“We cannot solve our problems with the same thinking we used when we created them.” - Albert Einstein

Competitive Advantage

The pursuit of sustainable competitive advantage, even after more than 75 years of business strategy case studies, continues to evade even the seemingly unassailable technology companies. Their strategy frameworks are often wrong, misleading, based on traditional - albeit easily measured - business metrics. Traditional corporate market sizing and income statement-based time series metric analysis provides only a partial view of the shape of an industry. In high tech industries, patterns of collaboration amongst leading researchers and scientists, as well as their publication volume, and ultimately their intellectual property rates of productivity, can often be more meaningful indicators of market structure. Certainly they are more accurate illustrations of the pattern of activity these technology companies engage in. Predicting or anticipating these market dynamics evades most Wallstreet analysts, as the traditional financial and accounting tools provide only limited portals into the business and strategy of managing a high-tech company.

Our Approach

XLP applies cutting edge analytics and landscaping tools to synthesize and recommend clear, simple investment hypotheses in technology markets. These tools were developed and refined in-house over the past two decades by the founders, building on 40 years of combined management consulting client and case experience, and over $250mm in venture and private equity deal experience. Although we employ our tools primarily for the purposes of operating our investment funds, we occasionally work on an advisory basis with large technology, consumer goods, energy, semiconductor, or telecom companies. Our data mining and technical literature analytics summarize and quantify operating levers, and provide both high-level and detailed audits of competitor activity for the strategy and executive audience. We apply our investment tools to help our clients quickly assess dynamic and rapidly changing technology markets, chart research and development priorities and multi-year program budgets, and provide due diligence during high tech mergers and acquisitions.

The Pace of Change

While it is often stated that the pace of change is accelerating, this is not uniformly true across all technologies and all markets. Our tools and analytics precisely quantify rates of growth in both specific and broad technology categories, so that our clients can develop appropriate leadship vs. fast follower strategies. When technology markets are growing rapidly, rapid fire R&D programs paired with prospective IP filing programs, and aggressive quick release strategies tend to predict ultimate market leadership. However, zero-sum or collapsing technology markets often prove that platform strategies, technology choke point ownership, and shared R&D costs through multi-party licensing programs can often drive greater profitability.

XLP Capital is a family office and as such is not required to be registered as an investment adviser with the U.S. Securities and Exchange Commission. Investments are made available only to accredited, qualified, or institutional investors that are eligible as family office clients, pursuant to the rules of the U.S. Investment Advisors Act of 1940. XLP does not seek or solicit investment for these funds or any other funds, and nothing on this page should constitute a solicitation for investment. The descriptions on this page is provided for information value only, as examples of prior investment related work XLP has conducted. XLP Capital assumes no liability for investment losses direct and indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, XLP Capital assumes no claim to investment gains direct or indirectly resulting from trading profits, investment management or advisory fees obtained by following investment recommendations made, implied, or inferred by its research. Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the Website are not an offer to sell or a solicitation of an offer to buy any investment, security or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.