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BandPage CEO James "J" Sider is about to receive results from BandPage's targeted advertising campaign on music streaming service Rhapsody and learn whether BandPage's strategy to improve ad click through rates and generate revenue has succeeded. BandPage, which began as a Facebook app to help musicians build professional-looking pages and convert fan "likes" into revenue, has become a major hub in the online music network. BandPage has deals with upstream and downstream music partners, from streaming services to ticket sellers to merchandise companies, and has built relationships with artists by providing a one stop shop to update current band information across most major music sites simultaneously. BandPage's most recent project has been to differentiate fans by their behavior on streaming sites in order to target super fans with high priced, exclusive and/or personalized offers from artists. At a time when tensions are high between streaming services and artists who believe that they are not being fairly compensated for the use of their music, Sider is convinced that BandPage can help streaming services drive revenue growth for artists through ticket, merchandise and exclusive offer sales. If the Rhapsody data proves that BandPage's strategy is working, the potential revenue growth for BandPage and all of its partners is massive.

To make sound business decisions, managers must be comfortable with the concepts of correlation and causation. This background note provides an overview of correlation and causation using examples and explains why the former does not imply the latter. It also describes several methods for gaining insights into causal relations, including randomized experiments, panel data, matching, and regression discontinuity. The note is intended for a general audience and does not require advanced statistics knowledge.

In 2015, Dietmar Hopp, owner of Germany's Bundesliga football team TSG Hoffenheim and co-founder of the global enterprise software company SAP, was considering how to ensure long-term sustainability and competitiveness for TSG Hoffenheim. While historically a small team from bottom rungs of the league, TSG Hoffenheim, with revenues of €60 million to €70 million, reached the top division of the Bundesliga in the 2008-2009 season thanks to a deliberate strategy focused on enhanced scouting, strong youth programs, and innovative technology and analytics that improved player development. In 2014 Hopp, who had personally invested €300 million in the club, built a "footbonaut," an automated training environment that collected data on players' skills and strengths. The tool, one of three in the world, helped scouts and coaches better assess and develop each player. Yet some managers felt the technology was a distraction, an investment too expensive for a team that was not yet cash-flow positive. The team finished the 2014-2015 season in eighth place, below the top division, and Hopp wondered whether the focus on technology and analytics was the right strategy to grow the club. He wondered if the "moneyball" approach-when a smaller team competed with wealthier teams by using statistical analysis to buy undervalued assets and sell overvalued assets-could work in football and if investments in technology could lead the team to financial independence.

This note examines the evolution of the thermostat industry as it transitioned from analog to digital technologies. It presents an overview of key industry participants and the shift in value creation and value capture models for firms.

When Google bought Nest, a digital thermostat and smoke detector company, for $3.2 billion just a few months ago, it was a clear indication that digital transformation and connection are reaching critical mass, spreading across even the most traditional industrial segments and creating a staggering array of business opportunities and threats. The digitization of tasks and processes has become essential to competition. General Electric, for example, was at risk of losing many of its top customers to nontraditional competitors--IBM and SAP on one hand, big data start-ups on the other--offering data-intensive, analytics-based services that could connect to any industrial device. So GE launched a multibillion dollar initiative focused on what it calls the industrial internet: Adding digital sensors to its machines, connecting them to a common, cloud-based software platform, investing in software development capabilities, building advanced analytics capabilities, and embracing crowd-based product development. With all this, GE is evolving its business model. Now, for example, revenue from its jet engines is tied to reduced downtime and miles flown over the course of a year. After just three years, GE is generating more than $1.5 billion in incremental income with digitally enabled, outcomes-based business models. The company expects that number to double in 2014 and again in 2015.

This supplemental case follows up on the Netflix Prize Contest described in Netflix: Designing the Netflix Prize (A). In the A case, Netflix CEO Reed Hastings must decide how to organize a crowdsourcing contest to improve the algorithms for Netflix's movie recommendation software. The B case follows the contest from the building of the platform in 2006 to the awarding of the highest prize in 2009. The B cause also considers the aftermath of the contest, and the issues of successfully implementing a winning idea from a contest.

In 2006, Reed Hastings, CEO of Netflix, was looking for a way to solve Netflix's customer churn problem. Netflix used Cinematch, its proprietary movie recommendation software, to promote individually determined best-fit movies to customers. Hastings determined that a 10% improvement to the Cinematch algorithm would decrease customer churn and increase annual revenue by up to $89 million. However, traditional options for improving the algorithm, such as hiring and training new employees, were time intensive and costly. Hastings decided to improve Netflix's software by crowdsourcing, and began planning the Netflix Prize, an open contest searching for a 10% improvement on Cinematch. The case examines the dilemmas Hastings faced as he planned the contest, such as whether to use an existing crowdsourcing platform or create his own, what company information to expose, how to protect customer privacy while making internal datasets public, how to allocate IP, and how to manage the crowd.

CEO Jeff Immelt considers whether GE is moving fast enough on its new Industrial Internet initiative. The undertaking includes building out an Industrial Internet, connecting machines and devices, collecting their data and operations, and providing services to clients based on analytics of this data and information. The case considers the implications of such an initiative across all 6 of GE's business units, and how best and how quickly to execute the strategy. The firm has committed $1b in investment, building out a new software center in California, and a commercial sales function at headquarters to deploy the new products and services.

Mark Fields, Ford Motor Company's COO, had to ensure the company's current business model of building cars and trucks remained strong, while concurrently navigating the company into the radily expanding industry of personal mobility. Personal mobility required new technologies and business models that were intraditional at Ford, and Fields had to evaluate the traditional business model colliding with the new business model. To direct these new technologies and business models, Ford released its "Blueprint for Mobility," which established near-, mid- and long-term goals to make mobility accessible and affordable to all. The case focuses on the launch of three mobility experiements (car sharing, parking, and on-deman ride sharing), and ask students to determine how Fields should balance these types of experiments with the company's traditional operations. Further, was Ford doing enough in the mobility space, and if so, was it moving fast enough? What new sources of revenue could Ford derive from mobility solutions?

This case follows Rodrigo Nino, founder and CEO of commercial real estate development company Prodigy Network, as he develops an equity-based crowdfunding model for small investors to access commercial real estate in Colombia, then tries out the model in the U.S. U.S. regulations, starting with the Securities Act of 1933, effectively barred sponsors from soliciting small investors for large commercial real estate. However, the JOBS Act of 2013 loosened U.S. restrictions on equity crowdfunding. Nino believes that crowdfunding will democratize real estate development by providing a new asset class for small investors, revolutionizing the industry. The case also follows Nino's development of an online platform to crowdsource design for his crowdfunded buildings, maximizing shared value throughout the development process. Nino faces many challenges as he attempts to crowdfund an extended stay hotel in Manhattan, New York. For example, crowdfunded real estate faces resistance from industry leaders, especially in regards to the concern of fraud, and SEC regulations on crowdfunding remain undetermined at the time of the case.

From the late 1990s to 2006/2007, Samsung Electronics moved from one of 170 TV manufacturers to gain dominant TV market share year over year from 2007-2013. As digital technologies increasingly converged in 2013-2014, the industry faced new questions: What was the future of TV? The case considers Samsung Electronics TV Group's product development processes, as the company's mobile and TV offerings increasingly converged and consumer demands and behavior pushed the historically clear boundaries of product, content, engagement and interaction.

In late 2013, Rajeev Kulkarni needed to decide how best to facilitate the emergence of a broad base of users and content to promote the sale of 3D Systems's consumer-focused 3D printers. As yet, neither the company nor users had identified an indispensable application for 3D printing for consumers, despite a plethora of potential opportunities.

This supplementary case follows up on an innovative R&D approach by Beiersdorf,a skin care and cosmetics company. The case relates what happened to the product launched by Beiersdorf, to its Nivea line, following the events of the A case, and how the commercial success of the product informed thinking by leaders in R&D for the future.

In May 2014, Bill McDermott will become the sole CEO of SAP AG, the world leader in the Enterprise Resource Planning (ERP) field. The case occurs in January 2014 at SAP's investors meeting, at a time when the company's stock is near record high. A 2010 strategy committed the company to a transition to cloud computing. The main driver behind this transition was the development of SAP HANA, an in-memory computing technology that combined database, data processing, and application platform functionality. Ownership of cloud infrastructure was a key question. SAP could build, own, and operate its own data centers, or partner to locate SAP HANA and other products with other cloud infrastructure providers, such as Amazon, Microsoft, or IBM. McDermott also had to make decisions around the organization and leadership of the company's cloud efforts.

The case describes the efforts of Beiersdorf, a worldwide leader in the cosmetics and skin care industries, to generate and commercialize new R&D through open innovation using external crowds and "netnographic" analysis. Beiersdorf, best known for its consumer brand Nivea, has a rigorous R&D process that has led to many successful product launches, but are there areas of customer need that are undervalued by the traditional process? A novel online customer analysis approach suggests untapped opportunities for innovation, but can the company justify a launch based on this new model of research?

This note provides information on the state of startup financing in Silicon Valley in 2013. It details different avenues startups have to raise funding, including venture capital, corporate venture capital, angel investors, incubators, and crowdfunding.

By 2013, Google, while not a traditional manufacturer of automobiles, had invested millions of dollars in its self-driving cars which had logged over 500,000 miles of testing. The Google management team faced several questions. Should Google continue to invest in the technology behind self-driving cars? How could Google's core software-based and search business benefit from self-driving car technology? As large auto manufacturers began to invest in automotive technology themselves, could Google compete? Was this investment of time and resources worth it for Google?

This is an MIT Sloan Management Review article.

The case describes Siemens, a worldwide innovator in the Energy, Healthcare, Industry, and Infrastructure & Cities sectors, and its efforts to develop and commercialize new R&D through open innovation, including internal and external crowdsourcing contests. Emphasis is placed on exploring actual open innovation initiatives within Siemens and their outcomes. These include creating internal social- and knowledge-sharing networks and utilzing third party platforms to host internal and external contests. Industries discussed include energy, green technology, infrastructure and cities, and sustainability. In addition, the importance of fostering a collaborative online environment and protecting intellectual property is explored.