Letās talk about a LOSS. Beginners, listen upā¦ Last year I was exploring different ideas, looking forward into the AI era noting that command-line tools were going to become more prevalent. This has become true. Regardless, I wanted to identify an investment opportunity that could āgovernā and āorchestrateā. $PATH was the evident chose after my research. Though, there were other players in the game - none were overtly as great at RPA compared to $PATH. The thesis was simple - with more AI tools being used, you needed to: - govern users. - govern AI bots/workflows. - orchestrate AI bots/workflows. - identify and create new applications. This captures the delineation between deterministic and probabilistic toolsets. Now, this is the slippery part. This thesis, is STILL TRUE. Yes, Iām not wrong about the technological side. But, I did go wrong somewhere elseā¦ The selection of $PATH. See, I selected $PATH because it looked like they were best positioned to offer all toolsets out of box straightaway. Which yes, was true. But my thesis ignored something. That something was enteprise lock-in. Over the years - enterprises adopted other enterprise automation solutions such as $NOW at a much greater rate. Turning away from the $PATH RPA hype, and into data driven-human focused cloud toolsets that a company like ServiceNow could produce on the fly. This created immense enterprise lock-in. So when the opportunity came for an enterprise to adopt $PATH, they didnāt - they didnāt because their data was locked into other ecosystems like $NOW. Ironically, $NOW is not a 1:1 RPA competitor and I want to make that clear - however, they are now moving in the direction of AI governance and orchestrationā¦ Hmm sounds similar. $NOW has developed the tools of which I believed gave $PATH the edge over the competitors. In reality, the edge was lock-in. Decades of centralized data consolidation all on other platforms. Now, back to $PATH ā¦ They quoted that their demand was unlike anything theyāve seen before. Even greater than early RPA era demand - and that investors should start to see this become material in Q1 2027 numbers (recent quarter). This was NOT TRUE. The reported 17% YoY revenue growth, which yes, is an acceleration. However, ARR remained flat at 12%ā¦. ARR is the critical factor to consider - because this captures all reoccurring revenues each year for the business. If revenues nominally increase - but ARR stays flat, thi indicated one-off revenue generating activities. Example, consulting or engineering services. At this point - my thesis broke and I parted ways with a 26% loss. Iāve learned that the MOST complicated technology that seems to be an edge isnāt always the most wise investment. You need to look at the customer story as well - after all, everything comes back to sales and retention. Is this flywheel or competitive edge material, or is it just theoretical? Lesson learned, booked and understood.
1,858 views
11 Comments
The Investment I Got Wrong: UiPath | Beginner Investors | Blossom Social
