In March 2023, Fixie Co-Founder and Chief Architect Matt Welsh and co-founders had the kind of meeting no founders want to have. The president of leading artificial intelligence (AI) research and deployment firm OpenAI, which had catapulted into fame with its ChatGPT (Generative Pre-trained Transformer) products, briefs them on a new product that represents an existential threat. OpenAI is launching ChatGPT plugins, which would transform ChatGPT from a base layer tool into a platform, where third-party application developers such as Expedia, InstaCart, or OpenTable could leverage OpenAI's underlying models to build useful applications. This move threatened to derail Fixie's nascent cloud-based platform that leveraged large language models (LLMs) to build and customize conversational AI systems for enterprise. Fixie aspired to be the middleware standard that connected underlying models with AI-facing applications. Now they had to decide if their product was still relevant, whether a pivot was possible, and how to play their next move in the fast-paced Gen AI chess game.
Husband-and-wife co-founders Patrick and Alexandria Gentry had built Sprout Solutions to be one of the biggest Software-as-a-Service human resources management platforms in the Philippines, guided by the mission to "impact the life of every Filipino by improving business in the Philippines." In 2019, they closed a $6 million Series A round of funding; in 2022, they were projecting what a Series B funding round might look like. Crucially, they were pondering two different growth trajectories: to stay in their home market of the Philippines and move towards creating an entire HR ecosystem including fintech offerings; or branch out into neighboring markets, a path which may attract more global investors.
In 2023, executives with ReMo Energy (founded 2020) were deciding which size ammonia plant to build as their first project. Their innovative model produced ammonia - useful for making fertilizer and for energy storage - from renewable energy, and they had received funding from a prominent environmentally-conscious venture capital fund. However, they needed more funding to build their first plant. Smaller plants were less efficient, but bigger plants were riskier, and different potential funders had different priorities. The case prevents three size options for ReMo's first plant, with a detailed model of how various present and future factors - the price of ammonia, power supply, taxes, and more - affect risk and return.
Case on the nascent business model of a mobile health IT startup. In particular, should they pivot away from their successful lead generation business model to charging health plans.
In September 2021, Adam Demuyakor (MBA 2017) was faced with decisions about how to launch his venture capital (VC) investment firm. His previous investment activities were a series of angel investments and special purpose vehicles alongside two part-time general partners (GPs). After hearing investor feedback that the firm was not institutional enough, Demuyakor created a successor firm on his own, Wilshire Lane Capital (WLC), and sold a GP stake to private equity firm Nile Capital to help with operational expenses, infrastructure support, and fundraising. Under WLC, Demuyakor sought to raise a $75 million fund mainly focused on Series A PropTech deals. However, he received conflicting advice on three strategic decision vectors-fund size, stage of deals, and subsector area of focus. Some potential investors were also concerned about Demuyakor running the fund as a solo GP instead of with a full-time partner. While the characteristics of the new fund were based on Demuyakor's background, preferences, and goals, he knew he had to align his strategy with the approach that would earn the confidence of investors. Thus, he had some decisions to make.
AllSpice, a software-as-a-service company that built a GitHub-like revision control tool for hardware engineers, was in the midst of preparing for rapid scale when the 2022 market downturn left them with big decisions to make. Cofounder and CEO Valentina Ratner had to map out the company's path to a successful Series A while deciding on how they should dedicate their resources. Early customer discovery experiments showed that engineers had an interest in the product, but Ratner needed to figure out the go-to-market motion they should focus their effort on: a bottoms-up freemium model, a top-down enterprise model, or something in between that relied on targeting engineers directly through inside sales efforts. Leading into her April board meeting, Ratner devised a plan to share with her investors.
In June 2021, John Crain and Jonathan Perkins, the founders of SuperRare, a marketplace for non-fungible tokens (NFTs), contemplate whether to transform their company into a decentralized autonomous organization (DAO). Crain and Perkins founded SuperRare in 2018 to provide a marketplace for fine art NFTs. However, after experiencing rapid growth in late 2020 and early 2021, they believed it was time to transition control of the platform's governance, curation, and strategic direction to the SuperRare community. Under the DAO, the platform's revenue would shift from SuperRare's balance sheet to a community treasury. Breaking new ground for startups, the founders have a difficult set of choices. They could immediately transform SuperRare into a DAO, pursue a tapered option in which the revenue gradually transitioned to the community treasury, or stay the course as a private company. They considered which option was the best for SuperRare and its community of artists and collectors as well as the SuperRare investors and team.
City Sealcoating CEO Keith Chaney had just publicly called out the Boston Chamber of Commerce for their slow progress on their supplier diversity program, Pacesetters. Established in 2018 by regional business leaders, Pacesetters was supposed to facilitate relationships between large purchasing organizations and minority-owned businesses in the greater Boston area, eventually leading to procurement contracts for those minority-owned businesses. It was designed as an approach to fix the worsening racial wealth gap in Boston; however, after 2 years of operation, the program did not deliver as many-including the Boston Chamber of Commerce-had hoped. Now nearing its third year, Boston Chamber of Commerce President & CEO James E. Rooney wondered how to best change the program, helping it deliver on its promise to, within a generation, close the racial wealth gap. Chaney, a minority business owner and Pacesetters participant, was skeptical.
Bubble was a software company in the low-code/no-code market, making tools that allowed users without traditional programming backgrounds or technical skills to build software. The case covers cofounder Joshua Haas's engineering background, as he experienced a high demand for coding expertise in the startup community, but a low supply of coders. It then outlines his founding, with cofounder Emmanuel Straschnov, of Bubble in 2012, and their subsequent bootstrapping for six years until 2018, when a well-known tech entrepreneur and angel investor offered them an attractive financing deal. The case covers Bubble's product-led growth, or a singular focus on the product (as opposed to investing in sales and marketing) as a strategy for user acquisition and retention. The case also covers the difficulties of hiring new employees, and Bubble's strategy for building a team.
In 2020, just after closing a $34 million Series B financing round, Dave Salvant and Songe LaRon consider how to adjust their business, Squire Technologies, to the new realities posed by the COVID-19 pandemic. Their barbershop technology, including tools to run a shop and a mobile app for customers was growing swiftly, but with nearly all barbershops shut down to prevent the spread of the disease and no revenue coming in, should they cut back, or take the opportunity to build up?
Founded in 2020 by Jewel Burks Solomon and her partners, Barry Givens and Justin Dawkins, Collab Capital was a new investment firm built on two pillars: first, it would identify and support ventures founded by Black entrepreneurs, a group underrepresented in venture-financed entrepreneurship. Second, Solomon and her partners had developed a novel financial instrument that incorporated both profit-sharing and equity to offer an alternative to traditional venture capital (VC) for startups. They believed their approach offered venture-level returns for investors while also closing a critical funding gap for Black entrepreneurs. But Limited Partners (LPs) were not yet convinced.
In January 2020, India-based KhataBook, a digital ledger app for small businesses, is led by CEO Ravish Naresh, as his team faces a series of dilemmas regarding where to focus next.
In March 2020, as COVID-19 spreads rapidly across the U.S., Everlywell founder Julia Cheek considers how to respond as a small start-up specializing in at-home lab testing. After making dramatic budget cuts, she decides to pivot the organization to address the country's testing shortage. But after a hectic few weeks building capacity at her partner labs to 30,000 COVID daily tests, the U.S. Food and Drug Administration (FDA) releases a statement warning the public that it has not granted approval for at-home tests. Cheek must decide whether to return to her core business or persist in focusing her nascent organization on COVID-19 tests, an opportunity whose commercial merit is unclear.
Black entrepreneurs encounter many unique obstacles when raising capital to start and grow a business. During their second year at Harvard Business School (HBS), MBA students Kimberly Foster and Tyler Simpson decided to do something to make a difference for early-stage Black technology entrepreneurs seeking funding. In just four months, they created the inaugural Black New Venture Competition (BNVC), which attracted 300 applicants and became the largest student-led business plan competition for Black entrepreneurs in the U.S. Over the course of the competition, Foster and Simpson were able to begin to identify some of the biases and frictions in the evaluation and funding of early-stage Black ventures. Was there bias in the selection rubric? What would happen when these Black founders faced traditional white VC investors in their next funding round? Now Foster and Simpson needed to decide what to keep and what to change for future iterations of the BNVC. Were they, and their successors, even thinking big enough for BNVC 2.0?
The co-founders (Black HBS alumnae) of an e-commerce beauty startup explore the unmet needs within the beauty industry. This case study examines the entrepreneurial opportunities that come from identifying an underserved market, specifically within the Black community and the best startup financing approach to pursue those opportunities. Students learn approaches to product ideation/innovation, marketing strategies for the social media age and launching a startup for a targeted audience. Students learn to analyze macro and micro economic data of an industry, synthesize consumer demographics and purchase behavior data, and create projected unit economics as well as pro forma financial documents to determine the potential economic opportunity that is unmet in a market and the requisite fundraising to launch a new business. At the time of the case, Mented co-founders went on to become the 15th and 16th African-American women to raise over $1 million in startup funding.