How to Become an Asian Tycoon - Commoncog

[cedric]

Note: This is Part 7 in a series of articles and cases on Asian Conglomerates. Read Part 6 here. You may read more about the Asian Conglomerate Series here, or view all the published cases here.

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This is a companion discussion topic for the original entry at https://commoncog.com/how-to-become-an-asian-tycoon

[mgoodrum]

Footnote from a long time SAS user:

SAS/PH-Clinical is the true moat, and this gets at what SAS is good at:

@cedric

I should also note that their use cases are always focused on specific, advanced analytics use cases, not the generic dashboarding that is so common in the BI world

Also, there are many use cases that are best described as intermediate with high stakes, like, “Combine data from a half dozen source systems on different platforms for regulatory review, and be exact about it: directionally correct is a disaster.”

Even beyond pharma, SAS’s best customers have a moat on the planning/regulated end of the economic spectrum, and SAS is part of how they preserve that moat

In that context, the switching cost moats become something more than standard

[Roger]

Can @cedric’s inner Singaporean tycoon please make regular appearances in the forum? Kthxbye.

[cedric]

I will say that inserting that bit of Singlish might just be my crowning achievement

@mgoodrum

Also, there are many use cases that are best described as intermediate with high stakes, like, “Combine data from a half dozen source systems on different platforms for regulatory review, and be exact about it: directionally correct is a disaster.”

Even beyond pharma, SAS’s best customers have a moat on the planning/regulated end of the economic spectrum, and SAS is part of how they preserve that moat

In that context, the switching cost moats become something more than standard

This is really, really good context. I’ve long been puzzled by SAS Institute’s wonderful track record. It’s quite rare to grow so large and so profitably for so long, and without external capital beyond bank loans — the typical VC narrative is that you need money due to the SaaS cash flow trough. But of course providers of capital will always try and convince you that they need their capital. That SAS grew before SaaS became a thing has always been notable to me.

Your comment — plus the fact that they’ve always done annual, cash-up-front contracts, per the oral history — probably explains it.

[mgoodrum]

I suspect SAS made it through the cash flow trough by growing slowly early on: per their corporate history, they didn’t get to 100 employees until 1981, five years after incorporating, and 15 years after software development started

VC firms being far away (1,100 km from Cary to Cambridge, MA; 4,500 km to Palo Alto) also probably helped

[mgoodrum]

@cedric

Think about two of the tenets we’ve just examined: first, that governments meddle in markets everywhere in the world. Second, that market distortions are opportunities

OK, I’ll be the one to bring it up

Spectacular timing here

The new U.S. tariff regime is a clear and present instance of ‘governments meddling in markets’

I have no idea how long it will stick, but it’s worth considering what opportunities might be created by this market distortion