Just two years after launching its 10k by 2020 initiative to hire 10,000 employees by 2020, the COVID-19 pandemic forced Chief Executive Officer Mark Wilson to send nearly all of his staff at Chime Solutions (Chime) to work from home. Chime was a customer contact firm that offered call center services to corporate clients. Chime had an employee-focused model where it hired call center agents from underserved communities. It then offered skill building and life services to these agents, which led to industry-leading employee retention rates and an overall more committed and expert staff. After agents were deployed to work from home, however, it struggled to maintain its current operating model, causing increased attrition rates. It also had amassed a large amount of debt from maintaining its facilities in Morrow, Georgia; Dallas, Texas; and Charlotte, North Carolina. At the same time, the company was growing at a record pace, but needed to address its talent and debt challenges before realizing its dream of uncovering hidden talent in underserved communities.
In 2022, the U.S. Congress examined the Democracy Is Strengthened by Casting Light on Spending in Elections (DISCLOSE) Act, the latest in a long series of campaign finance reforms. According to its authors, the law would be the "most consequential overhaul of federal campaign finance" in 20 years. In addition to prohibiting campaign spending by foreign nationals, the reform would require organizations to disclose their major political donors in order to curtail the rise of "dark money" following the 2010 Supreme Court decision Citizens United v. FEC. The emergence of new online conduits also spurred an increase in small campaign contributions, which some hoped might counterbalance the influence of large donors. Overall, significantly more money entered politics in the U.S. than in any other democracy: $17.20 per capita in 2020 (case p. 5). Beyond changes in campaign finance, electoral campaigns have undergone dramatic changes in the last two decades, from the revival of campaign strategies focusing on the mobilization of non-voters to the increasing reliance on social media, such as the unprecedented use of Twitter by Donald Trump in 2016. While campaign activities had long been determined by culture and habit, modern campaigns were informed by the latest advances in social science. They used rich individual-level data to choose which voters to target with outreach efforts. Campaigns have made dramatic gains in efficiency. However, scandals such as the Facebook-Cambridge Analytica data breach led observers, regulators, and many concerned citizens to wonder whether candidates were abusing the vast resources available to them to manipulate the electorate. As they were discussing DISCLOSE, members of Congress debated whether 1) business involvement in campaigns had been a force for good; 2) campaign contributions should be encouraged or curtailed; and 3) regulations of other dimensions of electoral campaigns should be reformed.
Cara Nicoletti was an emerging food entrepreneur that had recently launched her first product, a sustainably sourced, vegetable-infused meat sausage. Brooklyn, New York City-based Seemore Meats & Veggies had seen promising signs of success in local markets and pockets of the west coast, such as Los Angeles, California. Customers overwhelmingly approved of the product, and bought them by the case. Nicoletti was ready to scale her operation. However, she encountered challenges meeting the mounting demand for her products nationwide. She had already managed to enter a crowded industry dominated by industry giants Tyson Foods, JBS USA, and many others. Faced with the challenge of costly delivery expenses in her direct-to-consumer business (DTC), Nicoletti needed to decide whether she should, remain a digital DTC brand or shift to a multi-channel sales strategy that could include any combination of options such as grocery store, private label, or food service partners. Shrinking cash reserves left from her Seed Round expansion made the problem more pressing. Nicoletti needed to prove to investors that she could effectively scale, which would allow her to campaign for the funds to expand her product offering and sales operation.
The Akooda case describes the challenges confronting founder and CEO Yuval Gonczarowski (MBA '17) in 2022 as he attempts to boost sales. Launched in November 2020, Akooda was an AI company that mined 20 different sources of digital data, from tools like Slack, Google Drive, Jira, and Salesforce. Akooda's interfaces helped companies with knowledge management, process tracking, and onboarding employees by allowing managers to display real-time topics that teams and individuals engaged in during their actual work. Gonczarowski's company had begun to develop a reputation for helping companies generate insights previously obscured by the disparate software technologies used in day-to-day work. Despite strong growth, a large prospective client wanted Gonczarowski to use Akooda's artificial intelligence and machine learning capabilities to surveil, monitor, and measure the performance of individual employees. But Akooda's category was nascent, and Gonczarowski feared that providing companies with invasive monitoring tools would cause employees to distrust Akooda, hindering its ability to generate insights from employees' public-facing data. The case describes how Akooda impacts managers' roles in information-abundant but physically disconnected environments and Gonczarowski's needed to walk a tightrope between providing insights about company operations and monitoring previously private communications and activities.
In June 2021, Kim T. Folsom, the founder and CEO of revenue-based financing firm Founders First Capital Partners (FFCP), must decide whether to issue another loan to OnShore Technology Group, an up-and-coming software validation company. FFCP provided revenue-based financing (RBF) to small businesses, with a particular focus on diverse entrepreneurs. OnShore Founder Valarie King-Bailey had previously taken an RBF loan, and had requested a second round of capital from FFCP. The case provides an overview of the advantages and disadvantages of RBF - specifically relative to bank loans and merchant cash advances - and challenges readers to decide whether a second RBF loan would be appropriate for OnShore.
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 2021, the HBS Impact Investment Fund student team met with entrepreneur Teresa Maynard, who had applied for a $25,000 impact investment loan. The students thought the former Harvard Data Scientist's bakery business, Sweet Teez Bakery, showed promise. Maynard had bootstrapped the business, growing it from a small-scale venture to a point where she now considered expanding her corporate clientele and possibly opening a brick-and-mortar location. Alas, funding for such small businesses had been sparse, and Maynard needed working capital to take her business to the next level. The student team was eager to evaluate her financials and submit a recommendation to the investment committee. However, Maynard had taken meticulous records of her financial transactions but had yet to compile them into comprehensive financial statements, meaning that Sweet Teez's financial health was difficult to parse. The HBS student team wondered: How could they best build a reliable financial model from the currently fragmented historical information?
In fall 2021, Aliana Piñeiro, impact director at Boston Impact Initiative (BII) discovered that an entrepreneur the organization was considering for an investment had failed to disclose pre-existing debt with another lender. Although the business scored highly on BII's criteria for investment, Piñeiro and her colleagues had to reevaluate its risk profile in light of the additional debt. They also had to decide how to manage their relationship with the entrepreneur. The BII team determined an entrepreneur's creditworthiness through a series of in-depth conversations rather than using a one-size-fits-all application form. They also did not perform criminal background checks or credit checks. Nevertheless, they were disappointed that the entrepreneur had not disclosed his previous debt, and wondered why he had failed to bring it up in their previous conversations. At the conclusion of the case, Piñeiro and her team must decide whether to move forward with the investment and if so, how to address the issue with the entrepreneur.
In 2021, the HBS Impact Investment Fund student team had found a promising impact investment in the co-operative trouser manufacturer, Southwick Social Ventures. Their 100% immigrant workforce sought to pave the road to transforming Lawrence, Massachusetts, a city that was once a manufacturing hub that had recently seen less economic investment than other U.S. cities. The student team was then charged with recommending a set of terms to their investment committee. They needed to determine how exactly to strike the right balance between providing an acceptable return to the fund while providing founder-friendly terms to Southwick Social Ventures.
After launching a successful hot cloud storage company, Founder and CEO David Friend is ready to scale the venture rapidly. Wasabi Technologies had focused primarily on direct sales, but an opportunity to pivot to channel sales was on the horizon. The company's major competitors-Amazon, Google, and Microsoft-all sold their cloud storage products through multiple channels, and Friend feared that direct sales could never provide the momentum Wasabi Technologies needed to compete. However, channel sales would include changing its sales, marketing, and staffing strategies dramatically-effectively veering the company away from its already successful course. Was channel sales the right play for the burgeoning cloud storage provider? If so, how should Friend go about it?
In fall 2021, a team of students from the HBS Impact Investing Fund considered Neurologic Optimal Wellness Physical Therapy (NOW PT) for a potential investment. Dr. Banks, the founder of NOW PT, drove to visit patients. She sought an investment from the fund to open a brick-and-mortar clinic. However, the students believed that Dr. Banks might be more successful if she continued providing mobile PT services. At the conclusion of the case, the students must perform due diligence to test their hypothesis. What should their priorities be as they begin the due diligence process?
This (B) case examines the results of the HBS Impact Investment Fund student team's diligence on Neurologic Optimal Wellness Physical Therapy (NOW PT). After examining Springfield's demographics, anticipated PT demand, local competition, and NOW PT's financial statements, the students realized that NOW PT would be more successful if it opened a brick-and-mortar clinic. The case appendix provides the students' Investment Committee deck, which readers can reference as an example of a thorough due diligence process. The conclusion of the case reveals the students' investment recommendation and its results.
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.
Captain Michael Davidson of the container ship SS El Faro was determined to make his planned shipping trip on time-but a hurricane was approaching his intended path. To succeed, Davidson and his fellow officers must plot a course to avoid the storm in the face of conflicting weather reports from multiple sources and differing opinions among the officers on what to do. Over the 36-hour voyage, tensions rise as the ships gets closer and closer to the storm. Compounding the challenge, the El Faro was an old ship about to be scrapped. Its owner, TOTE Marine, was in the process of selecting officers to crew its new ships. Davidson and some of his officers were worried that they would soon lose their jobs.
After discovering that their cancer diagnostic tool, designed to leverage the cloud computing power of IBM Watson, needed greater integration into the clinical processes at the MD Anderson Cancer Center, the development team had difficult choices to make. The Oncology Expert Advisor tool used a combination of machine learning and the latest cancer care research to make recommendations to clinicians in the field. Was automated cancer diagnosis the future of cancer care? The development team, comprised of clinicians and data scientists, reviewed the results of their experiment to augment their implementation plan and better evaluate the efficacy of the analytics tool.
As Tara Noland, the Executive Director (ED) of GreenLight Cincinnati, reflected on her first few years on the job. Noland had delivered on what she had been hired to do in the city: work with leading philanthropists and nonprofit executives to use data and evidence to assess and understand the most pressing community needs; conduct due diligence on leading organizations nationally that were interested in replicating evidence-based programs in Cincinnati; and provide multi-year unrestricted funding and on-the-ground support for the selected programs as they launched in the community. Now, looking to raise the second fund, Noland thought about her future. GreenLight Fund is an innovative venture philanthropy fund that raises regional funds to help replicate evidence-based social service programs. The case explores the launch of their Cincinnati site and outlines some of the questions in how GreenLight balances national and local decision-making, creates career pathways for staff, how it helps organizations replicate, and how it manages its own replication and scale.
Boll & Branch is a direct-to-consumer (DTC) business launched in 2015. It was the first Fair-Trade Certified manufacturer of linens. The case provides background on the company, its start, business model, and evolution through 2019.