As you may have read in the About the author section, I am enrolled in the Master of Business Administration at the Shidler College of Business at Honolulu, HI. A very common question that I get all the time is: “so…what do you do?” Well, one of the most common assignments that we get is to solve business problems given a specific context. This context is usally found within Harvard Business School cases.
So how do you solve one?
Let’s give it a try!
Today we will use the idaconcpts way to solve the Collabrys, Inc. case from the Harvard Business School. Unfortunately I cannot post the PDF file because I would infringe their copyrights.
According to the Harvard Business School, this is the scenario:
The CEO of a two-year-old start-up must now decide whether to become a technology provider or a service agency. In a time of enormous uncertainty about the viability of various business models for Internet-delivered services and products, Collabrys has survived the burst Internet bubble by partnering with brand-name large companies and by responding to market feedback. This case traces the company from its earliest days and its original value proposition to a point at which the two very different future strategies appear feasible. Originally funded by venture capital, the company has changed key personnel, experimented with different distribution and partnering schemes, developed some sophisticated intellectual property, and raised a second round of funding.
- What are their customer’s top problems?
- Does Collabrys’ services concept solve these customer’s problems?
- If Collabrys was to offer its services for free to its clients, will they still acquire them?
- If Collabrys was to charge for these services, does it have a repeatable sales model?
• Has a problem
• Know they have a problem
• Has been actively looking for a solution
• Has put together a solution out of piece parts
• Has or can acquire a budget
Given the previous communications with clients, it was clear that Collabrys needed to establish a clear difference from other CRM applications in the mind of clients and that Collabrys should not spend time focusing on groups that did not have a clear idea of their problem, did not actively look for a solution (as opposed to explore options), and did not have access to a purchasing budget at all.
The second alternative, to use the technology in-house, but as part of a service provision. provides the right approach through the search of specific answers for the critical questions: What are we selling? What are its benefits? Who do we sell to? At what price? The creation of the Tiger Team should have been the starting point for Collabrys and the cornerstone of its business model, because it focuses on the prescribed customer development process of Blank. The process of contacting all existing partners and 35 potential clients to determine the budget of clients, necessary client interaction (e.g. sales cycle), existing competitors, and price ceiling of clients, would provide Collabrys with a clear idea whether clients are serious enough to buy a service that still needed some tweaking. The Tiger Team process clearly addresses the customer discovery and customer validation sections of the customer development process, which in turn would allow the company to set realistic year-one objectives according to its market type, position the company and service, and create repeatable, sustainable demand.
By focusing on being an agency that provides managed solutions for companies during their product launch an introduction and targeting the sales process to brand managers (instead of interactive marketing managers, market research people, or advertising agencies) the company will be able to make more efficient use of its resources and channel management and sales personnel to profitable activities.
This option is less likely to lead to either an IPO or sale of the company, but it provides a clear spending plan, establishes that the current team is right for this stage of the company and provides a clear sales growth plan. The company would now have the right mindset and tools to establish the goals for the next twelve months. A main concern of this recommendation is whether or not existing competitors can replicate Collabrys service provision, because there is not enough information on the case to establish a valid conclusion.