Think Tools

Think Tools AG was a Swiss information-technology consultancy and software company founded in 1993 by philosopher Albrecht von Müller. It began as a consultancy and developed a proprietary software product intended to support corporate and governmental problem solving. The company presented Think Tools Suite as an advanced visual environment for organizing ideas, knowledge and decision processes. In practical terms, the software provided graphical methods for representing and navigating information, rather than independently performing knowledge representation, reasoning or problem solving. The company became closely associated with the intellectual and business networks surrounding the World Economic Forum. Its public narrative emphasized the transition to a knowledge economy and suggested that Think Tools could help major organizations generate, retain and apply knowledge more effectively. Promotional material referred to a research background connected with work at the Max Planck Institute of Physics and cited prominent users or reference clients, including Nelson Mandela and the South African government. Later scrutiny questioned the extent to which the cited organizations actually used the software and whether the marketing claims accurately reflected the product's capabilities. Think Tools was profitable before its flotation. In 1999, it reported sales of CHF 10.6 million and net income of CHF 3.9 million, with much of its business coming from services to companies connected to the World Economic Forum. The company went public on the Swiss stock exchange on March 24, 2000, at the height of the technology-market boom. Shares were issued at CHF 270 and reached CHF 1,050 on the first trading day. At the peak, this implied a market capitalization of approximately CHF 2.52 billion, far beyond the scale of the company's operating revenue and earnings. The valuation rapidly unraveled. Sales rose to CHF 25.3 million in 2000, but the company recorded a CHF 19.8 million loss. In 2001, sales fell to CHF 3.4 million and the loss reached CHF 14.5 million. Analysts questioned the valuation, while concerns also emerged over alleged plagiarism involving ideas associated with biochemistry professor Frederic Vester, the accuracy of reference-client claims and the gap between the product's advertised ambitions and its actual functionality. The software's one-time licensing model, with individual licenses reportedly priced as high as CHF 1 million, also limited the pool of potential buyers. The decline continued through 2003, when sales were CHF 1.9 million against operating expenses of CHF 12.2 million. Think Tools agreed to merge with Swiss IT company redIT AG in May 2004. The transaction brought Think Tools' listed-company history to an end while enabling redIT AG to remain publicly traded. In October 2004, redIT sold the rights to the principal remaining Think Tools asset, Think Tools Suite, to the Parmenides Foundation, which had also been founded by Albrecht von Müller. The software was subsequently renamed Parmenides Eidos Suite - Visual Reasoning and Knowledge Representation. Think Tools is chiefly remembered as a case study in speculative technology valuations, ambitious enterprise-software claims and the rapid reversal of investor sentiment during the dot-com bust. Its methods and software continued to receive some attention in discussions of scenario development, visual reasoning and strategic decision making, including reported use in German government projects, even after the original company had ceased to operate.

Think Tools was established in Switzerland in 1993 by philosopher Albrecht von Müller as a consultancy. Its initial business focused on advising organizations on complex strategic and organizational issues. The company later sought to turn its advisory methods into software, producing Think Tools Suite as a visual environment for structuring information, ideas and decision processes. The product was marketed during the late 1990s as a tool for the emerging knowledge economy. Rather than operating as an autonomous artificial-intelligence system, it supplied a graphical framework in which users could arrange concepts, relationships and arguments. Think Tools nevertheless used expansive language about improving an organization's capacity to generate, store and use knowledge. The company also associated the product with a long-running research program at the Max Planck Institute of Physics and promoted relationships with influential corporate, governmental and international-policy circles. Before its flotation, Think Tools reported relatively modest but positive results. Its 1999 sales were CHF 10.6 million and net income was CHF 3.9 million. Much of its revenue came from consultancy work for companies linked to the World Economic Forum. The company's profile and connections helped it attract extraordinary attention when it went public on March 24, 2000. Shares were issued at CHF 270 and rose to CHF 1,050 on the first trading day, giving the company a peak value of roughly CHF 2.52 billion. The public-market valuation proved unsustainable. Think Tools increased sales to CHF 25.3 million in 2000 but recorded a CHF 19.8 million loss. In 2001, sales fell to CHF 3.4 million and losses reached CHF 14.5 million. Analysts described the stock as severely overvalued, while investors began examining whether the company's product could deliver the capabilities implied by its promotional claims. Questions were also raised about prominent reference clients and alleged similarities between elements of Think Tools Suite and work associated with Frederic Vester. The company's licensing model, based on large one-time payments that could reach CHF 1 million per license, further restricted the addressable market. The financial decline continued. Shares traded at CHF 26 on November 2, 2001, and at CHF 8.20 on January 3, 2003. For 2003, sales were CHF 1.9 million while operating expenses were CHF 12.2 million. By then, the company had not demonstrated a viable path from high-profile consultancy and ambitious software positioning to recurring commercial growth. Think Tools entered a final restructuring phase in 2004. In May it agreed to merge with redIT AG, a Swiss IT company. The combination resulted in redIT becoming the continuing publicly traded entity. In October, redIT sold the rights to the remaining Think Tools Suite asset to the Parmenides Foundation, another organization founded by von Müller. The foundation renamed the software Parmenides Eidos Suite - Visual Reasoning and Knowledge Representation and continued to offer it. The company's collapse also generated regulatory and reputational consequences. The Swiss Federal Banking Commission fined Vontobel CHF 21 million over irregularities surrounding the IPO after the Swiss stock exchange brought the matter to its attention. The case concerned the bank's retention and subsequent sale of shares that had been intended for the offering. After Think Tools ceased to exist as an independent company, its visual-reasoning concepts continued to appear in discussions of scenario planning and strategic decision making. Reports also described use of the software in German government projects, although such later references did not restore the original company's commercial position.

• 2004

  Merger with redIT and transfer of software rights

  [1]Think Toolsen.wikipedia.org

  Think Tools agreed to merge with redIT in May. In October, redIT sold the principal software asset to the Parmenides Foundation.

• 2003

  Business reaches severe contraction

  [1]Think Toolsen.wikipedia.org

  Sales declined to CHF 1.9 million while operating expenses were CHF 12.2 million; shares traded at CHF 8.20 on January 3.

• 2001

  Revenue contraction and share-price collapse

  [1]Think Toolsen.wikipedia.org

  Sales fell to CHF 3.4 million, the company reported a CHF 14.5 million loss, and shares traded at CHF 26 by November 2.

• 2000

  Initial public offering and market peak

  [1]Think Toolsen.wikipedia.org

  The company listed on March 24 at CHF 270 per share; the stock reached CHF 1,050 on its first trading day and later implied a valuation of about CHF 2.52 billion.

• 1999

  Last reported profitable pre-IPO year

  [1]Think Toolsen.wikipedia.org

  Think Tools reported CHF 10.6 million in sales and CHF 3.9 million in net income before its flotation.

• 1993

  Company founded as a consultancy

  [1]Think Toolsen.wikipedia.org

  Albrecht von Müller founded Think Tools in Switzerland as a consultancy focused on organizational and strategic problem solving.

Think Tools positioned itself as a knowledge-economy consultancy and software innovator helping organizations visualize complex information, coordinate policy and improve strategic decision making.

• Enterprise decision-support software

  Think Tools Suite

  Think Tools Suite was designed as a graphical workspace for organizing concepts, relationships and information in support of corporate and governmental problem solving. It functioned more like an intelligent visual notepad or structured knowledge-mapping environment than an autonomous reasoning engine: users supplied and interpreted the content. The company promoted it as a means of improving knowledge generation, storage and use, but later criticism focused on the difference between those broad claims and the software's actual capabilities. After the 2004 transfer of rights, the Parmenides Foundation renamed it Parmenides Eidos Suite - Visual Reasoning and Knowledge Representation.

• Information-technology and strategy consulting · 1993

  Consultancy services

  Consultancy was Think Tools' original business and remained an important part of its commercial identity. The company advised corporate and governmental organizations on strategic, policy and organizational questions, presenting its approach as a way to support complex decision making and knowledge-based management. Pre-IPO revenue was reported to come largely from services to companies with connections to the World Economic Forum.

• 2000

  IPO valuation and misleading-product claims controversy

  The company's extraordinary first-day share-price increase and later collapse prompted scrutiny of its valuation, product capabilities and promotional claims. Questions were raised about whether cited reference clients actually used Think Tools Suite and whether the software could perform the advanced functions suggested by the company's marketing.

  Source

• 2000

  Alleged plagiarism involving Think Tools Suite

  Think Tools faced allegations that elements of Think Tools Suite drew improperly on work associated with biochemistry professor Frederic Vester. The allegations became part of the broader scrutiny surrounding the product and the company's claims.

  Source

• Vontobel IPO irregularities

  The Swiss Federal Banking Commission fined Vontobel CHF 21 million after irregularities in the Think Tools IPO were reported to the regulator. The case concerned the bank retaining 52.14 percent of shares that were supposed to be sold in the offering and selling them later after the market price had risen.

  Source

Read more

• 2004

  Merge with redIT AGM&A

  Background

  Think Tools' revenue decline, continuing losses and inability to sustain its earlier market expectations left it without a viable independent public-company trajectory.

  Action taken

  In May 2004, Think Tools agreed to merge with Swiss IT company redIT AG.

  Aftermath

  redIT became the continuing publicly traded company, while Think Tools ceased to operate as an independent listed entity.

  Source

• 2004

  Sell rights to Think Tools SuiteOther

  Background

  After the merger, the principal remaining Think Tools software asset was separated from the company's former corporate structure.

  Action taken

  In October 2004, redIT sold the rights to Think Tools Suite to the Parmenides Foundation for CHF 350,000.

  Aftermath

  The foundation renamed the software Parmenides Eidos Suite - Visual Reasoning and Knowledge Representation and continued its development or sale.

  Sale price for software rights. CHF 350,000 (October 2004)

  Source

• 2000

  Adopt a high-value one-time software licensing modelStrategy

  Background

  Think Tools sought to commercialize its visual problem-solving software alongside consultancy services. Licenses were reportedly sold for one-time fees as high as CHF 1 million.

  Action taken

  The company marketed Think Tools Suite as a strategic enterprise tool rather than relying only on consultancy engagements or recurring software subscriptions.

  Aftermath

  The number of organizations willing to purchase such expensive licenses was quickly exhausted, contributing to the company's sales contraction after the IPO.

  Source

1. 1Think Toolsen.wikipedia.org