Appen mainly works with big tech clients like Google and Amazon, so it's struggling during the tech dip.
👉 Background: Appen is an Aussie-founded tech/services company. Appen crowdsources people to sort through millions of pieces of data which is used to train AI algorithms.
👉 What happened: This company mainly works with real big tech clients like Google and Amazon. But after a few years as a tech-darling, it has downgraded its earnings a lot. And it ain’t the first time.
👉 What else: Appen’s EBITBA for the first half of this year was 69% lower. Put simply, the overall slowdown in digital advertising meant there was less demand from Appen’s big customers.
💡The wisdom behind the old saying “don’t put all of your eggs in one basket” still stands. A small set of large customers can see businesses soar, but it also can prove to be a risky way of doing business.
💡 When all your customers are in the same market, they can all be affected by changes in that market (eg. tech-wreck). For Appen, 77% of their revenue was from key global clients like Google and Facebook.
💡And since the tech market has fallen significantly, it has exposed Appen for being so reliant on too few companies.
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