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Many entrepreneurs aspire to build an exceptional company, reap the rewards, and retain the CEO position at the end of the journey. Launching the startup is only the first step. The period of transition during which a startup grows up and becomes a scalable business is arguably the most critical time in the life of an emerging firm. We summarize the challenges of this period in a framework-the eight hurdles of transition-that outlines the essential steps in the evolution from a nascent startup into a disciplined organization capable of sustained and profitable growth. As the company engages the eight hurdles, the entrepreneur who aspires to retain the top position must embark on a parallel journey of personal and professional growth: the transition from founder to CEO. The skills, motivations, and behaviors that make a good entrepreneur are not the same as those required to lead a high growth organization. Using the literature and five scenarios from personal experience, I summarize the most commonly cited reasons for CEO replacement. Some are beyond the founder's control; most are not. We identify five shifts in perspectives and behaviors essential to retaining the CEO position and provide practical guidance for developing the founder's leadership capabilities.

Thomas D'Souza, a cofounder of Trinisoft, reflected on how far Trinisoft Technologies had come in just four years. He and Nicolson, his brother and cofounder, had just purchased a new office space in Ahmedabad, India, and added several new developers to service a growing list of clients. Trinisoft's fee-for-service business model meant clients would have to be replaced as development projects came to an end. Growth required more than just replacement, and attracting new clients depended on tangible successes with current ones.

Nickolay Lamm, a recent university graduate, has been interested in entrepreneurship since his childhood. After running two small start-ups as a teen, graduating with a marketing degree and being laid off from his first traditional job, he finds himself working as a freelance designer. His focus is on creating original visual representations of data that go viral. Nickolay's speculative illustration of a fashion doll based on the proportions of an average 19-year old American woman (referred to as "Normal Barbie" by online media) creates considerable market buzz. His "average is beautiful" doll concept is widely covered in online media channels including the Huffington Post, BBC Radio, Cosmopolitan, CNN, Good Morning America, MSN and Smithsonian. When Nickolay starts to receive requests from parents asking where they can purchase an actual physical "average" doll based on his visual representation, he asks himself a question: "Is this the entrepreneurial opportunity for which I've been waiting?" In the end, Nickolay has a decision to make: 1) explore the feasibility of a partnership with Mattel, Hasbro or another established player 2) launch his own company, either with business partners or by himself; or 3) wait for a better entrepreneurial opportunity to emerge...

With a young, urbanizing population, abundant natural resources, and a growing middle class, Africa seems to have all the ingredients necessary for huge growth. Nevertheless, a number of multinationals have recently left the continent, discouraged by widespread corruption, a lack of infrastructure and ready talent, and an underdeveloped consumer market. Some innovators, however, have succeeded by building franchises to serve poorer consumer segments; tapping the vast opportunity represented by nonconsumption; internalizing risk to build strong, self-sufficient, low-cost enterprises; and integrating operations to avoid corruption. The difference, the authors believe, lies in the choice between "push" and "pull" investment. MNCs seek growth by "pushing" current products onto emerging middle-class consumers. They retain some large portion of their existing cost structure and operating style, and thus set prices that limit market penetration. The winning strategy diverges from this approach in almost every respect. When innovators develop products that people want to "pull" into their lives, they create markets that serve as a foundation for sustainable growth and prosperity.

An increasingly popular route to success as a small business owner is "acquisition entrepreneurship"--buying and running an existing operation. If you're considering such a path, the authors offer practical advice for each stage of the process. (1) Think it through. Do you have the right qualities for the job (managerial skills, confidence, persuasiveness, persistence, a thirst for learning, and tolerance for stress)? Are you willing to trade the benefits of working at a large organization for the chance to be in charge? (2) Search diligently and efficiently. Plan to spend six months to two years--full time--following leads and systematically vetting business prospects. Focus on companies that are consistently profitable and have annual revenues of $5 million to $15 million. During this phase, you can self-finance or establish a search fund to recruit potential investors. (3) Strike a deal. When you've settled on a target, do preliminary due diligence to confirm the business's viability and arrive at a fair offer. If the seller accepts, you'll have about 90 days to work with your accountant and attorney on confirmatory due diligence. (4) Transition into leadership. After the sale closes, your priorities should be building relationships (with employees, customers, and suppliers) and setting up processes to ensure steady cash flow.

The case is about the concerns of second generation entrepreneurs in a family managed business who aspire to attain the next orbit, the next level of success in the business. Natural Ice Cream was started by the father in 1980s. The passionate ice cream maker made two small innovations; one, a product innovation in the form of using only natural ingredients. He was so creative that he could come up with 125 combinations of fresh and dried fruits in ice cream. Two, a marketing innovation in the form of selling ice cream only in exclusive ice cream parlours. Both were novel ideas of the time and became the 'Unique Selling Propositions' (USPs). The business expanded over the three decades and with the help of his sons changed the scale and adapted best practices of management. The expansion path was carefully drawn up by preserving the USPs of the business. The franchise route for expansion was used. Manufacturing remained at a central location to keep strict quality control. Having taken their business from a small dream to INR 1 billion niche brand in the artisan ice cream segment, the owners at Naturals were dreaming big. They were restless and anxious to enter the next orbit and aspired to become a pan-India and global brand.

Gondal, a serial entrepreneur, was supported by top technology experts in GOQii's angel round of funding. Case A details GOQii's journey from its incorporation in 2014 until April 2016. It describes GOQii's product-service offering of wearable fitness band technology supplemented with remote personalized coaching, its launch in the Indian market, and its emergence as a pioneer of a new category of product in the health and lifestyle space that had the ability to integrate human assistance with built-in artificial intelligence. Gondal realized that while people were adopting wearable technology solutions for healthy living, there was still a lack of awareness and an air of hesitancy about the usefulness of and need for wearable devices in India. Gondal's dilemma: whether to continue GOQii's positioning as "wearable technology with personalized coaching" and aggressively expand globally, or consolidate and broaden his present offering by embracing the customer more fully and focusing on the "customer healthcare journey" in India. Case B picks up from October 2016, by which time GOQii had consolidated and broadened its offering by focusing on the "customer journey" in India. It had successfully on-boarded different service providers such as doctors, a diagnostic center chain, a hospital chain, sports and grocery stores and Axis Bank (for payments) on their platform, thus providing a complete health ecosystem to the GOQii user. By the second quarter of 2016, GOQii had achieved the number one spot in the Indian wearables market. The immediate decision that GOQii core team need to make is whether they should tie up with multiple insurance providers or explore the possibility of partnering with a reinsurer to complete the entire health spectrum services offering on their data platform. The two cases allow for an in-depth discussion on the key role of a business model in ensuring the competitive advantage and sustained success of a business venture.

Supplement to case ISB079. Gondal, a serial entrepreneur, was supported by top technology experts in GOQii's angel round of funding. Case A details GOQii's journey from its incorporation in 2014 until April 2016. It describes GOQii's product-service offering of wearable fitness band technology supplemented with remote personalized coaching, its launch in the Indian market, and its emergence as a pioneer of a new category of product in the health and lifestyle space that had the ability to integrate human assistance with built-in artificial intelligence. Gondal realized that while people were adopting wearable technology solutions for healthy living, there was still a lack of awareness and an air of hesitancy about the usefulness of and need for wearable devices in India. Gondal's dilemma: whether to continue GOQii's positioning as "wearable technology with personalized coaching" and aggressively expand globally, or consolidate and broaden his present offering by embracing the customer more fully and focusing on the "customer healthcare journey" in India. Case B picks up from October 2016, by which time GOQii had consolidated and broadened its offering by focusing on the "customer journey" in India. It had successfully on-boarded different service providers such as doctors, a diagnostic center chain, a hospital chain, sports and grocery stores and Axis Bank (for payments) on their platform, thus providing a complete health ecosystem to the GOQii user. By the second quarter of 2016, GOQii had achieved the number one spot in the Indian wearables market. The immediate decision that GOQii core team need to make is whether they should tie up with multiple insurance providers or explore the possibility of partnering with a reinsurer to complete the entire health spectrum services offering on their data platform.

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).

In the fall of 2016, the management team at thredUP, the largest U.S. online retailer of secondhand clothing, is deciding whether to expand into international markets. Over the past 12 months the 7-year old startup, which had raised over $130 million in venture capital, had seen revenue grow 100% and gross margin double. Would moving abroad expand thredUP's total addressable market and help position the company for an IPO? Or would it prove a distraction, derailing momentum in the core U.S. business?

Entrepreneurs looking to launch start-ups in developing economies must confront numerous challenges that their peers in more developed countries may be less likely to encounter. Depending on the country in which they are operating, entrepreneurs in developing economies oftentimes lack access to human capital and professional services, sufficient sources of funding, large markets for their products, adequate infrastructure, and predictable legal and regulatory processes, among myriad other challenges. This note aims to explore these challenges in more depth-while simultaneously examining some representative countries and regions in which entrepreneurship is thriving. The note also serves as a complement (and informal update) to the 2013 World Economic Forum Report: "Entrepreneurial Ecosystems around the Globe and Company Growth Dynamics," as well as an update to our 2016 Teaching Note to include recent developments in select Asian, African, and Latin American entrepreneurial ecosystems. This note is intended primarily for current or budding entrepreneurs interested in starting a new venture in a developing economy, as well as investors seeking to fund start-ups in these countries. The note is also relevant for policy makers looking to encourage entrepreneurship in their cities or countries, universities wanting to support entrepreneurship, and corporations seeking a better understanding of their role in the entrepreneurial ecosystem of a developing economy.

Entrepreneurs looking to launch start-ups in developing economies must confront numerous challenges that their peers in more developed countries may be less likely to encounter. Depending on the country in which they are operating, entrepreneurs in developing economies oftentimes lack access to human capital and professional services, sufficient sources of funding, large markets for their products, adequate infrastructure, and predictable legal and regulatory processes, among myriad other challenges. This note aims to explore these challenges in more depth-while simultaneously examining some representative countries and regions in which entrepreneurship is thriving. The note also serves as a complement (and informal update) to the 2013 World Economic Forum Report: "Entrepreneurial Ecosystems around the Globe and Company Growth Dynamics." This note is intended primarily for current or budding entrepreneurs interested in starting a new venture in a developing economy, as well as investors seeking to fund start-ups in these countries. The note is also relevant for policy makers looking to encourage entrepreneurship in their cities or countries, universities wanting to support entrepreneurship, and corporations seeking a better understanding of their role in the entrepreneurial ecosystem of a developing economy.

Cervus Equipment Corporation, the major Canadian dealer group for John Deere and Peterbilt Motors Company equipment, had grown from CA$56 million in 2004 to close to $1 billion in 2014. It had achieved these results through an aggressive acquisition and growth-oriented strategy, by purchasing heavy-equipment dealerships representing John Deere, Bobcat, and other high-end original equipment manufacturers (OEMs). The company’s move into the long-haul trucking industry, beginning with the acquisition of 16 Peterbilt truck dealerships in 2013, was timely, as the agricultural and construction sectors entered what many believed would be a prolonged downturn in its base in western Canada. However, these acquisitions and this move into the trucking industry presented significant challenges related to integration, leadership and management skills at the dealer level, OEM partner control, and the presence of established competitors that served the major vocational and fleet markets. The bottom line: Cervus Equipment required its transport division to drive profitable growth in 2016 and beyond.

In the spring of 2016, Cyklop Packaging Systems India Private Limited (Cyklop) was facing the critical situation of high employee turnover. One out of every two employees was leaving the company each month. Although most employees were leaving voluntarily, some were being asked to leave because of below-par performance. The problem was not grave for major competitors as they were able to retain most of their employees. Cyklop’s managing director, was concerned about the impact the turnover would have on relationships with key clients. He was also worried about increasing managerial and other costs. He asked the head of human resources to analyze the problem and provide an action plan for containing turnover in the service domain.

In April 2016, Canopy Growth Corporation, one of Canada’s top producers of medical cannabis, was planning a strategy for its future. The government of Canada had just announced its plans to introduce a bill to legalize recreational cannabis use in 2017, followed by a rollout of the policy in early 2018. The company’s chief executive officer needed to plan a strategy that addressed three main issues: product messaging for recreational cannabis, establishing a retail footprint in recreational cannabis, and building an international business.

In 2015, Snapdeal, an e-commerce company in India, faced a supply chain situation in reverse logistics. In conforming to the industry trends, the company had a policy on assured product returns, which led to most customers returning to an online merchant for future purchases. However, by the end of 2015, the estimated worth of products returned under the Indian e-commerce platform was $800 million to $1 billion. The rate of returns of online products could add substantial logistics costs to each product return, hampering the industry’s growth. Snapdeal had some serious questions to address. Should it reverse its policy and not give customers a chance to return products? Should the company connect organizations and retailers with customers and derive valuable feedback from them? Should Snapdeal alter its product return policy in favour of a free returns or no questions asked return policy? Would corrective action be required for the e-commerce industry so companies like Snapdeal could create a return policy for customers who had legitimate reasons to return products?

For nearly 75 years, the Johnson Publishing Company has been the most successful African American magazine publisher. Its flagship Ebony magazine was an iconic coffee table fixture for decades in black households of all classes, making founder John H. Johnson the first African American to make the Forbes 400 list of richest Americans. But the privately held company was now in the hands of his daughter, and it faced the bracing, debilitating winds besetting the entire magazine and newspaper industry. Linda Johnson Rice now had to decide what to do with the company's publications and brands.

Mikey Dickerson and Haley Van Dyck found themselves far from home and far from certainty about where to take the U.S. Digital Service (USDS) next. In the summer of 2015, they had landed in London to meet with Mike Bracken, director of the United Kingdom's Government Digital Service (GDS). In 2014, President Barack Obama had given USDS a monumental task: transform how the federal government worked for the American people, digitally. The seeds of USDS had grown out of the rescue of HealthCare.gov, the federal website meant to allow consumers to shop for private health insurance. Its launch and crash in October 2013 had threatened one of Obama's signature policy achievements. Dickerson and a small team had been drafted to help fix HealthCare.gov and had successfully done so in a matter of months. While in London, Dickerson and Van Dyck wondered, of the other areas that most cried out for new technology approaches, which should be tackled next? Moreover, GDS had embedded satellite teams into the U.K.'s government agencies to guide, assist, and in some cases control, each agency's digital presence. Did London hold lessons for if, and how, these teams could be successful in the U.S. government? USDS had begun to experiment with this model too, embedding teams in a handful of departments in the U.S federal government. How could USDS best work with the dozens of agencies that were actually doing the work of government?

DesiFirangi.com was an online women’s apparel retailer in India. Started in November 2014, DesiFirangi catered to the fashion needs of modern Indian women with international style. Within the short span of its operations, the company had established itself as a niche electronic retailer of lingerie, nightwear, and clubwear. However, the online apparel market in India was highly crowded, and the fledging company faced stiff competition from a number of established and upcoming players. Given this intense competition in the market, DesiFirangi was incurring high marketing and customer acquisition costs, which were hurting the company’s bottom line. In order to increase revenues, DesiFirangi's founders needed to find ways to increase the number of unique visitors to the site, and convert more visitors to buyers.

In 2014, Alibaba Group (Alibaba), the largest e-commerce platform operator in China, boasted in its New York Stock Exchange prospectus about its e-commerce ecosystem, which was being built over time. Alibaba’s chairman and chief executive officer declared that the company’s mission was to “make it easy to do business anywhere.” However, the ecosystem, which was well suited for people’s Internet habits of the past, would not likely be up-to-date in the mobile age, when browsing for information no longer posed a problem and people became fascinated by mobile apps that provided practical and entertaining services. Internet traffic, representing people’s attention, started to take on a new pattern. Having thrived on pooling Internet traffic by displaying a huge variety of merchandise on its platform, Alibaba could not afford to now lose Internet traffic to countless customized small apps.