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In October 2016, Nevzat Aydin, co-founder and CEO of Yemeksepeti, the Turkish online food-ordering company, was looking over the company's quarterly results and projections for the upcoming year with his management team. It had been almost a year and a half since Aydin had agreed to sell the company's shares to Delivery Hero, the Berlin-based global leader in online and mobile food ordering, for $589 million. In 2016, the company had had grown to include more than 13,000 member restaurants servicing six million users and achieved a 41% year-on-year growth. Yemeksepeti operated with an EBITDA margin of over 50%. Although the company had introduced other revenue streams over the years, commissions remained as the main source of income. Aydin believed that, while there was plenty of room to grow by taking market share from phone orders, much could be done by revenue diversification; the company simply had too much valuable data to be ignored. What should the company do to take advantage of its data analysis capabilities and the new technologies on the market? What kind of outside-the-box solutions could create additional revenue streams and vertical growth capabilities? What about the cohort analysis and data generated from order histories? He motivated his the management team to come up with new ideas to put the vast amount of transaction data to use. The case describes potential avenues for a company to monetize its data, illustrates the pros and cons of each option. The case will help students think about how to prioritize growth over diversification, and forward think with regards to new technologies and customer trends.

The first module of TEM focuses on business model analysis and lean testing. Your business model defines your company and sets its strategic direction, including customer value proposition, operations, scaling, the context in which the company operates, and so on. Designing and evaluating a business model is a complicated task, given all the considerations that must influence your decisions-external opportunities and threats, internal resources, your goals as a founder as well as your investors' desires, plus laws or obligation to your community or society at large. While not simple, a well-designed and properly tested business model serves as a strong guiding compass for the company and aligns priorities and critical actions.

TalentCorp Malaysia runs the "Returning Expert Programme" (REP), a government program designed to encourage Malaysian professionals abroad to return home through use of various incentives. The REP is intended to combat the "brain drain," caused by highly educated professionals moving away to take advantage of better career opportunities by offering returnees benefits such as tax breaks and permanent residency for family members. In 2011, TalentCorp took over administration of the REP, and through adjustments to incentives and application requirements was able to dramatically increase the number of REP applicants and approvals. Now they are considering another set of changes and must demonstrate that their changes will increase "bang for the taxpayer buck," raising the number of applicants while maintaining the same level of quality.

Forward-thinking established companies utilize new routes for external innovation with start-ups and crowds. The reading reviews strategic partnerships, strategic investments, strategic acquisitions, and crowd-based collaborations. Case examples include Google, SK Telecom, DaVita, UPS, and GSK. The note can be paired with Core Reading: Leading Breakthrough Innovation in Established Companies (#5272).

Faced with the imminent loss of 40% of its revenues due to patent expirations, pharma giant Eli Lilly sets out on a dramatic transformation process in 2009. The case considers how Lilly restructured the organization into business areas to aid better decision making, faster innovation and clearer customer insight; the forward guidance and minimum performance guarantees that Lilly provided to the market during the transformation; the difficult HR adjustments that were required; and how the top leadership encountered and overcame market skepticism towards the innovation-focused plan.

In this Essential Reading, the authors explain what breakthrough innovation is; why it's important for large, established companies to excel at this type of innovation; and what challenges such organizations may expect to face as they seek to drive breakthrough innovation. The authors describe the nature of breakthrough innovation, including how mature industries can be disrupted and what stages breakthrough innovations progress through, providing examples from several different industries. Drawing on IBM and the Horizons of Growth Innovation Lifecycle Model as an example, the authors also identify the internal capabilities and leadership approaches that incumbents must master to guide promising ideas through the innovation lifecycle (which includes mature businesses, high-growth businesses, and emerging business opportunities). The authors then offer suggestions for how incumbents can collaborate with external parties to further drive breakthrough innovation, exploring four collaboration models: strategic partnerships, strategic investments, strategic acquisitions, and crowd-based collaborations.

Supercell is a young Finnish smartphone game company with an unusual team structure and company philosophy. It is already one of Finland's most valuable companies, and despite being only 6 years old, it has put up some impressive numbers: as of 2016, it has released only four games for global audiences, but each one has made it to the top (or almost to the top) of the most-downloaded and most-revenue-generated app charts; it has recorded multi-million daily revenues and around a hundred million daily users; it has nearly 200 employees in its Helsinki headquarters and support offices around the world; and now, thanks to an acquisition by Chinese internet/entertainment company Tencent, Supercell has a valuation of $10.2 billion, making it Europe's first "decacorn" (a start-up with a $10 billion or greater value). Supercell's success is due in part to its unconventional company structure and attitudes towards game development and management in general. The development unit at Supercell revolves around the concept of a "cell," a small team consisting of anywhere from two to a dozen (or more) people who work together to make a game. Cells are highly independent and control all the decision-making for their game, including when/whether a game should be cancelled. The case allows discussion of important concepts like what conditions aid an effective team dynamic, how an entrepreneurial company can scale in size while retaining the "power of small," how companies can create value through focus and being willing to terminate underperforming projects, and the implications of global markets and extreme valuations for what a company must achieve.

In this article, author William R. Kerr, who has researched global ventures for two decades, examines subtle but critical differences in how globalization is leveraged even among organizations that seem on the surface to be quite similar (for example, businesses engaged in outsourcing). Traditional approaches to globalization start with a mindset of taking the company's best products or services to global markets and often use cross-border opportunities to lower costs (what the author describes as "globalizing the best that your company can offer"); the core focus is on how globalization can enhance existing products and profit formulas. However, other organizations, the author notes, build their businesses on top of globalization (what he calls "harnessing the best that the world has to offer"). Such businesses display a sharp external focus, harness the resources and ideas of others, and aspire to achieve a large global footprint quickly. Although the digital economy can enable these ventures, the real differentiator, the author argues, is the managerial approach taken toward the business. In addition to looking at Airbnb and Uber, the article examines the global strategies of several companies, including Upwork Global, Alvogen, Rocket Internet, and Home Essentials (HK) Limited. The article highlights best practices that can support managers in globalizing their businesses, ranging from tailoring the businesses for the local environment to leveraging global network effects. Moreover, it looks at the issue of operational complexity and how considering the trade-offs between the benefits and costs can help managers find the optimal global footprint for their organization.

Residency Select, LLC provides psychometric assessments for matching medical students to residency programs. After a series of successful pilots, founder Alan Friedman is considering whether to continue developing his offerings in this area, or whether to expand into new areas in the healthcare field, including offering assessments for administrative or executive positions. The case provides a walkthrough of the decision-making process of a young firm making a strategic leap, and how Friedman weighs many factors, including his own personal mission and desires. Friedman is also an alumnus of HBS's "Launching New Ventures" Executive Education program, and the case discusses how he makes use of the lessons from that course.

Alvogen is a young Icelandic generic pharmaceutical company, whose CEO believes that his global strategy will give them an edge in this competitive industry. Robert Wessman, Alvogen's CEO, was also previously the CEO of Actavis, another Icelandic generics company, which he built from 90 people in 1999 to 11,000 people and €1.6 billion in revenues by 2007. Wessman has supreme confidence in his abilities to succeed, and a knack for convincing other people of the same and bringing them onboard his ventures. In 2009, after losing most of his net worth in the 2008 financial crisis, he used his last $2 million to found Alvogen, which he hoped to build into one of the top 5 generics companies in the world. Despite going up against the big players in the generics industry (where 50% of world sales is controlled by just 10 firms), Wessman believes that his plan for Alvogen, involving difficult-to-make drugs, biosimilar drugs, and strategies targeted to individual markets, will enable them to be competitive. He quickly recruited a team, with little more than a business plan written on a napkin, and began operations in 35 countries almost simultaneously. The company grew quickly, despite some close calls with funding, and by 2014 it has almost $650 million in sales. Currently, Wessman, top management, and some of Alvogen's investors are entertaining offers from two different groups. One option is to merge Alvogen into SuperPharm, a large, publicly-traded U.S. pharmaceutical company. The other is to be acquired by CVC, a U.K. private equity firm, and Temasek, a Singapore investment company, who are offering to buy out all Alvogen's shareholders. Or, Wessman and his team can reject both offers and continue on as an independent company.

Global ventures are those that weave globalization into their businesses from the start. Technological advances and emerging markets are enabling entrepreneurs to extract more value than ever before from setting up in multiple countries. At the same time, The emergence of new kinds of competitors and threats makes it even more important for founders to seize the advantages of globalization early on. As a result, many founders purposefully embed globalization into the core of their venture, rather than becoming global as the business matures. This Reading provides insights and best practices to help founders avoid pitfalls and create a truly global strategy. The author offers a framework for early ventures based on what they are globalizing: products and services; people, ideas, and technologies; or finance. It also differentiates between the venture that is seeking to globalize the best the company has to offer and the venture that are harnessing the best the world has to offer. After founders determine what they hope to gain from globalization, they must choose the best locations, decide how many countries to enter, adapt their business models to each location, and navigate the unique operational and managerial difficulties facing young global ventures. The Reading does not consider international entrepreneurship in its traditional sense, such as how establishing a domestic-market-oriented company in Brazil differs from starting one in Japan, or how established companies might open their first facility abroad or enter their 90th country. The insights in this Reading can inform managers in such companies, but does so through the lens of ventures that were born global. The focus of the Reading is on young global ventures and the specific resource constraints, opportunity costs, and founding-team challenges of new and early-stage ventures. Focusing on these businesses helps identify key business model traits related to globalization.

Neil Kashyap and Neil Lombardo (HBS '08) acquired Winnan Metal, Inc., a metal fabrication shop, after raising a search fund and an 11 month search to fulfill their dreams of becoming business owners. Two weeks after they took control of the company, Winnan's largest customer (60% of company revenues) threatened to take its business elsewhere. One year later, they had regained the respect of their customers and won the trust of their employees to promote a new culture of empowerment and respect. They wondered how to prioritize options to grow the business as they did not want to spread themselves too thin.

"Financing Entrepreneurial Ventures" introduces key issues involved in the financing of entrepreneurial enterprises. The Reading begins by examining how business models shape external financing requirements. It then contrasts the choice to bootstrap with the option to raise external funds, as well as the traits of debt versus equity investment. Readers learn about the different types of equity investors-including angels, VCs, and strategic investors-and follow an entrepreneurial venture's path through the financing stages. The Reading also examines how entrepreneurs can adjust business models to match financial conditions, and how they can reduce financing needs through alternative models such as partnerships. Finally, the Reading covers emerging funding models-such as crowdsourcing and accelerators-and the global aspects of entrepreneurial finance. There are 6 Interactive Illustrations included in the Reading: "Calculating a Cumulative Cash Flow Curve," "Asset Intensity Ratio," "Building a Cap Table," "How Investor Expectations and Target Returns Drive Company Ownership," "Payouts from Simple Equity and Convertible Investments," and "Seed Note Ownership and Value."

EFL provides credit-scoring services in developing countries using psychometric assessment, but the potential loss of a large customer makes them reconsider their scaling narrative.

Homestrings is an online investment platform for overseas diasporas to link financially with their home countries. The founder believes crowd-funding can become a pillar for development, but U.S. regulatory hurdles and resources constraints are substantial. The company is considering targeting non-diaspora investors, introducing new products like insurance or banking, and related expansion strategies.

Desi Shack is a "fast casual" restaurant, started by two HBS alumni, that serves Indian and Pakistani cuisine in midtown Manhattan. The founders are looking to expand into a second location and also plan to hire a COO, and there is very little room for error in the decision-making process if Desi Shack is to continue operating. This case discusses questions of location choice and hiring decisions, and provides an example of a framework entrepreneurs might use to think about the many factors that must go in to making these choices.

Neven Murugan is developing FanMode, an app that allows sports fans all over the world to broadcast their reactions in real time into stadiums where their team is playing. It also provides social networking across sports fans. The company is growing, and its founders face the questions of where to locate their headquarters and how to structure their company, and the legal issues surrounding these decisions, including intellectual property regulations, tax laws, and ownership structure. This case provides an example of a company that, due to the nature of its product, has had to operate globally from its earliest days and establish itself in many locations simultaneously.

AVA is a three-year old e-commerce company in the Philippines. From its early start mimicking the Gilt Groupe concept of online flash sales, the company has grown into a broader e-commerce platform for local fashion commerce. Oliver Segovia needs to evaluate where AVA should go next and answer some complicated personal questions. The case considers issues related to e-commerce platforms, diaspora-based international exchanges, business location choice, and global entrepreneurship broadly.

Brent Grinna is evaluating different options for the technology development of his start-up's iPhone app, including hiring local programmers, finding a CTO, or outsourcing. He only has a little over two months before he presents his alumni networking app to Brown University, in the hope that they will adopt it and fund his company, EverTrue. He lacks the technical knowledge necessary to make the prototype himself, and so has to quickly decide on the best option. He is considering multiple ways to find a developer, including hiring a local programmer or making use of a local app-development company; using an outsourcing platform like oDesk; contracting with Dashfire, a friend's company that charges low fees for product development in exchange for equity; or finding and hiring a CTO or technical co-founder. Grinna must weigh issues like cost, speed of development, equity retention, proximity and ease of collaboration, and control of intellectual property. The case further provides an opportunity for discussing the business models of global firms like oDesk and Dashfire.