Bobson Assignments

8/3/2019 Bobson Assignments

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Roll No. 29

EPGDIB (2010-11)

Case-1 (Hotmail Delivering Email to world)

Question-1: How did Hotmail come to develop its own unique business idea? What

light does this throw on the process of detecting an opportunity for a new

business?

Answer: Hotmails co-founders i.e. Sabeer Bhatia & Jack Smith who were working for

a Silicon Valley startup called Firepower Systems were greatly impressed by the IT

entrepreneurs. They become determined to start their own venture. Their first business idea

revolved around a product called Javasoft, a database built on Suns new Java Technology

for storing personal information over the internet. However, they were unable to attract

investors on this product because of lack of the product distinctiveness & their lack ofbusiness experience.

Further, they were afraid that their corporate email might be monitored as they were still in

regular employment. At first they tried to communicate through their private AOL email

accounts. However after some time their employer had setup a new firewall which

prevented accessing AOL email from office. They were then forced to swap the business

plans though diskettes, which they found to be very cumbersome & frustrating.

Getting the unique business idea

Jack Smiths creative solution to their problem of sending & receiving private email at work

became the basis of their unique business idea i.e. Hotmail. Their idea was to display theemails on the web page. They realized that they can use their Javasoft database to store

and display email messages as HTML documents via regular Internet browsers. This could

circumvent corporate firewalls & make content tracking by employers more difficult since

the message would reside on the external servers. Their idea was to offer the Hotmail

services to the end user free of cost & funding it through the revenue generated from the

advertisements through banner ads.

Detecting an opportunity

Sabeer Bhatia & Jack Smith had detected an opportunity that existed due to the non

availability of text messaging system to the common public which was secured & offer

privacy. They had conceptualized this business idea while working on some other project i.e.

Javasoft & the constraint to exchange their business plan in text mode privately had given

them this idea to offer a mail service which can be used by users to communicate with each

other in privacy.


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Question-2: What resource constraints were faced by Hotmail & how did the

entrepreneurs overcome them? What key resources were created & why?

Answer: There were two main instances when Hotmail faced resource constraints in

terms of

(a) Availability of funds/ cash during launching of the services so that markeing of the

product can be done effectively.

(b) The servers ran out of capacity very soon as hotmail popularity increased with

subscriber base & there were very limited scalable solutions available in the

open market at that point of time.

The first problem of cash requirement for marketing purpose had been taken care of by

adopting the viral marketing approach, whereby at the end of each mail a phrase had

been added PS: Get your own Hotmail account at www.hotmail.com. The employees

working for Hotmail had been persuaded to work without salary & to work for stock options

only.

The server capacity constraints had been tackled by Jack Smith by developing the

architecture for a scalable solution internally. At first the proposed architecture was not well

received by the Hotmail engineers but as it got successfully implemented with the help pf a

parallel team of Hotmail engineers & it offered a degree of scalability far higher than the

conventional email products.

Question-3: What led to the adoption of viral marketing? Were there any dangers

associated with this decision? If so, could anything have been done to reduce

these?

Answer: Hotmail ran out of cash/ funds six months after the startup & only one month

before the launching of the services. The founders were reluctant to raise additional funds

fearing undue dilution of their equity stakes. The employees working for Hotmail had been

persuaded to work without salary & to work for stock options only. As a result Hotmail

operated without additional cash for several weeks on the basis of employees willingness to

support the venture.

In addition to the above acute lack of cash prevented Hotmail to invest into marketing

initiatives of their services. At this point of time their VC proposed to add PS: Get your own

Hotmail account at www.hotmail.com at the end of every ongoing message, effectively

turning every message into a piece of advertisement. This approach is subsequently know

as viral marketing.
http://www.hotmail.com/http://www.hotmail.com/http://www.hotmail.com/http://www.hotmail.com/


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The viral marketing approach was thought to be a dangerous option as this type of

messaging could have been perceived to be spamming as in some previous cases. The key

reason is that it did not fit the internet culture of that time. In some ways it was subversive

to the existing culture & commercialization of internet could have been seen as a

colonization of one culture by another.

They reduced the above possible implications of viral marketing by separating the

advertisement from the main message via a line and removing the prefix PS from the

text.

Question-4: How was Hotmail supported & constrained by the network in which it

was embedded?

Answer: Hotmail gained a lot, from the experience of the venture capital firm, accepted

serious help in a number of obstacles during its growth and got advantage of the strategic

alliance established with Four11 by using its clients network. Nevertheless, as discussed

earlier, the nature of funding sometimes defines the future of a firm.

Strategic alliances are not charitable organizations. They are arrangements between

commercial organizations with a view to gain. The venture capital firm had always an exit

strategy, which should be rewarded. In any case investors had always an exit strategy in

their plans, and this is a milestone in their initial willingness when funding a start-up

company. At that case, this would mean the possibility of selling Hotmail in the near future

to a bigger potential competitor. When you have such a constraint, there is no space for

more radical innovative actions. For example, it could be a possible scenario to ally Hotmail

with a company from a different industry cluster, making a powerful innovative network,

dependent on new combinations of knowledge.

The choice of a partner is an important factor affecting alliance performance and firms

future. Instead, a more narrow alliance proposed, based only in the common nature of firms

aiming in mutually expanding their customers databases. Hotmail stayed locked into a

frame defined by its venture capital firm and its alliance. It should have gone for the

exploration of its competencies. This could direct the company to harvest ideas and

expertise from a wide array of sources. From the case, showed that both founders and

employees were high qualified, innovative and willing to take the risk. No company is smart

enough to know what to do with every opportunity it finds, and no company has enough

resources to pursue all opportunities it might execute.

In the case of Hotmail and Four11, we know that the alliance was encouraged by their

common venture capitalist. Based only in some of their common elements, both firms

agreed to proceed, recognizing that the alliance could support their pursuance forsustainability and growth. By evaluating what happened in the end, both start-ups were

sold with high profits to Microsoft and Yahoo, rewarding first the initial investment of the

venture capital firm and then the founders of Hotmail and Four11. At this stage, it is not

clear if the exit strategy of the venture capital firm was fully adopted by the founders of

Hotmail. We know that Mr Bhatia demonstrated for once more strong negotiation skills to

raise the price. If this was, what they really wanted, the network where Hotmail was

embedded operated successfully with high rewards in the end. If not, as mentioned above,


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Hotmail got stacked in a relationship that probably restrained its potentials for further

growth and domination of the e-mail industry services.

The worst-case scenario should be that, as Hotmail had a value, and the venture capitalists

identified this at the very early stage, this was used by them to improve the value of

Four11. In the end, having two valuable assets in their portfolio instead of one, would

enormously increase the potential of getting high returns in its investment.

Question-4: More specifically, comment on the advantages & disadvantages of

strategic partnership in the light of Hotmails experience with Four11?

Answer: Hotmail and Four11 had made a strategic alliance, which is one of the mostcommon types of business partnerships. A strategic alliance is a kind of arrangement that

establishes an exchange relationship but has no joint ownership involved. It exists for a

number of reasons:

to share risk (reaching economies of scale and scope could be faster than doing it

alone),

to gain access to resources (exchange/transfer technology),

to grow and

to gain a long-term strategic advantage (to learn or to shape competition).

Global competition and continuous technological changes dictates a relevant re-structuringacross companies. The idea of a firm, collaborating with one or multiple other firms, proved

to be a very useful tool. Starting in the early 90s, especially in the technology-oriented startup firms, companies incorporated this idea into their strategies and participated in

organizational networks.

The establishment of strategic alliances gives a number of advantages to the concernedfirms, which are:

to lower overhead costs

to obtain new technologies

to increase responsiveness

to customers

to enhance quality

to enter new markets

to increase their flexibility

to increase firms valueAs understood, such benefits can help them to be more flexible and adaptable to rapidlychanging environments. Trust and cooperative learning are critical factors that affect the

success of a strategic alliance. Intangible assets such as relationships and knowledge shouldbe managed by the alliance with the same care, such with tangible assets.

But as many other tools, establishing a partnership demands a number of components that

had to be continuously re-examined.Issues such as

the building of relationships,

mutually-rewarding deals,


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compatible values and goals,

appropriate balance of freedom and control are important and must be under

continuous revision.

Potential partner firms at this stage, had to secure and negotiate their nature of relationshiprecognise their independence be willing to share information, be willing to co-operate, invest

in the development of inter-firm capabilities, invest in good-faith and trust, utilize effectivelythe human resource and be able to successfully compete other network organisations. Todiscuss upon this, further surveys are necessary to be made by both allies such as, the

close proximity of the firms, the similarity of cultures, the relative size and position of thefirms (e.g. if they are relatively small or emerging firms), the rapid growth in the industry

and the initial timing of the relationship.

Proximity does not necessarily mean that firms have to operate in the same field orindustry, but rather that their core strategies should have common characteristics and

compatible mentalities. It is necessary prior to any kind of partnership, for each ally to re-examine the strategic rationale of the other and to identify which are the real business

needs of establishing this partnership. In addition, a shared vision, a clear communicationand collaborative sharing of expertise have to be parts of both firms core strategies.

Establishment of alliances may guide to potential benefits but sometimes hide pitfalls.

At this case, the alliance primarily was encouraged by the venture capital firm. This wasbased mostly in the potential of mutually exchanging their clients databases and the

penetration in each ones market. We conclude that there were no deep thoughts on theestablishment of such relationship and the approach was rather surface. The effort to

succeed in a social embeddedness on market efficiencies locked the two partners into anunproductive relationship.

Question-4: What was the role of the venture capitalist in this case? Were there

any asymmetries in the relationship with Hotmail?

Answer: Draper Fisher & Jurvetson had experience in the industry of technology. From thecase, it is clear that they had an active management role. Although in the primary stage of

the deal, regarding the funding of the company, it seemed that the venture capitalists hadmade a retreat in the requirements of Mr Bhatia (he was a strong negotiator), they had in

their minds the path they would follow.

For them, the strategic alliance would increase the value of their investment in Four11,through the mutual engagement with Hotmail. Hotmail had a steady increasing

development and could work supportively to Four11, while in opposite, Four11 as it was ahelp people to find people start-up firm could give its database to Hotmail. This move

would add to the value chain of both companies. Four11 would send its customers toHotmail to acquire a free e-mail account and Hotmail would send its customers to register in

the vast database of Four11.

At the critical point, where Hotmail had already expanded, there were two options regardingits relationship with Four11. Either to merge or to separate. The definitive decision of

Four11 to develop its own e-mail platform almost was supported by the venture capital firm,which actually would have two promising companies in the technology arena. As said

before, the e-mail service idea of Hotmail, was entirely new and the competition non-existant. There was enough space for competitors to get in. For a venture capitalist, there is

always an exit strategy. It was more than obvious that such start-ups sometime wouldattract the big fishes, which would be willing to pay more for decisions they did not take in


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the past. Needless to say that, companies such as Microsoft had not decided to enter in thisservice although they had the opportunities, as they viewed it as unproven and risky.

Although quick investments tend to produce more failures, this is not diminishing venture

capitalists returns. It is well known that the property of increasing returns in high-technology industries tends to generate a large first-mover advantage and lead to a winner-

take-all situation. Thus, quick investment has a better chance to produce highly successfulstart-ups.

At the end of 2007, the venture capital firm held a significant portfolio of stakes in both

start-ups. Both firms had the 64% of global users in their customers database. They werethe dominants of e-mail services at that time.

When the two start-ups became head-to-head competitors, an internal restructuring made

within the venture capital firm. The two venture capitalists separate their duties and agreedto manage one company each. That was necessary to avoid illegal or unethical actions.

This relationship was asymmetric. Hotmail instead of getting full advise and support from itsventure capital firm, it had to share it with a competitor. That was simply incompatible and

could raise issues of good faith. In other words, there could be problems of asymmetricinformation. The house style of an investment can influence the performance of both theinvestor and the investee. In addition, it may define the nature of their relationship.


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Case-2 (College Coach)

Question: The partners were finding it difficult to service all three business models

they had identified. If they close to pursue two markets, which would be most

complementary. What are the advantage & disadvantage of each business model?

Consider lead generation potential, public relation opportunities & account

servicing logistics. What type of location they choose & how will their choice affect

their marketing strategy? If the partners feel that there is real possibility that a

large potential partner such as Kaplan will continue to show interest, should this

have an impact on their location & marketing decision?

Answer: Out of the three business models i.e. Retail Classes, High School consulting &

Corporations the business models that complement each other are the following:

High School Consulting

Corporations

The main reason for the above two to complement each other is because the marketing

strategy to be opted can be of the similar lines, i.e. to target the senior management &

have them advocate down the line. Whereas, in case of Retail classes the marketing

strategy has to be different keeping in view the different set of client base.

High School Consulting

Advantages

High School Consulting was a new area with relatively less competitors. Colleges testing

prep majors like Kaplan & Princeton review were keeping a watch on this area. However

there has been no growth oriented new entrant in this area. The demand to apply forcolleges had been steadily increasing. This in turn was putting the pressure on the school

administrators who were not able to provide adequate college guidance. This pressure was

felt in the average school systems with low admission ratios at the top school. For this

reason the schools had started to accept the assistance of outside organization.

Further, since this will be B2B model the marketing spent can be relatively lesser than that

of a B2C model of retail classes.

The director of education who was the former superintendent of the Needham Public school

system was proving to be effective in generating the leads for this business. Hence, they

were readily available with the kind of resource required for getting into this business.

Disadvantages

Following are the main disadvantage of getting into the High School Consulting model

College Coach was an outside contractor with little or no prior experience in this

case. High schools would never liked to have the idea of handing over the guidance /

counseling work to an company having no prior experience.


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They were not a part of any union also. Hence, for getting the business from these

high schools would require some political wrangling.

The guidance counselors and school committees were having different opinion about

this business & are not able to decide on the prospects.

There was no uniformity w.r.t. to the business model as no two school administration

seems to be dealing with the guidance challenge in the same way. Some were

interested in College Coach to provide single day student work shop. Others were

interested in summer training programs for their guidance councilor.

CorporationsAdvantages

There are numerous advantages for getting associated with the corporations.

1. Both the partners are well versed with the corporate culture/ workings since they

both had a previous experience of that.

2. They would have made use of the connections they had developed during their

working in the corporate world, as they did in case of AIG.

3. The business model of working with the organizations is predominantly B2B in nature

which will require lesser marketing spend & keeping in view the tight funding

position, this business model is more suitable to them.

4. Their workshop with AIG had been a good success & AIG expressed their interest to

get these type of workshop each year. Approximately 150 families got involved

through AIG workshop which was an indicator to their success. On the basis of their

successful workshop they had been referred to another MNC based in New York.

5. The AIG workshop success had proved that College Coach were having a very good

curriculum with them. Hence, they stand a good chance to capitalize on the same.


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6. Being associated with big corporations would also add to their brand image basis

which they would get good response on various other business models.

Disadvantages

The main disadvantage in this business model is that similar to the case of High School

Consulting, one need to have the contacts at the senior level. They were to target the seniormanagement & have them advocate down the line. The connections with the senior

management were a difficult task until & unless being referred by an existing client.

Retail Classes

Advantages

The demand for retail classes was increasing with the no. of high school pass outs opting for

college admissions. The overall population of college bound students was expected to risedramatically over the next 10-20 years.

There was a positive demand in the market for retail classes due to various other factors.

Also, College Coach had the unique curriculum of offering 14 hrs of class works & then few

hrs of homework. The prices being charged by them i.e. $500 in the fall season was also

lowest as compared to the average $1000 to $1500. The first fall season pilot classes has

been well received.

Disadvantages

There were few disadvantages in this model as mentioned below:

1. The students they were targeting were already occupied with sporting commitments/

extracurricular activities at school/ SAT preparations; hence College Coachs

curriculum timelines was competing with the students available time.

2. In order to reach to their end customers which were predominantly the high school

students & parents the marketing spends was to be on higher scale & given the

current availability of funds that was not an easy accessible resource.

3. Selection of good teachers was also a big challenge. They found that credentials of

teachers were not the single most important factor.

Location Strategy


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In my opinion location of the office & centers depends upon the business models. In the

case ofRetail business& High School Consultingbusiness where by students shall be

coming on their own the perfect location for running the education center shall be the

community centers, church, market place with lot of traffic, good accessibility &

transportation facility. Leasing out community center & churches will be cost effective &

much of the funds can be used for other marketing tools like signage/ outdoor promotions/

newspaper & radio promotions/ conducting free workshops & seminars.

In case of the corporation business model the education centers shall be located in upscale

business areas with state of art technologies near the office areas. In this case since the

education centers/ offices are already placed in the upscale areas the brand visibility will be

higher to the prospective client. The marketing strategy in this scenario shall be of building

strong business relationship with the corporate by way of seminars, developing connections

at the top level, strong customer relationship management etc.

Location strategy need not be changed even if the large potential partner shows interest.

However, the marketing strategy may be tweaked or made more aggressive so that brand

building could be put on a fast track.


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Case-3 (Jack Sprats Restaurant)

Question: Do you think Chris should insist on hiring Arlene Spiegel?

Answer: From my perspective Chris should insist on hiring Arlene Spiegel to his father, for

a number of reasons as listed below.

1. First of all and most importantly Chris has very little experience in start-up ventures,

he only worked two months in a new Chicago Jakes restaurant, he is not

experienced in the field of entrepreneurship and could use the extra help just in

case.

2. As stated in the case experience of running restaurants lasts only two years, MsSpiegel has decades of experiences of running and setting up new restaurants, she

would be an invaluable asset to the company.

3. Her experience may help Chris to find good deals with suppliers, keep start up costs

and daily expenses low whilst maintaining high quality standards. It can be argued

that her knowledge and expertise may save the start up well over her $25,000 wage.

4. Arlene Spiegel meets the criteria Chris is looking for in a consultant perfectly, she is

highly esteemed in her field and is recognized as one of the countrys leading

foodservice specialists. She has won two awards in her field notably Foodservice

woman of the year in 1982 and 1987. Her knowledge of the industry is

unquestionable. She could only serve to improve on Chriss business plan and plans

for expansion, in this sense alone I feel her fee of $25,000 is worth it.

5. Ms Spiegel shares Chriss passion for healthy food and they share good interpersonal

chemistry. She is enthusiastic about the Jack Sprat project and wants to see it

succeed. Dr. Haramis worries that she will rewrite Chriss business plan are unlikely

to be true as they share similar mindsets and goals. However, she could only

improve on the plan.

6. She has agreed to commit to the project at an extremely low cost of $25,000; a

foodservice agent of her calibre could demand as high as $150,000, it cannot be

argued that Chris will not get value for money.

7. Chris knows the foodservice industry better than Dr. Harami and he knows what he

is and is not capable of. He obviously feels that if he hired Ms Spiegel the venture

would be far more likely to succeed therefore he must insist on her being included.

8. Dr. Haramis reason as to why he does not want to hire Ms. Spiegel is based on the

fact that Chriss Aunt and Uncle did not need a consultant to start a successful

restaurant chain, it is not based on any knowledge of the foodservice industry, as


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opposed to Chriss reason for wanting to hire the consultant which is based on

knowledge.

9. From analysis of the start-up costs attached to the case study it is of my opinion that

the venture capital can support the cost of hiring Arlene, the contingency fund of

$65,000 should be more than enough to cover any underestimated costs.

Question: Evaluate Jack Sprats restaurant as a high-potential venture.

Answer: A high potential venture will typically have a few distinct characteristics that

set them apart from other start up enterprises. I will discuss and explain each of these

characteristics and analyze whether Jack Sprats restaurant fits the criteria to be a high-

potential venture (HPV).

First of all high potential ventures are usually backed by capital, in this case Chris has found

an investor willing to put $250,000 into the enterprise so in this respect the venture is high

potential.

HPVs typically solve a problem for customers, or meet a compelling unserved need and

they are also by their very nature unique. In the case study Jack Sprats restaurant certainly

fits the criteria to be a high potential venture in this regard. Though market research and

consulting with others in the low fat food industry Chris found that there was a demand for

a tasty, healthy fast food restaurant showing that he could offer customers something they

desire and hold in high value that was currently not being met, thus meeting a compelling

unserved need.

Furthermore at the time in the US the healthy fast food market was relatively untapped and

only a handful of restaurants, mainly concentrated in California and Florida were offering

low fat, healthy fast food. However in these restaurants the food was marginal at best and

did not offer consumers value for money as the portions were small. Despite these

restaurants flaws they were very successful, this proved a demand for healthy fast food.

What Chris planned to do was exactly this but offer customers better value for money thus

offering customers something they desire for better value. A quality evidence of demand for

a product is another characteristic for a HPV and Jack Sprats restaurant meets this criteria.

With regards to the management teams in HPVs they are usually experienced and seasonedin their field, Chris is experienced in the restaurant business, he had worked as a restaurant

on two occasions as the general manager. He also has experience in business start ups

shown by his involvement with the opening of a Chicago Jakes restaurant. However through

the family meeting where Dr. Harami laid out the terms and conditions of the 250,000 it

was made clear that Chriss younger brothers would be actively involved in the running and

management of the new business, this is a cause for concern as one of the brothers Matt

has no prior experience in foodservice. Although the team has some problems with


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seasoned, experience management I believe that what Matt lacks in experience Chris and

Steve makes up for, so the business can still be regarded as high potential.

In HPVs it is also worth noting that the management team are usually passionate about the

firm and the industry. In Chriss case it cannot be argued otherwise, the concept is true to

his heart (his fathers health problems) and he had contemplated opening a restaurant since

a young age. He is also a cooking enthusiast and connoisseur showing his passion for food.

The case states his brothers are eager to learn also, so in this regard the venture can also

be regarded as one of high potential.

Ventures that find a unique way of cutting costs without sacrificing the quality of their

products are often HPVs as they can make higher returns than competitors. Chris has found

a unique way to do this in Jack Sprats restaurants by not having a chef on duty at all hours

in the restaurants, the recipes would be prepared by executive chefs while staff working in

the restaurant would simply heat it up, thus saving the venture thousands in labour costs.

Start ups in industries where there is a large market to which they can sell their products

are generally more likely to be high potential ventures. The threshold or minimum amountwould usually be perceived at $100m. In the case of jack Sprats restaurant the market size

for fast food was estimated at $100bn, 33% of all times people ate out they did so in fast

food restaurants. Chris planned to expand all across the US so the market was massive. The

healthy fast food market at the time could not be properly estimated as at the time it did

not exist, however across all levels of eating, the low fat food sector was growing fast,

indicating that eventually there would be a demand for healthy fast food. Jack Sprats

restaurant could be regarded as a high potential venture in this regard.

The packaged health food market in the US was growing steadily at 5% per year showing a

strong increasing demand for low fat foods. Jack Sprat offered this and more the

convenience of fast food. A typical characteristic of high potential ventures is the entranceto a hot market, I believe the healthy fast food market to have been hot at the time thus

making Jack Sprats a HPV.

Question: Evaluate Chriss progress to date.

Answer: From analysis of the case it is evident that Chris has made a lot of progress in

a relatively short time period. Through the years 1994-1995 he researched the market

thoroughly, set up clearly defined goals, built up a number of useful contacts, researched

potential locations, made detailed financial statements, obtained the relevant experience in

the restaurant business and even secured a substantial investment.

Research

1. Found out that some healthy fast food restaurants did exist in California and Florida

and subsequently travelled to the locations to suss them out and see how successful

they were.

2. He researched all areas of the low fat foods sector and found the area to be growing

at a rate of 5% per year.


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3. Attended Foodservice expos and enquired to those experienced in the field as to

whether they thought his idea would work.

4. Researched possible locations in New York and Boston.

Clearly defined goals

1. Set up a plan to include two types of restaurants in his arsenal, stand alone

restaurants and hosted QSRs. He had clear implications as to what each meant.

2. Chris planned to have his first two restaurants in operation by 1996, one stand alone

and one QSR.

3. A unique idea as to how food would be served and prepared.

4. He knew in exactly what types of areas he wanted to place the restaurants, prime

business districts with a strong concentration of professionals.

5. Short term goal Develop a base of operations from which further growth could beestablished.

6. Planned to expand heavily in Boston and develop a large presence there, then

expand Eastwards and Westwards as word of mouth spread.

Contacts

Through attending Foodservice expos and his research into the area of low fat foods

Chris built up an expansive network of contacts all across the industry many of

whom were interested in the project and willing to help him.

Obtained relevant experience

Chris got experience in the opening of a new restaurant Chicago Jakes

This helped him get experience in new business start ups and in the running of a

restaurant.

Made detailed financial statements and a well thought out business plan

1. Chris estimated the costs of the start up and how much it should cost to get off the

ground.

2. A Pro Forma Income Statement was also drawn up detailing cash flow for the first

year of the enterprise.

3. A well thought out business plan was also created.

4. Secured investment

5. Chris secured an investment of $250,000 from his father under a few terms and

conditions.


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From my perspective Chris made a lot of progress from the ideas initial conception. He has

thoroughly researched the industry and everything about it. However his progress has been

very slow, he thought the idea up many years before and in this case where the advantage

of being first mover in an emerging market is huge, his slow progress could be his downfall.

However he had got plans to open his first restaurant in less than year after the decision

point so his slow progress probably would not have affected him that much.

Question: What advice would you give Dr. Harami?

Answer: Taking all into consideration I would probably advise Dr. Harami not to invest

in the venture, I believe he is doing neither himself nor Chris any favours by making the

investment. Chris would be better off to seek an investment off someone more involved in

foodservice that has the experience Chris could use to his advantage. In this case there

would also be no need to involve a consultant thus saving much needed capital.

Dr. Harami does not even seem interested in the venture, let alone experienced. He holds

no passion towards the venture or the industry and only seems to be making the

investment for the sake of his son. He does not understand the concept that Chris is tryingto employ a tasty, healthy fast food restaurant. Dr. Harami: If youre going to get into

foodservice why not just open a hamburger joint? Asking this also shows that he does not

fully believe the concept will work, if this is the case he shouldnt even consider investing.

Dr. Harami and Chris evidently do not see eye to eye on a number of issues, one being the

consultant. He is unsure of Chriss judgement on the situation and therefore does not trust

him fully. These disagreements at the beginning of the venture are signs of things to come

in my opinion.

Furthermore, the Doctor is not a very rich man, the $250,000 he is investing is a lot of

money and losing it could break him should the restaurant not succeed. Even though I feelthe venture has very high potential I would advise him not to invest as there is too much at

stake for the Doctor.

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