In the words of the article, Isolde targets the market for “stuff” and Emmanuel targets the market for “machines.” More concretely, Siliquent could not earn high margin on test instruments and so focused on biological and chemical compounds, test kits, and other consumables as their mode of profit. Teomik on the other hand found that their profit could come from patent-protected devices. Isolde’s revenue model aligned with their customer’s need for certain consumables at a price just slightly lower than their customer’s fixed reimbursements from insurance. For those customers, Siliquent products reliably provided vital material at a reasonable price point. Teomik’s revenue model was built based on where they could compete – not where the restrictions were low and competition intense. The pros of the single revenue model is that there would be a broader customer base and a more singular focus on revenue creation. The peril is that they would lose the flexibility of what they are able to offer to their customers according to the shifting markets. The perils of the flexible model is that it would create more strain on the singular merged company and neither would be making money off their customer service. The pro would be that they would keep their holds over both markets as they do at this point.
I would ask them to weigh out the market growth and current market revenues for each of their revenue models and also to map out the flexible revenue model, as it is difficult to argue with numbers.
