Thursday, December 8, 2022

Cyndx, Zoom, and Approaching Markets

A recurring move I see companies make is choosing to attack a more powerful competitor where they are strongest, not weakest.

The ancient military strategist Sun Tzu argued “to win a hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.” So in war, the way to avoid what is strong is to strike what is weak.

When comparing how Cyndx is competing in the search market and how Zoom is competing in the video conference market showcases one company going after where the market is weak and the other attacking where the market is strong.

Cyndx, a focused search engine supplier for investment banking, is approaching the fight like Tzu would by hitting the market where there’s an opening with a targeted service, while Zoom is developing a competitor in one of the market’s strongest product categories.

Let’s explore how Cyndx is approaching what should be an impossible task successfully with an aggressive use of AI, while Zoom is taking a different approach:

Cyndx

What Cyndx has done is create the kind of tool that search market should have created but didn’t. So Cyndx was able to successfully be a dominant search tool in many banks.

Banks invest in a lot of technology but often don’t understand that technology well enough to optimize it. That means that related implementations in banking often perform well below their potential, and with investment banking, where you need as much information as possible about a potential investment, this results in avoidable process failures and losses.

Using advanced artificial intelligence (AI) techniques, Cyndx provides a focused tool specifically designed to rapidly execute diligence and aggregate and curate the information surrounding a potential investment, so the financial analyst doing the work gets a quick, thorough assessment of all related data and can then make an informed decision about the acquisition. This provides multiple advantages both in terms of the quantity and quality of the information supplied to the decision maker, so they can both move more quickly and with far greater assurance than they could using standard search.

Covering seven languages, the embedded AI in the Cyndx search tool uses what it knows about prior users’ similar searches to help refine and focus the financially related search and incorporate elements, like company size, number of employees, and location, both into the search criteria and presented as results depending on need.

Typical results include major suppliers, significant customers, curated patent data — which showcases where the company actually spends its time, and the validity of those patents — are they defensible, have they been successfully defended — and executive staff backgrounds. A recently added feature is an instantly derived valuation, so the investing entity can determine if an investment is supported by the target firm’s valuation.

This tool is actively used in around 90% of investment banks but only in around 10% of the companies actively doing acquisitions, suggesting both a growth opportunity for Cyndx and a competitive opportunity for non-banking firms actively doing similar types of investments and acquisitions.

This is a subscription service, so it isn’t corrupted, and it focuses on an area where the search market isn’t, which means the market likely isn’t, and won’t, work on coming up with a competing offering.

See more: Artificial Intelligence (AI) in Banking

Zoom

Zoom is rightly concerned about competitors bundling videos conferencing with productivity suites. However, collaboration is an obvious feature to add to a productivity suite, making it hard and likely inadvisable to try to use government ant-trust tools to fight.

To address this, Zoom has signaled they are expanding into the productivity space, mirroring what some tech companies did when faced with similar issues.

Zoom’s approach, therefore, could be better served by using Cyndx’s approach. Rather than attacking the productivity market, going after specific market segments, like education or remote meetings for governments or medical collaboration — requiring high security but with little need to integrate with office tools — and tech platforms — like Linux, Android, and Chrome — are rare moves that Zoom could defend. They may fly under the radar and allow Zoom to be more successful.

Regardless of these moves, Zoom should be advancing its AI capabilities to better mirror what competitors are rolling out to reduce the frequency of competitive migrations.

See more: Zoom Product Overview

Two market approaches 

When going after a larger competitor, remember Sun Tzu’s advice. Do a competitive assessment to better understand not only where the competitor is weakest but where it currently isn’t focused.

Cyndx has clearly done that in the search market. Cyndx is not only expanding where there is market opportunity, it is likely the market doesn’t care, meaning it won’t resource displacing Cyndx.

On the other hand, Zoom appears to be attacking one of the areas where the market is strongest and doing so in a way that will focus the market on efforts to move aggressively in return, resulting in an expensive competition with companies with great resources and market presence.

In the end, the lesson is that Tzu was right: If you want to win, understand your competitor and go where it isn’t and try to specifically find approaches that won’t focus them on your market to reduce your competitive risks and cost.

See more: Why NVIDIA Has Become a Leader in the AI Market

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