I’ve played around with ChatGPT a little and find it interesting. It quickly can rattle off a top 10 list, a situation overview, and more. And it’s fun.
I asked it to give me a list of M&A due diligence items and it gave me a list of top items and hit the old nail on the head. I asked for a list of value drivers in a business, got a nice list, and as with other requests it was a bit superficial.
It’s easy to give a list, it’s how you delve into the list’s items that makes a difference. For example, for everything I asked for that included “customers” it gave me only trivial answers. It’s easy to say customers are important as per what it gave me below.
Customer base: A loyal and growing customer base can be a key driver of value, as it provides a steady stream of revenue and can be a valuable asset to potential buyers.
What we should all want to know about customers are deeper things like:
- Is there good diversity or is there customer concentration?
- Are your top customers willing to pay based on quality and service, not the lowest price?
- If there’s a customer with high concentration is there a symbiotic relationship?
- Can you sell more to your current customers?
- How easy is it to get new customers (we all know how much more it costs to get a new customer versus doing more business with existing customers)?
It’s a great tool we know will get better. For now, I see it as something to start with and to build upon but still needs a lot of human insight.
“We all think alike, no one things very much.” Walter Lippmann
“The best way to have a good idea is to have lots of ideas.” Linus Pauling