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Saturday, January 17, 2015

Market leaders to Category Kings: Fast mover takes all.

Report by Play Bigger `Time To Market Cap: The new metric that matter' elaborated on this concept of Category Kings.
TTMC is the measure of the time it takes a company to reach certain market capitalization milestones such as $500 million, $1 billion, or $5 billion. Time is measured by the number of years since the company was founded. Market cap is measured by (a) a company public market
capitalization, or (b) a company valuation at the time of purchase, or (c) the most recent post-money valuation from a round of financing.
Category Kings, the companies that dominate the rest of their competitors in a particular market, rise above the rest. Think Facebook, Twitter, Uber, Airbnb, Workday. Category Kings take a greater percentage of a category’s total market cap now than in any previous era. Most Category Kings win 76 percent of the category’s valuation.
Consumers Vs Enterprise
Is there a difference in TTMC by category of company?
Consumer companies had a much faster TTMC than enterprise
companies by a wide margin. However, enterprise companies went thru the same phenomenon, though stretched over longer time periods. So within the enterprise group, while not as fast as for consumer, were enterprise companies where TTMC was still accelerating, with enterprise companies reaching $500 million almost twice as fast for Era 3 (2009-13) compared with Era 1 (2000-3).

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