This case lends itself to courses covering the topic of rapid expansion of an enterprise. By 2012, Rick Berry, the founder and CEO of Demandforce (DF), and his team had built a company with annual revenue of approximately $70 million. DF provided small businesses with software tools used by more than 23,000 individual businesses and 50,000 business users to communicate with their customers. DF's business model was software as a service (SaaS) for a monthly fee. The company's value creation for its clients was evidenced by a high client renewal rate of 88%. But after DF was acquired by Intuit in April 2012, Berry knew that the game had changed dramatically. He was now confronted with a new challenge-one he had never faced: building a big company. He had to take his business and grow it into one with $750 million of revenue as quickly as possible.
The author has examined common growth beliefs and the U.S. Growth Model and finds no support for them in any area of business research. He offers instead the Organic Growth Index, the result of ten years of research by the Batten Institute at the Darden School. Six keys to organic growth are presented and above-average growth companies that remained successful are linked to an internal Growth System called Smart Growth.
Business growth, though one of the most discussed topics in the entrepreneurial world, is the subject of many faulty assumptions and erroneous beliefs. In detailing the science of business growth, this article starts by debunking the common myth that growth is always good. Growth can create value, but mismanaged growth can destroy value. A growth risk assessment tool is provided so that entrepreneurs can assess whether or not their firm is prepared to grow. Growth requires much more than strategy, and the author shares lessons such as that growth requires constant improvement, that hiring for cultural fit is essential, that a choice must be made between a team culture and a star culture, and that when a firm believes it “has it all right,” it has started to decline. The article discusses business upgrading and the growth plateau, and describes the four ways to grow — through improvements, innovations, scaling, and strategic acquisitions. It ends with a nine-part strategic growth checklist that includes geographic expansion, introduction of complementary products to existing customers, and expansion to new customer segments with existing products.
BL Gruppo was a holding company that operated eight wildly acclaimed and highly rated restaurants, plus a catering operation, in Boston, Massachusetts. Its culinary mini-empire had continually achieved recognition as a great organization. But the story of BL Gruppo was actually two stories, of two entrepreneurial journeys. One was the journey of Barbara Lynch, a high school dropout who, through hard work, self-education, perseverance, and entrepreneurial focus, became a world-class chef. The other was the journey of someone with no formal business training who built a culinary business employing over 230 people and grossing close to $18 million in revenue. Now Lynch faced what she considered one of her biggest challenges: How might she institutionalize her business to sustain the enjoyment expected by her regular customers and the opportunity for advancement by her loyal employees, while at the same time giving her management team and herself chance to monetize and create wealth? And just as important: Should she keep directing her entrepreneurial zeal toward trying new business opportunities? ?
This technical note is the fourth in a series focusing on business growth. It addresses how to create a diversified Growth Portfolio based on the Learning Launch experiments. The note covers how growth requires several key elements-the right individuals and organizational mindsets, the right internal enabling system, and the right processes, which include experimental learning and creating and managing Growth Portfolios.
In this note, the author discusses how research shows that consistent growth companies engage in growth experiments or tests to gather better data to be used in determining which growth ideas are worth investing in. A Learning Launch is described as a process that can be used to do those growth experiments. Students will be shown that by doing Learning Launches, a business can evaluate many growth ideas quickly and cheaply, allowing it to gain better evidence to winnow down a multitude of ideas into a smaller group of ideas that appear to be more viable based on information learned.
This note states that growth research demonstrates that growth is much more than a strategy and it happens when the right kind of leadership, internal environment and processes come together to create a small-company-entrepreneurial soul in a large-company body. The Growth System Assessment Tool that illuminates the presence of growth inhibitors, nonalignment, and bad growth behaviors is discussed, and students are provided with a mini-assessment model of this tool to use to start thinking about how to create their own System for enabling and promoting growth mindsets and behaviors.
Could be used in entrepreneurship business strategy courses. This is a social entrepreneurship case that demonstrates the application of business best practices to a large rural community health organization. The case raises issues regarding growth/expansion and the examines the conflict between the mission and strategic focus. It asks the question: What are the business model limits to "doing good?"
Appropriate for entrepreneurship and strategy courses. The focus in the case is on how two entrepreneurs created a differentiating business model that was dependent on quality service and excellent execution. From a growth perspective, the case discusses two very different approaches to geographical expansion so as not to dilute the customer experience or the brand. Now the business faces the difficult question of how to scale the business faster.
This case could be used in entrepreneurship and managing a small business courses. It describes how an entrepreneur grows her innovative idea into a successful business while managing the risks, the pace, the financing, the channels of distribution, the quality of manufacturing, and the customer concentration associated with it. The case shows how a business grown at a slower-than-usual pace was able to survive the risks.
This case could be used in entrepreneurship, strategy, and small-business courses. It presents such classic issues regarding successful start-ups as: how to choose from a multitude of growth opportunities; how to pace growth so as not to dilute quality control and financial risk tolerance; and how to choose a strategic focus.
This is the last case in a series that is appropriate for entrepreneurship and small-business management courses. At issue is how to balance personal financial needs of stockholders in a family business with the business's need for capital. The problems of how to include family shareholders who do not work in the business in financial distributions and whether families should create different classes of stock to pay different dividends to different classes of family shareholders are also part of the mix. Follows UV2037, UV2038, and UV3937.
This is the third case in a series that is appropriate for courses in entreneurship and small-business managment. It presents common issues that often arise in situations regarding the choice of a successor to run the family business, including the founder's reluctance to "let go," sibling rivalry, gender discrimination, and the eldest son's feeling of entitlement. In this case, the particular issue is whether the family should compromise in picking the CEO and chairman of the board. Follows UV2037, and UV2038, and precedes UV3938.
This case is suitable for courses in entrepreneurship and managing small or family business. It is a follow up to the UV2037 case and raises further issues about family demands for larger dividends, family business investing in family member businesses, whether family members should have a way to liquify their family business stock, and the question of whether in-laws should attend family business meetings.
This case is appropriate for teaching in entrepreneurship, strategy, marketing, and finance courses. Motor City is the business brainchild of an absentee owner. It is a new business model for selling used cars and requires a senior management familiar with the car industry. Some issues are: How should the management be compensated to align interests with the owner? Stock ownership, phantom stock ownership, profit sharing? The B case [UV2045] raises such issues as matching the pace of growth with available cash flow.
This case is suitable for courses in entrepreneurship and growing enterprises and management communication. It follows the step by step process of growing a business built on a strong culture that fostered high employee engagement and loyalty. The result for Leaders was low employee turnover, long-term relationships based on communication and trust, and being finalist on the Wall Street Journal's 2008 Top Small Workplaces list.
This case could be used in courses about entrenpreneurship and managing small businesses. The founder and patriarch of a family business is confronted by his children regarding succession, equitable distribution of money from the business to nonworking family members, and nepotism. THe transition from first- to second- and third-generation involvement creates major challenges to the family harmony and the business beyond the life of the founding generation. There is a B case [UV2038] that examines these issues further.
This note lays out in detail a technique, the learning launch, for generating increased revenues through conducting small experiments in the marketplace. A learning launch is a process for testing and improving (or abandoning) a new business idea quickly and inexpensively. Although the process involves selling a new product or service to a customer or group of customers, a learning launch is not a traditional new-product rollout. Instead, it is an experiment designed to generate insights and actual market feedback that can then be used to refine or entirely redefine the business idea and to determine whether it deserves a larger commitment of time, people, and other resources.
This case is appropriate for teaching in the areas of entrepreneurship and managing the growth of smaller enterprises. It illustrates how an entrepreneur builds a premier service company by aligning culture, hiring practices, training, rewards, leadership, and its business model.
This case illustrates how two entrepreneurs bootstrapped their start-up, overcame the challenges that accompany growth, and built a successful business while being socially responsible.