We’ve been asking some questions lately. Especially to e-commerce companies that have lost some fizz over the last few months. The answers are usually candid. But sometimes, we come across Gobbledygook. Also known as phrases that are made unintelligible by excessive use of “technical terms.” Here is a pick from the list of such terms that we’ve been hearing most frequently these days and what it really means.
Right sizing, downsizing
It’s hard to catch someone saying that they are sacking people. What you would hear instead, is that they are right sizing. This pretty much translates to “we’re sacking.” When someone says we are right sizing (and sometimes it’s not even done right), it usually means that they are asking people to go. In other words, handing out pink slips.
Consolidating, Going Lean
These words are gaining currency like e-commerce companies are burning cash. With venture capital getting scarce, many of the new e-commerce companies are now forced to take a hard look at their business and decide what they are going to do next. Technically, consolidation means unification. But loosely used, it could mean merging with another company, consolidating its assets, or sometimes even a distress sale. The bottom line is: we’ve run out of money. Going lean would mean that they are cutting costs & right sizing.
GMV is NOT Revenue
For the Uninitiated, GMV is Gross Merchandise Value. Many people outside the industry and sometimes the mainstream media, tends to mistake GMV for revenue. GMV is as far from revenue as e-commerce companies are far from turning profitable. Investopedia has a good definition
Gross merchandise value is one element of an e-commerce site’s performance, since the revenue of the business will be a function of gross merchandise sold and fees charged. It is most useful as a comparative measure over time, such as current quarter value versus previous quarter value.
We want to be profitable
This again, translates in plain English as since there isn’t a lot of venture capital or free money lying around, we have no choice to but make the business fundamentally profitable. Usually, e-commerce companies that haven’t been very successful in raising follow on capital will say this.
Have signed a definitive agreement
Its simple. Definitive agreement is basically a done deal.
Consolidation in the industry
This is usually used by analysts and the so called industry experts. It means a bunch of things including (not limited to) shut downs, distress sale, acquisitions & mergers. You’d have heard analysts use the term “correction” as well. Like “there’s a correction in the offing.” Things don’t correct. They fall.