Does investors' shock verdict mean #Wix is to shift its #strategy from #growth to #profitability?
Will the company pull the levers it needs to increase such profitability?
With recent signals money supply might dwindle as central banks gird to fight inflation, increasingly cautious investor mindset means growth companies may now shift their focus towards proven profitability.
The growth king may not be dead yet, but long lives #operationalexcellence. Management at the company certainly has a lot to think about, after the chilly response to its somewhat sparse yearly revenue and profit forecast.
While part of Investors scramble to the exit is certainly due to #covid related uncertainty; I humbly suspect that the financial outlook in the company guidance, citing 5% free cash flow in '22 and 10% in '23, may not be enough.
Capital supply may become short in the next few years - as might investors' patience for loss making companies. The challenge ahead is then, how to extract more #value from the current user base:
How many would eventually move up the #freemium ladder?
How revenue retention can be increased? How to cross-sell to paying customers new value added services, and
How can the platform sustain the full digital lifecycle of modern day small businesses?
Finally, an intriguing one: Can, and should, Wix create value propositions for larger - and better paying - customers, or will Wordpress ecosystem continue to rule this space?
These are some questions that will determine #wix future success and a renewed #investor #confidence.
At TheRoad, we specialize in #businessmodel creation; #productstrategy ; #growthstrategy.
We help managements evaluate their options, craft their strategy, and create measurable workplans.