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Enron Mail |
Apologies for my Jerry McGuire-type long winded Memo, but I wanted articula=
te=20 my thoughts in detail to avoid confusion. We should get together to discus= s=20 these thoughts if we all see some opportunities here.... Rahil ***************************************************************************= *** ***************************************************************************= *** ******************************** ENW's Goals: To leverage the brand value residing in EnronOnline to help brand and creat= e=20 value for Enron's other e-commerce initiatives (DealBench, ClickPaper,=20 CommodityLogic, etc.). To find new ways to further develop and commercialize ENW's existing=20 platforms - i.e. use them to generate greater revenues and/or enhance their= =20 intrinsic value in the market. To strategically develop new businesses using Enron Net Works' core skills.= =20 This should/will lead to medium-longer term revenues on a sustainable basis= . To generate short-medium term revenues to meet targets and allow breathing= =20 room for longer term initiatives. Landscape: Few days ago, I came across this blurb on one of the online news updates=20 (Upside.com): Meanwhile =01( British Telecommunications' (BTY) internal incubator Brights= tar=20 announced Wednesday an agreement to work with U.S. based technology operati= ng=20 company incuVest, a $100 million holding company, to create companies in th= e=20 communications field based on British Telecomm's 13,000 patents. =20 Thoughts: BT's 13,000 patents are probably mostly technological patents or process=20 related patents. No organization has the "Bandwidth" (i.e. resources) to commercialize this= =20 many patents by itself in a short period of time. Doing it all themselves= =20 would mean having to work on commercializing these patents in a sequential= =20 manner - which could take years. Given the nature of these (and all other) patents, time-to-market is critic= al=20 since disruptive technologies can render these assets valueless. Even companies with adequate resources, won't have all the skills required = to=20 develop new businesses, since e-platforms require commercial, technological= ,=20 legal, regulatory, and development approaches that span across various=20 countries and industries. Hence, it would be in BT's best interests to try and: Focus on commercializing only the select patents that they think may offer= =20 them most value, and in which they have a truly developed skill-base. Monetize the remaining patents by giving them away in exchange for equity, = or=20 by selling them. This will also help raise money to re-deploy towards=20 commercializing the higher value patents. Pitch: Enron Net Works would be the perfect partner/solution provider for BT and= =20 others to: Evaluate the potential commercial value of BT's technological and process= =20 related patents so they can decide to whether incubate them internally or= =20 monetize them. Auction-off patents which BT considers to be less valuable via Deal Bench= =20 (which has data rooms capabilities to showcase patent specific information = as=20 well as an ability to host several clients). Commercialize patents (with BT and or other people who participate in the= =20 auctions) by providing a well-branded business development infrastructure= =20 (e.g. "from the company that developed the worlds biggest e-commerce site i= n=20 record time"). Benefits to ENW: Generate short-term revenues from DealBench's auction/data-room platform=20 while branding it in the longer run. Gain access to ideas and partners with whom we can develop new opportunitie= s. Branch out into servicing other companies that hold proprietary information= =20 (patents, etc.) like Lucent Technologies, Xerox, and others. Companies lik= e=20 this have been battered in the equity markets recently and would be open to= =20 ideas which helps them monetize some of their intellectual assets to appeas= e=20 the share-holders. Have secondary benefits of knowing what's being developed in the markets (b= y=20 plugging into a network of people and companies who've bought these patents= =20 and are commercializing them). This may allow us to invest in new ventures= =20 that hold promise when the market outlook improves in the future. Why Enron Net Works? Our experience across industries and geography allows us to leverage our=20 experiences to evaluate commercial opportunities. Once the value has been identified, we can use DealBench to monetize unwant= ed=20 assets in the broader market. We have experience and the support infrastructure on which we can rely to= =20 minimize the development time (legal, tax, regulatory, technological, and= =20 commercial support) just like we did with EnronOnline. Having industry and development experience has given us better skills to=20 develop new opportunities compared to consultants and incubators (who=20 typically don't have these "real-world" business experiences. Core skills include: Evaluating technology and implementing it in the most scaleable manner, Valuing the technology and opportunities from a financial standpoint, Commercial and market based insights which are increasingly valuable in the= =20 e-World where everything is getting commoditized due to decreasing=20 interaction costs and increasing transparency. ENW can quantify the value= =20 chain in these new industries. Enron's overall ability to manage risks in an array of commodity markets. Steps Forward - dedicate some resources to: Understand what it takes to do this and analyze whether we truly have the= =20 skills and resources to execute on this (e.g. Is DealBench built for this? = =20 Do we have the right skills?, etc.). We may also have to ally with some of= =20 the technology-specific skills within EBS. Identify the optimum number of new opportunities that can be valued,=20 auctioned and/or developed by ENW. This number may be only looking at 5=20 opportunities at a time or auctioning-off no more than 100. This is okay= =20 since we don't want to over extend ourselves (since our credibility is at= =20 stake). Identify top-level contacts with each of these organizations (BT and their= =20 partner incuVest, Lucent, Xerox, etc.) whom we can sell on our idea. Develop a contingency plan if the likes of BT, Lucent, and Xerox don't buy-= in=20 due ENW not having done similar things before. In this case, we could mine= =20 the patent database to identify the owners and approach some of the smaller= =20 shops (or other Mom-and-Pop owners) to buy and develop these things. This= =20 will allow us to develop an internal process and also develop a "history". If the patent holders have qualms about accidentally selling some patents= =20 with significant value (like Xerox has done in the past), we can structure= =20 creative contracts which allow them to share in the upside by retaining a= =20 certain percentage of the future earnings of the patent buyers (somewhat li= ke=20 a portfolio of equity in start-up companies). Enron can even help provide= =20 liquidity for these "portfolios" in the future. Let me know if you have any questions/ideas. Regards, Rahil 3-3206
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