Profitability & Efficiency posts

The Toptal Finance Blog covers all facets of finance, ranging from detailed strategies on raising capital to in-depth coverage of new finance trends and technologies.
Michael Yarmo
Meal Kit Industry Blues: How Can Blue Apron Lift Its Malaise?

In the past five years, Blue Apron has brought meal kits to the masses and commands a 40% market share in the USA. Yet all is not rosy; its financial losses have continually accelerated and it has ceded 17% of its market share in the past year.

Amazon buying Whole Foods on the eve of its 2017 IPO could have just been bad luck, or prescient signs of what’s to come for Blue Apron. This article looks at ways that the business can get its house in order and win back the Millennial kitchen.

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Elizabeth J. Howell Hanano, CFA
2017 Holiday Spending Forecast: Will Be Better Than Expected

Retail investors have had a rough year. The SPDR S&P Retail ETF has underperformed the S&P 500 by nearly 30 percentage points. From eCommerce shifts to higher gas prices, there are plenty of arguments to be made against retail. Yet, there are a couple reasons to be jolly heading into the holiday season that few are talking about.

In this article, Elizabeth Hanano, CFA suggests that low expectations combined with lesser-known tailwinds indicate it may be time to dip a toe back into the retail pond.

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Orinola Gbadebo-Smith
The Wealth of Nations: Investment Strategies of Sovereign Wealth Funds

Since their emergence in the early 2000s, Sovereign Wealth Funds (SWF) have been met with both curiosity and trepidation, existing somewhere between return-maximizing asset manager and clandestine government agency.

This article takes us into the $7.4 trillion world of the SWF, shedding light on objectives, ambitions, and mandates as well as allocation strategies.

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Melissa Lin
Are Corporate Responsibility Efforts Profitable?

Financial purists have long questioned whether corporate, environmental, and social initiatives benefit the bottom line and how to quantify their impact.

In this article, we put aside motive—of genuine altruism or self interest—and philosophical debates around moral obligation. Instead, we examine the results of studies around whether corporate responsibility initiatives positively impact profitability, examples of companies that have implemented such measures successfully, and recommendations for those looking to do so.

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Jonathan Sterling
Exploring the Bear Case of the Cryptocurrency Bubble

The arguments for a cryptocurrency revolution can tend to sway toward appearing more like get-rich-quick schemes than balanced debates. The regulatory risk overhang, constant scams, and technological immaturity of the movement mean that long-term success is far from certain.

In this article, Jonathan Sterling addresses the other side of the argument: the bear case for a crypto future. He shines a light on the problems blighting cryptocurrencies and some remedies for them, drawing upon comparisons with historic bubbles, some centuries old.

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Gregory Thompson
Small Data, Big Opportunities

By now, most have heard of Big Data – the buzzword d’jour across most business circles. In this exploratory piece, Finance Expert, Gregory Thompson, introduces us to the wonderful world of Small Data.

Specifically, he guides us through its broader market dynamics, tools, players and solutions, and includes a practical implementation guide for how small businesses might add analytics as a core-capability to their respective business arsenals.

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Melissa Lin
Celebrity Investors Take Over Silicon Valley

Today, there are many celebrities that have become investors, and many investors that are borderline celebrities. One thing is clear: The division between Hollywood and Silicon Valley has become increasingly blurred. Though in the past it has been common for famous entertainers, musicians, or actors to grow their wealth through real estate, royalties, or restaurants, celebrities today are turning towards tech investments.

This article explores why celebrities are drawn to Silicon Valley, the types of companies they invest in, different models of their involvement, and commentary on how it impacts the tech industry.

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Elizabeth J. Howell Hanano, CFA
Pearls of Wisdom - The Best Shareholder Letters Nobody Is Reading

Equity analysts often leave out an important source of wisdom when analyzing companies—the annual shareholder letter. This article intends to elucidate the purpose and traits of good shareholder letters based on an analysis of the 601 companies in the S&P SmallCap 600 Index. The article will also direct readers to some of the best lesser-known shareholder letters to put on their annual reading list.

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Mauro F. Romaldini, ACMA CGMA
How Is the International Money Transfer Market Evolving?

With the global workforce becoming increasingly mobile, international money transfers (“remittances”) have equally grown in prominence, passing the $530 billion a year mark in 2016.

Fees for transfers are at an all-time low, thanks to pressure from bodies such as the UN, which is providing consumers with more value. But how are transfer companies responding to this pressure and what steps are they taking to differentiate themselves from the rest of the pack?

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Marty Mooney
Why Every Business Should Build Weekly Cash Flow Forecasts

When most finance professionals hear the term “13 week cash Forecast,” they view it as a burden—one more task to appease an overbearing lender. It doesn’t help that it seems less exciting than analyzing an investment or acquisition. Therefore, people often only prioritize these forecasts in distressed situations, when it is too late to take corrective actions.

However, in this article, Toptal Finance Expert Marty Mooney argues that weekly cash forecasts are crucial for all businesses, irrespective of size, health, or sector. It also provides a simple tutorial for efficiently building such analyses.

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Alex Graham
Fintech and Banks: How Can the Banking Industry Respond to the Threat of Disruption?

Fintech attention tends to focus on startups and their efforts to unbundle the financial service industry’s suite of services. But how are banks responding to this disruptive threat? Despite their wealth, talent, and rich history of innovation, they have been sluggish to respond to the upstart movement.

This article suggest four ways banks can change their tact and respond better to fintech.

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Francesco Castellano
Commercial Drones Are Revolutionizing Business Operations

When most hear “drone,” they think expensive military aircrafts or small consumer toys. However, the future of drones will actually be shaped by practical commercial applications, due to their ability to drive efficiency and data analytics.

This article defines drones and their total addressable market and highlights how their capabilities can be leveraged in commercial business operations. It also includes investment trends and predictions for the future of the industry.

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Orinola Gbadebo-Smith
Bridgewater's Ray Dalio: Quiet Pioneer of Big Data, Machine Learning, and Fintech

Ray Dalio is an investing legend whose success is most often attributed to investment acumen. This article argues that it was equally due to his foresight as an early but quiet adopter of computational systems, big data techniques, and artificial intelligence that resulted in his outstanding success. Bridgewater was one of the world’s earliest fintech companies.

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Alex Graham
Great Recent Examples of Competitive Strategy Successes

Competitive strategy frameworks are widely known and mainstays of university curricula, despite being almost 40 years old. We often hear the stories of Walmart and Southwest Airlines, but what modern examples are there? In this article we use Michael Porter’s activity positioning framework to show successful applications of competitive strategy from modern digital companies.

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Orinola Gbadebo-Smith
Why More Entrepreneurs are Choosing To Build Search Funds over Startups

Search funds, though once an esoteric asset class and model for entrepreneurship, have seen a substantial rise in popularity in recent years. They can often represent a superior alternative to the venture-backed startup route especially for a select cohort of formally trained entrepreneurs, most of all those who deeply understand their motives, risk appetites, and contextual/financial encumbrances.

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Melissa Lin
Cybersecurity: What Every CEO and CFO Should Know

$7.35 million. That’s the average cost of a data breach is. Sure, cybersecurity isn’t sexy. However, in today’s digital age, it is undeniably critical for large corporations and small startups alike. This is compounded by the fact that hacks are becoming commonplace.

Read on to arm yourself with awareness to these invisible threats, and tangible steps you can take to protect yourself and your company.

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Jeffrey Mazer
Demystifying Cryptocurrencies, Blockchain, and ICOs

Despite significant advancements, cryptocurrencies remain highly controversial; while some tout it as “the next internet,” others view Bitcoin as “evil.” At their simplest, they are the newest fintech fad; yet at their most complex, they’re a revolutionary technology challenging the political and social underpinnings of society. This article will demystify cryptocurrencies’ appeal, its complex underlying technology, and its value. It will also examine the accounting and regulatory, and privacy issues surrounding the space.

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Puneet Gandhi
Should We Rethink the Use of EBITDA?

EBITDA is one of the most common metrics in finance. However, while intended to provide a “cleaner” picture of operating performance than net income, in reality it often achieves the opposite effect. It is also in many cases a questionable proxy for cash flow, as well as a dubious valuation tool.

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Melissa Lin
Why Investors are Irrational, According to Behavioral Finance

Though traditional economic theory posits that individuals are rational, we all know this to be an oversimplification of the truth. The cyclical investment process is rife with psychological pitfalls. Only by becoming aware of and actively avoiding innate behavioral biases can investors reach impartial decisions. Herein lies the true value of the emerging field of behavioral finance, which sheds light on true financial behavior.

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Melissa Lin
How Artificial Intelligence Is Disrupting Finance

As consumers, we’re familiar with AI: we benefit from cars that parallel park themselves, devices that respond when asked questions, and streaming platforms that suggest shows we may like. However, professionally, the larger question is how industries will harness the power of AI. In finance, AI offers opportunities for operational efficiencies in everything from risk management and trading to insurance underwriting.

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Melissa Lin
Experts’ Corner: Pitch Deck Tips for Fundraising Success

Fundraising, for companies at any stage, is undoubtedly a challenging process. Even for seasoned entrepreneurs and startups already experiencing market traction, a compelling pitch and accompanying pitch deck are still necessary. While there is variance around stylistic delivery of the pitch and aesthetic of the deck itself, you might be relieved to hear that the infamous pitch deck boils down to a formula.

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Melissa Lin
Advanced PowerPoint Presentation Tips & Hacks

Many have a love-hate relationship with PowerPoint presentation design. While extremely flexible, the tool can also be manual and tedious. Remove some of the friction with these advanced PowerPoint presentation tips and tricks, as provided by a former management consultant. Whether you’re designing a pitch deck or communicating your analysis to internal stakeholders, these hacks will enable you to quickly build engaging, creative presentations.

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Solon Molho
The Greek Debt Crisis Explained

After several months of relative quiet, Greece is back in the spotlight as the latest repayment deadline on its bailout debt comes due in July. We take the opportunity to review the root causes of the crisis, what has been happening since it kicked off, and what needs to be done to resolve the situation.

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Melissa Lin
Is a Cashless Society the New Reality?

A cashless society is approaching, with progress particularly pronounced in certain parts of the world. This piece examines global payment trends, as well as benefits and drawbacks of a cashless economy. It also includes case studies on India and Sweden, two countries already transitioning to a cashless future.

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Rajeev Jeyakumar
The State of Fintech in 2017

The financial services industry is seeing a wave of innovation that is bringing with it new technology, but also a need to attract and develop talent that have the skillset needed to operate in this changing environment. This article delves into some of the most important trends affecting the industry.

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Tayfun Uslu
SaaS Pricing Models - Pricing Strategy Examples and Best Practices

Pricing strategy is one of the most important financial levers that companies have at their disposal to influence the financial success of their business. However, it is not an easy task. This article analyzes SaaS software pricing strategies and finds that several of the operational characteristics of the business model generate some very useful pricing advantages that can help drive financial performance.

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Natallia Chykina
Open Source Software - Investable Business Model or Not?

Open-source software is a catalyst for growth and change in the IT industry, and one can’t overestimate its importance to the sector. In recent years, there has been a surge in venture capital dollars pouring into the sector. In this article, we analyse whether recent valuations make sense, and whether the open-source model lends itself to the returns profile that venture capital investors look for.

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