Due Diligence will enable you to perform a SWOT analysis for examining the Good, The Bad and the Ugly of your CityGuru Investment.
Before describing what a SWOT analysis is, it should be noted that sometimes other investors’ due diligence will lead you towards information important to evaluating your investment opportunity. Look for their research results, and better yet, network with them.
During a Google search, we happened upon another investor’s evaluation that “CityGuru Flunks Investors Due Diligence”. Apparently, the author is not a CITYGURU Investor but was conducting a risk analysis of a possible investment opportunity. He/she was acting in behalf of an Investor Syndicate who was scouting the Seattle, Washington area.
What are important about their report are the criteria they used to evaluate CityGuru, Inc. While the criteria is objective it is to identify the Good, the Bad and the Ugly of a business venture and then calculates a “pass-fail” grade.
Admittedly, their verdict did sting a bit, but the use of “pass-fail” criteria made sense for prospective investors. But what about those of us who are already invested heavily in CityGuru, Inc? This information does us little good now, but it can be used in a more constructive way to determine what we might do about the current situation now. How can we now accentuate the Good, correct the Bad and clean up the Ugly? Enter the SWOT analysis, or Matrix.
Using data from Fortune 500 companies, SWOT analysis was developed by the Stanford Research Institute (SRI International) to provide a structured planning method in evaluating the strengths, weaknesses, opportunities and threats involved in a business venture. It involves specifying the objective of the business venture and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The idea is to give decision makers a better idea of whether or not the objective is attainable, given the SWOTs.
The relevancy of such an analysis for the CITYGURU Investor is obvious. It should be a vital part of your own Due Diligence and key in your decision making towards entering the investment, increasing your funding, or to withdraw from the investment.
So, let’s create a SWOT Matrix for CityGuru, Inc. using the typical SWOT criteria:
|• Salesmanship; Fund-raising|
• No overhead; Admin costs
• Small Investor base
|• Founder only Company Talent
• No accounting; financials
• No Professional Management
• No Business/execution Plan
• No oversight on Cash Basis
• No correlation between funding and growth/development
|• Located in Vibrant Marketplace|
• Improving economy
• Networking can enhance Brand
• Resolve of Litigation could greatly enhance Brand and Funding Base
|• Growing Legal/Litigation Woes
• Attracting attention of Govt regulatory agencies
• Funding = Growing Liability
• Brand tainted with Bad Press
• Company is One-Man-Show
• Competitive Industry
Used constructively, these SWOTs can form the foundation of what needs to be done to “accentuate the Good, correct the Bad and clean up the Ugly of the business venture called CityGuru, Inc. Think of it as the same process as buying a dilapidated house, rehabbing it and flipping it for a profit. But like the house used as an example: there is a lot of work to be done first, and possibly even more money to be invested up front. Knowing the SWOTs and what can/cannot be done about them will determine if you should pursue this ambitious venture.
- STRENGTHS: This is the Good that we want to accentuate. It might be argued that Founder, Drew Morrison is the only asset CityGuru, Inc. has. It can certainly be argued that he is at his best when he is selling and pitching. Less time/energy spent in managing/operating the company and more time in business development would be the best use of this asset.
- WEAKNESSES: This is the Bad we want to correct. From a macro-perspective, CityGuru, Inc. seriously lacks a solid business foundation and leadership in which to navigate a rapidly changing environment. There is not a bullet on the Weakness quadrant of the SWOT Matrix which cannot be corrected for the better if CityGuru was re-designed from the ground up with a Business Plan being followed by a professional management and delegation of authority. In time, this would evolve into more Strength (the Good).
- OPPORTUNITIES: This is also the Good we want to accentuate. But we live in a cluttered house can’t see the opportunities! Tossing out what has been horded for years is perhaps the best way to see all the opportunities that exist; waiting for CityGuru to find them! But, this will not be easy; it will require “biting the bullet” to deal and resolve the many threats trashing the opportunities.
- THREATS: This is the Ugly; what we want to clean up. Ongoing litigation is long-neglected infections that are growing malignant. This is stunting the growth of CityGuru, Inc. which has evolved very little from its “startup” infancy five years ago. Bitter tasting medicine and painful remedies may be necessary to resolve all these litigations but the survival of CityGuru in the next year to two years could be dependent upon it.
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