Interview: Hamilton Helmer & Chenyi Shi on How to Build an AWS-Like Second Business
Acquired
Focusing on Revenue in Acquisitions
In making acquisitions, it is crucial to focus on generating new revenue rather than solely on cost savings. Attempts to cut costs by reducing personnel overlap in large organizations often fail due to the diseconomies within such organizations. The analysis should be based on fundamental factors like power. Successful acquisitions are usually those that lead to increased revenue since the potential for revenue growth is unlimited, unlike cost savings which have a cap.
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