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Joseph

So now can we get answers from the Cambridge Police Commissioner about the aucarccy of Gates Incident Report in which he testilied about his conversation with the 911 caller at the scene and what she said or didn't say to him about backpacks and black people?

Fergus

I just can't see a PE owned Apple developing the iPod. That said, perhaps there are very few publicly owned companies that would have felt able to invest so much so far from their core. But, at a more mundane level, would
a PE owned Wrigley's have spent years developing sugar free chewing gum way back in the 70's or would it have stuck to improving the standard sugar product. I tend to think that developing and nurturing a product idea like sugar free gum comes out of a view that while this year/next year profits are important we need to spend some time and money developing the future otherwise we're going to be in trouble 5 or 10 years down the line.

David Taylor (brandgym)

Fergus raises a good point about long vs. short-terms innovation...though the CEO of Sarah Lee used to say "the long terms is only a series of short-terms"!

Do think that a good dose of short-term, business building innovation would do a lot of companies good...but to Fergus' challenge, are there any examples of PE-run companies that have done the transformational type of innovation?

Guess the point is "could Apple have done the iPod/iPhone/iTunes if it was owned by a PE firm?

Fergus

The points are well made regarding PE's focus on money, growth and cutting out activities which help deliver neither.

Where I think criticism is rightly levelled against PE is around short-termism and it's potential impact on innovation. Where a business is so focused on a 2 to 3 year time
horizon (in order for the PE fund to sell the business on at the required profit) then the only innovations that will be done will be those that can be developed, launched and can show a profit on investment before the
business is to be sold. That pretty much limits innovation to simple flavour or format style extensions on existing brands. Where are the transformational innovations or the new brands that will drive category
growth and profits in the longer term going to come from?

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