Osprey is an example of a company with a great niche product, solving a particular issue that has no other near-term solution, but seemingly unable to make a viable business.
I used to own, having bought many many years ago, into what I imagined would be a huge worldwide success story.
It was a great lesson for me on many levels:
- just because it makes medical sense, doesn't mean it will be a commercial success. I have had to re-learn this on several occasions, and has made mextremely wary of delving into the medical space at all.
- Dont average down unless there is clear evidence of financial progress. I bought, and bought and bought. Sales were going up, they were investing in new sales team members in the best target states in the US where their product should be in high demand. There were signs of traction. But over time, and it took me far too long to realise, it became clear the cost of those sales was outpacing the revenue by a considerable margin
- I thought I was cleverer than the market, because it was in my sphere of competence.
- I believed in the turn around story. The contracts with large purchasing organisations ( I think Kaiser Permanente health from memory) and with GE as a re-seller would change everything. It hasnt....yet.
- Hope and loss avoidance. Even when I realised I was in a lemon, I couldnt bring myself to act and pull the pin, hoping somehow that it would pull off a coup.
@Abelian, I hope you have a better outcome than I did, but it would take a lot of evidence that they had gained significant sales traction and were defintiely FCF +ve before I would re-renter.
