the name, Adipose

The Adipose Fin represents a fin on a fish that has long been misunderstood to be a useless piece of fatty tissue but may in fact, be quite important to some fish.  It has repeatedly evolved a skeleton across many different species of fish who are not related (Catfish, Salmon, Trout, etc.) : offering a new understanding into tissue types and convergent evolution.  Adipose fins, therefore, represent a new model for exploring the evolution of vertebrate limbs and appendages. "It's pretty incredible that a structure which is incredibly common could be so misunderstood," Stewart said. "Our finding, that adipose fins have evolved repeatedly, shows that this structure, long assumed to be more-or-less useless, might be very important to some fishes. It's exciting because it opens up new questions."

Read the full report here from Science Daily, oh ye of disbelief.

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So, why the name for our company?

Well, we're of the disposition that companies ought to think through sales and marketing strategies concurrently with their growth

...(not after they IPO or a significant capital raise).

We've heard the tales of companies like Twitter losing money rapidly before their IPO and heard from many an optimistic Wall Street analyst say "because they haven't yet started actively working on revenue models, there's tremendous upside! much more than Facebook - who has revenue models and sales teams in place and therefore, less potential upside in the future."

This is bubble thinking.  Here's why:

- Twitter counts 60% or more of its traffic from mobile devices each month.  Mobile advertising is still very undefined. If we're at our infancy with digital and banner ads, we're at the point of conception with mobile ads in 2014.  A few things are certain, though, about mobile advertising:

  • It should cost more than traditional advertising.  (A mobile device has become your most intimate possession: with you at all times.  This precious experience has taken mind share from others you used to focus on - TV, magazines, books, etc.) More engaged minutes should dictate a higher CPM.
  • In Q4 Twitter reported an average CPM increase of $1.49 up from 97 cents in the previous three months.  This is not a good CPM. It is much harder to drive a price up than it is to bring it down.  Starting at 97 cents doesn't give us tremendous room to charge existing advertisers more money and puts the burden on Twitter dramatically increasing the number of users to make this a profitable enterprise.

- We have an irrational market dictating the value of a company like Twitter in a very short-term, news-oriented way.  I believe great businesses are built over time and with careful consideration towards revenue, growth and profit.  In fact, history supports this with companies like GE, Apple, and Exxon all building profitable businesses over the long term.

- The irrational market believes that with this increased liquidity, Twitter will get to work on the hard work of finding advertising dollars and partnership deals throughout the world.  The fact, though, is, we now have a lot of smart people who were, at one point affiliated with Twitter who are now #filthyrich and it's unclear who's left to actually execute on sales and revenue strategy.

So...what does all this have to do with Adipose?

At Adipose, we will help your business think about revenue, sales, modeling and financial forecasts before any life changing event.

We think the companies that will succeed in riding out any market volatility will be the ones with clear revenue streams structured well in advance of any liquidity event in the public or private markets.

We think once you're worth a couple hundred million dollars, it may be too late to run around doing hundred thousand or million dollar ad deals...but the truth is: that's where the long-term, stable, bill-paying, business-building money is.