Research Mentor(s): Yuan Shi, PhD student
Research Mentor School/College/Department: Finance, Ross School of Business
Presentation Date: Thursday, April 22, 2021
Session: Session 2 (11am – 11:50am)
Breakout Room: Room 3
Data is an asset Motivation: Our motivation is to analyze how the digital economy, which has increased the market cap hundred times for the last two decades, developed and boomed. For instance, what is the key makes Twitter grow to a billion-market-size company and have sustainable cash flow in the last decades. On the other hand, we want to predict how the digital economy will be in the future, and what will be the next trend in the digital economy. Methods: The mentor created a sample of 250 listed companies across different industries in the digital economy. We went to the SEC website to read the financial statements and quarter statements of these companies and capture certain financial metrics like revenue sources, revenue region, monthly active user, etc. Also, we made a short summary of the business model for each company. Finding: As we combine the business model with their financial metrics, we understand why certain companies are relegated after a few years while other companies become a unicorn company. Certain keys to success we found are “ability to develop loyal users”, ” ability to grow the user base”, ” ability to convert users to subscribers that pay money and contribute to the revenue.” Conclusion: This study helps us to understand the success factors of companies in the digital company. As we collected the significant data in the last term, we will further breakdown the data to find out which metric is most significant for the company’s success and analyze them to assess how these companies will be valued in the future.