will tell you, that is a growing product because pre-finished is going to be the future. - Former Executive VP of Strategic Accounts at Builders FirstSource

MongoDB: Vector Search, Displacing Postgres & DynamoDB

We have published a series of interviews covering various aspects of MongoDB. In this interview, a former Enterprise Sales Executive discusses what tools MongoDB is typically displacing and MDB's Vector Search capabilities.

" If I wanted to use the best vector data store, I might have to use Pinecone or Weaviate, and then keep it in sync with the metadata saved in a different database. There's always data movement and data plumbing when using various point solutions. But MongoDB doing it all under one umbrella means I can move faster. It may not be the best product for a vector database, but the integrations and the fact that it's all connected well means I have significantly less engineering work to do. As a startup, for any company dealing with this for the first time, I think that's a better way to iterate and try things much faster. Until one day, maybe I figure out I really need a very powerful vector store, and at that point, I would move away from MongoDB. - Former Enterprise Sales Executive

Flutter Entertainment: Barriers to Entry, Betfair Exchange & Online Gambling

In this interview, a former Head of Sports Betting at Flutter explains how online betting and live casinos are reshaping the market, focusing on the key growth levers for Flutter and the defensibility the business.

"So, how the online business and live casino affected the retail outlets? When I joined, the retail shops in the UK were still prevalent. There were about 10,000 betting shops in the UK when I started in 2015. Now, there are probably close to 4,500. So, half of them have closed. When I joined Paddy Power in 2015, our shops made an average of about £140,000 a year in EBITDA. By the time I left, it was close to £75,000 EBITDA per shop. The retail market has not only shrunk, but the fixed base cost hasn't changed much. - Former Head of Sports Betting at Flutter

Idun Industrier: Fredahl and Rydéns

Idun is an acquirer of Nordic industrial assets. This interview with a Former Fredahl and Rydéns, the largest opco of Idun, executive explores the company's history and growth opportunity.

In both Fredahl and Rydéns' case, I think overall, they have good quality and always have. But in recent years, since 2014, the funeral industry in Sweden has been exposed to new low-cost funeral homes, online funeral homes, and such. And I think Fredahl Rydéns also had to join them, you know, lower the prices, so to speak, because for several years, the end customer has thought, "Why is the funeral so expensive? Why is the coffin so expensive?" The coffin isn't expensive, but it's a boring thing to pay for. On average, I think you can have a coffin for like 4,000 or 5,000 krona. - Former Fredahl and Rydéns Executive

IP Podcast: Lifco vs Halma Org Structure (Spotify / Apple)

This podcast (Spotify / Apple) shares context to our recent research on how industrial acquirers like Lifco and Halma are organised to scale. We explore:

  • How Lifco and Halma are organised differently
  • The role of Sector Teams and Divisional Managers at Halma
  • How Divisions and Sector Teams differs from Lifco's Group Managers
  • Compensation plans for operating company managers at Halma and Lifco
  • Potential organisational limitations to scale for Lifco and Halma