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This section of the website features authors talking about new cases that they have developed.
Featured case - April 2008
StudentCity.com
William Bygrave and Carl Hedberg
Arthur M Blank Center for Entrepreneurship
After sixteen years of minor ups and major downs trying to build the
Web's first viable on-line student travel business, Mario Ricciardelli
has finally hit upon a business model that can generate significant
income and cash flow. With their first full season approaching, Mario
and his partner are taken aback when their trusted strategy adviser
suggests that now is the time to think about harvesting their venture.
How could they possibly think about selling when it's just beginning to
get fun? Mario started his spring break travel business (originally
called Take-A-Break) as a sophomore in his Babson dorm room. Over the
years he suffered all manner of challenges and setbacks, including
having a charter airline operator go out of business - after leaving
dozens of Mario's student customers stranded in Mexico. He almost gave
up; in fact, he had reason to quit many times along the way. But
something kept telling him that this was an idea whose time would come.
In the late 90s he aligned with competitor Jacqui Lewis, and changed
the company name to StudentCity.com. When they were acquired by a
'high-concept' venture-backed Web business that was spending millions
to create an on-line presence, it appeared their business concept was
finally going to get traction. Instead, Mario and Jacqui watched their
paper fortune evaporate as their cash-strapped parent failed for want
of a sustainable business model. They were able to exit with their
business intact. Mario, now in his late thirties with little to show
for his long 'career', decided to take one more shot. He mortgaged his
house to refinance the company, and focused all the company's efforts
and creativity on owning the spring break segment. Amazingly, after two
seasons with the new business model, they were on track to top $23
million in revenue, with income before tax projected to be $2 million
in 2004. If they could stage that sort of turn around in just 24
months, was it really the best time to sell? This case should be
positioned near the end of a new venture course. It could also be used
in an entrepreneurial finance course. The teaching objective is to
present an example of an undergraduate business student embarking on
very long and arduous journey to develop a profitable web-based model
in a highly fragmented industry.
View the author's comments
Previously featured cases
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